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Levy v. BASF Metals Ltd.

United States District Court, S.D. New York

June 9, 2017

SUSAN LEVY, Plaintiff,


          GREGORY H. WOODS, United States District Judge


         For the last nine years, Plaintiff Susan Levy has been searching for someone to make her whole for a failed investment. In 2008, Ms. Levy, an attorney, lost her entire investment in New York Mercantile Exchange (“NYMEX”) futures contracts for the precious m platinum. Four years later, in 2012, Ms. Levy filed a lawsuit in the U.S. District Court for the Eastern District of New York, alleging that various NYMEX traders and John Doe defendants colluded to crash the market and manipulate the price of these contracts, thereby causing her losses. That case was transferred to this district, and was voluntarily dismissed following a settlement on December 3, 2014. She now claims that, thanks to the information contained in a putative class action complaint filed on November 25, 2014-when her first lawsuit was still pending-she has discovered the true cause of her losses.

         The class action complaint alleged that defendants BASF Corporation (“BASF Corp.”), BASF Metals Limited (“BASF Metals” and, together with BASF Corp., “BASF”), Goldman Sachs International (“Goldman Sachs”), HSBC Bank USA, N.A. (“HSBC”), ICBC Standard Bank Plc (“ICBC”), UBS AG, UBS Securities LLC (“UBS Securities” and, together with UBS AG, “UBS”), and the London Platinum and Palladium Fixing Company Ltd. (“LPPFC”) manipulated and artificially suppressed the price of physical platinum and palladium. After copying a significant number of the factual allegations from the class action complaint, attempting to connect those facts to her 2008 injury, and adding twenty John Doe defendants (together with the above-named financial institutions and organizations, “Defendants”), Plaintiff filed the complaint in this case in September 2015. Ultimately, Ms. Levy's claims-all of which arise out of the 2008 injury-have been brought too late, and there is no equitable reason that would permit her to bring yet another complaint to recover her nearly decade-old failed investment. Defendants' motion to dismiss the Second Amended Complaint (“SAC”) is therefore GRANTED.

         II. BACKGROUND[1]

         Ms. Levy's suit stems from the alleged manipulation of the futures market for the precious Metals platinum and palladium. Because Ms. Levy relies substantially on the facts presented in the complaint brought in the related class action, and incorporates that complaint by reference, the Court refers the reader to its opinion and order granting the motion to dismiss that complaint. See In re Platinum and Palladium Antitrust Litig., 14-cv-9391-GHW, Dkt. No. 102 (“Class Action Complaint”); Dkt. No. 179, 2017 WL 1169626 (S.D.N.Y. Mar. 28, 2017) (“Class Action Opinion”); see also SAC, Dkt. No. 121, ¶ 260. The Class Action Opinion contains a more fulsome description of the London Platinum and Palladium Market (“LPPM”), the process by which the Defendants “fixed” the price of these precious Metals through a twice-daily auction process, and Defendants' alleged collusion to manipulate the market. Assuming familiarity with the facts presented in that opinion, the Court summarizes below the facts relevant to deciding Defendants' motion to dismiss Ms. Levy's complaint.

         Ms. Levy purchased NYMEX platinum futures contracts in 2008.[2] SAC ¶ 155. According to the SAC, beginning in the summer of 2008, the prices of NYMEX platinum “began to collapse” and Ms. Levy's investment lost value. SAC ¶ 474. On August 15, 2008, Ms. Levy received a margin call, requiring her to liquidate her platinum positions and sell her investments at a loss. SAC ¶ 475. On that day, Ms. Levy alleges that there was a “seismic gyration crashing the market, ” resulting in her “total losses.” SAC ¶¶ 24, 478, 575. Ms. Levy claims that this loss was due to collusion between Defendants to fix the price of precious m futures contracts through the London-based auction process. She alleges that Defendants violated the Commodities Exchange Act, 7 U.S.C. § 1, et seq. (“CEA”), the Sherman Act, 15 U.S.C. §§ 1-2 and New York State antitrust laws (N.Y. Gen. Bus. Law § 340, et seq.), and the Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. § 1961, et seq. (“RICO”) in working together to manipulate the price of platinum.

         These allegations are not so dissimilar from those Ms. Levy raised in her 2012 lawsuit. In that case, Ms. Levy also alleged that various individuals and corporations colluded to manipulate the price of NYMEX platinum contracts. See Levy v. Joseph Welsh et al., 12-cv-2056 (E.D.N.Y.), 13-cv-01858 (S.D.N.Y.).[3] There, she alleged that the defendants in that case-including forty John Doe defendants-caused “sudden gyrations” in the market that led to the August 15, 2008 margin call and her resulting monetary losses. 2012 Am. Compl. ¶ 255. Just as she does here, in that case, Ms. Levy brought claims under the CEA, RICO, and sections 1 and 2 of the Sherman Act seeking remedies for her 2008 injury. Ms. Levy voluntarily dismissed the complaint in that lawsuit on December 2, 2014. Levy v. Welsh, 13-cv-01858, Dkt. No. 120.

