In Re Platinum and Palladium Antitrust Litigation

20-1458 (L)

In re Platinum and Palladium Antitrust Litigation

In the

United States Court of Appeals

FOR THE SECOND CIRCUIT

AUGUST TERM 2020

Nos. 20-1458, 20-1575, 20-1611

IN RE PLATINUM AND PALLADIUM ANTITRUST LITIGATION

KPFF INVESTMENT, INC., WHITE OAK FUND LP, INDIVIDUALLY AND

ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, LARRY HOLLIN,

Plaintiffs-Appellants-Cross-Appellees,

MODERN SETTINGS LLC, A NEW YORK LIMITED LIABILITY COMPANY,

MODERN SETTINGS LLC, A FLORIDA LIMITED LIABILITY COMPANY,

ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,

CRAIG R. COOKSLEY, INDIVIDUALLY AND ON BEHALF OF ALL THOSE

SIMILARLY SITUATED, NORMAN BAILEY, THOMAS GALLIGHER,

KEN PETERS,

Plaintiffs,

v.

BASF METALS LIMITED, ICBC STANDARD BANK PLLC,

Defendants-Appellees-Cross-Appellants,

GOLDMAN SACHS INTERNATIONAL, HSBC BANK USA, N.A., THE

LONDON PLATINUM AND PALLADIUM FIXING COMPANY LTD., BASF

CORPORATION,

Defendants-Appellees,

UBS AG, UBS SECURITIES LLC,

Defendants. *

* The Clerk of Court is directed to amend the caption as set forth above.

On Appeal from the United States District Court

for the Southern District of New York

ARGUED: JUNE 4, 2021

DECIDED: FEBRUARY 27, 2023

Before: POOLER and MENASHI, Circuit Judges, and VYSKOCIL,

District Judge. †

The plaintiffs-appellants and cross-appellees are participants in

the physical and derivatives markets for platinum and palladium and

seek monetary and injunctive relief for violations of the antitrust laws

and the Commodities Exchange Act (“CEA”). According to the

plaintiffs-appellants, the defendants—mostly foreign companies

engaged in trading these metals—manipulated the benchmark prices

for platinum and palladium by collusively trading on the futures

market to depress the price of these metals and by abusing the process

for setting the benchmark prices. The defendants allegedly benefited

from this conduct via trading in the physical markets and holding

short positions in the futures market. The district court held that it

had personal jurisdiction over two of the foreign defendants, but it

dismissed the plaintiffs’ antitrust claims for lack of antitrust standing

and the plaintiffs’ CEA claims for being impermissibly

extraterritorial. The plaintiffs appeal the dismissal of these claims. The

†Judge Mary Kay Vyskocil of the U.S. District Court for the Southern

District of New York, sitting by designation.

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defendants cross-appeal the district court’s holdings on personal

jurisdiction.

We reverse in part, vacate in part, and affirm in part. We

reverse the district court’s holding that Larry Hollin and White Oak

Fund LP (the “Exchange Plaintiffs”) lacked antitrust standing to sue

for the manipulation of the New York Mercantile Exchange futures

market in platinum and palladium. As traders in that market, the

Exchange Plaintiffs are the most efficient enforcers of the antitrust

laws for that injury. But we affirm the district court’s conclusion that

KPFF Investment, Inc. did not have antitrust standing. Additionally,

we vacate the district court’s dismissal of the plaintiffs’ CEA claims.

The plaintiffs have alleged sufficient domestic activity so that the CEA

claims are not impermissibly extraterritorial. We affirm the district

court’s holdings as to personal jurisdiction over the foreign

defendants under a conspiracy theory of personal jurisdiction.

MATTHEW J. PEREZ, Labaton Sucharow LLP, New York,

NY (Jay L. Himes, Ethan H. Kaminsky, Labaton

Sucharow LLP, New York, NY, and Merrill G. Davidoff,

Martin I. Twersky, Zachary D. Caplan, Berger Montague

PC, Philadelphia, PA, on the brief), for Plaintiffs-Appellants-

Cross-Appellees.

PAUL MEZZINA, King & Spalding LLP, Washington, DC

(Damien J. Marshall, Leigh M. Nathanson, King &

Spalding LLP, New York, NY, and Joshua N. Mitchell,

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King & Spalding LLP, Washington, DC, on the brief), for

HSBC Bank USA, N.A.

Stephen Ehrenbergh, Mark A. Popovsky, Sullivan &

Cromwell LLP, New York, NY, for Goldman Sachs

International.

MATTHEW A. KATZ (Lisa C. Cohen, on the brief), Schindler

Cohen & Hochman LLP, New York, NY, for the London

Platinum and Palladium Fixing Company Ltd.

ANDREW C. LAWRENCE (Michael F. Williams, Peter A.

Farrell, on the brief), Kirkland & Ellis LLP, Washington,

DC, for BASF Metals Limited and BASF Corporation.

ROBERT G. HOUCK (John D. Friel, Minji Reem, on the brief),

Clifford Chance US LLP, New York NY, for ICBC

Standard Bank Plc.

MENASHI, Circuit Judge:

The plaintiffs-appellants and cross-appellees in this case

participate in the markets for physical platinum and palladium and

for derivatives in those commodities. The plaintiffs-appellants

brought lawsuits alleging that the defendants—companies engaged

in precious metals trading—conspired to manipulate the global

benchmarks for those metals. Most, but not all, of the defendants are

foreign.

The plaintiffs sued for violations of the antitrust laws and the

Commodities Exchange Act (“CEA”) and for unjust enrichment.

According to the plaintiffs, the defendants artificially depressed the

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benchmark prices for platinum and palladium both by collusively

trading in those metals’ derivatives—and thereby affecting the price

of platinum and palladium generally—and by manipulating the

process of setting the benchmark price. The defendants allegedly

benefited from these actions by participating in the physical market

for platinum and palladium and by holding short positions in the

futures market. The plaintiffs, as sellers of platinum and palladium

and participants in the derivatives market, allege corresponding

injuries.

The changing legal landscape since the initial filing resulted in

multiple complaints from the plaintiffs and multiple dispositions

from the district court. Ultimately, the district court concluded that it

had personal jurisdiction over two of the foreign defendants under a

conspiracy theory of personal jurisdiction, but it dismissed the

antitrust and CEA claims. It determined that the plaintiffs were not

efficient enforcers of the antitrust laws—and therefore lacked

antitrust standing—and that the plaintiffs’ CEA claims were

impermissibly extraterritorial. The plaintiffs timely appealed, and the

foreign defendants over whom the district court held that it had

personal jurisdiction cross-appealed that issue.

We reverse in part, vacate in part, and affirm in part. KPFF

Investment, Inc. lacked antitrust standing to sue for the impact that

the defendants had on the physical platinum and palladium market.

