State of Mississippi v. AU Optronics Corp., et al, No. 12-60704 (5th Cir. 2012)
Annotate this Case
Justia Opinion Summary
Want to stay in the know about new opinions from the Fifth Circuit US Court of Appeals?
Sign up for free summaries delivered directly to your inbox. Learn More ›
You already receive new opinion summaries from Fifth Circuit US Court of Appeals. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here.
Defendants, manufacturers and distributors of liquid crystal display (LCD) panels, jointly removed this case to federal district court on the grounds that (1) the action was a class action under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(1)(B), or (2) the action was a mass action under the CAFA. The State moved to remand the case to state court and the district court granted the motion. Because it was undisputed that there were more than 100 consumers, the court found that there were more than 100 claims at issue in this case. Further, no disqualifying exceptions to the term "mass action" was applicable. Consequently, the suit qualified as a mass action under the CAFA and the court found removal to be proper. Accordingly, the court reversed and remanded for further proceedings.
The court issued a subsequent related opinion or order on March 19, 2014.
Download PDF
Case: 12-60704 Document: 00512061193 Page: 1 Date Filed: 11/21/2012 IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED November 21, 2012 No. 12-60704 Lyle W. Cayce Clerk STATE OF MISSISSIPPI, ex rel Jim Hood, Attorney General, Plaintiff - Appellee v. AU OPTRONICS CORPORATION; AU OPTRONICS CORPORATION AMERICA, INCORPORATED; CHI MEI CORPORATION; CHIMEI INNOLUX CORPORATION, formerly known as Chi Mei Optoelectronics Corporation; CHI MEI OPTOELECTRONICS USA, INCORPORATED, formerly known as International Display Technology USA, Incorporated; CMO JAPAN COMPANY, LIMITED, formerly known as International Display Technology, Limited; HANNSTAR DISPLAY CORPORATION; HITACHI, LIMITED; JAPAN DISPLAY EAST, INCORPORATED; HITACHI ELECTRONIC DEVICES (USA); LG DISPLAY COMPANY, LIMITED, formerly known as LG Phillips LCD Company, Limited; LG DISPLAY AMERICA, INCORPORATED, formerly known as LGD LCD America, Incorporated; SAMSUNG ELECTRONICS COMPANY LTD; SAMSUNG SEMICONDUCTOR, INCORPORATED; SAMSUNG ELECTRONICS AMERICA, INCORPORATED; SHARP CORPORATION; SHARP ELECTRONICS CORPORATION; TOSHIBA CORPORATION; TOSHIBA MOBILE DISPLAY COMPANY, LIMITED, formerly known as Toshiba Matsushita Display Technology Company, Limited; TOSHIBA AMERICA ELECTRONIC COMPONENTS, INCORPORATED; TOSHIBA AMERICA INFORMATION SYSTEMS, INCORPORATED, Defendants - Appellants Appeal from the United States District Court for the Southern District of Mississippi Case: 12-60704 Document: 00512061193 Page: 2 Date Filed: 11/21/2012 No. 12-60704 Before JOLLY, CLEMENT, and ELROD, Circuit Judges. E. GRADY JOLLY, Circuit Judge: Appellants, manufacturers and distributors of liquid crystal display ( LCD ) panels, jointly removed this case to federal district court on the grounds that (1) the action was a class action under the Class Action Fairness Act ( CAFA ), 28 U.S.C. § 1332(d)(1)(B), or (2) the action was a mass action under the CAFA, § 1332(d)(11)(B). The State of Mississippi, Appellee, then moved to remand the case to state court, and the district court granted the motion. Because we find that the suit qualifies as a mass action under the CAFA, we find removal to be proper. Accordingly, we REVERSE the district court s remand order and REMAND for further proceedings. I. Ordinarily, a district court s remand order is not appealable, see 28 U.S.C. § 1447(d); however, there is a statutory exception to this rule that grants federal appellate courts discretionary jurisdiction to review remand orders in actions that are removed under the CAFA. See 28 U.S.C. § 1453(c). We review de novo a district court s order remanding an action that was removed pursuant to the CAFA. Admiral Ins. Co. v. Abshire, 574 F.3d 267, 272 (5th Cir. 2009). II. Under the CAFA, removal of a suit to federal court is proper if the suit qualifies as a class action or a mass action. See 28 U.S.C. § 1453(b); 28 U.S.C. § 1332(d)(11)(A). Our analysis begins by considering whether Mississippi s suit against the LCD manufacturers qualifies as a class action, a question that can be answered quickly in the negative. Under the relevant provision, a class action is defined as any civil action filed under Rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action. 