# In re SSA Bonds Antitrust Litigation

> District Court, S.D. New York · October 4, 2019

URL: https://www.frixlaw.com/law-library/cases/10318316

## Case

- **Court:** District Court, S.D. New York
- **Decided:** October 4, 2019
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10318316

## How later opinions describe it (automated extraction)

- finding that to support jurisdiction under N.Y. C.P.L.R. § 302, there must be “an articulable nexus, or a substantial relationship, between the claim asserted and the actions that occurred in New York”
- rejecting conclusory allegations and finding lack of specificity is highlighted when plaintiffs use of same boilerplate description for actions of multiple defendants
- observing that “random,” “fortuitous,” or “attenuated” contacts do not support § 302(a)(1) jurisdiction
- finding no personal jurisdiction under conspiracy theory because there was no factual basis from which court could impute conduct of putative co- conspirators to defendants

## Opinion text

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

OPINION AND ORDER
IN RE SSA BONDS ANTITRUST LITIGATION 16 Civ. 371] (ER)
UsDc sDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #
Ramos, D.J.: DATE FILED: Oct. 4, 2019
This litigation arises from fourteen related complaints filed against several banks and
certain employees who allegedly conspired to fix the price of supranational, sovereign, and
agency (“SSA”) bonds sold to and purchased from investors in the secondary market, where
investors can buy and sell bonds among themselves. These actions were consolidated under the
caption In re SSA Bonds Antitrust Litigation, No. 16 Civ. 3711. See Docs. 36, 314. Pending
before the Court are the motions to dismiss the Second Consolidated Amended Class Action
Complaint (“SAC”) for lack of personal jurisdiction and improper venue for certain foreign
corporate and individual Defendants. Docs. 520, 533, 537, 540, 542. For the reasons set forth
below, the motions are GRANTED.
I BACKGROUND
1) Factual Background!
SSA bonds are debt securities issued by governmental and quasi-governmental entities to
fund a range of public-policy mandates. SAC { 2, Doc. 506. Entities issuing SSA bonds include
supranational organizations, which are multilateral institutions with shareholders from multiple
countries, such as the World Bank and the European Investment Bank; sovereign and

! The following facts, drawn from the SAC, are presumed to be true for the purposes of Defendants’ motions to
dismiss. See Koch v. Christie’s Int’l PLC, 699 F.3d 141, 145 Qd Cir. 2012).

subsovereign borrowers, which are national, state, or provincial governments that issue debt in
foreign currencies; and agency borrowers, which are typically entities owned by or working on
behalf of governments, such as Germany’s Kreditanstalt fiir Wiederaufbau (a government-owned
investment bank). Jd. J§ 2, 118. SSA bonds are generally regarded as secure investments
because they often enjoy special legal status or government backing. Id. JJ 2,49. SSA bonds
can be U.S. dollar denominated (“USD”) and sold in the U.S. bond market. Jd. § 52.
After being issued, SSA bonds can be resold and traded by dealers and investors. Jd.
4 129. Investors trade SSA bonds in an over-the-counter market, meaning that rather than using
an open, anonymous exchange that matches buyers and sellers, investors transact individually
and privately with dealers. Jd. J 129,553. An investor typically contacts one or more dealers
by telephone, electronic chat messaging, or electronic trading platform to request a quote, which
the dealer relays to the investor, who can then place the order. /d. § 130-31. Because it is time-
consuming to contact dealers and because their quotes usually expire in a short amount of time,
investors generally do not “shop around” with more than a few dealers at atime. Jd. { 133.
Investors also do not have access to real-time market data and have limited ability to purchase
secondary market trading information, so they rely on dealers for pricing information for the
bonds. Id. Ff 132.
Dealers typically quote prices for SSA bonds in basis points (one basis point is 1/100th of
a percentage point) as a spread above the yield of the relevant benchmark U.S. Treasury bonds
with a similar maturity.” Id. 4 139. SSA bond yields are inversely related to bond prices: the
higher the spread above Treasury bond yields, the cheaper the price of the bond, and vice versa.
Id. § 141. Therefore, investors seek to buy SSA bonds at the highest available offer in basis

2 The Court will simply refer to “basis points” as a shorthand for this method of pricing.

points (i.e., the highest yield, and thus the cheapest price) and to sell them at the lowest available
bid in basis points (i.e., the lowest yield, and thus the most expensive price). Id.
For purposes of this motion, the corporate Defendants are several foreign banks operating as
dealers in the USD SSA bond market (the “Foreign Dealer Defendants”). Jd. § 17. Each Foreign
Dealer Defendant is headquartered and organized under the laws of a foreign country. Juris.
Memo 5, Doc. 521.
The thirteen Foreign Dealer Defendants seeking dismissal of all claims based on lack of
personal jurisdiction are: Barclays Bank PLC, Barclays Capital Securities Limited, Barclays
Services Limited, BNP Paribas, Citigroup Global Markets Limited, Crédit Agricole Corporate &
Investment Bank, Credit Suisse AG, Credit Suisse International, Credit Suisse Securities
(Europe) Ltd., Nomura International [PLC], Royal Bank of Canada, RBC Europe Limited, and
The Toronto Dominion Bank. Jd. at 1 n.1,5. A subset of six Foreign Dealer Defendants
challenge venue in New York based on Plaintiffs’ reliance on Section 12 of the Clayton Act:
Barclays Capital Securities Limited, Barclays Services Limited, Credit Suisse International,
Credit Suisse Securities (Europe) Ltd., and Nomura International PLC. Jd. at 5.
And four individual defendants (“Individual Defendants”), all British citizens or
residents, join the Foreign Dealer Defendants in their motion to dismiss: Gary McDonald
(“McDonald”) (Doc. 533), Amandeep Singh Manku (“Manku”) (Doc. 537), Shailen Pau (“Pau”)
(Doc. 540), and Bhardeep Singh Heer (“Heer”) (Doc. 542). These four Defendants were
employed by several of the bank Defendants as USD SSA bond traders and communicated with
each other via chat messages about their transactions. I

ns SAC 1371-73, Doc. 506.
The named Plaintiffs are the Alaska Permanent Fund Corporation (“Alaska Permanent
Fund”), the Alaska Department of Revenue, and the Iron Workers Pension Plan of Western
Pennsylvania (“Iron Workers”). SAC JJ 36-40, Doc. 506. Plaintiffs seek to represent a Class
comprising of all persons or entities who directly entered into USD SSA bond transactions with
Defendants, their respective subsidiaries, or affiliates, and which involved trade with the United
States from January 1, 2009 to December 31, 2015 (the “Class Period”). Jd. 9561.
2) Jurisdictional Facts
Plaintiffs allege that the Foreign Dealer Defendants and the Individual Defendants,
directly and through U.S,-based affiliates, colluded to make money in the USD SSA bond market
at the expense of U.S. customers. Opp. Memo 1, Doc. 579. The Foreign Dealer Defendants
approved and priced the named Plaintiffs’ transactions, knowing they were with a U.S.
counterparty. Jd. at 2. As an example of how the alleged scheme worked, Plaintiffs point to an
Alaska Permanent Fund USD SSA bond transaction with unnamed parties:
Alaska Permanent Fund Corporation’s decisions to buy and sell USD SSA bonds
were made in the United States, after placing inquiries with U.S.-based salespeople
working at the Dealer Defendants, who then passed the inquiry to the Dealer
Defendants’ London-based traders for a price. The U.S.-based salespeople then
received the price and gave it to Alaska Permanent Fund Corporation’s domestic
investment manager in the United States. Finally, the purchase or sale transaction
was executed in the United States, and either the USD SSA bond or the sale
proceeds were delivered to Alaska Permanent Fund Corporation in the United
States. The Dealer Defendants’ London desks knew they were pricing a trade for
a U.S.-based investor and that the price would be conveyed back to the U.S.-based
investor and result in a transaction executed in the United States, as they intended.

