United States: Five Takeaways From The Supreme Court’s "AU Optronics" Decision

Last Updated: January 30 2014
Article by Brian W. Shaffer, Thomas J. Sullivan and Zachary M. Johns

Court's decision provides key takeaways for class action defendants, including how the decision limits the use of CAFA's mass action provision to suits that actually name 100 or more persons as plaintiffs.

On January 14, the U.S. Supreme Court issued its decision in Mississippi ex rel. Hood v. AU Optronics Corp.,1 holding that a parens patriae action filed by the state of Mississippi on behalf of its citizens was not a "mass action" as defined by the Class Action Fairness Act (CAFA) and thus could not be removed to federal court on that basis. The Court interpreted the definition of "mass action" as requiring 100 or more parties to be actually named as plaintiffs. The Court also rejected arguments that the state's citizens should have been counted as the real unnamed parties in interest for purposes of the 100-person threshold. Instead, Mississippi's parens patriae lawsuit included only one plaintiff, the state.

There are five significant takeaways from AU Optronics that any potential defendant should understand. First, the decision limits the use of CAFA's mass action provision to suits that actually name 100 or more persons as plaintiffs. Second, the ruling likely enhances the incentive for private contingency-fee counsel to pair with state attorneys general and bring parens patriae actions in state court. Third, the opinion underscores the possibility that a defendant may face both class actions and parens patriae actions for the same alleged conduct—often in different courts. Fourth, private contingency-fee counsel may be further encouraged to urge state attorneys general to use parens patriae actions as an alternative to private class actions that would otherwise be barred, such as when potential class members have signed class action waivers. Finally, despite these possibilities, the AU Optronics decision is limited to jurisdiction under CAFA and does not eliminate or restrict the ability of litigants to remove attorney general cases on other grounds.

CAFA's Mass Action Provision

Congress enacted CAFA to expand federal jurisdiction and to provide for jurisdiction over class actions with national importance.2 Among its various provisions, CAFA contemplates two types of cases: class actions and mass actions.3 For both types of actions, CAFA loosened federal statutory jurisdictional requirements by only requiring minimal diversity among the parties4 as well as an aggregate amount in controversy that exceeds $5 million.5 Mass actions are defined under CAFA as the following:

[A]ny civil action (except a [class action] within the scope of section 1711(2)) 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).6

Of particular note is the limitation in the final clause, providing that, unlike a typical class action under Federal Rule of Civil Procedure 23, federal jurisdiction in a mass action "'shall exist only over those plaintiffs' whose claims individually satisfy the $75,000 amount in controversy requirement."7 CAFA also provides certain exceptions for mass actions, including actions that involve principally local issues or raise matters of state concern.8

Supreme Court Opinion

In AU Optronics, the state of Mississippi, represented by private contingency-fee counsel, sued AU Optronics and other manufacturers of liquid crystal displays (LCDs), alleging that they formed an international cartel to restrict competition and raise prices of LCDs.9 Mississippi brought a parens patriae action in state court on behalf of itself and Mississippi citizens who purchased LCD products at allegedly inflated prices. Defendants removed to the U.S. District Court for the Southern District of Mississippi. The district court found that the state's action qualified as a mass action because the state sought to represent the interests of many unnamed citizens, exceeding the "100 or more persons" requirement for a mass action.10 The district court interpreted the words "persons" and "plaintiffs" in the mass action section of CAFA as including the real parties in interest. The district court remanded, however, finding that the "general public" exception applied.11 The U.S. Court of Appeals for the Fifth Circuit agreed that the AU Optronics action qualified as a mass action but reversed the district court's finding that the suit fell within the general public exception.12

Justice Sonia Sotomayor, writing for a unanimous Court, disagreed with both the district court and the Fifth Circuit, instead interpreting the phrase "persons" as including only plaintiffs named in the action. Turning first to the statutory text, Justice Sotomayor observed that the "mass action" definition does not include "100 or more named or unnamed real parties in interest," instead referring to "100 or more persons."13 According to the Court, had Congress intended to include the "unnamed real parties in interest," it could have drafted language to that effect as it did elsewhere within CAFA.14 The Court also foresaw administrative complications for district courts if they were required to consider unnamed parties to a mass action, such as determining whether unnamed parties' claims satisfied the $75,000 requirement and how to handle claims valued at less than $75,000.15

Significantly, the Court observed that the mass action component of CAFA "functions largely as a backstop to ensure that CAFA's relaxed jurisdictional rules for class actions cannot be evaded by a suit that names a host of plaintiffs rather than using the class device."16 In doing so, the Court rejected arguments that federal courts are required under CAFA to look at the substance of actions for jurisdictional purposes in order to determine the real parties in interest. While the Court agreed that analyzing the real parties in interest is a "background principle" for determining diversity, the justices disagreed with the conclusion that Congress intended that principle to apply to CAFA's mass action provision.17

Five Takeaways

AU Optronics creates a significant limitation for parties seeking to remove certain actions under CAFA's mass action provision generally and for attorney general actions specifically. There are five key takeaways for any potential class action party:

  1. The Court limited use of CAFA's mass action provision to those actions that actually name "100 or more persons" as plaintiffs. In addition, although not expressly held by the Court, each plaintiff must have a claim in excess of $75,000 for the claim to remain in federal court. As the Court reasoned, the mass action provision serves as a "backstop" to CAFA's relaxed jurisdictional rules and ensures that plaintiffs cannot evade federal jurisdiction by naming "a host of plaintiffs rather than using the class device."18
  2. As a practical matter, the Court's ruling enhances the incentive for private contingency-fee counsel to pair with state attorneys general and bring parens patriae actions in state court on behalf of state citizens in tandem with or immediately following private class actions. Thus, there is an increased possibility of follow-up actions after the settlement of a class action, possibly brought by the same private counsel under the authority of a state attorney general.
  3. Such multiple cases for essentially the same conduct are likely to proceed in different courts. Chief Justice John Roberts homed in on this problem during oral argument in AU Optronics, questioning whether an attorney general could file a parens patriae action immediately following a class action settlement for the same alleged conduct.19 Counsel for Mississippi responded by pointing out (among other things) that the state's interest in parens patriae actions is broader than those of a class seeking damages to individual consumers as it includes, for example, indirect harms. The concern about multiple actions, also reflected in questions by Justices Antonin Scalia and Anthony Kennedy, is an area of significant debate. Although the underlying issues are more substantive than jurisdictional, the Court may have the opportunity to address such concerns in the future.
  4. The AU Optronics decision leaves open the possibility that private contingency-fee counsel may bring parens patriae actions on behalf of a state's citizens in state court where a class action would otherwise be impossible. For example, a parens patriae action may be a viable alternative to claims involving consumer products or services where a class action waiver has been signed.20 In this way, AU Optronics presents a potential end run around other Supreme Court class action jurisprudence.
  5. The holding in AU Optronics, although significant for attorney general actions, is limited to addressing jurisdiction over attorney general parens patriae actions under CAFA. The decision does not eliminate or restrict the ability of litigants to remove attorney general cases on other grounds, such as where state-law claims implicate significant federal issues, nor does it speak to situations where a single, diverse, private plaintiff invokes state law to attempt to recover more than $75,000 based on conduct harmful to other citizens.21

Removing a path to federal court under CAFA's mass action provision paves the way for attorney general actions to remain in state court and underscores the incentive for states and private contingency-fee counsel to pursue these actions. In fact, 46 states filed as amici curiae in support of Mississippi, suggesting that federal jurisdiction over parens patriae actions improperly places state actions in federal courts.22

The full impact of AU Optronics will be revealed as new claims are pursued by or in the name of state attorneys general. The universe of potential defendants is broad and could include all producers or sellers of goods or services within a state. Potential defendants should be aware of this important development, as it is increases the potential for class-like litigation in state courts and underscores the risk of multiple lawsuits involving the same conduct.


1. No. 12-1036, (U.S. Jan. 14, 2014), available here.

2. Id., slip op. at 2.

3. Id.

4. Minimal diversity requires only that one member of a class be a citizen of a state different from any defendant. 28 U.S.C. § 1332(d)(2)(A); see also 28 U.S.C. § 1332(d)(11)(A) (providing that "a mass action shall be deemed removable under [§§ 1332(d)(2) through (d)(10)]").

5. 28 U.S.C. §§ 1332(d)(2), (d)(6), (d)(11)(a).

6. 28 U.S.C. § 1332(d)(11)(B)(i).

7. AU Optronics, No. 12-1036, slip op. at 3 (quoting 28 U.S.C. § 1332(d)(11)(B)(i)). Although framed in terms of jurisdiction over "plaintiffs," the limitation refers to subject matter jurisdiction over claims that do not meet the amount in controversy requirement of 28 U.S.C. § 1332(a).

8. Id. at 3 n.1; see also 28 U.S.C. § 1332(d)(3)-(5).

9. AU Optronics, No. 12-1036, slip op. at 3.

10. Mississippi ex rel. Hood v. AU Optronics Corp., 876 F. Supp. 2d 758 (S.D. Miss. 2012).

11. The general public exception 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." 28 U.S.C. § 1332(d)(11)(B)(ii)(III).

12. Mississippi ex rel. Hood v. AU Optronics Corp., 701 F.3d 796 (5th Cir. 2012). Although remand orders are not generally appealable, CAFA creates an exception to that principle.

13. AU Optronics, No. 12-1036, slip op. at 6.

14. Id.

15. Id. at 8–9.

16. Id. at 11.

17. Id. at 12.

18. Id. at 11.

19. Oral Argument Transcript at 17–22, AU Optronics, No. 12-1036 (Nov. 6, 2013), available here.

20. See American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013) (upholding use of class action waiver).

21. E.g., Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U.S. 308, 314–16 (2005) (finding federal jurisdiction appropriate in quiet title action where the only contested legal and factual issues involved interpretations of federal law).

22. Brief of Amici Curiae State of Illinois and 45 Other States in Support of Petitioner at 19-20, AU Optronics, No. 12-1036 (July 29, 2013), available here.

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.