28 U.S.C. § 1332(d)(1)(B). Because Mississippi did 2 Case: 12-60704 Document: 00512061193 Page: 3 Date Filed: 11/21/2012 No. 12-60704 not bring this suit under Rule 23 or a rule of judicial procedure and because Mississippi state law explicitly prohibits class actions, see Am. Bankers Ins. Co. of Fla. v. Booth, 830 So. 2d 1205, 1214 (Miss. 2002) ( [T]he rule is that Mississippi does not permit class actions, even equitable class actions in chancery court. ), the only question is whether the suit is brought under a state statute similar to Rule 23. This suit was brought under the Mississippi Consumer Protection Act ( MCPA ), Miss. Code Ann. § 75-24-1 et seq., and the Mississippi Antitrust Act ( MAA ), Miss. Code Ann. § 75-21-1 et seq. The MCPA explicitly forbids class actions, see Miss. Code Ann. § 75-24-15(4), and the MAA does not require that suits brought by the State satisfy any requirements that resemble the adequacy, numerosity, commonality, and typicality requirements of class action lawsuits under Rule 23, see Miss. Code Ann. § 75-21-7. It is thus clear that neither the MCPA nor the MAA, the statutes under which Mississippi brings the present suit, are similar to Rule 23. Accordingly, we hold that the district court did not err in finding that the suit does not qualify as a class action under the CAFA. III. This conclusion brings us to the more difficult question: whether this suit qualifies as a mass action under the CAFA. Under the terms of the statute, a mass action is defined as a civil action in which (1) monetary relief claims of (2) 100 or more persons (3) are proposed to be tried jointly on the ground that the plaintiffs claims involve common questions of law or fact and (4) include an amount in controversy exceeding $75,000. 28 U.S.C. § 1332(d)(11)(B)(i). It is undisputed that the present suit involves monetary relief claims, see Compl. 54, ¶¶ 2, 3, and that the relief sought satisfies the amount in controversy requirement. Therefore, the decisive question is whether the suit involves the claims of 100 or more persons. If so, the suit is a mass action, and removal is proper. 3 Case: 12-60704 Document: 00512061193 Page: 4 Date Filed: 11/21/2012 No. 12-60704 In Louisiana ex rel. Caldwell v. Allstate Insurance Company, we first considered the application of the mass action provision to a suit filed by a state attorney general on behalf of a subset of injured citizens. 536 F.3d 418, 429-30 (5th Cir. 2008). Caldwell instructs us to pierce the pleadings and look at the real nature of a state s claims so as to prevent jurisdictional gamesmanship. See id. at 424-25, 429 ( It is well-established that in determining whether there is jurisdiction, federal courts look to the substance of the action and not only at the labels that the parties may attach . . . . This court has recognized that defendants may pierce the pleadings to show that the claim has been fraudulently pleaded to prevent removal. (citations and inset quotation marks omitted)). The Caldwell claim-by-claim approach contrasts with other circuits that look to a state s complaint as a whole and then subjectively determine if the state alone is the real party in interest. See, e.g., Nevada v. Bank of Am. Corp., 672 F.3d 661, 670 (9th Cir. 2012); LG Display Co., Ltd. v. Madigan, 665 F.3d 768, 774 (7th Cir. 2011). Caldwell, binding precedent on this court, effectively defined persons in the mass action context to be the real parties in interest as to the respective claims. See Caldwell, 536 F.3d at 424-25, 429. We follow its approach. The real parties in interest in Mississippi s suit are those more than 100 persons who, by substantive law, possess[] the right sought to be enforced, and not necessarily the person who will ultimately benefit from the recovery. Richards v. Reed, 611 F.2d 545, 546 n.2 (5th Cir. 1980) (inset quotations omitted); Charles Alan Wright & Mary Kay Lane, LAW OF FEDERAL COURTS 492 (6th ed. 2002). We find that the real parties in interest are numerous far in excess of 100. Contrary to the State s assertions, Mississippi is thus not the sole party in interest. Instead, the State (as a purchaser of LCD products) and individual citizens who purchased the products within Mississippi possess rights sought to be enforced. We have several bases for this conclusion. 4 Case: 12-60704 Document: 00512061193 Page: 5 Date Filed: 11/21/2012 No. 12-60704 First, the complaint: When the State sued the LCD manufacturers, its claim was that the manufacturers had engaged in a conspiracy to fix prices for LCD panels and that their conduct artificially inflated prices, which harmed the consumers who were forced to pay higher prices. In its complaint, the State includes a series of diverse statements about the nature of the injury involved. At times, it seems to be arguing the injury is generalized harm to the State as a whole. See Compl. 2, ¶ 1 ( [T]he State of Mississippi has a quasi-sovereign interest in the direct and indirect effect of defendants illegal conspiracy on the state s economy and the citizens economic condition. ); Compl. 51, ¶ 194(g) ( The economy of the state of Mississippi has been damaged. ). At other times, the Complaint indicates the injury it seeks to remedy with money damages is the injury suffered by the purchaser consumer. See Compl. 38, ¶ 145 ( Defendants conspiracy to raise . . . the price of LCD panels at artificial levels resulted in harm to Plaintiff and other indirect-purchaser consumers in Mississippi . . . ) (emphasis added); Compl. 