Representing investors who sued Edward D. Jones (EDJ), the financial management company, a CCL brief urged the Supreme Court to deny certiorari after the Ninth Circuit held that the case could move forward. 

      As co-counsel with Franklin D. Azar and Associates, CCL represents a putative class of passive investors, who purchase stock and then hold it while its value appreciates. They held their investments at EDJ, which only charged commissions when the stocks held were traded. Because these investors rarely traded, EDJ did not make any profit on the funds held. To make these investments generate money, EDJ convinced the investors to switch to annual management-fee accounts that charged them for "advice" on maintaining or increasing their investments. Although no advice was ever given, the cost to investors was substantially greater.

     The investors then sued under state law, arguing that EDJ's failure to conduct a suitability analysis before pushing for the change in the accounts. EDJ countered by arguing that federal Securities Litigation Uniform Standards Act (SLUSA) preemptively barred any lawsuits. A federal district court sided with EDJ and dismissed all claims with prejudice. The Ninth Circuit, however, unanimously reversed, finding that the claims were not premised on the sale or purchase of a security, a requirement for application of SLUSA, but instead on fees charged for passive accounts.

      EDJ argues that the federal circuit courts are in disagreement about what constitutes a qualifying sale or purchase, with some relying on Supreme Court precedent that the basis of the lawsuit must merely "coincide" with a sale or purchase, while others rely on subsequent Supreme Court precedent that requires the complaint topic be "material" to a purchase or sale. In its opposing brief, CCL argues that the dispute between "coincide" or "material" is irrelevant to this case because the gravamen of the complaint has no connection at all with a sale or purchase. 

     An EDJ reply brief is expected in early January. Afterwards, the Supreme Court will review the case in conference to determine whether to take up the matter.