Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

AMA Capital, LLC (“AMA”) is a claimant in an antitrust class-action settlement. The settlement agreement at issue required that each claimant substantiate its claims with such documents as class counsel and the claims administrator, in their discretion, deemed acceptable. The settlement agreement also provided each claimant with the opportunity to (1) remedy deficiencies in its claims before the claims administrator issued its decision and (2) if the claims administrator rejected its claims in whole or in part, contest the claims administrator’s decision within twenty days of the mailing of the rejection notice. In this case, the claims administrator rejected most of AMA’s claims because, among other things, AMA repeatedly failed to provide the requisite transactional records to support its claims. The district court agreed and also denied AMA’s motion for reconsideration based on documents it submitted subsequent to the claims administrator’s rejection.   On appeal, AMA argues primarily that the district court erred by failing to consider documents it submitted during the post-rejection contest process and by denying its claims on the basis of improper evidentiary requirements. The Second Circuit affirmed the district court’s order holding that the claims administrator was not required to accept records during the contest process that were previously available to AMA, which is akin to a motion for reconsideration, and that the district court did not err by denying AMA’s claims. Moreover, because AMA has standing as a class member to appeal any denial of its claims, the court dismissed as moot the appeal in No. 22-19, which challenges the district court’s denial of AMA’s motion to intervene. View "Contant v. AMA Cap., LLC" on Justia Law

A putative class of over 12 million merchants brought this antitrust action under the Sherman Act against Visa U.S.A. Inc., MasterCard International Inc., and numerous banks that serve as payment-card issuers for those networks. Plaintiffs alleged that Visa and MasterCard adopted and enforced rules and practices relating to payment cards that had the combined effect of injuring merchants by allowing Visa and MasterCard to charge supracompetitive fees (known as “interchange fees”) on each payment card transaction. After nearly fifteen years of litigation, the parties agreed to a settlement of roughly $ 5.6 billion, which was approved by the district court over numerous objections. In so doing, $900,000 in service awards was granted to lead plaintiffs, and roughly $523 million was granted in attorneys’ fees. Appellants are various objectors who argue that the district court erred when it certified the class, approved the settlement, granted service awards and computed attorneys’ fees.   The Second Circuit affirmed in all respects the district court’s orders to the extent they constituted a final judgment, with the exception that the court directed the district court to reduce the service award to class representatives to the extent that its size was increased by time spent in lobbying efforts that would not increase the recovery of damages. The court made no ruling as to how damages should be allocated between branded oil companies and their branded service station franchisees, the reasonableness of the special master’s ultimate findings, or the legality of releasing an as-of-yet hypothetical future claim. View "In re Payment Card Interchange Fee and Merchant Discount Antitrust" on Justia Law

Relevent Sports, LLC, a U.S.-based soccer promoter, alleges that the Fédération Internationale de Football Association (popularly known as FIFA) and the United States Soccer Federation, Inc. adopted and enforced a geographic market division policy in 2018 that unlawfully prohibits soccer leagues and teams from playing official season games outside of their home territory. Relevent claims that the 2018 policy represents an agreement among direct competitors to restrict competition in violation of federal antitrust laws. The district court concluded that Relevent failed to allege that the challenged anticompetitive conduct stemmed from a prior agreement to enter into the 2018 policy.   The Second Circuit vacated and remanded. The court explained that a plaintiff challenging an association policy or rule that governs the conduct of the members’ separate businesses need not allege an antecedent “agreement to agree.” Because Relevent challenges the allegedly monopolistic 2018 Policy directly, it has adequately alleged concerted action. The Sherman Antitrust Act and the Clayton Antitrust Act require no further allegations of an agreement to engage in concerted action for Relevent’s complaint to survive a motion to dismiss. View "Relevent Sports v. U.S. Soccer Federation" on Justia Law

