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Supreme Court hears oral argument in two economic-related cases

[JURIST] The US Supreme Court [official website] heard oral arguments in two economic related cases on Tuesday.

The first case, Cyan v. Beaver County Employees Retirement Fund [SCOTUSblog materials], examines whether a state court has subject matter jurisdiction to hear a class action that only alleges claims under the federal Securities Act of 1933 [text].

During the arguments in Cyan [transcript, PDF], counsel for Cyan argued that the Securities Uniform Standard Act (SUSA) [text, PDF] eliminated concurrent jurisdiction for many Securities Act claims in state court. That is to say that SUSA effectively removed a state court's power to hear such claims. In questioning counsel for Cyan, Justice Ruth Bader Ginsburg stated:

one could say, with respect to your argument, that Congress chose a rather obtuse way of saying that federal courts shall have exclusive jurisdiction. It could have simply said, in covered class actions related to claims under the '33 Act, federal courts shall have exclusive jurisdiction, period, and that would be clear and everybody would understand and you would prevail.
Counsel responded by stating that although Congress elected to grant exclusive jurisdiction in an "obtuse" way, the text of the statute makes clear that this was the intended purpose of the act. Counsel for Beaver County Employees Retirement Fund later attacked counsel for Cyan on this point, stating that after admitting that their reading was "obtuse," Cyan was looking for "elephants in mouseholes."

The second case, Digital Realty Trust Inc. v. Somers [SCOTUSblog materials], will establish whether anti-retaliation whistleblower protection clauses contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 [text] protect individuals who do not report misconduct to the Securities and Exchange Commission (SEC) [official website].

During arguments in Digital Realty Trust [transcript, PDF], counsel for Digital Realty argued that the plain meaning of the Dodd-Frank Act clearly states that whistleblowers are protected but only when reporting violations and misconduct to the SEC. Counsel argued that such a reading would not be overly restrictive of the protection clause as Congress's intent was to encourage reporting of such misconduct specifically to the SEC and not to any organization or entity the whistleblower sees fit. Counsel for Somers countered by arguing that the broader reading of the protection clause would align the Act with "the modern trend of major whistleblowing legislation." Counsel for Somers then further argued that Digital Realty's reading of the Act suggests that "all [Congress] were really concerned about here was getting information to the government, to the SEC" and not with broader reporting of wrongdoing.

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