Reply Brief — Kircher v. Putnam Funds Trust

‘JO

ier FILEO

APR 14 2006

No. 05-409 OFFICE OF THE CLERK

IN THE

Supreme Court of the Cinited States

CARL KIRCHER, ET AL.,

Petitioners,

Vv.

PUTNAM FUNDS TRUST, ET AL.,

Respondents.

On Writ of Certiorari

to the United States Court of Appeals

for the Seventh Circuit

REPLY BRIEF FOR PETITIONERS

ROBERT L. KING DAVID C. FREDERICK

701 Market Street Counsel of Record

Suite 350 ScoTr K. ATTAWAY

St. Louis, Missouri 6310: F. ANDREW HESSICK IT]

(314) 241-4844 KELLOGG, HUBER, HANSEN,

TODD, EVANS & FIGEL,

KLINT L. BRUNO P.8..8..C.

1732 North Wolcott 1615 M Street, N.W.

Suite #2 Suite 400

Chicago, Illinois 60622 Washington, D.C. 20036

(312) 286-4915 (202) 326-7900

Counsel for Petitioners

April 14, 2006

TABLE OF CONTENTS

Fe SIE FAs BI NU aindssiscscssnepnennlakcsehinnibadasinbinntinnt ll

ARGUMENT:

I. REMAND ORDERS FOR “TACK OF ~

SUBJECT-MATTER JURISDICTION UN-

DER SLUSA ARE NOT REVIEWABLE ON

FRE ri nkachihcnsnstinkicdamsbijsdinisaipaplaaicindbciiaanbevatenibaiane 1

Il. SLUSA MAKES REMOVAL JURISDIC-

TION DEPENDENT ON PREEMPTION............. 7

Hil. WACO DOES NOT AUTHORIZE REVIEW ....... 17

RITTER ccc Nadiicectuainigo tiedudncinaathitelag deck heliitas bel aiaaa nine 20

il

TABLE OF AUTHORITIES

Page

CASES

Aetna Health Inc. v. Davila, 542 U.S. 200 (2004)............. 14

Aliota v. Graham, 984 F.2d 1350 (3d Cir. 1993).......000....... 4

Arbaugh v. Y & H Corp., 126 S. Ct. 1235

Beneficial Natl Bank v. Anderson, 539 U.S. 1

TITTIES “ansssecie cakstepeasad acid itae cbechatne hanced abd dkicdaeeltasidiiaeatinimestiasita aiceiet 14

Calderon v. Aerovias Nacionales de Columbia,

DED F Bk BIO 11 Deis Cae BOTY oi ncccccckccsccccccccccccccnsccsececss 19

California Pub. Emplovees’ Retirement Sys. v. World-

Com, Inc., 368 F.3d 86 (2d Cir. 2004), cert.

denied, 543 U.S. 1080 (200) .................ccccesssssssesessssecees 6

City of Waco v. United States Fid. & Guar. Co..,

BE SE BP COD icici snciicmatcdsicdsccbscalicntiicininttnts 18, 19, 20

Dalrymple v. Great River Dam Auth., 145 F.3d 1180

CR a ON aise castaichtecencnsneciinecsihihindbtientclodiiainlen oaidisiaiaia 6

Franchise Tax Bd. v. Construction Laborers Vacation

Trust for Southern California, 463 U.S. 1

UU co ee 14

Gravitt v. Southwestern Bell Tel. Co., 4830 U.S. 723

NO a 2.3

INS v. National Ctr. for Immigrants’ Rights, Inc.,

ee Ie ER cliccindevtchceientcnablontncottiahctiauabiwnanisitind 10

King v. St. Vincent's Hosp., 502 U.S. 215 (1991) wo... )

in

Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737 (1976).......... 4

Lyons v. Alaska Teamsters Emplover Serv. Corp..,

188 F.3e 11.70 (Bthe Car. TDDB)... .ccccccccscccccsccsccccecsesss eee: 20

Martin v. Franklin Capital Corp., 126 S. Ct. 704

RUUD icdacacesieabick ike halite intedlacktnbabcatiniohesipindiih iu aaiiad acktie Mahesh 1]

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

126 S. Ct. 1503 (2006).................. 7, 9, 14, 14, 16, 18. 20

Metropolitan Cas. Ins. Co. v. Stevens, 312 U.S. 563

Nashville, C. & St. L. Rv. v. Wallace. 288 U.S. 249

RRR Sie RRO wR re CR RAE TS LR ck TORN ROT I 4

Nutter v. Monongahela Power Co.. 4° F.3d 319

UE UD, WON icin ks donctivasovacaeacsdbaicdaceseimnodaedsies 19, 20

Powers.v. Southland Corp., 4 F.3d 223 (8d Cir. 1993) .....19

Rogers v. Tyson Foods, Inc., 308 F.3d 785 (7th Cir. :

NUNN caistddinichinicdins tn sid egisana nada cisabackaribias cheb aekeakgea kan beet 20

Scheidler v. National Organization for Women, Inc.,

es RE CED cccseasth socesiaclce ean ansabwsvesvaad beibbevess 10

Shook v. District of Columbia Fin. Responsibility &

Mgmt. Assistance Auth., 132 F.3d 775 (D.C. Cir.

RSS AD AR TRIES Sa RNAI AEE CASO R OMS RT PRP EEO Se Re 10

Soley v. First Natl Bank of Commerce, 923 F.2d 406

I a I kta na ic easing a saascth tala aactnalbuighesdpsieginebounaiiie 20

Standefer v. United States, 447 U.S. 10 (1980) .....0.......... 20

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

I eI hla die caidaucca dosh oudceadbeecaevecekedbudeasiaass 2.5.4.6

iv

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

RIED sncissticvcie dincnivkareianeseihiiviniesasinsicaRiensaniaapabalantaaiiall 4,6

United States v. Martin Linen Supply Co., 430 U.S.

BG CREED vsiscsiccivnccqensiticnnnndicciningnaeaaebaliie 5

United States v. Minker, 350 U.S. 179 (1956)..............000. 10

United States v. Price, 361 U.S. 304 (1960)... ee eees 9

United States v. Rice, 327 U.S. 742 (1946)..........00..c eee 6

United States v. Ruiz, 536 U.S. 622 (2002)... 4-5

Webster v. Fall, 266 U.S. 507 (1925) ...............ccccceesseeceeeeeees 9

Willingham v. Morgan, 395 U.S. 402 (1969) .............. 13,14

CONSTITUTION, STATUTES, AND

REGULATIONS

U.S. Const.:

Pe eT OP remo nm e y er eK.” 6

BG Favs eckchajpeienatninstemsniaiiidadith data gone ee 4

Civil Rights Act of 1964, Tit. VII, 42 U.S.C. §§ 2000e

06 DIRE sisidccyovatvatsvi deciasicneswnlaeataladeidindaeianipaatitae 2.8

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

ee i a +)

Emplovee Retirement Income Security Act of 1974,

Pub. L. No. 93-406, 88 Stat. 829...............cccccscccsesseeeees 14.