44, ¶ 169 ( [D]efendants have passed through . . . to their customers 100% of the supra-competitive price increases that resulted from the defendants conspiracy . . . ) (emphasis added); Compl. 51, ¶ 194(f) ( Plaintiff and other Mississippi indirect purchasers have paid supra-competitive, artificially inflated prices for LCD products. ) (emphasis added); Compl. 54, ¶ 3 (Plaintiff is bringing this action on behalf of Mississippi residents . . . ) (emphasis added). We think the variety of allegations demonstrate that the real parties in interest include not only the State, but also individual consumers residing in Mississippi. Second, the state statutes: Neither the MCPA nor the MAA, the statutory bases of the State s suit, give the State sole authority to recover for particularized injuries suffered by consumers. The MCPA gives the State authority to seek injunctive relief and civil penalties, see Miss. Code Ann. §§ 7524-9; 75-24-19(1)(b), and may indeed be interpreted as giving the State authority 5 Case: 12-60704 Document: 00512061193 Page: 6 Date Filed: 11/21/2012 No. 12-60704 to seek restitution for its own injury, see Miss. Code Ann. § 75-24-11. However, no provision of the MCPA gives the State authority to enforce claims for injuries suffered by others. In other words, the statute does not authorize public collection of private damages. Similarly, the MAA allows the State to sue for injunctive relief and civil penalties, see Miss. Code Ann. §§ 75-21-1; 75-21-7, but not for restitution for injuries suffered by parties other than the State, see §§ 7521-9; 75-21-37. To be sure, there is one unpublished Mississippi state case (from a chancery trial court) that lends support, under § 75-24-11, for the proposition that a court may restore damages to an individual for a particularized injury, and also to the state on the basis of some generalized harm. See Miss. ex rel. Hood v. BASF Corp., No. 56863, 2006 WL 308378 (Miss. Ch. Jan. 17, 2006). But even if BASF Corporation were a more authoritative precedent, it cannot be denied that the case before us is distinguishable; the crucial question before us was not dealt with by the BASF Corporation court namely, who are the real parties in interest? Our case involves generalized and individual harms, which demonstrate the real parties in interest are both the State and consumers. In short, BASF Corporation does not provide the State with the power it seeks to assert ownership over all individualized claims in the name of the State. Third and finally, common law parens patriae authority: Even assuming arguendo that the State has parens patriae standing to bring the claims here (an issue that we do not decide), that standing does not change the fact that Mississippi is acting, not in its parens patriae capacity, but essentially as a class representative. Although the relevant statutory provision does not appear on the face of the complaint, we note that Mississippi law gives the state attorney general powers at common law. Miss. Code Ann. § 7-5-1. The State argues that parens patriae authority under common law allows the attorney general to bring the current suit, which, as we have seen, involves alleged state injury based on harm suffered by individual claimants. This argument fails to account 6 Case: 12-60704 Document: 00512061193 Page: 7 Date Filed: 11/21/2012 No. 12-60704 for the precise nature of the injury in this case and thus also fails to establish the State as the sole party in interest. As a general background principle, Caldwell reminds us that there are limitations on states parens patriae authority. 536 F.3d at 425-28 ( [I]t is clear that . . . there are some limitations [on parens patriae actions], particularly when a state is seeking to recover damages for alleged injuries to its economy. ). The Supreme Court, for example, has stated that when a state pursues the interests of a private party, the state is not asserting its sovereign interest, and the state remains only a nominal party. Snapp v. Puerto Rico, 458 U.S. 592, 602 (1982). That directive may apply here, where Mississippi is pursuing the interests of LCD purchasers. And even ignoring the Supreme Court and Caldwell s caveats regarding the over-extension of parens patriae to suits to which that concept should not attach, two additional considerations demonstrate that the State is not the sole party in interest. Mississippi law clearly prohibits double recovery for the same harm to respective class members. See City of Jackson v. Estate of Stewart ex rel. Womack, 908 So.2d 703, 711 (Miss. 2005). Thus, the state cannot recover for the injury to the consumers and still preserve the right of the consumers to recover, a right that the consumers clearly have under the statutes pursuant to which the suit is brought. See Miss. Code Ann. §§ 75-24-15; 75-21-9. In short, we have been directed to no statutory or common law that permits the State to extinguish the right and remedy the consumer has for his injury. There is, finally, the all too troubling suggestion by the plaintiff that Mississippi could obtain restoration for harm to individual citizens, yet keep that money for itself. We think that consideration, coupled with the reasons provided above, is enough to find against the State having carte blanche to recover for others injuries under common law parens patriae authority. 