At the conclusion of the Supreme Court term, the Court denied certiorari in Philip Morris USA Inc. v. Jackson, which presented an issue involving federal Due Process Clause limitations on state court class actions.  Last Fall, Justice Scalia had issued an in-chambers opinion, in his capacity as circuit justice of the Fifth Circuit, granting a stay.  DRI filed an amicus brief in support of certioriari. 

This Louisiana state court class action had resulted in a $241 million verdict against tobacco companies requiring them to pay for a ten-year smoking cessation program for the class.  The court of appeal affirmed and state supreme court denied review.  In granting a stay, Justice Scalia wrote that the case presented an important question regarding federal due process limits on class treatment in state courts:

This is a fraud case, and in Louisiana the tort of fraud normally requires proof that the plaintiff detrimentally relied on the defendant’s misrepresentations. Accordingly, the Court of Appeal indicated that members of the plaintiff class who wish to seek individual damages, rather than just access to smoking-cessation measures, would have to establish their own reliance on the alleged distortions. But the Court of Appeal held that this element need not be proved insofar as the class seeks payment into a fund that will benefit individual plaintiffs, since the defendants are guilty of a “distort[ion of] the entire body of public knowledge” on which the “class as a whole” has relied. Thus, the court eliminated any need for plaintiffs to prove, and denied any opportunity for applicants to contest, that any particular plaintiff who benefits from the judgment (much less all of them) believed applicants’ distortions and continued to smoke as a result.

. . . The apparent consequence of the Court of Appeal’s holding is that individual plaintiffs who could not recover had they sued separately can recover only because their claims were aggregated with others’ through the procedural device of the class action.

The extent to which class treatment may constitutionally reduce the normal requirements of due process is an important question. National concern over abuse of the class-action device induced Congress to permit removal of most major class actions to federal court, see 28 U.S.C. § 1332(d), where they will be subject to the significant limitations of the Federal Rules. Federal removal jurisdiction has not been accorded, however, over many class actions in which more than two-thirds of the plaintiff class are citizens of the forum State. See § 1332(d)(4). Because the class here was drawn to include only residents of Louisiana, this suit typifies the sort of major class action that often will not be removable, and in which the constraints of the Due Process Clause will be the only federal protection.  (Emphasis added; citations omitted.)

While Justice Scalia predicted that four justices would vote to grant certiorari, his prediction turned out to be wrong.  It is rare that Justice Scalia cannot get support at least from Chief Justice Roberts and Justices Thomas and Alito.  Perhaps the Court concluded that the issue presented was too closely tied to an issue of Louisiana state law that the due process question was not presented “cleanly” enough for the Court to take it up.  A blog post notes that a similar issue apparently is presented by Chemtall v. Stern, in which a petition for certiorari is pending.  I’m not sure it is quite the same issue.

This is an important issue that I expect will percolate up to the Court again within the next few years.  The Wal-Mart decision (see my blog post on Wal-Mart) is likely to further encourage plaintiffs’ class action attorneys to find ways around CAFA and bring more cases in state courts.  Some state court class action law may not satisfy federal due process standards, but unless the state appellate courts impose due process limits, the only remedy will be in the U.S. Supreme Court.