The US Court of Appeals for the Second Circuit considered in Purdue Pharma L.P. v. Kentucky whether a parens patriae suit was, in essence, a class action suit that may be removed to federal court under CAFA.

The Commonwealth of Kentucky, through its attorney general, and Pike County, Kentucky, brought suit in Kentucky state court against Purdue Pharma L.P. and related entities. The suit alleged that the defendants violated Kentucky law by misleading healthcare providers, consumers and government officials regarding the risks of addiction associated with OxyContin, a drug manufactured and sold by the Purdue entities. The defendants removed the action to federal court, arguing that the suit was a class action removable under CAFA. The case was transferred from the US District Court for the Eastern District of Kentucky to the US District Court for the Southern District of New York.

The Southern District of New York remanded the case, holding that the court lacked subject matter jurisdiction because the plaintiffs did not meet CAFA's definition of a class. The defendants sought leave to appeal and asserted that the case presented an important and unsettled question of law: whether a parens patriae lawsuit can be considered a class action under CAFA for removal purposes.

On January 9, 2013, the Second Circuit issued an opinion holding that a parens patriae suit brought under Kentucky state laws did not meet the definition of a "class action" under CAFA, and was therefore not removable. By doing so, the Second Circuit joins the Fourth, Fifth, Seventh and Ninth Circuits in concluding that parens patriae suits are not removable "class actions" under CAFA.

The court observed that the removal statute is to be construed narrowly and that any doubts must be resolved against removability. It also noted that CAFA expands federal diversity jurisdiction by allowing the removal of class actions meeting the requirements of:

A class action is defined by CAFA as an action brought under Federal Rule of Civil Procedure (FRCP) 23 or a state statute that is both similar to FRCP 23 and authorizes the action to proceed as a class action. As the state-court complaint was not filed under FRCP 23, the Second Circuit considered whether the suit was filed under a similar state statute.

A parens patriae suit is one in which a governmental entity brings an action to protect quasi-sovereign interests such as the health and well-being of its residents. In Purdue Pharma, the attorney general brought a parens patriae action seeking to enforce Kentucky state law against the defendants for violations of several of the state’s statutes which protect against fraud, false advertising and antitrust. As the court specifically noted, the attorney general did not seek relief under Kentucky’s state-law analog to FRCP 23.

The court determined that none of these statutes, nor parens patriae suits in general, bear sufficient similarity to FRCP 23, pointing particularly to the fact that they do not require numerosity, commonality, typicality or class certification. Although the court noted that a statute need not impose all of FRCP 23's requirements for it to be considered a similar state statute for CAFA removal purposes, the statute must, at a minimum, provide for a procedure by which a member of a class whose claim is typical of all members of the class can bring an action not only on his behalf but also on behalf of the others in the class.

The Second Circuit joins the Fourth, Fifth, Seventh and Ninth Circuits in rejecting the idea that parens patriae suits are, in essence, class action suits removable under CAFA. Parties who wish to litigate parens patriae suits in federal court may need to look beyond CAFA for removal.