[JURIST] The US Supreme Court ruled [opinion, PDF] unanimously Tuesday that the Securities Litigation Uniform Standards Act of 1998 (SLUSA) [text, PDF] did not strip state courts of jurisdiction over class action lawsuits under the 1933 Securities Act [text, PDF].
The Supreme Court decided that the statute does not say that state courts cannot hear class actions brought only on federal claims, and therefore states have concurrent jurisdiction over these cases. Although not disputed, the Supreme court also decided that these cases cannot be removed from state court.
Most of the case, Cyan Inc. v. Beaver County Employees Retirement Fund [SCOTUSblog materials], revolved around the SLUSA's "except clause" and whether it stripped state courts' jurisdiction to hear cases under the Securities Act of 1933.
Cyan argued that the purpose of SLUSA was to bring class action lawsuits exclusively to federal court, but the Supreme Court decided that it was the purpose to curb state courts hearing class actions, and it achieved that goal. However, the court did not believe that SLUSA was a complete bar to state courts for class actions under federal law.
In an opinion by Justice Elena Kagan, the court reasoned that:
if Congress had wanted to deprive state courts of jurisdiction over 1933 Act class actions, it had an easy way to do so: just insert ... an exclusive federal jurisdiction provision... by contrast, a mere definition [as is the case here]... does not so provide [exclusive jurisdiction].The decision is thought to be pro-plaintiff because the barriers for states accepting class actions lawsuits are generally lower than federal courts.