FrontPoint Asian Event Driven Fund, Ltd. et al v. Citibank, N.A. et al

Filing 393

OPINION AND ORDER DISMISSING CASE re: 347 MOTION for Leave to File Fourth Amended Class Action Complaint filed by Fund Liquidation Holdings LLC, 318 JOINT MOTION to Dismiss the Third Amended Class Action Complaint filed by Standard Chartered Bank, Oversea-Chinese Banking Corporation Ltd., Australia and New Zealand Banking Group, Ltd., Bank of Tokyo-Mitsubishi UFJ, Ltd., BNP Paribas, S.A., UBS AG, Credit Suisse AG, Credit Agricole Corporate and Inves tment Bank, Royal Bank of Scotland PLC, The Hongkong and Shanghai Banking Corporation Limited, United Overseas Bank Limited, Bank of America, N.A., Deutsche Bank AG, DBS Bank Ltd., 314 MOTION for Settlement Preliminary Approval o f Class Action Settlement filed by Sonterra Capital Master Fund, LTD., Fund Liquidation Holdings LLC, FrontPoint Asian Event Driven Fund, L.P. Because the APA does not effect the assignment of claims from FrontPoint to FLH, plaintiff lack s standing to bring its antitrust and breach of the implied covenant of good faith and fair dealing claims. Defendants' motion to dismiss the case is granted. Pursuant to my oral order at the May 2, 2019 hearing, Tr. at 5:11-16, plaintiff shall file an unredacted copy of the APA on the docket. See Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 124 (2d Cir. 2006). The motions for preliminary approval of the class settlements and to file a Fourth Amended Complaint are also denied. The clerk is instructed to terminate the motions (ECF 318, 314, 347), grant judgment to defendants, and close the case. (Signed by Judge Alvin K. Hellerstein on 7/25/2019) (ne) Transmission to Orders and Judgments Clerk for processing.

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 1 of 15

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------------- X
FUND LIQUIDATION HOLDINGS LLC, as
assignee and successor-in-interest to FrontPoint
Asian Event Driven Fund L.P ., on behalf of itself
and all others similarly situated,

-against-

Plaintiff,

CITIBANK, N.A., BANK OF AMERICA, N.A.,
JPMORGAN CHASE BANK, N.A., THE ROYAL
BANK OF SCOTLAND PLC, UBS AG, BNP
PARIBAS, S.A., OVERSEA-CHINESE
BANKING CORPORATION LTD., DEUTSCHE
BANK AG, CREDIT AGRICOLE CORPORATE
AND INVESTMENT BANK, CREDIT SUISSE
AG, STANDARD CHARTERED BANK, DBS
BANK LTD., UNITED OVERSEAS BANK
LIMITED, AUSTRALIA AND NEW ZEALAND
BANKING GROUP, LTD., THE BANK OF
TOKYO-MITSUBISHI UFJ, LTD., THE
HONG KONG AND SHANGHAI BANKING
CORPORATION LIMITED, AND JOHN DOES
NOS. 1-50,

OPIN ION AND ORDE R
DISM ISSIN G CASE

16 Civ. 5263 (AKH)

USDCSDNY
DOCUMENT
ELECTRONI CALLy FILED
DOC #: _ _ _-t-:--r-::::-DATE FILE D:_:_ _J+~W -t=:

Defendants.
-------------------------------------------------------------- X

ALVIN K. HELLERSTEIN, U.S.D.J.:
There are two primary issues raised by defendants' motion to dismiss
this antitrust
action charging defendants with conspiring to fix interbank rates in the
Singapore market, thus
affecting prices of derivative securities in New York and other cities
in the United States:
1) whether the new plaintiff, Fund Liquidation Holdings LLC ("FLH
" or "plain tiff'), has
capacity to sue and, if not, whether the court has subject matter jurisdi
ction, and 2) whether, if

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 2 of 15

there is no subject matter jurisdiction, the court may grant plaintiff s motion to preliminarily
approve a settlement with two defendants, or allow a Fourth Amended Complaint.
In a previous October 4, 2018 decision, I found that the original plaintiffs,
FrontPoint Asian Event Driven Fund, Ltd. ("FrontPoint") and Sonterra Capital Master Fund,
LTD ("Sonterra") had been dissolved prior to filing suit, and dismissed their case, for they had
no capacity to sue and, thus, there was no real party in interest. FrontPoint Asian Event Driven

