The opinion of the court was delivered by: Scheindlin, District Judge.
MEMORANDUM OPINION AND ORDER
Plaintiff has brought a federal securities fraud action
alleging violations of section 10(b) of the Securities and
Exchange Act of 1934, see 15 U.S.C. § 78j(b), and Rule 10b-5
promulgated thereunder, see 17 C.F.R. § 240.10b-5. Plaintiff's
Amended Complaint ("Am.Cmpl.") also asserts state common law
claims for fraud, breach of contract, conspiracy, and tortious
interference with contract. Federal jurisdiction over the state
claims is based on diversity of citizenship.*fn1 Defendants have
moved to dismiss the Amended Complaint. The automatic stay of
discovery provisions of the Private Securities Litigation Reform
Act of 1995 ("PSLRA"), 15 U.S.C. § 77a et seq., require a stay
of discovery in claims arising under that statute until after the
motion to dismiss has been decided.*fn2 Here, despite the stay
of discovery required by the PSLRA, plaintiff seeks discovery on
all state claims except the common law fraud claim.*fn3 The
narrow question presented is whether the PSLRA stays discovery
with respect to plaintiff's non-fraud state law claims where
over such claims is based on diversity of citizenship. For the
following reasons, I conclude that it should not.
A. Statutory Construction
"Where the meaning of a statute is textually ambiguous,
[courts] may consult its legislative history." Washington v.
Schriver, 240 F.3d 101, 108 (2d Cir. 2001) (citing Oklahoma v.
New Mexico, 501 U.S. 221, 235 n. 5, 111 S.Ct. 2281, 115 L.Ed.2d
207 (1991)), superseded on other grounds, 255 F.3d 45 (2d Cir.
2001); see also Lee v. Bankers Trust Co., 166 F.3d 540, 544 (2d
Cir. 1999) ("Legislative history and other tools of
interpretation may be relied upon only if the terms of the
statute are ambiguous.").
[The] first step in interpreting a statute is to
determine whether the language at issue has a plain
and unambiguous meaning with regard to the particular
dispute in the case. Our inquiry must cease if the
statutory language is unambiguous and the statutory
scheme is coherent and consistent.
The plainness or ambiguity of statutory language is
determined by reference to the language itself, the
specific context in which that language is used, and
the broader context of the statute as a whole.
Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843,
136 L.Ed.2d 808 (1997) (quotation marks and citations omitted).
Where there is ambiguity, however, courts may "`focus upon the
broader context and primary purpose of the statute.'" Elliott
Assocs., L.P. v. Banco de la Nacion, 194 F.3d 363, 371 (2d Cir.
1999) (quoting Castellano v. City of New York, 142 F.3d 58, 67
(2d Cir. 1998)).
Here, the ambiguity arises because the automatic stay
provisions apply to "any private action arising under" Chapter 2B
of Title 15 of the United States Code and "any private action
arising under" Subchapter 1 of Chapter 2A of Title 15 of the
United States Code. 15 U.S.C. § 78u-4(b)(3)(B) and § 77z-1(b)(1).
It is not clear from the face of the statute whether Congress
contemplated the situation where both federal question and
diversity jurisdiction are invoked in a single action.
Conceptually, the claims can be split into two groups: the
federal securities fraud claims which are subject to the
automatic stay and the state law claims which are not. Because
the statutory language is silent on this issue, resort to
legislative history is permitted to determine the scope of the
automatic stay provisions.
The PSLRA was passed to redress certain perceived abuses in
securities litigation including "the abuse of the discovery
process to coerce settlement." In re Advanta Corp. Secs.
Litig., 180 F.3d 525, 530-31 (3d Cir. 1999).
The purpose of the [PSLRA] was to restrict abuses in
securities class action litigation, including: (1)
the practice of filing lawsuits against issuers of
securities in response to any significant change in
stock price, regardless of defendants' culpability;
(2) the targeting of "deep pocket" defendants: (3)
the abuse of the discovery process to coerce
settlement; and (4) manipulation of clients by class
Id. at 531 (citing H.R. Conf. Rep. No. 104-369, 104th Cong. 1st
Sess. at 31 (1995), reprinted in 1995 U.S.C.C.A.N. ...