Contant v. Bank Of America Corporation

Background

The court entered a final judgment and order on the plaintiffs’ motion for final approval of five class settlements in an action involving alleged harm from foreign-exchange transactions. The opinion defines an “FX Instrument” as any foreign-exchange spot, forward, swap, future, option, or other foreign-exchange transaction whose trading or settlement value is related to foreign-exchange rates.

The settling parties included the class plaintiffs and several groups of defendants. The settlements were with Citigroup; MUFG Bank, Ltd.; Standard Chartered Bank; Société Générale; and the Group Settling Defendants, which included Bank of America, Barclays, BNP Paribas, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, RBC, RBS, and UBS. The order also identified Credit Suisse Group AG and Deutsche Bank Securities Inc. as released parties.

Settlement Amounts and Preliminary Proceedings

The settlements provided for these payments:

- Citigroup: $9,950,000. - MUFG Bank: $985,000. - Standard Chartered: $1,720,000. - Société Générale: $975,000. - Group Settling Defendants: $10,000,000 in total.

In earlier orders dated July 29, 2019, and July 17, 2020, the court preliminarily approved the settlements and plan of allocation, preliminarily certified the settlement classes, approved notice procedures, allowed class members to exclude themselves or object, appointed Berger Montague PC as settlement class counsel, and scheduled a fairness hearing. The court held that hearing on November 19, 2020. The 90-day period under the Class Action Fairness Act had also expired.

Final Approval of the Settlements

Under Federal Rule of Civil Procedure 23(e), the court granted final approval of the settlements in all respects, including the settlement amounts, releases, and dismissal with prejudice of claims against the settling defendants. The court found that the settlements were fair, reasonable, adequate, and in the best interests of the class members. It found that the settlements resulted from arm’s-length negotiations between highly experienced counsel and that the value of immediate monetary recovery outweighed the risks, uncertainty, expense, and delay of continued litigation.

The court also finally approved the proposed plan of allocation, finding that it had a reasonable basis and was fair and adequate. It finally approved the notice, finding that it was the best notice practicable under the circumstances, adequately informed class members about the action and settlements, and satisfied Rule 23, due process, and other applicable legal requirements.

Settlement Classes

For settlement purposes, the court certified classes of persons and entities who indirectly purchased foreign-exchange instruments through direct settlement class members and who met the applicable state-related requirements. The certified classes covered New York, Arizona, California, Florida, Illinois, Massachusetts, Minnesota, and North Carolina.

The court found that the requirements of Rule 23(a) and Rule 23(b)(3) were satisfied for settlement purposes. Those findings included that the classes were sufficiently numerous, had common legal or factual questions, had claims typical of the classes, were adequately represented by the plaintiffs and class counsel, and were superior to other available methods of resolving the controversy.

The class periods differed by settlement. For the Citigroup and MUFG Bank settlements, the period ran from December 1, 2007, through July 19, 2019. For the Standard Chartered and Société Générale settlements, it ran from December 1, 2007, through July 17, 2020. For the Group Settlement, it ran from December 1, 2007, through December 15, 2015.

Dismissal, Releases, and Continuing Jurisdiction

The court dismissed the action and all released claims against the released parties with prejudice. The order permanently barred releasing parties from pursuing released claims against released parties. It also barred contribution or indemnification claims against released parties for amounts paid in the action, subject to the settlement terms.

The order states that no person or entity had validly and timely requested exclusion from any settlement class. Accordingly, all class members were treated as releasing parties and were bound by the final order and settlements, including the releases of known and unknown claims arising from or relating to the factual basis of the action. The releases did not cover claims to enforce the settlements or claims by a person whose timely exclusion request was accepted by the court.

The order did not bar claims outside the released claims. It also preserved actions to enforce or carry out the settlements and retained the court’s exclusive continuing jurisdiction over settlement implementation, distributions, applications for attorneys’ fees and expenses, service awards, and construction, enforcement, and administration of the settlements.

The settlements and related acts were not to be treated as admissions of wrongdoing, liability, or fault. If a settlement failed to become effective or the final approval order was vacated or overturned under the circumstances specified in the order, the affected parties could revert to their prior positions under the applicable settlement terms.

Disposition

The court granted final approval of the class settlements, finally approved the plan of allocation and class notice, certified the settlement classes for settlement purposes, dismissed the action and released claims with prejudice against the released parties, and retained continuing jurisdiction over the settlements.