In Re: Term Commodities Cotton Futures Litigation
OPINION & ORDER re: (592 in 1:12-cv-05126-ALC-JW) MOTION to Seal Declaration of Christopher M. McGrath In Support of Plaintiffs' Motion for Class Certification. filed by Mark Allen, Brian Ledwith, (605 in 1:12-cv-05126-ALC-JW) MOTION to Seal Notice of Motion To File Under Seal. filed by Mark Allen, (597 in 1:12-cv-05126-ALC-JW) MOTION to Seal Certain of Defendants' March 9, 2021 Submissions. filed by LD Commodities Cotton LLC, Louis Dreyfus Commodities LLC, Louis dreyfus Commodities B.V., Term Commodities Inc., Joseph Nicosia, LDC Holding Inc., Allenberg Cotton Company, (595 in 1:12-cv-05126-ALC-JW) MOTION to Certify Class . filed by Mark Allen, Brian Ledwith, ( 607 in 1:12-cv-05126-ALC-JW) MOTION to Seal Notice of Motion To File Under Seal. filed by Mark Allen. Plaintiffs' motion for class certification is GRANTED. The Parties' motions to seal, ECF Nos. 592, 597, 607, are GRANTED in part and DENIED in part. The Parties are hereby ORDERED to file redacted versions of the documents referenced above on ECF within 30 days of the filing of this Order. The Court reserves the right to request additional briefing on whether these do cuments should remain sealed at a later stage in this litigation. The Clerk of the Court is respectfully directed to terminate the motions at ECF Nos. 592, 595, 597, 605, 607. (Signed by Judge Andrew L. Carter, Jr on 2/15/2022) Filed In Associated Cases: 1:12-cv-05126-ALC-JW et al. (ate)
Case 1:12-cv-05126-ALC-JW Document 628 Filed 02/17/22 Page 1 of 17
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE: TERM COMMODITIES COTTON
THIS DOCUMENT RELATES TO ALL MEMBER :
CASES OF THIS ACTION:
ANDREW L. CARTER, JR., District Judge:
OPINION & ORDER
Plaintiffs Mark Allen and Brian Ledwith (together, “Plaintiffs”) bring this putative class
action on behalf of a proposed class of traders who lost money when prices in the cotton futures
market increased unexpectedly in 2011. Plaintiffs claim that Defendants, Louis Dreyfus
Commodities B.V., Louis Dreyfus Commodities Cotton LLC (a/k/a Allenberg Cotton Company),
LDC Holdings Inc., Term Commodities, Inc., Louis Dreyfus Commodities LLC, and Joseph
Nicosia (collectively, “Defendants”) unlawfully manipulated the price of cotton futures by
unreasonably and uneconomically demanding delivery of certificated cotton in fulfillment of
futures contracts in conjunction with other manipulative behavior. As a result of Defendants’
market conduct, Plaintiffs argue they suffered losses in liquidating their positions in the May and
July 2011 Cotton No. 2 futures contracts. Plaintiffs now move for class certification. Both
parties move to seal documents filed in connection with the motion for class certification.
For the reasons that follow, the Court finds that the proposed class meets the
requirements of Rule 23(a) and the relevant requirements of Ruel 23(b) of the Federal Rules of
Civil Procedure. Plaintiffs’ motion is granted.
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A. Factual Background
The Court assumes familiarity with the particularities of this dispute and briefly recites facts
relevant to the pending motion. These facts are taken directly from the Court’s prior ruling on
Defendants’ motion for summary judgment. 1
Plaintiff Mark Allen was hired by Glencore Grain B.V. (“Glencore”) in 2009. UMF ¶1. Mr.
Allen was the head cotton trader at Glencore during the period from March 2011 through
July 2011. UMF ¶2. Glencore was one of the world's largest commodities firms during the
period from March 2011 through July 2011 but was a relatively small player in the cotton
market at the time. UMF ¶3. While Mr. Allen was trading futures on behalf of Glencore, he
was also trading using his personal account, and his claims in this case arise from his
personal transactions. UMF ¶4–5.
