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CHADBOURNE & PARKE LLP v. TROICE

Docket No.: 12-79
Argued: October 7, 2013
Decided: February 26, 2014
Consolidated with: 12-8612-88

Topics:

Securities Act of 1933, Securities Law

PartyNames: Chadbourne & Parke LLP v. Samuel Troice, et al.
Petitioner: Chadbourne & Parke LLP
Respondent: Samuel Troice, et al.

Court Below: United States Court of Appeals for the Fifth Circuit
Citation: 675 F.3d 503
Supreme Court Docket

Chadbourne & Parke LLP
v.
Samuel Troice, et al.
Background:

The Securities Litigation Uniform Standards Act ("SLUSA") precludes most state-law class actions involving "a misrepresentation" made "in connection with the purchase or sale of a covered security." 15 U.S.C. 78bb(f)(1)(A). The circuits, however, are divided over the standard for determining whether an alleged misrepresentation is sufficiently related to the purchase or sale of a covered security to satisfy the "in connection with" requirement. The Fifth Circuit in this case adopted the Ninth Circuit standard and held that the complaint here was not precluded by SLUSA, expressly rejecting conflicting Second, Sixth, and Eleventh Circuit standards for construing the "in connection with" requirement, all of which would result in SLUSA preclusion here. Additionally, and also in conflict with several other circuits, the Fifth Circuit held that SLUSA does not preclude actions alleging aiding and abetting of fraud in connection with SLUSA-covered security transactions when the aiders and abettors themselves did not make any representations concerning a SLUSA-covered security.

Consideration Limited:

LIMITED TO QUESTION 1 PRESENTED BY THE PETITION.

Question Presented:

1. Whether SLUSA precludes a state-law class action alleging a scheme of fraud that involves misrepresentations about transactions In SLUSA-covered securities. 2. Whether SLUSA precludes class actions asserting that defendants aided and abetted SLUSA-covered securities fraud when the defendants themselves did not make misrepresentations about the purchase or sale of SLUSA-covered securities.

CHADBOURNE & PARKE LLP v. TROICE
ORAL ARGUMENT

October 7, 2013

Listen to Oral Argument in CHADBOURNE & PARKE LLP v. TROICE
Holding: REVERSED
Vote: 7-2
Concurring: Thomas
Dissenting: Kennedy,Alito
Opinion By:
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