Simpson Thacher Discusses Supreme Court Ruling on State Court Jurisdiction Over Securities Class Actions

On March 20, 2018, the Supreme Court in Cyan, Inc. v. Beaver County Employees Retirement Fund, No. 15-1439, unanimously held that state courts have jurisdiction over class actions alleging only violations of the Securities Act of 1933.[1]  The Court rejected the issuer’s argument that the Securities Litigation Uniform Standards Act passed in 1998 eliminated the jurisdiction of state courts to hear such class actions.  In resolving a split among state and federal courts, the Court likewise rejected a middle-of-the-road position advanced by the Solicitor General that such actions should be removable from state to federal court.

Statutory Framework

Read more