3 For simplicity, the Court collectively refers to the Foreign Dealer Defendants and the Individual Defendants as (the
“Defendants”).

Id, at 4-5. An “essential step[]” in the conspiracy was that the foreign entities priced the bonds
for their U.S. cohorts. fd. at 5. Allegedly, the Foreign Dealer Defendants issued billions of USD
SSA bonds to U.S. Class Members during the Class Period
WE ii. at 6. BNP Paribas, Barclays Services Limited, and The Toronto-Dominion Bank
deny that they executed USD SSA bond trades with U.S. Class Members. Juris. Memo 13 n.15,
Doe. 521. Defendants contend that Plaintiffs have not established that these transactions show
that the United States was the “focal point” of the alleged misconduct. Juris Memo 2, Doc. 521.
Plaintiffs also claim that the Foreign Dealer Defendants created a “constant flow of
market information to and from Defendants’ U.S.- and New York-based salespeople and traders
and the London SSA desk.” Opp. Memo 8, Doc. 579. It was “routine practice” for the Foreign
Dealer Defendants to communicate with U.S.-based investors through daily calls regarding the
performance of the SSA bond market and which facilitated sales that were ultimately booked by
a U.S. salesperson. Jd. at 9. The Foreign Dealer Defendants also attended “meet and greet”
bond conferences in New York to network and generate business. /d. At these conferences, they
met with U.S. customers and colleagues to further promote the USD SSA bond business.
Additionally, the Foreign Dealer Defendants traveled to New York outside of the industry-wide
conferences to meet directly with U.S. investors, traders, salespeople, etc. at their affiliated
banks. Jd. The meetings with the customers would involve discussions about their accounts and
potential additional SSA bonds business transactions with the Foreign Dealer Defendants. Id.
To corroborate these claims, Plaintiffs point to chat transcripts [I
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iii aaa
fc. at 10-12. Additional factual allegations include that some USD SSA bonds were
called “Yankee” bonds because they were denominated in U.S. dollars and predominantly issued
and traded in the United States. SAC § 122, Doc. 506. For example, Plaintiffs present data “that
in 2013 over 75% of USD SSA activity came from U.S.-based clients.” Jd. On the other hand,
Defendants argue that Plaintiffs have failed to allege that “Foreign Dealer Defendants
participated in any wrongful conduct within or specifically directed at New York, or elsewhere
in the United States.” Juris Memo 2, Doc. 521. The Foreign Dealer Defendants assert that
Plaintiffs’ claims are “factually unsupported, boilerplate allegations.” Id. at 5.
3) Procedural Background
The first complaint in this case was filed on May 18, 2016 and was followed by several
related actions. Doc. 1. On August 22, 2016, the Court consolidated these and subsequent
related actions under the above caption. Doc. 36. Ultimately, fourteen actions were
consolidated, although some plaintiffs withdrew from the consolidated action or voluntarily
dismissed their complaint. See Docs. 304, 314, 430. On December 21, 2016, the Court
appointed Quinn Emanuel Urquhart & Sullivan, LLP and Robbins Geller Rudman & Dowd LLP
as interim co-lead counsel in the consolidated action. Doc. 88.
On April 7, 2017, Plaintiffs filed an amended complaint. Doc. 130. Following their
settlement with Deutsche Bank, Plaintiffs requested leave to file a Consolidated Amended
Complaint (“CAC”) on October 6, 2017, which the Court granted on November 3, 2017. Doc.
305. The CAC asserts a single cause of action for conspiracy to restrain trade in violation of § 1
of the Sherman Act, 15 U.S.C. § 1. CAC 99 413-20, Doc. 306. On December 12, 2017,
Defendants moved to dismiss the CAC for lack of subject-matter jurisdiction, failure to state a
claim, lack of personal jurisdiction, and improper venue. Docs. 342, 358, 365, 373, 376, 378.

In March 2018, the Court preliminarily approved the settlement agreements staying the
proceedings between Plaintiffs and Bank of America, Deutsche Bank, and Hiren Gudka, an
Individual Defendant, and Plaintiffs voluntarily dismissed TD Securities Limited, a TD Bank
subsidiary. Docs. 428, 430, 431, 448. On August 24, 2018, the Court granted the Defendants’
motion to dismiss for failure to state a claim because Plaintiffs did not plausibly allege an injury-
in-fact sufficient to establish antitrust standing. Doc. 495. The Court allowed Plaintiffs to file a
Second Amended Complaint (“SAC”), which Plaintiffs filed on November 13, 2018. Doc. 506.
On December 21, 2018, the Foreign Dealer Defendants and the Individual Defendants moved to
dismiss it for lack of personal jurisdiction and improper venue. Docs. 520, 527, 533, 537, 540,
542, 569.
Il. LEGAL STANDARD
All Defendants bring this motion to dismiss the case based on lack of personal
jurisdiction. Plaintiffs bear the burden of establishing that the court has jurisdiction over the
Foreign Dealer Defendants and the Individual Defendants. Bank Brussels Lambert v. Fiddler
Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). Before a court can exercise personal
jurisdiction over a defendant, three requirements must be met: (1) plaintiff's service of process
upon the defendant must have been procedurally proper, (2) there must be a statutory basis for
personal jurisdiction that renders such service of process effective, and (3) the exercise of
personal jurisdiction must comport with constitutional due process principles. Dennis v.
JPMorgan Chase & Co., 343 F. Supp. 3d 122, 197 (S.D.N.Y. 2018). Six Foreign Dealer
Defendants challenge venue under Section 12 of the Clayton Act. “The legal standard for a
motion to dismiss for improper venue is the same as a motion to dismiss for lack of personal
jurisdiction.” Casville Invs., Ltd. v. Kates, No. 12 Civ. 6968 (RA), 2013 WL 3465816, at *3
(S.D.N.Y. July 8, 2013) (citing Gulf Ins. Co. v. Glasbrenner, 417 F.3d 353, 355 (2d Cir. 2005)).

