The Berkshire Bank v. Bank of America Corporation et al

Filing 332

MEMORANDUM AND ORDER: Lender plaintiffs' application for reconsideration untimely, underdeveloped, and ultimately unpersuasive is denied. Lender plaintiffs shall revise the notice program proposed in relation to the pending settlements to acknow ledge both LIBOR V's dismissal of GDB' s fraud claims and LIBOR VII' s denial of class certification, as directed by the Court during the conference held on June 18, 2018. SO ORDERED. (Signed by Judge Naomi Reice Buchwald on 7/02/2018) Filed In Associated Cases: 1:11-md-02262-NRB, 1:12-cv-05723-NRB(ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------X
In re:
MEMORANDUM AND ORDER
LIBOR-Based Financial Instruments
Antitrust Litigation.

11 MD 2262 (NRB)

This Document Applies to:
12 Civ. 5723

Lender Action
----------------------------------------X
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE

Lender plaintiffs seek reconsideration of our decision in
LIBOR V, 2015 WL 6696407 (S.D.N.Y. Nov. 3, 2015), ECF No. 1234,
dismissing

as

time-barred

the

fraud

claims

asserted

by

Government Development Bank for Puerto Rico (GDB), see id. at
*12-13, slip op. at *32-34.

Lender plaintiffs base this motion

on the analysis of the statute of limitations applicable under
California law set forth in Charles Schwab Corp. v. Bank of
America Corp., 883 F.3d 68, 97-98 (2d Cir. 2018).

See Letter

from Jeremy Lieberman to the Court, June 15, 2018, ECF No. 2555.
Bank of America, JPMorgan, and UBS, the defendants remaining in
this action, oppose this application.

See Letter from Arthur

Burke to the Court, June 20, 2018, ECF No. 2577.
The motion is denied.

We considered a comparable request

from the Exchange plaintiffs two months ago, and this request
fares no better.

“As a threshold matter, even assuming that

Schwab’s

of

analysis

statutes

1

of

limitations

[and

inquiry

notice] . . . under California law applies directly to [GDB’s
fraud claims under Puerto Rico law], [Lender plaintiffs] offer
no

justification

for

why

their

motion

was

not

filed

until

[sixteen] weeks after the Second Circuit’s issuance of Schwab.”
Apr. 23, 2018 Order, ECF No. 2496.

As sixteen is greater than

seven, “[t]his unexplained delay alone warrants denial” of GDB’s
pending application as well.
Lender
substantive
the

basis

plaintiffs’
standard
of

an

Id.

motion

for

falls

far

short,

reconsideration.

intervening

change

in

too,

of

Reconsideration
controlling

law

the
on
is

appropriate “only when the court has a clear conviction of error
with respect to a point of law on which its previous decision
was predicated.

[M]ere doubt . . . is not enough to open the

point for full reconsideration.”

N. River Ins. Co. v. Phila.

Reinsurance Corp., 63 F.3d 160, 165 (2d Cir. 1995) (alterations
in original) (citations omitted) (quoting Fogel v. Chestnutt,
668 F.2d 100, 109 (2d Cir. 1981)).
At this point in the litigation, Lender plaintiffs should
be well aware of the importance of variations in state law.

Cf.

LIBOR VII, 299 F. Supp. 3d 430, 575-79, slip op. at *284-94
(S.D.N.Y. 2018), ECF No. 2452 (analyzing variations in state
substantive law and denying class certification, in part, on
that

basis).

And

yet,

Lender

plaintiffs

do

not

consider,

address, or even cite any Puerto Rico law in contending that we

2

should reconsider our prior analysis of Puerto Rico law -- even
though issues regarding statutes of limitations generally and
the recognition of a “defendant reassurance” exception (under
which a statute of limitations is tolled based on a defendant’s
reassurances once the plaintiff has otherwise been placed on
inquiry notice) specifically, have figured in this litigation
from the outset, see, e.g., LIBOR I, 935 F. Supp. 2d 666, 705,
slip op. at *74 (S.D.N.Y. 2013), ECF No. 286.
Puerto

Rico

jurisdictions

do

is
not

not

California,

appear

to

and

indeed,

recognize

a

some

“defendant

reassurance” exception to the applicable discovery rule.

See,

e.g., Gaslow v. QA Invs. LLC, 36 A.D.3d 286, 291-92 (1st Dep’t
2006) (analyzing In re Dean Witter P’ship Litig., No. Civ. A.
14816, 1998 WL 442456 (Del. Ch. July 17, 1998), aff’d mem. 725
A.2d 441 (Del. 1999)); see also Christianson v. Conrad-Houston
Ins.,

318

reliance

P.3d
on

relationship

390,

403

reassurances
between

the

&

n.44

(Alaska

depending
plaintiff

on

2014)
the

and

(recognizing

nature
person

of

the

providing

reassurance); Aleo v. Weyant, No. M2013-00355, 2013 WL 6529571,
at *4-5 (Ct. App. Tenn. Dec. 12, 2013) (rejecting reassurances
made by the plaintiff’s attorney as a basis for tolling the
legal malpractice statute of limitations). 1

Lender plaintiffs

1
Differences in the recognition of such an exception would only
heighten the concerns about statutes of limitations and variations in state
law that we have previously expressed.
See LIBOR VII, 299 F. Supp. 3d at

3

offer no argument that Puerto Rico law would likely (let alone
clearly) recognize such an exception in a context like that of
this case.
And further, even if Puerto Rico law were to recognize such
an

exception,

it

would

not

render

GDB’s

claims

timely

here.

Lender plaintiffs cannot dispute that they were on notice by
March 15, 2011 at the latest, meaning that the one-year statute
of limitations supplied by Puerto Rico law would have expired on
March 15, 2012.

The amended class action complaint, the first

pleading identifying GDB as a plaintiff, was not filed until
November 21, 2012, and GDB “cannot benefit from class-action
tolling because GDB was not within the original Berkshire Bank
class” (which was limited to New York-based institutions), LIBOR
V, 2015 WL 6996407, at *13 n.21, slip op. at *34 n.21, and in
any event, Berkshire’s first complaint was not filed until July
25, 2012.

GDB also makes no argument that it can benefit from

class-action tolling based on other, earlier-filed complaints.
See generally LIBOR IV, 2015 WL 6243526, at *154-55, slip op. at
*369-74 (S.D.N.Y. Oct. 20, 2015), ECF No. 1222 (analyzing the
tolling effect of other putative class-action complaints).

572, slip op. at *278 (“[A]ny statute-of-limitations issues impacting the
class here are not reducible simply to a question of inquiry notice.”); id.
at 576, slip op. at *288 (“[S]tate substantive law varies materially on . . .
when a would-be plaintiff is charged with a duty to investigate.”); see also
id. at 577, slip op. at *290-91 (noting Lender plaintiffs’ reliance on our
holding that “constructive notice occurred as to all class members (except
under California law) on May 29, 2008” as supporting class certification).

4

Lender

plaintiffs'

untimely,

underdeveloped,

denied.

Lender

application
and

plaintiffs

proposed in relation to

for

ultimately

shall

revise

reconsideration
unpersuasive
the

the pending settlements

both LIBOR V's dismissal of GDB' s
denial of class certification,

notice

is
program

to acknowledge

fraud claims and LIBOR VII' s

as directed by the Court during

the conference held on June 18, 2018.
SO ORDERED.

Dated:

New York, New York
July '9--, 2018

LQ2;L~
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE

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