Petition for Writ of Certiorari — Kircher v. Putnam Funds Trust

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IN THE

Supreme Court of the Anited States

CARL KIRCHER, ET AL.,

Petitioners,

Vv.

PUTNAM FUNDS TRUST, ET AL..,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Seventh Circuit

PETITION FOR A WRIT OF CERTIORARI

ROBERT L. KING DAVID C. FREDERICK

701 Market Street Counsel of Record

Suite 350 PRIYA R. AIYAR

St. Louis, Missouri 63101 KELLOGG, HUBER, HANSEN,

(314) 241-4844 TODD, EVANS & FIGEL,

P.L.L.C.

1615 M Street. N.W.

Suite 400

Washington, D.C. 20036

September 29, 2005 (202) 326-7900

QUESTIONS PRESENTED

1. Whether the court of appeals had jurisdiction, con-

trary to the holdings of three other circuits, to review a

district court order remanding for lack of subject-matter

jurisdiction a suit removed under the Securities Litigation

Uniform Standards Act of 1998 (““SLUSA”), notwithstand-

ing 28 U.S.C. § 1447(d)’s bar on appellate review of re-

mand orders based on lack of subject-matter jurisdiction

and the district courts’ conclusion that petitioners’ claims

are not preempted by and thus not removable under

SLUSA.

2. Whether the court of appeals erred in holding, in

acknowledged conflict with three other circuits, that

SLUSA preempts claims brought by holders of securities,

notwithstanding SLUSA’s language limiting preemption

to claims “in connection with the purchase or sale of a

covered security,” and this Court's interpretation of iden-

tical language to cover only claims brought by purchasers

or sellers in Blue Chip Stamps, Inc. v. Manor Drug Stores,

421 U.S. 723 (1975).

LIST OF PARTIES TO THE PROCEEDINGS

Petitioners Carl Kircher, Beth Dudley, Steve Dudley,

Avery Jackson, Dorothy Leuttinger, T.K. Parthasarathy,

Robert Potter, Terry Spurgeon, as Custodian for the Bene-

fit of James E. Spurgeon, and Gary Vogeler were plain-

tiffs in the district court and appellees in the court of

appeals.”

Robert Brockway, Sharon Smith, Stuart A. Smith, and

Edmund Woodbury also were plaintiffs in the district

court but did not participate in the court of appeals pro-

ceedings, and thus are not parties to the petition for a

writ of certiorari.

The following were defendants in the district court and

appellants in the court of appeals, and are respondents

here:

Artisan Funds, Inc.

Artisan Partners Limited Partnership

Columbia Acorn Trust

Columbia Wanger Asset Management L.P.

Deutsche Investment Management Americas Inc.

Janus Capital Management LLC

Janus Investment Fund

Pacific Life Insurance Company

Putnam Funds Trust

Putnam International Equity Fund

Putnam Investment Funds

Putnam Investment Management, LLC

Scudder International Fund, Inc.

Van Kampen Investment Advisory Corporation

Van Kampen Series Fund, Inc.

Petitioners each filed suit as individuals and on behalf of all others

sip ularly situated.

AIM Advisors, Inc., AIM International Funds, Inc.,

Evergreen International Trust, Evergreen Investment

Management Company LLC, T. Rowe Price International

Funds, Inc., T. Rowe Price International, Inc., Templeton

Funds, Inc., Templeton Global Advisors Limited, Tem-

pleton Global Smaller Companies Fund, Inc., Templeton

Growth Fund, Inc., and Templeton Investment Counsel

LLC also were defendants in the district court but did not

participate in the court of appeals proceedings, and thus

are not parties to the petition for a writ of certiorari.

Be ts

Sige Og Se

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ..................cccccccssesssereeeesteeeeeeees i

LIST OF PARTIES TO THE PROCEEDINGG.................. il

TABLE OF AUTHORITIES ............cccccccccceesereeeeenteeeeeeees vil

STEITEIITINIIEN ‘<icidethtntesinesbeseneapedusaseoces sdiilamilputdiiansdibindiaia ]

SU IIIT IIIT setinncicnccdsetusehntinndcntennchencntetnenesstetesesssverencee 4

JURISDICTION ....... iiciiddeacaniscenitanaibebisdatieenenecesetiabesesnichensstenesies 4

STATUTORY AND REGULATORY PROVISIONS

SiITIIIIIIE assincccbsndaniidlebiildameuteiacndhtdcnesteneengntnonssecencsesesescesees 4

STATEMENT OF THE CASE:

A. The Statutory Framework .......................ccccccceceeeeess 4

B. Petitioners’ Common-Law Claims .............0.00c0008 5

I sncsulvenncanded )

REASONS FOR GRANTING THE PETITION:

1. THE COURT SHOULD GRANT CERTIO.-

~-RARI TO REVIEW THE SEVENTH CIR.

CUITS HOLDING THAT REMAND OR.

DERS UNDER SLUSA ARE SURJECT TO

APPELLATE REVIEW .............. pubeiiebsdoninatateandentesove 13

A. The Seventh Circuit's Exercise Of Appel-

late Jurisdiction Squarely Conflicts With

Decisions Of Three Other Circuits .................. 13

1. Second Circuit — Spielman ...............6...00005 14

a. es GED = SUG. 1. nncdccnncnscccocoss 15

3. Eleventh Circuit — Williams ...................... 15

B. The Seventh Circuit's Exercise Of Appel-

late Jurisdiction Is Inconsistent With

This Court’s Precedents And The Lan-

SINT Eee aicniteintibnteinnsncbdatnatebanientinintnnaiils 17

C. The Reviewability Of Remand Orders

Under SLUSA Is An Issue of Great Im-

portance Warranting This Court's Reso-

II. csthdsncisiemmainiandnaptaniitiianentngrenitatidianiimesbnines 20

Il. THIS COURT HAS GRANTED CERTIO-

RARI IN MERRILL LYNCH V. DABIT TO

DECIDE WHETHER SLUSA PREEMPTS

CLAIMS BROUGHT BY HOLDERS OF

Fe Die erensccocscsiinetensicuntensinncanigumnitagarevinsianes 23

A. The Seventh Circuit’s Decision That

SLUSA Preempts Holder Claims Square-

ly Conflicts With The Decisions Of Three

rT vicccnscitnitininnisscinemmmemenvcnnionsnetie 24

1. Second Circuit — Dabit ................:cccceeseeeeees 24

Z. Hbgtaths Civewit — Gir GG0 ....ccccccccsccsccvcsscsscesees 26

3. Eleventh Circuit — Rilev.......................00006 26

B. The Seventh Circuit’s Interpretation Of

SLUSA’s Preemptive Scope Is Contrary

To This Court’s Blue Chip Stamps Deci-

sion And Congressional Intent ........................ 27

C. Whether SLUSA Preempts’ Holder

Claims Is An Issue Of Great Importance........ 29

APPENDIX

vil

TABLE OF AUTHORITIES

Page

CASES

Abada v. Charles Schwab & Co., 300 F.3d 1112

NR re Soc ee oe 2, 10, 15, 21

Bates v. Dow AgroSciences LLC, 125 S. Ct. 1788

STEED csliihuriicsteinantiilaiemsemericaictnseiiliadcadtaineiaaibcisduniphiatiabaiinaiid 28, 29

Birnbaum v. Newport Steel Corp., 193 F.2d 461

PRED: TUITE cciailisicindia tcihcpenibinniiaaiiniidiasibaatinianiiiasibiieebiadtaeieesitesini’ 27

Blue Chip Stamps v. Manor Drug Stores, 421 U.S.

Pe cctinctsstncnnsteninies 3, 12, 13, 24, 25, 26, 27, 28, 29

Bradfisch v. Templeton Funds, Inc.. Case No. 03-CV-

0760-MJR (S.D. Ill. Jan. 23, 2004) 200.0... ceceeeeeeeeee i)

Chick Kam Choo v. Exxon Corp., 486 U.S. 140 (1988) .....19

Dabit v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

395 F.3d 25 (2d Cir. 2005), cert. granted, No. 04-

1371 (U.S. Sept. 27, 2005)..........3, 23, 24, 25, 26, 29, 30

Disher v. Citigroup Global Markets Inc., 419 F.3d

hs SID cei intinnitihinininisndabtensibielaeibiies 17, 20-21, 27

Gravitt v. Southwestern Bell Tel. Co., 430 U.S. 723

SITET Ui ccianiteli detieiasidinndcitliddiiclnatdabatiasidigiimidddapyisiiiminadiiabibummiing 17,18

Green v. Ameritrade, Inc., 279 F.3d 590 (8th Cir.

STII itecesatiaibaduagansbevatineinasdudeaessadeideipeiinnibinntinubiciatedneiiniiins 3, 26

Kontrick v. Rvan, 124 8S. Ct. 906 (2004) ................ 19, 20, 21

Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) ...0....00..00000. 28

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit.

No. 04-1371 (U.S. Sept. 27, 2005)...000 ee 3, 23, 30

vill

Riley v. Merrill Lynch, Pierce, Fenner & Smith, Inc..,

292 F.3d 1334 (11th Cir. 2002).................... 3, 16, 26, 27

Rowinski v. Salomon Smith Barney Inc., 398 F.3d

SEE CEES ERE, SITTIa sccshrictcietinestieieibiecncencssinatinteadiendiniatiaaneaantainame 17

Scarborough v. Principi, 124 S. Ct. 1856 (2004) ..19, 20, 21

Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984)........ 29

Spielman v. Merrill Lynch, Pierce, Fenner & Smith,

Inc., 332 F.3d 116 (2d Cir. 2003) .....2, 10, 14, 15, 20, 21

Thermtron Products, Inc. v. Hermansdorfer, 423 U.S.

