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Sullivan v. Barclays PLC

United States District Court, S.D. New York

February 21, 2017



          P. Kevin Castel United States District Judge

         Plaintiffs bring this putative class action asserting claims directed to the defendants' alleged manipulation of the Euro Interbank Offered Rate (“Euribor”). The Euribor is a daily benchmark intended to reflect the average interest rate that major banks offer one another to hold short-term Euro deposits. Its daily calculation is based on submissions from some of the world largest banks, including defendants.

         Some contracts - such as interest rate swaps, forward rate agreements and currency futures - include a price or payment term derived from the Euribor. Changes in the Euribor alter the payment obligations, and hence the profits and losses, of the parties to these contracts. The core misconduct alleged in the Complaint is relatively straightforward: plaintiffs claim that, for their own enrichment, traders and institutions secretly conspired to submit false data used to calculate the Euribor. Plaintiffs allege that as a result of the Euribor's manipulation, they suffered losses in their own Euribor-based transactions, as did others similarly situated.

         Although the Complaint often discusses “defendants” in the aggregate, the Euribor scheme described by plaintiffs apparently was orchestrated by two individuals: a Deutsche Bank trader named Christian Bittar and a trader named Philippe Moryoussef, who was employed by Barclays and later by RBS. (See e.g., Compl't ¶¶ 142-244; Opp. Mem. at 1 (describing Barclays as the “ringleader” of Euribor manipulation.) Accepting the Complaint's allegations, Bittar and Moryoussef drew traders and submitters at other banks into their scheme, seeking to manipulate the Euribor rate for the benefit of holdings that they had at Deutsche Bank, Barclays and/or RBS.

         The Complaint does not allege the total market size for Euribor-based transactions, but it states that during the class period, the United States market for just two categories of derivative contracts exceeded $41 trillion.[1] Transactions directly involving the defendant banks made up a modest portion of the overall market - as alleged in the Complaint, defendants' positions totaled hundreds of millions of dollars, or perhaps somewhere in the billions. Only two plaintiffs - FrontPoint Australian Opportunities Trust and the California State Teachers' Retirement System - allege that they transacted directly with any defendant.

         Plaintiffs' Fourth Amended Class Action Complaint (the “Complaint”) brings claims under the Sherman Antitrust Act, 15 U.S.C. § 1, et seq., the Commodity Exchange Act, 7 U.S.C. § 1 et seq. (the “CEA”), the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. (“RICO”), and asserts common-law claims of unjust enrichment and the breach of the implied covenant of good faith and fair dealing.

         Defendants have moved to dismiss the Complaint for lack of subject matter jurisdiction, failure to state a claim and lack of personal jurisdiction. Rules 12(b)(1), 12(b)(2) and 12(b)(6), Fed.R.Civ.P. For the reasons that will be explained, this Court concludes that plaintiffs have Article III standing. But the Complaint suffers from several infirmities. It does not plausibly allege that four of the six plaintiffs have an essential component of antitrust standing: that they can function as efficient enforcers of the antitrust laws. Out of plaintiffs' four Sherman Act claims, only Count One plausibly alleges an agreement among the defendants to restrain trade. Their claims under RICO are barred in their entirety by the statute's presumption against extraterritorial application, as are significant portions of their claims under the CEA. To the extent that the Complaint has alleged any claims for relief, the plaintiffs have not made a prima facie case showing that any of the foreign defendants are subject to personal jurisdiction.

         As a result, plaintiffs' claims are dismissed, except for one Sherman Act claim and two common-law claims against the Citigroup and J.P. Morgan defendants. BACKGROUND.

         A. The Motion to Dismiss Is Deemed Withdrawn as to Certain Defendants.

         After the filing of the operative Complaint, plaintiffs voluntarily dismissed all claims against defendant BNP Paribas S.A. without prejudice. (Docket # 185.) During the time that this motion to dismiss has been sub judice, the Court preliminarily approved a class action settlement and preliminarily certified a settlement class as to the following defendants: Barclays PLC, Barclays Bank PLC, Barclays Capital Inc., HSBC Holdings PLC and HSBC Bank PLC. (Docket # 234, 279.) The motion to dismiss filed by the Barclays and HSBC defendants is deemed withdrawn without prejudice to refiling in the event that the proposed settlements are not finally approved.

         In addition, on the consent of plaintiffs and defendants Deutsche Bank AG and DB Group Services (UK) Ltd. (collectively, “Deutsche Bank”), the motion to dismiss filed by Deutsche Bank is deemed withdrawn without prejudice to renewal.

         Certain allegations against them are nevertheless relevant to fully understanding plaintiffs' claims against the remaining defendants. To the extent that Barclays, HSBC, Deutsche Bank and BNP Paribas are discussed in this Memorandum and Order, it is as context for plaintiffs' allegations against the remaining defendants.

         B. Overview of the Euribor.

         The Euribor is a daily rate intended to reflect interest rates that large banks offer one another for short-term Euro deposits. (Compl't ¶ 107.) It is intended to serve as a wider “daily proxy” for the banks' interest rates. (Compl't ¶ 9.) The Euribor was created by the European Banking Federation (“EBF”), an unregulated trade association made up of large banks. (Compl't ¶¶ 9, 108.)

         The EBF code of conduct required contributor banks to make Euribor submissions on each trading day based on their observations of the terms that “prime” banks offer one another for deposits within the European Monetary Union. (Compl't ¶ 108.) The quotes reflect a range of fifteen different maturity dates, or “tenors, ” ranging from one week to twelve months, with longer-term deposits paying higher interest than short-term deposits. (Compl't ¶ 110.) Thomson Reuters, a publishing company, managed the Euribor submissions process and received the submitters' daily quotes electronically. (Compl't ¶ 109.) Thomson Reuters calculated the daily Euribor rate based on the average of the middle 70% of contributor quotes, discarding the highest and lowest 15% of the quoted rates. (Compl't ¶ 111.)

         The EBF's code of conduct required each participating bank to make an independent, daily submission. (Compl't ¶ 10.) It forbade the banks from coordinating or discussing their submissions, contributing false quotes, or determining quotes in light of the value of their own Euribor-based derivatives positions. (Compl't ¶ 14, 112.)