Fund, L.P. v. Citibank, NA., No. 16-cv-5263 (AKH), 2018 WL 4830087, at *11 (S.D.N.Y. Oct.
4, 2018) ("SJBOR II"). Plaintiffs then filed, with my permission, a Third Amended Complaint
("TAC") alleging that the two compan,ies had assigned their claims to FLH pursuant to an Asset
Purchase Agreement ("APA") executed July 13, 2011. The issue posed by defendants' motion to
dismiss is whether the assignment embraces the claims in Plaintiff s complaint for, if the
assignment does not, FLH, as well as Frontpoint and Sonterra, is not a real party in interest,
lacking capacity to sue, and the TAC must be dismissed.
The TAC alleges a conspiracy to manipulate two interest rate benchmarks, the
Singapore Interbank Offered Rate ("SIBOR") and the Singapore Swap Offer Rate ("SOR").
FLH asserts claims of conspiracy to restrain trade in violation of Section 1 of the Sherman Act,
15 U.S.C. § 1 et seq., against financial institutions participating in the rate setting process.
Plaintiff also alleges a state law claim against two defendants, Deutsche Bank AG and Citibank
N.A., for breach of implied covenant of good faith and fair dealing.

2

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 3 of 15

The defendants who have not entered into settlement agreements I move to
dismiss the Third Amended Complaint ("TAC"), pursuant to Fed. R. Civ. P. 12(b)(l
), (b)(2), and
(b)( 6), for lack of subject matter jurisdiction, for lack of personal jurisdiction
as to certain
defendants,2 and for failure to state a claim on which relief can be granted. I
grant defendants'
motions because I conclude that the Court lacks subject matter jurisdiction.
Plaintiff also moves for preliminary approval of their two settlements and to file
a
Fourth Amended Complaint. Plainti ffs motions are denied.

Plainti ffs allegations and the procedural background are described in my earlier
Opinion and Order, SIBOR II, 2018 WL 4830087, at *1-*3, and will not be repeate
d except as
necessary to the issues now at hand.
Basically, the complaint alleges a Sherman Act conspiracy to fix two benchm
ark
interest rates, SIBOR and SOR. The rates reflect daily averages in the Singap
ore market.
Plaintiff alleges that defendants, by agreeing to manipulate SIBOR and SOR,
intended to fix
prices of derivatives traded in New York.

1
Bank of America, N.A., The Royal Bank of Scotland pie, UBS AG, BNP Paribas,
S.A., Oversea-Chinese Banking
Corporation Ltd., Deutsche Bank AG, Credit Agricole Corporate and Investm
ent Bank, Credit Suisse AG, Standard
Chartered Bank, DBS Bank Ltd., United Overseas Bank Limited, Australia and
New Zealand Banking Group, Ltd.,
The Bank of Tokyo-Mitsubishi UFJ, Ltd., and The Hongkong and Shanghai Banking
Corporation Limited.

Citibank, N.A. and JPMorgan Chase Bank, N.A., having entered into settleme
nt agreements with plaintiff, do not
join the motion.
2 The
Royal Bank of Scotland pie, UBS AG, BNP Paribas, S.A., Oversea-Chinese Banking
Corporation Ltd., Credit
Agricole Corporate and Investment Bank, Credit Suisse AG, Standard Chartere
d Bank, DBS Bank Ltd., United
Overseas Bank Limited, Australia and New Zealand Banking Group, Ltd., The
Bank of Tokyo-Mitsubishi UFJ, Ltd.,
and The Hongkong and Shanghai Banking Corporation Limited.

3

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 4 of 15

In SIBOR 11, I granted in part and denied in part
claim s raised in plain

tiffs '

Second Ame nded Com plain t (SAC ) and granted
leave to file the TAC at issue here. In
particular, I dismissed the antitrust claims alleg
ed against non- SIBO R Pane l Mem bers and all
of
the claims alleged by Sont erra Capital Mas ter
Fund, Ltd. ("Sonterra"). I dismissed all the RIC
O
and RIC O cons pirac y claims, and I dismissed the
claim s against foreign defendants not serving
on the SIBO R Panel for lack of pers onal juris dicti 3
on.
The capacity to sue by Fron tPoin t and Sonterra
was addressed in my previous
decision. I dism issed the plain tiffs ' claims, beca
use they were dissolved entities whe n the actio
n
began, on July 1, 2016. In response, plaintiffs
asserted that Sont erra and Fron tPoi nt's claims
were assigned to FLH unde r Fron tPoi nt's Asse
t Purchase Agre eme nt ("AP A"), executed July
13,
2011. ECF 320-1. I granted plain tiff leave to
ame nd and to substitute FLH as the real party in
interest, and instructed plaintiffs to "sho w how
they got their assig nme nt and give me an
interpretation of the contract to show that they
have the ability to sue. That should be in [the]
plea ding ." SJBOR II, 2018 WL 4830087, at* 12;
Tr., ECF 282, at 48:2 -5. The TAC now alleges
the assig nme nt and substitutes FLH as a party
plaintiff. Defe ndan ts' moti on challenges the
adeq uacy of the assignment.

3 Having allowed plain tiff
to file the TAC, and having found the issues raised
by defendant~' pres~nt motion to_be
the same I denied as academic motions for recon
sideration by The Hongkong and Shanghai Bank
mg Corporatron
Limited, 'oBS Bank Ltd, Oversea-Chinese Bank
ing Corporation Limited, and United Overseas Bank
Limited. ECF
385-8 6.

4

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 5 of 15

Discussion
A.

Legal Standard
"The district courts of the United States ... are 'courts oflimitedjurisdict ion.

They possess only that power authorized by Constitution and statute."' Exxon Mobil Corp. v.

Allapattah Servs., Inc., 545 U.S. 546, 552 (2005) (quoting Kokkonen v. Guardian Life Ins. Co. of
Am., 511 U.S. 375, 377 (1994)). "A district court properly dismisses an action under Fed. R.
Civ. P. 12(b)(l) for lack of subject matter jurisdiction if the court "lacks the statutory or
constitutional power to adjudicate it." Cortlandt, 790 F.3d 411, 416-17. "'The party invoking
federal jurisdiction bears the burden of establishing' prudential and constitutional standing .... "

Keepers, Inc. v. City of Milford, 807 F.3d 24, 39 (2d Cir. 2015) (quoting Rajamin v. Deutsche
Bank Nat. Tr. Co., 757 F.3d 79, 84 (2d Cir. 2014)). "In assessing the plaintiffs assertion of
standing, 'we accept as true all material allegations of the complaint[] and ... construe the
complaint in favor of the complaining party' [and] may also rely on evidence outside the
complaint." Cortlandt, 790 F.3d at 417 (internal citations omitted).
"In its constitutional dimension, standing imports justiciability: whether the
plaintiff has made out a 'case or controversy' between himself and the defendant within the
meaning of Art. III." Cortlandt, 790 F.3d at 417 (quoting Warth v. Seldin, 422 U.S. 490,498
(1975)). "[L]awsuits by assignees ... are 'cases and controversies of the sort traditionally
amenable to, and resolved by, the judicial process.'" Cortlandt, 790 F .3d at 418 (quoting Sprint

Commc 'ns Co., L.P. v. APCC Servs., Inc., 554 U.S. 269, 285 (2008)). "Although federal
antitrust laws do not expressly permit assignment, it has been long acknowledged by federal
courts that these claims may be assigned." DNAML Pty, Ltd. v. Apple Inc., 2015 WL 9077075,

5

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 6 of 15

at *3 (citing In re Fine Paper Litig. State of Wash., 632 F.2d 1081, 1090 (3d Cir. 1980)); see also

Cordes & Co. Fin. Servs. v. A.G. Edwards & Sons, Inc., 502 F.3d 91, 100 (2d Cir. 2007).
"To effect a transfer of the right to bring an antitrust claim, the transferee must
expressly assign the right to bring that cause of action, either by making specific reference to the
antitrust claim or by making an unambiguous assignment of causes of action in a manner that
would clearly encompass the antitrust claim." DNAML Pty, Ltd v. Apple Inc., No. 13-cv-6516
(DLC), 2015 WL 9077075, at *3 (S.D.N.Y. Dec. 16, 2015).
"In determining whether the Agreement has effectively made an assignment of
the right to bring an antitrust claim, ordinary principles of contract law will be applied."

DNAML Pty, Ltd v. Apple Inc., 2015 WL 9077075, at *4. "A contract is unambiguous when the
contractual language has a definite and precise meaning about which there is no reasonable basis
for a difference of opinion." Keifer v. Harlequin Enters. Ltd., 751 F.3d 64, 69 (2d Cir. 2014).
"By contrast, ambiguity exists where a contract's term could objectively suggest more than one
meaning to one familiar with the customs and terminology of the particular trade or business."
1

Id. "A fundamental precept of contract law is that agreements are to be construed in accordance
with the parties' intent," and "[t]he best evidence of what the parties intended is what they say in
their writing." In re World Trade Ctr. Disaster Site Litig., 754 F.3d 114, 122 (2d Cir. 2014)
(internal quotation marks removed). "The existence of an ambiguity is to be ascertained from
the face of an agreement without regard to extrinsic evidence." Id.

B.

Terms of the APA
In determining whether the AP A is effective in assigning the claims from

FrontPoint to FLH, I begin with the language of the contract. Section 1.1 of the AP A provides
6

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 7 of 15

that FLH purchases "all of [FrontPoint's] right, title and interest in all of the Assets, including,
without limitation, all of [FrontPoint' s] right, title and interest in all of the Assets, now or
hereafter payable pursuant to any Recovery Rights .... "
This initial, general assignment does not end the inquiry, because this general
assignment is limited by its very terms: assets are defined as "all of [FrontPoint' s] right, title, and
interest in and to any and all Recovery Rights and any and all amounts payable in connection
with any of the Existing Claims and the Future Claims .... " AP A Art. II. Recovery Rights are
"all monetary, legal and other rights held by or accruing to [FrontPoint] in respect of such Claim,
including without limitation, the aggregate amount which [FrontPoint] is, or may become,
entitled to receive pursuant to any Settlement and/or Judgment in connection with such Claim."
Id.

Claims, in tum, are defined as "the Existing Claims and the Future Claims." AP A
Art. II. Relevant here are Future Claims, which the AP A defines as:
[A]ny and all claims of [Frontpoint] to Recovery Rights related to the
ownership of, or any transaction in, any Included Securities, in each case,
as to which no Case has been filed as of the date hereof arising out of: (i)
any future securities class action lawsuit or any Judgment thereon to the
extent related to Seller's ownership of, or any transaction in, any
Included Securities; and (ii) any future holdbacks or reserves under any
settled securities class action lawsuits or any Judgment thereon, to the
extent related to [FrontPoint's] ownership of, or any transaction in, any
Included Securities.
Future Claims do not include Recovery Rights in respect of causes of
action and interests in any state or federal common law claim, any nonsecurities related claim, or any claim related to the bankruptcy of
Lehman Brothers.

APA Art. II.

7

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 8 of 15

"Includ ed Securities" is defined as "all Securities in the Trade Data that were
owned, held, acquired, sold or otherwise disposed of by such Seller during
the Trade Period."
AP A Art. II. "Secur ities" means "any debt and/or equity securities of any kind,
type, or nature,
including, withou t limitation, stock, bonds, options, puts, calls, swaps and similar
instruments or
rights." APA Art. II. The AP A refers to both a defined term "Secur ities" and
an undefined
"securi ties," used in the definition of Securities and in other sections, includi
ng the definition of
Future Claims. "Trade Data" is defined to mean "all of the relevant inform
ation to be provided
by each Seller to Buyer pursua nt hereto and relating to purchases, sales, owners
hip and other
transactions in all Included Securities by the Sellers during the Trade Period.
AP A Art. II.
Trade Period, in turn, is "the period from and including the date of [FrontP oint's]
formation or
incorporation to and including the present ." APA Art. II.
Exhibi t B of the AP A, a notice of assignm ent to "Relev ant Filing Agents, Claims
Administrators, Brokers, Prime Brokers, [and] Vendor s" purports to disclos
e the transfer and
assignm ent of "all rights, title and interest of in and to or associated with, or
any manne r to, any
and all recove ry rights and amounts payable in connection with any securiti
es related claims
related to or arising out of the Transf eror's owners hip of, or any transaction
in, any debt and/or
equity securities of any kind, type, or nature (including, withou t limitation,
stocks, bonds,
options, puts, calls, swaps and similar instruments or rights) .... "

8

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 9 of 15

C.

Motion to Dismiss
1.

The AP A Does Not Effect an Assignment of Claims from FrontPoint to
FLH

First, plaintiff argues that the law of the case doctrine precludes consideration of
standing and the propriety of the claims' assignment. As discussed, plaintiff alleged the
assignment of claims by FrontPoint to it for the first time in the TAC. The issue was not
previously decided and is properly before me now.
Next, plaintiff disputes defendants' standing to challenge the assignment of
claims under the AP A. Although defendants are not parties to the AP A, such a challenge is
clearly appropriate, where, as here, defendants face legal liability based on claims asserted
pursuant to the assignment. See, e.g., DNAML Pty, Ltd. v. Apple Inc., 2015 WL 9077075, at *5
(after analyzing terms of purported assignment agreement, granting summary judgment for
defendants based on a lack of standing).
Plaintiffs claim of breach of the implied covenant of good faith and fair dealing
is a "cause[] of action ... in [a] state ... common law claim" and thus explicitly excluded from
the definition of Future Claims. See FrontPoint Asian Event Driven Fund, L.P. v. Citibank, NA.,
No. 16-cv-5263 (AKH), 2017 WL 3600425, at *1 (S.D.N.Y. Aug. 18, 2017) ("SIBORF'). This
claim is dismissed for lack of standing.
In order for the contract to have assigned FrontPoint's antitrust claims arising
under the Sherman Act, to FLH, the antitrust claims must be, within the meaning of the contract,
"claims ... arising out of ... [a] securities class action lawsuit," so as to constitute
"unambiguous assignment of causes of action in a manner that would clearly encompass the

9

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 10 of 15

antitrust claim," DNAML Pty, Ltd. v. Apple Inc., 2015 WL 9077075, at *3, and those claims
must not be excepted from transfer as "non-securities related claim[ s]." AP A Art. II.
The AP A lacks express language transferring either "antitrust claims" or "all
causes of action." DNAML Pty, Ltd. v. Apple Inc., 2015 WL 9077075, at *5. As the AP A's
terms and definitions make clear, assets and causes of action to be transferred were not total but
subject to important limitations. The AP A distinguishes between "security class action[ s],"
which were subject to transfer, and "any non-security related claim[s]," which were not.
Plaintiff urges a broad, generic reading of the term "security" as employed in the
contract. This interpretation of the contract is inconsistent with the contract's terms. By
invoking claims arising out of "securities class actions," the parties showed an intention to name
and transfer a specific category of causes of action, to the exclusion of others. See DNAML Pty,

Ltd. v. Apple Inc., 2015 WL 9077075, at *5 ("Applying the principle expressio unius est
exclusio[] alterius, the inclusion of these specific transfer provisions confirms that the parties to
the Agreement were aware of how to transfer legal claims, chose to transfer specific rights that
they delineated, and did not intend a general transfer of all legal claims."). Even if "securities
class actions" could be understood to include antitrust actions such as this one, it hardly
constitutes an "unambiguous assignment" required by federal law. DNAML Pty, Ltd. v. Apple

Inc., 2015 WL 9077075, at *3. This understanding is further enforced by the parties' explicit
exception of any "causes of action and interests in ... any non-securities related claim." AP A
Art. II.
Securities and antitrust claims are distinct. See, e.g., Masters v. Wilhelmina

Model Agency, Inc., 473 F.3d 423,437 (2d Cir. 2007) (distinguishing "antitrust class actions"
from "securities class actions"); In re LIBOR-Based Fin. Instruments Antitrust Litig., No. 11
10

