IRS Antitrust MDL Plaintiffs v. IRS Antitrust MDL Defendants
OPINION & ORDER NO.4: For the foregoing reasons, it is hereby: ORDERED that the motion to appoint Quinn Emanuel and Cohen Milstein as Interim Co-Lead Counsel for the putative class, Dkt. 74, is granted. Quinn Emanuel and Cohen Milstein shall be resp onsible for the overall conduct of the litigation on behalf of the putative class of investor plaintiffs, including providing supervision of all class-plaintiffs' counsel in this litigation. It is further ORDERED that the motions by other counse l for appointment as interim co-lead counsel, or for appointment to a formal plaintiffs' committee, Dkts. 77, 79, 81, 82, 85, 90, are denied. It is further ORDERED that Interim Co-Lead Counsel may not delegate its responsibilities or assign lega l work to other law firms without the prior approval of the Court, except that the Court hereby pre-approves such delegation of responsibilities to Hagens Berman, Kellogg Huber, and Susman Godfrey. The decision of when to draw on the resources and ex pertise of other law firms is left to the sole discretion of the Interim Co-Lead Counsel. Court approval of assignments to these three firms is not required. No firm to which Interim Co-Lead Counsel delegates responsibility may further sub-delegate t he work without the prior approval of Interim Co-Lead Counsel and the Court. It is further ORDERED that the Court designates Adam S. Hakki and Richard F. Schwed of Shearman & Sterling and Kenneth A. Gallo and Julia Tarver-Mason Wood of Paul Weiss as liaison counsel for defendants. The purpose of this designation is solely for the purposes of facilitating communication with the Court. (As further set forth in this Opinion) (Signed by Judge Paul A. Engelmayer on 8/3/2016) (kl)
The claims in this action arise out of an alleged conspiracy to reduce competition in the
market for Interest Rate Swaps (“IRS”). Defendants consist of 12 groups of corporate affiliates
of large financial institutions (“banks”) which, as alleged, participate in this market, and two
market operators. Plaintiffs allege that the banks enjoyed favorable IRS pricing as a result of
having special access to exchange-like platforms, while colluding among themselves and with
the two market operators to discourage the development and introduction of trading platforms
that would have resulted in superior pricing for others. There are two types of plaintiffs in this
MDL: a putative class of investors who purchased IRS products in the over-the-counter (“OTC”)
market from the defendant financial institutions (the “putative class”), and two entities that
sought to provide exchange-like trading platforms for IRS products. Insofar as this Opinion and
Order concerns the appointment of plaintiffs’ counsel, it applies only to the putative class.
The first investor class action complaint was filed on November 25, 2015 by the Public
School Teachers’ Pension and Retirement Fund of Chicago (“CTPF”), represented by Cohen
Milstein Sellers & Toll PLLC (“Cohen Milstein”), Quinn Emanuel Urquhart & Sullivan, LLP
(“Quinn Emanuel”), and Jacobs Burns Orlove & Hernandez (“Jacobs Burns”). 15 Civ. 9319,
Dkt. 1. 1 On February 25, 2016, CTPF filed an amended complaint, adding as a plaintiff the
Mayor and City Council of Baltimore, represented by Susman Godfrey L.L.P. (“Susman
Godfrey”). 15 Civ. 9319, Dkt. 121.
Since that first complaint was filed, seven other class actions have been filed. On
February 18, 2016, Harrison County, Mississippi, Magnolia Regional Health Center, and
Cullman Regional Health Center, Inc. filed their complaint, represented by Kellogg, Huber,
All case numbers refer to docket numbers in the Southern District of New York.
Hansen, Todd, Evans & Figel, P.L.L.C. (“Kellogg Huber”), Korein Tillery, LLC (“Korein
Tillery”), McCulley McCluer PLLC (“McCulley McCluer”), Badham & Buck LLC (“Badham &
Buck”), Boni & Zack LLC (“Boni & Zack”), Boyce Holleman & Associates (“Boyce
Holleman”), Fuller, Willingham, Fuller & Carter, LLC (“Fuller Willingham”), Fine, Kaplan and
Black, R.P.C. (“Fine Kaplan”), and Mike Moore Law Firm, LLC (“Moore”). 16 Civ. 4561, Dkt.
1. On May 4, 2016, the Policemen’s Annuity & Benefit Fund of Chicago filed its complaint,
represented by Korein Tillery, Scott+Scott, Attorneys at Law, LLP (“Scott+Scott”), and Louis F.
Burke PC (“Burke”). 16 Civ. 4566, Dkt. 1. On May 23, 2016, the City of Philadelphia filed its
complaint, represented by Korein Tillery, Obermayer Rebmann Maxwell & Hippel LLP
(“Obermayer”), Boni & Zack, Scott+Scott, Kellogg Huber, and Fine Kaplan. 16 Civ. 4563, Dkt.
