Stevenson v. Becker

• Court: District Court, N.D. California
• Decided: March 28, 2024
• Docket: 4:23-cv-02277
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 KIM STEVENSON, et al., Case No. 23-cv-02277-HSG

8 Plaintiffs,

9 v. ORDER DENYING MOTIONS TO REMAND 10 GREG W. BECKER, et al., Re: Dkt. Nos. 56, 39 11 Defendants. 12 STEPHEN ROSSI, et al., Case No. 23-cv-02335-HSG

13 Plaintiffs,

14 v.

15 GREG W. BECKER, et al., 16 Defendants.

17 18 Before the Court are Plaintiffs’ two motions to remand in these related cases. Dkt. No. 56 19 in 23-cv-2277; Dkt No. 39 in 23-cv-2335. The Court held a hearing, Dkt. Nos. 77, 57, and 20 DENIES the motions. 21 I. BACKGROUND 22 This is a putative class action initially filed in Santa Clara Superior Court. Dkt. No. 1-2 23 (“Compl.”) ¶ 1.1 According to the complaint, SVB Financial Group (SVB) was a bank that 24 specialized in accepting deposits from and lending to startup companies, particularly ones based in 25 the Silicon Valley region of the San Francisco Bay Area. Id. ¶ 37. In 2021, SVB announced that 26

27 1 The complaints and motions to remand in both actions are nearly identical and assert the same 1 it entered into a definitive merger agreement to acquire Boston Private Bank & Trust Company 2 (Boston Private). Id. ¶ 48. Under the terms of the agreement, Boston Private shareholders would 3 receive a specified number of shares of SVB common stock and cash for each Boston Private 4 share they owned. Id. According to Plaintiffs, all the shares of SVB stock were issued and 5 solicited pursuant to Offering Materials that “contained untrue statements of material fact and 6 omitted material facts that were both required by governing regulations and necessary to make the 7 statements made not misleading.” Id. ¶ 54. Following the merger, SVB experienced financial 8 trouble and filed for bankruptcy in March 2023. Id. ¶ 163. Since then, according to Plaintiffs, 9 SVB’s stock has “lost substantially all of its value.” Id. Plaintiffs filed this action asserting claims 10 for relief under §§11, 12, and 15 of the Securities Act of 1933 against SVB’s directors, officers, 11 and auditors (collectively, “Defendants”). 12 Defendants removed the case to this Court. Dkt. No. 1. Defendants argued that the action 13 is removable under 28 U.S.C. § 1452(a), a statute that authorizes federal court jurisdiction in cases 14 “related to” a pending bankruptcy. Id. at 2. Plaintiffs now move to remand, arguing that the 1933 15 Securities Act precludes removal. Mot. at 5. 16 II. LEGAL STANDARD 17 A. Removal in General 18 Section 1441(a) of Title 28 provides that a defendant may remove from state court any 19 action “of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 20 1441(a). The vast majority of lawsuits “arise under the law that creates the cause of action.” 21 American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260 (1916); see also Merrell 22 Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 808 (1986). Federal district courts “shall have 23 original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the 24 United States.” 28 U.S.C. § 1331. The removal statute is strictly construed against removal 25 jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992); see also Sygenta Crop Prot. v. 26 Henson, 537 U.S. 28, 32 (2002). “The strong presumption against removal jurisdiction means that 27 the defendant always has the burden of establishing that removal is proper.” Gaus, 980 F.2d at 1 Courts must reject federal jurisdiction if there is any doubt as to the right of removal in the first 2 instance. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996). “However, a plaintiff seeking 3 remand has the burden to prove that an express exception to removal exists.” Luther v. 4 Countrywide Home Loans Servicing LP, 533 F.3d 1031, 1034 (9th Cir. 2008). 