On a motion to dismiss, courts “are not bound to accept as true a legal conclusion
couched as a factual allegation.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “[A]
plaintiff may not rely on conclusory statements without any supporting facts, as such allegations
would ‘lack the factual specificity necessary to confer jurisdiction.’” Art Assure Ltd., LLC v.
Artmentum GmbH, No. 14 Civ. 3756 (LGS), 2014 WL 5757545, at *2 (S.D.N.Y. Nov. 4, 2014)
(quoting Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 185 (2d Cir. 1998)).
Il. CLAYTON ACT
Personal jurisdiction is not proper under § 12 of the Clayton Act because Plaintiffs have
not satisfied its venue provision. Plaintiffs bring this case pursuant to § 1 of the Sherman Act,
which prohibits conspiracies restraining trade. SAC 9571, Doc. 506. “Although plaintiffs
allege violations of the Sherman Act, the private right of action to pursue antitrust claims is
provided by the Clayton Act[.]” In re Vitamin C Antitrust Litig., No. 05 Civ. 453 (BMC) (JO),
2012 WL 12355046, at *5 (E.D.N.Y. Aug. 8, 2012). In federal antitrust cases, § 12 of the
Clayton Act provides for venue and service of process against a corporation in the judicial
district where it is an inhabitant or where it may be found or transacts business. 15 U.S.C. § 22.
The Section provides:
Any suit, action, or proceeding under the antitrust laws against a corporation may be
brought not only in the judicial district whereof it is an inhabitant, but also in any district
wherein it may be found or transacts business; and all process in such cases may be
served in the district of which it is an inhabitant, or wherever it may be found.
Id. (emphasis added). By authorizing service outside of the state, this Section is construed as
conferring personal jurisdiction over the corporation served. Goldlawr, Inc. v. Heiman, 288 F.2d
579-81 (2d Cir. 1961), rev’d on other grounds, 369 U.S. 463 (1962). The Second Circuit has
interpreted the phrase “in such cases,” to limit Clayton Act personal jurisdiction only to suits
where venue is proper—the judicial district where the corporation is an inhabitant, may be found,

or transacts business—and not more broadly to “any suit... under the antitrust laws.” Daniel v.
Am. Bd. of Emergency Med., 428 F.3d 408, 423 (2d Cir. 2005) (holding personal jurisdiction
under Clayton Act is only proper when venue provision has been satisfied).
Alternatively, Plaintiffs seek to assert that venue is proper under § 12 of the Clayton Act
by relying on a separate statute for venue, 28 U.S.C. § 1391(d), which provides that “a defendant
not resident in the United States may be sued in any judicial district.” Juris Memo 23, Doc. 521.
However, if venue is not proper under the Clayton Act, then Plaintiffs cannot rely on § 1391(d)
to apply the Clayton Act’s worldwide service provisions and establish personal jurisdiction over
the Defendants. Accordingly, to establish personal jurisdiction over the Foreign Dealer
Defendants pursuant to § 12 of the Clayton Act, Plaintiffs must first prove that they are an
inhabitant of, are found in, or transact business in New York.
For venue to be proper in a district where the defendant is not an “inhabitant,” the
defendant must “be found? or transact[] business” there. 15 U.S.C. § 22. The Supreme Court
has construed the Clayton Act phrase “transacts business” as “the practical, everyday business or
commercial concept of doing business or carrying on business of any substantial character.”
Dennis, 343 F. Supp. 3d at 198-99. For a defendant to transact business of a “substantial
character” there must be “some amount of business continuity and certainly more than a few
isolated and peripheral contacts with the particular judicial district.” Jd. at 199.

4 For a corporation, “inhabitant” means its place of incorporation. See, e.g., Expoconsul Int’l, Inc. v. A/E Systems,
Inc., 711 F. Supp. 730, 732-33 (S.D.N.Y. 1989).
5 To “be found” in a district requires more than “transacting business” there. U.S. v. Watchmakers of Switzerland
Info. Ctr., 133 F. Supp. 40, 42-43 (S.D.N.Y. 1955) (defining “more” as “proof of continuous local activities’).

Of the thirteen Foreign Dealer Defendants, a subset of five challenge venue.® Opp.
Memo 46, Doc. 579. Plaintiffs argue that the “‘transacts business’ test is readily met here,” as
every Venue Defendant “directed its collusive USD SSA bond trading activities to [and engaged
in these activities in] the United States, including to New York in particular.” Jd. at 47. The
alleged trading activities included setting artificial prices that U.S. affiliates used to execute USD
SSA bond transactions with members of the Class in New York and that all Venue Defendants,
except Barclays Services Limited, directly executed bond transactions with members of the Class
in New York. Jd. Plaintiffs also allege that all the Venue Defendants periodically attended bond
conferences and in-person client meetings in New York to promote the USD SSA business. Jd.
The New York contacts that Plaintiffs allege do not meet the “transacts business”
standard required to establish venue. Plaintiffs’ allegations do not provide factual corroboration
for the alleged New York-based bond transactions. See, e.g., Raul Int’! Corp. v. Nu-Era Gear
Corp., 28 F.R.D. 368, 371 (S.D.N.Y. 1961) (finding evidence like “correspondence, invoices and
other records” showed the degree of business transacted was of a substantial nature). This lack
of factual support is the type of “legal conclusion couched as factual allegation” that courts need
not accept as true. Twombly, 550 U.S. at 555.
Plaintiffs also state that Credit Suisse Securities (Europe) Ltd. and Credit Suisse
International have significant operations in New York through their U.S. subsidiaries and
affiliates, and that Nomura International PLC has many employees based in New York. Opp.
Memo 48, Doc. 579. But without allegations of specific activities, these are “minimal
allegations” that do not satisfy the “transacts business” standard. Dennis, 343 F. Supp. 3d. at

6 The five Venue Defendants are: Barclays Capital Securities Limited, Barclays Services Limited, Credit Suisse
International, Credit Suisse Securities (Europe) Ltd., and Nomura International PLC.

10

Le
a
SAC 4 392, Doc. 506. Attending one bond conference in New York is not evidence of “carrying
on business of any substantial character.” Dennis, 343 F. Supp. 3d. at 200.
The fact that Plaintiffs cannot establish § 12’s venue requirement over the Foreign Dealer
Defendants means that the Court must find that it lacks jurisdiction over the Foreign Dealer
Defendants. News Am. Mktg. In-Store, Inc. v. Insignia Sys., Inc., No. 03 Civ. 8555 (RCC), 2006
WL 2807189, at *2 (S.D.N.Y. Sept. 28, 2006) (finding lack of personal jurisdiction on out-of-
state defendant when plaintiff relied on the Clayton Act and failed to establish § 12’s venue
provision).
IV. NEW YORK LONG-ARM STATUTE
Next, the Court turns to whether Plaintiffs have alleged sufficient facts to rely on New
York’s long-arm statute for personal jurisdiction. The statute states in relevant part that:
As to a cause of action arising from any of the acts enumerated in this section, a
court may exercise personal jurisdiction over any non-domiciliary, or his executor
or administrator, who in person or through an agent:
1. transacts any business within the state or contracts anywhere to supply goods or
services in the state; or
2. commits a tortious act within the state, except as to a cause of action for
defamation of character arising from the act; or
3. commits a tortious act without the state causing injury to person or property
within the state, except as to a cause of action for defamation of character arising
from the act....
N.Y. C.P.L.R. 302(a)(1)}-(3). Plaintiffs claim that § 302 applies to the Foreign Dealer
Defendants on these three bases.

