Opinion analysis: Justices reject plea to hold state AG actions in federal court
on Jan 16, 2014 at 11:22 am
The Fifth Circuit got its third consecutive unanimous reversal on Tuesday, when the Court decided its first class action case of the year, Mississippi v. AU Optronics Corp. This one went the way of the plaintiffs, largely because the Justices agreed that the case shouldn’t be treated like a class action at all.
The case involves the Class Action Fairness Act of 2001 (the “CAFA”), which allows defendants to remove to federal court large class actions filed in state court. The question is whether that statute applies to this case: an action brought by the state of Mississippi (which obviously is not a class) based on the injuries that a large number of Mississippi residents suffered from price-fixing in the liquid-crystal display (“LCD”) industry. The Fifth Circuit allowed the defendants to remove the state’s action to federal court on the premise that the case was a “mass action” covered by the CAFA.
Writing for a unanimous Court, Justice Sotomayor rejected the Fifth Circuit’s decision out of hand. The defendants had emphasized the strong congressional intent to limit the costs of mammoth litigation, hoping to play to the sympathy of the Justices that have been hamstringing class actions for the last several years in decisions like Wal-Mart, Comcast, and Genesis. But in this particular case that strategy was not strong enough to overcome what the Justices apparently viewed as unambiguously clear language in favor of the states.
The basic problem, as Justice Sotomayor explained, is that the statute defines a mass action as one with one hundred or more “plaintiffs,” and this case has only one plaintiff (the Mississippi Attorney General). Although the defendants had suggested that “plaintiff” easily could be read to refer to the underlying claimants on whose behalf relief was sought, Justice Sotomayor thought that reading “would stretch the meaning of ‘plaintiff’ beyond recognition.” She emphasized the idea that the presumption that a word has the same meaning throughout a statute “is at its most vigorous when a term is repeated within a given sentence.”
Nor was she content to rest with several detailed examples of the statute’s ill-fitting uses of “plaintiff.” She also emphasized practical absurdities, like the idea that the statute would require a district court to remand to state court the claims of all individuals who suffered less than $75,000 in losses. That would presumably include the great majority of individual residents, but how would the district court practicably make that determination in a case in which the plaintiffs were not seeking class certification?
As published, the unanimous opinion does not suggest that the arguments of the defendants in support of the Fifth Circuit made any impact on the Justices at all. It well might be, though, that some of the Justices most likely to be concerned about the costs of class actions were the same Justices who would be most inclined to worry about the insult to the state of forcing its action into the federal court. For whatever reason, though, the opinion suggests that all the Justices viewed this as an easy reversal.
PLAIN LANGUAGE SUMMARY: Defendants who manufacture LCD screens cannot force Mississippi to litigate in federal court when it sues to recover for the harms that Mississippi and its residents suffered. Mississippi is free to pursue that case in state court, and the federal Class Action Fairness Act has nothing to do with it.