However, those plaintiffs who participated in the futures market—

Larry Hollin and White Oak Fund LP—are the most efficient

enforcers of the alleged antitrust injury in that market and have

antitrust standing to pursue claims based on that injury. We also hold

that the plaintiffs have alleged sufficient domestic activity to survive

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a motion to dismiss on the CEA claims. And we affirm the district

court’s exercise of personal jurisdiction over the foreign defendants.

BACKGROUND

In considering this appeal, we “accept[] as true all factual

claims in the complaint and draw[] all reasonable inferences in the

plaintiff’s favor.” Henry v. County of Nassau, 6 F.4th 324, 328 (2d Cir.

2021) (quoting Fink v. Time Warner Cable, 714 F.3d 739, 740-41 (2d Cir.

2013)).

I

Platinum and palladium, members of the same element family,

are versatile metals. The metals are used in “catalytic converters,

laboratory equipment, electrodes, and dentistry equipment.” App’x

372 (footnote omitted). Besides these industrial applications,

platinum and palladium are used in jewelry and are traded by

investors. In 2013 alone, the gross demand for platinum and

palladium was over 8 million and 9.6 million ounces, respectively.

Aside from the traditional physical market, the metals are also

traded in futures and options markets, especially on the New York

Mercantile Exchange (“NYMEX”), “the leading centralized exchange

for platinum and palladium futures and options worldwide.” Id. at

381. On the NYMEX, “futures are standardized contracts that call for

the delivery of physical platinum or palladium … on a specified

date.” Id. In contrast to transactions involving physical metal, which

“are done between private parties,” the NYMEX “is the counterparty

to all transactions on the exchange” through “its clearinghouse, CME

Clearing.” Id. at 381. By “simultaneously buying and selling the

contract,” a clearinghouse “guarantees both sides of the trade and

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ensures that neither buyer nor seller is exposed to any counterparty

credit risk.” In re Amaranth Nat. Gas Commodities Litig., 730 F.3d 170,

174 (2d Cir. 2013). Since 2011, the aggregate annual value of platinum

and palladium futures has surpassed $100 billion and $40 billion,

respectively.

The defendants include BASF Metals Ltd. (“BASF Metals”),

Goldman Sachs International (“Goldman Sachs”), HSBC Bank USA,

N.A. (“HSBC”), and ICBC Standard Bank PLC (“ICBC”) (collectively,

the “Fixing Members”). BASF Metals is a company organized under

the laws of the United Kingdom with its principal place of business

in London, England, that engages in “precious metals commodity

dealing.” App’x 363. Goldman Sachs, HSBC, and ICBC are financial

services companies and, according to the plaintiffs, each company

“holds substantial market share in Physical and NYMEX Platinum

and Palladium.” Id. at 366-68. The three financial services companies

each conduct proprietary trading and also execute client trades.

HSBC’s principal place of business is in McLean, Virginia; Goldman

Sachs’s and ICBC’s principal places of business are in London,

England.

Between 2008 and 2014, there was a formal process for

establishing the market spot price for platinum and palladium called

the “Fixing.” Id. at 373. The Fixing was conducted twice daily—in an

“AM Fixing” and a “PM Fixing”—with a private conference call that

would set global benchmark prices for platinum and palladium. To

conduct the Fixing, BASF Metals, Goldman Sachs, HSBC, and ICBC

established the London Platinum and Palladium Fixing Company

Ltd. (“LPPFC”). The LPPFC has its principal place of business in

London, England, and “is 100% owned and controlled” by the four

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entities that founded it. Id. at 371. Its “only function is to take on and

continue the promotion, administration and conduct of [the Fixing].”

Id. (internal quotation marks omitted).

The Fixing was designed to be conducted as a Walrasian

auction. 1 One of the four founding entities would serve as the chair of

the auction, and the chair would announce an opening price

“ostensibly at or near the current spot price.” App’x 374. Each of the

other three founding entities would then declare itself to be a net

buyer or a net seller or to have no interest. The chair would adjust the

price until there was no (or nearly no) net interest in buying or selling,

and the resulting price would serve as the benchmark price—or the

“Fix price.”

Once the chair announced the benchmark price, the orders of

the auction participants could not be retracted. But the effects of the

benchmark extended beyond those orders. Market participants

uninvolved in the Fixing frequently incorporated the benchmark

prices in contracts. When buyers and sellers entered “spot”

contracts—pursuant to which the contracting parties agreed to

consummate the purchase and sale of physical platinum or

palladium—the “spot price” was “often tied or keyed to the relevant

metal’s Fixing on the day of the sale.” Id. at 380. Because the prices of

NYMEX platinum and palladium closely tracked the spot prices of

1In a Walrasian auction, each trader “submit[s] his demand, or even his

demand schedule,” to the auctioneer, who “aggregates traders’ demands

and supplies to find a market-clearing price.” Maureen O’Hara, Market

Microstructure Theory 4 (1995). In this way, the final price is the result of “an

unseen trading game in which buyers and sellers costlessly exchange

assets.” Id.

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those metals, the result was that “[t]he spot, Fix, and NYMEX

settlement prices exhibit[ed] an almost perfect correlation.” Id. at 387.

II

The Fixing would have been “a competitive process” if it were

conducted properly. Id. at 352. The plaintiffs allege that it was not so

conducted.

The plaintiffs-appellants in this case are Larry Hollin, White

Oak Fund LP (“White Oak”), and KPFF Investment, Inc. (“KPFF”).

Hollin and White Oak sold NYMEX platinum or palladium futures

contracts (collectively, the “Exchange Plaintiffs”). KPFF sold physical

platinum and palladium. All of the plaintiffs-appellants reside in the

United States.

According to the plaintiffs, the defendants had the opportunity

and the motive to use the Fixing to manipulate the benchmark prices

of platinum and palladium toward lower prices. The plaintiffs alleged

collusion among the defendants in several ways. Each Fixing call

“involved the direct exchange of intended or future price information

among horizontal competitors.” Id. at 448. The defendants also moved

the market downward by coordinating large sell orders, which would

lower the opening price for the Fixing. During the Fixing itself, the

defendants affected the benchmark price by “submit[ting] aggregate

‘auction’ ‘bids’ that understated demand.” Id. at 452. All the while, the

defendants coordinated their behavior using “chat rooms, instant

messages, phone calls, proprietary trading venues and platforms, and

e-mails.” Id. at 449. The motive for such collusion, the plaintiffs

contend, was that the defendants “are traders of Physical and

NYMEX Platinum and Palladium and … had large short futures

positions on NYMEX.” Id. at 474.