         C. The Euribor's Role in Valuing Derivatives.

         A derivative is a contract in which the price or payment terms are drawn from another source. (Compl't ¶ 12.) The daily Euribor rate governed the prices and payments of Euribor-based derivatives, and its daily calculation was intended to eliminate the need for parties to derivatives contracts to independently negotiate a daily competitive rate. (Compl't ¶¶ 14-15.) According to the Complaint, the Euribor was an express benchmark for determining the interest rate, price or payment for the following five categories of derivatives: Euribor interest rate swaps, Euribor forward rate agreements, Euro foreign exchange forwards, Euro currency futures traded on the Chicago Mercantile Exchange (“CME”) and NYSE LIFFE Euribor futures contracts.[2] (Compl't ¶ 13.) This Memorandum and Order describes each type of derivative in greater detail when addressing defendants' arguments directed to plaintiffs' Article III standing. According to plaintiffs, the Euribor-based derivatives market is “one of the largest derivatives markets in the world . . . .” (Compl't ¶ 113.)

         Three types of derivatives at issue in this case were standardized, bilateral contracts between a buyer and a seller: NYSE Euribor futures, CME currency futures and foreign exchange forwards. (See, e.g., Compl't ¶¶ 115, 121, 125.) For example, in a CME Euro currency futures contract, a buyer agrees to purchase €125, 000 on a designated future date, with the future cost of buying or selling those Euros determined by a formula that incorporates the Euribor. (Compl't ¶¶ 122-23.) As the value of the Euribor increases, the future price of Euros declines, thus lowering the value of the contract. (Compl't ¶ 123.) As the Euribor declines, the future price of Euros rises, and the value of the contract increases. (Compl't ¶ 123.) According to the Complaint, any shift in the value of the Euribor directly affects the value of the contract. (Compl't ¶ 124.)

         For interest-rate swaps, forward-rate agreements and foreign exchange forwards, the derivative contracts are more individualized, but their values are still determined by the Euribor rate. For example, in an interest rate swap, one party exchanges a “floating-rate obligation” set by the Euribor in exchange for a negotiated-upon, fixed stream of interest payments, with payment made at regular intervals. (Compl't ¶¶ 127-29.) To use the Complaint's example, a “fixed-stream” interest may be set at 2% per year, with the “floating rate” set to match the Euribor. (Compl't ¶ 127.) The party with the larger obligation - whether it is the fixed interest rate or the floating rate - makes a scheduled payment that reflects the difference between the two rates. (Compl't ¶ 129.) Under such an arrangement, the Euribor directly affects the value of the floating rate, and therefore the payment obligations of the parties to the agreement. (Compl't ¶ 130.)

         According to the Complaint, each of the five categories of derivatives identified by the plaintiffs is directly affected by Euribor rates.

         D. Defendants' Alleged Manipulation of the Euribor.

         Plaintiffs allege that from June 1, 2005 through March 31, 2011, defendants agreed to rig the daily Euribor rate and to fix the prices of Euribor-based derivatives. (Compl't ¶ 1.) Instead of competitors independently submitting quotes, as required by the EBF code of conduct, defendants allegedly engaged in “the manipulation of benchmarks” to alter the price of Euribor-based derivatives. (Compl't ¶ 15.) Plaintiffs allege that “Deutsche Bank and the other Defendants” knew that they were acting unlawfully, and actively concealed their actions from the public by communicating through “secret electronic chat rooms, ” in-person meetings and “unrecorded mobile phones.” (Compl't ¶ 25.)

         Defendants allegedly used several techniques to manipulate the Euribor. Plaintiffs allege that the banks' own Euribor derivatives traders requested that rates be set at artificial levels in order to enhance the value of their own positions, doing so both on target dates where derivative values were to be priced, benchmarked or settled, as well as through longer-term, standing orders to fix rates in certain directions in order to skew prices for their own benefit. (Compl't ¶ 138-39.) The Complaint alleges that four to eight banks coordinated prices for any given manipulation, doing so in person at social gatherings or professional conferences, or through electronic communications. (Compl't ¶¶ 141.)

         According to plaintiffs, the defendants also intentionally manipulated the Euribor rate by borrowing and lending Euros to one another at rates that were either above-market or below-market, thus distorting the rate of interest being paid in Euro deposits. (Compl't ¶ 185.) Plaintiffs call this practice “pushing cash.” (Compl't ¶ 185.) Plaintiffs allege that this practice was effective when several defendants with large money-market desks were involved because they could easily move cash prices and affect the Euribor. (Compl't ¶ 187.)

         Another approach used inter-dealer brokers as intermediaries to transmit false bids and offers to participants in the derivatives market in an effort to manipulate prices - a practice known as “spoofing.” (Compl't ¶ 194.) Defendant ICAP, and inter-dealer broker, was one such intermediary. (Compl't ¶ 194.) Because prices were manipulated to appear artificially high, some unwitting contributors to the Euribor panel were tricked into making inflated quotes for the daily Euribor rate. (Compl't ¶ 195.)

         According to plaintiffs, management at the defendant banks - specifically, Deutsche Bank, UBS and Rabobank - facilitated their employees' activities by making structural changes to their money markets and derivatives desks that allowed for collusion, implemented lax compliance standards that failed to detect misconduct, and concealed evidence from regulators. (Compl't ¶¶ 250-86.) As an example, Deutsche Bank allegedly did not maintain records of which employees made Euribor submissions or train employees on the methodologies used for making submissions. (Compl't ¶ 251.) Deutsche Bank allegedly assigned employees responsible for daily Euribor submissions to sit in desks located near derivatives traders. (Compl't ¶ 253.) It also allegedly concealed from U.S. regulators a non-public report issued by a German regulator that criticized Deutsche Bank's purportedly shoddy practices for submitting rate quotes for the Euribor. (Compl't ¶¶ 275-84.)

         E. Defendants' Other Alleged Manipulations.

         Plaintiffs allege that defendants engaged in additional conduct that amounted to horizontal price-fixing between competitors in the Euribor-based derivatives market. (Compl't ¶ 287.) These activities were related to the Euribor-based derivatives market, but did not necessarily require the participants to artificially fix the daily Euribor quotes. The Sherman Act violations set forth in Counts Two, Three and Four are directed to these activities.

         Plaintiffs allege that Deutsche Bank and Barclays consulted each other and agreed to prices before offering price quotes for over-the-counter derivatives to their counter-parties. (Compl't ¶¶ 288-91.) In contrast to instruments traded on public exchanges, over-the-counter derivatives are priced without transparency, and are based on a price quote and transaction that involves only the market-maker and a client. (Compl't ¶ 289.) Plaintiffs allege that Deutsche Bank and Barclays conferred with one another before making price quotes to counterparties. (Compl't ¶¶ 289-91.)