5 B. Removal Barred Under the Securities Act of 1933 6 Section 22(a) of the Securities Act of 1933, codified at 15 U.S.C. 77v(a), provides for 7 concurrent jurisdiction in state and federal courts over alleged violations of the Act: The district courts of the United States and the United States courts 8 of any Territory shall have jurisdiction of offenses and violations under this subchapter and under the rules and regulations promulgated 9 by the Commission in respect thereto, and, concurrent with State and Territorial courts. 10 Id. Additionally, Section 22(a) bars removal of actions that are brought in state court under the 11 Act: “Except as provided in section 77p(c) of this title, no case arising under this subchapter and 12 brought in any State court of competent jurisdiction shall be removed to any court of the United 13 States.” 14 C. Removal Permitted under 28 U.S.C. 1452(a) 15 28 U.S.C 1452(a) permits removal of an action that is “related to” a bankruptcy action under 16 Title 11. Section 1452(a) states: 17 A party may remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil 18 action by a governmental unit to enforce such governmental unit’s police or regulatory power, to the district court for the district where 19 such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title. 20 Id. Section 1334(b) provides that “district courts shall have original but not exclusive jurisdiction 21 of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 22 III. DISCUSSION 23 This case requires the Court to assess the interplay between two unambiguous statutes. 24 Plaintiffs argue that remand is warranted because Section 22(a) prohibits removal of actions which 25 were commenced in state court “[i]n no uncertain terms.” Mot. at 5. According to Plaintiffs, the 26 lone exception to Section 22(a)’s otherwise absolute prohibition on removal applies to certain 27 class actions based on the statutory or common law of any State. Id; 15 U.S.C. § 77p(b)–(c). 1 Plaintiffs argue that this case does not involve that exception and therefore is not removable. 2 Plaintiffs also contend that remand is warranted because Plaintiffs’ claims are not “related to” a 3 bankruptcy proceeding, and that equitable reasons favor remand. Defendants argue that Section 4 1452(a) authorizes removal of any claim or cause of action that is related to a bankruptcy case, and 5 contend that Plaintiffs’ claims fall into that category. Opp. at 9. Having considered the parties’ 6 arguments, the Court finds that remand is not appropriate. 7 A. The Securities Act of 1933 does not prohibit removal under 28 U.S.C. 1452(a) 8 Courts are divided on whether the removal bar of Section 22(a) trumps Section 1452(a)’s 9 bankruptcy removal provision. See Cobalt Partners, LP v. Sunedison, Inc., No. C 16-02263- 10 WHA, 2016 WL 4488181, at *5 (N.D. Cal. Aug. 26, 2016) (discussing split in authority). The 11 Ninth Circuit has yet to consider the issue, and it appears that the Second Circuit is the only court 12 of appeals to address it. See California Pub. Emps.’ Ret. Sys. v. WorldCom, Inc., 368 F.3d 86, 108 13 (2d Cir. 2004) (holding that “generally nonremovable claims brought under the Securities Act of 14 1933 may be removed to federal court if they come within the purview of 28 U.S.C. § 1452(a)”). 15 Plaintiffs argue that this Court should not rely on WorldCom because it is in conflict with 16 Supreme Court and Ninth Circuit law in two important respects. First, Plaintiffs argue that 17 WorldCom did not, as the Supreme Court and Ninth Circuit require, determine whether there was 18 an irreconcilable conflict between the two statutes. Plaintiffs contend that the statutes do not 19 conflict, making remand appropriate. Second, Plaintiffs argue that even if there is an 20 irreconcilable conflict, the Court should not follow WorldCom because Section 1452’s “general 21 grant of the right of removal . . . does not trump § 22(a)’s specific bar to removal.” Mot. at 12. 22 The Court finds the Second Circuit’s opinion in WorldCom persuasive and adopts its 23 reasoning here. 24 i. There is a conflict between the two statutes 25 According to Plaintiffs, because there is no “irreconcilable conflict” between Section 1452 26 and the Securities Act, this Court must apply the Securities Act’s removal bar. Mot. at 7. 