SEITEN icciinntttienlincteuiteieiniedhininaiheieeeicinbapeciaiiieamladieipiihdemeiidapil 21, 22

Things Remembered, Inc. v. Petrarca, 516 U.S. 124

IIT cdicelasesiiie abasic iin lina iedinlhlen ih idimaaanidiiis 17, 18, 21

United Investors Life Ins. Co. v. Waddell & Reed

Inc., 360 F.3d 960 (9th Cir. 2004)................ 2, 10, 15, 21

Williams v. AFC Enters., Inc., 389 F.3d 1185 (11th

EE ee a a Oe Oe 2.15, 16

STATUTES AND REGULATIONS

Class Action Fairness Act of 2005, Pub. L. No. 109-2,

SE ESTES “RR ESe ane ene me See ee Sw Ee ie 22

§ 4(a)(2), 119 Stat. 11 (to be codified at 28 U.S.C.

a 22

§ 5(a):

119 Stat. 12 (to be codified at 28 U.S.C.

iF TIED dua: indetubiesiniiaiainiedssiidindineiiniatiaiatiiagll 22

119 Stat. 13 (to be codified at 28 U.S.C.

ON DOTTIE LD IT AE OTA T 22

Private Securities Litigation Reform Act of 1995,

Pub. L. No. 104-67, 109 Stat. 737 .00.........cccccceseseeeeereeees 4

Securities Act of 1933, 15 U.S.C. §§ 77a et seq. ..........00..... 5

BB UBL. © TIE cocccccsccccccsessese 2, 5, 9, 11, 16, 18, 19, 23

BD BAI. © FED cccncrvcsecsesesivinneciensend 5, 9, 11, 18, 20, 23

BB De © Fe ccc cncacatsesencnnnnnpesncnmesseincosined 5, 19, 23

BS DBA. © Te ee Rc cceccccnesconsessssececnnscctoniensonnnntenin 1]

i a 4

Securities Exchange Act of 1934, 15 U.S.C. §§ 78a

SEGUE: ieccciadndtinatinhonineinimmeniibimemniininipedensnelial 5, 10, 12

§ 10(b), 15 U.S.C. § 78)(b) .......... 3, 10, 12, 13, 24, 26, 27

eS, Pee ele et UE intisdicitremnncntntientnniiapecnnnsitaninnnenininsbabile 4

§ 28(f)(1), 15 U.S.C. § 78bb(f)(1)...... eee 5, 15

§ 28(f)(2), 15 U.S.C. § T8bb(f)(2)....... eee eeeeeeeeeee 5, 15

§ 28(f)(3)(D), 15 U.S.C. § 78bb(F)(3B)(D) «0.0. eeeeee 5

Securities Litigation Uniform Standards Act of 199%,

Pub. L. No. 105-353, 112 Stat. 3227............. ce eeeecee eens 2

BS UIC. § CBa-DeG IID 000 ccces: ccoscccevcsvscsnszccsscnccesonsionl 6

RE. © Pee ctcotccsctnsencnscincccnemnssecentescettinvasasevmunsnsitions 4

a i penne 10, 17

28 U.S.C. § 1447(d).................05.. 2, 10, 11, 13, 15, 16, 17, 20

17 C.F.R.:

§ 240.10b-5 (Rule 10b-5) .................. 3, 12, 13, 24, 26, 27

SEE SS ee ee AMO SENN RT 6

LEGISLATIVE MATERIALS

H.R. Conf. Rep. No. 105-803 (1998) .............ccccccccceeeeeeeeeeeees 4

Mutual Funds - Trading Practices and Abuses that

Harm Investors: Hearing Before the Subcomm.

on Federal Financial Management, Government

Information, and International Security of the

Senate Comm. on Homeland Security and Gov-

ernmental Affairs, 108th Cong. (Nov. 3, 2003)

(Statement of New York Attorney General Eliot

Spitzer, available at http://hsgac.senate.gov/

eR ciderictdideinsesimenvidéedienenliateesnbianiods 6-7

OTHER MATERIALS

Jennifer Barrett, “Inexcusable,” MSNBC.com, Nov.

11, 2003, available at http://www.msnbc.com/id/

3403565/site/mnewsweek ...........0..0.ccccccccceccececcceeecececeeeees 29

Financial Policy Forum, Special Policy Brief 13 —

Overview of Mutual Fund Scandal: “A Gauntiet

of Fraud” (Dec. 14, 2003; updated May 21, 2004),

available at http://www.financialpolicy.org/

SEED ciccsischinscninseicidiiigiitlniniddtasiieeiamnonastibbunertaibiintalamisidd 6

Investment Company Institute, Trading Abuse Re-

forms & Actions, available at http://www.ici.org/

I iccuscapidiihicincsintiamnummecinataiisicbaubiatigihindbdididainiediiiiie 7

Jennifer O’Hare, Preemption under the Securities

Litigation Uniform Standards Act: If It Looks

Like a Securities Fraud Claim and Acts Like a

Securities Fraud Claim, Is It a Securities Fraud

Claim?, 56 Ala. L. Rev. 325 (2004) .............ccccccceeeeeeeees 23

United States Government Accountability Office,

Mutual Fund Trading Abuses: Lessons Can Be

Learned from SEC Not Having Detected Viola-

tions at an Earlier Stage (Apr. 2005), available at

http://www.gao.gov/new.items/d05313.pdf................ 1,7

Eric Zitzewitz, Who Cares About Shareholders?

Arbitrage-Proofing Mutual Funds, 19 J.L. Econ.

Sy is TUTE OIIITTT El idiep sicdinensincibiickguttcindadinabececorsdiniubadiniansées 29

Carl Kircher, Beth Dudley, Steve Dudley, Avery Jack-

son, Dorothy Leuttinger, T.K. Parthasarathy, Robert Pot-

ter, Terry Spurgeon, as Custodian for the Benefit of

James E. Spurgeon, and Gary Vogeler (collectively, “peti-

tioners”) respectfully petition for a writ of certiorari to re-

view the judgment of the United States Court of Appeals

for the Seventh Circuit in this case.

INTRODUCTION

These eight consolidated cases involve two frequently

litigated issues of securities law of vital importance to the

administration of the federal courts and the investing

community. The circuits are deeply divided on the juris-

dictional and substantive questions presented. In the two

opinions below, the Seventh Circuit created conflicts with

four other circuits, leaving petitioners and investors like

them without a remedy for a practice by arbitrageurs that

costs investors an estimated $5 billion every year. |

Petitioners are long-term investors in international mu-

tual funds. They sued respondent funds and their man-

agers in state court, alleging that the funds negligently or

recklessly failed to calculate share prices accurately and

thereby exposed petitioners to an investment-diluting

practice known as “stale price trading” or “market tim-

ing.” That practice involves arbitrageurs trading on time

differences between the closing of U.S. markets and for-

eign exchanges. It dilutes the value of investors’ long-

term holdings as well as their voting rights. Because

market timing injures non-trading shareholders of mutual

funds - not purchasers or sellers — petitioners sought to

represent classes of individuals who held shares in funds

that experienced market-timing activity.

The respondent mutual funds removed the lawsuits to

federal district court and moved for dismissal under the

' See United States Government Accountability Office, Mutual Fund

Trading Abuses: Lessons Can Be Learned from SEC Not Having De-

tected Violations at an Earlier Stage 4-5 (Apr. 2005) (GAO Report’).

avatlable at http://www.gao.gov/new.items/d053 L3.pdf.

Securities Litigation Uniform Standards Act of 1998

(“SLUSA”). Petitioners moved for remand based on lack

of subject-matter jurisdiction. All of the district court

judges in these eight consolidated cases concluded that

SLUSA did not preempt petitioners’ claims, because the

claims were in connection with the retention or holding of

securities, rather than “in connection with the purchase or

sale of a covered security.” 15 U.S.C. § 77p(b). The dis-

trict judges further found that, because petitioners’ claims

were not preempted, they were also not removable under

SLUSA and therefore had to be remanded to state court

for lack of subject-matter jurisdiction.

On respondents’ appeal of those remand orders, the

Seventh Circuit issued two decisions that independently

warrant certiorari. First, the court held that 28 U.S.C.

§ 1447(d), which precludes appellate review of remands

based on a district court's conclusion that it lacked

subject-matter jurisdiction, did not bar review of the or-

ders in these cases. The Seventh Circuit rejected the dis-

trict courts’ characterization of their own orders as

grounded on a lack of jurisdiction. See Pet. App. 10a-17a

(“Kircher I~). In doing so, the Seventh Circuit acknowl-

edged that it was creating a conflict with the Second and

Ninth Circuits, which have held that § 1447(d) bars re-

view of a district court’s remand order under SLUSA. See

Spielman v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

332 F.3d 116 (2d Cir. 2003); United Investors Life Ins. Co.

v. Waddell & Reed Inc., 360 F.3d 960 (9th Cir. 2004):

Abada v. Charles Schwab & Co... 300 F.3d 1112 (9th Cir.

2002). Since the Seventh Circuit's decision on this re-

mand issue, the Eleventh Circuit has rejected the ap-

proach adopted by the Seventh Circuit and has agreed

with the Second and Ninth Circuits. See Williams v. AFC

Enters., Inc.. 389 F.3d 1185 (11th Cir. 2004).

