Chadbourne & Parke LLP v. Troice
In brief
The Supreme Court upheld the Fifth Circuit’s ruling: SLUSA does not block the Stanford investors’ state-law class actions.
- Where it stands
- Decided
Decided 7-2 · February 26, 2014 · Opinion by Justice Breyer
- What it’s about
- Investors who bought certificates of deposit from Stanford International Bank sued Chadbourne & Parke and others under state law, alleging they helped enable a fraud that included false statements about securities covered by federal law; the defendants argued the Securities Litigation Uniform Standards Act (SLUSA) barred the suits.
- Who it affects
- Chadbourne & Parke and the other defendants cannot use SLUSA to block these investors’ state-law class actions.
Summary: written with AI from the case record.
What it's about
The Supreme Court agreed with the Fifth Circuit that SLUSA did not bar these class actions.
The investors alleged that attorneys, accountants, brokers, and investment advisers helped enable the Stanford fraud, which included false statements about securities covered by federal law.
The case concerned whether SLUSA’s federal bar for certain state-law securities class actions reached claims tied to an alleged fraud involving securities covered by federal law.
Question presented
Does the Securities Litigation Uniform Standards Act (SLUSA) preclude a class action under state securities law that alleges fraud and misrepresentations of securities as SLUSA-covered securities?
What the Court decided
Holding
The Litigation Act does not preclude the plaintiffs’ state-law class —————— * Together with No. 12–86, Willis of Colorado Inc. et al. v. Troice et al., and No. 12–88, Proskauer Rose LLP v. Troice et al., also on certiorari to the same court. actions. 675 F. 3d 503, affirmed.
- Result
- Affirmed
The vote
From the opinions
“For purposes of this litigation all accept the premise that Allen Stanford and SIB induced the investors to purchase the CDs by fraudulent representations.”
What's next
The ruling leaves the lower courts to handle the state-law claims without a SLUSA bar. The Supreme Court did not decide whether the defendants were liable for the alleged fraud.
Each side's argument
- The investors who bought Stanford International Bank certificates of deposit
- They argued that SLUSA did not bar their state-law class actions.
- Chadbourne & Parke and the other defendants
- They argued that SLUSA barred the investors’ state-law claims.
Documents
Opinions
Docket activity
New analysis added
AI analysis generated: Case Briefing
New analysis added
AI analysis generated: Impact Analysis
AI analysis generated: Opinion Summary
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AI analysis generated: Decision Record
Case data updated: summary, question_presented, generation_metadata
Case data updated: question_presented, extraction_metadata
Opinion added: Troice
More questions
- What did Justice Thomas say separately?
- He agreed with the Court’s opinion on the understanding that the alleged false statements were not properly treated as connected to transactions in securities covered by federal law.
Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.