Debevoise & Plimpton

Handling state AG parens patriae actions after the Supreme Court’s rejection of federal court removal

By Mark P Goodman, Jeffrey S Jacobson, John S Kiernan, Maura K Monaghan and Erica S Weisgerber

The Supreme Court ruled unanimously last week, in Mississippi v AU Optronics Corp, No. 12-1036 (2014), that state attorney-general lawsuits seeking restitution for damaged consumers cannot be removed to federal court as ‘mass actions’ under the Class Action Fairness Act (CAFA). This decision is likely to encourage more of these parens patriae quasi-class actions, and even companies that think they stopped the class-action train with mandatory arbitration agreements may see the same kinds of claims asserted by state AGs on their residents’ behalf. With federal removal unavailable, companies must find alternative ways to manage these cases.

Federal courts may still have a role to play. A federal judge evaluating a class-action settlement has the power to order parallel state parens patriae actions stayed during the approval process, and then to release those claims, even over the AG’s objections, if they approve the settlement. AU Optronics did not disturb precedent for this. Thus, while a defendant ideally would negotiate a global settlement with all claimants at the same table, if that proves not to be feasible the defendant may be able to settle directly with a state AG’s constituents as putative class members in a federal case and thereby end the AG’s ability to prosecute a separate parens patriae action in state court. Even defendants that could compel private cases into arbitration may wish to keep this option in mind…

If you are registered and logged in to the site, click on the link below to read the rest of the Debevoise & Plimpton briefing. If not, please register or sign in with your details below.

Sign in or Register to continue reading this article

Sign in


It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer


Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.


Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.


Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Debevoise & Plimpton

View more briefings from Debevoise & Plimpton

Analysis from The Lawyer

  • Shell

    Shell: taking the power back

    Shell legal director Peter Rees is switching litigation control away from external counsel to a unified global team of in-housers

Browse This Firm’s


Old Broad St