Plaintiffs are participants in the physical and derivatives markets for platinum and palladium and seek monetary and injunctive relief for violations of the antitrust laws and the Commodities Exchange Act (“CEA”). According to Plaintiffs, Defendants—mostly foreign companies engaged in trading these metals—manipulated the benchmark prices for platinum and palladium by collusively trading on the futures market to depress the price of these metals and by abusing the process for setting the benchmark prices. Defendants allegedly benefited from this conduct via trading in the physical markets and holding short positions in the futures market. The district court held that it had personal jurisdiction over two of the foreign Defendants, but it dismissed Plaintiffs’ antitrust claims for lack of antitrust standing and the Plaintiffs’ CEA claims for being impermissibly extraterritorial. Plaintiffs appealed the dismissal of these claims.   The Second Circuit reversed in part, vacated in part, and affirmed in part. The court reversed the district court’s holding that the “Exchange Plaintiffs” lacked antitrust standing to sue for the manipulation of the New York Mercantile Exchange futures market in platinum and palladium. The court explained that as traders in that market, the Exchange Plaintiffs are the most efficient enforcers of the antitrust laws for that injury. But the court affirmed the district court’s conclusion that KPFF Investment, Inc. did not have antitrust standing. Additionally, the court vacated the district court’s dismissal of Plaintiffs’ CEA claims. View "In re Platinum and Palladium Antitrust Litigation" on Justia Law

Plaintiff brought this putative class action against more than twenty banks and brokers, alleging a conspiracy to manipulate two benchmark rates known as Yen-LIBOR and Euroyen TIBOR. He claimed that he was injured after purchasing and trading a Euroyen TIBOR futures contract on a U.S.-based commodity exchange because the value of that contract was based on a distorted, artificial Euroyen TIBOR. Plaintiff brought claims under the Commodity Exchange Act (“CEA”), and the Sherman Antitrust Act, and sought leave to assert claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”).   The district court dismissed the CEA and antitrust claims and denied leave to add the RICO claims. Plaintiff appealed, arguing that the district court erred by holding that the CEA claims were impermissibly extraterritorial, that he lacked antitrust standing to assert a Sherman Act claim, and that he failed to allege proximate causation for his proposed RICO claims.   The Second Circuit affirmed. The court explained that fraudulent submissions to an organization based in London that set a benchmark rate related to a foreign currency—occurred almost entirely overseas. Here Plaintiff failed to allege any significant acts that took place in the United States. Plaintiff’s CEA claims are based predominantly on foreign conduct and are thus impermissibly extraterritorial. As such, the district court also correctly concluded that Plaintiff lacked antitrust standing because he would not be an efficient enforcer of the antitrust laws. Finally, Plaintiff failed to allege proximate causation for his RICO claims. View "Laydon v. Coöperatieve Rabobank U.A., et al." on Justia Law

Plaintiff brought this putative class action against more than twenty banks and brokers, alleging a conspiracy to manipulate two benchmark rates known as Yen-LIBOR and Euroyen TIBOR. Plaintiff brought claims under the Commodity Exchange Act (“CEA”), and the Sherman Antitrust Act, and sought leave to assert claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). The district court dismissed the CEA and antitrust claims and denied leave to add the RICO claims. Plaintiff appealed, arguing that the district court erred by holding that the CEA claims were impermissibly extraterritorial, that he lacked antitrust standing to assert a Sherman Act claim, and that he failed to allege proximate causation for his proposed RICO claims.   The Second Circuit affirmed. The court explained that the conduct—i.e., that the bank defendants presented fraudulent submissions to an organization based in London that set a benchmark rate related to a foreign currency—occurred almost entirely overseas. Indeed, Plaintiff fails to allege any significant acts that took place in the United States. Plaintiff’s CEA claims are based predominantly on foreign conduct and are thus impermissibly extraterritorial. Further, the court wrote that the district court also correctly concluded that Plaintiff lacked antitrust standing because he would not be an efficient enforcer of the antitrust laws. Lastly, the court agreed that Plaintiff failed to allege proximate causation for his RICO claims. View "Laydon v. Coöperatieve Rabobank U.A., et al." on Justia Law

Defendants JABA Associates LP and its general partners appealed the district court’s judgment granting summary judgment to Plaintiff, (“Trustee”), pursuant to the Securities Investor Protection Act of 1970 (“SIPA”). JABA was a good faith customer of Bernard L. Madoff Investment Securities LLC (“BLMIS”) and held BLMIS Account Number 1EM357 (the “JABA Account”). The Trustee brought this action to recover the allegedly fictitious profits transferred from BLMIS to Defendants in the two years prior to BLMIS’s filing for bankruptcy. The district court granted recovery of $2,925,000 that BLMIS transferred to Defendants in the two years prior to BLMIS’s filing for bankruptcy, which made it recoverable property under SIPA.Defendants appealed the district court’s grant of summary judgment. The Second Appellate District affirmed reasoning that because is no genuine dispute of material fact that Bernard L. Madoff transferred the assets of his business to Defendants, which made it recoverable property under SIPA, the district court properly granted summary judgment to Plaintiff. The court reasoned that here Here, Defendants argue that the Bankruptcy Code does not authorize an award of prejudgment interest because the statute is silent. Yet Defendants do not make any argument that this silence is dispositive. Further, the court wrote that prejudgment interest has been awarded against other similarly situated defendants in related SIPA litigation. Thus, the district court appropriately balanced the equities between the parties. Given this, the district court did not abuse its discretion in granting an award of 4 percent prejudgment interest to the Trustee. View "In re: Bernard L. Madoff Investment Securities LLC" on Justia Law