Private Securities Litigation Reform Act of 1995,

Pub. L. No. 104-67, 109 Stat. 737..............cccseseccoscsesesees 8

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

ee es aE FS piciccaniecvacntcscenionnstioe’ 1,8, 10, 12, 13, 15

BS ©. & TIO onccccsesscnsscnciess 1, 3. 4. 7, 8. 9. 10, 11, 20

0 OSES RTS cI IIS REO ES 8, 12

RELL ALLEL SEDO AD 11, 12

Securities Litigation Uniform Standards Act of 1998,

Pub. L. No. 105-353, 112 Stat. 3227.................... passim

RE CARRE ELT ERE AOI ATOR OEE 7

ST RISE T RRR ESIGN EP NEO nS ORO Po RRR ROOD Re 2

SS SERED SR REY Sa PI ENG Das aha SP EE 4.6

EF Pen Th BE Fe icctbebcsecvcceseshanosoed 1, 2, 3, 4, 5, 6, 7, 13, 18

17 C.F.R. § 240.10b-5 (Rule 10b-5)...... 1,6, 7. 10, 11, 15, 20

LEGISLATIVE MATERIALS

H.R. Conf. Rep. No. 105-803 (1998) ...............:cceceeeeseeeeeeeeees 7

H.R. Rep. No. 105-640 (1998) .....ccccccccccessccccssesssscsveeceses 8.11

ee ie a ie ldecesmdpeesbessivide 1!

vl

OTHER MATERIALS

16 Moore’s Federal Practice (3d ed. 2005)............ccccceceeees 19

15A Charles Alan Wright, et al., Federal Practice

and Procedure (24 €0. 1902) .......000.0ccccccccoccccccccssecesscees 20

For centuries, the general rule has been that orders re-

manding cases to state court are not reviewable on ap-

peal. That rule governs when the remand is based on a

lack of subject-matter jurisdiction. Without even a pass-

ing nod to the history of 28 U.S.C. § 1447(d). respondents

attempt to extrapolate from this Court's narrow excep-

tions to the general rule of non-appealability a rule that

gives defendants in securities cases a right to appellate

review that other civil defendants do not enjoy. This

Court should reject that plea. Although Congress knows

how to draft a right of appellate review when it wants to,

it did not do so in SLUSA. Rather, Congress made clear

that 15 U.S.C. § 77p(c) - which concededly governs

subject-matter jurisdiction — defines removal jurisdiction

to be coextensive with SLUSA’s preemptive scope. That

reading advances Congress's multiple purposes of ensur-

ing that Rule 10b-5 claims masquerading as state-law

claims may be brought only in federal court and that non-

preempted claims will proceed in state court without bur-

dening the federal svstem with appeals of remand orders.

I. REMAND ORDERS FOR LACK OF SUBJECT-

MATTER JURISDICTION UNDER SLUSA ARE

NOT REVIEWABLE ON APPEAL

A. This case concerns the district courts construction

of SLUSA’s removal provision, 15 U.S.C. § 77ptc), which

respondents agree “confers subject-matter jurisdiction in

the federal courts” over removed cases. Br. 19. The dis-

trict courts below construed § 77pi(c)'s phrase, “as set forth

in subsection (b).” to mean that Congress intended to con-

dition removal on a defendant's satisfaction of cach ele-

ment of the preemption defense set out in § 77p(b). In-

deed, respondents’ own notices of removal argued that

removal was proper precisely because each of the § 77p(b)

requirements for preemption was met. See Pet. Br. 33-34.

After finding no preemption, the district courts expressly

dismissed these actions for a “‘lack| of] subject matter ju-

risdiction.” Resp. Br. 12 (quoting Pet. App. 1} 2a).

Respondents concede that the district courts explicitly

based remand on a lack of subject-matter jurisdiction. See

id. Respondents’ concession resolves this case. As the

Court explained in Thermtron Products, Inc. v. Hermans-

dorfer, 423 U.S. 336 (1976), “[i]f a trial judge purports to

remand a case on the ground that it was removed im-

providently and without jurisdiction, his order is not sub-

ject to challenge in the court of appeals by appeal, by

mandamus, or otherwise.” Jd. at 343 (emphasis added,

quotation marks omitted). That prohibition on appellate

review applies to all remands based on a district court's

determination that it lacks subject-matter jurisdiction,

whether “erroneous or not.” Jd. Given the district courts’

express conclusions that they lacked subject-matter juris-

diction, the remand orders issued pursuant to those find-

ings are unreviewable. See Gravitt v. Southwestern Bell

Tel. Co., 430 U.S. 723, 723-24 (1977) (per curiam).

Respondents attempt (at 13) to avoid Thermtron’s man-

date by claiming that a court of appeals is not bound by

the “label” the district court gives to its remand order.

Citing Arbaugh v. Y & H Corp., 126 S. Ct. 1235 (2006),

respondents argue that a court of appeals may review a

remand order to determine whether the district court’s

jurisdictional determination was correct. But Arbaugh

did not construe or even cite § 1447. There, the district

court had vacated a plaintiff’s Title VII jury verdict for

lack of jurisdiction on the ground, raised for the first time

after trial, that the defendant employer had fewer than

15 employees. This Court reversed, finding that the-

employee-numerosity requirement in Title VII went to the

merits and not jurisdiction and was therefore waived.

Under § 1447(d), by contrast, inquiring into the reason-

ing underlying a remand order based on lack of subject-

matter jurisdiction is precisely what Thermtron pro-

scribes: “remand orders issued under § 1447(c) and invok-

ing the grounds specified therein — that removal was im-

provident and without jurisdiction — are immune from re-

view under § 1447(d).” 423 U.S. at 346. In view of the

district courts express statements that thev remanded for

lack of subject-matter jurisdiction, those orders are un-

reviewable, even if the courts plainly erred in concluding

that jurisdiction was lacking. “[T]he issue of removability

is closed if the federal district court refuses to assume ju-

risdiction and remands the cause.” Metropolitan Cas. Ins.

