In re SSA Bonds Antitrust Litigation
- Valerie Caproni
- 1:16-cv-03711
- U.S. District Court · Southern District of New York
- 14
In re SSA Bonds Antitrust Litigation: Judge Ramos granted domestic dealers’ motion to dismiss with prejudice because plaintiffs did not plausibly plead antitrust standing or conspiracy.
The named plaintiffs and the domestic dealer defendants were directly affected by the ruling. The court also directed termination of the foreign dealer defendants and individual defendants based on the earlier order, while noting that some defendants remained involved in settlement negotiations.
What happened
In re SSA Bonds Antitrust Litigation involved claims by the Alaska Department of Revenue, Treasury Division, the Alaska Permanent Fund Corporation, and Iron Workers Pension Plan of Western Pennsylvania. They alleged that banks and employees conspired not to compete when pricing U.S.-dollar supranational, sovereign, and agency bonds.
The domestic dealer defendants asked the court to dismiss the second consolidated complaint for failure to state a claim. The court found that the plaintiffs did not identify a specific transaction showing that they suffered antitrust harm and did not provide enough facts connecting each domestic dealer to a broader conspiracy.
Judge Ramos granted the domestic dealer defendants’ motion to dismiss with prejudice. The court directed the Clerk to terminate the domestic dealer defendants, foreign dealer defendants, and individual defendants as parties, while noting that the case remained active as to some defendants involved in settlement negotiations.
The detailed version
- In re SSA Bonds Antitrust Litigation · No. 1:16-cv-03711
- Valerie Caproni
- Mar. 25, 2020
Background
This consolidated class action concerned allegations that banks and certain employees agreed not to compete when selling U.S.-dollar supranational, sovereign, and agency bonds. The named plaintiffs were the Alaska Department of Revenue, Treasury Division; the Alaska Permanent Fund Corporation; and Iron Workers Pension Plan of Western Pennsylvania.
The plaintiffs previously filed a consolidated amended complaint, which the court dismissed for failure to state a claim and failure to plausibly allege an injury sufficient for antitrust standing. The court allowed an amended complaint. The plaintiffs then filed a second consolidated class action complaint containing two new plaintiffs, additional factual allegations including chatroom messages, and additional economic analyses.
The domestic dealer defendants moved to dismiss the second complaint for failure to state a claim. The opinion addressed that motion after an earlier order addressed arguments by the foreign dealer defendants and individual defendants.
Legal standards
Under Federal Rule of Civil Procedure 12(b)(6), a complaint must contain enough factual matter to make the claimed violation plausible, rather than merely possible. On such a motion, the court generally accepts well-pleaded factual allegations as true and draws reasonable inferences for the plaintiff, without deciding the ultimate merits or weighing evidence.
The court explained that antitrust standing is a threshold requirement for a private antitrust action. A plaintiff must plausibly allege an antitrust injury—an actual injury caused by the alleged violation and of the type the antitrust laws address—and must be an appropriate plaintiff to enforce those laws. The plaintiff must also allege facts plausibly suggesting that each defendant participated in the alleged conspiracy.
Court’s analysis
The court held that the plaintiffs did not plausibly allege antitrust harm. Although they alleged that they bought and sold U.S.-dollar SSA bonds from the dealer defendants, they did not identify a single transaction from which the court could plausibly infer that they suffered antitrust harm. The court found that the plaintiffs instead relied on conclusory allegations that defendants had executed collusive trades with them.
The court also held that the alleged conspiracy was not plausible as pleaded. The complaint made undifferentiated allegations against the domestic dealer defendants and linked corporate affiliates without enough supporting facts. For example, the plaintiffs alleged that Barclays Capital Inc. acted as a U.S.-based broker-dealer, took directions from overseas affiliates, and executed collusive transactions, but did not identify a specific instance in which it coordinated bidding, fixed prices, or agreed not to compete. The court found similar allegations against other domestic dealer defendants insufficient.
The court discussed allegations involving Citigroup, Inc., Citibank N.A., and an individual defendant, Gary McDonald. It concluded that the described transactions did not involve a specific plaintiff and did not show a broader conspiracy extending to the domestic dealer defendants.
The court also rejected the plaintiffs’ reliance on a separate case involving government-sponsored-entity bonds. It found that the alleged bond markets differed, including because SSA bonds were quoted individually rather than on a systemic basis, and because the plaintiffs had not supplied facts showing what percentage of the secondary U.S.-dollar SSA bond market the defendants traded.
Disposition
Judge Edgardo Ramos granted the domestic dealer defendants’ motion to dismiss for failure to state a claim with prejudice. The court stated that the plaintiffs had not sufficiently pleaded antitrust standing or facts supporting a plausible conspiracy. It directed the Clerk to terminate the domestic dealer defendants, foreign dealer defendants, and individual defendants as parties. The court noted that the case remained active as to some defendants involved in settlement negotiations.
Read the full 14-page opinion on CourtListener, the free public archive maintained by the Free Law Project.