         Deutsche Bank and Barclays also allegedly engaged in “bid rigging” whereby they agreed to offer worse prices to the same market participant in order to guarantee that an offering price stayed in a desired range. (Compl't ¶ 292.) Through Christian Bittar of Deutsche Bank and Philippe Moryoussef of Barclays and later RBS, Deutsche Bank, Barclays and/or RBS allegedly agreed in advance to quote the same prices for multiple derivatives in quote lists sent to the same clients, refused to deal with certain counterparties at prices below an agreed-upon rate, and offered one another favorable derivatives prices. (Compl't ¶¶ 293-94.) Plaintiffs allege that some defendants also shared proprietary information and coordinated concerning the “pricing curves” that they used for customer quotes concerning Euribor-based derivatives. (Compl't ¶¶ 296-99.)

         F. Regulator Actions against the Banks.

         In December 2013, the European Commission found that defendants Barclays, Deutsche Bank, Société Générale and RBS had participated in a “Euro Interest Rate Derivatives cartel, ” and fined them more than $1.26 billion in total. (Compl't ¶¶ 351-52.) In May 2014, the European Commission sent defendants Crédit Agricole, HSBC and JPMorgan a “statement of objections, ” stating in part that the Commission had “reached the preliminary conclusion” that the banks “may have participated in this cartel too.” (Compl't ¶ 354.) Regulators in the United States, Canada, Asia and Switzerland began investigations into submissions made to the Euribor panel. (Compl't ¶¶ 369-72.) In addition to the European Commission's investigations and penalties, the Department of Justice and the Commodity Futures Trading Commission (“CFTC”) have conducted investigations and proceedings resulting in penalties against participants in the Euribor scheme, the details of which are discussed in greater details below.

         After the European Commission issued its findings, defendants Citibank, UBS and Rabobank withdrew from the Euribor panel. (Compl't ¶ 360.) Senior executives resigned from some of the defendant banks, and some traders implicated in the Euribor scheme were disciplined, terminated and/or fined by their employers. (Compl't ¶¶ 361-368.)

         The EBF has since reformed aspects of the Euribor rate-setting process, and revised the Euribor Code of Conduct on the methodologies, quality-control and independent review of Euribor submissions, and created a conflicts-of-interest policy. (Compl't ¶ 390.)

         G. The Parties.

         Plaintiffs each allegedly traded in Euribor-based derivatives in the United States. (Compl't ¶¶ 57-62.) Plaintiffs include a natural person, Stephen Sullivan; one retirement fund, the California State Teachers' Retirement System (“CalSTRS); and four investment funds, White Oak Fund LP (“White Oak”), Sonterra Capital Master Fund, Ltd. (“Sonterra”), FrontPoint Australian Opportunities Trust (“FrontPoint Australian”) and FrontPoint Partners Trading Fund, L.P. (“FrontPoint Trading”). (Compl't ¶¶ 57-62.)

         Of the six plaintiffs, only FrontPoint Australian and CalSTRS allege that they participated in Euribor transactions that included a defendant as a counterparty. FrontPoint Australian alleges that it engaged in two derivative transactions with defendant UBS, and CalSTRS alleges that it had “hundreds” of transactions with defendants Barclays UBS, Citibank, Deutsche Bank, HSBC, J.P. Morgan and RBS, as well as “dozens” of transactions with Société Générale. (Compl't ¶¶ 347, 319.) The other plaintiffs alleged that they participated in Euribor-based derivative transactions and were injured as a result of defendants' alleged manipulation, but do not identify any defendant as a counterparty to a Euribor-based.

         With the exception of ICAP, defendants are large financial institutions that were members of the EBF and participated in the panel that helped to set daily Euribor rates. The defendants are alleged to have conspired between and among one another to fix daily Euribor rates. Two of the defendants, Citigroup, Inc. and J.P. Morgan Chase & Co., are alleged to be Delaware corporations with their principal places of business in New York. (Compl't ¶¶ 70, 85.) Defendant JPMorgan Chase Bank, N.A., is a federally chartered national banking association headquartered in New York. (Compl't ¶ 86.) Citibank, N.A. is a wholly owned subsidiary of Citigroup, Inc., and was a member of the Euribor panel. (Compl't ¶ 71.) The J.P. Morgan and Citigroup defendants do not challenge this Court's personal jurisdiction over them.

         The remaining defendants are incorporated and headquartered in European countries, but are alleged to maintain branches, offices and/or subsidiaries within the United States. (Compl't ¶¶ 63-103.) All defendants are banks with the exception of the two ICAP defendants: ICAP plc and ICAP Europe Limited. (Compl't ¶ 101-03.) The ICAP defendants act as brokers between principals, including banks, and are alleged to have participated in the rigging of the Euribor by quoting false cash prices to other market participants, thereby “spoofing” the market. (Compl't ¶¶ 102-03.)

         H. Plaintiffs' Claims.

         Plaintiffs assert eleven causes of action. Four of the claims assert that all defendants conspired to restrain trade in violation of section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. According to plaintiffs, defendants conspired to rig the Euribor, conspired to fix the prices of Euribor-based derivatives, unlawfully rigged bids for Euribor-based derivatives and engaged in concerted refusals to deal with certain derivatives counterparties. (Compl't ¶¶ 422-56.)

         Plaintiffs assert three causes of action under the Commodity Exchange Act, 7 U.S.C. § 1, et seq. (the “CEA”). (Compl't ¶¶ 457-71.) They allege that the Euribor is a commodity that trades in interstate commerce, and that any manipulation of the Euribor affects Euribor futures contracts in an artificial manner that violates the CEA. (Compl't ¶ 459.) Plaintiffs allege that all defendants violated the CEA by manipulating prices for Euribor futures contracts, are liable for the conduct of their employees and agents, and aided and abetted the manipulation of Euribor futures contracts. (Compl't ¶ 457-71.)

         Plaintiffs assert two RICO claims against all defendants, and allege that defendants engaged in a pattern of racketeering activity based on predicate acts of wire fraud for the common purpose of profiting on their own derivatives holdings. (Compl't ¶¶ 472-506.)

         Counts Ten asserts a common law claim of unjust enrichment, and alleges that all defendants benefited from ill-gotten gains at the expense of plaintiffs and the putative class. (Compl't ¶¶ 507-14.) Count Eleven alleges that defendants UBS, Barclays, Citibank, Deutsche Bank, HSBC, J.P. Morgan, RBS and Société Générale violated the implied covenant of good faith and fair dealing as to plaintiffs FrontPoint Australian and CalSTRS when they entered into derivatives contracts for the purpose of obtaining ill-gotten profits from the manipulated Euribor rates. (Compl't ¶¶ 515-21.)


