Jason de Bretteville, chair of Stradling’s White Collar Criminal Defense practice group and co-chair of the firm’s Enforcement Defense & Investigations practice group, was quoted by Westlaw Journal regarding the Supreme Court’s decision in Cyan Inc. et al. v. Beaver County Employees Retirement Fund et al, a class action lawsuit alleging that the telecommunications systems supplier misrepresented its sales figures before its IPO. The Supreme Court unanimously agreed that “state courts have concurrent jurisdiction with federal courts over class-action lawsuits that only allege violations of the Securities Act of 1933.”
The outcome of Cyan will likely result in a larger number of securities class actions in state court. De Bretteville stated “the decision is a substantial win for the plaintiff’s bar, who now may evade federal procedural protections, including certain provisions of the Private Securities Litigation Reform Act, merely by filing 1933 Act claims in state courts.” He also noted that Justice Kagan’s decision resolved a “long-standing split among the courts by means of remarkably thorough statutory exegesis” and will result in a surge of state court filings which will “substantially increase the cost of litigating and settling 1933 Act cases.” Read the full article below.