11

1) Transacts Business Within the State
A defendant transacts business within the meaning of § 302(a)(1) when through volitional
acts he avails himself of the privilege of conducting business in New York, thus invoking its
benefits and legal protections. Fischbarg v. Doucet, 880 N.E.2d 22, 26 (2007). “The appropriate
focus of an inquiry under CPLR § 302(a)(1) is on what the non-domiciliary defendant did in
New York and not on what the plaintiffs did.” Int’! Customs Assocs., Inc. v. Ford Motor Co.,
893 F. Supp. 1251, 1262 (S.D.N.Y. 1995), aff'd, 307 F. App’x 479 (2d Cir. 2008). Courts
consider the totality of all defendant’s contacts with New York when determining if exercising
jurisdiction would be proper. Grand River Enters. Six Nations, Ltd. v. Pryor, 425 F.3d 158, 165—
66 (2d Cir. 2005) (construing New York’s long-arm statute).
a) Foreign Dealer Defendants
Plaintiffs allege that because the Clayton Act’s venue clause “requires as much as, if not
more than,” the “transacts business” requirement under the New York long-arm statute, the same
facts discussed as to the Venue Defendants apply here, too. Opp. Memo 49-50, Doc. 579
(quoting Grosser v. Commodity Exch., Inc., 639 F. Supp. 1293, 1313 (S.D.N.Y. 1986), aff'd, 859
F.2d 148 (2d Cir. 1988). Having a business office in New York is an example of transacting
business under the long-arm statute. See Corley v. Vance, 365 F. Supp. 3d 407, 434 (S.D.N.Y.
2019) (finding that company “plainly availed itself of New York law” when it was registered to
do business in New York and had two offices in New York). However, the inquiry does not end
there, as plaintiffs must then show that the underlying lawsuit arose from the transacted business.
See Best Van Lines, Inc. v. Walker, 490 F.3d 239, 246 (2d Cir. 2007) (finding that to support
jurisdiction under N.Y. C.P.L.R. § 302, there must be “an articulable nexus, or a substantial
relationship, between the claim asserted and the actions that occurred in New York”).

12

Having found that Plaintiffs did not sufficiently allege that the Venue Defendants
transacted business within New York State, the Court focuses its analysis on the remaining eight
Foreign Dealer Defendants.’ Plaintiffs summarily argue that all the foreign banks structured
their USD SSA operations in the same way, with the London desks provided marketing, pricing,
and approval direction to their New York counterparts. Opp. Memo 50, Doc. 579. Alone, this
argument lacks specificity and does not support a finding that the non- Venue Defendants also
transacted business in New York. See Gerstle v. Nat'l Credit Adjusters, LLC, 76 F. Supp. 3d
503, 510 (S.D.N.Y. 2015) (rejecting conclusory allegations and finding lack of specificity is
highlighted when plaintiffs use of same boilerplate description for actions of multiple
defendants).
Plaintiffs do establish that six of the Foreign Dealer Defendants have New York offices
and “transact business” in New York State: Barclays Bank PLC (New York office); BNP
Paribas (New York office); Crédit Agricole Corporate & Investment Bank (New York branch
and Chief Financial Officer is based in New York); Credit Suisse AG (New York office); Royal
Bank of Canada (New York office and is listed on the New York Stock Exchange); and The
Toronto-Dominion Bank (New York office). Opp. Memo 50, Doc. 579. Citigroup Global
Markets Limited does not have an office anywhere in the United States and Plaintiffs make no
factual allegations that they transacted business in New York. Juris Memo 5 n.6, Doc. 521.
Accordingly, the Court next considers whether Plaintiffs’ claims against the Foreign Dealer
Defendants with New York offices arises out of their business activity within New York State.

Bank, Credit Suisse AG, Royal Bank of Canada, RBC Europe Limited, and The Toronto Dominion Bank.

13

Plaintiffs identify only one specific trade between a Plaintiff and a non-venue Defendant
with an office in New York: a transaction between the Alaska Department of Revenue and
“Credit Suisse.” SAC § 177, Doc. 506. However, there are four Credit Suisse entities sued as
Defendants herein, and Plaintiffs do not specify whether the Credit Suisse entity they refer to is
Credit Suisse AG (““CSAG”), Credit Suisse Securities (USA) LLC (““CSSUSA”), Credit Suisse
Securities (Europe) Limited (‘CSSEL”), or Credit Suisse International (“CSI”). Id. □ 80.
Plaintiffs reference these entities collectively as “Credit Suisse.” Jd Because this is a class
action, Plaintiffs are required to make a personal jurisdiction claim regarding each Defendant
with respect to the “named” Plaintiffs. Famular v. Whirlpool Corp., 16 Civ. 944 (VB), 2017 WL
2470844, at *2 (S.D.N.Y. June 7, 2017). Allegations in the form of a group pleading are
insufficient, even for affiliated corporate entities. See In re Zinc Antitrust Litig., 155 F. Supp. 3d
337, 384 (S.D.N.Y. 2016). As to Barclays Bank PLC, BNP Paribas, Crédit Agricole Corporate
& Investment Bank, Royal Bank of Canada, and the Toronto-Dominion Bank, Plaintiffs do not
allege any specific transactions, let alone transactions that took place in New York, with a
substantial connection to Plaintiffs’ claims. Plaintiffs have not established a nexus between the
alleged business transactions in New York and the claims of this antitrust case. Therefore, the
New York long-arm statute does not reach the Foreign Dealer Defendants.
b) Individual Defendants
Plaintiffs claim that each of the Individual Defendants deliberately targeted New York
with their USD SSA bond trading activities. Opp. Memo 66, Doc. 579. Each one allegedly
promoted, artificially priced, and traded USD SSA bonds with members of the Class in the
United States and New York. Jd. Yet, Plaintiffs cannot rely on bare allegations that Defendants
transacted with unnamed absent class members to establish jurisdiction. Plaintiffs would need to

14

show that the Individual Defendants transacted with named Plaintiffs, not just unnamed members
of the class. Beach v. Citigroup Alt. Invs. LLC, No. 12 Civ. 7717 (PKC), 2014 WL 904650, at *6
(S.D.N.Y. Mar. 7, 2014) (finding a defendant’s alleged “[c]ontacts with unnamed class members
may not be used as a jurisdictional basis”)
Plaintiffs allege that each Individual Defendant traveled to New York to promote his
bond trading services and to maintain relationships with his New York-based customers for USD
SSA bonds and was personally responsible for USD SSA transactions with members of the Class
in the United States, including in New York. SAC f 110 (Heer), 111 (Manku), 112
(McDonald), and 113 (Pau), Doc. 506. Plaintiffs assert that Pau worked with U.S.-based
salespeople, id. § 114, and traveled to New York for a USD SSA bond conference, but Plaintiffs
do not allege that he manipulated or even discussed bond prices at the conference. Pau Memo 2,
Doc. 541. Neither do Plaintiffs present facts to support their allegation that the trips were used to
plan the manipulation. Laydon v. Bank of Tokyo-Mitsubishi UFJ, Ltd., 2017 WL 1113080, at *4
(S.D.N.Y. Mar. 10, 2017). These are boilerplate allegations. These limited contacts are not
sufficient to establish jurisdiction over the Individual Defendants. See Beatie & Osborn LLP v.
Patriot Sci. Corp., 431 F. Supp. 2d 367, 387 (S.D.N.Y. 2006) (observing that “random,”
“fortuitous,” or “attenuated” contacts do not support § 302(a)(1) jurisdiction) (citations omitted).
Moreover, the Court cannot credit these allegations because Plaintiffs do not offer
particularized facts to show that the Individual Defendants’ activities in New York had an
articulable nexus, or substantial relationship, to the underlying cause of action. See King Cty.,
Wash. v. IKB Deutsche Industriebank, AG, 769 F. Supp. 2d 309, 316 (S.D.N.Y. 2011).
Accordingly, Plaintiffs have not established that the Individual Defendants transacted business in
New York such that personal jurisdiction may properly be obtained.

