Opposition Brief — Cyan, Inc. v. Beaver Cnty. Emps. Ret. Fund, 138 S. Ct. 440 (2017) (No. 15-1439)

~

Fup |

AUG 24 2915

Loreen of ne cere |

No. 15-1439

IN THE

Supreme Court of the United States

CYAN, INC., et al.,

Petitioners,

Vv.

BEAVER COUNTY EMPLOYEES’

RETIREMENT FUND, et al., ©

Respondents.

On Petition for Writ of Certiorari to the

Superior Court of the State of California

for the County of San Francisco

BRIEF IN OPPOSITION

ROBERT V. PRONGAY ANDREW S. LOVE

EX KANO 8S. SAMs II Counsel of Record

GLANCY PRONGAY & SUSAN K. ALEXANDER

MURRAY LLP JOHN K. GRANT

1925 Century Park East KENNETH J. BLACK

Suite 2100 ROBBINS GELLER

Los Angeles, CA 90067 RUDMAN & DOwD LLP

(310) 201-9150 Post Montgomery Center

One Montgomery Street

Suite 1800

San Francisco, CA 94104

(415) 288-4545

alove@rgrdlaw.com

Counsel for Respondents

a RRS

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, D. C. 20002

QUESTION PRESENTED

Petitioners seek review of an unpublished order of a

California state trial court that concededly conflicts

with no state or federal appellate ruling on a question

that only one appellate court in the nation has ever

decided. The question is whether after the Securities

Litigation Uniform Standards Act of 1998 state courts

continue to possess concurrent jurisdiction over claims

brought under the Securities Act of 1933, just as they

always have since that statute’s enactment.

TABLE OF CONTENTS

QUESTION PRESENTED ............0...ccc-sececssscceses

TABLE OF AUTHORITIBS ....................0.0000......

STATEMENT OF THE CASE ....................0.......

ee ee eee eee ee eee eee eee ee ee

(11)

Page

22

iv

TABLE OF AUTHORITIES

CASES Page(s)

Badri v. TerraForm Global, Inc.,

No. 15-ev-06323-BLF, 2016 WL 827372

a noes Be ig. | EI ee eerenerr 12, 13

Buelow v. Alibaba Grp. Holding Ltd.,

No. 15-cv-05179-BLF, 2016 U.S. Dist.

LEXIS 7444 (N.D. Cal. Jan. 20, 2016)....... 13

Carlson v. Ovascience, Inc.,

No. 15-14032-WGY, 2016 WL 2650707

CEP, TN B,C BNO cas ccovsswecsscecececceres: 13

Catlin v. United States,

Be ee, i sic tcctesecceesccsnssscscesasasens 8

CBS, Inc. v. FCC,

I AE GI EE i vicis cvcicaoccanweccnevedveversssesses 20

Cervantes v. Dickerson,

No. 15-cv-3825-PJH, 2015 U.S. Dist.

LEXIS 143390 (N.D. Cal. Oct. 21, 2015)...... 13

Chadbourne & Parke LLP v. Troice,

ey Sie I RD whe tstrescccacesscnsccnsssercene 2

Charles Dowd Box Co. v. Courtney,

ee ke Be IE ieciveicie ss teneeScousansyicesosess 18

City of Birmingham Ret. & Relief

Sys. v. MetLife, Inc., No. 2:12-cv-02626-

HGD, 2013 U.S. Dist. LEXIS 147675

Oe ee. AU. UNE, TEI MII ae bo fess seccenses-scnnases 13

City of Warren Police & Fire Ret.

Sys. v. Revance Therapeutics, Inc.,

125 F. Supp. 3d 917 (N.D. Cal, 2015) ........ 12,13

Vv

TABLE OF AUTHORITIES—-Continued

Page(s)

Construction & Gen. Laborers’

Union v. Curry,

BE ee i I G caicscacovscsnaccacdssasdevcccenas 7

Countrywide Fin. Corp. v. Luther,

EF ee PD Is veen carcssececvecesvussescovesss 4

Cox Broad. Corp. v. Cohn,

og Fg, a 6,7

Cyan, Inc. et al. v. Beaver County

Employees Retirement Fund, et al.,

No. A146891 (Cal. App. Ist Dec. 10, 2015)

Cyan, Inc. et al. v. Beaver County

Employees Retirement Fund, et al.,

No. $231299 (Cal. Sup. Ct. Feb. 24, 2016).

Desmarais v. Johnson,

No. C 13-03666 WHA, 2013 U.S. Dist.

LEXIS 153165 (N.D. Cal. Oct. 22, 2013)......

Dir. of Revenue of Missouri v.

CoBank ACB,

Ee We I NN iiss cnsksosccnckascsveveascecs.

Elec. Workers Local #357 Pension and

Health & Welfare Trs. v.

Clovis Oncology, Inc.,

No. 16-cv-00933-EMC, 2016 WL 2592947

Ree Es BU We POO viidinsesenconcsensacsccecevss :

Flynt v. Ohio,

I Sr Ee CRE aoe hc iencccpscceccecsocoosnoetevunes

vi

TABLE OF AUTHORITIES—Continued

Page(s)

Fortunato v. Akebia Therapeutics, Inc.,

No. 15-13501-PBS, 2016 WL 1734073

(D. Maen. Ame. SO, DOUG) .......0000ccsces.ce0.000000- 13, 18

Gulf Offshore Co. v. Mobil Oil Corp.,

SPE its OMe CUES Dicciiese sen 0nscocancssecconsievessex- 20

Gulfstream Aerospace Corp. v.

Mayacamas Corp.,

485 U.S. 271 (1988)............... So le oo, 6

Hung v. iDreamSky Tech. Ltd.,

No. 15-CV-2514 (JPO), 2016 U.S. Dist.

LEXIS 8389 (S.D.N.Y. Jan. 25, 2016)........ 12

Iinois Mun. Ret. Fund v. Citigroup, Inc.,

391 F.3d 844 (7th Cir. 2004) .....0.000 ee. 11

Iron Workers Mid-South Pension Fund

v. TerraForm Global, Inc.,

No. 15-ev-6328-BLF, 2016 WL 827374

Opie Be. | | ores 13

Kerley v. Mobilelron Inc., et ai.,

No. 15-ev-04416-VC

$6 eee ee Ol es 13

Kircher v. Putnam Funds Trust,

Oy Be, Ce Ci vvcnicccccsccococcsésvesccaconsese o 33: 22

Lauro Lines s.r.l. v. Chasser,

rs SI Oi accacicecececscosscScescataccsscaccs 8

Liu v. Xoom Corp.,

No. 15-CV-00602-LHK, 2015 U.S. Dist.

