by Cather­ine Willis*

In June 2021, the Supreme Court grant­ed cer­tio­rari in Piv­otal Soft­ware, Inc. v. Supe­ri­or Court of Cal­i­for­nia on the ques­tion of whether the Pri­vate Secu­ri­ties Lit­i­ga­tion Reform Act’s (“PSLRA”) lan­guage “in any pri­vate action” refers to actions brought in state or fed­er­al court, or sole­ly such actions brought in fed­er­al court.1 Sub­se­quent­ly, the case was removed from the argu­ment cal­en­dar fol­low­ing a joint motion to hold pro­ceed­ings in abeyance, and par­ties have agreed in prin­ci­ple to set­tle the case.2 Accord­ing­ly, the ques­tion of whether the Pri­vate Secu­ri­ties Lit­i­ga­tion Reform Act’s dis­cov­ery-stay pro­vi­sion (“the Pro­vi­sion”) refers to actions brought in state and fed­er­al court, or sole­ly actions in fed­er­al court, remains an open question.

As Secu­ri­ties Act claims may be brought in state or fed­er­al courts,3 the Pro­vi­sion should apply in “any pri­vate action” aris­ing under the Secu­ri­ties Act, regard­less of venue.4 In order to accom­plish the Provision’s pur­pose of com­bat­ting the use of dis­cov­ery to force set­tle­ments of unmer­i­to­ri­ous secu­ri­ties claims, its scope must include all such actions wher­ev­er they are filed. Accord­ing­ly, find­ing a broad state-court excep­tion to the applic­a­bil­i­ty of the dis­cov­ery stay would sig­nif­i­cant­ly frus­trate this pur­pose. The plain mean­ing of “any” also requires the scope of the dis­cov­ery stay to be any court in which the action is appro­pri­ate­ly brought.5 Apply­ing the whole code canon of statu­to­ry inter­pre­ta­tion fur­ther clar­i­fies that there is no state-court excep­tion to the dis­cov­ery-stay provision.

As the Suprema­cy Clause pre­empts appli­ca­tion of state pro­ce­dur­al rules, the PSLRA’s auto­mat­ic dis­cov­ery stay appro­pri­ate­ly pre­empts state dis­cov­ery law in actions aris­ing under the Secu­ri­ties Act, a fed­er­al statute.6 To read the Pro­vi­sion oth­er­wise would impose an unnec­es­sary bur­den on a fed­er­al right and dis­re­gard the lack of a his­tor­i­cal basis for states to dic­tate pro­ce­dure for a fed­er­al pri­vate right of action. State-court cir­cum­ven­tion of the PLSRA dis­cov­ery stay would also have neg­a­tive pub­lic pol­i­cy con­se­quences. If dis­cov­ery stays are not applied at the motion to dis­miss stage, com­pa­nies will be pres­sured to set­tle unmer­i­to­ri­ous state-court actions, result­ing in increased costs to com­pa­nies, under­writ­ers, and share­hold­ers. And, as states may dis­parate­ly impose dis­cov­ery stays, uneven­ly enforc­ing the PSLRA’s dis­cov­ery stay may encour­age forum shop­ping and result in dis­parate appli­ca­tion of a fed­er­al right.

*****

The pur­pose of the PSLRA and its dis­cov­ery-stay pro­vi­sion elim­i­nates any ambi­gu­i­ty as to its scope. Con­gress enact­ed the PSLRA in 1995 in response to abus­es of the Secu­ri­ties Act in the form of “friv­o­lous law­suits” brought to com­pel defen­dants to set­tle, or as fish­ing expe­di­tions for poten­tial claims.7 Con­gress imposed coun­ter­mea­sures to these tac­tics in the PSLRA, includ­ing a Safe Har­bor statute for for­ward-look­ing state­ments,8 a height­ened plead­ing stan­dard,9 and the dis­cov­ery-stay pro­vi­sion for all pri­vate actions aris­ing under the Secu­ri­ties Act.10 Congress’s pri­ma­ry con­cern was that dis­cov­ery dur­ing the pen­den­cy of a motion to dis­miss put sig­nif­i­cant finan­cial and time bur­dens on com­pa­nies and pres­sured them to set­tle even unmer­i­to­ri­ous suits that would not sur­vive past that pre­lim­i­nary stage.11 Con­gress described this abuse as using “the dis­cov­ery process to impose costs so bur­den­some that it is often eco­nom­i­cal for the vic­tim­ized par­ty to set­tle.”12 Con­gress accord­ing­ly includ­ed the Pro­vi­sion in the PSLRA to auto­mat­i­cal­ly stay dis­cov­ery dur­ing the pen­den­cy of a motion to dis­miss and rem­e­dy this spe­cif­ic problem.

