In a case involving Mississippi Attorney General Jim Hood, who had sued liquid-crystal display (LCD) makers on behalf of citizens of his state, the U.S. Supreme Court has unanimously ruled states’ claims against corporate defendants on behalf of their citizens may be pursued in their state courts. The opinion, written by Justice Sonia Sotomayor, said that while the Class Action Fairness Act of 2005, which was designed to limit class action suits, lets defendants remove “mass actions” from state to federal court, the law requires that a “mass action” must involve monetary claims brought by 100 or more persons who propose to try those claims jointly as named Plaintiffs. Because the State of Mississippi is the only named Plaintiff in case brought by Attorney General Hood, the high court said the case must be remanded to state court.
The suit was filed by Attorney General Hood seeking restitution for citizens. Named as defendants were units of Sharp Corp. and AU Optronics Corp. The companies sought to move the suit into federal court, where they expected they would fare better than in state court. It was alleged in the suit that the LCD makers fixed prices and overcharged for their products in violation of the Mississippi Consumer Protection Act. LCD screens are used in computers and televisions.
More than a dozen states have sued LCD makers over an alleged conspiracy among the companies to fix prices. Defense lawyers have complained that there’s a growing trend of Plaintiff attorneys teaming up with states’ attorneys general to bring cases on behalf of citizens as a way of circumventing the 2005 law. Clearly, the Class Action Fairness Act was never intended to apply to such cases. The Fifth Circuit Court of Appeals ruled that the case belonged in federal court but now the Supreme Court has sent it back to the state courts. This was a very good result for state attorneys general and for the citizens they represent.
Source: Insurance Journal
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