                FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

CHARLES T. MADDEN; SHASHIDHAR      
ACHARYA, M.D.; ACHAUER FAMILY
LIMITED PARTNERSHIP, a limited
partnership; ANGELA ALLEVATO,
M.D.; ROBERT A. BAIRD, M.D.;
ANNETTE C. BERNHUT-CAPLIN,
D.O.; THOMAS W. BRODERICK,
M.D.; NANCY K. BROWNELL, M.D.;
DAWN LYNN BRUNER, M.D.;
ROBERT BUDMAN, M.D.; ROBERT
WILLIAM BUSTER, M.D.; MICHAEL
W. CATER, M.D.; ANNA LISA                No.07-15900
CHAVEZ, M.D.; JANAK R. CHOPRA,
M.D.; RAMAN CHOPRA, M.D.;                 D.C. No.
                                       CV-06-04886-JSW
GASTON CILLIANI, M.D.; CARMELITA
R. CO-CASQUEJO, M.D.; WILLIAM J.          OPINION
COLLINS, M.D.; LEO H. CUMMINS,
M.D.; CHRISTINA K. ELLIOTT; MARK
H. ELLIS, M.D.; STANLEY P.
GALANT, M.D.; SHERWIN A.
GILLMAN, M.D. and BONNIE S.
GILLMAN, as Trustees for the
Gillman Community Property
Trust; KEITH L. GLADSTIEN, M.D.;
STUART M. GORDON; KENNETH E.
GRUBBS, D.O.; NORAH GUTRECHT,
M.D.;
                                   



                         1653
1654              MADDEN v. COWEN & CO.


THOMAS A. HRYNIEWICKI, M.D.; R.       
JUDD JESSUP; STANLEY KANOW,
M.D.; LEONARD FRANK KELLOGG
JR., M.D.; MARK E. KRUGMAN,
M.D.; LAWRENCE N. KUGELMAN;
SANDRA BARRY LIEBERMAN, as
successor in interest to Melvyn B.
Lieberman, M.D., Trustee for the
Melvyn B. Lieberman Trust; ALAN
MADERIOUS, M.D.; MARK C.
MARTEN; WILLIAM C. MCMASTER,
M.D.; MARIA E. MIÑON, M.D.;
JUDITH HARRISON-MONGE, M.D., as
Trustee for the Harrison-Monge
1996 Family Trust; RONALD W.
MORELAND; STANLEY K.
NAKAMOTO, M.D.; CHRISTOPHER C.        
OHMAN; KUSUM OHRI, M.D.; JACK
M. OSBORN, M.D.; RICHARD T.
PITTS, D.O.; NORMAN J. ROSEN,
M.D.; ERIC MURROW ROWEN,
M.D.; HELEN ROWEN, as Trustee
for the Rowen Family Trust Dated
May 5, 1982; MARK STEVEN
ROWEN; MARSHALL ROWEN, M.D.,
individually and as Trustee for the
Rowen Family Trust Dated May 5,
1982; SCOTT JEFFREY ROWEN,
M.D.; PRAVIN V. SHARMA, M.D.;
HAL S. SHIMAZU, M.D.; SIERRA
VENTURES V, L.P., a California
limited partnership; AISHA SIMJEE,
M.D.; JAMES B. TANANBAUM;
                                      
                    MADDEN v. COWEN & CO.               1655


ALLAN G. WEISS; DANIEL L.                
WEISSBERG, M.D.; LINDA F.
WEISSBERG; LAURENCE D.
WELLIKSON, M.D.; ANGELA F.
WINTHEISER; and ALLAN WONG,
M.D.,
                Plaintiffs-Appellants,
                   v.                    
COWEN & COMPANY, a New York
limited partnership; SG COWEN
SECURITIES CORPORATION, a New
York corporation; COWEN
COMPANY, LLC, a Delaware
limited liability company,
               Defendants-Appellees.
                                         
        Appeal from the United States District Court
           for the Northern District of California
         Jeffrey S. White, District Judge, Presiding

                 Argued and Submitted
       November 21, 2008—San Francisco, California

                   Filed February 11, 2009

        Before: Procter Hug, Jr., John T. Noonan, and
               Sandra S. Ikuta, Circuit Judges.

