The opinion of the court was delivered by: Owen, District Judge.
Plaintiff, asserting a class, commenced this action on behalf
of holders of USA Networks' stock in New York State court,
alleging that a certain press release of USA constituted a breach
of fiduciary duty under Delaware law. Defendants removed to
federal court, arguing that this was under federal law a) a
"covered security", b) the claim actually alleges a
misrepresentation with regard to the purchase or sale of
securities, and c) therefore federal securities legislation bars
any cause of action based on a claimed violation of state law,
including this one. On June 30, 1999 I issued a Memorandum and
Order remanding the matter to the state court, familiarity with
which is presumed here.
Defendants and amicus curie representing more than 720
securities firm move for reconsideration.
Federal courts do not have jurisdiction to review orders
remanding a case to state court that are based on a) subject
matter jurisdiction or b) improper removal. 28 U.S.C. § 1447(d).
This means not only that there is no appellate review of such a
remand order but also that a district court may not review it on
a motion for reconsideration. Seedman v. United States District
Court for the Central District of Cal., 837 F.2d 413, 414 (9th
Cir. 1988). It makes no difference that the District Court may be
wrong in its conclusions. State of Ohio v. Wright,
992 F.2d 616, 617 (6th Cir. 1993).
However, Section 1447(d) is not a blanket rule. Only remand
orders issued under § 1447(c) and invoking the grounds specified
therein — a lack of subject matter jurisdiction or a defect in
removal procedure — are immune from review. Some courts have
interpreted this very narrowly. In an example of a court limiting
the application of § 1447(d), the 5th Circuit reviewed a remand
based on the federal worker's compensation laws. There, the
federal statute, 28 U.S.C. § 1445(c), provided that "a civil
action in any state court arising under the workmen's
compensation laws of any such state may not be removed to any
district court of the United States" (emphasis added). The court
ruled that this remand was under the workers compensation statute
and not under § 1447(c), and therefore was reviewable. In re
Excel Corp., 106 F.3d 1197, 1200 (5th Cir. 1997).
In any event, I conclude that because my remand order was based
on an assessment of the applicability of the federal securities
law, and not § 1447(c), reconsideration is not barred. See, id.
Upon such reconsideration, however, I reach the same result for
reasons stated in the earlier opinion. That is that
. . this action does not become assailable under
SLUSA, which bars class actions based on state law
which allege misrepresentations or omissions "in
connection with the purchase or sale of a covered
security," 15 U.S.C. § 78bb(f)(1), because the pleader
of the complaint used language "acquired their [sic]
or continue to hold their securities" in the second
cause of action at paragraph 62 on page 16, for this
does not change the clearly pleaded allegation of
"breach of fiduciary duty" alleged in paragraph 5 of
Since plaintiffs' claim does not allege that misrepresentations
were made "in connection with the purchase or sale of a
security", 15 U.S.C. § 78bb(f)(1), it does not fall within the
prohibition of the federal statute. In the interest of
completion, I might observe that given the above, one does not
reach the exceptions, noting that even there a purchase or sale
is required for applicability.
Finally, defendant and particularly amicus being concerned
with arguable misapplication of my prior opinion hereafter, I
observe that it was not intended to define plaintiff's cause of
action as within or without the "Delaware carve-out", nor did I
rule on the merits of any of the plaintiffs' state law claims,
that being for the state courts hereafter. Nothing stated here or
earlier should be construed otherwise. The remand stands.
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