Co. v. Stevens, 312 U.S. 563, 568 (1941): see Pet. Br. 24-28.

B. In any event, respondents wrongly maintain that

this case turns on a dispute about a “label.” In Arbaugh,

the employee-numerosity provision was not jurisdictional,

whereas § 77p(c) concededly is jurisdictional. See Resp.

Br. 19 (“SLUSA’s removal provision ... confers subject-

matter jurisdiction’). Respondents’ disagreement thus is

not with the label attached to the district courts’ rulings,

but with those courts’ construction of § 77p(c) as incorpo-

rating the preemption criteria “set forth in subsection (b)”

for purposes of subject-matter jurisdiction. That funda-

mentally is a disagreement with the correctness of the

district courts’ jurisdictional analysis — both in statutory

construction and in application of facts to law — under a

statute that governs subject-matter jurisdiction.

Thus, even if respondents were correct that an order

expressly based on a lack of jurisdiction could be reviewed

if the court wrongly “labeled” the statutory provision as

jurisdictional when in fact it was not — and Thermtron

and its progeny reject that proposition — such a principle

would not apply here. Respondents’ argument would ef-

fectively limit the reach of § 1447(d) to issues of fact (e.g..

citizenship of a party). but would make reviewable alleged

errors of law made by the district court in construing a

jurisdictional statute. Respondents’ position that Therm-

tron’s narrow exception is in fact a baseline “7Thermtron

rule” (Br. 9, 11, 38-41), to which § 1447(d) provides a lim-

ited exception, is squarely contrary to this Court's long-

standing precedent and turns on its head Congress's pol-

icy that remand orders are not reviewable. See Pet. Br.

20-23 (detailing history of § 1447(d)):; id. at 28 n.34.

Moreover, respondents’ theory cannot be reconciled with

Gravitt, which concerned a district court's application of

judicial estoppel to bar the defendant's assertion that it

was diverse from all plaintiffs. The court of appeals found

the remand order reviewable because judicial estoppel ts

not a ground mentioned in § 1447(c). This Court rejected

that notion. It held that, because the remand was based

on lack of diversity, it was unreviewable. See Pet. Br. 25-

26. That is the same as the jurisdictional holding here,

which was based on the district courts’ conclusions that

§ 77p(c) incorporated the preemption factors “as set forth

in subsection (b),” and that those factors were not met.'

C. Contrary to respondents’ view, prohibiting appellate

review of a remand order expressly based on a lack of

subject-matter jurisdiction does not conflict with the doc-

trine that “federal courts must independently determine

whether appellate jurisdiction exists in a given case.”

Resp. Br. 13. A court of appeals always has jurisdiction to

determine its own power to review a remand order, that

is, “to determine its own jurisdiction.” United States v.

' Respondents’ additional cases are inapposite. See Br. 13. Like

Arbaugh, two of the decisions cited from this Court neither addressed

§ 1447(d) nor concerned a remand to state court. See Liberty Mut. Ins.

Co, v. Wetzel, 424 U.S. 737 (1976) (holding final judgment on liability

that declined to award a remedy was non-final and unreviewable);

Nashville, C. & St. L. Ry. v. Wallace, 288 U.S. 249 (1933) (state legis-

lative judgments concerning declaratory actions not controlling as to

whether an Article II] “case or controversy” exists). Justice Ginsburg s

statement concerning a “tag” in her concurring opinion in Things

Remembered, Inc. v. Petrarca, 516 U.S. 124 (1995), was made in the

context of rejecting a law/equity distinction under a bankruptcy code

statute, and had nothing to do with § 1447(d) orders. See id. at 134; id.

at 135 (CA restrictive definition of what is ‘equitable’ could invite

wasteful controversy over the reviewability of bankruptcy case remand

orders that are not reached by § 1447 and rest on grounds a common-

law pleader might tvpe ‘legal.”) (emphasis added). The Third Circuit

in Aliota v. Graham, 984 F.2d 1350 (3d Cir. 1993) (Alito, J.). did ad-

dress § 1447(d), but not in a way that assists respondents. There. the

court found that the district court had exceeded its authority in finding

erroneous a determination made by the Attorney General, which bv

statute was deemed “conclusive” as to “subject matter jurisdiction” and

therefore unrecirewable. Id. at 1357 (analogizing to Thermtron’s hold-

ing that a district court lacks authority to remand based on an over-

crowded docket, “"grounds that he had no authority to consider”) (quot-

ing 423 U.S. at 351) (emphasis added in Aliota), Here, by contrast.

there can be no dispute that the district courts were authorized

indeed, required — to construe § 77plcy)s requirements for subject-

matter yurtsdiction over removed cases

wt

Ruiz, 536 U.S. 622, 628 (2002). When a district court

bases remand on a lack of subject-matter jurisdiction. the

court of appeals must conclude that it lacks jurisdiction to

review that order, particularly when the district court t-

construing a subject-matter jurisdiction provision.

Respondents next attempt to analogize to decisions con-

struing the bar on appellate review of judgments of ac.

quittal in a criminal case in 18 U.S.C. § 3731. They note

the Court's instruction that “‘what constitutes an “acquit-

tal” is not to be controlled by the form of the judge's ac

tion”; instead, it depends on “'whether the ruling of the

judge, whatever its label, actually represents a resolution,

correct or not, of some or all of the factual elements of the

offense charged.” Resp. Br. 14 (quoting United States v.

Martin Linen Supply Co., 430 U.S, 564. 571 (1977): citing

other cases). Respondents view those cases as establish-

ing that “a court of appeals may question a district court's

labeling of its remand order as ‘jurisdictional’ without vio-

lating the bar on appeals of ... jurisdictional remands.”

Br. 15: see id. (asserting that court should “independently

determine the basis for a district court’s remand order be-

tore holding that § 1447(d) bars an appeal’).