LEXIS 82830 (N.D. Cal. June 25, 2015).... 13

vil

TABLE OF AUTHORITIES—Continued

Page(s)

Luther v. Countrywide Fin. Corp.,

195 Cal. App. 4th 789 (2011).............00.0.... passim

Luther v, Countrywide Fin. Corp.,

No. §194319

(Cal. Sup. Ct. Sept. 14, 2011)..................... 4

Luther v. Countrywide Home Loans

Sevicing LP, 533 F.3d 1031

CAR, Fe Pecbsecnidsviscousnecscaeiasti tise 1]

Maine v. Thiboutot,

GE T.. BE i Gitssttitsierceermanenene 18

Mercantile Nat'l Bank v. Langdeau,

Fak Wo res Ue las cacencatcrecnedeeiaccniont ies 7

Merrill Lynch, Pierce, Fenner & Smith,

Inc. v. Dabit,

GT BIG. Fe CI fvciiitikccccnwunneee 2

Merrill Lynch, Pierce, Fenner & Smith,

Inc. v. Manning,

ROO Dk GE, BE Cv cvecesssiseinsicusncsutseetes 19

Mims v. Arrow Fin. Servs., LLC.,

Rae Cs Cres PIU LAPD csinsconsccdinaccdctonaemicieaen 19, 21

Mitchell v. Forsyth,

BTR RT Bec BER Kiss 6esedeceiciucccccvensdeancenceens 7

Pac. Inv. Mgmt. Co. LLC v. Am. Int'l Grp.,

Inc., No. SA CV 15-0687-DOC, 2015

US. Dist. LEXIS 75355

(C.D. Cal. Jume 316, BORS) ......<.<..csccscsss. oaks 13

vill

TABLE OF AUTHORITIES—Continued

Patel v. TerraForm Global, Inc.,

No. 16-cv-00073-BLF, 2016 WL 827375

i Ee ES | ener

Pennsylvania v. Ritchie,

SE MP EEEUED sscasccccvesessensescsesncesseceesss

Plymouth Cty. Ret. Sys. v. Model N, Inc.,

No. 14-CV-04516-WHO, 2015 65110

oe le |S SS |) eens

Proctor v. Vishay Intertechnology Inc.,

584 F.3d 1208 (9th Cir. 2009) ..................

Pytel v. Sunrun Inc.,

No. C 16-2566-CRB, 2016 U.S. Dist.

LEXIS 90417 (N.D. Cal. July 12, 2016).

Rajasekaran v. CytRx Corp.,

No. CV 14.3406-GHK, 2014 U.S. Dist.

LEXIS 124550 (C.D. Cal. Aug. 21, 2014).

Reyes v. Zynga, Inc.,

No. C 12-05065 JSW, 2013 WL 5529754

CO. SAL AE, CE EOD scccccesecsecssccvecsconee

Rivera v. Fitbit, Inc.,

No. 16-CV-02890-SI, 2016 WL 4013504

(N.D. Cal. July 27, 2016) ..........cccccccccceee.

Rosenberg v. Cliffs Nat. Res., Inc.,

No. 1:14CV1531, 2015 U.S. Dist. LEXIS

48915 (N.D. Ohio Mar. 25, 2015).............

Sarti v. Salt Creek Ltd.,

167 Cal. App. 4th 1187 (2008).............00...

Page(s)

. 12-13

.. 13, 20

ix

TABLE OF AUTHORITIES—Continued

Page(s)

Springdale Mem'l Hosp. Ass'n, Inc.

vu. Bowen,

818 F.2d 1377 (8th Cir. 1987) ....................

Tafflin v. Levitt,

Se AF A 0 BR oecsexsicvsicecessscoeversnnes 18, 19, 20

Toth v. Envivo, Inc.,

No. C 12-5636 CW, 2013 U.S. Dist.

LEXIS 147569 (N_D. Cal. Oct. 11, 2013) ...

Unschuld v. Tri-S Security Corp.,

No. 1:06-CV-02931-JEC, 2007 WL

2729011 (N.D. Ga. Sept. 14, 2007).............

Van Cauwenberghe v. Biard,

ee ee CI oa ritchchecivepecccscéeninesnceries

Westmoreland Cnty. Emp. Ret. Fund v.

Inventure Foods, Inc., et ai.,

No. 2:16-cv-01410-PHX-JMM (D. Az.

Be SE haa doiieeniseveianigtonnnitiatinanoncasctuten

Wunsch v. Am. Realty Capital Props.,

No. JFM-14-4007, 2015 U.S. Dist. LEXIS

48759 (D. Md. Apr. 14, 2015)...............00..

STATUTES, RULES AND REGULATIONS

28 U'S.C.

13

x

TABLE OF AUTHORITIES—Continued

Page(s)

Private Securities Litigation Reform Act of

1995, Pub. L. 104-67, 109 Stat. 737

(FED nied anencenscenetedtparecasetiniocednastnetsinsaasenaitth passim

Securities Act of 1933, Pub. L. No. 73-22, 48

Stat. 74, 15 U.S.C. § 77a et seq................ passim

DF WEN si iioisencluicanwerahicdatmudinandutousagatecsinteacradl passim

A MOREE ta PETE RTI Re stesthobe pines Ta sets 3,16

Oy Mie SBE Ee Aas 8S Ae 9 Bo 3, 17

Be PIED cetissaceaisbkcucwiidscieadsSevabaineasenmidasant 5

§ 77p(fX2AA)...... pM Ee NOt TEATS! Pr 3

3g. fh) Raha iee cairn a ins ee 3

Tit. I, § 22, 48 Stat. 86, 15 U.S.C.

Be ENED sicccicdeancoved shitaasibdinsientihelnabeaencntes 2

Securities Exchange Act of 1934, 15 U.S.C.

i PU asa hse pede obusleanemteabeniod 2, 17, 20

I a aati 20

NN cick cn sacteecncaiceseutenitetesbekecenuceiers 2

Securities Litigation Uniform Standards

Act of 1998, Pub. L. 105-353, 112 Stat.

SE i iisiacicatccstxenessncineaccnendesiietstinneasicahl passim

Tit. I, § 101(a\(3), 112 Stat. 3230 (1998).

Bust tes... 3, 16

x)

TABLE OF AUTHORITIES-- Continued

COURT FILINGS Page(s)

Petition for Review, Cyan, Inc. ef al. v.

Beaver County Employees Retirement

Fund, et al., No. 8222702 (Cal. Sup. Ct.