After concluding that it had appellate jurisdiction, the

court then issued an opinion on the merits, where it again

created a split. this time with the Second, Eighth, and

Eleventh Circuits. Those circuits hold that SLUSA’s pre-

emption provision — which preempts class-action securi-

ties fraud claims “in connection with the purchase or sale

of a covered security” — does not apply to claims brought

by holders of securities, as opposed to purchasers or sell-

ers. See Dabit v. Merrill Lynch, Pierce, Fenner & Smith,

Inc., 395 F.3d 25, 43 (2d Cir. 2005), cert. granted, No. 04-

1371 (U.S. Sept. 27, 2005); Riley v. Merrill Lynch, Pierce,

Fenner & Smith, Inc., 292 F.3d 1334 (11th Cir. 2002);

Green v. Ameritrade, Inc., 279 F.3d 590 (8th Cir. 2002). In

those ‘courts, the “in connection with” language of SLUSA

has the same meaning as the nearly identical language in

§ 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.

§ 78}(b), and its corresponding Rule 10b-5, 17 C.F.R.

§ 240.10b-5, which this Court has interpreted to cover

only claims brought by purchasers or sellers. See Blue

Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975).

The Seventh Circuit, by contrast, concluded below that a

class-action plaintiff need not be a purchaser or seller of

securities for SLUSA to preempt his or her claims. See

Pet. App. la-9a (“Kircher 11°). Two days ago, this Court

granted certiorari to resolve this issue in Merrill Lynch,

Pierce, Fenner & Smith, Inc. v. Dabit, No. 04-1371.

The Seventh Circuit's decision below not only created a

conflict with three other circuits and countless district

courts, but also completely extinguished an entire cate-

gory of claims that have existed for more than 50 vears

and with this Court's blessing for the last 30. See Blue

Chip Stamps, 421 U.S. at 739 n.9 (noting availability of

“remedies ... to nonpurchasers and nonsellers under

state law”). Shareholders like petitioners who have no

§ 10(b) or Rule 10b-5 claim because they do not allege mis-

conduct “in connection with’+the purchase or sale of a se-

curity under those provisions are now simultaneously de-

nied a cause of action under state law because their

claims are deemed preempted under SLUSA as “in con-

nection with” the purchase or sale of a security. The Sev-

enth Circuit's holdings thus snuff out the claims of tens of

millions of mutual fund investors who have collectively

suffered an annual multi-billion-dollar dilution in the

value of their holdings from the funds’ negligent and reck-

less practices. The Seventh Circuit's decision strips such

investors of any direct private cause of action, on the the-

ory that their “claims must be left to public enforcement.”

Pet. App. 8a.

OPINIONS BELOW

The district courts’ opinions granting plaintiffs’ motions

to remand (Pet. App. 23a-64a) are unreported. The court

of appeals’ opinions finding appellate jurisdiction (id. at

10a-17a), and reversing and remanding the district courts’

judgments with instructions to undo the remand orders

and to dismiss plaintiffs’ state-law claims (id. at la-9a),

are reported at 373 F.3d 847 and 403 F.3d 478.

JURISDICTION

The court of appeals entered its judgment on April 5,

2005. A timely petition for rehearing was denied on May

2, 2005. Pet. App. 65a. On July 22, 2005, Justice Stevens

extended the time for filing a petition for a writ of certio-

rari to and including August 30, 2005, id. at 143a, and, on

August 26, 2005, further extended the time for filing to

and including September 29, 2005, id. at 144a. The juris-

diction of this Court is invoked under 28 U.S.C. § 1254(1).

STATUTORY AND REGULATORY

PROVISIONS INVOLVED

Relevant statutory and regulatory provisions are set

forth at Pet. App. 118a-142a.

STATEMENT OF THE CASE

A. The Statutory Framework

In 1995, Congress passed the Private Securities Litiga-

tion Reform Act (“PSLRA”) (codified in part at 15 U.S.C.

$$ 77z-1. 78u) to prevent “strike suits.” or meritless class

actions alleging fraud in the securities market. See H.R.

Conf. Rep. No. 105-803, at 13 (1998). To deter those suits,

the PSLRA imposes stringent pleading and other proce-

dural requirements on securities class-action plaintiffs.

To avoid the PSLRA’s requirements, plaintiffs increas-

ingly brought suit against issuers in state court alleging

securities fraud under state statutory or common law.

To prevent private plaintiffs from such alieged circum-

ventions of the PSLRA, Congress passed SLUSA, which

added to the Securities Act of 1933 (“1933 Act”) and the

Securities Exchange Act of 1934 (“1934 Act”) identical

provisions that preempt certain class actions under state

law. Specifically, SLUSA’s preemption provision states:

No covered class action based upon the statutory

or common law of any State or subdivision thereof

may be maintained in any State or Federal court by

any private party alleging —

(1) an untrue statement or omission of a material

fact in connection with the purchase or sale of a cov-

ered security; or

(2) that the defendant used or employed any

manipulative or deceptive device or contrivance in

connection with the purchase or sale of a covered

security.

15 U.S.C. § 77p(b): accord id. § 78bb(f)(1). SLUSA au-

thorizes such actions to be removed to federal court:

Any covered class action brought in any State

court involving a covered security, as set forth in

subsection (b) of this section, shall be removable to

the Federal district court for the district in which

the action is pending, and shall be subject to subsec-

tion (b).

Id. § 77p(c): accord id. § 78bb(f)(2)._ Following removal, if

the district court determines that the action is not in

fact within the scope of SLUSA’s preemption provision,

it must remand the action to state court. See id.

§§ 77p(dy(4), 78bb(f)(3)(D).

B. Petitioners’ Common-Law Claims

Petitioners are among the more than 90 million indi-

vidual long-term investors whom the Federal Reserve es-

timates have more than $4 trillion in long-term savings

invested in mutual funds with substantial holdings in

international stocks. See Financial Policy Forum, Special

Policy Brief 13 — Overview of Mutual Fund Scandal: “A

Gauntlet of Fraud” (Dec. 14, 2003; updated May 21, 2004),

available at http://www.financialpolicy.org/fpfspb13.htm.

The price at which one share of a mutual fund is sold and

redeemed is equal to the value of the fund’s portfolio of

securities, known as the fund's net asset value (“NAV”),

divided by the number of outstanding shares. The NAV is

calculated once a day at 4:00 p.m. Eastern Time. When a

fund holds assets that trade in competitive markets, it

must value those assets at their market price. See 15

U.S.C. § 80a-2(a)(41)(B)(ii); 17 C.F.R. § 270.2a-4(a).

Respondents value their assets using the final closing

price of the foreign security in its home market. For do-

mestic securities, that method yields a current price. For

securities of foreign issuers, however, the method pro-

duces prices that are up to 15 hours old and may no

longer reflect the current value of the foreign security,

causing mutual fund share prices to be either artificially

high or artificially low. For example, if the United States

market moves up following the close of Asian and Euro-

pean markets, investors can predict that foreign markets

will move up once trading begins on their next trading

day, and a share price based on foreign securities’ final

closing price will be artificially low. Or, as the Seventh

Circuit explained below, “[s]tock of a Japanese firm that

closes in Tokyo at ¥10,000 might trade in Frankfurt at

€ 75.22 (equivalent to ¥10,500) between the close in To-

kyo and the close in New York -— but the mutual fund

nonetheless would value each share at ¥10,000, because

that was its most recent price in the issuer's home mar-

ket.” Kircher II, Pet. App. 2a.

In early September 2003, New York Attorney General

Eliot Spitzer announced that his office’s investigation of

the mutual fund industry “revealed that some of the na-

tion's largest mutual fund companies permitted” a prac-

tice called “market timing.” Mutual Funds — Trading

Practices and Abuses that Harm Investors: Hearing

Before the Subcomm. on Federal Financial Management,

Government Information, and International Security of

the Senate Comm. on Homeland Security and Govern-

mental Affairs, 108th Cong. (Nov. 3, 2003) (Statement of

New York Attorney General Eliot Spitzer, available at

http://hsgac.senate.gov/_files/ACF1DE.pdf). Market tim-

ers exploit the time differences between U.S. and foreign

markets for short-swing profits. They do so by regularly

purchasing and redeeming mutual fund shares on days

when the foreign securities in the fund’s portfolio are un-

dervalued or overvalued, respectively. Studies have esti-

mated that such trading costs non-trading shareholders

like petitioners nearly $5 billion each year by diluting the

value of their investments. See GAO Report at 4-5.

Every purchase of a mutual fund share at an artificially

low price reduces the value of the investments of all exist-

ing, non-trading shareholders because the purchaser ac-

quires a larger share of the fund than if the fund had cal-

culated the NAV more accurately. Similarly, every re-

demption of a share at an artificially high price reduces

the value of the investments of non-trading shareholders

because the redemption depletes their pooled assets more

than if the fund had not relied on stale prices. The mu-

tual fund industry’s main trade organization has conceded

that “the discovery of trading abuses involving mutual

funds ... put at risk the reputation of the entire fund in-

dustry.” “shook the industry to its core,” and “triggered a

degree of Congressional oversight of mutual funds rarely

seen in the industry's history.””

Petitioners filed eight lawsuits in state court, charging

that respondents used pricing methods negligently’ or

* Investment Company Institute, Trading Abuse Reforms & Actions.

available at http://www.ic..org/issues/timing.

* See Pet. App. 69a (4 55) (Kircher), 74a. 76a (¥) 55. 68) (Potter).