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 7 Case: 12-60704 Document: 00512061193 Page: 8 Date Filed: 11/21/2012 No. 12-60704 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. See 28 U.S.C. § 1332(d)(11)(B)(i). IV. This conclusion alone, however, does not yield a final result. The CAFA contains a number of disqualifying exceptions to the term mass action. Of these, the general public exception is relevant here. It provides that a suit is not a mass action if all of the claims in the action are asserted on behalf of the general public (and not on behalf of individual claimants or members of a purported class) pursuant to a State statute specifically authorizing such action. 28 U.S.C. § 1332(d)(11)(B)(ii)(III). But this public exception does not exempt this case from the CAFA and federal jurisdiction. The requirement that all of the claims be asserted on behalf of the public is not met here. As discussed above, individual consumers, in addition to the State, are real parties in interest, so there is no way that all of the claims are asserted on behalf of the general public. Accord Mississippi ex rel. Hood v. Entergy Mississippi, Inc., No. 3:08cv780, 2012 WL 3704935, at *15 (S.D. Miss. Aug. 25, 2012) (A finding that the State has brought [an] action in its representative capacity to recoup restitution for individual[s] . . . precludes application of the general public exception. ). We do, however, acknowledge the concern that finding the general public exception inapplicable here may render such statutory exception a dead letter (because finding a suit to be a mass action negates the possibility of the exception applying), and we welcome congressional clarification of this issue.1 1 The general public exception here, in the development of the law, has become somewhat problematical in the sense it reflects statutory surplusage when the State brings consumer-related actions such as the one before us today. See Antonin Scalia & Bryan A. 8 Case: 12-60704 Document: 00512061193 Page: 9 Date Filed: 11/21/2012 No. 12-60704 Nevertheless, the argument that our finding vitiates the application of the exception must yield to our responsibility to apply the unambiguous, express language of a statute as written. Davis v. Johnson, 158 F.3d 806, 810 (5th Cir. 1998). Here, doing precisely that (i.e., finding a suit to be a mass action because monetary relief claims of 100 or more persons are at issue) precludes us from finding that the general public exception applies. V. At its core, this case practically can be characterized as a kind of class action in which the State of Mississippi is the class representative. By proceeding the way it has, the plaintiff class and its attorneys seek to avoid the rigors associated with class actions (and avoid removal to federal court). See generally, Waltzing through a Loophole: How Parens Patriae Suits Allow Circumvention of the Class Action Fairness Act, 83 U. Colo. L. Rev. 549 (2012). Because this suit is a mass action under the terms of the CAFA, removal is proper.2 The judgment of the district court is therefore REVERSED, and the case is REMANDED for further proceedings. REVERSED and REMANDED. Garner, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 174 (1st ed. 2012) (discussing the surplusage canon of construction, which provides that [i]f possible, every word and every provision is to be given effect . . . . None should be ignored. None should be given an interpretation that causes it . . . to have no consequence (emphasis added)). If a court such as ours decides that the case must be considered on a claim-by-claim basis and is, therefore, a mass action, it has necessarily decided that not all of the claims are claims of the State and the public exception has no relevance. On the other hand, if, as other circuits have held, these cases complaints should be evaluated as a whole, and not on a claim-by-claim basis, such a decision means that the case is not a mass action because the State is the sole party in interest. Consequently, the public exception has no application. Thus, under either scenario, the public exception becomes statutory surplusage. 2 Nothing we have said denies the State of Mississippi the right to proceed with this case. It will simply proceed in federal, not state, court. 9 Case: 12-60704 Document: 00512061193 Page: 10 Date Filed: 11/21/2012 No. 12-60704 JENNIFER WALKER ELROD, Circuit Judge, concurring in the judgment: I concur in the judgment because the majority opinion is a fair application of our binding precedent, namely Louisiana ex rel. Caldwell v. Allstate Insurance Co., 536 F.3d 418 (5th Cir. 2008). I write separately, however, to express my concerns with Caldwell. Caldwell s claim-by-claim approach is problematic when applied to CAFA s mass action provision in parens patriae suits such as the instant case.1 Moreover, and just as troubling, applying Caldwell s reasoning to CAFA s general public exception may render the exception a dead letter in this circuit. We should reconsider Caldwell and correct our course in this area of the law. We have jurisdiction over this case only if it is a class action or a mass action under CAFA. For the reasons stated in the majority opinion, this is not a class action. The central issue, then, is whether Mississippi s lawsuit is a mass action. CAFA defines that term as: [A]ny civil action . . . 