City of Warren Police & Fire Retirement System v. Revance Therapeutics, Inc.

125 F. Supp. 3d 917, 2015 U.S. Dist. LEXIS 115740, 2015 WL 5117631
CourtDistrict Court, N.D. California
DecidedAugust 31, 2015
DocketCase No. 15-cv-02512-HSG
StatusPublished
Cited by1 cases

This text of 125 F. Supp. 3d 917 (City of Warren Police & Fire Retirement System v. Revance Therapeutics, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Warren Police & Fire Retirement System v. Revance Therapeutics, Inc., 125 F. Supp. 3d 917, 2015 U.S. Dist. LEXIS 115740, 2015 WL 5117631 (N.D. Cal. 2015).

Opinion

ORDER GRANTING MOTION TO REMAND

HAYWOOD S. GILLIAM, JR., United States District Judge

Pending before the Court is Plaintiff City of Warren Police and Fire Retirement System’s motion to remand. For the reasons articulated below, the Motion' is GRANTED.

I. BACKGROUND

On May 1, 2015, Plaintiff City of Warren Police and Fire Retirement System filed this securities class action in the San Mateo County Superior Court. Dkt. No. 1-2. In its complaint, Plaintiff asserts only federal Securities Act claims against Defendant Revance Therapeutics, Inc., certain officers and directors thereof, and certain venture capitalists and underwriters associated with-.a public offering of Revance securities. Id. On June 5, 2015, Defendant removed this case to federal court pursuant to 28 U.S.C. § 1441(a). Dkt. No. 1. In the present motion, Plaintiff argues that Defendant’s removal' of the case is expressly barred by the Securities Act of 1933.

II. DISCUSSION

A. Legal Standard

“Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed” , to federal court. 28 U.S.C. § 1441(a). The Ninth Circuit has held that “[fjederal jurisdiction must be rejected if there is . any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992). Because of this “strong presumption against removal jurisdiction,” a defendant “always has the burden of establishing that removal is proper.” Id, (internal quotation marks omitted). But “a plaintiff seeking remand [on the basis of an express exception to removal jurisdiction] has the burden to prove that an express exception to removal exists.” Luther v. Countrywide Home Loans Servicing LP, 533 F.3d 1031, 1034 (9th Cir.2008).

B. The Securities Act Of 1933 And The Securities Litigation Uniform Standards Act

In 1998, Congress enacted the Securities Litigation Uniform Standards Act (“SLU-SA”), which amended, in relevant part, the jurisdictional and antiremoval provisions of the Securities Act of 1933. Before 1998, the jurisdictional provision of the Securities Act granted concurrent jurisdiction over Securities Act claims to both state and federal courts as follows: “The district [919]*919courts of the United States-... shall have jurisdiction of offenses and violations under this subchapter ... concurrent with State and Territorial courts, of all suits in equity and actions at law brought to - enforce any liability or duty created by this subchapter.” 15 U.S.C. § 77v(a) (1997). The Securities Act also contained an antiremoval provision that stated: “No. case arising under this subchapter and brought in any State court of competent jurisdiction shall be removed to any court of the United States.” Id.

SLUSA amended § 77v(a) by adding the following italicized language:- .

The district courts of the United States ... shall have jurisdiction of offenses and violations under this subchapter ... concurrent with State and Territorial courts, except as provided in section 77p of this title with respect to covered class actions, of all suits in equity -and actions at law brought to enforce any liability or duty created by this subchapter____ Except as provided in section 77p(e) of this title, no case arising under this sub-chapter and brought in any State court of competent jurisdiction shall be removed to any court of the United States.

15 U.S.C. § 77v(a) (emphases added).

Section 77p(c), which was also added by SLUSA, is titled “Removal of covered class actions,” and states: •

Any covered class action brought in any State court involving a covered security, as set forth in subsection (b), shall be removable to the Federal district court for the district in which the action is pending, and shall be subject to subsection (b).

15 U.S.C. § 77p(c). Section 77p(b) (another SLUSA addition), in turn, is titled “Class action limitations” and describes certain securities class actions that are now completely pi’eeluded under the Securities Act:

No covered class action based upon the statutory or common law .of any State or subdivision thereof may be maintained in any. State or Federal court by any private party alleging—
(1) an untrue statement or omission of a material fact in connection with the purchase or sale of a covered security; or
(2) that the defendant used or employed any manipulative or deceptive device or contrivance in connection with the purchase or sale of a covered security- .

15 U.S.C. § 77p(b).

' Finally; SLUSA also added a definitions provision that defines “covered class action” to include “any -single lawsuit' in which[ ] damages are sought on behalf of more than 50 persons or prospective class members, ... [or] one or more named parties seek to recover damages on a representative basis on behalf of themselves and other unnamed parties similarly situated.” 15 U.S.C. § 77p(f)(2)(A)(i).

C. Statutory Interpretation

The parties dispute whether the above provisions, taken together, prohibit the removal of securities fraud class actions like the present one that bring claims only under the federal Securities Act and not under state law.

1. Plain Language

“As with any question of statutory interpretation,” the Court’s “analysis begins with the plain language of the statute.” Jimenez v. Quarterman, 555 U.S. 113, 118, 129 S.Ct. 681, 172 L.Ed.2d 475 (2009). Plaintiffs position is that “the language that was inserted into the first sentence of the jurisdictional provision ... references the entirety of 77p, a section that is-exclusively concerned with state law class actions.” [920]*920Rajasekaran v. CytRx Corp., No. 14-cv-03406-GHK, 2014 WL 4330787, at *5 (C.D.Cal. Aug. 21, 2014). According to Plaintiff, the Rajasekamn court concluded,

The SLUSA amendment to § 77v(a) does not go so far as to take all securities class actions out of state court. The better view is that the.

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Cite This Page — Counsel Stack

Bluebook (online)
125 F. Supp. 3d 917, 2015 U.S. Dist. LEXIS 115740, 2015 WL 5117631, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-warren-police-fire-retirement-system-v-revance-therapeutics-cand-2015.