Second Circuit – Antitrust litigation: In re: LIBOR-Based Financial Instruments Antitrust Litigation

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United States Court of Appeals for the Second Circuit

Antitrust litigation

Efficient enforcer – Personal jurisdiction and conspiracy

In re: LIBOR-Based Financial Instruments Antitrust Litigation

17-1569(L)

Judges Livingston, Lynch, and Sullivan

Background: The appeal arose from a multidistrict litigation alleging that the defendants conspired to suppress the London Interbank Offered Rate, a benchmark rate used in countless financial instruments around the globe. At issue on appeal are several orders granting the defendant’s–appellees’ motions to dismiss antitrust claims based on the plaintiffs-appellants’ lack of antitrust standing and/or the court’s lack of personal jurisdiction over the defendants-appellees.

Ruling: The Second Circuit held that the plaintiffs-appellants who purchased LIBOR-indexed bonds from third parties lack antitrust standing. To have antitrust standing, a plaintiff must be an efficient enforcer of the antitrust laws whose alleged injury was proximately caused by a defendant. The third parties’ independent decisions to reference that benchmark severed the casual chain linking the plaintiffs-appellants’ injuries to the defendants-appellees’ misconduct, thereby rendering the plaintiffs-appellants unsuitable as efficient enforcers. The Second Circuit also held that a defendant purposefully avails itself of the laws of a forum when that defendant or its co-conspirator undertakes an overt act in furtherance of the conspiracy in the forum.

Eric F. Citron, of Goldstein & Russell, for the plaintiffs-appellants; Neal Kumar Katyal, of Hogan Lovells, for the defendants-appellees.