399 F.Supp.3d 94
S.D.N.Y.2019Background
- This antitrust suit alleges defendants conspired to manipulate Singapore interbank benchmarks (SIBOR and SOR), affecting prices of derivatives traded in New York. Plaintiff is Fund Liquidation Holdings LLC (FLH), an assignee that claims FrontPoint and Sonterra assigned their claims to FLH under a 2011 Asset Purchase Agreement (APA).
- The original FrontPoint and Sonterra plaintiffs were dissolved before filing; the court previously dismissed their suits for lack of capacity. The court allowed a Third Amended Complaint (TAC) substituting FLH only after FLH alleged an assignment under the APA.
- Defendants moved to dismiss the TAC for lack of subject-matter jurisdiction (standing), lack of personal jurisdiction over some foreign defendants, and failure to state claims. Two defendants (Citibank and JPMorgan) had settled and are not part of the dismissal motion.
- The central legal question is whether the APA unambiguously assigned FrontPoint’s antitrust (Sherman Act) and related state-law claims to FLH, thereby giving FLH Article III standing and preserving the suit.
- The court concluded the APA did not unambiguously assign the antitrust and non-securities claims to FLH, so FLH lacks standing; substitution under Rule 17(a)(3) could not cure the jurisdictional defect; related motions for preliminary settlement approval and leave to file a Fourth Amended Complaint were therefore denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FLH has Article III standing via assignment under the APA | APA transferred "all" assets and Recovery Rights from FrontPoint to FLH, thus conveying the antitrust claims | APA’s language limits transferred rights to securities class-action Recovery Rights and expressly excludes non‑securities claims; antitrust claims were not unambiguously assigned | APA does not unambiguously assign antitrust/non‑securities claims; FLH lacks standing |
| Whether extrinsic evidence can be considered to interpret the APA | FLH relied on a declaration (former GC) and other evidence to show parties intended a broad transfer | Defendants argue contract text is controlling and transfer must be unambiguous; consideration of extrinsic evidence is unnecessary when contract is clear | Court found interpretation turns on the APA text; because the terms are not unambiguous in FLH’s favor, extrinsic evidence is unnecessary and would not save standing |
| Whether Rule 17(a)(3) substitution can cure absence of jurisdictional standing | FLH/FrontPoint substitution should be allowed to correct a procedural defect and restore the suit | Substitution cannot create Article III standing where none existed at filing; real-party-in-interest deficiency is substantive and not curable by Rule 17 | Substitution under Rule 17 cannot cure the lack of subject‑matter jurisdiction; dismissal required |
| Whether court can preliminarily approve class settlements absent established subject-matter jurisdiction | FLH sought approval for settlements with Citibank and JPMorgan and leave to amend | Defendants opposed, arguing lack of standing means court lacks power to approve | Court denied settlement-approval motions because it lacks jurisdiction absent a plaintiff with standing |
Key Cases Cited
- Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (2005) (federal courts are courts of limited jurisdiction)
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (jurisdictional limits of federal courts)
- Cortlandt St. Recovery Corp. v. Hellas Telecommunications, 790 F.3d 411 (2d Cir. 2015) (standing analysis accepts complaint allegations and may consider outside evidence)
- Keepers, Inc. v. City of Milford, 807 F.3d 24 (2d Cir. 2015) (party invoking federal jurisdiction bears burden of establishing standing)
- Rajamin v. Deutsche Bank Nat. Tr. Co., 757 F.3d 79 (2d Cir. 2014) (prudential and constitutional standing principles)
- Warth v. Seldin, 422 U.S. 490 (1975) (constitutional standing imports justiciability)
- Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423 (2d Cir. 2007) (distinguishing antitrust class actions from securities class actions)