West Virginia v. ComCast Corp., — F. Supp. 2d —, 2010 WL 1257639 (E.D. Pa., March 31, 2010) (No. 09-4671).
The State of West Virginia in its capacity as parens patriae (for those who have no idea how to pronounce that, just say parent), brought suit against Comcast Corporation to stop Comcast’s policy of you have to “pay to play” pricing methods on its cable boxes. The suit was filed in state court alleging that the cable company’s policy of requiring their premium subscribers to only rent Comcast cable boxes “constituted impermissible tying behavior.” (or in other words they were acting like a spoiled three year who is not willing to share his toys) Comcast had the suit removed to federal court based on CAFA diversity requirements. The most pivotal aspect of the case hinged on the Court’s analysis of when is a State acting as a real party plaintiff.
The issue before the court was to determine who was right: the parent or the child (in essence was removal proper)? According to CAFA, in order to remove a case all four requirements must be met. Of the four requirements, the parties were only in agreement that the aggregate amount exceeded five million. Therefore, the Court was left to wrestle with the other three issues.
The first issue was whether minimal diversity was met. Generally, where the only plaintiff is the state, diversity jurisdiction does not exist. Let us analyze: West Virginia is a state and the only plaintiff, case closed, right? Wrong, would I really write about a case that simple. Of course not, where there is a rule there is an exception. And that exception arises when the state should not be considered the only plaintiff.
So the question arose, when should the state be viewed as more than the only party, when they are the only party?(Are you confused yet?) The answer rests on whether the state’s interest is the only “real interest.” If the Court finds that the State is filing on behalf of itself and it is the only real interest, then minimum diversity cannot exist. However, if the Court finds that the State, in its capacity as parens patriae, is representing other parties’ interest, then minimum diversity exists and the case can be removed.
To determine whether a state is representing more than a nominal interest, the state must operate in one of two “quasi-sovereign” interests: 1) acting as a superhero protecting the health and well-being of its residents in general; or 2) playing the victim of discriminatorily being denied its rightful status within the federal system. Well, it goes without saying that number is one is applicable and the Court felt the same way. In order to justify its position, the Court paid homage to the state of Louisiana and took a detour to analyze the Fifth Circuit’s opinion in Caldwell v. Allstate Ins. Co., 536 F. 3d 418, 424 (5th Cir. 2008). (Editors’ Note: See the CAFA Law Blog analysis of Caldwell posted on April 14, 2008).
Caldwell is a case brought by “The Boot” against (Surprise! Surprise!) insurance carriers that were allegedly in cohorts to defeat competition by suppressing policy rates. The Court in Caldwell laid two analyses for determining real parties: either case by case or the “wholesale” approach. As with all good superheroes, you attack your enemy using their weakness. That is why the Court used Caldwell’s framework of case by case approach (in other words I do not want to be consistent so I will play it by ear) to arrive at the decision that the real parties in the suit were actually Comcast’s premium subscribers. Therefore, the state was not the only real party and minimum diversity existed.
Once the Court decided that minimum diversity existed, it easily resolved the issue of numerosity, because Comcast conceded that it had tens of thousands of premium subscribers in West Virginia. As to the issue of whether the West Virginia’s equivalent was equal to rule 23 of Federal Rules of Civil Procedure, the Court held that rule 23 should be interpreted liberally and that West Virginia’s law does not require “exactitude.”
Now, as with any parent whose child is correct in an argument, West Virginia did not go down without a fight. The State attempted to argue that 1) removal of the action to federal court would violate the State’s right to sovereign immunity under the Eleventh Amendment; and 2) removal would violate the State’s right to enforce its police power under the Tenth Amendment. And just like a wise grandparent witnessing the whole scene, the Court chastised the State for its feeble arguments. Ultimately, punishing West Virginia and denying its Motion to Remand.
By: Latisha Nixon-Jones