1. On May 27, 2016, the Kansas City, Missouri Employees’ Retirement System filed its
complaint, represented by Bernstein Litowitz Berger & Grossmann LLP (“BLBG”) and Hausfeld
LLP (“Hausfeld”). 16 Civ. 4005, Dkt. 1. On June 1, 2016, the Genesee County Employees’
Retirement System filed its complaint, represented by Labaton Sucharow LLP (“Labaton
Sucharow”) and Kessler Topaz Meltzer & Check, LLP (“Kessler Topaz”). 16 Civ. 4089, Dkt. 1.
On June 7, 2016, LD Construction LLC, LDLJ Associates, L.P., Lawrence W. Gardner and
David Gardner filed their complaint, represented by Hagens Berman Sobol Shapiro LLP
(“Hagens Berman”). 16 Civ. 4239, Dkt. 1. On July 1, 2016, Triangle T Partners, LLC filed its
complaint, represented by Berger & Montague, P.C. (“Berger & Montague”). 16 Civ. 5260, Dkt.
On June 10, 2016, the Court issued an Order that, inter alia, designated Quinn Emanuel
as Temporary Lead Counsel for the plaintiff class, and directed plaintiffs to file a letter
addressing the advisability of appointing lead and/or liaison counsel and a steering committee to
support lead counsel, and the process for making such appointments. 16-MD-2704, Dkt. 11
(Order No. 1). 2 On July 8, 2016, plaintiffs filed a letter expressing the views of the various
plaintiffs and their counsel. Dkt. 51. On July 18, 2016, the Court directed any plaintiff’s counsel
seeking appointment to a leadership position to file an application by July 22, 2016. Dkt. 93
(Order No. 2).
On July 22, 2016, the Court received leadership applications from Quinn Emanuel and
Cohen Milstein (jointly), Dkts. 74–76, Hagens Berman, Dkt. 77, Berger & Montague, Dkts. 79,
83, Susman Godfrey, Dkt. 81, Labaton Sucharow, Dkts. 82, 84, Hausfeld and BLBG (jointly),
Dkt. 85, Kellogg Huber, Dkts. 90–91, and Korein Tillery and Scott+Scott (jointly), Dkts. 90–91,
95. The Court also received a joint letter from the two individual plaintiffs, Tera Group, Inc. and
its affiliates (“Tera”), and Javelin Capital Markets LLC and its affiliate (“Javelin”), supporting
Quinn Emanuel and Cohen Milstein’s application. Dkt. 73.
On July 26, 2016, the Court held an initial pretrial conference, addressing a range of case
management issues. At the conference, plaintiffs’ counsel were given an opportunity to share
their views on the optimal structure for the representation of the class. The Court also stated it
would afford any plaintiff’s counsel the opportunity to submit a written response to the
leadership applications that had been submitted by others, but none indicated a desire to do so.
The Court also requested that defendants designate one or two firms to serve as liaison counsel,
for the limited purpose of facilitating communications with the Court. On July 29, 2016,
defendants designated Adam S. Hakki and Richard F. Schwed of Shearman & Sterling LLP
(“Shearman & Sterling”) and Kenneth A. Gallo and Julia Tarver-Mason Wood of Paul, Weiss,
Rifkind, Wharton & Garrison LLP (“Paul Weiss”). Dkt. 96.
Unless otherwise specified, all remaining references to docket entries are to 16-MD-2704.
Federal Rule of Civil Procedure 23(g)(3) (“Rule 23(g)(3)”) provides that the Court “may
designate interim counsel to act on behalf of a putative class before determining whether to
certify the class.” “[D]esignation of interim counsel clarifies responsibility for protecting the
interests of the class during precertification activities, such as making and responding to motions,
conducting any necessary discovery, moving for class certification, and negotiating settlement.”
Manual For Complex Litigation (Fourth) § 21.11 (2004) (“MCL”). “When appointing interim
class counsel, courts generally look to the same factors used in determining the adequacy of class
counsel under Rule 23(g)(1)(A).” In re Mun. Derivatives Antitrust Litig., 252 F.R.D. 184, 186
(S.D.N.Y. 2008) (citing In re Air Cargo Shipping Antitrust Litig., 240 F.R.D. 56, 57 (E.D.N.Y.
Rule 23(g)(1)(A) requires the Court to consider:
(i) the work counsel has done in identifying or investigating potential claims in the
action; (ii) counsel’s experience in handling class actions, other complex litigation,
and the types of claims asserted in the action; (iii) counsel’s knowledge of the
applicable law; and (iv) the resources that counsel will commit to representing the
Fed. R. Civ. P. 23(g)(1)(A). “When more than one choice of counsel satisfies these requirements
for adequacy, Rule 23(g)(2) provides that the court ‘must appoint the applicant best able to
represent the interests of” the plaintiffs.” In re Mun. Derivatives Antitrust Litig., 252 F.R.D. at
186 (quoting Fed. R. Civ. P. 23(g)(2)).