         Although there are a number of similarities between this case and her previous one, in the complaint in this action, Ms. Levy borrows heavily from the factual allegations contained in the Class Action Complaint. SAC ¶ 260 (incorporating by reference the data presented in the Class Action Complaint). That complaint alleged that over the class period of January 1, 2008 to November 30, 2014, Defendants worked together to suppress the price of platinum and palladium at prices lower than market forces would otherwise have set. Class Action Compl. ¶¶ 1, 4, 97. As support for this allegation, the class action plaintiffs presented data demonstrating large “anomalous” downward spikes in the prices of the platinum and palladiu Metals hortly before the time of the twice-daily auction calls during which Defendants “fixed” the price of these precious Metals. Class Action Compl. ¶ 92. The Class Action Complaint does not allege, however, that at any point during the class period Defendants' alleged price suppression caused the class members to suddenly lose their entire investment. To the contrary, the Class Action Complaint notes that palladium prices “have been in a general upward trend” since the beginning of the class period and that platinum prices tripled from January 2000 through December 2013. Class Action Compl. ¶¶ 100, 125 & fig. on p. 41.

         Because the Class Action Complaint does not suggest the kind of loss that Ms. Levy alleges in the SAC, Ms. Levy makes additional allegations in an apparent attempt to make her 2008 loss cohere with the data asserted in the class action and the theory of damages that data was presented to support. First, Ms. Levy argues that the August 15, 2008 margin call and her resulting loss occurred when Defendants “decided to crash the market by covering their short positions.” SAC ¶ 11. Ms. Levy also states that the Defendants “artificially suppressed prices en mass in August of 2008, ” which caused members of the public to sell their positions, and that those sales caused a collapse of the market. SAC ¶ 183. In another part of the SAC, Ms. Levy contends the August 2008 market crash was the result of Defendants “selling off their large holdings in the Physical Market in London to create fraudulent profits” throughout the winter, spring, and summer of 2008. SAC ¶ 422. Yet in that same paragraph she also alleges that the August margin call was “sudden and unexpected” and later claims that the suppression of market prices by Defendants was similarly “sudden.” SAC ¶¶ 422, 575. In addition to these disparate and inconsistent allegations, Ms. Levy alleges that the Defendants caused the crash on the market by “failing to properly coordinate their scheme with other precious Metals traders who were also manipulating the market in the same fashion as the platinum and palladium traders including gold, palladium and silver.” SAC ¶¶ 11, 485. That is, Ms. Levy contends that her loss was the result of scheming traders in distinct markets failing to coordinate their illicit acts well enough.


         On September 16, 2015, Plaintiff filed the complaint in this action, alleging causes of action under the CEA, RICO, sections 1 and 2 of the Sherman Act, New York State antitrust laws, for unjust enrichment, and for tortious interference with prospective advantage.

         Plaintiff amended her complaint once as a matter of right in January 2016, and again in April 2016 in response to Defendants' March 14, 2016 motion to dismiss. On August 31, 2016, Defendants again moved jointly to dismiss the SAC. Dkt. No. 129. In addition to filing a joint memorandum of law, certain groups of defendants also filed their own memoranda of law in support of the motion to dismiss. Dkt. Nos. 132 (BASF), 133 (LPPFC), 134 (UBS), 136 (ICBC). Plaintiff filed her opposition on September 29, 2016, Dkt. No. 153, and Defendants replied on October 13, 2016, Dkt. No. 159.

         Because the statute of limitations for all of Plaintiff's claims has expired, and because there is no equitable reason to permit tolling of the statute of limitations in this case, Plaintiff's CEA, RICO, and Sherman Act claims are dismissed. The Court declines to extend supplemental jurisdiction over the remaining state law claims in Plaintiff's complaint. Defendants' motion to dismiss the SAC is therefore GRANTED.


         Under Federal Rule of Civil Procedure 8(a)(2), a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Rule 8 “does not require detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “To survive dismissal, the plaintiff must provide the grounds upon which his claim rests through factual allegations sufficient ‘to raise a right to relief above the speculative level.'” ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Twombly, 550 U.S. at 544).

         Determining whether a complaint states a plausible claim is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. The court must accept all facts alleged in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122, 124 (2d Cir. 2008) (per curiam). However, a complaint that offers “labels and conclusions” or “naked assertion[s]” without “further factual enhancement” will not survive a motion to dismiss. Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555, 557).

         Generally, courts are instructed to read pro se complaints with “special solicitude” and interpret them “to raise the strongest arguments that they suggest.” Triestman v. Fed. Bureau of Prisons,470 F.3d 471, 474-75, 477 (2d Cir. 2006). However, where plaintiff is an attorney-as Plaintiff is here-she is not entitled to the same liberal construction as would other pro se plaintiffs. Gundlach v. IBM Japan, Ltd., 983 F.Supp.2d 389, 393 (S.D.N.Y. 2013), aff'd sub nom. Gundlach v. Int'l Bus. Machs. Inc., 594 F. App'x 8 (2d Cir. 2014); see also Fenner v. City of N.Y., No. 08-CV-2355, 2009 WL 5066810, at *3 (E.D.N.Y. Dec. 21, 2009) (“Although pro se litigants are generally entitled to a broad reading of their submissions because of their lack of familiarity with the law, that is not the case with attorneys who have chosen to proceed pro se. It is well settled in the Second Circuit ...

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