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, except that jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the jurisdiction amount requirement under [28 U.S.C. § 1332(a)]. 1 I disagree with the majority opinion s veiled assertion that this may not be a parens patriae suit because Mississippi is pursuing the interests of LCD purchasers. In its complaint, Mississippi identified a valid quasi-sovereign interest in preventing illegal antitrust conduct prohibited under MAA and MCPA. The facts in Mississippi s complaint also show that it sought restitution based, at least in part, on generalized harm to the Mississippi economy caused by Appellants price-fixing scheme. The LCD consumers may be real parties in interest under Caldwell s approach but that does not eviscerate Mississippi s asserted quasi-sovereign interest in the restitution claim. Moreover, the caveats to parens patriae authority that the majority opinion references apply only when the state is a nominal party in interest. The majority opinion never states that Mississippi is merely a nominal party in interest; to the contrary, it recognizes that the real parties in interest in this suit include both the State and individual consumers of LCD products. Furthermore, unlike in Caldwell, where the damages were to go to specific policyholders, Mississippi asserted both in its complaint and at oral argument that it would retain any restitution damages. 10 Case: 12-60704 Document: 00512061193 Page: 11 Date Filed: 11/21/2012 No. 12-60704 28 U.S.C. § 1332(d)(11)(B)(i). In Caldwell, we considered the application of this provision to a parens patriae suit. As the majority opinion explains, Caldwell essentially defined persons in the mass action context as the real parties in interest with respect to each claim in the suit. See 536 F.3d at 424, 429. In that case, Louisiana sued several insurance companies for conspiring to suppress competition and sought, among other things, treble damages on behalf of its citizens. Id. at 422 23. The defendants removed the case to federal court, argu[ing] that although labeled parens patriae, th[e] case [was] in substance and fact a . . . mass action under CAFA. Id. at 423. We evaluated Louisiana s suit on a claim-by-claim basis, rather than as a whole. Id. at 429 30. Using this approach, we concluded that Louisiana consumers were the real parties in interest with respect to the treble damages claim; therefore, the suit involved the monetary claims of 100 or more persons and (because it also met the other statutory requirements) was a mass action. Id. Here, as the majority opinion shows, applying the claim-by-claim approach leads to the conclusion that Mississippi consumers are the real parties in interest with respect to the state s restitution claim, so this is a mass action under CAFA.2 This result is the exact opposite of the outcome in many other 2 The majority opinion reaches this result using the claim-by-claim approach from Caldwell, but there are notable differences between Louisiana s claims in Caldwell and Mississippi s claims here. In Caldwell, Louisiana sued under the Louisiana Monopolies Act, which provided that any person who is injured in his business or property under the Monopolies Act shall recover[] [treble] damages. 536 F.3d at 429 (emphasis added) (quoting La. Rev. Stat. § 51:137). Because the Louisiana statute contemplated individual enforcement, the court reasoned that the policyholders, and not the State, [were] the real parties in interest. Id. (citation omitted); see also id. at 430 (concluding that there was no reason to believe that the policyholders were not the real parties in interest given that the purpose of antitrust treble damages provisions [is] to encourage private lawsuits by aggrieved individuals for injuries to their businesses or property (citing Hawaii v. Standard Oil Co., 405 U.S. 251, 262 (1972)). Here, Mississippi sued under MAA and MCPA, which specifically authorize the Attorney General to sue on behalf of the general public for violations of the respective statutes. 