BN ik eo, et SE See 4

Petition for Writ of Mandate and/or

Prohibition or Other Relief, Cyan, Inc. et

al. v. Beaver County Employees Retirement

Fund, et al., No. A146891 (Cal. App. Ist

os |: | eee Cd BEE AD MAAS nce 4 TI 10

SECONDARY AUTHORITIES

H.R. Rep. No. 105-640 (1998)....cccccccecccseeee. 1

H.R. Rep. No. 105-803 (1998).....................4. 1

S. Rep. No. 106-182 (1998) ..................:0-.0s00 17, 21

OTHER AUTHORITIES

John C. Coffee Jr., Gone With the Wind:

Small IPOs, the JOBS Act, and Reality,

THE CLS BLUE SKY BLOG, Feb. 1,

I nod csniiotoeletcutenteuabedsiabiceenbcocdanatadannahiaiaats 15-16

Judy Greenwald, JOBS Act triggers rise in

public stock offerings and IPO-related

litigation, BUSINESS INSURANCE,

III SII oo cncccronanaxdciipenoceadackassonailsces 15

Laura Lorenzetti, IPOs raised $249 billion

in 2014, and the fundraising frenzy could

continue, FORTUNE, Jan. 5, 2015.......... 15

Matt Krantz, 1POs rigged? 68% of new

stocks fall short, USA TODAY, August

Re NR ea i ee eee 15

xii

TABLE OF AUTHORITIES—Continued

Page(s)

PriceWaterhouseCoopers, Material weak-

nesses: Why disclosing them before your

IPO may make sense, October 2015,

www.pwe.com/us/en/deals/publications/

assets/pwc-deals-ipo-material-weakness-

IE ibvniictisscissscqnosnsavensoneinsianepasores 15

Wilmer Hale, 2016 [PO Report, https://

www.wilmerhale.com/uploadedFiles/Sha

red_Content/Fditorial/Publications/Docu

ments/2016-WilmerHale-IPO-Report. pdf 15

STATEMENT OF THE CASE

For more than eighty years, since the enactment of

the Sccurities Act of 1933 (“1933 Act”), state courts

have had concurrent jurisdiction to decide federal law

claims brought under that statute. In the Securities

Litigation Uniform Standards Act of 1998 (“SLUSA”),

Congress precluded certain state law securities class

actions outright. In a “Conforming Amendment,” H.R.

Rep. No. 105-640 at 4, 16 (1998); H.R. Rep. No. 105-

803 at 5 (1998), Congress amended the 1933 Act to

reflect that limitation on state court claims.

Consistent with state courts’ longstanding juris-

diction, respondents brought this lawsuit against peti-

tioners in a California superior court asserting claims

under the 1933 Act. Petitioners moved to dismiss,

asserting that the Conforming Amendment did not

merely preclude state law class actions outright, but

also did something very different: eliminated concur-

rent jurisdiction for 1933 Act claims. The superior

court rejected that argument, applying Luther v.

Countrywide Fin. Corp., 195 Cal. App. 4th 789 (2011),

a state appellate ruling that this Court previously

declined to review. Both the state court of appeals and

the state supreme court declined to review the supe-

rior court’s interlocutory ruling.

1. From the earliest days of the federal securities

laws, state courts have possessed concurrent jurisdic-

tion over securities claims brought under both state

law and the 1933 Act. Jurisdiction over state claims

was, of course, provided by state law. With respect

to federal claims under the 1933 Act, that statute

expressly provided for jurisdiction of federal courts,

“concurrent with State ... courts”

2

of all suits .. . brought to enforce any liability

or duty created by this title.... [And that nlo

case arising under this title and brought in

any State court of competent jurisdiction

shall be removed to any court of the United

States.

Securities Act of 1933, Pub. U. No. 73-22, Title I, § 22,

48 Stat. 86, codified as subsequently amenued at 15

U.S.C. § 77v(a). By contrast, federal district courts pos-

sess exclusive jurisdiction to decide claims under

the Securities Exchange Act of 1934 (“1934 Act”). 15

U.S.C. § 78aa(a).

Subsequently, in the Private Securities Litigation

Reform Act of 1995 (“PSLRA”), Congress imposed a

variety of procedural restrictions on the litigation of

securities fraud class actions under the federal

securities laws. PSLRA, Pub. L. No. 104-67, 109 Stat.

737 (1995); see Kircher v. Putnam Funds Trust, 547

U.S. 633, 636 (2006). In response, some shareholders

began filing essentially the same securities fraud class

action claims, pleaded instead under state securities

laws in state and federal court. Id.

Congress enacted SLUSA as a targeted response

to the use of state law claims to evade the PSLRA.

SLUSA added substantive provisions to the 1933

Act and the 1934 Act precluding certain state law

securities class actions altogether. See Chadbourne &

Parke LLP v. Troice, 134 S. Ct. 1058, 1068 (2014);

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

547 U.S. 71, 81-82 (2006). In § 77p, SLUSA precludes

“covered class actions” alleging deception with respect

3

to “covered securities,”' from being maintained in state

or federal court, but on/y with respect to claims “based

upon the statutory or common law of any State.” 15

U.S.C. § 77p(b). If plaintiffs nonetheless bring a pro-

hibited state law suit in state court, it may be removed

to federal district court, where it must be dismissed.

15 U.S.C. § 77p(c).

SLUSA thus eliminates the ability to adjudicate

state law securities class action claims in state and

federal court. SLUSA therefore included a “Conform-

ing Amendment” to the 1933 Act. That amendment

modified the 1933 Act’s provision (quoted above) to

provide for jurisdiction of federal courts, concurrent

with state courts, “except as provided in section [77p

of this title] with respect to covered class actions.”

SLUSA, Pub. L. No. 105-353, Title I, § 101(a)(3), 112

Stat. 3230 (1998), codified at 15 U.S.C. § 77v(a).

Further, removal of claims under the 1933 Act is pro-

hibited “(e]lxcept as provided in section [77p](c) of this

title.” Id. Section 77p is the provision that precludes

certain state law “covered class actions”; § 77p(c) is the

specific subsection that permits the removal of the

state law suits prohibited by SLUSA in order to be

dismissed automatically thereafter by the federal

district court.

2. In 2014, respondents brought this covered class

action against petitioners in California superior court.

Respondents’ complaint asserts claims under the 1933

Act. It does not assert any state law claim subject to

SLUSA.

' A “covered class action” involves fifly or more plaintiffs. 15 U.S.C.

§ 77p(P(2XAMi). A “covered security” is principally a security

traded on a national exchange. 15 U.S.C. § 77r(b)(1).

4

Petitioners themselves previously recognized that

“Congress has left in place federal and state concur-

rent jurisdiction of claims under the Securities Act of

1933.” Petition for Review, Cyan v. Superior Court of

California, California Supreme Court No. $222702, at

4 (Nov. 21, 2014). Petitioners nonetheless moved to

dismiss this suit for lack of jurisdiction. They argued

that the Conforming Amendment eliminated state

court jurisdiction over covered class actions asserting

claims under the 1933 Act, requiring dismissal.

