FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

EDWARD ANDERSON; COLEEN 

WORTHINGTON; JANET GORAL,

Plaintiffs-Appellants,

v.

EDWARD D. JONES & CO., L.P.; THE 

JONES FINANCIAL COMPANIES,

LLLP; EDJ HOLDING COMPANY,

INC.; JAMES D. WEDDLE; VINCENT J.

FERRARI,

Defendants-Appellees.

No. 19-17520

D.C. No.

2:18-cv-00714-

JAM-AC

OPINION

Appeal from the United States District Court

for the Eastern District of California

John A. Mendez, District Judge, Presiding

Argued and Submitted December 9, 2020

San Francisco, California

Filed March 4, 2021

Before: DANNY J. BOGGS,* MILAN D. SMITH, JR., 

and MARK J. BENNETT, Circuit Judges.

Opinion by Judge Milan D. Smith, Jr.

* The Honorable Danny J. Boggs, United States Circuit Judge for 

the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
2 ANDERSON V. EDWARD D. JONES & CO.

SUMMARY**

Securities Law

The panel reversed the district court’s dismissal of a 

class action brought by investors with a financial services 

firm, alleging breach of fiduciary duties under Missouri and 

California law when the investors moved their assets from 

commission-based to fee-based accounts.

The district court concluded that it lacked subject matter 

jurisdiction over the state law claims because the Securities 

Litigation Uniform Standards Act (SLUSA) prevented 

plaintiffs from bringing their claims as a class action 

consisting of fifty or more persons. The district court also 

dismissed plaintiffs’ securities fraud claim under § 10(b) of 

the Securities Exchange Act of 1934. Plaintiffs appealed 

dismissal of their state law claims only. 

Reversing, the panel held that SLUSA did not bar 

plaintiffs’ state law fiduciary duty claims because the alleged 

misrepresentation or omission that formed the basis for the 

claims was not “in connection with the purchase or sale of a 

covered security.” Following Chadbourne & Parks LLP v. 

Troice, 571 U.S. 377 (2014), the panel held that the phrase 

“in connection with” requires a showing that the 

misrepresentation or omission was material to a decision to 

buy or sell a security. The panel concluded that defendants’ 

alleged failure to conduct a suitability analysis before 

inviting plaintiffs to switch to fee-based accounts was not 

** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.
ANDERSON V. EDWARD D. JONES & CO. 3

material because plaintiffs did not allege that they would 

have purchased or sold different covered securities had 

defendants conducted such an analysis.

COUNSEL

Michael Anthony Brown (argued), Spertus Landes & 

Umhofer LLP, Los Angeles, California; John R. Garner, 

Garner & Associates, Willows, California; Michael D. 

Murphy, Franklin D. Azar & Associates P.C., Aurora, 

Colorado; for Plaintiffs-Appellants.

Mark A. Perry (argued), Gibson Dunn & Crutcher LLP,

Washington, D.C.; Alexander K. Mircheff and Meryl L. 

Young, Gibson Dunn & Crutcher LLP, Los Angeles, 

California; Samuel A. Keesal Jr., Keesal Young & Logan, 

Long Beach, California; Julie L. Taylor, Keesal Young & 

Logan, San Francisco, California; for DefendantsAppellees.

OPINION

M. SMITH, Circuit Judge:

Plaintiff-Appellant Edward Anderson and others 

(collectively, Plaintiffs) are the Lead Plaintiffs in a class 

action brought against Defendant-Appellee Edward D. Jones 

& Co., L.P., and other associated entities and individuals 

(collectively, Edward Jones). Plaintiffs alleged that Edward 

Jones breached its fiduciary duties owed to Plaintiffs under 

Missouri and California law. The district court concluded 

that it did not have subject matter jurisdiction because the 

Securities Litigation Uniform Standards Act (SLUSA) 
4 ANDERSON V. EDWARD D. JONES & CO.

prevents Plaintiffs from bringing their claims as a class 

action consisting of fifty or more persons. See 15 U.S.C. 

§ 78bb(f)(1), (f)(5)(B).

Because Edward Jones’s alleged misrepresentation or 

omission that forms the basis for Plaintiffs’ fiduciary duty 

claims is not “in connection with the purchase or sale of a 

covered security,” id. § 78bb(f)(1)(A), we reverse the 

decision of the district court and remand for further 

proceedings consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Plaintiffs’ Investment Relationship with Edward 

Jones

Plaintiffs were investors with Edward Jones, a financial 

services firm headquartered in St. Louis, Missouri.1 

According to Plaintiffs, they are “buy-and-hold clients,” 

which means that they “conduct[] little to no trading each 

year.” Plaintiffs previously invested with Edward Jones 

through commission-based accounts. Under this investment 

model, “Edward Jones provided its clients free financial 

advice, only charging them on a per trade basis.” Plaintiffs 

assert that this “model particularly benefitted middle-income 

investors in small communities who engaged in little to no 

trading,” like themselves.

In 2008, Edward Jones introduced a fee-based model of 

investing. In a fee-based account, Edward Jones “charged a 

1 The background that we lay out in this opinion is largely drawn 

from Plaintiffs’ Second Amended Complaint. Because the district court 

disposed of this case at the motion to dismiss stage of the litigation, we 

must accept Plaintiffs’ well-pleaded allegations as true. Northstar Fin. 

Advisors, Inc. v. Schwab Invs., 904 F.3d 821, 828 (9th Cir. 2018).
ANDERSON V. EDWARD D. JONES & CO. 5

flat annual asset management fee.” “The standard fee was 

1.35% to 1.50% of a client’s assets under management,” 

though it could be as high as 2%, in addition to 

administrative fees. Clients investing in a fee-based account 

would pay an annual fee “regardless of the transactions” that 

Edward Jones conducted on behalf of those clients.

Plaintiffs moved their assets from commission-based to 

fee-based accounts. During the transition, Edward Jones 

purportedly gave written disclosures to Plaintiffs, including 

a brochure entitled “Making Good Choices.” Clients also 

signed a form in which they “acknowledge[d] that [the 

client] has received and read the Brochure, which describes 

the [fee-based program] in greater detail.” Clients also 

acknowledged that they “made [their] own decision[s] to 

invest in the” fee-based account. Additionally, clients filled 

out a form with their investment objectives.

B. Plaintiffs’ Suit Against Edward Jones

Plaintiffs filed their Second Amended Complaint on July 

29, 2019, which forms the basis for this appeal. Plaintiffs 

brought a number of counts against Edward Jones, including 

allegations that Edward Jones violated its state law fiduciary 

duties and federal securities law.