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Five complaints based on this alleged conduct—each seeking

to bring claims individually and on behalf of a class—were filed

between November 2014 and March 2015. On March 20, 2015, the

district court consolidated the five cases. Four months and two

amendments later, the plaintiffs filed a second consolidated class

action complaint. This second amended complaint named BASF

Metals, Goldman Sachs, HSBC, ICBC, the LPPFC, BASF Corporation,

UBS AG, and UBS Securities LLC as defendants. BASF Corporation,

a “carrier, assayer, and refiner of platinum and palladium,” is a sister

company of BASF Metals and is registered in Delaware. Id. at 85-86.

UBS AG and UBS Securities—a wholly owned subsidiary of UBS

AG—are financial services companies involved in trading physical

and NYMEX platinum and palladium.

The second amended complaint brought seven causes of action

alleging (1) an agreement restraining trade in violation of the

Sherman Act, 15 U.S.C. § 1, (2) five violations of the CEA, 7 U.S.C. § 1

et seq., and (3) unjust enrichment. The plaintiffs alleged that the

“manipulation of the Fixing by the Defendants impacted” the

plaintiffs’ transactions and caused the plaintiffs “to incur greater

losses and/or realize lower prices than they would have realized in a

free and open competitive market.” Id. at 193. The plaintiffs also

sought to certify a class of persons and entities similarly situated who

engaged in certain transactions in platinum or palladium during the

period from January 1, 2008, through November 30, 2014.

The defendants moved to dismiss the complaint, and the

district court granted the motion in part and denied it in part. In re

Platinum & Palladium Antitrust Litig. (Platinum I), No. 14-CV-9391,

2017 WL 1169626, at *2 (S.D.N.Y. Mar. 28, 2017). First, after noting that

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the complaint “is silent with respect to whether … Plaintiffs had any

direct sales to or purchases from Defendants,” the district court

dismissed the plaintiffs’ claim under the Sherman Act for lack of

antitrust standing. Id. at *20-25. Second, the district court denied the

defendants’ motion to dismiss the CEA claims, granting the motion

only with respect to the plaintiffs’ claims “based on false reports and

transactions that precede the effective date of” Commodity Futures

Trading Commission (“CFTC”) Rule 180.1. Id. at *36. Third, because

the plaintiffs did not allege any direct transactions with the

defendants, the district court held that “they have not adequately

pleaded that Defendants were enriched at their expense” and

dismissed the unjust enrichment claim. Id. at *38. Additionally, the

district court dismissed all claims against BASF Corporation, UBS

AG, and UBS Securities for failure to state how those entities were

involved in the alleged misconduct. See id. at *51 (“UBS is not alleged

to have been a member of the Fixing during the Class Period, or to

have participated in the Fixing, either directly or indirectly.”); id. at

*52 (“[T]he [complaint] says nothing about BASF Corp.’s

involvement—direct or indirect—in the alleged price manipulation,

BASF Corp.’s role in executing the scheme, or BASF Corp.’s motive in

artificially suppressing the Fix Price.”).

BASF Metals, ICBC, and the LPPFC (collectively, the “Foreign

Defendants”) also filed a motion to dismiss the complaint for lack of

personal jurisdiction, which the district court granted. Id. at *2. The

district court held that the plaintiffs “have not made a prima facie

showing that the Foreign Defendants have sufficient contacts with the

United States as a whole.” Id. at *44. Additionally, the district court

rejected the plaintiffs’ argument that it could hear the suit under a

theory of conspiracy jurisdiction. Id. at *49. The district court

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concluded its order by granting the plaintiffs leave to amend the

complaint a third time. Id. at *53.

On May 15, 2017, the plaintiffs filed a third amended complaint

that differed from the previous complaint in several respects. The

complaint no longer named the LPPFC, BASF Corporation, UBS AG,

and UBS Securities as defendants. It also no longer brought claims for

unjust enrichment or CEA claims based on Rule 180.1 for conduct that

preceded the rule’s enactment.

Most important, the plaintiffs added allegations relating to

antitrust standing and personal jurisdiction. As to antitrust standing,

the complaint provided allegations to demonstrate “[t]he close

relationship between the Fix[ing] and NYMEX futures prices,” “[t]he

Defendants’ substantial market share in physical platinum and

palladium as well as NYMEX platinum and palladium futures and

options,” and “Plaintiffs’ ability to assess damages through

discovery.” App’x 350-51. As to personal jurisdiction, the complaint

provided allegations “pertaining to [BASF Metals’s and ICBC’s]

continuous presence in the U.S. and their suit-related conduct in the

U.S.” Id. at 350.

While the third amended complaint was pending, this court

decided Charles Schwab Corp. v. Bank of America Corp. (Schwab I), 883

F.3d 68 (2d Cir. 2018), and Prime International Trading, Ltd. v. BP P.L.C.,

937 F.3d 94 (2d Cir. 2019). Those cases addressed, respectively,

whether a conspiracy theory of jurisdiction establishes personal

jurisdiction over a co-conspirator and whether the CEA has

extraterritorial application. See Schwab I, 883 F.3d at 86-87; Prime Int’l,

937 F.3d at 102-04. In response to Prime International, the defendants

sought reconsideration of the district court’s denial of the motion to

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dismiss with respect to the CEA claims. In re Platinum & Palladium

Litig. (Platinum II), 449 F. Supp. 3d 290, 302 (S.D.N.Y. 2020).

Taking the new allegations and the recent case law into

account, the district court dismissed in part the third amended

complaint. Id. at 298. The district court again concluded that the

plaintiffs lacked antitrust standing, but this time the district court

separately analyzed the antitrust standing of KPFF, which transacted

solely in physical platinum and palladium, and the antitrust standing

of the other plaintiffs, which transacted on the NYMEX. Id. at 303. The

district court held that KPFF lacked antitrust standing because “the

[complaint] does not allege that [KPFF] transacted directly with any

defendant.” Id. at 304. With respect to the plaintiffs that transacted on

the NYMEX, the district court was persuaded that the “line between

those who transacted directly with defendants and those who did

not” had little meaning in the exchange context. Id. at 311. Instead, the

district court adopted a “market domination” test that other district

courts in this circuit have applied. Id. at 312. Under that test, plaintiffs

must “allege that defendants dominated the relevant exchange

market” to establish antitrust standing. Id. (“Recognizing that

counterparties to exchange plaintiffs are not reasonably ascertainable,

judges in this district have adopted a test that depends primarily on

the extent of defendants’ control of the market for the product traded

on the exchange.”) (internal quotation marks omitted). Because it

determined that the NYMEX plaintiffs “have not adequately pleaded

that Defendants dominated the NYMEX market for platinum and

palladium derivatives,” the district court held that those plaintiffs

lacked antitrust standing as well. Id. at 317.

