Appendices — California Public Employees' Retirement System v. Ebbers, 125 S. Ct. 862 (2005) (No. 04-366)

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INDEX TO REPLY APPENDIX

Ill. Mun. Ret. Fund v. Citigroup, Inc., No. 03-3703

GE Ral Be oe, ITD eseiteninnrcieicenicevenicnianvannennies

Tenn. Consol. Ret. Sys. v. Citigroup, Inc., Nos. 03-

5785/5786, Order (6th Cir. Nov. 4, 2003) ..........20000

Ret. Sys. of Ala. v. J.P. Morgan Chase & Co., No. 02-

15585 (1 1ths Cir, Jaume 18, 2003) .occcccccsscsccesccccvsecscscese

Tenn. Consol. Ret. Sys. v. Citigroup, Inc., No. 3:03-

0128, Order (M.D. Tenn. Oct. 8, 2004)... eee

Tenn. Consol. Ret. Sys. v. Citigroup, Inc., No. 3:03-

0128, Memorandum (M.D. Tenn. Oct. 8, 2004) .......

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REPLY APPENDIX A

IN THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 03-3703

ILLINOIS MUNICIPAL RETIREMENT FUND,

Plaintiff-Appellee,

Vv.

CITIGROUP, INC., J.P. MORGAN SECURITIES, INC.,

BANC OF AMERICA SECURITIES, LLC, et al.,

Defendants-Appellants.

Appeal from the United States District Court

for the Southern District of Illinois.

No. 03 C 465—G. Patrick Murphy, Chief Judge.

Argued November 9, 2004—Decided December 2, 2004

Before FLAUM, Chief Judge, and CUDAHY and

POSNER, Circuit Judges.

FLAUM, Chief Judge. Plaintiff-appellee filed suit in Illi-

nois state court. Following removal by defendants-appellants,

the district court remanded the action to state court.

Defendants-appellants appeal, arguing that the district court

exceeded its authority, and seeking vacatur of the remand

order. For the reasons stated herein, we affirm.

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I. Background!

Between 1998 and 2001, WorldCom, once the second larg-

est telecommunications company in the world, issued debt

securities worth billions of dollars in connection with which

defendants-appellants served as underwriters. WorldCom

agreed to indemnify appellants for liability arising out of

untrue statements or omissions in prospectuses issued in

connection with the offerings.

On June 25, 2002, WorldCom announced that it had im-

properly treated $3.8 billion in ordinary costs as capital

expenditures and that it would have to restate its financial

statements. This led to the filing of numerous individual and

class actions in state and federal courts across the country. On

October 8, 2002, the Judicial Panel on Multidistrict Litigation

(JPML”) ordered that actions pending in federal courts be

centralized in the Southern District of New York before

Judge Cote, pursuant to 28 U.S.C. § 1407, the multidistrict

litigation statute.

Many of the individual actions brought in state courts

following WorldCom’s announcement were filed by state and

private pension funds that had purchased WorldCom bonds

( bondholders”). Rather than joining a class action against

WorldCom and the other defendants, the bondholders,

represented by Milberg Weiss Bershad Hynes & Lerach,

brought individual actions in state courts across the country.

Between July 5, 2002 and October 3, 2003, Milberg Weiss

filed at least 47 of these individual actions on behalf of over

120 plaintiffs.

' The facts in this section are taken principally from the Second

Circuits recent decisions in the WorldCom multidistrict litigation. See

Ret. Sys. of Ala. v. J.P. Morgan Chase & Co., 386 F.3d 419 (2d Cir.

2004); Cal. Pub. Employees Ret. Sys. v. WorldCom, Inc., 368 F.3d 86 (2d

Cir. 2004).

ee eee

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The bondholders actions filed in state courts, unlike the

class actions filed in federal courts, do not assert claims under

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

§ 78a, et seq.; instead, they allege claims only under the

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

Unlike the 1934 Act which provides for exclusive federal

jurisdiction, see 15 U.S.C. § 78aa, the 1933 Act allows for

concurrent federal and state jurisdiction and has an anti-

removal provision. See 15 U.S.C. § 77v(a) (“[N]o case arising

under this subchapter and brought in any State court of

competent jurisdiction shall be removed to any court of the

United States. ). Drafting the complaints in this way would

seem to ensure a state forum and prevent removal. If this was

the bondholders’ intention, however, their efforts have been

frustrated by WorldCom’s July 2002 bankruptcy filing.

After that date, state-court defendants began removing the

actions to federal court on the ground that they are related

to WorldCom’s bankruptcy. See 28 U.S.C. §§ 1334(b),

1452(a).? Many of these removed bondholder actions have

been identified as ‘tag-along actions” and transferred to

Judge Cote.

On March 3, 2003, Judge Cote denied a motion to remand

filed by the New York City Employees’ Retirement System

(NYCERS ), holding that subject matter and removal juris-

diction were proper-and that abstention was not appropriate.

* Section 1334(b) provides, in relevant part: [T]he district courts shall

have original but not exclusive jurisdiction of all civil proceedings arising

under title 11, or arising in or related to cases under title 11. Section

1452(a), titled Removal of Claims Related to Bankruptcy Cases,

provides, in relevant part: A party may remove any claim or cause of

action in a civil action . . . to the district court for the district where such

civil action is pending, if such district court has jurisdiction of such claim

or cause of action under section 1334 of this title.”

* JPML Rule 1.1 defines a ‘tag-along action” as “a civil action pending

in a district court and involving common questions of fact with actions

previously transferred under Section 1407.

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See In re WorldCom, Inc. Sec. Litig., 293 B.R. 308 (S.D.N.Y.

2003). This ruling applied to the actions transferred to Judge

Cote pursuant to the JPML s October 8, 2002 order, as well as

to the tag-along actions. On May 11, 2004, the Second Circuit

affirmed Judge Cotes denial of the motion to remand,

holding that the 1933 Acts anti-removal provision does not

bar removal of actions under § 1452(a). See Cal. Pub.

Employees’ Ret. Sys. v. WorldCom, Inc., 368 F.3d 86 (2d

Cir. 2004).

On June 18, 2003, plaintiff-appellee Illinois Municipal

Retirement Fund ( IMRF”) filed suit in Illinois state court,

alleging claims arising out of IMRF’s purchase of WorldCom

debt securities and alleging false and misleading statements in

registration statements and prospectuses issued in connection

with the bond offerings, of which the underwriter appellants

allegedly were aware or should have been aware. Consistent

with the litigation strategy of other individual pension funds,

and represented by the same attorneys, IMRF alleged claims

only under the 1933 Act. On July 16, 2003, appellants

removed the case to the United States District Court for the

Southern District of Illinois, premising removal on § 1452(a).

On the same day, appellants filed a notice with the clerk of

the JPML, requesting that the action be transferred as a tag-

along action to Judge Cote. On July 25, 2003, appellants filed

a motion to stay the action pending a determination by the

* Plaintiffs in numerous individual bondholder actions, represented by

Milberg Weiss, were permitted to intervene in NYCERS s motion so that

their arguments concerning removal could be heard on an expedited basis.

Id. at 315.

* On May 1, 2004, the west coast partners of Milberg Weiss Bershad

Hynes & Lerach LLP formed a new law partnership, Lerach Coughlin

Stoia Geller Rudman & Robbins LLP. Plaintiff-appellee is represented by

the new partnership.

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JPML on the issue of transfer. The JPML issued a conditional

transfer order on September 3, 2003, notice of which ap-

pellants filed with the district court on September 5, 2003.

On the same day that appellants filed their motion to stay,

June 25, 2003, IMRF filed a motion to remand or abstain,

raising three arguments: (1) the 1933 Act absolutely prohibits

removal, even by way of § 1452(a), (2) IMRF’s action does

not fall within federal bankruptcy jurisdiction; and (3) even if

there is subject matter and removal jurisdiction, the district

court should abstain from exercising jurisdiction and should

remand pursuant to § 1334(c)(1), which permits abstention in

cases related to a bankruptcy case in the interest of justice, or

in the interest of comity with State courts or respect for State

law, or § 1452(b), which permits remand of claims related to

a bankruptcy case on any equitable ground. These were the

same arguments IMRF’s attorneys already had made to J udge

Cote without success, and would later make to the Second

Circuit with the same result.

On September 9, 2003, although acknowledging Judge

Cote s contrary decision and the JPML’s conditional transfer

order, the district court remanded this action to Illinois state

court. (Sept. 9, 2003 Order at 3.) The court found that the

1933 Act bars removal but that its language conflicts with

§ 1452(a). (/d.) It resolved this conflict by concluding that

‘the rules of statutory construction require [the 1933 Act]

to control over the more general provisions of 28 U.S.C.

§§ 1334(b) and 1452” and that the only way to give effect to

the legislative intent behind its enactment is to construe it as a

bar to removal even under these circumstances. (Id. at 3-4.)

The district court further held that even if the 1933 Act did

not bar removal, the claims were not related to the

WorldCom bankruptcy and cannot be removed under Section

1452, and also that remand is appropriate pursuant to the

doctrines of permissive abstention and equitable remand’

under §§ 1334(c)(1) and 1452(b). (/d. at 4.) The court denied

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appellants’ motion to stay proceedings pending the final

transfer decision of the JPML and granted the [MRF’s motion

to remand or abstain. (/d. at 5.) On October 9, 2003, ap-

pellants filed a notice of appeal.

II. Discussion

A. Appellate Jurisdiction

We first must determine whether we have jurisdiction to

hear this appeal. The general grant of our appellate juris-

diction is found in 28 U.S.C. § 1291, which provides that

courts of appeals shall have jurisdiction of appeals from all

final decisions of the district courts of the United States. The

breadth of our jurisdiction, however, is limited by several

statutes which specifically bar appellate review of certain

types of final decisions.” Each of the following statutes limit

our jurisdiction in this case, given the district courts

alternative grounds for remand: 28 U.S.C. § 1447(d) provides

that [a]n order remanding a case to the State court from

which it was removed is not reviewable on appeal or

otherwise ; § 1334(d) bars appellate review of [a]ny decision

to abstain made in a bankruptcy case or proceeding; and

§ 1452(b) bars review of equitable remands of claims related

to a bankruptcy case.

The parties agree that these three statutes bar appellate

review of the district court s reasons for remand in this case.°

Appellants argue, however, that antecedent questions of

power are properly presented to courts of appeals. In other

words, appellants contend that the district court lacked

° In unpublished opinions, the Sixth and Eleventh Circuits dismissed

similar appeals on this ground. See Tenn. Consol. Ret. Sys. v. Citigroup,

Nos. 03-5785, 03-5786 (6th Cir. Nov. 4, 2003) (unpublished); Ret. Sys. of

Ala. v. J.P. Morgan Chase & Co., No. 02-15385 (Lith Cir. June 18, 2003)

(unpublished).

Tra

statutory authority to issue the remand order and that we

may vacate the order even though we may not review its

reasoning.

In Thermtron Products, Inc. y. Hermansdorfer, where the

Supreme Court first decided that § 1447(d) is not a complete

bar to appellate review of remand orders, the Court held that

it had appellate jurisdiction to review a remand order

premised on the district court s overcrowded docket. 423 U.S.

336 (1976), abrogated on different grounds by Quackenbush

v. Allstate Ins. Co., 517 U.S. 706 (1996). “Because the Dis-

trict Judge remanded a properly removed case on grounds

that he had no authority to consider, he exceeded his

statutorily defined power.” /d. at 351. We have explained that

‘Thermtron permits us to decide whether a district court has

the power to do what it did, although we cannot examine

whether a particular exercise of power was proper.” Jn re

Cont 1 Cas. Co., 29 F.3d 292, 294 (7th Cir. 1994).

In Continental Casualty, we issued a writ of mandamus

ordering a district court to recall its remand and reinstate the

case on its docket because it had remanded sua sponte for a

procedural removal defect. Jd. at 295. We held that the

district court lacked statutory authority to remand a case

based on a procedural defect in removal absent a motion bya

party. /d. at 294-95. In so holding, we did not consider the

substance of the district court s order, but merely explained

that the lack of a motion deprives a district court of power to

return a case to state court. /d. at 294 (emphasis in original).

In Thermtron, the Supreme Court permitted appellate re-

view of a statutorily invalid reason for remand. In Continental

Casualty, we recognized that appellate review also may be

had where a district court has articulated statutorily valid

reasons for remand yet has exceeded its authority in some

other way. This principle has been applied in various

contexts. For example, in Tramonte v. Chrysler C orp., 136

F.3d 1025 (Sth Cir. 1998), the defendant asked the judge to

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recuse herself because a member of the judge’s family was a

potential class member. The judge denied the recusal motion

and remanded the case for lack of subject matter jurisdiction.

The defendant appealed, arguing that the judge lacked

authority to enter the remand order because she was

disqualified from handling the case under the federal recusal

statute.’ The Fifth Circuit agreed, explaining that, if the

judge should have recused herself, any subsequent order must

be vacated:

Our vacatur of the remand order would therefore not

constitute a review of the merits of that order, prohibited

by 28 U.S.C. § 1447(d). Rather, we would be per-

forming an essentially ministerial task of vacating an

order that the district court had no authority to enter for

reasons unrelated to the order of remand itself.

Tramonte, 136 F.3d at 1028. Similar reasoning has been

relied upon in vacating remand orders entered by magistrate

judges acting without the parties consent. See, e.g., Vogel v.