Most important to Plaintiffs’ fiduciary duty allegations 

is that Edward Jones allegedly failed to conduct a “suitability 

analysis” before inviting Plaintiffs to switch to fee-based 

accounts. Plaintiffs argue that under Financial Industry

Regulatory Authority (FINRA) Rule 2111, “broker-dealers 

must ensure that fee-based accounts are only recommended 

to those clients for whom they are suitable; as such accounts 

tend to be more expensive for clients who engage in little to 

no trading activity.” Plaintiffs concede that FINRA Rule 

2111 “may not [create] a private right of action,” but argue 
6 ANDERSON V. EDWARD D. JONES & CO.

that a FINRA rule “may be used as evidence of industry 

standards and practices” when pursuing a breach of fiduciary 

duty claim.

Additionally, Plaintiffs contend that Edward Jones 

“improperly incentivize[d] its [financial advisors] to violate 

their fiduciary duties and rack up asset-based fee revenue 

for” Edward Jones and “terminated, gave smaller raises and 

bonuses to, and/or failed to promote [financial advisors] who 

disagreed with [Edward Jones’s] strategy.” Plaintiffs allege 

that Edward Jones pressured financial advisors to switch 

clients to fee-based accounts through regional meetings, 

training sessions, and field office visits.

Plaintiffs claim that this lack of a suitability analysis and 

the corresponding push to move clients to fee-based 

accounts is a breach of Edward Jones’s fiduciary duties 

under Missouri and California law. According to Plaintiffs, 

they “should not have been transferred from commissionbased accounts into fee-based accounts and, thus, should not 

have been charged annual asset-based fees at all, only 

commissions.” They seek damages

in the amount of the fees they paid Edward 

Jones after having their assets improperly 

transferred from commission-based accounts 

into unsuitable fee-based accounts, less the 

commissions they would have paid if the 

assets ha[d] properly remained in the 

commission-based accounts, plus the 

increase in value the assets would have 

achieved over time had Edward Jones not 

improperly deducted the substantial fees 

from the accounts.
ANDERSON V. EDWARD D. JONES & CO. 7

Plaintiffs do not allege that they would have made or not 

made any particular trades had Edward Jones conducted a 

suitability analysis.

Plaintiffs also alleged that Edward Jones violated § 10(b) 

of the Securities Exchange Act of 1934, 15 U.S.C. § 78j, and 

the corresponding Securities and Exchange Commission 

Rule 10b-5, 17 C.F.R. § 240.10b-5. In this section of the 

complaint, Plaintiffs argued that Edward Jones “failed to 

disclose” the fact that financial advisors “did not conduct a 

suitability analysis to assess whether a fee-based account 

was suitable or otherwise in the best interests of clients, prior 

to transferring the clients from commission-based accounts 

to fee-based accounts.” Plaintiffs claimed that “[t]he 

commission-based/fee-based dichotomy is critical and 

material to any investment decision, including Lead 

Plaintiffs’ and the Class members’ investment decisions to 

transfer them from commission-based accounts into feebased accounts.” Plaintiffs did not devote a section of the 

Rule 10b-5 cause of action to showing that there was “a 

connection between [Edward Jones’s] misrepresentation or 

omission and the purchase or sale of a security.” Halliburton 

Co. v. Erica P. John Fund, Inc., 573 U.S. 258, 267 (2014).

 Referring to the choice of investment advisor, rather 

than the choice to purchase or sell a security, Plaintiffs 

alleged:

[I]f [Edward Jones] disclosed to Lead 

Plaintiffs that Edward Jones was not 

fulfilling even its most basic responsibilities 

as an investment advisor—namely, 

conducting a suitability analysis—Lead 

Plaintiffs’ trust in the relationship would 

have faltered and a reasonable investor would 

have looked elsewhere for investment 
8 ANDERSON V. EDWARD D. JONES & CO.

advisory services or chosen not to heed their 

[financial advisor’s] advice.

The district court dismissed the complaint with 

prejudice. In re Edward D. Jones & Co., L.P. Sec. Litig., 

No. 2:18-CV-00714-JAM-AC, 2019 WL 5887209, at *8 

(E.D. Cal. Nov. 12, 2019). The district court characterized 

Plaintiffs’ fiduciary duty causes of action as alleging a 

misrepresentation or omission based on Edward Jones not 

conducting a suitability analysis. Id. at *2. The district court 

reasoned that Plaintiffs could not plead a state law fiduciary 

duty claim and a federal securities claim based on the same 

conduct when Plaintiffs characterized the lack of a suitability 

analysis as an omission for the federal law claim, but not an 

omission for the state law claim. Id. Thus, in accordance 

with the previous dismissal,2 the district court held, pursuant 

to SLUSA, that it had no jurisdiction over the class action 

state law claim. See id. The court did not address whether 

the lack of a suitability analysis was “in connection with the 

purchase or sale of a covered security” for the fiduciary duty 

claims.3 15 U.S.C. § 78bb(f)(1)(A).

2 The district court previously dismissed Plaintiffs’ First Amended 

Complaint for largely the same reasons, but without prejudice. In re 

Edward D. Jones & Co., L.P. Sec. Litig., No. 2:18-CV-00714-JAM-AC, 

2019 WL 2994486, at *9 (E.D. Cal. July 9, 2019).

3 The district court did hold that Plaintiffs’ breach of contract claims 

involved alleged promises that were “in connection with” the purchase 

or sale of covered securities. See In re Edward D. Jones, 2019 WL 

5887209, at *2–3. Plaintiffs’ contract claims, which they do not appeal, 

were not based on a lack of suitability analysis, but instead on “the 

allegation Edward Jones never intended to provide and did not provide 

the additional services purportedly warranting the fees imposed in” the 

fee-based accounts. Id. at *2. The district court did “not agree that the 
ANDERSON V. EDWARD D. JONES & CO. 9

The district court also held that the Rule 10b-5 claim 

failed for a number of reasons. Relevant here, the district 

court decided that the alleged lack of suitability analysis was 

not an actionable omission because Edward Jones provided 

Plaintiffs with various documents relating to the nature of 

the fee-based accounts. See In re Edward D. Jones, 2019 

WL 5887209, at *4–5. The district court also stated that 

these various documents “were part of the suitability 

analysis [Edward Jones] conducted, further undermining 

Plaintiffs’ allegations that [Edward Jones] did not conduct a 

suitability analysis.” Id. at *5 (internal quotation marks and 

citation omitted). The district court additionally addressed 

scienter, reliance, and loss causation. See id. at *5–7. 

However, the district court did not decide whether Plaintiffs’

Rule 10b-5 claim alleged “a connection between” the lack of 

a suitability analysis “and the purchase or sale of a security.” 