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The district court reached a different conclusion with respect to

personal jurisdiction. The district court understood Schwab I to allow

the exercise of personal jurisdiction in this case if “United-States-

based co-conspirators acted in furtherance of the conspiracy.” Id. at

323-24 (internal quotation marks omitted). Because the third

amended complaint “alleges United-States based traders for affiliates

of BASF Metals and [ICBC] provided non-public client order

information directly to Fixing participants” in furtherance of the

conspiracy, the district court held that it had personal jurisdiction

over BASF Metals and ICBC. Id. at 325-26. The district court denied

the defendants’ motion to dismiss under Rule 12(b)(2).

Success on the jurisdictional issue did not mean overall success

for the plaintiffs, however, because the district court granted the

defendants’ motion to reconsider its holding on the CEA claims. Id. at

332. Based on Prime International, the district court concluded that the

plaintiffs’ CEA claims “are predominantly foreign” and therefore

“impermissibly extraterritorial.” Id. at 331. The district court

dismissed the CEA claims without prejudice and granted the

plaintiffs leave to amend the Sherman Act and CEA claims. Id. at 332-

33.

In sum, the district court denied BASF Metals’s and ICBC’s

motion to dismiss for lack of personal jurisdiction, but it granted the

defendants’ motion to dismiss for failure to state a claim as well as the

defendants’ motion for reconsideration. Rather than file another

amended complaint, the plaintiffs requested that the district court

enter final judgment, which the district court did on April 15, 2020. Of

the plaintiffs, only Hollin, White Oak, and KPFF appealed. BASF

Metals and ICBC cross-appealed the district court’s denial of their

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motion to dismiss for lack of personal jurisdiction.

DISCUSSION

“We review de novo the grant of a motion to dismiss, accept as

true all factual claims in the complaint, and draw all reasonable

inferences in the plaintiffs’ favor.” In re Aluminum Warehousing

Antitrust Litig., 833 F.3d 151, 157 (2d Cir. 2016).

According to the plaintiffs, the district court erred (1) in

holding that the plaintiffs lack antitrust standing, (2) in holding that

the CEA claims were impermissibly extraterritorial, (3) in dismissing

the LPPFC for lack of personal jurisdiction, and (4) in dismissing the

second amended complaint as to BASF Corporation for failure to state

a claim. BASF Metals and ICBC—the only cross-appellants in this

case—argue that the district court erred in holding that it had

personal jurisdiction to hear claims against them. We address these

arguments in turn.

I

We begin with the plaintiffs’ Sherman Act claims. Section 1 of

the Sherman Act provides that “[e]very contract, combination in the

form of trust or otherwise, or conspiracy, in restraint of trade or

commerce among the several States … is declared to be illegal.”

15 U.S.C. § 1. The Clayton Act provides a private cause of action for

injuries “by reason of anything forbidden in the antitrust laws,” id.

§ 15(a), as well as a private cause of action to seek “injunctive relief …

against threatened loss or damage by a violation of the antitrust

laws,” id. § 26. The plaintiffs claim that the defendants violated the

Sherman Act when they “conspir[ed] to manipulate platinum and

palladium market prices and the benchmark price” and seek treble

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damages and injunctive relief because the conspiracy affected “the

price of Physical and NYMEX Platinum and Palladium.” App’x 491-

92.

The district court dismissed these claims for lack of antitrust

standing. The antitrust standing requirement “originates in the

Supreme Court’s recognition that … ‘Congress did not intend the

antitrust laws to provide a remedy in damages for all injuries that

might conceivably be traced to an antitrust violation.’” Daniel v. Am.

Bd. of Emergency Med., 428 F.3d 408, 436-37 (2d Cir. 2005) (quoting

Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters

(AGC), 459 U.S. 519, 534 (1983)). “To establish antitrust standing, a

plaintiff must show (1) antitrust injury, which is injury of the type the

antitrust laws were intended to prevent and that flows from that

which makes defendants’ acts unlawful, and (2) that he is a proper

plaintiff in light of four efficient enforcer factors.” Schwab Short-Term

Bond Mkt. Fund v. Lloyds Banking Grp. PLC (Schwab II), 22 F.4th 103,

115 (2d Cir. 2021) (internal quotation marks omitted). Whether a

plaintiff is an efficient enforcer depends on:

(1) the directness or indirectness of the asserted injury;

(2) the existence of more direct victims or the existence of

an identifiable class of persons whose self-interest would

normally motivate them to vindicate the public interest

in antitrust enforcement; (3) the extent to which the claim

is highly speculative; and (4) the importance of avoiding

either the risk of duplicate recoveries on the one hand, or

the danger of complex apportionment of damages on the

other.

In re Am. Express Anti-Steering Rules Antitrust Litig., 19 F.4th 127, 138

(2d Cir. 2021) (internal quotation marks omitted). “[T]he weight to be

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given the various factors will necessarily vary with the circumstances

of particular cases.” Daniel, 428 F.3d at 443.

The district court separately analyzed the antitrust standing of

KPFF, which traded in the physical market for platinum and

palladium, and the antitrust standing of the Exchange Plaintiffs, who

traded only on the exchange market for those metals. It determined

that none of the plaintiffs were efficient enforcers and that no plaintiff

had antitrust standing. We agree with the district court as to KPFF but

disagree as to the other plaintiffs. We hold that the Exchange Plaintiffs

have antitrust standing.

A

We first consider whether KPFF has antitrust standing. KPFF

alleges that it “sold physical platinum and palladium … at artificial

prices proximately caused by Defendants’ unlawful manipulation.”

App’x 362. The district court determined that the complaint “does not

allege that [KPFF] transacted directly with any defendant,” Platinum

II, 449 F. Supp. 3d at 304, and KPFF on appeal concedes that it “did

not transact with a Defendant,” Appellants’ Br. 45. Based on the

efficient-enforcer factors, we agree with the district court that KPFF

lacks antitrust standing in this case.

1

The first efficient-enforcer factor—“whether the violation was

a direct or remote cause of the injury”—turns on “familiar principles

of proximate causation.” Am. Express, 19 F.4th at 139. “In the context

of antitrust standing, proximate cause generally follows the first-step

rule.” Id. That rule “requires some direct relation between the injury

asserted and the injurious conduct alleged.” Id. at 140 (internal

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quotation marks omitted); see also Gatt Commc’ns, Inc. v. PMC Assocs.,

L.L.C., 711 F.3d 68, 78 (2d Cir. 2013) (“Directness in the antitrust

context means close in the chain of causation.”) (quoting IBM Corp. v.

Platform Sols., Inc., 658 F. Supp. 2d 603, 611 (S.D.N.Y. 2009)).

“Our court has repeatedly followed the first-step rule in the

antitrust context.” Am. Express, 19 F.4th at 140. In American Express,

we held that merchants who complained of anticompetitive conduct

by American Express Company (“Amex”) but did not accept

American Express cards lacked antitrust standing to sue. Id. at 134-35.

