2009 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit

1-20-2009 

# In Re: Lord Abb ett
P r e c e de nt i al or N on-P r e c e de nt i al : P r e c e de nt i al D ocke t N o . 07-1112

F o llow thi s and a dd it ion al work s at : http://d i git alc ommon s .l a w . vi ll anova . e du/thir dc ir c uit_2009

Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. It h as be e n a c c ept e d for inclusion in 2009 D e c i sion s b y an authori z e d a dmini s tr at or of V i ll anova U nive r sity S choo l of L a

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. F or mor e inform at ion, p le as e c ont a ct Be n j amin
. C arl s on@l a

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. Re c omme nde d C it at ion

" In Re: L or d Ab be tt " (2009). 2009 D e cisio n s . P ape r 1957. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2009/1957P RE CE DE NT I AL
UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

N o. 07- 1112

I N R E : L or d A bbettM utual Funds Fee l i t i gat i on, JO S E P H C . W H IT E ; JO S E P H IN E L O G A N ; RI CH AR D C UR T I S ; BO BO RT NE R; J AM E S A. PI NG I TOR E; PHI LI P B. KA TZ,
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.

v. LOR D A BBETT & CO LLC; LOR D A BBETT DI S T RI BU T OR L L C; T RA CI E E

. AHE RN ; JO A N A . B IN S T O C K ; D A N IE L E . C A R P E R ; R O B E R T S . D O W ; H O W A R D E . H A N S E N ; P AUL A. HI L S T AD; L AWRE NC E H. KAP L AN; R O B E R T G

. M O R R IS ; A

. E D W A R D O B E R H A U S , III ; ED W A RD K

. V O N D ER LI N D E; M I CH A EL B RO O K S; Z A N E E . B R O W N ; P A T R IC K B R O W N E ; J OHN J

. DI CH I AR O; S HOL OM DI NS KY; L E S L I E J

. DI XON; KE VI N P

. F E RG US ON; R O B E R T P . F E T C H ; D A R IA L . F O S T E R ; DAN I EL H. F RAS CAREL LI ; ROBER T I

. GERBE R; M I CH AEL S. GO LDSTEI N; M I CH AEL A

. GR AN T;2 CH AR L E S HOF E R; W. T HOMAS HUDS ON; CI N D A H U G H ES; ELL EN G

. I TSK O V I TS; M AR EN LI ND STROM ; RO BERT A

. LEE; GR EGO RY M

. M AC OSK O; THO M AS M ALO NE; CHARLE S M ASS ARE, J R. ; S TE P HEN J

. M CGRUDER; P A U L M C N A M A R A ; R O B E R T J. N O E L K E ; R . M A R K P E N N IN G T O N ; W A L T E R P R A H L ; M IC H A E L R O S E ; E L I M . S A L Z M A N N ; D O U G L A S B . S IE G ; R IC H A R D S IE L IN G ; M I CH AE L T

. S M I T H; RI CH AR D S M OL A; DI AN E TOR NEJ AL; CH RI STOPHER J

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A r gued on J une 25, 2008

B efor e: SL O V I T E R , B A R R Y and R O T H , C i r cui tJ udges

( O pi ni on fi l ed: J anuary20, 2009 )3 J er om e M

. C ongr es s , E s qui r e ( A r gue d) M i l b e r g W e i s s , LLP O ne Penns y l vani a Pl aza , 49 Fl oor th N ew Y or k, N Y 10119- 0165
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. R o cc o , E sq u ir e Shal ov, St one & B onner 65 M adi s on A venue, Sui t e 333 M orr i s t ow n, N J 07960
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o r A p p e llan ts J eff r eyB

. M al ett a, E s qui r e ( A r gue d) N icho las G

. T erris, E sq u ir e S h an d a N

. H asti n g s, E sq u ir e Ki r k p a tr i c k & Lo c k h a r tPr e s t o n Gat e s El l i s , LLP 1 6 0 1 K S tr e e t, N . W

. W as hi ngt on, D

. C

. 20006 C h ri stop h er A

. B arb arisi , E sq u ir e Ki r k p a tr i c k & Lo c k h a r tPr e s t o n Gat e s El l i s , LLP O ne N ew ark C ent er , 10 Fl oor th N ew ark, N J 07102 C ouns el forA ppel l eesA num berof otherdefe ndant s ar e no l ongeri n the ca s e. 1 4

O P I N I O N

RO TH , C i r cui tJ udge: Pl a i nt i ff s a pp e a l the D e c e mber4, 20 06 , or de rof the U

. S. D is tr ict C o u rt f

o r th e D istric t o f

N e w Je rse y , d ism iss in g th e ir act i on w it h pr ej udi ce pur s uantt o the Secur i t i es L i t i gat i on U n ifo rm S tand ard s A ct o f 1 9 9 8 (S L U S A ), 1 5 U

. S

. C

. § 7 8 b b (f). T hi s appea l pr es ent s the ques t i on w hetherSL U SA r equi r es the d i s mi s s a l o f

th e e n t i r e a c t i on w he n th e a c t i o n i n c l u d e s s o me s t at e l aw cl as s act i on cl ai m s thatcl ear l y m ay not be mai nt ai ned under SL U SA as w el l as othercl ai m s thatar e nots o pr ohi bi t ed. W e ho l d thatS L U S A do es not r equ i re s uch a dis m iss a l. A ccordi ng l y w e w i l l vacate the d i sm i ssal and rem and this case for further proceedings.
I . Fac t ualand Pr oc e dur alBackg r ound Pl ai nt i ffs ar e a pr opos ed cl as s of s har ehol der s of m utual f u n d s ma n a g e d b y L o r d , Ab b e t t & C o . L L C ( L o r d Ab b e t t )

. On February 9, 2004, theyfi l ed thi s l aw s ui tagai ns tL or d A bbettand L or d A bbettD i s tr i but orL L C , the i nvestm entadvi s erand di s tr i but o r o f t he Lord A bbettm utual funds

. Fol l ow i ng the 1 co n s ol i dat i on of m ul t i pl e r el at ed cas es , pl ai nt i ffs fi l ed a5 C ons ol i dat ed A m ended Cl as s A ct i on C om pl ai nt on A ugus t16, 2 0 0 4

. In th e ir C o n so lid a ted A m e n d e d C las s A c tio n C o m p lain t, p lain t i ffs al l eged (am on g o ther m i sdeeds) that Lo rd A bb ett ch arg ed its e x ist ing inv esto rs ex ce ssive fe es th at w ere im p ro p e rly u se d to p a y b ro k e rs to m a rk e t L o rd A b b e tt fu n d s to otheri nves t or s . Pl ai nt i ffs cl ai m ed thatL or d A bbettw as m ot i vat ed t o char ge exc es s i ve fees beca us e i t s m anage m entfee s w er e base d on the amountof as s et s bei ng m anage d – as the nu m ber of invest ors gr ew so did the asset s – and so did the fees. P l a i n t i f f s a l l e g e d v i o l a t i o n s o f b o th f e d e r a l a n d s t a t e l a w, i ncl udi ng vi ol at i ons of Sect i ons 36( b) and 48( a) of the I nves t m entC om panyA ct o f 1 9 4 0 , br oughton behal f of the p ro p o se d c las s, a n d f

o u r sta te law c o u n ts, a lso b ro u g h t o n b e h a lf of the cl ass. D efe ndant s fi l ed a mot i on t o di s m i s s , bas ed i n parton the gr ound t hatpl ai nt i ffs ’ act i on w as pr e- empt ed bySL U S A , 15 U

