The Berkshire Bank v. Bank of America Corporation et al

Filing 37

MEMORANDUM AND ORDER denying (296) Motion for Reconsideration; denying (327) Motion for Leave to File Document; denying (330) Motion for Leave to File Document; granting in part and denying in part (333) Motion to Amend/Correct ; denying (341) Motion for Leave to File Document in case 1:11-md-02262-NRB. For the reasons stated above, the exchange-based plaintiffs' motion for interlocutory appeal is denied; the OTC, bondholder, and exchange-based plaintiffs' motions to add allegations w ith respect to antitrust are denied; the exchange-based plaintiffs' motion to add allegations with respect to trader-based manipulation is denied; BT-MU, Credit Suisse, and Norinchukin's motion for reconsideration is denied without prejudic e to a similar motion being filed by defendants that addresses the issues raised herein; and, the OTC plaintiffs motion for leave to reassert their unjust enrichment claim and to add a claim for breach of implied covenant of good faith and fair deali ng is granted. By September 10, 2013, the OTC plaintiffs and the exchange-based plaintiffs shall each file a second amended complaint that conforms with the rulings herein. If defendants believe that the new complaints are inconsistent with our ruli ngs, they shall inform us by September 20, 2013. Further, if defendants wish to file a motion for reconsideration on grounds similar to those asserted in BT-MUs, Credit Suisse's, and Norinchukin's motion and which addresses the issues we ha ve raised, they must file such a motion by September 20, 2013. Finally, if defendants intend to move for reconsideration of the March 29 Order on statute of limitations grounds or to make a renewed motion to dismiss with regard to "Period 2" ; claims, they must seek leave to file such a motion by September 20, 2013. This Memorandum and Order resolves docket entry nos. 296, 316, 327, 330, 333, and 341. (Signed by Judge Naomi Reice Buchwald on 8/23/2013) Filed In Associated Cases: 1:11-md-02262-NRB et al.(ft)

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

MEMORANDUM AND ORDER
11 MD 2262 (NRB)

THIS DOCUMENT RELATES TO: All Cases
----------------------------------------X
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE
I. Introduction
On

March

29,

2013,

we

issued

a

Memorandum

and

Order

granting in part and denying in part defendants’ motions to
dismiss plaintiffs’ complaints (the “March 29 Order”).

In re

LIBOR-Based Fin. Instruments Antitrust Litig. (Mar. 29 Order),
No. 11 MD 2262 (NRB), 2013 WL 1285338 (S.D.N.Y. Mar. 29, 2013).
Specifically, we dismissed plaintiffs’ antitrust and RICO claims
in

full;

we

dismissed

plaintiffs’

commodities

manipulation

claims to the extent they were based on contracts entered into
between

August

2007

and

May

29,

2008;

and,

we

allowed

plaintiffs’ commodities manipulation claims to the extent they
were based on contracts entered into between May 30, 2008, and
May 2010.1

1

Finally, we dismissed with prejudice the exchange-

In ruling on plaintiffs’ commodities manipulation claims, we trifurcated the
Class Period (as defined in the plaintiffs’ complaints then before us) into
three periods: August 2007 through May 29, 2008 (“Period 1”), May 30, 2008,
through April 14, 2009 (“Period 2”), and April 15, 2009, through May 2010

2
based

plaintiffs’

declined

to

state-law

exercise

claim

for

supplemental

unjust

enrichment

jurisdiction

over

and
the

remaining state-law claims.
Since the issuance of the March 29 Order, the parties have
filed a number of motions.
have

moved

for

First, the exchange-based plaintiffs

certification

of

the

March

29

Order

for

interlocutory appeal on the question of whether LIBOR is the
commodity underlying Eurodollar futures contracts (“plaintiffs’
motion for interlocutory appeal”).

Second, three defendants,

Bank

(“BT-MU”),

of

Tokyo-Mitsubishi

UFJ,

Ltd.

Credit

Suisse

Group AG (“Credit Suisse”), and Norinchukin Bank (“Norinchukin”)
have moved for reconsideration of that portion of our Memorandum
and Order denying their motion to dismiss the exchange-based
plaintiff’s commodity manipulation claims (“defendants’ motion
for

reconsideration”).

Third,

the

over-the-counter

(“OTC”),

bondholder, and exchange-based plaintiffs have each moved for
leave to file a second amended complaint to add allegations in
response to our ruling that plaintiffs had not plausibly alleged
antitrust injury (“plaintiffs’ motion to amend their antitrust

(“Period 3”). Mar. 29 Order, 2013 WL 1285338, at *34-*36. We found that the
Commodity Exchange Act (“CEA”)’s statute of limitations barred plaintiffs’
claims to the extent they were based on contracts entered into during Period
1, but did not bar plaintiffs’ claims based on contracts entered into during
Period 3.
Id.
With regard to claims based on contracts purchased during
Period 2, we declined to dismiss plaintiffs’ claims because we “[were] not in
a position to address” the issues bearing on whether those claims were
timely. Id. at *35.

3
claims”).2

Finally, the exchange-based plaintiffs have moved for

leave to file a second amended complaint to add allegations
relating to their commodity manipulation claims (“plaintiffs’
motion to amend their commodities manipulation claims”).
For

the

reasons

stated

below,

the

exchange-based

plaintiffs’ motion for interlocutory appeal is denied; the OTC,
bondholder,

and

exchange-based

plaintiffs’

motions

to

add

allegations with respect to antitrust are denied; the exchangebased

plaintiffs’

motion

to

add

allegations

with

respect

to

trader-based manipulation is denied; BT-MU, Credit Suisse, and
Norinchukin’s

motion

for

reconsideration

is

denied

without

prejudice to a similar motion being filed by defendants that
addresses the issues raised herein; and, the OTC plaintiffs’
motion for leave to reassert their unjust enrichment claim and
to add a claim for breach of the implied covenant of good faith
and fair dealing is granted.
Because the background of this case has been thoroughly set
out in the March 29 Order, we will proceed directly to our
consideration of the pending motions.
II. Discussion

2

The motion to amend filed by the OTC plaintiffs also seeks leave (1) to add
an allegation that we have jurisdiction under the Class Action Fairness Act
(“CAFA”) over the OTC plaintiffs’ state-law claims, (2) to reassert the
previously pleaded claim for unjust enrichment, which we dismissed without
prejudice due to lack of subject matter jurisdiction, and (3) to advance a
new claim for breach of contract.

4
A. Plaintiffs’ Motion for Interlocutory Appeal
Plaintiffs have moved for certification of the March 29
Order

for

“Whether

interlocutory

LIBOR

is

the

appeal
‘commodity

on

the

following

underlying’

the

question:
Eurodollar

futures contract within the meaning of Section 22(a)(1)(D) of
the Commodity Exchange Act (‘CEA’).”

Letter from Christopher

Lovell

Court

and

David

E.

Kovel

to

the

(Apr.

22,

2013)

[hereinafter Pls.’ Letter Mot. for Interlocutory Appeal].3

Under

28 U.S.C. § 1292:
When a district judge, in making in a civil action an
order not otherwise appealable under this section,
shall be of the opinion that such order involves a
controlling question of law as to which there is
substantial ground for difference of opinion and that
an immediate appeal from the order may materially
advance the ultimate termination of the litigation, he
shall so state in writing in such order. The Court of
Appeals which would have jurisdiction of an appeal of
such action may thereupon, in its discretion, permit
an appeal to be taken from such order, if application
is made to it within ten days after the entry of the
order[.]

3

In a Memorandum filed on May 3, 2013, we noted that we had received a letter
from the exchange-based plaintiffs seeking leave to move for certification of
our Memorandum and Order of March 29 for interlocutory appeal, as well as a
letter from defendants in opposition.
In re LIBOR-Based Fin. Instruments
Antitrust Litig., No. 11 MD 2262 (NRB), 2013 WL 1947367, at *2 (S.D.N.Y. May
3, 2013).
We further observed that, “[b]ased on the submissions to date,
this Court could not enter such a certification.” Id. Nonetheless, “to give
exchange-based plaintiffs a full opportunity to support their position,” we
permitted plaintiffs to submit a reply submission within two weeks, noting
that we would treat plaintiffs’ original letter as a letter motion.
Plaintiffs submitted their reply on May 20.

5
28 U.S.C. § 1292(b).4

As the Second Circuit has held: “It is a

basic tenet of federal law to delay appellate review until a
final judgment has been entered.

Section 1292(b)'s legislative

history reveals that . . . [this law] is a rare exception to the
final judgment rule that generally prohibits piecemeal appeals.”
Koehler v. Bank of Bermuda Ltd., 101 F.3d 863, 865 (2d Cir.
1996)

(citation

omitted).

Indeed,

“only

exceptional

circumstances [will] justify a departure from the basic policy
of postponing appellate review until after the entry of a final
judgment,” Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co.
Americas, 426 F. Supp. 2d 125, 127 (S.D.N.Y. 2005) (alteration
in original) (quoting Klinghoffer v. S.N.C. Achille Lauro, 921
F.2d 21, 25 (2d Cir. 1990)) (internal quotation marks omitted),
and

district

courts

must

“exercise

great

care

in

making

a

§ 1292(b) certification,” id. (quoting Westwood Pharm., Inc. v.
Nat’l Fuel Gas Distrib. Corp., 964 F.2d 85, 89 (2d Cir. 1992)).
Here, interlocutory appeal is not warranted because there
is not “substantial ground for difference of opinion” regarding
whether

LIBOR

contracts.
futures

is

the

commodity

underlying

Eurodollar

futures

As we explained in the March 29 Order, a Eurodollar

contract

is

a

futures

contract

whose

“underlying

instrument” is a “Eurodollar Time Deposit having a principal

4

Although section 1292 also authorizes appeals of interlocutory orders in
several other situations, none of those situations is present here.

6
value

of

Group,

USD

$1,000,000

Eurodollar

with

a

three-month

Futures:

maturity.”

Contract

CME

Specifications,

http://www.cmegroup.com/trading/interest-rates/stir/eurodollar_
contract_specifications.html
“Eurodollars

are

outside

United

the

U.S.

(last

dollars

States.”

visited

deposited
CME

August
in

Group,

23,

2013).

commercial

Eurodollar

banks

Futures,

http://www.cmegroup.com/trading/interest-rates/files/IR148_
Eurodollar_Futures_Fact_Card.pdf.

At settlement, the price of a

Eurodollar futures contract “is equal to 100 minus the threemonth Eurodollar interbank time deposit rate,” which rate is
defined as the LIBOR fix on the contract’s last trading day.
CME

Group,

Eurodollar

Futures

Final

Settlement

Procedure,

http://www.cmegroup.com/trading/interest-rates/files/finalsettlement-procedure-eurodollar-futures.pdf.

Prior

to

settlement, “the price of a 3-month Eurodollar futures contract
is

an

Dollar

indication
LIBOR

on

of

the

[that]

market’s

date.”

prediction

Settlement

of

the

3-month

Agreement

Between

Dep’t of Justice, Criminal Div., and Barclays (June 26, 2012),
Appendix A, ¶ 9, Ex. B, Porpora Decl.
Plaintiffs

argue

that

LIBOR

is

the

commodity

underlying

Eurodollar futures contracts for purposes of the CEA.

But this

position

a

is

simply

implausible.

For

one,

LIBOR

is

price

index; it is not a “commodity,” which the CEA defines to include
“all services, rights, and interests . . . in which contracts

7
for future delivery are presently or in the future dealt in.”
U.S.C. § 1a(9).

7

Moreover, to call LIBOR a commodity, one would

need to be able to articulate a price of LIBOR independent from
LIBOR itself.

Plaintiffs have not plausibly done so, and we

cannot imagine how they could.
As we reasoned in the March 29 Order, “[t]he only plausible
way to characterize the components of a Eurodollar contract is
that the underlying commodity is a USD 1,000,000 deposit in a
foreign commercial bank with a three-month maturity, and the
price of the contract is settled or traded at a value based on
LIBOR.”5
prices
copper

Mar. 29 Order, 2013 WL 1285338, at *43.
of

futures

track

the

contracts
prices

based,
of

for

their

example,

Just as the
on

respective

gold

or

underlying

commodities, see Loeb Indus., Inc. v. Sumitomo Corp., 306 F.3d
469, 488 (7th Cir. 2002); Sanner v. Bd. of Trade of City of
Chicago, 62 F.3d 918, 929 (7th Cir. 1995), so the prices of
Eurodollar

futures

contracts

track

(generally)

the

prices

three-month U.S. dollar time deposits in foreign banks.

of

In the

case of futures based on physical commodities, the correlation
of futures contract price with underlying commodity price occurs

5

Given that the commodity underlying Eurodollar futures contracts is a USD
1,000,000 deposit in a foreign commercial bank with a three-month maturity,
the price of that commodity would be the interest rate charged for the use of
such a time deposit.
LIBOR, of course, does not correspond to any actual
interest rate charged for the use of U.S. dollars, but rather is an index
based on the LIBOR panel banks’ estimates of the rate at which they would be
able to borrow funds.

8
by virtue of the natural operation of the market.
of

Eurodollar

futures,

the

correlation

occurs

In the case
because

the

futures price directly incorporates LIBOR, which is an index
intended to represent the average price paid by banks for threemonth U.S. dollar time deposits.

If, as plaintiffs allege,

defendants submitted false LIBOR quotes to the BBA, it would be
inaccurate to say that they manipulated the commodity underlying
Eurodollar futures contracts or the price of that commodity,
thereby affecting Eurodollar futures prices indirectly.

Rather,

the best characterization of what defendants allegedly did would
be

that

they

affected

Eurodollar

futures

prices

directly

by

manipulating the index that was directly incorporated into the
formula for those prices.
Contrary to plaintiffs’ argument, see Pls.’ Letter Mot. for
Interlocutory Appeal 2, the fact that defendants have described
Eurodollar futures contracts as “bets on LIBOR” does not suggest
that LIBOR is the commodity underlying those contracts.
futures

contract

is

a

bet.

Strictly

speaking,

Every

however,

a

futures contract is not a bet on the underlying commodity itself
(whatever that might mean).
on

which

direction

commodity will move.

the

Rather, a futures contract is a bet
average

price

for

the

underlying

So also with Eurodollar futures, which are

bets on which direction the average interest rate for threemonth U.S. dollar time deposits in foreign banks, represented by

9
LIBOR, will move.

In short, although it is undoubtedly correct

to say that Eurodollar futures contracts are bets on LIBOR, to
say this is not to embrace plaintiffs’ assertion that LIBOR is a
commodity, but rather to acknowledge the obvious fact that LIBOR
is a price index.
Plaintiffs

also

argue

that,

because

Eurodollar

futures

contracts trade and settle based on LIBOR and do not involve any
actual delivery of three-month U.S. dollar time deposits, those
contracts can be manipulated only by manipulating LIBOR, not by
manipulating

the

According

to

deposits

that

time

deposit

plaintiffs,
are

market.

“[t]he

never

amounts

delivered

Id.

See
of

have

at

phantom
no

2-3.
dollar

significance

whatsoever for purposes of manipulation of Eurodollar futures
prices (except as to supply a multiplication unit by which to
measure the degree of loss from such manipulation of LIBOR).”
Pls.’ Reply Mem. of Law in Supp. of Mot. to Certify the Mar. 29,
2013

Order

for

Interlocutory

Appeal

Pursuant

to

28

U.S.C.

§ 1292(b), at 8 [hereinafter Pls.’ Interlocutory Appeal Reply].
In light of this, plaintiffs contend that the CEA’s purposes of
deterring and remedying manipulation of the commodities futures
markets6 support a finding that LIBOR is the commodity underlying
Eurodollar futures contracts.

6

Id.

Further, plaintiffs argue that Congress’s specific purpose in adding a cause
of action based on manipulation of the price of the commodity underlying
futures contracts was to “expand[] the prevention of manipulation and the

10
Although we appreciate the important functions served by
the CEA, we do not agree with plaintiffs that the only way to
manipulate Eurodollar futures is to manipulate LIBOR directly.
When properly calculated, LIBOR reflects the average interest
rate for three-month U.S. dollar loans in the London interbank
lending market.

By manipulating this market, which is a subset

of the broader market for three-month U.S. dollar time deposits
in

foreign

banks,

an

entity

would

cause

LIBOR,

Eurodollar futures prices, to be artificial.

and

thereby

Thus, one could

plausibly manipulate the price of Eurodollar futures contracts
by manipulating the price of foreign three-month U.S. dollar
time deposits; one need not manipulate LIBOR directly.
Finally, not only is plaintiffs’ position implausible, but
there is no split of authority on this issue which would counsel
in favor of certifying our decision for interlocutory appeal.
See Consub Del. LLC v. Schahin Engenharia Limitada, 476 F. Supp.
2d

305,

309 (S.D.N.Y.

2007)

(“The

requirement

that

such

a

substantial ground [for a difference of opinion] exist may be
met when ‘(1) there is conflicting authority on the issue, or
(2) the issue is particularly difficult and of first impression
for the Second Circuit.” (quoting In re Lloyd's Am. Trust Funds
Litig., No. 96 Civ. 1262, 1997 WL 458739, at *5 (S.D.N.Y. Aug.

protection of the integrity of futures contract prices.”
Appeal Reply 8.

Pls.’ Interlocutory

11
12, 1997)).
plaintiffs’

The only authority that even arguably supports
claim

that

LIBOR

is

the

commodity

underlying

Eurodollar futures contracts consists of a few stray clauses in
the Barclays CFTC settlement order stating that LIBOR is “a
commodity

in

interstate

commerce”

for

purposes

of

sections

See CFTC Barclays Settlement Order

9(a)(2) and 6(c) of the CEA.

(June 27, 2012), at 4, 25-26, Ex. A, Porpora Decl.; see also
Pls.’

Interlocutory

Appeal

Reply

5-6.

However,

these

stray

references do not convince us that there is a substantial ground
for difference of opinion.
First,

even

assuming

that

LIBOR

is

“a

commodity

in

interstate commerce” for purposes of sections 9(a)(2) and 6(c)
of the CEA, it does not necessarily follow that LIBOR is the
commodity underlying Eurodollar futures contracts for purposes
of section 22(a).

Indeed, section 22(a), the provision of the

CEA which establishes a private right of action for any person
“who

purchased

or

sold

a

[futures

contract]

or

swap

if

the

violation constitutes . . . (ii) a manipulation of the price of
any

such

contract

or

swap

or

the

price

of

the

commodity

underlying such contract or swap,” 7 U.S.C. § 25(a)(1)(D), is
not even referenced in the CFTC settlement order at issue.
Moreover,

to

whatever

extent

the

CFTC’s

“commodity

in

interstate commerce” language is in tension with our finding
that LIBOR is not the commodity underlying Eurodollar futures

12
contracts, such tension is not substantial enough to warrant
interlocutory appeal.

Although courts generally “defer to an

agency's reasonable interpretation of a statute it is charged
with administering,” Cuomo v. Clearing House Ass’n, L.L.C., 557
U.S. 519, 525 (2009), such deference is not appropriate when the
court is “not reviewing an agency rulemaking or adjudication,
but only a settlement agreement,” Se. Fed. Power Customers, Inc.
v. Geren, 514 F.3d 1316, 1327 (D.C. Cir. 2008) (Silberman, J.,
concurring).

This is especially so when “the agency itself
Id. (alteration in

[was] an interested party to the agreement.”

original) (quoting Nat'l Fuel Gas Supply Corp. v. FERC, 811 F.2d
1563, 1571 (D.C. Cir. 1987)).

Here, although we would normally

afford deference to the CFTC’s interpretation of the CEA, see
Damato v. Hermanson, 153 F.3d 464, 472 (7th Cir. 1998), we need
not defer to statements made in the Barclays settlement order.
See

Sec.

Inc., 234

Investor
B.R.

293,

Protection

Corp.

336 (Bkrtcy.

v.

S.D.N.Y.

Stratton
1999)

Oakmont,

(“The

Second

Circuit has clearly held that consent judgments . . . are not
the result of actual adjudications on the merits . . . .”); cf.
In re Platinum and Palladium Commodities Litig., 828 F. Supp. 2d
588, 594 (S.D.N.Y. 2011) (prohibiting plaintiffs from relying on
a

CFTC

order

because,
findings,

to

plead

“[a]lthough
it

the

the

nevertheless

“underlying

CFTC
was

Order
the

facts

included
product

of

liability”

certain
of

a

factual

settlement

13
between the CFTC and the Respondents, not an adjudication of the
underlying
cannot

issues

in

conclude,

commodity

in

the

based

interstate

CFTC

on

proceeding”).

the

references

commerce”

in

the

Therefore,
to

LIBOR

CFTC’s

as

we
“a

Barclays

settlement order, that a substantial ground for difference of
opinion exists that would justify interlocutory appeal.
For

the

foregoing

reasons,

plaintiffs

have

not

even

approached satisfying the requirements of 28 U.S.C. § 1292(b),
and their motion for certification of the March 29 Order for
interlocutory appeal is denied.
B. Defendants’ Motion for Reconsideration
1. Background
Defendants

BT-MU,

(collectively,

the

reconsideration

of

Credit

“moving
that

Suisse,

defendants”)

portion

of

our

and

Norinchukin

have

moved

Memorandum

and

for
Order

denying their motion to dismiss the exchange-based plaintiff’s
commodity manipulation claims, on the ground that we improperly
found that plaintiffs had adequately pleaded scienter.

In the

March 29 Order, we held that, although the scienter element of a
commodities manipulation claim “may be alleged generally,” Mar.
29 Order, 2013 WL 1285338, at *37 (quoting Fed. R. Civ. P. 9(b))
(internal quotation marks omitted), plaintiffs must still allege
facts that “give rise to a strong inference of scienter,” id.
(alteration in original) (quoting In re Amaranth Natural Gas

14
Commodities Litig., 612 F. Supp. 2d 376, 384 (S.D.N.Y. 2009))
(internal quotation marks omitted).

Plaintiffs may demonstrate

scienter by, inter alia, “alleging facts to show that defendants
had both motive and opportunity to commit fraud.”7

Id. (quoting

In re Crude Oil Commodity Litig., No. 06 Civ. 6677 (NRB), 2007
WL 1946553, at *8 (S.D.N.Y. June 28, 2007)). “Sufficient motive
allegations entail concrete benefits that could be realized by
one or more of the false statements and wrongful nondisclosures
alleged.”

Id. (quoting In re Amaranth Natural Gas Commodities

Litig., 612 F. Supp. 2d 376, 383 (S.D.N.Y. 2009)) (internal
quotation marks omitted).

In the case at bar, we found that

plaintiffs’ allegations of defendants’ motive and opportunity
were sufficient to demonstrate scienter.

Id. at *38.

Our conclusion that plaintiffs had adequately pleaded that
“defendants stood to gain concrete benefits from manipulating
the price of Eurodollar futures contracts,” id., was based on
plaintiffs’ allegation that “[d]efendants, through their brokerdealer affiliates actively traded Eurodollar futures and options
on those futures during the Class Period.”
7

Exchange-Based Pls.’

Scienter can also be pleaded “by alleging facts that constitute strong
circumstantial evidence of conscious misbehavior or recklessness.”
In re
Crude Oil Commodity Litig., No. 06 Civ. 6677 (NRB), 2007 WL 1946553, at *8
(S.D.N.Y. June 28, 2007) (quoting Lerner v. Fleet Bank, N.A., 459 F.3d 273,
290-91 (2d Cir. 2006)) (internal quotation mark omitted).
However,
plaintiffs cannot satisfy this standard.
The only alleged action of
defendants that might qualify as “conscious misbehavior or recklessness” is
their alleged submission of artificial LIBOR quotes to the BBA. However, as
discussed below, merely submitting artificial LIBOR quotes does not by itself
indicate an intent to manipulate Eurodollar futures contract prices.

15
Am.

Consol.

Class

Action

Compl.

¶

218.

Plaintiffs’

first

amended complaint proceeded to list broker-dealer affiliates of
certain of the defendants, including Credit Suisse, but not of
others, such as BT-MU or Norinchukin.

Id.

Nonetheless, we

understood

that

each

plaintiffs

to

be

alleging

defendant,

through its broker-dealer affiliate, “actively traded Eurodollar
futures and options on those futures during the Class Period.”
Id.

Whether or not we were correct in our interpretation of the

exchange-based

plaintiffs’

first

amended

complaint,

the

exchange-based plaintiffs have since moved for leave to file a
second amended complaint that would add, inter alia, explicit
allegations that Credit Suisse, BT-MU, and Norinchukin, or their
respective affiliates, each held or traded Eurodollar futures
contracts during the Class Period.

See Exchange-Based Pls.’

Second Am. Consol. Class Action Compl. ¶¶ 459, 467, 479, Ex. A,
Revised Kovel Decl. [hereinafter Exchange-Based Pls.’ PSAC].

As

discussed below, although we will not permit the exchange-based
plaintiffs to add all of their proposed new allegations, we do
not

object

Therefore,

to
in

the

paragraphs

addressing

the

immediately

present

at

motion,

issue
we

here.

understand

plaintiffs to have explicitly alleged that each of the moving
defendants held or traded Eurodollar futures contracts during
the Class Period.

