SLUSA And ’33 Act Class Actions

As a general matter, claims under the ’33 Act may be brought in federal or state court and cannot be removed. There is a continuing split, however, over whether the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”) created a removal exception for ’33 Act securities class actions (e.g., misstatements in a prospectus) brought in state court. The Second Circuit says that it did, but other courts have disagreed. In the latest decision on the issue, Lowinger v. Johnston, 2005 WL 2592229 (W.D.N.C. Oct. 13, 2005), the court found that removal pursuant to SLUSA was proper.

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