                    Opinion by Judge Ikuta
1658                   MADDEN v. COWEN & CO.




                              COUNSEL

Phillip Borowski, San Francisco, California, for the plaintiffs-
appellants.

Linda Goldstein, New York, New York, for the defendants-
appellees


                              OPINION

IKUTA, Circuit Judge:

   Sixty-three shareholders brought a state-law action against
an investment bank for misleading them in connection with
the sale of their closely held corporation to a publicly traded
acquiring corporation. The suit was removed to federal dis-
trict court under the Securities Litigation Uniform Standards
Act of 1998, Pub. L. No. 105-353, 112 Stat. 3227
(“SLUSA”), which allows for the removal and preclusion1 of




   1
     The Supreme Court recently explained that SLUSA precludes, rather
than preempts, state law claims: “The preclusion provision is often called
a preemption provision; the Act, however, does not itself displace state
law with federal law but makes some state-law claims nonactionable
through the class action device in federal as well as state court.” Kircher
v. Putnam Funds Trust, 547 U.S. 633, 636 n.1 (2006).
                       MADDEN v. COWEN & CO.                          1659
“private state-law ‘covered’ class actions alleging untruth or
manipulation in connection with the purchase or sale of a
‘covered’ security.” Kircher, 547 U.S. at 636-37 (quoting 15
U.S.C. § 77p(b)).2 We conclude that the suit falls within
SLUSA’s savings clause, known as the “Delaware carve-out,”
which preserves certain state-law actions. 15 U.S.C. § 77p(d).
We therefore vacate and remand to the district court with
instructions to remand the action to state court.

                                     I

   Charles T. Madden, along with sixty-two other individuals
and entities (collectively, “Madden”), brought a state-law
action in state court against Cowen & Company, SG Cowen
Securities Corporation, and Cowen and Company, LLC (col-
lectively, “Cowen”). Madden and his fellow plaintiffs, most
of whom are physicians, owned a majority interest in St.
Joseph Medical Corporation, which in turn owned a control-
ling share in Orange Coast Managed Care Services. Both St.
Joseph and Orange Coast were closely held corporations. St.
Joseph was incorporated in California, and Orange Coast in
Delaware. The following facts are taken from the allegations
in Madden’s complaint:

   In 1997, the management of St. Joseph and Orange Coast
sought a buyer for the two companies and formed a “Special
Committee” for that purpose. The Special Committee, which
included members of the boards of directors of St. Joseph and
Orange Coast, retained an investment bank, Cowen, whose
duties included looking for prospective buyers, providing
advice regarding the structure of any potential sale, and pro-
  2
   SLUSA amended section 16 of the Securities Act of 1933 (“1933
Act”), codified at 15 U.S.C. § 77p, and made a substantially identical
amendment to section 28(f) of the 1934 Act, codified at 15 U.S.C.
§ 78bb(f). For simplicity, we follow Kircher and cite to the relevant provi-
sion in the 1933 Act, 15 U.S.C. § 77p, except as noted. See 547 U.S. at
637 n.3.
1660               MADDEN v. COWEN & CO.
viding the shareholders of St. Joseph with a “fairness opinion”
regarding any proposed transaction. Cowen’s contract pro-
vided that it would receive a $50,000 retainer fee plus 1% of
any sale price, payable in cash.

   Cowen found four possible buyers, two of which are rele-
vant here: St. Joseph’s Hospital of Orange County, already a
part-owner of Orange Coast, offered $40 million ($30 million
in cash and a $10 million note); and FPA Medical Manage-
ment, a publicly traded corporation, offered shares of its stock
valued at $66.5 million. After Cowen recommended FPA as
a buyer, St. Joseph and Orange Coast began exclusive negoti-
ations with FPA. In January 1998, these discussions resulted
in an agreement on the terms of a merger. Under the merger
agreement, FPA would acquire all outstanding shares of St.
Joseph and thereby obtain St. Joseph’s controlling share in
Orange Coast as well. In exchange, FPA would issue shares
of its stock worth $60 million to St. Joseph’s shareholders.
Cowen concluded that this transaction would be financially
fair to the shareholders of Orange Coast and St. Joseph.