16
Defendants maintain that such allegations are insufficient
to plead scienter.

According to defendants, “plaintiffs do not

allege any facts to suggest that each (or any) Movant ‘took
specific actions which exhibited an actual intent’ to manipulate
the

price

of

Eurodollar

futures

contracts

or

made

‘specific

communications . . . about any specific plan to cause artificial
prices’ in that market.”
for

Reconsideration

(quoting

In

re

or

Defs.’ Mem. of Law in Supp. of Mot.
Reargument

Commodity

3

Exchange,

(alteration
Inc.,

in

Silver

original)

Futures

and

Options Trading Litig., No. 11 Md. 2213 (RPP), 2012 WL 6700236,
at

*10-*11

(S.D.N.Y.

Dec.

21,

2012)).

Further,

defendants

argue, “plaintiffs do not allege whether each Movant was long or
short –- a fact that is essential to showing that each Movant
would

have

gained

‘concrete

benefits’

from

manipulation of the price of those contracts.”

the
Id.

alleged
Finally,

although plaintiffs have alleged that defendants held or traded
Eurodollar contracts, defendants contend that “[t]he desire to
profit from trading such contracts is precisely the kind of
general motive possessed by most corporate defendants that is
insufficient to adequately allege scienter.”

Id. at 4.

Although we have considered defendants’ motion carefully,
we are not at present prepared to resolve it because several
important issues have not been sufficiently briefed.

Thus, we

deny defendants’ motion for reconsideration without prejudice to

17
a

similar

motion

being

filed,

by

September

20,

2013,

which

addresses the following concerns.
2. Relevant Authority
In general, courts have held that, to plead scienter, it is
insufficient to allege merely “a generalized motive” that could
be “imputed to any publicly-owned, for-profit endeavor.”
v.

Gen.

Elec.

Co., 101

F.3d

263,

268

(2d

Cir.

Chill

1996).

For

instance, “[t]he motive to maintain the appearance of corporate
profitability,

or

of

the

success

of

an

investment,

will

naturally involve benefit to a corporation, but does not ‘entail
concrete benefits.’”

Id.

Also insufficient are a corporation’s

“desire[ for] its stock to be priced highly by the market,” id.
at 268 n.5, or its “desire to maintain the company's credit
rating,” id.

at 268 (citing San Leandro Emergency Med. Grp.

Profit Sharing Plan v. Philip Morris Cos., Inc.
813-14 (2d Cir. 1996)).

75 F.3d 801,

Further, allegations that individual

defendants “were motivated by a desire to maintain or increase
executive
acquisition

compensation”
proposal

plead motive.

or

[for

to
their

“achieve
company]”

the

most

are

lucrative

inadequate

to

Kalnit v. Eichler, 264 F.3d 131, 140-41 (2d Cir.

2001).
With regard to plaintiffs’ allegations that defendants were
motivated

to

manipulate

Eurodollar

futures

contract

prices

because they held positions in that market, the authority cited

18
by

defendants

raises

a

serious

question

plaintiffs’ allegations are sufficient.8

regarding

whether

Specifically, in In re

Crude Oil Commodity Litigation, No. 06 Civ. 6677 (NRB), 2007 WL
1946553 (S.D.N.Y. June 28, 2007), we held that plaintiffs had
failed to plead motive to manipulate crude oil prices where they
had alleged that “defendants had a large presence in the crude
oil market [and] the NYMEX crude oil futures and options market,
and also engaged in the purchase and sale of OTC contracts in
crude oil.”

Id. at *8.

Similarly, in In re Commodity Exchange,

Inc., Silver Futures and Options Trading Litig., No. 11 Md. 2213
(RPP), 2012 WL 6700236 (S.D.N.Y. Dec. 21, 2012), the Court found
that

plaintiffs

manipulate
8

silver

had

failed

futures

to

plead

contract

defendant’s

prices

by

motive

alleging

to

that

In their opposition, plaintiffs argue that “[the Court] could have found and
held that the allegations of hundreds of manipulative acts by each Movant,
accompanied by competent allegations of that Movant’s knowledge of thousands
of manipulative acts by other Defendants and the circumstance that Eurodollar
futures prices were the inverse of LIBOR, sufficed to give rise to a
reasonable inference of manipulative intent.” Pls.’ Mem. of Law in Opp’n to
Defs.’ Mot. for Reconsideration or Reargument 6 (citations omitted).
We
neither so found nor so held. We have never, and do not, accept the notion
that intentionally submitting false LIBOR quotes is tantamount to intending
to manipulate Eurodollar futures contracts.
Indeed, plaintiffs themselves
have alleged that one of the primary goals of each defendant in submitting
false LIBOR quotes was to protect the market’s perception of that defendant’s
financial health. Plaintiffs have also alleged that a separate goal was to
profit on LIBOR-based trading, which may or may not involve Eurodollar
futures contracts.
In short, even accepting plaintiffs’ allegations that
each defendant submitted false LIBOR quotes over a long period of time and
was aware that the other defendants were doing the same, those allegations by
themselves do not make plausible that defendants intended to manipulate
Eurodollar futures contracts.
Of course, although defendants were likely
aware that submitting artificial LIBOR quotes would affect the Eurodollar
market, “[m]ere knowledge that certain actions might have an impact on the
futures market is not sufficient to state a private claim under the CEA.” In
re Rough Rice Commodity Litig., No. 11 C 618, 2012 WL 473091, at *7 (N.D.
Ill. Feb. 9, 2012) (citing Hershey v. Energy Transfer Partners, L.P., 610
F.3d 239, 249 (5th Cir. 2010)).

19
defendant was “a large holder of COMEX silver futures contracts,
short puts, and options,” had engaged in allegedly suspicious
trading activity, and made allegedly “‘unusual’ deliveries of
silver between March 2008 and October 2010.”

Id. at *10-*12.9

To the extent that these cases are analogous to the facts here,
they give rise to serious questions regarding whether plaintiffs
have adequately pleaded motive.
3. What Plaintiffs Have, and Could Have, Alleged
Complicating the analysis is the fact that, as we were led
to understand at oral argument,10 plaintiffs are operating with
significantly
informed
futures

us,

limited
the

information.

details

contracts,

of

including

As

particular
the

plaintiffs’
trades

identity

parties, are not publicly available.

of

in

the

Tr. 20-23.11

counsel

Eurodollar
transacting

Specifically,

according to plaintiffs’ counsel, brokers have a fiduciary duty
not

9

to

disclose

The Court
“motive and
evidence of
WL 1946553,

the

details

of

their

clients’

trades,

and,

in Silver Futures did not specify whether it was applying the
opportunity” standard for scienter or the “strong circumstantial
conscious misbehavior or recklessness” standard. Crude Oil, 2007
at *8; see also Silver Futures, 2012 WL 6700236, at *10-*12.

10

Significantly, it was not until oral argument that the issues addressed in
this section, involving what information plaintiffs could reasonably be
expected to know about defendants’ Eurodollar futures contract positions,
received any meaningful discussion. Given that we anticipate that this issue
will inform whether plaintiffs have adequately pleaded scienter, the minimal
and belated attention devoted to the issue contributes to our disinclination
to rule on whether reconsideration is warranted until we have received
further briefing.

11

Citations to “Tr.” refer to the transcript of the oral argument held on
August 8, 2013.

20
although

the

CFTC

publishes

aggregated

trading

data,

it

prohibited from publicly identifying the parties to trades.

is
Id.

Thus, it appears that we cannot reasonably expect plaintiffs,
prior to discovery, to have identified the particular contracts
and transactions on which the moving defendants allegedly sought
to profit.

Of course, it is well established that pleading

requirements

are

relaxed

where

proof

of

a

claim

facts solely within the defendant's knowledge.”

“involve[s]

ATSI Commc’ns,

Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 102 (2d Cir. 2007); see
also DGM Investments, Inc. v. N.Y. Futures Exchange, Inc., 265
F. Supp. 2d 254, 264 (S.D.N.Y. 2003) (“Dismissal on the ground
that facts within Defendants' knowledge have not yet been proven
in the pleading stage is ‘particularly inappropriate.’” (quoting
Sam Wong & Son, Inc. v. New York Mercantile Exchange, 735 F.2d
653, 678 (2d Cir. 1984)).
Indeed, there is yet another layer of uncertainty impeding
plaintiffs’
proving

ability

motive

is

to

plead

with

to

show

that

specificity.
a

One

defendant

way

of

executed

a

transaction that yielded a concrete benefit to it as the result
of the defendant’s manipulative conduct.
have

shown

that

a

given

defendant

Here, plaintiffs might

exited

a

position

in

a

Eurodollar futures contract such that the defendant profited as
a result of the defendant’s manipulation.

However, pleading

with such specificity appears to be impossible at this stage.

21
For

one,

as

discussed

above,

plaintiffs

do

not

know

which

positions defendants held or when they exited those positions.
Further, plaintiffs are not in a position to demonstrate that
the degree of LIBOR artificiality changed over the time that
defendants held their positions in such a way that defendants
profited by exiting when they did.
To elaborate on the latter point: In their Proposed Second
Amended

Complaint

(“PSAC”),

plaintiffs

allege

that

LIBOR

was

artificial to some degree for all or most of the period from
August 2007 through May 2010.12

Therefore, the mere fact that a

defendant exited a position at a time when LIBOR was artificial
does

not

establish

manipulation.

that

Rather,

the

the

defendant

defendant

benefited

would

profit

from

only

if

LIBOR’s degree of artificiality changed over the time that the
defendant
defendant.

held

its

position

in

a

manner

that

benefited

the

Regardless of whether plaintiffs will ever be able

to show this, we cannot discern how they could allege it with
specificity now.
“[t]he

benchmarks

probative

12

of

when

As we reasoned in the March 29 Order, because
referenced

by

plaintiffs,

LIBOR

at

an

was

though

artificial

generally

level,

do

not

Because alleged trader-based manipulation is the basis for plaintiffs’ new
allegation that the Class Period begins in January 2005 rather than August
2007, and because, for the reasons stated below, we deny the exchange-based
plaintiffs leave to add allegations based on such manipulation, we will
assume for purposes of the present discussion that the Class Period begins in
August 2007.

22
indicate precisely at which level LIBOR should have been fixed
on any given day,” plaintiffs “cannot reasonably be expected to
know the spread between LIBOR's ‘true’ value and its actual
level on any given day, let alone how this spread changed over
time.”

Mar. 29 Order, 2013 WL 1285338, at *42.

Therefore,

although it is possible that, after discovery, plaintiffs will
be able to point to particular trades by defendants to show that
the

defendants

alleged

stood

manipulative

to

reap

a

conduct,

concrete

we

benefit

question

from

whether

we

their
can

reasonably expect plaintiffs to have alleged that at this stage.
4. Important Issues that Have Not Been Adequately
Briefed
In light of the above discussion, there are three issues
that concern us.
information

can

First, putting aside considerations of what
be

reasonably

attributed

plaintiffs adequately alleged scienter?13
question

13

is

answered

in

the

to

plaintiffs,

have

Second, if the first

negative,

do

plaintiffs’

As we see it, this question involves at least two subparts.
First, as
discussed above, there is an issue regarding whether plaintiffs’ allegations
that defendants held positions in the Eurodollar futures market is sufficient
to plead scienter. Second, in light of the fact that the various groups of
plaintiffs have alleged several motives of defendants to manipulate LIBOR
other than profiting from Eurodollar futures contracts, namely portraying
themselves as economically healthier than they actually were and profiting on
particular LIBOR-based financial instruments other than Eurodollar futures,
what burden do plaintiffs bear in pleading that defendants’ actions were
actually motivated, at least in part, by their desire to profit on Eurodollar
futures?
In other words, assuming we find at least one of the nonEurodollar-based motives to manipulate LIBOR plausible, what showing must
plaintiffs make to demonstrate that defendants’ LIBOR submissions were, in
fact, made with the specific intent to manipulate the price of Eurodollar
futures?

23
informational handicaps change the result?

And, third, if both

of the previous questions are answered in the negative, can the
analysis reasonably be confined to the moving defendants, or is
it equally applicable to all defendants?14

Because these issues

have

think

not

been

adequately

briefed,

we

it

would

be

imprudent, especially in a case of this magnitude, to resolve
the present motion without further briefing.
Accordingly,

defendants’

motion

for

reconsideration

is

denied without prejudice to defendants’ filing, by September 20,
2013, of a similar motion that addresses the concerns raised
herein.
C. Exchange-Based Plaintiffs’ Motion to Amend
Their Commodities Manipulation Claims
1. Background
In

the

March

29

Order,

we

granted

the

exchange-based

plaintiffs leave to move to file a second amended complaint to
include

allegations

manipulation

at

manipulation

wherein

based

issue

in

on
the

defendants

the

day-to-day,

Barclays

trading-based

settlement,

allegedly

submitted

that

is,

specific

LIBOR quotes in order to benefit particular positions that they

14

At oral argument, defense counsel sought to distinguish the moving
defendants from the non-moving defendants by arguing that plaintiffs’
allegations of artificial LIBOR submissions are especially weak with respect
to the movants and, indeed, that the data cited by plaintiffs actually
exculpate them. See Tr. 10-15. However, although these arguments might be
relevant to whether artificial Eurodollar futures contract prices existed and
whether the moving defendants caused those artificial prices, it is unclear
how the arguments are relevant to scienter.

