                   FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

GERALD K. SMITH, as Plan Trustee          
for and on behalf of the Estates of
Boston Chicken, Inc., BC Real
Estate Investments, Inc., and all
Boston Chicken affiliates,
                    Plaintiff-Appellee,
                   v.
ARTHUR ANDERSEN LLP, a limited
liability partnership,
                            Defendant,
                  and
MERRILL LYNCH & CO., Inc., a                    No. 03-16791
corporation; MERRILL LYNCH                       D.C. Nos.
PIERCE FENNER & SMITH INC., a
corporation; DEUTSCHE BANC
                                             CV-01-00218-PGR
                                              CV-01-00246-PGR
SECURITIES, INC., a corporation dba           CV-02-01162-PGR
Deutsche Banc Alex.Brown;                     CV-02-01248-PGR
MORGAN STANLEY & CO., Inc., a
corporation,
              Defendants-Appellants,
BELL, BOYD & LLOYD, a limited
liability corporation; PEDERSEN &
HOUPT, a professional corporation,
               Defendants-Appellees.
                   v.
MARK W. STEPHENS,
                          Third-party-
                    plaintiff-Appellee.
                                          

                              11715
11716            SMITH v. ARTHUR ANDERSEN LLP



GERALD K. SMITH, as Plan Trustee            
for and on behalf of the Estates of
Boston Chicken, Inc., BC Real
Estate Investments, Inc., and all
Boston Chicken affiliates,
                    Plaintiff-Appellee,
                   v.
ARTHUR ANDERSEN LLP, a limited
liability partnership; MERRILL
LYNCH & CO., Inc., a corporation;
MERRILL LYNCH PIERCE FENNER &
SMITH INC., a corporation;
DEUTSCHE BANC SECURITIES, INC., a
corporation dba Deutsche Banc                     No. 03-16803
Alex.Brown; MORGAN STANLEY &
                                                   D.C. Nos.
CO., Inc., a corporation; BELL,
BOYD & LLOYD, a limited liability              CV-01-00218-PGR
                                                CV-01-00246-PGR
corporation; PEDERSEN & HOUPT, a
                                                CV-02-01162-PGR
professional corporation,
                                                CV-02-01248-PGR
                          Defendants,
                  and
SCOTT A. BECK, an individual, and
the marital community of Scott A.
Beck, and his spouse; SAAD J.
NADHIR, an individual, and the
marital community of Saad J.
Nadhir, and his spouse,
              Defendants-Appellants,
                   v.
MARK W. STEPHENS,
                          Third-party-
                               plaintiff.
                                            
                 SMITH v. ARTHUR ANDERSEN LLP            11717



GERALD K. SMITH, as Plan Trustee          
for and on behalf of the Estates of
Boston Chicken, Inc., BC Real
Estate Investments, Inc., and all
Boston Chicken affiliates,
                    Plaintiff-Appellee,
                   v.
ARTHUR ANDERSEN LLP, a limited
liability partnership; MERRILL
LYNCH & CO., Inc., a corporation;
MERRILL LYNCH PIERCE FENNER &
SMITH INC., a corporation;
DEUTSCHE BANC SECURITIES, INC., a               No. 03-16899
corporation dba Deutsche Banc
                                                 D.C. Nos.
Alex.Brown; MORGAN STANLEY &
                                              CV-01-00218-PGR
CO., Inc., a corporation; PEDERSEN
& HOUPT, a professional                      CV-01-00246-PGR
                                              CV-02-01162-PGR
corporation,
                                              CV-02-01248-PGR
                          Defendants,
                                                 OPINION
                  and
BELL, BOYD & LLOYD, a limited
liability corporation,
                 Defendant-Appellee,
PEER PEDERSEN, an individual and
the marital community of Peer
Pedersen and his spouse,
                Defendant-Appellant,
                   v.
MARK W. STEPHENS,
                          Third-party-
                    plaintiff-Appellee.
                                          
11718          SMITH v. ARTHUR ANDERSEN LLP
        Appeal from the United States District Court
                 for the District of Arizona
        Paul G. Rosenblatt, District Judge, Presiding

                   Argued and Submitted
        February 8, 2005—San Francisco, California

                   Filed August 30, 2005

  Before: J. Clifford Wallace, Johnnie B. Rawlinson, and
               Jay S. Bybee, Circuit Judges.

                 Opinion by Judge Wallace
11722          SMITH v. ARTHUR ANDERSEN LLP


                         COUNSEL

Ronald L. Marmer, C. John Koch, Jenner & Block LLP, Chi-
cago, Illinois, and Don Bivens, Paul L. Stoller, Meyer, Hen-
dricks & Bivens, P.A., Phoenix, Arizona, for defendant-
appellant Saad J. Nadhir.

George B. Curtis, Gregory J. Kerwin, Gibson, Dunn & Crut-
cher LLP, Denver, Colorado, and Martin Galbut, Galbut &
Hunter, P.C., Phoenix, Arizona, for defendant-appellants Mer-
rill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith,
Inc., Deutsche Banc Securities, Inc., and Morgan Stanley &
Co., Inc.

C. Barry Montgomery and David E. Stevenson, Williams
Montgomery & John Ltd., Chicago, Illinois, for defendant-
appellant Peer Pedersen.

Leo R. Beus, Nicholas J. DiCarlo, and Christine R. Taradash,
Beus Gilbert PLLC, Scottsdale, Arizona, for plaintiff-appellee
Gerald K. Smith.

Martin Glenn, O’Melveny & Meyers LLP, New York, New
York, and Amy J. Longo, O’Melveny & Meyers LLP, New-
port Beach, California, for plaintiff-appellee Mark W. Ste-
phens.

Mark C. Dangerfield and Michael K. Kennedy, Gallagher &
Kennedy, LP, Phoenix, Arizona, for defendant-appellee
Pedersen & Houpt.
                SMITH v. ARTHUR ANDERSEN LLP               11723
James R. Condo, Snell & Wilmer LLP, Phoenix, Arizona, and
Richard A. Derevan, Marc L. Turman, Snell & Wilmer LLP,
Irvine, California, for defendant-appellee Bell, Boyd & Lloyd.


                          OPINION

WALLACE, Senior Circuit Judge:

   Gerald K. Smith, in his capacity as Plan Trustee for the
Bankruptcy Estate of Boston Chicken, Inc. and various related
entities (the Trustee) filed an action alleging a variety of
claims. Later, the Trustee filed motions seeking district court
approval of settlements reached with certain of the defendants
and requesting bar orders enjoining the non-settling defen-
dants from asserting certain claims against the settling defen-
dants. Over objection of some of the non-settling defendants,
the district court granted the approval motions resulting in this
appeal.

   The district court had jurisdiction pursuant to 28 U.S.C.
§ 1334. We hold that we have appellate jurisdiction and
affirm.

                               I.

   The Trustee’s 225-page Second Amended Complaint (com-
plaint) asserts 45 separate claims under state and federal law
against certain of Boston Chicken’s former officers and direc-
tors, attorneys, auditors, and investment bankers. The com-
plaint refers to Scott A. Beck, Saad J. Nadhir, and Mark W.
Stephens, who were officers and/or directors of Boston
Chicken, as the “Individual Defendants.” Defendants Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith, Inc.,
Deutsche Banc Securities, Inc., d/b/a Deutsche Banc Alex.
Brown, and Morgan Stanley & Co., Inc. are the “Underwriter
Defendants.” The defendants other than the Individual Defen-
11724           SMITH v. ARTHUR ANDERSEN LLP
dants and PricewaterhouseCoopers (which was Boston Chick-
en’s post-bankruptcy auditor) are the “Professional
Defendants.”

