366 F. Supp. 3d 516
S.D. Ill.2018Background
- Plaintiffs allege a multi-bank conspiracy to manipulate Sterling LIBOR from Jan 1, 2005–Dec 31, 2010, injuring purchasers of LIBOR‑linked instruments; consolidated CAC filed after various government settlements revealed participants.
- Plaintiffs: FrontPoint, Sonterra, and Dennis (individual) asserted Sherman Act, RICO, Commodity Exchange Act (CEA), and state-law claims (including unjust enrichment and implied covenant) against multiple foreign banks and entities (including UBS, Barclays, RBS, Rabobank, Lloyds, Deutsche Bank, BCI).
- Defendants moved to dismiss for lack of subject‑matter jurisdiction, failure to state claims, statute of limitations, lack of personal jurisdiction, and by arguing insufficient particulars for several causes of action.
- Court found statutes of limitations and inquiry‑notice rules differ by claim-type (antitrust, RICO, CEA); held fraudulent concealment plausibly alleged to toll limitations for many claims based on LIBOR secrecy and BBA assurances.
- Result on claims: antitrust claims largely survive only for FrontPoint v. UBS (FrontPoint has antitrust standing against UBS); Sonterra’s and Dennis’s Sherman Act and many other claims dismissed; RICO and CEA claims dismissed (CEA claim by Dennis dismissed for lack of specific intent); BCI claims dismissed for inadequate allegations.
- Personal jurisdiction: court exercises specific (and pendent) jurisdiction over UBS for FrontPoint's Sherman Act and unjust enrichment claims (nationwide contacts / forum nexus); decline to exercise jurisdiction as to other foreign defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness (statutes of limitations for antitrust, RICO, CEA) | Limitations tolled by fraudulent concealment; plaintiffs lacked notice until government settlements disclosed participants | Press reports from 2008 put plaintiffs on inquiry notice; so many claims time‑barred | Fraudulent concealment plausibly alleged; CEA claims against Barclays/UBS/RBS time‑barred but other CEA, antitrust, RICO claims survived limitations analysis at pleading stage (though RICO later dismissed on other grounds) |
| Antitrust standing (efficient‑enforcer) | All plaintiffs suffered antitrust injury from LIBOR manipulation | Sonterra and Dennis are indirect umbrella purchasers; injuries too attenuated/speculative | Only FrontPoint (which transacted directly with UBS) has antitrust standing against UBS; Sonterra and Dennis lack antitrust standing |
| Antitrust conspiracy pleading (Sherman §1) | Allegations of interbank communications, trader coordination, broker relays, and regulator settlements support an agreement inference | Defendants contend allegations show only intra‑firm communications or parallel conduct | Complaint plausibly alleges conspiracy (plus factors, settlements, interdealer communications); conspiracy claims survive dismissal for FrontPoint v. UBS |
| CEA (Dennis) — specific intent to manipulate futures | Persistent suppression theory: manipulation of LIBOR rendered futures artificial; standing satisfied | No facts showing defendants intended to manipulate prices of Dennis’s specific FX futures; scienter lacking | Dennis has CEA standing but fails to plead specific intent or conscious misbehavior; CEA claims dismissed |
| RICO (predicate wire fraud extraterritoriality) | Use of U.S. wires and some U.S. trader conduct supports domestic application of wire‑fraud predicates and RICO | Scheme was principally foreign; wire‑fraud predicates lack extraterritorial reach; domestic contacts incidental | RICO claims dismissed for failure to overcome presumption against extraterritoriality (wire fraud predicates not shown to be domestic in focus) |
| Personal jurisdiction over foreign banks (UBS and others) | Nationwide contacts and specific U.S. conduct (e.g., Stamford manager, U.S. trading/submitter activity, direct transactions with FrontPoint) support jurisdiction | Foreign banks not "at home" in NY; registrations under NY Banking Law or ISDA do not consent to general jurisdiction; contacts insufficient | Specific jurisdiction found over UBS (nationwide contacts/suit‑related U.S. conduct); other foreign defendants not subject to jurisdiction; group pleading insufficient to hold BCI liable |
Key Cases Cited
- Merced Irrigation Dist. v. Barclays Bank PLC, 165 F. Supp. 3d 122 (S.D.N.Y. 2016) (price‑fixing conspiracies are often inherently self‑concealing for tolling)
- Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (U.S. 1971) (limitations and accrual principles in antitrust price‑fixing contexts)
- Koch v. Christie’s Int’l PLC, 699 F.3d 141 (2d Cir. 2012) (RICO accrual and inquiry‑notice / storm‑warning framework)
- Lentell v. Merrill Lynch & Co., 396 F.3d 161 (2d Cir. 2005) (inquiry notice and investor duty to investigate)
- Gelboim v. Bank of Am. Corp., 823 F.3d 759 (2d Cir. 2016) (antitrust standing/efficient‑enforcer factors in LIBOR context)
- Associated Gen. Contractors v. Cal. State Council of Carpenters, 459 U.S. 519 (U.S. 1983) (antitrust standing is threshold inquiry)
- RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090 (U.S. 2016) (RICO private suits must allege domestic application and domestic injury to overcome presumption against extraterritoriality)