15

2) Tortious Acts and New York State .
a) Section 302(a)(2): Tortious Acts Within the State
Plaintiffs improperly conflate the standard for §302(a)(2) and (3), and simply state that
the Foreign Dealer Defendants engaged in a “continuous course of tortious conduct—sometimes
within New York, and sometimes [outside of] New York.” Opp. Memo 50, Doc. 579. Pursuant
to § 302(a)(2), New York courts have recognized that jurisdiction may extend to out-of-state
individuals if they have an agent or co-conspirator physically present in New York who
committed a tort in furtherance of a conspiracy. LaChapelle v. Torres, 1 F. Supp. 3d 163, 169
(S.D.N.Y. 2014), Under Section 302(a)(3), antitrust violations are “tortious acts” if the
defendant should have reasonably expected that the violations would cause injury in New York.
In re Vitamin C, 2012 WL 12355046, at *6. When courts determine whether an injury in New
York is sufficient to warrant § 302(a)(3) jurisdiction, they generally apply a situs-of-injury test,
which asks them to locate the “original event which caused the injury,” which is the first effect
of the tort that caused injury. Carell v. Shubert Org., Inc., 104 F. Supp. 2d 236, 269-70
(S.D.N.Y. 2000) (quoting Brussels, 171 F.3d at 791).
Plaintiffs allege that the Defendants engaged in marketing, pricing, and approving USD
SSA bond transactions: providing a constant flow of information to and from New York-based
salespeople and traders; and traveling to New York to meet U.S. investors. Id. at 50-51.
However, Plaintiffs do not point to any specific salesperson, date of transaction, amount of
transaction, or any other fact that can support a finding of a tortious act within New York State
committed by Defendants or their alleged co-conspirators in furtherance of the conspiracy.
Without factual support for this claim, the Court cannot credit it. Lastly, nothing in the record
indicates that the original event occurred in New York. On the contrary, Plaintiffs allege that the

16

tort originated at the London desks of the Defendants who conspired not to compete on USD
SSA bonds with U.S.-based investors and then controlled their U.S.-based associates. Opp.
Memo 4, Doc. 579. Plaintiffs have not established a tort committed within New York that gives
rise to personal jurisdiction here.
In sum, Plaintiffs do not meet their burden of establishing that the Court has personal
jurisdiction over the Foreign Dealer Defendants or the Individual Defendants pursuant to the
New York long-arm statute.
b) Due Process Requirements
The Court does not need to reach whether establishing personal jurisdiction over the
Defendants comports with due process. See, e.g., In re Terrorist Attacks on Sept. 11, 2001, 392
F. Supp. 2d 539, 558 (S.D.N.Y. 2005), aff'd, 538 F.3d 71 (2d Cir. 2008) (finding if personal
jurisdiction exists under the New York long-arm statute, then Fourteenth Amendment’s due
process standards apply). But even if the Court did so, Plaintiffs have failed to show that the
Foreign Dealer Defendants and the Individual Defendants had minimum contacts with New
York. The touchstone due process principle has been that the defendant must have sufficient
“minimum contacts” with the forum such that the lawsuit does not offend “traditional notions of
fair play and substantial justice.” Dennis, 343 F. Supp. 3d at 200 (citing Gucci Am., Inc. v.
Weixing Li, 768 F.3d 122, 142 n.21 (2d Cir. 2014) (collecting cases)).
There are two types of personal jurisdiction: general jurisdiction and specific
jurisdiction. Dennis, 343 F. Supp. 3d at 201. General jurisdiction over foreign corporations is
proper when the corporations’ affiliations are so continuous and systematic that they are
essentially “at home” in the forum state. Daimler AG v. Bauman, 571 U.S. 117, 127 (2014).
Plaintiffs’ claim that the Foreign Dealer Defendants are subject to general jurisdiction in the

17

United States can be dispensed with quickly, as none of the Foreign Dealer Defendants are
domiciled or have a principal place of business in the United States and Plaintiffs have not
alleged exceptional circumstances apply here. Dennis, 343 F. Supp. 3d at 202.
“Specific jurisdiction is a significantly more limited doctrine” than general jurisdiction.
Id. “Tn order for a state court to exercise specific jurisdiction, the suit must arise out of the
defendants’ contacts which create a substantial connection with the forum state.” Daimler, 571
U.S. at 127. The due process inquiry requires courts to evaluate the “quality and nature of the
defendant’s contacts with the forum state under a totality of the circumstances test.” Licci, 732
F.3d at 170 (internal quotation marks omitted). This is also known as the “minimum contacts”
test, which includes two methods for proving minimum contacts: (1) “purposeful availment,” in
which “the defendant purposefully availed itself of the privilege of doing business in the forum
state and could foresee being haled into court there,” Licci, 732 F.3d at 170 (internal quotation
marks omitted); and (2) “purposeful direction,” also known as the “effects test,” which
establishes personal jurisdiction when “the conduct that forms the basis for the controversy
occurs entirely out-of-forum, and the only relevant jurisdictional contacts with the forum are
therefore in-forum effects harmful to the plaintiff,” id. at 173. The “effects test” generally
requires that plaintiffs show that the defendants’ conduct was intentional and expressly aimed at
the forum state with the knowledge that substantial injury would be felt there. Calder v. Jones,
465 U.S. 783, 790-91 (1984) (finding effects test applied when forum state was “focal point” of
both conduct and harm suffered).
Here, Plaintiffs do not allege facts that specifically show that any of the Defendants sold
USD SSA bonds in New York. Fire & Police Pension Ass’n of Colorado v. Bank of Montreal,
368 F. Supp. 3d 681, 695 (S.D.N.Y. 2019) (finding that in financial conspiracy cases, “suit-

18

related conduct” means sale of derivative in forum state and that sale has connection to price
manipulation scheme). Accordingly, Plaintiffs have not alleged purposeful availment. Plaintiffs
also allege the Foreign Dealer Defendants artificially priced and approved USD SSA bonds
knowing the trades were for a U.S. investor. Opp. Memo 30-31, Doc. 579. This is a conclusory
statement. There is no factual support for the proposition that Defendants directed any actions at
New York specifically. See Dennis, 343 F. Supp. 3d at 207—08 (finding no jurisdiction where
foreign defendants aimed their conduct at transactions worldwide and some counterparties
happened to be in United States).
In sum, exercising personal jurisdiction over any of the Defendants in the instant case
would not be proper and would violate due process.
V. CONSPIRACY JURISDICTION
Another jurisdictional theory, called “conspiracy jurisdiction,” may be available in cases
alleging a conspiracy. Dennis, 343 F. Supp. 3d at 203. “[T]he appropriate test for alleging a
conspiracy theory of jurisdiction,” is an allegation that “(1) a conspiracy existed; (2) the
defendant participated in the conspiracy; and (3) a co-conspirator’s overt acts in furtherance of
the conspiracy had sufficient contacts with a state to subject that co-conspirator to jurisdiction in
that state.” Charles Schwab Corp. v. Bank of Am. Corp., 883 F.3d 68, 87 (2d Cir. 2018).
Conspiracy jurisdiction allows a plaintiff to establish personal jurisdiction over a defendant by
imputing to them the jurisdictional contacts of in-forum defendants based on the alleged
conspiracy. Juris Memo 29, Doc. 521 (citing SAC ff 31-35, Doc. 506).
1) Existence of a Conspiracy
To establish a conspiracy under § 1 of the Sherman Act, proof of joint or concerted action
is necessary and mere parallel conduct is not sufficient. Sonterra Capital Master Fund, Ltd. v.
Barclays Bank PLC, 366 F. Supp. 3d 516, 550 (S.D.N.Y. 2018). There are two ways that a