According to petitioners, when Congress specified that

federal and state courts possess concurrent jurisdic-

tion “except as provided in Section 77p of this title with

respect to covered class actions,” it eliminated state

court jurisdiction over all “covered class actions,”

including class actions asserting federal claims under

the 1933 Act.

The superior court rejected petitioners’ argument on

the basis of the California Court of Appeal’s ruling in

Countrywide, 195 Cal. App. 4th 789, which both the

California Supreme Court and this Court previously

declined to review. Countrywide Fin. Corp. v. Luther,

565 U.S. 1080 (2011); California Supreme Court No.

$194319 (Sep. 14, 2011). The appellate court in

Countrywide recognized that SLUSA’s Conforming

Amendment preserves the ability of state courts to

adjudicate 1933 Act claims “/e/xcept as provided in

Section 77p.” 195 Cal. App. 4th at 795 (emphasis in

original). In turn, § 77p “provides” only two limita-

tions with respect to maintaining securities claims in

state courts. Consistent with Congress’s targeted

response to the use of state law securities fraud claims

to evade the PSLRA, § 77p: (i) precludes state law

securities fraud class action claims, and (ii) provides

that those same state Jaw claims may be removed to a

federal district court, which must dismiss them. By

5

contrast, § 77p does not “provide” anything with

respect to maintaining class actions in state court

generally, including class actions under the 1933 Act.

Thus, the Conforming Amendment

does not say that there is an exception to

concurrent jurisdiction for ail covered class

actions. Nor does it create its exception by

referring to the definition of covered class

action in . . . section 77p(f(2). Instead, it

refers to section 77p without limitation, and

creates an exception to concurrent jurisdic-

tion only as provided in section 77p “with

respect to covered class actions.”

Countrywide, 195 Cal. App. 4th at 795 (emphasis

added).

The superior court’s ruling rejecting petitioners’

jurisdictional objection was interlocutory. Petitioners

sought review in the California Court of Appeal, which

declined to review the case. California Court of Appeal,

First Appellate Dist., No. A146891 (Dec. 10, 2015).

Petitioners then sought review in the California Supreme

Court, which has never decided the Question Pre-

sented, and which denied review as well. California

Supreme Court No. $231299 (Feb. 24, 2016).

REASONS FOR DENYING THE WRIT

This case does not come close to satisfying any of the

criteria for this Court’s review. This Court lacks

jurisdiction to review the unpublished, interlocutory

ruling of the state superior court. That ruling, more-

over, has only ever been the subject of a single appel-

late ruling and does not conflict with any appellate

authority in any state or federal court. There is no

merit to petitioners’ arguments that obstacles exist

to such a conflict emerging, and so this Court should

6

reject petitioners’ request to depart from its ordinary

criteria for review. The ruling below is, moreover,

correct.

1. This Court lacks jurisdiction because the Supe-

rior Court’s decision denying petitioners’ motion for

judgment on the pleadings is not “final” within the

meaning of 28 U.S.C. § 1257.

Petitioners acknowledge, as they must, that “merits

litigation is ongoing in the Superior Court,” and so the

decision below plainly is interlocutory. Petition for

Writ of Certiorari (“Pet.”) 17. Indeed, an order denying

a dispositive motion is the opposite of final because

it “ensures that litigation will continue.” Gulfstream

Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 275

(1988). Petitioners argue, however, that the Superior

Court’s interlocutory decision should be treated as

final because the jurisdiction question is discrete and

anterior to the merits, and it would serve various

policy objectives to consider it sooner rather than

later. These arguments are unpersuasive.

The limitations on this Court’s power embodied

in § 1257 are long-settled, and rooted in powerful prin-

ciples of “efficiency, judicial restraint, and federalism.”

Pennsylvania v. Ritchie, 480 U.S. 39, 72 (1987)

(Stevens, J., dissenting). Although this Court has, on

occasion, granted certiorari to consider a state court’s

resolution of a federal question before the conclusion

of state proceedings, petitioners have not cited a case

in which the underlying substantive claim itself arose

under federal rather than state law. Indeed, this

Court has recognized that “ijn most, if not all, of the

cases” in which it has exercised jurisdiction, the addi-

tional state “proceedings would not require the deci-

sion of other federal questions that might also require

review by the Court at a later date.” Cox Broad. Corp.

7

v. Cohn, 420 U.S. 469, 477 (1975) (emphasis added).

Thus, in describing Construction & Gen. Laborers’

Union v. Curry, 371 U.S. 542 (1963), and Mercantile

Nat? Bank v. Langdeau, 371 U.S. 555 (1963), both

cited by petitioners, the Court noted that in each case,

“the party sceking review here might prevail on the

merits on nonfederal grounds, thus rendering unnec-

essary review of the federal issue by this Court” and

preventing the Court from considering the federal

question after final judgment. Cox, 420 U.S. at 482-

83. Here, however, there are no potential alternate

state grounds that would frustrate this Court’s exer-

cise of jurisdiction after a true final judgment. If

petitioners lose on the merits, they can bring their

jurisdictional claim to this Court’s attention in due

course. Moreover, delaying review until after final

judgment would prevent “piecemeal review with

respect to federal issues.” Flynt v. Ohio, 451 U.S. 619,

621 (1981).

In light of that fact, petitioners’ policy arguments

are unpersuasive. If petitioners are correct about the

merits, then the policies embodied in the PSLRA can

be vindicated upon review after a final judgment in

this case. Indeed, petitioners’ position is no different

from any other class action defendant that fails to win

by dispositive motion. On the other hand, petitioners

do not address the countervailing policy concerns, i.e.,

that immediate review in this Court will deal a blow

to the federalism, comity, and efficiency principles

that underlie § 1257.

Petitioners cite Mitchell v. Forsyth, 472 U.S. 511,

525 (1985), which held that the denial of qualified

immunity was reviewable on appeal under 28 U.S.C.

§ 1291. But qualified immunity presents an unusual

exception to the long-established rule that “denial

8

of a motion to dismiss, even when the motion is

based upon jurisdictional grounds, is not immediately

reviewable.” Catlin v. United States, 324 U.S. 229,

236 (1945). And immunity is, of course, different from

petitioners’ effort to dismiss respondents’ action

because petitioners are not arguing that they are

entirely immune from suit; they are only disputing the

appropriate forum. This Court has never regarded

such decisions as final. See, e.g., Lauro Lines s.r.l. v.

Chasser, 490 U.S. 495, 501 (1989) (holding that denial

of motion based on contractual forum clause was not

final because the clause did not entitle the petitioner

“to avoid suit altogether, and an entitlement to avoid

suit is different in kind from an entitlement to be sued

only in a particular forum”); Van Cauwenberghe v.

