South Carolina Business Law Blog

Per the United States Supreme Court's unanimous ruling in Mississippi v. AU Optronics Corp. (issued on January 14, 2014), a state's lawsuit seeking restitution for the benefit of its citizens does not meet the definition of a "mass action" under the Class Action Fairness Act of 2005 (CAFA) and cannot be removed to federal court. Background   CAFA defines "mass action" as "any 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."  28 U.S.C Section 1332(d)(11)(B)(i). This case reached the Supreme Court following the 5th Circuit's determination that Mississippi's lawsuit against AU Optronics qualified as a "mass action" under CAFA.  According to the 5th Circuit, even though the State of Mississippi was the only "named plaintiff," the "real parties in interest" w

In AU Optronics Corporation and LG Display Co. v. State of South Carolina , the 4th Circuit Court of Appeals considered for the first time the issue of whether a state's lawsuit pursuing claims that may benefit some of its citizens is a "mass action" under the Class Action Fairness Act of 2005  ("CAFA"). BACKGROUND The State of South Carolina brought separate actions against Defendants AU Optronics and LG Display (citizens of states other than South Carolina) in state court (Richland County) under the S.C. Antitrust Act and the SC Unfair Trade Practices Act (SCUTPA) and alleging a price-fixing conspiracy involving LCD panels.   The suits sought civil forfeitures, statutory penalties, and restitution for those South Carolina individuals who had purchased products utilizing these panels.    Defendants removed the actions to the District of South Carolina, alleging that the cases satisfied the "minimal diversity" standards of  CAFA as “class