Cyan, Inc. v. Beaver County Employees Retirement Fund

Case Updates

In a unanimous decision, the Supreme Court held that (1) the Securities Litigation Uniform Standards Act of 1988 (“SLUSA”) did nothing to strip state courts of jurisdiction over class actions brought under the 1933 Act, and (2) SLUSA does not permit defendants to remove class actions alleging only 1933 Act claims from state to federal court.

Click here to view the Chamber's brief, filed jointly with the Securities Industry and Financial Markets Association and National Venture Capital Association. This case concerns a California state court decision which permits a securities class action lawsuit based solely on federal law to proceed in state court. The brief explained that California state courts have become a hotbed for federal securities class actions, despite the fact that state court jurisdiction over these suits—based solely on federal securities law—are contrary to the express jurisdictional provision in the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”), which eliminated state court jurisdiction for covered actions alleging claims under the Securities Act of 1933.

James C. Dugan, Mary J. Eaton, Frank Scaduto, and Stephanie L. Klock of Willkie Farr & Gallagher LLP served as co-counsel for the amici.

Joined by the Securities Industry and Financial Markets Association and National Venture Capital Association, the U.S. Chamber filed an amicus brief in support of a petition for certiorari seeking review of a California state court decision to permit a securities class action lawsuit based solely on federal law to proceed in state court. The brief explained that California state courts have become a hotbed for federal securities class actions, despite the fact that state court jurisdiction over these suits—based solely on federal securities law—are contrary to the express jurisdictional provision in the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”), which eliminated state court jurisdiction for covered actions alleging claims under the Securities Act of 1933. Further, the Chamber argued that allowing these suits to proceed in state court, where federal procedural protections often do not apply, fuels uncertainty and drives up the cost of raising capital in U.S. markets, which ultimately hampers innovation and leads to lower returns for investors.

James C. Dugan, Mary J. Eaton, Frank Scaduto, and Vincent P. Iannece of Willkie Farr & Gallagher LLP served as co-counsel for the amici.