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September 16, 2015

Stroock Special Bulletin

By: Melvin A. Brosterman, David J. Kahne

On September 10, 2015, Stroock & Stroock & Lavan LLP filed an amicus curiae brief with the U.S. Supreme Court in Merrill Lynch v. Manning, a securities law case raising important implications in the energy sector, that will be heard this Term and is expected to be decided by June 2016.

The case concerns whether the Securities Exchange Act of 1934 requires a plaintiff asserting state-law claims based on the alleged violation of the SEC’s short-selling regulations to bring such an action exclusively in a federal court.  This question turns in part on the construction of an exclusive federal jurisdiction statute that requires claims based on a “duty” or “liability” under the Exchange Act to be brought solely in federal court. 

The Stroock brief, filed on behalf of the Natural Gas Supply Association, the Electric Power Supply Association and the Western Power Trading Forum, argues that the plain language of the exclusive jurisdiction clauses contained in the Natural Gas Act and the Federal Power Act – which are virtually identical to the clause in the Exchange Act – require state-law claims based on duties or liabilities under the relevant statutes and regulations to be brought exclusively in federal court.