8la (4 59) (Parthasarathy). 86a (§ 53) (Dudley), 9la-92a (4 53) (Voge-

ler), 96a-97a (© 52) Jackson), 109a-110a (4 53) (Spurgeon).

recklessly’ in a way that exposed petitioners’ investments

to dilution from market timing. The complaints alleged

that, because respondents should have known of the exis-

tence of market timing and of alternative pricing proce-

- dures that would prevent it, respondents breached their

duties of care to petitioners and similarly situated owners

or shareholders” of respondent funds.* For example, peti-

tioners alleged that respondents failed to make pricing

adjustments based on correlations between movements in

the U.S. and foreign markets. '

Petitioners filed their claims as class actions on behalf

of holders of the relevant securities: specifically, “all per-

sons in the United States who have held shares of |the

fund] for more than fourteen days from the date of pur-

chase to the date of sale (redemption) or exchange.”” The

Spurgeon complaint took the additional step of explicitly

excluding any claims based on purchase or sale. See Pet.

App. 106a (4 39) (Spurgeon) (defining plaintiff class as “all

persons in the United States who, through their owner-

ship of [the fund’s] products, held units of any [fund] sub-

* See Pet. App. 70a (% 60) (Kircher), 75a, 76a-77a (%" 60, 73) (Pot-

ter), 82a (4 64) (Parthasarathy), 86a-87a (4 54) (Dudley), 92a (" 54)

(Vogeler), 97a (9 53) (Jackson), Llla (4% 56-57) (Spurgeon).

” See Pet. App. 69a (© 56) (Kircher), 74a-77a (V4 56, 60, 69, 73) (Pot-

ter), Sla-82a (449 60, 64) (Parthasarathy). 85a-86a (© 49) (Dudley). 9la

(* 49) (Vogeler), %« (% 49) (Jackson), 113a-ll4da (© 62) (Spurgeon)

(breach of fiduciary duties).

" Petitioner Spurgeon also alleged violations of several provisions of

the California Business & Profession Code (Count IV). See Pet. App.

L1l5a-116a (*% 67, 69, 73).

' See Pet. App. 66a-68a (*4 17, 32-33) (Kircher). Tla-73a (4 17, 32-

33) (Potter), 7&a-80a (44 22, 37-38) (Parthasarathy), 83a-85a (44 13,

28-29) (Dudley), 88a-90a (8% 13, 28-29) (Vogeler), 93a-95a (1% 13. Za-

2 (Jackson), 108a-104da (*© 31-32) (Spurgeon).

* See Pet. App. 68a (4 41) (Kircher), 73a (€ 41) (Potter), 80a (4 46)

(Parthasarathy), 85a (9 37) (Dudley), 90a (© 37) (Vogeler), 95a (% 37)

(Jackson) (omitting “from the date of purchase to the date of sale (re-

demption) or exchange’).

account invested in mutual funds which included foreign

securities in their portfolios and which experienced mar-

ket timing trading activity”); id. (4 40) (excluding “from

this Complaint ... any claims based upon [the fund’s]

conduct in connection with Plaintiff's or any class mem-

ber’s purchase or sale of any [fund]” product or units).

That exclusion is implicit in the other complaints, which

assert negligence and recklessness claims that only non-

trading shareholders possess. Only holders are injured by

market-timing activity: while respondents’ use of stale

prices may cause a purchaser to buy a fund share at an

artificially high price or a seller to redeem a fund share at

an artificially low price, those losses do not depend on

whether other individuals simultaneously engage in mar-

ket timing.

C. Proceedings Below

In each case, the respondent fund removed to federal

district court, arguing, inter alia, that the case fell within

the district court’s removal jurisdiction under SLUSA, see

15 U.S.C. § 77p(c), and that petitioners’ claims were pre-

empted by that Act, see id. § 77p(b). Petitioners moved to

remand the cases to state court for lack of subject-matter

jurisdiction. All three district judges to hear those mo-

tions agreed with petitioners that they lacked jurisdiction.

Specifically, the district judges found that petitioners’

common-law claims were outside the scope of SLUSA’s

preemption provision because the claims were brought —

indeed, could only be brought — by holders of securities,

not purchasers or sellers. See, ¢.g., Pet. App. 26a-27a

(Kircher), 30a (Dudley) (“Only holders of fund shares have

the dilution of ownership interests and voting rights

claims asserted in the complaints.”), 40a (Parthasarathy)

(agreeing that the “‘complaint alleges dilution claims that

only a holder of securities can bring’”) (quoting Bradfisch

v. Templeton Funds, Inc., Case No. 03-CV-0760-MJR, slip

op. at 6 (S.D. Ill. Jan. 23, 2004)), 44a-45a (Potter) (same),

50a-51la (Vogeler) (same), 56a-57a (Jackson) (same). The

district judges concluded that, because petitioners claims

were not “in connection with the purchase or sale of a cov-

ered security,” they were not cognizable under § 10(b) of

the 1934 Act; were not preempted by the Act as amended

by SLUSA; and were not removable under SLUSA. See,

e.g., id. at 26a-27a (Kircher), 30a (Dudley), 39a-40a (Par-

thasarathy), 44a-45a (Potter), 50a-51a (Vogeler), 56a-57a

(Jackson), 60a-6la (Spurgeon). The district judges re-

manded all eight cases to state court, expressly basing

each remand order on a lack of subject-matter jurisdic-

tion. See, e.g., id. at 27a (Kircher), 30a (Dudley), 40a

(Parthasarathy), 46a (Potter), 51a (Vogeler), 57a (Jack-

son), 64a (Spurgeon).

On respondents’ appeal of the Kircher remand order,

the Seventh Circuit initially ordered respondents to show

cause why their appeal should not be dismissed for lack of

jurisdiction under § 1447(d), which precludes appellate

review of remand orders based on a district court's conclu-

sion that it lacked subject-matter jurisdiction. The Sev-

enth Circuit then, in acknowledged conflict with the Sec-

ond and Ninth Circuits, issued a published decision hold-

ing that it had jurisdiction to review the district court's

remand order. See Kircher 1, Pet. App. 15a-16a (acknowl-

edging conflicts with Spielman, United Investors, and

Abada).

The Seventh Circuit noted that, under § 1447(d). a re-

mand on a ground listed in § 1447(c) is unappealable. See

id. at 12a. Section 1447(c) provides that a case must be

remanded if the court lacks subject-matter jurisdiction.

The court, however, did not accept the district court's ex-

planation that its remand order was based on a lack of

subject-matter jurisdiction. See id. at 27a. The court

characterized the district court opinion as holding that

removal was proper — notwithstanding the district court's

statements that “removal is appropriate only if the Court

has federal question jurisdiction over Plaintiffs’ claims”

(id. at 24a), and that “SLUSA does not permit removal of

Plaintiffs’ claims” because petitioners’ claims were not

preempted by SLUSA (id. at 26a-27a).

To reach its conclusion that the remand orders were

appealable, the Seventh Circuit opined that SLUSA per-

mits removal of all “covered class actions” — that is, all

class actions that seek damages on behalf of more than 50

investors, see 15 U.S.C. § 77p(f)(2)(A) - even though the

Act only preempts “covered class actions” that meet the

further requirement of alleging an untrue statement or

omission, or use of a manipulative or deceptive device, “in

connection with the purchase or sale of a covered secu-

rity,” id. § 77p(b). The court did not address petitioners’

argument that the words “as set forth in subsection (b)” in

§ 77pi(c) make clear that only those actions preempted by

SLUSA are subject to remand. Rather, it held that a dis-

trict court may find removal proper even though a lawsuit

is outside SLUSA’s preemptive scope when the lawsuit is

a “covered class action.” The court found that remand of

such a lawsuit is not based on a lack of subject-matter ju-

risdiction, because “a court lacks ‘subject-matter jurisdic-

tion’ only when Congress has not authorized the federal

judiciary to resolve the sort of issue presented by the

case.” Kircher I, Pet. App. 13a.

The Seventh Circuit concluded that a remand under

SLUSA is unlike a “[njormal” remand that “leave{s] all

substantive issues open to plenary resolution in the state

court,” because whether SLUSA preempts a class action is

“one specific substantive decision ... [that] must be made

by the federal rather than the state judiciary.” /d. at 15a.

The Seventh Circuit reasoned that, under SLUSA, state

judges are incapable of making a preemption ruling. and

thus “it is now or never for appellate review of the ques-

tion whether an action under state law is preempted.” /d.

Having determined that it could exercise appellate ju-

risdiction over the district court's remand order in the

Kircher case consistent with § 1447(d), the Seventh Cir-

cuit consolidated these eight cases, which present identi-

cal issues, for briefing and decision on the merits. The

Seventh Circuit began by rejecting petitioners’ renewed

jurisdictional objections and stating that, under Aircher 1.

the remand orders in all of the lawsuits were appealable.

On the merits, the Seventh Circuit then held that SLUSA

completely preempted petitioners’ state-law claims.

In so holding, the Seventh Circuit recognized that

“le]very court of appeals to encounter SLUSA has held

that its language has the same scope as its antecedent in

Rule 10b-5.” Kircher II, Pet. App. 5a. The court pur-

ported to agree with that conclusion, observing that

SLUSA was designed to prevent Rule 10b-5 private plain-

tiffs from migrating to state court to avoid the PSLRA.

The court acknowledged that its decision conflicted with

prior decisions of the Second, Eighth, and Eleventh Cir-

cuits; that, in Blue Chip Stamps, the Supreme Court had

held that investors who neither purchase nor sell securi-

ties have no cause of action under § 10(b) and Rule 10b-5;

and that the Spurgeon complaint defined a class of non-

trading shareholders who could not bring a private action

under Rule 10b-5. Jd. at 5a-7a.”

