Bloomberg News

Companies Rejected as U.S. Supreme Court Backs State Suits (1)

January 14, 2014

The U.S. Supreme Court said a federal law designed to limit class action suits lets states use their own courts to press claims on behalf of their citizens against corporate defendants.

The justices unanimously ruled in favor of Mississippi in its antitrust lawsuit against makers of liquid-crystal displays, including units of Sharp Corp. (6753) and AU Optronics Corp. (AUO:US) The companies were seeking to move the suit into federal court, where defendants often fare better.

The Mississippi lawsuit is part of the fallout from a Justice Department price-fixing investigation that has produced more than $1.3 billion in criminal fines. Mississippi is invoking its antitrust and consumer-protection statutes to sue on state residents’ behalf.

The justices rejected the companies’ contention that the 2005 Class Action Fairness Act gives defendants the right to force such lawsuits by states into federal court. The companies said those suits are akin to class actions, which the statute says can be moved to federal court if the amount in dispute is greater than $5 million.

Writing for the court, Justice Sonia Sotomayor said a key provision of the 2005 law states that it applies to “claims of 100 or more persons.” Because Mississippi was pressing the suit on its own, it isn’t covered by that language, she wrote.

“The statute says, ‘100 or more persons,’ not ‘100 or more named or unnamed real parties in interest,’” Sotomayor said.

Mississippi is one of a handful of states that have tried to press follow-on suits in their own courts, seeking damages for people in the state who paid too much for products. Liquid-crystal displays are used in computer monitors, televisions and mobile phones.

The case is Mississippi v. AU Optronics, 12-1036.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editor responsible for this story: Patrick Oster at poster@bloomberg.net


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Companies Mentioned

  • AUO
    (AU Optronics Corp)
    • $4.17 USD
    • -0.11
    • -2.64%
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