Nypl v. JP Morgan Chase & Co.

Background

The plaintiffs alleged that JP Morgan Chase, Citibank, Barclays, Bank of America, HSBC, Royal Bank of Scotland, and UBS participated in a conspiracy to manipulate prices in the foreign-exchange market. The alleged manipulation concerned euros purchased with U.S. dollars in the consumer retail market.

The court had previously limited the claims to transactions involving foreign currency that plaintiffs purchased with U.S. dollars and physically received at defendants’ retail branches within the United States. The court referred to those as “qualifying transactions.” The plaintiffs relied on guilty pleas, regulatory orders, and other materials concerning manipulation of foreign-exchange benchmark rates, market prices, and bid-ask spreads.

Summary-judgment standard

Summary judgment is appropriate when the evidence shows no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. The court viewed the evidence and reasonable inferences in the plaintiffs’ favor, but the plaintiffs still had to point to record evidence that could allow a reasonable jury to rule for them.

Federal antitrust claims

The court explained that an antitrust claim requires proof of an antitrust violation, injury and causation, and damages. The court granted defendants’ motion because the record gave no reasonable jury a basis to find that the alleged conspiracy caused injury to the plaintiffs. Because the injury requirement was not met, the court did not decide whether the plaintiffs had sufficient legal entitlement to bring the antitrust claims, known as antitrust standing.

For Nypl and Rubinsohn, the court found no evidence that either made a qualifying transaction. Neither physically received euros purchased with U.S. dollars at a U.S. branch of a defendant bank. The court rejected their general references to deposition transcripts because they did not identify evidence of an actual qualifying purchase. It also rejected their attempt to challenge the earlier limitation of their claims, noting that they had not timely sought reconsideration or relief from that order.

McCarthy and Jolly, along with their businesses Mad Travel and Go Everywhere, Inc., did testify that they purchased physical euros with U.S. dollars at U.S. branches of JPMC. But the record contained no evidence that the prices paid on the documented purchase days, or on any other qualifying purchase days, were inflated by the alleged conspiracy. The court clarified that receipts were not necessarily required; testimony or other evidence could have been enough. However, McCarthy did not remember when or how often she made the purchases, and Jolly had receipts for only four specific days. The court concluded that no reasonable jury could find that these purchases occurred at prices above competitive levels because of the alleged conspiracy.

The court assumed, for purposes of the motion, that some defendants’ admissions could establish an antitrust violation and that plaintiffs would not need to calculate damages with perfect precision if they could first prove actual harm. But plaintiffs had not offered evidence that the conspiracy caused higher prices in the transactions at issue. A conspiracy’s illegality did not eliminate the requirement to prove that plaintiffs were actually harmed.

The court found that the guilty pleas and regulatory orders described manipulation that was episodic and could move prices in different directions. The materials did not show whether prices were increased or decreased on the particular days when plaintiffs made qualifying purchases. Evidence about conduct involving telephone, email, or electronic-chat transactions did not establish injury in the in-person physical transactions covered by the claims. Evidence about widened bid-ask spreads also did not connect such spreads to transactions the plaintiffs actually made.

The court likewise found that a Department of Justice estimate of an average three-pip change in certain benchmark rates did not show how much prices were inflated on any particular day. The estimate included both upward and downward effects, while the plaintiffs could have been injured only when the euro price was higher relative to the dollar. Statements about criminal fines and possible restitution did not supply the missing evidence of compensable injury.

California Cartwright Act claims

The court also granted summary judgment on the plaintiffs’ claims under California’s Cartwright Act. The court held that the claims failed for the same lack of evidence of resulting harm. Separately, the court held that plaintiffs abandoned the claims against the argument that California law did not apply to plaintiffs without sufficient connections to California because plaintiffs did not respond to that argument. Nypl was identified as a California resident, but the court found that he made no qualifying transactions; the other identified plaintiffs lived or did business in Florida, Texas, or Pennsylvania, and McCarthy and Jolly made qualifying purchases in Florida and Texas.

Disposition

Judge Lorna G. Schofield granted defendants’ motion for summary judgment. The court denied the request for oral argument as moot and directed the clerk to close the motion at Docket No. 806 and close the case.