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Court Allows Class Action Against Lord Abbett Co.

(CN) - The 3rd Circuit allowed a group of mutual fund investors to proceed with a class action accusing the Lord Abbett Co. of charging excessive fees and using the money to market the funds to other investors.

The district court ruled that the entire lawsuit should be thrown out because it includes some state-law claims that are pre-empted by the Securities Litigation Uniform Standards Act (SLUSA).

Judge Roth of the Philadelphia-based federal appeals court overturned that decision and remanded.

"It is entirely consistent with the purposes of SLUSA to require the dismissal of those state law claims that are clearly pre-empted by the statute," Roth wrote.

"To require the dismissal of all of the other claims in the same action would not appear to serve those goals and is not supported by the plain language or legislative history."

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