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In June, when the U.S. Supreme Court asked Solicitor General Elena Kagan to weigh in on the 2nd Circuit’s precedent-setting “F-cubed” ruling in Morrison v. National Australia Bank, it looked like the high court was getting securities litigation fever. Just days before, it had decided to take on Merck & Co., et al., v. Reynolds, et al., which raised the issue of how the statute of limitations should apply in shareholder cases. But in a brief filed Tuesday, the SG seems to be trying to cool the Court’s ardor. The brief, submitted by the Securities and Exchange Commission as well as the solicitor general’s office, urges the court not to grant certiorari in the F-cubed case. The purported class in the Morrison case included non-U.S. NAB shareholders who bought shares of the Australian bank on foreign exchanges. They argued that their fraud case belonged in a U.S. court because NAB allegedly made critical misrepresentations in Florida, where the bank has a subsidiary. The 2nd Circuit disagreed and dismissed the case for lack of subject-matter jurisdiction. The SEC supported the foreign shareholders at the 2nd Circuit, but apparently changed its collective mind before submitting the Supreme Court brief with the solicitor general. While the brief maintains that American courts do have jurisdiction over certain cases alleging transnational fraud, it argues that the Morrison case was correctly dismissed by the 2nd Circuit. The Supreme Court, of course, may still grant cert, despite the SG’s urging. Thomas Dubbs of Labaton Sucharow, an attorney for the plaintiffs, isn’t giving up hope. “We would hope that in the interests of increasing foreign investment in the U.S., the Supreme Court would take this case,” Dubbs told the Litigation Daily. “Many studies have shown investors put their money in America because of its strong securities law and disclosure regime.” George Conway III of Wachtell, Lipton, Rosen & Katz, an attorney for NAB, said in an e-mail: “We are pleased that the government agrees that this is a case that should never have been brought in a court of the United States.”

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