In Mississippi ex rel. Jim Hood v. AU Optronics Corp., Case No. 12-1036 (U.S. Jan. 14, 2014), the United States Supreme Court reversed the Fifth Circuit’s decision and held that a statewide antitrust lawsuit brought by the state attorney general seeking restitution for its citizens is not a CAFA mass action and is therefore not removable under CAFA.
Writing for the majority, Justice Sonia Sotomayor relied on CAFA’s plain text and said that a true mass action must involve monetary claims brought by 100 or more persons who are actually proposing to try claims jointly as named plaintiffs in a lawsuit. And, because the state of Mississippi was the only named plaintiff, CAFA’s removal requirements were not met. Specifically, the Court held that CAFA’s “100 or more persons” phrase meant actual named plaintiffs and does not include unnamed parties in interest to claims brought by the state AG. To rule otherwise, the Court held, would result in an “administrative nightmare” where courts would have to identify hundreds of thousands of unnamed parties and then decide how to manage each of those claims within the context of a mass action.
The good news for class action defense practitioners is that this opinion reinforced a few key concepts for removing cases. First, the opinion reiterated the fact that CAFA intended to lower diversity jurisdiction requirements in class actions. Second, the Court reinforced the difference in class and mass actions for the purposes of removal in holding that CAFA’s mass action provisions were intended merely as a backstop to ensure that CAFA’s relaxed class action jurisdictional rules could not be evaded by a suit that names a lot of plaintiffs rather than using the actual class action mechanism. Third, the Court reminded lower courts that it may look behind the pleadings in CAFA class action removal cases to ensure that the removal is consistent with the public policies behind CAFA.