Plaintiff Brian Ledwith was a derivatives trader at Omog Trading during the period from
March 2011 through July 2011. UMF ¶7. Mr. Ledwith traded in both the May and the July
2011 ICE Cotton No. 2 futures contracts. UMF ¶8.
Defendant Louis Dreyfus Commodities B.V. “trades and markets commodities, including
cotton, on an international basis.” Third Consolidated Amended Complaint (“TCAC”) (ECF
No. 484) at ¶12. The remaining corporate Defendants are all subsidiaries, affiliates, or
clearing members for Louis Dreyfus Commodities B.V. Defendant Louis Dreyfus Company
Cotton LLC (known during 2011 as LD Commodities Cotton LLC) (a/k/a Allenberg Cotton
Co.) was one of, if not the, largest cotton merchants in the United States and throughout the
world during the relevant time period from March 2011 through July 2011. UMF ¶24.
Defendant Joseph Nicosia was Executive Vice President of Louis Dreyfus Commodities LLC
and Chief Executive Officer of Allenberg Cotton Company. UMF ¶25.
Ruling at 13.
The crux of Plaintiffs’ allegations is that Defendants intentionally and uneconomically took
the largest ratio of deliveries of physical cotton to the amount of certificated supplies in the
history of ICE cotton futures trading, which exacerbated existing market congestion and
caused the contract prices to climb—i.e., Defendants “squeezed” the market. As part of this
alleged scheme, Defendants acted uneconomically by (1) failing to re-tender cotton, which
further depleted deliverable supplies and further inflated prices, TCAC at ¶42; (2)
decertificating all of the cotton they received delivery on in the May 2011 Contract, id.; and
(3) refusing cheaper cotton from the cash market, id. ¶¶61. The culmination of this
uneconomic activity was that the deliverable supply was too low to satisfy Defendants’
positions through delivery, which resulted in shorts having to liquidate their positions at
prices greater than what physical cotton could be sold for in the cash market. Id. ¶¶ 51, 61(e).
For a more detailed recitation, see generally In re Term Commodities Cotton Futures Litig., No. 12-CV-5126
(ALC), 2020 WL 5849142 (S.D.N.Y. Sept. 30, 2020).
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According to Plaintiffs, Defendants knew that lengthy warehouse loadout delays would
impact market participants who sought to purchase cotton stored in cash market warehouses
for delivery to ICE warehouses to satisfy May 2011 cotton futures contracts. UMF ¶280.
Indeed, Plaintiffs allege that Defendants themselves claimed that “we are only able to find
very limited amounts of cotton in the cash market” in their request to ICE for a notice period
exemption for the March 2011 Contract. UMF ¶¶ 273, 283. Accordingly, Defendants knew
that it would be difficult to make a large number of deliveries on the May 2011 Contract, and
thus that a large stopper in the May 2011 Contract could increase the inversion between the
May Contract price and the July Contract price. UMF ¶287.
Plaintiffs allege that Defendants manipulated the market by making large additions to their
May Contract long positions and July Contract short positions to hold an approximately
balanced bull spread position. UMF ¶295. 6 These additions peaked with a 3,093,200 bale
long position in the May Contract. UMF ¶296. Defendants made these purchases when the
rest of the long side of the open interest in the May Contracts was, on the other hand,
generally decreasing their long positions. UMF ¶298. This, along with Defendants’ slower
rate of liquidation, caused their percentage market share of the May Contract long positions
to grow from 25.7% on March 30 to 99.4% on April 25. UMF ¶299. As Defendants’
percentage market share of the open interest in the May Contract increased to the point where
Defendants held more than 99% of the long open interest, the spread between the price of the
May Contract and the price of the July Contract generally tended to increase as well. UMF
¶300. Defendants’ large late buying deprived the shorts of liquidity to exit the positions at
market balanced prices. UMF ¶334. During the delivery period for the May Contract,
Defendants took 99%+ of the deliveries made on the May Contract. UMF ¶348. Plaintiffs
allege that Defendants made approximately $55.1 million in trading profits from March 30 to
May 6, 2011 as a result of Defendants’ spread position that was long the May 2011 Contract
and short the July 2011 Contract. UMF ¶350.
Plaintiffs allege that Defendants’ conduct during the July 2011 contract was substantially
similar to their conduct during the May 2011 contract. Between May 23 and June 20,
Defendants were net buyers of 1,797,700 bales of July Contracts. UMF ¶407. Between June
6 and June 20, Defendants were net buyers of 1,054,200 bales of July contracts. UMF ¶408.