U.S. Office Prods. Co., 258 F.3d 509, 517-19 (6th Cir. 2001)

(holding that a remand order entered by a magistrate judge

was beyond his statutory authority and concluding that review

was proper because the court of appeals was not reviewing

the merits of the remand order itself); Jn re U.S. Healthcare,

159 F.3d 142, 146-47 (3d Cir. 1998) (same). Thus, although

§§ 1447(d), 1334(d), and 1452(b) preclude appellate review

of the reasoning contained in many remand orders, they do

not deprive appellate courts of jurisdiction to vacate a remand

order issued in excess of a district court s statutory authority.

In an earlier case we suggested that it would be within our

appellate jurisdiction to vacate a remand order issued by a

” See 28 U.S.C. § 455(b)(5) (Any judge of the United States shall dis-

qualify himself where “[h]e” or his spouse, or a person within the third

degree of relationship to either of them, or the spouse of such a person... .

[i]s a party to the proceeding.”).

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transferor court after the case has been transferred by the

JPML. See Gen. Elec. Co. v. Byrne, 611 F.2d 670, 673 (7th

Cir. 1979) (“[T]he entry of the transfer order deprives the

transferor court of jurisdiction until the case is returned to it,

so that any action taken by the transferor court after transfer

would be ineffective. ). Today we make the principle

underlying this observation explicit: When a district court

exceeds its statutory authority by the very issuance of a

remand order—as opposed to merely issuing a flawed remand

order—it is within our appellate jurisdiction to review that

court s exercise of authority and vacate the ineffective order,

provided we can do so without reference to the contents of

the remand order. In this case, we can review the contested

exercise of authority without considering the reasoning in the

district court s remand order. Accordingly, we do so here.

B. Authority to Remand

We review de novo whether 28 U.S.C. § 1407, the multi-

district litigation statute, prohibits a district court from issuing

a remand order in contravention of a potential transferee

courts earlier jurisdictional ruling. See Resolution Trust

Corp. v. Gallagher, 10 F.3d 416, 418 (7th Cir. 1993) (ques-

tions of statutory construction are subject to de novo review).

Section 1407 provides, in part:

(a) When civil actions involving one or more common

questions of fact are pending in different districts, such

actions may be transferred to any district for coordinated

or consolidated pretrial proceedings. Such transfers shall

be made by the judicial panel on multidistrict litigation

authorized by this section upon its determination that

transfers for such proceedings will be for the con-

venience of parties and witnesses and will promote the

just and efficient conduct of such actions. . . .

(b) Such coordinated or consolidated pretrial proceed-

ings shall be conducted by a judge or judges to whom

— —

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such actions are assigned by the judicial panel on multi-

district litigation. ...

28 U.S.C. § 1407. Under the rules of procedure adopted by

the JPML, see 199 F.R.D. 425 (2001), upon learning of a

potential tag-along action, an order may be entered by the

Clerk of the [JPML] transferring the action to the previously

designated transferee district court. JPML Rule 7.4(a). The

Clerk of the [JPML] shall serve this order on each party to the

litigation but, in order to afford all parties the opportunity to

oppose transfer, shall not send the order to the clerk of the

transferee district court for fifteen days from the entry

thereof.” /d. If there is no opposition to the transfer in

response to the conditional transfer order, the clerk of the

JPML will transmit a final transfer order to the transferee

court. See JPML Rule 7.4(d). Conditional transfer orders do

not become effective unless and until they are filed with the

clerk of the transferee district court.” JPML Rule 7.4(e). The

pendency of a conditional transfer order does not affect or

suspend orders and pretrial proceedings in the district court in

which the action is pending and does not in any way limit the

pretrial jurisdiction of that court. JPML Rule 1.5.

In this case, the district court remanded after the JPML

issued a conditional transfer order but before transmittal of a

final transfer order to the previously designated transferee,

Judge Cote in the Southern District of New York. Therefore,

the transfer had not become effective and the conditional

order did not “in any way limit the pretrial jurisdiction” of the

district court. JPML Rules 1.5, 7.4(e). Under the JPML rules

of procedure, the district court did not exceed its authority in

issuing the remand order. At oral argument, appellants ac-

knowledged that they cannot prevail in this appeal without

showing that JPML Rule 1.5 is invalid. They have attempted

to do so by arguing that the rule conflicts with the text,

structure, and purpose of § 1407.

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Appellants textual argument for invalidating Rule 1.5 is

based on the language in the statute providing that “con-

solidated pretrial proceedings shall be conducted’ by the

transferee judge. 28 U.S.C. § 1407(b). Appellants contend

that the word shall” signals an obligation of the transferee

court and deprives other courts of the authority to interfere

with the transferee courts actions: “given the scope of the

transferee court s authority over pretrial proceedings, it

follows inevitably that once a transferee court has been

designated, potential transferor courts—such as the district

court below—do not enjoy the latitude to issue decisions

contrary to the rulings of the transferee court. We disagree.

Subsection (b) provides that the transferee judge shall

conduct ‘consolidated pretrial proceedings,” but subsection

(a) states that actions must be “transferred,” not merely

designated, for consolidated pretrial proceedings” to be con-

ducted. Thus, though the statute identifies a duty of the

transferee court after an action has been transferred, it does

not suggest, even implicitly, that the authority of either court

is affected before transfer by the mere designation of a

transferee court. Consistent with this, Rule 1.5 states that the

authority of the potential transferor court is not limited “in

any way. prior to actual transfer. There is no textual conflict

between § 1407 and Rule 1.5 that would support striking the

latter or finding that the district court exceeded its authority in

this case.

Appe..au. structural argument for invalidating Rule 1.5

flows from their observation that § 1407, implicitly, and the

rules, explicitly, contemplate tag-along actions that are

brought to the JPMLs; attention for transfer after a multi-

district litigation has already been assigned to a transferee

court. From this, appellants conclude that the command that

pretrial proceedings shall be before the designated transferee

court affects not only cases transferred, but also those waiting

to be transferred. Appellants contend that the ‘contrary

interpretation leads to absurd results because it would allow

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potential transferor courts to issue rulings discordant with

those of the transferee court, which clearly undermines the

stated purposes of the multidistrict litigation statute.

We find nothing absurd in district courts individually

evaluating their own jurisdiction. Furthermore, Congress has

indicated a preference for remands based on such in-

dividualized jurisdictional evaluations and a tolerance for

inconsistency. As we have explained, 28 U.S.C. § 1447(d)

bars appellate review of a remand order based on a district

court’s determination that it lacks subject matter jurisdiction.

See Baker v. Kingsley, 387 F.3d 649, 653-54 (7th Cir. 2004).

This creates a “one-bite-at-the-apple scheme, under which

inconsistent jurisdictional decisions by district courts cannot

be brought in line through the appellate process. Adkins v. Ill.

