State attorneys general are a diverse bunch, and their posture on policy and legal issues often reflects that of the states they represent. Think about the response to the Affordable Care Act. Twenty-eight state attorneys general joined lawsuits challenging it, while many of the others were among its staunchest defenders. But when the Supreme Court convenes Wednesday to hear argument in Mississippi v. AU Optronics, the state attorneys general will present a united front. That's not surprising given that the case presents a challenge to their authority and jurisdiction.
The issue before the court is whether a defendant sued by a state AG for restitution or damages incurred by injured consumers can move (or “remove”) the lawsuit from state to federal court. More broadly, the case offers the Roberts court an opportunity to limit the reach of state attorneys general.
When Congress enacted the Class Action Fairness Act of 2005, it expanded federal jurisdiction to class actions and similar mass actions that involved the claims of 100 or more people. At the time, Congress noted that state courts often show bias against out-of-state defendants and keep cases of national importance out of federal courts.
In Mississippi v. AU Optronics, the court will decide whether a case that otherwise satisfies all of CAFA's requirements can still remain in state court merely because it was filed by a state attorney general instead of private plaintiffs. The AGs often file such cases, as the Mississippi attorney general did in this case, under the doctrine of parens patriae. That term literally means "parent of the country," but over time it has come to embody an undefined notion of jurisdiction by the state over issues of interest and importance to its citizens.
The Supreme Court has nibbled around the edges of defining when states can assert parens patriae jurisdiction, but has failed to offer precise boundaries for the scope of an AG's parens patriae authority. For example, it has said a state may bring an action to vindicate a “quasi-sovereign” interest, but has not clarified what constitutes such an interest.
In a 2010 case, the court described a state's interest in ensuring an equitable division of an interstate river as "precisely the type of interest that the State, as parens patriae, represents on behalf of its citizens.” The court has also noted that to assert its parens patriae authority, a state must "be more than a nominal party” and must "articulate an interest apart from the interests of particular private parties.” If the Supreme Court strictly applies those standards during the AU Optronics argument, the attorneys general might be in for a rough ride.
The claims against AU Optronics arise from allegations that a group of foreign companies conspired to fix the prices of LCD panels. As a result, the AG says, consumers paid inflated prices. The only connection to Mississippi is that some of the consumers of products with AUO’s panels hailed from the state. Mississippi wants restitution for those consumers' alleged overpayments.
The Mississippi attorney general filed in state court, arguing that because its case is brought by the state as a parens patriae action, it is exempt from CAFA. AU Optronics responds that the statute expressly covers all cases “in which monetary relief claims of 100 or more persons are proposed to be tried jointly.”
There is no reason to believe CAFA meant to exempt lawsuits filed by state attorneys general. To the contrary, while the legislation was being considered, Congress rejected a proposed amendment that would have expressly excluded suits brought by state attorneys general.