NY Judge nixes plaintiffs’ motion to amend complaint in FX benchmark rate fixing case

The plaintiffs in a Forex benchmark rate fixing case have had their motion to amend the complaint nixed by Judge Lorna G. Schofield of the New York Southern District Court. The Judge signed an order on Tuesday, denying the motion by the plaintiffs to expand the scope of their case, which targets major banks like JPMorgan Chase & Co. (NYSE:JPM), JPMorgan Chase Bank, N.A., Barclays Capital, Inc., Citibank, N.A., Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), Bank of America, N.A, HSBC Bank USA, N.A., HSBC North America Holdings, Inc, The Royal Bank of Scotland plc (now known as NatWest Markets plc), and UBS AG.

The lawsuit is brought by Go Everywhere, Inc., Valarie Jolly, Mad Travel, Inc., Lisa McCarthy, John Nypl, and William Rubinsohn. The plaintiffs represent a putative class of consumers and end-user businesses who allege that they paid inflated Forex rates caused by an alleged conspiracy among the defendant banks to fix prices of FX benchmark rates in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. sec. 1 et seq.

The plaintiffs have tried several times to amend their complaint to enlarge the scope of the definition of “foreign currency retail transactions”. According to the plaintiffs, “foreign currency retail transactions” should include transactions other than those involving foreign currency purchased with USD and physically received at the defendant banks’ retail branches within the United States, including credit and debit card transactions and ATM cash withdrawals abroad.

The latest attempt by the plaintiffs to do so was from May this year.

The defendant banks, however, disagreed. On June 7, 2019, they filed a Letter with the New York Southern District Court, noting that this is the plaintiffs’ fourth attempt over the course of a year and a half to vastly expand the scope of their case to include new claims arising out of the plaintiffs’ overseas credit card, debit card, and ATM transactions.

The defendant banks argued that users of credit, debit, and ATM cards are not efficient enforcers of the antitrust laws for the alleged manipulation in the FX spot markets. They also noted that the plaintiffs’ complaint does not allege that individuals who engaged in credit, debit, and ATM card transactions are direct purchasers of foreign currency. Further, according to the banks, the plaintiffs’ allegations about their credit, debit, and ATM card transactions fail to meet the due process requirements for bringing claims under the Cartwright Act. Finally, the banks stated that the plaintiffs’ claims regarding wire transfers are conclusory and time-barred.

As per the latest Court filings, seen by FinanceFeeds, the Judge has sided with the defendant banks on the matter. In the order issued on Tuesday, July 9, 2019, Judge Schofield said the plaintiffs did not identify “an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.”

The plaintiffs contended that the Court overlooked tolling of the statute of limitations under 15 U.S.C. § 16(i) and the doctrine of fraudulent concealment. But, the Judge said, it is black letter law that a motion for reconsideration may not be used to advance new facts, issues or arguments not previously presented to the Court, nor may it be used as a vehicle for relitigating issues already decided by the Court.

Regarding fraudulent concealment, the Judge found that even setting aside the fact that the plaintiffs did not clearly raise this issue in their second motion for leave to amend the Court already considered and rejected this ground for tolling in its June 20, 2018, Order, which denied the plaintiffs’ first motion for leave to amend.

This litigation is now in its fifth year. To add a theory of liability based on a completely new set of foreign exchange transactions at this late stage would unduly expand the scope of this case and prejudice the defendants, the Judge said.

Finally, the plaintiffs argue that the Court did not give “precise notice of the statute of limitations deficiency” prior to its May 20, 2019, Order, and therefore Plaintiffs’ second motion for reconsideration should be deemed “not a re-consideration, but . . . Plaintiffs’ response and proposed cure to the Court’s notice of deficiency.” Even assuming this were true, the plaintiffs proposed amendments merely restate arguments previously considered and rejected, and would not cure any deficiency, Judge Schofield concluded.