State of Mississippi v. AU Optronics Corporation , 701 F.3d 796 ( 2012 )

Case: 12-60704 Document: 00512061193 Page: 1 Date Filed: 11/21/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
November 21, 2012
No. 12-60704 Lyle W. Cayce
Clerk
STATE OF MISSISSIPPI, ex rel Jim Hood, Attorney General,
Plaintiff - Appellee
v.
AU OPTRONICS CORPORATION; AU OPTRONICS CORPORATION
AMERICA, INCORPORATED; CHI MEI CORPORATION; CHIMEI
INNOLUX CORPORATION, formerly known as Chi Mei Optoelectronics
Corporation; CHI MEI OPTOELECTRONICS USA, INCORPORATED,
formerly known as International Display Technology USA, Incorporated;
CMO JAPAN COMPANY, LIMITED, formerly known as International
Display Technology, Limited; HANNSTAR DISPLAY CORPORATION;
HITACHI, LIMITED; JAPAN DISPLAY EAST, INCORPORATED; HITACHI
ELECTRONIC DEVICES (USA); LG DISPLAY COMPANY, LIMITED,
formerly known as LG Phillips LCD Company, Limited; LG DISPLAY
AMERICA, INCORPORATED, formerly known as LGD LCD America,
Incorporated; SAMSUNG ELECTRONICS COMPANY LTD; SAMSUNG
SEMICONDUCTOR, INCORPORATED; SAMSUNG ELECTRONICS
AMERICA, INCORPORATED; SHARP CORPORATION; SHARP
ELECTRONICS CORPORATION; TOSHIBA CORPORATION; TOSHIBA
MOBILE DISPLAY COMPANY, LIMITED, formerly known as Toshiba
Matsushita Display Technology Company, Limited; TOSHIBA AMERICA
ELECTRONIC COMPONENTS, INCORPORATED; TOSHIBA AMERICA
INFORMATION SYSTEMS, INCORPORATED,
Defendants - Appellants
Appeal from the United States District Court
for the Southern District of Mississippi
Case: 12-60704 Document: 00512061193 Page: 2 Date Filed: 11/21/2012
No. 12-60704
Before JOLLY, CLEMENT, and ELROD, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
Appellants, manufacturers and distributors of liquid crystal display
(“LCD”) panels, jointly removed this case to federal district court on the grounds
that (1) the action was a “class action” under the Class Action Fairness Act
(“CAFA”), 28 U.S.C. § 1332(d)(1)(B), or (2) the action was a “mass action” under
the CAFA, § 1332(d)(11)(B). The State of Mississippi, Appellee, then moved to
remand the case to state court, and the district court granted the motion.
Because we find that the suit qualifies as a mass action under the CAFA, we find
removal to be proper. Accordingly, we REVERSE the district court’s remand
order and REMAND for further proceedings.
I.
Ordinarily, a district court’s remand order is not appealable, see 28 U.S.C.
§ 1447(d); however, there is a statutory exception to this rule that grants federal
appellate courts discretionary jurisdiction to review remand orders in actions
that are removed under the CAFA. See 28 U.S.C. § 1453(c). We review de novo
a district court’s order remanding an action that was removed pursuant to the
CAFA. Admiral Ins. Co. v. Abshire, 574 F.3d 267, 272 (5th Cir. 2009).
II.
Under the CAFA, removal of a suit to federal court is proper if the suit
qualifies as a “class action” or a “mass action.” See 28 U.S.C. § 1453(b); 28
U.S.C. § 1332(d)(11)(A). Our analysis begins by considering whether
Mississippi’s suit against the LCD manufacturers qualifies as a “class action,”
a question that can be answered quickly in the negative. Under the relevant
provision, a class action is defined as “any civil action filed under Rule 23 of the
Federal Rules of Civil Procedure or similar State statute or rule of judicial
procedure authorizing an action to be brought by 1 or more representative
persons as a class action.” 28 U.S.C. § 1332(d)(1)(B). Because Mississippi did
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not bring this suit under Rule 23 or a rule of judicial procedure and because
Mississippi state law explicitly prohibits class actions, see Am. Bankers Ins. Co.
of Fla. v. Booth, 830 So. 2d 1205, 1214 (Miss. 2002) (“[T]he rule is that
Mississippi does not permit class actions, even equitable class actions in
chancery court.”), the only question is whether the suit is brought under a state
statute “similar” to Rule 23. This suit was brought under the Mississippi
Consumer Protection Act (“MCPA”), Miss. Code Ann. § 75-24-1 et seq., and the
Mississippi Antitrust Act (“MAA”), Miss. Code Ann. § 75-21-1 et seq. The MCPA
explicitly forbids class actions, see Miss. Code Ann. § 75-24-15(4), and the MAA
does not require that suits brought by the State satisfy any requirements that
resemble the adequacy, numerosity, commonality, and typicality requirements
of class action lawsuits under Rule 23, see Miss. Code Ann. § 75-21-7. It is thus
clear that neither the MCPA nor the MAA, the statutes under which Mississippi
brings the present suit, are “similar” to Rule 23. Accordingly, we hold that the
district court did not err in finding that the suit does not qualify as a “class
action” under the CAFA.