Cent. R.R. Co., 326 F.3d 828, 832 (7th Cir. 2003). Even clear

errors in a district courts jurisdictional analysis may not be

corrected by the courts of appeals if the district court thought

that it lacked subject matter jurisdiction. See Baker, 387 F.3d

at 655. Section 1447(d) makes clear that errors in favor of

remand which yield inconsistent holdings on subject matter

jurisdiction must be tolerated. See id. If the courts of appeals

have no power to bring consistency to these remand orders,

there is no reason why a sister district court, in a different

circuit, should have this power. After a transfer takes place

under § 1407, the transferee court has authority to issue

consistent jurisdictional rulings in all of the transferred cases

before it. Before the transfer is effective, however, the

potential transferee court wields no such power over indi-

vidual, unconsolidated cases.

Finally, appellants statutory purpose argument for inval-

idating Rule 1.5 relies on § 1407s goal of centralizing civil

litigation “involving one or more common questions of fact”

that are pending in different districts. 28 U.S.C. § 1407(a).

The JPML is empowered to effectuate this goal by transfer-

ring pending actions upon determining that such transfers will

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be to the convenience of parties and witnesses and will

promote the just and efficient conduct of such actions. Jd.

Appellants argue that the district courts order issued during

the pendency of the transfer process undermines the purposes

of the statute, namely, promotion of efficient litigation and

avoidance of inconsistent contemporaneous rulings in like

cases,

Undoubtably, efficiency and consistency are goals of §

1407. It does not follow from this premise, however, that any

rule that limits efficiency or allows inconsistency conflicts

with the statute and may not stand. As appellants ac-

knowledge, among the statutes stated goals are the con-

venience of parties and witnesses and the “just... conduct

of such actions. § 1407(a). To this end, the JPML rules

provide for a conditional transfer period “in order to afford all

parties the opportunity to oppose transfer.” JPML Rule 7.A(a).

Appellants do not, and cannot, suggest that the existence of

this pre-transfer interim conflicts with the purposes of § 1407.

We need not decide if a district court ever exceeds its

authority in acting during this period. We are satisfied.

however, that it does not do so when it rules on its own

jurisdiction. This, after all, is a fundamental obligation of all

courts of limited jurisdiction. See Hay v. Ind. State Bd. of Tax

Comm 'rs, 312 F.3d 876, 878 (7th Cir. 2002), Though some

district courts stay proceedings during the interim following

a conditional transfer order, see, e.g., Bd. of Trs. of the

Teachers Ret. Sys. of the State of Ill. v. WorldCom, Inc., 244

F, Supp. 2d 900 (N.D. III. 2002), this is not required where

the court concludes that it lacks subject matter jurisdiction.

We will not require a district court that believes that it lacks

subject matter jurisdiction over a case to facilitate a transfer

under § 1407, a statute that does not itself confer jurisdiction.

Rule 1.5, as applied in this case, does not conflict with the

text, structure, or purpose of § 1407, and the district court did

not exceed its authority in issuing a remand order.

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III. Conclusion

The order of the district court is AFFIRMED.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

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REPLY APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

[Filed Nov. 4, 2003]

Nos. 03-5785/5786

TENNESSEE CONSOLIDATED RETIREMENT SYSTEM,

Plaintiff Appellee,

v.

CITIGROUP, INC.; CITIGROUP GLOBAL MARKETS, INC.., for-

merly known as Salomon Smith Barney Inc.; J.P. MORGAN

SECURITIES, INC.; J.P. MORGAN CHASE & Co.; BANK OF

AMERICA CORP.; BANC OF AMERICA SECURITIES LLC:

ABN AMRO INCORPORATED; DEUTSCHE BANK AG;

DEUTSCHE BANC ALEX. BROWN, INC.; LEHMAN BROTHERS

HOLDINGS, INC.; LEHMAN BROTHERS, INC.; CREDIT SUISSE

FIRST BOSTON CORPORATION; GOLDMAN SACHS GROUP,

INC.; GOLDMAN SACHS & Co.; UBS WARBURG LLC:

NATIONSBANC MONTGOMERY SECURITIES LLC:

Defendants-Appellants (03-5785),

ARTHUR ANDERSON LLP:

Defendant-Appellant (03-5786)

ORDER

Before: RYAN, NORRIS, and ROGERS, Circuit Judges.

In 2001, the sole plaintiff in this action, the Tennessee

Consolidated Retirement System (“TCRS”), purchased over

$160 million in bonds issued by WorldCom, Inc. The

following year, WorldCom announced that it had misstated

its financial results in 2001. It entered bankruptcy pro-

ceedings in the Southern District of New York in July of

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2002. TCRS initiated this action in Tennessee state court

pursuant to § 22(a) of the Securities Act of 1933, 15 U.S.C.

§ 77v(a). It named as defendants various underwriters as well

as WorldCom’s accounting provider, Arthur Anderson.

Section 22(a) provides that a securities action brought in

state court may not be removed to federal court. Nevertheless,

the defendants removed the action to the Middle District of

Tennessee pursuant to 28 U.S.C. § 1452(a) as a case in which

federal subject-matter jurisdiction exists under 28 U.S.C.

§ 1334(b). Section 1334(b) grants ‘ederal jurisdiction over

cases related to a pending bankruptcy action. Because they

have contingent claims against WorldCom, the defendants

assert this case is related to WorldCom’s bankruptcy. TCRS

promptly moved to remand the action to state court. The

defendants, in the meantime, had sought a ruling by the

Judicial Panel on Multidistrict Litigation (“MDL Panel”) to

transfer the case to the Southern District of New York for

consolidation with other such cases. They moved the district

court to stay its ruling pending a final decision by the MDL

Panel. The district court, relying upon a suggestion of the

MDL Panel that it was not divested of jurisdiction to do so,

proceeded to the merits of the motion to remand.

After evaluating the statutes at issue, the court concluded

that the § 22 prohibition against removal should prevail over

the assertion of related-to jurisdiction and therefore granted

the motion to remand. Alternatively, the district court

suggested abstention under 28 U.S:C. § 1334(c)(l) was ap-

propriate. However, the court stayed the remand of the case to

permit the defendants an opportunity to appeal to this court.

The district court suggested that this court might have

appellate jurisdiction pursuant to the holding of /n re: Dow

Corning Corp., 86 F.3d 482, 490 (6th Cir. 1996).

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The defendants appealed. TCRS now moves to dismiss

both of these appeals on grounds that they seek review of an

unreviewable order of remand. The defendants argue that

they are actually seeking review of the district court’s

decision to deny a transfer of the case to the Southern District

of New York. Alternatively, they seek review in mandamus.

Additionally, the United States has intervened on grounds

that the constitutionality of a statute is challenged and

responds in support of the motion to dismiss.

The removal statute provides at 28 U.S.C. § 1447(d) that

an “order remanding a case to the State court from which it

was removed is not reviewable on appeal or otherwise .. . .”

Likewise, an order remanding on equitable grounds a case

that was removed from state court to federal court on an

assertion of related-to jurisdiction is not reviewable by appeal

or otherwise. 28 U.S.C. § 1452(b). Section 1447(d) bars the

review of remand decisions that are “based on a timely raised

defect in removal procedure or on a lack of subject-matter

jurisdiction.” Things Remembered, Inc. v. Petrarca, 516

U.S. 124, 127-28 (1995). The prohibition on review like-

wise applies to orders of remand in cases removed under

§ 1452(b). Things Remembered, 516 U.S. at 128. And,

§ 1334(d) provides that a decision to abstain is not reviewable

by appeal or otherwise.

The district court in the instant case concluded that § 22(a)

precluded an assertion of related-to jurisdiction in this case.

This defect was present at the time of removal, and as a result

the district court held it could not exercise federal subject-

matter jurisdiction. We conclude the district court’s decision.

is unreviewable under § 1447(d). See Anusbigian v. Tru-

green/Chemlawn, Inc., 72 F.3d 1253 (6th Cir. 1996) (decision

on a non-jurisdictional issue that is necessarily related to the

question of jurisdiction is not reviewable).

The defendants argue their appeal is from the denial of a

request to transfer this case. They suggest that this court may

18ra

find appellate jurisdiction in the holding of /n re: Dow

Corning Corp., 86 F.3d 482 (6th Cir. 1996). In that case, the

defendants in product liability tort actions had contingent

claims of contribution and indemnity against the Chapter 11

debtor, Dow Corning. They moved under 28 U.S.C.

§ 157(b)(5) to transfer all the tort actions to the district court

where Dow’s bankruptcy was being conducted. The district

court, exercising its jurisdiction in bankruptcy, denied the

motion. The nondebtor defendants appealed. This court held

it had appellate jurisdiction to review that decision. First, the

order was a final order in bankruptcy, where the concept of

finality would be more flexibly applied. Secondly, the

decision was appealable as a collateral order.

Dow Corning does not compel the exercise of appellate

jurisdiction in the instant case. This case arises from the

district court’s exercise of its general jurisdiction, not its

bankruptcy jurisdiction. Thus, there are no particular bank-

ruptcy considerations or differing standards of finality that

apply. Further, this case directly implicates the statutory bar

on appellate review of 28 U.S.C. § 1447(d). Dow Corning did

not involve the remand of a case to state court following a

determination that the federal court lacked subject-matter

jurisdiction.

The defendants alternatively ask that this court exercise its

power of review in mandamus. One factor relevant to relief

in mandamus is whether the petitioner for such relief has

available a direct appeal. Jn re Bendectin Products Liab.

Litig., 749 F.2d 300, 304 (6th Cir. 1993). However, the

authority exercised in mandamus cannot overcome the

§ 1447(d) bar on review of a remand order by “appeal or

otherwise.”

19ra

Therefore, the motion to dismiss these appeals hereby is

GRANTED.

ENTERED BY ORDER OF THE COURT

/s/ Leonard Green

Clerk

20ra

REPLY APPENDIX C

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

[Filed JUN 18, 2003]

No. 02-15385

Non-Argument Calendar

D. C. Docket No. 02-00898-CV-A-N

THE RETIREMENT SYSTEMS OF ALABAMA, consisting of The

Employees Retirement System of Alabama and The

Teachers Retirement System of Alabama; The Public

Education ‘Employees’ Health Insurance Fund; The Public

Employees Individual Retirement Account Fund; The

Clerks’ and Registers’ Supernumerary Fund; The Wildlife

and Freshwater Fisheries Fund; The Alabama Cultural

Resources Preservation Trust Fund; and the Alabama

Trust Fund,

Plaintiff-Appellee,

versus

J.P. MORGAN CHASE & Co.,

J.P. MORGAN SECURITIES INC., et al.,

Defendants-Appellants.

Appeal from the United States District Court

for the Middle District of Alabama

2Ira

Before TJOFLAT, BIRCH, and COX, Circuit Judges.

PER CURIAM:

The Defendants’ seek review of the district court’s order

remanding this action to state court pursuant to the court’s

discretionary abstention power under 28 U.S.C. § 1334(c)(1).

The Retirement Systems of Alabama (“RSA”) filed suit

against the Defendants based on their alleged involvement in,

or culpable knowledge of, the events and transactions that

led to WorldCom Corporation’s bankruptcy. Some of the

Defendants filed a timely notice of removal to federal

district court based on 28 U.S.C. § 1452(a), but the district

court exercised its discretionary abstention power under

§1334(c)(1) and granted RSA’s Motion to Remand or to.

Abstain.

On appeal, RSA contends that this court lacks appellate

jurisdiction to review the court’s abstention decision based on

the statutory bars to appellate review contained in 28 U.S.C.

§§ 1334(d) and 1452(b). In response, the Defendants contend

that the statutory bars in §§ 1334(d) and 1452(b) are

unconstitutional and that this court has jurisdiction to evaluate

the constitutionality of these statutes. Based on their argu-

ment that the statutory bars to appellate review are

unconstitutional, the Defendants contend that this court has

jurisdiction to review the district court’s abstention order and

they urge this court to hold that the district court’s order

constitutes an abuse of discretion. The United States has

intervened to defend the constitutionality of §§ 1334(d) and

1452(b).

We have jurisdiction to evaluate the constitutionality of

§§ 1334(d) and 1452(b). See, e.g., Felker v. Turpin, 518 U.S.

' “The Defendants” refers collectively to J.P. Morgan ‘Chase & Co,;

J.P. Morgan Securities, Inc; Citigroup, Inc.; Salomon Smith Barney, Inc,;

Arthur Andersen, LLP; Bank of America Corp.; Banc of America

Securities LLC; Bernard J. Ebbers; Scott D. Sullivan; and Bear Stearns &

Co., Inc.

22ra

651, 661, 665, 116 S.Ct. 2333, 2339, 2341 (1996) (dis-

missing for want of jurisdiction after rejecting a con-

stitutional challenge brought on Article III, § 2, Exceptions

Clause grounds); see also United States v. Ruiz, _ U.S._,

122 S.Ct. 2450, 2454 (2002) (noting that a federal court

always has jurisdiction to determine its own jurisdiction).

Having carefully reviewed the briefs submitted by RSA, the

Defendants, and the United States, -we conclude that the

statutory bars to appellate review contained in §§ 1334(d) and

1452(b) are constitutional. Ex Parte McCardle, 74 U.S. (7

Wall) 506, 513-14 (1869); Ex Parte Yerger, 75 U.S. (8 Wall.)

85, 104 (1870). As a result, we lack jurisdiction to consider

the Defendants’ argument that the district court abused its

dis-

cretion when it exercised its discretionary abstention power

under § 1334(c)(1) and remanded the action to state court.”

DISMISSED FOR WANT OF JURISDICTION.

? RSA’s motion to dismiss, which was carried with the case, is

DENIED AS MOOT in light of our conclusion in this opinion that we

lack jurisdiction under §§ 1334(d) and 1452(b).