. S. C

. § 78bb( f)

. A s w e re cent l yexpl ai ned i n LaSal a v. B or der etC ie

. , 5 19 F. 3d 121, 127- 28 ( 3d C i r . 2008) , SL U SA w as enac t ed as a s uppl ementt o the P r i vat e Secur i t i es L i t i gat i on R eform A ctof 1995, 15 U

. S. C

. §§ 77z- 1, 7 8 u -4 ( PSL R A or R eform A ct )

. C ongr es s enac t ed t he P SL R A t o pr eventthe fi l i ng o f “ strik e su its” – a b u siv e c las s a c tio n s w h ich a re b ro u g h t w ith th e h o p e th a t th e e x p e n se o f lit ig a tio n m a y f o rc e d e f e n d a n ts to s e t t l e d e s p i t e th e a c t i o n s ’ l a c k o f me r i t
. I n Co n g r e s s ’ s v i e w, s uch act i ons “unnec es s ar i l y i ncr eas e the cos tof r ai s i ng capi t al an d ch il l corp o rate d iscl o su re . . . . ” S

. R e p . 1 0 4 -98 (19 9 5 ), r epr i nt ed i n 1995 U

. S. C

. C

. A

. N

. 679, 683. T he PSL R A i m pos edI n part i cul ar , the PSL R A i m pos ed hei ght ened p lead i ng 2 r equi r ement s i n fr aud ca s es br oughtunderSect i on 10( b) of the E xchange A ct , 15 U

. S

. C

. § 78j , and SE C R ul e 10b- 5. T he P S L R A re q u ire s th a t p lain tiff s p lea d m isle a d in g sta tem e n ts

“ w ith p a rticu lar ity ,” 1 5 U .S .C . § 7 8 u -4 (b )(1 ), p lea d f a c ts cr ea ti n g a “s tr ong i nfer ence ” of s ci ent er , 15 U

. S. C

. § 78u4( b) ( 2) , and pr ove l os s caus at i on, 15 U

. S. C

. § 78u- 4( b) ( 4)

. T he P S L R A al so “l i m i t [s] recoverabl e dam ages and at t orney ’s fees, provide[s] a ‘s afe h arbor’ for forw ard- l oo king st at em ents , i m pos e[s ] new r es tr i ct i ons on the s el ect i on of ( and compensa ti o n aw ard ed to) l ea d p lai n ti ff s, m an d at e[s ] i m pos i t i on of s anct i ons forfr i vol ous l i t i gat i on, and author i ze[ s ] a s ta yof di s coverypendi ng r es ol ut i on of anym ot i on t o di s m i s s . ” Me rr ill Ly n c h , P ier c e , Fe n n e r & Sm ith , In c . v. D a b it , 547 U

. S. 71, 81 (20 0 6 ) (D a b it

II ) (citin g 1 5 U .S .C . § 7 8 u -4 ); see al so 1 5 U. S

. C. § 7 8 u -5

. 6 a numberof r equi r ement s on fede r al s ecur i t i es l i t i gat i on plai nti ffs, desi gn ed to det er s uch fri vo l ou s sui t s. 2
I n r eac t i on t o the r i gor s of th e P S L R A , pl ai nt i ffs began fi l i ng cases i n st at e cou rt s un der l ess stri ct st at e securi t i es l aw s. C ongr es s then ena ct ed SL U SA , s t at i ng that [ I ] n o rd e r to p re v e n t ce rta in S tate p riv a te s ecur i t i es cl as s act ion l aw s ui t s al l egi ng fr aud fr om bei ng us ed t o frus tr at e the obj ect i ves of the Pr i vat e S ecur i t i es L i t i gat i on R eform A ctof 1995, i t i s appr opr i at e t o enac t nat i onal s t andar ds for s ecur i t i es cl ass ac ti o n law su it s i nvol vi ng7 nat i onal l y tr aded s ecur i t i es , w hi l e pr es ervi ng the a p p ro p r ia te e n f

o r c e m e n t p o w e rs o f S tate s ecur i t i es r egul at or s and notchangi ng the curr ent treatm ent of i nd i vidual l aw sui t s. SL U SA , S

. 1260, 105th C ong. § 2( 5) , 112 St at
. 3227. T he SL U SA C onfer ence R eportexpl ai ns that [S ]i nce passage of the R eform A c t, pl ai nti ffs’ law y er s have s oughtt o ci r cumventthe A ct ’s pr ovi s i ons byexpl oi t i ng di ffe r ences betw een Feder al and St at e l aw s by fil i ng fr i vol ous and sp ec u lat ive l a w su it s in S tat e c o u rt , w h ere essent i al l ynone of the R eform A ct ’ s pr ocedur al o r su b sta n tiv e p ro tec tio n s a g a in st a b u siv e su its ar e ava i l abl e. . . . [A ] s i ngl e s t at e ca n i m pos e the r i s ks and cos t s of i t s pecul i arl i t i gat i on s y s t em on a ll n a tio n a l issu e s. T h e so lu tio n to th is p ro b lem is t o m ake Fede r al court the excl us i ve venue for m os ts ecur i t i es fr aud cl as s act i on l i t i gat i on i nv olvi ng nati on al l ytraded securi t i es. H

. R

. R ep. N o. 105- 803, at 14- 15 ( 1998) ( C onf. R ep. ) ( i nt ernal q u o tat ion o m itted).
A ccor di ngl y , SL U SA barr ed ce r t ai n cl as s act i ons and m a ss a c tio n s f

ro m sta te c o u rts, p ro v id in g in re lev a n t p a rt: N o cov er ed cl as s act i on bas ed upon the sta tu to ryo r c o m m o n law o f a n yS tate ors ubdi vi s i on ther eof maybe mai nt ai ned8 i n anySt at e orFeder al courtbyanypr i vat e partyal l egi ng – ( A ) a mi s r epr es en t a t i o n o rom i s s i on of a ma t e r i a l f

a c ti n c o n n e c t i on w i th the pur chas e ors ale o f a c o v ere d sec u ri ty ; or ( B ) thatthe def

en dantus ed or emp l o y e d a n yma n i p u l a t i v e or d e c e p tiv e d e v ice o r co n triv a n c e in connec t i on w i th the pur chas e or s a l e o f a c o v e r e d s e c u r i ty. 15 U

. S. C

. § 78bb( f) ( 1)

