Securities Act of 1933

When the U.S. Supreme Court confirmed in its March 2018 Cyan decision that state courts retain concurrent jurisdiction over ’33 Act liability actions, commentators suggested that plaintiffs’ lawyers would opt to pursue Section 11 claims in state court, either in preference to or in addition to parallel federal court actions. Indeed, in many lawsuits filed in the past few months involving IPO companies, plaintiffs’ lawyers have indeed resorted to state court. However, a recent decision from a Texas state court highlights the fact that  whatever advantages the plaintiffs’ lawyers may think they have by proceeding in state court, their claims will still face scrutiny – and in the specific case at issue in Texas, dismissal. As noted in a November 13, 2018 Law 360 article (here), the Texas court’s dismissal is among the first by a state court following the U.S. Supreme Court’s decision in Cyan.
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On May 18, 2011, the California Intermediate Court of Appeals held in the Luther v. Countrywide Financial Corporation case that state courts have concurrent jurisdiction with federal courts to hear liability lawsuits under the Securities Act of 1933, and that more recent legislative enactments did not eliminate the concurrent state court jurisdiction for the plaintiffs&rsquo