Courts may look to this kind of leg­isla­tive his­to­ry and the pur­pose of a statute to clar­i­fy tex­tu­al ambi­gu­i­ty.13 In addi­tion to the text itself, “[i]n expound­ing a statute” a court should look to the law’s “object and pol­i­cy”14 because “[t]he pur­pose of Con­gress is the ulti­mate touch­stone” of statu­to­ry inter­pre­ta­tion.15 If an inter­pre­ta­tion is in con­flict with Congress’s expressed pur­pose in enact­ing a giv­en statute, that inter­pre­ta­tion should be reject­ed.16 As the con­cern moti­vat­ing Congress’s adop­tion of the statute is not unique to actions in fed­er­al courts, it should not be inter­pret­ed to be so lim­it­ed. The objec­tive of the Pro­vi­sion is to com­bat the use of dis­cov­ery as a tool of “abu­sive secu­ri­ties class actions,” and read­ing it to con­tin­ue to allow this prac­tice in secu­ri­ties actions in state courts would leave alive and well the prob­lem Con­gress leg­is­lat­ed to solve.17 There­fore, this inter­pre­ta­tion must be reject­ed as “[c]ontrary to the intent of Con­gress.”18

*****

The oppo­si­tion in Piv­otal Soft­ware argued against apply­ing the dis­cov­ery stay in state courts by rea­son­ing that the pro­ce­dur­al nature of the Pro­vi­sion fore­clos­es its appli­ca­tion in state courts and that the pre­sump­tion against pre­emp­tion sup­ports read­ing the stay to apply only in Secu­ri­ties Act actions in fed­er­al court.19 These argu­ments are indi­vid­u­al­ly flawed and do not sup­port insert­ing a state-court excep­tion into the PSLRA dis­cov­ery stay.

First, no pro­ce­dure ver­sus sub­stance dis­tinc­tion dis­al­lows the Provision’s appli­ca­tion in state court. The Supreme Court in Cyan, Inc. v. Beaver Coun­ty Employ­ees Retire­ment Fund not­ed that cer­tain PSLRA pro­vi­sions con­tain pro­ce­dur­al rules for Secu­ri­ties Act actions that apply “only when such a suit [is] brought in fed­er­al court.”20 How­ev­er, the Court in Cyan referred specif­i­cal­ly to pro­vi­sions that include statu­to­ry lan­guage lim­it­ing their appli­ca­tion to actions brought in fed­er­al court.21 The per­ti­nent pro­vi­sion of the PSLRA, § 77z‑1(a)(2)(A)(ii), places pro­ce­dur­al rules on “a lead plain­tiff in any class action brought under the Fed­er­al Rules of Civ­il Pro­ce­dure [(“FRCP”)].”22 Through this exam­ple, the Court demon­strat­ed that it was refer­ring to pro­vi­sions express­ly lim­it­ed to fed­er­al courts since the FRCP apply only in fed­er­al courts. There­fore, while some PSLRA pro­ce­dures apply only in fed­er­al courts, not all PSLRA pro­ce­dur­al pro­vi­sions do, and the Pro­vi­sion is not lim­it­ed in this way.

Sec­ond, the oppo­si­tion in Piv­otal Soft­ware invoked the con­sti­tu­tion­al avoid­ance canon and sug­gest­ed that impos­ing fed­er­al pro­ce­dur­al rules in state court in this con­text would vio­late state sov­er­eign­ty.23 How­ev­er, prece­dent estab­lish­es that states may only apply their “neu­tral pro­ce­dur­al rules to fed­er­al claims” where not “pre-empt­ed by fed­er­al law.”24 Addi­tion­al­ly, fed­er­al law may leave state court rules in place “only inso­far as those courts employ rules that do not impose unnec­es­sary bur­dens” on fed­er­al rights.25 This premise is ground­ed in the Constitution’s Nec­es­sary and Prop­er Clause,26 which endows Con­gress with the author­i­ty to enact and gov­ern fed­er­al rights and statutes, and the Suprema­cy Clause, which instructs that “the Judges in every State shall be bound [by fed­er­al law], any Thing in the Con­sti­tu­tion or Laws of any State to the Con­trary notwith­stand­ing.”27 Accord­ing­ly, while “[f]ederal statutes enforce­able in state courts do, in a sense, direct state judges to enforce them . . . this sort of fed­er­al ‘direc­tion’ of state judges is man­dat­ed by the text of the Suprema­cy Clause.”28

