Mississippi Ex Rel. Hood v. AU Optronics Corp.
Mississippi Ex Rel. Hood v. AU Optronics Corp.
Opinion
*164
Under the Class Action Fairness Act of 2005 (CAFA or Act), defendants in civil suits may remove "mass actions" from state to federal court. CAFA defines a "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."
I
*165 A
Congress enacted CAFA in order to "amend the procedures that apply to consideration of interstate class actions."
CAFA accordingly loosened the requirements for diversity jurisdiction for two types of cases-"class actions" and "mass actions." The Act defines "class action" to mean "any civil action filed under
*740
rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure."
For class and mass actions, CAFA expanded diversity jurisdiction in two key ways. First, it replaced the ordinary requirement of complete diversity of citizenship among all plaintiffs and defendants, see
State Farm Fire & Casualty Co. v. Tashire,
B
Respondents manufacture liquid crystal displays, or LCDs. In March 2011, the State of Mississippi sued them in state court, alleging that they had formed an international cartel to restrict competition and raise prices in the LCD market. The State claimed that these actions violated two Mississippi statutes: the Mississippi Antitrust Act, Miss.Code Ann. § 75-21-1 et seq . (2009), and the Mississippi Consumer Protection Act, § 75-24-1 et seq. (2009 and Cum. Supp. 2013). The State sought injunctive relief and civil penalties under both statutes, along with punitive damages, costs, and attorney's fees. It also sought restitution for its own purchases "of LCD products and the purchases of its citizens." App. to Brief in Opposition 65a; § 75-24-11.
Respondents filed a notice to remove the case from state to federal court, arguing that the case was removable under CAFA as either a "class action" or a "mass action." The District Court ruled that the suit did not qualify as a "class action" because it was "not brought pursuant to Federal Rule of Civil Procedure 23 or a 'similar State statute or rule of judicial procedure.' "
*167
because "[i]t is a 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.' "
The District Court nonetheless remanded the case to state court on the basis of CAFA's "general public exception," which excludes from the "mass action" definition "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."
The Court of Appeals reversed.
II
A
Our analysis begins with the statutory text.
Sebelius v. Cloer,
569 U.S. ----, ----,
"[T]he term mass action means any civil action (except a [class 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 jurisdictional amount requirements under subsection (a)." § 1332(d)(11)(B)(i).
The parties do not dispute that this provision encompasses suits that are brought jointly by 100 or more named plaintiffs who propose to try their claims together. The question is whether the *742 provision also includes suits brought by fewer than 100 named plaintiffs on the theory that there may be 100 or more unnamed persons who are real parties in interest *169 as beneficiaries to any of the plaintiffs' claims. Respondents argue that the provision covers such suits because "claims of 100 or more persons" refers to "the persons to whom the claim belongs, i.e., the real parties in interest to the claims, " regardless of whether those persons are named or unnamed. Brief for Respondents 19 (some emphasis in original). We disagree.
To start, the statute says "100 or more persons," not "100 or more named or unnamed real parties in interest." Had Congress intended the latter, it easily could have drafted language to that effect. Indeed, when Congress wanted a numerosity requirement in CAFA to be satisfied by counting unnamed parties in interest in addition to named plaintiffs, it explicitly said so: CAFA provides that in order for a class action to be removable, "the number of members of all proposed plaintiff classes" must be 100 or greater, § 1332(d)(5)(B), and it defines "class members" to mean "the persons (named or unnamed) who fall within the definition of the proposed or certified class," § 1332(d)(1)(D). Congress chose not to use the phrase "named or unnamed" in CAFA's mass action provision, a decision we understand to be intentional. See
Dean v. United States,
More fundamentally, respondents' interpretation cannot be reconciled with the fact that the "100 or more persons" referred to in the statute are not unspecified individuals who have no actual participation in the suit, but instead the very "plaintiffs" referred to later in the sentence-the parties who are proposing to join their claims in a single trial. Congress made this understanding evident in two key ways.
