By: WISCONSIN LAW JOURNAL STAFF//November 10, 2011//
United States Court of Appeals
Civil
Securities — SLUSA
A class action dismissed pursuant to the Securities Litigation Uniform Standards Act of 1998 must be with prejudice.
“There is no merit to the suggestion that dismissal of a removed suit on the ground that the suit is barred by SLUSA is jurisdictional and therefore without prejudice, despite a word in the Supreme Court’s decision in Kircher v. Putnam Funds Trust, supra, 547 U.S. at 644, that might seem to point in that direction: ‘If the action is precluded, neither the district court nor the state court may entertain it, and the proper course is to dismiss. If the action is not precluded, the federal court likewise has no jurisdiction to touch the case on the merits, and the proper course is to remand to the state court that can deal with it.’ The word is ‘likewise.’ If SLUSA is not a bar to the suit, the federal court lacks jurisdiction (unless there is a basis for federal removal jurisdiction other than SLUSA) except to determine that it has no jurisdiction. Id. But when SLUSA is a bar, it operates as an affirmative defense, which is a defense on the merits, not a jurisdictional defense. See Fed. R. Civ. P. 8(c); Turek v. General Mills, Inc., No. 10-3267, 2011 WL 4905732, at *1 (7th Cir. Oct. 17, 2011). We think that what the Court must have meant in Kircher when it used the word ‘likewise’ is that the district court has no authority to consider whether the removed suit has merit—whether for example there was a breach of the duty of loyalty in this case. Once it decides that SLUSA either is or is not a bar to the suit, the court has finished; either way it has no further business with the case.”
Affirmed.
Appeal from the United States District Court for the Northern District of Illinois, Bucklo, J., Posner, J.