Dennis Ex Rel. PICO Holdings, Inc. v. Hart

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires corporations to hold periodic advisory votes on executive compensation. Nominal defendant PICO Holdings, Inc. held such a vote, and a majority of shareholders expressed dissatisfaction with PICO’s executive compensation policies. Soon thereafter, the plaintiffs in these consolidated cases filed shareholder derivative suits in California state court, alleging that PICO’s compensation policies violated state law. The defendants removed the cases to federal court and argued that Dodd-Frank bars the suits. The district court dismissed portions of each case and remanded the remaining portions for lack of jurisdiction. As we explain below, removal of these cases was improper and the district court lacked jurisdiction to do anything other than remand them to state court. Accordingly we vacate the decisions of the district court with instructions to remand the cases to state court. We dismiss the defendants’ cross-appeals for lack of jurisdiction.

Background

The Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank) provides that, at least every three years, public companies must conduct a…