27 Plaintiffs contend that WorldCom, and cases that adopted that court’s reasoning, incorrectly 1 at 15. Plaintiffs argue that Radzanower v. Touche Ross & Co., 426 U.S. 148 (1976), and Epic Sys. 2 Corp. v. Lewis, 584 U.S. 497 (2018), require a court to determine as a threshold matter whether a 3 conflict exists. Plaintiffs contend that WorldCom and cases following it ignored this necessary 4 analytical step. See id. at 8 (“[P]otential or even arguable conflict is not enough; rather, 5 Defendants must establish a ‘positive repugnancy’ such that there is no plausible alternative 6 interpretation by which the two statutes might ‘mutually coexist.’”) (quoting Radzanower, 426 7 U.S. at 155); see also Dkt. No. 80 (“Hrg. Tr.”) at 9:24–10:10 (“[T]here’s also a hole, a sort of a 8 threshold omission in the WorldCom analysis. Since Cobalt, since WorldCom, the Supreme Court 9 has reiterated in Epic v. Lewis that before you get to the specificity canons and the recency canons 10 and the sort of back and forth of which statute trumps the other, there’s a threshold burden to find 11 an irreconcilable conflict.”). 12 The Court disagrees with Plaintiffs’ argument for several reasons. First, Plaintiffs contend 13 that Epic created a new and different analytical framework than the one applied by the Second 14 Circuit in WorldCom. At the hearing, Plaintiffs emphasized that WorldCom and cases adopting its 15 reasoning came before the Epic decision. According to Plaintiffs, Epic changed the landscape. See 16 Hrg. Tr. at 15:13–17. But this argument overreads Epic. The Epic Court considered an argument 17 that the National Labor Relations Act (NLRA) impliedly repealed the Federal Arbitration Act 18 (FAA). The plaintiffs contended that though the FAA would normally require the Court to 19 enforce their arbitration agreement, the NLRA overrode that requirement in their case alleging a 20 violation of federal law. To support this proposition, Plaintiffs cited a provision of the NLRA 21 which gives employees “the right to self-organization, to form, join, or assist labor organizations, 22 to bargain collectively through representatives of their own choosing, and to engage in other 23 concerted activities for the purpose of collective bargaining or other mutual aid or 24 protection.” Epic, 584 U.S. at 511 (quoting 29 U.S.C. § 157). Plaintiffs asked the Supreme Court 25 to “infer a clear and manifest congressional command to displace the Arbitration Act and outlaw 26 agreements like theirs.” Id. The Court ruled that because the identified NLRA provision did not 27 “express approval or disapproval of arbitration” or “mention class or collective action 1 The circumstance presented in this case is meaningfully different. Unlike in Epic, the 2 Court need not draw any inferences or add any language to identify the conflict between Section 3 22 and Section 1452. Cf. Epic, 584 U.S. at 510–16. It is apparent on the face of the statutes: one 4 permits what the other forbids. Epic also reflects the somewhat unique nature of the statutory 5 conflict analysis in the arbitration agreement context. See id. 516 (“In many cases over many 6 years, this Court has heard and rejected efforts to conjure conflicts between the Arbitration Act 7 and other federal statutes. In fact, this Court has rejected every such effort to date.”). Finally, Epic 8 does not overrule, disagree with, or even mention WorldCom. Cases after Epic have followed 9 WorldCom. See, e.g., Moeller-Bertram v. Gemini Tr. Co., LLC, No. 23-cv-2027, 2023 WL 10 3451379 (S.D.N.Y. May 15, 2023); see also Coffey v. Ripple Labs Inc., 333 F.Supp.3d 952 (N. D. 11 Cal. 2018) (applying WorldCom to hold that the Securities Act’s removal bar did not require 12 remand where defendants removed under CAFA based on plaintiffs’ state law claims). And the 13 Court has not found a single case applying Epic to find that WorldCom failed to apply the 14 analytical framework Plaintiffs claim is now required. Accordingly, to the extent Plaintiffs assert 15 that Epic changed the landscape in a way that is relevant to this case, the Court rejects that 16 position. 