Court Opinion

ID: 3065820
Source: CourtListenerOpinion
Date Created: 2015-10-14 22:42:56.851298+00
Date Added: 2024-06-11T11:49:47.229904
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

WASHINGTON STATE; THE                
PEOPLE OF THE STATE OF
CALIFORNIA, ex rel. Kamala D.
Harris, Attorney General of the
State of California, as parens
patriae on behalf of natural
persons residing in the state; THE
STATE OF CALIFORNIA; ALAMEDA
COUNTY; CITY OF LONG BEACH;
CITY OF LOS ANGELES; CITY OF
OAKLAND; CITY OF SAN DIEGO;
CITY AND COUNTY OF SAN
FRANCISCO; CITY OF SAN JOSE;
CONTRA COSTA COUNTY; CORONA-
NORCO UNIFIED SCHOOL DISTRICT;       
ELK GROVE UNIFIED SCHOOL
DISTRICT; FRESNO COUNTY; FRESNO
UNIFIED SCHOOL DISTRICT; GARDEN
GROVE UNIFIED SCHOOL DISTRICT;
KERN COUNTY; LOS ANGELES
COUNTY; LOS ANGELES UNIFIED
SCHOOL DISTRICT; OAKLAND UNIFIED
SCHOOL DISTRICT; ORANGE COUNTY;
SACRAMENTO COUNTY; SAN DIEGO
CITY UNIFIED SCHOOL DISTRICT;
SAN FRANCISCO UNIFIED SCHOOL
DISTRICT; SAN JOAQUIN COUNTY;
SAN JUAN UNIFIED SCHOOL
DISTRICT; SAN MATEO COUNTY;
                                     

                          18753
18754     WASHINGTON STATE v. CHIMEI INNOLUX CORP.

SANTA CLARA COUNTY; SANTA             
BARBARA COUNTY; SONOMA
COUNTY; SWEETWATER UNION HIGH
SCHOOL DISTRICT; TULARE COUNTY;
VENTURA COUNTY; THE
REGENTS OF THE UNIVERSITY OF
CALIFORNIA,
              Plaintiffs-Appellees,
                v.
CHIMEI INNOLUX CORP.; CHI MEI
OPTOELECTRONICS USA, INC.; CMO
JAPAN CO., LTD.; EPSON IMAGING
DEVICES CORPORATION; HITACHI,              No. 11-16862
LTD.; HITACHI DISPLAYS, LTD.;                D.C. Nos.
HITACHI ELECTRONICS DEVICES              3:10-cv-05212-SI
(USA), INC.; SAMSUNG ELECTRONICS          3:10-cv-05711-SI
CO., LTD.; SAMSUNG
SEMICONDUCTOR, INC.; SAMSUNG                 OPINION
ELECTRONICS AMERICA, INC.; SHARP
CORPORATION; SHARP ELECTRONICS
CORPORATION; TOSHIBA
CORPORATION; TOSHIBA AMERICA
ELECTRONICS COMPONENTS, INC.;
TOSHIBA AMERICA INFORMATION
SYSTEMS, INC.; TOSHIBA MOBILE
DISPLAY TECHNOLOGY CO., LTD.,
FKA Toshiba Matsushita Display
Technology Co., Ltd.; EPSON
ELECTRONICS AMERICA, INC.,
            Defendants-Appellants.
                                      
        Appeal from the United States District Court
          for the Northern District of California
          Susan Illston, District Judge, Presiding
           WASHINGTON STATE v. CHIMEI INNOLUX CORP.             18755
                  Argued and Submitted
       September 13, 2011—San Francisco, California

                      Filed October 3, 2011

       Before: Sidney R. Thomas and N. Randy Smith,
          Circuit Judges, and Solomon Oliver, Jr.,
                    Chief District Judge.*

                    Opinion by Judge Thomas

  *The Honorable Solomon Oliver, Jr., Chief District Judge for the U.S.
District Court for Northern Ohio, Cleveland, sitting by designation.
          WASHINGTON STATE v. CHIMEI INNOLUX CORP.     18757

                        COUNSEL

John M. Grenfell and Jacob R. Sorenson; Pillsbury Winthrop
Shaw Pittman LLP, San Francisco, California, for appellant
Sharp Corporation.

Christopher B. Hockett and Neal A. Potischman; Davis Polk
& Wardwell LLP, Menlo Park, California, for appellant
Chimei Innolux Corporation, Chi Mei Optoelectronics USA,
Inc., and CMO Japan Co., Ltd.

