937 F.3d 94
2d Cir.2019Background
- Plaintiffs (traders and related entities) sued multiple oil companies, alleging they manipulated physical Brent crude prices and the Dated Brent Assessment to profit on related derivatives, asserting Sherman Act and Commodity Exchange Act claims.
- The district court dismissed Sherman Act claims for lack of antitrust standing, dismissed Statoil for lack of subject‑matter jurisdiction under the FSIA, and dismissed STASCO for lack of personal jurisdiction; Plaintiffs appealed.
- Plaintiffs alleged two relevant markets: (1) the physical Brent crude market and (2) derivatives that directly incorporate Dated Brent as a benchmark or pricing element.
- Plaintiffs conceded the operative benchmark for many Brent derivatives is the ICE Brent Index, not the Dated Brent Assessment; they relied on correlation and indirect incorporation theories to tie their derivative trading to Dated Brent.
- Statoil is majority‑owned by the Kingdom of Norway (an instrumentality under the FSIA); Plaintiffs argued Statoil’s overseas manipulation caused direct effects in the U.S. market. STASCO is a UK entity accused only of manipulating physical Brent in Europe.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Antitrust standing / Antitrust injury (Sherman Act) | Plaintiffs argued their trading losses flowed from defendants’ manipulation of Dated Brent and thus they sustained antitrust injury in the derivative market. | Defendants argued plaintiffs were not participants in the market directly restrained (physical Dated Brent) and did not plausibly plead that their traded products directly incorporated Dated Brent. | Held: Dismissed — plaintiffs failed to plausibly allege antitrust injury in a market directly restrained; ICE Brent, not Dated Brent, governed their products and allegations were conclusory. |
| Relevant market / incorporation of Dated Brent into ICE Index | Plaintiffs argued Dated Brent closely correlates with ICE Brent and is incorporated into derivatives pricing, so harm is tied to the restrained market. | Defendants stressed the ICE Brent Index is the operative benchmark and plaintiffs did not plead specific trading in instruments that expressly incorporate Dated Brent. | Held: Plaintiffs did not plead that the derivatives they traded were directly linked to Dated Brent; correlation alone insufficient. |
| FSIA commercial‑activity exception for Statoil | Plaintiffs contended Statoil’s overseas manipulative acts caused direct effects in the U.S., triggering the FSIA commercial‑activity exception. | Statoil argued its allegedly manipulative conduct occurred abroad and any U.S. effects were indirect and attenuated through intermediaries (price reporters, exchanges, other traders). | Held: Dismissed for lack of jurisdiction — effects were too attenuated and mediated by intervening actors to be a "direct effect" under the FSIA exception. |
| Specific personal jurisdiction over STASCO | Plaintiffs argued STASCO’s overseas trades aimed at and produced effects in the U.S., supporting specific jurisdiction. | STASCO argued it had no U.S. contacts and all challenged conduct occurred in Europe; mere foreseeability that U.S. actors might be harmed is insufficient. | Held: Dismissed — plaintiffs failed to show suit‑related contacts with the U.S.; mere knowledge of possible U.S. effects insufficient for specific jurisdiction. |
Key Cases Cited
- Gelboim v. Bank of Am. Corp., 823 F.3d 759 (2d Cir.) (antitrust standing requires antitrust injury)
- Brunswick Corp. v. Pueblo Bowl–O–Mat, Inc., 429 U.S. 477 (U.S. 1977) (antitrust injury definition)
- In re Aluminum Warehousing Antitrust Litig., 833 F.3d 151 (2d Cir.) (relevant market and participant requirement)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading standard: labels and conclusions insufficient)
- Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (U.S. 1992) ("direct effect" requires immediate consequence)
- Virtual Countries, Inc. v. Republic of S. Africa, 300 F.3d 230 (2d Cir.) (attenuated causation and intervening actors defeat direct‑effect jurisdiction)
- Walden v. Fiore, 571 U.S. 277 (U.S. 2014) (personal‑jurisdiction limits; conduct must connect defendant to forum)
- Calder v. Jones, 465 U.S. 783 (U.S. 1984) (effects‑based personal jurisdiction principles)