   On January 13, 1998, the boards of directors of Orange
Coast and St. Joseph approved the merger agreement. A week
later, the agreement was executed by Orange Coast, St.
Joseph, and FPA, although it had not yet been approved by St.
Joseph’s shareholders. On February 5, 1998, Cowen issued a
letter memorializing its fairness opinion. FPA then filed a reg-
istration statement for the new stock it would issue to Madden
under the terms of the merger agreement. The registration
statement, which included Cowen’s fairness letter (as well as
Cowen’s written consent to its inclusion), was approved by
the Securities and Exchange Commission (SEC) on February
17, 1998. After receiving a copy of the registration statement
and fairness letter, Madden voted in favor of the merger
agreement. The merger became effective on March 20, 1998.

   A few months later, on May 15, 1998, FPA issued a calam-
itous first-quarter report for 1998: earnings per share were 30
                   MADDEN v. COWEN & CO.                    1661
cents below expectation, and FPA’s share price tumbled 75%
in the next two trading days. Two months later FPA declared
bankruptcy, with a share price that was approximately 0.5%
of its value at the time of the merger agreement. Madden
agreed with Cowen to toll the statute of limitations so that
Madden could first sue FPA’s management, auditor, and
financial advisor in California court. Those defendants
removed the action to federal district court, which entered
summary judgment in their favor. We upheld the grant of
summary judgment on appeal. See Madden v. Deloitte & Tou-
che, LLP, 118 F. App’x 150, 153-54 (9th Cir. 2004). Madden
then brought the present action against Cowen in California
court, alleging that Cowen committed negligent representa-
tion and professional negligence under California law in con-
nection with its role in the merger. Cowen removed the action
to federal district court. Applying SLUSA, the district court
denied Madden’s motion to remand to state court and granted
Cowen’s motion to dismiss. Madden timely appealed.

                               II

   SLUSA is part of a recent congressional attempt to rein in
private securities litigation. Section 10(b) of the Securities
and Exchange Act of 1934 (“1934 Act”), 15 U.S.C. § 78j(b),
and Rule 10b-5 of the SEC’s regulations, 17 C.F.R.
§ 240.10b-5, serve as the federal securities laws’ catchall anti-
fraud provisions, see Ernst & Ernst v. Hochfelder, 425 U.S.
185, 203 (1976), broadly prohibiting “deception, misrepresen-
tation, and fraud in connection with the purchase or sale of
any security,” Merrill Lynch, Pierce, Fenner & Smith Inc. v.
Dabit, 547 U.S. 71, 78 (2006) (internal quotation marks omit-
ted). The Supreme Court has long recognized an implied pri-
vate right of action under these provisions. Id. at 79 (citing
Superintendent of Ins. of N.Y. v. Bankers Life & Cas. Co., 404
U.S. 6 (1971)).

  In 1995, Congress adopted “legislation targeted at per-
ceived abuses of the class-action vehicle in litigation involv-
1662               MADDEN v. COWEN & CO.
ing nationally traded securities.” Dabit, 547 U.S. at 81. The
Private Securities Litigation Reform Act of 1995 (“Reform
Act”), 109 Stat. 737 (codified at 15 U.S.C. §§ 77z-1 and 78u-
4), was intended “to deter or at least quickly dispose of” abu-
sive class actions, particularly those alleging violations of
Section 10(b), by limiting the potential liability of defendants
and requiring plaintiffs bringing private securities fraud
actions in federal court to surmount a number of procedural
hurdles. Dabit, 547 U.S. at 81-82. But rather “than face the
obstacles set in their path by the Reform Act, plaintiffs and
their representatives began bringing class actions under state
law, often in state court.” Id. at 82. In response to this unin-
tended consequence of the Reform Act, Congress enacted
SLUSA to “stem this shift from Federal to State courts and
prevent certain State private securities class action lawsuits
alleging fraud from being used to frustrate the objectives of
the Reform Act.” Id. (internal quotation marks and alterations
omitted).