   The complaint alleges the following core facts. Boston
Chicken was insolvent from its inception, which the defen-
dants knew or should have known. Rather than acknowledge
this fact and seek bankruptcy protection, the defendants
sought to keep the firm afloat for various reasons (retaining
their corporate positions, salaries and fees, preserving the
value of their investments in Boston Chicken and related enti-
ties, etc.). This was accomplished by, among other things,
misrepresenting (not necessarily intentionally) the firm’s
financial condition to its outside directors and investors who
participated in the firm’s various securities offerings. The
Individual Defendants, as high-ranking corporate officials,
had the authority to implement this plan; the Professional
Defendants, as advisors to the firm and underwriters of its
securities, provided the services and resources necessary to
make it happen. Accordingly, the complaint alleges in part
that the Individual Defendants breached the fiduciary duties
they owed to Boston Chicken and made false and misleading
misrepresentations to Boston Chicken’s Board of Directors.
The complaint also alleges that the Professional Defendants
are liable for breach of certain contracts with Boston Chicken,
breach of fiduciary duties owed to Boston Chicken and pro-
fessional malpractice.

   Furthermore, the complaint charges that had these misrep-
resentations and breaches not occurred, the funds obtained
through the capital markets might not have been forthcoming,
and the outside directors might have chosen to enter bank-
ruptcy at an earlier date. In that situation, Boston Chicken’s
assets would not have been squandered on an unviable busi-
ness plan (or on the defendants’ compensation and fees), and
the firm would not have been encumbered with additional
debt obligations that it had no realistic chance of repaying. In
summary, the complaint alleges that the defendants engaged
                SMITH v. ARTHUR ANDERSEN LLP               11725
in a course of conduct that plunged Boston Chicken deeper
and deeper into insolvency.

   In October 1998, Boston Chicken and various related enti-
ties filed for bankruptcy protection under Chapter 11 of the
Bankruptcy Code. In May 2000, the bankruptcy court con-
firmed Boston Chicken’s Third Amended Plan (Debtor’s
Plan), under which certain of Boston Chicken’s assets were
sold to the McDonald’s Corporation, Boston Chicken was dis-
solved, and the Trustee was appointed as the representative of
the bankruptcy estates. The Trustee commenced a number of
lawsuits, all of which are now consolidated into one proceed-
ing in the United States District Court for the District of Ari-
zona (the Trustee’s Action).

   Before Boston Chicken had entered bankruptcy, over 20
securities class actions were filed in the United States District
Court for the District of Colorado. The class actions, which
alleged various claims under state and federal securities laws
and were based largely on the same conduct at issue in the
Trustee’s Action, were later consolidated into one proceeding
in Colorado (the Class Action). The Class Action was trans-
ferred to the United States District Court for the District of
Arizona in November 2002 and consolidated with the Trust-
ee’s Action “for discovery and pretrial purposes only” in
March 2003. However, in May 2003 the consolidation order
was vacated and the Class Action was transferred back to Col-
orado, while the Trustee’s Action remained in Arizona. The
Class Action remains in Colorado, and is not before us.

   During 2003, the Trustee reached settlements with three of
the defendants in the Trustee’s Action (collectively, including
the Trustee, the Settling Parties): Bell Boyd & Lloyd (BB&L)
and Pedersen & Houpt (P&H), both of which served as coun-
sel to Boston Chicken, and Stephens, one of the Individual
Defendants. The Trustee filed joint motions with each of the
settling defendants seeking district court approval of these
three settlements (Approval Motions). The proposed orders
11726           SMITH v. ARTHUR ANDERSEN LLP
submitted with the Approval Motions contained provisions
enjoining the non-settling defendants from pursuing certain
claims against the settling defendants (bar orders), as well as
provisions reducing any future judgment rendered in the
Trustee’s Action against the non-settling defendants by the
pro rata share of fault attributable to each settling defendant
(judgment reduction credits).

   Nadhir, Peer Pedersen (another of Boston Chicken’s direc-
tors), and the Underwriter Defendants (collectively, the Non-
Settling Defendants), as well as certain other parties, objected
to the Approval Motions. Their objections generally were not,
however, focused on the fairness of the settlements or the
terms of the proposed orders. Rather, they objected princi-
pally because each Approval Motion sought “findings of fact,
a bar order, and a permanent injunction” against the Non-
Settling Defendants, even though, they asserted, the district
court “lack[ed] jurisdiction to do anything more than to dis-
miss the plan trustee’s claims.”

   The Non-Settling Defendants presented two arguments in
support of this jurisdictional challenge. First, they contended
that the Trustee was in effect asserting claims of Boston
Chicken’s creditors, which it lacked standing to do under
Caplin v. Marine Midland Grace Trust Co., 406 U.S. 416
(1972). This same argument had been presented to the district
court in connection with a motion to dismiss an earlier version
of the complaint, but was rejected. See Smith ex rel. Estates
of Boston Chicken v. Arthur Andersen LLP, 175 F. Supp. 2d
1180, 1203 (D. Ariz. 2001). Second, they argued that the
Securities Litigation Uniform Standards Act of 1998
(SLUSA) deprived the district court of subject matter jurisdic-
tion over the Trustee’s Action. This argument, too, had
already been rejected by the court in several different con-
texts.

 The district court held two hearings on the Approval
Motions. The first, held on August 19, 2003, addressed the
                SMITH v. ARTHUR ANDERSEN LLP               11727
Trustee’s settlements with BB&L and Stephens. The district
court approved the settlements and overruled the jurisdic-
tional objections. Later, the district court entered an “Ap-
proval and Bar Order” with respect to the BB&L settlement
in the form proposed in the BB&L Approval Motion. The dis-
trict court did not enter an Approval and Bar Order regarding
the Stephens settlement. However, the record contains a min-
ute entry dated August 19, 2003 indicating that the Stephens
Approval Motion was granted.

   A hearing on the P&H settlement was set for August 26,
2003. On that day, P&H filed a reply in support of its
Approval Motion, which argued that the objecting defendants
themselves had no standing to challenge the proposed settle-
ment because “a non-settling defendant, in general, lacks
standing to object to a partial settlement.” Waller v. Fin.
Corp. of Am., 828 F.2d 579, 582 (9th Cir. 1987). This was the
first time the Settling Parties had challenged the Non-Settling
Defendants’ standing on this ground. At the hearing, the dis-
trict court ruled that the Non-Settling Defendants “have no
standing to object” to the Approval Motion, overruled the
Non-Settling Defendants’ jurisdictional objections, and
granted the Approval Motion. The court later entered an
Approval and Bar Order regarding the P&H settlement.

   The Non-Settling Defendants appealed from effectively all
the orders of the district court related to the three settlements,
and we consolidated their appeals.

                               II.

