U.S. Supreme Court settles on venue for LCD price fixing litigation

JACKSON- The U.S. Supreme Court agreed recently to hear a case originating in Mississippi that could determine where future consumer protection litigation is heard.

Attorney General Jim Hood sued in 2011 manufacturers of liquid crystal display screens, accusing them of price-fixing from April 2001 to December 2006. He accused the companies of forcing consumers to pay too much for their products, in violation of the Mississippi Consumer Protection Act. LCD screens are used in computers and televisions.

LCD-MonitorHood brought the action in Hinds County Chancery Court, under the parens patriae theory, which allows a state’s top law enforcement officer to sue on behalf of his constituents.

The defendants removed the case from chancery court to Mississippi’s Southern District federal court. In court filings, defendants argued that the Class Action Fairness Act, passed by Congress in 2005, allowed the change in venue because the plaintiffs were the people of Mississippi, not Hood.

The CAFA defines as a “mass action” litigation with a lot of plaintiffs, similar to class action lawsuits. The law allows for the removal of mass actions to federal court.

Hood countered that the case, since it arose out of the parens patriae theory, belonged in federal court. Federal judge Carlton Reeves of Jackson agreed with Hood, and sent the case back to chancery court.

The defendants appealed to the Fifth Circuit Court of Appeals, which ruled that the case belonged in federal court. The Fifth Circuit is the only federal appeals court to rule that consumer protection litigation brought on behalf of a state belongs in federal court, and not state court. The appeals court issued a similar ruling relating to consumer protection litigation brought by Louisiana’s attorney general against Allstate Insurance Co.

Due to the split, the U.S. Supreme Court ruled on May 28 that it would hear the case.

That court had not set a briefing schedule as of Tuesday. Oral argument will likely occur this fall, since the case is listed is part of the court’s October sitting.

Hood

Hood

The justices will determine who the actual plaintiff is – Hood, or the people he sued LCD manufacturers on behalf of. Their ruling will likely determine the venue of future consumer protection litigation brought under the parens patriae theory.

“We are pleased that the court granted the state’s petition and look forward to having the case heard on the merits,” Hood said Monday in an email to the Mississippi Business Journal. “Corporations have abused federal jurisdiction by using the Class Action Fairness Act to remove consumer actions from state court to federal court. During Senate debate on the Class Action Fairness Act, even the senators supporting the act stated on the record that it would not apply to actions brought by attorneys general. I anticipate a vast majority of attorneys general joining in an amicus brief supporting our position, which three Federal Circuit Courts of Appeals upheld.”

Consumer interest group Public Citizen has filed an amicus brief in support of Hood’s position. The Washington, D.C.-based group was active in the process to pass the CAFA. In the brief, Public Citizen says the removal of parens patriae cases to federal “departs from the plain language and intent” of the law.

Public Citizen’s was only amicus brief listed on the supreme court’s website. The case name is Mississippi ex rel. Hood v. AU Optronics.

 

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