The Seventh Circuit split with the Fifth over whether a lawsuit by a state attorney general counts as a “class” or “mass” action that the Class Action Fairness Act [sic] allows defendants to remove to federal from state court. The panel held that CAFA doesn’t reach such a “parens patriae” case if the complaint as a whole discloses that the AG brings it not for the gain of private parties but in the state’s role as righter of wrongs against the whole people of the state. LG Display Co., Ltd. v. Madigan, No. 11-8017 (7th Cir. Nov. 18, 2011) (affirming remand of Illinois AG’s parens patriae action under Land of Lincoln law for conspiracy to fix LCD panel prices).
The court thus parted with the Fifth Circuit, which ruled that any claim that aimed to benefit actual people robbed a parens patriae complaint of its non-class and non-mass valence. Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418 (5th Cir. 2008).
Who gains and who loses under the Seventh Circuit’s ruling? State AGs, of course, win the freedom to file and stay in the state court of their choice. Defendants, for the same reason, take a hit. They’d much rather make all cases that involve the same sort of claims against them run their course in a federal court of their choosing. Class action lawyers might also feel bad. Giving the AGs more sway tends to reduce theirs in the contest to get credit for making the bad guys pay.