. U nderSL U SA , a “c over ed cl as s act i on” b ro u g h t in sta te c o u rt m a yb e r e m o v e d to f e d e ra l co u rt a n d is s u b je c t to th e a b o v e lim ita tio n s . 1 5 U .S .C . § 7 8 b b (f )( 2 ). S L U S A defines the term “cov ered cl ass act i on ” as: ( i ) anys i ngl e l aw s ui ti n w hi ch – ( I ) damages ar e s ou g h ton b e h a l f o f mor e th a n 50 persons or prospect i ve clas s m em ber s , and ques t i ons of l aw or factcom m on t o those per s ons o r m ember s of the pr os p ect i ve cl as s , w i thout r efe r ence t o i s s ues of i ndi vi dual i zed r el i ance on9 an al l eged m i s s t at ementor om i s s i on, pr edomi nat e over a n y q u e stio n s a f

f e c tin g o n ly ind ividua l per s ons or m em b ers; or ( I I ) one orm ore nam ed part i es s eek t o r ecove r damages on a r epr es ent at i ve bas i s o n behal f of t hem selv es a n d ot her u n n a m e d p a r ties sim ilarly s i tuat ed, an d ques t i ons of l aw or fact com m on t o those per s ons or m ember s o f t he prospecti ve clas s pr edomi nat e o v er a ny qu est i on s affect i ng on ly i ndi vi dual p ersons or m em b ers; or ( i i ) anygr oup of l aw s ui t s fi l ed i n or pendi ng i n the s ame co u r tand i nvol v i n g c o mmon ques t i ons of l aw orfac t , i n w hi ch – (I) d am ag es are s oug hton behal f of m ore tha n 50 per s ons ; andT he D i s tr i ct C our t i s s ued an amended or derand opi ni on on 3 D e c e m b e r 2 8 , 2 0 0 5

. I

n r e Lord A bbet t Mut

. Funds F ee L it ig. , 4 0 7 F

. S u p p . 2 d 6 1 6 (D

. N

. J. 2 0 0 5 ). 10 ( I I ) the l aw s ui t s ar e j oi ned, con sol idat ed, or ot herw i se pr oceed as a s i ngl e ac t i on foranypurpos e. 1 5 U

. S

. C

. § 7 8 b b (f)(5)(B ). SL U SA is fr equent l ydes cr i bed as “pr e- empt i ng” s t at el aw cl ai m s . H ow ever , as the Supr eme C our thas explai ned, S L U S A d o e s n o t ac tu a lly“ p re -e m p t” s u c h c laim s; it m e re ly

“ d e n ie s p lain tiff

s th e rig h t to u se th e c las s-a c tio n d e v ice to vi ndi cat e ce r t ai n clai m s . ” Merri l l L ynch , P i erce, Fenn er & Sm ith , I n c . v. D a b it , 5 4 7 U

. S

. 7 1 , 8 7 (20 0 6 ) (D a b it II ). Pl ai nt i ffs r et ai n the ri ght t o br i ng s uch a cl ai m as an i ndi vi dual s t a t e - l a w cl a i m orf

e d e r a l s e c u r i t i e s f

r a u d c l a s s a c t i o n c l a i m. L a Sa la , 5 1 9 F .3 d a t 1 2 9

. O n A u g u s t3 0, 2005, the D i s tr i ctC our tdi s m i s s ed the four st at e cl ai m s pl ed in pl ai nti f f s’ C on sol i dated A m end ed C l ass A ct i on C om pl ai ntas pr e- empt ed bySL U SA

. T he D i s tr i ct 3 C o u rt a lso d ism iss e d th e re m a in in g f e d e ra l cla im s f

o r f a ilu re to s t at e a c l ai m . W i th r es pectt o pl ai nt i ffs ’ cl ai m s for vi ol at i ons of Sect i ons 36( b) and 48( a) of the I nves t m entC om panyA ctof 19 40 , the D i stri ct C ou rt determ i ned that t here i s no d i rectcause of ac t i on underSect i on 36( b) , w hi ch w as a pr edi cat e fortheO n Feb ruary 21 , 20 06 , defe nd ants fi l ed a m oti on t o d i sm i ss 4 on the gr ounds that( 1) pl ai nt i ffs ’ cl ai m s w er e t i m e barr ed under the one- y earl ook back pe r i od of Sect i on 36( b) ( 3) , and they c o n t a i n n o r e l e v a n ta l l e ga t i o n s a d d r e s s i n g th e r e l e v a n tt i me f ra m e ; (2 ) se c tio n 1 7 o f th e In v e stm e n t C o m p a n yA c t p ro h ib its p lain tiff s f ro m b rin g in g a c o m m o n a c tio n o n b e h a lf o f m u lti p le L or d A bbett funds ; ( 3) pl ai nt i ffs fai l ed t o s t at e a cl aim u nder Sect i on 36( b) o f the I nves t m entA dvi s er s A ct ; and ( 4) s ect i on 11 Sect i on 48( a) cl ai m , and di s m i s s ed thos e cl ai m s w i thout p re ju d ic e . Pl ai nt i ffs fi l ed a Sec ond A m ended C o m p la i nton S e p t e mb e r2 9 , 2 0 0 5 , a s s e r t i n g o n l ytwo d e r i v a t i v e c l a i ms al l egi ng vi ol at i ons of Sect i ons 36( b) and 48( a) of the I nves t m ent C o m p a n yA c t. In g e n e ra l, pla in tiff s a ll e g e d th a t L o rd A b b e tt had recei ved excessi ve m anag em ent fees fr om i t s i nv est ors, pr i m ar i l ybeca us e i thad fai l ed t o pas s al ong the bene fi t s of the e c o n o m ie s o f

s c a le a c h ie v e d a s th e f

u n d s g re w . M eanw hi l e, o n Sept ember14, 2005, defe ndant s m oved for r ec o n side rat i on of the D i stri ctC ou rt ’s decis i on t o d i sm i ss the c l a i ms wi tho ut pr e

j ud i c e , i n pa r t on the gr ou nd s tha tSLU SA r equi r es dism is s al of the ent i r e ac t i on notm er el ydi s m i s s al of the i m pr opers t at e l aw s ecur i t i es cl ai m s . W i thoutr eac hi ng the i s s ue, the D i s tr i ct C our t deni ed t he mot i on as l acki ng s uffi ci ent gr ounds forr econs i der at i on but subs equent l ygr ant ed the d ef en d an ts l ea v e to b ri ef

the iss u e fo r de novo cons i der at i on. A c c o rd in g ly , o n M a y3 , 2 0 0 6 , d e f e n d a n ts f

iled a m o tio n to d i s mi s s th e S e c o n d Am e n d e d Co mp l a i n tp u r s u a n tt o S L US A. 436( b) does not appl y t o 12b- 1 fee s . T hi s m ot i on w as br i efe d by th e p a rties , b u t th e D istric t C o u rt n e v e r ru led o n it. C i t i ng R ow i ns kiand the D i s tr i ct C our t ’ s opi ni on i n thi s cas e, 5 the T enth C i r cui t r ece nt l y di s m i s s ed an ent i r e compl ai ntas pr eemp t e d u n d e rSLUSA w h e r e th e p l a i n t i f f s h a d i n c o rp o r at ed thei rgener al cl as s al l egat i ons i nt o eac h of t hei r cl ai m s , eac h of w h ic h w a s b a s e d o n s ta te la w . A nders on v. Mer r i l lLynch, 12 T he D i s tr i ctC our t gr ant ed t he m ot i on and di s m i s s ed the Second A m ended Com pl ai ntw i th pr ej udi ce on D ece m ber4, 2006. T he D i s tr i ct C our t r efe rr ed t o our opi ni on i n R ow i ns kiv. Sal om on Sm i th B ar ney I nc. , 398 F. 3d 294 ( 3d C i r . 2005) , w her e, in re sp o n se to th e p lain tif f s ’ a rg u m e n t th a t th e c o u rt sh o u ld exami ne ea ch count s epar at el y t o det erm i ne w hetheri ts houl d be pr e- empt ed, w e not ed i n di ctum : [ W ] e q u e stio n w h e th e r p re e m p tio n o f c e rta in count s and r emand of other s i s cons i s t entw i th the pl ai n m eani ng of SL U SA