III.
This conclusion brings us to the more difficult question: whether this suit
qualifies as a “mass action” under the CAFA. Under the terms of the statute, a
mass action is defined as a civil action in which (1) monetary relief claims of (2)
100 or more persons (3) are proposed to be tried jointly on the ground that the
plaintiffs’ claims involve common questions of law or fact and (4) include an
amount in controversy exceeding $75,000. 28 U.S.C. § 1332(d)(11)(B)(i). It is
undisputed that the present suit involves “monetary relief” claims, see Compl.
54, ¶¶ 2, 3, and that the relief sought satisfies the amount in controversy
requirement. Therefore, the decisive question is whether the suit involves the
claims of “100 or more persons.” If so, the suit is a mass action, and removal is
proper.
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In Louisiana ex rel. Caldwell v. Allstate Insurance Company, we first
considered the application of the mass action provision to a suit filed by a state
attorney general on behalf of a subset of injured citizens. 536 F.3d 418, 429-30
(5th Cir. 2008). Caldwell instructs us to pierce the pleadings and look at the real
nature of a state’s claims so as to prevent jurisdictional gamesmanship. See id.
at 424-25, 429 (“It is well-established that in determining whether there is
jurisdiction, federal courts look to the substance of the action and not only at the
labels that the parties may attach . . . . This court has recognized that
defendants may pierce the pleadings to show that the claim has been
fraudulently pleaded to prevent removal.” (citations and inset quotation marks
omitted)). The Caldwell claim-by-claim approach contrasts with other circuits
that look to a state’s complaint “as a whole” and then subjectively determine if
the state alone is the real party in interest. See, e.g., Nevada v. Bank of Am.
Corp., 672 F.3d 661, 670 (9th Cir. 2012); LG Display Co., Ltd. v. Madigan, 665
F.3d 768, 774 (7th Cir. 2011). Caldwell, binding precedent on this court,
effectively defined “persons” in the mass action context to be the real parties in
interest as to the respective claims. See Caldwell, 536 F.3d at 424-25, 429. We
follow its approach.
The real parties in interest in Mississippi’s suit are those more than 100
persons who, “by substantive law, possess[] the right sought to be enforced, and
not necessarily the person who will ultimately benefit from the recovery.”
Richards v. Reed, 611 F.2d 545, 546 n.2 (5th Cir. 1980) (inset quotations
omitted); Charles Alan Wright & Mary Kay Lane, LAW OF FEDERAL COURTS
492 (6th ed. 2002). We find that the real parties in interest are numerous – far
in excess of 100. Contrary to the State’s assertions, Mississippi is thus not the
sole party in interest. Instead, the State (as a purchaser of LCD products) and
individual citizens who purchased the products within Mississippi possess
“rights sought to be enforced.” We have several bases for this conclusion.
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First, the complaint: When the State sued the LCD manufacturers, its
claim was that the manufacturers had engaged in a conspiracy to fix prices for
LCD panels and that their conduct artificially inflated prices, which harmed the
consumers who were forced to pay higher prices. In its complaint, the State
includes a series of diverse statements about the nature of the injury involved.
At times, it seems to be arguing the injury is “generalized harm” to the State as
a whole. See Compl. 2, ¶ 1 (“[T]he State of Mississippi has a quasi-sovereign
interest in the direct and indirect effect of defendants’ illegal conspiracy on the
state’s economy and the citizens’ economic condition.”); Compl. 51, ¶ 194(g) (“The
economy of the state of Mississippi has been damaged.”). At other times, the
Complaint indicates the injury it seeks to remedy with money damages is the
injury suffered by the purchaser consumer. See Compl. 38, ¶ 145 (“Defendants’
conspiracy to raise . . . the price of LCD panels at artificial levels resulted in
harm to Plaintiff and other indirect-purchaser consumers in Mississippi . . .”)