Biard, 486 U.S. 517, 524 (1988) (holding that the

question is whether “the claimed right is a right not to

stand trial”). Here, petitioners themselves argue that

the “right” they are asserting is the right to litigate in

a federal forum —1.e., exactly the sort of right that this

Court has found insufficient to trigger finality in the

§ 1291 context. Pet. 19.

To put it another way: if a federal! district court had

refused to dismiss a case under the 1993 Act for lack

of subject matter jurisdiction, that decision would not

be appealable to a circuit court of appeals, let alone

this Court. It is odd indeed for petitioners to argue that

a substantively identical decision, rendered in a state

tria] court, should receive greater scrutiny from this

federal appellate Court.

2. Even if this Court possessed jurisdiction, certio-

rari should be denied. The interlocutory posture of the

case counsels strongly in favor of deferring review

until the entry of a final judgment. The state court

of appeal and state supreme court have not yet spoken

9

tu the superior court’s jurisdiction over this case, and

either could do so later in the proceedings, e.g., after

final judgment. Also, because respondents’ substan-

tive claims arise under federal law, and could there-

fore present one or more issues meriting review in this

Court, the more efficient course is to permit all of the

federal law issues in the case to be presented together

in a single petition after the entry of final judgment.

Further, only one appellate court in the country has

ever decided the Question Presented. This Court rou-

tinely permits such issues to percolate in the appellate

courts to determine whether a conflict arises and to

give time for a better understanding of the legal

question to emerge.

Because the issue has only ever been decided by a

single appellate court, by definition the unpublished,

nonprecedential ruling below does not conflict with

any state or federal appellate authority. Petitioners

do not contend otherwise. Review is inappropriate for

that reason alone.

Petitioners argue that this Court should depart from

its ordinary criteria for granting certiorari because

it is unlikely that a conflict could ever emerge. In

fact, state appellate courts can easily decide the Ques-

tion Presented, and could create a conflict worthy of

review. As discussed, the issue was decided by a

California court of appeal in Countrywide. Although

petitioners are correct that the ruling in Countrywide

currently binds California superior courts, they omit

the far more important point: that is only because no

state court of appeal in any of the other five appellate

districts in California has yet decided the issue. There

is no obstacle to defendants securing such a ruling in

their favor. See Sarti v. Salt Creek Ltd., 167 Cal. App.

4th 1187, 1193 (2008). This case is proof positive:

10

petitioners sought interlocutory review in a different

California court of appeal. There, they described such

review as “[rloutine[].” Petition for Writ of Mandate

and/or Prohibition or Other Relief, Cyan, Inc. et al. v.

Beaver County Employees Retirement Fund, et ai.,

California Court of Appeal, First Appellate District,

No. Al46891, at 8 (Dec. 2, 2015).

The state supreme court can decide the question

(whether or not the court of appeal grants review), but

has not yet dene so — although it could in another case

or after the entry of final judgment in this case.

Petitioners themselves sought review in the California

Supreme Court. It is no surprise that the state

supreme court would decline to step in to review an

interlocutory jurisdictional objection in the absence of

any conflict in its lower courts. But that hardly

provides a basis for this Court to do so given that the

question has been decided by only one appellate court

anywhere in the nation.

And that is just California. ‘There are forty-nine

other states, the District of Columbia, and courts of

U.S. territories. Claims under the 1933 Act can be,

and are, brought in those local courts. The relevant

appellate courts can review those rulings, frequently

an interlocutory matter and always after the entry of

final judgment. Petitioners’ argument that cases

under the 1933 Act are regularly brought in state

court means only that this Court will have no shortage

of opportunities to decide the Question Presented.

Review is also available in the federal courts of

appeals, in exactly the same fashion as every other

context in which a claim is removed from state to

federal court, which must then consider whether to

remand the dispute to state court. Contrary to the

necessary assumption of petitioners’ argument, this

Ll

Court has not applied different certiorari criteria in

such cases. The very fact that Congress generally pre-

cluded the courts of appeal from reviewing orders

granting remand is strong evidence that this Court’s

immediate intervention in such cases is not war-

ranted.

Although appellate review may be unavailable in

cases in which the district court grants remand, that

is not uniformly true. Luther v. Countrywide Home

Loans Sevicing LP, 533 F.3d 1031, 1033 (9th Cir.

2008); Illinois Mun. Ret. Fund v. Citigroup, Inc., 391

F.3d 844, 848-49 (7th Cir. 2004). Further, petitioners’

suggestion that remand is frequently granted is ulti-

mately just an acknowledgment that their inter-

pretation of the Conforming Amendment lacks merit.

Remand is granted only because district courts over-

whelmingly agree with the ruling below. In such cir-

cumstances, where there is little to no disagreement

in the lower courts, this Court’s intervention is unwar-

ranted.

If federal district courts instead reverse course and

begin to adopt petitioners’ argument on the merits,

they will deny remand and the plaintiffs can seek

permission to appeal under 28 U.S.C. § 1292 or appeal

from the eventual final judgment. The subsequent

appellate rul'»gs would, of course, be subject to review

in this Court

Petitioners argue that it is frequently costly to await

the outcome of the proceedings in the trial court. To

the extent that is so, it is not remotely unique to this

Question Presented. The same could be said with

respect to every securities class action — indeed, every

class action. Yet, this Court has not applied different

certiorari criteria in those contexts.

12

3. There is accordingly no merit to petitioners’ argu-

ment that the Question Presented has led to “chaos”

in the lower courts. There is no conflict in any binding

precedent at any level of any state or federal court

anywhere in the United States. There simply is no

precedent for this Court to grant review in such a

circumstance, where the Question Presented has only

ever been decided by a single appellate court in the

nation — and by no state supreme court or federal court

of appeals.

Petitioners identify a supposed conflict in district

court rulings, highlighting decisions issued from 2015

onward. Pet. 12 n.10. In fact, there is now a “domi-

nant view around the country” (Badri v. TerraForm

Global, Inc., No. 15-cv-06323-BLF, 2016 WL 827372

(N.D. Cal. Mar. 3, 2016) (quotation marks and citation

omitted), that “has almost uniformly been upheld by

the district courts since 2012.” City of Warren Police

& Fire Ret. Sys. v. Revance Therapeutics, Inc., 125 F.

Supp. 3d 917, 921 (N.D. Cal. 2015).

In the post-2014 period highlighted by petitioners,

nineteen federal district courts have decided the

Question Presented. Of those, only two accepted peti-

tioners’ argument, one in a two-paragraph summary

order’; the other seventeen are consistent with the rul-

ing below.’ Petitioners’ self-selected period also omits

* Hung v. iDreamSky Tech. Ltd., No. 15-CV-2514 (JPO), 2016

U.S. Dist. LEXIS 8389 (S.D.N-Y. Jan. 25, 2016); Wunsch v. Am.