Upon consideration of the factors specified by Rule 23(g)(1)(A), the Court finds that
Quinn Emanuel and Cohen Milstein are the two firms best able to represent the interests of the
proposed plaintiff class. All counsel who submitted leadership applications have impressive
records of experience and success in prosecuting class claims, including serving as lead or colead counsel in antitrust class action litigations. Each appears to have deep knowledge not only
of class action law and procedure, but also of substantive antitrust law. Further, each firm has
expressed a commitment to dedicating its resources to representing the interests of the class. As
such, the second, third, and fourth Rule 23(g) factors, although in certain particulars marginally
favoring certain applicants, do not strongly drive the Court’s decision here.
However, the Court finds, the first Rule 23(g) factor compellingly favors appointment of
Quinn Emanuel and Cohen Milstein as interim co-lead counsel. As their application emphasizes,
Quinn Emanuel and Cohen Milstein jointly filed the first class action complaint on behalf of
CTPF, Cohen Milstein’s client. Critically, the firms did so not by piggybacking on an existing
government investigation or enforcement action, but by undertaking an independent
investigation. The firms represent that they interviewed dozens of market participants and
confidential witnesses and consulted leading experts. The firms estimate that these efforts cost
Quinn Emanuel close to $1 million, lasted more than six months, and entailed the retention of an
expert. Dkt. 74, 1–2, 4–10. The letter from Tera and Javelin supporting appointment of these
firms confirms that Quinn Emanuel and Cohen Milstein’s investigative efforts were extensive.
Dkt. 73, at 1–2.
Important, too, as the chronology described above reflects, it was the CTPF action that
catalyzed the filing of the later actions. Although the Court has no doubt that the other counsel
seeking leadership positions also invested a degree of time and energy investigating the claims of
their clients before filing their complaints, the Court’s assessment is that the efforts undertaken
by Quinn Emanuel and Cohen Milstein were more generative and exceeded the investigative
work of the other applicants by an order of magnitude. Therefore, the first Rule 23(g) factor
strongly favors appointing Quinn Emanuel and Cohen Milstein as interim co-lead counsel. 3
The Court further finds that appointing two interim co-lead counsel is most likely to
produce efficient and effective representation. As to the number of counsel, the appointment of
two interim co-leads ensures that there are sufficient resources available to prosecute the class’s
claims. It also provides a safeguard in the event that a firm-specific conflict arises that inhibits
one of the interim co-lead counsel from taking on an aspect of the representation. At the same
time, in the Court’s view, for the reasons expressed by various counsel during the initial pretrial
conference, having more than two interim co-lead counsel will likely yield needless duplication
of effort and inefficient decision making. Indeed, appointing two co-lead counsel has become a
common practice in this District in connection with similar putative antitrust class actions. See,
e.g., In re Platinum and Palladium Antitrust Litig., 14 Civ. 9391, Dkt. 32 (S.D.N.Y. Mar. 20,
2015); In re Credit Default Swaps Antitrust Litig., 13-MD-2476, Dkts. 244 (S.D.N.Y. Dec. 5,
2013), 255 (S.D.N.Y. Dec. 13, 2013).
Having reflected carefully on the support structure available to the co-lead counsel, the
Court does not find that, in this case, appointing a formal committee of plaintiffs’ counsel is
necessary or beneficial to the class’s interests. The creation of a formal committee is “most
commonly needed when group members’ interests and positions are sufficiently dissimilar to
justify giving them representation in decision making.” MCL § 10:221. The Court does not
perceive any such divergent interests here—a view shared by various plaintiffs’ counsel at last
week’s initial pretrial conference. In addition, the Court’s firm view is that creating a formal
Quinn Emanuel and Cohen Milstein’s application to be appointed as interim co-lead counsel is
supported not only by the Tera and Javelin plaintiffs, but also by three firms representing
putative class members: Hagens Berman, Susman Godfrey, and Berger & Montague.
committee with vested responsibilities here (whether for oversight, mandatory consultation, or
otherwise) would lead to unnecessary duplication of work and hinder efficient decision making.
See, e.g., In re London Silver Fixing, Ltd., Antitrust Litig., 14-MD-2573, Dkt. 17 (S.D.N.Y. Nov.
