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United States District Court for the Southern District of New York
September 19, 2022, Decided; September 19, 2022, Filed
MEMORANDUM OPINION AND ORDER
JESSE M. FURMAN, United States District Judge:
In this putative class action, Plaintiff Tara Williams sues Defendant Bristol-Myers Squibb Company ("BMS") and several of its directors and officers, [*2] alleging that the Registration Statement they filed in connection with certain Contingent Value Rights ("CVRs") was false and misleading, in violation of the Securities Act of 1933 (the "1933 Act"), 15 U.S.C. § 77a et seq. See ECF No. 1-2 ("Compl."). Williams initiated the case in New York state court, but BMS timely removed it to this Court, asserting federal subject-matter jurisdiction pursuant to the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d) et seq. See ECF No. 1 ("Notice of Removal"), ¶¶ 16-26. Williams now moves, pursuant to 28 U.S.C. § 1447(c), to remand the case back to state court, arguing that BMS removed the case in violation of 15 U.S.C. §77v(a), the 1933 Act's "removal ban," which generally prohibits removal of cases, such as this one, "arising under" the Act. See ECF No. 21-1 ("Pl.'s Mem."), at 1; see also Cyan, Inc. v. Beaver Cnty. Emps. Ret. Fund, 138 S. Ct. 1061, 1075, 200 L. Ed. 2d 332 (2018) ("[F]ederal-law suits like this one — alleging only 1933 Act claims — are . . . subject to the 1933 Act's removal ban." (emphasis omitted)).
The parties spill considerable ink on who bears the burden on this motion and whether or when a later statute (here, CAFA) can override an earlier one (here, the 1933 Act). Compare Pl.'s Mem. 5-14, with ECF No. 22 ("Defs.' Opp'n), at 8-15. But these disputes are irrelevant for the simple reason that the premise of all Defendants' arguments — that [*3] CAFA provided for removal — is wrong. Sure, the case meets the requirements of Section 1332(d)(2), which provides for removal of certain class actions. But another provision of CAFA provides that Section 1332(d)(2) "shall not apply to any class action that solely involves a claim . . . concerning a covered security as defined under [section] 16(f)(3) of the Securities Act of 1933 and section 28(f)(5)(E) of the Securities Exchange Act of 1934." 28 U.S.C. § 1332(d)(9)(A) (citations omitted). Section 16(f)(3) of the 1933 Act defines a "covered security" to mean (with one exception not relevant here) "a security that satisfies the standards for a covered security specified in paragraph (1) or (2) of section 18(b) at the time during which it is alleged that the misrepresentation, omission, or manipulative or deceptive conduct occurred." 15 U.S.C. §??78bb(f)(5)(E). And Section 18(b), in turn, defines a covered security to mean "a security designated as qualified for trading in the national market . . . that is listed, or authorized for listing, on a national securities exchange." Id. § 77r(b); see also Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71, 83, 126 S. Ct. 1503, 164 L. Ed. 2d 179 & n.9 (2006) ("A 'covered security' is one traded nationally and listed on a regulated national exchange."). The CVRs at issue here plainly fall within the scope of this definition, as they were traded publicly on the New York Stock Exchange. See Pl.'s Mem. 14; Compl. ¶ 10. It follows that the "covered security" exception applies and that Defendants [*4] cannot claim federal jurisdiction under CAFA. See, e.g., Vanbecelaere v. YayYo, Inc., No. 20-CV-7997, 2020 U.S. Dist. LEXIS 163680, 2020 WL 5362696 (C.D. Cal. Sept. 8, 2020) (finding that because the removed class actions "assert only 1933 Act claims concerning covered securities, neither action is removable under CAFA").1
Defendants do not, and cannot, dispute that this case falls squarely within the plain language of CAFA's "covered security" exception. Nor do they cite a single case in which a defendant has successfully removed a class action that, like this one, solely involves claims regarding a covered security under the 1933 Act — a failure that is all the more notable given that class actions alleging 1933 Act claims are regularly brought in state courts. See, e.g., St. John v. Cloopen Grp. Holding Ltd., 171 N.Y.S.3d 893 (Table), 2022 N.Y. Misc. LEXIS 3799 (N.Y. Sup. Ct. Aug. 10, 2022); Erie Cnty. Emps.' Ret. Sys. v. NN, Inc., 205 A.D.3d 644, 170 N.Y.S.3d 15 (1st Dep't May 31, 2022); City of Warwick Mun. Emps. Pension Fund v. Rest. Brands Int'l Inc., 75 Misc. 3d 1202(A), 166 N.Y.S.3d 510, 2022 NY Slip Op 50337(U) (Table) (N.Y. Sup. Ct. May 2, 2022). Instead, Defendants rely primarily on the legislative history and purported purpose of CAFA to argue that Congress did not actually intend to carve out all claims concerning covered securities, but only claims concerning covered securities brought under state law. See Defs.' Opp'n 16-21. But, as the Supreme Court and Second Circuit have repeatedly emphasized, "a court may engage with legislative history only when the plain meaning of a provision is ambiguous." Springfield Hosp., Inc. v. Guzman, 28 F.4th 403, 422 (2d Cir. 2022) (emphasis added); see also Bostock v. Clayton Cnty., 140 S. Ct. 1731, 1749, 207 L. Ed. 2d 218 (2020) ("This Court has explained many times [*5] over many years that, when the meaning of the statute's terms is plain, our job is at an end."). Where, as here, "the statutory language is unambiguous, any reliance on legislative history to reach a contrary result is precluded." Springfield Hosp., 28 F.4th at 422; accord Bostock, 140 S. Ct. at 1749 ("Legislative history, for those who take it into account, is meant to clear up ambiguity, not create it." (internal quotation marks omitted)); Novak v. Kasaks, 216 F.3d 300, 310 (2d Cir. 2000) ("Only if the text of the statute is not unambiguous do we turn for guidance to legislative history and the purposes of the statute."). Thus, Defendants' reliance on legislative history and purpose is misplaced.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2022 U.S. Dist. LEXIS 168901 *; 2022 WL 4345564
TARA WILLIAMS, on behalf of herself and all others similarly situated, Plaintiff, -v- BRISTOL-MYERS SQUIBB COMPANY et al., Defendants.
class action, legislative history, removal, traded