SCOTUS Holds State AG Action Not A Mass Action Subject To CAFA

more+
less-

On January 14, the U.S. Supreme Court unanimously held that an action filed by a state attorney general seeking restitution on behalf of hundreds of the state’s citizens who are not themselves parties to the action is not a “mass action” within the meaning of the Class Action Fairness Act (CAFA), and that such a suit cannot be removed to or filed in federal court under that Act. Mississippi ex rel. Hood v. AU Optronics Corp., No. 12-1036, 2014 WL 113485 (Jan. 14, 2013). In this case, defendants in a civil suit brought by the Mississippi Attorney General on behalf of allegedly harmed state citizens sought to invoke CAFA’s provision allowing the removal of “mass actions,” those “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 district court and Fifth Circuit looked to the “real parties in interest”—the more than 100 allegedly harmed state citizens—and determined that the case qualified as a mass action. The Court disagreed and held that under a plain reading of CAFA, “100 or more persons” refers to named plaintiffs, not unnamed parties in interest. The Court explained that (i) CAFA uses “persons” and “plaintiffs” the same way they are used in Federal Rule of Civil Procedure 20, i.e. as individuals who are proposing to join as “plaintiffs” in a single action; and (ii) “claims of 100 or more” unnamed indi­viduals cannot be “proposed to be tried jointly on the ground that the. . . claims” of some completely different group of named plaintiffs “involve common questions of law or fact.” Further, the Court determined that (i) the CAFA provision that a “mass action” removed to federal court may not be transferred unless a majority of plaintiffs so request would be unworkable if “plaintiffs” included unnamed real parties in interest; and (ii) Congress did not intend that courts conduct an inquiry into the real parties in interest. The Court declined to reach the issue of whether other state attorney general cases could be deemed class actions under different facts. In the rulings below, both the district and appeals courts rejected defendants’ argument that the suit was a class action. The Court also did not reach the issue present in the underlying decisions of whether the suit fell within the “general public” exemption to CAFA mass actions.