Melvin R. Goldman, Stephen P. Freccero, Derek F. Foran,
Morrison & Foerster LLP, San Francisco, California, for
appellant Epson Imaging Devices Corp. and Epson Electron-
ics America, Inc.

Kent M. Roger and Herman J. Hoying; Morgan, Lewis &
Bockius LLP, San Francisco, California, for appellants
Hitachi, Ltd., Hitachi Displays, Ltd., and Hitachi Electronic
Devices (USA), Inc.

Simon J. Frankel and Jeffrey M. Davidson, Covington & Bur-
ling LLP, San Francisco, California, for appellants Samsung
Electronics Co., Ltd., Samsung Semiconductor, Inc., and
Samsung Electronics America, Inc.
18758     WASHINGTON STATE v. CHIMEI INNOLUX CORP.
Bijal Vakil, Palo Alto, California; Christopher M. Curran and
Kristen J. McAhren, Washington, D.C., and John H. Chung,
New York, New York, White & Case LLP, for appellants
Toshiba Corporation, Toshiba Mobile Display Co., Ltd.,
Toshiba America Electronic Components, Inc., and Toshiba
America Information Systems, Inc.

Kamala Harris, Attorney General, State of California, and
Kathleen E. Foote, Ester H. La, and Adam Miller, Deputy
Attorneys General, San Francisco, California, for appellee
Attorney General of the State of California.

Robert M. McKenna, Attorney General, State of Washington,
and Jonathan Mark and Brady R. Johnson, Office of the
Attorney General, Seattle, Washington, for appellee Attorney
General of Washington.

Lawrence G. Wasden, Attorney General, State of Idaho, and
Brett T. DeLange, Deputy Attorney General, Boise, Idaho, for
amicus curiae States of Alaska, Arkansas, Arizona, Delaware,
Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Lousiana,
Maine, Maryland, Massachusetts, Minnesota, Mississippi,
Missouri, Montana, Nevada, New Hampshire, New Mexico,
North Dakota, Ohio, Oregon, South Carolina, South Dakota,
Utah, Vermont, and West Virginia.

                         OPINION

THOMAS, Circuit Judge:

   This appeal presents the question, inter alia, of whether
parens patriae actions filed by state Attorneys General consti-
tute class actions within the meaning of the Class Action Fair-
ness Act of 2005 (“CAFA”), Pub. L. No. 109-2, 119 Stat. 4
(codified at 28 U.S.C. §§ 1332(d), 1453, 1711-15). We con-
clude that they do not, and we affirm the remand order
entered by the district court.
            WASHINGTON STATE v. CHIMEI INNOLUX CORP.              18759
                                    I

   The Attorneys General of Washington and California filed
parens patriae actions in their states’ courts alleging that
Defendants engaged in a conspiracy to fix the prices of thin-
film transistor liquid crystal display (“TFT-LCD”) panels, and
that state agencies and consumers were injured by paying
inflated prices for products containing TFT-LCD panels.

   The complaints allege that between 1998 and 2006, Defen-
dants engaged in an international conspiracy to fix the prices
of TFT-LCD panels in violation of state antitrust laws, which
resulted in higher prices for state agencies and citizens pur-
chasing products containing TFT-LCD panels.1

   The Attorney General of Washington, in the name of the
state and as parens patriae on behalf of state citizens, filed an
antitrust lawsuit against Defendants in state court. The Attor-
ney General’s complaint in this litigation alleges violations of
the Act and seeks: (1) declaratory and injunctive relief; (2)
civil penalties; (3) and damages and restitution “to the State
of Washington on behalf of its state agencies and consumers.”
The consumers are Washington residents who purchased fin-
ished products, such as televisions and cell phones, containing
TFT-LCD panels.

   The Attorney General of California filed a similar com-
plaint in state court, as parens patriae on behalf of California
residents. The California Attorney General’s complaint
alleges statutory violations and unjust enrichment and seeks:
(1) declaratory and injunctive relief; (2) civil penalties; and
(3) restitution and treble damages for state agencies, munici-
palities, and California residents who purchased finished
products containing TFT-LCD panels.
  1
   Class actions asserting the same price-fixing claims against the same
Defendants had been filed as early as 2006. Those actions were consoli-
dated in April 2007 as Multi-District Litigation No. 1827 in the Northern
District of California.
18760     WASHINGTON STATE v. CHIMEI INNOLUX CORP.
   Defendants removed the California action to the United
States District Court for the Northern District of California
and the Washington action to the United States District Court
for the Western District of Washington, alleging federal juris-
diction under CAFA. Specifically, Defendants alleged that
consumers were the real parties in interest for the monetary
relief claims, and that therefore the States’ parens patriae
claims were disguised class actions removable under CAFA.