         Defendants move to dismiss the Complaint pursuant to Rule 12(b)(1), Fed. R. Civ. P., on the grounds that the plaintiffs have not alleged any injury-in-fact, thus depriving them of Article III standing and the Court of subject-matter jurisdiction. According to defendants, the Complaint does not plausibly allege that any alleged manipulation of the Euribor caused plaintiffs to suffer losses in the five categories of derivatives described in the Complaint. Further, plaintiffs do not claim to have personally transacted in Forward Rate Agreements, for which they nevertheless seek relief on behalf of the class.

         “Subject matter jurisdiction is generally a ‘threshold question that must be resolved . . . before proceeding to the merits.'” Stockbridge-Munsee Cmty. v. N.Y., 756 F.3d 163, 166 (2d Cir. 2014) (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 88-89 (1998)). “A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). The plaintiff has the burden of demonstrating subject matter jurisdiction. See Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011). In resolving a motion to dismiss under Rule 12(b)(1), “the district court must take all uncontroverted facts in the complaint . . . as true, and draw all reasonable inferences in favor of the party asserting jurisdiction.” Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014).

         A plaintiff's standing is necessary to exercise subject matter jurisdiction. See, e.g., Strubel v. Comenity Bank, 842 F.3d 181, 187 (2d Cir. 2016). “To satisfy the ‘irreducible constitutional minimum' of Article III standing, a plaintiff must demonstrate (1) ‘injury in fact, ' (2) a ‘causal connection' between that injury and the complained-of conduct, and (3) a likelihood ‘that the injury will be redressed by a favorable decision.'” Id. at 187-88 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).

         “As a general rule, the ‘injury-in-fact' requirement means that a plaintiff must have personally suffered an injury.” W.R. Huff Asset Mgmt. Co., LLC v. Deloitte & Touche LLP, 549 F.3d 100, 107 (2d Cir. 2008). “Injury in fact is a low threshold, which we have held need not be capable of sustaining a valid cause of action . . . .” Ross v. Bank of Am., N.A. (USA), 524 F.3d 217, 222 (2d Cir. 2008) (quotation marks omitted). At the pleading stage, a plaintiff has only a “relatively modest” burden to show a traceable injury, which is defined as an injury that is fairly traceable to the defendant's allege conduct, and “‘not th[e] result [of] the independent action of some third party not before the court . . . .'” Rothstein v. UBS AG, 708 F.3d 82, 91-92 (2d Cir. 2013) (alterations in original; quoting Lujan, 504 U.S. at 560-61). There must be a “causal nexus” between the defendant's conduct and a resulting injury, but causation need not be as direct as tort causation, and “indirectness is not necessarily fatal to standing, because the ‘fairly traceable' standard is lower than that of proximate cause.” Id. (internal citation and quotation marks omitted). “[H]arms that flow indirectly from the action in question” will confer standing on a plaintiff. Id. at 92.

         In addition, at the pleading stage, a plaintiff has standing to assert claims on behalf of class members if it plausibly alleges that it “has suffered some actual injury as a result of the putatively illegal conduct of the defendant, ” and that this conduct “implicates the same set of concerns as the conduct alleged to have caused injury to other members of the putative class by the same defendants.” NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 162 (2d Cir. 2012) (quotation marks omitted). To pursue a claim on behalf of the class, the plaintiff need not necessarily have suffered the same injury, provided that it suffered actual injury caused by the same underlying misconduct. See id.

         A. Forward Rate Agreements.

         Plaintiffs allege that defendants unlawfully fixed the prices of Forward Rate Agreements (“FRAs”) as a direct consequence of manipulating the Euribor. In an FRA, the parties contract for payment at a settlement date, with the amount due based on the difference between an agreed-upon, fixed “forward rate” and a fluctuating “market rate” set by the Euribor. (Compl't ¶¶ 132-33.) Under an FRA, one party benefits if the Euribor increases before the settlement date, and the other party benefits if the Euribor decreases. (Compl't ¶ 132.) The Complaint alleges that “the notional amount” of Euribor-based FRAs in the United States during the class period exceeded $5 trillion. (Compl't ¶ 132.)

         Plaintiffs do not allege that they transacted in FRAs, and acknowledge as much in their opposition memo. (Opp. Mem. at 11.) However, they argue that under Second Circuit authority, at the pleading stage, a plaintiff has standing to pursue claims on behalf of class members who suffer an injury based on the same underlying misconduct that harmed the named plaintiffs. Although courts refer to this concept as “class standing, ” it is properly raised at the pleading stage, and weighs interests distinct from those considered on a motion for class certification. See NECA, 693 F.3d at 158 n.9 (a plaintiff's “standing to assert claims on others' behalf is an inquiry separate from its ability to represent the interests of absent class members under Fed.R.Civ.P. Rule 23(a).”).[3]

         As mentioned, in NECA, 693 F.3d at 162, the Second Circuit concluded that “a plaintiff has class standing if he plausibly alleges (1) that he personally has suffered some actual injury as a result of the putatively illegal conduct of the defendant, and (2) that such conduct implicates the same set of concerns as the conduct alleged to have caused injury to other members of the putative class by the same defendants.” (quotation marks, alterations and internal citations omitted; citing Blum v. Yaretsky, 457 U.S. 991, 999 (1982); Gratz v. Bollinger, 539 U.S. 244, 267 (2003).) “When this standard is satisfied, the named plaintiff's litigation incentives are sufficiently aligned with those of the absent class members that the named plaintiff may properly assert claims on their behalf.” Ret. Bd. of the Policemen's Annuity & Benefit Fund of the City of Chicago v. Bank of N.Y. Mellon, 775 F.3d 154, 161 (2d Cir. 2014).

         In NECA, plaintiff alleged violations of the Securities Act of 1933 based on misrepresentations made by originators whose mortgage loans were pooled into mortgage-backed securities. 693 F.3d at 148-49. The Second Circuit concluded that the plaintiff had standing to pursue class claims on behalf of those whose certificates were backed by the same originators as those held in plaintiff's own portfolio, even if the certificates were purchased in different offerings, since claims on behalf of the class were directed to the identical misrepresentations made by the identical parties. Id. at 163-64. Plaintiff did not, however, have standing to pursue claims directed to other originators. Id. at 163. As NECA explained, misstatements made by additional originators “ha[ve] the potential to be very different - and could turn on very different proof.” Id. The plaintiff could therefore pursue class claims only to the extent that they were directed to originators and misstatements that allegedly injured the plaintiff itself. Id.; see also Fernandez v. UBS AG, 2016 WL 7163823, at *10 (S.D.N.Y. Dec. 7, 2016) (plaintiffs alleged class standing because “if defendants' systematic conduct is tortious with respect to one fund, it is also tortious with respect to another fund, and does not depend on the individualized circumstances of each Fund.”) (Stein, J.). NECA emphasized that its conclusions as to standing should not be conflated with relevant considerations in a Rule 23 class certification analysis. 643 F.3d at 165.

