Citing the “obvious magnitude” of the Libor-related antitrust litigation, Southern District of New York Judge Naomi Reice Buchwald has given the plaintiffs leave to attempt to amend their complaints to address the shortcomings that previously led her to grant the defendants’ motion to dismiss. Judge Buchwald granted the plaintiffs’ request for leave to file a motion to amend in a short May 3, 2013 order, a copy of which can be found here.


As detailed here, on March 29 2013, Judge Buchwald, in a ruling that she acknowledged at the time might be “unexpected,” granted the Libor benchmark- setting banks’ motions to dismiss the plaintiffs’ consolidated antitrust and RICO claims. In her massive 161-page opinion, Judge Buchwald held that the plaintiffs had failed to allege “antitrust injury” – that is, that the injury of which the plaintiffs’ complain was the result of the defendants’ anti-competitive conduct. Judge Buchwald dismissed the antitrust claims with prejudice.


Following her March 29 ruling, various groups of plaintiffs petitioned Judge Buchwald to try to obtain leave to amend their complaints. In her May 3 order, Judge Buchwald expressed skepticism that the plaintiffs could amend their pleadings sufficiently in order to address the concerns that led her to grant to the motion to dismiss. She noted that “although plaintiffs have described the allegations that they intend to add in their second amended complaint with regard to the issue of antitrust injury, we are inclined to think that none of these proposed allegations would change the outcome reached in our Memorandum and Order.”


Judge Buchwald cited a number of factors in support of her skepticism that the plaintiffs would be able to overcome the shortcomings of their prior complaints. First, she noted that as a result of the procedural history of the consolidated case and the revelations of the various regulatory investigations, the plaintiffs have in effect already effectively had opportunities to amend their pleadings. In addition, she noted that “plaintiffs have long been on notice that antitrust injury would be an important issue in this case,” adding that “plaintiffs never specifically argued, until after we issued our Memorandum and Order, that they would be able to satisfy the requirements for antitrust injury through additional allegations.”


Despite her skepticism that the plaintiffs will be able to address the antitrust injury issue in their amended pleadings, she nevertheless granted the plaintiffs leave to file a motion to amend and a proposed amended complaint. She added that “given the obvious magnitude f this litigation, we intend to proceed deliberately in evaluating plaintiffs’ request.”   However, in light of her concerns, as well as the “comprehensive manner” of her prior ruling and “the tremendous amount of resources already expended by defendants,” she said that she will review the proposed amended complaint prior to requiring the defendants to respond to any motion for leave to amend. Judge Buchwald allowed the plaintiffs two weeks in which to file a motion to amend, to which they must attach their proposed amended complaint.


Judge Buchwald’s May 3 order also addresses a number of other requests that other litigants have raised. Several of the defendants had sought to have her reconsider her denial of the motion to dismiss the exchange-based plaintiffs’ Commodity Exchange Act claims. Without ruling on the motion for reconsideration, she requested the parties to confer “regarding whether the exchange-based plaintiffs will be able to adequately allege their CEA claims against each moving defendant in a second amended complaint, in light of our rulings in our Memorandum and Order.”


In light of these other rulings, Judge Buchwald declined the request of several parties to lift the stay that has remained in place. She also decline to rule on the exchange-based plaintiffs’ request for leave to seek an interlocutory appeal, asking for additional briefing on the issue.


As a result of their efforts, the plaintiffs have at least managed to obtain leave to file a motion to amend. On the other hand Judge Buchwald gave them little reason from which to hope that they might overcome her concerns about their prior allegations. Indeed, among the possible outcomes is that Judge Buchwald could simply deny their motion for leave to amend. Nevertheless, Judge Buchwald’s May 3 ruling does raise the possibility, no matter how slight, that the antitrust allegations in the Libor-scandal might go forward after all.


Motion to Dismiss Granted in Securities Suit Against U.S.-Listed Chinese Company: In a May 6, 2013 order, Southern District of New York Judge Katherine B. Forrest granted the motion of China National Offshore Oil Co. (CNOOC) Limited, a U.S.-listed Chinese petroleum company, to dismiss the securities suit pending against the company. (The plaintiffs had previously voluntarily dismissed the claims they had filed against certain individual plaintiffs.) A copy of Judge Forrest’s May 6 order can be found here.


As discussed here, the plaintiffs filed their action in February 2012, alleging that the company had initially failed to disclose and then later down played two oil spills at the company’s production facilities in Bohai Bay. The company moved to dismiss the plaintiffs’ complaint.


Judge Forrest granted the defendants’ motion to dismiss, finding that the plaintiffs’ allegation were “insufficient to support a plausible inference of scienter.” In reaching this conclusion, she observed that “quite simply, there is not a single allegation in the complaint specifically identifying any information known to CNOOC at the time CNOOC made any of its allegedly false statements undermining the accuracy of those statements in any way.” Judge Forrest granted the motion to dismiss with prejudice.


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