. T he s t at u te does not pr eemptpart i cul ar‘ cl ai m s ’ or ‘ count s ’ butr ather pr eempt s ‘ act i ons , ’ 15 U

. S. C

. § 78bb( f)( 1 ), s ugges t i ng thati f any cl ai m s al l eged i n a cove r ed cl ass act i on are pr eem pted, the en t i re act i on m ust be di s m i s s ed.
I d. at305. A s th e D i s tr i ctC our tacknow l edged, w e di d not r eac h thi s i s s ue i n R ow i ns kibeca us e i n that cas e t he pl ai nt i ff ha d i ncorpor at ed pr e- empt ed s t at e- l aw al l egat i ons i nt o everycount o f his co m p lai n t. I

d. H ow ever , the D i s tr i ctC our tfound 5P i er ce, Fenner& Sm i th, I nc. , 5 2 1 F .3 d 1 2 7 8 , 1 2 8 7 n .6 (1 0 th C ir

. 2 0 0 8 )

. A s s uch, the Tent h C i r cui tdi d nothave t o deci de “w hether , i n anotheract i on, SL U SA w oul d perm i tthe pr ecl us i on of ce r t ai n cl ai m s and the r emand of ot her s . ” I d. T he D i s tr i ct C our t s i m i l ar l y ci t ed the U

. S. D i s tr i ctC our tfor 6 th e Di s tr i c t o f New J e r s e y ’ s h o l d i n g i n L aSala v. B or di eret C i e. , 452 F. Supp. 2d 575 ( D

. N

. J

. 2006) , i n w hi ch the di s tri ct court di s m i s s ed S w i s s l aw cl ai m s thati ncorpor at ed byr efe r ence and w er e cl ear l yt i ed t o the al l egat i ons s uppor t i ng the s t at e l aw s e c u r i t i e s c l a i ms . W e r e ve r s e d , n o t i n g th a t“ b yi t s t e r ms [SL U SA ] onl yaff

ect s cl ai m s bas ed upon the l aw s of a s t at e or t err i t oryof the U ni ted S tat es . ” LaSal a v. B or di eret C i e. , 519 F. 3d 121, 143 (3d C i r . 2008)

. W e di d nothave t o r eac h the q u e stio n p re se n ted h e re , h o w e v e r, n a m e ly “ [ w ]h e th e r a sin g le offe ndi ng cl ai m r equi r es di s m i s s al of the ent i r e ac t i on . . . . ” I d. at129 n. 6. 13 Ro wi n s ki “ h e lp f

u l” in th a t it“ p ro v id e [ d ] stro n g su p p o rt, alb e it i n d icta , for the p roposi t io n th atS L U S A preem pts enti re cl ass a c tio n s ra th e r t h a n in d iv id u a l c la im s .” 6
T he D i s tr i ctC our tthen turned t o the s t atut oryl anguage . T he D i s tr i ctC ou rt n o ted that , byi t s ow n t erm s , SL U SA pr eem p ti o n ap p li es to an y“c o v ere d class a cti o n , ” w h ich is in turn defi ned as “anys i ngl e l aw s ui t ” or“g roup of l aw s ui t s , ” and c o n c lu d e d th a t th is la n g u a g e re f lec ts C o n g re ss ’ s in te n t to r egul at e ent i r e l aw s ui t s . T he D i s tr i ct C our t r eas oned furtherthat C o n g re s s h a s u se d th e w o rd “ c laim ” o r “ c laim s” e lse w h e re in the secu ri t i es law s, i ncludi ng i n the PS L R A , and that C on gressT he Second Ci r cuit su b seq uent l yr ei t er at ed i t s hol di ng that 7 SL U SA does notr equi r e di s m i s s al of an e nt i r e ac t i on that i ncl udes onl ys om e pr e- empt ed cl ai m s i n a non- pr ece dent i al o p inion

. G r ay v. Seaboar d Secs

. , I nc. , 126 Fed. A ppx. 14, 16 (2d C ir

. M ar. 9, 20 0 5 ). 14 p re su m a b lyw o u ld h a v e u se d a n a rro w e r te rm th a n “ a c tio n ” if it in te n d e d o th e rw is e . T he D i s tr i ctC our tacknow l edged thatthe C ourtof A ppeal s forthe Second Ci r cui thad addr es s ed t he pre s enti s s ue i n D abi tv. Mer r i l lLyn ch , P i er ce, Fenner& Sm i th, I nc. , 395 F

. 3 d 2 5 (2d C ir

. 2 0 0 5 ) (D a b it I ) , hol di ng thatSL U SA does not r equi r e the di s m i s s al of an e nt i r e ca s e w her e onl y so m e of the cl ai m s ar e i m pr oper s t at e l aw cl ai m s underSL U SA

. I n D a b it 7 I, the courtacknow l edged thatSL U SA ’ s pr ovi s i ons m i ghtbe r ead a s pr ohi bi t i ng m ai nt enanc e of an ent i r e act i on thati ncl udes p re -e m p te d sta te- law a lleg a tio n s. 3 9 5 F .3 d a t 4 7 . T h e c o u rt, h o w ev er, de cli n ed to h o ld that S L U S A o p era ted in this m an n er, re a s o n in g th a t, O n th is re a d in g , S L U S A w o u ld e f f e c tiv e ly pr eemptanys t at e l aw cl ai m conj oi ned i n a gi ven c a se w ith a se c u rities f ra u d c laim , w h a tev e r its n a tu r e . W e a ss u m e , h o w e v e r, th a t th e h isto ric pol i ce pow er s of the s t at es ar e notpr eempt ed un l ess i tw as C on gress ’s ‘cl ear and m anifest purpos e’ t o do s o.15 Id

. ( q u ot i ng C ity o

f Milw a u ke e v . Ill in o is , 451 U

. S. 304, 316 (19 8 1 )).
T h e S u p rem e C o u rtrev erse d the C o u rto f A p p ea l’ s h o ld in g o n o th e r g ro u n d s, ru lin g th a t S L U S A p re -e m p ts s tate law c laim s a lleg in g f

ra u d b r o u g h t b yin v e sto rs w h o h e ld securi t i es, as w el l as b y tho se w ho pu rchased or sol d securi t i es. D a b it II, 547 U

