Supreme Court Upholds State Court Jurisdiction Over Securities Act Claims
In a unanimous decision, the U.S. Supreme Court has held that U.S. state courts have jurisdiction over securities class action lawsuits alleging only claims under the Securities Act of 1933 (the “Securities Act”), leaving open at least one way for plaintiffs to obtain what is often perceived as a more favourable state court forum.
The question of whether a lawsuit belongs in federal or state court has been one of the key issues in the securities class action world since enactment of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). In an attempt to curb frivolous securities class action litigation, the PSLRA put in place a number of procedural hurdles, such as heightened pleading standards for certain elements of a claim, that have made it easier to dismiss such lawsuits at an early stage, as well as a stay of all discovery while a motion to dismiss is pending.
Read more in the full publication on how the Supreme Court Upholds Court Jurisdiction Over Securities Act Claims.