Tuesday, September 30, 2008

S.D.N.Y. Holds that CAFA Removal Provision Trumps Non-Removal Provision of Securities Act

Per New Jersey Carpenters Vacation Fund v. Harborview Mortg. Loan Trust 2006-4, Slip Copy, 2008 WL 4369840 (S.D.N.Y. Sept. 24, 2008):

The Plaintiffs argue that CAFA does not override the Securities Act anti-removal provision, and that even if it did, this case falls under one of CAFA's exceptions, § 1332(d)(9)(C), which excepts from federal jurisdiction a class action that relates to the “rights, duties and obligations arising out of a security.” 28 U.S.C. § 1332(d)(9)(C). Defendants instead and among other arguments contend that CAFA, passed in 2005, trumps the anti-removal provision of the Securities Act of 1933 because the statutes' conflicting language brings into play the Rule of Recency, and thus CAFA passed in 2005 controls. ( See Def Opp. Mem. 14-15 (citing In re Inosphere Clubs, Inc., 922 F.2d 984, 991 (2d Cir.1990).)

. . .

These circumscribed exceptions coupled with the overriding purpose of CAFA to provide for federal court jurisdiction in cases of national importance illustrate the intent of Congress to include within the reach of CAFA all securities class actions except for those set forth in the § 1332(d)(9) exceptions. Id. Consequently, CAFA overrides the Securities Act's anti-removal provision because this case involves exactly the type of case CAFA was concerned about-a large, non-local securities class action dealing with a matter of national importance, the mortgage-backed securities crisis that is currently wreaking havoc with the national and international economy. Thus, this case is removable under § 1453(b), unless subject to an exception.


At 8:10 AM, Blogger fitzgeralds said...

Thanks for the good read, I will definitely return for an update!

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