24
held in the Eurodollar futures market.15
1285338, at *36.

Mar. 29 Order, 2013 WL

On May 23, plaintiffs filed such a motion, as

well as a proposed second amended complaint.
opposed

plaintiffs’

motion

on

the

grounds

Defendants have

that

the

proposed

amendments are futile, as they are time-barred and fail to state
a claim under the CEA.

Defs.’ Mem. of Law in Opp’n to Exchange-

Based Pls.’ Mot. for Leave to Amend as to CEA Claims and File
the Second Am. Consol. Class Action Compl. [hereinafter Defs.’
Opp’n

to

Mot.

to

Amend

CEA

Claims.].

Among

defendants’

arguments is that plaintiffs have failed to plead that they
suffered

actual

damages.

Id.

at

24-25.

We

agree

that

plaintiffs have not adequately alleged that they suffered an
injury as a result of defendants’ alleged trader-based conduct,
and thus plaintiffs lack standing under the CEA to pursue such
claims.16

This

ground

being

sufficient

to

deny

plaintiffs’

motion to amend, we do not reach defendants’ other arguments.
2. Legal Standard
Under Rule 15(a) of the Federal Rules of Civil Procedure, a
second amended complaint may be filed “only with the opposing
party's written consent or the court's leave.”

Fed. R. Civ. P.

15

We required that “any such motion address[] the concerns raised [in the
March 29 Order] and [be] accompanied by a proposed second amended complaint.”
Mar. 29 Order, 2013 WL 1285338, at *36.

16

As discussed below, although loss causation is not an element of a
commodities manipulation claim, private plaintiffs must still plead actual
damages in order to have standing to bring suit under the CEA.

25
15(a)(2).

Although “[t]he court should freely give leave when

justice so requires,” id., we “ha[ve] discretion to deny leave
for good reason, including futility, bad faith, undue delay, or
Holmes v. Grubman, 568

undue prejudice to the opposing party.”
F.3d

329,

Bradstreet

334 (2d

Cir.

Corp., 482

2009)

F.3d

(quoting

184,

McCarthy

200 (2d

Cir.

v.

Dun

2007)).

&
“An

amendment to a pleading is futile if the proposed claim could
not withstand a motion to dismiss pursuant to [Rule] 12(b)(6).”
Lucente v. Int’l Business Machs. Corp., 310 F.3d 243, 258 (2d
Cir.

2002)

(citing

Dougherty

v.

N.

Hempstead

Bd.

of

Zoning

Appeals, 282 F.3d 83, 88 (2d Cir. 2002)).
Under Federal Rule of Civil Procedure 12(b)(6), a complaint
may be dismissed for “failure to state a claim upon which relief
can be granted.”

Fed. R. Civ. P. 12(b)(6).

To avoid dismissal,

a complaint must allege “enough facts to state a claim to relief
that is plausible on its face.”
U.S. 544, 570 (2007).
claims

across

the

Bell Atl. Corp. v. Twombly, 550

Where plaintiffs have not “nudged their

line

from

complaint must be dismissed.”

conceivable
Id.

to

plausible,

their

In applying this standard, a

court must accept as true all well-pleaded factual allegations
and

must

draw

plaintiff.

all

reasonable

inferences

in

favor

of

the

See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per

curiam); Kassner v. 2nd Ave. Delicatessen, Inc., 496 F.3d 229,
237

(2d

Cir.

2007).

The

Court

may

also

“properly

consider

26
‘matters of which judicial notice may be taken, or documents
either in plaintiff['s] possession or of which plaintiff[] had
knowledge and relied on in bringing suit.’”

Halebian v. Berv,

644 F.3d 122, 130 n.7 (2d Cir. 2011) (quoting Chambers v. Time
Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002)).
3. Analysis
As discussed in the March 29 Order, to avoid dismissal,
plaintiffs not only must allege the elements of a commodities
manipulation claim, but also must show that they have standing
See Mar. 29 Order, 2013 WL 1285338, at *37.

to sue.

Under

section 22(a) of the CEA, a plaintiff has standing to bring a
commodities manipulation action only if he has suffered “actual
damages” as a result of defendant’s manipulation.
§ 25(a)(1).
courts

in

7 U.S.C.

“The term ‘actual damages’ has been applied by
a

straightforward

manner

to

actual injury caused by the violation.”

require

a

showing

of

Ping He (Hai Nam) Co.

Ltd. v. NonFerrous Metals (U.S.A.) Inc., 22 F. Supp. 2d 94,
107 (S.D.N.Y.

1998),

vacated

on

other

121 (S.D.N.Y.

1999)

(ruling

that,

grounds,

“[e]ven

if

187

F.R.D.

[defendant]

violated every provision of the CEA or the CFTC rules, under the
express language of § 22, [plaintiff] is only authorized to
bring suit, and can only recover, for those violations that
caused [plaintiff] to suffer ‘actual damages’” (quoting 7 U.S.C.
§ 25(a))).

27
Here,

the

exchange-based

plaintiffs

have

not

adequately

pleaded that they suffered actual damages as a result of the
newly alleged trader-based conduct.17

In contrast to the alleged

persistent suppression of LIBOR that was the sole basis for
plaintiffs’

Amended

Consolidated

Class

Action

complaint,

the

day-to-day, trader-based LIBOR manipulation that is the basis
for

plaintiffs’

direction.

new

That

instances

of

submissions

allegations

is,

it

allegedly

were,

at

¶¶ 183-217.

consists

false

times,

times, artificially low.

was

episodic
of

LIBOR

a

and

number

varying
of

submissions,

artificially

high

in

discrete

and

and,

those

at

other

See, e.g. Exchange-Based Pls.’ PSAC

To plead actual damages based on such manipulation,

plaintiffs would need to allege that the resulting artificiality
in

LIBOR

caused

them

injury,

in

light

of

their

trading

of

Eurodollar futures contracts.
Plaintiffs have failed to meet this burden.

In the PSAC,

plaintiffs do not include any allegations that make plausible
(1) that they transacted in Eurodollar futures contracts on days
on which Eurodollar futures contract prices were artificial as a
result of trader-based manipulation of LIBOR, or (2) that their

17

We would note from the outset that plaintiffs’ allegations of trader-based
manipulation of three-month USD LIBOR do not implicate every defendant, but
rather are essentially confined to Barclays.

28
positions were such that they were injured.18

Cf. In re Energy

Transfer Partners Natural Gas Litig., No. 4:07–cv–3349, 2009 WL
2633781 (S.D.

Tex.

Aug.

26,

2009)

(requiring

plaintiffs,

in

order to allege actual damages under the CEA, to show an overlap
between the time period during which the manipulation occurred
and the period during which plaintiffs traded their contracts).
Indeed,

despite

the

fact

that

plaintiffs

indisputably

have

access to their own Eurodollar futures contract trading records,
the PSAC is devoid of any references to particular Eurodollar
contracts.19

See Tr. 38-41, 45.

Rather than plead with such

specificity, plaintiffs have simply alleged that each of the
named

plaintiffs

“traded

on-exchange

based

products

tied

to

18

Although plaintiffs’ argument that “[t]he inquiry on a CEA manipulation
claim must be on the existence of artificial prices, not whether prices were
artificially high or artificially low,” Pls.’ Reply Mem. of Law in Supp. of
Exchange-Based Pls.’ Mot. for Leave to Amend as to CEA Claims and File the
Second Am. Consol Class Action Compl. 16, is correct with regard to pleading
the elements of a commodities manipulation claim,
it is not correct with
regard to pleading CEA standing, for which actual damages are required.
Whereas a CEA claim brought by the CFTC is focused wholly on defendants’
conduct, such that the injury suffered by individual traders is irrelevant, a
CEA claim brought by private plaintiffs pursuant to section 22 is focused
both on defendants’ conduct and on whether that conduct caused plaintiffs’
injury.
As seems almost tautological, moreover, the issue of whether
plaintiffs were harmed by defendants’ alleged manipulative conduct, which
caused the price of Eurodollar futures contracts to be either artificially
high or artificially low, must turn, at least in part, on whether plaintiffs’
positions were such that plaintiffs were benefited by the manipulation or
harmed by it.
19

At oral argument, plaintiffs’ counsel stated that, while plaintiffs could
have alleged the particular Eurodollar contracts they traded, they did not do
so because they did not think it necessary. Tr. 50. We are skeptical that
plaintiffs’ motivation for failing to identify their particular Eurodollar
futures contracts was in fact so innocent. At any rate, for the reasons set
forth herein, which we note cannot come as any great surprise to plaintiffs’
counsel, we reject the notion that it is unnecessary here to plead the
particular contracts on which plaintiffs were allegedly harmed.

29
LIBOR

such

as

Eurodollar

futures”

during

the

Class

Period,

Exchange-Based Pls.’ PSAC ¶¶ 20-27, and that the members of the
proposed class “transacted in Eurodollar futures and options on
Eurodollar futures on exchanges such as the CME [during the
Class Period] and were harmed by Defendants’ manipulation of
LIBOR,” id. ¶ 502.

However, because the alleged trader-based

manipulation did not occur on every day of the Class Period, but
rather

on

only

a

subset

of

those

days

-–

a

subset

that

plaintiffs can, at least in part, identify -- and because the
alleged

manipulation

on

any

given

day

went

in

a

particular

direction –- a direction which, again, plaintiffs can, at least
in part, identify20 –- and thus would have harmed only those
entities

with

plaintiffs

certain

positions,

have

offered

are

elucidate

this

point,

the

broad

insufficient

to

allegations

allege

actual

damages.
To

persistent
pleading
theory,

suppression
sufficient,

where

we

do

theory,
with
not.

we

can

where

their
In

contrast
we

found

trader-based
evaluating

the

plaintiffs’
plaintiffs’
manipulation
persistent

suppression allegations in plaintiffs’ first amended complaint,

20

Although “plaintiffs could not have known the ‘true’ level of any LIBOR
quote[ and thus] could not have pleaded, consistent with Rule 11, precisely
which quotes were inaccurate and by how much,” Mar. 29 Order, 2013 WL
1285338, at *39, the Barclays settlements reveal, for at least some of the
days on which Barclays’ alleged trader-based manipulation occurred, in which
direction LIBOR was manipulated (and thus which positions would have been
harmed).

30
we did not require plaintiffs to allege the specific days on
which

they

traded

because

LIBOR,

and

consequently

Eurodollar

futures prices, was allegedly artificial throughout the Class
Period.

Here, by contrast, the proposed trader-based claims,

even if accepted, would entail only that LIBOR was artificial
for certain discrete days during the Class Period, and thus the
allegation that plaintiffs traded during the Class Period is
insufficient to show that plaintiffs suffered actual damages.
With regard to alleging plaintiffs’ positions, we relaxed the
requirement

in

the

persistent

suppression

context

because

plaintiffs could not be expected to know how LIBOR compared to
“true LIBOR” on any given day (as opposed to whether LIBOR was
artificial on average over a period of time).

In the trader-

based manipulation context, however, the Barclays allegations
suggest, for at least some of the days on which manipulation
occurred, in which direction LIBOR deviated from “true LIBOR.”
Thus, whereas we could not expect plaintiffs to allege how their
specific

positions

were

negatively

affected

by

persistent

suppression of LIBOR, we can expect plaintiffs to allege how
their

positions

were

negatively

affected

by

trader-based

manipulation.
Contrary to plaintiffs’ assertion, see Pls.’ CEA Reply 17,
this

analysis

does

not

involve

an

application

of

the

loss

causation principles established in Dura Pharmaceuticals, Inc.

31
v. Broudo, 544 U.S. 336 (2005).

As we explained in the March 29

Order, Dura established that “where plaintiffs’ injury results
from

defendants’

inflated

dissemination

purchase

price

of

will

false

not

information,

itself

constitute

proximately cause the relevant economic loss.’”
2013

WL

1285338,

Interpreting

at

the

*40

cases

(quoting
decided

Dura,

in

the

‘an
or

Mar. 29 Order,

544

U.S.

wake

of

at

342).

Dura,

we

concluded:
[I]f the manipulation alleged here is analogous to
isolated artificial stock purchases, we can presume
that plaintiffs suffered damages based on an inflated
purchase price [because we can presume that the
artificiality
dissipated
soon
after
plaintiffs’
purchase]. If, however, the manipulation is more akin
to disseminating inaccurate information, plaintiffs
need to show that they sold or settled their
Eurodollar contracts at a loss [because we cannot
presume that artificiality resulting from inaccurate
information will dissipate on its own].
Id.

