Opinion ID: 3039127
Heading Depth: 3
Heading Rank: 5

Heading: Whether Swiss-law claims are tied so closely to

Text: the state-law claims that they are preempted The District Court also held, and the Banks argue, that the Swiss claims are preempted because they are tied so closely to the state-law claims. This argument is also unpersuasive because it relies on a readily distinguishable case. The District Court and the Banks invoke a decision of the District Court for the District of Delaware, ruling that a particular state-law claim, though it did not specifically allege conduct that would constitute fraud “in connection with” a security, was nonetheless “in connection with” a security (and thus preempted), see 15 U.S.C. § 78bb(f)(1)(A), because it alleged conduct by the defendant that was part of a “‘unitary scheme of fraud’ which 25 Again, if, on remand, it is revealed that the Trust’s characterization of Swiss law on this point is inaccurate, the District Court may reconsider this issue at that time. 29 began before the ‘purchase or sale’ of securities and continued afterward.” Zoren v. Genesis Energy, L.P., 195 F. Supp. 2d 598, 604–06 (D. Del. 2002). Because the claim was in this sense “tie[d] . . . so closely” to the other claims that clearly alleged fraud in connection with securities trading, the claim was itself deemed a claim of fraud in connection with securities trading and therefore preempted. Id. Zoren simply involved an application of SLUSA’s “in connection with” language, 15 U.S.C. § 78bb(f)(1)(A), concluding that the claim in question alleged fraud in connection with securities trading. Zoren is distinguishable in two respects. First, unlike the Banks here, the defendants in Zoren were accused of orchestrating a “unitary scheme of fraud.” Here, the Banks are not accused of any misrepresentations or omissions; rather, their alleged participation in the Directors’ scheme is limited to participating in insider-trading transactions and assisting in laundering the proceeds. Second, Zoren involved exclusively state-law claims and applied the “in connection with” language, not the ingredient that any preempted claims be based upon “state” law. It did not address a foreign-law claim or even purport to address how its analysis would affect foreign-law claims. Thus, we conclude that the Banks’ contention that the Swiss claims are preempted as “closely tied” to the state-law claims is without merit.