Respondents’ analogy is inapt. The purpose of the label!

rule in the acquittal cases is not to prevent delay suffered

by plaintiffs in litigating removal issues on appeal and

thereby to tolerate some risk of inaccuracy (as with

§$ 1447(d)). but rather to achieve the fullest accuracy pos-

sible to protect a criminal defendant's right to avoid dou-

ble jeopardy and thus to preclude the government from

bringing a second criminal prosecution. No such over

arching constitutional right is implicated here. Instead.

the respect for the “label” given by the federal courts to

foreclose appellate review of remand orders advances the

constitutional principle that federal courts are courts ot

limited jurisdiction. Respondents cite no case suggesting

that judgments of acquittal should be treated the same as

remand orders. Thermtron explained that § 1447(d) pro-

hibits review when the district court “purports” to base

remand on a determination that it lacks subject-matter

a

jurisdiction. 423 U.S. at 343. In any event, under any

reasonable view, the district courts’ remand orders here

concerned subject-matter jurisdiction under § 1447(c).

which brings them within the prohibition on appellate re-

view of § 1447(d).°

Finally, respondents claim that review “would better

serve Congress's expressed interest in uniformity in pri-

vate securities litigation.” Br. 37. In SLUSA,. Congress

sought certain uniformity between state and federal law

by preempting disguised Rule 10b-5 claims brought under

state law. Respondents invoke the very different interest

in uniformity of decision among “each judicial district” in

the federal system. /d. But Congress simply did not pre-

scribe an unrelenting uniformity. Instead, Congress codi-

fied a “policy of not permitting interruption of the litiga-

tion of the merits of a removed cause by prolonged litiga-

tion of questions of jurisdiction of the district court to

which the cause is removed.” United States v. Rice, 327

U.S. 742, 751 (1946). This Court has long “assume[d] that

Congress is ‘aware of the universality of thle] practice’ of

denving appellate review of remand orders when Con-

gress creates a new ground for removal.” Things Remem-

bered, 516 U.S. at 128 (quoting Rice, 327 U.S. at 752)

(alteration in original). In SLUSA, Congress declined to

include “a clear statutory command to the contrary,” id.,

despite having done so in other statutes. See Pet. Br. 29-

30. That congressional policy must be applied here. '

* Cf Law Professors Amicus Br. 10 (‘gradual evisceration’ of the

§ 1447(d) bar"); Dalrymple v. Great River Dam Auth., 145 F.3d 1180,

1185 n& (10th Cir. 1998) (“We fear such maneuvering [to avoid

§ 1447(d)] unnecessarily convolutes the law in this area and runs afoul

of strong congressional policy against review of remand orders ‘in order

to prevent delay in the trial of remanded cases by protracted litigation

of jurisdictional issues.” Thermtron Prod... Inc., 423 US. at 351.").

* Congress has made similar policy judgments in other contexts.

Compare Cal. Pub. Empl. Ret. Sys. v. WorldCom, Inc., 568 F.3d 86, 105

(2d Cir, 2004) (lederal interest in “centralizing bankruptey litigation in

a tedera! forum’): and U.S. Const. art. lL. § 8. ch 3 Cuniform Laws on

the subject of Bankruptcies”), with Things Remembered, 516 U.S. at

128-29 (no review of jurisdictional remand orders in bankruptcy cases).

~)

Il. SLUSA MAKES REMOVAL JURISDICTION

DEPENDENT ON PREEMPTION

The district courts correctly construed § 77p(c) to permit

removal only of claims satisfying the preemption criteria

“as set forth in subsection (b).” By cross-referencing

SLUSA’s preemption provision, § 77p(c) mandates that a

covered class action involving a covered security cannot

properly be removed unless it is preempted. See Pet. Br.

30-34. Because preemption is a jurisdictional prerequisite

to removal under SLUSA, § 1447(d) bars review of the dis-

trict courts’ remand orders.

Respondents’ contrary claim is that “SLUSA’s removal

provision is broader than its preclusion provision — that

is. it confers subject-matter jurisdiction in the federal

courts over some claims that are not precluded.” Br. 19;

see Br. 18-24. Thus, respondents contend, § 77p(c) re-

quires only a “colorable” assertion of preemption. Br. 25-

31. They then posit that, if the claim ts found not to be

preempted, remand is not required and the district court

has “discretion” to order a remand. Br. 32-37. Respon-

dents’ theory conflicts with SLUSA’s text and purposes,

and produces the unintended result that state-law claims

not preempted by SLUSA may remain in federal court.

A. SLUSA’s removal provision is coextensive with its

preclusion provision.

1. Congress's inclusion of the phrase “as set forth

in subsection (b)” in § 77p(c) reflects that. under SLUSA,

state-law claims that are in fact disguised Rule 10b-5

claims must be pursued in federal court subject to, inter

alia. heightened pleading requirements. a stay of discov-

erv while a motion to dismiss is pending, and a safe har-

bor for forward-looking statements by issuers. See Merrill

Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 126 5S. Ct.

1503, 1511 (2006) (SLUSA enacted “‘to prevent certain

State private securities class action lawsuits alleging

fraud from being used to frustrate the objectives of the

IPSLRA]™) (quoting SLUSA § 2(5)) (emphases added);

H.R. Conf. Rep. No. 104-803, at 13 (1998) (‘Under the leg-

islation, class actions relating to a ‘covered security’. . .

alleging fraud or manipulation must be maintained pur-

suant to the provisions of Federal securities law, in Fed-

eral court”): Resp. Br. 1-2.

But Congress expressed no intent to re-channel state

claims not subject to the PSLRA into federal court for a

trial applying state-law principles of liability. See Pet. Br.

3-4. As respondents maintain, “Congress included the

removal provision to ensure that precluded actions do not

proceed in state court.” Br. 22 (emphasis added). Thus,

the “removal provision ‘is designed to prevent a State

court from inadvertently, improperly, or otherwise main-

taining jurisdiction over an action that is preempted.” Id.

(quoting H.R. Rep. No. 105-640, at 16 (1998)) (emphasis

added).

That reading is confirmed by § 77p(d), which specifically

preserves certain state claims that would otherwise be

preempted by § 77p(b) and mandates remand of those

preserved actions to state court. See 15 U.S.C. § 77p(d):

Pet. Br. 5 n.2; Resp. Br. 35. There is no reason to think

that Congress intended a different result for other purely

state-law claims not preempted in the first place.

2. Respondents (at 19-20) invoke Arbaugh’s statement

that a statutory element should be treated as jurisdic-

tional “fijf the Legislature clearly states” that it is “juris-

dictional.” 126 S. Ct. at 1245. In Arbaugh, however, the

Title VII emplovee-numerosity requirement at issue was

contained in a “definitions” section of the statute defining

13 terms: Title VII's jurisdictional provision was in an en-

tirely different section.* There is no such structural sepa-

ration here. Section 77p(c) clearly authorizes removal of

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

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

Whether a federal question exists to support removal

of purely state-law claims plainly raises a question of

subject-matter jurisdiction and each statute must be

read on its own terms. See id. at 1245 n.11 (‘Congress

* See Arbaugh, 126 S. Ct. at 1245 (Congress could have made the

emplovee-numerosity requirement “jursdictional’ if it had wanted to).

has exercised its prerogative to restrict the subject-matter

jurisdiction of federal district courts based on a wide vari-

ety of factors, some of them also relevant to the merits of a

case.) (emphasis added).

