Opinion ID: 149655
Heading Depth: 2
Heading Rank: 2

Heading: Covered Securities

Text: The amended complaints do not acknowledge that appellants invested in covered securities. [3] However, in support of their notice of removal, defendants introduced account statements establishing that appellants deposited their retirement savings into Morgan Stanley IRA accounts, where covered securities were purchased on their behalf: mutual funds in the case of the Romano appellants and mutual funds and listed securities or securities authorized for listing in the case of the Lawton appellants. When deciding a motion to dismiss pursuant to Rule 12(b)(6), courts focus primarily on the allegations in the complaint. See Chambers v. Time Warner, 282 F.3d 147, 152 (2002). [4] However, if subject matter jurisdiction is contested, courts are permitted to look to materials outside the pleadings. See Rule 12(b)(1); Land v. Dollar, 330 U.S. 731, 735 n. 4, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947); see also St. Paul Fire & Marine Ins. Co. v. Universal Builders Supply, 409 F.3d 73, 80-81 (2d Cir.2005); Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000). Such materials can include documents appended to a notice of removal or a motion to remand that convey information essential to the court's jurisdictional analysis. See, e.g., Davenport v. Procter & Gamble Mfg. Co., 241 F.2d 511, 514 (2d Cir.1957) (looking to information contained in affidavits submitted in support of a motion to remand to determine removability); see also Oglesby v. RCA Corp., 752 F.2d 272, 278 (7th Cir. 1985) (holding it was proper for the district court to look to a motion to remand and removal petition to determine removability). Under SLUSA, removal jurisdiction is restricted to precluded actions[. Therefore,] a motion to remand claiming the action is not precluded must be seen as posing a jurisdictional issue. Kircher v. Putnam Funds Trust, 547 U.S. 633, 643-44, 126 S.Ct. 2145, 165 L.Ed.2d 92 (2006). Thus, where a district court's removal jurisdiction under SLUSA is challenged, it must first determine whether it has subject matter jurisdiction over plaintiffs' claims. See Dabit, 395 F.3d at 36 n. 8 (citing Spielman, 332 F.3d at 133) (Newman, J., concurring). To answer that question, it must determine whether plaintiffs actually allege misrepresentations or omissions of material fact in connection with the purchase or sale of a covered security. 15 U.S.C. § 78bb(f)(1), (2). Here, the Morgan Stanley account statements were before the District Court in the remand litigation and were used to determine that the euphemistic investments referred to throughout the amended complaints were, in fact, covered securities. The District Court was entitled to look beyond the four corners of appellants' amended complaints because determining whether the cases were properly removed under SLUSA is essentially a jurisdictional question. See In re Lord Abbett Mut. Funds Fee Litig., 553 F.3d 248, 254 (3d Cir.2009).