Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 547 U.S. 547 U.S. 71, 126 S. Ct. 1503 (2006)

Shadi Dabit, a former Merrill Lynch broker, filed this class action on behalf of himself and all other former or current brokers who, while employed by Merrill Lynch, owned and continued to own securities. Dabit alleged Merrill Lynch breached the fiduciary duty and covenant of good faith and fair dealing it owed to its brokers by disseminating misleading research and thereby manipulating stock prices. Merrill Lynch moved to dismiss Dabit’s claim on the ground that it was preempted by the Securities Litigation Uniform Standards Act of 1998 (SLUSA). The Supreme Court agreed that Dabit’s claim was preempted by the statute. Cf. Abrego v. The Dow Chem. Co., 443 F.3d 676, (9th Cir. 2006) (employer failed to establish coverage under Class Action Fairness Act of 2005 of complaint alleging exposure to chemical pesticide asserted by 1,160 Panamanian banana plantation workers); Bearden v. U.S. Borax, Inc., 138 Cal. App. 4th 429 (2006) (employees covered by collective bargaining agreement were not exempt from meal-period requirements of state law).