Fur­ther, the PSLRA and the Secu­ri­ties Act are fed­er­al laws, and the Pro­vi­sion pro­vides a fed­er­al right to not be bur­dened by dis­cov­ery at the motion to dis­miss stage in Secu­ri­ties Act suits.29 The auto­mat­ic stay grant­ed by the Pro­vi­sion pro­tects this right, and con­trary state dis­cov­ery-stay rules are there­fore pre­empt­ed and may not be imposed.30 Fur­ther­more, even if Con­gress had wished to leave the rules of pro­ce­dure con­cern­ing this fed­er­al right to state courts, such a defer­ral would not be per­mis­si­ble, as the non-appli­ca­tion of the dis­cov­ery stay in state courts would unnec­es­sar­i­ly bur­den the right pro­tect­ed by the Pro­vi­sion.31 Con­se­quent­ly, the fed­er­al pre­emp­tion at issue is not a vio­la­tion of state sov­er­eign­ty, but rather a nec­es­sary exer­cise of con­sti­tu­tion­al author­i­ty to pro­tect a fed­er­al right, ren­der­ing the appli­ca­tion of con­sti­tu­tion­al avoid­ance inappropriate.

*****

Statu­to­ry inter­pre­ta­tion guid­ance from the plain mean­ing of the statute, the whole code canon, and analy­sis of the sur­round­ing pro­vi­sions fur­ther sup­ports a broad­er inter­pre­ta­tion of the Provision’s application.

The analy­sis of the Pro­vi­sion relies upon whether the phrase “[i]n any pri­vate action aris­ing under [the Secu­ri­ties Act]” means what it says.32 In inter­pret­ing a phrase, one must first look to its plain mean­ing.33 In doing so, courts gen­er­al­ly assume Con­gress “means . . . what it says.”34 Indeed, when apply­ing the “fun­da­men­tal canon” of plain mean­ing, a court shall inter­pret words “as tak­ing their ordi­nary, con­tem­po­rary, com­mon mean­ing.”35 The com­mon mean­ing of the oper­a­tive term “any” is defined broad­ly as “one or some indis­crim­i­nate­ly of what­ev­er kind” and “every . . . one select­ed with­out restric­tion” and “all.”36 Accord­ing­ly, inter­pret­ing “any” to mean a more restric­tive “some” or “cer­tain” would fly in the face of its plain mean­ing. The Supreme Court has also observed that the word “any” has an “expan­sive mean­ing”37 and has repeat­ed­ly inter­pret­ed it expan­sive­ly in sim­i­lar statu­to­ry con­texts.38 In choos­ing the term “any,” Con­gress broad­ly encom­passed pri­vate actions under the Secu­ri­ties Act whether filed in state or fed­er­al court. There­fore, courts should assume that Con­gress meant what it said: that the Pro­vi­sion applies in any pri­vate action aris­ing under the Secu­ri­ties Act, includ­ing those in state courts.

Read­ing the Pro­vi­sion in the con­text of the entire­ty of the PSLRA fur­ther clar­i­fies that there is no state-court excep­tion to the statute’s auto­mat­ic dis­cov­ery stay.39 In inter­pret­ing sub­sec­tion 77z‑1(b), its sur­round­ing sub­sec­tions pro­vide fur­ther con­text. Sec­tion 77z‑2 (the “Safe Har­bor” pro­vi­sion) includes the exact lan­guage of the Pro­vi­sion, apply­ing in “any pri­vate action aris­ing under [the Secu­ri­ties Act],”40 and con­tains its own dis­cov­ery stay, again applic­a­ble “[i]n any pri­vate action aris­ing under [the Secu­ri­ties Act].”41 The Supreme Court in Cyan, Inc. v. Beaver Coun­ty Employ­ees Retire­ment Fund found that this pro­vi­sion “applie[s] even when a [Secu­ri­ties] Act suit [is] brought in state court.”42 It is well-estab­lished that when iden­ti­cal words or phras­es are “used in dif­fer­ent parts of the same statute” they are “pre­sumed to have the same mean­ing.”43 There­fore, courts con­front­ed with the Pro­vi­sion should, as with the Safe Har­bor pro­vi­sion, find that the phrase “[i]n any pri­vate action aris­ing under [the Secu­ri­ties Act]” refers to all actions, whether filed in state or fed­er­al courts.44

