The Second Circuit held in Estate of Pew v. Cardarelli, 2008 U.S. App. LEXIS 10269 (2d Cir. May 13, 2008), that federal jurisdiction exists under CAFA (28 U.S.C. §§ 1332(d)(9) (C) and 1453(d)(3)) over a class action alleging that officers of an issuer — abetted by the issuer's auditor — failed to disclose, while marketing debt certificates, that the issuer was insolvent, in violation of New York's consumer fraud statute. (The plaintiffs’ original securities action had been dismissed with prejudice and their accompanying consumer fraud claim dismissed without prejudice. It was this latter claim that was refiled in state court and removed. Among the interesting holdings:

1. Seven-Day Typo. “CAFA requires that any petition for review of an order granting or denying a motion to remand be made to the court of appeals ‘not less than 7 days after entry of the order.’ 28 U.S.C. § 1453(c)(1) (emphasis added).... We join our sister circuits in interpreting the statute to mean ‘not more than 7 days.’"

2. No Need to Seek Stay of Remand Order in District Court. “Plaintiffs argue that we lack jurisdiction to decide the present appeal because defendants failed to make a timely application to the district court to stay its order of remand. Section 1453 conditions the right of appeal on a timely filing, without mention of a stay. See 28 U.S.C. § 1453(c)(1). We therefore hold that in granting the federal courts of appeals jurisdiction to review remand orders ‘notwithstanding section 1447(d),’ Congress did not require a defendant to seek a stay. Id. § 1453(c)(1).”

3. Criteria for Granting Discretionary Review. “A sound exercise of discretion will be guided by consideration of the importance and novelty of the issues raised by the case. [Citation omitted.] Here, we elect to entertain defendants' appeal because the question of whether a state-law deceptive practices claim predicated on the sale of a security is removable under CAFA is important and consequential, and a decision of the question will alleviate uncertainty in the district courts.”

4. Judicial Efficiency Counsels Deciding Merits Together with Leave to Appeal. “Plaintiffs urge us to decide now only the motion for leave to appeal, and decide the merits later. That course would be inefficient because in order to decide whether we have appellate jurisdiction we must construe the same statutory language upon which the district court rested its remand order (and because the parties have already briefed their positions on that virtually identical statute). Moreover, once leave to appeal is granted, the Court has only 60 days to render a decision. See DiTolla v. Doral Dental IPA of N.Y., LLC, 469 F.3d 271, 275 (2d Cir. 2006) (‘CAFA's 60-day clock for rendering judgment starts running on the day that the Court's order granting permission to appeal is filed.’). Rather than spin wheels, we elect to decide the merits of the appeal now.”

5. Merits: “[A] class action that solely involves a claim ... that relates to ... rights ... created by or pursuant to any security.” “To determine whether the district court properly remanded to state court (and whether we lack appellate jurisdiction under § 1453(c)), we must consider an exception to CAFA's grant of original federal jurisdiction, for ‘any class action that solely involves a claim . . . that relates to the rights, duties (including fiduciary duties), and obligations relating to or created by or pursuant to any security.’ 28 U.S.C. § 1332(d)(9)(C). If plaintiffs' state-law consumer fraud claim falls within this exception, the district court lacks jurisdiction and properly remanded the case to state court (and we lack appellate jurisdiction to review that determination). *** Congress intended that § 1332(d)(9)(C) and § 1453(d)(3) should be reserved for ‘disputes over the meaning of the terms of a security,’ such as how interest rates are to be calculated, and so on. This is entirely consistent with our interpretation of § 1332(d)(9)(C) and § 1453(d)(3) as applying only to suits that seek to enforce the terms of instruments that create and define securities, and to duties imposed on persons who administer securities.”