Antitrust Law Daily Wrap Up, ANTITRUST—S.D.N.Y.: Global banks must defend Yen LIBOR manipulation suit, (Jul 28, 2015)

By Linda O’Brien, J.D., LL.M.

In an action against major domestic and foreign financial institutions for conspiring to manipulate the Japanese yen London Interbank Offered Rate (LIBOR) and Euroyen Tokyo Interbank Offered Rate (TIBOR) benchmarks, the federal district court in New York City has denied reconsideration of its order denying the defendants’ motion to dismiss for lack of personal jurisdiction (Laydon v. Mizuho Bank, Ltd., July 24, 2015, Daniels, G.).

In April 2012, Jeffrey Laydon, an investor in Yen LIBOR and Euroyen TIBOR futures contracts, filed suit against several major domestic and foreign banks for conspiring to manipulate the LIBOR and TIBOR rates which reflect the interest on short term loans denominated in Japanese yen. In March 2015, the court denied motions to dismiss for lack of personal jurisdiction by defendants Deutsche Bank AG, The Shoko Chukin Bank, Ltd., The Bank of Yokohama, Ltd., Sumitomo Mitsui Banking Corp., Mizuho Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, and The Norinchukin Bank. The defendants moved for reconsideration and, in the alternative, to certify the order for interlocutory appeal.

The court found that the defendants waived their right to their personal jurisdiction defense by failing to timely raise the issue after the U.S. Supreme Court ruling in Daimler AG v. Bauman, 134 S.Ct. 746 (2014). The defendants’ contention that the Daimler decision was not controlling until the Second Circuit issued a similar ruling in Gucci America, Inc. v. Weixing Li, 768 F.3d 122 (2014) was rejected. The defendant banks filed their motions to dismiss seven months after the Daimler decision and over a month prior to the issuance of the Gucci decision. In the court’s view, the defendants’ argument that Daimler served as an impetus for their motions was not compelling, and they could not relitigate the issue by raising an argument that contradicted their earlier position.

The defendants’ argument that their conduct only constituted waiver if the plaintiff was prejudiced or extensive pretrial proceedings and discovery have occurred that might otherwise have been avoided was also rejected. According to the court, the defendants had many clear opportunities to raise their personal jurisdiction defense, including their response to a direct inquiry by the court during an April 2014 conference. The sole and repeated representation by the defendants’ counsel was that they did not intend to bring motions to dismiss for lack of personal jurisdiction. Thus, they have no valid ground for reconsideration.

Finally, the defendants’ request to certify the March 2015 order for interlocutory appeal was also denied. The issue of specific personal jurisdiction did not involve a controlling question of law, and an immediate appeal from the order would not materially advance the ultimate termination of the litigation, the court concluded.

The case is No. 1:12-cv-03419-GBD-HBP.

Attorneys: Thomas Michael Skelton (Lowey Dannenberg Cohen & Hart, PC) for Jeffrey Laydon. Christopher Michael Viapiano (Sullivan & Cromwell LLP) for The Bank of Tokyo Mitsubishi UFJ, Ltd., and Mitsubishi UFJ Trust and Banking Corp. Michael Llloyd Spafford (Paul Hastings LLP) for Sumitomo Mitsui Banking Corp. Jerome Steven Fortinsky (Shearman & Sterling LLP) for Mizuho Corporate Bank, Ltd. Gary W. Kubek (Debevoise & Plimpton, LLP) for The Bank of Yokohama, Ltd. Dale Christian Christensen, Jr. (Seward & Kissel LLP) for The Sumitomo Trust and Banking Company, Ltd.

Companies: The Bank of Tokyo Mitsubishi UFJ, Ltd.; Mitsubishi UFJ Trust and Banking Corp.; Sumitomo Mitsui Banking Corp.; Mizuho Corporate Bank, Ltd.; The Bank of Yokohama, Ltd.; Sumitomo Trust and Banking Company, Ltd.

Cases: Antitrust NewYorkNews