. S. at71. T he Supr eme C our texpl ai ned,
I n concl udi ng thatSL U SA pr e- empt s s t at e- l aw h o l der cl ass- act i on cl ai m s of the ki nd al l eged in D abi t ’ s compl ai nt , w e do notl os e s i ghtof the gener al ‘ pr esu m [pt i on] thatC ongr es s does not c a v a lie rl yp re -e m p t s ta te -l a w c a u s e s o f a c tio n .’ Medtr oni c, I

nc. v. Lohr , 518 U

. S. 470, 485 ( 19 9 6 )

. B utthatpr es um pt i on carr i es l es s for ce her e than i n othercont ext s beca us e SL U SA does n o t actua ll yp re-em p t any stat e cau se of ac ti o n . It si m plyden i es pl ai nti ffs the ri gh tt o u se the clas sact i on devi ce t o vi ndi cat e cert ai n cl ai m s . T he A ct does notdenyanyi ndi vi dual pl ai nt i ff, ori ndeed a n yg ro u p o f f

e w e r th a n 5 0 p lain tiff

s, th e rig h t to e n f o r c e a n y s t a t e - l a w c a u s e o f a c t i o n th a tm a y e x ist.
M o reo v er, th e tail o red e x c ep ti o n s to S L U S A ’s preem pti ve co m m and dem on strat e t hat C on gress di d notbyanym eans act‘ cava l i er l y ’ her e. T he s t atut e ca r eful l yexempt s fr om i t s oper at i on c e rta in c las s ac tio n s b a se d o n th e law o f th e S tate16 in w h ich th e iss u e r o f th e c o v e re d se c u rityis i ncorpor at ed, act i ons br oughtby a s t at e age ncyor sta te p e n sio n p lan , ac tio n s u n d e r c o n tra c ts betw ee n i s s uer s and i ndentur e trus t ees , and der i vat i ve ac t i ons br oughtby shar ehol der s on behal f of a corpor at i on. 15 U

. S. C

. §§ 7 8 b b (f)(3)(A )-( C ), (f)(5)(C ).
D a b it II, 547 U

. S. at87.
I n di s m i s s i ng pl ai nt i ffs ’ ent i r e ac t i on i n the pr es entcas e, the D i s tr i ct C our t acknow l edged t hat , i n D a b it II, th e S u p r e me C our thad nots peci fi cal l yaddr es s ed w hetherpr eempt i on of one cl ai m under SL U SA r equi r es di s m i s s al of the ent i re a ct i on. H ow ever , beca us e the pr es um pt i on agai nst p re- empt i on had u n d erp inn ed the S ec o n d C ir cu it ’s a n a ly sis, the D istri ct C o u rt f o u n d th a tth e Su p r e me Cou r t ’ s d e c i s i o n i n D a b it II had “w ea k en ed , if n o t un d erc u t entir ely , ” th e S ec o n d C ir cu it ’s rea so n ing that S L U S A d o es n o t r eq u ir e d ism issal o f the e n ti re act i on. T he D i s tr i ctC our tal s o concl uded thatr eadi ng SL U SA as pre- em pti ng enti re act i on s w ou l d n ot pro du ce absu rd r esul t s, r ej ect i ng pl ai nt i ffs ’ cl ai m thatappl y i ng SL U SA t o r eq u ir e t he di s m i s s al of an e nt i r e ac t i on w oul d encour age the fi l i ng of m u lt ip le law su its b a se d o n th e sa m e se t o f f a c ts in o rd e r to s egr egat e s t at e and fede r al cl ai m s . T he D i s tr i ctC our tfound that C ongr es s had addr es s ed thi s pot ent i al pr obl em bytr eat i ng “any gr oup of l aw sui t s ” as a “c over ed cl as s act i on” forpurpos es of S L US A.17 P lai n ti ff s ap p ea led. T h ey co n tend that the D istri ct C o u rt erred in co n clud ing that S L U S A req u ir es d ism issal of an en ti re ac ti o n . D ef

en d an ts urg e u s to a f f ir m th e D istri ct C o u rt ’s hol di ng or , i n the al t ernat i ve, t o aff i r m the m ot i on t o di s m i s s on the gr ounds that ther e i s no pr i vat e r i ght of act i on underSect i on 48( a) of the I nves t m ent C o m panyA ctand thatpl ai nt i ffs have fai l ed t o s t at e a c l ai m underSect i on 36( b)

. B ec aus e w e agr ee that SL U SA does not r equi r e di s m i s s al of an ent i r e action that in c lu d e s s o m e c laim s th a t ar e n o t p re -e m p ted b yS L U S A in addi t i on t o s om e thatar e, w e w i l l vaca t e the D i s tr i ctC ourt ’s di s m i s s al and re m and thi s act i on t o the D i s tr i ctC our tforfur ther p ro c e e d in g s . I I . D i s cus s i on T he D i s tr i ctC our thad j ur i s di ct i on p u rsuantt o the I nves t m entC om panyA ctof 1940, 15 U

. S.C

. § 8 0a- 43, the I nves t m entA dvi sers A ctof 1940, 15 U

. S. C

. § 80b- 14, and 28 U. S

. C. § 1 3 9 1 ( b )

. W e h a v e j u r i s d i c t i o n o v e rth i s a p p e a l f r o m a f in a l ju d g m e n t o f

th e D is tr ic t C o u rt p u rs u a n t to 2 8 U .S .C . § 1291. “SL U SA pr eempt i on i s j ur i s di ct i onal , an d w e r evi ew di s m i s s al s forl ack of

s ubj ect- m att erj ur i s di ct i on de novo .” L a Sa la , 5 1 9 F

. 3 d at 12 9 n . 7 (3d C ir

. 2 0 0 8 ).
A s des cr i bed above , SL U SA w as enac t ed t o pr eventthe fl i ghtof s ecur i t i es cas es fr om fede r al t o s t at e court s , ther eby pr event i ng abus i ve l aw s ui t s and “mak[i ng] Federal courtthe excl us i ve venue form os ts ecur i t i es fr aud cl as s act i on l i t i gat i on i nvol vi ng nat i onal l y tr aded s ecur i t i es . ” H

. R

. R ep. N o. 105- 803, a t 1 5 (1 9 9 8 ) (C o n f. R e p .); see al so Secur i t i es L i t i gat i on U n ifo rm S tand ard s A ct of 1 9 9 8 , S

