In re Foreign Exchange Benchmark Rates Antitrust Litigation – Court Denies Motion to Decertify Class

As we reported here and here, although all but one of the defendants in the In re Foreign Exchange Benchmark Rates Antitrust Litigation, 1:13 civ 07789 (LGS), have settled, Credit Suisse has not.  (Technically, the defendants are three separate Credit Suisse entities, which are being treated as one for all relevant purposes.)   Since our last post, Judge Schofield’s decision to deny Credit Suisse’s motion for summary judgment and to schedule the case for trial starting on October 11, 2022, has resulted in a massive burst of activity.  Since August 12, 2022, the parties have filed 18 in limine motions, competing Daubert motions, numerous briefs and other submissions regarding jury instructions and verdict forms, as well as pro hac vice motions, stipulations, and letters to the court, etc.  Given the rarity of trials in these actions, many of these filings and resulting opinions and orders are worth examining in detail.

One opinion of interest was issued on August 31, 2022, with Judge Schofield denying Credit Suisse’s motion to decertify the class.  As the court explained, in 2019 it certified an “issue class” under F.R.C.P. 23(c)(4) with respect to “(1) the existence of a conspiracy to widen spreads in the FX spot market and (2) participation in the conspiracy by [Credit Suisse].”  See 407 F. Supp. 3d 422 (S.D.N.Y. 2019).  Credit Suisse moved to decertify the class, and the court denied the motion on several grounds.

First, on procedural grounds, the court found that Credit Suisse had waited too long.  Although an order “denying or granting class status is inherently tentative,” and a district court “may decertify a class if it appears that the requirements of Rule 23 are not in fact met,” and “an intervening event is not required to decertify a class,” the court found that because Credit Suisse did not point to any changed factual circumstances, and instead merely argued “that Rule 23 was never satisfied and that the class certification decision was wrong,” the motion was in essence a motion for reargument that had been filed several years too late.  However, the court considered the merits anyway owing to its “special duty when a proceeding will bind absent class members.”

On the merits, the court considered the standard class action issues of ascertainability, predominance and superiority.  For ascertainability, the court rejected Credit Suisse’s argument that the “need for individual inquiries to determine class membership,” and the possible complexity of such inquiries, was a basis to reject certification; the class “is ascertainable because it is defined using objective criteria that establish a membership with definite boundaries.”  The need for “individual inquiries to determine class membership is irrelevant to ascertainability,” as is any “difficulty of proof.”  Rather, the court noted, these considerations are part of a predominance analysis.

Moving to predominance, the court first brushed aside Credit Suisse’s Article III standing objection: “Every class member suffered an injury in fact because the class includes only customers who conducted FX trades in an affected currency pair with a Defendant during the period when Defendants were allegedly conspiring to widen FX spreads. Every class member suffered the harm of paying more or receiving less than they should have in those trades.”  The court then addressed Credit Suisse’s argument regarding the relative predominance of individual questions of fact:

“individual issues that bear on class membership do not preclude certification of an issue class where those individual issues are not certified for class treatment. Only two issues are certified: the existence of a conspiracy, and Credit Suisse’s participation in it. The class is not certified on the issue of ‘liability’ generally. Rather, the certified issues comprise part of the first liability element of an antitrust claim: ‘a violation of the antitrust laws.’  Issues relating to the second element – ‘injury caused by that violation,’ — will not be adjudicated class-wide, so they are not weighed in the predominance.”

Finally, on the issue of superiority, the court held that “resolution of Credit Suisse’s participation in a conspiracy will materially advance the resolution of the litigation as a whole” because “the most complex and consequential issue in this case is whether Credit Suisse joined a global, multi-year price-fixing conspiracy, and the individual issues surrounding class membership are minor by comparison . . . . These [individual] determinations are currently made by a claims administrator processing the other Defendants’ settlements.”  The court also rejected Credit Suisse’s asserted concerns about adequate notice to class members and the Seventh Amendment.   Although not a factor in most civil cases, the Seventh Amendment’s requirement that “no fact tried by a jury, shall be otherwise reexamined in any court of the United States” can impact bifurcated trials with separate juries.  Here, however, the court held that “the first jury’s determination of the class-wide issues will not require examining any individual claims that will be re-examined by a later jury, and vice versa. The first jury may consider some of the same evidence in deciding class-wide issues that a later jury would use to decide distinct individual issues, but that is not a Seventh Amendment problem.”

To summarize, it appears that Credit Suisse’s motion had no real likelihood of success on the merits once the court decided that the same arguments were being presented that had been rejected the first time, but the decision is worthy of review because of its explanation of issues involved in limited class certifications.  Subsequent posts will look at other questions of interest, including the parties’ Daubert motions, disputes about the verdict form, and Credit Suisse’s attempts to exclude bad evidence about regulatory settlements and guilty pleas in limine.

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