The Ninth Circuit concluded today that the Class Action Fairness Act of 2005 doesn’t override a prohibition in the Securities Act of 1933 against removal of securities actions from state court.
Section 22(a) of the depression-era statute provides that "no case arising under this subchapter and brought in any State court of competent jurisdiction shall be removed to any court of the United States." 15 U.S.C. 77v(a). CAFA confers a species of federal diversity of citizenship jurisdiction over securities class actions involving at least $5 million in controversy. 28 U.S.C. 1332(d)(2). Another section allows removal of cases that fall within the grant of jurisdiction. 28 U.S.C. 1453(b).
In affirming remand of the case to Los Angeles County Superior Court, the Ninth Circuit held that the specificity of the Securities Act ban on removal overrode the more general allowance of removal in CAFA. Luther v. Countrywide Home Loans Servicing LP, No. 08-55865 (9th Cir. July 17, 2008).