351 F. Supp. 3d 698
S.D. Ill.2018Background
- trueEX, an operator of an interest-rate-swap (IRS) electronic trading platform, filed an Amended Complaint alleging a § 1 Sherman Act group-boycott conspiracy by major dealer banks (the "Dealers") to marginalize or destroy all-to-all IRS trading platforms, including trueEX, Javelin, and Tera.
- The court previously sustained similar § 1 claims brought by investor plaintiffs and by Javelin and Tera (In re Interest Rate Swaps Antitrust Litig., "IRS I").
- trueEX filed its own complaint seeking damages and alleged the conspiracy against it continued through the date of its Amended Complaint.
- Defendants moved to dismiss trueEX’s AC, arguing new or cognizable facts (e.g., that some Dealers cleared trades, on-boarded, or provided quotes on trueEX) render a boycott claim implausible as to trueEX and that some individual defendants lack sufficient linking facts.
- trueEX argued (1) the earlier ruling that Dealers targeted trueEX is law of the case, (2) many facts cited by defendants are not cognizable on a motion to dismiss, and (3 the AC pleads facts from which coordinated conduct and anticompetitive intent can be inferred.
- The Court denied dismissal of the § 1 Sherman Act claim and the parallel Donnelly Act claim, but dismissed state-law claims for unjust enrichment and tortious interference.
Issues
| Issue | Plaintiff's Argument (trueEX) | Defendant's Argument | Held |
|---|---|---|---|
| Whether the law-of-the-case doctrine bars reexamination of whether Dealers conspired against trueEX | Prior ruling in IRS I that Dealers targeted trueEX binds the court; trueEX had insufficient notice to litigate this particular damages action otherwise | The prior ruling addressed different complaints; trueEX’s separate case must be judged on its own pleadings | Law-of-the-case does not bar de novo review; court evaluates trueEX’s AC independently |
| Whether AC plausibly pleads a § 1 group-boycott conspiracy aimed at trueEX | Allegations of limited liquidity, delays, pretextual documentation reviews, conditioned liquidity on name-give-up, and coordinated stratagems show a conspiracy to marginalize trueEX | Dealers’ business interactions with trueEX, asymmetric conduct, and survival of trueEX undermine plausibility | Viewing allegations in context of a broader conspiracy against similar platforms (Javelin, Tera), the § 1 claim is plausible and survives dismissal |
| Whether allegations sufficiently link individual Dealer defendants to the trueEX-targeted object of the conspiracy | Individual-fact allegations (communications, stratagems) support each Dealer’s awareness or participation in the broader conspiracy | For some Dealers, acts are too thin or show legitimate business dealings inconsistent with boycott participation | Claims against individual Dealers survive at pleading stage; participation is fact-intensive and reserved for discovery/summary judgment/trial |
| Whether pre-June 14, 2014 conduct is time-barred | Tolling via fraudulent concealment and due diligence justify inclusion of earlier conduct | Statute of limitations bars conduct before June 14, 2014 absent tolling; dismissal appropriate now | Court defers ruling on statute-of-limitations until after discovery; denies dismissal without prejudice |
| Viability of state-law claims (unjust enrichment; tortious interference) | Donnelly Act parallels § 1 so survives; unjust enrichment and tortious interference pleadings adequately allege harm and benefit | Unjust enrichment lacks allegation of direct benefit to Dealers; tortious interference too vague about particular relationships and harm | Donnelly Act claim survives; unjust enrichment and tortious interference claims are dismissed |
Key Cases Cited
- In re Interest Rate Swaps Antitrust Litig., 261 F. Supp. 3d 430 (S.D.N.Y. 2017) (sustaining § 1 boycott allegations as to Javelin and Tera and addressing related pleading issues)
- Uccio, 940 F.2d 753 (2d Cir. 1991) (discussing law-of-the-case doctrine and its branches)
- Tenzer, 213 F.3d 34 (2d Cir. 2000) (law-of-the-case doctrine allows deviation for cogent or compelling reasons)
- Interstate Circuit, Inc. v. United States, 306 U.S. 208 (U.S. 1939) (noting conspiracies can involve asymmetric or non-simultaneous actions by participants)
- SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412 (4th Cir. 2015) (holding limited or strategic business interactions do not necessarily negate a boycott claim)
- Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406 (2d Cir. 2008) (limits on judicial notice: courts may consider public materials but not accept their factual assertions as true on a motion to dismiss)