Respondents (at 20) next defend the Seventh Circuit's

ruling that the “covered class action” element of § 77p(c) is

jurisdictional while the preemption element is not, citing

a footnote in Dabit, 126 8. Ct. at 1512 n.7 ("Another key

provision of the statute makes all ‘covered class actions’

filed in state court removable to federal court.”). SLUSA’s

removal provision was not at issue in Dabit — that case

was filed in federal, not state, court (see id. at 1507) -

and this Court has held numerous times (including in

Arbaugh) that such passing dicta is not precedenttal.

“Questions which merely lurk in the record, neither

brought to the attention of the court nor ruled upon, are

not to be considered as having been so decided as to con-

stitute precedents.” Webster v. Fall, 266 US. 507, 511

(1925).

Respondents assert that the words “anv” and “involv-

ing” as used in § 77p(c) indicate that non-preempted

claims are nevertheless removable because “|t|hese are

terms of inclusion, not limitation.” Br. 20: see Br. 20-21,

22-23. But that contention ignores the context in which

those terms appear. “Any covered class action brought in

any State court involving a covered securit.. as set forth

in subsection (by) is most naturally read to encompass

those actions described in “subsection (b).” not to broaden

removability bevond those actions so described. See. e.g..

King v. St. Vincent's Hosp.. 502 U.S. 215, 221 (1991)

(meaning of words in statute depends on context). The

words “any” or “involving” signify only that) claims

"CAFA does not reflect an understanding that SLUSA bases re

moval solely on the existence of a “covered security” See Resp Br. 21

ni. As noted in the text. even respondents concede (as did the Sev

enth Cireuit) that removal jurtsdiction also requires. at a minimum.

that the case involve a “eovered class action” Bro 24 no see alse

United States t) Price, 361 US. WO4 O13 (1960) (views of later Con-

vress a “hazardous basis tor interring the mtent of an earher one’)

10

meeting the three removability criteria — the action is a

covered class action, it involves a covered security, and it

is preempted under § 77p(b) — may be removed.”

Respondents next contend (at 21-22, 23) that reading

the clause “as set forth in subsection (b)” to authorize re-

moval only of preempted claims would render superfluous

the final clause of 77p(c), which states that removed ac-

tions “shall be subject to subsection (b).” The two clauses

‘an easily be read to perform different functions. however.

The first clause defines which actions may be removed:

the second clause directs that such a removable action

shall be dismissed as preempted. See Scheidler v. NOW,

126 S. Ct. 1264, 1273 (2006) (rule against surplusage is

not violated if each clause performs a function). Even

assuming some overlap in those related commands, they

need not be read as coextensive and thus superfluous. Cf

Shook v. District of Columbia Fin. Responsibility & Mgmt.

Assistance Auth., 132 F.3d 775, 782 (D.C. Cir. 1998)

(“Sometimes Congress drafts statutory provisions that .. .

appear duplicative of others — simply, in Macbeth’s words,

‘to make assurance double sure.”). In any event, constru-

ing the last clause of § 77p(c) as merely confirmatory of

the earlier clause is far more faithful to Congress's pur-

poses than is respondents’ construction, which ascribes to

Congress an intent wholly at odds with SLUSA. Given

what Congress was trving to accomplish in SLUSA

stemming the tide of Rule 10b-5-tvpe claims that had

flowed into state court - it would be anomalous to read

"The title of § 77p(c) — “Removal of covered class actions” - does not

erase the limiting phrase “as set forth in subsection (bY m the text of

the statute. See United States v. Minker, 350 US. 179. 185 (1956) (the

tithe of a statute and the heading of a section cannot lumit the plain

meaning ) (quotation marks omitted). Indeed. applying respondents

same logic to the phrase “involving a covered security” would read that

limitation out of the statute as well. In JNS vc. National Center for

Immigrants’ Rights, Inc., 502 US. 183 (1991). relied on by respondents

(at 21). the Court deferred to the “agenev <= reasonable. consistentls

held interpretation of its own regulation” in relying on the ttle of an

ambiguous regulation. See 502 US. at 189-00. No such principle of

agency deference applies here.

: 1]

§ 77p(c) to launch into federal court non-Rule LOb-5 (and

therefore non-preempted) claims to be adjudicated on the

merits by the district court.

Respondents next focus on the sentence in the legisla-

tive history stating that § 77p(c) “‘provides that anv class

action described in subsection (b) that is brought in a

State court shall be removable to a Federal district court,

and may be dismissed pursuant to the provisions of sub-

section (b).” Br. 21 (quoting H.R. Rep. No. 105-640, at 16;

S. Rep. No. 105-182, at 8 (1998)) (emphases added by re-

spondents). Respondents assert that this use of “shall”

and “may” “can only be read to mean that some actions

that are removable are not precluded.” Br. 23. Whatever

ambiguity may have been created in that sentence ts

clarified in the report's very next sentence, which makes

clear that Congress's concern was solely with the removal

of claims that SLUSA actually (not arguably) preempts:

“This provision [§ 77p(c)] is designed to prevent a State

court from inadvertently, improperly. or otherwise main-

taining jurisdiction over an action that is preempted pur-

suant to subsection (b).” H.R. Rep. No. 105-640. at 16.

That sentence confirms that Congress's focus was on

keeping preempted claims out of state courts: but no-

where did Congress suggest in SLUSA that (in the ab-

sence of complete diversity) it wanted to re-channel non-

preempted state claims into the federal courts for federal

adjudication of the merits of purely state-law claims. See

supra pp. 8-9. Accordingly, any ambiguity arguably

shown by respondents in parsing selected words and

phrases of the statute and its legislative history — and

thev have shown none — necessarily disappears in light of

the goals Congress sought to achieve in SLUSA.'

' Respondents claam that Congress's use of “shall” im § 77 p¢dyad) in

dicates that other. non- preempted actions “may be remanded” Br. 35

hoating Martin co. Franklin Capital Corp.. 1268. Ct. TOA, TOG e20Od))

Unlike here. in Martin “may” was used in juxtaposition to several

other uses of “shall” in the same statutory subsection

12

Indeed, Congress expressly provided that certain claims ~

meeting § 77p(b)’s preemption criteria nonetheless are

preserved by § 77p(d) and “shall” be remanded to state

court. 15 U.S.C. § 77p(d)(4). Congress was silent on the

remand of claims that did not meet the preemption crite-

ria. The logical inference, given SLUSA’s text, structure,

and purpose, is that Congress assumed such claims are

not properly removable to begin with.