   Both California and Washington moved to remand to their
respective state courts, contending that removal under CAFA
was improper. The district court granted both States’ motions
to remand. This timely appeal followed.

   We review the question of whether these actions were
properly remanded to the State courts from which they were
removed de novo. Patel v. Del Taco, Inc., 446 F.3d 996, 998
(9th Cir. 2006); Providence Health Plan v. McDowell, 385
F.3d 1168, 1171 (9th Cir. 2004). Similarly, we review the
“construction, interpretation, or applicability” of CAFA de
novo. Bush v. Cheaptickets, Inc., 425 F.3d 683, 686 (9th Cir.
2005).

                               II

   [1] A federal court has jurisdiction over a civil case initi-
ated in state court and removed by the defendant to federal
district court if the case originally could have been brought in
federal court. See 28 U.S.C. § 1441; Martin v. Franklin Capi-
tal Corp., 546 U.S. 132, 134 (2005).

   Congress enacted CAFA to “ ‘curb perceived abuses of the
class action device which, in the view of CAFA’s proponents,
had often been used to litigate multi-state or even national
class actions in state courts.’ ” United Steel v. Shell Oil Co.,
602 F.3d 1087, 1090 (9th Cir. 2010) (quoting Tanoh v. Dow
Chem. Co., 561 F.3d 945, 952 (9th Cir. 2009)). CAFA vests
a district court with original jurisdiction over “a class action”
           WASHINGTON STATE v. CHIMEI INNOLUX CORP.         18761
where: (1) there are one-hundred or more putative class mem-
bers; (2) at least one class member is a citizen of a state dif-
ferent from the state of any defendant; and (3) the aggregated
amount in controversy exceeds $5 million, exclusive of costs
and interest. 28 U.S.C. § 1332(d)(2), (5)(B), (6).

   [2] CAFA authorizes the removal of class action lawsuits
from state to federal court when the jurisdictional require-
ments are satisfied. 28 U.S.C. § 1332(d)(2). However, the
general principles of removal jurisdiction apply in CAFA
cases. The right of removal is statutory, and the requirements
strictly construed. Abrego Abrego v. The Dow Chem. Co., 443
F.3d 676, 685 (9th Cir. 2006). The burden of establishing
removal jurisdiction, even in CAFA cases, lies with the defen-
dant seeking removal. Id. at 686.

                                A

   In applying these principles, the district court correctly con-
cluded that parens patriae suits filed by state Attorneys Gen-
eral may not be removed to federal court because the suits are
not “class actions” within the plain meaning of CAFA.
Accordingly, the district court properly remanded the actions.

   [3] The doctrine of parens patriae allows a sovereign to
bring suit on behalf of its citizens when the sovereign alleges
injury to a sufficiently substantial segment of its population,
articulates an interest apart from the interests of particular pri-
vate parties, and expresses a quasi-sovereign interest. Alfred
L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592, 607
(1982). Relevant to this action, the Washington Consumer
Protection Act authorizes the Attorney General to file a suit
“as parens patriae on behalf of persons residing in the State”
to “prevent the doing of any act herein prohibited or declared
to be unlawful.” Wash. Rev. Code § 19.86.080(1). Similarly,
California law empowers the Attorney General to file a suit
as parens patriae to “secure monetary relief. . . for injury sus-
tained by those natural persons to their property by reason of
18762     WASHINGTON STATE v. CHIMEI INNOLUX CORP.
any violation of this chapter.” Cal. Bus. & Prof. Code
§ 16760(a)(1); see also Cal. Bus. & Prof. Code § 17204.

   The question of whether these parens patriae lawsuits are
class actions within the meaning of CAFA is one of statutory
construction. As always, our starting point is the plain lan-
guage of the statute. Children’s Hosp. & Health Ctr. v. Bel-
she, 188 F.3d 1090, 1096 (9th Cir. 1999). “[W]e examine not
only the specific provision at issue, but also the structure of
the statute as a whole, including its object and policy.” Id. If
the plain meaning of the statute is unambiguous, that meaning
is controlling and we need not examine legislative history as
an aid to interpretation unless “the legislative history clearly
indicates that Congress meant something other than what it
said.” Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d
863, 877 (9th Cir. 2001) (en banc). If the statutory language
is ambiguous, then we consult legislative history. United
States v. Daas, 198 F.3d 1167, 1174 (9th Cir. 1999).