Sim­i­lar­ly, where a qual­i­fy­ing phrase is present in one sub­sec­tion but not anoth­er, it should be pre­sumed that Con­gress used such lan­guage inten­tion­al­ly.45 Sec­tion 77z‑1(a) of the PSLRA pro­vides that “[t]he pro­vi­sions of this sub­sec­tion shall apply to each pri­vate action aris­ing under this sub­chap­ter [(the Secu­ri­ties Act of 1933)] that is brought as a plain­tiff class action pur­suant to the Fed­er­al Rules of Civ­il Pro­ce­dure.”46 Here, the phrase “this sub­sec­tion” refers to sub­sec­tion (a) “Pri­vate Class Actions,” not the sub­sec­tion of the Pro­vi­sion, sub­sec­tion (b) “Stay of dis­cov­ery; preser­va­tion of evi­dence.”47 As this qual­i­fy­ing lan­guage is only present in sub­sec­tion (a), the ref­er­ence to the Fed­er­al Rules of Civ­il Pro­ce­dure is only applic­a­ble to that sub­sec­tion, and not to the entire­ty of sec­tion 77z‑1. Indeed, “[w]here Con­gress includes par­tic­u­lar lan­guage in one sec­tion of a statute but omits it in anoth­er sec­tion of the same Act, it is gen­er­al­ly pre­sumed that Con­gress acts inten­tion­al­ly and pur­pose­ly in the dis­parate inclu­sion or exclu­sion.”48 Had Con­gress intend­ed the dis­cov­ery stay to be lim­it­ed to fed­er­al actions, “it pre­sum­ably would have done so express­ly as it did in the imme­di­ate­ly [pre­ced­ing] sub­sec­tion.”49 How­ev­er, “Con­gress did not write the statute that way.”50 Accord­ing­ly, the lan­guage of the statute clar­i­fies that the PSLRA dis­cov­ery stay does apply in state courts.

*****

In addi­tion to hon­or­ing statu­to­ry inter­pre­ta­tion prin­ci­ples, it is impor­tant to keep in mind the sig­nif­i­cant neg­a­tive pub­lic pol­i­cy con­se­quences that would result from insert­ing a state-court excep­tion into the statute. Specif­i­cal­ly, the cir­cum­ven­tion of the Pro­vi­sion would harm busi­ness­es, share­hold­ers, and under­writ­ers, and encour­age forum shop­ping by class action lawyers. Cre­at­ing an excep­tion to Congress’s pro­tec­tion of secu­ri­ties-lit­i­ga­tion defen­dants goes against the design of the PSLRA to pro­tect busi­ness­es and stock­hold­ers, and instead serves to ben­e­fit class action lawyers.51 The loop­hole that would result from a state-court excep­tion “risks invit­ing the type of ear­ly, vex­a­tious dis­cov­ery requests that the PSLRA meant to elim­i­nate.”52 Of sub­stan­tial con­cern is that “[t]hese coer­cive tac­tics have sig­nif­i­cant down­stream costs for com­pa­nies that issue secu­ri­ties, and pre­mi­ums for direc­tors’ and offi­cers’ lia­bil­i­ty insur­ance have sky­rock­et­ed.”53

More­over, as dif­fer­ent states apply var­ied dis­cov­ery rules, fur­ther forum shop­ping will occur as plain­tiffs’ lawyers seek out the most favor­able pro­ce­dur­al laws. Ini­ti­at­ing exten­sive dis­cov­ery at the motion to dis­miss stage would be expen­sive for defen­dants as well as a dis­trac­tion for com­pa­ny exec­u­tives, result­ing in the  set­tle­ment of  claims that would not have made it past the motion to dis­miss stage on the mer­its. Ex ante, as par­ties involved in issu­ing secu­ri­ties are forced to build in the costs of inevitable secu­ri­ties actions, dis­cov­ery, and set­tle­ments, the cost of Ini­tial Pub­lic Offer­ings (“IPOs”) may increase. In some instances, this con­cern is now being baked into the share price at IPO through the strat­e­gy of under­pric­ing.54 These sig­nif­i­cant down­stream con­se­quences neg­a­tive­ly impact the secu­ri­ties mar­ket, com­pa­nies, and share­hold­ers alike. Indeed, read­ing a state-court excep­tion into the PSLRA dis­cov­ery stay would allow those bring­ing actions in state courts to return to pre-PSLRA dis­cov­ery tac­tics that “injure ‘the entire U.S. econ­o­my.’”55