   [1] SLUSA sought to achieve these goals by generally pre-
cluding state-law “covered class actions” alleging fraud or
misrepresentation in connection with “covered securities.”
SLUSA’s preclusion provision states:

    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—

         (1) an untrue statement or omission of a
         material fact in connection with the pur-
         chase or sale of a covered security; or

         (2) that the defendant used or employed any
         manipulative or deceptive device or con-
         trivance in connection with the purchase or
         sale of a covered security.
                   MADDEN v. COWEN & CO.                      1663
15 U.S.C. § 77p(b).

    [2] The breadth of this preclusion provision is limited in
several respects. It applies only to a “covered class action,”
defined to include an action “to recover damages on a repre-
sentative basis” or in which “damages are sought on behalf of
more than 50 persons.” 15 U.S.C. § 77p(f)(2)(A)(i). It is also
limited to actions involving a “covered security,” defined as
a security “traded nationally and listed on a regulated national
exchange,” Dabit, 547 U.S. at 83, “at the time during which
it is alleged that the misrepresentation, omission, or manipula-
tive or deceptive conduct occurred.” 15 U.S.C. 77p(f)(3)
(cross-referencing the statutory definition of “covered securi-
ty” in § 77r).

   Additionally, SLUSA preserves certain types of state-law
claims that fall within the scope of its preclusion provision.
Most relevant here is the Delaware carve-out, 15 U.S.C.
§ 77p(d), which provides that a private party may bring a cov-
ered class action “based upon the statutory or common law of
the State in which the issuer is incorporated (in the case of a
corporation) or organized (in the case of any other entity),”
§ 77p(d)(1)(A), if the action involves:

    (i) the purchase or sale of securities by the issuer or
    an affiliate of the issuer exclusively from or to hold-
    ers of equity securities of the issuer; or

    (ii) any recommendation, position, or other commu-
    nication with respect to the sale of securities of the
    issuer that—

         (I) is made by or on behalf of the issuer or
         an affiliate of the issuer to holders of equity
         securities of the issuer; and

         (II) concerns decisions of those equity hold-
         ers with respect to voting their securities,
1664                     MADDEN v. COWEN & CO.
            acting in response to a tender or exchange
            offer, or exercising dissenters’ or appraisal
            rights.

15 U.S.C. § 77p(d)(1)(B).

   To prevent actions precluded by SLUSA from being liti-
gated in state court, SLUSA authorizes defendants to remove
such actions to federal court, effectively ensuring that federal
courts will have the opportunity to determine whether a state
action is precluded.3 As the Supreme Court has explained, any
suit removable under SLUSA’s removal provision, § 77p(c),
is precluded under SLUSA’s preclusion provision, § 77p(b),
and any suit not precluded is not removable. See Kircher, 547
U.S. at 644; see also Spielman v. Merrill Lynch, Pierce, Fen-
ner & Smith, Inc., 332 F.3d 116, 131-32 (2d Cir. 2003) (New-
man, J., concurring) (noting that SLUSA’s removal and
preclusion provisions are “opposite sides of the same coin”).
If a federal court determines that an action is not precluded
under § 77p(b), it “has no jurisdiction to touch the case on the
merits, and the proper course is to remand to the state court
that can deal with it.” Kircher, 547 U.S. at 644. Likewise, if
a federal court “determines that the action may be maintained
in State court pursuant to” the Delaware carve-out, “the Fed-
eral court shall remand such action to such State court.” 15
U.S.C. § 77p(d)(4).
  3
   Section 77p(c) provides:
      Any covered class action brought in any State court involving a
      covered security, as set forth in subsection (b) [15 U.S.C.
      § 77p(b), the SLUSA preclusion provision], shall be removable
      to the Federal district court for the district in which the action is
      pending, and shall be subject to subsection (b).
15 U.S.C. § 77p(c).
                       MADDEN v. COWEN & CO.                          1665
                                    III

