Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ill.: Class certification granted in antitrust suit alleging manipulation of crude oil market, (Jun 25, 2025)

By Kenneth H. Ryesky, M.B.A., J.D.

Contemporaneous communications among defendants included "We pushed each other so hard for years for this one moment" and "Please don’t tell anybody what happened today lads."

The federal district court in Chicago has granted a motion to certify the class in a lawsuit alleging manipulation of the crude oil futures contracts market. An entity that traded on the exchange through an exchange member had accused the exchange member, its principal, and other individuals of manipulating the market when the price of the benchmark crude oil futures price unprecedently dipped into negative territory. The court ruled that the proposed class satisfied all of the requisites for a class action. The court also found the appointed the plaintiff entity and its counsel to represent the class, and denied the defendants' motion to exclude the plaintiff's expert's testimony without prejudice to reprise that motion at the merits stage of litigation (Mish International Monetary Inc. v. Vega Capital London, Ltd., No. 1:20-cv-04577 (N.D. Ill. Jun. 24, 2025)).

Background. Futures markets have been established for many commodities that are vital to the economy but whose market price is subject to volatility, such that the producer and the consumer of the commodity can each know with certainty the price that will be paid/received at a future date. Between the producer's advance sale of the commodity and the consumer's advance purchase, the contract more often than not passes through the hands of investors who are neither producers nor users of the commodity; these investors effectively absorb the market risk that otherwise would impart uncertainty to the producer and consumer.

Some commodities are known as "benchmark commodities," which are either a particular grade of a commodity, or a composite index of multiple grades. The price of a benchmark commodity influences if not totally determines the commodity's price, and within a given industry, particular grades of the commodity are often subject to a pricing differential from the benchmark commodity.

The benchmark commodity for crude oil in the United States is West Texas Intermediate Light Sweet Crude Oil (WTI). Futures contracts for WTI are traded on the Chicago Mercantile Exchange's (CME) online platform, and is the world's most liquid and actively traded crude oil contract. Futures contracts in WTI provide that the parties to the contract will either effect a cash settlement or physical delivery at the contract's expiry. Many contracts are closed on a Trade at Settlement (TAS) basis.

Although the city of Cushing, Oklahoma has long passed its heyday from the early Twentieth Century oil boom, and the last of its many oil refineries has shut down, it still is the situs of the world's largest petroleum tank farm, and the infrastructure of the many oil pipelines that had intersected there remains. Cushing is the designated physical delivery situs in the WTI futures contracts.

The May 2020 WTI futures contracts expired on April 21, 2020. The day before, the price of the May contract price went negative, dipping at one point to nearly negative $40 dollars per barrel and settling at -$37 (which the "seller" was required to pay the "buyer" to take delivery or to make a cash settlement).

Mish International Monetary Inc. (Mish) brought a putative class action against Vega Capital London, Ltd. (Vega) and other individuals who traded on the Chicago Mercantile Exchange through Vega, alleging a conspiracy to manipulate WTI May 2020 futures prices. The class action lawsuit survived dismissal, and Mish moved for class certification for a class of those (except the defendants and associated individuals and entities) who sold a May 2020 WTI futures contract between 9:00 AM and 1:30 PM, Chicago time, in order to liquidate a long position.

Class certification-numerosity. The judge ruled that the proposed class fulfilled the numerosity requirement for a class action [Fed. R. Civ. P. 23(a)(1)]. Although only 11 sellers other than Mish were specifically identified, other evidence indicated a sufficient number of class members. Such evidence included (1) a CME audit trail that found more than 1,100 unique account numbers who traded during the class period; and (2) a Commodity Futures Trading Commission report showing 173 traders holding May 2020 positions in the May 2020 contract. Moreover, traders of the May 2020 WTI contracts were geographically diverse in 35 states and 47 countries. This geographic dispersion weighed towards making joinder of all class members impracticable.

Class certification-typicality. The court found that the proposed class satisfied the typicality requirement for a class action [Fed. R. Civ. P. 23(a)(3)]. The underlying conduct alleged by Mish entailed a scheme by the defendants to coordinate sales of the May 2020 contract to drive down the prices, and the acts and/or omissions by Vega and its principal; this scheme was common to all members of the proposed class. The liability theories based upon the Sherman Act and the Commodities Exchange Act were also shared by the class. Although there would surely be differences in class members' damages calculations based upon the times and bases they executed their trades, some class members might not qualify for any recovery at all, and there accordingly was potential for conflicts between individual class members, such matters were for a later stage of litigation and did not vitiate the typicality requisite.

Class certification-commonality. The court determined that the proposed class met the typicality requirement for a class action [Fed. R. Civ. P. 23(a)(2)]. Mish's identified common questions pertained to (1) defendants' engagement in a conspiracy; (2) defendants' intentions; (3) defendants' ability to manipulate the contract prices; and (4) whether the prices were actually depressed artificially by the defendants. These questions were common to all members of the proposed class.

Class certification-superiority. The court determined that a class action lawsuit was a superior method of adjudicating the controversy [Fed. R. Civ. P. 23(b)(3)]. Here, the defendants' expert estimated the total damages to be $1.15 billion, and the average claim therefore in excess of $1 million. The judge noted that even if the class members were to all be joined or each brought their own individual actions, the same issues and questions would need to be delved into regardless of the amount of the claim. There also was a contention from the defendants that matter should be arbitrated in accordance with the arbitration provisions in their contracts to trade on the exchanges; this was "not a developed argument" and there remained questions as to whether those arbitration clauses would apply at all.

The Case is No. 1:20-cv-04577.

Judge: Shah, M.

Attorneys: Craig Essenmacher (Lovell Stewart Halebian Jacobson LLP) for Mish International Monetary Inc. Michael P. Kelly (Akerman LLP) for Vega Capital London, Ltd.

Companies: Mish International Monetary Inc.; Vega Capital London, Ltd.

Cases: Antitrust IllinoisNews