Law.com has an article today summarizing a 2-1 decision by a panel of the United States Court of Appeals for the Second Circuit regarding the scope of a securities law exception to the Class Action Fairness Act’s removal provisions. The article both summarizes the case and contains a link to the opinion itself. The decision concerns an exception to the federal removal jurisdiction conferred by CAFA, codified at 28 U.S.C. §§ 1332(d)(9)(C) and 1453(d)(3) for claims that “relate to the rights, duties (including fiduciary duties), and obligations relating to or created by or pursuant to any security.” The exception came into play because the defendant was a citizen of the forum state. The majority held that the exception did not apply to claims for relief under state consumer fraud laws based on the defendant’s alleged acts in marketing securities because the claims did not “relate” the rights or obligations of holders of the securities.
The opinion also addresses issues relating to procedures on interlocutory appeal of an order remanding a case removed under CAFA, including a finding that the phrase in 28 U.S.C. § 1453(c)(1) that an appeal be filed “not less than 7 days after the entry of the order” contains a typographical error and must be interpreted to mean “not more than 7 days after the entry of the order,” a conclusion also reached by other circuits.