Plaintiffs, investors in 22nd Century Group, alleged on behalf of an investor class that (1) Defendants engaged in an illegal stock promotion scheme in which they paid authors to write promotional articles about the company while concealing the fact that they paid the authors for the articles; and (2) Defendants failed to disclose an investigation by the Securities and Exchange Commission (“SEC”) into the company’s financial control weaknesses. Plaintiffs alleged they were harmed after public articles revealed the promotion scheme and stock prices fell. The district court dismissed the complaint for failing to state a claim.   On appeal, Plaintiffs argued (1) they adequately alleged material misrepresentations sufficient to sustain claims under SEC Rule 10b-5; (2) their claim under Section 20(a) of the Securities Exchange Act was premised on a valid predicate violation of Section 10(b); and (3) the district court erred in dismissing the complaint with prejudice.   The Second Circuit affirmed in part and vacated in part. On the first and second points, the court agreed that the allegation that Defendants failed to disclose the SEC investigation states a material misrepresentation and could also support Section 20(a) liability. However, the court found no merit in the remaining challenges. The court reasoned that because the complaint does not adequately allege that Defendants had a duty to disclose that they paid for the articles’ publication, Plaintiffs fail to state a claim that the existence of the stock promotion scheme constituted a materially misleading omission. View "Noto v. 22nd Century Grp." on Justia Law

Defendant appealed a judgment entered in district court following a jury trial, convicting him of conspiracy to restrain trade in violation of Section 1 of the Sherman Act. On appeal, Defendant argued that the district court erred by failing to consider his proffered evidence that the illegal trading activity lacked anticompetitive effects and had procompetitive benefits and by refusing to conduct a pre-trial assessment as to whether the per se rule or the rule of reason applies. He further contended that the district court abused its discretion in precluding his competitive effects evidence from admission at trial and in conducting only a limited post-trial inquiry into juror misconduct.   The Second Circuit affirmed the ruling, concluding that the district court was not required to make a threshold pre-trial determination as to whether the per se rule or the rule of reason applies to the alleged misconduct in this case. The court reasoned that the grand jury indicted Defendant for a per se antitrust violation and the government was entitled to present its case to the jury. The district court properly assessed the sufficiency of the evidence of the alleged per se violation and the sufficiency decision upholding the verdict is not challenged on appeal. In addition, the district court acted within its broad discretion in strictly limiting the admission of Defendant’s competitive effects evidence at trial. Finally, the district court did not abuse its discretion in ending its post-trial investigation into alleged juror misconduct. View "United States v. Aiyer" on Justia Law

Plaintiffs filed a putative class action alleging that Haitian government officials and multinational corporations conspired to fix the prices of remittances and telephone calls from the United States to Haiti. Plaintiffs allege a price-fixing claim under the Sherman Act and related state law claims, alleging that defendants agreed to produce official instruments (a Presidential Order and two Circulars of the Bank of the Republic of Haiti) to disguise their agreement as a tax for domestic education programs.The Second Circuit held that the act of state doctrine does not bar adjudication of a claim merely because that claim turns on the "propriety" of the official acts of a foreign sovereign. Instead, the doctrine forecloses a claim only if it would require a court to declare that an official act of a foreign sovereign is invalid, i.e., to deny the act legal effect. In this case, even assuming the Presidential Order and Circulars have their full purported legal effect under Haitian law, the court concluded that plaintiffs' antitrust claim under U.S. federal law remains cognizable. Accordingly, the court reversed the district court's dismissal of the antitrust claim under the act of state doctrine and vacated the dismissal of the fifteen state law claims for reanalysis under the proper standard. The court also vacated the dismissal on the alternative grounds of forum non conveniens because the district court did not give due deference to U.S.-resident plaintiffs' choice of forum. The court remanded for further proceedings. View "Celestin v. Caribbean Air Mail, Inc." on Justia Law