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Supreme Court rules on 'mass action' suit

The US Supreme Court [official website] ruled [opinion, PDF] Tuesday in Mississippi ex rel. Hood v. AU Optronics Corp. [SCOTUSblog backgrounder] that the lawsuit in question is not a "mass action" suit under the Class Action Fairness Act (CAFA) [text] of 2005, reversing the previous holding [opinion, PDF] of the US Court of Appeals for the Fifth Circuit. CAFA allows "mass action" suits, which it defines as those in which 100 or more persons are named as plaintiffs, to be removed from state to federal court. Previously both the district and circuit courts hearing the case found it to be a "mass action" under the CAFA because Mississippi was bringing the suit on the behalf of a large number of its citizens. The Supreme Court reversed, holding that the "100 or more persons" phrase of the CAFA was not intended to encompass counting of unnamed persons with an interest in the claim, and since Mississippi is the only plaintiff named in the suit it is not a mass action. In its reasoning the court stated that to expand the definition of "plaintiff" to include unnamed parties with a real interest in the suit would distort the definition of the term to an unrecognizable degree. Construing "plaintiff" to include not just the named parties to a suit but also any person who might benefit from the claim would create an "administrative nightmare" that Congress clearly could not have intended. The result is a failure of federal jurisdiction mandating that the case be remanded to state court to be tried on the merits.

The court heard oral arguments [JURIST report] in the case in November. The Court heard [JURIST report] another case relating to CAFA last January in The Standard Fire Insurance Co. v. Knowles, which presented the question of whether a class of persons under the CAFA can avoid a removal of the case to federal court if the amount claimed by each plaintiff is less than the statutorily stated amount of $75,000. The court ruled on the case in March, holding [JURIST report] that a stipulation to keep damages below a certain amount by a single plaintiff is not enough to bind the whole class named in the suit.

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