Realty Capital Props., No. JFM-14-4007, 2015 U.S. Dist. LEXIS

48759 (D. Md. Apr. 14, 2015).

° Westmoreland Cnty. Emp. Ret. Fund v. Inventure Foods, Inc.,

et al., No. 2:16-cv-01410-PHX-JMM, slip op. (D. Az. Aug. 11,

2016), Rivera v. Fitbit, Inc., No. 16-CV-02890-SI, 2016 WL

4013504 (N.D. Cal. July 27, 2016); Pytel v. Sunrun Inc., No. C 16-

2566-CRB, 2016 U.S. Dist. LEXIS 90417 (N_D. Cal. July 12,

13

the time between August 2012 and January 2015, in

which five district courts decided the Question

Presented, all consistent with the decision below.’ So,

in the past four years, defendants are batting two for

twenty-four — less than 9% of cases.° That is a pattern

2016); Elec. Workers Local #357 Pension and Health & Welfare

Trs. v. Clovis Oncology, Inc., No. 16-cv-00933- EMC, 2016

WL 2592947 (N.D. Cal. May 5, 2016); Fortunato v. Akebia

Therapeutics, Inc., No. 15-13501-PBS, 2016 WL 1734073 (D.

Mass. Apr. 29, 2016); Badri, 2016 WL 827372; Iron Workers Mid

South Pension Fund v. TerraForm Global, Inc., No. 15-cv-6328-

BLF, 2016 WL 827374 (N.D. Cal. Mar. 4, 2016); Patel v.

TerraForm Global, Inc., No. 16-cv-00073-BLF, 2016 WL 827375

(N.D. Cal. Mar. 3, 2016); Carison v. Ovascience, Inc., No. 15-

14032-WGY, 2016 WL 2650707 (D. Mass. Feb. 23, 2016); Buelow

v. Alibaba Grp. Holding Ltd., No. 15-cv-05179-BLF, 2016 U.S.

Dist. LEXIS 7444 (N.D. Cal. Jan. 20, 2016); Kerley v. Mobilelron

Inc., et al., No. 15-cv-04416-VC, slip op. (N.D. Cal. Nov. 30, 2015);

Cervantes v. Dickerson, No. 15-cv-3825-PJH, 2015 U.S. Dist.

LEXIS 143390 (N_D. Cal. Oct. 21, 2015); City of Warren., 125 F.

Supp. 3d 917; Liu v. Xoom Corp., No, 15-CV-00602-LHK, 2015

U.S. Dist. LEXIS 82830 (N.D. Cal. June 25, 2015); Pac. Inv.

Mgmt. Co. LLC v. Am. Intl Grp., Inc., No. SA CV 15-0687-DOC

(DFMx), 2015 U.S. Dist. LEXIS 75355 (C.D. Cal. June 10, 2015),

Rosenberg v. Cliffs Nat. Res., Inc., No. 1:14CV1531, 2015 U.S.

Dist. LEXIS 48915(N.D. Ohio Mar. 25, 2015); Plymouth Cty. Ret.

Sys. v. Model N, Inc., No. 14-CV-04516-WHO, 2015 65110 (N.D.

Cal. Jan. 5, 2015).

* Rajasekaran v. CytRx Corp., No. CV 14-38406-GHK (PJWx),

2014 U.S. Dist. LEXIS 124550 (C.D. Cal. Aug. 21, 2014);

Desmarais v. Johnson, No. C 13-03666 WHA, 2013 U.S. Dist.

LEXIS 153165 (N.D. Cal. Oct. 22, 2013); Toth v. Envivo, Inc., No.

C 12-5636 CW, 2013 U.S. Dist. LEXTS 147569 (N.D. Cal. Oct. 11,

2013); City of Birmingham Ret. & Relief Sys. v. MetLife, Inc., No.

2:12-cv-02626-HGD, 2013 U.S. Dist. LEXIS 147675 (N_D. Ala.

Aug. 23, 2013); Reyes v. Zynga, Inc., No. C 12-05065 JSW, 2013

WL 5529754 (N.D. Cal. Jan. 23, 2013).

5 Moreover, an average of six cases annually across the country

is hardly the litigation tsunami portrayed by petitioners.

14

of uniformity in the district courts, not a striking

conflict that requires this Court’s early intervention.

Petitioners point to some older district court deci-

sions. But disagreements among the district courts

are commonplace and it is well-settled that they do not

merit review in this Court. Further, those rulings bind

no other court and the more recent pattern favoring

the ruling below is clear. Unless that emerging con-

sensus reverses itself in the courts of appeals, this

Court should apply its ordinary criteria and deny

certiorari.

Petitioners purport to identify a 1400 percent

“spike[]” in California state court filings of 1933 Act

cases since the California Court of Appeal’s ruling in

Countrywide. Only lawyers could come up with such

statistics. Pet. 8. Thatis, in fact, a total of thirty-eight

cases in five years, or an average of just over seven

cases annually, Pet. 8 & n.5, which certainly is not so

significant as to justify departing from this Court's

ordinary certiorari critena.

That is particularly true given that any increase in

litigation plainly is not attributable to Countrywide.

Petitioners argue to the contrary based only on the

bald assertion of one of their fellow securities defense

counsel. Pet. 27 n.36. But that self-interested argu-

ment makes no sense. Countrywide did not change the

law: state courts have had jurisdiction over claims

under the 1933 Act since the statute’s adoption.

Nothing about Countrywide would cause an increase

in litigation; there were not even other appellate

rulings around the country that would have inhibited

such suits. Petitioners specifically note that fourteen

of the thirty-eight California state cases were filed in

2015, but provide no explanation for why the 2011

15

decision in Countrywide would lead to an increase in

new state court filings in California four years later.

Further, if petitioners were right that Countrywide

and other cases rejecting their position increased state

court litigation, they would be able to cite systemic

increases in other states. They cannot.

In fact, the increase in claims under the 1933 Act

is principally attributable to an increase in initial

public offerings. It is those filings that have spiked in

California, increasing from four in 2009 to twenty in

2010, and then rising in a steady progression to highs

of forty-four in 2013 and fifty-four in 2014 — the years

immediately preceding the greatest jump in 1933 Act

cases.° For example, petitioner Cyan’s IPO was one of

’ See Wilmer Hale, 2016 IPO Report, https://www.wilmer

hale.com/uploadedFiles/Shared Content/Editorial/Publications/

Documents/2016-WilmerHale-IPO-Report.pdf. Importantly, it was

not merely the volume of [POs that led to an increase in 1933 Act

cases in state and federal court, but the rise in grossly overvalued

IPOs that were quick to miss earnings expectations after filing.

