Charles Schwab Corporation et al v. Bank of America Corporation et al

Filing 47

MDL ORDER TRANSFERRING CASE to the Southern District of New York. Signed by the MDL Panel on 10/2/13. (vlk, COURT STAFF) (Filed on 10/2/2013)

Case MDL No. 2262 Document 253 Filed 10/02/13 Page 1 of 3

UNITED STATES JUDICIAL PANEL
on
MUL TIDISTRICT LITIGATION

IN RE: LIBOR-BASED FINANCIAL INSTRUMENTS
ANTITRUST LITIGATION
The Charles Schwab Corp., et al. v. Bank of America Corp., et al., )
N.D. California, C.A. No. 4:13-02244
)

MDL No. 2262

TRANSFER ORDER

Before the Panel:* Pursuant to Panel Rule 7.1, plaintiff Schwab entities 1 move to vacate our
order conditionally transferring their action to the Southern District ofNew York for inclusion in
MDL No. 2262. Defendants JP Morgan Chase & Co. and JPMorgan Chase Bank, N.A. (collectively
Chase) oppose the motion. 2

In opposing transfer, plaintiffs principally rely on the March 29, 2013, ruling of the transferee
judge, the Honorable Naomi Reice Buchwald, in which, inter alia, she dismissed the Shennan Act,
RICO, and California Cartwright Act claims in three other actions brought by these same plaintiffs
and earlier transferred to the MDL. 3 See In re LIBOR-Based Fin. Instruments Antitrust Litig.,F. Supp. 2d-, 2013 WL 1285338 (S.D.N.Y. Mar. 29, 2013). In that ruling, the judge also declined
to exercise supplemental jurisdiction over plaintiffs' then-remaining California state law claims for
interference with economic advantage, breach of the implied covenant of good faith, and unjust
enrichment. See id. at *58-59. Following that ruling, plaintiffs commenced this new action- with

Judge Marjorie 0. Rendell, Judge Lewis A. Kaplan, and Judge Sarah S. Vance took no part
in the decision of this matter.
The Charles Schwab Corporation, Charles Schwab Bank, N.A., Charles Schwab & Co., Inc.,
Schwab Short-Term Bond Market Fund, Schwab Total Bond Market Fund, Schwab U.S. Dollar
Liquid Assets Fund, Schwab Money Market Fund, Schwab Value Advantage Money Fund, Schwab
Retirement Advantage Money Fund, Schwab Investor Money Fund, Schwab Cash Reserves, Schwab
Advisor Cash Reserves, Schwab YieldPlus Fund, and Schwab YieldPlus Fund Liquidation Trust.
2

Chase states that the following defendants join in or otherwise support its opposition: Bank
ofAmerica Corporation; Bank of America, N.A.; Barclays Bank plc; Citigroup, Inc.; Citigroup, N .A.;
Cooperatieve Centrale Raiffeisen- Boerenleenbank B.A.; Credit Suisse Group AG; Deutsche Bank
AG; HSBC Holdings plc; HSBC Bank plc; Lloyds Banking Group, plc; HBOS plc; Portigon AG; The
Norinchukin Bank; The Royal Bank of Scotland Group plc; and UBS AG.
The three actions subject to the motion to dismiss, which were transferred to the MDL in
September 2011, remain pending therein, awaiting the entry of fmal judgment. Plaintiffs state that
once fmaljudgment is entered, they intend to appeal the dismissal of their antitrust and RICO claims
to the Second Circuit.

A CERTIFIED COPY .
RUBY 1 KRAJICK, CLERK

B~~JL

Case MDL No. 2262 Document 253 Filed 10/02/13 Page 2 of 3

- 2the state law claims over which Judge Buchwald declined to exercise jurisdiction - in state court.
They argue that re-sending those claims to the MDL would contravene that ruling and run afoul of
Section 1407's purposes. We fmd this argument unpersuasive.
In this new action, plaintiffs have not merely re-filed the state law claims over which Judge
Buchwald declined to exercise jurisdiction. They also have added other claims, including alleged
violations of the Securities Act of 1933. At the time ofJudge Buchwald's ruling, plaintiffs were
asserting no federal law claims other than claims under the Sherman Act. 4 Moreover, five of the
California state law claims that plaintiffs now assert can be found in other actions already in the MDL.
In addition, defendants removed this action from state court on jurisdictional bases- the Edge
Act and the Foreign Sovereign Immunities Act (FSIA)- that were not argued to, or considered by,
Judge Buchwald in the briefmg on the motions to dismiss. See id. at *58-59. Although plaintiffs
challenge the propriety of that removal, we have held frequently that the pendency of a remand
motion is not, as a general matter, a sufficient reason to delay or deny transfer. 5 Moreover, we note
that Edge Act and FSIA remand issues are already before the transferee court in two actions in the
MDL.
After considering all argument ofcounsel, we find that this action involves common questions
of fact with actions in this litigation previously transferred to MDL No. 2262, and that transfer will
serve the convenience of the parties and witnesses and promote the just and efficient conduct of the
litigation. Moreover, transfer is warranted for reasons set out in our original order directing
centralization. In that order, we held that the Southern District ofNew York was an appropriate
Section 1407 forum for actions "shar[ing] factual issues arising from allegations concerning
defendants' participation in the British Bankers' Association (BBA) London Interbank Offered Rate
(Libor) panel." In re: Libor-Based Fin. Instruments Antitrust Litig., 802 F. Supp. 2d 1380, 1381
(J.P.M.L. 2011). We cited, in particular, allegations that defendants "manipulated Libor by
deliberately and intentionally understating their respective borrowing costs to the BBA, and that, by
doing so, they paid lower interest rates to customers who bought defendants' products with rates of
return tied to Libor, and also avoided disclosing the true risk premium that the market was attaching

Having dismissed the Sherman Act claims, the judge clearly found the absence of any other
federal claim significant. Indeed, in declining also to exercise supplemental jurisdiction over the state
law claim found in another complaint in the MDL (following the dismissal of the Sherman Act claim
therein), the judge stated: "[T]he question before us is whether we should exercise supplemental
jurisdiction over the state common law claim in light of the fact that no federal causes of action
remain." !d. at *58.
Under Panel Rule 2.1 (d), the pendency of a conditional transfer order does not limit the
pretrial jurisdiction of the court in which the subject action is pending. Between the date a remand
motion is filed and the date the Panel fmalizes transfer of the action to the MDL, a court wishing to
rule upon that motion generally has adequate time to do so. In this action, the Northern District of
California court has deferred ruling on plaintiffs' remand motion pending our decision on plaintiffs'
motion to vacate the conditional transfer order.

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-3to them during the global fmancial crisis." !d. Plaintiffs do not dispute that their action shares
multiple factual issues with the actions already in the MDL.
IT IS THEREFORE ORDERED that pursuant to 28 U.S.C. § 1407, this action is transferred
to the Southern District ofN ew York, and, with the consent ofthat court, assigned to the Honorable
Naomi Reice Buchwald for inclusion in the coordinated or consolidated pretrial proceedings.

PANEL ON MULTIDISTRICT LITIGATION

Chairman
Kathryn H. Vratil
Charles R. Breyer

Paul G. Barbadoro