We found that persistent suppression “is less like isolated

manipulative

activity

and

information.”

Id. at *41.

claims

on

more

based

plaintiffs

will

persistent

be

required

like

disseminating

false

To the extent that they assert
LIBOR
to

suppression,

show

that

they

therefore,
sold

their

Eurodollar contracts at a loss; at the pleading stage, we found
their allegations sufficient in light of their limited access to
information.
By

See id. at 41-42.

contrast,

the

trader-based

conduct

described

in

the

Barclays settlement documents falls squarely in the category of

32
isolated (though repeated) manipulative activity.

As such, we

can presume that the effect of the manipulation dissipated, see
id. at *40, and plaintiffs need only allege that they engaged in
a transaction at a time during which prices were artificial as a
result of defendants’ alleged trader-based manipulative conduct,
and that the artificiality was adverse to their position.

As

discussed above, however, plaintiffs have not even alleged this.
Finally, although plaintiffs asserted at oral argument that
the

trader-based

manipulation

was

sufficiently

frequent

to

render the Eurodollar futures market artificial for the duration
of

the

Class

Period,

Tr.

supported by the facts.

27-28,

46-52,

this

claim

is

not

As alleged in the PSAC: “[b]etween

January 2005 and May 2009, at least 173 requests for USD-LIBOR
submissions were made to Barclays’ Submitters.”
Pls.’ PSAC ¶ 195.

Exchange-Based

Of these 173 requests, 111 were made between

January 3, 2006, and August 6, 2007.

Id.

The United Kingdom

Financial Services Authority (“FSA”) found that, of these 111
requests, “on around 70% of those occasions, the submissions
were

consistent

Although

with

plaintiffs

the
have

traders’
not

request.”

alleged

how

Id.

¶

frequently

196.
the

remaining 62 requests affected LIBOR submissions, we can assume
the

70%

rate

here,

as

well.

Thus,

plaintiffs’

allegations

indicate the following: between January 2005 and May 2009, 121
LIBOR submissions were artificial as a result of trader-based

33
manipulation; between January 3, 2006, and August 6, 2007, 78
were; and, between August 7, 2007, and May 2009, at most 43
were.
Assuming that there are roughly 250 trading days per year,21
we

can

calculate

the

approximate

frequency

manipulation during the Class Period.

of

trader-based

Between January 2005 and

May 2009, LIBOR submissions were artificial roughly 11% of the
time; in the narrower period between January 3, 2006, and August
6, 2007, submissions were artificial roughly 20% of the time;
and, between August 7, 2007, and May 2009, LIBOR was artificial,
at most, roughly 10% of the time.

Taking these numbers at face

value, we cannot say that the alleged trader-based manipulation
was so constant that plaintiffs adequately plead actual damages
by alleging merely that they traded during the Class Period.
Moreover, there is no indication that the alleged manipulation
was evenly spaced throughout the relevant time periods; given
the

possibility

that

the

manipulation

was

concentrated

in

certain weeks or months, it is even less likely that plaintiffs’
generalized allegations demonstrate actual damages.

21

In 2013, the CME Group recognized 11 holidays.
CME Group, CME Group
Holiday Calendar, http://www.cmegroup.com/tools-information/holiday-calendar/
(last visited Aug. 23, 2013).
Assuming roughly 104 weekend days per year,
there are 250 days on which Eurodollars futures contracts could be traded on
the CME. (We recognize that “[o]n CME Group recognized holidays, open outcry
trading and CME Globex trading observe different opening and closing times,
depending on markets traded,” id., and that our calculation of 250 trading
days is a simplification. Nonetheless, it will do for present purposes.)

34
To whatever extent the foregoing analysis has failed to
discredit plaintiffs’ pleading of actual damages, a footnote in
the FSA’s report delivers the coup de grâce.

Explaining its

methodology for calculating 173 requests between January 2005
and May 2009, the FSA stated:
If more than one request was contained in the same
communication, these have been counted separately.
For example, a request for a “high 3 month and low 6
month” would be counted as two requests.
A request
for a “high 3 month for the next two days” would also
be counted as two requests.
A request for “high” or
“low” submissions which did not specify a particular
maturity would be counted as three requests (for one
month, three month and six month submissions) unless
the context of the communication indicates otherwise.
FSA Barclays Final Notice (June 27, 2012), ¶ 56(i) n.15, Ex. C,
Porpora

Decl.

In

other

words,

although

Eurodollar

futures

contract prices are based solely on 3-month U.S. dollar LIBOR,
the FSA included in its analysis requests relating to one-month
and six-month LIBOR.22

Not only does this methodology suggest

that

calculated

the

frequencies

above

might

significantly

overstate how often three-month LIBOR was artificial, but it
also introduces an indefiniteness into plaintiffs’ pleading that
precludes

their

argument

that

Eurodollar

futures

artificial for essentially all of the Class Period.

prices

were

Deprived of

this argument, plaintiffs cannot justify their failure to show
22

With regard to the 111 requests between January 3, 2006, and August 6,
2007, the FSA similarly failed to distinguish among different tenors,
referring instead simply to “requests . . . relating to US dollar LIBOR
submissions.” FSA Final Notice (June 27, 2012), ¶ 71(i).

35
that their trading in Eurodollar futures was such that they
suffered actual damages from defendants’ alleged misconduct.23
4. Conclusion
The exchange-based plaintiffs have not adequately pleaded
that

they

suffered

actual

damages

from

defendants’

alleged

trader-based manipulation of Eurodollar futures contract prices.
Therefore, plaintiffs are denied leave to amend their complaint
to add allegations of such manipulation.

Separately, it appears

that the exchange-based plaintiffs are seeking to amend their
complaint in other ways relevant to their CEA claims.

Among

these proposed amendments is their naming of Societe Generale as
a

defendant,

explicitly
traded

in

amendments

as

that

well

as

their

new

(almost)

every

defendant,

futures

contracts.

Eurodollar
do

not

appear

to

be

allegations

opposed.

or

stating

its

more

affiliate,

These

proposed

Accordingly,

the

exchange-based plaintiffs shall submit, by September 10, 2013, a
version

of

the

PSAC

that

contains

only

those

allegations

consistent with the holdings herein.
Finally, we would note that defendants advanced arguments
in opposing plaintiffs’ motion to amend that appear to be aimed

23

Obviously, we could not expect plaintiffs to connect their trading to
instances of manipulative conduct that occurred on dates that are still not
publicly available.
However, the Barclays settlement documents do identify
the dates and circumstances of a number of instances of alleged manipulative
conduct. To plead actual damages, plaintiffs would have needed to show that,
at least for some of these instances, their Eurodollar futures trading was
such that they suffered damages from defendants’ conduct.

36
at seeking reconsideration of our March 29 Order.
whereas

we

had

dismissed

only

those

Specifically,

“persistent

suppression”

claims based on contracts entered into during “Period 1,” from
August 2007 through May 29, 2008, defendants seem to be arguing
now that we should also dismiss “persistent suppression” claims
based on contracts entered into at other times.

Whether or not

this was defendants’ intention, we are not prepared to dismiss
claims

we

previously

declined

to

dismiss

based

contained in an opposition to a motion to amend.

on

arguments

If defendants

intend to seek reconsideration of our March 29 Order on statute
of limitations grounds, or intend to submit a renewed motion to
dismiss regarding “Period 2” claims, they may move for leave to
file such a motion by September 20, 2013.
D. Plaintiffs’ Motion to Amend Their
Antitrust Claims
In the March 29 Order, we dismissed plaintiffs’ antitrust
claims because plaintiffs failed to plead antitrust injury and
thus lacked standing to bring claims pursuant to the Clayton
Act.

See

response,

Mar. 29 Order, 2013 WL 1285338, at *10-*19.
the

OTC,

exchange-based,

and

bondholder

In

plaintiffs

have moved to amend their respective complaints, principally to
add allegations addressed to antitrust injury.
As

discussed

above,

although

“[t]he

court

should

freely

give leave [to amend] when justice so requires,” Fed. R. Civ. P.

37
15(a)(2), we “ha[ve] discretion to deny leave [to amend] for
good

reason,

including

futility,

bad

faith,

undue prejudice to the opposing party.”
F.3d

329,

Bradstreet

334 (2d

Cir.

Corp., 482

2009)

F.3d

delay,

or

Holmes v. Grubman, 568

(quoting

184,

undue

200 (2d

McCarthy
Cir.

v.

Dun

2007)).

&
“An

amendment to a pleading is futile if the proposed claim could
not withstand a motion to dismiss pursuant to [Rule] 12(b)(6).”
Lucente v. Int’l Business Machs. Corp., 310 F.3d 243, 258 (2d
Cir.

2002)

(citing

Dougherty

v.

N.

Hempstead

Bd.

of

Zoning

Appeals, 282 F.3d 83, 88 (2d Cir. 2002)).
For

the

two

independent

reasons

discussed

below,

plaintiffs’ motion for leave to amend is denied.
1. Given the Circumstances of this Case,
Amendment Would Not Be Proper
In light of the history and circumstances of this case,
justice does not require us to afford plaintiffs yet another
opportunity

to

amend.

Each

of

plaintiffs’

first

amended

complaints24 asserted a cause of action for violation of section
1 of the Sherman Act.
length

from

consolidation

211
of

These amended complaints, which ranged in

to
twenty

253

paragraphs,

original

resulted

complaints,

and

from
were

the
filed

following a fierce competition for appointment as class counsel.
Indeed, our decision appointing class counsel reflected that we
24

For purposes of the present analysis, we do not address the complaints
filed by the Schwab plaintiffs, who have not sought leave to replead.

38
had then been persuaded that all of the firms competing to be
class counsel “have extensive experience in complex litigation,”
“have adequate knowledge of the applicable law,” “would each
devote significant resources to prosecuting plaintiffs’ claims,”
and,

finally,

investigated
Instruments

“have

the

demonstrated

relevant

Antitrust

that

claims.”

Litig.,

No.

they

In

re

MD

2262

11

5980198, at *3 (S.D.N.Y. Nov. 29, 2011).
and

Susman

Godfrey

as

interim

have

thoroughly

LIBOR-Based

Fin.

(NRB), 2011

WL

We appointed Hausfeld

class

counsel

for

the

OTC

plaintiffs and Kirby McInerney and Lovell Stewart as interim
class counsel for the exchange-based plaintiffs, id. at *4; the
bondholder

plaintiffs,

who

filed

later,

are

Weinstein Kitchenoff & Asher and Morris & Morris.

represented

by

In short, the

allegations in the first amended complaints not only drew on the
work of twenty sets of plaintiffs and plaintiffs’ counsel, but
also

presumably

represented

the

best

efforts

of

six

highly

experienced firms to state a viable claim.
At the time that the first amended complaints were filed,
it was widely projected that damages in this case might reach
billions of dollars.
Banks

$35

Billion:

See Mark Gongloff, Libor Scandal May Cost
Study,

Huffington

Post

(July

17,

2012),

http://www.huffingtonpost.com/2012/07/17/libor-scandal-costbanks_n_1680764.html; Halah Touryalai, Libor Lawsuits Are Piling
Up and Could Cost Billions, Banks Brace for Another Big Legal

39
Battle,

Forbes

(July

12,

2012),

http://www.forbes.com/sites/halahtouryalai/2012/07/12/liborlawsuits-are-piling-up-and-could-cost-billions-banks-brace-foranother-big-legal-battle/;

Alistair

Crippling

Costs:

Libor

Litigation

Osborne,

Britain’s

Banks

Banks

Face

Face
Costs

Running into Tens of Billions of Pounds from the Libor Scandal
if US Litigants Prove They Were the Victims of Four Years of
Mispricing, City Experts Have Warned, Telegraph (June 28, 2012),
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/
9363260/Banks-face-crippling-Libor-litigation-costs.html;

see

also OTC Pls.’ Consol. Am. Compl. ¶ 6 (“By acting together and
in concert to knowingly understate their true borrowing costs,
Defendants

caused

LIBOR

to

be

calculated

or

suppressed

artificially low, reaping hundreds of millions, if not billions,
of dollars in ill-gotten gains.”).
In

sum,

given

the

competition

to

become

interim

lead

counsel, which revealed the experience of the competitors; the
number of original complaints that had been filed; and, the
obvious motivation to craft sustainable first amended complaints
containing

all

factual

and

legal

allegations

that

supported

plaintiffs’ claims, the Court was entitled to rely on these
pleadings

to

contain

the

strongest

possible

statement

of

plaintiffs’ case based on the collective skills of plaintiffs’
counsel.

