In Merrill Lynch v. Manning, the US Supreme Court has held that federal securities laws don’t preempt some claims from being brought in state court, upholding a Third Circuit ruling that sent a suit against a Merrill Lynch unit and other Wall Street firms back to a New Jersey state court.
Litigation partner Peter Haveles provided Law360 with his opinion on the importance of the decision:
"The Supreme Court has narrowed the ability to remove state law claims based on conduct in the securities markets and bars federal jurisdiction unless the state law action is brought to give effect the 1934 Securities Exchange Act. In other words, the court seems to require a determination that the act was 'infringed' or 'breached' in order for there to be exclusive federal jurisdiction. The decision may well encourage plaintiffs to assert more state law claims in state court in order to avoid the stricter standards that the act and the Supreme Court decisions under the act have imposed on claims for fraud or market manipulation."
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