(emphasis added); Compl. 44, ¶ 169 (“[D]efendants have passed through . . . to
their customers 100% of the supra-competitive price increases that resulted from
the defendants’ conspiracy . . .”) (emphasis added); Compl. 51, ¶ 194(f) (“Plaintiff
and other Mississippi indirect purchasers have paid supra-competitive,
artificially inflated prices for LCD products.”) (emphasis added); Compl. 54, ¶ 3
(Plaintiff is bringing this action “on behalf of Mississippi residents . . .”)
(emphasis added). We think the variety of allegations demonstrate that the real
parties in interest include not only the State, but also individual consumers
residing in Mississippi.
Second, the state statutes: Neither the MCPA nor the MAA, the statutory
bases of the State’s suit, give the State sole authority to recover for
particularized injuries suffered by consumers. The MCPA gives the State
authority to seek injunctive relief and civil penalties, see Miss. Code Ann. §§ 75-
24-9; 75-24-19(1)(b), and may indeed be interpreted as giving the State authority
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to seek restitution for its own injury, see Miss. Code Ann. § 75-24-11. However,
no provision of the MCPA gives the State authority to enforce claims for injuries
suffered by others. In other words, the statute does not authorize public
collection of private damages. Similarly, the MAA allows the State to sue for
injunctive relief and civil penalties, see Miss. Code Ann. §§ 75-21-1; 75-21-7, but
not for restitution for injuries suffered by parties other than the State, see §§ 75-
21-9; 75-21-37. To be sure, there is one unpublished Mississippi state case (from
a chancery trial court) that lends support, under § 75-24-11, for the proposition
that a court may “restore” damages to an individual for a particularized injury,
and also to the state on the basis of some generalized harm. See Miss. ex rel.
Hood v. BASF Corp., No. 56863, 2006 WL 308378 (Miss. Ch. Jan. 17, 2006). But
even if BASF Corporation were a more authoritative precedent, it cannot be
denied that the case before us is distinguishable; the crucial question before us
was not dealt with by the BASF Corporation court – namely, who are the real
parties in interest? Our case involves generalized and individual harms, which
demonstrate the real parties in interest are both the State and consumers. In
short, BASF Corporation does not provide the State with the power it seeks to
assert “ownership” over all individualized claims in the name of the State.
Third and finally, common law parens patriae authority: Even assuming
arguendo that the State has parens patriae standing to bring the claims here (an
issue that we do not decide), that standing does not change the fact that
Mississippi is acting, not in its parens patriae capacity, but essentially as a class
representative. Although the relevant statutory provision does not appear on
the face of the complaint, we note that Mississippi law gives the state attorney
general “powers at common law.” Miss. Code Ann. § 7-5-1. The State argues
that parens patriae authority under common law allows the attorney general to
bring the current suit, which, as we have seen, involves alleged state injury
based on harm suffered by individual claimants. This argument fails to account
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for the precise nature of the injury in this case and thus also fails to establish
the State as the sole party in interest. As a general background principle,
Caldwell reminds us that there are limitations on states’ parens patriae
authority. 536 F.3d at 425-28 (“[I]t is clear that . . . there are some limitations
[on parens patriae actions], particularly when a state is seeking to recover
damages for alleged injuries to its economy.”). The Supreme Court, for example,
has stated that when a state pursues the interests of a private party, the state
is not asserting its sovereign interest, and the state remains only a nominal
party. Snapp v. Puerto Rico, 458 U.S. 592, 602 (1982). That directive may apply
here, where Mississippi is pursuing the interests of LCD purchasers. And even
ignoring the Supreme Court and Caldwell’s caveats regarding the over-extension
of parens patriae to suits to which that concept should not attach, two additional
considerations demonstrate that the State is not the sole party in interest.
Mississippi law clearly prohibits double recovery for the same harm to
respective class members. See City of Jackson v. Estate of Stewart ex rel.
Womack, 908 So.2d 703, 711 (Miss. 2005). Thus, the state cannot recover for the
injury to the consumers and still preserve the right of the consumers to recover,
a right that the consumers clearly have under the statutes pursuant to which
the suit is brought. See Miss. Code Ann. §§ 75-24-15; 75-21-9. In short, we have
been directed to no statutory or common law that permits the State to extinguish
the right and remedy the consumer has for his injury. There is, finally, the all
too troubling suggestion by the plaintiff that Mississippi could obtain restoration
for harm to individual citizens, yet keep that money for itself. We think that
consideration, coupled with the reasons provided above, is enough to find against
the State having carte blanche to recover for others’ injuries under common law
parens patriae authority.
