Nypl v. JP Morgan Chase & Co.

USONUITTEHDE RSTNA DTIESST RDIICSTT ROIFC TN ECWOU YROTRK

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:

JOHN NYPL,et al., :

Plaintiffs, :

: 15Civ.9300(LGS)

-against- :

: ORDER

JP MORGAN CHASE & CO.,et al., :

Defendants. :

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LORNA G. SCHOFIELD, District Judge:

WHEREAS, on March 18, 2019, the Court so ordered a Stipulation and Order Concerning

Deposition Coordination (the “Stipulation”). See Dkt. No. 425. Inthe Stipulation, Plaintiffs

agreedto seek the deposition of thesignatories of certain, identified pleaagreements and deferred

prosecution agreements between certain Defendants and the DOJ (the “Signatory Witnesses”),

and/or Rule 30(b)(6) depositions on topics limited to those agreements. See id.

I. Plaintiffs’ Letter Motions to Amend the Stipulation

WHEREAS, with respect to Defendants HSBC North America Holdings, Inc. and HSBC

Bank USA, N.A (the “HSBC Defendants”), the Stipulation provides that Plaintiffs “are only

seeking the depositions of (i) the signatories to . . .the December 11, 2012 deferred prosecution

agreement between the United States Department of Justice, HSBC Holdings PLC, and HSBC

Bank USA, N.A., and the January 18, 2018 deferred prosecution agreement between the United

States Department of Justice and HSBC Holdings PLC . ..and/or a corporate representative

designated under Rule 30(b)(6) that is knowledgeable about . . .the December 11, 2012 and

January 18, 2018 deferred prosecution agreements, on topics limited to those agreements[.]” See

id.

WHEREAS, with respect to Defendants Bank of America Corporation and Bank of

America, N.A.(the “Bank of America Defendants”), the Bank of America Defendants were not

among the Defendants identified in the Stipulationas Defendants for which Plaintiffs sought

either to depose affiliated signatories or Rule 30(b)(6) representatives. See id.

WHEREAS, the Third Amended Complaint (“TAC”) includes as exhibits,inter alia,an

order relating to the HSBC Defendants — “Order Instituting Proceedings Pursuant to Sections

6(c)(4)(A) and 6(d) of the Commodity Exchange Act” by the Commodity Futures Trading

Commission (“CFTC”) in the matter of HSBC Bank plc (the “HSBC CFTC Order”),see Dkt. No.

190-9. The TAC also includes as exhibits two consent orders relating to the Bank of America

Defendants —(1) a “Cease and Desist Order and Assessment of a Civil Money Penalty Issued

Upon Consent” by the Board of Governors of the Federal Reserve System in the matter of Bank

of America Corporation,see Dkt. No. 190-15,and (2) a Consent Order from the Department of

Treasury, Office of the Comptroller of the Currency in the matter of Bank of America N.A. (the “

Bof A Consent Orders”),see Dkt. No. 190-22. The HSBC CFTC Order and the B of A Consent

Orders are not includedin the Stipulation. See Dkt. No. 425.

WHEREAS, on December 4, 2019, the testamentary discovery stay in this case was lifted

in part. SeeDkt. No. 476. Subsequently, Plaintiffs served various deposition notices, includinga

Rule 30(b)(6) deposition notice addressed to the Bank of American Defendants,and a Rule

30(b)(6) deposition notice addressed to the HSBC Defendants that included as a topic the HSBC

CFTC Order. See Dkt. No. 490.

WHEREAS, onJanuary 31, 2020, the parties filed a joint letter providing their respective

positions regardingthe disputesrequiring the Court’s intervention relating to Plaintiffs’

deposition notices. SeeDkt. No. 490. Defendants objected toPlaintiffs’ request fora Rule

30(b)(6) deposition of Bank of America Defendants,and to the topics in the Rule 30(b)(6)

deposition notice on the HSBC Defendants, including the topic seeking information on the HSBC

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CFTC Order, as precluded by the Stipulation. See id. Plaintiffs did not dispute that these notices

were precluded by the Stipulation, nor did they assertthat the Bank of America Defendants or the

HSBC CFTC Order were omitted from the Stipulation in error. Rather, Plaintiffs arguedas to the

the Bank of America Defendantsthat the B of A Consent Orders are “similar in nature to the

pleas signed by the other defendants and, since they were identified as topics in the 30(b)(6)

deposition notice and were identified in the [TAC], plaintiffs should be allowed to conduct these

depositions even though the [B of A Consent Orders] were not specifically named” in the

Stipulation. As to the HSBC Defendants,Plaintiffs argued that the HSBC CFTC Order “deals

with similar evidence as was summarized in the plea agreements of the other defendants” and it

therefore “is a legitimate area of inquiry in their [] deposition of HSBC.” See id.

