JACKSON, Miss. (Legal Newsline) - Mississippi Attorney General Jim Hood is arguing that his lawsuits against six credit card companies should be heard in state court.
Hood's office filed a motion to remand the suits on Sept. 7, a month after the defendants had them removed to federal court. Hood, who hired two out-of-state firms to represent the State in the cases, argues that his case is neither a mass action nor a class action and must be heard in state court.
Class action lawsuits are removable to federal court under the Class Action Fairness Act. Hood says every federal circuit court of appeal has resolved the question of whether parens patriae actions filed by AGs constitute class actions.
"The procedural differences between an attorney general's action and a class action prevent the removal of an attorney general's suit on class action grounds," the motion says.
"Unlike private litigants, the attorneys general have statutory authority to sue in parens patriae and need not demonstrate standing through a representative injury nor obtain certification of a class in order to recover on behalf of individuals.
"Additionally, the attorney general is not required to provide notice, and recovery is paid into state funds rather than to the individual victims of fraud. Thus, no amount of linguistic gymnastics can change the State's (Consumer Protection Act) case into a class action."
Hood is one of three attorneys general to have filed suit over the companies' payment-protection products that carry monthly fees. The defendants in his cases are Discover, JPMorgan Chase & Co., HSBC Bank Nevada, Citigroup, Bank of America and Capital One.
Capital One had challenged the contingency fee agreements between Golomb & Honik of Philadelphia and two AGs - Hood and Hawaii's David Louie. The firm was involved in a private class action settlement reached by Capital One in 2010, then was hired by the AGs to pursue state claims.
U.S. District Judge Virginia Hernandez Covington ruled Aug. 22 against Capital One, which asked her to enter an injunction against the state lawsuits and sanction the law firm. She called the requests "inappropriate."
"The court's order approving the settlement and closing this case did not bind the states of Mississippi and Hawaii," she wrote. "The attorneys general of Mississippi and Hawaii were not defined as class members and did not have an opportunity to participate in the litigation or opt out of the class."
Covington wrote that granting the injunctions would usurp the claims of two sovereign states.
Capital One wrote that it did not matter if the attorneys general weren't parties to the settlement because the customers they are representing were. It also said plaintiffs attorney Richard Golomb agreed to effectuate the settlement agreement.
West Virginia Attorney General Darrell McGraw settled a similar case with Capital One in January. He did not use the Golomb firm, but hired it for a case against nine other companies that continues in Mason County Circuit Court.
The defendants in the Mississippi case have asked that the six cases be consolidated under U.S. District Judge William Henry Barbour.
Also representing the three attorneys general is Baron & Budd of Houston. Russell Budd gave Hood's campaign fund $10,000 in 2005.
From Legal Newsline: Reach John O'Brien at email@example.com.
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