Defendants’ share of the long open interest in the July Contract increased from -.10 percent
on June 3 to 72.19 percent on June 24, 2011. UMF ¶409. Plaintiffs allege that Defendants’
large late buying deprived shorts of liquidity to exit/buy out of the contract. ¶415. Between
June 3 and June 24, 2011, the inversion between the July Contract price and the October
Contract price increased from 14.03 cents per pound to 38.3 cents per pound. UMF ¶416.
Finally, between June 14 and July 5, the July Contract price was much higher than the cash
market price, but on July 6 and 7, the July Contract price crashed by approximately 20 cents
per pound. UMF ¶¶ 423–24.
Ruling at 16–18.
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B. Proposed Class Definition
Plaintiffs seek to certify the following class:
All persons, corporations and other legal entities that (a) purchased between March 30
and May 6, 2011 a May 2011 Contract in order to liquidate a short position in such
contract, including short positions held as part of spread positions; or (b) contracted to
purchase cotton on call based on the May 2011 Contract price, and set the price on this
contract between March 30 and May 6; or (c) purchased between June 7 and July 7, 2011,
a July 2011 Contract in order to liquidate a short position therein, including short
positions held as part of spread positions; or (d) contracted to purchase cotton on call
based on the July 2011 Contract price, and set the price on this contract between June 7
and July 7, 2011.
Excluded from the Class are Defendants, any parent, subsidiary, affiliate, agent or
employee of any Defendant, and any co-conspirator.
Pls.’ Mem. at 1 n.2
Motion for Certification of Proposed Class
A. Legal Standard
Rule 23 of the Federal Rules of Civil Procedure governs class certification. That is,
plaintiffs must demonstrate that “(1) the class is so numerous that joinder of all members is
impracticable; (2) there are questions of law or fact common to the class; (3) the claims or
defenses of the representative parties are typical of the claims or defenses of the class; and (4)
the representative parties will fairly and adequately protect the interests of the class.” Fed. R.
Civ. P. 23(a). To meet the requirements of Rule 23(a), “plaintiffs in the proposed class must
demonstrate that they satisfy four requirements: (1) numerosity, (2) commonality, (3) typicality,
and (4) adequacy of representation.” Cent. States Se. & Sw. Areas Health & Welfare Fund v.
Merck-Medco Managed Care, L.L.C., 504 F.3d 229, 244 (2d Cir. 2007).
In addition to the requirements of Rule 23(a), plaintiffs must demonstrate that a class is
maintainable under Rule 23(b). Plaintiffs move for certification pursuant to Rule 23(b)(3).
Under Rule 23(b)(3), the court must decide whether “questions of law or fact common to the
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members of the class predominate over any questions affecting only individual members,” and
whether a class action “is superior to other available methods for the fair and efficient
adjudication of the controversy.” Fed. R. Civ. P. 23(b).
B. Numerosity Under Rule 23(a)
The numerosity requirement in Rule 23(a)(1) does not mandate that joinder of all parties be
impossible—only that the difficulty or inconvenience of joining all members of the class make
use of the class action appropriate. Cent. States Se. & Sw. Areas Health & Welfare Fund v.
Merck-Medco Managed Care, L.L.C., 504 F.3d 229, 244–45 (2d Cir. 2007). Although, there is
no bright line rule setting a requisite number of class members for certification, “numerosity is
presumed for classes larger than forty members.” Pa. Pub. Sch. Employees’ Ret. Sys. v. Morgan
Stanley & Co., 772 F.3d 111, 120 (2d Cir. 2014).
The Second Circuit has held that “the numerosity inquiry is not strictly mathematical.” Id.
District courts “must take into account the context of the particular case, in particular whether a
class is superior to joinder based on other relevant factors including: (i) judicial economy, (ii)
geographic dispersion, (iii) the financial resources of class members, (iv) their ability to sue
separately, and (v) requests for injunctive relief that would involve future class members.” Id.