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 11 of 15

MDL 2262 (NRB), 2015 WL 6243526, at *150 (S.D.N.Y. Oct. 20, 2015) (disting
uishing
"Secur ities Act claims" from "antitrust ... claims"). Absent some explicit
definition in the
AP A, a securities class action lawsuit is unders tood as a suit arising out of the
securities laws,
mirroring its use by other courts. See, e.g., Halliburton Co. v. Erica P. John
Fund, Inc., 573 U.S.
258,27 5 (2014) (discussing, inter alia, the operation of"secu rities class actions
" in the contex t
of the U.S. securities laws).
As plainti ff points out, the AP A defines "Secur ities" broadly, to encompass
a
wide array of financial instruments, but the wide scope of securities and securit
ies-adjacent
instruments nowher e suggests that "securities class action lawsuit " should also
encompass
antitrust claims. AP A Art. IL While the broadly delimited term "Secur ities"
is explicitly defined
by the AP A, the lowercase-s "securities class action" and "non-securities related
claim" used to
define Future Claims are not, making "securi ty" suitable for interpretation in
light of commo n
understanding.
In further suppor t of its interpretation of the AP A, plainti ff cites the declara
tion of
T. A. McKinney, a former general counsel of FrontPoint. ECF 345. Becaus
e I conclude that the
terms of the AP A are unamb iguous on their face, it is unnecessary and inappro
priate to apply
extrinsic evidence here. Baldwin v. EM! Feist Catalog, Inc., 805 F.3d 18, 31
(2d Cir. 2015)
("[ c]onsideration of extrinsic evidence is only permis sible where the contrac
t at issue is
ambiguous"); In re World Trade Ctr. Disaster Site Litig., 754 F.3d at 122; DNAM
L Pty, Ltd. v.

Apple Inc., 2015 WL 9077075, at *6. The APA does not assign the claims at
issue in this case,
and plainti ff lacks standing to assert them.

11

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 12 of 15

2.

Plaintiffs Substitution Under Rule 17(a)(3) Is Improper and its Claims are
Untimely

There is another reason for dismissing the TAC. Because FrontPoint and Sonterra
lacked capacity to sue, there was no real "case or controversy" before the court and,
consequently, no subject matter jurisdiction. See U.S. Const. Art III; Cortlandt, 790 F.3d at 417.
The substitution of FLH under Fed. R. Civ. P. 17(a)(3) could not repair the basic deficiency of
Frontpoint's and Sonterra's pleading, since Rule 17 allows substitutions to cure mistakes, not
repair an absent substance. Cortland, 790 F.3d at 424 (substitution of parties allowed where it
can cure "a mistake ... as to the person entitled to bring such suit and such substitution will not
alter the substance of the action."). As the Second Circuit observed in dictum, '"[I]n the absence
of a plaintiff with standing ... there [is] no lawsuit for the real party in interest to ratify, join, or
be substituted into under Rule 17(a)(3) or otherwise.' Whether the real party in interest [that is,
Fund] made a mistake [by not suing originally] does not even enter into consideration." Klein ex

rel. Qlik Techs., Inc. v. Qlik Techs., Inc., 906 F.3d 215,227 n.7 (2d Cir. 2018) (internal citation
omitted) (quoting Cortlandt, 790 F.3d at 423); see Dennis v. JPMorgan Chase & Co., 342 F.
Supp. 3d 404,416 (S.D.N.Y. 2018). Although I gave leave to Frontpoint and Sonterra to
substitute Fund, my order could not confer jurisdiction where it did not originally exist.
FLH, if it were a proper assignee, could file a claim of its own that mirrored the
complaint filed by Frontpoint and Sierra. However, its complaint would be a new filing, not
capable ofrelating back in time to Frontpoint's and Sonterra's filing. The four-year statute of
limitations, running from no later than June 2013, would bar Fund from now filing such suit (or
at the time it filed the TAC, October 26, 2019). 15 U.S.C. § 15b.

12

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 13 of 15

D.