   [4] There is no ambiguity in CAFA’s definition of class
action. CAFA defines the term class action as “any civil
action filed under rule 23 of the Federal Rules of Civil Proce-
dure or similar State statute or rule of judicial procedure
authorizing an action to be brought by 1 or more representa-
tive persons as a class action.” 28 U.S.C. § 1332(d)(1)(B)
(emphasis added). Under this definition, a suit commenced in
state court is not a class action unless it is brought under a
state statute or rule similar to Rule 23 that authorizes an
action “as a class action.” Id.

   [5] Neither lawsuit was filed under Rule 23 of the Federal
Rules of Civil Procedure or any similar state statute. Unlike
private litigants, the Attorneys General have statutory author-
ity to sue in parens patriae and need not demonstrate standing
through a representative injury nor obtain certification of a
class in order to recover on behalf of individuals. See Wash.
Rev. Code § 19.86.080; Cal. Bus. & Prof. Code § 16760.
None of the state statutes contain the typical class action
          WASHINGTON STATE v. CHIMEI INNOLUX CORP.         18763
requirements of showing numerosity, commonality, typicality,
or adequacy of representation. See Marlo v. United Parcel
Serv., Inc., 639 F.3d 942, 946 (9th Cir. 2011) (“To maintain
a class action, a plaintiff must demonstrate numerosity, com-
monality, typicality, and adequate representation of the class
interest.”). As the California Supreme Court noted:

    an action by the People lacks the fundamental attri-
    butes of a consumer class action filed by a private
    party. The Attorney General or other governmental
    official who files the action is ordinarily not a mem-
    ber of the class, his role as a protector of the public
    may be inconsistent with the welfare of the class so
    that he could not adequately protect their interests
    and the claims and defenses are not typical of the
    class.

People v. Pacific Land Research Co., 569 P.2d 125, 129 (Cal.
1977) (citations and footnotes omitted).

   As the California Supreme Court also noted, a statutory
parens patriae action may well result in a settlement that does
not include restitution to victims of the fraud, but only results
in penalties paid to the public treasury. Id. at n.6. This fact
highlights the great distinction between a parens patriae law-
suit and a true class action.

   [6] Put another way, class actions are always representa-
tive actions, but representative actions are not necessarily
class actions. Indeed, the Supreme Court has held that other
representative suits are not class actions. See Gen. Tel. Co. v.
EEOC, 446 U.S. 318, 333-34 & n.16 (1980) (“We hold . . .
that the EEOC may maintain its § 706 civil actions for the
enforcement of Title VII and may seek specific relief for a
group of aggrieved individuals without first obtaining class
certification . . . .”). The question under CAFA is whether the
state statute authorizes the suit “as a class action.” The state
statutes at issue here do not.
18764       WASHINGTON STATE v. CHIMEI INNOLUX CORP.
   [7] In reaching the conclusion that parens patriae lawsuits
are not class actions within the meaning of CAFA, we join the
Fourth Circuit—the only other circuit court to have squarely
considered the question. West Virginia ex rel. McGraw v. CVS
Pharm., Inc., 646 F.3d 169 (4th Cir. 2011). In CVS Pharmacy,
the West Virginia AG brought suit against five pharmacies
alleging that they sold generic drugs to in-state consumers
without passing along the cost savings, in violation of three
state statutes. Id. at 171-72. The court identified the four
requirements of Rule 23, and concluded that “while a ‘simi-
lar’ state statute or rule need not contain all of the other condi-
tions and administrative aspects of Rule 23, it must, at a
minimum, provide a procedure by which a member of a class
whose claim is typical of all members of the class can bring
an action not only on his own behalf but also on behalf of all
others in the class . . . .” Id. at 175. Because the state statutes
did not require the AG to be designated as a representative
member of the class and did not contain any numerosity, com-
monality, or typicality requirements, the Fourth Circuit held
that the action was not covered by CAFA. Id. at 176.2