Plaintiffs seek to establish numerosity by deducing a class size based on the number of large
traders in the May and July contracts. In the proposed class period, ninety-six larger traders held
contracts for cotton, and large traders are only a fraction of the number of traders present in the
class period. Then, Plaintiffs argue, the actual number of traders is undoubtedly sufficient to
meet the numerosity requirement. Other courts in this district have used this method in finding
the requisite class size on a motion for class certification. See, e.g., In re Amaranth Natural Gas
Commodities Litigation, 269 F.R.D. 366, 379 (S.D.N.Y. 2010) (finding numerosity where record
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showed that there were “approximately one thousand large and floor traders during the [c]lass
[p]eriod.”); In re Natural Gas Commodities Litigation, 231 F.R.D. 171, 179 (S.D.N.Y. 2005)
(finding numerosity where the record showed almost 400,000 open futures contracts at the end of
the proposed class period and almost 200 large traders holding positions on the exchange in
question). The Court concludes that Plaintiffs have made a sufficient showing to meet Rule
23(a)’s numerosity requirement.
C. Commonality Under Rule 23(a) and Predominance Under Rule 23(b)(3)
“The commonality requirement is met if plaintiffs’ grievances share a common question of
law or of fact,” Cent. States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed
Care, L.L.C., 504 F.3d 229, 245 (2d Cir. 2007), “truth or falsity [of which] will resolve an issue
that is central to the validity of each one of the claims in one stroke.” Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. at 350. Plaintiffs need only “demonstrate that the class members ‘have suffered
the same injury.” Johnson v. Nextel Commc’ns Inc., 780 F.3d 128, 137 (2d Cir. 2015) (internal
quotation marks and alterations omitted). That is, “factual differences in the amount of damages,
date, size, or manner of purchase, the type of purchase, the presence of both purchasers and
sellers . . . will not defeat class action certification where plaintiffs allege that the same unlawful
course of conduct affected all member of a class.” Sumitomo, 182 F.R.D. at 92.
“The predominance requirement of Rule 23(b)(3) tests whether proposed classes are
sufficiently cohesive to warrant adjudication by representation.” Myers v. Hertz Corp., 624 F.3d
537, 547 (2d Cir. 2010) (internal quotation marks and citations omitted). Plaintiffs must
demonstrate that “resolution of some of the legal or factual questions that qualify each class
member’s case as a genuine controversy can be achieved through generalized proof, and [that]
these particular issues are more substantial than the issues subject only to individualized proof.”
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Moore v. PaineWebber, Inc., 306 F.3d 1247, 1252 (2d Cir.2002). Predominance does not require
the absence of individualized damages, but plaintiffs’ damages methodology “must actually
measure damages that result from the class's asserted theory of injury.” Roach v. T.L. Cannon
Corp., 778 F.3d 401, 407 (2d Cir. 2015).
Common Questions of Law and Fact Exist Between May 2011 and July 2011
Plaintiffs argue that common questions of law exist because all potential class members must
prove manipulation under Commodities Exchange Act and monopolization under the Sherman
Act. Proof of manipulation will depend on the fact-finder’s determinations regarding
Defendants’ course of conduct in the May 2011 and July 2011 Contracts.
Defendants contend that the episodic nature of the conduct at issue forces the Court to make
individualized evaluations for each trader in the proposed class. They cite to In re Aluminum
Warehousing Litigation, 336 F.R.D. 5 (S.D.N.Y. 2020). In Aluminum, plaintiffs sued aluminum
warehouse owners for allegedly fixing aluminum prices over a six-year period. The plaintiffs in
Aluminum argued that even though they did not buy aluminum directly from the defendants, the
conduct had a knock-on effect in the aluminum market. The issue in Aluminum was whether the
defendants conduct had any effect at all on each of the pricing in plaintiffs’ contracts. Here,
however, Plaintiffs are not alleging a scheme that had an individualized effect on each class
member; rather, Defendants’ conduct affected all traders in the May 2011 and July 2011. No
individualized inquiry is required to prove whether the alleged squeeze affected the availability
of cotton on the market during the relevant period.
The Court has previously held that Plaintiffs’ claims fall under the persistent suppression
theory, recognizing the alleged market squeeze in the May 2011 and July 2011 Contracts as one
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manipulative scheme. See In re Term Commodities Cotton Futures Litig., No. 12-CV-5126
(ALC), 2020 WL 5849142, at *39 (S.D.N.Y. Sept. 30, 2020).