   The Non-Settling Defendants raise the same jurisdictional
objections based upon Caplin and SLUSA that they raised in
response to the Approval Motions. However, the Settling Par-
ties argue that we may not reach the Non-Settling Defendants’
objections because (1) appellate jurisdiction does not exist
over this appeal and (2) the Non-Settling Defendants lack
standing to object to the settlements. We first address our
11728            SMITH v. ARTHUR ANDERSEN LLP
appellate jurisdiction, and then the Non-Settling Defendants’
standing.

                                A.

   28 U.S.C. § 1292(a)(1) provides appellate jurisdiction over
“[i]nterlocutory orders of the district courts . . . granting . . .
injunctions.” Each of the two Approval and Bar Orders
entered by the district court permanently enjoins the Non-
Settling Defendants from asserting certain claims against the
settling defendants. Although no Approval and Bar Order was
entered in relation to the Stephens settlement, a minute entry
indicates that the Stephens Approval Motion, which sought
entry of a bar order, was granted. Because the Non-Settling
Defendants appeal from the specific entry of a requested
injunction, we have jurisdiction pursuant to section
1292(a)(1). Paige v. California, 102 F.3d 1035, 1038 (9th Cir.
1996); see also FDIC v. Geldermann, Inc., 975 F.2d 695, 697
(10th Cir. 1992) (“Because the district court’s bar order
expressly enjoins the Defendants from suing the Settlors for
contribution or indemnity, it is an ‘interlocutory order[ ] . . .
granting . . . injunctions . . .’ under 28 U.S.C. § 1292(a)(1)”
(alterations in original)).

   However, the Non-Settling Defendants do not directly chal-
lenge the injunctions. They do not argue, for example, that the
district court abused its discretion by entering the bar order.
Cf. Resolution Trust Corp. v. Rice (In re Consol. Pinnacle W.
Sec. Litig./Resolution Trust Corp.-Merabank Litig.), 51 F.3d
194, 197 (9th Cir. 1995). Rather, they are using this appeal
from the injunctions to challenge the Trustee’s standing and
the district court’s subject matter jurisdiction. The question
therefore arises whether we have “pendent appellate jurisdic-
tion” over these issues.

   [1] “Under 28 U.S.C. § 1292(a)(1), we may exercise inter-
locutory appellate jurisdiction over the district court’s . . .
injunction and pendent jurisdiction over any ‘otherwise non-
                SMITH v. ARTHUR ANDERSEN LLP               11729
appealable ruling [that] is ‘inextricably intertwined’ with or
‘necessary to ensure meaningful review of’ the order properly
before us on interlocutory appeal.’ ” Hendricks v. Bank of
Am., N.A., 408 F.3d 1127, 1134 (9th Cir. 2005) (citations
omitted) (alterations in original). As in Hendricks, we need
not decide whether the Trustee standing and SLUSA issues
are “inextricably intertwined” with the injunctions, “because
we conclude that ‘review of [these two defenses] is necessary
to ensure meaningful review of’ the district court’s . . . injunc-
tion.” Id. (alterations in original), quoting Swint v. Chambers
County Comm’n, 514 U.S. 35, 51 (1995).

   [2] We have stated that “[r]esolution of subject matter juris-
diction . . . is ‘necessary to ensure meaningful review of’ the
district court’s interlocutory rulings because if appellate
courts lack jurisdiction, they cannot review the merits of these
properly appealed rulings.” Meredith v. Oregon, 321 F.3d
807, 816 (9th Cir.), amended by 326 F.3d 1030 (9th Cir.
2003); see also Hendricks, 408 F.3d at 1134; Wong v. INS,
373 F.3d 952, 960-61 (9th Cir. 2004). Here, the Non-Settling
Defendants characterize their arguments based upon Caplin as
challenges to the Trustee’s Article III standing; those argu-
ments therefore implicate the district court’s subject matter
jurisdiction. See Cetacean Cmty. v. Bush, 386 F.3d 1169,
1174 (9th Cir. 2004) (“A suit brought by a plaintiff without
Article III standing is not a ‘case or controversy,’ and an Arti-
cle III federal court therefore lacks subject matter jurisdiction
over the suit”). Similarly, the Non-Settling Defendants’
SLUSA arguments challenge the district court’s subject mat-
ter jurisdiction over the state-law claims in the Trustee’s
Action. We therefore have pendent jurisdiction over both of
these issues, which “call[ ] into question the district court’s
‘authority to rule on a party’s motion for a[n] . . . injunc-
tion.’ ” Hendricks, 408 F.3d at 1134 (emphasis in Hendricks),
quoting Meredith, 321 F.3d at 816.

                               B.

  [3] The Settling Parties argue that the Non-Settling Defen-
dants do not have standing to challenge the settlements
11730           SMITH v. ARTHUR ANDERSEN LLP
because “a non-settling defendant, in general, lacks standing
to object to a partial settlement.” Waller, 828 F.2d at 582
(citations omitted). We review this issue de novo. See id.

   In Waller, we explained that there is “a recognized excep-
tion to the general principle barring objections by non-settling
defendants to permit a non-settling defendant to object where
it can demonstrate that it will sustain some formal legal preju-
dice as a result of the settlement.” Id. at 583 (citations omit-
ted). It is well established that such prejudice exists where a
settlement “purports to strip [a non-settling defendant] of a
legal claim or cause of action, an action for indemnity or con-
tribution for example.” Id. (citations omitted); see also Wein-
man v. Fid. Capital Appreciation Fund (In re Integra Realty
Res., Inc.), 262 F.3d 1089, 1102 (10th Cir. 2001); In re Vita-
mins Antitrust Class Actions, 215 F.3d 26, 31 (D.C. Cir.
2000); Eichenholtz v. Brennan, 52 F.3d 478, 482 (3d Cir.
1995); Agretti v. ANR Freight Sys., Inc., 982 F.2d 242, 247
(7th Cir. 1992); Alumax Mill Prods., Inc. v. Congress Fin.
Corp., 912 F.2d 996, 1002 (8th Cir. 1990).

   The Non-Settling Defendants contend that they have suf-
fered prejudice because, among other reasons, they are
enjoined from pursuing indemnification, contribution, and
certain other claims. Furthermore, they argue that the judg-
ment reduction credits do not fully eliminate this prejudice.

   In opposition, the Settling Parties contend that the Non-
Settling Defendants waived these arguments by failing to
raise them in the district court. We disagree with this conten-
tion for two reasons. First, Nadhir’s counsel did argue at the
August 26, 2003 hearing on the P&H settlement that the Non-
Settling Defendants had standing because the settlement
stripped them of indemnity and contribution claims. Although
the Non-Settling Defendants did not make one of the particu-
lar arguments they advance here, i.e., that the judgment reduc-
tion credits do not fully extinguish any harm caused by the
bar orders, we will not preclude them from bolstering their
                SMITH v. ARTHUR ANDERSEN LLP               11731
defense to the Settling Parties’ challenge to their standing. See
Lake v. Lake, 817 F.2d 1416, 1424 (9th Cir. 1987) (where
defendant raised issue of personal jurisdiction in district court
and plaintiffs responded, defendant could not prevent plain-
tiffs from arguing that issue on appeal or “strengthening their
argument”).