Halliburton, 573 U.S. at 267.

Plaintiffs appealed only the district court’s dismissal of 

the state fiduciary duty claims. Plaintiffs did not appeal the 

dismissal of any other claims brought before the district 

court.

II. STANDARD OF REVIEW

We have jurisdiction to entertain this appeal pursuant to 

28 U.S.C. § 1291. Banks v. N. Tr. Corp., 929 F.3d 1046, 

1049 (9th Cir. 2019). “[D]ismissals under SLUSA are 

jurisdictional,” governed by Federal Rule of Civil Procedure 

12(b)(1). Hampton v. Pac. Inv. Mgmt. Co. LLC, 869 F.3d 

844, 847 (9th Cir. 2017). “We review de novo a district 

court’s order granting a motion to dismiss.” Northstar Fin. 

breach of contract claims repackage[d] Plaintiffs’ specific securities 

claims.” Id.
10 ANDERSON V. EDWARD D. JONES & CO.

Advisors, Inc. v. Schwab Invs., 904 F.3d 821, 828 (9th Cir. 

2018). “In evaluating [Plaintiffs’] claims, we accept factual 

allegations in the complaint as true and construe the 

pleadings in the light most favorable to the nonmoving 

party.” Id. (citation and internal quotation marks omitted).

III. ANALYSIS

A. SLUSA

“SLUSA bars a plaintiff class from bringing (1) a 

covered class action (2) based on state law claims 

(3) alleging that the defendants made a misrepresentation or 

omission or employed any manipulative or deceptive device 

(4) in connection with the purchase or sale of (5) a covered 

security.” Northstar, 904 F.3d at 828; 15 U.S.C. 

§ 78bb(f)(1).

SLUSA is to be given a broad interpretation. Merrill 

Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71, 

85 (2006). SLUSA “seeks to prevent state class actions 

alleging fraud ‘from being used to frustrate the objectives’

of the” Private Securities Litigation Reform Act of 1995, 

which created heightened pleading requirements for 

securities class actions. Freeman Invs., L.P. v. Pac. Life Ins. 

Co., 704 F.3d 1110, 1114 (9th Cir. 2013) (citation omitted). 

The statute “is designed to prevent persons injured by 

securities transactions from engaging in artful pleading or 

forum shopping in order to evade limits on securities 

litigation that are designed to block frivolous or abusive 

suits.” Holtz v. JPMorgan Chase Bank, N.A., 846 F.3d 928, 

930 (7th Cir. 2017). Accordingly, while we normally 

construe federal statutes preempting state laws narrowly, 

“this general principle carries far less force when construing 

SLUSA,” because SLUSA does not preempt state law 

claims; it only prohibits use of the class action device for 
ANDERSON V. EDWARD D. JONES & CO. 11

certain claims by fifty or more persons. Northstar, 904 F.3d 

at 829 (citing Dabit, 547 U.S. at 87).4

However, SLUSA “is not boundless. It ‘does not 

transform every breach of fiduciary duty into a federal 

securities violation.’” Rowinski v. Salomon Smith Barney 

Inc., 398 F.3d 294, 301 (3d Cir. 2005) (quoting SEC v. 

Zandford, 535 U.S. 813, 825 n.4 (2002)). To interpret 

SLUSA too broadly “would interfere with state efforts to 

provide remedies for victims of ordinary state-law frauds.” 

Chadbourne & Parke LLP v. Troice, 571 U.S. 377, 391 

(2014). “[A] claim is not automatically SLUSA-barred

merely because it involves securities.” Fleming v. Charles 

Schwab Corp., 878 F.3d 1146, 1153 (9th Cir. 2017).

Finally, because SLUSA includes many statutory terms 

that Congress also used in § 10(b), courts look to § 10(b) and 

cases interpreting that statute when deciding SLUSA cases. 

See, e.g., Dabit, 547 U.S. at 86; Fleming, 878 F.3d at 1152–

53.

B. Overlapping Claims

SLUSA’s restrictions on bringing a claim as a class 

action “does not turn on the name or title given to a claim by 

the plaintiff. It turns instead on the gravamen or essence of 

4 SLUSA defines “covered class action” as “any single lawsuit in 

which . . . damages are sought on behalf of more than 50 persons or 

prospective class members.” 15 U.S.C. § 78bb(f)(5)(B)(i)(I). Thus, 

“SLUSA does not actually pre-empt any state cause of action.” Dabit, 

547 U.S. at 87. Instead, the statute “simply denies plaintiffs the right to 

use the class-action device to vindicate certain claims. [SLUSA] does 

not deny any individual plaintiff, or indeed any group of fewer than 

50 plaintiffs, the right to enforce any state-law cause of action that may 

exist.” Id. The district court technically erred in discussing “SLUSA 

preemption.” See In re Edward D. Jones, 2019 WL 5887209, at *2.
12 ANDERSON V. EDWARD D. JONES & CO.

the claim.” Northstar, 904 F.3d at 829 (internal quotation 

marks and citation omitted). We “must determine if the 

Plaintiffs’ claims, stripped of formal legal characterization, 

could have been pursued under § 10(b) and Rule 10b-5.” 

Fleming, 878 F.3d at 1153; see also Goldberg v. Bank of 

Am., N.A., 846 F.3d 913, 916 (7th Cir. 2017) (per curiam). 

“[P]laintiffs cannot avoid” the SLUSA class action bar 

“‘through artful pleading that removes the covered words . . .

but leaves in the covered concepts.’” Freeman, 704 F.3d 

at 1115 (citation omitted). However, “[j]ust as plaintiffs 

cannot avoid SLUSA through crafty pleading, defendants 

may not recast [state law] claims as fraud claims by arguing 

that they ‘really’ involve deception or misrepresentation.” 

Id. at 1116.

Edward Jones argues that Plaintiffs’ “position on appeal 

cannot be reconciled with the operative complaint.” 

Essentially, Edward Jones contends that Plaintiffs’ Second 

Amended Complaint is internally inconsistent. In the Rule 

10b-5 portion of the complaint, Plaintiffs alleged that “[t]he 

commission-based/fee-based dichotomy is critical and 

material to any investment decision.” Yet, as detailed below, 

for Plaintiffs’ fiduciary duty claims to survive SLUSA, they 

must show that the move from commission-based to feebased accounts was not material to the decision to purchase 

or sell covered securities.

