Avoiding the Inevitable: The Continuing Viability of State Law Claims in the Face of Primary Jurisdiction and Preemption Challenges Under the Securities Exchange Act of 1934

Sunday, January 1st, 1995 at 12:00 am by Francis J. Facciolo and Richard L. Stone
Francis J. Facciolo and Richard L. Stone, Avoiding the Inevitable: The Continuing Viability of State Law Claims in the Face of Primary Jurisdiction and Preemption Challenges Under the Securities Exchange Act of 1934, 1995 Colum. Bus. L. Rev. 525

This article first examines preemption, concluding that state law is rarely preempted pursuant to the Exchange Act because a clear intent to preempt state law cannot be found in the Exchange Act, which in fact expressly preserves the continued application of state law in section 28(a), and because direct conflicts between state and federal law in the securities area are infrequent. This conclusion is strengthened by the fact that state statutes and common law that augment federal law or provide additional claims or remedies for actions that also violate federal securities laws are not, under enunciated preemption standards, preempted by the Exchange Act. This article then examines primary jurisdiction, concluding that primary jurisdiction should have little application in the securities context because of the substantial judicial experience with the application of the federal securities laws and the SEC’s active policy of intervening as an amicus curiae in securities cases to advise the courts.

Author Information

Facciolo (teaches at St. John's University School of Law); Stone (partners at Cadwalader, Wickersham & Taft)