Con­sid­er­ing the pur­pose of the PSLRA, such an impact on com­pa­nies, share­hold­ers, the mar­ket, and secu­ri­ties lit­i­ga­tion prac­tices can­not have been what Con­gress intend­ed, and should be avoid­ed. To pro­mote “pre­dictabil­i­ty, con­sis­ten­cy, and fair­ness when it comes to lit­i­gat­ing Secu­ri­ties Act cas­es in state courts,” the dis­cov­ery stay should apply in any pri­vate action under the Secu­ri­ties Act, includ­ing those in state courts.56

*****

Until the Supreme Court is pre­sent­ed with this issue again, low­er courts will con­tin­ue to dis­parate­ly apply the PSLRA dis­cov­ery stay and con­tribute to an incon­sis­tent secu­ri­ties law regime.57 If and when the issue returns to the Supreme Court, the pur­pose of the PSLRA dis­cov­ery stay, statu­to­ry inter­pre­ta­tion prin­ci­ples, the Court’s own prece­dent in Cyan, and robust pol­i­cy incen­tives demand that the Court adopts a broad read­ing: that the dis­cov­ery stay applies “in any action” aris­ing under the Secu­ri­ties Act, regard­less of venue.


* Cather­ine Willis is a J.D. Can­di­date (2023) at New York Uni­ver­si­ty School of Law. This Con­tri­bu­tion arose from the prob­lem pre­sent­ed at the 2022 Irv­ing R. Kauf­man Memo­r­i­al Secu­ri­ties Law Moot Court Com­pe­ti­tion host­ed by Ford­ham Law School. The ques­tion pre­sent­ed asked whether the lan­guage “in any pri­vate action” of the Pri­vate Secu­ri­ties Lit­i­ga­tion Reform Act’s dis­cov­ery-stay pro­vi­sion refers to any action under the Secu­ri­ties Act of 1933 brought in state or fed­er­al court, or sole­ly such actions brought in fed­er­al court. This Con­tri­bu­tion presents a dis­til­la­tion of argu­ments made by the author in favor of Peti­tion­ers and does not nec­es­sar­i­ly rep­re­sent the views of the author.

1. 141 S. Ct. 2884 (2021).

2. Joint Motion to Recal­en­dar Argu­ment and Hold Pro­ceed­ings in Abeyance, Piv­otal Soft­ware, Inc. v. Supe­ri­or Ct. of Cal., 141 S. Ct. 2884 (2021), (No. 20–1541) (filed Aug. 27, 2021); Let­ter Regard­ing Set­tle­ment Pro­ceed­ings, Piv­otal Soft­ware, Inc. v. Supe­ri­or Ct. of Cal., 141 S. Ct. 2884 (2021), (No. 20–1541) (filed July 8, 2022).

3. 15 U.S.C. § 77v(a); see also Cyan, Inc. v. Beaver Cnty. Emps. Ret. Fund, 138 S. Ct. 1061, 1069 (2018) (hold­ing that state courts may retain juris­dic­tion to decide class actions brought under the Secu­ri­ties Act).

4. 15 U.S.C. § 77z‑1(b)(1).

5. Any, Webster’s Third New Inter­na­tion­al Dic­tio­nary 97 (1976).

6. Howlett v. Rose, 496 U.S. 356, 367–75 (1990); see also Brown v. W. Ry. Of Ala., 338 U.S. 294, 296 (1949) (hold­ing that a “fed­er­al right can­not be defeat­ed by the forms of local practice”).

7. S. Rep. No. 104–98, at 114 (1995) (describ­ing the preva­lence of “abu­sive secu­ri­ties class actions”).

8. 15 U.S.C. § 77z‑2.

9. 15 U.S.C. § 78u‑4.

10. 15 U.S.C. § 77z‑1(b)(1).