Even if Plaintiffs’ complaint is internally inconsistent, 

that does not mean that SLUSA automatically blocks them 

from bringing their state law claims as a class action. The 

question of whether a plaintiff could have pursued a claim 

pursuant to Rule 10b-5 is distinct from the question of 

whether a plaintiff did pursue that claim pursuant to Rule 

10b-5. A plaintiff can plead both state law and federal 

securities claims in the same complaint based on the same 
ANDERSON V. EDWARD D. JONES & CO. 13

underlying conduct by the defendant. The presence of a 

federal securities cause of action does not mechanically bar 

the plaintiff from pursuing a state law class action in the 

same complaint. See Fleming, 878 F.3d at 1153; Norman v. 

Salomon Smith Barney Inc., 350 F. Supp. 2d 382, 387 

(S.D.N.Y. 2004). To hold otherwise would prevent 

plaintiffs from pursuing multiple theories of recovery.

“In light of the liberal pleading policy embodied in 

[Federal Rule of Civil Procedure 8(e)], . . . a pleading should 

not be construed as an admission against another alternative 

or inconsistent pleading in the same case,” at least at the 

“initial pleading stage.” Molsbergen v. United States, 

757 F.2d 1016, 1019 & n.4 (9th Cir. 1985). Furthermore, 

forcing a plaintiff to bring different suits containing their 

federal and state law claims would be inefficient for district 

courts in these often-complex cases. The precept that a 

plaintiff can pursue multiple, even if inconsistent, theories of 

recovery in the same suit is especially true when the plaintiff 

does not maintain that inconsistency on appeal. Here, 

Plaintiffs have not appealed the dismissal of their Rule 10b5 claim.

The district court implicitly recognized that Plaintiffs 

pursued two inconsistent causes of action:

Plaintiffs maintain [that the lack of suitability 

analysis], unlike the conduct underlying their 

federal securities claim, is “not based on 

misrepresentations or omissions.” And yet, 

when describing their federal securities claim 

pages before, Plaintiffs characterized 

[Edward Jones’s] failure to conduct a 

suitability analysis as a “misleading 

omission.” [Edward Jones’s] suitability 

analysis, or lack thereof was either an 
14 ANDERSON V. EDWARD D. JONES & CO.

omission or it wasn’t—Plaintiffs cannot have 

it both ways.

In re Edward D. Jones, 2019 WL 5887209, at *2 (citations 

omitted). The district court was partially right. In light of 

SLUSA, “Plaintiffs cannot have it both ways.” Id. 

Plaintiffs’ fiduciary duty claims cannot proceed as a class 

action if those claims give rise to a Rule 10b-5 claim. That 

is the very purpose of SLUSA. However, that Plaintiffs 

cannot have it both ways does not necessarily mean that they 

cannot have it either way.5

This is not to say that every unsuccessful Rule 10b-5 

claim bypasses SLUSA. The overlap between claims that 

5 In Northstar, we cautioned that courts should not limit their 

consideration “to a pleading’s satisfaction of the bare elements of the 

state law claim” without also considering how the facts underlying those 

claims could be pleaded as federal securities law violations. Northstar, 

904 F.3d at 832. We did not state that the mere presence of a federal 

securities law cause of action in the same complaint doomed any state 

law claim as a class action under SLUSA. Additionally, in Northstar we 

discussed only “whether the plaintiff class alleged that the defendants 

made a misrepresentation or omission.” Id. at 828. As the district court 

noted in this case, Plaintiffs might have alleged that the lack of suitability 

analysis was both an omission for the purposes of Rule 10b-5 and not an 

omission for the purposes of the state fiduciary duty claims. See In re 

Edward D. Jones, 2019 WL 5887209, at *2. Here, we instead decide 

whether any purported misrepresentation or omission was “in connection 

with the purchase or sale of . . . a covered security.” Northstar, 904 F.3d 

at 828. The district court did not address the “in connection with” 

requirement for either the fiduciary duty or Rule 10b-5 claims. See id.; 

Halliburton, 573 U.S. at 267. The district court only did so for Plaintiffs’

contract claims, which were based on different conduct. See supra n.3. 

Thus, it is unclear if the district court would have held that Plaintiffs’

allegation of a lack of suitability analysis was “a connection between the 

misrepresentation or omission and the purchase or sale of a security” for 

the purposes of Rule 10b-5. Halliburton, 573 U.S. at 267.
ANDERSON V. EDWARD D. JONES & CO. 15

are both unsuccessful under federal securities laws and those 

subject to SLUSA’s class action bar is not clear and may 

require further elaboration by our court or the Supreme 

Court. However, we need not draw the exact line in this

case. As we discuss below, Edward Jones’s alleged breach 

of its fiduciary duties was clearly not “in connection with the 

purchase or sale of a covered security.” 15 U.S.C. 

§ 78bb(f)(1)(A). Thus, that Plaintiffs simply have pleaded a 

Rule 10b-5 claim does not mean that SLUSA bars them from 

bringing their state law fiduciary duty claims as a class 

action.

The parties further dispute whether a court should review 

only the state law cause of action, or the entire complaint 

(including any federal securities cause of action), when 

determining whether SLUSA bars jurisdiction over the class 

action. This disagreement misunderstands the SLUSA 

analysis. SLUSA requires a court to “determine if the 

Plaintiffs’ claims, stripped of formal legal characterization, 

could have been pursued under § 10(b) and Rule 10b-5.” 

Fleming, 878 F.3d at 1153. “Could have been pursued” 

means that courts must analyze a plaintiff’s state law 

allegations under federal securities law in every case, 

regardless of whether the plaintiff has actually alleged a 

federal securities law violation. Referencing a plaintiff’s 

Rule 10b-5 claim from the same complaint might help a 

court accomplish this task, but the court would need to 

conduct such an analysis even in the absence of a pleaded 

federal securities claim.6

6 Because “dismissals pursuant to SLUSA’s class-action bar must 

be for lack of subject-matter jurisdiction,” Hampton, 869 F.3d at 846, it 

appears that a court must raise SLUSA in every class action involving a 

claim that could implicate federal securities law, see Fed. R. Civ. P. 
16 ANDERSON V. EDWARD D. JONES & CO.

C. “In Connection With” Requires Materiality

For SLUSA’s class action bar to apply, the defendant’s 

misrepresentation or omission must be “in connection with 

the purchase or sale of . . . a covered security.” Northstar, 

904 F.3d at 828. Plaintiffs argue that their fiduciary duty 

claims “pertain to the terms of the relationship between 

Edwards Jones and the Plaintiffs and the vehicle for 

delivering the securities – neither of which are in connection 

with the purchase or sale of the securities themselves.” The 

district court did not address the “in connection with” 

requirement for the SLUSA bar or the Rule 10b-5 claim. See

In re Edward D. Jones, 2019 WL 5887209, at *2, *6. We 

now evaluate whether the alleged breach of Edward Jones’s 

fiduciary duties—namely the purported lack of suitability 

analysis—is in connection with the purchase or sale of a 

covered security.