   Second, although we usually do not consider issues raised
for the first time on appeal, there are exceptions to this rule.
For example, we will consider such an issue where “there are
exceptional circumstances why the issue was not raised in the
trial court.” United States v. Echavarria-Escobar, 270 F.3d
1265, 1267-68 (9th Cir. 2001); see also United States v.
Antonakeas, 255 F.3d 714, 721 (9th Cir. 2001). We conclude
that exceptional circumstances exist in this case. The Settling
Parties did not cite the general rule, stated in Waller, that non-
settling defendants lack standing to challenge partial settle-
ments until August 26, 2003, which was the day of the hear-
ing on the P&H settlement and one week after the hearing on
the BB&L and Stephens settlements. It is therefore unsurpris-
ing that the Non-Settling Defendants did not invoke the “for-
mal legal prejudice” exception to the general rule prior to that
time. Given the Settling Parties’ own torpor in challenging the
Non-Settling Defendants’ standing, we will permit the Non-
Settling Defendants to argue that the judgment reduction cred-
its do not eliminate the prejudice caused by the bar orders. To
hold otherwise would create an incentive for a party to with-
hold its challenges to its opponent’s standing until the last
possible moment and then contend that its opponent “waived”
any response to those challenges by not anticipating and
countering them in the district court.

   The Settling Parties also argue that the Non-Settling Defen-
dants waived the argument that they have standing to chal-
lenge the settlements by not making that argument in their
opening briefs. However, we may consider an issue not raised
in the appellant’s opening brief if it is raised in the appellee’s
brief. See, e.g., Koerner v. Grigas, 328 F.3d 1039, 1048 (9th
11732           SMITH v. ARTHUR ANDERSEN LLP
Cir. 2003); United States v. Franco-Lopez, 312 F.3d 984, 993
n.6 (9th Cir. 2002). That is the case here. We therefore now
proceed to consider the Non-Settling Defendants’ arguments
that they have standing.

   [4] As explained above, one exception to the general rule
that non-settling defendants lack standing to challenge settle-
ments is that standing exists where the settlement purports to
strip the non-settling defendant of a “legal claim or cause of
action, an action for indemnity or contribution for example.”
Waller, 828 F.2d at 583 (citations omitted). The Settling Par-
ties contend, in effect, that there is an exception to this excep-
tion, under which a non-settling defendant who is subject to
a bar order will nonetheless lack standing if the settlement
includes a “judgment reduction credit” reducing any subse-
quent judgment against the non-settling defendants by the
proportion of fault attributable to the settling defendants. In
support of this argument, the Settling Parties cite Zupnick v.
Fogel, 989 F.2d 93 (2d Cir. 1993) and School District of Lan-
caster v. Lake Asbestos of Quebec Ltd. (In re School Asbestos
Litigation), 921 F.2d 1330, 1333 (3d Cir. 1990).

   [5] Neither Zupnick nor School Asbestos Litigation holds
that a judgment reduction credit always eliminates any formal
legal prejudice caused by a bar order. Indeed, the same court
that decided School Asbestos Litigation held in a later case
that non-settling defendants did have standing to object to a
settlement where the district court had imposed a bar order,
see Eichenholtz, 52 F.3d at 482-83 & n.8, even though the set-
tlement agreement contained a “proportionate fault judgment
reduction provision” similar to that involved here, see id. at
481. We interpret Zupnick and School Asbestos Litigation as
standing for the proposition that a judgment reduction credit
may divest non-settling defendants of standing if it is written
in such a way as to ameliorate any harm caused by other pro-
visions in the settlement agreement. See Zupnick, 989 F.2d at
99 & n.3 (no standing where settlement agreement “fully pro-
tect[ed]” the non-settling defendants’ contribution and indem-
                SMITH v. ARTHUR ANDERSEN LLP              11733
nity rights by providing that “Plaintiffs and the Class agree to
reduce or satisfy any judgment obtained either by settlement
or after trial against Non-Settling Defendants, or any of them,
to the extent necessary to extinguish any claims of such Non-
Settling Defendants for indemnity or contribution from [the
settling defendant], as may be determined by the Court or
jury”); Sch. Asbestos Litig., 921 F.2d at 1333 (similar). We
will therefore examine the specific provisions at issue to
decide whether the Non-Settling Defendants have standing.

   The P&H Approval and Bar Order provides in part (empha-
sis added):

    5. The non-settling parties are permanently barred
    and enjoined from asserting or continuing to prose-
    cute, either directly or in any other capacity, any and
    all Claims (as defined in the Settlement Agreement)
    whether directly, indirectly, derivatively, representa-
    tively, or in any other capacity (excluding claims to
    enforce the terms of the Settlement Agreement),
    against P&H. The Released Claims are compro-
    mised, settled, and released as against P&H by virtue
    of this Approval and Bar Order.

    6. By virtue of the “good faith” nature of the Settle-
    ment Agreement approved by this Court, P&H is
    discharged from all Released Claims for contribu-
    tion, indemnification or the like that have been or
    may later be brought by or on behalf of any of the
    non-settling parties based upon, relating to or arising
    out of the Released Claims as defined in the Settle-
    ment Agreement. Accordingly, the Other Defendants
    are permanently barred, enjoined and restrained
    from asserting or continuing to prosecute any such
    Claim, however styled, whether for contribution,
    indemnity or otherwise, and whether arising under
    state, federal or common law against P&H, based
    upon, arising out of, or related to the Claims.
11734           SMITH v. ARTHUR ANDERSEN LLP
    7. With respect to any judgment that might be
    entered on any cause of action or claim in this
    action, or any pending future adversary proceeding,
    contested matter or civil action in which the Trustee
    is also a party, in which there is or may be a determi-
    nation of fault on the part of P&H, including but not
    limited to a determination of fault based on joint and
    several liability, the non-settling parties shall receive
    a pro rata judgment reduction credit. In recognition
    of the Settlement Payment, and in light of the Par-
    ties’ intent to provide P&H with comprehensive, full
    and complete finality with regard to any and all
    claims that could be asserted against P&H as a result
    of his conduct or prior dealings with the Debtor or
    the Debtors’ respective bankruptcy estates, any
    resulting judgment reduction credit shall be applied
    so as to preclude recovery by any party for any
    amount of pro rata fault attributable to P&H. . . .

  Similar language is contained in the BB&L Approval and
Bar Order and the proposed form of order submitted by Ste-
phens.

   [6] We conclude that the judgment reduction credit does
not eliminate the formal legal prejudice caused by the bar
orders. The Non-Settling Defendants are enjoined from assert-
ing any claim for “contribution, indemnity or otherwise” that
is “based upon, arising out of, or related to” the released
claims. Although the judgment reduction credit, which is
equal to “any amount of pro rata fault attributable to” the set-
tling defendants, might offset the Non-Settling Defendants’
loss of potential contribution claims, it is not clear that it
would compensate them for the elimination of “indemnity or
other[ ]” claims.

   [7] That the Non-Settling Defendants have not articulated
the precise nature of the “indemnity or other[ ]” claims they
are barred from asserting does not demonstrate a lack of for-
                SMITH v. ARTHUR ANDERSEN LLP               11735
mal legal prejudice. We are not reviewing an order entering
summary judgment or dismissing a complaint, where a more
searching inquiry into the factual and legal basis of a claim
might be productive. Rather, we are determining whether the
Non-Settling Defendants have standing, and we have stated
that a non-settling defendant has standing where a settlement
purports to strip it “of a legal claim or cause of action.” Wal-
ler, 828 F.2d at 583. The plain language of the Approval and
Bar Orders extends beyond contribution claims, and we can-
not conclude at this stage that the language precluding “in-
demnity or other[ ]” claims, which the Settling Parties
requested the district court to include in the Approval and Bar
Orders, is of no practical effect. Moreover, the Non-Settling
Defendants have had little opportunity to identify in concrete
terms the exact ways in which the bar orders prejudice them
because the Settling Parties did not assert challenges to the
Non-Settling Defendants’ standing under Waller until the day
of the hearing on the P&H settlement. We hold that the Non-
Settling Defendants had standing to object to the settlements.