11. H.R. Rep. No. 104–369, at 31 (1995) (Conf. Rep.) (not­ing the preva­lence of this tac­tic, which “often forces inno­cent par­ties to set­tle friv­o­lous secu­ri­ties class actions”).

12. Id.

13. See gen­er­al­ly Church of Holy Trin­i­ty v. Unit­ed States, 143 U.S. 457, 460 (1892) (con­sid­er­ing Congress’s pur­pose in pass­ing a bill in deter­min­ing how to eval­u­ate its text).

14. Unit­ed States v. Heirs of Bois­doré, 49 U.S. 113, 122 (1850).

15. Medtron­ic, Inc. v. Lohr, 518 U.S. 470, 485 (1996).

16. F.T.C. v. Sun Oil Co., 371 U.S. 505, 521 (1963) (find­ing invalid an inter­pre­ta­tion that would be “con­trary to the intent of Congress”).

17. S. Rep. No. 104–98, at 114 (1995).

18. Sun Oil Co., 371 U.S. at 521.

19. Brief in Oppo­si­tion, Piv­otal Soft­ware, Inc. v. Supe­ri­or Ct. of Cal., 2021 U.S. S. CT. BRIEFS LEXIS 1509, (No. 20–1541) (filed June 4, 2021).

20. 138 S. Ct. 1061, 1067 (2018).

21. Id.

22. 15 U.S.C. § 77z‑1(a)(2)(A)(ii).

23. Brief in Oppo­si­tion, Piv­otal Soft­ware, Inc., 2021 U.S. S. CT. BRIEFS LEXIS 1509, (No. 20–1541) (filed June 4, 2021).

24. Howlett v. Rose, 496 U.S. 356, 372 (1990).

25. Felder v. Casey, 487 U.S. 131, 150 (1988) (inter­nal quo­ta­tion marks omitted).

26. U.S. Con­st., art. VI, cl. 2.

27. U.S. Con­st., art. I, § 8, cl. 18.

28. New York v. Unit­ed States, 505 U.S. 144, 178­­–79 (1992).

29. 15 U.S.C. § 77z‑1(b)(1).

30. Howlett, 496 U.S. 356; see also Adams v. Mary­land, 347 U.S. 179, 183 (1954) (stat­ing that “since Con­gress in the legit­i­mate exer­cise of its pow­ers enacts ‘the supreme Law of the Land,’ state courts are bound by [a fed­er­al statute] even though it affects their rules of practice”).

31. See Felder, 487 U.S. at 150 (describ­ing that defer­ral to state pro­ce­dure is allowed only when doing so would not impose an unnec­es­sary bur­den (quot­ing Brown v. W. Ry. Co. of Ala., 338 U.S. 294 (1949))).

32. 15 U.S.C. § 77z‑1(b)(1) (empha­sis added).

33. Conn. Nat’l Bank v. Ger­main, 503 U.S. 249, 253 (1992) (out­lin­ing that a court should always turn to the “car­di­nal canon” of plain mean­ing “before all others”).

34. Id. at 254.

35. Per­rin. v. Unit­ed States, 444 U.S. 37, 42 (1979).

36. Any, Webster’s Third New Inter­na­tion­al Dic­tio­nary 97 (1976).

37. Unit­ed States v. Gon­za­les, 520 U.S. 1, 5 (1997).

38. See, e.g., id. (con­clud­ing that since “Con­gress did not add any lan­guage lim­it­ing the breadth of [the] word [“any”] . . . we must read [the statute] as refer­ring to all,” includ­ing state courts); Col­lec­tor of Inter­nal Rev­enue v. Hub­bard, 79 U.S. 1, 15 (1870) (find­ing it “quite clear that [‘in any court’] includes the State courts as well as the Fed­er­al courts”), over­ruled on oth­er grounds by Eis­ner v. Macomber, 252 U.S. 189 (1920); Stew­art v. Kahn, 78 U.S. 493 (1870) (reject­ing that the phrase “any action” is some­how exclu­sive of actions in state courts).

39. See Unit­ed Sav. Ass’n of Tex. v. Tim­bers of Inwood For­est Assocs., 484 U.S. 365, 371 (1988) (describ­ing statu­to­ry con­struc­tion as “a holis­tic endeav­or” through which pro­vi­sions are “often clar­i­fied by the remain­der of the statu­to­ry scheme”).

