Dist. Ct. did not err in dismissing plaintiff’s state-court class action that had been removed to federal court under SLUSA, alleging that defendant breached its contract with plaintiff by charging hidden fee whenever defendant purchased mutual funds on behalf of plaintiff with cash funds contained in plaintiff’s investment account at end of each day. Under SLUSA, state-law class action can be removed to federal court if said claim qualified as “covered class action,” and instant claim qualified as covered class action, where plaintiff essentially alleged misrepresentation or omission of material fact in connection with purchase or sale of covered security. As such, SLUSA required dismissal of instant state-law claim since plaintiff could only pursue claim under federal securities law. Ct. rejected plaintiff’s claim that instant failure to disclose fee was outside SLUSA because failure to disclose fee did not involve price, quality or suitability of any security. (Dissent filed.)
Federal 7th Circuit Court
Civil Court
Securities Litigation Uniform Standards Act