The Seventh Circuit nevertheless concluded that the

Spurgeon plaintiffs claims were “in connection with the

purchase or sale” of securities and were preempted by

SLUSA. The court read Blue Chip Stamps’ holding that

only purchasers or sellers can bring claims under § 10(b)

and Rule 10b-5 not as an interpretation of the “in connec-

tion with the purchase or sale” language in the 1934 Act.

” The Seventh Circuit ruled that the complaints in the other cases

did not succeed in defining classes of non-trading shareholders because

some of the investors who held shares during the class period undoubt-

edly purchased or sold shares during that period. Petitioners believe

that this ruling is incorrect. Whether the classes include some indi-

viduals who happen also to be purchasers or sellers is irrelevant. The

complaints assert negligence and recklessness claims on behalf of class

members who were injured by market timing. which. as explained

above. see supra p. 9. ts a clan that only holders can assert. Purchas-

ers or sellers could not bring the claims asserted in the complaints,

because they are not injured by market timing. In any event, because

the Seventh Circuit did find that the Spurgeon complaint defined a

class of holders wrthout claims under Rule 10b-5, the court's error on

this point is not material to the petition.

Rather, the court viewed the Blue Chip Stamps rule as a

policy-based, judicial limitation on the private right of ac-

tion to enforce § 10(b) and Rule 10b-5 that is not grounded

in the text of § 10(b). See id. at 7a (stating that “Blue

Chip Stamps came out as it did” because “the Court

wanted to confine [private] actions to situations where

litigation is apt to do more good than harm”). The court

concluded that, “[b]y depicting their classes as containing

entirely non-traders, plaintiffs do not take their claims

outside § 10(b) and Rule 10b-5; instead, they demonstrate

only that the claims must be left to public enforcement.”

Id. at 8a.

REASONS FOR GRANTING THE PETITION

I. THE COURT SHOULD GRANT CERTIORARI TO

REVIEW THE SEVENTH CIRCUIT'S HOLDING

THAT REMAND ORDERS UNDER SLUSA ARE

SUBJECT TO APPELLATE REVIEW

A. The Seventh Circuit’s Exercise Of Appellate

Jurisdiction Squarely Conflicts With Deci-

sions Of Three Other Circuits

In holding that 28 U.S.C. § 1447(d) does not bar courts

of appeals from reviewing a remand order based on a dis-

trict court’s finding that a plaintiff’s claims are not pre-

empted by SLUSA, the Seventh Circuit acknowledged it

was creating a conflict with the Second and Ninth Cir-

cuits. Those circuits hold that SLUSA’s preemption and

removal provisions are co-extensive, meaning that a state-

law action that falls outside of SLUSA’s preemptive scope

is not properly removed under SLUSA. In the Second

Circuit, Ninth Circuit, and Eleventh Circuit (which

agreed with the former two courts after the decision be-

low), a district court's remand of such a lawsuit is based

on a lack of subject-matter jurisdiction and is not review-

able under § 1447(d).

The Seventh Circuit. by contrast. insisted that SLUSA

authorizes removal of lawsuits that the statute does not

preempt; disregarded the district courts’ own characteri-

zations of their remand orders as predicated on a lack of

jurisdiction; and held that the remands of non-preempted

lawsuits were not based on lack of jurisdiction. The divi-

sion between the circuits is clear and stems from two op-

posing interpretations of SLUSA’s removal provision: one

(the Seventh Circuit's) that regards the provision as au-

thorizing removal of all “covered class actions,” and an-

other (the Second, Ninth, and Eleventh Circuits’) that re-

gards it as authorizing removal only of those actions de-

scribed in SLUSA’s preemption provision.

1. Second Circuit - Spielman

In Spielman, the Second Circuit addressed whether it

could review a district court order granting a motion to

remand after determining that the defendant’s alleged

misrepresentations were not “in connection with the pur-

chase or sale” of securities, and that the plaintiff's claims

were therefore not preempted by SLUSA. The Second

Circuit stated that “SLUSA’s removal provision makes

removable any ciass action preempted by 15 U.S.C.

§ 78bb(f)(1)(A) [SLUSA’s preemption provision].”. 332

F.3d at 123. Thus, in the Second Circuit’s view, “SLUSA

only converts into federal claims those state claims that

fall within its clear preemptive scope, thereby confining

federal question jurisdiction under this statutory regime

to a subset of securities fraud cases.” /d. at 124.

The Second Circuit explained that, after a defendant

removes an action under SLUSA, the district court must

determine whether the action meets “the substantive re-

quirements necessary to sustain removal under SLUSA’s

preemption provision” (id.): “If a district court determines

the action is not a ‘preempted class action’ and, therefore,

removal was improper, the district court lacks subject

matter jurisdiction to further entertain the action.” /d. at

125. The Second Circuit concluded that, even though the

district court in Spielman had not expressly stated that it

was remanding for lack of jurisdiction, because the court

had found the plaintiff's claims not to be preempted by

SLUSA, its remand order was necessarily based on a lack

of jurisdiction and was not reviewable under § 1447(d).

The Second Circuit’s decision squarely conflicts with

Kircher I, which held that a remand order that followed a

finding of no preemption was not based on a lack of juris-

diction and was reviewable under § 1447(d). As Judge

Newman succinctly explained in his Spielman concur-

rence, the issues “of complete preemption and the exis-

tence of subject matter jurisdiction ... are the opposite

sides of the same coin.” Id. at 132.

2. Ninth Circuit —- Abada

In Abada, the Ninth Circuit stated that SLUSA’s re-

moval provision “provides for the removal of ‘any covered

class action’ ‘based upon the statutory or common law of

any State’ ‘alleging a misrepresentation or omission of a

material fact in connection with the purchase or sale of a

covered security.” 300 F.3d at 1119 (quoting 15 U.S.C.

§ 78bb(f)(1) and (2)). The district court in Abada, like the

district courts in this case, had found that the plaintiffs’

claims were not preempted by SLUSA because they were

not “in connection with the purchase or sale” of securities.

In accord with the Second Circuit, and in square conflict

with the Seventh Circuit, the Ninth Circuit found that the

district court’s remand order was grounded on the absence

of subject-matter jurisdiction and was not reviewable.

The court held that, “|iJn order to decide whether it had

subject matter jurisdiction, the district court was required

to decide whether Abada’s claims were completely pre-

empted by SLUSA. Because construction of SLUSA was

necessary for the resolution of subject matter jurisdiction,

[Ninth Circuit precedent] does not apply to create appel-

late jurisdiction.” /d. See also United Investors, supra

(reaffirming the rule of Abada).

3. Eleventh Circuit —- Williams

_ In Williams, decided after Kircher 1, the Eleventh Cir-

cuit addressed whether it could review a district court or-

der remanding a lawsuit that had been removed under

SLUSA, but that asserted claims only under federal law.

The Eleventh Circuit found that the lawsuit was a “cov-

ered class action” involving a “covered security” as those

terms are defined by SLUSA. 389 F.3d at 1186. How-

ever, the Eleventh Circuit also found that the lawsuit was

not covered by SLUSA’s preemption provision, because

one of the requirements for preemption is that the action

be “based upon the statutory or common law of any State

or subdivision thereof.” 15 U.S.C. § 77p(b). See 389 F.3d

at 1188. The Eleventh Circuit observed that SILLUSA’s

removal provision refers to SLUSA’s preemption provi-

sion. /d. at 1189 n.6. The court concluded that, even

though the district court never explicitly mentioned

subject-matter jurisdiction, its remand order was based on

a lack of removal jurisdiction and was not reviewable un-

der § 1447(d). See id. at 1190 (“We therefore hold that the

district court’s remand order based on lack of removal ju-

risdiction, entered in response to a timely motion to re-

mand, is not reviewable under § 1447(d).”).'° The Wil-

liams decision thus squarely conflicts with Kircher 1,

which held that, where the district court found that plain-

tiff’s lawsuit was a “covered class action” but was not pre-

empted, its remand order could not be based on a lack of

subject-matter jurisdiction, notwithstanding the court's

express statements that it was remanding for lack of

jurisdiction.

A clear and acknowledged conflict thus exists between

the Seventh Circuit and the Second, Ninth, and Eleventh

Circuits. The Seventh Circuit has no intention of revisit-

ing its position in light of the views of other circuits, be-

cause it recently reaffirmed Kircher’s holding that “a dis-

trict court's remand of a case to state court based on

"In Riley. the Eleventh Circuit had stated that, “in order to remove

un action to federal court under SLUSA, the removing party must

show that (1) the suit is a ‘covered class action, (2) the plaintiffs’

claims are based on state law, (3) one or more ‘covered securities’ has

been purchased or sold, and (4) the defendant misrepresented or omit-

ted a material fact ‘in connection with the purchase or sale of such secu-

rity.” 292 F.3d at 1342.

SLUSA is appealable.” -Disher v. Citigroup Global Mar-

kets Inc., 419 F.3d 649, 652 (7th Cir. 2005). Moreover,

even a circuit that has not yet addressed the issue has

similarly recognized the circuit conflict. See Rowinski v.

Salomon Smith Barney Inc., 398 F.3d 294, 298 n.2 (3d

Cir.\2005) (noting “a division among the courts of appeals

on an issue of appellate jurisdiction under SLUSA”). This

Court’s intervention is necessary to establish the proper

interpretation of SLUSA’s removal provision and the re-

viewability of remand orders under SLUSA.

