In May 15, 2019, a Connecticut Superior Court found that
defendants in a claim under the Securities Act of 1933 (Securities
Act) were entitled to the mandatory discovery stay pending a motion
to dismiss under the Private Securities Litigation Reform Act of
1995 (PSLRA)—a significant ruling due to its reasoning and
the possibility that other state courts may follow the
decision.
Background
The Securities Act states that suits brought under the Act may
be filed in either state or federal courts and includes an
anti-removal provision that prevents defendants from removing a
case from state to federal court.
The Securities Act also allows for class-action suits. In 1995,
in order "to stem perceived abuses of the class-action
vehicle," Congress amended the Securities Act and the
Securities Exchange Act of 1934 (the primary mechanism for bringing
anti-fraud class action suits) and enacted the PSLRA. In its
discovery stay subsection, the PSLRA states: "In any
