[JURIST] The US Supreme Court [official website] heard oral arguments [day call, PDF] in two cases Monday. In Madigan v. Levin [transcript, PDF; JURIST report] the court was asked to decide whether age discrimination claimants can circumvent the Age Discrimination in Employment Act (ADEA) [materials] and bring claims directly under the Equal Protection clause [Cornell LII backgrounder] and 42 USC § 1983 [text]. The US Court of Appeals for the Seventh Circuit, contrary to the holding of four other circuit courts, held [opinion] that it is permissible to bring claims under those two laws rather than the ADEA. The justices spent much of the argument time questioning whether the Seventh Circuit had jurisdiction to rule on the matter before the case went to trial, suggesting that they might remand the case to the lower courts without deciding the constitutional question.
In Chadbourne & Parke LLP v. Troice [transcript, PDF; JURIST report] the court heard arguments on the legal remedies available for the victims of convicted financier Allen Stanford [JURIST news archive], who is currently serving a 110-year prison sentence [JURIST report] for orchestrating a $7 billion Ponzi scheme [SEC backgrounder]. The court is considering whether the Securities Litigation Uniform Standards Act of 1998 (SLUSA) [text, PDF] precludes the various plaintiffs from pursuing class action lawsuits under state laws against investment firms that encouraged them to invest with Stanford. The attorney for the petitioners, the defendants in the original suits, argued that the "Stanford Ponzi scheme was a massive fraud, but that fraud clearly included material misrepresentations about transactions in covered securities," meaning that the claims should have been precluded. Counsel for the US also argued on behalf of petitioners as amicus curiae. Counsel for the respondents, the plaintiffs in the original suits, asked the court, "to write an opinion affirming and that it adopts the following rule, and that is, that a false promise to purchase securities for one's self in which no other person will have an interest is not a material misrepresentation in connection with the purchase or sale of covered securities."