40
The
antitrust

subject

of

plaintiffs’

injury,

figured

motions

prominently

in

to
the

amend,
case

namely

after

the

filing of the first amended complaints, being presented clearly
and

repeatedly

complaints.

as

a

flaw

in

the

pleading

of

plaintiffs’

In their motion papers filed on June 29, 2012,

defendants argued that plaintiffs’ amended complaints should be
dismissed because, inter alia, they failed to allege antitrust
injury.

See Mem. of Law in Supp. of Defs.’ Mot. to Dismiss

Pls.’ Antitrust Claims 26-27.

Although plaintiffs thereafter

submitted a letter to the Court on August 1, 2012, seeking leave
to amend, primarily on the basis of information contained in the
Barclays

settlements,

there

was

no

indication

in

plaintiffs’

letter that the proposed amendments would bolster plaintiffs’
allegations of antitrust injury.

When plaintiffs perfunctorily

reiterated their request for leave to amend in their opposition
to

defendants’

motion

to

dismiss

the

antitrust

claims,

they

again did not indicate that new allegations would remedy any
previous defects regarding antitrust injury.

See Pls.’ Joint

Mem. of Law in Opp’n to Defs.’ Mot. to Dismiss Pls.’ Antitrust
Claims 36-38, 52-53.

Finally, the issue of antitrust injury

featured prominently in the oral argument held on March 5, 2013,
and a concession by plaintiffs’ counsel that the LIBOR-setting
process

is

discussion.

not

competitive

was

the

topic

of

significant

Yet, despite being squarely on notice that the

41
Court

considered

threshold

antitrust

issue,

injury

plaintiffs

did

a
not

serious
seek

and,

to

indeed,

amend

their

complaint to strengthen their pleading of antitrust injury until
after we issued the 161-page March 29 Order.25
Whatever might be the appropriate result in other cases,
here, justice does not require us to permit plaintiffs to file a
second amended complaint.
surely

a

case

entitled

to

in

the

which

Indeed, just the opposite.
“the

plaintiffs’

defendants

best

effort

and
at

the

This is

Court

presenting

were
their

claims in response to the objections raised by the defendants.”
In re Eaton Vance Mut. Funds Fee Litig., 403 F. Supp. 2d 310,
318 (S.D.N.Y. 2005).

Further, it would be unacceptable to allow

plaintiffs, after failing to seek to amend their complaints with
regard to antitrust injury in response to defendants’ motion and
after tremendous effort was expended by defendants and the Court
in considering and ruling on the motions to dismiss, to seek to
plug the holes in their complaints identified by the March 29
Order.
from

Plaintiffs “[are] not entitled to an advisory opinion

the

Court

informing

them

of

the

deficiencies

of

the

complaint and then an opportunity to cure those deficiencies.”
Id. (quoting PR Diamonds, Inc. v. Chandler, 364 F.3d 671, 699
(6th Cir. 2004) (internal quotation marks omitted).

25

Indeed, to

That decision followed briefing that exceeded 330 pages (exclusive, of
course, of complaints and declarations).

42
permit amendment here might have the perverse effect of turning
defense counsel and the Court into plaintiffs’ counsel’s cocounsel,

with

plaintiffs

waiting

to

see

what

objections

defendants raise and how the Court rules on those objections and
then amending their complaint as necessary based on what they
learned in the process.

Especially in a case of this magnitude,

with so much at stake and with enormous expenditure of resources
by defendants and the Court, that is an unacceptable way to
operate a system of justice.

Nor is this a situation, as with

pro se parties, where either plaintiffs or their counsel (who
will,

if

they

prevail,

seek

to

have

their

fees

paid

by

defendants) are deserving of any special solicitude.
Finally, it must emphasized that essentially none of the
allegations

plaintiffs

put

forward

with

regard

to

antitrust

injury rest on new facts that plaintiffs could not have pleaded
before.

Indeed, after receiving plaintiffs’ letter of August 1,

2012, we permitted plaintiffs to rely on the Barclays settlement
documents

in

opposing

defendants’

motions

to

dismiss,

and,

although settlements involving UBS and RBS have since come to
light, these settlements do not advance plaintiffs’ antitrust
injury argument in any way that the Barclays settlement did not.
Plaintiffs’

new

antitrust

injury

allegations

mostly

involve

reframing previously known facts in an attempt to remedy the

43
defects

we

identified

on

the

fundamental

issue

of

antitrust

standing.
2. Plaintiffs’ Proposed Amendments Would Be Futile
Even if we did not find plaintiffs’ effort to amend their
complaints for a second time with regard to antitrust standing
to be wholly unwarranted in these circumstances, we would deny
them leave to amend because the proposed amendment would be
futile.

Specifically,

proposed

allegations,

even

taking

plaintiffs

into
do

account

not

plaintiffs’

adequately

plead

antitrust injury.
The issue of antitrust injury was thoroughly examined in
the

March

29

opinion.

Order,

and

we

stand

by

our

reasoning

in

that

As we stated there, antitrust injury is an injury

“attributable to an anticompetitive aspect of the practice under
Mar. 29 Order, 2013 WL 1285338, at *11 (quoting Atl.

scrutiny.”
Richfield

Co.

334 (1990))
“should
violation

v.

USA

(internal

reflect
or

the

of

Petroleum
quotation

Co.
marks

anticompetitive

anticompetitive

acts

(“ARCO”), 495
omitted).

U.S.
The

328,

injury

effect

either

of

the

made

possible

by

the

violation,” id. (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat,
Inc., 429

U.S.

477,

489 (1977)),

and

it

must

involve

“loss

[that] stems from a competition-reducing aspect or effect of the
defendant's behavior,” id. (quoting ARCO, 495 U.S. at 344).

44
Here,

after

careful

review

of

the

allegations

in

plaintiffs’ proposed second amended complaints, we conclude that
none of plaintiffs’ new allegations change the outcome reached
in the March 29 Order.

Plaintiffs’ allegations include new ways

of packaging previously known facts, such as arguing that the
LIBOR-setting rules themselves give rise to competition, and new
theories for how defendants compete, such as that they compete
over

their

customers

creditworthiness,
the

instruments,

or

best

interest

that

they

that

they

rate

benchmark

compete

by

compete
on

“keeping

to

financial

other

honest” and reporting any improper conduct by them.

offer

banks

However,

regardless of the creativity they display, none of plaintiffs’
allegations make plausible that there was an arena in which
competition

occurred,

that

defendants’

conduct

harmed

such

competition, and that plaintiffs suffered injury as a result.
Even

where

plaintiffs

have

identified

a

market

in

which

defendants are, in fact, competitors, they have not plausibly
alleged that each defendant failed to act in its independent
individual self-interest.

In other words, even if we grant that

plaintiffs have alleged a vertical effect -- that they suffered
harm

as

a

result

of

defendants’

conduct

--

they

have

not

plausibly alleged a horizontal effect –- that the process of
competition was harmed because defendants failed to compete with

45
each

other

or

otherwise

interacted

in

a

manner

outside

the

bounds of legitimate competition.
Therefore, both because amendment would not be proper in
the

circumstances

allegations

would

of

this

case

be

futile,

and

because

plaintiffs

are

plaintiffs’
denied

leave

new
to

amend their antitrust claims.
E. State Law Claims
In
asserted

their
a

restitution.

first

single

amended

state-law

complaint,
claim

for

the

unjust

OTC

plaintiffs

enrichment

OTC Pls.’ Consol. Am. Compl. ¶¶ 227-30.

and

Because

we dismissed the OTC plaintiffs’ antitrust claim –- their only
other

asserted

claim

for

relief

–-

we

declined

to

exercise

supplemental jurisdiction over their state-law claim.26

Mar. 29

Order, 2013 WL 1285338, at *58-*59.
Since the March 29 Order was issued, plaintiffs have taken
the position, despite the fact that they had not previously
relied on diversity jurisdiction at all, that subject matter
jurisdiction based on the Class Action Fairness Act of 2005
(“CAFA”), in fact, exists.

Pls.’ Mem. of Law in Supp. of Their

Mot. for Leave to File Proposed Consol. Second Am. Compl. 14-15.

26

We also noted that, “[a]lthough it [was] conceivable that we could retain
jurisdiction over [plaintiffs’ state-law] claim by virtue of diversity of
citizenship,” we did not need to consider this ground for jurisdiction
because “plaintiffs ha[d] not pleaded that this Court has diversity
jurisdiction over their state law claim, nor ha[d] they alleged facts that
would support our exercise of diversity jurisdiction.”
Mar. 29 Order, 2013
WL 1285338, at *58 n.23.

46
Defendants agree.
Request

for

See Defs.’ Mem. of Law in Opp’n to OTC Pls.’

Leave

to

Amend

Defs.’ State Law Opp’n].

State

Law

Claims

1

[hereinafter

As do we: this is a case in which at

least one member of the putative class is diverse from at least
one

defendant,

28

U.S.C.

§ 1332(d)(2)

(2006);

the

matter

in

controversy plausibly exceeds the sum of $5,000,000, id.; and,
the number of members of the proposed plaintiff class exceeds
100, id. § § 1332(d)(5)(B).

Further, the exceptions to CAFA

jurisdiction do not seem to apply.

Therefore, we may assert

jurisdiction over the OTC plaintiffs’ proposed state-law causes
of action.
As

discussed

above,

Rule

15(a)

provides

that

a

second

amended complaint may be filed “only with the opposing party's
written

consent

or

the

court's

leave,”

though

“[t]he

should freely give leave when justice so requires.”
Civ. P. 15(a)(2).

court

Fed. R.

We “ha[ve] discretion to deny leave for good

reason, including futility, bad faith, undue delay, or undue
prejudice to the opposing party.”

Holmes v. Grubman, 568 F.3d

329, 334 (2d Cir. 2009) (quoting McCarthy v. Dun & Bradstreet
Corp., 482 F.3d 184, 200 (2d Cir. 2007)).
Here, plaintiffs seek to reassert their unjust enrichment
claim, Pls.’ Second Consol. Am. Compl. ¶¶ 389-92, Ex. A, Pls.’
Mem. of Law in Supp. of Their Mot. for Leave to File Proposed
Consol. Second Am. Compl. [hereinafter OTC Pls.’ PSAC], and to

47
plead a new claim for breach of contract, based primarily on
defendants’ alleged breach of the implied duty of good faith and
fair dealing, id. ¶¶ 375-88.
deny

plaintiffs

leave

to

Defendants argue that we should

make

these

amendments

because

the

amendments are futile and because plaintiffs’ delay in seeking
to amend is inexcusable.
Unlike in the antitrust context, we do not believe that
considerations of bad faith, undue delay, or undue prejudice to
defendants
regarding

require
their

us

to

state-law

deny

plaintiffs

claims.27

For

the

leave

to

reasons

amend
stated

below, moreover, we also do not believe that futility mandates
that we deny plaintiffs leave to amend, though our decision is
without

prejudice

to

a

motion

by

defendants

to

dismiss

any

second amended complaint.
Although we grant plaintiffs’ motion, we are concerned that
plaintiffs

failed

amended complaint.

to

include

contract

claims

in

their

first

Our concern was not alleviated during oral

argument, as, despite questioning, no adequate explanation was
proffered by plaintiffs’ counsel.
failure
27

has

the

consequence

We note further that this
of

further

delaying

the

We would note that, in their letter to the Court of August 1, 2012,
submitted after defendants filed their motions to dismiss but before
plaintiffs filed their opposition papers, plaintiffs requested leave to amend
to add, inter alia, new causes of action.
In this respect, plaintiffs’
present request to amend is differently situated from their request to add
allegations to cure their amended complaint’s defects relating to antitrust
injury, which plaintiffs did not seek to do, despite being on notice of the
issue since at least June 2012, until after we issued the March 29 Order.

48
determination of the contours of the complaint –- a delay that
obviously is not to plaintiffs’ advantage.
1. Unjust Enrichment
Plaintiffs reassert their claim for unjust enrichment, over
which we previously declined to exercise jurisdiction.

In the

March

unjust

29

Order,

we

considered

the

elements

of

an

enrichment claim in the context of addressing the exchange-based
plaintiffs state-law claim.

As we stated there: “Under New York

law, ‘[t]he theory of unjust enrichment lies as a quasi-contract
claim

and

contemplates

an

obligation

imposed

by

equity

to

prevent injustice, in the absence of an actual agreement between
Mar. 29 Order, 2013 WL 1285338, at *60 (quoting

the parties.’”

Georgia Malone & Co. v. Rieder, 19 N.Y.3d 511, 516 (2012)).

