Supreme Court Clarifies State Court Jurisdiction for Securities Claims and Opens Door to Plaintiff Forum Shopping

By: James E. Anklam, Andrew B. Barkan, Lee T. Barnum, Daniel J. Bursky, Andrew Cashmore, Joshua Thomas Coleman, ‎Israel David, Stuart H. Gelfond, Samuel P. Groner, Mark S. Hayek, Scott B. Luftglass, Meredith L. Mackey, Joshua D. Roth, Peter L. Simmons, ‎James D. Wareham, Joshua Wechsler

On March 20, 2018, the Supreme Court resolved a split between state and federal courts regarding the ability of plaintiffs to bring class actions in state court arising under federal securities laws.  In Cyan, Inc. et al. v. Beaver County Employees Retirement Fund, --- U.S. ---, 2018 WL 1384564 (Mar. 20, 2018), the Court held that the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”) did not strip state courts of jurisdiction over class actions alleging violations of the Securities Act of 1933 (“1933 Act”) where such lawsuits assert claims only under the 1933 Act. The Court also held that defendants could not remove such cases from state courts to federal courts.

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