. 1 2 6 0 , 1 0 5 th C o n g . § 2 (5),18 11 2 S tat
. 3227. N ei therthe Supr eme C our tnorthi s C our thas s quar el y addr es s ed t he i s s ue r ai s ed i n thi s appea l : w hetherthe i nclusi on of a SLU SA pr e- empt ed s t at e- l aw cl ai m i n a com plai nt, al so al l eging no n-SL U S A pre- em pted cl ai m s, r equi r es di s m i s s al of the ent i r e act i on. I n cons i der i ng thi s i s s ue as a m att e r o f firstim p ression , an d m ind fu l of S L U S A ’s purpos e, w e conc l ude thatnei therthe st atut oryl anguage , the l egi s l at i ve hi s t ory , northe r el evant c as e l aw s uppor t s the compl et e di s m i s s al of s uch an a ct i on. “The r ol e of the court s i n i nt erpr et i ng a st atut e i s t o gi ve eff ectt o C o n g r es s ’ s i nt ent
. ” R os enber g v. X M V entur es , 274 F

. 3 d 1 3 7 , 1 4 1 (3d C ir

. 2 0 0 1 ). T h e f ir s t s tep in statutory cons truct i on is to c ons i derthe pl ai n l anguage of the s t atut e. Uni t e d S ta t e s v . G r egg , 2 2 6 F

. 3 d 2 5 3 , 2 5 7 (3d C ir

. 2 0 0 0 ). “If th e lan g u a g e o f

th e sta tu te e x p re ss e s C o n g r e s s ’ s in ten t w ith su f f icie n t p re c isio n , the in q u irye n d s th e re a n d th e sta tu te is en fo rce d acc or di ng t o i t s t erm s . ” Id

. “W her e the s t atut ory la n g u a g e d o e s n o t e x p re s s C o n g re s s ’s in te n t u n e q u iv o c a lly, a court tr adi t i onal l y r efe r s t o the l egi s l at i ve hi s t ory an d the a tm o sp h e re in w h ich th e sta tu te w a s e n a c ted in a n a ttem p t to det erm i ne the congr es s i onal purpos e. ” I d.
T h e p lain lan g u a g e o f

S L U S A d o e s n o t cle a rlyin d ica te w hether Congre s s i nt ended SLU SA t o pr e- empt ent i r e ac t i ons that i nclude an off

end i ng st at e-l aw cl a im

. S L U S A provides, “N o co vered clas s act i on bas ed upon the s t atut ory orcomm on law o f a n yS tate o r su b d iv isio n th e re o f m a yb e m a in tain e d in any St at e o rFe d e r a l c o u r t
. . . . ” 1 5 U. S. C. § 7 8 b b ( f ) ( 1) (e m p h a sis a d d e d ). T h e ter m “ c o v e re d c las s a c tio n ,” in tu rn , is d ef ined to inclu d e a “sin g le law su it ” o r “ gr oup of l aw s ui t s . ” I d.19 a t § 7 8 b b (f

)(5 )(B ) (e m p h a sis a d d e d ). A s w e su g g e ste d in R ow i ns ki , t he t erm s “no .

. . act i on, ” “l aw s ui t , ” an d “gr oup of l aw sui t s” i nd eed sug gestthat SL U S A i ntends that ent i re act i on s, as oppos ed t o part i cul ar cl ai m s , s houl d fai l

. 398 F

. 3 d at 305. H ow ever , the w or d “ac t i on” i s m odi fi ed bythe phr as e “ba s ed u p o n th e s ta tu to ry o r c o m m o n la w o f a n yS ta te .” 1 5 U .S .C . § 7 8 b b (f )(1 ). T h e p lain lan g u a g e o f S L U S A d o e s n o t re f

e r to act i ons , s uch as thi s one, bas ed i n p arto n s t a t e l a w. N ordoes the l egi s l at i ve hi s t orycomp el us t o concl ude that S L U SA r equi r es di s m i s s al of the ent i r e ac t i on i n s uch a case. T h e legi sl at i ve h i st oryi s si l ent as t o w hetherC on gress in ten d e d a n a c tio n to b e d ism iss e d in it s e n tiretyw h e n it i ncl ud es pre - empt ed cl ai m s orw hetheronl ythe pr e- empt ed cl ai m s m us tbe di s m i s s ed. W e s trug g l e t o s ee how perm i t t i ng fe de r a l c l a i ms tha tdo no ts pe c i fi cal l ytr i gg e rthe SLU SA pr eempt i on t o pr ocee d w oul d l ead t o ei therabus i ve l i t i gat i on or t o the appl i cat i on of di ffe r entl egal s t andar ds t o nat i onal se c u rities

. F a ili n g to d ism iss th e e n tire c o m p lain t w o u ld sim p ly al l ow cl as s act i on fed era l c l ai m s , and s t at e l aw cl ai m s thatdo n o t trigg e r th e S L U S A p re e m p tio n , to p ro c e e d . N o th in g in S L U S A ’s la n g u a g e o r h isto ry in d ica tes a n y in ten t to e v isc e ra te such clai m s. O f cour s e, r equi r i ng the di s m i s s al of an e nt i r e ac t i on p u rsu a n t to S L U S A m ig h t d e ter c las s ac tio n p lain tiff s a n d th e ir att orney s fr om at t empt i ng t o t es tthe boundar i es of w hi ch i n d i v i d u a l s t a t e l a w c l a i ms a r e p r e - e mp t e d b yS L US A. H ow ever , nothi ng i n ei therthe pl ai n l anguage of the s t atut e orI n I n r e Enron C or

por at i on Secur i t i es , 53 5 F. 3d 32 5 (5 th 8 C ir. 2 0 0 8 ) , th e C o u rt o f A p p e a ls f

o r th e F if

th C irc u it rec e n tly sugg est ed that plai nti ffs (or , perhap s, theirat t orney s) faced ri sk of di s m i s s al pur s uant t o SL U SA w her e they chos e t o pur s ue pr eempt ed s t at e l aw cl ai m s i n m ul t i pl e l aw s ui t s eac h i nvol vi ng few erthan fi ftypl ai nt i ffs

. I n I n re E n r on , the c o u rt h e ld th a t, w her e the l aw s ui t s w ere coor di nat ed and ne ar l yi dent i cal , t en cas es cons ol i dat ed i n m ul t i

- di s tr i ctl i t i gat i on w er e a “ cover ed cl as s act i on” for purpos es of SL U SA , notw i ths t andi ng thatpr i or t o r emoval and cons ol i dat i on eac h cas e mi ghthave e s cape d S L U S A p re -e m p tio n b a s e d o n th e n u m b e r o f p la in tif f s . I d. at 340. I n s o doi ng, the court r ej ect ed the pl ai nt i ffs’ argum ent th a t p re e m p tin g th e ir c laim s w o u ld lea d to a n a b su rd re su lt i n th e c o n te x t o f

m u lti- d is tr ic t liti g a tio n , n o tin g , “ [ T ]h e . . . plai nt i ff s brus h a s i de the i rown co ntr i bu t i on t o SLU SA pr eempt i on: choos i ng t o pr ocee d as a si ngl e act i on. . . . [T]he y m us t now fac e t he conse quence s . ” I d. at 3 4 2

. “[ T ]he issue h ere is no t w h ethe r [p lai n ti ff s] m ay a v o id S L U S A ; th e q u e stio n is w h e th e rth e y di d i n fac tavoi d SL U SA