We reasoned that, “[a]t the first step, Amex raised the price for Amex-

accepting merchants,” and only at a later step did Amex’s competitors

follow suit and raise the price for the plaintiff merchants. Id. at 140-

41. Accordingly, the plaintiff merchants’ injuries “were not

proximately caused by Amex; the alleged antitrust violation was

instead a ‘remote’ cause of the injuries.” Id. at 141.

In Schwab II, we considered the London Interbank Offered Rate

(“LIBOR”), a “benchmark interest rate” that “serves as an index for a

variety of financial instruments, including bonds, interest rate swaps,

commercial paper, and exchange-traded derivatives.” Schwab II,

22 F.4th at 109-10. Bondholders who “held LIBOR-based bonds issued

by third parties” alleged that the defendant banks had manipulated

the LIBOR in violation of the antitrust laws. Id. at 111. We held that

those bondholders were not efficient enforcers because “the decision

of a third party to incorporate LIBOR as a term in a financial

instrument could be made without any connection to the actions” of

the defendant banks. Id. at 116. Additionally, that decision “in no way

enriched the [defendant banks], who had no financial stake in the

[third-party] transactions whatsoever.” Id. Accordingly, “[t]he first-

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step rule and traditional proximate cause considerations require

drawing a line between those whose injuries resulted from their direct

transactions with the [defendant banks] and those whose injuries

stemmed from their deals with third parties.” Id.

We hold that KPFF has not alleged a direct injury in this case.

As in Schwab II, the decision to incorporate or reference the

benchmark price in the transactions into which KPFF entered—and

by which KPFF was allegedly harmed—was an independent decision.

The only transactions that were required to adopt the benchmark

prices were those into which the defendants entered as part of the

Fixing, and KPFF has concededly not transacted with the defendants.

We said in Schwab II that the “disconnect” between the

plaintiffs’ injury and the defendants’ alleged benefit “further

demonstrates the attenuated nature of the causal chain.” Id. In other

words, the allegedly harmful transactions in that case “in no way

enriched” the defendants. Id. In this case, KPFF alleges that the

conspiracy enabled the defendants, as “large participants in the

market for physical platinum and palladium,” to “buy platinum and

palladium cheaper than they would have been able to” otherwise,

App’x 466, just as the defendant banks in Schwab II “may have

increased their profits by selling LIBOR-indexed instruments,”

22 F.4th at 116. But the defendants “derived no benefit from [KPFF’s]

transactions with third parties,” which “were entirely separate from

the purpose of the alleged conspiracy and took place merely because

of [the benchmark’s] unlimited public availability as a reference point

for innumerable transactions.” Id. at 117.

KPFF argues that this case differs from Schwab II because, in

this case, KPFF alleges a “lockstep” relationship between the

19

benchmark prices and the spot prices—and provided “the kind of

statistical allegations” to prove that relationship—that was absent

from the Schwab II plaintiffs’ case. Appellants’ Supp. Br. 14. In Sanner

v. Board of Trade, the Seventh Circuit characterized the futures market

and the cash market for the same commodity as exhibiting a

“lockstep” relationship. 62 F.3d 918, 929 (7th Cir. 1995). 2 To prove that

such a relationship is present here, KPFF provides charts to show that

“[t]he spot, Fix, and NYMEX settlement prices exhibit an almost

perfect correlation.” App’x 387-88.

We disagree that Schwab II can be framed as a mere failure of

proof. In Schwab II, the plaintiffs held “LIBOR-based bonds,” which

“incorporate[d] LIBOR as a term.” 22 F.4th at 116. If the court were

merely seeking evidence of a close relationship between LIBOR and

the plaintiffs’ bonds, the incorporation of the benchmark into the

bonds would have sufficed. Instead, we found it significant that the

plaintiffs independently decided to incorporate the LIBOR in

contracts with third parties; those decisions “snap the chain of

causation linking [p]laintiffs’ injury to the [b]anks’ misconduct.” Id.

2 Sanner involved the Chicago Board of Trade’s July 11, 1989, resolution that

“required all holders of gross long positions in soybean futures contracts to

liquidate their positions by at least 20 percent daily until July 20, 1989.”

62 F.3d at 920-21. The plaintiffs were soybean farmers who alleged that the

resolution “was prompted by a conspiracy to cause a precipitous drop in

soybean cash crop prices” and brought antitrust claims against the Board.

Id. at 921. Despite the farmers being in the cash market for soybeans, as

opposed to the futures market, the court held that “[s]ince one market tends

to move in lockstep with the other, participants in the cash market can be

injured by anticompetitive acts committed in the futures market.” Id. at 929.

The court held that the farmers had alleged a direct injury for purposes of

antitrust standing.

20

Accordingly, KPFF’s causal link between the benchmark prices

and its own transactions—even if more fully documented than the

one in Schwab II—does not transform its indirect injury into a direct

one. As in Schwab II, transactions in the commodity (here, platinum

and palladium) were “often tied or keyed to” the benchmark prices,

but KPFF’s injury was separated from the defendants’ conduct by the

decision to incorporate the benchmark. App’x 380.

We hold that KPFF’s injury is indirect for purposes of antitrust

standing.

2

The remaining efficient-enforcer factors do not establish

antitrust standing for KPFF. As noted above, “the weight to be given

the various factors will necessarily vary with the circumstances of

particular cases.” Daniel, 428 F.3d at 443. “Though Associated General

Contractors outlined a comprehensive approach to the question of

antitrust standing, it gives little guidance as to how to weigh the

various factors, and whether the absence of a particular factor would

be fatal to standing in every instance.” Sullivan v. Tagliabue, 25 F.3d

43, 46 (1st Cir. 1994). We look to our precedents to decide how the

efficient-enforcer factors must be balanced. In this case, the first and

second factors are decisive.

We held in Schwab II that the second factor—“the existence of

more direct victims of the alleged conspiracy”—“clearly weighs

against antitrust standing since there is no shortage of other parties in

this very case who purchased LIBOR-indexed financial instruments

directly” from the defendants. 22 F.4th at 118. In this case, the fact that

there are platinum and palladium sellers who have directly

transacted with the defendants “diminishes the justification for

21

allowing a more remote party to perform the office of a private

attorney general.” Am. Express, 19 F.4th at 141 (alteration omitted)

(quoting AGC, 459 U.S. at 542). The second factor “weighs against

antitrust standing” for that reason. Schwab II, 22 F.4th at 118.

The fourth efficient-enforcer factor—“the importance of

avoiding either the risk of duplicate recoveries on the one hand, or

the danger of complex apportionment of damages on the other”—

favors the plaintiffs, as it did in Schwab II. 22 F.4th at 119. The fourth

factor guards against “pass-on theories that would require a court to

divide damages from the same violation among multiple plaintiffs.”

Am. Express, 19 F.4th at 143; see also Schwab II, 22 F.4th at 119

(describing pass-on theories as “the usual focus” of the fourth factor).