17 Moreover, contrary to Plaintiffs’ assertion, the WorldCom Court devoted an entire section 18 of the opinion to discussing and analyzing the “statutory conflict,” detailing the statutory history 19 of both the Securities Act and Section 1452(a). See WorldCom, 368 F.3d at 96. Beginning with 20 the original Bankruptcy Reform Act of 1978, the Court explained that Section 1452 initially 21 authorized broad removal of bankruptcy claims to federal bankruptcy court. Id. Citing the 22 legislative history, the Court quoted a Senate Report on the Reform Act explaining that “[t]his 23 broad grant of jurisdiction will enable the bankruptcy courts . . . to dispose of controversies that 24 arise in bankruptcy cases or under the bankruptcy code. Actions that formerly had to be tried in 25 the State court or in the Federal district court, at great cost and delay to the estate, may now be 26 tried in the bankruptcy court.” Id. at 96–97. Eventually, the Supreme Court concluded that the 27 statute’s broad grant of jurisdiction to bankruptcy courts was unconstitutional. WorldCom 1 iteration of Section 1452. Thus, “although that statute revamped the relationship between Article 2 III judges and Article I bankruptcy judges, it did not materially alter the jurisdictional scheme.” 3 Id. at 97. 4 WorldCom then analyzed the Securities Act of 1933. The removal bar in that statute was 5 added to the Securities Act in 1998 when Congress enacted the Securities Litigation Uniform 6 Standards Act of 1998 (SLUSA). Id. at 98. SLUSA was enacted after the Private Securities 7 Litigation Reform Act of 1995 (“PSLRA”) was passed to “curtail ‘strike suits’ —i.e., meritless 8 class actions alleging fraud in the sale of securities.” Id. According to WorldCom, SLUSA was 9 passed after it became clear that the PSLRA was ineffective in eliminating strike suits because 10 “plaintiffs were able to avoid its strictures by bringing suit in state rather than federal courts.” Id. 11 SLUSA expanded federal jurisdiction over class actions, but “did not in any way alter Section 12 22(a)’s bar on the removal of individual Securities Act claims.” Id. (emphasis in original). 13 After detailing this statutory background, the WorldCom court found a clear conflict 14 between the two statutes: “While the bankruptcy removal statute unambiguously states that any 15 civil action brought by a private party in state court . . . may be removed to federal court if the 16 action is related to a bankruptcy case, Section 22(a) of the Act states, in equally unambiguous 17 terms, that individual actions under the Act may not be removed from state court.” Id. The Court 18 agrees with this conclusion, and rejects Plaintiffs’ argument that the two statutes can be read 19 “harmoniously.” See Mot. at 9. The Court cannot simultaneously give effect to both the removal 20 provision in Section 1452 and the removal bar in the Securities Act. This conflict is more than the 21 statutes “produc[ing] different results when applied to the same factual situation”: instead, the 22 Court inherently cannot “regard each as effective.” Radzanower, 426 U.S. at 155. Because the 23 statutes contain two competing congressional directives, the Court must resolve the conflict to 24 decide which provision controls. 25 ii. Both statutes are equally specific 26 Plaintiffs argue that even if the statutes are in conflict, the Securities Act’s more specific 27 removal bar should prevail over Section 1452(a)’s general removal provision. Mot. at 12. “It is a 1 subject is not submerged by a later enacted statute covering a more generalized spectrum.” Luther 2 v. Countrywide Home Loans Servicing LP, 533 F.3d 1031, 1034 (9th Cir. 2008) (citation omitted). 