Legal reform group, manufacturers urge U.S. SC to uphold ruling over federal jurisdiction

WASHINGTON (Legal Newsline) -- A group of veteran legal reform advocates, in an amicus brief filed last week, want the U.S. Supreme Court to uphold a November ruling by a federal appeals court in a case over federal jurisdiction.

Access to Courts Initiative's amicus brief was written by Constitutional law expert and states' rights advocate Chuck Cooper, and was joined by the National Association of Manufacturers, or NAM.

"Amici believe that an unduly constrained view of federal jurisdiction has helped fuel the litigation explosion of the last 50 years, contributing to the imposition of billions of dollars of costs on American consumers, the loss of hundreds of thousands of American jobs, reduced foreign investment increased medical costs, and fewer potentially lifesaving medical products being made available to the public," Cooper wrote in the brief, filed for the respondents in State of Mississippi ex rel. Hood v. AU Optronics Corp. Tuesday.

In February, Mississippi Attorney General Jim Hood petitioned the nation's high court to review, and overturn, a ruling by the U.S. Court of Appeals for the Fifth Circuit.

In Hood's lawsuit, several companies from Japan, Korea and Taiwan were accused of fixing prices for thin film transistor LCD panels from 1999 to 2006.

The Fifth Circuit found that the suit qualified as a "mass action" under the Class Action Fairness Act.

The federal statute, passed in 2005, gives federal courts jurisdiction to certain class actions in which the amount in controversy exceeds $5 million, and in which any of the members of a class of plaintiffs is a citizen of a state different from any defendant, unless at least two-thirds or more of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the state in which the action was originally filed.

Business groups and tort reform supporters had lobbied for the legislation, arguing that it was needed to prevent class-action lawsuit abuse.

"After analyzing the complaint, the relevant statutes and the parens patriae authority of the State, we hold that the real parties in interest in this suit include both the State and individual consumers of LCD products. Because it is undisputed that there are more than 100 consumers, we find that there are more than 100 claims at issue in this case. The suit therefore meets the CAFA definition of a 'mass action,'" Judge E. Grady Jolly wrote for the Fifth Circuit in a Nov. 21 opinion.

Hood, who sued several major suppliers of the LCD panels in Hinds County Chancery Court in March 2011, argues that the suit should remain in a state court.

The attorney general says he filed the suit under his parens patriae powers -- to protect the physical and economic well-being of the residents of his state.

ACI and NAM argue in their brief that the framers of the Constitution, apprehensive of actual or perceived court bias in favor of local interests, considered a federal tribunal necessary in some cases that involving multiple states, or citizens from another state.

"[I]n light of the plain language of Article III specifically extending federal jurisdiction to controversies such as this one and the important purposes such jurisdiction was intended to serve... CAFA should, at a minimum, be interpreted without any presumption against removal," Cooper wrote in the 38-page brief.

"Indeed, it should be interpreted generously, with a presumption favoring removal, to effectuate the constitutional design."

ACI President James Wootton said in a statement last week that the initiative's mission is to close loopholes to CAFA and to promote legislation more consistent with Article III of the U.S. Constitution.

Wootton was an organizer of the coalition that advocated passage of the 2005 federal law.

The Supreme Court has set oral arguments in the case for Nov. 6.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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