AU Optronics Corporation v. State of South Carolina
699 F.3d 385
| 4th Cir. | 2012Background
- State filed parens patriae antitrust and SCUTPA suits in South Carolina state court alleging price fixing by LCD panel manufacturers; defendants removed to the District of South Carolina invoking CAFA and diversity; district court remanded to state court as CAFA minimal diversity not satisfied; district court treated the actions as parens patriae with quasi-sovereign State interests; court remanded and denied CAFA jurisdiction; Fourth Circuit granted permission to appeal and consolidated briefing.
- Court relied on parens patriae framework, holding the State is the real party in interest despite restitution claims to private citizens; minimal diversity is not satisfied because South Carolina is not a citizen of any state.
- Court recognized CAFA’s exemption for parens patriae actions and the State’s quasi-sovereign interests, concluding restitution does not defeat the State’s real-party-in-interest status and the actions should remain in state court.
- Court summarized that it would adopt the whole-case approach over claim-by-claim in determining real-party-in-interest status, aligning with Ninth and Seventh Circuits, and rejected Louisiana’s claim-by-claim framework.
- Court ultimately held CAFA minimal diversity not satisfied, affirmed remand to state court, and granted petitions to appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAFA minimal diversity satisfied? | State argues it is the real party in interest; diversity from defendants is irrelevant | AU Optronics and LG Display contend South Carolina citizens are real parties in interest; minimal diversity satisfied | No; CAFA minimal diversity not satisfied; remand affirmed |
| Which approach governs real-party-in-interest analysis? | State should be considered real party in interest under whole-case approach | Defendants urge claim-by-claim approach counting individual consumers | Court adopts whole-case approach; State remains real party in interest despite restitution claims |
| Do restitution claims alter the State's quasi-sovereign interest? | Restitution enhances state enforcement interests | Restitution could make private citizens real parties in interest | Restitution does not defeat quasi-sovereign interest; does not defeat real-party status |
Key Cases Cited
- Nevada v. Bank of America Corp., 672 F.3d 661 (9th Cir. 2012) (parens patriae action; whole-case approach favored Real party in interest)
- LG Display Co., Ltd. v. Madigan, 665 F.3d 768 (7th Cir. 2011) (whole-case approach; State real party in interest)
- West Virginia ex rel. McGraw v. CVS Pharmacy, Inc., 646 F.3d 169 (4th Cir. 2011) (parens patriae; not CAFA class action; quasi-sovereign interest)
- Bank of America Corp. v. City of Las Vegas, 672 F.3d 670 (9th Cir. 2012) (real-party-in-interest analysis; quasi-sovereign interest sustained)
- Caldwell v. Allstate Ins. Co., 536 F.3d 418 (5th Cir. 2008) (claim-by-claim approach used in CAFA diversity)
- Messer v. American Gems, Inc., 612 F.2d 1367 (4th Cir. 1980) (nominal party vs real party in interest)
- Hickman v. Missouri, Kansas, & Texas Ry. Co., 183 U.S. 53 (1901) (real party in interest matters for diversity)
- Navarro Sav. Ass’n v. Lee, 446 U.S. 458 (1980) (disregard nominal parties; focus on real parties in interest)
- Moffitt v. Residential Funding Co., LLC, 604 F.3d 156 (4th Cir. 2010) (causal standard for CAFA jurisdiction)
- In re Celotex Corp., 124 F.3d 619 (4th Cir. 1997) (CAFA jurisdiction standards)