         FRAs are a different category of derivative than those transacted in by plaintiffs, but any harm suffered by a party to an FRA as a result of the Euribor's manipulation would have been caused by the identical misconduct of the identical parties. Liability would turn on the same proof as to the allegedly false Euribor submissions. There would be no need to separately assess separate acts of manipulation by additional parties. See Bank of N.Y. Mellon, 775 F.3d at 162-63 (denying class standing when “alleged misconduct must be proved loan-by-loan and trust-by-trust.”). Aside from the separate issue of damages, the evidence in support of plaintiffs' own claims would be in unity with any claim brought on behalf of parties to FRA transactions.

         The Court therefore concludes that plaintiffs satisfy both prongs of NECA. At the pleading stage, they allege that they actually suffered harm as a result of the Euribor's manipulation, and that defendants' conduct implicates the same set of concerns between themselves and those who transacted in FRAs. Because any injury suffered by those who transacted in FRAs “flowed from” the same conduct and the same parties who allegedly caused injury to plaintiffs, the Court concludes that plaintiffs have alleged class standing on behalf of those who transacted in FRAs.

         Defendants' motion to dismiss plaintiffs' class claims related to FRAs pursuant to Rule 12(b)(1) is therefore denied.

         B. FX Forwards and CME Futures.

         Defendants argue that plaintiffs do not have standing to pursue claims related to two other categories of derivatives: FX forwards and CME currency futures. They argue that plaintiffs cannot allege injury-in-fact because the value of these derivatives is not tied to the Euribor. (Def Mem. at 6-8.) Thus, any unlawful manipulation of the Euribor would not have affected the value of these transactions

         A CME Euro Currency Futures Contract is alleged to be a category of standardized bilateral agreements. (Compl't ¶ 121.) The futures contracts trade on the Chicago Mercantile Exchange. (Compl't ¶ 121.) Each contract is an agreement to buy or sell €125, 000, “in terms of U.S. Dollars, ” on a future date, and each employs “an industry standard formula that, ” according to plaintiffs, “incorporates Euribor.” (Compl't ¶ 122.)

         Defendants argue that plaintiffs do not have standing to pursue claims directed to CME Euro Currency Futures Contracts because the contracts' value is not tied to the Euribor. With no relationship to the Euribor, defendants argue, plaintiffs cannot claim that they suffered loss in these derivatives because of the Euribor manipulation. But the Complaint makes non-conclusory factual allegations about the Euribor's role in CME Euro Currency Futures Contracts. Plaintiffs allege that the price of the contracts “is determined using an industry standard formula that incorporates Euribor.” (Compl't ¶ 122.) The Complaint states that the price of the contract is determined by the following formula: Future Price = Spot Price x (Image Omitted). (Compl't ¶ 122.) The Complaint alleges that the “Euribor . . . is incorporated into the formula as either ‘Rbase' or ‘Rterm' depending on whether Euros are being purchased or sold in the transaction. Thus Euribor is used to calculate the cost of carrying Euros over the ‘duration' of a CME Euro currency futures contract, indicated by the variable ‘d.'” (Compl't ¶ 123.) The Complaint alleges that the price of a CME Euro Currency Futures Contract “will exhibit an inverse relationship to the changes in Euribor.” (Compl't ¶ 123.)

         Defendants assert that the “generic formula” quoted in the Complaint makes no express reference to the Euribor, nor does a supporting publication cited in the Complaint. (Def. Mem. 7.) Defendants also contend that the Euribor's maturity dates could not be applicable to CME Euro Currency Futures Contracts, making it impossible for the Euribor to affect their value. (Def. Mem. 7.) Defendants cite “other CME publications” for the proposition that prices are determined according to “an auction-like process, ” rather than the standard formula cited in the Complaint. (Def. Mem. 7.)

         The Court cannot resolve these conflicting factual assertions at the pleading stage. The Complaint's allegations are non-conclusory, and the defendants' argument is an invitation to weigh industry publications' descriptions of how CME Euro Currency Futures Contracts are structured and valued. If defendants are correct and the Complaint inaccurately describes the Euribor's role in these transactions, the issue could likely be resolved through a summary judgment motion at the proper juncture. At the pleading stage, the Court must accept the truth of the Complaint's non-conclusory facts and not weigh competing facts offered by defendants. Cf. Wacker v. JP Morgan Chase & Co., 2017 WL 442366, at *3 (2d Cir. Feb. 1, 2017) (“our precedents caution against assessing the choice of a benchmark at the pleading stage because it involves an inherently fact-intensive inquiry into the relationship between the benchmark and the market it allegedly tracks.”) (summary order). Because the Complaint plausibly alleges that the Euribor was incorporated into CME Euro Currency Futures Contracts, and that plaintiffs were consequently injured by the Euribor's manipulation, defendants' motion to dismiss for lack of standing is denied.

         The same analysis applies to plaintiffs' claims concerning FX Forwards. A foreign-exchange forward, or “FX Forward, ” is alleged to be an over-the-counter, Euribor-based derivative that is identical to a CME Euro Currency Futures Contract, except that instead of being governed by the regulations of the CME, the parties have the ability customize the terms of the agreement. (Compl't ¶ 125.) As an example, the Complaint states that instead of the standard €125, 000 amount in a CME contract, the parties can bargain for a €1, 000, 000 contract. (Compl't ¶ 125.) The Complaint alleges that FX Forwards are priced according to the same formula cited above, although other short-term interest rates and interbank offering rates may be used in addition to the Euribor. (Compl't ¶ 126.)

         Defendants raise identical arguments concerning the Euribor's use in FX Forwards. Because the Court cannot resolve this factual dispute at the pleading stage, their motion is denied as to plaintiffs' claims directed to FX Forwards.