The Supreme Court’s explanation of the phrase “in 

connection with” has shifted in recent years. In Dabit, the 

Court gave “in connection with” a relatively broad 

interpretation. Drawing on § 10(b) precedent, the Court 

stated that “it [wa]s enough that the fraud alleged 

‘coincide[d]’ with a securities transaction—whether by the 

plaintiff or by someone else.” Dabit, 547 U.S. at 85. We 

then adopted this “coincide” standard. See, e.g., Freeman, 

704 F.3d at 1116–17.

Eight years after Dabit, the Court again confronted the 

“in connection with” issue, this time in Troice. There, the 

Court held that the phrase requires a showing of materiality: 

12(h)(3) (“If the court determines at any time that it lacks subject-matter 

jurisdiction, the court must dismiss the action.”). It is nonetheless more 

efficient for a party to bring SLUSA to the court’s attention.
ANDERSON V. EDWARD D. JONES & CO. 17

“A fraudulent misrepresentation or omission is not made ‘in 

connection with’ such a ‘purchase or sale of a covered 

security’ unless it is material to a decision by one or more 

individuals (other than the fraudster) to buy or sell a ‘covered 

security.’” Troice, 571 U.S. at 387. The Court further 

explained:

The phrase “material fact in connection with 

the purchase or sale” suggests a connection 

that matters. And for present purposes, a 

connection matters where the 

misrepresentation makes a significant 

difference to someone’s decision to purchase 

or to sell a covered security, not to purchase 

or to sell an uncovered security, something 

about which [SLUSA] expresses no concern.

Id. at 387–88. The Court explained that the materiality 

principle “d[id] not . . . modify Dabit.” Id. at 387; but see 

id. at 411 (Kennedy, J., dissenting) (“[T]he Court’s analysis 

is inconsistent with the unanimous opinion in Dabit . . . .”). 

The Court reasoned that every previous case involving the 

in-connection-with language “concerned a false statement 

(or the like) that was ‘material’ to another individual’s 

decision to ‘purchase or s[ell]’” a covered security, allowing 

the two decisions to be consistent. Id. at 393 (majority 

opinion).

Whether one views the difference between Dabit and 

Troice as a change in interpretation or simply further 

explanation of SLUSA, our sister circuits have taken this 

shift seriously. The Sixth Circuit, pre-Troice, held that 

SLUSA “does not ask whether the complaint makes 

‘material’ or ‘dependent’ allegations of misrepresentation in 

connection with buying or selling securities.” Segal v. Fifth 
18 ANDERSON V. EDWARD D. JONES & CO.

Third Bank, N.A., 581 F.3d 305, 311 (6th Cir. 2009). 

However, last year, the First Circuit noted that it had 

“interpreted Troice to infuse the transactional nexus analysis 

with a determinative inquiry into materiality.” United States 

v. McLellan, 959 F.3d 442, 459 (1st Cir. 2020); see also

Taksir v. Vanguard Grp., 903 F.3d 95, 97 (3d Cir. 2018) 

(“[T]he Supreme Court in Troice made clear that: 

(1) materiality is relevant to the analysis of SLUSA’s 

prohibitive scope; and (2) Troice clarifies—rather than 

modifies—Dabit.”).

We too have noted this shift. For example, in Banks, we 

concluded that pre-Troice cases read “in connection with” 

too broadly. See Banks, 929 F.3d at 1053–54. We explained 

that the phrase still “must be read broadly, but not so broadly 

that the connection between a defendant’s conduct and the 

covered security becomes immaterial.” Id. at 1054.

We have been less than precise as to Troice’s impact. In 

Fleming, we reiterated Dabit’s “coincide” language and 

implied that the materiality requirement accords with the 

bare requirement that “[t]he misrepresentation need only 

‘have more than some tangential relation to the securities 

transaction.’” Fleming, 878 F.3d at 1155 (quoting Freeman, 

704 F.3d at 1116); see also Banks, 929 F.3d at 1054 (quoting 

the “tangential relation” language). In Fleming, we quoted 

Troice’s materiality language in a parenthetical, see 

Fleming, 878 F.3d at 1155. We later noted that “SLUSA 

requires only that ‘the misrepresentation makes a significant 

difference to someone’s decision to purchase or to sell a 

covered security.’” Id. at 1156 (quoting Troice, 571 U.S. at 

387).

The five-part test for SLUSA we enunciated in Northstar

and other cases does not explicitly include the requirement 

of “materiality.” See Northstar, 904 F.3d at 828. We take 
ANDERSON V. EDWARD D. JONES & CO. 19

this opportunity to clarify that the fourth prong of that test—

“in connection with the purchase or sale,” id.—must include 

an inquiry into the materiality of the alleged 

misrepresentation or omission to the purchase or sale of a 

covered security. See Banks, 929 F.3d at 1051. SLUSA 

itself does not define “in connection with” or “materiality.” 

See Troice, 571 U.S. at 398 (Thomas, J., concurring); see 

also Grund v. Del. Charter Guarantee & Tr. Co., 788 

F. Supp. 2d 226, 239 & n.3 (S.D.N.Y. 2011). We repeat the 

Supreme Court’s admonition in Troice: “[A] connection 

matters where the misrepresentation makes a significant 

difference to someone’s decision to purchase or to sell a 

covered security.” Troice, 571 U.S. at 387.

D. The Alleged Lack of Suitability Analysis Was Not 

Material

With this materiality requirement in mind, we turn to 

Plaintiffs’ claim that the lack of a suitability analysis did not 

have a connection to the purchase or sale of a covered 

security.

i. Fees

In a number of cases from outside this circuit, plaintiffs 

have alleged that defendant brokerage firms violated state 

law by charging customers transaction fees that exceeded the 

actual cost to the firm when purchasing or selling a covered 

security. See, e.g., Brink v. Raymond James & Assocs., Inc., 

892 F.3d 1142, 1144–45 (11th Cir. 2018). “[C]ustomers 

chose to trade securities with full knowledge of the amount 

of the Processing Fee for each trade and never paid more 

than they agreed.” Id. at 1149. However, the plaintiffs 

argued that inflating the fee beyond the actual cost of the 

transaction constituted a breach of the firm’s state law “duty 

of care owed to its customers, which [plaintiffs] alleged 
20 ANDERSON V. EDWARD D. JONES & CO.

included a duty to charge customers a reasonable fee for [the 

firm’s] services.” Id. at 1145.

