Rainero v. Archon Corp., No. 14-17106 (9th Cir. 2016)
Annotate this CasePlaintiff filed suit against Archon, alleging breach of contract stemming from Archon's issuance of a Notice of Redemption to holders of outstanding shares of preferred stock. The court concluded that the district court properly held that it lacked federal question subject matter jurisdiction under 28 U.S.C. 1331 because plaintiff did not assert a federal claim, and the Securities Litigation Uniform Standards Act, 15 U.S.C. 77p(d)(1)(A), does not provide an independent basis for federal question jurisdiction over plaintiff's state-law claim. The court also concluded that it lacked diversity jurisdiction over the class action suit under section 1332(d)(2) because of the exception provided in section 1332(d)(9)(C). Finally, the court concluded that the district court properly held that it lacked diversity jurisdiction over plaintiff's individual claim under section 1332(a) and therefore could not exercise section 1367 supplemental jurisdiction over the class members’ claims. Accordingly, the court affirmed the district court's dismissal of the complaint.
Court Description: Securities Litigation Uniform Standards Act /. Jurisdiction The panel affirmed the district court’s dismissal of a class action suit, brought on behalf of a class of preferred stock shareholders, for lack of subject matter jurisdiction; and held, inter alia, that the Securities Litigation Uniform Standards Act did not provide an independent basis for federal question jurisdiction under 28 U.S.C. § 1331. The sole claim in plaintiff’s complaint was a breach-of- contract claim arising under Nevada law. The panel held that the district court properly concluded that it lacked federal question jurisdiction under 28 U.S.C. § 1331 because the plaintiff did not assert a federal claim and the Securities Litigation Uniform Standards Act, 15 U.S.C. § 77p(d)(1)(A), did not provide an independent basis for federal question jurisdiction over plaintiff’s state-law claim. The panel also held that the district court properly concluded that it lacked diversity jurisdiction over the class action suit under 28 U.S.C. § 1332(d)(2) because of the exception in 28 U.S.C. § 1332(d)(9)(C), which provides that § 1332(d)(2) shall not apply to any class action that solely involves a claim relating to a security. RAINERO V. ARCHON CORP. 3 Finally, the panel held that the district court properly held that it lacked diversity jurisdiction over plaintiff’s individual claim under 28 U.S.C. § 1332(a), and therefore could not exercise § 1367 supplemental jurisdiction over the class members’ claims. Specifically, the panel held that plaintiff’s original complaint did not even plead individual diversity jurisdiction, nor did it contain allegations that would be sufficient to create such jurisdiction. The panel further held that granting leave to amend would have been futile because plaintiff’s proposed amended complaint also failed to allege a sufficient amount in controversy.
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