B. The Seventh Circuit’s Exercise Of Appellate

Jurisdiction Is Inconsistent With This Court’s

Precedents And The Language Of SLUSA

Not only does the Seventh Circuit’s decision conflict

with the decisions of three other circuits, it is inconsistent

with this Court's precedents. In Things Remembered, Inc.

v. Petrarca, 516 U.S. 124 (1995), the Court stated that

§ 1447(d) bars appellate review of remands based on

grounds recognized in § 1447(c), such as lack of subject-

matter jurisdiction. See id. at 127-28. That prohibition

on appellate review extends not only to remand orders in

suits removed under the general removal statute, but also

to remand orders in cases removed under any other stat-

ute, even if the other statute contains an express remand

provision of its own. See id. at 128. Moreover, it is imma-

terial whether the district court’s decision that it lacked

subject-matter jurisdiction was correct: § 1447(d) pre-

cludes review even of jurisdictional decisions that are

clearly wrong. See Gravitt v. Southwestern Bell Tel. Co..,

430 U.S. 723, 723 (1977) (per curiam).

The district courts in these cases interpreted SLUSA’s

removal provision to confer removal jurisdiction only over

cases preempted by SLUSA, and therefore remanded

based on a perceived lack of subject-matter jurisdiction

once they determined that petitioners claims were not

preempted. See, e.g.. Pet. App. 24a, 26a-27a (Kircher)

(stating that “removal is appropriate only if the Court has

federal question jurisdiction over Plaintiffs’ claims” and

that “SLUSA does not permit removal of Plaintiffs’

claims”), 28a, 30a (Dudley) (stating that “[t]hese cases do

not belong in the federal district court” and that “they are

not removable under SLUSA”), 39a-40a (Parthasarathy),

44a-45a (Potter), 50a-5la (Vogeler), 56a-57a (Jackson),

60a-6la (Spurgeon). Contrary to the Seventh Circuit's

assertion, the district judges never held that “[r]emoval of

this suit was proper.” Kircher I, Pet. App. 14a. Even if

the district courts were mistaken in their interpretation of

SLUSA’s removal provision — for example, because the

Seventh Circuit is correct that SLUSA authorizes removal

of all “covered class actions,” not just preempted actions —

the district courts’ orders were still unreviewable under

Gravitt and Things Remembered. Kircher I’s assertion

that the district court had found removal to be proper is

contrary to the district judges’ explicit statements, and

the Seventh Circuit’s exercise of appellate jurisdiction

conflicts with this Court's decisions.

Moreover, the Seventh Circuit's interpretation of

SLUSA’s removal provision is incorrect and unsupported

by the statutory text. As the Second, Ninth, and Elev-

enth Circuits noted, SLUSA’s removal provision cross-

references SLUSA’s preemption provision. SILLUSA does

not permit removal of all covered class actions, but of

“lajny covered class action brought in any State court in-

volving a covered security. as set forth in subsection (b),”

15 U.S.C. § 77p(c) (emphasis added), with subsection (b)

being the preemption provision. The plain language of

the removal provision indicates that Congress intended to

authorize removal of those actions that met the require-

ments for preemption.

The Seventh Circuit's opinion utterly failed to address

this language or the three conflicting circuits’ interpreta-

tions of the removal provision. The Seventh Circuit sim-

ply chided the other circuits for being “mesmerized by the

word ‘jurisdiction,” Kircher J, Pet. App. 16a, instead of

recognizing that those courts quite naturally interpreted

SLUSA to render removal proper only when an action is

within the scope of § 77p(b). In addition, the { veeth Cir-

cult’s insistence (id. at 15a) that only federa: judges may

resolve the issue of SLUSA preemption is s@ anprece-

dented reading of the statute, unsupported by text or leg-

islative history, that conflicts with settled Supreme Court

law regarding the ability of state courts to address a pre-

emption defense. See. e.g., Chick Kam Choo v. Exxon

Corp., 486 U.S. 140, 149-50 (1988) (“[W]hen a state pro-

ceeding presents a federal issue, even a pre-emption issue,

the proper course is to seek resolution of that issue by the

state court.”).

Finally, the Seventh Circuit advanced a red herring in

stating that district courts lack subject-matter jurisdiction

“only when Congress has not authorized the federal judi-

ciary to resolve the sort of issue presented by the case,”

Kircher I, Pet. App. 13a (citing Kontrick v. Rvan, 124 S.

Ct. 906, 914-16 (2004), and Scarborough v. Principi, 124

S. Ct. 1856, 1864-65 (2004)). The Seventh Circuit noted

that § 77p(d)(4) provides that, “[iJn an action that has

been removed from a State court pursuant to subsection

action may be maintained in State court pursuant to this

subsection, the Federal court shall remand such action to

such State court.” 15 U.S.C. § 77p(d)(4). According to the

Seventh Circuit, that subsection, coupled with SLUSA’s

removal provision, authorizes federal courts to determine

whether an action is preempted by SLUSA. The court be-

low thus reasoned that a remand after a finding of no pre-

emption is not based on a lack of jurisdiction, because

Congress has authorized the federal judiciary to resolve

the issue of preemption.

That reasoning misses the point by ignoring the statu-

torv language fashioned by Congress. SLUSA specifically

confers removal jurisdiction only on preempted actions.

The fact that federal courts are “authorized” to resolve the

issue of preemption in ruling on a motion to remand

stems from the basic principle that federal courts have

jurisdiction to determine their own jurisdiction. Under

SLUSA, after a defendant removes a case, a federal court

must address the question of preemption to determine

whether it has federal-question jurisdiction. A court’s

remand order based on a finding of no preemption is, for

purposes of § 1447(d), no different from any other remand

order based on a lack of federal-question jurisdiction fol-

lowing a defendant’s removal of a case. The removals in

all of the instant cases were initiated by respondents and

were found improper by the district courts — not “proper,”

as Kircher I incorrectly asserted, Pet. App. 14a. Nothing

in Kontrick or Scarborough suggests that the district

courts’ authority to resolve the preemption issue in ruling

on motions to remand somehow meant that the courts’

remand orders were not based on a lack of jurisdiction.

On the contrary, Scarborough explained that the “label

subject-matter jurisdiction refers to statutory prescrip-

tions “‘delineating the classes of cases .. . falling within a

court’s adjudicatory authority.” Scarborough, 124 S. Ct.

at 1865 (quoting Kontrick, 124 S. Ct. at 915). By ignoring

the crucial clause in § 77p(c) — “as set forth in subsection

(b)” — the Seventh Circuit missed that, under SLUSA,

only that class of cases satisfying the requirements for

preemption falls within a federal court’s “adjudicatory au-

thority” or removal jurisdiction. The Seventh Circuit thus

incorrectly severed the jurisdictional issue from the sub-

stantive decision on preemption, when in fact the two “are

the opposite sides of the same coin.” Spielman, 332 F.3d

at 132 (Newman, J., concurring).

C. The Reviewability Of Remand Orders Under

SLUSA Is An Issue Of Great Importance War-

ranting This Court’s Resolution

The circuit split over the reviewability of remand orders

under SLUSA involves the core securities litigation cir-

cuits and is unlikely to be resolved without this Court's

intervention. The Seventh Circuit concluded that such

orders were reviewable in full awareness that two circuits

had held to the contrary. and there is no reason to think

that the court will alter its view. See Disher, 419 F.3d at

652 (declining to revisit the court’s decision in Kircher 1).

There is also no reason to think that the Second, Ninth, or

Eleventh Circuits will reach a different conclusion regard-

ing SLUSA remand orders based on the reasoning of the

Seventh Circuit. Indeed, the Eleventh Circuit determined

that such orders were not reviewable after the Seventh

Circuit had decided the opposite.

Kircher I pointed out that Spielman and Abada pre-

dated Scarborough and Kontrick. See Pet. App. 16a.

However, as explained ahove, there is no reason to expect

Scarborough or Kontrick to affect the analysis of the Sec-

ond and Ninth Circuits. Moreover, as Kircher I recog-

nized, see id., the Ninth Circuit has reaffirmed the hold-

ing of Abada after Kontrick. See United Investors, supra.

The reviewability of remand orders under SLUSA is a

question of great importance for the administration of the

federal courts. That question is central not just in cases

involving “holder” claims or market timing, but in the

entire range of cases in which plaintiffs successfully con-

test the applicability of SLUSA’s preemption provision.

Whether remand orders in such cases are subject to im-

mediate appellate scrutiny has a significant impact not

only on the dockets of the federal courts of appeals, but

also on the ability of plaintiffs to obtain a timely adjudica-

tion of their viable state-law claims. Letting the Seventh

Circuit’s erroneous decision stand will undermine the

“strong congressional policy against review of remand or-

ders,” Things Remembered, 516 U.S. at 136 (Ginsburg &

Stevens, JJ., concurring) (internal quotation marks omit-

ted), unfairly delaying legitimate state-court suits. See

Spielman, 332 F.3d at 124. In his dissent in Thermtron

Products, Inc. v. Hermansdorfer, 423 U.S. 336 (1976),

then-Justice Rehnquist offered a cogent explanation of the

reasons for precluding appellate review of remand orders:

Congress’ purpose in barring review of all remand

orders has always been very clear — to prevent the

additional delay which a removing party may

achieve by seeking appellate reconsideration of an

order of remand. The removal jurisdiction extended

by Congress works a significant interference in the

conduct of litigation commenced in state court.

While Congress felt that making available a federal

forum in appropriate instances justifies some such

interruption and delay, it obviously thought it was

equally important that when removal to a federal

court is not warranted the case should be returned

to the state court as expeditiously as possible. If

this balanced concern is disregarded, federal re-

moval provisions may become a device affording liti-

gants a means of substantially delaying justice.