                              III.

   We turn now to the merits of the Non-Settling Defendants’
challenges to the district court’s jurisdiction. We first address
their attacks on the Trustee’s standing, and then consider their
SLUSA arguments.

                               A.

   The Non-Settling Defendants contend that the Trustee lacks
standing to assert the claims in the Trustee’s Action pursuant
to the Supreme Court’s Caplin decision. We review this issue
de novo. See Williams v. Cal. 1st Bank, 859 F.2d 664, 666
(9th Cir. 1988).

   We emphasize that the only issue before us is whether the
district court had authority to grant the Approval Motions.
The Non-Settling Defendants argue that such authority was
11736           SMITH v. ARTHUR ANDERSEN LLP
absent because (1) Caplin divests the Trustee of standing; (2)
Caplin and its progeny establish constitutional principles of
standing and therefore implicate subject matter jurisdiction,
see City of Sausalito v. O’Neill, 386 F.3d 1186, 1197, 1199
(9th Cir. 2004) (explaining that standing involves both Article
III limitations and non-constitutional limitations, and that the
“non-constitutional standing inquiry is not whether there is a
‘case or controversy’ under Article III, and thus does not go
to our subject matter jurisdiction”); and (3) since the require-
ments of Article III have not been met, the district court not
only lacked jurisdiction to adjudicate the Trustee’s claims, but
could not even grant the interlocutory Approval Motions.

   We address first the issue of the Trustee’s standing and
then address the Non-Settling Defendants’ principal objec-
tions.

                               1.

   [8] A bankruptcy trustee is the representative of the bank-
rupt estate, and has the capacity to sue and be sued. See 11
U.S.C. § 323. Among the trustee’s duties is the obligation to
“collect and reduce to money the property of the estate.” Id.
§ 704(1). The “property of the estate” includes “all legal or
equitable interests of the debtor in property as of the com-
mencement of the case,” id. § 541(a)(1), including the debt-
or’s “causes of action.” United States v. Whiting Pools, Inc.,
462 U.S. 198, 205 n.9 (1983) (internal quotation marks and
citation omitted). Thus, “[u]nder the Bankruptcy Code the
trustee stands in the shoes of the bankrupt corporation and has
standing to bring any suit that the bankrupt corporation could
have instituted had it not petitioned for bankruptcy.” Shearson
Lehman Hutton, Inc. v. Wagoner, 944 F.2d 114, 118 (2d Cir.
1991) (citations omitted).

   [9] However, “[i]t is well settled that a bankruptcy trustee
has no standing generally to sue third parties on behalf of the
estate’s creditors, but may only assert claims held by the
                SMITH v. ARTHUR ANDERSEN LLP               11737
bankrupt corporation itself.” Id. (citation omitted); see also
Steinberg v. Buczynski, 40 F.3d 890, 893 (7th Cir. 1994)
(“[T]he trustee is confined to enforcing entitlements of the
corporation. He has no right to enforce entitlements of a cred-
itor”). This principle derives from the Supreme Court’s deci-
sion in Caplin, “in which the Court concluded that a
reorganization trustee under Chapter X had no standing under
the old Bankruptcy Act to assert, on behalf of the holders of
the debtor’s debentures, claims of misconduct against a third
party.” Williams, 859 F.2d at 666; see also Rochelle v. Marine
Midland Grace Trust Co., 535 F.2d 523, 527 (9th Cir. 1976)
(stating that Caplin held that “a reorganization trustee has no
standing to maintain [an] action on the part of any person or
entity other than his debtor corporation”). As we explained in
Williams, the holding of Caplin remains valid under the cur-
rent version of the Bankruptcy Code, and is equally applicable
to both reorganization and liquidation trustees. See 859 F.2d
at 666-67.

   Although the line between “claims of the debtor,” which a
trustee has statutory authority to assert, and “claims of credi-
tors,” which Caplin bars the trustee from pursuing, is not
always clear, the focus of the inquiry is on whether the
Trustee is seeking to redress injuries to the debtor itself
caused by the defendants’ alleged conduct. See, e.g., Scholes
v. Lehmann, 56 F.3d 750, 753 (7th Cir. 1995) (explaining that
a bankruptcy trustee may sue only to redress injuries to the
debtor in bankruptcy). If the debtor suffered an injury, the
trustee has standing to pursue a claim seeking to rectify such
injury. But, “[w]hen a third party has injured not the bankrupt
corporation itself but a creditor of that corporation, the trustee
in bankruptcy cannot bring suit against the third party.” Stein-
berg, 40 F.3d at 893.

   [10] Here, the Trustee alleges that the defendants breached
contracts with or duties owed to Boston Chicken, and that if
they had not concealed Boston Chicken’s financial condition
from its outside directors and the investing public, the firm
11738           SMITH v. ARTHUR ANDERSEN LLP
might have filed for bankruptcy more promptly. In that situa-
tion, additional assets might not have been spent on a failing
business. This allegedly wrongful expenditure of corporate
assets qualifies as an injury to the firm which is sufficient to
confer standing upon the Trustee. See Official Comm. of
Unsecured Creditors v. R.F. Lafferty & Co., 267 F.3d 340,
350 (3d Cir. 2001) (“[P]rolonging an insolvent corporation’s
life through bad debt may . . . cause the dissipation of corpo-
rate assets. Th[is] harm[ ] can be averted, and the value within
an insolvent corporation salvaged, if the corporation is dis-
solved in a timely manner, rather than kept afloat with spuri-
ous debt”). Therefore, we conclude that the Trustee has
standing.

                               2.

   Unpersuaded, the Non-Settling Defendants present a host
of challenges to the Trustee’s standing, all of which suffer
from a common defect: a failure to refute the argument that
the Trustee is seeking to redress injuries suffered by Boston
Chicken as a result of the defendants’ alleged conduct. We
address their principal arguments in turn.