After analyzing the complaint, the relevant statutes, and the parens
patriae authority of the State, we hold that the real parties in interest in this
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suit include both the State and individual consumers of LCD products. Because
it is undisputed that there are more than 100 consumers, we find that there are
more than 100 claims at issue in this case. The suit therefore meets the CAFA
definition of a “mass action.” See 28 U.S.C. § 1332(d)(11)(B)(i).
IV.
This conclusion alone, however, does not yield a final result. The CAFA
contains a number of disqualifying exceptions to the term “mass action.” Of
these, the “general public” exception is relevant here. It provides that a suit is
not a mass action if “all of the claims in the action are asserted on behalf of the
general public (and not on behalf of individual claimants or members of a
purported class) pursuant to a State statute specifically authorizing such action.”
28 U.S.C. § 1332(d)(11)(B)(ii)(III). But this public exception does not exempt this
case from the CAFA and federal jurisdiction. The requirement that “all of the
claims” be asserted on behalf of the public is not met here. As discussed above,
individual consumers, in addition to the State, are real parties in interest, so
there is no way that “all of the claims” are “asserted on behalf of the general
public.” Accord Mississippi ex rel. Hood v. Entergy Mississippi, Inc., No.
3:08cv780, 2012 WL 3704935, at *15 (S.D. Miss. Aug. 25, 2012) (A “finding that
the State has brought [an] action in its representative capacity to recoup
restitution for individual[s] . . . precludes application of the general public
exception.”).
We do, however, acknowledge the concern that finding the general public
exception inapplicable here may render such statutory exception a dead letter
(because finding a suit to be a mass action negates the possibility of the
exception applying), and we welcome congressional clarification of this issue.1
1
The general public exception here, in the development of the law, has become
somewhat problematical in the sense it reflects statutory surplusage when the State brings
consumer-related actions such as the one before us today. See Antonin Scalia & Bryan A.
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Nevertheless, the argument that our finding vitiates the application of the
exception must yield to our responsibility to apply the unambiguous, express
language of a statute as written. Davis v. Johnson, 158 F.3d 806, 810 (5th Cir.
1998). Here, doing precisely that (i.e., finding a suit to be a mass action because
“monetary relief claims of 100 or more persons” are at issue) precludes us from
finding that the general public exception applies.
V.
At its core, this case practically can be characterized as a kind of class
action in which the State of Mississippi is the class representative. By
proceeding the way it has, the plaintiff class and its attorneys seek to avoid the
rigors associated with class actions (and avoid removal to federal court). See
generally, Waltzing through a Loophole: How Parens Patriae Suits Allow
Circumvention of the Class Action Fairness Act, 83 U. Colo. L. Rev. 549 (2012).
Because this suit is a mass action under the terms of the CAFA, removal is
proper.2
The judgment of the district court is therefore REVERSED, and the case
is REMANDED for further proceedings.
REVERSED and REMANDED.
Garner, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 174 (1st ed. 2012)
(discussing the “surplusage canon” of construction, which provides that “[i]f possible, every
word and every provision is to be given effect . . . . None should be ignored. None should be
given an interpretation that causes it . . . to have no consequence” (emphasis added)). If a court
such as ours decides that the case must be considered on a “claim-by-claim” basis and is,
therefore, a mass action, it has necessarily decided that not all of the claims are claims of the
State and the public exception has no relevance. On the other hand, if, as other circuits have
held, these cases’ complaints should be evaluated “as a whole,” and not on a “claim-by-claim”
basis, such a decision means that the case is not a mass action because the State is the sole
party in interest. Consequently, the public exception has no application. Thus, under either
scenario, the public exception becomes statutory surplusage.
2
Nothing we have said denies the State of Mississippi the right to proceed with this
case. It will simply proceed in federal, not state, court.
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JENNIFER WALKER ELROD, Circuit Judge, concurring in the judgment:
I concur in the judgment because the majority opinion is a fair application
of our binding precedent, namely Louisiana ex rel. Caldwell v. Allstate Insurance
Co., 536 F.3d 418 (5th Cir. 2008). I write separately, however, to express my
concerns with Caldwell. Caldwell’s claim-by-claim approach is problematic
when applied to CAFA’s “mass action” provision in parens patriae suits such as
the instant case.1 Moreover, and just as troubling, applying Caldwell’s
reasoning to CAFA’s general public exception may render the exception a dead
letter in this circuit. We should reconsider Caldwell and correct our course in
this area of the law.
