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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2017

## Text

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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Petitioners seek review of an unpublished order of a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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0668%3A03. Public record. Not legal advice.