The Eleventh Circuit concluded that SLUSA did not 

prohibit litigating this state law claim as a class action 

because “a reasonable investor would [not] have made 

different investment decisions had she known that some of 

the Processing Fee . . . included profit for [the brokerage 

firm] instead of merely covering the transaction execution 

and clearing costs.” Id. at 1149. For support, the Eleventh 

Circuit cited decisions from the Second and Seventh Circuits 

that had reached similar conclusions concerning fees. See 

Appert v. Morgan Stanley Dean Witter, Inc., 673 F.3d 609, 

617 (7th Cir. 2012) (holding that SLUSA did not bar 

bringing a breach of contract claim as a class action because 

“whether Morgan Stanley improperly inflated the . . . fee to 

include a profit is not objectively material to . . . any class 

members’ investment decisions”); Feinman v. Dean Witter 

Reynolds, Inc., 84 F.3d 539, 541 (2d Cir. 1996) (holding, in 

the context of a § 10(b) claim, that “reasonable minds could 

not find that an individual investing in the stock market 

would be affected in a decision to purchase or sell a security 

by knowledge that the broker was pocketing a dollar or two 

of the fee charged for the transaction”). Thus, such fees were 

not material to the decision to buy or sell securities for both 

SLUSA and § 10(b).

Plaintiffs’ allegations are based on fees charged by their 

financial advisor, Edward Jones. Anderson alleges, for 

example, that “during the history of his commission-based 

account, [he] had paid minimal fees each year.” “After he 

was moved into [a fee-based account], he paid over $6,000 

in fees and would have seen his account balance materially 

diminish each year for the life of the account had he not 

closed it.”
ANDERSON V. EDWARD D. JONES & CO. 21

It is difficult to compare Plaintiffs’ fees to those in Brink

and the other out-of-circuit fees cases. In Brink, the broker 

charged “$30.00 to $50.00 per transaction, depending on the 

type of security.” Brink, 892 F.3d at 1144. Thus, each and 

every time that the broker purchased or sold a covered 

security for a customer, the broker charged that customer a 

fee. See also Taksir, 903 F.3d at 96 (noting that “Vanguard 

charged the Taksirs a $7 commission for each of their 

respective purchases” of Nokia Corporation stock). In this 

case, Edward Jones took a percentage of each customer’s 

total assets on a regular basis.

For the Brink court, it was “the nature of the fees, not 

their amount, that render[ed] the misrepresentation 

immaterial as a matter of law.” Brink, 892 F.3d at 1149; but 

see Taksir, 903 F.3d at 99 (“In contrast with such significant 

investments, single-digit differences in trading commissions 

are objectively immaterial.”). We agree that Brink’s 

reasoning applies to this case. It is not the amount of fees 

that Edward Jones charged Plaintiffs that renders those fees 

immaterial. Instead, the fees are immaterial because the 

Second Amended Complaint alleges that Plaintiffs did not 

buy or sell any covered securities because Edward Jones 

switched them to fee-based accounts. Nowhere do Plaintiffs 

allege that they would have purchased or sold different 

covered securities had Edward Jones conducted a suitability 

analysis, which might have resulted in Plaintiffs remaining 

in commission-based accounts. Edward Jones’s purported 

lack of suitability analysis is less material to the trading of 

covered securities than the brokers’ actions in Brink and the 

other fees cases. The fees in Brink were paid each time the 

broker bought or sold a security. Here, Plaintiffs paid a fee 

“regardless of the transactions” Edward Jones took on their 

behalf.
22 ANDERSON V. EDWARD D. JONES & CO.

Even if we look to the Rule 10b-5 portion of the 

complaint, Plaintiffs do not allege that their trading 

strategies would have changed. Indeed they claim just the 

opposite. Plaintiffs allege that, after transferring to feebased accounts, Plaintiffs’ “buy-and-hold philosophy 

remained unchanged.” Plaintiffs do allege that “[t]he 

commission-based/fee-based dichotomy is critical and 

material to any investment decision,” but the only example 

they give is their decision “to transfer . . . from commissionbased accounts into fee-based accounts.” Plaintiffs inform 

us that they “do not allege in their fiduciary [duty] claims 

that . . . Edward Jones’s conduct” caused them to change 

their trading behavior. Again, Plaintiffs point to no instance 

where they would have traded covered securities differently 

had Edward Jones conducted a suitability analysis. The lack 

of modification of Plaintiffs’ investment strategies suggests 

that the lack of suitability analysis did not materially affect 

the purchase or sale of any covered securities. Cf. Fleming, 

878 F.3d at 1156 (holding that the claim met the “in 

connection with” requirement when the plaintiffs’

“allegations make clear that if Schwab had not misled 

Plaintiffs into believing that Schwab would obtain the best 

prices for Plaintiffs’ trades, Plaintiffs would not have made 

those trades”).

In Freeman, we did connect the particular fees at issue 

with the purchase or sale of covered securities. We held that 

the “excessive cost of insurance charges” was “in connection 

with” the purchase or sale of a security because “[e]ach 

inflated charge . . . depletes the value of the investment.” 

Freeman, 704 F.3d at 1114, 1117. We wrote that “[a] fund 

subject to higher fees and charges will, over time, have a 

lower value than a fund subject to more modest charges.” Id.

at 1117. However, we decided Freeman before the Supreme 

Court handed down Troice, and nowhere did we cite a 
ANDERSON V. EDWARD D. JONES & CO. 23

materiality requirement. We only required that there be 

“more than some tangential relation to the securities 

transaction.” Id. at 1116 (citation and internal quotation 

marks omitted).7

Additionally, in Freeman, “[e]very time [the insurance 

company] collected the allegedly inflated cost of insurance 

charge, it sold securities to generate the funds.” Id. at 1118; 

see also Behlen v. Merrill Lynch, 311 F.3d 1087, 1094 (11th 

Cir. 2002) (deciding that fees “were an integral part of the 

transactions” where “the very reason [plaintiffs] were sold 

the Class B shares was because those shares were subject to 

the excess fees and commissions”). That is not the situation 

here. There is no allegation that Edward Jones bought or 

sold securities to generate the fees that Plaintiffs owed after 

switching to fee-based accounts.

ii. Choice of Broker

Plaintiffs allege that they changed their investment 

behavior in one sense after switching to fee-based accounts: 

they closed their accounts. In effect, they left Edward Jones 

and found a new broker.

