January 14, 2014 United States Supreme Court published opinions

 

Mississippi ex rel. Hood v AU Optronics Corp.

Hood sued AU in state court alleging price fixing for LCD screens and seeking restitution for Mississippi citizens who purchased items with AU screens. AU removed the case as a “mass action” under the Class Action fairness Act, 28 USC 332(D)(11). The removal was ultimately upheld by the 5th Circuit. The Court, resolving a circuit split, unanimously reversed. It held that “plaintiff” is the operative word and here there is only one plaintiff the State of Mississippi. Therefore, there cannot be “100 or more persons” bringing the suit and the 5th Circuit erred in applying real party in interest cases to go beyond the pleadings to look at the number of people entitled to restitution as the text of the Act is plain and unambiguous and directs courts to look only at the pleadings and count plaintiffs. The Court noted that the 5ht Circuit’s approach would inevitably lead to administrative problems as district courts tried to figure out what nonparty potential claimants meet the Act’s requirements and would also result in cases being split between state and federal courts. The Court reasoned that neither outcome could possibly be what Congress intended with the mass action provisions which serves to prevent artful pleading from defeating the class action provisions of the Act.

Daimler AG v Bauman

Bauman and other plaintiffs field suit in California federal court alleging Daimler was responsible for certain actions of a now subsidiary in Argentina in the 1970s. Personal jurisdiction was ultimately found by the 9th Circuit based on an agency relationship between Daimler and its distributor and the sale and marketing of cars in California. The Court, with one justice concurring in judgment, reversed. Based on the record, the majority limited its analysis to general jurisdiction. It held that even significant sales of cars was insufficient to establish the Daimler had substantial and continuous contacts and was thus was “at home’ in California, Noting that the paradigm for general jurisdiction is incorporation or principal place of business, the majority reasoned that allowing jurisdiction here would subject companies to suit in all states for actions anywhere in the world which is not consistent with the doctrine of general jurisdiction as it does not compare the conduct in state with the activities of the corporation throughout the world and is inconsistent with the international approach to these issues. The concurrence agreed that foreign plaintiffs suing a foreign company for actions in a foreign country in California was unreasonable here as Germany was an available and more reasonable forum. It argued that the majority erred in its reasoning as Daimler did nto raise the issue below and contacts analysis is focused on the forum state not the activities of a company throughout the world, in any event that analysis has never been required by Court precedent and the effect of the new rule is to shield multinational companies from US courts while subjecting smaller companies to the same jurisdiction and shifting the costs of injury to the plaintiffs who will now not be able to sue.

 

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