Economic Diversity Among Traders Does Not Defeat Commonality or Predominance
Defendants argue that Plaintiffs’ proposed class will include traders with diverging economic
interests, namely long traders, short traders, and hedgers. Defendants’ economic interest
argument largely goes to the calculation of damages, arguing that, for example, a hedger may
have taken a short position to minimize risk of their physical position. However, “all class
members have a common interest in pursuing the largely mathematical enterprise at establishing
a correlation between [Defendants] positions and prices.” Sumitomo, 182 F.R.D. at 92; see also,
Amaranth, 269 F.R.D. at 381 (noting that despite complex calculation the inclusion of net long
or short positions “can be determined objectively through mechanical calculation”); Natural Gas,
231 F.R.D. at 180 (noting that “[a]ll class members will have to engage in the same detailed
discovery to compile a common body of data”).
Defendants further argue that the inclusion of traders and hedgers who did not suffer a net
loss, results in uninjured class members. This risk, they argue, demonstrates that individual
inquiries into damages will predominate over class-wide inquiries. Defendants rely on In re
LIBOR-Based Financial Instruments Antitrust Litigation, 299 F. Supp. 3d 430 (S.D.N.Y. 2018)
and Tyson Foods v. Bouaphakeo, 577 U.S. 442 (2016), to support the proposition that the
inclusion of uninjured class members should lead to a denial of certification. This reliance is
The LIBOR court considered the certification of three distinct classes, which all presented a
significantly greater degree of complexity than this action. See generally LIBOR, 299 F. Supp.
3d at 539, 551 569, 590 (discussing netting requirements and the various types of traders in each
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of the four proposed classes). The court denied three of the four proposed class actions and
certified the final class (OTC action) only as to the antitrust claims in that action.” Id. at 459.
The court noted that the arguments against predominance raised by the OTC defendants went to
“the assessment of what amount of damages the class member has suffered and whether that
amount of damages is greater than zero.” Id. at 595. The court held that these arguments
implicated only the individualized damages and were insufficient to support a denial of class
In Tyson Foods, The Supreme Court declined to opine on “whether uninjured class members
may recover” damages or “whether [the proposed method] or some other methodology will be
successful in identifying uninjured class members” because these were not questions presented
on petition for certiorari. Tyson Foods, 577 U.S. at 461.
Plaintiffs are only required to demonstrate that “their damages stemmed from the defendant’s
actions that created the legal liability.” Sykes v. Mel S. Harris & Assocs. LLC, 780 F.3d 70, 88
(2d Cir. 2015). Moreover, the complexity of the damages calculation is not a sufficient bar to
certification at this stage in the litigation. See Roach v. T.L. Cannon Corp., 778 F.3d 401, 407
(2d Cir. 2015) (noting that the presence of individualized damages by itself is not enough to bar
class certification under Rule 23(b)(3)); see also Amaranth, 269 F.R.D. at 385 n.133 (collecting
Large Traders Do Not Defeat Predominance
The Parties acknowledge that a substantial share of the proposed class will consist of large
traders. Defendants contend that these traders are subjected to individualized inquiries and
defenses that threaten to overwhelm the litigation. Defendants argue that these traders were
better positioned to ensure delivery of physical cotton in satisfaction of their short futures
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position and that failure to prepare to delivery was irresponsible. Def. Reply at 5. These
arguments raise questions of proximate cause, the answers to which are properly determined by
the fact-finder at trial. See 2020 WL 5849142, at *33-34 (finding that “a reasonable jury could
conclude that Defendants were the proximate cause of the artificial prices in the cotton futures
market during the relevant” period).
D. Typicality Under Rule 23(a)
Typicality “requires that the claims of the class representatives be typical of those of the
class.” Cent. States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care,
L.L.C., 504 F.3d 229, 245 (2d Cir. 2007). A putative class satisfies this requirement “when each
class member’s claim arises from the same course of events, and each class member makes
similar legal arguments to prove the defendant’s liability.” Id. “Class certification is
inappropriate where a putative class representative is subject to unique defenses which threaten
to become the focus of the litigation.” Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222
F.3d 52, 59 (2d Cir. 2000). But “[A] representative may satisfy the typicality requirement even
though that party may later be barred from recovery by a defense particular to him that would not
impact other class members.” Natural Gas, 231 F.R.D. at 184 (quoting In re Sumitomo Copper
Litig., 182 F.R.D. 85, 95 (S.D.N.Y. 1998)).