First, we presume that " 'Congress is aware of existing law when it passes legislation.' "
Hall v. United States,
566 U.S. ----, ----,
*170 and "plaintiffs" just as they are used in Federal Rule of Civil Procedure 20, governing party joinder. Where § 1332(d)(11)(B)(i) requires that the "claims of 100 or more persons [must be] proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact," Rule 20 provides that "[p]ersons may join in one action as plaintiffs if they assert any right to relief jointly ... and any question of law or fact common to all plaintiffs will arise in the action." Thus, just as it is used in Rule 20, the term "persons" in § 1332(d)(11)(B)(i) refers to the individuals who are proposing to join as plaintiffs in a single action.
Second, respondents' interpretation of "persons" cannot square with the statute's requirement that the claims of the "100 or more persons" must be proposed for joint trial "on the ground that the plaintiffs' claims involve common questions of law or fact." § 1332(d)(11)(B)(i). It is difficult to imagine how the claims of one set of unnamed individuals could be proposed for joint trial on the ground that the claims of some completely different group of named plaintiffs share common questions. The better understanding is that Congress meant for the "100 or more persons" and the proposed "plaintiffs" to be one and the same.
*743 Recognizing that the statute's use of the term "persons" could be a reference to proposed plaintiffs, respondents assert that "plaintiffs," like "persons," should be construed to "includ[e] both named and unnamed real parties in interest." Brief for Respondents 24. But that stretches the meaning of "plaintiff" beyond recognition. The term "plaintiff" is among the most commonly understood of legal terms of art: It means a "party who brings a civil suit in a court of law." Black's Law Dictionary 1267 (9th ed. 2009); see also Webster's Third New International Dictionary 1729 (1961) (defining "plaintiff" to mean "one who commences a personal action or lawsuit," or "the complaining party in any litigation"
*171 ). It certainly does not mean " anyone, named or unnamed, whom a suit may benefit," as respondents suggest. 5
Moreover, Congress used the term "plaintiffs" twice in the mass action provision. The provision encompasses actions in which monetary "claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions," and it then provides that "jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requiremen[t]" of $75,000. § 1332(d)(11)(B)(i). If respondents are correct that "plaintiffs" means unnamed parties in interest where it is used the first time, then so too the second. After all, the "presumption that a given term is used to mean the same thing throughout a statute" is "at its most vigorous when a term is repeated within a given sentence."
Brown v. Gardner,
Yet if the term "plaintiffs" is stretched to include all unnamed individuals with an interest in the suit, then § 1332(d)(11)(B)(i)'s requirement that "jurisdiction shall exist only over those plaintiffs whose claims [exceed $75,000]" becomes an administrative nightmare that Congress could not possibly have intended, see
Griffin v. Oceanic Contractors, Inc.,
Furthermore, what would happen with individuals whose claims were valued at less than $75,000? The District Court in this case suggested that if the suit were deemed a mass action, it would sever the claim for "restitution for losses incurred by individuals claiming less than or equal to $75,000 each" and remand that claim to state court, while allowing the other claims (including the restitution claims exceeding $75,000) to proceed in federal court.
We think it unlikely that Congress intended that federal district courts engage in these unwieldy inquiries. By contrast, interpreting "plaintiffs" in accordance with its usual meaning-to refer to the actual named parties who bring an action-leads to a straightforward, easy to administer rule under which a court would examine whether the plaintiffs have pleaded in good faith the requisite amount. See
Horton v. Liberty Mut. Ins. Co.,
B
Our reading of the mass action provision's text is reinforced by the statutory context. See
Mohamad v. Palestinian Authority,
566 U.S. ----, ----,
First, the provision of CAFA governing transfer motions confirms our view that the term "plaintiffs" refers to actual named parties as opposed to unnamed real parties in interest. That provision, § 1332(d)(11)(C)(i), provides that once a mass action has been removed to federal court, it "shall not thereafter be transferred to any other court ... unless a majority of the plaintiffs in the action request transfer." If respondents are correct that "plaintiffs" means "unnamed parties in interest," it will be surpassingly difficult for a court to decide in a case like this one whether an action may be transferred. The District Court itself acknowledged this problem, noting that it would have to identify and communicate with "hundreds of thousands if not millions of real parties in interest" to "pol[l] [them] about their preferred forum" if respondents' interpretation were correct.
