314 F.Supp.3d 497
S.D.N.Y.2018Background
- Plaintiff 7 West 57th (assignee of Sheldon Solow) alleges that contributor banks colluded to manipulate USD-LIBOR in 2008, causing injury to Solow when Citibank seized and sold his municipal bond collateral for LIBOR-linked loans.
- LIBOR was set daily by BBA using submissions from a 16‑bank U.S. Contributor Panel; Thomson Reuters computed the published rate by trimming extremes and averaging the remainder.
- Plaintiff contends traders induced LIBOR submitters to report false rates to benefit trading positions, producing artificial USD‑LIBOR that affected pricing of trillions in instruments.
- Solow pledged ~$450M in municipal bonds as collateral; Citibank declared default in Sept. 2008, liquidated the portfolio in Nov. 2008 at a loss, obtained a large state‐court judgment, and Solow assigned his claims to Plaintiff after satisfying the judgment.
- The district court previously dismissed the amended complaint (March 31, 2015) for lack of personal jurisdiction over foreign banks, failure to plead antitrust injury, and RICO claims barred by statute of limitations and res judicata; leave to amend antitrust claims was allowed.
- Plaintiff moved for leave to file a Second Amended Complaint; court denied leave as futile, addressing personal jurisdiction, antitrust standing (efficient‑enforcer), and RICO/time‑bar/res judicata issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Foreign Bank Defendants | New allegations in SAC show sufficient U.S./NY contacts to establish specific jurisdiction or consent | Contacts remain insufficient; prior dismissal for lack of jurisdiction stands | Court denied amendment as futile on federal claims and did not reach new personal jurisdiction arguments; earlier finding of no specific jurisdiction stands as law of the case |
| Antitrust standing (Sherman Act §1) — antitrust injury | LIBOR manipulation harmed Solow by devaluing collateral and causing sale; Gelboim supports standing for LIBOR plaintiffs | Even if antitrust injury plausibly alleged, Plaintiff is not an efficient enforcer because causation is attenuated and damages speculative | Court held antitrust injury could be plausibly alleged under Gelboim, but Plaintiff lacks antitrust standing (inefficient enforcer) due to attenuated chain of causation and highly speculative damages; leave to amend antitrust claim denied as futile |
| RICO — statute of limitations (inquiry notice/fraudulent concealment) | BPP Illinois and related authority show limitations/inquiry‑notice issues are factbound; fraudulent concealment (BBA assurances) tolls limitations | May 29, 2008 press and later reports put Solow on inquiry notice; RICO claims time‑barred | Court revisited its prior limitations ruling in light of intervening circuit authority, concluded tolling by fraudulent concealment plausibly alleged, so RICO claims are not dismissed as time‑barred on pleading stage; but RICO claims are nevertheless barred by res judicata (state judgment) and leave to amend denied |
| Res judicata (preclusion by Citibank v. Solow state judgment) | BPP Illinois does not require reconsideration; res judicata is appropriate to consider on Rule 12 when record permits | Prior state judgment precludes relitigation of claims that could have been raised; plaintiff had inquiry notice before state judgment | Court held res judicata bars Plaintiff's RICO claims because the state court judgment was final, arose from the same transactions, Citibank was party, and Solow could have asserted RICO claims in that action; leave to amend RICO claims denied |
Key Cases Cited
- Gelboim v. Bank of Am. Corp., 823 F.3d 759 (2d Cir. 2016) (framework for antitrust standing; antitrust injury and efficient‑enforcer analysis)
- Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (1990) (antitrust injury must be of a type the antitrust laws were intended to prevent)
- Brunswick Corp. v. Pueblo Bowl‑O‑Mat, Inc., 429 U.S. 477 (1977) (antitrust injury and proximate causation principles)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard for conspiracy/antitrust claims)
- Associated Gen. Contractors of Calif. v. California State Council of Carpenters, 459 U.S. 519 (1983) (efficient‑enforcer factors for antitrust standing)