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  • In re LIBOR-Based Financial Instruments Antitrust Litigation, 935 F.Supp.2d 666 (2013)

    2013-1 Trade Cases P 78,323, RICO Bus.Disp.Guide 12,350...

    2014 Thomson Reuters. No claim to original U.S. Government Works. 1

    935 F.Supp.2d 666United States District Court,

    S.D. New York.

    In re: LIBORBASED FINANCIALINSTRUMENTS ANTITRUST LITIGATION.

    This Document Relates to: All Cases.

    No. 11 MD 2262 (NRB). | March 29, 2013.

    SynopsisBackground: Over-the-counter (OTC), exchange-based,and bondholder plaintiffs brought purported class antitrustlitigation alleging that members of panel assembled bybanking trade association conspired to artificially suppressdaily interest rate benchmark, the London InterBank OfferedRate (LIBOR), by understating their borrowing costs toleading trade association for U.K. banking and financialservices sector. Fourth group of plaintiffs also broughtnonclass litigation. Defendants filed motions to dismiss.

    Holdings: The District Court, Naomi Reice Buchwald, J.,held that:

    [1] plaintiffs had not plausibly alleged that they sufferedantitrust injury, and thus they lacked standing to bringantitrust claims pursuant to Clayton Act or California'sCartwright Act;

    [2] claims by exchange-based plaintiffs did not requireimpermissible extraterritorial application of CommodityExchange Act (CEA);

    [3] commodities manipulation claims were time-barred, atleast to extent they relied on Eurodollar contracts purchasedfrom class period through date by which plaintiffs wereclearly on inquiry notice of their injury;

    [4] exchange-based plaintiffs adequately pleaded primaryclaim for commodities manipulation based on manipulationof price of Eurodollar futures contracts, and secondary claimsfor vicarious liability and aiding and abetting;

    [5] Racketeer Influenced and Corrupt OrganizationsAct (RICO) claim was barred by Private SecuritiesLitigation Reform Act (PSLRA) and sought impermissibleextraterritorial application of U.S. law;

    [6] district court would decline to exercise supplementaljurisdiction over OTC plaintiffs' as-yet-unspecified state-lawclaim and, with exception of Cartwright Act claim, overclaims under California law; and

    [7] exchange-based plaintiffs failed to state cause of actionunder New York law for unjust enrichment.

    Motions granted in part and denied in part.

    West Headnotes (46)

    [1] Federal Civil ProcedureInsufficiency in general

    To avoid dismissal for failure to state a claim,complaint must allege enough facts to stateclaim to relief that is plausible on its face;where plaintiffs have not nudged their claimsacross the line from conceivable to plausible,their complaint must be dismissed. Fed.RulesCiv.Proc.Rule 12(b)(6), 28 U.S.C.A.

    [2] Federal Civil ProcedureConstruction of pleadings

    Federal Civil ProcedureMatters considered in general

    Federal Civil ProcedureMatters deemed admitted; acceptance as

    true of allegations in complaint

    In applying plausibility standard to motion todismiss for failure to state a claim, court mustaccept as true all well-pleaded factual allegationsand must draw all reasonable inferences in favorof plaintiff; court may also properly considermatters of which judicial notice may be taken, ordocuments either in plaintiff's possession or ofwhich plaintiff had knowledge and relied on inbringing suit. Fed.Rules Civ.Proc.Rule 12(b)(6),28 U.S.C.A.

    [3] Antitrust and Trade Regulation

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  • In re LIBOR-Based Financial Instruments Antitrust Litigation, 935 F.Supp.2d 666 (2013)

    2013-1 Trade Cases P 78,323, RICO Bus.Disp.Guide 12,350...

    2014 Thomson Reuters. No claim to original U.S. Government Works. 2

    Right of Action; Persons Entitled to Sue; Standing; Parties

    To have standing under Clayton Act, privateplaintiff must demonstrate (1) antitrust injury,and (2) that he is a proper plaintiff in light of fourefficient enforcer' factors derived from SupremeCourt's 1983 Associated General Contractorsdecision. Sherman Act, 1, 15 U.S.C.A. 1;Clayton Act, 4, 15 U.S.C.A. 15.

    [4] Antitrust and Trade RegulationInjury to Business or Property

    Antitrust injury refers to injury attributableto anticompetitive aspect of practice underscrutiny. Clayton Act, 4(a) 15 U.S.C.A. 15(a).

    [5] Antitrust and Trade RegulationCausation

    Although conduct in violation of the ShermanAct might reduce, increase, or be neutral withregard to competition, private plaintiff canrecover for such violation only where loss stemsfrom competition-reducing aspect or effect ofdefendant's behavior. Sherman Act, 1 et seq.,15 U.S.C.A. 1 et seq.

    [6] Antitrust and Trade RegulationCausation

    It is not enough that defendant's conductdisrupted or distorted competitive market, asalthough all antitrust violations distort market,not every loss stemming from violation counts asantitrust injury; therefore, antitrust plaintiff mustdemonstrate not only that it suffered injury andthat injury resulted from defendants' conduct,but also that injury resulted from anticompetitivenature of defendant's conduct. Clayton Act, 4,15 U.S.C.A. 15.

    [7] Antitrust and Trade RegulationInjury to Business or Property

    Even when antitrust plaintiff can successfullyallege per se violation of Sherman Actrestraint of trade provision, such as horizontalprice fixing, plaintiff will not have standingunder Clayton Act unless he can separatelydemonstrate antitrust injury; i.e., even thoughdefendant might have violated Sherman Act andthus be subject to criminal liability, it is separatequestion whether Congress intended to subjectdefendant as well to civil liability, in particular toplaintiffs suing. Sherman Act, 1, 15 U.S.C.A. 1; Clayton Act, 4, 15 U.S.C.A. 15.

    [8] Antitrust and Trade RegulationInjury to Business or Property

    Antitrust injury requirement applies to claimspursuant to California's antitrust statute,the Cartwright Act. West's Ann.Cal.Bus. &Prof.Code 16700 et seq.

    [9] Antitrust and Trade RegulationParticular cases

    Plaintiffs had not plausibly alleged