To

state a claim for unjust enrichment, a plaintiff must allege
that “(1) the other party was enriched, (2) at that party's
expense, and (3) that it is against equity and good conscience
to

permit

the

recovered.”

other

Id.

party

to

retain

what

is

sought

to

be

(quoting Georgia Malone, 19 N.Y.3d at 516)

(internal quotation mark omitted).
Based

on

the

present

record,

we

cannot

conclude

plaintiffs’ unjust enrichment claim would be futile.
have

alleged

that

they

purchased

financial

that

Plaintiffs

instruments

from

defendants wherein they paid defendants fixed sums and received
in return a floating amount tied to LIBOR.

OTC Pls.’ PSAC

49
¶¶ 12-13,

35.

Additionally,

plaintiffs

have

alleged

that

defendants “knowingly understate[d] their true borrowing costs”
during

the

Class

Period

and

thereby

“caused

LIBOR

to

calculated or suppressed artificially low.”

Id. ¶ 5.

conduct

pay

allegedly

“allowed

[defendants]

to

be
This

unduly

low

interest rates to investors, including Baltimore Plaintiffs, on
LIBOR-based financial instruments during the Class Period.”
¶ 8.

Id.

In short, plaintiffs have alleged that defendants were

enriched at their expense by receiving from plaintiffs fixed
sums set based on an “accurate” LIBOR, see id. ¶ 336, and paying
plaintiffs floating amounts that were artificially low due to
defendants’ alleged manipulation of LIBOR.
plausibly

allege

that

defendants

to

expense.

Although

agreements

with

retain

the

it

the

would
rewards

plaintiffs

be
they

had

“expectation

Further, plaintiffs

inequitable
reaped

entered

that

the

at

into

to

permit

plaintiffs’
their

floating

swap

payments

[they] would receive over the life of the contract would be
calculated
LIBOR

based

definition,

on
an

LIBOR

submissions

accurate

measure

that
of

conformed

interbank

to

the

borrowing

costs,” id., defendants allegedly manipulated LIBOR such that it
was fixed at a lower level than it would have been at normally,
and thereby paid plaintiffs less than they were entitled to
receive.

On face, these allegations appear to state a claim for

unjust enrichment.

50
Nonetheless, defendants argue that plaintiffs’ claims are
barred because their relationships with defendants were governed
by contract.

Under New York law, the cause of action of unjust

enrichment does not lie “where the parties have entered into a
contract that governs the subject matter” at issue.

Pappas v.

Tzolis, 20 N.Y.3d 228, 234 (2012) (quoting Cox v NAP Constr.
Co.,

10

N.Y.3d

592,

607

(2008))

(internal

quotation

mark

omitted).

Here, defendants contend that the contracts between

plaintiffs

and

financial

defendants

instruments

“govern

the

[plaintiffs]

consideration

purchased,

and

for

thus

claim for unjust enrichment fails as a matter of law.”

the

their
Defs.’

Mem. of Law in Opp’n to OTC Pls.’ Request for Leave to Amend
State Law Claims 4 [hereinafter Defs.’ State Law Opp’n].
We

are

not

convinced.

“[T]he

predicate

for

dismissing

quasi-contract claims is that the contract at issue ‘clearly
covers the dispute between the parties.’”

Union Bank, N.A. v.

CBS

WL

Corp., No.

(S.D.N.Y.

June

08

Civ.

10,

8362

2009)

(PGG),

(quoting

2009

1675087,

Clark-Fitzpatrick,

at

*7

Inc.

v.

Long Island R.R. Co., 70 N.Y.2d 382, 389 (1987)); see also id.
at *8 (declining to dismiss unjust enrichment claim where there
was a chance that “resolution of th[e] dispute [would] require[]
going outside the four corners of the parties' agreements”).
Here,

although

the

swap

contracts

clearly

required

defendants to pay plaintiffs the prescribed floating rate of

51
return using the LIBOR reported by the BBA, the contracts did
not “clearly cover[]” the subject matter now at issue,28 namely
whether defendants were permitted to manipulate LIBOR itself and
thereby

depress

plaintiffs.29
agreements

the

As

with

amount

such,

the

defendants

they

were

existence

does

not

of

bar

required

to

pay

plaintiffs’

swap

plaintiffs’

unjust

enrichment claim.
Defendants also argue that plaintiffs’ pleading of unjust
enrichment is insufficient because plaintiffs’ allegations do
not show that defendants reaped a “net gain” at the expense of
plaintiffs’ “net loss.”

See Defs.’ State Law Opp’n 5-6.

In

support of this argument, defendants cite Maryland Casualty Co.
v.

W.R.

Grace

and

Co., 218

F.3d

204 (2d

Cir.

2000),

which

involved a dispute among insurers of a manufacturer of asbestoscontaining products, in which insurers who had settled with the
28

Defendants surely overreach when they argue that plaintiffs’ unjust
enrichment claim is barred because the swap contracts govern the subject
matter of “the consideration for the financial instruments [plaintiffs]
purchased.”
Defs.’ State Law Opp’n 4.
If a plaintiff could not assert a
claim for unjust enrichment based on any conduct by the defendant that
affected the “consideration” the plaintiff received under a contract with the
defendant, unjust enrichment claims would effectively be barred whenever a
contract between the plaintiff and the defendant existed.
Such a result,
though possibly to defendants’ liking, is not countenanced by New York law.

29

Importantly, the question we face here is distinct from that we face in
deciding whether plaintiffs may add a new claim for breach of the implied
duty of good faith and fair dealing.
In evaluating whether plaintiffs may
add their contract claim, we ask whether plaintiffs have plausibly alleged
that a duty not to manipulate LIBOR was implicit in the swaps contracts. By
contrast, in evaluating whether plaintiffs may reassert their unjust
enrichment claim, we ask whether the swaps contracts clearly govern whether
defendants are permitted to submit artificial LIBOR quotes to the BBA. Apart
from how we answer the former question, we answer the latter question in the
negative.

52
manufacturer early on sought reimbursement of covered litigation
defense costs from insurers who settled subsequently.
earlier-settling

insurers

had

argued

that

the

Id.

The

later-settling

insurers had been unjustly enriched because they “simply sat
back and waited until the early settling insurers paid amounts
that

settled

[the

manufacturer]’s

claim

for

defense

Id. at 212.

accruing prior to the [early] settlements.”

The Second Circuit rejected this argument.
early

settlements

cover

the

entered

insured’s

into

by

then-incurred

costs

plaintiffs
defense

Although the

forced

costs,

them

they

to

also

absolved plaintiffs of responsibility for later defense costs,
which were far greater, and allowed plaintiffs to pay out their
indemnity limits before defense costs sharply escalated.
213.

Id. at

Therefore, “it [could not] be determined whether (overall)

[plaintiffs]

paid

more

in

combined

indemnity

and

defense

payments as a result of the non-contribution of [defendants], or
whether (overall) [plaintiffs] paid less.”

Id.

Combined with

the fact that the decision of when to settle was inherently
risky and involved some amount of benefit and some amount of
harm,

the

Circuit

unjustly enriched.
Maryland

concluded

that

defendants

had

not

been

distinguishable.

In

that

Id.

Casualty

is

plainly

case, the issue was not whether defendants had been unjustly
enriched

through

transactions

directly

with

plaintiffs,

but

53
rather whether defendants had paid less than their fair share to
the insured manufacturer and therefore should be compelled to
reimburse plaintiffs.

In light of this, the relevant comparison

was necessarily between the overall amount plaintiffs paid the
insured, in fact, and the overall amount plaintiffs would have
paid

had

defendants

settled

earlier.

Here,

by

contrast,

plaintiffs entered into swap contracts directly with defendants,
and the allegation is that defendants benefited at plaintiffs’
expense by paying plaintiffs less on those contracts.

Maryland

Casualty is inapposite to these facts.30
For the foregoing reasons, we are not convinced that the
OTC

plaintiffs’

requested

amendment

would

be

futile.

Thus,

although we do not preclude defendants from moving to dismiss
any

unjust

enrichment

claim

asserted

in

a

second

amended

complaint, we will permit plaintiffs to make such an amendment.

30

Defendants also argue that plaintiffs have failed to satisfy Rule 9(b)’s
requirements of pleading fraud with particularity.
We disagree, for
substantially the reasons given in the March 29 Order for why the exchangebased plaintiffs had satisfied Rule 9(b).
See Mar. 29 Order, 2013 WL
1285338, at *39-*40. With regard to the one requirement of Rule 9(b) that is
different between the OTC and the exchange-based claims, alleging the effect
that defendants’ scheme had on the market at issue, here the OTC plaintiffs
have alleged, as discussed above, that the contracts they entered into with
defendants paid a floating rate of return based on LIBOR, such that
manipulation of LIBOR directly affected defendants’ payments on those
contracts.

54
2. Breach of the Implied Duty of Good Faith and
Fair Dealing
The OTC plaintiffs seek to add a new claim for breach of
the implied covenant of good faith and fair dealing.31

Under New

York law, “a covenant of good faith and fair dealing in the
course

of

contract

contracts.”

Dalton

performance”
v.

Educ.

is

Testing

“[i]mplicit
Serv., 87

in

all

N.Y.2d

384,

389 (1995) (citing Van Valkenburgh, Nooger & Neville, Inc. v.
Hayden

Publ’g

Co., 30

N.Y.2d

34,

45 (1972)).

The

implied

covenant of good faith and fair dealing obligates a promisor to
fulfill “any promises which a reasonable person in the position
of

the

promisee

would

be

included” in the contract.

justified

in

understanding

were

Id. (quoting Rowe v Great Atl. &

Pac. Tea Co., 46 N.Y.2d 62, 69 (1978)) (internal quotation marks
omitted).
31

Specifically, implied in every contract is a promise

Plaintiffs style this claim: “Breach of Contract and Implied Covenant of
Good Faith and Fair Dealing.” OTC Pls.’ PSAC, at 157. Although plaintiffs
focus this claim on breach of the implied duty, they also allege that
“Defendants’ collusion to manipulate the LIBOR rate also breached the
contractual term that provided that Plaintiffs would receive payments that
were based on the LIBOR definition.”
Id. ¶ 387.
However, plaintiffs have
not alleged an explicit term in their swap contracts that required the
benchmark used to calculate the floating amount to be based on the LIBOR
definition. See Tr. 65, 69-71. The contracts’ provision that the floating
rate would be based on “USD-LIBOR-BBA,” OTC Pls.’ PSAC ¶¶ 377, 379, though it
may give rise to an implied duty, is not such an explicit term.
Moreover,
given that LIBOR is, by definition, an average of eight banks’ submissions to
the BBA, no one bank could possibly guarantee that a particular LIBOR fix was
determined in a manner that wholly complied with the BBA’s rules. Therefore,
plaintiffs cannot state a claim for breach of an explicit contractual
provision, and our analysis here will focus instead on whether they can state
a claim for breach of the implied covenant of good faith and fair dealing.

55
that “neither party shall do anything which will have the effect
of

destroying

or

injuring

the

right

of

receive the fruits of the contract.”

the

other

party

to

Id. (quoting Kirke La

Shelle Co. v Armstrong Co., 263 N.Y. 79, 87 (1933)) (internal
quotation marks omitted); see also LJL 33rd St. Assocs., LLC v.
Pitcairn Properties Inc., Nos. 11–5425–cv, 12–1382–cv, 2013 WL
3927615, at *9 (2d Cir. July 31, 2013) (“The implied covenant of
good faith and fair dealing bars a party from taking actions ‘so
directly to impair the value of the contract for another party
that

it

may

be

assumed

that

they

are

inconsistent

with

the

intent of the parties.’” (quoting Bank of China v. Chan, 937
F.2d 780, 789 (2d Cir. 1991))).

That said, the implied covenant

arises “only in connection with the rights or obligations set
forth

in

Corp., No.

the

terms

09–CV–1932

of

the

(ENV)

contract,”
(JMA),

(E.D.N.Y. Feb. 16, 2011); see also

Paul

2011

WL

v.

Bank

684083,

of
at

Am.
*6

Corazzini v. Litton Loan

Servicing LLP, No. 1:09–CV–0199 (LEK/RFT), 2010 WL 1132683, at
*7 (N.D.N.Y. Mar. 23, 2010) (“[T]he implied obligation is in aid
and furtherance of other terms of the agreement of the parties.”
(quoting Murphy v. Am. Home Prods. Corp., 58 N.Y.2d 293, 304
(1983))), and “cannot create duties that negate explicit rights
under a contract,” LJL 33rd St. Assocs., 2013 WL 3927615, at *9.
Here,

plaintiffs

have

plausibly

alleged

that

defendants

breached the implied covenant good faith and fair dealing.

As

56
discussed above, plaintiffs allege that they entered into swap
contracts with defendants wherein they paid defendants a fixed
rate and received in return a floating rate tied to LIBOR.

In

entering into these contracts, plaintiffs allege, they expected
LIBOR

to

be

set

according

to

its

definition,

such

that

it

reflected the average interest rate being charged in the London
interbank lending market.

