A unanimous Supreme Court today held that "covered class actions" over exchange-traded securities are not removable from state courts under SLUSA when they assert only '33 Act claims.
The Court held the removal provisions of the Act are in aid of its state-law claim bar (removed to ensure dismissal), and do not otherwise affect the long-standing grant of concurrent jurisdiction for '33 Act claims.
"Under our reading of SLUSA, all covered securities class actions must proceed under federal law; most (i.e., those alleging 1934 Act claims) must proceed in federal court; some (i.e ...
In 1995, the Private Securities Litigation Reform Act ("PSLRA") was passed to limit frivolous and unwarranted securities lawsuits. 15 U.S.C. §78u-4. While private securities litigation is an indispensable tool in which defrauded investors can recover their losses, such litigation has led to nuisance filings, targeting of deep-pocket defendants, and vexatious discovery requests in attempts to, among other things, extort large settlements. See Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71 (2006). To combat these actions, the PSLRA changed the pleading ...