Supreme Court Keeps AG 'Class Actions' in State Court

From the Experts

, Corporate Counsel

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In its Mississippi v. AU Optronics, Corp. decision, the U.S. Supreme Court ignored the negative practical implications, particularly for corporate defendants that are litigating in the class action sphere.

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What's being said

  • The authors are too polite. For the high court‘s Mississippi v. AU Optronics, Corp. decision effectively encourages pay-to-play injustice, wherein private-sector personal injury law firms and politically ambitious state AGs shamelessly pursue their self-interest instead of evenhanded justice in the public interest.

    Typically, pay-to-play rackets work like this: A plaintiffs‘ firm (e.g., MotleyRice) that has contributed generously in the past to an AG‘s campaign(s) approaches the AG with a novel scheme (e.g., public nuisance as opposed to strict products liability) to extort a lucrative settlement from a given defendant company or whole industry (e.g., manufacturers that may or may not have sold lead-based in given jurisdictions 60 years ago). The AG often hires the firm to litigate the claim on a contingency fee basis, effectively deputizing private, profit-driven lawyers with the power of the state to pursue their self interest, claiming his/her hourly staff attorneys haven’t the necessary expertise for such litigation (read: staff attorneys are insufficiently shameless). If the private lawyers win the case, they get very rich and, in turn, trickle down some of their loot to the AG‘s campaign coffers. Meanwhile, the populist AG can brag to voters that s/he successfully rifled the pockets of mean old out-of-state corporations for some "free" money to pay for more services without raising taxes.

    Of course, states that develop reputations for such bald-faced corruption soon enough suffer the economic consequences as businesses choose not to expand or relocate there. Rhode Island‘s lead-paint scam alluded to above is a prime example. After two attorneys general spent nearly a decade in cahoots with MotleyRice, trying desperately but unsuccessfully to extort paint and chemical manufacturers, former AG Sheldon Whitehouse now enjoys the perks and prestige of a U.S. Senator while his Rhode Island constituents suffer the highest unemployment rate in the nation.

    Cleary the public interest of Rhode Island‘s unemployed wasn‘t served by their AGs lead-paint scam that improperly targeted deep-pocket corporations instead of properly targeting property owning slumlords who’ve allowed lead-painted walls to fall into disrepair and thus pose a danger to children. Of course, slumlords are voters and campaign donors too, and Senator Whitehouse and his ilk wouldn’t want to alienate them.

    -Darren McKinney, American Tort Reform Association, Washington, D.C.

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