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From Antitrust Law Daily, June 30, 2014

High Court to consider when dismissal of consolidated LIBOR manipulation action is appealable final order

By Linda O’Brien, J.D., LL.M.

The U.S. Supreme Court today agreed to review a decision by the U.S. Court of Appeals in New York City that it lacked appellate jurisdiction over the appeal of a district court decision, rejecting bond purchasers’ antitrust and other class claims against financial institutions. The Second Circuit dismissed the appeal because the district court had not dismissed all of the consolidated complaints. The petition was filed on March 26, 2014 (Gelboim v. Credit Suisse Group AG, Dkt. 13-1174).

Ellen Gelboim and Linda Zacher were purchases of bonds with interest rates linked to the London Interbank Offered Rate (LIBOR). LIBOR identifies the short-term borrowing costs for financial institutions and is the most important benchmark for short-term interest rates in the U.S. and around the world. The purchasers filed a putative class action suit against several domestic and foreign financial institutions, alleging a single claim that the defendants conspired to manipulate LIBOR by submitting false information to the British Bankers Association (BBA) which publishes LIBOR daily, in violation of federal antitrust law.

The case was consolidated with other LIBOR-related class actions for pretrial purposes only. Instead of ordering the plaintiffs to file a single, integrated class action, the district court ordered the litigation to proceed with respect to three separate class action complaints. The district court granted the defendants’ motion to dismiss the antitrust claims, which disposed of the only claim for relief by the petitioners, and the petitioners appealed. The Second Circuit dismissed the petitioners’ appeal on that ground that a final order had not been issued by the district court, since the order did not dispose of all claims in the consolidated action.

In the petition, the bond purchasers contended that the Second Circuit acknowledged a conflict among other circuits on whether consolidated cases retain their separate identity or become one case for purposes of appellate jurisdiction. In dismissing their appeal, the Second Circuit expressly considered and rejected the rules used in similar contexts by the First and Sixth Circuits and the Ninth and Tenth Circuits, and the approaches of the Third, Fifth, and Seventh Circuits.

According to the petitioners, the Federal, Ninth, and Tenth Circuits apply a categorical rule that, absent certification under Federal Rule of Civil Procedure 54(b), a judgment in a consolidated action that does not dispose of all claims is not a final, appealable judgment. However, the First and Sixth Circuits apply the opposite categorical rule that the dismissal of one of several consolidated cases is immediately appealable. The Third, Fifth, Seventh, Eighth, and Eleventh Circuits have a third approach which, on a case-by-case basis, dictates that an immediate appeal is allowed whenever the underlying complaint was not consolidated with still pending suits for all purposes.

The petitioners also contended that the issue is sufficiently important because it can arise from any litigation that is subject to coordination by the Judicial Panel on Multidistrict Litigation as well as each time a district court consolidates related actions. The conflict among circuits confounds a frequent, recurring issue that should be clear and uniform. Finally, the respondents expressly acknowledged that the circuit conflict was determinative of the petitioners’ right to pursue their appeal.

Attorneys: Karen Lisa Morris (Morris and Morris LLC), David H. Weinstein (Weinstein Kitchoff & Asher LLC), and Thomas C. Goldstein (Goldstein & Russell, P.C.) for Ellen Gelboim and Linda Zacher.

Companies: Bank of America, N.A.; Barclays Bank plc; Citibank, N.A.; Cooperatieve Centrale Raiffeisen-Boerenleenbank; Credit Suissse Group AG; Deutsche Bank AG; HSBC Bank plc; JPMorgan Chase Bank, N.A.; Lloyds Banking Group plc; The Norinchukin Bank; Royal Bank of Canada; The Royal Bank of Scotland Group plc; The Bank of Tokyo-Mitsubshi UFJ, Ltd.; UBS AG; WestLB AG.

MainStory: TopStory Antitrust


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