Mayor and City Council of Baltimore v. Bank of America Corporation

Background

The order concerns the over-the-counter, or OTC, action in multidistrict litigation involving financial instruments based on the U.S. Dollar London Interbank Offered Rate (LIBOR). The plaintiffs identified in the order were the Mayor and City Council of Baltimore, City of New Britain, Vistra Energy Corp., Yale University, and Jennie Stuart Medical Center, Inc. They moved under Federal Rule of Civil Procedure 23(e) for final approval of a settlement with MUFG Bank, Ltd., The Norinchukin Bank, and Société Générale; certification of a settlement class; approval of a distribution plan and class notice; and appointment of class counsel.

The order states that persons or entities who entered qualifying transactions with non-settling defendants could participate in the settlement because the OTC action included antitrust claims under which the settling defendants allegedly could be held jointly and severally liable for the alleged conduct of all defendants. The court did not decide whether the alleged antitrust violations occurred or whether any defendant was liable.

Settlement Approval

The court granted final approval of the settlement under Rule 23(e), finding that it was fair, reasonable, adequate, and in the best interests of the settlement class. The court relied on the arm’s-length negotiations conducted by experienced counsel, the assistance of a professional mediator, the serious and contested legal and factual issues in the case, the value of immediate recovery and prospective relief, and class counsel’s assessment and the class members’ response.

The court also finally approved the pro rata Plan of Distribution, finding that it had a reasonable and rational basis and was fair and adequate. Hausfeld LLP and Susman Godfrey L.L.P. were designated as settlement class counsel. The court found that the class notice was adequate, sufficient, the best notice practicable under the circumstances, and compliant with Rule 23, due process, and other applicable law.

Settlement Class

The court certified the following class solely to carry out the settlement: persons or entities, other than the defendants and specified related persons, that purchased in the United States directly from a defendant or its subsidiaries or affiliates a U.S. Dollar LIBOR-based instrument and owned it at any time from August 2007 through May 2010.

The court found the Rule 23 requirements satisfied for settlement purposes, including numerosity, common questions, typical claims, adequate representation, predominance of common legal and factual questions, and superiority of class treatment. The certification would become null and void as to the relevant parties if the settlement’s effective date did not occur because a settlement condition failed. Persons and entities that timely and validly opted out were excluded from the class, were not bound by the judgment as it related to the settlement, and could not claim settlement benefits.

Release and Disposition

The court approved implementation of all settlement terms. It dismissed the OTC Action and all Released Claims against the Released Parties, with prejudice. The order defined Released Claims broadly to include claims arising from or relating to conduct alleged, or that could have been alleged, from the factual basis of the OTC action, subject to stated exclusions and limitations. The order did not release claims outside that scope.

Upon the settlement’s effective date, the releasing parties—including the class plaintiffs and class members who did not opt out—would waive and release the Released Claims, be barred from bringing those claims against the Released Parties, and agree not to sue or assist others in suing on those claims. The settlement and related conduct could not be used as evidence of the claims’ validity or of wrongdoing, liability, fault, or omission by the Released Parties, except in proceedings concerning enforcement or interpretation of the settlement or specified claim-preclusion defenses.

The court retained continuing jurisdiction over settlement implementation, distribution of settlement money, fee and expense applications, service awards, and construction, enforcement, and administration of the settlement. The court also barred, to the extent permitted by law, specified contribution and indemnification claims involving the Released Parties. Judge Naomi Reice Buchwald entered the final judgment and order under Rule 54(b), finding no just reason to delay entry.