WASHINGTON, D.C. (December 2, 2011) — International law firm McDermott Will & Emery LLP served as counsel to the U.S. Chamber of Commerce (“Chamber”) in preparing and filing its “friend of the court” brief urging the U.S. Supreme Court to review a recent securities ruling.
Specifically, McDermott partners Eugene Goldman and M. Miller Baker represented the National Chamber Litigation Center, Inc., the public policy law firm of the U.S. Chamber of Commerce that advocates for fair treatment of business in the courts and before regulatory agencies.
In its brief, the Chamber argues that the New York Court of Appeals erred in its ruling in RGH Liquidating Trust v. Deloitte concerning key issues with respect to federal securities litigation law. According to the Chamber, the ruling creates an implied exception to the plain language of the Securities Litigation Uniform Standards Act (SLUSA) by allowing a “liquidating trust” to bring state law fraud claims on behalf of more than 800 bondholders who assigned their claims to the trust. SLUSA precludes state law claims brought on behalf of more than 50 purchasers or holders of nationally traded securities. However, the court adopted a single-entity exception to SLUSA where the “primary purpose” of the liquidating trust was not to bring litigation.
The decision by the lower court “raises issues of vital importance to the Nation’s business community,” the Chamber argues. “If the erroneous decision …is left undisturbed, it may influence courts across the country to provide plaintiffs with an escape mechanism from the protections” mandated by the Private Securities Litigation Reform Act to deter abusive securities litigation.
“This case presents the Court with a valuable and timely opportunity to halt the erosion of SLUSA, caused by the creation of an erroneous implied exception to SLUSA preclusion,” the Chamber writes. “Such review would also resolve a conflict in the circuit courts of appeal, a conflict which is deepened by the decision below, and provide clarity to multiple courts grappling with the treatment of single-entity plaintiffs in SLUSA cases…This conflict and uncertainty—and the growing use of the ‘liquidating trust’ device—threaten the national uniformity and efficient operations of the securities markets that SLUSA was enacted to promote.”
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