Attorney for Miss. AG to U.S. SC: CAFA case is 'straightforward'

WASHINGTON (Legal Newsline) -- It is unclear, based on oral arguments Wednesday, how the U.S. Supreme Court will rule in a Mississippi case in which some contend state Attorney General Jim Hood is trying to circumvent the federal Class Action Fairness Act.

Based on a transcript of the arguments, most of the justices' questioning focused on whether the lawsuit State of Mississippi ex rel. Hood v. AU Optronics Corp. qualified as a "mass action" under CAFA.

Attorney Jonathan Massey, of Massey & Gail LLP and who argued on behalf of Hood Wednesday, called the case "straightforward."

"There is only one plaintiff in the case, the state of Mississippi," he told the justices. "It is not a citizen for purposes of diversity jurisdiction, and therefore, the requirements of even minimal diversity, let alone the 100-person numerosity requirement of CAFA, cannot be met."

The justices must decide if CAFA's requirement that both class and mass actions belong in federal court applies to parens patriae suits filed by state attorneys general.

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

The Fifth Circuit found that the suit qualified as a "mass action" under CAFA.

According to the act, mass actions are cases "in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact."

The companies being sued, six liquid crystal display manufacturers, and the Fifth Circuit contend the act applies to parens patriae suits because individual consumers are the real parties in interest in the case. But Hood argues that the state was the only plaintiff, and so CAFA doesn't apply.

Hood also contends that the Fifth Circuit's decision last November contradicts four other cases brought by state attorneys general against the same companies.

He and a group of 46 other state attorneys general -- who filed a brief in support of Hood in July -- call the Fifth Circuit ruling an "affront" to states' ability to bring parens patriae cases and "warrants plenary review."

The attorneys general, in siding with Hood, argue the Fifth Circuit imposed a "novel limit" on parens patriae authority in ruling that the removal of the lawsuit to a federal court was proper.

"Essentially, the attempt to force state actions into the mass action definition is a square-peg-round-hole kind of problem," Massey told the justices.

"The mass action definition addresses the situation of mass consolidation or mass joinder when there are 100 individual plaintiffs or more in a case. And CAFA provides that there's federal jurisdiction over such a case. But that does not apply to this situation.

"CAFA refers to real plaintiffs asserting concrete claims and further provides that those claims must be proposed to be tried jointly. None of that happens in a parens patriae case where the state is the only plaintiff."

But the companies argue CAFA doesn't limit states' powers. Instead, they say the case is one of simple statutory interpretation.

"Our position, of course, is that the Mississippi statute requires that the money goes to the Mississippi citizens, and that the attorney general here is basically suing as a representative or a conduit for those citizens," attorney Christopher Curran, of law firm White & Case and who argued on behalf of the companies, told the justices.

"The fact that those citizens, many of those citizens, not all of them, the fact that many of them have settled and have resolved the claims in the multidistrict litigation, that means that there is going to be a fight in one court or another -- we think it should be in a federal court; the attorney general thinks the state court -- over what the preclusive effects are of that prior settlement."

He continued, "We view this case as nothing more than an attempt to double dip."

Click here to read the complete transcript of the arguments.

Hood, who critics say shows favoritism to trial lawyers donors to his political campaigns, filed a lawsuit against AU Optronics in 2011. In the case, Hood sued on behalf of the state, communities and residents who purchased LCDs. It all relates to a 2006 U.S. Department of Justice grand jury investigation into price-fixing allegations against LCD makers.

In his suit, Hood named six LCD manufacturers also named in private class-action suits. Of the 206 paragraphs in the filing, 176 of them are identical or nearly identical to the ones in the private class actions. Zimmerman Reid, one of the firms Hood hired as special assistants to litigate the case for the state, filed the private class actions.

Several states signed a $539 million settlement with the LCD makers. But Mississippi, California, Illinois, South Carolina and Washington decided to pursue cases in their state courts. The defendant companies removed each of the cases, but each state successfully fought to have the cases sent back to state court, except for Mississippi.

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