23ra

REPLY APPENDIX D

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF TENNESSEE

NASHVILLE DIVISION

NO. 3:03-0128

JUDGE HAYNES

TENNESSEE CONSOLIDATED RETIREMENT SYSTEM,

Plaintiff,

V.

CITIGROUP, INC., et al.,

Defendants.

ORDER

In accordance with the Memorandum filed herewith, the

Defendants’ motion for relief (Docket Entry No. 62) is

GRANTED, but the Court affirms its earlier ruling. This

action is REMANDED to the Chancery Court Davidson

County, Tennessee.

It is so ORDERED.

ENTERED this the 8th day of October, 2004.

/s/ William J. Haynes, Jr.

WILLIAM J. HAYNES, JR.

United States District Judge

24ra

REPLY APPENDIX F

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF TENNESSEE

NASHVILLE DIVISION

NO. 3:03-0128

JUDGE HAYNES

TENNESSEE CONSOLIDATED RETIREMENT SYSTEM,

Plaintiff,

v.

CITIGROUP, INC., ef al.,

Defendants.

MEMORANDUM

Plaintiff, Tennessee Consolidate Retirement System

(“TCRS”), fled this action, originally in the Davidson County

Chancery Court, against the Defendants: Citigroup, Inc.;

Salomon Smith Barney, Inc.; J.P. Morgan Securities, Inc.;

J.P. Morgan Chase & Co.; Bank of America Corporation;

Banc of America Securities, LLC; ABN Amro Incorporated;

Deutsche Bank AG; Deutsche Banc Alex. Brown, Inc.;

Lehman Brothers Holdings, Inc.; Lehman Brothers, Inc.;

Credit Suisse Group; Credit Suisse First Boston Corporation;

Goldman Sachs Group, Inc.; Goldman Sach & Co.; UBS

Warburg, LLC; Nationsbanc Montgomery Securities, LLC;

and Arthur Andersen, LLP.

TCRS’s action “is a securities suit involving WorldCom,

Inc., naming as defendants WorldCom’s investment bankers

and its accountants for violations of the Securities Act of

1933 (‘1933 Act”) arising out of its purchases of WorldCom

25ra

debt securities (the ‘“WorldComBond”) sold to public

investors in WorldCom’s August 1998, May 2000 and May

2001 bond offerings (the “Offerings”).” (Docket Entry No. 1,

Attachment thereto, Exhibit A), TCRS’s claims arise under

Section 11 of the Securities Act of 1933 with jurisdiction

under 22(a) of that Act, codified at 15 U.S.C. § 77v(a), as

amended. TCRS alleges that misrepresentations were made in

connection with bond purchases that TCRS made as

investments for current and former Tennessee public

employees. TCRS asserts only federal claims under Section

11 of the 1933 Act. Section 22(a) gives state courts concur-

rent jurisdiction with federal courts over Section 11 claims.

15 U.S.C. § 77v(a).

The Underwriter Defendants, with the exception of Arthur

Andersen, LLP and Credit Suisse Group,’ removed the action

to this Court, asserting that TCRS’s action is “related to” the

bankruptcy of WorldCom, Inc. that is not a named defendant

in this action. (Docket Entry No. |, Notice of Removal). The

Underwriter Defendants cited 28 U.S.C. § 1334(b), the

federal bankruptcy jurisdictional statute, and 28 U.S.C.

§ 1452, the bankruptcy removal statute, as the legal bases for

their removal and this Court’s jurisdiction. In earlier

proceedings, the Court granted the Plaintiff's motion to

remand concluding that the express provisions of Section

22(a) of the Securities Act of 1933, as amended in 1998,

barred the removal of this action from the Court. In light of a

possible appeal, under the Sixth Circuit precedent, the Court

' Arthur Andersen joined the other Defendant’ opposition to TCRS’s

motion to remand. See Docket Entry No. 27. Under 28 U.S.C. § 1452(a), a

single party can remove an action. 16 James W. Moore, et al., Moore's

Federal Practice, at 107.15[8][b]. Credit Suisse Group was apparently

inadvertently omitted from the list of Underwriter Defendants in the

Notice of Removal.

26ra

stayed its Order of removal so as to not to prejudice the

Defendants’ appeal rights.”

Before the Court is the Defendants motion for relief under

Fed. R. Civ. P. Rule 60(b) (Docket Entry No. 62), contending

that since the Court’s decision, a copy of which is attached

hereto, the Second Circuit in California Public Employees

Retirement System v. WorldCom, Inc., 368 F.3d 86 (2d Cir.

2004), has held that Section 22(a) does not preclude the

exercise of federal bankruptcy jurisdiction. Plaintiff responds

that Second Circuit opinion does not present any new legal

arguments to justify relief under Rule 60(b).

The Court applies the law of the case doctrine and will not.

set aside its earlier Order of remand absent a showing of

manifest error or injustice. United States v. Moored, 38 F.3d

1419, 1421 (6th Cir. 1994),

The Court holds the Second Circuit and the Honorable Jose

A. Cabranes, the author of the WorldCom opinion in the

highest regard. Yet, after review of the Second Circuit’s

decision, the Court reaffirms its earlier conclusion that

Section 22(a) precludes the removal of Plaintiff’s action to

this Court. In the Court’s view, the Second Circuit decision

misapplies Supreme Court precedent; erroneously utilizes a

rule of statutory construction to set aside a clear statutory

mandate and misconstrues this Court’s earlier opinion.

In its analysis of the issue of statutory construction, the

Second Circuit relied principally on Radzanower v. Touche

Ross & Co., 426 U.S. 148, 153 (1976). After its review of the

circumstances in Radzanower, involving different venue

> Contrary to the suggestion of the District Court in WorldCom, Inc.

Securities Litigation, 2003 WL 22953644, * 6 (S.D.N.Y. 2003), the Court

was not “[e]xpressing uncertainty about its analysis [in] stay[ing] its

ruling pending appeal.” The Court stayed its Order to avoid the

Defendants losing any appeal of that Order of remand.

27ra

statutes for claims against a national bank, the Second Circuit

concluded:

Based on the principles of statutory interpretation

articulated in Radzanower, we cannot conclude that

Section 22(a) is more “specific than Section 1452(a).

First, unlike the National Bank Acts venue provision,

which applies to a defined group of litigants, Section

22(a), like both Section 1452(a) and the 1934 Act’s

venue provision, applies to a defined class of claims.

so Thus, the Supreme Court’s distinction between a statute

applicable to a “broad” universe of potential defendants.

and a statute that protects a “particularized group of

defendants, id. at 153-54, 96 S.Ct.1989, carries not

weight here.