25, 2014) (appointing interim co-lead counsel but not a formal committee); In re LIBOR-Based
Fin. Instruments Antitrust Litig., 11-MD-2262, Dkt. 90 (S.D.N.Y. Dec. 22, 2011) (appointing
two pairs of interim co-lead counsel to represent two putative classes but not a formal
At the same time, for a number of reasons, the Court finds—in agreement with various
plaintiffs’ counsel—that the class would benefit from having several pre-designated law firms
available to support the efforts of interim co-lead counsel. The Court is mindful of the high
stakes and complexity of the litigation and that it may take unexpected turns. It is possible, for
example, that, as the case proceeds, formidable challenges relating to managing and taking
discovery, or perhaps other issues, will be presented by the existence of 14 distinct defendant
groups here. There is value in having a support network of pre-designated law firms at the ready
whom interim co-lead counsel can deploy, at interim co-lead counsel’s discretion, to help
shoulder such burdens. There is also value in having firms ready to assume responsibility for
one-off issues that co-lead counsel determine, as a result of potential conflicts or for other
reasons, are best handled by a separate law firm. Given the knowledge, experience, and skills of
the various firms here, there is value to having several available as a brain trust for interim colead counsel to tap as useful. Finally, the Court’s pre-designation of several firms has the virtue
of assuring that co-lead counsel have a balanced and deep bench to draw upon, while limiting the
potential for side-deals or favoritism presented by leaving the selection process to interim colead counsel.
For avoidance of doubt, the counsel whom the Court today pre-designates are not vested
at this time with any responsibilities in this case. They are not authorized to do independent
work on behalf of the putative class. Rather, they are to be “on-call”—available, at interim colead counsel’s sole discretion, as a resource.
After careful consideration of all of the leadership position applications, the Court
designates three firms—Hagens Berman, Kellogg Huber, and Susman Godfrey—to serve in this
support capacity. While all of the firms that submitted leadership applications have extensive
experience and demonstrated success in this area, the Court’s assessment is that these three firms
are particularly well-suited to this assignment. Each has a stellar track record and a reputation in
the District for diligent, effective, and professional representation. In selecting these firms, the
Court paid careful attention to the varied skills and experience of counsel, both in pretrial, trial,
and appellate advocacy. The Court selected counsel that, partnered with Quinn Emanuel and
Cohen Milstein, create a diverse, complementary, and deep team whose members, when viewed
together, have represented the substantial majority of the plaintiffs here.
As explained in the order that immediately follows, in designating these three firms, the
Court does not preclude interim co-lead counsel from seeking the Court’s approval for the
involvement of other firms not here designated for specific tasks or projects upon a showing why
it is necessary for such a firm, as opposed to one of the three pre-designated here, to take on a
For the foregoing reasons, it is hereby:
ORDERED that the motion to appoint Quinn Emanuel and Cohen Milstein as Interim
Co-Lead Counsel for the putative class, Dkt. 74, is granted. Quinn Emanuel and Cohen Milstein
shall be responsible for the overall conduct of the litigation on behalf of the putative class of
investor plaintiffs, including providing supervision of all class-plaintiffs’ counsel in this
litigation. As Interim Co-Lead Counsel for the class, Quinn Emanuel and Cohen Milstein have
the authority to:
a. Promote the efficient conduct of this litigation and avoid unnecessary duplication and
unproductive efforts by making and supervising all work assignments;
b. Prepare and file the Consolidated Class Complaint on behalf of the putative class, and
any subsequent pleadings;
c. Make, brief, and argue motions;
d. Conduct all pretrial, trial, and post-trial proceedings on behalf of the putative class and
act as a spokesperson for the putative class;
e. Conduct or coordinate discovery on behalf of the putative class consistent with the
Federal Rules of Civil Procedure, including preparation (or responses to) written
discovery requests and examination (or defense) of witnesses in depositions;
f. Monitor activities of the plaintiffs’ counsel to whom they delegate work and implement
procedures to ensure that schedules are met and unnecessary expenditures of time and
funds are avoided by collecting from each firm regular time and expense reports;
g. Negotiate with defense counsel with respect to settlement and other matters;
h. Prepare any application for an award (or approval) of fees and reimbursement of
expenses incurred by the putative class;
i. Consult with and retain expert witnesses for the putative class;
j. Negotiate with, retain, and manage relations with outside vendor(s) for the collection,
processing, or review of documents and electronically stored information produced in
k. Conduct or coordinate all negotiations with defense counsel regarding search and
production protocols, manage the review of documents produced by defendants and third
parties (and production of documents by the putative class plaintiffs), and implement
advanced analytics for the efficient review of documents as appropriate;
l. Coordinate and communicate as necessary with counsel for other parties in the litigation
regarding any matters addressed in this Order in order to ensure efficient use of
plaintiffs’, defendants’, and the Court’s time;
m. Ensure that all plaintiffs’ counsel and plaintiffs are informed of the progress of this
litigation as necessary; and
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