On Tuesday, March 20, 2018, the United States Supreme Court released its long-anticipated decision in Cyan, Inc. et al. v. Beaver County Employees Retirement Fund et al.
, No. 15-1439, unanimously affirming the findings of the California state courts en route to bringing much needed clarity regarding the jurisdictional bounds of claims brought under the Securities Act of 1933 (the “’33 Act”). View a copy of the decision here
. View a copy of the amicus brief here
As touched on by the Court, for more than a decade, plaintiffs and defendants have sparred across the country over one question: does the Securities Litigation Uniform Standard Act of 1998 (“SLUSA”) strip state courts of any jurisdiction to adjudicate actions alleging only ’33 Act violations? Justice Kagan, writing for the unanimous Court, resoundingly rejected petitioner Cyan’s strained interpretation of statutory text in favor of its own plain reading in favor of concurrent state court jurisdiction over these claims. The Court similarly found that the text of SLUSA does not arm defendants with a right of removal of ’33 Act claims brought in state court, a position put forth by the United States as amicus curiae
, as reading the text to provide for such leads to an incongruous and untenable application of the law.
At the core of its decision, the Supreme Court rejected the invitation of Cyan and the Federal Government to read into the statute incongruous congressional intent and limitations that would otherwise render the law ineffective for its actually-stated purposes, or otherwise strip away clear, unambiguous meaning. In its opinion rejecting Cyan’s and the government’s interpretations of the statute, the Supreme Court echoed arguments made in an amicus curiae
brief submitted by a group of institutional investors (the “Amici”), in support of the positions of respondents in the action, particularly with respect to the legislative history surrounding the enactment of SLUSA.
Levi & Korsinsky, LLP is proud to have been part of the legal team representing the Amici, alongside Scott + Scott, LLP and Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C. In praising the court’s decision, Levi & Korsinsky founding partner Eduard Korsinsky stated, “Today’s Supreme Court decision is a victory for all shareholders in every state, opening the courthouse doors across the country to investors seeking to hold corporate bad actors accountable.”
With the issue of state court concurrent jurisdiction over ’33 Act cases now settled law, plaintiff-investors have been afforded an additional arrow in their quiver for addressing corporate malfeasance with respect to securities offerings.