   [8] For all these reasons, we conclude that the statutory
parens patriae lawsuits before us are not class actions within
the meaning of CAFA, and that the district court properly
remanded the actions to state court.
  2
    The Fifth Circuit’s decision in In re Katrina Canal Litig. Breaches,
524 F.3d 700 (5th Cir. 2008) is not to the contrary. In Katrina, the Louisi-
ana Attorney General filed a lawsuit, not under a parens patriae statute,
but under the general state class action statute, Louisiana Code of Civil
Procedure, Article 591, which contains requirements similar to Fed. R.
Civ. P. 23. Id. at 703. Under those circumstances, the Fifth Circuit con-
cluded that the suit was removable under CAFA. Id. at 706. The Fifth Cir-
cuit did not reach the question of whether statutory parens patriae
lawsuits were class actions under CAFA and, in fact, in a subsequent case
specifically noted that issue had not been decided. See Louisiana ex rel.
Caldwell v. Allstate Ins. Co., 536 F.3d 418, 430 (5th Cir. 2008) (“[W]e
need not address whether this lawsuit could . . . properly proceed as a class
action under CAFA.”).
          WASHINGTON STATE v. CHIMEI INNOLUX CORP.         18765
                               B

   Defendants contend that the States’ parens patriae suits are
class actions within the meaning of CAFA because they are
representative actions with sufficient “similarity” to a class
action under Rule 23. They cite the Senate Judiciary Commit-
tee’s instructions to interpret the definition of class action
“liberally” under CAFA: “[i]ts application should not be con-
fined solely to lawsuits that are labeled ‘class actions’ by the
named plaintiff or the state rulemaking authority.” S. Rep.
No. 109-14, at 34 (2005), reprinted in 2005 U.S.C.C.A.N. 3,
30.

   [9] Defendants’ argument, however, disregards the second
part of the statutory text defining class actions within the
meaning of CAFA. A state action must be filed under a statute
that is both “similar” to Rule 23 and authorizes an action “as
a class action.” 28 U.S.C. § 1332(d)(1). Had Congress
intended CAFA to apply to any representative actions demon-
strating sufficient similarity to class actions under Rule 23, it
would not have also included an explicit requirement that the
suit be brought “as a class action.” See TRW Inc. v. Andrews,
534 U.S. 19, 31 (2001) (“It is a cardinal principle of statutory
construction that a statute ought, upon the whole, be so con-
strued that, if it can be prevented, no clause, sentence, or word
shall be superfluous, void, or insignificant.” (internal quota-
tion marks and citation omitted)). Although a comparison to
the requirements for class certification under Rule 23 can be
useful in determining whether parens patriae suits are similar
to federal class actions, it is not the end of the inquiry.

   [10] Defendants’ suggestion that the Senate’s “explicit leg-
islative guidance” to define class action “liberally” requires
viewing parens patriae claims as class actions under CAFA
is also unpersuasive. Even under an expansive definition,
CAFA would not cover parens patriae suits. As we have
noted, it is not only that parens patriae suits are not “labeled
‘class actions,’ ” it is that they also lack statutory require-
18766       WASHINGTON STATE v. CHIMEI INNOLUX CORP.
ments for numerosity, commonality, typicality, or adequacy
of representation that would make them sufficiently “similar”
to actions brought under Rule 23, and that they do not contain
certification procedures. Parens patriae suits lack the defining
attributes of true class actions. As such, they only “resemble”
class actions in the sense that they are representative suits.3

   Defendants argue that even if the States’ statutes do not
contain typicality and adequacy of representation require-
ments, they do contain other procedural requirements such as
notice to the affected citizens, opt-out provisions, and court-
approval for any settlements.4 According to Defendants, these
procedural requirements make parens patriae actions suffi-
ciently similar to class actions. However, this argument
ignores CAFA’s requirement that the state statute authorize
the suit “as a class action” and the central requirements of
class actions.

                                    III

   [11] Under the plain text of 28 U.S.C. § 1332(d), the
parens patriae suits are not class actions within the meaning
of CAFA. Therefore, the district court lacked jurisdiction over
the actions and properly remanded them to state court. Given
this conclusion, we need not, and do not, reach any other issue
raised by the party.
  3
     Furthermore, the Senate Report contains a statement implying that
CAFA only applies to suits filed under a state’s Rule 23 analog, which
contradicts the Report’s later statement that CAFA applies to all lawsuits
that simply resemble class actions. S. Rep. No. 109-14, at 29, reprinted in
2005 U.S.C.C.A.N. 3, 24. (“[CAFA] defines the term ‘class action’ to
include representative actions filed in federal district court under Rule 23
of the Federal Rules of Civil Procedure, as well as actions filed under sim-
ilar rules in state courts that have been removed to federal court.” (empha-
sis added)).
   4
     Although California’s state statute includes these types of provisions,
see Cal. Bus. & Prof. Code § 16760(b)-(c), Washington’s does not, see
Wash. Rev. Code § 19.86.080.
    WASHINGTON STATE v. CHIMEI INNOLUX CORP.   18767
AFFIRMED.