SCOTUS: States aren’t “Persons” Under CAFA
In 2005, Congress enacted the Class Action Lawsuit Fairness Act (“CAFA”) to alter the procedures for interstate class action lawsuit suits. Particularly, CAFA produced a brand new kind of suit known as a “mass action,” that is any civil suit for financial relief where the “claims of 100 or even more persons are suggested to become attempted jointly on the floor the plaintiffs’ claims involve common questions of law or fact.” 28 U.S.C. § 1332(d)(11)(B)(i). The U . s . States Top Court just clarified CAFA’s “100 or even more persons” requirement in Mississippi ex rel. Hood v. AU Optronics Corp., No. 12-1036 (Jan. 14, 2014).
AU Optronics posed an easy question towards the Top Court: will the “100 or even more persons” requirement permit mass actions to become introduced by less than 100 named plaintiffs when certainly one of individuals plaintiffs is really a condition? A unanimous Court clarified within the negative, rejecting the respondents’ argument that CAFA permits mass action claims by less than 100 named plaintiffs once the action is prosecuted with a condition (i.e., one complaintant) with respect to its citizens (who number greater than 100 persons).
A Legal Court organized eight distinct causes of holding that claims require a minimum of 100 named plaintiffs to become qualified as CAFA mass actions. The very first four reasons concern Congress’s utilisation of the term “person.” First, Congress simply used the word “persons” for mass actions, while for CAFA class actions, Congress defined “class members” as “persons (named or unnamed)” who are handled by the suggested class’s definition. That Congress didn’t clearly permit mass action plaintiffs to become named or unnamed signifies its intent to want mass action plaintiffs to become named. Second, “persons” in mass actions are unambiguously described within the same sentence of § 1332(d)(11)(B)(i) as “plaintiffs” hence, individuals “persons” would be the named plaintiffs positively proposing to participate their claims like a mass action, not some unnamed amalgam of individuals passively observing the litigation. Third, studying CAFA as requiring 100 named persons for mass actions will give it an interpretation in line with Federal Rule of Civil Procedure 20’s utilisation of the terms “persons” and “plaintiffs.” 4th, it’s unclear how an unnamed group’s claims might be suggested for joint trial according to discussing common questions of law and fact having a completely distinct number of named plaintiffs. Accordingly, a legal court reasoned, the word “person” here means plaintiffs named within the suit.
The following three good reasons address Congress’s utilisation of the term “plaintiff.” First, the plain concept of the word “plaintiff” is somebody who has introduced suit, so applying that term to “persons” requires interpreting “persons” as individuals who’ve introduced suit, not another group who’ve not introduced suit. Second, giving “persons” this is suggested through the AU Optronics respondents would, within the Court’s words, create an “administrative nightmare.” For the reason that scenario, to use § 1332(d)(11)(B)(i)’s limitation of district courts’ jurisdiction to simply individuals plaintiffs alleging harm with a minimum of $75,000, district courts will have to (1) identify a slew of unknown plaintiffs and (2) determine the quantity in debate together and also the defendant. On the other hand, requiring plaintiffs to become named would obviate the requirement for such queries. Third, utilisation of the term “plaintiff” elsewhere in CAFA shows that only named plaintiffs are incorporated, not unnamed parties in interest. For instance, § 1332(D)(11)(C)(i) claims that full of action taken off condition to federal court can’t be transferred from federal court without “the most of the plaintiffs within the action” requesting just as much. Courts could be not able to determine whether or not they may transfer mass actions when they must consult unknown and unnamed parties. Hence, a legal court figured that the word “plaintiff” means actual plaintiffs named within the claim, no unnamed number of people with interests within the claim.
Lastly, the final Court rejected the 5th Circuit’s use of a “background principle” that courts turn to the “substance from the action” additionally to “the labels the parties may attach.” The 5th Circuit held that employing this principle here would permit CAFA mass actions with less than 100 named plaintiffs as lengthy because there were a minimum of 100 parties thinking about the litigation. The Final Court flatly rejected this application and holding for 2 reasons. First, while Congress’s intent to use an identical background principle to diversity actions could be deduced to avoid parties from collusively destroying diversity, nothing suggests Congress intended that background principle to become extended towards the mass action context. Second, CAFA’s meaning of mass actions clearly excludes suits in which the claims were became a member of due to a defendant’s motion, which evinces a congressional intent to provide plaintiffs control of the litigation. Using the “background principle” here would contravene that intent by requiring district courts to visit beyond analyzing the pleadings when defendants request they are doing so. Accordingly, to become qualified as full of action under CAFA, a suit should have 100 or even more named plaintiffs.