Court Opinion

ID: 7004684
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:48:22.919734+00
Date Added: 2024-06-11T16:10:02.153098
License: Public Domain

BYE, Circuit Judge,
concurring in part and dissenting in part.
The district court unearthed a federal right in various logistical provisions of the Private Securities Litigation Reform Act of 1995 (PSLRA) that enable “lead plaintiffs” to “control” securities litigation. I have my doubts that the PSLRA confers the sort of “uniquely federal right or remedy,” Mitchum v. Foster, 407 U.S. 225, 237, 92 S.Ct. 2151, 32 L.Ed.2d 705 (1972), that authorizes a district court to enjoin state proceedings of equal dignity. A lead plaintiffs opportunity to control litigation is shared by every civil plaintiff, and so it hardly seems unique. Despite my doubts, however, I am reluctant to disagree with the district court because few cases explain what qualifies as a federal right, and the mode of discerning such rights is far from scientific.
The district court ultimately held that a lead plaintiffs right of control would be frustrated unless a dueling state securities action were enjoined. I disagree with the court’s conclusion that an exception to the Anti-Injunction Act permitted an injunction here. It appears unlikely that a lead plaintiffs right “could be given its intended scope only by the stay of a state court proceeding,” id. at 238, 92 S.Ct. 2151, when all plaintiffs possess a constitutional right to opt out of a coercive state court settlement. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 811-12, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985). More important still — and irrespective of whether opt-out rights prove illusory in practice — nothing in the legislative history of the PSLRA suggests that Congress sanctioned the injunction of state court securities actions. To the contrary, that history reveals that *805Congress countenanced their continued availability. The majority’s opinion reveals that the propriety of an injunction in these circumstances is debatable among reasonable jurists. Yet “[a]ny doubts as to the propriety of a federal injunction against state court proceedings should be resolved in favor of permitting the state courts to proceed in an orderly fashion to finally determine the controversy.” Atl. Coast Line R.R. Co. v. Bhd. of Locomotive Eng’rs, 398 U.S. 281, 297, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970). I respectfully dissent from the majority’s disposition with the sole exception of its resolution of the class-notice issue.