. ” I d. a t 3 4 2 n .1 5

. W hi l e thi s l anguage m ays ugges tthatSL U SA can ha ve a puni t i ve ef

fec t , t h e F if

th C i r cui tw as notpr es ent ed w i th, and ther efor e di d notcons i der , the i s s ue pr es ent ed i n thi s cas e. T he ques t i on pr es ent ed her e, w hetherSL U SA r equi r es di s m i s s al of an ent i r e compl ai ntw here onl ys om e of the cl ai m s ar e pr eemp t e d s t a t e l a w c l a i ms , i s v e ry d i f f e r e n t f r o m th e q u e s t i on of 20 the l e gi s l a t i ve hi s t orys ug ge s t s tha t Congr e s s i nt e nd e d SLU SA t o have suc h a puni t i ve effec t
. E ven i f SL U SA w er e i nt erpr et ed 8w hetherpl ai nt i ffs m ayavoi d SL U SA pr e- empt i on al t ogetherby f ilin g m u ltip le la w s u its

. 21 th is w a y , p lain tiff

s c o u ld s im p lyb rin g tw o o r m o re a c tio n s in or dert o avoi d havi ng al l of thei r cl ai m s di s m i s s ed – one ac t i on w ith the p o tential ly p re-em p ted stat e law claim s an d o n e o r m o re w i th the r em ai ning cl ai m s. It is e n ti r e ly c o n sis ten t w ith th e p u rp o se s o f S L U S A to req u ir e th e dism issal o f th o se st ate law sec u ri ti es c lai m s tha t are c lea rlyp re -e m p ted b yth e sta tu te. T o re q u ire th e d ism iss a l o f a ll of the othercl ai m s i n the s ame act i on, i n contr as t , w oul d not a p p e a r t o se rv e th o se g o a ls an d is no t su p p o rte d b y th e p la in l a ng ua ge orl e gi s l a t i ve hi s t ory . W e ho l d the r e fo r e tha tSLU SA does notm andat e di s m i s s al of an act i on i n i t s ent i r etyw her e the a c tio n in c lu d e s o n ly so m e p re -e m p te d c la im s . O u r u n d e rsta n d in g o f S L U S A ’s r e q u ire m e n ts w ith r e s p e c t t o d i s mi s s a l i s n o ti n c o n s i s t e n twi th r e l e v a n tc a s e l a w. W e di s agr ee w i th the D i s tr i ctC our t ’ s concl us i on thatthe S u pr eme C our t ’ s hol di ng i n D a b it II “ i mpl i c i t l yr e

j e c t e d the S ec o n d C ir cu it ’s vi e w ” o f th e issu e p rese n ted in this case

. In D a b it II, the S u p rem e C our tw as confr ont ed w i th the i s s ue of w hethera s t at e l aw cl as s act i on cl ai m bas ed on the factthatthe i nves t or s hel d ont o overval ued s ecur i t ies as a r es ul tof mi s r e p r e s e n t a t i o n s b yth e b r o k e r s wa s p r e - e mp t e d b yS L US A. D a b it II, 547 U

. S. at 76- 78. T he Second C i r cui t had he ld t hat S L U S A d id n o t p re -e m p t su c h a n a c tio n b e c a u se , p u rsu a n t to B lu e C h ip Stam

ps v. M anorD r ug St or es , 4 2 1 U

. S

. 7 2 3 (19 7 5 ), the “hol der ” pl ai nt i ffs had no r emedy forthe al l eged f r aud underSect i on 1447( d) pr ovi des , “A n or der r emandi ng a ca s e t o the 9 St a t e c o u r tf

r o m w h i c h i twas r e mov e d i s n o tr e v i e wab l e on appea l orotherw i s e, exce ptthatan or der r emandi ng a ca s e t o the St at e courtfr om w hi ch i t w as r emoved pur s uant t o s ect i on 1443 o f th is title s h a ll b e re v ie w a b le b ya p p e a l o r o th e rw is e .” 22 f e d e ra l s e c u ri tie s la w s . D a b it I , 395 F. 3d at 39- 44. I n r ever s i ng, the Supr eme C our t det erm i ned that , i n l i ght of SL U SA ’ s s t at ed purpos e t o pr eventfrus tr at i on of the PSL R A , “[i ] t w oul d be odd, to sa yth e lea st, if S L U S A e x e m p ted th a t p a rticu lar ly tr oubl es om e s ubs etof cl as s act i ons [hol der act i ons ] fr om i t s pr eempt i ve s w eep. ” D a b it II, 5 4 7 U .S . a t 8 6

. W i th r es pectt o the Supr eme C our t ’ s obs e rv a t i on i n D a b it II th a tth e p r e s u mpt i o n a g a i n s tp r e - e mpt i o n “ c a rr i e s l e s s f o r ce

. . . becau se S L U S A do es no t actuall y pre- em pt anyst at e cause of ac t i on, ” i d. at 87 , the o b serv ati o n o n w h ich the D istri ct C o u rt reli ed , o u r h o lding tod ayd o es n o t i n an yw aylessen S L U S A ’s “pr e- empt i ve s w eep. ” S t at e l aw s ecur i t i es cl ai m s al l egi ng fr aud w ill c o n tin u e to b e p re -e m p ted u n d e r S L U S A

. W e h o ld sim p ly th a ta n yv a l i d f

e de r a l c l a i ms p l e d i n th e s a me a c t i o n – c l a i ms that , i f br oughti ndepende nt l y , w oul d cl ear l yfal l out s i de of SL U SA ’ s pr e- empt i ve s cope – ne ed notal s o be di s m i s s ed.
N ordoes the S u p r eme C our t ’ s deci s i on i n K i r cherv. P utna m F u n ds T

rust , 5 4 7 U .S . 6 3 3 (2 0 0 6 ), co m p e l u s to h o ld that S L U S A req u ir es d ism issal of an ac ti o n in it s en ti rety
. In K i r cher , the Supr eme C our thel d thatSL U SA does notexempt r emand or ders f

r om the gene r al rul e of nona ppeal abi l i tyof 28 U

. S. C

. § 1447( d)

. 547 U

. S. at 648. O ur concl us i on t odaydoes 9I ti s true thatthe K i r chero p in io n in c lu d e s s o m e lan g u a g e to 10 thi s eff ect
. T he Supr eme C our ts t at ed, forexampl e, “I f the act i on is prec lud ed , n eith er the D istri ct C o u rt n o r th e state c o u rt maye nt e r t a i n i t , a nd the pr op e r c ou r s e i s t o di s mi s s . ” 54 7 U. S. a t6 4 4 ( e mp h a s i s a d d e d )

. T h e Cou r ta l s o n o t e d , “ [ S L US A] avai l s a def

endantof a f

eder al forum in co n tem pl at i on notof f u rth e r liti g a ti o n o v e r th e m e rits o f a c laim b ro u g h t in sta te court , butof t erm i nat i on of the pr ocee di ngs al t ogether

