FrontPoint Asian Event Driven Fund, Ltd. v. Citibank, N.A.

Background

The plaintiffs sought final approval of a settlement with JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A., which the order collectively calls JPMorgan. The settlement concerned claims relating to alleged manipulation of the Singapore Interbank Offered Rate and the Singapore Swap Offer Rate, and derivatives or similar financial instruments priced, benchmarked, or settled to those rates. The order does not decide whether JPMorgan or any other defendant actually manipulated those rates or violated the law.

The court held a fairness hearing on November 29, 2022. It found that mailed notice, publication, a website, and the other parts of the notice plan were the best practicable notice and gave class members a fair opportunity to exclude themselves, object, appear at the hearing, and learn about the distribution plan and related requests for fees and incentive awards. The court found that one class member had validly excluded itself and that no objections had been submitted.

Settlement Class and Approval

For settlement purposes only, the court finally certified a class consisting generally of all persons and entities that purchased, sold, held, traded, or otherwise had an interest in covered Singapore-rate derivatives during the period from January 1, 2007, through December 31, 2011. Defendants, their specified affiliates and agents, alleged co-conspirators, and the United States Government were excluded.

The court found that the settlement class satisfied the applicable requirements of Federal Rule of Civil Procedure 23(a) and Rule 23(b)(3) for purposes of the settlement. In particular, it found that the class was sufficiently numerous, that common legal and factual questions existed, that the plaintiffs’ claims were typical, that the plaintiffs’ interests did not conflict with absent class members, and that class counsel adequately represented the class. It also found that common issues predominated and that a class action was superior to other available methods of resolving the controversy.

The court approved the settlement as fair, reasonable, adequate, and in the best interests of the settlement class. It found that the negotiations were conducted at arm’s length by experienced counsel, that the plaintiffs and class counsel adequately represented the class for settlement purposes, and that class members were treated equitably. It also approved the distribution plan and proof-of-claim and release form. The court stated that the settlement and approval order were not admissions, adjudications, or evidence of a statutory violation, alleged wrongdoing, liability, damages, or the validity of the claims.

Release, Dismissal, and Continuing Authority

The order binds settling class members whether or not they submit a proof of claim and release. A settling class member must execute a release and covenant not to sue to receive a share of the net settlement fund, but the order states that the claims are released and barred regardless of whether the class member executes that document. The order gives the settlement and final judgment preclusive effect in proceedings involving the released claims against JPMorgan and the released parties.

The court approved the release and covenant not to sue and directed that the action be dismissed against JPMorgan and the released parties fully, finally, and with prejudice. The order expressly did not dismiss claims against the other named defendants. It also permanently barred and enjoined specified lawsuits, proceedings, class actions, and assistance concerning the released claims against JPMorgan and the released parties, along with certain contribution and indemnification claims.

The court retained exclusive jurisdiction over implementation and enforcement of the settlement agreement and approval of certain administration costs, fees, and distributions. It also approved the settlement fiduciary account, confirmed A.B. Data, Ltd. as settlement administrator, and required confidentiality for information submitted by class members in connection with claims, subject to the order’s stated exceptions. The court said that the class certification and representative appointments were limited to this settlement and could not be used as binding or persuasive authority in later class-certification disputes.

Disposition

Judge Alvin K. Hellerstein finally approved the settlement with JPMorgan, certified the settlement class for settlement purposes, approved the distribution plan and claim materials, and directed dismissal of the action against JPMorgan and the released parties fully, finally, and with prejudice. The court reserved a separate order for class counsel’s request for attorneys’ fees, expense reimbursement, and incentive awards.