Removal of class actions filed in state court alleging federal securities law violations
Abstract
Purpose
The purpose of this paper is to survey the landscape of recent federal securities class actions filed in state court and explore arguments for removal of those cases to federal courts under the Securities Litigation Reform Act (SLUSA) or the Class Action Fairness Act (CAFA).
Design/methodology/approach
The paper discusses: US Congressional legislation designed to bring the bulk of securities class actions back into federal courts, including the Private Securities Litigation Reform Act (PSLRA) and SLUSA; CAFA, another law designed to redirect class action litigation away from state courts; recent cases that have tested the limits of SLUSA and CAFA for removal from state to federal courts; and arguments for removal under SLUSA and CAFA.
Findings
Legislative history for both SLUSA and CAFA suggests that these statutes should be read as evidence of Congressional intent to return most securities class actions to federal court. Nonetheless, plaintiffs have continued to devise legal schemes to litigate class actions in what they perceive to be friendlier forums in state courts.
Originality/value
Although the arguments discussed in this paper are not exhaustive, they are a starting point for defendants seeking removal once litigation arises.
Keywords
Citation
Jacobs, C., Strauss, J.M., Tharp, J.J. and Agonis, K. (2008), "Removal of class actions filed in state court alleging federal securities law violations", Journal of Investment Compliance, Vol. 9 No. 4, pp. 68-78. https://doi.org/10.1108/15285810810922288
Publisher
:Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited