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AGs file brief to U.S. SC in support of Hood in dispute over federal jurisdiction

By Jessica M. Karmasek | Jul 30, 2013

WASHINGTON (Legal Newsline) -- A group of 46 state attorneys general are backing Mississippi Attorney General Jim Hood's efforts to have a November ruling by the U.S. Court of Appeals for the Fifth Circuit overturned by the U.S. Supreme Court.

In May, the nation's high court agreed to decide whether federal courts have jurisdiction over lawsuits filed in state courts by attorneys general on behalf of consumers.

Oral arguments in Mississippi ex rel Hood v. AU Optronics Corp. will be scheduled for the fall term.

This week, a vast majority of the nation's attorneys general filed an amicus brief with the court, agreeing with Hood that the Fifth Circuit's decision "warrants plenary review."

The attorneys general, in their 31-page brief, said the Fifth Circuit imposed a "novel limit" on parens patriae authority in ruling that the removal of a lawsuit involving liquid crystal display panels to a federal district court was proper.

"The Fifth Circuit's approach forces States to litigate in federal court cases they bring in their own courts, under their own laws, for conduct occurring within their own borders. Worse, this approach encourages federal courts to override a State's determination that a particular action and mode of relief will serve the public interest," they wrote.

"At the same time, the Fifth Circuit's rule has absurd practical consequences for the State as litigant and for the proper construction and consistent application of state law."

The attorneys general continued, "Because the decision below upends entrenched principles of federal-state comity and yields absurd results in practice, the amici States urge this Court to reverse that decision and hold that Mississippi's parens patriae suit was not a mass action subject to federal removal under CAFA (federal Class Action Fairness Act)."

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 CAFA.

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.

"First, it is beyond reasonable dispute that the Fifth Circuit's decision directly conflicts with the decisions of the Fourth, Seventh and Ninth Circuits. The Fifth Circuit's judgment also conflicts with this court's precedent regarding the nature of parens patriae actions, the real party in interest test, and the requirement that removal statutes such as CAFA be strictly construed," Hood wrote in his Feb. 19 petition to the Supreme Court.

"The decision below involves an important and recurring issue of federal law and runs counter to deeply-rooted principles of federalism. The Fifth Circuit's decision will result in additional, wasteful jurisdictional battles and administrative complexity. Review by this court is amply warranted."

Montana Attorney General Tim Fox, who is one of the attorneys general supporting Hood in the appeal, said the Fifth Circuit's decision has had an effect on his own state.

"This precedent has directly affected Montana, as we've had at least one of our consumer protection cases removed to Montana federal court, and then transferred to a Louisiana federal court," he said in a statement Monday.

"Additionally, nearly all state attorneys general agree that the CAFA should not be interpreted in a manner that takes away the sovereign right of the states to choose state courts as their preferred litigation forum."

Also joining the brief: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

From Legal Newsline: Reach Jessica Karmasek by email at

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