Id. at 354-55 (Rehnquist, J., dissenting).

This Court’s intervention is warranted to prevent de-

fendants from “substantially delaying justice” in class ac-

tions that SLUSA does not preempt and to resolve the

disagreement among the courts of appeals over the re-

viewability of SLUSA remand orders.'' Moreover, this

case is a particularly suitable vehicle. Practically, this

'"' The Class Action Fairness Act of 2005 (“CAFA”), which applies

to class action suits commenced on or after February 18, 2005, does

not diminish the importance of the jurisdictional question presented.

CAFA establishes federal jurisdiction over certain class actions despite

the absence of complete diversity of citizenship: permits removal of

such actions; and authorizes appellate review of remand orders in such

actions. See CAFA § 5(a), 119 Stat. 12 (to be codified at 28 U.S.C.

§ 1453(c)(1)) (notwithstanding section 1447(d), a court of appeals may

accept an appeal from an order of a district court granting or denying a

motion to remand a class action to the State court from which it was

removed”). CAFA’s provisions do not apply to “any class action that

sulely involves ... a claim ... concerning a covered security as defined

under section 16(f)(3) of the Securities Act of 1933 (15 U.S.C. 7&p(f)3))

and section 28(f)(5)(E) of the Securities Exchange Act of 1934 (15

U.S.C. 7&bb(Uf MS) E)).” Jd. § 4(a)(2), 119 Stat. 11 (to be codified at 28

U.S.C. § 1332(d)(9)(A)): accord id. § Sta), 119 Stat. 15 (to be codified at

2a ULS.C. § 1453(d)). CAFA thus specifically exempts securities class

actions: SLUSA continues to govern such actions. and questions about

the proper interpretation of SLUSA’s preemption and removal provi-

sions are no less important after passage of CAFA. In CAFA, Congress

chose not to disturb the balance struck in SLUSA between federal and

state prerogatives in securities litigation.

Court will only have the opportunity to determine

whether appellate jurisdiction exists over SLUSA remand

orders in a case arising from a circuit that answers that

question in the affirmative, and the only such circuit is

the Seventh.

The Court very recently granted certiorari in Dabit to

address whether SLUSA preempts claims brought by

holders of securities. The Court, however, need not wait

for a disposition of Dabit before determining whether to

grant certiorari in this case. Dabit does not involve the

jurisdictional question presented here. Moreover, the

Court’s decision on the merits in Dabit will not remedy

the conflict in the courts of appeals over whether SLUSA

remand orders are reviewable. Whether SLUSA pre-

empts holder claims is wholly independent of the question

whether a district court’s determination that a claim is

not preempted, erroneous or not, is subject to immediate

appellate review. Kircher is an ideal companion case to

Dabit. Granting certiorari in both cases will ensure the

Court the opportunity to resolve the procedural as well

as the substantive confusion regarding the operation of

SLUSA’s preemption, removal, and remand provisions, 15

U.S.C. § 77p(b), (c), and (d)(4).

Il. THIS COURT HAS GRANTED CERTIORARI

IN MERRILL LYNCH V. DABIT TO DECIDE

WHETHER SLUSA PREEMPTS' CLAIMS

BROUGHT BY HOLDERS OF SECURITIES

When the Seventh Circuit split with three other circuits

on whether SLUSA preempts holder claims, it deepened

an already-existing confusion throughout the federal judi-

ciary regarding SLUSA’s preemptive scope. As one com-

mentator has observed, “[t]he courts have struggled to in-

terpret SLUSA’s preemption provision, and the case law

is in disarray.” Jennifer O'Hare. Preemption under the

Securities Litigation Uniform Standards Act: If It Looks

Like a Securities Fraud Claim and Acts Like a Securities

Fraud Claim, Is It a Securities Fraud Claim?, 56 Ala.

L. Rev. 325. 326 (2004). This Court’s intervention is

required both to clarify the meaning of SLUSA’s preemp-

tion provision and to ensure that holders of securities who

have suffered damages from issuers’ unlawful conduct are

not stripped of their legitimate state-law claims.

A. The Seventh Circuit’s Decision That SLUSA

Preempts Holder Claims Squarely Conflicts

With The Decisions Of Three Other Circuits

Three circuits have held that state-law claims in con-

nection with the retention of securities fall outside of

SLUSA’s preemptive scope. The Seventh Circuit ac-

knowledged a clear conflict between its decision below and

those of the Second, Eighth, and Eleventh Circuits.

1. Second Civcuit - Dabit

In Dabit, the Second Circuit held that the meaning of

“in connection with” under SLUSA was “coterminous”

with the meaning of the nearly identical language of

§ 10(b) and Rule 10b-5, 395 F.3d at 28, and that the

purchaser-seller rule of Blue Chip Stamps applies as a

limit on SLUSA’s “in connection with” requirement such

that SLUSA does not preempt holding claims. The Sec-

ond Circuit began by observing that the phrase “in con-

nection with the purchase or sale of a covered security”

has been extensively interpreted by the Supreme Court

and lower federal courts in the context of § 10(b) and Rule

10b-5 litigation. The Second Circuit explained (id. at 36)

that application of § 10(b) jurisprudence to SLUSA’s lan-

guage comports with the Act's stated goal of closing the

“federal flight” loophole in the PSLRA:

If the “in connection with” phrase is read to reach

the same conduct under SLUSA as it does under

§ 10(b) and Rule 10b-5, then SLUSA will preempt

precisely those state class actions which could be

brought as federal actions subject to the heightened

requirements of the PSLRA. If it were otherwise,

actions might be preempted for meeting all of

SLUSA’s requirements, including the “in connection

with” term, but not be capable of being brought

under iederal law for failure to mest the parallel re-

quirement of Rule 10b-5, a result that the legislative

history does not suggest Congress intended to pro-

duce in enacting SLUSA.

Finally, the Second Circuit rejected the precise argu-

ment endorsed by the Seventh Circuit: that the Blue Chip

Stamps purchaser-seller rule is simply a judicially fash-

ioned standing rule, not a textually based and substantive

limit on the “in connection with purchase or sale” lan-

guage. The Second Circuit acknowledged that “[t]he limi-

tation on standing to bring private suit for damages for

fraud in connection with the purchase or sale of securities

is unquestionably a distinct concept from the general

statutory and regulatory prohibition on fraud in connec-

tion with the purchase or sale of securities.” /d. at 39.

The court, however, found that observation to have “little

persuasive force in this context, because SLUSA deals

with precisely the category of actions subject to the

purchaser-seller rule” (id.):

Once it is agreed that Congress deliberately bor-

rowed SLUSA’s “in connection with” language from

§ 10(b), the fact that the standing rule is analyti-

cally distinct from the underlying prohibition on

fraud does not compel the conclusion that SLUSA

preempts more than the purchaser/seller category of

private damages claims over which the “in connec-

tion with” source language operates. Because only

purchasers and sellers have a federal private dam-

ages remedy, it is far more natural to suppose that

Congress meant to import the settled standing rule

along with the “in connection with” phrase as a sub-

stantive standard. Nor are we moved by the obser-

vation that the standing rule is merely a judge-made

gloss on the statute and the Rule, because private

Rule 10b-5 damages actions are themselves a crea-

ture of judicial implication.

Id. at 39-40.

The Second Circuit concluded that SLUSA’s “wholesale

importation” of the language that gave rise to the “balanc-

ing judgment” of Blue Chip Stamps — namely, the judg-

ment that “the judicially-adopted bar on federal non-

purchaser and non-seller claims was counterbalanced by

the existence of remedies under state law” — must “be pre-

sumed to represent a ratification of that judgment.” 7d. at

40. In sum, the Second Circuit anticipated, thoroughly

analyzed, and squarely rejected the Seventh Circuit's rea-

soning regarding the applicability of SLUSA to holder

claims.

2. Eighth Circuit - Green

Like the Second Circuit, the Eighth Circuit in Green

turned to cases construing the identical language in

§ 10(b) and Rule 10b-5 to interpret the “in connection with

the purchase or sale” language in SLUSA. The Eighth

Circuit observed that, in Blue Chip Stamps, the Court re-

fused to read that language broadly, limiting standing

under § 10(b) and Rule 10b-5 to purchasers and sellers of

securities. The Eighth Circuit concluded that “nonsellers

and nonpurchasers of securities are not covered by

SLUSA’s preemption provision,” because Congress en-

acted SLUSA in full awareness of the judicial gloss on

§ 10(b), “which acknowledged that causes of actions for

the ‘nonpurchase’ or ‘nonsale’ of securities were not cov-

ered by the 1934 Act, and that state law would fill those

gaps. 279 F.3d at 598 (internal quotation marks omit-

ted). Like the Second Circuit's Dabit decision, the Eighth

Circuit's decision squarely conflicts with Kircher I.

3. Eleventh Circuit — Riley

In Rilev, the Eleventh Circuit concluded, based on the

same analysis as the Second and Eighth Circuits, that

SLUSA does not preempt claims dealing with the reten-

tion of securities, rather than with purchase or sale. See

292 F.3d at 1345. The Eleventh Circuit stated that the

“in connection with the purchase or sale” language of

SLUSA incorporates the meaning of the same phrase in

§ 10(b) and Rule 10b-5. The Eleventh Circuit further

noted that “[a]nalogizing to § 10b-5 is particularly appro-

priate because SLUSA was specifically enacted as an

amendment to the 1933 and 1934 Acts.” /d. at 1342.

