News & Events

On May 17, 2010, the Court of Appeals for the Third Circuit dismissed for lack of jurisdiction the appeal of plaintiff State of New Jersey, which had sought review of a ruling by the District of New Jersey denying its motion to remand. Plaintiff filed an action in New Jersey state court against officers and directors of Lehman, as well as its auditor, Ernst & Young, asserting claims under the Securities Act and state law. The complaint alleged state pension fund losses of over $180 MM arising out of plaintiff’s purchases of Lehman securities just months before the company filed for bankruptcy. Defendants removed the action to federal court, after which plaintiff filed a motion to remand the action to state court. The District Court declined to remand the case, and plaintiff sought appellate review by way of both interlocutory review under 28 U.S.C. 1292(b) (granted by the District Court but denied by a Third Circuit motions panel) and direct appeal. The Third Circuit accepted defendants’ argument that there was no right to appeal the denial of plaintiff’s remand motion, and therefore dismissed the appeal on jurisdiction grounds. Defendants will renew their application to the Judicial Panel on Multidistrict Litigation to have New Jersey’s case transferred for pretrial proceedings to MDL Judge Lewis Kaplan in the Southern District of New York. Mary Elizabeth and local counsel handled the arguments on behalf of all defendants in both the District Court and Court of Appeals. Defendants’ papers were drafted by Michael J. Chepiga, Mary Elizabeth McGarry, Erika Burk, Ihsan Dogramaci, Hiral Mehta, and Caleb Edwards.