Kircher v. Putnam Funds Trust
Plaintiffs, a class of Putnam Funds Trust share owners, sued Putnam Funds Trust and the fund's adviser in state court, alleging that Putnam had violated state law by engaging in misconduct that reduced the value of their shares. Putnam removed the suit to a federal district court under the Securities Litigation Uniform Standards Act of 1998 (SLUSA), which blocks many state class action suits when state law is preempted by federal securities laws. The district court ruled that, although the shares in dispute were regulated by federal securities laws, SLUSA did not block the suit because the plaintiffs were not alleging fraud related to the purchase of the shares. Thus, it remanded the suit to state court. The defendants then filed a notice of appeal, but the plaintiffs argued that an appeal was barred by 28 U.S.C. § 1447(d), which states that a district court's order to remand a case to state court is not appealable. The Seventh Circuit, however, ruled that remand was unaffected by § 1447(d) because § 1447(d) only affects suits in which removal was not proper. In this case, removal was proper because the securities were regulated by federal securities laws.
The defendants then appealed the district court's ruling that SLUSA did not block the suit. On this point, the Seventh Circuit ruled in favor of the defendants, that the dispute was related to the plaintiff's purchase of the shares. It also rejected the plaintiff's challenge to the court's previous decision that it had jurisdiction to hear the appeal of the district court's order to remand the suit to state court. Thus, the court of appeals reversed the district court's remand orders and ordered the dismissal of the plaintiff's suit.
Question Presented:
Whether the court of appeals had jurisdiction, contrary to the holdings of three other circuits, to review a district court order remanding for lack of subject-matter jurisdiction a suit removed
under the Securities Litigation Uniform Standards Act of 1998 ("SLUSA"), notwithstanding 28 U.S.C. § 1447(d)'s bar on appellate review of remand orders based on lack of subject matter jurisdiction
and the district courts' conclusion that petitioners' claims are not preempted by and thus not removable under SLUSA.
Decisions under Review:
First Appeal
Second Appeal
