Sonterra Capital Master Fund, Ltd. v. Barclays Bank PLC

Background

The action was filed on May 6, 2015, on behalf of people and entities that engaged in Sterling London Interbank Offered Rate-based derivative transactions. The opinion addressed an unopposed motion by Richard Dennis, Fund Liquidation Holdings LLC, and any subsequently named plaintiffs, collectively called the Representative Plaintiffs, for preliminary approval of a class-action settlement with Deutsche Bank AG.

The Representative Plaintiffs asked the court to preliminarily approve the settlement and proposed distribution plan; conditionally certify a settlement class; appoint the class representatives and class counsel; appoint Citibank, N.A. as escrow agent and A.B. Data, Ltd. as settlement administrator; approve the proposed notices; set a schedule leading to a final evaluation and fairness hearing; and stay proceedings concerning Deutsche Bank except those related to settlement approval.

Reasons for Preliminary Approval

The court conducted a preliminary evaluation under Federal Rule of Civil Procedure 23. It considered the adequacy of representation, the negotiations, the adequacy of the relief, and whether class members would be treated equitably. The court found that the Representative Plaintiffs’ interests aligned with those of the class because they engaged in the relevant transactions. It also found that their lawyers had suitable antitrust and Commodity Exchange Act class-action experience.

The court found that the settlement appeared to result from extensive, good-faith, arm’s-length negotiations between experienced counsel. The negotiations began in September 2021; the parties signed a term sheet on January 3, 2022; and they executed the settlement on March 31, 2022.

The court found that continued litigation would involve significant risks, complexity, discovery, motion practice, and expense. It found the proposed distribution plan fair, reasonable, and adequate. The opinion states that the requested attorneys’ fees were limited to no more than one-third of the settlement amount, or $1.67 million, less litigation expenses not exceeding $600,000. The court said the fee request appeared reasonable at that point, but that additional materials, including attorney affidavits and billing records, would be needed before final approval of fees.

The court also found that pro rata distribution among authorized claimants and the release of covered claims against Deutsche Bank treated class members equitably. It considered the remaining relevant settlement factors and concluded that they favored preliminary approval, including the settlement’s monetary recovery, Deutsche Bank’s cooperation in identifying potential class members, and its assistance in validating the distribution plan.

Conditional Settlement Class Certification

The court found that the proposed class met the requirements of Rule 23(a): sufficient size, common legal or factual questions, typical claims by the Representative Plaintiffs, and adequate representation. It also found that common issues predominated and that a class action was superior to other ways of resolving the dispute under Rule 23(b)(3). Because certification was sought only for settlement, notice, and distribution, the court did not address manageability. The court certified the class for those purposes only.

Notice and Settlement Administration

The court approved the proposed notice plan as the best notice practicable under the circumstances and found that it met due-process requirements. The plan included first-class postcard mailings, a long-form notice and proof-of-claim form on the settlement website, and publication of a short-form notice in periodicals, industry publications, and through a digital campaign.

The court adopted the Representative Plaintiffs’ recommendation to appoint A.B. Data as settlement administrator. It granted the request to designate Citibank as escrow agent for the settlement fund based on Citibank’s prior experience with other settlements in the district.

Disposition

The court granted the Representative Plaintiffs’ motion for preliminary approval of the settlement. It directed the parties to resubmit an editable version of the proposed order describing the settlement procedure and schedule, stating that it would approve that procedure in a separate order. The parties were also ordered to inform the court within two weeks whether they wanted to schedule the fairness hearing earlier than 225 calendar days after entry of the preliminary approval order. The clerk was directed to close the open motions on the docket. The opinion concerned preliminary approval; it did not state that final settlement approval had been entered.