IN RE MEXICAN GOVERNMENT BONDS ANTITRUST LITIGATION
- James Oetken
- 1:18-cv-02830
- U.S. District Court · Southern District of New York
- 6
In re Mexican Government Bonds Antitrust Litigation, Judge Oetken denied reconsideration because the motion was untimely and unpersuasive.
The ruling affected the U.S. pension-fund plaintiffs and the six Mexico-based bank defendants identified as the Moving Defendants. It left the prior dismissal for lack of personal jurisdiction in place as to those defendants.
What happened
In re Mexican Government Bonds Antitrust Litigation is a proposed class action by U.S. pension funds alleging that banks conspired to manipulate prices and trading spreads for Mexican government bonds. The alleged misconduct occurred through activities in Mexico, while some sales involved customers and sales desks in the United States.
The court had previously dismissed the claims against six Mexico-based bank defendants for lack of personal jurisdiction, meaning the court concluded it could not constitutionally exercise authority over those defendants. The plaintiffs asked the court to reconsider that decision, arguing that a later Supreme Court decision changed the law.
Judge Oetken denied the reconsideration motion. He ruled that it was filed too late under the court’s 14-day deadline and, separately, that the plaintiffs’ argument was unpersuasive because a controlling Second Circuit decision still applied and the later Supreme Court decision did not clearly displace it.
The detailed version
- IN RE MEXICAN GOVERNMENT BONDS ANTITRUST LITIGATION · No. 1:18-cv-02830
- James Oetken
- Mar. 30, 2022
Background
The plaintiffs, identified as U.S. pension funds, brought a consolidated proposed class action alleging that several banks and related affiliates conspired to sell Mexican government bonds at prices above competitive levels. The alleged scheme involved weekly bond auctions conducted by the Bank of Mexico, participation by approved financial institutions known as “Market Makers,” and later over-the-counter sales.
The defendants seeking dismissal were identified as six Mexico-based banks. According to the complaint as described by the court, their Mexican trading desks set prices and communicated them to a related sales desk in New York. Customers in the United States could contact the New York sales desk, and completed transactions delivered the bonds to customers’ U.S. accounts.
Earlier jurisdiction ruling
On November 30, 2020, the court granted the Moving Defendants’ motion to dismiss the complaint for lack of personal jurisdiction. Personal jurisdiction is a court’s authority over a particular defendant. The court concluded that exercising jurisdiction would violate constitutional due-process limits because the alleged wrongful conduct—conspiring to fix bond auctions, prices, and bid-ask spreads—occurred in Mexico. It also concluded that the unjust-enrichment claim was based on the same alleged conduct.
The court relied on the Second Circuit’s decision in Charles Schwab Corp. v. Bank of America Corp. The court read that decision to distinguish between misconduct occurring outside the United States and sales occurring in the United States, and concluded that the sales did not create specific jurisdiction over the antitrust claims here.
Reconsideration motion
The plaintiffs moved for reconsideration under Federal Rule of Civil Procedure 54(b). They argued that the Supreme Court’s decision in Ford Motor Co. v. Montana Eighth Judicial District Court was an intervening change in law requiring a different result.
The court explained that reconsideration is subject to a strict standard. It is not a way to relitigate old issues or present new theories. Generally, the moving party must identify an intervening change in controlling law, new evidence, clear error, or manifest injustice.
Court’s analysis
The court first denied the motion as untimely. Local Civil Rule 6.3 required a reconsideration motion to be filed within 14 days after the original decision. The plaintiffs did not meet that deadline or request an extension. The court rejected their reliance on the later issuance of Ford because the earlier order had already discussed Ford, putting the plaintiffs on notice that the decision might bear on the relevant law. The plaintiffs also waited nearly two months after Ford was decided before raising their objection.
The court separately denied reconsideration on the merits of the motion. It concluded that the facts in Charles Schwab were indistinguishable in the relevant respect: the alleged misconduct occurred outside the United States, while sales occurred in the United States. The court stated that those sales did not create specific jurisdiction over the antitrust claims because the sales were not part of the alleged misconduct and there was no other legally recognized connection supporting jurisdiction.
The court held that Ford and Charles Schwab were not irreconcilable. Although Ford recognized that some relationships can support jurisdiction without a showing of causation, it did not clearly establish specific jurisdiction over foreign misconduct based on U.S. sales of financial instruments. The court stated that it was bound by Charles Schwab unless the Second Circuit reconsidered it or a later Supreme Court decision rejected it. It concluded that it was not nearly certain that the Second Circuit would overrule Charles Schwab.
Disposition
The court denied the plaintiffs’ motion for reconsideration and directed the Clerk of Court to close the motion at Docket Number 228.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.