3 “Where there is no clear intention otherwise, a specific statute will not be controlled or nullified 4 by a general one, regardless of the priority of enactment.” Radzanower, 426 U.S. at 153 (citation 5 omitted). On this point, Plaintiffs argue that WorldCom is in tension with the Ninth Circuit’s 6 opinion in Luther, which held that the Securities Act’s removal bar trumped the right of removal 7 in the Class Action Fairness Act (CAFA) because the Securities Act is “the more specific statute.” 8 533 F.3d 1031. Plaintiffs contend that WorldCom did not follow this principle of statutory 9 interpretation, making its reasoning and outcome inconsistent with circuit precedent that is binding 10 on this Court. Mot. at 13. 11 The Court disagrees that the Ninth Circuit’s holding in Luther compels the conclusion that 12 Section 1452’s removal provision is more general than Section 22(a)’s removal bar, and is thus 13 subsumed by it. In Luther, the Court considered CAFA, but obvious differences between that 14 statute and Section 1452 make this case distinguishable. This point is underscored by the Luther 15 procedural history: after the Ninth Circuit ruled that Defendants could not remove under CAFA, 16 they decided to remove under Section 1452(a). Luther v. Countrywide Home Loans Servicing LP, 17 No. 12-CV-5125MRP, 2012 WL 12888836, at *2 (C.D. Cal. Sept. 4, 2012). Plaintiffs again 18 moved to remand on similar grounds, but the district court denied that motion, holding that “[t]he 19 Ninth Circuit’s decision in Luther is not controlling” because “this case involves the bankruptcy 20 removal statute rather than the Class Action Fairness Act.” Id. The Ninth Circuit’s ruling that 21 Section 22(a) was more specific than the removal provision in CAFA simply does not support the 22 conclusion that Section 22(a) likewise trumps Section 1452(a). See Cobalt, 2016 WL 4488181 at 23 *6 (“The fact that our court of appeals concluded that Section 22(a) trumped the removal 24 provisions in CAFA does not mandate the conclusion that Section 22(a) also trumps Section 25 1452(a). [T]he removal provisions in CAFA and Section 1452(a) are different and exist within 26 different statutory frameworks.”); see also Fed. Home Loan Bank of San Francisco v. Deutsche 27 Bank Secs., Inc., No. 10-3038, 2010 WL 5394742 at *6 (N.D. Cal. Dec. 20, 2010) (“However, the 1 22(a) trumps the Court's related-to bankruptcy jurisdiction.”). 2 The Court again finds WorldCom’s reasoning persuasive: because both statutes apply to a 3 “defined class of claims,” the Supreme Court’s distinction between “a statute applicable to a 4 ‘broad universe of potential defendants’ and a statute that protects a ‘particularized’ group of 5 defendants, carries no weight here.” WorldCom, 368 F.3d at 102 (applying the Supreme Court’s 6 statutory conflict analysis from Radzanower to find the bankruptcy removal provision and the 7 Securities Act’s removal bar equally specific). And many claims are removable under Section 8 1452 that are not related to the Securities Act of 1933, and many claims unrelated to bankruptcy 9 are not removable because of Section 22(a). Id. 10 The Court thus concludes that Section 22(a) does not bar removal of actions “related to” a 11 bankruptcy action under Section 1452(a). 12 B. Plaintiffs’ claims are “related to” a bankruptcy proceeding 13 Plaintiffs also argue that this action is not “related to” the SVB bankruptcy and that the 14 Court accordingly lacks jurisdiction over the claims. Mot. At 15. Like several other circuits, the 15 Ninth Circuit has adopted the Third Circuit’s test in determining when a case is “related to” a 16 bankruptcy action so as to support removal under Section 1452(a). Under this standard, a suit is 17 “related to” a bankruptcy action if “the outcome of the proceeding could conceivably have any 18 effect on the estate being administered in bankruptcy.” In re Fietz, 852 F.2d 455, 457 (9th Cir. 19 1988) (quoting Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir. 1984)). The proceeding need 20 not necessarily be against the debtor or against the debtor’s property. Instead, an action is related 21 to bankruptcy if the outcome could alter the debtor’s rights, liabilities, options, or