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Statutory Interpretation – SLUSA

By: Derek Hawkins//February 26, 2019//

Statutory Interpretation – SLUSA

By: Derek Hawkins//February 26, 2019//

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7th Circuit Court of Appeals

Case Name: Susan Nielen-Thomas v. Concorde Investment Services, LLC, et al.

Case No.: 18-2875

Officials: FLAUM, KANNE, and HAMILTON, Circuit Judges.

Focus: Statutory Interpretation – SLUSA

Susan Nielen-Thomas, on behalf of herself and others similarly situated, filed a complaint in Wisconsin state court alleging she and other class members were defrauded by their investment advisor. Defendants removed the case to federal court. They then argued the action should be dismissed because it was a “covered class action” precluded by the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”). See 15 U.S.C. § 78bb(f)(1), (f)(5)(B), amending Securities Exchange Act of 1934. According to Nielen-Thomas, her lawsuit did not meet SLUSA’s “covered class action” definition because she alleged a proposed class with fewer than fifty members. See § 78bb(f)(5)(B)(i)(I). The district court agreed with defendants that Nielen-Thomas’s suit was a “covered class action” because she brought her claims in a representative capacity, see § 78bb(f)(5)(B)(i)(II), and it dismissed her claims with prejudice.

We hold that the plain language of SLUSA’s “covered class action” definition includes any class action brought by a named plaintiff on a representative basis, regardless of the proposed class size. Because this includes Nielen-Thomas’s class action lawsuit and her complaint meets all other statutory requirements, her lawsuit is precluded by SLUSA. We affirm the judgment of the district court.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.

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