We held in Schwab II that the fourth factor favored the plaintiffs

because “the third parties who sold the bonds—and benefited from the

suppressed rate—would clearly not be in a position to enforce the

antitrust laws.” 22 F.4th at 119. The same logic applies in this case.

Whoever purchased palladium or platinum from KPFF benefited

from the lowered price, and there is no concern that those purchasers

would sue the defendants or cause any complex problems of

apportionment. Thus, we “view this fourth factor as favoring” KPFF.

Id.

This case differs from Schwab II with respect to the third

efficient-enforcer factor—“whether the alleged damages are highly

speculative.” Id. (internal quotation marks omitted). The third factor

evaluates whether the plaintiff can produce “a just and reasonable

estimate of damages.” Gelboim v. Bank of Am. Corp., 823 F.3d 759, 779

(2d Cir. 2016) (internal quotation marks omitted) (quoting U.S.

Football League v. Nat’l Football League, 842 F.2d 1335, 1378 (2d Cir.

22

1988)). “[H]ighly speculative damages is a sign that a given plaintiff

is an inefficient engine of enforcement.” Id. In Schwab II, we held that

this factor cut against antitrust standing because calculating damages

“would require the court to speculate about how the third-party

sellers would have factored a non-suppressed LIBOR into the

transaction.” 22 F.4th at 119. To estimate the damages, the plaintiffs

“would essentially have to create an alternative universe” beyond

modeling “basic lost sales and lost profits.” Id. (internal quotation

marks and alterations omitted). At the same time, we gave this factor

“only limited weight” because the damages calculation would be

“more straightforward” for the plaintiffs who purchased bonds prior

to the LIBOR being suppressed and because “[t]he Supreme Court has

warned that antitrust standing should not provide a ‘get-out-of-court-

free card’ to be played ‘any time that a damages calculation might be

complicated.’” Id. (quoting Apple Inc. v. Pepper, 139 S. Ct. 1514, 1524

(2019)).

The third factor favors KPFF in this case. Unlike in Schwab II,

the benchmark prices for platinum and palladium are derived from

the same kind of transactions that incorporated the benchmark prices.

Damages were speculative in Schwab II because the LIBOR aimed to

describe the rate at which certain banks could borrow money but it

was incorporated into the terms of unrelated bonds. That disjunction

meant that the plaintiffs would have needed to account for such

possibilities as whether “the price of the bond itself may have been

correspondingly lowered to account for a suppressed LIBOR.” Id. In

this case, the benchmark price describes the price at which the

defendants buy metal, and KPFF alleges that the benchmark price

was used in its transactions to sell the same type of metal. KPFF has

provided data to show that the prices at which it sold the metal and

23

the benchmark prices were all but identical. Thus, even though the

“damages calculation might be complicated,” Apple, 139 S. Ct. at 1524,

the damages are not so speculative as to weigh against antitrust

standing in this case.

Even so, we ultimately conclude that KPFF cannot pursue its

antitrust claims. “The four efficient-enforcer factors need not be given

equal weight,” and the fact that KPFF’s injury “may have been

foreseeable, predictable, and even calculable” is not by itself sufficient

to confer antitrust standing. Am. Express, 19 F.4th at 142. In American

Express, we determined that only the first two efficient-enforcer

factors weighed against standing. Id. at 143. We nevertheless held that

because “[t]he key principle underlying [the efficient enforcer test] is

proximate cause” and the plaintiffs “fail[ed] to show the required

direct connection between the harm and the alleged antitrust

violation,” the plaintiffs lacked antitrust standing. Id. In the same

way, the absence of a direct connection between the harm and the

violation and the existence of more direct victims are decisive here.

We affirm the district court’s dismissal of KPFF’s antitrust claims.

B

We next consider whether the Exchange Plaintiffs have alleged

antitrust standing. The Exchange Plaintiffs did not participate in the

physical platinum and palladium market; instead, the Exchange

Plaintiffs allegedly sold “NYMEX platinum and palladium futures

contracts at artificial prices proximately caused by Defendants’

unlawful manipulation.” App’x 361. The district court held that these

plaintiffs also lacked antitrust standing.

We disagree. The antitrust standing question depends on “the

relationship between the defendant’s alleged unlawful conduct and

24

the resulting harm to the plaintiff.” Am. Express, 19 F.4th at 143

(quoting Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of Cal., 190 F.3d 1051, 1058

(9th Cir. 1999)). “We employ the efficient-enforcer test to evaluate the

relevant relationship.” Id. After considering the four factors, we hold

that the Exchange Plaintiffs are efficient enforcers of the antitrust

laws.

1

Unlike KPFF, the Exchange Plaintiffs suffered a direct injury.

The complaint alleges that the defendants were “large participants in

NYMEX futures and options” and “profited from their manipulation”

of the futures market. App’x 466. The Exchange Plaintiffs argue that

the defendants “exploited their foreknowledge of downward swings

in the [benchmark price] to make advantageous trades in … [the]

NYMEX markets.” Appellants’ Br. 10. Apart from the Fixing itself, the

Exchange Plaintiffs allege that the defendants engaged in collusive

trading to move the NYMEX market downward. According to the

Exchange Plaintiffs, the defendants “profited from their manipulation

… at the expense of” the Exchange Plaintiffs. App’x 466. In other

words, the defendants manipulated the futures market to profit from

futures contracts transactions, while the Exchange Plaintiffs

simultaneously lost money through futures contracts transactions in

the same market. The Exchange Plaintiffs were harmed at the first

step.

The defendants argue that the plaintiffs’ injury cannot be direct

because, as the complaint notes, “NYMEX—through its

clearinghouse, CME Clearing—is the counterparty to all transactions

on the exchange.” Id. at 381. Thus, although the Exchange Plaintiffs

and the defendants all traded in the same market, each traded directly

25

only with CME Clearing. According to the defendants, “[t]he

reasoning in Schwab II applies with full force to the Exchange

Plaintiffs” because the Exchange Plaintiffs “did not transact with any

defendant.” Appellees’ Supp. Br. 7 n.2.