We have jurisdiction over this case only if it is a “class action” or a “mass
action” under CAFA. For the reasons stated in the majority opinion, this is not
a “class action.” The central issue, then, is whether Mississippi’s lawsuit is a
“mass action.” CAFA defines that term as:
[A]ny 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, except
that jurisdiction shall exist only over those plaintiffs whose claims
in a mass action satisfy the jurisdiction amount requirement under
[28 U.S.C. § 1332(a)].
1
I disagree with the majority opinion’s veiled assertion that this may not be a parens
patriae suit because “Mississippi is pursuing the interests of LCD purchasers.” In its
complaint, Mississippi identified a valid quasi-sovereign interest in preventing illegal antitrust
conduct prohibited under MAA and MCPA. The facts in Mississippi’s complaint also show that
it sought restitution based, at least in part, on generalized harm to the Mississippi economy
caused by Appellants’ price-fixing scheme. The LCD consumers may be real parties in interest
under Caldwell’s approach but that does not eviscerate Mississippi’s asserted quasi-sovereign
interest in the restitution claim. Moreover, the caveats to parens patriae authority that the
majority opinion references apply only when the state is a nominal party in interest. The
majority opinion never states that Mississippi is merely a nominal party in interest; to the
contrary, it recognizes that “the real parties in interest in this suit include both the State and
individual consumers of LCD products.” Furthermore, unlike in Caldwell, where the damages
were to go to specific policyholders, Mississippi asserted both in its complaint and at oral
argument that it would retain any restitution damages.
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28 U.S.C. § 1332(d)(11)(B)(i). In Caldwell, we considered the application of this
provision to a parens patriae suit.
As the majority opinion explains, Caldwell essentially defined “persons”
in the mass action context as the real parties in interest with respect to each
claim in the suit. See 536 F.3d at 424, 429. In that case, Louisiana sued several
insurance companies for conspiring to suppress competition and sought, among
other things, treble damages on behalf of its citizens. Id. at 422–23. The
defendants removed the case to federal court, “argu[ing] that although labeled
parens patriae, th[e] case [was] in substance and fact a . . . ‘mass action’” under
CAFA. Id. at 423. We evaluated Louisiana’s suit on a claim-by-claim basis,
rather than as a whole. Id. at 429–30. Using this approach, we concluded that
Louisiana consumers were the real parties in interest with respect to the treble
damages claim; therefore, the suit involved the monetary claims of 100 or more
persons and (because it also met the other statutory requirements) was a mass
action. Id.Here, as the majority opinion shows, applying the claim-by-claim approach
leads to the conclusion that Mississippi consumers are the real parties in
interest with respect to the state’s restitution claim, so this is a “mass action”
under CAFA.2 This result is the exact opposite of the outcome in many other
2
The majority opinion reaches this result using the claim-by-claim approach from
Caldwell, but there are notable differences between Louisiana’s claims in Caldwell and
Mississippi’s claims here. In Caldwell, Louisiana sued under the Louisiana Monopolies Act,
which provided that “any person who is injured in his business or property” under the
Monopolies Act “shall recover[] [treble] damages.” 536 F.3d at 429 (emphasis added) (quoting
La. Rev. Stat. § 51:137). Because the Louisiana statute contemplated individual enforcement,
the court reasoned that “the policyholders, and not the State, [were] the real parties in
interest.” Id. (citation omitted); see also id. at 430 (concluding that there was “no reason to
believe” that the policyholders were not the real parties in interest “given that the purpose of
antitrust treble damages provisions [is] to encourage private lawsuits by aggrieved individuals
for injuries to their businesses or property” (citing Hawaii v. Standard Oil Co., 405 U.S. 251,
262 (1972)). Here, Mississippi sued under MAA and MCPA, which specifically authorize the
Attorney General to sue on behalf of the general public for violations of the respective statutes.
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similar lawsuits around the country.3 That so many other courts are reaching
a different result in cases that involve similarly-situated litigants and nearly
identical claims suggests that we should consider whether we have staked out
the correct position. I believe we have not.
I.