Defendants argue that Plaintiff Allen is not typical of class members because he is subject to
unique defenses. Allen, through his role at Glencore, was the subject of an ICE investigation
resulting from his own conduct during the class period. The mere existence of a unique defense
does not render a named plaintiff atypical of a putative class member. See, e.g., Natural Gas,
231 F.R.D. (finding typicality where defendants raised unclean hands and credibility defenses);
Sumitomo, 182 F.R.D. at 95 (finding typicality where defendants raise a failure to mitigate
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defense). The Court concludes that the potential defenses raised against Allen are not so core as
to “become the focus of the litigation.”
E. Adequacy Under Rule 23(a)
Adequacy requires that the class representatives “will fairly and adequately protect the
interests of the class.” Denney v. Deutsche Bank AG, 443 F.3d 253, 267 (2d Cir. 2006) (internal
quotation marks omitted). To determine adequacy, courts evaluate “whether: 1) plaintiff's
interests are antagonistic to the interest of other members of the class and 2) plaintiff's attorneys
are qualified, experienced and able to conduct the litigation.” In re Flag Telecom Holdings, Ltd.
Sec. Litig., 574 F.3d 29, 35 (2d Cir. 2009). “Class certification may properly be denied where
the class representatives have so little knowledge of and involvement in the class action that they
would be unable or unwilling to protect the interests of the class against the possibly competing
interests of the attorneys.” Maywalt v. Parker & Parsley Petroleum Co., 67 F.3d 1072, 1077–78
(2d Cir. 1995) (quotation marks and alterations omitted). Courts may also consider “the honesty
and trustworthiness of the named plaintiff.” Savino v. Computer Credit, Inc., 164 F.3d 81, 87
(2d Cir. 1998).
Defendants contend that Allen is an inadequate representative because his alleged
misconduct in this litigation indicates a lack of integrity and trustworthiness. Defendants allege
that Allen misappropriated documents from his former employer and that those documents go to
the core of this action. Allen left Glencore in September 2011. In his December 3, 2015
deposition, he testified that he only discovered the documents in mid-2015. See ECF No. 599-9
at 168:4-174:6. Allen also received internal Glencore documents from a former colleague who
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was still employed at Glencore at the time. See id. Allen further testified that these documents
were not used at any stage in this litigation. See id. at 174:7-16.
Although Defendants argue that Allen’s conduct goes to the heart of the action, the alleged
misappropriation was discovered more than five years ago and has not been a central issue in this
action. The Court finds that Allen is an adequate representative for the absent class members of
the putative class.
Defendants contend that Ledwith is an inadequate class representative because he has
made little attempt to oversee class counsel and familiarize himself with the issues in the case.
In his June 21, 2019 deposition, Ledwith did not know the name of the Plaintiffs’ expert or the
content of his report. See ECF No. 599-4 at 94:18-95:5, 226:8-227:10. He was not familiar with
the briefing in the various motions made before this Court, see id. at 93:20-94:6, 96:15-21, 98:58, 146:3-14; had not read the previous opinions of this Court, see id. at 94:7-13,153:21-23; and
had not reviewed any of the documents produced in this case besides his own, see id. at 106:20107:14. Ledwith also appeared to be unsure whether he had reviewed the any of the various
iterations of the complaint, see id. at 78:6-9, 93:11-17; whether his attorney had appeared before
this Court, see id. at 64:16-19; and just whom he seeks to represent in this action. See id. at
96:15-97:4. In short, Ledwith “display[ed] an “alarming unfamiliarity with the issues in this
action” and had all but abdicated his responsibilities in this action. Scott v. N.Y.C. Dist. Council
of Carpenters Pension Plan, 224 F.R.D. 357 (S.D.N.Y. 2004). The Court finds that Ledwith is
an inadequate class representative.
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F. Implied Requirement of Ascertainability
The Second Circuit recognizes the implied requirement of ascertainability when deciding to
certify a putative class. Ascertainability “demands that a class be sufficiently definite so that it is
administratively feasible for the court to determine whether a particular individual is a member.”
In re Petrobras Sec., 862 F.3d 250, 260 (2d Cir. 2017) (internal quotation marks omitted).
Ascertainability is satisfied where a class is “identified by subject matter, timing, and location.”
Id. at 269-70.
