Sullivan v. UBS AG, 149 F.4th 206

Background:

Plaintiffs (an individual, various investment funds, and CalSTRS) alleged that several major global banks manipulated the Euro Interbank Offered Rate (Euribor) from 2005 to 2011.
Plaintiffs traded in Euribor-based over-the-counter (OTC) derivatives and claimed defendant banks and brokers rigged Euribor to affect the value of these instruments, harming U.S.-based transactions.
Plaintiffs filed a putative class action in the Southern District of New York bringing claims under the Sherman Act, Commodity Exchange Act (CEA), RICO, and state common law.
The district court dismissed the complaint for lack of personal jurisdiction over defendants and failure to state a claim, finding the jurisdictional link to the U.S. insufficient and the pleadings deficient.
On appeal, the Second Circuit reviewed the sufficiency of plaintiffs’ jurisdictional allegations, the adequacy of their pleadings under RICO and the Sherman Act, state-law claims, and issues of class standing.
The district court's judgment was affirmed in part, reversed/vacated in part, and remanded for further proceedings.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Personal Jurisdiction (Conspiracy)	Defendants’ actions and contacts in furtherance of a conspiracy in the U.S. create jurisdiction.	No sufficient overt acts or directed conduct occurred in the U.S. for most defendants.	No conspiracy-based jurisdiction; only direct transactions in the U.S. by select parties create jurisdiction.
Personal Jurisdiction (Direct Contacts)	Certain defendants transacted OTC derivatives directly with U.S. plaintiffs, creating jurisdiction.	Not all defendants had relevant U.S. contacts; mere allegations in supporting documents are insufficient.	Jurisdiction exists over UBS and RBS for Sherman Act and RICO claims tied to specific OTC transactions in the U.S.
RICO Pleading	Sufficient domestic predicate acts (wire fraud) alleged by tying manipulation to U.S.-based trades.	Allegations are conclusory; not pleaded with required specificity under Rule 9(b).	RICO claims dismissed for failure to meet Rule 9(b) particularity requirement.
Sherman Act Claims	Plausibly alleged conspiracy to fix Euribor and harm U.S. OTC derivatives.	No plausible conspiracy; injury and efficient enforcer requirements not met for FX forwards.	Sufficient allegations as to conspiracy, antitrust injury, and standing for Sherman Act claim; survives as to certain plaintiffs/defendants.
Class Standing (FRAs)	Class standing exists even if named plaintiffs did not transact in all derivatives, as conduct and injury are closely linked.	No standing since named plaintiffs did not transact in FRAs.	Class standing upheld; injuries from manipulation are sufficiently alike across products.
State Law Claims	Should proceed alongside federal claims if from same facts, given pendent jurisdiction.	No jurisdiction and/or claims are time-barred.	Dismissal of state claims vacated; remanded for reconsideration; claims timely filed.

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (establishing plausibility standard for pleading under Rule 12(b)(6))
Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945) (minimum contacts required for personal jurisdiction)
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977) (antitrust injury requirement for Sherman Act standing)
United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940) (per se illegality of price-fixing conspiracies)
Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158 (2d Cir. 2010) (standard for reviewing personal jurisdiction appeals)
First Cap. Asset Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159 (2d Cir. 2004) (Rule 9(b) particularity in RICO-wire fraud context)