We disagree. “Futures trading is a zero-sum game” because

“every contract has a long and a short” and “every gain can be

matched with a corresponding loss.” Leist v. Simplot, 638 F.2d 283, 286-

87 (2d Cir. 1980). Although CME Clearing is, formally, the

counterparty to every transaction, it serves only as a conduit: “CME

Clearing matches buyers and sellers.” App’x 382; see also Amaranth

Nat. Gas, 730 F.3d at 174 (“All trades on NYMEX must go through the

exchange’s clearinghouse.”) (emphasis added). We would have no

difficulty identifying a direct injury if the defendants had selected

another NYMEX participant with which to execute a futures contract,

even if a clearinghouse facilitated the transaction. To argue, as the

defendants do, that interposing a clearinghouse immunizes

misconduct on an exchange market from antitrust liability is to exalt

form over substance. 3

3We note that this case differs from Laydon v. Coöperatieve Rabobank U.A., in

which we held that a plaintiff who traded Euroyen TIBOR futures on an

exchange lacked antitrust standing. 55 F.4th 86, 98-99 (2d Cir. 2022). In that

case, a plaintiff alleged that defendant banks made fraudulent submissions

to the British Bankers’ Association, a body that set the Yen-LIBOR

benchmark rate, which in turn affected a second benchmark rate that was

set by the Japanese Bankers Association, causing losses to traders in futures

that referenced the second benchmark rate. We said that the plaintiff failed

to allege proximate causation because of the “series of causal steps that

separate [the d]efendants’ conduct and [the plaintiff’s] purported injury.”

Id. at 98. In this case, the defendants transacted on the same exchange as the

Exchange Plaintiffs and we do not have the same attenuated causal chain.

26

The district court viewed the effect of the clearinghouse

differently than the defendants. Because of the clearinghouse, the

district court concluded that “the Exchange Plaintiffs’ counterparties

are not reasonably ascertainable” and instead used market

dominance as a proxy for directness of injury. Platinum II, 449

F. Supp. 3d at 311. According to the district court, “in a market in

which defendants dominate, it is far more likely that a plaintiff who

bought on an exchange will have transacted directly with a

defendant.” Id. at 312. Additionally, “concern[s] about damages

disproportionate to wrongdoing” would “appl[y] much less

forcefully” when the defendants dominate the market; “where

defendants had over 90% market share, they would also be

responsible for over 90% of the damages.” Id. In adopting this test, the

district court followed other district courts in this circuit. See, e.g., In

re London Silver Fixing, Ltd., Antitrust Litig., 332 F. Supp. 3d 885, 909

(S.D.N.Y. 2018); Sonterra Cap. Master Fund Ltd. v. Credit Suisse Grp. AG,

277 F. Supp. 3d 521, 561-62 (S.D.N.Y. 2017).

Although the defendants’ market share may inform the amount

of damages the Exchange Plaintiffs can seek, we disagree that it can

render the Exchange Plaintiffs’ injury indirect. “The first-step rule

requires some direct relation between the injury asserted and the

injurious conduct alleged.” Am. Express, 19 F.4th at 139-40. Market

dominance does not determine whether such a relation exists. The

defendants allegedly sought to profit from concurrently

manipulating the Fixing and entering the futures market. That profit

came at the expense of the other futures market participants. The

members of that group are—as the defendants contend—

interchangeable, and that group includes the Exchange Plaintiffs.

That the defendants’ profits cannot be traced to a subgroup of those

27

market participants is not a reason to conclude that none of those

participants suffered a direct injury. To hold otherwise would be to

hold that anticompetitive behavior on an exchange can directly injure

no one.

We conclude that the Exchange Plaintiffs have adequately

alleged a direct injury.

2

We hold that the remaining efficient-enforcer factors favor

antitrust standing for the Exchange Plaintiffs as well.

First, there are no more direct victims than the Exchange

Plaintiffs. Because all participants in the NYMEX transact through the

clearinghouse, there is no injured party closer to the defendants’

alleged anticompetitive activity than the Exchange Plaintiffs. If the

Exchange Plaintiffs do not have antitrust standing, the defendants’

alleged conspiracy to manipulate the exchange market would go

“undetected or unremedied.” Am. Express, 19 F.4th at 141 (quoting

AGC, 459 U.S. at 542).

The defendants contend that the existence of sellers who sold

physical platinum and palladium to the defendants means that those

sellers are more direct victims. According to the defendants, “[t]he

question is whether there are ‘more direct victims of the alleged

conspiracy,’ not among a particular subset of those allegedly affected.”

Appellees’ Supp. Reply Br. 4 (quoting Schwab II, 22 F.4th at 118).

Because the conspiracy sought to affect the physical platinum and

palladium market in addition to the futures market, the defendants

argue, the second factor must take the victims in that market into

account as well.

28

The defendants’ argument rests on false premises. The

assertion that the direct victims in the physical market are better

situated to sue is based on the defendants’ argument that the

Exchange Plaintiffs are indirect victims. But because we hold that the

Exchange Plaintiffs are direct victims, even if we were to include the

victims in the physical market in our analysis, there is no reason to

think that those victims are more direct than the Exchange Plaintiffs.

Nor does it make sense for victims in one market to disqualify victims

in a different market from bringing suit. 4

In In re Aluminum Warehousing Antitrust Litigation, we held that

purchasers in the physical aluminum market who had alleged a

conspiracy by traders in the aluminum futures market had not

suffered an antitrust injury. 833 F.3d at 161-62. We reached that

conclusion by treating the physical market as separate from the

futures market; because typically “only those that are participants in

the defendants’ market can be said to have suffered antitrust injury,”

we dismissed the plaintiffs’ claims without reaching the efficient-

enforcer analysis. Id. at 158. In this case, the physical market victims

cannot allege the same type of injury that the Exchange Plaintiffs

suffered. It is hard to see how the “self-interest” of those victims can

render the Exchange Plaintiffs’ suit—alleging injuries in a different

and larger market—superfluous. Am. Express, 19 F.4th at 141.

Second, we do not think that calculating damages would be so

“highly speculative” that the Exchange Plaintiffs should be denied

antitrust standing. AGC, 459 U.S. at 542. “A damages calculation for a

4In Laydon, we concluded that the plaintiff was not a direct victim of the

alleged conspiracy and for that reason looked for participants in other

markets who might be more direct victims. Laydon, 55 F.4th at 99.

29

market manipulation scheme, though it may require expert

testimony, is hardly beyond the ken of the federal courts.” Sanner, 62

F.3d at 930. “[S]ome degree of uncertainty stems from the nature of

antitrust law,” Gelboim, 823 F.3d at 779, but we generally require “that

the wrongdoer shall bear the risk of the uncertainty which his own

wrong has created,” id. (quoting In re DDAVP Direct Purchaser

Antitrust Litig., 585 F.3d 677, 689 (2d Cir. 2009)).

Third, there is no risk of “duplicate recoveries” or “complex

apportionment of damages.” AGC, 459 U.S. at 544. There was no

intermediary between the Exchange Plaintiffs and the defendants

who could sue for the defendants’ anticompetitive conduct in the

exchange markets. Accordingly, recognizing antitrust standing in this

case would not “require a court to divide damages from the same

violation among multiple plaintiffs.” Am. Express, 19 F.4th at 143.