11 Case: 12-60704 Document: 00512061193 Page: 12 Date Filed: 11/21/2012 No. 12-60704 similar lawsuits around the country.3 That so many other courts are reaching a different result in cases that involve similarly-situated litigants and nearly identical claims suggests that we should consider whether we have staked out the correct position. I believe we have not. I. As an initial matter, I agree with Judge Southwick s dissenting opinion in Caldwell. Judge Southwick would have ordered remand of Louisiana s suit to state court because its complaint did not on its face present a class or mass action. Caldwell, 536 F.3d at 436 (Southwick, J., dissenting). In reaching that conclusion, Judge Southwick acknowledged two important principles: (1) the plaintiff is the master of his complaint, and (2) [d]oubts about propriety of See Miss. Code Ann. § 75-21-37 (providing direct statutory authority for Mississippi to enforce civil features of the antitrust laws . . . at law or in equity ); id. § 75-24-19(1)(b) (giving the attorney general direct statutory authority [to] recover on behalf of a state a civil penalty in a sum not to exceed [$10,000] per violation ). In addition, the Mississippi Attorney General has the powers of the Attorney General at common law. Id. § 7-5-1. Those powers include the right to institute, conduct and maintain all suits necessary for the enforcement of the laws of the State, preservation of order and the protection of public rights. Gandy v. Reserve Life Ins. Co., 279 So. 2d 648, 649 (Miss. 1973) (citations omitted). Simply put, this case turns on different facts and law than did Caldwell. 3 Several other states attorneys general and private plaintiffs filed actions against the makers of LCD flat panels based on the same alleged conduct that forms the basis for this suit. See, e.g., LG Display Co., Ltd. v. Madigan, 665 F.3d 768 (7th Cir. 2011); Illinois v. AU Optronics Corp., 794 F. Supp. 2d 845 (N.D. Ill. 2011); South Carolina v. AU Optronics Corp., No. 3:11 CV 731, 2011 WL 4344079 (D.S.C. Sept. 14, 2011). These cases essentially fall into two groups. Some were transferred to an MDL court in the Northern District of California. See In re TFT-LCD (Flat Panel) Antitrust Litig., No. 07-1827, 2011 WL 560593, at *1 (N.D. Cal. Feb. 15, 2011). Others, however, remained in the district courts to which they were removed these cases were first filed in state court and involved states attorneys general asserting only state law claims against the LCD defendants. See, e.g., South Carolina, 2011 WL 4344079, at *2. The MDL court handling the first group of cases has examined states interests in the actions as a whole when deciding real-party-in-interest questions. See In re TFT-LCD, 2011 WL 560593, at *3 4. The district courts dealing with the second set of cases have done the same, consistently remanding parens patriae suits back to state court. See, e.g., Illinois, 794 F. Supp. 2d at 859; South Carolina, 2011 WL 4344079, at *2. But see Mississippi ex rel. Hood v. Entergy Miss., Inc., No. 3:08-CV-780, 2012 WL 3704935, at *15 (S.D. Miss. Aug. 25, 2012) at *7 n.6 (following Caldwell because it believed it was duty bound to do so). 12 Case: 12-60704 Document: 00512061193 Page: 13 Date Filed: 11/21/2012 No. 12-60704 removal are resolved in favor of remand. Id. at 433 (citations omitted). Consistent with these principles, when we decide whether a suit is removable under CAFA, we should determine what the case is, not what it must be if all the relief requested is to be part of the litigation. Id. at 432 33. Of course, this view did not carry the day in Caldwell, but the development of case law outside this circuit since then suggests that we should take another look. Consistent with Judge Southwick s dissent, almost every court that has independently considered Caldwell s claim-by-claim approach has either questioned or disagreed with it.4 Indeed, every court of appeals to address the issue since Caldwell has rejected its approach. See AU Optronics Corp. v. South Carolina, ___F.3d___, Nos. 11 254 & 11 255, 2012 WL 5265799, at *6 (4th Cir. Oct. 25, 2012) (slip op.) (adopting the whole-case approach and rejecting the claim-by-claim approach ); Nevada v. Bank of Am. Corp., 672 F.3d 661, 670 (9th Cir. 2012) (acknowledging the court s adoption of the approach of looking at the case as a whole to determine the real party in interest, rather than the claim-byclaim approach adopted in Caldwell ); Madigan, 665 F.3d at 773 74 (referencing the courts that have questioned Caldwell s analysis and holding that an action was not a removable mass action under CAFA, even if the state was not a real party in interest for damages claims). Each of these decisions includes convincing reasons to discard the claim-by-claim approach, a few of which I discuss here. 4 See, e.g., cases cited supra n.2. Courts in other contexts (i.e., non-LCD cases) have also disagreed with Caldwell s approach. See, e.g., West Virginia ex rel. McGraw v. JPMorgan Chase & Co., 842 F. Supp. 2d 984, 997 98 (S.D. W. Va. 2012); Connecticut v. Moody s Corp., No. 3:10-CV-546, 2011 WL 63905, at *2 3 (D. Conn. Jan. 5, 2011); Missouri ex rel. Koster v. Portfolio Recovery Assocs., Inc., 686 F. Supp. 2d 942, 945 46 (E.D. Mo. 2010); Illinois v. SDS W. Corp., 640 F. Supp. 2d 1047, 1052 (C.D. Ill. 2009). But see West Virginia ex rel. McGraw v. Comcast Corp., 705 F. Supp. 2d 441, 449 50 (E.D. Penn. 2010) (concluding that Caldwell s framework is consistent with CAFA s goals). 