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Handling State AG Parens Patriae Actions Now That the Supreme Court Has Rejected Federal Court Removal
21 January 2014
The Supreme Court has ruled that state attorney general lawsuits seeking restitution for damaged consumers are not “mass actions” under the Class Action Fairness Act and cannot be removed to federal court.
Because the Supreme Court’s ruling may encourage more such state “parens patriae” lawsuits, companies should consider that if they settle parallel claims in a federal class action, the federal court may be willing to stay the state lawsuits, pursuant to the All Writs Act, while it considers the fairness of the proposed class action settlement, which would release the underlying claims asserted by the state AG.
Although this tool is only available in limited circumstances, this strategy can be of great benefit to a company facing parallel proceedings when it wants to settle those claims rather than litigate them.
Mark P. Goodman
John S. Kiernan
Maura Kathleen Monaghan
Erica S. Weisgerber
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