Sonterra Capital Master Fund Ltd. v. Credit Suisse Group AG

Background

The plaintiffs sought final approval of a settlement with Credit Suisse Group AG and Credit Suisse AG in a class action concerning alleged manipulation of Swiss franc LIBOR-based derivatives. The settlement class covered all persons and entities who purchased, sold, held, traded, or otherwise had an interest in Swiss franc LIBOR-based derivatives during the class period, except for the defendants and specified affiliates, agents, co-conspirators, and the United States Government.

The settlement’s released claims included claims arising from alleged manipulation of Swiss franc LIBOR and related conduct under the Commodity Exchange Act, the Sherman Antitrust Act, the Racketeer Influenced and Corrupt Organizations Act, and other federal or state laws. The order also listed claims that were not released, including certain claims against defendants other than Credit Suisse and certain claims based solely on transactions executed entirely outside the United States by class members domiciled outside the United States.

Court’s analysis

For settlement purposes only, the court reconfirmed certification of the settlement class under Rule 23 of the Federal Rules of Civil Procedure. It found that the class was sufficiently numerous, that common legal and factual questions existed, that the representative plaintiffs’ claims were typical, that their interests did not conflict with absent class members, and that class counsel adequately represented the class. The court also found that common issues predominated and that a class action was the superior method for resolving the controversy.

The court found that the mailed, published, and website notice program was the best practicable notice and gave class members a fair opportunity to exclude themselves, object, appear at the fairness hearing, and seek relief under the distribution plan. It found that the settlement resulted from arm’s-length negotiations between experienced counsel, treated class members equitably, and was fair, reasonable, adequate, and in their best interests. The court stated that the settlement and related materials were not admissions, adjudications, or evidence of violations, wrongdoing, liability, damages, or injury by Credit Suisse or any released party.

Ruling and effect

Judge Sidney H. Stein finally approved the settlement in all respects and directed the parties to carry it out. The court approved the distribution plan and proof-of-claim and release form, approved the settlement fiduciary account as a qualified settlement fund, and confirmed the settlement administrator. Class members who sought payment must execute the required release and promise not to sue, although the order states that the claims are released and barred regardless of whether a class member executes that document.

The court approved the release and covenant not to sue and directed dismissal of the action against Credit Suisse and the released parties fully, finally, and with prejudice. The order did not dismiss the action against any other defendant. It permanently barred and enjoined covered claims against Credit Suisse and the released parties, including related class actions and certain contribution or indemnification claims. The court retained exclusive jurisdiction over implementation, enforcement, administration, and disputes concerning the settlement. The request for attorneys’ fees, expense reimbursement, and incentive awards was left for a separate order.