Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning (14-1132)
argument 14-1132Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning
Supreme Court of the United States
1h 0m
6 speakers
8 chapters
transcribed 6 days ago
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What is the Supreme Court’s central question about Section 27’s jurisdiction in Merrill Lynch v. Manning?
We'll hear argument first this morning in case fourteen eleven thirty two. Merrill Lynch, Pierce, Fenorin Smith versus Manning. Mr Hacker?
Mr Chief Justice, and may it please the court. In language that differs distinctly from the arising under language of section thirteen thirty one. Exchange Act Section twenty seven confers on the federal courts exclusive jurisdiction over All suits brought to enforce any duty created by the Exchange Act and its regulations. That language establishes a straightforward test. The federal court has exclusive jurisdiction if the suit is brought to enforce Exchange Act duties, even if the suit is also brought to enforce state law duties, in particular. The words brought to enforce focus on what the plaintiff itself wants the court to decide, not on what the court would necessarily have to decide, as thirteen thirty one has been read to require.
By applying the thirteen thirty one test, The Third Circuit not only ignored Section twenty seven's distinct language, but also its distinct policies, which strongly disfavour State Court adjudication of Exchange Act duties, and thus are exactly the opposite of the policies favoring State Court adjudication that underlie the Jackson Pollock canvas this Court has painted over Section thirteen thirty one. Respondents, however, begin not with the necessity rule derived from thirteen thirty-one, but with a much more aggressive position that Section twenty-seven only creates jurisdiction over causes of action created by the Exchange Act itself, and thus categorically bars jurisdiction over state-based causes of action like those asserted here.
or what might be proven under a uh a more generally worded complaint. Suppose the complaint in this case made no reference to any feder federal regulations, but I'm not that familiar with the The pleading rules in New Jersey, but suppose they w it was uh you know notice pleading and so there's no reference to the regulations, uh but uh they They sought to prove their case by uh arguing that the New Jersey the new the rule in New Jersey should be the same as the Federal regulation. Would that fall within your test?
Uh the way you put it at the very end, the answer is no. If the rule in New Jersey is the same because it's the rule in New Jersey then that would not be seeking to enforce an exchange act duty. The answer to the first part of your question is yes, which is our test does look at the allegations on the face of the complaint, is the complaint as pleaded seeking to enforce a duty created by the Exchange Act.
So they could amend the complaint and then we wouldn't be here because they could amend the complaint to say that we are suing under New Jersey law. And New Jersey law mirrors the Federal law is a matter of New Jersey's choice.
The way I would put it is we wouldn't have been here if they had written that complaint to start with, but because uh removal jurisdiction is tested at the time of removal, if they amended their complaint now, it wouldn't change the fact that there is Federal jurisdiction based on the face of the complaint at the time of the of removal. Well
is the court obligated to do a search of all federal laws and regulations to know if this complaint might have a f federal clause of acronym?
Uh no. Um that's why it's important to look at the face of the complaint. This clay complaint exemplifies the kind of complaint that triggers Section twenty seven jurisdiction because
Uh L let's assume as Justice Alito assumed that N New Jersey is the same as the federal system, notice pleading. Can you just tell me as a matter of practice Do most complaints set forth the Federal statute under which the not 1331, but the specific Federal statute that creates the duty, or do they just allege the duty?
Most complaints, I mean uh sure it depends on the jurisdiction, but certainly in my Let's say just under notice pleading under Federal standards. They would almost certainly set forth the the statute under which they are pleading that identifying the duty so that the court understands what the nature of the claim is.
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Chapters
8 chapters
1
What is the Supreme Court’s central question about Section 27’s jurisdiction in Merrill Lynch v. Manning?
0:00–8:37
2
How do the parties interpret the “brought to enforce” language of Section 27?
8:37–17:17
3
Why does the Court focus on the well‑pleaded complaint rule rather than the underlying federal statutes?
17:17–23:51
4
In what way does the complaint’s reliance on Regulation SHO affect federal versus state court jurisdiction?
23:51–31:09
5
What arguments are presented about state‑law duties that mirror federal securities duties?
31:09–39:02
6
How do the parties address pre‑emption and the impact of SLUSA on this case?
39:02–45:43
7
Why is the term “exclusive jurisdiction” significant to the parties’ strategies?
45:43–52:59
8
What conclusions does the Court reach regarding the balance between federal exclusivity and state‑court competence?
52:59–1:00:59