Plaintiffs contend, and Defendants do not contest, that the proposed class is sufficiently
ascertainable. Plaintiffs proposed class consists of all traders holding position in the May 2011
and July 2011 Contracts. Plaintiffs propose to identify these traders by requiring sworn
statements from traders and the records of these trades. The Court finds that the proposed class
is sufficiently “defined by objective criteria” and therefore ascertainable. Petrobras, 862 F.3d at
G. Superiority Under Rule 23(b)(3)
Under Rule 23(b)(3), plaintiffs must also demonstrate “that a class action is superior to other
available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P.
23(b)(3). In determining superiority, a court examines Rule 23(b)(3)'s nonexclusive list of
factors for consideration. Most important of these factors to this case is the manageability of a
class action. Fed. R. Civ. P. 23(b)(3)(D).
Defendants argue that this case would not be manageable as a class action because the parties
would dispute whether price increases could be attributable “to world events and market forces
or to defendants conduct.” Def. Reply at 13 (citing Gordon v. Hunt, 98 F.R.D. 573, 575-76
(S.D.N.Y. 1983). The Court is not convinced that this action presents any unique manageability
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issues. If, however, these do arise, the Court “may decertify [the] class if it appears that the
requirements of Rule 23 are not in fact met. Mazei v. Money Store, 829 F.3d 260, 266 (2d Cir.
2016) (citing Sirota v. Solitron Devices, Inc., 673 F.2d 566, 572 (2d Cir. 1982)).
Motions to Seal
The Parties collectively submit motions to seal their submissions, including to seal
Plaintiff’s Memorandum of Law in Support of their Motion for Class Certification, the
Declaration of Ian T. Stoll; Defendants’ Memorandum of Law in Opposition to Defendants’
Memorandum of Law in Opposition to Plaintiffs’ Motion for Class Certification; and the
Declaration of William H. Wagener and the exhibits thereto; Plaintiffs’ Reply Memorandum Of
Law in Further Support of Their Motion for Class Certification; and the Declaration of Ian T.
Stoll in Further Support of Plaintiffs’ Motion for Class Certification. See ECF Nos. 592, 597,
605, 607. 2
When considering a motion to seal, the court must first determine whether the documents
at issue are judicial documents. “In determining whether a document is a judicial record, we
evaluate the ‘relevance of the document’s specific contents to the nature of the proceeding’ and
the degree to which ‘access to the [document] would materially assist the public in understanding
the issues before the . . . court, and in evaluating the fairness and integrity of the court's
proceedings.” Bernstein v. Bernstein Litowitz Berger & Grossmann LLP, 814 F.3d 132, 139 (2d
Cir. 2016) (quoting Newsday LLC v Cty. of Nassau, 730 F.3d 156, 166–67 (2d Cir. 2013)).
If the court determines that the documents in question are judicial documents, then the
common law presumption of access attaches. Lugosch v. Pyramid Co. of Onondaga, 435 F.3d
Plaintiffs filed a motion to seal documents support its reply memorandum. See ECF No. 605. Plaintiffs later filed
a corrected copy of their reply memorandum and an additional motion to seal. As such, Plaintiffs’ motion to seal,
ECF No. 605 is DENIED as moot.
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110, 119 (2d Cir. 2006). The court must then determine the weight of this presumption. Id.
“[T]he weight to be given the presumption of access must be governed by the role of the material
at issue in the exercise of Article III judicial power and the resultant value of such information to
those monitoring the federal courts.” Id. “[A]fter determining the weight of the presumption of
access, the court must “balance competing considerations against it.” Id. at 120. In addition to
the common law right of access, there is a strong First Amendment presumption of public access
to judicial documents and proceedings. See id. at 110, 119–20, 123–24. However, court
documents may be sealed if “specific, on the record findings are made demonstrating that
‘closure is essential to preserve higher values and is narrowly tailored to serve that interest.’”
Press-Enterprise Co. v. Superior Court, 478 U.S. 1, 13 –14 (1986) (quoting Press-Enterprise Co.
v. Superior Court, 464 U.S. 501, 510 (1984)).