Choosing a broker or specific type of account is 

fundamentally different than choosing to buy or sell a 

covered security. “[T]he choice of a type of investment 

account, much like the choice of a broker-dealer, is not 

intrinsic to the investment decision itself.” Brink, 892 F.3d 

7 Further supporting the notion that Troice changed the landscape 

for the fees cases are examples of other courts holding, pre-Troice, that 

fees were “in connection with” the buying and selling of covered 

securities. See, e.g., Rowinski, 398 F.3d at 303; Dommert v. Raymond 

James Fin. Servs., Inc., No. CIV A. 1:06-CV-102, 2007 WL 1018234, 

at *11 (E.D. Tex. Mar. 29, 2007).
24 ANDERSON V. EDWARD D. JONES & CO.

at 1148–49; see also SEC v. Goble, 682 F.3d 934, 943 (11th 

Cir. 2012) (interpreting the materiality requirement under 

§ 10(b) “to mean an investment decision—not an 

individual’s choice of broker-dealers”); accord Abada v. 

Charles Schwab & Co., Inc., 127 F. Supp. 2d 1101, 1103 

(S.D. Cal. 2000) (holding that SLUSA’s “in connection 

with” requirement was not met because the “defendant’s 

conduct had nothing to do with the trading of any particular 

security . . . but merely involved the relationship between 

Schwab and its customers”).8

Edward Jones is correct that Plaintiffs argued to the 

district court that they “would have looked elsewhere for 

investment advisory services” had Edward Jones disclosed 

that they failed to conduct a suitability analysis. Closing an 

investment account is not equivalent to buying or selling a 

covered security. SLUSA bars only class actions for claims 

that are “in connection with” the latter.

iii. Best Execution

Edward Jones draws our attention to a series of cases 

involving the duty of best execution. A violation of such a 

8 As with fees, some pre-Troice cases held that a broker-investor 

relationship satisfied the “in connection with” requirement. See, e.g., 

Rowinski, 398 F.3d at 303 (“[T]he action arises from the broker/investor 

relationship, the ‘very purpose’ of which is ‘trading in securities.’” 

(citation omitted)). Rowinski’s holding is in contrast to the post-Troice

cases, such as Brink.

The First Circuit recently decided that the choice of an asset 

transition manager was material, but that court specifically distinguished 

brokers. See McLellan, 959 F.3d at 462. The asset transition manager’s 

misrepresentations “concerned the costs of the trades themselves,” and 

not “ancillary facts about [brokers’] businesses, such as the nature of a 

processing fee and the financial state of the firm.” Id.
ANDERSON V. EDWARD D. JONES & CO. 25

duty occurs when a broker “directs large blocks of its clients’

trade orders to . . . pre-determined trading venues where [the 

broker] will maximize kickback revenue.” Lewis v. 

Scottrade, Inc., 879 F.3d 850, 854 (8th Cir. 2018) (internal 

quotation marks and citation omitted). We decided that “[a] 

broker’s fraudulent claim that it is able to provide best 

execution can surely be material to the client’s decision to 

trade.” Fleming, 878 F.3d at 1156; see also Lewis, 879 F.3d 

at 853. Breaching the duty of best execution is “in 

connection with” the purchase or sale of a covered security 

because “if [the broker] had not misled Plaintiffs into 

believing that [it] would obtain the best prices for Plaintiffs’

trades, Plaintiffs would not have made those trades.” 

Fleming, 878 F.3d at 1156.

Again, Plaintiffs’ allegations do not relate to the 

purchase or sale of any particular security, or even any group 

of securities. Cf. McLellan, 959 F.3d at 463 (“[T]here need 

not ‘be a misrepresentation about the value of a particular 

security in order to run afoul of [§ 10(b)].’” (quoting 

Zandford, 535 U.S. at 820)). The fees affect the net value of 

Plaintiffs’ assets stored in an Edward Jones account, but the 

fees as alleged do not affect the net price of buying or selling 

securities for that account. Because the purported lack of a 

suitability analysis does not affect the price of any security 

when it is bought or sold, Plaintiffs do not allege that they 

“would not have made [certain] trades,” as in Fleming. 

878 F.3d at 1156.

iv. Edward Jones’s Other Arguments

Edward Jones highlights two paragraphs of the fiduciary 

duty claims in the Second Amended Complaint to try to 

show that Plaintiffs are alleging that the purported lack of 

suitability analysis relates to the buying or selling of 

securities, not just the choice of account or brokerage firm.
26 ANDERSON V. EDWARD D. JONES & CO.

First, Edward Jones calls attention to the following 

allegation:

Although Edward Jones may have exercised 

some trades in Lead Plaintiffs’ and Class 

members’ fee-based accounts, these 

additional trades (“Phantom Trades”) were 

not made with any real analysis, nor made to 

enhance the value of the fund’s assets, but to 

give the appearance that Edward Jones was 

managing the fee-based account in a 

deceptive effort to justify its fees it now 

“earned” as a percentage of the accounts’

assets.

This specific allegation appears to be irrelevant to Plaintiffs’

fiduciary duty claims. We gather that Plaintiffs are 

attempting to show how Edward Jones wanted to justify its 

recommendation to switch to fee-based accounts after the 

switch took place. Plaintiffs’ fiduciary duty claims are based 

on the allegation that the switch itself was improper without 

a suitability analysis. Once Edward Jones allegedly failed to 

conduct a suitability analysis, and made a recommendation 

without that analysis, causing Plaintiffs to switch accounts, 

the breach of fiduciary duty would be complete. This 

paragraph in Plaintiffs’ Second Amended Complaint 

perhaps provides context to their claim, but “complaints are 

often filled with more information than is necessary.” 

LaSala v. Bordier et Cie, 519 F.3d 121, 141 (3d Cir. 2008). 

“[T]he inclusion of such extraneous allegations does not 

operate to require that the complaint must be dismissed 

under SLUSA.” Id.; cf. In re Charles Schwab Corp. Secs. 

Litig., 257 F.R.D. 534, 551 (N.D. Cal. 2009) (“True, those 
ANDERSON V. EDWARD D. JONES & CO. 27

allegations are incorporated by reference into the state 

claims but are really irrelevant thereto.”).9

Second, Edward Jones points to Plaintiffs’ allegation 

that when they moved from commission-based to fee-based 

accounts, it was done “through the sale of the[] assets” in 

Plaintiffs’ accounts. Though Edward Jones did not highlight 

this allegation in its brief, at oral argument, counsel for 

Edward Jones contended that this allegation shows that 

Plaintiffs’ allegations are “in connection with the purchase 

or sale of . . . a covered security.” Northstar, 904 F.3d at 

828.

We note that this phrase appears a single time in the 

complaint, in a parenthetical, and in a paragraph devoted to 

alleging that Edward Jones did not conduct a suitability 

analysis. It is not at all clear what this phrase means. 