   The Non-Settling Defendants first argue that our decision
in Williams compels the conclusion that the Trustee lacks
standing because the creditors are the “real parties in interest”
in the Trustee’s Action. In Williams, we held that a trustee
lacked standing to assert claims that had been assigned to the
trustee by the debtor’s investors because, among other rea-
sons, “the assignments notwithstanding, the investors plainly
remain[ed] the real parties in interest in [the trustee’s]
actions.” Williams, 859 F.2d at 666. Here, in contrast, the
Trustee is not attempting to assert claims that were assigned
to him by Boston Chicken’s creditors, but rather seeks to rec-
tify injuries to Boston Chicken itself. Nothing in Williams
suggests that creditors are the “real parties in interest” in an
action pursuing compensation for injuries to the corporate
debtor.
                SMITH v. ARTHUR ANDERSEN LLP               11739
   Second, the Non-Settling Defendants argue that “if [Boston
Chicken] took on more debt than it could repay, it is [Boston
Chicken’s] creditors—the ones who actually lost that money
by lending it to [Boston Chicken]—who were injured.” In
their view, the additional debt that Boston Chicken incurred
and cannot now repay as a result of the defendants’ alleged
conduct does not establish a harm to Boston Chicken remedi-
able by the Trustee. In response, the Trustee argues that he
has alleged a cognizable harm to Boston Chicken. He invokes
the “deepening insolvency” theory, exemplified by the Third
Circuit’s decision in Lafferty, under which an insolvent corpo-
ration is deemed to suffer a “distinct and compensable injury
when it continues to operate and incur more debt.” Kittay v.
Atl. Bank (In re Global Serv. Group LLC), 316 B.R. 451, 457
(Bankr. S.D.N.Y. 2004); see also Lafferty, 267 F.3d at 347
(stating that “deepening insolvency” refers to “an injury to the
Debtors’ corporate property from the fraudulent expansion of
corporate debt and prolongation of corporate life”).

   [11] We need not make any general pronouncements on the
deepening insolvency theory, not least because it is difficult
to grasp exactly what the theory entails. See Limor v. Buerger
(In re Del-Met Corp.), 322 B.R. 781, 807 (Bankr. M.D. Tenn.
2005) (pointing out the “lack of definition of the developing
theory of deepening insolvency” and discussing cases and
commentary). We do, however, agree with the Third Circuit’s
observation in Lafferty that “prolonging an insolvent corpora-
tion’s life through bad debt may” dissipate corporate assets
and thereby harm the value of corporate property. 267 F.3d at
350. Thus, we agree that the complaint states a cognizable
harm to Boston Chicken when it alleges that the defendants
“prolonged” the firm’s existence, causing it to expend corpo-
rate assets that would not have been spent “if the corporation
[had been] dissolved in a timely manner, rather than kept
afloat with spurious debt.” Id. In so holding, we do not opine
whether the incurrence of additional debt that cannot be
repaid, in and of itself, constitutes a corporate injury remedia-
11740            SMITH v. ARTHUR ANDERSEN LLP
ble by a trustee. We rely only on the dissipation of assets in
reaching the conclusion that Boston Chicken was harmed.

   It is, of course, true that the dissipation of assets limited the
firm’s ability to repay its debts in liquidation. Acknowledg-
ment of this fact is not, however, a concession that only the
creditors, and not Boston Chicken itself, have sustained any
injury. Instead, it is a recognition of the economic reality that
any injury to an insolvent firm is necessarily felt by its credi-
tors. See Brandt v. Hicks, Muse & Co. (In re Healthco Int’l,
Inc.), 208 B.R. 288, 300 (Bankr. D. Mass. 1997) (“In com-
plaining that directors authorized a transaction which unduly
weakened Healthco, the Trustee is not asserting the claim of
creditors. He alleges Healthco was the victim of poor manage-
ment causing damage to the corporation which necessarily
resulted in damage to its creditors by diminishing the value of
its assets and increasing its liabilities”). Thus, for example, if
corporate directors mismanage an insolvent firm and cause it
injury, the creditors will feel that injury indirectly. See Prod.
Res. Group, LLC v. NCT Group, Inc., 863 A.2d 772, 776
(Del. Ch. 2004) (stating that even when acts of mismanage-
ment “occur when the firm is insolvent, they operate to injure
the firm in the first instance by reducing its value, injuring
creditors only indirectly by diminishing the value of the firm
and therefore the assets from which the creditors may satisfy
their claims”). The existence of such indirect injury to credi-
tors notwithstanding, it is “axiomatic” that a trustee has
authority to bring “actions against the debtor’s officers and
directors for breach of duty or misconduct.” Koch Ref. v.
Farmers Union Cent. Exch., Inc., 831 F.2d 1339, 1348 (7th
Cir. 1987), citing Pepper v. Litton, 308 U.S. 295, 307 (1939);
see also La. World Exposition v. Fed. Ins. Co., 858 F.2d 233,
246 (5th Cir. 1988); Mixon v. Anderson (In re Ozark Rest.
Equip. Co.), 816 F.2d 1222, 1225 (8th Cir. 1987); Delgado
Oil Co. v. Torres, 785 F.2d 857, 860 (10th Cir. 1986). More-
over, neither our own decision in Williams, nor any of the
other decisions upon which the Non-Settling Defendants prin-
cipally rely, see Breeden v. Kirkpatrick & Lockhart LLP (In
                SMITH v. ARTHUR ANDERSEN LLP              11741
re Bennett Funding Group, Inc.), 336 F.3d 94 (2d Cir. 2003);
Hirsch v. Arthur Andersen & Co., 72 F.3d 1085 (2d Cir.
1995); E.F. Hutton & Co. v. Hadley, 901 F.2d 979 (11th Cir.
1990); Mixon, 816 F.2d 1222, are inconsistent with this analy-
sis, as none of these decisions hold that conduct causing an
insolvent debtor corporation to expend its assets injures only
the creditors and not the corporation.

   Third, the Non-Settling Defendants point out that if the
Trustee succeeds in holding the defendants liable and distrib-
utes the recovery to Boston Chicken’s creditors, some credi-
tors might make out better than if they had brought their own
direct fraud claims against the defendants, while others might
fare worse. This may be true, but it is irrelevant to the ques-
tion of the Trustee’s standing. As Nadhir himself explains in
his brief, this supposed disparity is simply a function of the
reality that any recovery in the Trustee’s Action would be dis-
tributed to creditors according to the priority schedule set
forth in the Bankruptcy Code. This does not show that Boston
Chicken itself was not injured by the defendants’ conduct.

   Fourth, the Underwriter Defendants argue that the Trustee
is asserting claims barred by Caplin because the “Trustee’s
damage claim here is measured in terms of Boston Chicken’s
unpaid debt at the time of its bankruptcy filing, instead of any
actual harm to the corporation.” In response, the Trustee cites
dicta in several cases suggesting that the amount of debt
incurred following a false representation of solvency may be
a valid measure of harm. See Fla. Dep’t of Ins. v. Chase Bank
of Tex. Nat’l Ass’n, 274 F.3d 924, 935 (5th Cir. 2001); Tabas
v. Greenleaf Ventures, Inc. (In re Flagship Healthcare, Inc.),
269 B.R. 721, 728 (Bankr. S.D. Fla. 2001). We need not and
do not express any opinion on the appropriate measure of
damages in this case. The only question before us is whether
the Trustee has sufficiently alleged an injury to Boston
Chicken, as distinguished from the question of how to mea-
sure the extent of that injury. See Schnelling v. Thomas (In re
Agribiotech, Inc.), 319 B.R. 216, 224 (D. Nev. 2004)
11742           SMITH v. ARTHUR ANDERSEN LLP
(“Whether damages to the creditors is a proper measure of
damages to the debtor is a separate question from whether the
Trustee has standing to assert claims that allege the defendant
harmed the debtor”). Because Boston Chicken has allegedly
suffered an injury, the Trustee has standing. Should the
Trustee succeed in holding the defendants liable on any of the
claims in the Trustee’s Action, questions regarding the proper
measure of damages will be addressed by the district court at
that time.

