The U.S. Supreme Court granted cert last week to address whether a state attorney general’s parens patriae antitrust action is removable as a mass action under the Class Action Fairness Act of 2005. See Mississippi v. AU Optronics Corp., No. 12-1036 (U.S., certiorari granted 05/28/13).
As noted in the respondents’ papers, CAFA expands federal diversity jurisdiction for both “class actions” and “mass actions.” A “mass action” is defined as any civil action in which monetary relief claims of 100 or more persons are proposed to be tried jointly. The definitions of “class actions” and “mass actions” are connected, as a mass action is deemed to be a class action removable to federal court if it otherwise meets the provisions of a “class action,” including CAFA’s unique minimal diversity.
Determining whether the 100 person level is satisfied requires consideration of whose claims are actually being asserted, as the Court has held that diversity jurisdiction must be based upon the citizenship of
real parties to the controversy. E.g., Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 461 (1980). Where the action filed by the State seeks monetary relief claims on behalf of more than 100 unnamed persons who are among the real parties in interest and any one of them is diverse from any defendant, CAFA applies. This was the approach of the 5th Circuit here, 701 F.3d 796, 800 (5th Cir. 2012), under the so-called “claim-by-claim” approach. In contrast other courts look to the “state’s complaint as a whole.” E.g., AU Optronics Corp. v. South Carolina, 699 F.3d 385, 394 (4th Cir. 2012).
It will be interesting to see if the Court applies the notion from the unanimous CAFA decision in Standard Fire that treating a nonbinding stipulation (on damages) from the class rep before a class is even certified as if it were binding on the later class would “exalt form over substance, and run directly counter to CAFA’s primary objective: ensuring federal court consideration of interstate cases of national importance.”