. . . . ” I d. at64 4 n

. 12

. G i ven that the S up rem e C ou rtdid not have to confr ontthe i s s ue athand, w e do notbel i eve thatthe us e of the w o rd s “ a c tio n ” a n d “ p ro c e e d in g s ” re f lec ts a h o ld in g a s to th is i s s ue. 23 no i nj ury t o thi s hol di ng, forthe K i r cheropi ni on di d notr el yon a n yr e q u i r e me n tth a ta n a c t i o n , i n c l u d i n g a tl e a s ts o me im p e rm iss ib le s ta te la w c laim s, m u st b e d ism iss e d in its e n tiret y. T h is iss u e w a s n o t ev e n p re se n ted to th e C o u rt;

10 i ndeed, the compl ai nti n K i r cheri ncluded on l y st at e-l aw cl ai m s. I d. a t 6 3 7

. O th e r c a se law su p p o rts o u r h o ld in g . W h ile n o t d ire c tly o n p o i n t b e c a u s e i t a d d r e s s e s a n o th e r s t a tu t e , t he Su p r e me C our t ’ s r ece nt hol di ng i n Jones v. B ock , 5 4 9 U .S

. 1 9 9 , 1 2 7 S .C t. 910 ( 2007) , su g g est s thatC ongr es s ’ s us e of the phr as e “no act i on” in a s t atut e i s notnece s s ar i l ydet erm i nat i ve of w hether a p rec lusion p rov isi o n req u ir es d ism issal o f the en ti re ac ti o n . In Jones , the S u p rem e C o u rth eld th at th e P ri so n L it igation R ef o rm A c t, w h ich p ro v id e s, “ N o a c tio n sh a ll b e b ro u g h t w ith re sp e c t to p ri so n co n d it ion s . . . u n ti l su ch ad m inistrati v e re m ed ies as a re av ail ab le are e x h au sted , ” 4 2 U

. S

. C

. § 1 9 9 7 e(a ), d o es n o t r eq u ir e24 d ism iss a l o f

a n e n tire a c tio n w h e re th e p lain ti f f h a s f a iled to e x h a u s t s o m e , b u t n o t a ll, o f h is c la im s . 1 2 7 S .C t. a t 9 2 3 -2 6

. R ej ect i ng the ar gum entthat C ongr es s coul d have us ed the w ord “cl ai m ” i nst ead of “act i on ” i f i t i ntended t o p ro h ib it o n lythe fil ing o f p arti cu lar clai m s, the S u p rem e C o u rt expl ai ned, “Thi s s t atu toryphr as i ng – ‘ no act i on s hal l be br ought ’ – i s boi l erpl at e l anguage . ” I d. a t 9 2 4

. The Sup r e me C o u rt c o n tin u e d , A s a g e n e ra l m a tter, if a c o m p lain t co n tain s b o th good and bad cl ai m s , the courtpr ocee ds w i th the g o o d a n d l e a v e s th e b a d

. [ O] n l yth e b a d c l a i ms are d ism issed ; th e c o m p lai n t as a w h o le is n o t. If C o n g r e s s m e a n t t o d e p a r t f r o m th i s n o r m, we w oul d expec ts om e i ndi cat i on of that , and w e fi nd none. I d. (i n te rn a l q u o ta tio n o m itte d ).
A l though J

o n es d id n o t in v o lv e S L U S A , it s a n a ly sis sugg est s that the fa ctthat SL U S A provides, “N o co vered clas s act i on . . . m ay be m ai nt ai ned, ” does not r equi r e di s m i s s al of an enti re acti on that i ncludes on l y som e off end i ng cl ai m s. A tl east one court , al bei tnon- bi ndi ng on thi s C our t , has found Jones hel pful i n deci di ng the pr es ent is s ue and l i kew i s e det erm i ned th a t S L U S A d o e s n o t r e q u ir e a c o m p le te d is m is s a l. See In re Sal om on Sm i th B ar ney M ut

. Fund Fees Li t ig. , 528 F. Supp. 2d 3 3 2 , 3 3 4 n .3 (S .D .N .Y . 2 0 0 7 ) (re jec tin g th e a rg u m e n t th a t all c laim s m u st b e d ism iss e d u n d e r S L U S A ); LaSal a v. B ank of C ypr us P ub. C o. , 5 1 0 F

. S u pp. 2d 246, 274- 75 & 274 n. 11A t or al ar gum ent , couns el for pl ai nt i ffs i ndi cat ed thatthey 11 are n o lon g er p u rsuin g their claim s u n d er S ec ti o n 4 8 (a). 25 (S .D .N .Y . 2 0 0 7 ) (h o ld in g th a t D a b it I r emains the l aw of the Second C i r cui tr egar di ng w hetherthe ent i r e ac t i on s houl d be di s m i s s ed, and r ej ect i ng the D i s tr i ctC our t ’ s anal y s i s of D a b it I in this ca se).
B eca us e nothi ng i n the l anguage , l egi s l at i ve hi s t ory , or r el evant cas e l aw m andat es the di s m i s s al of an e nt i r e ac t i on that i ncl udes both cl ai m s that do notoffe nd SL U SA ’ s pr ohi bi t i on on s t at e l aw s ecur i t i es cl as s act i ons and cl ai m s thatdo, the D i s tr i ct C ou rterr ed in di sm i ssi ng this act i on on these grou nd s. A l l ow i ng thos e cl ai m s thatdo notfal l w i thi n SL U SA ’ s pr ee m p tiv e sc o p e to p ro c e e d , w h ile d ism iss in g th o se th a t d o , is cons i s t entw i th the goal s of pr event ing abusi ve s ecur i t i es lit ig a tion w hil e prom oti n g n a tio n a l leg a l sta n d a rd s f o r n a tio n a lly tr a d e d s e c u ri tie s . W e dec l i ne def

endant s ’ r eques tt o aff

i r m the di s m i s s al of this case on al t ernat i ve g round s, i n p art i cular , that pl ai nti ffs’ compl ai ntfai l s t o s t at e a c aus e o f ac ti o n underSect i on 48( a) beca us e no pri vat e ri ght of ac t i on exi s t s underthatpr ovi s i on and that p lai n ti ff

s h av e fa il ed to state a c lai m u n d er S ec ti o n 3 6 (b). 11 T h e se a ltern a te g ro u n d s, a lo n g w ith a n u m b e r o f o th e r p o ss ib le b a se s f o r d ism iss a l, w e re a ll b rie f e d b e f o re th e D istric t C o u rt in a s epar at e mot ion to d i s m i s s , w hi ch w as pendi ng w hen the D i s tr i ctC our tdi s m i s s ed the case o n SL U SA gr ounds

. T he al t ernat e gr ounds fordi s m i s s al w oul d be bett erdeci ded bythe D is tr ic t C o u rt in th e f

ir s t in s ta n c e .26 I V . C oncl usi on For the rea s ons s etfor th above, w e w i l l vaca t e the D i s tr i ctC our t ’ s or derdi s m i s s i ng the ent i r e act i on on the gr ounds that i t i s pr e- empt ed by SL U SA and re m and t he cas e for fur therpr ocee di ngs cons i s t entw i th thi s O pi ni on.