As an initial matter, I agree with Judge Southwick’s dissenting opinion in
Caldwell. Judge Southwick would have ordered remand of Louisiana’s suit to
state court because its complaint did not “on its face” present a class or mass
action. Caldwell, 536 F.3d at 436 (Southwick, J., dissenting). In reaching that
conclusion, Judge Southwick acknowledged two important principles: (1) “the
plaintiff is the master of his complaint,” and (2) “[d]oubts about propriety of
See Miss. Code Ann. § 75-21-37 (providing direct statutory authority for Mississippi “to enforce
civil features of the antitrust laws . . . at law or in equity”); id. § 75-24-19(1)(b) (giving the
attorney general direct statutory authority “[to] recover on behalf of a state a civil penalty in
a sum not to exceed [$10,000] per violation”). In addition, the Mississippi Attorney General
has “the powers of the Attorney General at common law.” Id. § 7-5-1. Those powers include
“the right to institute, conduct and maintain all suits necessary for the enforcement of the
laws of the State, preservation of order and the protection of public rights.” Gandy v. Reserve
Life Ins. Co., 279 So. 2d 648, 649 (Miss. 1973) (citations omitted). Simply put, this case turns
on different facts and law than did Caldwell.
3
Several other states’ attorneys general and private plaintiffs filed actions against the
makers of LCD flat panels based on the same alleged conduct that forms the basis for this suit.
See, e.g., LG Display Co., Ltd. v. Madigan, 665 F.3d 768 (7th Cir. 2011); Illinois v. AU
Optronics Corp., 794 F. Supp. 2d 845 (N.D. Ill. 2011); South Carolina v. AU Optronics Corp.,
No. 3:11–CV–731, 2011 WL 4344079 (D.S.C. Sept. 14, 2011). These cases essentially fall into
two groups. Some were transferred to an MDL court in the Northern District of California.
See In re TFT-LCD (Flat Panel) Antitrust Litig., No. 07-1827, 2011 WL 560593, at *1 (N.D.
Cal. Feb. 15, 2011). Others, however, remained in the district courts to which they were
removed—these cases were first filed in state court and involved states’ attorneys general
asserting only state law claims against the LCD defendants. See, e.g., South Carolina, 2011
WL 4344079, at *2. The MDL court handling the first group of cases has examined states’
interests in the actions “as a whole” when deciding real-party-in-interest questions. See In re
TFT-LCD, 2011 WL 560593, at *3–4. The district courts dealing with the second set of cases
have done the same, consistently remanding parens patriae suits back to state court. See, e.g.,
Illinois, 794 F. Supp. 2d at 859; South Carolina, 2011 WL 4344079, at *2. But see Mississippi
ex rel. Hood v. Entergy Miss., Inc., No. 3:08-CV-780, 2012 WL 3704935, at *15 (S.D. Miss. Aug.
25, 2012) at *7 n.6 (following Caldwell because it believed it was “duty bound” to do so).
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removal are resolved in favor of remand.” Id. at 433 (citations omitted).
Consistent with these principles, “when we decide whether a suit is removable
under CAFA, we should determine what the case is, not what it must be if all the
relief requested is to be part of the litigation.” Id. at 432–33. Of course, this
view did not carry the day in Caldwell, but the development of case law outside
this circuit since then suggests that we should take another look.
Consistent with Judge Southwick’s dissent, almost every court that has
independently considered Caldwell’s claim-by-claim approach has either
questioned or disagreed with it.4 Indeed, every court of appeals to address the
issue since Caldwell has rejected its approach. See AU Optronics Corp. v. South
Carolina, ___F.3d___, Nos. 11–254 & 11–255, 2012 WL 5265799, at *6 (4th Cir.
Oct. 25, 2012) (slip op.) (adopting “the whole-case approach and rejecting the
claim-by-claim approach”); Nevada v. Bank of Am. Corp., 672 F.3d 661, 670 (9th
Cir. 2012) (acknowledging the court’s adoption of “the approach of looking at the
case as a whole to determine the real party in interest, rather than the claim-by-
claim approach adopted in Caldwell”); Madigan, 665 F.3d at 773–74 (referencing
the courts that have questioned Caldwell’s analysis and holding that an action
was not a removable “mass action” under CAFA, even if the state was not a real
party in interest for damages claims). Each of these decisions includes
convincing reasons to discard the claim-by-claim approach, a few of which I
discuss here.
4
See, e.g., cases cited supra n.2. Courts in other contexts (i.e., non-LCD cases) have
also disagreed with Caldwell’s approach. See, e.g., West Virginia ex rel. McGraw v. JPMorgan
Chase & Co., 842 F. Supp. 2d 984, 997–98 (S.D. W. Va. 2012); Connecticut v. Moody’s Corp.,
No. 3:10-CV-546, 2011 WL 63905, at *2–3 (D. Conn. Jan. 5, 2011); Missouri ex rel. Koster v.