   The question before us is whether the district court cor-
rectly determined that Madden’s complaint, which alleged
state-law claims and was filed in state court, is the sort of cov-
ered class action that is both (1) precluded by § 77p(b) of
SLUSA and (2) not saved from preclusion by the Delaware
carve-out, § 77p(d). A “federal court has leeway ‘to choose
among threshold grounds for denying audience to a case on
the merits.’ ” Sinochem Int’l Co. v. Malay. Int’l Shipping
Corp., 549 U.S. 422, 431 (2007) (quoting Ruhrgas AG v.
Marathon Oil Co., 526 U.S. 574, 585 (1999)). Because we
conclude the Delaware carve-out, § 77p(d), applies to Mad-
den’s suit, we remand this case to the district court with
instructions to remand to state court. Accordingly, we need
not consider whether Madden’s suit falls within SLUSA’s
preclusion provision, § 77p(b), and therefore need not resolve
whether Madden’s suit alleges a misrepresentation or omis-
sion “in connection with the purchase or sale of a covered
security,” 15 U.S.C. § 77p(b)(1).4

   [3] Madden argues his complaint survives SLUSA’s pre-
clusion provision because it falls within a subsection of the
Delaware carve-out, § 77p(d)(1)(B)(ii). For Madden’s suit to
qualify under this subsection, it must (1) be based on the law
of the state in which “the issuer” is incorporated and (2)
involve a “communication with respect to the sale” of the
issuer’s securities that (3) was made “by or on behalf of” the
issuer or its affiliate (4) to the shareholders of the issuer and
that (5) “concerns” specified shareholder decisions, including
a “response to a tender or exchange offer.” 15 U.S.C.
§ 77p(d)(1)(A), (B)(ii).

   Madden claims that his suit against Cowen qualifies for this
  4
   The parties do not dispute that Madden’s suit, which seeks damages on
behalf of more than fifty plaintiffs, is a “covered class action” as defined
in 15 U.S.C. § 77p(f)(2).
1666                  MADDEN v. COWEN & CO.
subsection of the Delaware carve-out as follows: First, Mad-
den brought his suit under the law of California, the state of
incorporation of St. Joseph, which Madden argues is the rele-
vant “issuer” under the subsection because it was the issuer of
the securities that Madden sold to FPA in response to FPA’s
exchange offer. Second, Madden’s suit involves a communi-
cation with respect to the sale of St. Joseph’s securities,
namely, Cowen’s letter opining that the exchange of St.
Joseph securities for FPA shares of stock would be financially
fair to St. Joseph’s shareholders. Third, this communication
was made by or on behalf of St. Joseph, because Cowen was
retained by St. Joseph’s and Orange Coast’s management to
make such a communication to St. Joseph shareholders.
Fourth, the communication was made to St. Joseph sharehold-
ers when they received the fairness opinion. And fifth, the
communication concerned a decision by St. Joseph sharehold-
ers regarding their response to FPA’s exchange offer.

   Cowen disputes two of these claims: that St. Joseph is “the
issuer” referred to in the Delaware carve-out, and that Cowen
was acting “on behalf of” St. Joseph when it provided its fair-
ness opinion. We address each in turn.5