19

plaintiff can allege enough facts to support the inference that a conspiracy existed and overcome
a motion to dismiss: (1) present direct evidence that the defendants entered into an agreement in
violation of the antitrust laws, or (2) present circumstantial facts supporting the inference that a
conspiracy existed. Mayor & City Council of Baltimore, Md. v. Citigroup, Inc., 709 F.3d 129,
136 (2d Cir. 2013). Such direct evidence could consist of, for example, “a recorded phone call in
which two competitors agreed to fix prices at a certain level.” Jd. But in many antitrust cases,
this type of “smoking gun” direct evidence is hard to come by. Jd. In the absence of “smoking
gun” evidence, a horizontal anticompetitive agreement may be inferred when interdependent
conduct among competitors is accompanied by circumstantial evidence and plus factors. Jd.
“These ‘plus factors’ may include: a common motive to conspire, evidence that shows that the
parallel acts were against the apparent individual economic self-interest of the alleged
conspirators, and evidence of a high level of interfirm communications.” Jd. (quoting Twombly
v. Bell Atl. Corp., 425 F.3d 99, 114 (2d Cir. 2005), rev’d on other grounds, Twombly, 550 U.S.
544).
“The crucial question in a Section 1 case is... whether the challenged conduct stems
from independent decision or from an agreement, tacit or express.” Mayor & City Council of
Baltimore, 709 F.3d at 136 (citing Starr v. Sony BMG Music Entm’t, 592 F.3d 314, 321 (2d Cir.
2010) (internal quotations omitted)). Here, Plaintiffs allege the existence of a horizontal
conspiracy among Defendants to not compete against each other in the market for USD SSA □

bonds and to cooperate and maximize their own profits at the expense of their customers. SAC §
143, Doc. 506. Purportedly, Defendants’ overarching objective was to ensure that cartel
members could transact with investor clients at prices that were more favorable for the
conspiring dealers than would have been achieved absent collusion. Jd. Specifically, that when

20

an investor contacted one or more dealers to purchase a bond, the Defendants communicated
with each other via chat rooms and phone calls, where they coordinated sales to achieve more
favorable prices and terms for themselves. Jd { 130. IID
hee
el
Se
□□□ § 503. They argue that these techniques were per se unlawful. Id.
a. Direct Evidence
A court in this District found that a horizontal conspiracy existed in a consolidated class
action alleging a long-running agreement between the world’s largest banks to manipulate the
benchmark rates in the foreign exchange (“FX”) market. in re Foreign Exch. Benchmark Rates
Antitrust Litig., 74 F. Supp. 3d 581, 585 (S.D.N.Y. 2015) [hereinafter “FOREX’]. The District
Court found the existence of a conspiracy and that all defendants were part of the conspiracy
based on the chat room messages traders exchanged. /d. at 591-92. The defendants used chat
rooms with evocative names like “The Cartel,” “The Bandits’ Club,” “The Mafia” and “One
Team, One Dream,” which were the primary sites of the conspiracy. /d. at 587. The chat rooms
included traders from several of the bank defendants, including high-ranking employees, such as
chief currency dealer. Jd, The traders shared inappropriate, market-sensitive information with
rivals about pricing, customer’s orders, net trading positions, and types and volumes of trades
they planned to place. /d. The court found that, in totality, these chat room exchanges were not
“isolated instances of inter-firm communications by rogue employees, but common practice” in a
market where tight-knit social and professional ties in the FX trading community created
incentives and opportunities for collusion. Jd. at 588. No one defendant could accomplish

)1

systematic and continuing manipulation of “the Fix,” a benchmark exchange rate for trading
currency globally without coordination with its rivals. Jd, at 586-88.
Here, the Defendants are horizontal competitors in the USD SSA bonds market who
compete for customers by supplying different bid and ask quotes. If Defendants collude,
costumers pay non-competitive prices. [aaa

ee
SAC { 252, Doc. 506.
ee

a 2. (5 190-92.
□□

Id. §§ 173-76.

08.74 F.Supp. 30 at
591-92. Such chat communications are the type of “rare smoking gun” evidence that shows

947

WE. in re GSE Bonds Antitrust Litig., No. 19 Civ. 1704 (JSR), 2019 WL 4071070, at *5
(S.D.N.Y. Aug. 29, 2019). In GSE Bonds, plaintiffs filed a class action alleging a conspiracy to
fix secondary market prices of bonds issued by government-sponsored entities (“GSEs”). Jd. at
*1, Here, Plaintiffs have sufficiently alleged that these conversations were [I
se |
Mayor & City Council of Baltimore, 709 F.3d at 136.
b. Indirect and Statistical Evidence
Plaintiffs further corroborate this inference with statistical analyses that indicate collusion
during the Class Period, January 1, 2009 to December 31, 2015, which overlapped with the
employment periods of certain Individual Defendants. SAC 4 561, Doc. 506. Plaintiffs allege
that beginning in late 2015, the U.S. Department of Justice (“DOJ”) began an investigation that
led “all or nearly all of the key participants in the cartel” to be removed from their trading desks.
SAC § 375-380, Doc. 506. In late 2015, Bank of America suspended or terminated Gudka, who
worked as a bond trader at several banks from December 2001 to November 2015. Jd. 145,
377. In late 2015 or early 2016, Credit Suisse suspended or terminated Pau, who traded bonds at
several banks from 1999 to February 2016. Jd. J] 146, 378. In late 2015 or early 2016, Crédit
Agricole suspended or terminated Manku, who traded bonds at several banks between January
2002 and December 2015. Jd. 147,379. And in late 2015 or early 2016, Nomura suspended
Heer, who worked at Nomura from January 2005 to March 2016. Jd. {§ 148, 380. Plaintiffs
infer that the conspiracy was in place as early as January 1, 2009, when several of the “individual
cartel members” were employed at USD SSA trading desks for Dealer Defendants: i.e., Gudka
was working at Bank of America; Pau was working at RBC; Manku was working at HSBC; Heer
was working at Nomura, etc. Jd. 158.

42

Prosecutors obtained transcripts of online chat rooms indicating possible misconduct of
SSA traders at defendant banks who were sharing information on certain USD dollar bonds. □□□
{ 383. Plaintiffs rely on SSA bond data from Bloomberg that does not allow for the
identification of bids, offers, or final pees at an individual or trade level, but does allow for
analyses on market-wide pricing in the USD SSA bond market. Jd. 7509. A regression model is
an econometric tool for measuring how well one or more tested variables perform in terms of
predicting or explaining a given outcome and is an accepted model for determining whether an
alleged antitrust conspiracy impacted purchasers. Id. 512. The regression analysis Plaintiffs
conducted included a variable to indicate whether or not the pricing information was being
drawn from the core conspiracy period. /d. 515. The role of this “Collusion Indicator” is to
detect if bid-ask spreads were higher (or lower) during the alleged conspiracy period, after
controlling for factors that can legitimately cause spreads to vary across bonds and over time. Jd.
The “Collusion Indicator” analysis showed a “no” reading prior to 2009 and after 2015.
Id. § 516-17. Plaintiffs allege that the reports of the investigation placed a regulatory spotlight
on the Defendants and cast a chilling effect on their collusion activity. /d. 1517. This leads to
an inference that there was a correlation between the removal of certain Individual Defendants
from their trading desks and a “Collusion Indicator” of “no,” or 0, outside of the alleged
conspiracy period, Jd. A relevant plus factor is that some of the traders’ actions went against
their economic interests, [iii
See, e.g., SAC $f 173, 219, 444, Doc. 506; Twombly, 425 F.3d 99 at 114. Thus, Plaintiffs have
alleged a plausible inference that certain Individual Defendants colluded.