Portfolio Recovery Assocs., Inc., 686 F. Supp. 2d 942, 945–46 (E.D. Mo. 2010); Illinois v. SDS
W. Corp., 640 F. Supp. 2d 1047, 1052 (C.D. Ill. 2009). But see West Virginia ex rel. McGraw
v. Comcast Corp., 705 F. Supp. 2d 441, 449–50 (E.D. Penn. 2010) (concluding that Caldwell’s
framework is consistent with CAFA’s goals).
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First, the claim-by-claim approach does not find a foothold in CAFA’s text.
The Caldwell court resorted to CAFA’s legislative history to rationalize its
approach. 536 F.3d at 424; see Madigan, 665 F.3d at 773 (reasoning that
Caldwell “did not adopt the claim-by-claim approach based on any language in
CAFA itself, nor is there any such language to be found”). Perhaps that is
because CAFA’s text does not suggest that, in a case in which a single plaintiff
brings suit, a court should dissect the complaint to determine whether that
plaintiff is the sole beneficiary of each basis for relief. This court has repeatedly
cautioned against considering legislative history unless the text of a statute is
ambiguous.5 See, e.g., Carrieri v. Jobs.com Inc., 393 F.3d 508, 518–19 (5th Cir.
2004); see also Chamber of Commerce of U.S. v. Whiting, 131 S. Ct. 1968, 1980
(2011) (“Congress’s ‘authoritative statement is the statutory text, not the
legislative history.’” (quoting Exxon Mobil Corp. v. Allapattah Servs., Inc., 545
U.S. 546, 568 (2005) (citations omitted)). There is no ambiguity here. Moreover,
even assuming arguendo that the legislative development of CAFA were
relevant, the Caldwell court acknowledged that CAFA’s history reveals
conflicting expressions of intent. See 536 F.3d at 424 n.4; see also Harvey v.
Blockbuster, Inc., 384 F. Supp. 2d 749, 752–54 (D.N.J. 2005) (discussing CAFA’s
legislative history and concluding that Congress did not intend to encroach on
the ability of states’ attorneys general to bring parens patriae actions).
Compounding the absence of textual support for the claim-by-claim
approach is the Supreme Court’s directive that removal statutes should be
“strictly construed.” Syngenta Corp. Prot., Inc. v. Henson, 537 U.S. 28, 32 (2002).
This rule undermines the argument that a case is removable under CAFA even
5
I have previously expressed that I generally eschew the use of legislative history to
determine a statute’s intent. See, e.g., Villas at Parkside Partners v. City of Farmers Branch,
Tex., 675 F.3d 802, 829 n.4 (5th Cir. 2012) reh’g en banc granted, 688 F.3d 801 (5th Cir. 2012).
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though it does not on its face satisfy the statute’s requirements. See Caldwell,
536 F.3d at 433 (Southwick, J., dissenting). Furthermore, the rule should apply
with particular force when the plaintiff is a state that sued in its own courts.
Removing such a case to federal court implicates important principles of
federalism, and “considerations of comity [should] make us reluctant to snatch
cases which a State has brought from the courts of that State, unless some clear
rule demands it.” Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463
U.S. 1, 21 n.22 (1983); see also West Virginia ex rel. McGraw v. CVS Pharmacy,
Inc., 646 F.3d 169, 178 (4th Cir. 2011), cert. denied, 132 S. Ct. 761 (2011)
(“While it is true that West Virginia voluntarily entered into its own courts to
enforce its laws, it did not voluntarily consent to removal of its case to a federal
court, and a federal court should be most reluctant to compel such removal,
reserving its constitutional supremacy only for when removal serves an
overriding federal interest.”).
Finally, the impetus for Caldwell’s procedure to pierce the pleadings and
look to the nature of each claim for relief—instead of considering the essential
nature and effect of the proceedings—does not provide a compelling basis to
persist with that approach. At the outset of its opinion, the Caldwell court
recognized that “Louisiana did not raise any objections to [the district court’s]
decision to pierce the pleadings or [its] procedure for doing so . . . . As such, that
issue [was] waived.” Caldwell, 536 F.3d at 425 (emphasis added). Therefore,
while the Caldwell court referenced the proposition that “federal courts look to
the substance of the action” when determining jurisdiction, id. at 424 (citations
omitted), the court did not consider different methods for evaluating the
substance (e.g., “as a whole,” as other circuits have done). The procedure
stemming from the waived argument in Caldwell does not withstand the
persuasive force of the analysis in the subsequent decisions rejecting it.
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II.
Beyond the problems of using the claim-by-claim approach for the mass
action analysis, I am also concerned that its application to CAFA’s general public
exception will negate the exception altogether in this circuit.