freedom of 22 action (either positively or negatively), and in any way impacts the handling and administration of 23 the bankrupt estate. Id. 24 Defendants assert four bases for “related to” jurisdiction: (1) defense costs will be paid out 25 of the Defendants’ policies, which provide coverage in some circumstances to the debtor in 26 bankruptcy, such that the Bankruptcy Court has imposed reporting and additional approval 27 requirements; (2) discovery relating to the same allegations in the Removed Actions is already 1 SVB; and (4) Defendants also have a right to contribution from SVB. Opp. at 16. Plaintiffs 2 contend that Defendants’ arguments depend on a “host of uncertain findings” that are 3 “unsubstantiated” and insufficient to establish “related to” jurisdiction. Mot. at 16. 4 The Court disagrees. Numerous courts in the Ninth Circuit have concluded that a case is 5 “related to” a bankruptcy action where there is an indemnification agreement between the 6 defendant in the case and a bankruptcy debtor, even if the defendant is not guaranteed 7 indemnification. See Stitching Pensionenfonds ABP v. Countrywide Fin. Corp., 447 B.R. 302, 310 8 (C.D. Cal. 2010) (collecting cases). Here, SVB’s Bylaws entitle Defendants to “to advancement 9 of and indemnification for attorneys’ fees and costs.” Opp. at 19. Based on this potential for 10 indemnification, the outcome in this case “could conceivably have an[] effect on the estate being 11 administered in bankruptcy.” In re Fietz, 852 F.2d at 457. Moreover, in the corresponding 12 bankruptcy case, the Bankruptcy Court ordered Defendants to provide quarterly reporting of 13 expenses paid under the Policies and required them to seek court approval before using proceeds 14 to pay any settlement or judgment. In Re SVB Fin. Group, 650 B.R. 790, 802 (Bankr. S.D.N.Y. 15 2023). Any favorable result for Defendants in this case likely will affect Defendants and their 16 ability to pay outstanding financial obligations. See In re Fietz, 852 F.2d at 457. Accordingly, the 17 Court concludes that it has “related to” jurisdiction. 18 C. Equity does not favor remand 19 The Court’s finding of “related to” jurisdiction does not end the inquiry, because under 20 Section 1452(b), the Court may remand a removed claim based on “any equitable ground.” 21 Plaintiffs argue that even if removal is permitted under Section 1452(a), the Court should remand 22 on equitable grounds. The Court disagrees that the equities support remand. 23 “Section 1452 (b) gives courts an unusually broad grant of authority in determining 24 whether remand is equitable.” Charles Schwab Corp. v. Banc of America Securities, No. 10–CV– 25 03489–LHK, 2011 WL 864978 at *7 (N.D. Cal. March 11, 2011) (internal quotation marks and 26 citations omitted). District courts in this circuit “have typically identified seven factors governing 27 the decision to remand: (1) the effect of the action on the administration of the bankruptcy estate; 1 (4) comity; (5) the relatedness of the action to the bankruptcy case; (6) any jury trial right; and (7) 2 prejudice to plaintiffs from removal.” Parke v. Cardsystems Solutions, No. C 06–04857 WHA, 3 2006 WL 2917604, at *4 (N.D. Cal. Oct. 11, 2006) (quoting Hopkins v. Plant Insulation Co., 349 4 B.R. 805, 813 (N.D.Cal.2006)). 5 Plaintiffs allege only federal claims, so there is no risk of issues of state law 6 predominating, or any concern based on the difficulty of applicable state law or the need to respect 7 comity. See Cobalt, 2016 WL 4488181 at *7 (“The absence of California claims also weighs 8 against remand. . . . Omega and Glenview assert claims under Maryland securities law and 9 Maryland and Delaware common law. A California court will be in no better position than a 10 federal court to interpret Maryland and Delaware law. Moreover, federal securities law provides 11 the backbone of the complaints.”); see also Luther, 2012 WL 12888836, at *5 (“Equitable remand 12 is inappropriate here. The second, third, and fourth factors weigh heavily against remand. 