13 Case: 12-60704 Document: 00512061193 Page: 14 Date Filed: 11/21/2012 No. 12-60704 First, the claim-by-claim approach does not find a foothold in CAFA s text. The Caldwell court resorted to CAFA s legislative history to rationalize its approach. 536 F.3d at 424; see Madigan, 665 F.3d at 773 (reasoning that Caldwell did not adopt the claim-by-claim approach based on any language in CAFA itself, nor is there any such language to be found ). Perhaps that is because CAFA s text does not suggest that, in a case in which a single plaintiff brings suit, a court should dissect the complaint to determine whether that plaintiff is the sole beneficiary of each basis for relief. This court has repeatedly cautioned against considering legislative history unless the text of a statute is ambiguous.5 See, e.g., Carrieri v. Jobs.com Inc., 393 F.3d 508, 518 19 (5th Cir. 2004); see also Chamber of Commerce of U.S. v. Whiting, 131 S. Ct. 1968, 1980 (2011) ( Congress s authoritative statement is the statutory text, not the legislative history. (quoting Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 568 (2005) (citations omitted)). There is no ambiguity here. Moreover, even assuming arguendo that the legislative development of CAFA were relevant, the Caldwell court acknowledged that CAFA s history reveals conflicting expressions of intent. See 536 F.3d at 424 n.4; see also Harvey v. Blockbuster, Inc., 384 F. Supp. 2d 749, 752 54 (D.N.J. 2005) (discussing CAFA s legislative history and concluding that Congress did not intend to encroach on the ability of states attorneys general to bring parens patriae actions). Compounding the absence of textual support for the claim-by-claim approach is the Supreme Court s directive that removal statutes should be strictly construed. Syngenta Corp. Prot., Inc. v. Henson, 537 U.S. 28, 32 (2002). This rule undermines the argument that a case is removable under CAFA even 5 I have previously expressed that I generally eschew the use of legislative history to determine a statute s intent. See, e.g., Villas at Parkside Partners v. City of Farmers Branch, Tex., 675 F.3d 802, 829 n.4 (5th Cir. 2012) reh g en banc granted, 688 F.3d 801 (5th Cir. 2012). 14 Case: 12-60704 Document: 00512061193 Page: 15 Date Filed: 11/21/2012 No. 12-60704 though it does not on its face satisfy the statute s requirements. See Caldwell, 536 F.3d at 433 (Southwick, J., dissenting). Furthermore, the rule should apply with particular force when the plaintiff is a state that sued in its own courts. Removing such a case to federal court implicates important principles of federalism, and considerations of comity [should] make us reluctant to snatch cases which a State has brought from the courts of that State, unless some clear rule demands it. Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 21 n.22 (1983); see also West Virginia ex rel. McGraw v. CVS Pharmacy, Inc., 646 F.3d 169, 178 (4th Cir. 2011), cert. denied, 132 S. Ct. 761 (2011) ( While it is true that West Virginia voluntarily entered into its own courts to enforce its laws, it did not voluntarily consent to removal of its case to a federal court, and a federal court should be most reluctant to compel such removal, reserving its constitutional supremacy only for when removal serves an overriding federal interest. ). Finally, the impetus for Caldwell s procedure to pierce the pleadings and look to the nature of each claim for relief instead of considering the essential nature and effect of the proceedings does not provide a compelling basis to persist with that approach. At the outset of its opinion, the Caldwell court recognized that Louisiana did not raise any objections to [the district court s] decision to pierce the pleadings or [its] procedure for doing so . . . . As such, that issue [was] waived. Caldwell, 536 F.3d at 425 (emphasis added). Therefore, while the Caldwell court referenced the proposition that federal courts look to the substance of the action when determining jurisdiction, id. at 424 (citations omitted), the court did not consider different methods for evaluating the substance (e.g., as a whole, as other circuits have done). The procedure stemming from the waived argument in Caldwell does not withstand the persuasive force of the analysis in the subsequent decisions rejecting it. 15 Case: 12-60704 Document: 00512061193 Page: 16 Date Filed: 11/21/2012 No. 12-60704 II. Beyond the problems of using the claim-by-claim approach for the mass action analysis, I am also concerned that its application to CAFA s general public exception will negate the exception altogether in this circuit. CAFA tells us not only what a mass action is, but also what it is not. See 28 U.S.C. § 1332(d)(11)(B)(ii)(I) (IV). Specifically, the general public exception provides: [T]he term mass action shall not include any civil action in which . . . all of the claims in the action are asserted on behalf of the general public (and not on behalf of individual claimants or members of a purported class) pursuant to a State statute specifically authorizing such action. 