40. 15 U.S.C. § 77z‑2(c)(1).

41. 15 U.S.C. § 77z‑2(f).

42. 138 S. Ct. 1061, 1066, 1072 (2018).

43. Robers v. Unit­ed States, 572 U.S. 639, 643 (2014) (find­ing that for statu­to­ry con­sis­ten­cy, the word ‘prop­er­ty’ in the phrase “any part of the prop­er­ty . . . returned” appear­ing in 18 USCA § 3663A(b)(1) must refer to any prop­er­ty lost as a result of the crime); see also IBP, Inc. v. Alvarez, 546 U.S. 21, 34 (2005) (reject­ing an argu­ment that ran against this pre­sump­tion of statu­to­ry consistency).

44. 15 U.S.C. § 77z‑1(b)(1).

45. See Rus­sel­lo v. Unit­ed States, 464 U.S. 16, 23 (1983) (find­ing that courts should not con­clude that Congress’s inclu­sion of dif­fer­ent lan­guage in two sub­sec­tions is intend­ed to mean the same thing, nor “ascribe [a] dif­fer­ence to a sim­ple mis­take in draftsmanship”).

46. 15 U.S.C. § 77z‑1(a)(1) (empha­sis added).

47. This read­ing is con­sis­tent with the Supreme Court’s guid­ance in Koons Buick Pon­ti­ac GMC, Inc. v. Nigh, in which it eval­u­at­ed the respec­tive House and Sen­ate draft­ing man­u­als and con­clud­ed that Con­gress fol­lows a hier­ar­chi­cal scheme with sec­tions bro­ken into sub­sec­tions in this man­ner. 543 U.S. 50 (2004).

48. Rus­sel­lo, 464 U.S. at 23.

49. Id.

50. Id. (quot­ing Unit­ed States v. Naf­tal­in, 441 U.S. 768, 773 (1979)).

51. See Vir­ginia Mil­stead, Why We Need a State-Lev­el Pri­vate Secu­ri­ties Lit­i­ga­tion Reform Act, Am. Bar Ass’n, Sec­tion of Lit­ig., Class Actions & Deriv­a­tive Suits Comm. (2019), https://www.skadden.com/-/media/files/publications/2019/12/whyweneedastatelevelprivatesecuritieslitigationref.pdf.

52. Id. at *3 (cit­ing SG Cowen Sec. Corp v. U.S. Dis­trict Court, 189 F.3d 909, 911 (9th Cir. 1999)).

53. Andrew Clubok et al., Supreme Court to Decide Whether PSLRA Dis­cov­ery Stay Applies in State Court, Lath­am & Watkins Client Alert Com­men­tary 2 (July 6, 2021), https://rg-www-prod-cd.azurewebsites.net/admin/upload/SiteAttachments/Alert%202885.v4.pdf.

54. See Kath­leen W. Han­ley & Ger­ard Hoberg, Lit­i­ga­tion Risk, Strate­gic Dis­clo­sure and the Under­pric­ing of Ini­tial Pub­lic Offer­ings (FEDS Work­ing Paper No. 2011-­12, 2011), https://ssrn.com/abstract=1810084.

55. Mer­rill Lynch, Pierce, Fen­ner & Smith Inc. v. Dabit, 547 U.S. 71, 81 (2006) (quot­ing H.R. Rep. No. 104-­369, at 31 (1995) (Conf. Rep.)).

56. Mil­stead, supra note 51 at *5.

57. Com­pare Mat­ter of PPDAI Grp. Sec. Lit­ig., 116 N.Y.S.3d 865 (N.Y. Sup. Ct. 2019) (hold­ing that the PSLRA dis­cov­ery stay is not applic­a­ble in state court and refrain­ing from apply­ing the stay), with City of Livo­nia Retiree Health & Dis­abil­i­ty Ben­e­fits Plan v. Pit­ney Bowes, Inc., 2019 Conn. Super. LEXIS 1604 (Conn. Super. Ct. 2019) (hold­ing that the PSLRA dis­cov­ery stay is applic­a­ble in state court and apply­ing the stay accord­ing­ly). Notably, fol­low­ing Mat­ter of PPDAI Grp. Sec. Lit­ig., the com­pa­ny set­tled the mat­ter. See In re PPDAI Grp. Inc. Sec. Lit­ig., 2022 U.S. Dist. LEXIS 11427 (E.D.N.Y. 2022).