13 Plaintiffs have brought only federal claims in their complaint. Any difficult or unsettled questions 14 will involve federal law.”). And despite Plaintiffs’ argument to the contrary, the Court finds that 15 the action is related to (and in some ways has already affected) the administration of the 16 bankruptcy estate. Equitable factors do not favor remand under these circumstances.2 17 IV. CONCLUSION 18 The Court DENIES Plaintiffs’ motions to remand. Dkt. No. 56 in 23-cv-2277; Dkt. No. 19 39 in 23-cv-2335. At the hearing, counsel for all parties confirmed that they do not oppose 20 certification of this order for interlocutory appeal. Hrg. Tr. at 5:23–6:13. The Court agrees that 21 2 After briefing on the motions to remand was complete, Plaintiffs filed an administrative motion 22 for leave to submit supplemental materials. See Dkt. No. 82. Plaintiffs seek to bolster their argument that equitable remand is appropriate. Plaintiffs argue that if the case is not remanded, 23 they will suffer prejudice because in the Federal Securities Action, the court-appointed federal lead plaintiffs filed a complaint and chose “not to pursue in the federal action claims arising out of 24 the Boston Private Merger.” Dkt. No. 82 at 3. Plaintiffs argue that if their case remains in federal court, it will be consolidated with that Federal Securities Action, prejudicing them because their 25 claims have been excluded from that case. The Court GRANTS Plaintiffs’ motion to supplement the record, but this additional information does not alter the Court’s conclusion. Plaintiffs’ 26 argument has no bearing on the Court’s findings that this case asserts only federal claims and is related to a bankruptcy proceeding. Plaintiffs’ argument also rests on the assumption that their 27 case will be consolidated with the Federal Securities Action if it remains in federal court. The 1 the interests of clarity would be best served by definitive guidance from the Ninth Circuit as to the 2 || recurring legal question of whether Section 22(a) of the 1933 Securities Act bars removal of even 3 actions “related to” a bankruptcy action pursuant to Section 1452(a). Given the unanimous view 4 || of the Court and the parties on this point, the Court directs the parties to meet and confer and 5 submit a stipulation and proposed certification order briefly addressing the relevant factors under 6 || 28 U.S.C. 1292(b) and Ninth Circuit precedent. See In re Cement Antitrust Litig. (MDL No. 296), 7 673 F.2d 1020, 1026 (9th Cir. 1981) (holding that a district court may certify an order for 8 interlocutory appeal if “(1) there [is] a controlling question of law, (2) there [are] substantial 9 grounds for difference of opinion, and (3) [] an immediate appeal may materially advance the 10 || ultimate termination of the litigation.”). The Court directs the parties to file this stipulation and 11 proposed order by April 11, 2024 or request more time if needed. 12 The Court GRANTS Plaintiffs’ administrative motion for leave to submit supplemental 13 materials. See Dkt. No. 82 in 23-cv-2277; Dkt. No. 58 in 23-cv-2335. 14 The Court further SETS a telephonic case management conference for April 16, 2024 at 3 15 2:00pm. The Court further DIRECTS the parties to submit a joint case management statement by a 16 || April 9, 2024. All counsel shall use the following dial-in information to access the call: Dial-in: 888-808-6929 18 Passcode: 6064255 19 For call clarity, parties shall NOT use speaker phone or earpieces for these calls, and where 20 at all possible, parties shall use landlines. All attorneys appearing for a telephonic case 21 management conference are required to dial in at least 15 minutes before the hearing to check in 22 || with the CRD. The parties should be prepared to discuss how to move this case forward 23 efficiently, including the plan for revisiting the related case determination with Judge Donato. 24 IT IS SO ORDERED. 25 || Dated: 3/28/2024 26 Aspurd 5 bbl □□ HAYWOOD S. GILLIAM, JR. 27 United States District Judge 28