28 U.S.C. § 1332(d)(11)(B)(ii)(III). The majority opinion implicitly concludes that Caldwell s approach also governs our analysis of this exception. If that is correct, then there is no question that the exception does not apply in this case because, as the majority opinion states, there is no way that all of the claims are asserted on behalf of the general public. This result is troublesome. If we deny the applicability of the general public exception when individual consumers are parties in interest, then, as a practical matter, we will have eliminated the exception in this circuit. Caldwell specifies that a case is a mass action if more than 100 persons are the real parties in interest as to any claim for relief; and pursuant to CAFA s plain text, the general public exception cannot apply unless the case is a mass action. Under this framework, it is difficult to imagine a case that could be a mass action that also falls within the general public exception. See, e.g., Entergy Miss., 2012 WL 3704935, at *7 n.6, *15 (following Caldwell and concluding that the general public exception could not apply because [e]ven if the State has a quasi-sovereign interest in protecting Mississippi consumers . . . the presence of the discrete group of [citizens] who have a substantive legal right to receive restitution . . . means that all of the 16 Case: 12-60704 Document: 00512061193 Page: 17 Date Filed: 11/21/2012 No. 12-60704 claims in the action are not asserted on behalf of the general public ). In essence, our precedent has created a situation in which a case cannot satisfy the criteria of both the mass action provision and the general public exception.6 The majority opinion states that this concern must yield to our responsibility to apply the unambiguous, express language of a statute as written, but that misses the point. It is not CAFA s plain text that causes the problem, but rather our approach in applying the text. But for the claim-byclaim approach, we could give effect to both the mass action provision and the general public exception.7 In CAFA, Congress defined a category of cases that are mass actions and explicitly specified that certain cases shall not be included in that category. Our approach in applying the statute has essentially eliminated the latter provision, contrary to well-established canons of construction that counsel against interpretations that render parts of a statute meaningless. See, e.g., White v. Black, 190 F.3d 366, 368 (5th Cir. 1999) (citation omitted) (explaining that we must give words their ordinary meaning and . . . 6 I note some commentary consistent with this concern. See Dwight R. Carswell, Comment, CAFA and Parens Patriae Actions, 78 U. Chi. L. Rev. 345, 370 (2011) (recognizing that [l]awsuits that seek only injunctive relief or money that will go to the state treasury rather than to state citizens are not mass actions as defined by CAFA. Thus, it does not make sense to argue that these are the only lawsuits that will fall within the mass action exception. ). 7 The majority opinion also suggests that the general public exception is statutory surplasage under any analysis. In making that assertion, the majority opinion conflates the definition of persons in the mass action provision with claimants and members of a purported class in the general public exception. See Russell v. Law Enforcement Assistance Admin., 637 F.2d 354, 356 (5th Cir. 1981) (recognizing the well settled rule of statutory construction that where different language is used in the same connection in different parts of a statute it is presumed that the Legislature intended a different meaning and effect, and holding that a claimant under one provision was not an applicant or grantee within the meaning of another provision (citation omitted)); cf. Mohamad v. Palestinian Auth., 132 S.Ct. 1702, 1707 08 (2012) (holding that the term individual in the Torture Victim Protection Act meant natural person, but reiterating that courts should respect Congress decision to use different terms to describe different categories of people or things (citation omitted)). 17 Case: 12-60704 Document: 00512061193 Page: 18 Date Filed: 11/21/2012 No. 12-60704 not render as meaningless the language of a statute ); see also Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 174 (1st ed. 2012) (discussing the surplusage canon of construction, which provides that [i]f possible, every word and every provision is to be given effect . . . . None should be ignored. None should be given an interpretation that causes it . . . to have no consequence. (emphasis added)). Therefore, we should reconsider Caldwell s approach to ensure that every facet of CAFA may be given effect in our circuit. III. I concur in the judgment because the majority opinion is a fair application of our precedent in this challenging context. For the reasons above, however, we should reconsider that precedent and adopt a different approach for analyzing the removal of parens patriae suits under CAFA. 18
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