See, e.g., Laura Lorenzetti, 1POs raised $249 billion in 2014, and

the fundraising frenzy could continue, FORTUNE, Jan. 5, 2015,

Matt Krantz, 1POs rigyed? 68% of new stocks fall short, USA

TODAY, August 14, 2014. The Jumpstart Our Business Startups

Act (“JOBS Act”), enacted in 2012, eased the requirements

for going public for newer, growing companies. As reported by

CFO.com, 76% of issuers that went public in the blockbuster year

of 2014 filed under the JOBS Act. Many of these IPOs were of

poor quality. As an October 2015 PriceWaterhouseCoopers study

found, because “[s)maller companies are often limited in their

accounting and financial reporting capabilities, given their stage

of growth, small staff, and amount of resources they are able to

invest in the business,” those “limitations may result in a Jess-

defined and more poorly developed interna] control environment,

which often leads to [material weaknesses).” PriceeWaterhouseCoopers,

Material weaknesses: Why disclosing them before your IPO may

make sense, October 2015, www.pwe.com/us/en/deals/publications/

assets/pwe-deals-ipo-material-weakness-disclosure.pdf. See also

16

forty-four filed in California in 2013. This increase in

IPO filings — 1250% using petitioners’ math - is why

more such suits have been filed in both state and fed-

eral court in California, a critical fact that petitioners’

statistics omit.” If petitioners were right, there would

be fewer federal court suits, not more.

3. Finally, this Court’s early intervention is unwar-

ranted because the ruling below is plainly correct. The

Conforming Amendment modifies the 1933 Act to

provide that state courts continue to adjudicate claims

brought under the 1933 Act “except as provided in

section |77p of this title] with respect to covered class

actions.” SLUSA, Pub. L. No. 105-353, Title I, § 101(a)(3),

112 Stat. 3230 (1998), codified at 15 U.S.C. § 77v(a).

Petitioners stress that the definition of “covered class

actions” is not limited to state law claims. That is true,

but not persuasive. The definition on which petition-

ers rely has no operative effect in isolation. Section

77p thus does not “provide//” anything with respect to

maintaining “covered class actions” generally, includ-

ing actions raising only claims under the 1933 Act.

Rather, $ 77p “provide/s/’ that “covered class actions”

Judy Greenwald, JOBS Act triggers rise in public stock offcrings

and [PO-related litigation, BUSINESS INSURANCE, October

12,2014; John C. Coffee Jr., Gone With the Wind: Small

IPOs, the JOBS Act, and Reality, THE CLS BLUE SKY BLOG,

Feb. 1, 2013.

' To verify the increase in federal filings, respondents’ counsel

conducted a detailed search of public dockets found on the Stan-

ford Law School’s Securitics Class Action Clearinghouse (http://

securities.stanford.edu/filings.htm]), supplemented by Lexis Nexis

Courtlink. Counsel searched for all post-SLUSA cases filed in

federal district courts nationwide alleging 1933 Act claims, and

reviewed the complaints in each case to verify the claims raised.

This search disclosed nine cases filed in 2011, four cases in 2012,

eight cases in 2013, four cases in 2014 and eleven cases in 2015.

17

asserting state /aw claims (§ 77p(b)) may not be main-

tained in state or federal court, and that such state law

actions may be removed to federal district court to be

dismissed (§ 77p(c)). The Conforming Amendment, in

turn, addresses only those cases.

Petitioners read out of the statute the express

reference to how § 77p “provide(s|” for limitations on

maintaining covered class actions based on state law.

If Congress intended SLUSA to operate as petitioners

contend, it could have (and would have) written the

statute differently. Similar to the 1934 Act, it would

have provided that federal courts have “exclusive

jurisdiction” for covered class actions under the 1933

Act. See n.10, infra.

Petitioners’ argument also cannot be reconciled with

Congress's purpose in enacting SLUSA. Congress's

expressly stated goal in enacting that statute was to

prevent the evasion of the PSLRA through the filing

of state law securities claims. SLUSA, Pub. L. No.

105-353, 112 Stat. 3227 (1998) (SLUSA’s purpose is

“to limit the conduct of securities class actions under

State law.”) Congress further sought to promote uni-

formity by preventing “the dangers of maintaining

differing federal and state standards of liability for

nationally-traded securities.” S. Rep. No. 105-182, at

3 (1998). Allowing 1933 Act claims to proceed in state

court was completely consistent with the PSLRA,

which permitted such suits, just as had always been

true since the 1933 Act’s adoption.

That is why petitioners err in arguing that state

court suits under the 1933 Act are not subject to the

PSLRA: that is true only because that is how Congress

designed the PSLRA, generally choosing to respect

state courts’ authority over their own procedures.

Nothing in SLUSA reversed that choice, which is

18

rooted in sound principles of federalism.* There is

nothing unusual about recognizing “concurrent state

court jurisdiction even where federal law provided for

special procedural mechanisms” in federal court.

Tafflin v. Levitt, 493 U.S. 455, 466 (1990) (concurrent

jurisdiction despite extended venue and service-of-

process provisions for RICO cases that are only

applicable in federal court).®

Contrary to petitioners’ assertions (Pet. 28), adjudi-

cation of 1933 Act class action cases in state court does

not undermine uniform interpretation of the 1933

Act. “SLUSA promotes uniformity to some degree by

ensuring that covered class actions alleging securities

fraud can only proceed under federal law, which is

ultimately reviewable by [this) Court.” Fortunato,

2016 WL 1734073, at *5. Concurrent jurisdiction

“creates no significant danger of inconsistent appli-

cation of federal [] law” where, as here, federal courts

would “retain full authority and responsibility for the

interpretation and application of federal [] law,” not

“bound by state court interpretations,” and state

* Petitioners contend that the practical consequences of allow-

ing concurrent jurisdiction for 1933 Act class action cases is

having simultaneous cases in state and federal court — which they

assert is “strange||.” Pet. 28. But parallel litigation is not an

unusual feature of claims for which there is concurrent juris-

diction, and courts have various procedural mechanisms for

adjudicating such cases. For example, as petitioners themselves

note, state courts can stay the state court action in deference to a

federal court action. Jd. 28 n.27.

* See also Charles Dowd Box Co. v. Courtney, 368 U.S. 502

(1962) (concurrent jurisdiction over Labor Management Rela-

tions Act § 301 suits despite federal enforcement and venue

provisions); Maine v. Thiboutot, 448 U.S. 1, 3 n.1 (1980) (concur-

rent jurisdiction over 42 U.S.C. § 1983 suits, despite federal

procedural provisions of § 1988).