B. SLUSA requires a successful defense of preemption

~a “colorable” argument is insufficient for removal.

1. Respondents concede that, under the well-pleaded

complaint rule, they ordinarily would have no right to re-

move based on a federal preemption defense. See Br. 16,

31. They correctly note that “Congress has acted on occa-

sion to make state-!aw actions removable solely on the ba-

sis of a substantial federal question presented as a de-

fense,” thus abrogating the well-pleaded complaint rule in

certain contexts. Br. 16. But respondents erroneously

assert that, “|w|hen Congress has done so, it has always

been recognized that the removing defendants need not

prove the merits of the defense to invoke the subject-

matter jurisdiction of the federal court; rather, such a case

is within the removal jurisdiction if the federal defense is

‘colorable’ (non-frivolous).” Br. 16-17: see also Br. 25.

The text and structure of SLUSA, however. align

squarely with the “complete preemption” doctrine, under

which this Court has held repeatedly that state-law

claims are removable if and only if federal law completely

preempts them: a “colorable” preemption defense is in-

adequate to justify removal. See Pet. Br. 34-36. Respon-

dents relegate the complete preemption doctrine to a pass-

ing footnote, arguing that it “applies only where Congress

has not expressly provided for federal jurisdiction.” Br. 19

n.5. But it is immaterial whether Congress provided “ex-

pressly” for complete preemption or this Court interpreted

Congress's regulation to have done so. SLUSA operates

the same way as the complete preemption doctrine. See

Pet. Br. 35-36; Law Professors Amicus Br. 15-16.

13

That is precisely how respondents understood SLUSA

to work at the removal stage in the district court

before they sought to avoid the non-reviewability bar of

§ 1447(d). Respondents’ own removal papers argued that

the cases here were removable precisely because they

were preempted, setting forth all four of the § 77p(b) pre-

emption criteria and claiming that each criterion was met.

See Pet. Br. 33-34 & nn.41-42. In this Court, respondents

decline to explain their multiple removal pleadings in any

other way, and, indeed, acknowledge that, “|w|here a case

is removable on the basis of a federal defense, the courts

look to the removal papers to establish the bases for fed-

eral jurisdiction.” Br. 8, 28.

2. Respondents point to cases interpreting the federal

officer removal statute in asserting that only a “colorable”

federal defense is necessary to create removal jurisdiction

under SLUSA. See Br. 25-28. But merely because Con-

gress can base removal on the assertion of a “colorable”

federal defense, as it has in that context, does not mean

that SLUSA must be interpreted in the same way. Like

the complete preemption doctrine, actual (rather than col-

orable) preemption is the sine qua non of SLUSA removal.

Moreover, the federal officer removal cases rest on “the

verv basic interest in the enforcement of federal law

through federal officials” Willingham v. Morgan, 395

U.S. 402. 406 (1969). Determining whether a federal offi-

cer was in fact acting within the scope of his or her official

duties may often be a fact-intensive inquiry, and the

~ Respondents counse! of record in this Court argued to the district

court to justify removal jurtsdietion: “SLUSA’s preemptive provisions

authorize removal and dismissal of lawsuits tiled in state court that

meet four basic requirements: (1) the underlving suit must be a ‘coy

ered class action, (2) the claim must purport to be based on state law:

(3) the defendant must be ‘alleged to have misrepresented or omitted a

material tact (or to have used or emploved any manipulative or decep-

tive device or contrivance), and (4) the detendant must be “alleged to

have engaged in conduct described by criterton C)) “in connection with”

the purchase or sale of a “covered security” Green oo Ameritrade, Inc.

270 PF 3d 590. 596 O8th Cir, 20020" Dets” Opp. to Mot. to Remand at 5

(Potter, Dist. Ct. Docket Entry 45) tomphases added)

14

federal interest fn having a federal rather than a state

jury pass on such questions is obvious. See id. at 409 (“If

the question raised is whether [the federal officers] were

engaged in some kind of ‘frolic of their own’ in relation to

{the federal prisoner], then they should have the opportu-

nity to present their version of the facts to a federal, not a

state, court.”). Under SLUSA, by contrast, the allegations

in the complaint need only be measured against SLUSA's

preemption criteria. This Court’s complete preemption

decisions likewise have simply compared the allegations

in the complaint to the statutory scheme.”

Respondents also assert that “the sole purpose of

SLUSA’s removal provision is to have the preclusion de-

fense ... decided by a federal court.” Br. 27. Just as in

the complete preemption context, however, the federal

court must determine whether SLUSA preemption ap-

plies; if it does, then the case is removable. Respondents

cite the “‘magnitude of the federal interest in protecting

the integrity and efficient operation of the market for na-

tionally traded securities.” /d. (quoting Dabit, 126 S. Ct.

at 1509). But they ignore that SLUSA’s purpose was not

to re-channel non-preempted claims arising solely under

state law into federal court for adjudication on the merits.

Instead, Congress sought to re-channel preempted state-

law claims into federal court for dismissal.

Respondents implicitly recognize that their reliance on

the federal interest in securities regulation does not ex-

tend to the adjudication of non-preempted, purely state-

law claims in federal court, and thus assert that such

* See, e.g.. Beneficial Nat? Bank v. Anderson, 539 U.S. 1, 7 (2003)

(“*Aveo stands for the proposition that if a federal cause of action com.

pletely pre-empts a state cause of action any complaint that comes

within the scope of the federal cause of action necessarily “arises un-

der” tederal law”) (quoting Franchise Tax Bd. v. Construction Labor-

ers Vacation Trust for Southern California, 163 US. 1, 28-24 (1983)

(emphasis added); Aetna Health Inc. v. Davila, 542 U.S. 200, 211

(2004) (assessing complete preemption under ERISA by examining the

“complaints. the [state] statute on which the[] clams are based .

and the various femplover health benefit} plan documents’).

15

claims should be remanded to state court. Respondents

first concoct the counterfactual theory that the district

courts orders in this case were “discretionary” remands,

rather than mandatory remands for lack of subject-matter

jurisdiction. Br. 32. They then seek to justify those so-

called “discretionary” remands as similar to remands of

pendent state claims once the federal claims giving the

court original federal-question jurisdiction have been dis-

missed. See Br. 32-37. But those machinations only rein-

force the illogic of respondents theory. There was never a

federal claim to begin with, and therefore nothing to

which petitioners’ state-law claims could he “pendent.”

3. Because SLUSA preempts only state-law covered

class actions alleging Rule 10b-5-like fraud or manipula-

tion, petitioners negligence and recklessness claims are

not preempted. See Pet. Br. 42-15. Although Dabit held

that holder claims meet the “in connection with” criterion

and thus fall within the ambit of Rule 10b-5 and § 77p(b),

it did not address whether market-timing claims alleging

negligence fall within those provisions, and respondents

make no such claim. Thus. while the state court will cer-

tainly be required to apply Dabit’s ruling that holder

claims fall within the “in connection with” language of

Rule 10b-5 and § 77p(b). it may examine in the first in-

stance whether petitioners’ non-fraud claims fall within

those provisions.

Accordingly, the Court should make clear that. on re-

mand, the state court is not bound by the Seventh Cir-

cuit’s April 5, 2005 opinion (see Pet. App. la-9a), which

was rendered without jurisdiction and is therefore null

and void. In that opinion, the court of appeals erred in

concluding that petitioners “affirmatively repudiated” the

argument that their claims do not depend on allegations

of fraud or manipulation. Resp. Br. 30. Because SLUSA

preemption raises a question of federal subject-matter ju-

risdiction. these arguments cannot be waived. See Pet.

16

Br. 44-45.'° And, in any event, petitioners repeatedly

stressed in their brief and oral argument before the Sev-

enth Circuit that they were not alleging fraud, but were

claiming that respondents acted negligently and reck-

lessly in failing to adopt practices that would protect peti-

tioners’ assets from the dilution in value caused by mar-

ket timing.'' Respondents’ assertions and the Seventh

Circuit's view are at odds with an undisputed record.

Respondents further assert that petitioners’ complaints

depend on allegations of fraud. Although respondents

quote nothing in support, they apparently rely on the al-

legations that respondents failed to protect their funds

from market timing,'~ while at the same time “convincing

investors ... to hold their fund shares by urging investors

to invest for the long term and by effectively marketing

the various advantages of long term ownership of funds

over direct investment.”'’ But petitioners have not sought

relief based on respondents’ fraudulent representations

about their funds. Instead, they seek relief on the ground

that respondents acted negligently and recklessly by fail-

ing to follow practices that would protect petitioners’

Respondents (at 31) mistakenly assert that. because this Court

did not independently analyze whether fraud was alleged in Dadi. ut

must have held that element to be non-jurtsdictional. Dabit was filed

in federal court based on complete diversity. so the Court had no occa-

ston to decide any removal jurtsdiction issues. See supra p. 9.

"See. eg. Tth Cir, 1/7/05 Tr. 18:18-20 ("[Petitioners] [we]re not

bringing a clam that thev were misled in anv way to buy the stock.”):

id. at 21:6-7 (The allegation is negligent valuation of the shares under

state law’): Pet. CLA. Br. 4 ('[Petitioners| have sued the Funds and the

Funds Managers for negligently or recklessly failing to calculate the

Funds share prices accurately”); see also Pet. Bro 44. Respondents

tellingly do not quote the transcript. because nothing in it can be read

to support the court of appeals “affirmative repudiation” ruling.

'= See JA 174-77 (Potter), 197-200 (Kircher), 223-25 (Parthasarathy).

2419-52 (Dudley 1). 267-70 (Dudley IH), 284-87 (Vogeler). 301-03 ¢Jack-

son), 316-18 (Spurgeon).

JAN 169 (Potter), 192 (Kircher). 218 (Parthasarathy), 244 (Dudler

1). 262 (Dudles 11), 279 Vogeler). 296 (Jackson), 312 (Spurgeon).

17

assets from the dilution in value caused by a failure to set

price at fair value. See Pet. Br. 44 & 1.53.

Respondents also quote out of context petitioners state-

ment that SLUSA does not preclude claims brought by

“current holders who are traudulently lulled into continu-

ing to hold.” Br. 32 n.11 (quoting Pls. Mot. to Remand at

7 (Kircher, Dist. Ct. Docket Entry 20)) (emphasis omitted).

The full quotation, however, makes clear that petitioners

made that statement only to illustrate that a// holder

claims, including those based on allegations of fraud, did

not meet the “in connection with” requirement based on

then-existing law. ' Accordingly, holder claims not assert-

ing fraud are not preempted by SLUSA. Petitioners never

indicated in their remand motions (or elsewhere) that

their claims depended on allegations of fraud. Rather.

petitioners emphatically stated in their remand motions

that they “have not contended|[] ‘that defendants misrep-

resented that the Funds were appropriate for long-term

buv-and-hold investors. nor have [thev] made any allega-

tion that the defendants ‘misrepresented the NAVs of the

Funds shares’ or ‘that defendants misrepresented and

omitted material facts concerning plaintiffs’ investments

and the value of the Funds shares.” Aircher Mot. to

Remand at 5 (quoting Notice of Removal © 16 (JA 349)).

Ill. WACO DOES NOT AUTHORIZE REVIEW

Because the Seventh Circuit's erroneous rulings on the

fraud clement of SLUSA preemption were rendered with-

out appellate jurisdiction, they cannot stand. To avoid

that result. respondents assert as a fallback that. “even it

the Court were to conclude that the remands in this case

were based on a lack of subject-matter jurisdiction.” Br.

it read: “Non-sellers and non-purchasers, such as prospective

purchasers who are fraudulently deterred trom purchasing or current

holders who are fraudulently lulled into continuing to hold their secu-

rittes, do not have cognizable claums ander the “4 Act as a matter ot

thoroughly well-established law” Aireher Mot. to Remand at 7 That

statement merely advanced the pre-Datit view that all holder claun-

even those based on traud — were not preempted by SLUSA. Petition

ers here have not brought traud clamms mm their complaimts

18

41-42, SLUSA preemption decisions are nevertheless re-

viewable under City of Waco v. United States Fidelity &

Guaranty Co., 293 U.S. 140 (1934). Respondents then

reason (at 46) that “the Seventh Circuit's determination

that the actions are precluded by SLUSA — which has

since been approved by this Court in-Pabit — would be

binding and the cases would be dismissed by the state

courts.” Respondents misunderstand Waco and misstate

the preclusive effect in state court of the district courts’

jurisdictional determinations.

In Waco, a citizen of Texas sued the City of Waco,

Texas, in state court. Waco filed a cross-complaint for in-

demnity against Fidelity, a citizen of Marvland, and Fi-

delity removed the entire case to federal court based on

diversity (claiming that the cross-suit was a “separable”

controversy obviating the need for complete diversity).

The district court agreed that a separable controversy was

presented and jurisdiction was thus proper, but it then

dismissed Fidelity as “an unnecessary and improper

party: and “since, upon that dismissal, there was no di-

versity of citizenship of the remaining parties, the court

held it lacked jurisdiction, and remanded the cause to the

state court.” /d. at 142. The City appealed, “not from the

order of remand, but from that dismissing its action

against... Fidelitv.” /d. This Court held that, although

“no appeal hes from the order of remand,” appellate re-

view of the order of dismissal was proper because “in logic

and in fact the decree of dismissal preceded that of re-

mand and was made by the District Court while it had

control of the cause.” /d. at 143. The Court made clear

that it was “liJndisputablv this order.” and not the re-

mand order, that was “the subject of... appeal.” /d."

Respondents theory ignores that Waco found jurisdic-

tion proper because the City appealed “not from the order

of remand, but from that dismissing its action against .. .

1D eas e "

Phis Court has crted Waco only once. in order to reattirm the rule

that § 1447(d) “precludes review of the remand order directly or imd-

rectly” Metropolitan Cas. Ins. 312 U.S. at 568 (crtations omitted)

19

Fidelity.” By contrast, respondents’ notices of appeal ap-

pealed only from orders “remanding™ the actions.'” No

district court here entered a separately appealable order

concluding that petitioners’ claims were not preempted.

Rather, the district courts examined the preemption ques-

tion only to determine whether they had removal jurisdic-

tion (indeed, that was the same theory of SLUSA ad-

vanced in respondents’ removal papers). Courts have

understood Waco to mean that, “fijf the court looks to an

issue for the purpose of determining subject matter juris-

diction, the issue is not separable because it cannot be

said to have preceded the remand decision ‘in logic and in

fact.” Powers v. Southland Corp., 4 F.3d 223, 228 (3d Cir.

1993) (quoting Waco, 293 U.S. at 143) (emphasis added by

Powers).

Waco does not apply when a court addresses a question

of substantive law that is “intrinsic to the district court's

decision to remand for lack of subject matter Jurisdiction.”

Calderon v. Aerovias Nacionales de Columbia, 929 F.2d

599, 602 (11th Cir. 1991) (remand decision holding that

Warsaw Convention did not preempt plaintiff's state-law

claims held unreviewable): see also, e.g... Nutter v. Monon-

gahela Power Co., 4 F.3d 319, 321 (4th Cir. 1993) (reject-

ing reliance on Waco where “the court's findings regarding

preemption and jurisdiction are indistinguishable’). Un-

der SLUSA, the preemption decision is intrinsic to the ju-

risdictional determination. Respondents identifv no case

applving Waco to find reviewable a preemption ruling on

which subject-matter jurisdiction was based, and they do

not dispute that courts of appeals uniformly hold that or-

ders by district courts rejecting a complete preemption

defense are unreviewable. See Pet. Br. 35 & n.44 (citing

cases): Law Professors Amicus Br. 16 n.8."'

" See JA 41 (Parthasarathy). 49 (Kircher). 56 (Potter), 64 (Vogeler)

89 (Dudley I). 75 (Dudley ID. 79 Jackson), = 4 (Spurgeon)

' Respondents reliance on learned treatises ts misplaced. Compare

Resp Bro dl. 47. with 16 Moore's Federal Practice § VO7 VA 2 | {alfa}, at

107-254. (3d ed. 2005) (Waco mappheable where the decision is “nec-

20

Respondents also assert that they will be precluded in

state court from litigating the SLUSA preemption issue.

See Br. 44. Not so. “Under contemporary principles of

collateral estoppel,” the inability to pursue an appeal is a

“factor strongly militat|ing] against giving a [judgment]

preclusive effect.” Standefer v. United States, 447 U.S. 10,

23 (1980) judgment of acquittal). Respondents ignore the

cases rejecting reliance on Waco because “a district

cu rts findings incident to an order of remand have no

preclusive effect.” Nutter, 4 F.3d at 322 (rejecting reliance

on Waco) (citing cases); see Chamber of Commerce Amicus

Br. 16 (discussing state-court holdings that litigation of

SLUSA preemption is not precluded).

The state court on remand will apply Dabit’s ruling

that holder claims fall under the “in connection with” lan-

guage of Rule 10b-5 and thus § 77p(c). And, because the

Seventh Circuit had no jurisdiction for its holding with

respect to the fraud criterion - and it is not justified by

Waco — the state court may address in the first instance

petitioners’ argument that their complaints, fairly read,

do not allege fraud and are not preempted by SLUSA.

CONCLUSION

The judgment of the court of appeals should be reversed.

essary to determine whether the [district] court has subject matter

jurisdiction”), and 15A Charles Alan Wright, ef al.. Federal Practice

and Procedure § 3914.11. at 711-12 (2d ed. 1992) (appeal may he from

“disposition on the merits before the balance of the case is remanded”

but the “remand order [can|not be reviewed as part of the appeal’).

'* See also. e.g.. Rogers v. Tyson Foods, Inc. 308 F.3d 785. 791 (7th

Cir. 2002) (preemption question open on remand despite rejection of

complete preemption defense in finding no jurisdiction): Lyons v.

Alaska Teamsters Employer Serv. Corp. 188 F.3d 1170. 1173 (9th Cir.

199%) (no preclusion on remand because “any consideration of the mer-

its of the preemption defense was in the context of determining jurts-

diction”): Solev v. First Natl Bank of Commerce, 923 F.2d 406. 110 (5th

Cir. 1991) (interpreting remand order “as jurisdictional.” so state court

“will have an opportunity to consider the appellants preemption de-

fense and the district court's order will have no preclusive effect”).

ROBERT L. KING

701 Market Street

Suite 350

St. Louis, Missouri 63101

(314) 241-4844

KLINT L. BRUNO

1732 North Wolcott

Suite #2

Chicago. Illinois 60622

(312) 286-4915

Respectfully submitted,

DAVID C. FREDERICK

Counsel of Record

Scott K. ATTAWAY

F. ANDREW HESSICK III

KELLOGG, HUBER, HANSEN,

TODD, EVANS & FIGEL,

P.L.L.C.

1615 M Street, N.W.

Suite 400

Washington, D.C. 20036

(202) 326-7900

Counsel for Petitioners

April 14, 2006