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Supreme Court rules in securities antitrust, auto passenger rights cases

[JURIST] The US Supreme Court [official website; JURIST news archive] handed down decisions in three cases Monday, including Credit Suisse First Boston v. Billing [Duke Law case backgrounder; JURIST report], where the Court held that federal antitrust laws do not apply to a case where investors filed a class action lawsuit against underwriters and institutional investors for their alleged manipulation of initial public offerings. The Court held that there was a "plain repugnancy" between the plaintiffs' antitrust claims and federal securities law and ruled that "we must interpret the securities laws as implicitly precluding the application of the antitrust laws to the conduct alleged in this case." According to the Court, "The buyers claim that the underwriters unlawfully agreed with one another that they would not sell shares of a popular new issue to a buyer unless that buyer committed (1) to buy additional shares of that security later at escalating prices (a practice called 'laddering'), (2) to pay unusually high commissions on subsequent security purchases from the underwriters, or (3) to purchase from the underwriters other less desirable securities (a practice called 'tying')." The Second Circuit's decision [PDF text] in the case was reversed. Read the Court's opinion [text] per Justice Breyer, along with a concurrence [text] from Justice Stevens and a dissent [text] from Justice Thomas. Justice Kennedy did not take part in the consideration or decision of the case.

In Brendlin v. California [Duke Law case backgrounder; JURIST report], the Court held that an automobile passenger, like a driver, can challenge the constitutionality of a traffic stop under the Fourth Amendment. Read the Court's unanimous opinion [text] per Justice Souter.

Finally, in Powerex Corp. v. Reliant Energy Services [Duke Law case backgrounder] the Court held that the Ninth Circuit erred in reviewing a district court's decision to remand Reliant Energy's price-fixing lawsuit to state court. Reliant filed the lawsuit in state court and after several defendants filed cross claims for indemnity against additional companies, including Powerex, the cross-claimants sought to have the case removed to federal court. Powerex argued that because it was a wholly owned subsidiary of a crown corporation of the Canadian province of British Columbia, it is an instrumentality of a foreign nation under the Foreign Sovereign Immunities Act of 1976 [text]. Reliant argued that Powerex should not be considered a foreign state and the district court remanded the case to state court. On appeal, the US Court of Appeals for the Ninth Circuit determined that it could review substantive issues of law [decision, PDF] that preceded the district court's order to remand the case, but the Supreme Court ruled that the Ninth Circuit was barred from considering Powerex's claim that it is a foreign state under FSIA by 28 USC 1447(d) [text], the federal statute which states that "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise." Read the Court's opinion [text] per Justice Scalia, along with a concurrence [text] from Justice Kennedy and a dissent [text] from Justice Breyer.

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