19

courts would not only be “guided by federal court

interpretations of the relevant federal! || statutes” but

“(s]tate court judgments misinterpreting federal || law

would, of course, also be subject to direct review by this

Court.” Tafflin, 493 U.S. at 464-65. Indeed, “this

Court’s ability to review state court decisions of federal

questions would sufficiently protect federal interests.”

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

Manning, 1368. Ct. 1562, 1574 (2016).

Moreover, the mechanism Congress chose in enact-

ing SLUSA was to extinguish a category of suits

outright: it forbade class actions based on state law

that were assertedly being used to evade the PSLRA.

Those suits could not be pursued in either state or

federal court. But petitioners read the Conforming

Amendment to do something very different: to main-

tain suits under the 1933 Act, so long as they are filed

in federal district court. Pct. 27. That reading of the

statute — shifting only the forum of litigation, not the

form of the claim — is inconsistent with SLUSA’s basic

design.

Any doubt is resolved by two settled principles of

statutory construction. First, there is a “deeply rooted

presumption in favor of concurrent state court juris-

diction,” that is rebuttable only if “Congress affirm-

atively ousts the state courts of jurisdiction over a

particular federal claim.” Mims v. Arrow Fin. Servs.,

LLC., 132 S. Ct. 740, 748 (2012) (citation omitted).

This Court’s practice is to “read|] jurisdictional laws,

so long as consistent with their language, to respect

the traditional role of state courts in our federal

system.” Manning, 136 S. Ct. at 1567-68. The pre-

sumption of concurrent state court jurisdiction can

therefore only be overcome “by an explicit statutory

20

directive, by unmistakable implication from legisla-

tive history, or by a clear incompatibility between

state-court jurisdiction and federal interests.” Tafflin,

493 U.S. at 460 (quoting Gulf Offshore Co. v. Mobil

Oil Corp., 453 U.S. 473, 478 (1981)). The 1934 Act, for

example, provides an express bar to concurrent juris-

diction over securities claims as opposed to the

language of the Conforming Amendment to the 1933

Act.'"°

Second, when Congress designates a statutory

provision a “conforming amendment” it is evidence of

“legislative intent that the amendment should be read

as a nonsubstantive reaction to related legislation.”

Springdale Mem'l Hosp. Ass’n, Inc. v. Bowen, 818 F.2d

1377, 1386 n.9 (8th Cir. 1987) (citing CBS, Inc. v. FCC,

453 U.S. 367, 381-82 (1981)); see also Dir. of Revenue

of Missouri v. CoBank ACB, 531 U.S. 316, 324 (2001)

(rejecting interpretation of statute that “would mean

that Congress made a radical — but entirely implicit —

change in the [legislation] ... with lan amendment

that] was merely one of numerous ‘technical and con-

forming amendments’ to the Farm Credit Act”) (cita-

tion omitted). If Congress intended to provide for exclu-

sive jurisdiction over class actions brought under the

1933 Act, it “would have said as much.” Rajasekaran,

2014 U.S. Dist. LEXIS 124550, at *12-*15. It certainly

would not have made such a significant change to state

courts’ long-standing concurrent jurisdictiun over

15 U.S.C. § 78aa (1934 Act) (“The district courts of the United

States ... shall have exclusive jurisdiction of violations of this

chapter... , and of all suits in equity and actions at law brought

to enforce any liability or duty created by this chapter or the rules

and regulations thereunder.”); see also Tafflin, 493 U.S. at 471,

(Scalia, J., concurring).

21

claims under the 1933 Act through a conforming

amendment.

The “isolated snippets” of legislative history cited by

petitioners, Clovis, 2016 WL 2592947, at *9 n.7, do not

amount to an “unmistakable implication from legisla-

tive history” of a congressional] intent to eliminate

state courts’ jurisdiction over claims under the 1933

Act. Mims, 132 S. Ct. at 748. SLUSA’s first sentence

states that its purpose is “[tlo amend the Securities

Act of 1933 ... to limit the conduct of securities class

actions under State law.” SLUSA, Pub. L. No. 105-

353, 112 Stat. 3227 (1998).

Indeed, “[nJothing in SLUSA’s text or the legislative

history suggests that Congress intended to place

roadblocks in the way of federal claims . . .; its only

discernible intent was to preclude the use of the class-

action device to prusecute certain state-law class

action claims.” Proctor v. Vishay Intertechnology Inc.,

584 F.3d 1208, 1228 (9th Cir. 2009). The over-

whelming weight of SLUSA’s legislative history thus

demonstrates that “Congress ... sought to curb the

state law end-around [the PSLRA] by ‘prevent[ing]

state laws from being used to frustrate the operation

and goals of the [PSLRA].” Clovis, 2016 WL 2592947,

at *9 (quoting S. Rep. No. 105-182 at 2); see Unschuld

v. Tri-S Security Corp., No. 1:06-CV-02931-JEC,

2007 WI. 2729011, at *8 (N.D. Ga. Sept. 14, 2007)

(“Congress was simply trying to preempt or preclude

state law, not state fora, from being used in securities

class actions.”)

Finally, petitioners’ argument cannot be reconciled

with Kircher, 547 U.S. 633. Kircher held that under

SLUSA an order remanding a securities class action to

state court is not appealable. Jd. at 640. In relevant

part, the Court explained that the “authorization for

22

the removal in subsection (c)” is “confined to cases ‘set

forth in subsection (b)” — i.e., to those state law class

actions precluded by SLUSA. 7d. at 642 (citation

omitted). In turn, except with respect to those pre

cluded state law class actions, “the federal court .. .

has no jurisdiction to touch the case on the merits, and

the proper course is to remand to the state court that

can deal with it.” Id. at 643-44. Respondents’ suit

against petitioners under the 1933 Act contains no

state law claim precluded by SLUSA. Directly con-

trary to petitioners’ submission, Kircher concludes

that a federal] district court “has no jurisdiction” over

the suit, which instead belongs in the California

superior court “that can deal with it.” Td.

CONCLUSION

The Petition for a Writ of Certiorari should be

denied.

Respectfully submitted,

ROBERT V. PRONGAY ANDREW S. LOVE

EX KANO 8S. SAMS If Counsel of Record

GLANCY PRONGAY & SUSAN K. ALEXANDER

MURRAY LLP JOHN K. GRANT

1925 Century Park Fast KENNETH J. BLACK

Suite 2100 ROBBINS GELLER

Los Angeles, CA 90067 RUDMAN & DowD LLP

(310) 201-9150 Post Montgomery Center

One Montgomery Street

Suite 1800

San Francisco, CA 94104

(415) 288-4545

alove@rgrdlaw.com