Motion for Preliminary Settlement Approval
Plaintiff moves, with Citibank, N.A. and JPMorgan Chase Bank, N.A., for

preliminary approval of their respective settlement agreements. These motions are denied, for
the Court lacks subject matter jurisdiction.
A court's approval of a settlement requires a finding by the court that there is
subject matter jurisdiction. See Frank v. Gaos, 139 S. Ct. 1041, 1046 (2019) ("A court is
powerless to approve a proposed class settlement if it lacks jurisdiction over the dispute, and
federal courts lack jurisdiction if no named plaintiff has standing."); see also Denney v. Deutsche

Bank AG, 443 F.3d 253, 264 (2d Cir. 2006) ("[N]o class may be certified that contains members
lacking Article III standing."); Zink v. First Niagara Bank, NA., 155 F. Supp. 3d 297,305
(W.D.N.Y. 2016) ("[U]ncertainty as to subject matter jurisdiction cannot be treated merely as a
factor to be weighed in the settlement equation. Unless subject matter jurisdiction is established,

I cannot even consider the Uncontested Motion, much less approve it.").
At the May 2, 2019 hearing, plaintiff raised the argument that, even if the Court
lacks subject matter jurisdiction over the case because of the infirm assignment of rights from
FrontPoint to FLH, it may have jurisdiction based on the somewhat broader language of the
assignment of claims from Sonterra to FLH. However, Sonterra's were dismissed because it was
not an efficient enforcer. FrontPoint Asian Event Driven Fund, L.P. v. Citibank, NA., 2018 WL
4830087, at *6. FLH, as assignee, has no greater capacity than its assignor.

E.

Motion to File a Fourth Amended Complaint
Plaintiff also moves to file a Fourth Amended Complaint and amend the Third

Amended Complaint, adding an additional plaintiff in an attempt to cure the antitrust standing
13

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 14 of 15

issues identified by the Court in SIBO R II, where I found that
FrontPoint, was not an efficient
enforcer for USD SIBOR or SOR, because it transacted in deriva
tives incorporating only SGD
SIBOR. Front Point Asian Event Driven Fund, L.P. v. Citibank,
NA., 2018 WL 4830087, at *5.
The Fourth Amended Complaint purports to cure the deficiency
by adding new plaintiffs, Moon
Capital Partners Master Fund, Ltd. and Moon Capital Master Fund,
Ltd (collectively, the "Moo n
plaintiffs"). Plaintiff alleges that both transacted in SGD FX forwa
rds that incorporated both
USD SIBOR and SOR benchmarks.
This motion is denied for the same reasons that the TAC is dismi
ssed: the
inadequate assignment of claims to FLH from FrontPoint has
deprived the Court of subject
matter jurisdiction. In addition, the new claims of the Moon plaint
iffs correspond to events that
occurred more than eight years ago and are time-barred. Class
action tolling under Amer ican
Pipe applies only to the extent that new plaintiffs can join the
class individually or file individual

claims if the class fails. See China Agritech, Inc. v. Resh, 138
S. Ct. 1800, 1804 (2018). The
Moon plaintiffs cannot bring a new class action or otherwise revive
an otherwise infirm action.
The alternative reading "wou ld allow the statute of limitations

to be extended time and again; as

each class is denied certification, a new named plaint iff could
file a class complaint that
resuscitates the litigation." Id. at 1808.

14

Case 1:16-cv-05263-AKH Document 393 Filed 07/26/19 Page 15 of 15

Conclusion

Because the AP A does not effect the assignment of claims from FrontPoint to
FLH, plaintiff lacks standing to bring its antitrust and breach of the implied covenant of good
faith and fair dealing claims. Defendants' motion to dismiss the case is granted. Pursuant to my
oral order at the May 2, 2019 hearing, Tr. at 5: 11-16, plaintiff shall file an unredacted copy of
the APA on the docket. See Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 124 (2d Cir.
2006). The motions for preliminary approval of the class settlements and to file a Fourth
Amended Complaint are also denied.
The clerk is instructed to terminate the motions (ECF 318, 314, 347), grant
judgment to defendants, and close the case.

SO ORDERED.
Dated:

~lt•~~k-,;

July~19
New York, New York

AL VIN K. HELLERSTEIN
United States District Judge

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