                                   A

  Cowen first argues that St. Joseph is not “the issuer” for
purposes of the Delaware carve-out. Cowen notes that the
Delaware carve-out, § 77p(d), refers to “the issuer” rather
  5
    Cowen also argues that Madden’s suit cannot qualify under the Dela-
ware carve-out as an action against Cowen for making a communication
on behalf of Orange Coast (as opposed to St. Joseph). Because Orange
Coast was incorporated in Delaware and Madden’s suit was brought in
California, Cowen argues that, if Orange Coast is “the issuer,” the suit
would not be “based upon the statutory or common law of the State in
which the issuer is incorporated.” 15 U.S.C. § 77p(d)(1)(A). We need not
address this argument, however, because we conclude that Cowen made
its communication on behalf of St. Joseph, which was incorporated in Cal-
ifornia.
                   MADDEN v. COWEN & CO.                   1667
than “an issuer,” and contends that “the issuer” must refer to
the issuer of the “covered security” referred to in SLUSA’s
preclusion provision, § 77p(b). Otherwise, Cowen argues, the
definite article in “the issuer” would have no antecedent.
Cowen also notes that in Dabit the Supreme Court described
the Delaware carve-out as applying to “class actions based on
the law of the State in which the issuer of the covered security
is incorporated.” 547 U.S. at 87 (emphasis added). Under
Cowen’s interpretation of § 77p(d), the Delaware carve-out
would apply only to FPA and not to St. Joseph (which as a
closely held corporation was not an issuer of covered securi-
ties). In this case, Cowen argues, the Delaware carve-out
would preserve only suits based on Delaware law (where FPA
is incorporated) involving communications to FPA sharehold-
ers concerning their decisions in voting their FPA securities.
Because Madden’s action is based upon California law (where
St. Joseph is incorporated) and does not involve communica-
tions to FPA shareholders, Cowen argues that the Delaware
carve-out is inapplicable to Madden’s suit.

   [4] We disagree. As in all statutory interpretation, we start
with the plain language of the statute. See Ariz. Health Care
Cost Containment Sys. v. McClellan, 508 F.3d 1243, 1249
(9th Cir. 2007). The Delaware carve-out does not use the
phrase “issuer of the covered securities.” Rather, the Dela-
ware carve-out refers only to “securities” or “equity securi-
ties.” 15 U.S.C. § 77p(d)(1)(B). SLUSA does not define the
word “issuer” to mean “issuer of the covered securities,” nor
does SLUSA’s preclusion provision, § 77p(b), refer to an “is-
suer of covered securities.” Thus, contrary to Cowen’s argu-
ment, there is no clear antecedent to the phrase “the issuer”
in the Delaware carve-out. Moreover, the significance of the
word “the” before “issuer” in the version of the Delaware
carve-out added to the 1933 Act is questionable, given that
SLUSA’s nearly identical Delaware carve-out in the 1934 Act
refers to both “the issuer” and “an issuer.” See 15 U.S.C.
§ 78bb(f)(3)(A)(ii)(II) (providing that the Delaware carve-out
applies to a covered class action that involves “any recom-
1668                  MADDEN v. COWEN & CO.
mendation, position, or other communication with respect to
the sale of securities of an issuer” that meets certain criteria)
(emphasis added). If the choice of the word “the” instead of
“an” had substantive meaning, we would expect that the word
“the” would have been used consistently in two otherwise
identical amendments. Cf. Kircher, 547 U.S. at 637 n.3 (not-
ing that SLUSA amends the 1933 Act and 1934 Act “in sub-
stantially identical ways”). Accordingly, we conclude that the
plain language of § 77p(d) allows a shareholder to bring a
covered class action under state law against any “issuer” that
has made certain communications regarding the sale of its
“securities,” and that these securities need not be the “covered
securit[ies]” referred to in § 77p(b).