There is a clear division between the Second, Eighth,

and Eleventh Circuits on the one hand, and the Seventh

Circuit on the other hand, regarding the applicability of

SLUSA’s preemption provision to holder claims. Only last

month, the Seventh Circuit reaffirmed that, while three

other circuits had held that “claims related solely to the

retention of securities, as opposed to a purchase or sale,

... are not prempted by SLUSA,” it was bound by the de-

cision in Kircher lI to conclude that such holder claims

were preempted by SLUSA. Disher, 419 F.3d at 655 (ac-

knowledging conflict with the Second, Eighth, and Elev-

enth Circuits). oaar

B. The Seventh Circuit’s Interpretation Of

SLUSA’s Preemptive Scope Is Contrary To

This Court’s Blue Chip Stamps Decision And

Congressional Intent

The Seventh Circuit's decision is contrary to Supreme

Court precedent. In Blue Chip Stamps. the Court inter-

preted § 10(b) and Rule 10b-5 to permit private lawsuits

only by purchasers or sellers of securities. The Court

made clear that the purchaser-seller rule, far from being

untethered to the “in connection with the purchase or

sale” language of § 10(b), was an interpretation of that

language in the context of private securities litigation.

For example, the Court stated that “the wording of

§ 10(b), making fraud in connection with the purchase or

sale of a security a violation of the Act, is surely badly

strained when construed to provide a cause of action, not

to purchasers and sellers of securities, but to the world at

large.” 421 U.S. at 733 n.d.

Referring to Birnbaum v. Newport Steel Corp., 198 F.2d

461 (2d Cir. 1952) — the Second Circuit opinion that origi-

nated the purchaser-seller rule — the Court observed that

longstanding acceptance of “Birnbaum’s reasonable in-

terpretation of the wording of § 10(b). wording which is

directed toward injury suffered ‘in connection with the

purchase or sale’ of securities, argues significantly in fa-

vor of acceptance of the Birnbaum rule by this Court.”

421 W.S. at 733 (footnote omitted). The Court added that

“[t}he wording of § 10(b) directed at fraud ‘in connection

with the purchase or sale’ of securities stands in contrast

with the parallel antifraud provision of the 1933 Act. ...

When Congress wished to provide a remedy to those who

neither purchase nor sell securities, it had little trouble in

doing so expressly.” Id. at 733-34.

The Court’s reliance on policy concerns in Blue Chip

Stamps “to flesh out the portions of the law with respect

to which neither the congressional enactment nor the ad-

ministrative regulations offer conclusive guidance,” id. at

737, does not mean that the purchaser-seller rule is not

an interpretation of the “in connection with” phrase, al-

beit one guided by policy as well as text. SLUSA deals

with private securities litigation and should be construed

consistently with this Court’s interpretation of the “in

connection with the purchase or sale” language in such

litigation. The Seventh Circuit was wrong simply to dis-

regard Blue Chip Stamps after recognizing that the “in

connection with” language of SLUSA “has the same scope

as its antecedent in Rule 10b-5.” Kircher I], Pet. App. 5a.

The Seventh Circuit’s ruling also runs afoul of this

Court’s presumption against preemption. “‘[Blecause the

States are independent sovereigns in our federal system,

we have long presumed that Congress does not cavalierly

pre-empt state-law causes of action.” Bates v. Dow Agro-

Sciences LLC, 125 S. Ct. 1788, 1807 (2005) (quoting Med-

tronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)). The pre-

sumption against preemption applies not only to the ques-

tion whether Congress intended any preemption at all,

but also to questions about the scope of an express pre-

emption statute. See Medtronic, supra.

As this Court made clear in Blue Chip Stamps, claims

based on the retention of securities have traditionally

been “available to nonpurchasers and nonsellers under

state law.” 421 U.S. at 739 n.9. Nothing in the text or

background of SLUSA manifests a clear intent to preempt

the state-law holding claims that Blue Chip Stamps ac-

knowledged would be preserved. Indeed, the legislative

history does not mention holding claims. See Dabit, 395

F.3d at 41-42 (discussing historical materials). SLUSA’s

language, the conference report, and the statements of

SLUSA’s proponents all indicate that SLUSA aimed to

prevent circumvention of the PSLRA and therefore pre-

empted only those claims that could be brought in federal

court. The Seventh Circuit’s decision to the contrary is

inconsistent with Blue Chip Stamps, as well as with this

Court’s preemption jurisprudence.

C. Whether SLUSA Preempts Holder Claims Is

An Issue Of Great Importance

As a result of the practice of market timing, tens of mil-

lions of investors have suffered a dilution of their securi-

ties holdings that is estimated at $5 to $10 billion per

year.'” Under the Seventh Circuit’s ruling, even though

these investors were injured by unlawful conduct on the

part of mutual funds and fund managers, they have no

viable claims under either federal or state law. “If Con-

gress had intended to deprive injured parties of a long

available form of compensation, it surely would have ex-

pressed that intent more clearly.” Bates, 125 S. Ct. at

1801 (citing Silkwood v. Kerr-McGee Corp., 464 U.S. 238,

251 (1984)). Only holders of securities can seek redress

for market-timing activity; as explained above, see supra

p. 9. purchasers and sellers are not injured by market

timing. The Seventh Circuit was wrong to suggest that

2 See. eg.. Jennifer Barrett, “Inexcusable.” MSNBC.com, Nov. 11,

2003 (interview with John Bogle, founder and former CEO of the Van-

guard Group, estimating market-timing dilution to cost Investors 35 to

$10 billion per vear), available at http://www.msnbe.com/1d/3403565/

site/newsweek. See also Ene Zitzewitz, Who Cares About Sharehold-

ers’ Arbitrage-Proofing Mutual Funds, 19 J... Econ. & Org. 245. 260

(2003) (total annualized dilution in the first three quarters of 2001 can

be estimated at $4.9 billion per vear’).

petitioners could simply redefine the plaintiff classes to

include purchasers and sellers, and could then bring their

market-timing claims in federal court. See Kircher I], Pet.

App. 9a. Contrary to the Seventh Circuit's statements,

see id., petitioners claims do not depend on any state-

ments made or omitted in connection with their purchases

of the funds’ securities. Petitioners do not allege that re-

spondents misled them by failing to disclose the existence

of market timing; rather, they allege negligence and reck-

lessness on the part of respondents in failing to protect

their investments from market timing. Permitting the

Seventh Circuit’s ruling to stand would deprive the vic-

tims of market timing of any avenue of recourse in the

state or federal courts.

Approxi.sately 200 market-timing suits have been filed

against mutual funds in the last two years. See Kircher

I1, Pet. App. 9a. This Court’s intervention is necessary to

ensure that those lawsuits, involving numerous plaintiffs

and billions of dollars in damages, are resolved correctly

and consistently. Just two days ago, the Court recognized

the importance of the questions presented in this case by

granting certiorari in Dabit to address whether, “as the

Seventh Circuit held earlier this month and in direct con-

flict with the decision below, SLUSA preempts state law

class action claims based upon allegedly fraudulent state-

ments or omissions brought solely on behalf of persons

who were induced thereby to hold or retain (and not pur-

chase or sell) securities.” Dabit Pet. at i, No. 04-1371. If

the Court does not grant this petition to address the ju-

risdictional question presented — which is not at issue in

Dabit — it should at the very least hold the petition pend-

ing resolution of Dabit, and then grant certiorari on Ques-

tion 1.

CONCLUSION

The petition for a writ of certiorari should be granted.

In the alternative, the Court should hold the petition

pending resolution of Dabit.

ROBERT L. KING

701 Market Street

Suite 350

St. Louis, Missouri 63101

(314) 241-4844

September 29, 2005

Respectfully submitted,

DAVID C. FREDERICK

Counsel of Record

PRIYA R. AIYAR

KELLOGG, HUBER, HANSEN,

TODD, EVANS & FIGEL,

P.L.L.C.

1615 M Street, N.W.

Suite 400

Washington, D.C. 20036

(202) 326-7900

APPENDIX |

TABLE OF CONTENTS

Opinion of the United States Court of Appeals for

the Seventh Circuit, Kircher, et al. v. Putnam

Funds Trust, et al., Nos. 04-1495, et al. (Apr. 5,

2005) ....... scsebsesbniidihanniiapiaticsdapesiontaiidiantianiauenadiyiniiehpipes iio:

Opinion of the United States Court of Appeals for

the Seventh Circuit, Kircher, et al. v. Putnam

Funds Trust, et al., No. 04-1495 (June 29, 2004) ......

Order of the United States Court of Appeals for

the Seventh Circuit, Dudley, et al. v. Putnam

International Equity Fund, et al., Nos. 04-1496 &

Re nD Fy chet citicatnicctiniscievevindsanasindnodtoteis

Order of the United States Court of Appeals for

the Seventh Circuit, Parthasarathy, et al. v. Arti-

san Funds, Inc., et al., No. 04-1628 (June 30,

Order of the United States Court of Appeals for

the Seventh Circuit, Luettinger, et al. v. Scudder

International Fund, Inc., et al., Nos. 04-1650 &

DG BEE GOD BA Te costcrisitsccisvinsnisacéntnpesedcsctiionnies

Order of the United States Court of Appeals for

the Seventh Circuit, Vogeler v. Columbia Wanger

Asset Management, et al., Nos. 04-1660 & 04-

RE CII rs PR cra cnecttincansnbinccnsintiipnveidintntniintstoininins

Order of the United States Court of Appeals for

the Seventh Circuit, Jackson v. Van Kampen

Series Fund, Inc., et al., No. 04-2162 (June 30,

NED cnnstosanspininvesiancavivacnsersnindngsineiapeniaigidennintiédipiabetnipeninns

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