The context in which the mass action provision was enacted lends further support to our conclusion. Congress' overriding concern in enacting CAFA was with class actions. See Preamble,
III
Rather than relying on the text of CAFA as the source of its real party in interest inquiry, the Court of Appeals appeared to find such an inquiry necessary on the basis of what it understood to be a background principle: that "federal courts look to the substance of the action and not only at the labels that the parties may attach."
Caldwell,
We have interpreted the diversity jurisdiction statute to require courts in certain contexts to look behind the pleadings to ensure that parties are not improperly creating or destroying diversity jurisdiction. We have held, for example, that a plaintiff may not keep a case out of federal court by fraudulently naming a nondiverse defendant.
Wecker v. National Enameling & Stamping Co.,
But the question in this case is not simply whether there exists some background principle of analyzing the real parties in interest to a suit; the question is whether Congress intended that courts engage in that analysis when deciding
*175
whether a suit is a mass action. Recognizing this fact, respondents do not argue that the real party in interest inquiry employed in the above cases somehow supersedes the text of CAFA; they instead argue that we should read CAFA in light of those cases because " 'Congress expects its statutes to be read in conformity with this Court's precedents.' " Brief for Respondents 19 (quoting
United States v. Wells,
First, it makes sense to infer Congress' intent to incorporate a background principle into a new statute where the principle has previously been applied in a similar manner. But that is not the case here. The background real party in interest inquiry identifies what party's (or parties') citizenship should be considered in determining diversity. The inquiry that respondents urge is quite different: It is an attempt to count up additional unnamed parties in order to satisfy the mass action provision's numerosity requirement. Respondents offer no reason to believe that Congress intended to extend the real party inquiry to this new circumstance, and so any presumption that Congress wanted to incorporate the inquiry, if it exists in this case at all, would be comparatively weak. Cf.
Meyer v. Holley,
*746
*176
Second, even if the background principle had previously been applied in the manner sought by respondents, Congress provided express indications that it did not want the principle to apply to the mass action provision. It specified that "the term 'mass action' shall not include any civil action in which ... the claims are joined upon motion of a defendant." § 1332(d)(11)(B)(ii)(II). By prohibiting defendants from joining unnamed individuals to a lawsuit in order to turn it into a mass action, Congress demonstrated its focus on the persons who are actually proposing to join together as named plaintiffs in the suit. Requiring district courts to pierce the pleadings to identify unnamed persons interested in the suit would run afoul of that intent. Moreover, as already discussed, Congress repeatedly used the word "plaintiffs" to describe the 100 or more persons whose claims must be proposed for a joint trial. That word refers to actual, named parties-a concept inherently at odds with the background inquiry into unnamed real parties in interest, who by definition are never plaintiffs. Congress thus clearly displaced a background real party in interest inquiry, even assuming one might otherwise apply. Cf.
Barnhart v. Sigmon Coal Co.,
* * *
For the foregoing reasons, the judgment of the United States Court of Appeals for the Fifth Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
CAFA provides certain exceptions for class actions that involve matters of principally local or state concern. See
Respondents do not challenge this ruling before this Court.
The Court of Appeals did so on the rationale that because individual Mississippi consumers are real parties in interest to the State's restitution claim, the general public exception's requirement that "all of the claims" must be "asserted on behalf of the general public (and not on behalf of individual claimants)" was not satisfied.
See
AU Optronics Corp. v. South Carolina,
Congress could of course require a real party in interest inquiry in a statute that uses the term "plaintiff" simply by saying so. But it has not done that here.
Respondents suggest that a district court might be able to exercise supplemental jurisdiction over the claims that fall beneath $75,000, thereby avoiding the problem of identifying and remanding such claims to the state court. We need not decide the issue here, but we note that at least one Court of Appeals has rejected that view. See
Lowery v. Alabama Power Co.,
The parties both point to the "general public exception," § 1332(d)(11)(B)(ii)(III), in support of their respective positions. But because the foregoing arguments resolve this case, we need not construe that provision here.
We have also applied a real party in interest inquiry in contexts other than that of determining citizenship for purposes of diversity jurisdiction. See
North Dakota v. Minnesota,
Reference
- Full Case Name
- MISSISSIPPI Ex Rel. Jim HOOD, Attorney General, Petitioner v. AU OPTRONICS CORPORATION Et Al.
- Cited By
- 243 cases
- Status
- Published