Id

2) Foreign Dealer Defendants’ Participation
While the chat messages Rs, (hc
Foreign Dealer Defendants argue that the instant case differs from GSE Bonds because the chats
here are sporadic discussions concerning individual bonds, from numerous distinct issuers,
trading at different times and in disparate circumstances. Doc. 624, 2. They allege these
“fragmented communications” do not suggest any overarching conspiracy to fix prices
throughout the SSA bonds “market.” Jd. In GSE Bonds, the court found that the bank
defendants (there were no individual defendants in the case) colluded to inflate prices for all
bonds they co-underwrote at a critical juncture, when the secondary market trading was set to
begin, and that they collectively traded 77% of the overall market, pointing to a market-wide
conspiracy. GSE Bonds, 2019 WL 4071070, at *1-2, *5—6. Defendants argue that Plaintiffs
have not alleged that Defendants hold a similarly large share of the market here and have
acknowledged that the market is composed of numerous other non-colluding members. Doc.
624, 2.
The nature of the SSA bond market differs from that of the GSE bond market in one
crucial way: SSA bonds are quoted on an individual and not a systemic basis. Plaintiffs explain
that investors operate in a dealer-to-customer market where investors call SSA bond traders
individually and get quotes. SAC 4 133, Doc. 506 (explaining that it is laborious and time-
consuming for investors to contact too many dealers and that dealers usually placed short
expiration times on quotes they provide). While SSA bond prices are quoted in basis points as a
spread above the yield of the relevant benchmark U.S. Treasury bonds with a similar maturity,
Plaintiffs have not alleged that any Defendant manipulated the benchmark rate. /d. { 139. While
“there is no rule that isolated occurrences of conspiratorial conduct do not qualify as direct

evidence,” the chat messages here do not qualify as direct evidence of a “broad, market-wide”
conspiracy. GSE Bonds, 2019 WL 4071070, at *5-6 (citing Mayor & City Council of Baltimore,
709 F.3d at 136).
The group chats here merely show opportunistic attempts at collusion by individual
traders and are not evidence of an overarching conspiracy committed by the Foreign Dealer
Defendants, Silver Fix If, 332 F. Supp. 3d at 904. Put differently, the chats do not signal a
widespread, multi-bank conspiracy, but rather I IT
Dees SAC 371-73, Doc. 506.

Lea
Rn Jc § 160. It is “harder to infer a conspiracy from individual acts of
trader-based manipulation because large financial institutions are both buyers and sellers of
derivative products, and thus any changes may well offset each other.” Sonterra, 277 F. Supp.
3d at 555. The GSE Bonds court dismissed the claims against those defendants that plaintiffs
had failed to “tie” to the conspiracy. GSE Bonds, 2019 WL 4071070, at *5. At this stage of the
litigation, Plaintiffs need only plead that their theory of conspiracy is plausible, but they have not
met that burden as to the Foreign Dealer Defendants. Gelboim v. Bank of Am. Corp., 823 F.3d
759, 781 (2d Cir. 2016).
3) Co-Conspirator’s Acts in New York
Lastly, while Plaintiffs have pleaded plausible collusion existed among certain Individual
Defendants, they have failed to show that the any Defendants’ alleged co-conspirators committed
a tort in New York. At the pleading stage, Plaintiffs must at least provide some details about the
transactions that bear on the plausibility that the alleged manipulation caused actual damage.

a6

Sonterra, 277 F. Supp. 3d at 571; see also Daventree Ltd. v. Republic of Azerbaijan, 349 F.
Supp. 2d 736, 762-63 (S.D.N.Y. 2004) (finding no personal jurisdiction under conspiracy
theory because there was no factual basis from which court could impute conduct of putative co-
conspirators to defendants). While, here, the chat history
nes, Plaintiffs provide no
evidence as to any specific transactions that occurred in New York or who the alleged co-
conspirators were. In sum, Plaintiffs have not met their burden of establishing conspiracy
jurisdiction.
VI. FEDERAL LONG-ARM STATUTE
Having found that Plaintiffs have not established personal jurisdiction over Defendants
pursuant to the Clayton Act or the New York long-arm statute, the Court next considers whether
Rule 4(k)(2) of the Federal Rules applies. “This Rule, which is commonly known as the federal
long-arm statute, permits federal courts to exercise personal jurisdiction over a defendant that
lacks contacts with any single state if the complaint alleges federal claims and the defendant
maintains sufficient contacts with the United States as a whole.” Haviish v. Royal Dutch Shell
PLC, No. 13 Civ. 7074 (GBD), 2014 WL 4828654, at *4 (S.D.N.Y. Sept. 24, 2014). Rule
4(k)(2) is designed to fill a gap in federal law when exercising personal jurisdiction over
defendant with enough contacts with the United States to satisfy due process, but not enough
contacts with any single state to support jurisdiction under a state’s long-arm jurisdiction.
Daventree, 349 F, Supp. 2d at 760, Here, Plaintiffs have alleged claims under two federal
statutes: the Sherman Act and the Clayton Act. SAC 4 28, 571, Doc. 506.
Rule 4(k)(2) establishes personal jurisdiction “where (1) the claim arises under federal
law, (2) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction,
and (3) exercising jurisdiction is consistent with the United States Constitution and laws.”

V7

Havilish, 2014 WL 4828654, at *4 (quotations omitted). There is no dispute that this case arises
under federal law claims and thus meets the first requirement of Rule 4(k)(2). However, the
Foreign Dealer Defendants argue that Rule 4(k)(2) is unavailable because Plaintiffs did not
provide a certification that Defendants are not subject to jurisdiction in any one state. Juris
Memo 34 n.32, Doc. 521. Plaintiffs rely on cases outside of this Circuit to claim that the burden
is on the defendant to “name some other state in which the suit could proceed.” Opp. Memo 52—
53, Doc. 579 (quoting JS7 Int’l, Inc. v. Borden Ladner Gervais LLP, 256 F.3d 548, 552 (7th Cir.
2001)).
In this Circuit, plaintiffs need to certify that the foreign defendants are not subject to
jurisdiction in any other state to meet the second requirement of Fed. R. Civ. P. 4(k)(2). 7 W.
57th St. Realty Co., LLC v. Citigroup, Inc., No. 13 Civ. 981 (PGG), 2015 WL 1514539, at *13
(S.D.N.Y. Mar. 31, 2015), aff'd, No. 18 Civ. 1102, 2019 WL 1914278 (2d Cir. Apr. 30, 2019);
see also Porina v. Marward Shipping Co., Ltd., No. 05 Civ. 5621 (RPP), 2006 WL 2465819, at
*4 (S.D.N.Y. Aug. 24, 2006) (finding plaintiffs bear burden of certifying that to their knowledge,
“the defendant is not subject to suit in the courts of general jurisdiction of any state”). Because
the Plaintiffs in the instant case have not certified that the Foreign Dealer Defendants are not
subject to general jurisdiction in another state, they have not met all of the elements of Rule
4(k)(2), and this Court can decline to apply the provision here. 7 W. 57th St. Realty, 2015 WL
1514539, at *13.
Plaintiffs request that should this Court conclude that certification is required, Plaintiffs
be allowed the opportunity to certify that the Foreign Dealer Defendants are not subject to
jurisdiction in any other state court. Opp. Memo 54, Doc. 579. But even if Plaintiffs met their
burden of certifying that the Foreign Dealer Defendants cannot be haled into court in any other