Additionally, the class of claims covered by Section

22(a) is no more specific than the class of claims

covered by Section 1452(a). Section 22(a) does not

cover only a subset of the claims covered by Section

1452(a). By the same token, Section 1452(a) does not

cover only a subset of the claims covered by Section

22(a). Rather, just as Section 1452(a) applies to many

claims that are not brought under the 1933 Act, Section —

22(a) applies to many claims that are not “related to” a

bankruptcy.

In that respect, it is instructive to compare Section

1452(a) to the general removal statute, which, “except as

otherwise expressly provided by Act of Congress,”

permits removal of “any civil action brought in a State

court of which the district courts of the United States

have original jurisdiction...” 28 U.S.C. §1441(a), Even

without the introductory clause in Section 1441(a),

Section 22(a) would arguably trump that provision on

the ground that Section 22(a) is more specific than

Section 1441(a); that is Section 22(a) applies to only

one...

28ra

Finally, even if we were to conclude that Section

22(a) covers a more “specific” group of claims than

Section 1452(a), Section 22(a) would not necessarily

control. The Supreme Court in Radzanower indicated

that where the application of a specific statute would

“unduly interfere” with the operation of a general statute

that was enacted subsequent to the specific statute, the

more general statute controls. See Radzanower, 426 U.S.

at 156, 96 S.Ct. 1989. In Radzanower, however, the

Court determined that the National Bank Act’s venue

provision would not “unduly interfere” with the

operation of the 1934 Act, because (1) the provision

“will have not impact whatever upon the vast majority of

lawsuits brought under that Act and (2) “[i]n the tiny

fraction of litigation where its effect will be felt, it

will foreclose nobody from invoking the Act’s pro-

visions.” /d.

We are not so sanguine about Section 22(a)’s effect

on the system created by the Bankruptcy Code. When

Congress enacted Section 1452(a) in 1984, fifty years

after it first enacted Section 22(a), “Congress intended to

grant comprehensive jurisdiction to bankruptcy courts so

that they might deal efficiently and expeditiously with

all matters connected with the bankruptcy estate,”

Celotex Corp. v. Edwards, 514 U.S. 300, 308, 115 S. Ct.

1493, 131 L. Ed. 2d 403 (1995) emphasis added and

internal quotation marks omitted). Therefore, Congress

crafted Section 1452(a) to allow removal in a broad

array of situations. First, unlike Section 1441(a), which

authorizes defendants to remove, the bankruptcy

removal statute authorizes any “party, including

plaintiffs, to remove. See 28 U.S.C. § 1452(a). Second,

because any one “party” can remove under Section

1452(a), removal that provision, unlike removal under

Section 1441(a), does not require the unanimous consent

29ra

of the defendants. See Creasy v. Coleman Furniture

Corp, 763 F.3d 656, 660 (4th Cir. 1985).

* * * *

Because, in any given case, the full amount of

damages sought under the 1933 Act can be the basis for

a claim against the estate, the policy underlying Section

1452(a) applies with full force to claims under the Act.

Section 1452(a) dictates that these claims, when they are

brought against defendants with contribution rights,

should not be subject to conflicting outcomes along with

repetitive and time-consuming discovery proceedings in

multiple state courts.

In sum, because Section 22(a) does not cover a

narrower class of claims than Section 1452(a), it cannot

be considered more “specific” than Section 1452(a).

Moreover, even if Section 22(a) were more specific than

Section 1452(a), Radzanower counsels that, because

Section 22(a) could interfere with the operation of the

Bankruptcy Code, it would not necessarily control.

368 F.3d at 102-04.

The Second Circuit also noted that “SLUSA .. . merely

expanded federal jurisdiction over class actions,” and that

“nothing in the text or legislative history of SLUSA indicates

that Congress intended to alter the jurisdictional scheme

applicable to individual actions under the 1933 Act.’” /d. at

104-05 (quoting In Re Global Crossing, Ltd. Sec. Litig., 2003

WL 21659360, at *3 (S.D.N.Y. July 15, 2003)) (emphasis in

the original). “Because Congress did not manifest an intent to

alter the preexisting law when it amended the 1993 Act in

1988, we cannot resolve the statutory conflict by focusing

on SLUSA.” /d. at 105. Thus, the Second Circuit deferred to

§ 1452(a) and concluded that “Congress did not intend for

Section 22(a) and its analogues to bar removal of ‘related to’

claims.” /d. at 106.

30ra

The Second Circuit reasoned that unlike § 1441(a),

§ 1452(a) does not contain a clause excepting claims arising

under an Act of Congress that otherwise prohibits removal

and a literal reading of Section 22(a) would render the

exception clause under § 1441(a) mere surplusage. /d. at 106.

“In other words, if we concluded that a nonremoval provision

such as Section 22(a) prevents removal under both Section

1441(a) and Section 1452(a), notwithstanding the phrase

‘fe]xcept as otherwise expressly provided by Act of

Congress’ in Section 1441(a), that phrase in the general

removal statute would serve no apparent purpose.” /d. Second

Circuit thus concluded that Section 1452(a) “grant[ed]

additional removal jurisdiction in a class of cases which

would not otherwise be removable under the prior grant of

authority. .. . [Therefore,] generally nonremovable claims

brought under the Securities Act of 1933 may be removed to

federal court if they come within the purview of 28 U.S.C.

§ 1452(a), which confers federal jurisdiction over claims that

are related to a bankruptcy case.” /d. at 107-08 (internal

quotation omitted).

The Court respectfully disagrees with the Second Circuit

for several reasons. First, Radzanover articulates the principle

that the specific statute governs the more general statute.

It is a basic principle of statutory construction that a

statute dealing with a narrow, precise, and specific

subject is not submerged by a later enacted statute

covering a more generalized spectrum. “Where there is

no clear intention otherwise, a specific statute will not

be controlled or nullified by a general one, regardless of

the priority of enactment.” Morton v. Mancari, 417 U.S.

535, 550-551. “The reason and philosophy of the rule is,

that when the mind of the legislator has been turned to

the details of a subject, and he has acted upon it, a

subsequent statute in general terms, or treating the

subject in a general manner, and not expressly contra-

3lra

dicting the original act, shall not be considered as

intended to affect the more particular or positive

previous provisions, unless it is absolutely necessary to

give the latter act such a construction, in order that its

words shall have any meaning at all.”

426 U.S. at 153 (emphasis added and citations omitted)

(quoting T. Sedgwick, The Interpretation and Construction of

Statutory and Constitutional Law 98 (2d ed. 1874)).

Another Sedgwick rule of statutory construction supports

this Court earlier conclusion:

“Leges posteriores, priores contrarias abrogant. ‘Tf

two inconsistent acts be passed at different times, the

last,’ said the Mater of the Rolls, ‘is to be obeyed; and if

obedience cannot be observed without derogating from

the first, it is the first which must give way. Every act of

Parliament must be considered with reference to the state

of the law subsisting when it came into operation, and

when it is to be applied; it cannot otherwise be rationally

construed. Every act is made, either for the purpose of

making a change in the law, or for the purpose of better

declaring the law; and its operation is not to be impeded

by the mere fact that_it-si inconsistent with some

previous enactment.”

