Overview
In an opinion yesterday, Judge Schofield denied various banks’ motion to dismiss a price fixing case concerning a foreign exchange benchmark called the “Fix.” Notably, Judge Schofield distinguished her ruling from Judge Buchwald’s ruling dismissing a similar case concerning the LIBOR benchmark (covered here). Judge Buchwald had ruled there could be no “antitrust injury” because LIBOR is set by banks acting “cooperative[ly]” (as opposed to acting as competitors) to estimate their borrowing costs, whereas, as Judge Schofield pointed out, banks establish the Fix by actual transactions. Judge Schofield went on to disagree with the LIBOR ruling, to the extent it could be read to require a showing, at the pleading stage, that the injury alleged could not have resulted from unilateral (as opposed to collusive) conduct:
Defendants argue that because “plaintiffs would have suffered the same injury from any alleged manipulation of the London fix” even if “individual defendants had unilaterally engaged in such manipulation,” there can be no antitrust injury. However, that argument would doom almost every price-fixing claim at the pleading stage. Simply because conduct can be legal when undertaken individually, does not prevent it from becoming illegal if undertaken collusively -- that is the essence of a conspiracy. Defendants’ argument -- that there can be no antitrust injury where they could have accomplished unilaterally the same result that they allegedly achieved through collusion – does not even implicate the concept of antitrust injury. The argument has nothing to do with whether Plaintiffs allege that they suffered an injury of the kind the antitrust laws were intended to prevent -- which they do. Rather, Defendants’ argument, if accepted, would impose an additional pleading requirement: that private antitrust plaintiffs must plead that the alleged antitrust violation could not have occurred through Defendants’ unilateral action. Such a pleading requirement has no support in the law. While a plaintiff must present evidence to “rule out the possibility of independent action” at summary judgment or trial in order to prove an illegal conspiracy, no such requirement applies at the pleading stage.Alison Frankel has further, excellent analysis here.
