saden1
05-29-2009, 10:25 AM
I don't have time to educate myself on the case this morning...did she argue it was a states rights type issue and get overturned?
The crust of her argument (http://otd.oyez.org/cases/2005/merrill-lynch-pierce-fenner-smith-inc-v-dabit-shadi-03212006) was that people should be able to sue under state law. She (they really) also asked the Supreme Court for clarification. You can find the legal grounds for the opinion here (http://bulk.resource.org/courts.gov/c/F3/395/395.F3d.25.03-7458.03-7499.html).
Dabit filed a "breach of fiduciary duty" claim under Oklahoma state law in the U.S. District Court for the Western District of Oklahoma under "diversity grounds" because the parties in the case were from different states. His complaint was moved to the U.S. District Court for the Southern District of New York where more than 120 additional cases against Merrill Lynch were consolidated.
In the suit, Dabit claimed that Merrill Lynch's practices caused certain stocks to trade at "artificially inflated" prices through the use of deceptive devices alleged to be the "hallmarks of stock manipulation."
Section 10(b) of the federal Securities Exchange Act makes it unlawful for any person to use deceptive or manipulative devices "in the connection or sale of any security." Because of a perceived flood of frivolous lawsuits regarding security fraud through state courts, Congress enacted the Securities Litigation Uniform Standards Act (SLUSA) in 1998, which provides that people must file suits charging securities fraud in federal court where there are stringent, uniform standards.
SLUSA states that any class action lawsuit based on state or local law alleging fraud "in connection with the purchase or sale" or of a stock must be governed by federal law.
...
Judge Sonia Sotomayor [in agreement with her colleagues], wrote that SLUSA should be interpreted very narrowly to apply to only purchasers and sellers.
"We see no clear indication either in the text or the legislative history of SLUSA of a congressional intent to abolish nonpurchaser and nonseller state class action claims," wrote Sotomayer.
Sotomayer seemed to ask for definition of the "in connection with" phrase from the U.S. Supreme Court, writing that the high court has "not yet interpreted this phrase in the context of SLUSA."
The crust of her argument (http://otd.oyez.org/cases/2005/merrill-lynch-pierce-fenner-smith-inc-v-dabit-shadi-03212006) was that people should be able to sue under state law. She (they really) also asked the Supreme Court for clarification. You can find the legal grounds for the opinion here (http://bulk.resource.org/courts.gov/c/F3/395/395.F3d.25.03-7458.03-7499.html).
Dabit filed a "breach of fiduciary duty" claim under Oklahoma state law in the U.S. District Court for the Western District of Oklahoma under "diversity grounds" because the parties in the case were from different states. His complaint was moved to the U.S. District Court for the Southern District of New York where more than 120 additional cases against Merrill Lynch were consolidated.
In the suit, Dabit claimed that Merrill Lynch's practices caused certain stocks to trade at "artificially inflated" prices through the use of deceptive devices alleged to be the "hallmarks of stock manipulation."
Section 10(b) of the federal Securities Exchange Act makes it unlawful for any person to use deceptive or manipulative devices "in the connection or sale of any security." Because of a perceived flood of frivolous lawsuits regarding security fraud through state courts, Congress enacted the Securities Litigation Uniform Standards Act (SLUSA) in 1998, which provides that people must file suits charging securities fraud in federal court where there are stringent, uniform standards.
SLUSA states that any class action lawsuit based on state or local law alleging fraud "in connection with the purchase or sale" or of a stock must be governed by federal law.
...
Judge Sonia Sotomayor [in agreement with her colleagues], wrote that SLUSA should be interpreted very narrowly to apply to only purchasers and sellers.
"We see no clear indication either in the text or the legislative history of SLUSA of a congressional intent to abolish nonpurchaser and nonseller state class action claims," wrote Sotomayer.
Sotomayer seemed to ask for definition of the "in connection with" phrase from the U.S. Supreme Court, writing that the high court has "not yet interpreted this phrase in the context of SLUSA."