   [5] “It is well established that when the statute’s language
is plain, the sole function of the courts—at least where the
disposition required by the text is not absurd—is to enforce it
according to its terms.” Lamie v. U.S. Trustee, 540 U.S. 526,
534 (2004). Nonetheless, we note our disagreement with
Cowen’s argument that SLUSA’s legislative history suggests
a congressional intent to limit the Delaware carve-out to suits
against issuers of “covered securities.” The public debate sur-
rounding Congress’s addition of the Delaware carve-out
weighs against Cowen’s interpretation. The testimony before
Congress when it inserted the Delaware carve-out into
SLUSA suggests that the purpose of § 77p(d) was to preserve
state-law actions brought by shareholders against their own
corporations in connection with extraordinary corporate trans-
actions requiring shareholder approval, such as mergers and
tender offers, regardless whether the corporations issued
nationally traded securities.6
  6
   See, e.g., Securities Litigation Uniform Standards Act of 1997: Hear-
ing on S. 1260 Before the S. Comm. on Banking, Housing, and Urban
Affairs, Subcomm. on Securities, 105th Cong. 48 (Oct. 29, 1997) (state-
ment of SEC Chairman Arthur Levitt and Commissioner Isaac Hunt,
Securities and Exchange Commission) (expressing concern that the ver-
sion of SLUSA originally introduced in the Senate “could preempt state
                       MADDEN v. COWEN & CO.                           1669
   Nor does the Supreme Court’s passing reference in Dabit
to one type of class action covered by the Delaware carve-out
require us to adopt a different reading. See 547 U.S. at 87
(noting that the Delaware carve-out applies to “class actions
based on the law of the State in which the issuer of the cov-
ered security is incorporated”). In context, the Court’s refer-
ence to the Delaware carve-out in Dabit is simply part of the
Court’s explanation that “the tailored exceptions to SLUSA’s
pre-emptive command demonstrate that Congress did not by
any means act ‘cavalierly’ ” in displacing state law. Id. Dabit
did not purport to limit the scope of the Delaware carve-out
to covered securities; it neither considered nor addressed
whether the Delaware carve-out preserves state-law share-
holder class actions against issuers of securities that are not
nationally traded.

   Finally, interpreting the Delaware carve-out as Cowen sug-
gests would have illogical results. Under Cowen’s interpreta-
tion of the statute, St. Joseph’s shareholders are deprived of
their state-law remedy against St. Joseph because it agreed to
exchange its securities with a corporation that issued nation-
ally traded securities instead of with a closely held corpora-
tion. There is no dispute that Madden could bring state-law
claims against St. Joseph if it had agreed to exchange its stock
with another closely held corporation, because in the absence
of any “covered security” the SLUSA preclusion provision
would not be applicable in the first place. Madden might also

class actions for damages based on material misstatements or omissions in
proxy and tender offer materials in connection with an extraordinary cor-
porate transaction”); Securities Litigation Uniform Standards Act of 1997:
Hearing on H.R. 1689 Before the H. Comm. on Commerce, Subcomm. on
Finance and Hazardous Materials, 105th Cong. 64 (May 19, 1998) (testi-
mony of Jack Coffee) (noting the important role of state class actions in
the area of mergers and corporate reorganization and approving of the
Senate’s addition of the Delaware carve-out as an “attempt[ ]” to “carve
back into the statute a role for the Delaware courts, and the courts of other
States, to deal with fundamental questions of corporate governance”).
1670               MADDEN v. COWEN & CO.
be able to bring state-law claims against St. Joseph if St.
Joseph were an issuer of nationally traded, covered securities,
because St. Joseph would then be able to meet Cowen’s defi-
nition of “the issuer” in the Delaware carve-out. In other
words, under Cowen’s theory, Madden’s remedy against his
own company for misstatements in connection with its efforts
to obtain his approval of a merger is foreclosed because his
company did not issue nationally traded securities and the
acquiring company did.

   [6] This reading of § 77p(d) is unreasonable, and it is
inconsistent with the Delaware carve-out’s purpose. Given
that the plain language of the statute leads to “a rational,
common-sense result,” Ariz. State Bd. for Charter Schools v.
U.S. Dept. of Educ., 464 F.3d 1003, 1008 (9th Cir. 2006), and
one consistent with congressional purpose, we read the term
“the issuer” in the Delaware carve-out to refer to the corpora-
tion that is the issuer of the securities described in the Dela-
ware carve-out, rather than being limited to an issuer of a
“covered security” defined in 15 U.S.C. § 77p(f)(3).

                               B

   [7] Cowen alternatively argues that even if St. Joseph quali-
fies as “the issuer” under the Delaware carve-out, Cowen did
not make any statement “on behalf of” St. Joseph, and so
Madden’s complaint fails to allege a misleading communica-
tion made “by or on behalf of” the issuer or its affiliate as
required by 15 U.S.C. § 77p(d)(1)(B)(ii)(I). The district court
agreed, and on this basis held that the Delaware carve-out did
not save Madden’s suit from SLUSA preclusion.

