South Carolina Business Law Blog

Hello FAA, My Old Friend South Carolina courts have frequently been called upon to consider the ways in which the Federal Arbitration Act (FAA) applies to those contracts containing clauses purporting to require arbitration. The recent S.C Court of Appeals decision Grant v. Kuhn Chevrolet is the latest example. The opinion and its result rests not on the application of South Carolina statutory or case law, but instead a line of United States Supreme Court (SCOTUS) cases applying the FAA to disputes over agreements to arbitrate. For some background and discussion on some of these cases, click  here , here , or here . While it may not be entirely remarkable to apply SCOTUS opinions in state court cases, the manner of contract interpretation mandated by SCOTUS for arbitration agreements is completely different than the way South Carolina courts interpret “everyday” contracts. More specifically, these SCOTUS opinions explicitly prohibit the use of several contract interpretation t

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

Third in a series of posts discussing the United States Supreme Court's decisions addressing arbitration, in the context of existing South Carolina case law and particularly the South Carolina Supreme Court's Herron decision. Previous posts are here and here . The Herron Result The South Carolina Supreme Court determined that the prohibition against class actions found in the parties' arbitration agreement was unenforceable because it conflicted with clear language in the Dealers Act allowing class actions. Because the arbitration agreement contained a severability clause ("[i]f any part of this Agreement shall be deemed or found unenforceable for any reason, the remainder of the Agreement shall remain enforceable"), the class action prohibition would be stricken from the agreement and the case could go forward in arbitration. However, the S.C. Supreme Court declined to compel the matter to arbitration, based upon a statement by counsel for Century at o

By Shaun Blake This post is the second in a series discussing the South Carolina Supreme Court’s decision in Herron in the context of recent United State Supreme Court decisions addressing arbitration. Click here for part one. Update: you may want to click here and listen while you read. Shady Grove In Shady Grove the Petitioner filed a putative class action in Federal District Court under CAFA to recover from Allstate interest on an insurance claim allowed under a New York law. The District Court dismissed the action after concluding it lacked jurisdiction because N.Y. Civ. Prac. Law Ann. §901(b) explicitly bars claimants from pursuing a class action to recover a "penalty" such as statutory interest. However, the U.S. Supreme Court ultimately reversed this decision in a plurality decision, holding that Rule 23 of the Federal Rules of Civil Procedure and §901(b) conflicted, and therefore Rule 23 allowed the Petitioner to pursue a federal class action despite

On April 27th, the United States Supreme Court issued its opinion in Stolt-Nielsen v. Animalfeeds invalidating an arbitration panel's determination that the parties' agreement implicitly allowed class arbitration. We intend to do some more in-depth analysis of Stolt-Nielsen (as well as the Supreme Court's Shady Grove Opinion ) as time permits, but in the meantime, the folks at the ADR Prof Blog offer some very thought-provoking takes on Stolt-Nielsen.

In Dukes v. Wal-Mart , the 9th Circuit Court of Appeals in San Francisco upheld a District Court decision certifying a nationwide class consisting of all women who have worked at Wal-Mart since the end of 1998. According to the ABA Journal , this is the largest class action suit ever, consisting of over one million plaintiffs. As noted by the Marquette Law School Faculty Blog , the dissent by Chief Judge Alex Kozinski sets up a Petition for Certiorari , and the case may be headed for the United States Supreme Court.