IR

state, Plaintiffs fail to show that the exercise of personal jurisdiction over defendants is
“consistent with the United States Constitution and laws.” Porina, 521 F.3d at 127 (quoting Fed.
R. Civ. P. 4(k)(2)). “Due process for purposes of Rule 4()(2) requires (1) that the defendant
have sufficient minimum contacts with the United States in general, rather than any particular
state and (2) that the exercise of jurisdiction is reasonable.” Jd.
The first step in the Rule 4(k)(2) due process analysis is applying the minimum contacts
test. “In applying Rule 4(k)(2), courts have engaged in the traditional minimum contacts
analysis based on an aggregation of the defendant’s contacts with the nation as a whole.”
Aerogroup Int’l, Inc. vy. Marlboro Footworks, Ltd., 956 F. Supp. 427, 439 (S.D.N.Y. 1996)
(citing Eskofot A/S v. EI. Du Pont De Nemours & Co., 872 F. Supp. 81, 87 (S.D.N.Y. 1995)). In
Eskofot, the District court listed the following non-exhaustive factors for meeting the standard:
“(1) transacting business in the United States, (2) doing an act in the United States, or (3) having
an effect in the United States by an act done elsewhere.” 872 F. Supp. at 87 (citing Leasco Data
Processing Equip. Corp. v. Maxwell, 468 F.2d 1326, 1340 (2d Cir. 1972)). The second step in
the analysis is determining whether the exercise of personal jurisdiction is reasonable. TAGC
Memt., LLC v. Lehman, No. 10 Civ. 06563 (RJH), 2011 WL 3796350, at *6 (S.D.N.Y. Aug. 24,
2011) (establishing “reasonableness” factors).
For the Foreign Dealer Defendants, Plaintiffs merely assert they purposely availed
themselves of the forum and argue that certification under Rule 4(k)(2) is not necessary. Opp.
Memo 54, Doc. 579. They do not attempt to make a prima facie case that Rule 4(k)(2) applies to
the Foreign Dealer Defendants. For the Individual Defendants, Plaintiffs propose that all the
same facts and arguments that applied to the New York long-arm statute apply to the Rule
4(k)(2) analysis, except that the Individual Defendants’ ties to the United States are stronger than

99

to New York State. Opp. Memo 75-76, Doc. 579. Plaintiffs repeat their boilerplate allegations
that the Individual Defendants executed and marketed USD SSA bonds at artificial prices with
members of the Class in New York, directly and via U.S.-based salespeople. Jd. at 76.
However, as discussed above, Plaintiffs’ bare allegations concerning the sporadic contacts that
the Individual Defendants had with New York are not sufficient to establish personal jurisdiction
over them. See supra Section IV(1)(a). Accordingly, Plaintiffs have not met their burden of
establishing that this Court has jurisdiction over the Defendants pursuant to Rule 4(k)(2).
VII. JURISDICTIONAL DISCOVERY
The final argument that the instant Plaintiffs make is that they are entitled to
jurisdictional discovery, Opp. Memo 82, Doc. 579, as they have made allegations “sufficient to
articulate a colorable basis for personal jurisdiction, which could be established with further
development of the factual record.” Leon v. Shmukler, 992 F. Supp. 2d 179, 195 (E.D.N.Y.
2014). Plaintiffs do not point to any information they hope to obtain. The Foreign Dealer
Defendants respond that after three prior attempts (and now the instant fourth attempt) Plaintiffs
have failed to cure the jurisdictional deficiencies in their case and do not establish a prima facie
case for personal jurisdiction. Foreign Dealer Defendants’ Reply 24-25, Doc. 589. Plaintiffs did
not submit a discovery plan.
“Tt is within the Court’s discretion to allow jurisdictional discovery,” but given that
Plaintiffs have not proposed an actual plan for such discovery, it would be inappropriate to
permit limitless discovery at this stage of the proceedings. Dennis, 343 F. Supp. 3d at 212
(refusing jurisdiction when plaintiffs did not propose jurisdictional discovery plan). Here, the
allegations that link any of the Foreign Dealer Defendants to New York are conclusory and
devoid of any facts that show specific transactions in New York that were in furtherance of the
alleged conspiracy. Although Plaintiffs rely on Leon, that case notes that plaintiffs are not

30

entitled to jurisdictional discovery in every situation. 992 F. Supp. 2d at 195. Plaintiffs have not
presented evidence that leads to a colorable jurisdictional claim against the Defendants. Thus,
the Court denies Plaintiffs’ request for jurisdictional discovery.
ANTITRUST INJURY
The Court has already dismissed Plaintiffs’ allegations of antitrust injury and so no
underlying tort has been sufficiently pled. In re SSA Bonds Antitrust Litig., No. 16 Civ. 3711
(ER), 2018 WL 4118979, at *9 (S.D.N.Y. Aug. 28, 2018). But on September 9, 2019, Plaintiffs
urged the Court to consider a supplemental case where the Second Circuit held that where
plaintiffs’ injury occurred in the very market that the defendants sought to constrain, plaintiffs
have standing to bring an antitrust claim. Doc. 623 (citing Eastman Kodak Co. v. Henry Bath
LLC, 936 F.3d 86, 95 (2d Cir. 2019) [hereinafter “Aluminum IV’]). The defendants in Aluminum
IV, allegedly restrained the market for aluminum sales by artificially manipulating a price
component for sales of the metal. Aluminum IV, 936 F.3d at 95. The plaintiffs’ injury was not
an incidental byproduct of the defendants’ alleged violation, but a direct result of defendants’
anticompetitive conduct. Jd. at 96.
In this case, the Dealer Defendants® rely on a prior Aluminum decision to argue that
Plaintiffs lack antitrust standing because the alleged misconduct occurred in the interdealer
“market” where the Defendants transacted with each other, and not in the dealer-to-customer
“market” where the Defendants allegedly transacted with Plaintiffs. Doc. 525, 10. Put
differently, the Defendants argue that Plaintiffs cannot plead antitrust standing for alleged
misconduct that occurred in an interdealer “market” they had no access to and never transacted

8 In this instance, the term “Dealer Defendants” includes both domestic and foreign dealer defendants and has the
same meaning ascribed to it as defined in Doc. 525, I n.1.

3]

in. Plaintiffs argue that this argument is erroneous in light of Aluminum IV because the fact
that one means of accomplishing Defendants’ conspiracy occurred in the interdealer market does
not render Plaintiffs’ standing less relevant. Doc. 623, 1. While the Court agrees with Plaintiffs
interpretation of the Second Circuit’s reasoning in Aluminum IV, Plaintiffs have not pleaded facts
sufficient to show an antitrust injury. In re SSA Bonds Antitrust Litig., 2018 WL 4118979, at *9.
Specifically, Plaintiffs failed to show that they themselves were party to any specific price-fixed
transaction with a named Defendant. Doc. 525, 7-11.
IX. CONCLUSION
The Defendants’ motion to dismiss for personal jurisdiction and improper venue is
GRANTED with prejudice. The Foreign Dealer Defendants’ and McDonald’s requests for oral
arguments, and the joint letter motion for a conference, are DENIED as moot.
It is SO ORDERED.
Dated: September 30, 2019
New York, New York

Edgardo Ramos, U.S.D.J.

32

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10318316. Public record. Not legal advice.