CAFA tells us not only what a “mass action” is, but also what it is not. See
28 U.S.C. § 1332(d)(11)(B)(ii)(I)–(IV). Specifically, the general public exception
provides:
[T]he term “mass action” shall not include any civil action in which
. . . all of the claims in the action are asserted on behalf of the
general public (and not on behalf of individual claimants or
members of a purported class) pursuant to a State statute
specifically authorizing such action.
28 U.S.C. § 1332(d)(11)(B)(ii)(III). The majority opinion implicitly concludes that
Caldwell ’s approach also governs our analysis of this exception. If that is
correct, then there is no question that the exception does not apply in this case
because, as the majority opinion states, “there is no way that ‘all of the claims’
are ‘asserted on behalf of the general public.’” This result is troublesome.
If we deny the applicability of the general public exception when
individual consumers are parties in interest, then, as a practical matter, we will
have eliminated the exception in this circuit. Caldwell specifies that a case is
a mass action if more than 100 persons are the real parties in interest as to any
claim for relief; and pursuant to CAFA’s plain text, the general public exception
cannot apply unless the case is a mass action. Under this framework, it is
difficult to imagine a case that could be a mass action that also falls within the
general public exception. See, e.g., Entergy Miss., 2012 WL 3704935, at *7 n.6,
*15 (following Caldwell and concluding that the general public exception could
not apply because “[e]ven if the State has a quasi-sovereign interest in protecting
Mississippi consumers . . . the presence of the discrete group of [citizens] who
have a substantive legal right to receive restitution . . . means that ‘all of the
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claims in the action’ are not asserted on behalf of the general public”). In
essence, our precedent has created a situation in which a case cannot satisfy the
criteria of both the mass action provision and the general public exception.6
The majority opinion states that this concern “must yield to our
responsibility to apply the unambiguous, express language of a statute as
written,” but that misses the point. It is not CAFA’s plain text that causes the
problem, but rather our approach in applying the text. But for the claim-by-
claim approach, we could give effect to both the mass action provision and the
general public exception.7 In CAFA, Congress defined a category of cases that
are mass actions and explicitly specified that certain cases “shall not” be
included in that category. Our approach in applying the statute has essentially
eliminated the latter provision, contrary to well-established canons of
construction that counsel against interpretations that render parts of a statute
meaningless. See, e.g., White v. Black, 190 F.3d 366, 368 (5th Cir. 1999) (citation
omitted) (explaining that we must “give words their ordinary meaning and . . .
6
I note some commentary consistent with this concern. See Dwight R. Carswell,
Comment, CAFA and Parens Patriae Actions, 78 U. Chi. L. Rev. 345, 370 (2011) (recognizing
that “[l]awsuits that seek only injunctive relief or money that will go to the state treasury
rather than to state citizens are not mass actions as defined by CAFA. Thus, it does not make
sense to argue that these are the only lawsuits that will fall within the mass action
exception.”).
7
The majority opinion also suggests that the general public exception is statutory
surplasage under any analysis. In making that assertion, the majority opinion conflates the
definition of “persons” in the mass action provision with “claimants” and “members of a
purported class” in the general public exception. See Russell v. Law Enforcement Assistance
Admin., 637 F.2d 354, 356 (5th Cir. 1981) (recognizing the “well settled rule of statutory
construction that where different language is used in the same connection in different parts
of a statute it is presumed that the Legislature intended a different meaning and effect,” and
holding that a “claimant” under one provision was not an “applicant or grantee” within the
meaning of another provision (citation omitted)); cf. Mohamad v. Palestinian Auth., 132 S.Ct.
1702, 1707–08 (2012) (holding that the term “individual” in the Torture Victim Protection Act
meant “natural person,” but reiterating that courts should “respect Congress’ decision to use
different terms to describe different categories of people or things” (citation omitted)).
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not render as meaningless the language of a statute”); see also Antonin Scalia
& Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 174 (1st ed.
2012) (discussing the “surplusage canon” of construction, which provides that
“[i]f possible, every word and every provision is to be given effect . . . . None
should be ignored. None should be given an interpretation that causes it . . . to
have no consequence.” (emphasis added)). Therefore, we should reconsider
Caldwell’s approach to ensure that every facet of CAFA may be given effect in
our circuit.
III.
I concur in the judgment because the majority opinion is a fair application
of our precedent in this challenging context. For the reasons above, however, we
should reconsider that precedent and adopt a different approach for analyzing
the removal of parens patriae suits under CAFA.
18