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Federal Court Not Suited to LCD Antitrust Case

(CN) - Dozens of LCD panel manufacturers accused of price-fixing must litigate in state court, the 9th Circuit ruled, finding that lawsuits filed by a state to protect its citizens are not class actions under federal law.

The attorneys general of Washington and California allege that, from 1998 to 2006, Sharp, Toshiba, Epson and many other manufacturers of thin-film transistor liquid crystal display (LCD) panels engaged in a scheme to fix prices, stifle competition and overcharge consumers around the world.

Both states filed antitrust actions on behalf of their citizens in their respective state courts, but the manufacturers removed the cases to federal court, claiming that the claims were parens patriae "disguised" as class actions.

Latin for "parent of the nation," parens patriae is a legal theory that allows states to sue and seek redress on behalf of their citizens.

The states moved to send the claims back to their own courts, and U.S. District Judge Susan Illston in San Francisco agreed.

A three-judge panel of the 9th Circuit affirmed unanimously in a short ruling Monday.

The court rejected the manufacturers' argument that the cases were actually class actions because the consumers, not the states, were the real parties in interest. Class actions may always be representative actions, but "representative actions are not necessarily class actions," the judges found.

"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 private parties, and expresses a quasi-sovereign interest," Judge Sidney Thomas wrote for the San Francisco-based appeals panel. "Unlike private litigants, the attorneys general have statutory authority 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."

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