         C. LIFFE Futures and Interest Rate Swaps.

         A NYSE LIFFE Three-Month Euribor Futures Contract has a notional value of €1, 000, 000, and is “directly priced, benchmarked, and settled based on the three-month Euribor . . . .” (Compl't ¶ 114.) “LIFFE” is an abbreviation of the London International Financial Futures and Options Exchange, the market where these futures contracts are traded. (Compl't ¶¶ 53, 118.) The contracts are standardized under LIFFE rules, and are an agreement between a buyer and a seller. (Compl't ¶ 115.) The Complaint describes them as follows:

NYSE LIFFE three-month Euribor futures contracts are available for delivery in 28 months, those following the “March quarterly cycle, ” i.e., March, June, September and December, and four serial months such that the nearest six contracts are for delivery are available in consecutive calendar months. Each of the 28 available futures contract trades until the Monday before the third Wednesday of the delivery month when it “expires.”

(Compl't ¶ 116.) At the time of expiration, the two parties to the agreement “settle” their positions, with the transaction's profit or loss determined by the difference between the initial contract price and the price of a final, offsetting futures contract. (Compl't ¶ 117.) According to the Complaint, the Euribor “has a direct impact on the price” of these transactions, and the contracts' prices are derived from the Euribor. (Compl't ¶ 119.) It alleges that expiring Euribor futures contracts are settled at a price equal to 100, minus the three-month Euribor rounded to three decimal places. (Compl't ¶ 119.) The Complaint alleges that the Euribor “is the sole variable in the formula used to price and settle” the contracts. (Compl't ¶ 119.)

         An interest rate swap is an over-the-counter derivative in which two parties agree to exchange interest rate payment obligations on an agreed-upon principal. (Compl't ¶ 127.) To use the example cited in the Complaint, the parties may agree to exchange a fixed stream of interest rate payments at 2% a year with one based on a “floating” Euribor rate. (Compl't ¶ 127.) Payment is due at regular intervals, and the party with the larger obligation makes a payment reflecting the difference between the two interest rates. (Compl't ¶ 129.) The Complaint alleges that the “Euribor directly impacts the value of the Euribor-based interest rate swaps by determining the value of the floating rate payments due under that swap contract.” (Compl't ¶ 130.)

         Defendants argue that plaintiffs do not have standing to bring claims directed to LIFFE futures and interest rate swaps because the Complaint does not specifically link the dates of defendants' individual Euribor manipulations with the dates that plaintiffs' settled their positions. (Def. Mem. at 8-9.)

         But the Complaint alleges a years-long conspiracy to secretly manipulate the Euribor, and asserts that defendants' misconduct occurred “on a daily basis . . . .” (Compl't ¶ 50.) True, the Complaint identifies certain specific dates where defendants allegedly communicated with one another about manipulating the Euribor, but those dates do not purport to be the universe of defendants' communications and misconduct. It ultimately is plaintiffs' burden to prove that any unlawful manipulation of the Euribor resulted in injury. For the purpose of alleging a standing at the pleading stage, however, the plaintiffs have adequately alleged a traceable injury resulting from the defendants' alleged manipulation of the Euribor.

         Defendants' motion to dismiss plaintiffs' claims directed to LIFFE Futures and Interest Rate Swaps for lack of standing is therefore denied.


         The Court next addresses the defendants' argument that the Complaint fails to state a claim for relief under Rule 12(b)(6). At defendants' urging, the Court reviews their Rule 12(b)(6) arguments prior to addressing their challenge to personal jurisdiction. (See Def. Juris. Mem. at 17.) Although a court should “traditionally treat personal jurisdiction as a threshold question to be addressed prior to consideration of the merits of a claim, that practice is prudential and does not reflect a restriction on the power of the courts to address legal issues.” ONY, Inc. v. Cornerstone Therapeutics, Inc., 720 F.3d 490, 498 n.6 (2d Cir. 2013). “[I]n cases such as this one with multiple defendants - over some of whom the court indisputably has personal jurisdiction - in which all defendants collectively challenge the legal sufficiency of the plaintiff's cause of action, we may address first the facial challenge to the underlying cause of action and, if we dismiss the claim in its entirety, decline to address the personal jurisdictional claims made by some defendants.” Chevron Corp. v. Naranjo, 667 F.3d 232, 247 n.17 (2d Cir. 2012).

         Defendants' arguments as to personal jurisdiction turn in part on the substance of their motion to dismiss for failure to state a claim. Moreover, because the J.P. Morgan and Citigroup defendants do not dispute this Court's personal jurisdiction, it ultimately is necessary to rule on the defendants' Rule 12(b)(6) arguments regardless of the Court's personal jurisdiction over the remaining defendants. The Court therefore decides defendants' motion to dismiss under Rule 12(b)(6) before reaching the separate issue of personal jurisdiction.

         To survive a motion to dismiss under Rule 12(b)(6), Fed. R. Civ. P., “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Legal conclusions are not entitled to the presumption of truth, and a court assessing the sufficiency of a complaint disregards them. Id. Instead, the Court must examine only the well-pleaded factual allegations, if any, “and then determine whether they plausibly give rise to an entitlement to relief.” Id. at 679. The Complaint must include non-conclusory factual allegations that “‘nudge[ ]'” its claims “‘across the line from conceivable to plausible.'” Id. at 680 (quoting Twombly, 550 U.S. at 570)). “Dismissal is appropriate when ‘it is clear from the face of the complaint, and matters of which the court may take judicial notice, that the plaintiff's claims are barred as a matter of law.'” Parkcentral Global Hub Ltd. v. Porsche Auto. Holdings SE, 763 F.3d 198, 208-09 (2d Cir. 2014) (quoting Conopco, Inc. v. Roll Int'l, 231 F.3d 82, 86 (2d Cir. 2000)).

         “[T]he purpose of Federal Rule of Civil Procedure 12(b)(6) ‘is to test, in a streamlined fashion, the formal sufficiency of the plaintiff's statement of a claim for relief without resolving a contest regarding its substantive merits.'” Halebian v. Berv, 644 F.3d 122, 130 (2d Cir. 2011) (quoting Global Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 155 (2d Cir. 2006)). A court reviewing a Rule 12(b)(6) motion “does not ordinarily look beyond the complaint and attached documents in deciding a motion to dismiss brought under the rule.” Id. A court may, however, “consider ‘any written instrument attached to [the complaint] as an exhibit or any statements or documents incorporated in it by reference . . . and documents that the plaintiffs either possessed or knew about and upon which they relied in bringing the suit.'” Stratte-McClure v. Morgan Stanley, 776 F.3d 94, 100 (2d Cir. 2015) (quoting Rothman v. Gregor, 220 F.3d 81, 88 (2d Cir. 2000)).

         A. Plaintiffs' Sherman Act Claims.

         Defendants argue that the Complaint does not plausibly allege a restraint of trade or antitrust injury, that plaintiffs do not have antitrust standing as “efficient enforcers” of the antitrust laws and that the Complaint fails to allege the existence of a conspiracy as to any of the four Sherman Act claims. After the defendants' motion was fully briefed, the Second Circuit decided Gelboim v. Bank of America Corp., 823 F.3d 759 (2d Cir. 2016), cert. denied, 2017 WL 160462 (U.S. Jan. 17, 2017), which addresses several issues arising in the pending motions. The parties have addressed Gelboim in supplemental letter-briefs, and Gelboim guides the Court's analysis of the Sherman Act claims.

         Gelboim reviewed a horizontal price-fixing claims brought by plaintiffs who purchased financial instruments tied to the London Interbank Offered Rate (“LIBOR”), a daily benchmark that was organized similar to the Euribor. 823 F.3d at 765-67. Similar to the instant case, the plaintiffs alleged that defendant banks colluded to fix daily LIBOR submissions for their own benefit. Id. at 766. The interests of the plaintiffs were more varied than those here; the plaintiffs included bondholders as well as parties to derivatives transactions. Id. at 767-68. As will be discussed, Gelboim comfortably concluded that the plaintiffs alleged a horizontal price fixing per se violation and resulting antitrust injury. Id. at 770-77. However, without ultimately deciding whether plaintiffs were “efficient enforcers” of the antitrust laws - a component of antitrust standing - Gelboim gave guidance to the district court on remand. Id. at 777-80. As will be explained, this Court concludes that the plaintiffs have plausibly alleged a restraint of trade and antitrust injury. The Court concludes, however, that only plaintiffs CalSTRS and FrontPoint Australian can act as efficient enforcers of the antitrust laws, and that the remaining plaintiffs lack antitrust standing. The Court also concludes that plaintiffs have plausibly alleged the existence of a horizontal price-fixing conspiracy only as to Count One, and that Counts Two through Four are therefore dismissed.

         1. The Complaint Plausibly Alleges a Restraint of Trade.

         Section 1 of the Sherman Act states: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.” 15 U.S.C.A. § 1.

         Count One alleges that defendants restrained trade by coordinating the submission of false Euribor quotes to the EBF and Thomson Reuters, “pushing cash” to manipulate the Euribor and transmitting “spoof” bids through their brokers. (Compl't ¶ 424.) Plaintiffs allege that, as a consequence, the Euribor was the product of collusion and did not accurately reflect competitive market prices; this, in turn, caused plaintiffs and putative class members to either pay more or receive less than they should have when they participated derivatives transactions. (Compl't ¶¶ 425-26.)

         Defendants argue that their duties in setting the Euribor were inherently cooperative, rather than competitive, and that Count One therefore fails to allege a restraint of trade. Gelboim rejected the same argument as a “syllogism, ” and concluded that the banks' actions made through a private trade association heightened, rather than diminished, the risk of collusion. 823 F.3d at 775; accord Alaska Elec. Pension Fund v. Bank of Am. Corp., 175 F.Supp.3d 44, 58 (S.D.N.Y. 2016) (“If anything, therefore, the fact that ‘otherwise-competing' entities acted together as part of a ‘cooperative endeavor' is reason for more scrutiny, not less - and certainly not a basis for immunity from antitrust liability altogether.”) (Furman, J.).

         The Gelboim plaintiffs alleged that participating banks conspired to drive down the LIBOR rate in order to profit from their own transactions. 823 F.3d at 766. Among the plaintiffs were parties to derivatives transactions who claimed that they were injured by defendants' horizontal conspiracy to fix the LIBOR. Id. at 767-68. The Second Circuit concluded that because the complaint alleged that LIBOR was a core component for calculating plaintiffs' returns on certain financial instruments, any fixing of LIBOR per se violated the antitrust laws. Id. at 770-71. It viewed plaintiffs' claims as “uncomplicated, ” stating that they plausibly alleged that “the Banks, as sellers, colluded to depress LIBOR, and thereby increased the cost to [plaintiffs], as buyers, of various LIBOR-based financial instruments, a cost increase reflected in reduced rates of return.” Id. at 771. “[T]he fixing of a component of price violates the antitrust laws.” Id. (citing United States v. Sacony-Vacuum Oil Co., 310 U.S. 150, 222 (1940). “The unfamiliar context of appellants' horizontal price-fixing claims provides no basis to disturb application of the per se rule.” Id.

         Applying this reasoning, Count One plausibly alleges a per se violation of the Sherman Act. The Complaint alleges that defendants colluded to artificially manipulate the Euribor. (Compl't ¶¶ 137-84.) Defendants allegedly did so both as to target dates when traders priced, benchmarked and/or settled Euribor-based derivatives, as well incrementally over longer periods of time. (Compl't ¶ 139.) To support this claim, plaintiffs quote communications between defendants' employees, including statements like, “where do you want to put the 1m and 1m fixing, ” “we need to make the 1 mth libor come down, ” “1m very low if you can please, ” “they're going to set it low, ” “where DB 3s fixing today will u guys finally deliver?” “we also need high 1m and high 6m, ” and other similar statements. (See, e.g., Compl't ¶¶ 143, 145, 146, 147, 149, 158.)

         Because the Complaint plausibly alleges that the defendants coordinated to manipulate the Euribor rate-setting process, defendants' motion to dismiss Count One for failure to a conspiracy to restrain trade is denied.

         2. The Complaint Plausibly Alleges Antitrust Injury.

         A plaintiff “must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful.” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). “Generally, when consumers, because of a conspiracy, must pay prices that no longer reflect ordinary market conditions, they suffer ‘injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful.'” Gelboim, 823 F.3d at 772 (quoting Brunswick, 429 U.S. 489); see also State of N.Y. v. Hendrickson Bros., Inc., 840 F.2d 1065, 1079 (2d Cir. 1988) (“In general, the person who has purchased directly from those who have fixed prices at an artificially high level in violation of the antitrust law is deemed to have suffered the antitrust injury within the meaning of § 4 of the Clayton Act . . . .”).

         Gelboim concluded that plaintiffs successfully alleged an antitrust injury because they “claim[ed] violation (and injury in the form of higher prices) flowing from the corruption of the rate-setting process, which (allegedly) turned a process in which the Banks jointly participated into conspiracy.” 823 F.3d at 775. Gelboim explained:

Appellants have alleged an anticompetitive tendency: the warping of market factors affecting the prices for LIBOR-based financial instruments. No further showing of actual adverse effect in the marketplace is necessary. This attribute separates evaluation of per se violations - which are presumed illegal - from rule of reason violations, which demand appraisal of the marketplace consequences that flow from a particular violation.

