In re Foreign Exchange Benchmark Rates Antitrust Litigation

Background

The defendants, referred to in the opinion as “CS,” filed eleven motions in limine—requests to decide before trial whether particular evidence or arguments may be presented to the jury. The court addressed each motion under the Federal Rules of Evidence and, for the eleventh motion, the federal expert-disclosure rules.

Rulings

1. CS consent order with the New York State Department of Financial Services — granted. The court excluded evidence and argument about the consent order under Rules 403 and 408. Rule 408 generally bars civil settlements and consent decrees when offered to prove liability. The court also found that Rule 404(b), which concerns evidence of other acts, did not make the order admissible. The order had little probative value, while its admission could unfairly suggest that the regulator endorsed the plaintiffs’ view or that CS was generally a bad actor.

2. Testimony from people invoking the Fifth Amendment — denied. The court allowed the plaintiffs to call at least some witnesses who had invoked the protection against self-incrimination. It found that the relevant factors pointed in different directions but that allowing the testimony would better serve the search for reliable evidence. The ruling did not prevent CS from later asking the court to limit the number of such witnesses after the plaintiffs disclosed how many they intended to call.

3. Other banks’ and traders’ criminal prosecutions, guilty pleas, and convictions — denied. The court allowed evidence concerning criminal proceedings involving other banks and traders because those proceedings covered at least some conduct at issue in this case and were highly relevant to whether a conspiracy existed. The court noted that this evidence could be limited by a jury instruction explaining that it addressed the existence of a conspiracy, not whether CS joined it.

4. Factual admissions in guilty pleas and plea allocutions by non-CS persons and entities — denied. The court allowed relevant factual admissions concerning conduct at issue, including widening spreads by lowering bid quotes and increasing ask quotes through an anticompetitive conspiracy. The parties were directed to meet and confer about the specific admissions the plaintiffs intended to present and to report unresolved disputes before offering the evidence.

5. Consent orders and regulatory settlements involving non-CS parties — granted in part and denied in part. The court generally excluded the settlements under Rule 408, but it did not exclude underlying evidence cited by regulators. It also allowed factual admissions in a Barclays PLC consent order that were relevant to the conduct at issue because Barclays had admitted those facts. The court distinguished admissions made independently of settlement negotiations from allegations that were merely part of a compromise.

6. Federal Reserve investigations concerning Peter Little and Michael Weston — granted. The court excluded the Weston consent order under Rule 408. It also excluded the Little order under Rules 401, 402, and 403 because it appeared to concern manipulation of benchmark “fix” rates and coordinated trading around those rates, rather than the conduct at issue in this case.

7. Internal bank policies — granted in part and denied in part. Policies that merely repeated or interpreted antitrust law, such as policies describing price fixing or bid rigging, were excluded as irrelevant or potentially confusing. Policies specifically addressing conduct alleged to have facilitated the conspiracy, such as using instant messaging or sharing information about nonpublic trades, were admissible. The court stated that a jury instruction could clarify that the described conduct did not itself establish an antitrust violation.

8. Subsequent remedial measures — granted. The court excluded evidence of closing chat rooms, strengthening corporate policies, and firing employees allegedly responsible for price fixing under Rule 407. The court rejected the argument that antitrust cases receive an exception to that rule. It distinguished evidence that corrective actions were taken from evidence such as narrower spreads after the alleged conspiracy ended, which could show that earlier bidding patterns had been distorted.

9. Communications involving only participants outside the United States — denied. The court rejected the argument that the plaintiffs first had to establish a separate United States connection for each communication. It explained that the Foreign Trade Antitrust Improvements Act limits which Sherman Act claims may proceed, not which evidence may be admitted. Because the plaintiffs sought to prove an international conspiracy affecting class members who had the required United States connection, the communications could be used as evidence of that conspiracy.

10. Other alleged bad acts — granted in part and otherwise denied without prejudice. The court excluded two specific chats under Rules 401, 402, 403, and 404(b). One chat’s references to alleged wrongdoing in other markets risked an impermissible inference that the defendants had a general tendency to engage in misconduct. The other chat was irrelevant and did not qualify under Rule 404(b). The court did not exclude all other bad-act evidence; it denied that broader request without prejudice to renewal during trial, noting that some evidence might be admissible for purposes such as showing intent, motive, preparation, knowledge, or a method of operation.

11. Keith Underwood’s testimony and reports — granted. The court barred the plaintiffs from calling Underwood and using the reports he prepared in separate proceedings because the plaintiffs had not made the required disclosure for an unretained expert witness. The court found no adequate explanation for the missed disclosure, limited importance of the testimony, and substantial prejudice to the defendants if they had to prepare for it shortly before trial. The court allowed questioning of a defense expert, Dr. McCrary, about any reliance on Underwood’s opinions or reports.

Disposition and classification

The court entered the eleven rulings stated above and closed the corresponding motions. This was an evidentiary and pretrial order; it did not decide the underlying antitrust claims. The order is therefore classified as a procedural order.