Courthouse Steps: Cyan v. Beaver County Employees Retirement Fund
Corporations, Securities & Antitrust Practice Group Teleforum
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The Cyan v. Beaver County Employees Retirement Fund case examines whether state courts have subject matter jurisdiction over covered class actions that are asserted under the Securities Act of 1933. State courts have had the jurisdiction to decide federal law claims brought under that statute since the enactment of the Securities Act of 1933. But since the passing of the Securities Litigation Uniform Standards Act of 1988, certain state law securities class actions have been prevented, and the 1933 Act was amended to reflect the new limits on state court claims. Beaver County Employees' Retirement Fund filed a lawsuit in California superior court asserting claims under the 1933 Act, but Cyan Inc., went against the claims, stating that the amended 1933 Act stopped state courts from exercising subject matter jurisdiction over 1933 Act claims entirely. The superior court rejected Cyan's objection to the exercise of jurisdiction. There is now a split amongst federal district courts as to whether state courts have subject matter jurisdiction over covered class actions that allege only 1933 Act claims. The case is set to be argued on Nov 28, 2017.
Paul Watkins, Civil Litigation Division Chief, Office of the Arizona Attorney General
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