Such an expectation would have been

integral to the “bet” that is one purpose of entering into a
swap:

each

plaintiff,

as

the

party

paying

a

fixed

rate

and

receiving a floating rate, bet that interest rates would rise
over the life of the contract, and each defendant, as the party
paying a floating rate and receiving a fixed rate, bet that
interest rates would fall.32

32

By allegedly manipulating LIBOR

Defendants argue that, for at least some of the plaintiffs, such as the
City of Baltimore, the purpose of entering into swap contracts was not to bet
on the direction of prevailing interest rates, but rather to hedge against
exposure to interest rate fluctuation resulting from other instruments
plaintiffs had entered into, with the effect of making plaintiffs floating
rate neutral. Tr. 62-63; Defs.’ State Law Opp’n 6 n.7; Defs.’ Mem. of Law
in Supp. of Mot. to Dismiss Pls.’ Antitrust Claims 32-33. However, even if
this was one of plaintiffs’ purposes in entering into the swap contracts,
there is no indication that this was any plaintiff’s sole purpose; that is,
it is not clear that any plaintiff purchased swaps so as to make itself
actually floating rate neutral.
There is also no indication that this
hedging purpose was held by every plaintiff. Moreover, even if hedging was
any plaintiff’s sole purpose in entering into a swap, that does not indicate
that the plaintiff sought to be LIBOR-neutral, as opposed to interest-rateneutral, generally; in other words, the plaintiff’s purpose might have been
to receive payments tied to prevailing interest rates, as reflected through
LIBOR, in order to hedge exposure to both LIBOR and non-LIBOR rates it was
paying on other instruments. Although defendants might be able to establish
through discovery that plaintiffs’ sole purpose in entering into the swaps
was to hedge their exposure to LIBOR, we are not in a position to decide that
now. For present purposes, plaintiffs have sufficiently alleged that one of
their purposes in entering into the swaps was to profit from receiving a rate
that reflected prevailing interest rates.
See, e.g., OTC Pls.’ PSAC ¶ 336
(alleging that the City of Baltimore entered into the swaps with the

57
downward, such that it was lower than it would have been if set
according

to

its

definition,

defendants

depressed

the

consideration plaintiffs received pursuant to their contracts
and undermined the contractual bargain whereby plaintiffs agreed
to pay a certain fixed rate in exchange for receiving a rate
that

reflected

prevailing

interest

rates.

In

other

words,

plaintiffs have alleged that defendants “injur[ed their right]
to receive the fruits of the contract,” Dalton, 87 N.Y.2d at 389
(quoting Kirke La Shelle, 263 N.Y. at 87) (internal quotation
mark omitted), “so directly . . . impair[ing] the value of the
contract

for

[plaintiffs]

that

it

may

be

assumed

that

[defendants’ alleged actions] are inconsistent with the intent
of the parties.”

LJL 33rd St. Assocs., 2013 WL 3927615, at *9

(quoting Bank of China, 937 F.2d at 789) (internal quotation
marks omitted).

Further, an implied duty not to manipulate

LIBOR is “in connection with” plaintiffs’ explicit contractual
right to receive a LIBOR-based rate, and defendants’ obligation
to pay such a rate, because manipulation of LIBOR would cause
the

contractual

exchange

to

depart

from

what

the

parties

“expectation that the floating payments it would receive over the life of the
contract would be calculated based on LIBOR submissions that conformed to the
LIBOR definition, an accurate measure of interbank borrowing costs”); id.
¶ 386 (stating that “the purpose of the contracts” was “to make and receive
payments based on a LIBOR rate that is set according to the terms of the
LIBOR definition”).

58
intended.33

Thus, plaintiffs plausibly allege that the duty of

good faith and fair dealing implicit in their contracts with
defendants included a promise by defendants not to manipulate
LIBOR to their benefit and plaintiffs’ detriment.
The allegations here are analogous to those in City of New
York v. Coastal Oil New York, Inc., No. 96 Civ. 8667 (RPP), 1999
WL 493355 (S.D.N.Y. July 12, 1999).

In Coastal Oil, the City of

New York had a contract with a fuel oil vendor whereby the City
purchased fuel oil at variable prices adjusted weekly based on
wholesale prices reported in an industry publication.

Id.

The

defendant vendor was one of six companies that submitted prices
to the publication, id. at *3, and, during the life of its
contract with the City, submitted artificially high prices to
the publication which caused the price paid by the City under
the contract to be artificially high.

Id. at *3-*4.

Although

the

contained

explicit

City’s

contract

with

the

vendor

“no

agreement . . . regarding the prices that [the vendor] could
submit to [the industry publication],”34 id. at *3, the City
brought suit on the theory that the vendor’s submission of false

33

Additionally, of course, an implied duty not to manipulate LIBOR does not
“negate explicit rights under [the parties’] contract[s].”
LJL 33rd St.
Assocs., 2013 WL 3927615, at *9.
34

There also was no “written or oral agreement between [the publication] and
[the vendor] defining the prices [the vendor] could submit to [the
publication],” though the submitted prices were understood to “represent
advertised wholesale asking prices for the date listed in [the publication]
as the effective date.” Coastal Oil, 1999 WL 493355, at *3 & n.4.

59
wholesale prices constituted a breach of the implied duty of
good faith and fair dealing.
The Court held that plaintiffs had raised a genuine issue
of

material

fact

precluding

summary

judgment.

Finding

that

“[t]he purpose of the price adjustment clause . . . [was] to
produce

a

delivered

market . . .

according

price
to

‘which

the

shall

method

vary

the

adjustment,”

of

with

and

reasoning that “[t]he delivered price could not vary with market
conditions if it was not based on bona fide [published] quotes,”
the Court concluded that “[t]he artificial manipulation of the
[wholesale] price average in [the publication] would prevent the
price

adjustment

purpose.”

clause

Id. at *7.

from

accomplishing

this

essential

By manipulating the wholesale price it

reported to the publication, therefore, the vendor breached its
implied duty of good faith and fair dealing.
At oral argument, defendants sought to distinguish Coastal
Oil by arguing that, whereas the purpose of the contract there
was clearly frustrated by defendant’s conduct, here, the purpose
of the swap contracts was merely to pay the LIBOR reported by
the BBA, which defendants undeniably did.
distinction, however, is not convincing.

Tr. 61-67.

This

Although plaintiffs

surely expected to be paid at a rate incorporating reported
LIBOR, there is no indication that they wanted this merely for
its own sake.

Rather, as plaintiffs have plausibly alleged,

60
they expected to be paid at a rate that reflected prevailing
interest

rates,

which

LIBOR,

as

defined,

did.

Indeed,

as

discussed above, one of the purposes of entering into a swap is
to bet on the direction prevailing interest rates will move,35
and

this

purpose

is

undermined

if

the

interest

rate

index

incorporated into the contractual payment formula is decoupled
from the market through the manipulative conduct of defendants.
Thus, contrary to defendants’ arguments, Coastal Oil counsels in
favor of granting plaintiffs’ motion for leave to amend.
Defendants’ additional arguments also fail to convince us
that

plaintiffs

defendants

should

reprise

be

their

denied

leave

contention

that

to

amend.

Although

plaintiffs

have

not

shown a net loss based on LIBOR suppression in light of their
overall exposure to LIBOR, see Defs.’ State Law Opp’n 10, this
argument is even weaker than it was in the unjust enrichment
context,
individual

given

that,

contracts

here,
on

our

which

focus

plaintiffs

is

squarely

received

a

on

the

floating

rate tied to LIBOR and therefore were allegedly harmed when
LIBOR was artificially reduced.

Further, even if “the implied

covenant of good faith will not be breached without some showing
of intent to harm the other contracting party or a reckless
35

For the reasons discussed above, although defendants argue that plaintiffs
entered into the swap contracts not to bet on the direction interest rates
would move, but rather to hedge their exposure to LIBOR fluctuation, we
cannot conclude, on the present record, that this was any plaintiff’s sole
purpose in entering into the swaps.

61
disregard of it,” Paul v. Bank of Am. Corp., No. 09–CV–1932
(ENV) (JMA), 2011 WL 684083, at *6 (E.D.N.Y. Feb. 16, 2011),
plaintiffs here have plausibly alleged that defendants’ alleged
manipulation of LIBOR was at least in reckless disregard of the
detriment to plaintiffs, with whom defendants were in direct
contractual privity.

Finally, despite defendants’ argument that

plaintiffs’ contract claim is unsuited to class treatment and
that “the implausibility of certification weighs heavily against
permitting the belated addition of a breach of contract claim,”
Defs.’ State Law Opp’n 11 (failing to cite any authority for
this

proposition),

we

do

not

think

that

class

concerns require us to deny the present motion.

certification
Regardless of

whether plaintiffs will ultimately be able to prevail on a class
certification motion, the propriety of class treatment does not
bear on our decision whether to permit plaintiffs to add their
contract claim.
Defendants have not demonstrated that plaintiffs’ proposed
contract claim would be futile.
enrichment

claim,

therefore,

As with plaintiffs’ unjust

although

we

do

not

preclude

defendants from moving to dismiss any contract claim asserted in
a second amended complaint, we grant plaintiffs leave to add
such a claim.

62
F. Stay of Actions Not Subject to the Prior
Motions to Dismiss
On

August

imposing

a

14,

stay

defendants’

2012,
on

motions

we

all
to

issued

a

complaints
dismiss.

Memorandum
not

In

then

re

and

Order

subject

LIBOR–Based

to
Fin.

Instruments Antitrust Litig., No. 11 MD 2262 (NRB), 2012 WL
3578149 (S.D.N.Y. Aug. 14, 2012).

On May 3 of this year, we

issued a Memorandum in which we stated: “The stay shall remain
in

place

for

now

with

respect

to

cases

that

raise

issues

addressed in our Memorandum and Order [of March 29, 2013].
there

are

any

complaints

please advise.”

that

do

not

raise

any

such

If

issue,

In re LIBOR-Based Fin. Instruments Antitrust

Litig., No. 11 MD 2262 (NRB), 2013 WL 1947367, at *2 (S.D.N.Y.
May 3, 2013).

In response to that invitation, we have received

a number of letters from plaintiffs seeking to lift the stay on
their cases.

Having reviewed those letters, and in light of the

conclusions in the present Memorandum and Order and the fact
that

the

legal

landscape

of

this

case,

though

substantially

clarified, is still in somewhat of a state of flux, we think the
most prudent course of action is to maintain the stay on all
actions previously subject to it.

Further, given the magnitude

of this multi-district litigation and the fact that the universe
of actions encompassed by it continues to expand, we are wary of
addressing

the

individual

cases

piecemeal

rather

than

63
comprehensively.

Therefore,

all

actions

not

subject

to

defendants’ previously filed motions to dismiss shall continue
to be stayed, pending further order of the Court.36

36

The stay does not apply to the motion to remand in Salix Capital US Inc. v.
Banc of America Securities LLC, No. 13 Civ. 4018 (NRB).

64

III. Conclusion
the

For
iffs'

and

exchange-based

all

ions with re

based

plaintiffs'

exchange-based

the

interlocutory appeal

motion

bondholder,

above,

stated

reasons

ed;

is

plaintiffs'

motions

ct to antitrust are deni
to

add

allegations

th

based manipulation

is

deni

BT-MU,

t

prejudice

to

addresses

motion

the

motion for

a

for

similar
issues

leave

reconsideration

motion

raised

ing

to reassert

to add a claim

and,

Suisse,

denied

by

to
and

defendants

the

OTC

ir unjust

breach of

add

respect

is

filed

here

to

the exchange

motion

Norinchukin's

the OTe,

without

plaintiffs'

chment

claim and

implied covenant of good

th

fair dealing is granted.
By September 10,

2013,

OTC plaintiffs and the exchange

based plaintiffs shall each file a second amended complaint that
conforms

with

the

the new compl
inform us by S
file

a

mot

asserted

rulings

a

ember 20,
for

intend

to

statute of

move

by

2013.

recons

in BT-MU' s,

motion

de

s

bel

nts are inconsistent with our rulings,

and which addresses
such

If

ion

Credit
the

Suisse's,

20,

2013.

reconsideration

limitations grounds

or

to

they

1

if defendants wish to

on grounds

similar

to

and Norinchukin' s

issues we have

September

for

Further,

that

sed,

March
a

motion

they must

nally,

of

those

if
29

file

defendants
Order

on

renewed motion to

65

dismiss with regard to "Period 2"
to file such a mot

claims,

they must seek leave

by September 20, 2013.

This Memorandum and Order resolves docket entry nos.

296,

316, 327, 330, 333, and 341.

SO ORDERED.

Dated:

New York, New York
August 23, 2013

L~~~

NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE