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Gelboim v. Bank of Am. Corp.

United States Court of Appeals for the Second Circuit

November 13, 2015, Argued; May 23, 2016, Decided

Docket Nos. 13-3565-cv (L), 13-3636-cv (CON), 15-441-cv (CON), 15-454-cv (CON), 15-477-cv (CON), 15-494-cv (CON), 15-498-cv (CON), 15-524-cv (CON), 15-537-cv (CON), 15-547-cv (CON), 15-551-cv (CON), 15-611-cv (CON), 15-620-cv (CON), 15-627-cv (CON), 15-733-cv (CON), 15-744-cv (CON), 15-778-cv (CON), 15-825-cv (CON), 15-830-cv (CON)


 [*764]  DENNIS JACOBS, Circuit Judge:

Appellants purchased financial instruments, [**2]  mainly issued by the defendant banks, that carried a rate of return indexed to the London Interbank Offered Rate ("LIBOR"), which approximates the average rate at which a group of designated banks can borrow money. Appellees, 16 of the world's largest banks ("the Banks"), were on the panel of banks that determined LIBOR each business day based, in part, on the Banks' individual submissions. It is alleged that the Banks colluded to depress LIBOR by violating the rate-setting rules, and that the payout associated with the various financial instruments was thus below what it would have been if the rate had been unmolested. Numerous antitrust lawsuits against the Banks were consolidated into a multi-district litigation ("MDL").

The United States District Court for the Southern District of New York (Buchwald, J.) dismissed the litigation in its entirety on the ground that the complaints failed to plead antitrust injury, which is one component of antitrust standing. The district court reasoned that the LIBOR-setting process was collaborative rather than competitive, that any manipulation to depress  [*765]  LIBOR therefore did not cause appellants to suffer anticompetitive harm, and that they have [**3]  at most a fraud claim based on misrepresentation. The complaints were thus dismissed on the ground that they failed to allege harm to competition.

We vacate the judgment on the ground that: (1) horizontal price-fixing constitutes a per se antitrust violation; (2) a plaintiff alleging a per se antitrust violation need not separately plead harm to competition; and (3) a consumer who pays a higher price on account of horizontal price-fixing suffers antitrust injury. Since the district court did not reach the second component of antitrust standing --a finding that appellants are efficient enforcers of the antitrust laws--we remand for further proceedings on the question of antitrust standing. The Banks urge affirmance on the alternative ground that no conspiracy has been adequately alleged; we reject this alternative.


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823 F.3d 759 *; 2016 U.S. App. LEXIS 9366 **; 2016-1 Trade Reg. Rep. (CCH) P79,642

ELLEN GELBOIM et al., Plaintiffs-Appellants, - v.- BANK OF AMERICA CORPORATION et al., Defendants-Appellees.

Subsequent History: As Corrected June 9, 2016.

Corrected by Gelboim v. Bank of Am. Corp., 2016 U.S. App. LEXIS 10703 (2d Cir., June 10, 2016)

US Supreme Court certiorari denied by Bank of Am. Corp. v. Gelboim, 2017 U.S. LEXIS 749 (U.S., Jan. 17, 2017)

Prior History:  [**1] Plaintiffs-appellants, comprising individuals and entities that held diverse financial instruments, allege that the defendant banks colluded to depress a benchmark incorporated into those instruments, thereby decreasing the instruments' financial returns in violation of Section One of the Sherman Act. The United States District Court for the Southern District of New York (Buchwald, J.) dismissed the lawsuit for failure to allege antitrust injury. We vacate the judgment and remand for further proceedings consistent with this opinion.

In re LIBOR-Based Fin. Instruments Antitrust Litig., 935 F. Supp. 2d 666, 2013 U.S. Dist. LEXIS 45909 (S.D.N.Y., 2013)


antitrust, Banks, conspiracy, complaints, district court, price-fixing, prices, anti trust law, damages, antitrust violation, allegations, consumer, horizontal, anticompetitive, factors, transactions, competitors, appellants', financial instrument, enforcer, markets, conspirators, depress, interest rate, associations, plaintiffs', bondholder, purchasers, borrow, cases

Civil Procedure, Appeals, Standards of Review, De Novo Review, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleadings, Amendment of Pleadings, Leave of Court, Antitrust & Trade Law, Private Actions, Standing, Requirements, Constitutional Law, Case or Controversy, Elements, Sherman Act, Claims, Scope, Regulated Practices, Price Fixing & Restraints of Trade, Price Fixing & Restraints of Trade, Per Se Rule & Rule of Reason, Per Se Violations, Cartels & Horizontal Restraints, Sherman Act, Price Fixing, Clayton Act, Remedies, Damages, Clayton Act, Regulated Industries, Higher Education & Professional Associations, Professional Associations, Per Se Rule & Rule of Reason, Evidence, Burdens of Proof, Allocation, Monopolies & Monopolization, Conspiracy to Monopolize