State Section 11 Litigation in the Post-Cyan Environment (Despite Sciabacucchi)

It has been two years since the Supreme Court’s decision in Cyan v. Beaver County Employees Retirement Fund[1] permitted securities class actions alleging violations of the Securities Act of 1933 to be litigated in state courts nationwide. The court recognized that, in enacting the Securities Litigation Uniform Standards Act (SLUSA), Congress apparently intended to withdraw jurisdiction over Securities Act cases from state courts, but it held unanimously that the terms of SLUSA failed to accomplish that goal. The result, as shown in Figure 1, has been a dramatic increase in the volume of state-filed ’33 Act cases – and, … Read more