The Parties request the Court seal documents reflecting, inter alia, Defendants’ market
positions, customer information, market research, and confidential business information
regarding cotton futures market. Defendants identify five categories of documents in the Parties’
(1) “Materials reflecting Defendants’ physical cotton and cotton futures trading
strategies, including specific information reflecting Defendants’ precise positions on
particular dates and internal communications regarding Defendants’ futures trading or
physical cotton sales strategies”;
(2) “Materials reflecting Defendants’ profits and losses, which are non-public because
Defendants are privately owned”;
(3) “Materials reflecting specific contractual terms regarding purchases and sales of
(4) “Materials reflecting Defendants’ customers’ identities or information about those
(5) “Materials reflecting private information regarding specific individuals, including
Case 1:12-cv-05126-ALC-JW Document 628 Filed 02/17/22 Page 16 of 17
ECF No. 623 (“Joint Submission”), at 5–6. The Parties also propose redactions of information
third parties have designated as confidential or highly confidential information. The Court has
carefully reviewed the Parties’ memoranda, Joint Submission, and proposed redactions. Several
proposed redactions cover information that is either publicly available or not confidential. The
Court denies Defendants’ request as to the following proposed redactions:
Exhibit 1 to the Declaration of Ian Stoll:
o Paragraphs 65 –70 should be limited to the data obtained from the third-party
platform. The current proposed redactions are overinclusive.
o Paragraphs 71 and 72 as well as their accompanying footnotes should not be
redacted to the extent that they reflect information provided by the USDA in its
Annual Report on Cotton Price Statistics.
o Paragraphs 102 and 103 reflect a hypothetical by the Plaintiffs’ expert and does
not include any information on the Defendants’ physical cotton positions. As
such, these paragraphs should be unredacted.
o Paragraphs 122–27, reflect Plaintiff’s expert’s conclusions based on data provided
by ICE. The proposed redactions are overinclusive. The redactions in these
paragraphs should be limited to the actual data provided by ICE.
o Paragraphs 130 and 131 contain information and opinions regarding Plaintiff
Allen. They should not be redacted.
Exhibit 5 to the Declaration of Ian Stoll:
o Paragraph 2 proposes redactions of information available in the Parties’ other
submissions. The proposed redaction in Paragraph 2 quotes Paragraphs 3, 131 –
34 of the Expert Report of Matthew A. Evans, Exhibit 16 to the Declaration of
William H. Wagener. Paragraph 3 of the Evans Report is not redacted.
o Paragraph 3, 191–92 proposes redactions which cite to unredacted material
available in the Evans Report. Additionally, the information is included in the
Court prior opinion in this action. See In re Term Commodities Cotton Futures
Litig., No. 12-CV-5126 (ALC), 2020 WL 5849142, at *26 (S.D.N.Y. Sept. 30,
o Paragraphs 191 –92 propose redactions to information which paraphrases
unredacted portions of the February 2016 Amended Expert Report of Dr. Craig
Pirrong, Exhibit 4 to the Declaration of William H. Wagener.
o Paragraphs 196 –203 propose redactions that express the Plaintiff’s expert’s
opinion. To the extent that the Parties seek to redact the exact data (i.e, the
numbers) collected from third parties like Cotlook, redactions should be limited to
Exhibit 16 to the Declaration of William H. Wagener:
o Paragraph 104 proposes redactions of information which the Parties have already
made publicly available. See In re Term Commodities Cotton Futures Litig., 2020
WL 5849142, at *7, 25.
Case 1:12-cv-05126-ALC-JW Document 628 Filed 02/17/22 Page 17 of 17
o Paragraphs 140–41, 160 --61 proposes redactions summarizes some of the case
key facts and arguments in this case. They do not include confidential
information regarding Defendants’ cotton positions. The Court does not believe
this information warrants protection.
o The first two proposed redactions in Paragraph 162 reflect general market
strategy, which the Court does not believe is exclusive to the Defendants.
Plaintiffs’ motion for class certification is GRANTED. The Parties’ motions to seal,
ECF Nos. 592, 597, 607, are GRANTED in part and DENIED in part. The Parties are hereby
ORDERED to file redacted versions of the documents referenced above on ECF within 30 days
of the filing of this Order. The Court reserves the right to request additional briefing on whether
these documents should remain sealed at a later stage in this litigation.
The Clerk of the Court is respectfully directed to terminate the motions at ECF Nos. 592,
595, 597, 605, 607.
Dated: February 15, 2022
New York, New York
ANDREW L. CARTER, JR.
United States District Judge
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