   In support of this argument, Cowen points us to the Reform
Act, which defines the phrase “person acting on behalf of an
issuer” to mean “an officer, director, or employee of the issu-
er.” 15 U.S.C. § 77z-2(i)(6). Cowen argues that it did not act
on behalf of St. Joseph because it is not an “officer, director
or employee” of St. Joseph. Madden counters that we should
                   MADDEN v. COWEN & CO.                    1671
not rely on the Reform Act, which provided the definition of
“on behalf of” in the context of creating a safe harbor for
those who make forward-looking statements. Rather, Madden
argues, we should rely on the SEC’s regulations implement-
ing the National Securities Market Improvement Act, which
provide that an offering document is “prepared by or on
behalf of the issuer” if the issuer: “(1) Authorizes the docu-
ment’s production, and (2) Approves the document before its
use.” 17 C.F.R. § 230.146(a). Madden claims that this defini-
tion is preferable because it relates to offering documents
such as the registration statement at issue in this case. See 15
U.S.C. § 77r.

   [8] Again, we must start with the plain language of the stat-
ute. See Ariz. Health Care Cost Containment Sys., 508 F.3d
at 1249. Because there is no definition of the phrase “on
behalf of” in SLUSA itself, “we consider whether there is an
unambiguous common sense meaning of the word that
resolves the question” before us. Id. The common sense
meaning of “on behalf of,” according to the dictionary, is “in
the interest of,” “as a representative of,” or “for the benefit
of.” Webster’s Third New International Dictionary 198
(2002). Because the language in § 77p(d)(B)(ii)(I) has an
unambiguous, common sense meaning, we see no need to
look to other statutes that Congress chose not to cross-
reference. Accordingly, we conclude that § 77p(d)(B)(ii)(I)
refers to an individual or entity that makes a communication
to an issuer’s stockholders in the interest of, or as a represen-
tative of, the issuer.

   [9] Even if we adopt this common sense definition of “on
behalf of,” Cowen argues that it was acting on behalf of only
Orange Coast, because Cowen addressed its fairness opinion
to that company. We are bound, however, by the allegations
in Madden’s complaint. See U.S. Mortgage, Inc. v. Saxton,
494 F.3d 833, 842 (9th Cir. 2007) (SLUSA “authorizes
removal and dismissal based on the allegations in the com-
plaint and does not require any additional evidentiary showing
1672               MADDEN v. COWEN & CO.
from either party.”). According to Madden’s complaint, the
management of Orange Coast and St. Joseph formed a Special
Committee to “assess the opportunities for a strategic affilia-
tion or sale.” Madden alleges that the Special Committee,
which included members of the boards of directors of St.
Joseph and Orange Coast, retained Cowen for tasks that
included “[r]endering an opinion as to whether or not the
financial terms of an acquisition were fair, from a financial
point of view, to the shareholders of Orange Coast and St.
Joseph.” Further, the complaint alleges that Cowen’s fairness
opinion was provided to the shareholders of St. Joseph with
Cowen’s consent and that the shareholders relied on the opin-
ion when voting in favor of the merger. Madden’s complaint
therefore sufficiently alleges that Cowen’s communication
was “on behalf of” St. Joseph for purposes of the Delaware
carve-out, regardless whether Cowen addressed its letter only
to Orange Coast.

                              IV

   We conclude that Madden’s complaint meets the require-
ments of the Delaware carve-out, 15 U.S.C. § 77p(d). The
complaint is based on the law of the state (California) in
which the issuer of the relevant securities (St. Joseph) was
incorporated, and it involves a communication (Cowen’s fair-
ness opinion) with respect to the sale of those securities. The
communication was made by Cowen “on behalf of” St.
Joseph, to the shareholders of St. Joseph, concerning the
shareholders’ response to an exchange offer.

  [10] Because the Delaware carve-out is applicable to Mad-
den’s suit, we VACATE the judgment of the district court
and REMAND the case with instructions to remand to state
court.
