Section 16 -- Additional Remedies; Limitation on Remedies
Except as provided in subsection (b), the rights and remedies provided
by this title shall be in addition to any and all other rights and remedies
that may exist at law or in equity.
Class action limitations
No covered class action based upon the statutory or common law of any
State or subdivision thereof may be maintained in any State or Federal court
by any private party alleging--
an untrue statement or omission of a material fact
in connection with the purchase or sale of a covered security; or
that the defendant used or employed any manipulative
or deceptive device or contrivance in connection with the purchase or
sale of a covered security.
Removal of covered class actions
Any covered class action brought in any State court involving a covered
security, as set forth in subsection (b), shall be removable to the Federal
district court for the district in which the action is pending, and shall
be subject to subsection (b).
Preservation of certain actions
Actions under State law of State of incorporation
Notwithstanding subsection (b) or (c), a covered class action
described in subparagraph (B) of this paragraph that is based upon
the statutory or common law of the State in which the issuer is incorporated
(in the case of a corporation) or organized (in the case of any other
entity) may be maintained in a State or Federal court by a private
A covered class action is described in this subparagraph if it
the purchase or sale of securities by
the issuer or an affiliate of the issuer exclusively from or to
holders of equity securities of the issuer; or
any recommendation, position, or other
communication with respect to the sale of securities of the issuer
is made by or on behalf of the
issuer or an affiliate of the issuer to holders of equity
securities of the issuer; and
concerns decisions of those equity
holders with respect to voting their securities, acting in
response to a tender or exchange offer, or exercising dissenters'
or appraisal rights.
Notwithstanding any other provision of this section, nothing in
this section may be construed to preclude a State or political subdivision
thereof or a State pension plan from bringing an action involving
a covered security on its own behalf, or as a member of a class comprised
solely of other States, political subdivisions, or State pension plans
that are named plaintiffs, and that have authorized participation,
in such action.
State pension plan defined
For purposes of this paragraph, the term "State pension plan"
means a pension plan established and maintained for its employees
by the government of the State or political subdivision thereof, or
by any agency or instrumentality thereof.
Actions under contractual agreements between issuers
and indenture trustees
Notwithstanding subsection (b) or (c), a covered class action that
seeks to enforce a contractual agreement between an issuer and an indenture
trustee may be maintained in a State or Federal court by a party to the
agreement or a successor to such party.
Remand of removed actions
In an action that has been removed from a State court pursuant to
subsection (c), if the Federal court determines that the action may be
maintained in State court pursuant to this subsection, the Federal court
shall remand such action to such State court.
Preservation of State jurisdiction
The securities commission (or any agency or office performing like functions)
of any State shall retain jurisdiction under the laws of such State to investigate
and bring enforcement actions.
For purposes of this section, the following definitions shall apply:
Affiliate of the issuer
The term "affiliate of the issuer" means a person that directly or
indirectly, through one or more intermediaries, controls or is controlled
by or is under common control with, the issuer.
Covered class action
The term "covered class action" means--
any single lawsuit in which--
damages are sought on behalf of
more than 50 persons or prospective class members, and questions
of law or fact common to those persons or members of the prospective
class, without reference to issues of individualized reliance
on an alleged misstatement or omission, predominate over any
questions affecting only individual persons or members; or
one or more named parties seek
to recover damages on a representative basis on behalf of
themselves and other unnamed parties similarly situated, and
questions of law or fact common to those persons or members
of the prospective class predominate over any questions affecting
only individual persons or members; or
any group of lawsuits filed in or pending
in the same court and involving common questions of law or fact,
damages are sought on behalf of
more than 50 persons; and
Notwithstanding subparagraph (A), the term "covered class action"
does not include an exclusively derivative action brought by one or
more shareholders on behalf of a corporation.
Counting of certain class members
For purposes of this paragraph, a corporation, investment company,
pension plan, partnership, or other entity, shall be treated as one
person or prospective class member, but only if the entity is not
established for the purpose of participating in the action.
Rule of construction
Nothing in this paragraph shall be construed to affect the discretion
of a State court in determining whether actions filed in such court
should be joined, consolidated, or otherwise allowed to proceed as
a single action.
The term "covered security" means a security that satisfies the standards
for a covered security specified in paragraph (1) or (2) of section
18(b) at the time during which it is alleged that the misrepresentation,
omission, or manipulative or deceptive conduct occurred, except that such
term shall not include any debt security that is exempt from registration
under this title pursuant to rules issued by the Commission under section
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