WHEREAS, on February 24, 2020, the Court quashed Plaintiffs’ deposition notices and

topics to the extent they exceeded the scope ofthe Stipulation, includingPlaintiffs’ Rule 30(b)(6)

notice on the Bank of America Defendants,and Plaintiffs’ Rule 30(b)(6) notice on the HSBC

Defendants to the extent the designated topics relate to subject matters other than the January 18,

2018 deferred prosecution agreement,”1 including topics relating to the HSBC CFTC Order. See

Dkt. No 498. Plaintiffs did not move for reconsideration of the ruling.

WHEREAS, on June 4, 2020, following further briefing regarding the remaining

deposition notices, the Court issued an order permitting Plaintiffs to serve certain interrogatories

on each of Defendants Barclays PLC, Citicorp, JPMorgan Chase & Co., Royal Bank of Scotland

PLC, and UBS AG -- the Defendants identified in the Stipulation -- to address the threshold

question of what communications, if any, each Defendant had with the Government relating to

1 The December 11, 2012 deferred prosecution agreement were separately found to beirrelevant.

See Dkt. No. 514.

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the plea agreements named in the Stipulation. Fact discovery, scheduled to end on June 1, 2020,

was extended by this order solely “for purposes of the above-referenced discovery.” See Dkt. No

547.

WHEREAS, as Plaintiffs had requested to file a letter motion to serve the above-

mentioned interrogatories on the Bank of America Defendants and the HSBC Defendants,the

June 4, 2020 order also directed the filing of such letters. See id.

WHEREAS, on June 5, 2020, Plaintiffs filed a letter motion seeking to modify the

Stipulation to include the Bank of America Defendants “in order to serve the interrogatories

identified in the Court’s June 4, 2020, Order” and “if necessary, to seek deposition.” Dkt. No.

549. Plaintiff requested the modification pursuant to Federal Rule of Civil Procedure 60(b) or

pursuant to the Court’s the inherent authority. See id. and Dkt. No. 564. Plaintiffs arguedthat,

“because [the Bank of America Defendants were] inadvertently omitted, the Stipulation and

Order should be modified because there is a complete lack of consideration” between the parties.

Dkt. No. 564. The Bank of America Defendants opposed the request. See Dkt. No. 559.

WHEREAS, on June 10, 2020, Plaintiffs filed a letter motion seeking, inter alia, “relief

under Fed. R. Civ. P. 60(b) to modify the Stipulation and Order entered on March 18, 2019, to

include the [HSBC CFTC Order]” because “[i]t is clear from the face of [the Stipulation] that the

Nypl Plaintiffs never intended to relieve the HSBC Defendants of their obligation to provide

depositions completely” and “[s]hould the HSBC Defendants be excused from answering the

interrogatories identified by the Court in its June 4, 2020, Order, there would be a complete

failure of consideration between HSBC and the Nypl Plaintiffs in the [Stipulation].” Dkt. No.

557. The HSBC Defendants opposed the request. See Dkt. No. 563.

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WHEREAS, Plaintiffs’ arguments under Federal Rule of Civil Procedure 60(b) are

rejected, because the Rule applies onlyto final orders, and is therefore inapplicable to Plaintiffs’

requestto amend the Stipulation. See Fed. R. Civ. P. 60(b) (“On motion and just terms, the court

may relieve a party or its legal representative from a final judgment, order, or proceeding . . .”);

see also Fennell v.TLBKent Co., 865 F.2d 498, 501 (2d Cir. 1989) (Rule 60(b) “only applies to

the reconsideration of a“final judgment, order or proceeding” (emphasis in original));accord

McGraw-Hill Glob.Educ.Holdings,LLCv.Mathrani, 293 F. Supp. 3d 394, 397 n.2(S.D.N.Y.

2018).

WHEREAS, Plaintiffs’ argument that the Stipulation should be amended to permit

Plaintiffs to notice a Rule 30(b)(6) deposition of the Bank of America Defendants and to add the

HSBC CFTC Order to the list of plea and deferred prosecution agreements, pursuant to the

Court’s inherent authority to reconsider interlocutory orders,is also rejected. The Court has

already ruled on a prior application by Plaintiffs to notice a Rule 30(b)(6) depositiononthe Bank

of America Defendants, and to permit Plaintiffs to include topics relating to the CFTC Order in

the HSBC Rule 30(b)(6)deposition notice, despite the clear language of the Stipulation. See Dkt.