Sedgwick, supra, at 104.

The Court remains of the view that Radzanower counsels

the enforcement of more specific statute, to Section 22(a) that

applies a particular and well defined group of Plaintiffs that

Congress consciously selected after a study of state and

federal securities class actions.

Second, the Second Circuit’s analysis lies principally in its

characterization of SLUSA as a mere[] expan[sion]” of

federal jurisdiction over class actions and its subsequent

analysis of 28 U.S.C. § 1452(a) as the later-enacted modifier

32ra

of Section 22(a). /d. at 105-08. The relevant Section 22(a)

provisions, as amended by SLUSA in 1998 provide:

Notwithstanding any other provision of this section,

nothing in this section may be construed to preclude a

State or political subdivision thereof or a State pension

plan from bringing an action involving a covered

security on its own behalf, or as a member of a class

comprised soley of other States, political subdivisions,

or State pension plans that are named plaintiffs, and that

have authorized participation, in such action.

* * *

Except as provided in section 77p(c) of this title [dealing

with class actions], no case arising under this subchapter

and brought in any State court of competent jurisdiction

shall be removed to any court of the United States.

15 U.S.C. §§ 77p(d)(2)(A), 77v(a) (emphasis added).

Under the SLUSA amendments, Section 77p(d)(2)(A) as

part of a statutory overhaul added section covering “Protected

Actions”, and Section 77v(a) was amended to include its

current first clause. The Second Circuit based its analysis on

the fact that exception to removal under Section 77v(a)

predated Section 1452(a), and concluded that the latter

created an exception to the former. This Court disagrees with

this conclusion. Congress 1998 amendments to the Securities

Act of 1933 added several provisions allowing for the

removability of class actions, and also featured provisions,

such as Section 77p(d)(2)(A) above, which “protected” state

actions such as those dealing with state pension.

The legislation provides for certain exceptions for

specific types of actions. The legislation preserves State

jurisdiction over: (1) certain actions that are based upon

the law of the State in which the issuer of the security in

question is incorporated; (2) actions brought by States

33ra

and political subdivisions, and State pension plains, so

long as the plaintiffs are named and have authorized

participation in the action; and (3) actions by a party to a

contractual agreement (such as an indenture trustee)

seeking to enforce provisions of the indenture.

H.R. Conf. Rep. 105-803, ** 13, 14.

Congress clearly modified Section 77v(a) by excepting

from the removal exception only the state class actions

described in Section 77p(c): “Except as provided in section

77p(c) of this title... . ” Congress did this in 1998 with full

knowledge of the Bankruptcy removal statute, yet did nothing

to textually provide for the removability of cases under 77p

(except those under subsection (c)) “related to” bankruptcy

claims.

Thus, SLUSA does more than “merely expand” federal

jurisdiction over class actions, SLUSA specifically “disallows

the removal of actions under the Securities Act of 1933

from any state court from competent jurisdiction,” and it

“expressly recognizes the ‘special interests of states in the

context of securities litigation . . . evinc[ing] a policy of

special respect for the forum choices of state pension plans

with regard to securities claims and for state courts whose

jurisdiction is invoked to hear them, and adds a strong reason

for abstention .... ”” Tenn Consol. Ret. Sys. v. Citigroup,

Inc., 2003 WL 22190841, at *3 (M.D. Tenn. May 9, 2003)

(quoting Ret. Sys. of Ala. v. Merrill Lynch & Co., 209 F.

Supp. 2d 1257, 1269 (M.D. Ala. 2002)).

Because SLUSA enumerated many classes of state-

initiated securities cases, yet granted state court jurisdiction to

only one specific class of cases, and amended the removal

exception statute without reflecting Section 1452(a), this

Court concludes that Section 22(a)’s removal exception, read

in light of SLUSA, trumps Section 1452(a) as it applies to

this action.

34ra

Accordingly, the Court considers the 1998 SLUSA

amendments to Section 22(a) as the later-enacted modifier of

Section 1452. The SLUSA amendments were enacted after

Section 1452(a); is more specifically worded; and expressly

removes from federal jurisdiction a narrow class of cases,

including claims related to state pension plans. Congress

enacted SLUSA with full cognizance of the existence

and breadth of Section 1452(a). The Court concludes that

as the later-enacted, specifically-worded statute, SLUSA’s

exception to federal jurisdiction control over the general grant

of federal jurisdiction to “any claim ‘related to’” bankruptcy

cases in Section 1452(a).

To the extent a conflict between Section 22(a) and the

bankruptcy statute exists, the Court’s conclusion in this case

is consistent with the Supreme Court’s holding in

Radzanower that a specific statute governs a previously-

enacted generally-worded one. Radzanower, 426 U.S. at 154

(“[W]here provisions in . . . two acts are in irreconcilable

conflict, the later act to the extent of the conflict constitutes

an implied repeal of the earlier one”) (emphasis added). The

remedy for this conflict rests with Congress.

Third, the Second Circuit’s reading of SLUSA and Section

1452(a) nullifies and eviscerates the clearly articulated intent

of Congress to preserve to the state court’s jurisdiction over

certain securities actions concerning state pension funds.

Even if Section 22(a) were read as predating Section 1452,

the former, more specific statute would be nullified. As the

Court noted previously in this action, “‘[t]he primary rule of

statutory construction is to ascertain and give effect to the

legislative intent.” Tenn. Consol Ret. Sys., 2003 WL

22190841, at *3. Indeed, Congress recognized explicitly the

distinction between securities claims involving public

employee pension funds and espoused the policy of fiscal

integrity so as to allow them to pursue claims against a named

35ra

defendant, and not against the debtor. The exemption of state

pension plans from SLUSA’s preemption provisions:

“embodies a Congressional recognition of the special

needs of state governments and pension plans to be able

to pursue state law remedies in state courts in order to

protect their pensioners and taxpayers from securities

fraud.... [T]hese provisions clearly evince a policy of

special respect for forum choices of state pension plans

with regard to securities claims and for state courts

whose jurisdiction is invoked to hear them... .”

Id. at *3 (quoting Ret. Sys. of Ala., 209 F. Supp. 2d at 1269).

Thus, the Court reaffirms its conclusion that “Section 22(a)

is a clear statutory prohibition” to removal Tenn. Consol Ret.

Sys., 2003 WL 22190841, at *3, that evinces a clear

legislative intent to reserve to the state pension funds the right

to litigate securities action in state courts. This statutory

command should be honored.

For these reasons, the Defendants’ motion to

reconsideration is granted, but the Court affirms its earlier

ruling.

An appropriate Order is filed herewith.

ENTERED this the 8th day of October, 2004.

/s/ William J. Haynes, Jr.

WILLIAM J. HAYNES, JR.

United States District Judge