   Finally, the Non-Settling Defendants argue that any claims
in the Trustee’s Action alleging that the Individual Defen-
dants breached their fiduciary duties while Boston Chicken
was insolvent must be brought by the creditors to whom those
duties were owed and not the Trustee. In advancing this argu-
ment, the Non-Settling Defendants rely on the “insolvency
exception,” common to the corporate law of many states,
under which directors of insolvent firms owe fiduciary duties
to creditors. See, e.g., Geyer v. Ingersoll Publ’ns Co., 621
A.2d 784, 787 (Del. Ch. 1992) (“[W]hen the insolvency
exception does arise, it creates fiduciary duties for directors
for the benefit of creditors”). This exception gives creditors of
an insolvent firm standing to assert that directors “breached
their fiduciary duties by improperly harming the economic
value of the firm, to the detriment of the creditors who had
legitimate claims on its assets.” Prod. Res. Group, 863 A.2d
at 792.

   [12] Although creditors may attain standing to assert fidu-
ciary duty claims upon a firm’s insolvency as a matter of state
corporate law, it does not follow that a trustee, who represents
the debtor, lacks standing to assert such claims as a matter of
federal bankruptcy law. Again, the ultimate question in deter-
mining whether a trustee has standing is whether the debtor
corporation has been injured. Even when a firm is insolvent,
it may be injured by breaches of fiduciary duty. As the Dela-
ware Court of Chancery has explained:
                SMITH v. ARTHUR ANDERSEN LLP               11743
    [E]ven in the case of an insolvent firm, poor deci-
    sions by directors that lead to a loss of corporate
    assets and are alleged to be a breaches of equitable
    fiduciary duties remain harms to the corporate entity
    itself. . . . The firm’s insolvency simply makes the
    creditors the principal constituency injured by any
    fiduciary breaches that diminish the firm’s value and
    logically gives them standing to pursue these claims
    to rectify that injury. Put simply, when a director of
    an insolvent corporation, through a breach of fidu-
    ciary duty, injures the firm itself, the claim against
    the director is still one belonging to the corporation.

       ....

       Whether a firm is solvent or insolvent, it—and not
    a constituency such as its stockholders or its
    creditors—owns a claim that a director has, by fail-
    ing to exercise sufficient care, mismanaged the firm
    and caused a diminution to its economic value.

Id. at 792-93 (footnotes omitted).

   [13] Thus, the Non-Settling Defendants might be correct
that Boston Chicken’s creditors could have asserted fiduciary
duty claims outside the bankruptcy context similar to those
pressed by the Trustee, but this does not prove that the
Trustee is asserting “creditors’ claims” within the meaning of
Caplin. Rather, it is simply because state law often permits
creditors to pursue derivative claims on an insolvent corpora-
tion’s behalf when the corporation itself has been injured by
breaches of fiduciary duty. Because such claims involve
injury to the debtor, a bankruptcy trustee has standing to pur-
sue them.

   [14] We stress that our ruling here is a narrow one. Because
the only issue before us is whether the district court had juris-
diction, we hold only that the Trustee has standing to assert
11744           SMITH v. ARTHUR ANDERSEN LLP
the claims alleged in the Trustee’s Action and do not opine on
any issues related to the merits of those claims. See Cardenas
v. Anzai, 311 F.3d 929, 933-34 (9th Cir. 2002) (citing Davis
v. Passman, 442 U.S. 228, 239 n.18 (1979) for the proposition
that the “question of whether a plaintiff has standing to bring
suit, and thus whether the court has jurisdiction to hear the
controversy, is separate from the question of whether a plain-
tiff has a cause of action”); Loyd v. Paine Webber, Inc., 208
F.3d 755, 758 & n.3 (9th Cir. 2000) (per curiam) (holding that
trustee had standing because his complaint sufficiently
alleged that defendant law firm’s conduct was a cause of
injury to the debtor corporation, even though the complaint
did not state a claim for legal malpractice, and explaining that
“[w]hether [the law firm’s] conduct rises to the level of legal
malpractice goes to the merits of the lawsuit, not to the pre-
liminary question of standing”). For example, although we
hold that the dissipation of assets constitutes an injury to Bos-
ton Chicken, we express no opinion on whether the complaint
states a valid claim for relief based on that injury, whether the
Trustee must prove intentional or merely negligent conduct to
succeed on any of his claims, or whether certain of the Trust-
ee’s fiduciary duty claims are affected by the business judg-
ment rule. In addition, as stated above, we do not decide what
measure of damages might be appropriate if the defendants
are found liable on any claims. For present purposes, we need
hold only that Caplin does not divest the Trustee of standing.

                               B.

   We now turn to the Non-Settling Defendants’ contentions
based upon SLUSA. We review the district court’s interpreta-
tion of a statute de novo. SEC v. McCarthy, 322 F.3d 650, 654
(9th Cir. 2003).

   [15] SLUSA is a “federal statute that preempts state-law
securities actions” under certain circumstances. United Inves-
tors Life Ins. Co. v. Waddell & Reed Inc., 360 F.3d 960, 962
(9th Cir. 2004). SLUSA amends both the Securities Act of
               SMITH v. ARTHUR ANDERSEN LLP             11745
1933 and the Securities Exchange Act of 1934. The 1933 Act
amendments are codified at 15 U.S.C. § 77p. The 1934 Act
amendments, which are functionally identical, are codified at
15 U.S.C. § 78bb. We cite here only the 1934 Act codifica-
tion. SLUSA provides in part:

    No covered class action based upon the statutory or
    common law of any State or subdivision thereof may
    be maintained in any State or Federal court by any
    private party alleging—

    (A) a misrepresentation or omission of a material
    fact in connection with the purchase or sale of a cov-
    ered security[.]

15 U.S.C. § 78bb(f)(1)(A).

   The Non-Settling Defendants argue that the Trustee’s
Action is a “covered class action” to which this provision
applies. They contend that SLUSA does not merely provide
an affirmative defense of preemption to the Trustee’s state-
law claims, but divests the district court of subject matter
jurisdiction over those claims and required the court to dis-
miss the entire case at the moment SLUSA applied. They con-
cede that no federal court has held that SLUSA applies this
way, but argue that this result is required by the language of
SLUSA itself— namely, its command that no “covered class
action” that comes within its scope “may be maintained” in
any federal or state court. We need not decide whether
SLUSA is jurisdictional in this sense because even if it is,
SLUSA did not require dismissal.

   [16] Under SLUSA, either a “single lawsuit” or “group of
lawsuits” can qualify as a “covered class action.” Id.
§ 78bb(f)(5)(B)(i)-(ii). The Non-Settling Defendants invoke
both of these definitions in their challenge to the Trustee’s
Action, and we consider each in turn.
11746           SMITH v. ARTHUR ANDERSEN LLP
                               1.

  Under SLUSA, a “covered class action” includes a “single
lawsuit” in which

    damages are sought on behalf of more than 50 per-
    sons or prospective class members, and questions of
    law or fact common to those persons or members of
    the prospective class, without reference to issues of
    individualized reliance on an alleged misstatement or
    omission, predominate over any questions affecting
    only individual persons or members[.]

Id. § 78bb(f)(5)(B)(i)(I). The Non-Settling Defendants con-
tend that the Trustee’s Action is brought “on behalf of more
than 50 persons or prospective class members,” i.e., the bene-
ficiaries of the plan trust, because the Trustee does not qualify
as one “person” under the following definition:

    For purposes of this paragraph, a corporation, invest-
    ment company, pension plan, partnership, or other
    entity, shall be treated as one person or prospective
    class member, but only if the entity is not established
    for the purpose of participating in the action.