No 498. The instant letter motions-- although not framed as such -- areuntimely motions for

reconsideration of that ruling. But,a motion for reconsideration is “not a vehicle for relitigating

old issues, presenting the case under new theories, securing a rehearing on the merits, or

otherwise taking a second bite at the apple.” Analytical Surveys, Inc. v. Tonga Partners, L.P.,

684 F.3d 36, 52 (2d Cir. 2012) (quoting Sequa Corp. v. GBJ Corp.,156F.3d136, 144 (2dCir.

1998)) (internal quotation marks omitted). The standard for granting a motion for reconsideration

is “strict, and reconsideration will generally be denied unless the moving party can point to

controlling decisions or data that the court overlooked.” Id.(quoting Shrader v. CSX Transp.,

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Inc.,70F.3d255, 257 (2dCir. 1995)) (internal quotation marks omitted). Here, Plaintiffs had the

opportunity to raise the arguments made in the instant letter motion before the Court’s prior

ruling on this issue, but did not do so. Now, after the close of general fact discovery, Plaintiffs’

letter motion seeks to relitigate a ruling issued four months ago regarding a Stipulation negotiated

and signed over a year ago. Plaintiffs forfeited the newly raised arguments by not timely raising

them in the first instance. See Phillips v.City ofNewYork, 775 F.3d 538, 544 (2d Cir. 2015)

(“Those arguments were raised for the first time in plaintiffs' motion for reconsideration and

therefore were not properly presented to the district court. Accordingly, they are waived.”). In

any event, while “[a] district court may . . . disregard a stipulation if it would be manifestly unjust

to enforce the stipulation,”Sinicropiv.Milone, 915 F.2d 66, 68 (2d Cir. 1990), there is “nothing

in the record . . . indicating that [Plaintiffs] did not knowingly and voluntarily enter into the

Stipulation.” Id. That Plaintiffs now argue that the consideration received -- the right to attend

depositions in related actions, and access to deposition transcripts in related actions

notwithstanding any provision limiting the use of such transcripts in any protective order entered

in any of the Actions -- is not sufficient in these circumstances to find the stipulation to be

manifestly unjust. The Court declines to reconsider the prior order.

II. Plaintiffs’ Letter Motions to Serve Interrogatories on the HSBC Defendants

regarding the 2018 Deferred Prosecution Agreement

WHEREAS, in the letter motion filed on June 10, 2020, Plaintiffs also seek to serve

interrogatories on the HSBC Defendants to inquire into communications with the Government

related to the January 18, 2018,deferred prosecution agreement between the United States

Department of Justice and HSBC Holdings PLC. See Dkt. No. 557. The HSBC Defendants

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oppose the request on the grounds that the agreement is not relevant to Plaintiffs’ claims. See

Dkt. No. 563.

WHEREAS, in the January 18, 2018 deferred prosecution agreement, HSBC Holdings plc

asserts that “the allegations described in the Information and the facts described in the attached

Statement of Facts are true and accurate.” See Dkt. No 557 at 7. The Statement of Facts

describes two FX transactions that that were manipulated through “front running,” to the

detriment of HSBC Holdings plc’s clients. For example, the Statement of Facts describes how,

before one transaction,

HSBC ‘ramped’ the price Sterling/Dollar by aggressively trading before and

during the fix in a manner designed to increase the price of Sterling/Dollar. As a

result, the price of Sterling/Dollar spiked around the 3 PM fix. Indeed, in the 30

seconds before and 30 seconds after 3:00 PM London time, the price of

Sterling/Dollar reached a market high for the day,allowing Johnson, Scott, and

other FX traders at HSBC to generate significant profits in their Pbooks from their

prior Sterling purchases by selling that Sterling at the higher prices generatedby

HSBC.

Dkt. 557 at 38. This conduct is not so different from the conduct alleged by Plaintiffs to be held

irrelevant to the action. And that HSBC Holdings plc is not a defendant in this action is relevant

only to the extent that Plaintiffs are limited --as with any interrogatories -- to seeking information

regarding the HSBC Defendants’ communications with the Government relating to the January

18, 2018 deferred prosecution agreement.

III. Conclusion

It is hereby ORDERED that, for the aforementioned reasons, Plaintiffs’ letter motions at

Dkt. Nos. 549 and 557 are DENIEDto the extent that Plaintiffs seek to amend the Stipulation,

andGRANTEDto the extent that Plaintiffs seek to serve interrogatories on the HSBC

Defendants to inquire into communications between the HSBC Defendants and the Government

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related to the January 18, 2018, deferred prosecution agreement. The HSBC Defendants’ letter

motion at Dkt. No. 557 is DENIED as moot.

The Clerk of Court is respectfully requested to close the motions at Dkt. No. 549, 557 and

568.

Dated: June 25, 2020

New York, New York

LORNA G. ae

UNITED STATES DISTRICT JUDGE