Anderson alleges that Edward Jones “moved his assets into” 

a fee-based account. Other Plaintiffs allege the same. 

Plaintiffs often refer to how Edward Jones “transferr[ed] . . .

clients’ assets from commission-based accounts to” feebased accounts, but Plaintiffs do not allege that they bought 

or sold different assets in those fee-based accounts. 

Additionally, Edward Jones does not point to any evidence 

in the record to prove that it sold any covered securities on 

Plaintiffs’ behalf after they transferred to fee-based 

accounts. From the face of the complaint, and “constru[ing] 

the pleadings in the light most favorable to” Plaintiffs, id.

(citation and internal quotation marks omitted), this single 

9 Additionally, Plaintiffs make clear in the Rule 10b-5 portion of the 

complaint that “to the extent Edward Jones ever performed a suitability 

review of Lead Plaintiffs, it performed such review only in connection 

with trades made after it had transferred Lead Plaintiffs’” assets to feebased accounts.
28 ANDERSON V. EDWARD D. JONES & CO.

phrase does not show that there was a material connection 

between the alleged lack of suitability analysis and the 

“purchase or sale of . . . a covered security,” id.10

10 Additionally, although the Second Amended Complaint does not 

show that the SLUSA class action bar applies because of this 

parenthetical, our independent review of the record indicates that, at least 

in theory, Edward Jones had the ability to purchase or sell securities on 

Plaintiffs’ behalf after Plaintiffs transferred to fee-based accounts. 

Edward Jones clients purportedly signed an agreement before 

transferring to fee-based accounts that suggests that Edward Jones 

distinguished between certain types of securities that could be held in 

commission-based accounts and in fee-based accounts. The agreement 

provides that “[i]f the Client transfers into the [fee-based] Account 

marketable securities that are not” permitted in a fee-based account, then 

that “Client . . . directs Edward Jones . . . to promptly sell those securities 

. . . .” A client also “agree[d] that it has determined to participate in the 

[fee-based account] and to direct the sales of those securities not 

otherwise on the Program List,” i.e., the list of funds that Edward Jones 

permitted a client to hold in a fee-based account. Even if Edward Jones 

sold some of Plaintiffs’ securities after the transfer to the fee-based 

accounts, Edward Jones has not shown that the alleged lack of suitability 

analysis was “in connection with” the purchase or sale of the securities 

for two reasons.

First, similar to the “phantom trades” argument, Plaintiffs’ fiduciary 

duty claim is based on the alleged lack of suitability analysis, not on posttransfer sales of securities. Once Plaintiffs agreed to transfer to feebased accounts, allegedly because Edward Jones did not conduct a 

suitability analysis, the purported breach of fiduciary duty is complete. 

Actions Edward Jones took after the breach, such as selling securities as 

part of the transfer of assets into the fee-based accounts, are extraneous 

to the alleged state law violation.

Second, as outlined above, Plaintiffs’ complaint is premised on their 

“choice of a type of investment account,” which “is not intrinsic to the 

investment decision itself.” Brink, 892 F.3d at 1148–49. The alleged 

lack of suitability analysis might have caused Plaintiffs to choose feebased accounts, but, unlike in Fleming, Plaintiffs do not allege that they 
ANDERSON V. EDWARD D. JONES & CO. 29

Finally, Edward Jones contends that it “did, in fact, 

perform a suitability analysis, as demonstrated by the 

documents considered by the district court.” The district 

court stated, only when discussing the Rule 10b-5 claim, that 

the “questionnaires were part of the suitability analysis 

[Edward Jones] conducted . . . further undermining 

Plaintiffs’ allegations that [Edward Jones] did not conduct a 

suitability analysis.” In re Edward D. Jones, 2019 WL 

5887209, at *5 (citation and internal quotation marks 

omitted). Whether Edward Jones did or did not conduct a 

suitability analysis is a question pertaining to the substance 

of the fiduciary duty claims. At this stage, we decide only 

whether the district court had jurisdiction over those claims 

pursuant to SLUSA. We must “accept factual allegations in 

the complaint as true and construe the pleadings in the light 

most favorable to the nonmoving party,” the Plaintiffs. 

Northstar, 904 F.3d at 828 (citation and internal quotation 

marks omitted). Plaintiffs’ Second Amended Complaint 

alleges that Edward Jones failed to conduct a suitability 

analysis. A defense that the questionnaires did amount to 

such an analysis might succeed at a later stage of the 

litigation, but not at this jurisdictional juncture.

“would not have made those trades” that occurred after the switch to the 

fee-based accounts. Fleming, 878 F.3d at 1156. They tell us the 

opposite. Plaintiffs do not allege that they changed their trading behavior 

at all; they allege only that they would not have switched to fee-based 

accounts. The alleged lack of suitability analysis must “make[] a 

significant difference to [Plaintiffs’] decision to purchase or to sell a 

covered security.” Troice, 571 U.S. at 387. The alleged lack of 

suitability analysis might have made a significant difference to the 

decision to move to fee-based accounts, but Plaintiffs have not alleged 

that it made a significant difference in any decisions to purchase or sell 

securities. Their “buy-and-hold philosophy remained unchanged.”
30 ANDERSON V. EDWARD D. JONES & CO.

IV. CONCLUSION

We hold that SLUSA does not bar bringing the state law 

fiduciary duty claims as a class action in Plaintiffs’ Second 

Amended Complaint. Plaintiffs claim that Edward Jones 

breached its fiduciary duties under Missouri and California 

law by failing to conduct a suitability analysis. Plaintiffs 

allege that this lack of suitability analysis caused them to 

move their assets from commission-based accounts to feebased accounts, which was not in their best financial interest 

as low-volume traders. Because the alleged failure to 

conduct a suitability analysis was not material to the decision 

to buy or sell any covered securities, Plaintiffs’ state law 

claims are not based on alleged conduct that is “in 

connection with” the purchase or sale of any covered 

securities. SLUSA requires that all five elements outlined 

by this court be met if a class action is to be barred. See 

Northstar, 904 F.3d at 828. Because Plaintiffs’ state law 

claims do not meet the fourth requirement,11 we reverse the 

decision of the district court and remand for further 

proceedings consistent with this opinion.

REVERSED AND REMANDED.

11 Because we decide that Plaintiffs’ claims are not “in connection 

with the purchase or sale of a covered security,” 15 U.S.C. 

§ 78bb(f)(1)(A), we need not analyze Plaintiffs’ other contention that the 

lack of suitability analysis was not a misrepresentation or omission for 

the purposes of SLUSA. See Banks, 929 F.3d at 1055.