Id. § 78bb(f)(5)(D).

   Thus, the issue is whether the Trustee was “established for
the purpose of participating in the action”; if it was not, then
the Trustee is a single “person,” and the Trustee’s Action is
not a “covered class action” under the above definition.

   We are aware of no federal appellate decision interpreting
SLUSA’s definition of “person.” However, one district court
has suggested that an entity is not one person if its “primary
purpose” is to pursue causes of action. See Cape Ann Inves-
tors LLC v. Lepone, 296 F. Supp. 2d 4, 10 (D. Mass. 2003).
We adopt this sensible definition. The Non-Settling Defen-
                SMITH v. ARTHUR ANDERSEN LLP               11747
dants’ contrary interpretation, under which any entity estab-
lished “at least in part” for the purpose of pursuing litigation
is not a “person,” is inconsistent with the statute’s plain lan-
guage, which provides that an entity “shall be treated as one
person” if the entity is not “established for the purpose of par-
ticipating in the action.” Moreover, that interpretation could
potentially deprive many bankruptcy trustees of the ability to
pursue state-law securities fraud claims on behalf of an estate.
Nothing in SLUSA suggests that Congress intended to work
such a radical change in the bankruptcy laws.

   [17] We agree with the Settling Parties that pursuing causes
of action is not the Trustee’s “primary” purpose. The Debtors’
Plan, under which the Trustee was appointed, provides that
the Trustee will “act as the Estates’ representative for all pur-
poses, and will be responsible for (i) controlling and manag-
ing the consideration received from [McDonald’s] and all
Retained Assets, (ii) monetizing Retained Assets, (iii) filing,
prosecuting and settling claim objections, (iv) administering
the disputed claim reserve, (v) prosecuting and settling Estate
causes of action, (vi) making distributions in accordance with
the terms of the Plan, and (vii) winding-up and closing the
Estates” (emphasis added). Because the Trustee is to “act as
the Estates’ representative for all purposes,” and not just for
the purpose of pursuing causes of action, the Trustee is one
person, and the Trustee’s Action is not a “single lawsuit”
barred by SLUSA.

                               2.

  The Non-Settling Defendants also rely on the provision in
SLUSA defining “covered class action” to include

    any group of lawsuits filed in or pending in the same
    court and involving common questions of law or
    fact, in which—

    (I) damages are sought on behalf of more than 50
    persons; and
11748           SMITH v. ARTHUR ANDERSEN LLP
    (II) the lawsuits are joined, consolidated, or other-
    wise proceed as a single action for any purpose.

15 U.S.C. § 78bb(f)(5)(B)(ii). The Non-Settling Defendants
advance a number of different arguments that rely on this def-
inition. Chief among these is the assertion that, when the
Trustee’s Action was consolidated with the Class Action in
Arizona for “discovery and pretrial purposes only” for several
months in 2003, the two actions became a “group of lawsuits”
covered by this definition. In the Non-Settling Defendants’
view, the fact that the district court vacated the order consoli-
dating the cases and transferred the Class Action back to Col-
orado is irrelevant, because the district court was powerless to
do anything other than dismiss the Trustee’s Action at the
instant SLUSA applied.

   The critical flaw in their argument, however, is its assump-
tion that we may consider the Class Action in determining
whether the Trustee’s Action is part of a “group of lawsuits”
barred by SLUSA. That assumption cannot be squared with
the provision governing the applicability of SLUSA’s amend-
ments:

    APPLICABILITY.—The amendments made by this
    section shall not affect or apply to any action com-
    menced before and pending on the date of enactment
    of this Act.

Securities Litigation Uniform Standards Act of 1998, Pub. L.
No. 105-353, § 101(c), 112 Stat. 3227, 3233 (1998).

   [18] As several courts have recognized, this language
“amounts to an express proscription that forbids the applica-
tion of SLUSA to any case pending on the day SLUSA came
into force,” which was November 3, 1998. W.R. Huff Asset
Mgmt. Co. v. BT Sec. Corp., 190 F. Supp. 2d 1273, 1276
(N.D. Ala. 2001); see also W.R. Huff Asset Mgmt. Co. v.
Kohlberg Kravis Roberts & Co., 234 F. Supp. 2d 1218, 1222
               SMITH v. ARTHUR ANDERSEN LLP             11749
(N.D. Ala. 2002) (“This language certainly qualifies as an
‘express command’ that prevents application of SLUSA to
cases pending on the date of SLUSA’s enactment”); In re
BankAmerica Corp. Sec. Litig., 95 F. Supp. 2d 1044, 1046 n.2
(E.D. Mo. 2000) (stating that SLUSA “does not apply to suits
filed prior to November 3, 1998, the effective date of the
Act”). The actions comprising the Class Action were filed and
consolidated before November 3, 1998. Therefore, the appli-
cability provision commands that SLUSA “shall not affect or
apply” to the Class Action.

   If the Non-Settling Defendants are correct that the Trust-
ee’s Action and Class Action are a “group of lawsuits” meet-
ing the definition of a “covered class action” precluded by
SLUSA, dismissal would be required not only of the Trustee’s
Action but of the Class Action as well. See 15 U.S.C.
§ 78bb(f)(1) (providing that “[n]o covered class action” meet-
ing certain requirements “may be maintained in any State or
Federal court”). This, of course, would violate SLUSA’s
applicability provision.

  [19] Therefore, we will not consider the Class Action in
deciding whether the Trustee’s Action is part of a “group of
lawsuits” that qualify as a “covered class action.” Since the
Non-Settling Defendants have not argued that there is another
lawsuit which, together with the Trustee’s Action, is a “group
of lawsuits” constituting a “covered class action,” SLUSA
does not bar the Trustee’s Action.

   In challenging this analysis, the Non-Settling Defendants
cite decisions holding that SLUSA applies to conduct that
occurred prior to SLUSA’s enactment. See, e.g., Prof’l Mgmt.
Assocs., Inc. Employees’ Profit Sharing Plan v. KPMG LLP,
335 F.3d 800, 804 (8th Cir. 2003) (“We thus conclude
SLUSA applies to all actions commenced after its enactment,
even if the challenged conduct predates SLUSA”). The ques-
tion here is not, however, whether SLUSA can apply to con-
duct that occurred before November 3, 1998, but whether it
11750           SMITH v. ARTHUR ANDERSEN LLP
can apply to an action that was filed before the effective date.
That question is answered by SLUSA’s applicability provi-
sion.

   [20] It is not clear whether the Non-Settling Defendants
argue that, even if the Class Action is disregarded, the several
lawsuits that were consolidated into the Trustee’s Action are
themselves a “group of lawsuits” which constitute a “covered
class action.” Assuming they do make this argument, they are
wrong. A group of lawsuits will not constitute a covered class
action if it does not seek damages “on behalf of more than 50
persons.” 15 U.S.C. § 78bb(f)(5)(B)(ii)(I). Because the
Trustee is a single person, see Part III.B.1, supra, the Trust-
ee’s Action is not a group of lawsuits which qualifies as a
covered class action. SLUSA does not require dismissal of the
Trustee’s Action.

  AFFIRMED.