Id. Because the plaintiffs' claims were premised on a price-fixing conspiracy that, if proven, would be a per se violation of the antitrust laws, plaintiffs were not required to allege additional harm to competition. Id. Such a pleading requirement “‘comes dangerously close to transforming a per se violation into a case to be judged under the rule of reason . . . .'” Id. at 776 (quoting Pace Electronics, Inc. v. Canon Computer Sys., Inc., 213 F.3d 118, 123-24 (3d Cir. 2000)). For purposes of antitrust injury, it sufficed for plaintiffs to allege “that they paid artificially fixed higher prices.” Id. at 777. Although plaintiffs “remained free to negotiate the interest rates attached to particular financial instruments, ” the “antitrust law is concerned with influences that corrupt market conditions, not bargaining power.” Id. at 773.

         Gelboim also observed that antitrust injury is not conditioned on a plaintiff's status as a competitor, provided that the plaintiff was injured through “‘a purposefully anticompetitive scheme, '” with the injury “‘inextricably intertwined with the injury the conspirators sought to inflict . . . .'” Id. at 774 (quoting Blue Shield of Va. v. McCready, 457 U.S. 465, 483-84 (1982)). Defendants' scheme to fix the LIBOR placed plaintiffs in a “worse position, ” thereby demonstrating “that their injury is one the antitrust laws were designed to prevent.” Id. at 775.

         The Complaint in this action plausibly alleges antitrust injury. Identifying by date, party and value of transaction, the Complaint alleges transactions in which plaintiffs paid an artificially inflated price in their Euribor-based transactions and/or liquidated their positions at a loss. (Compl't ¶¶ 303-50.) Defendants are alleged to have purposefully undertaken an anti- competitive scheme to manipulate the Euribor for their own benefit, and the plaintiffs have alleged that they were injured as a direct result. Plaintiffs have successfully alleged antitrust injury, and defendants' motion to dismiss Counts One through Four for failure to allege antitrust injury is denied.

         3. Based on the Complaint's Allegations, Only FrontPoint Australian and CalSTRS are Efficient Enforcers of the Antitrust Laws.

         a. Overview.

         If a plaintiff has established antirust injury, the second issue that must be addressed is whether it is “an efficient enforcer” of the antitrust laws. Daniel v. Am. Bd. of Emergency Med., 428 F.3d 408, 443 (2d Cir. 2005); Gelboim, 823 F.3d at 777. The efficient enforcer analysis looks to whether the plaintiff's injuries and the nature of its dealings with the defendants render the plaintiffs suitable “as [an] instrument[] for vindicating the Sherman Act.” Id. at 778. It considers whether the antitrust laws ought to provide the party a remedy in the specific circumstances alleged. Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 539-45 (1983) (footnotes omitted).

         The factors bearing upon this analysis were first laid out in the Supreme Court's opinion in Associated General Contractors. Each of the factors will be addressed in turn. Because several of the factors overlap, it is useful for the Court to explain its conclusion before delving into the analysis.

         The Court comfortably concludes that four plaintiffs - Sullivan, White Oak, Sonterra and FrontPoint Trading - are not positioned to vindicate the public's interest in enforcing the antitrust laws. These four plaintiffs had no direct dealings with the defendants on any Euribor-based transactions. Their “umbrella”-type damages claims would include virtually any loss on a Euribor-based derivative transaction, regardless of the nature of the transaction or identity of counterparty. In part because the damages would be determined based on transactions with non-parties, the calculation and apportionment of damages would be exceptionally complex and have aspects that can fairly be described as speculative. The total quantum of damages would be orders of magnitude greater than any ill-gotten gains of defendants.

         It also is relevant that the defendants' conduct has been investigated by government regulators in the United States and Europe. Billions of dollars in fines have been levied. The European Commission has announced new regulations for the setting of benchmark rates such as the Euribor. Given the size of the derivatives market and the risk of what courts have described as “overkill, ”[4] plaintiffs Sullivan, White Oak, Sonterra and FrontPoint Trading are not positioned to serve as efficient enforcers, and their Sherman Act claims will be dismissed.

         In contrast, CalSTRS and FrontPoint Australian were counterparties to Euribor-based transactions with one or more defendants, which means the proof and scope of damages would be cabined and discernable. For transactions in which CalSTRS or FrontPoint Australian were counterparties with a remaining defendant who is alleged to have engaged in price fixing, the Court concludes that these two plaintiffs satisfy the efficient enforcer requirements of antitrust standing.

         b. The “Efficient Enforcer” Factors.

         Four of the factors relevant to the efficient enforcer requirement for antitrust standing arise from the majority's opinion in Associated General Contractors, and were restated in the Circuit's opinion in Gelboim:

(1) the “directness or indirectness of the asserted injury, ” which requires evaluation of the “chain of causation” linking [plaintiffs'] asserted injury and the Banks' alleged price-fixing; (2) the “existence of more direct victims of the alleged conspiracy”; (3) the extent to which appellants' damages claim is “highly speculative”; and (4) the importance of avoiding “either the risk of duplicate recoveries on the one hand, or the danger of complex apportionment of damages on the other.”

823 F.3d at 778 (quoting Associated Gen. Contractors, 459 U.S. at 540-45).

         Courts sometimes weigh a fifth consideration: “whether the putative plaintiff is a proper party to ‘perform the office of a private attorney general' and thereby ‘vindicate the public interest in antitrust enforcement.'” Gatt Commc'ns, Inc. v. PMC Assocs., L.L.C., 711 F.3d 68, 80 (2d Cir. 2013) (quoting Daniel, 428 F.3d at 443).

         “The importance assigned to these factors ‘will necessarily vary with the circumstances of particular cases.'” Id. at 78 (quoting Assoc. Gen. Contractors, 459 U.S. at 542).

         c. Directness of Injury and Evaluation of Chain of Causation.

         The first factor is the “‘directness or indirectness of the asserted injury, ' which requires evaluation of the ‘chain of causation' linking [plaintiffs'] asserted injury and the [defendants'] alleged price-fixing. . . .” Gelboim, 823 F.3d at 778. Plaintiffs bring their claims on behalf of “[a]ll persons or entities that engaged in a U.S. based transaction of Euribor-based derivatives” between June 1, 2005 and “at least March 2011.” (Compl't ¶ 392.) Thus, all derivative contracts of any ...

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