We hold that the Exchange Plaintiffs have antitrust standing to

proceed on their claims under the Clayton Act. 5

5KPFF and the Exchange Plaintiffs also seek injunctive relief under § 16 of

the Clayton Act. Because standing to sue for injunctive relief “raises no

threat of multiple lawsuits or duplicative recoveries,” the third and fourth

efficient enforcer factors “are not relevant” to standing to pursue such relief.

Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 111 n.6 (1986). Based on the

remaining factors, our disposition of KPFF’s and the Exchange Plaintiffs’

respective claims for injunctive relief is the same as each party’s claim for

damages. The Exchange Plaintiffs have antitrust standing, and KPFF does

not. However, we note that it is unclear what injunctive relief would be

available to the plaintiffs, given that the alleged misconduct occurred in the

past. The district court may consider on remand whether to dismiss the

Exchange Plaintiffs’ request for injunctive relief for failure to state a claim.

30

II

We now consider the district court’s dismissal of the plaintiffs’

CEA claims. The third amended complaint alleges that the defendants

manipulated the prices of platinum and palladium in violation of the

CEA, including CFTC Rule 180.2. In connection with that claim, the

plaintiffs also allege that the defendants are liable under principal-

agent and aiding-and-abetting theories for violations of the CEA. The

district court dismissed the plaintiffs’ CEA claims as impermissibly

extraterritorial. Platinum II, 449 F. Supp. 3d at 327-28. We disagree,

and we vacate the district court’s dismissal of those claims.

“The CEA is a remedial statute that serves the crucial purpose

of protecting the innocent individual investor—who may know little

about the intricacies and complexities of the commodities market—

from being misled or deceived.” Loginovskaya v. Batratchenko, 764 F.3d

266, 270 (2d Cir. 2014) (internal quotation marks omitted). Sections 6

and 9 of the CEA proscribe fraud in commodities markets. 7 U.S.C.

§ 9(1) (“It shall be unlawful for any person … to use or employ … in

connection with any swap, or a contract of sale of any commodity in

interstate commerce … any manipulative or deceptive device or

contrivance.”); id. § 13(a)(2) (“It shall be a felony … for … [a]ny person

to manipulate or attempt to manipulate the price of any commodity

in interstate commerce.”). 6 Private parties have a cause of action to

sue for violations of the CEA under section 22 of the Act, which

provides that “[a]ny person … who violates this chapter or who

6 See also 17 C.F.R. § 180.2 (“It shall be unlawful for any person, directly or

indirectly, to manipulate or attempt to manipulate the price of any swap, or

of any commodity in interstate commerce, or for future delivery on or

subject to the rules of any registered entity.”).

31

willfully aids, abets, counsels, induces, or procures the commission of

a violation of this chapter shall be liable for actual damages.” 7 U.S.C.

§ 25(a)(1).

In Prime International, this court held that sections 6, 9, and 22

do not apply extraterritorially. 937 F.3d at 102-03. Accordingly,

stating a proper claim under section 22 has two requirements. First,

because “the focus of congressional concern in Section 22 is clearly

transactional, ... the suit must be based on transactions occurring in

the territory of the United States.” Id. at 104 (internal quotation marks

omitted). In other words, “[t]he ‘domestic transaction test’ essentially

‘decides the territorial reach of Section 22.’” Id. (alteration omitted)

(quoting Loginovskaya, 764 F.3d at 272). Second, because section 22

“creates no freestanding, substantive legal obligations,” the plaintiff

must allege “domestic—not extraterritorial—conduct by Defendants

that is violative of a substantive provision of the CEA, such as

[7 U.S.C. § 9(1)] or [§ 13(a)(2)].” Id. at 105. 7

7 This two-part test comes from Parkcentral Global Hub Ltd. v. Porsche

Automobile Holdings SE, in which this court held that “a domestic

transaction is necessary but not necessarily sufficient to make [Securities

Exchange Act § 10(b)] applicable.” 763 F.3d 198, 216 (2d Cir. 2014); see Prime

Int’l, 937 F.3d at 105 (holding that “Parkcentral’s rule carries over to the

CEA”). Some courts have criticized the conduct requirement as

“inconsistent with Morrison.” SEC v. Morrone, 997 F.3d 52, 60 (1st Cir. 2021);

Stoyas v. Toshiba Corp., 896 F.3d 933, 950 (9th Cir. 2018). In Morrison v.

National Australia Bank Ltd., the Supreme Court held that § 10(b) does not

apply extraterritorially because the statute covers “only transactions in

securities listed on domestic exchanges, and domestic transactions in other

securities.” 561 U.S. 247, 265-67 (2010). The Supreme Court described its

“transactional test” as a “clear test” that asks “whether the purchase or sale

is made in the United States, or involves a security listed on a domestic

32

Under that analysis, the plaintiffs in this case have alleged a

domestic application of section 22. We have explained, in the context

of the Securities Exchange Act, that “there are two ways to allege a

‘domestic transaction’”: a plaintiff may allege either “that title … was

transferred within the United States” or “that the purchaser incurred

irrevocable liability within the United States to take and pay for a

security, or that the seller incurred irrevocable liability within the

United States to deliver a security.” Loginovskaya, 764 F.3d at 273-74

(quoting Absolute Activist Value Master Fund Ltd. v. Ficeto, 677 F.3d 60,

68 (2d Cir. 2012)). The same test applies to CEA claims. Id. at 274.

Here, the plaintiffs have alleged domestic transactions in both ways.

First, the Exchange Plaintiffs allege that they sold NYMEX platinum

and palladium futures contracts. Such sales on a domestic futures

exchange are domestic transactions. See Morrison, 561 U.S. at 269-70

(noting that the “transactional test” asks whether the purchase or sale

“is made in the United States, or involves a security listed on a

domestic exchange”); see also Loginovskaya, 764 F.3d at 273-74

(applying this test in the context of the CEA). Second, KPFF, with a

principal place of business in California, alleges selling physical

platinum and palladium, thereby incurring liability to deliver those

commodities. The plaintiffs have adequately alleged that domestic

transactions took place.

exchange.” Id. at 269-70. Parkcentral held that, despite the presence of a

domestic transaction, § 10(b) did not apply because “the claims in this case

are so predominantly foreign as to be impermissibly extraterritorial.” 763

F.3d at 216. The court recognized that it was not straightforwardly applying

Morrison and cautioned that the conduct requirement could not be

“perfunctorily applied to other cases based on the perceived similarity of a

few facts.” Id. at 217.

33

The plaintiffs also allege domestic conduct by the defendants

that violated the CEA. To succeed at this step, the conduct must not

“be so predominantly foreign as to render the claims impermissibly

extraterritorial.” Prime Int’l, 937 F.3d at 107 (internal quotation marks

omitted). On this basis, in Prime International we dismissed the CEA

claims brought by plaintiffs who traded in Brent crude futures on the

NYMEX and who alleged manipulation of the benchmark for Brent

crude. We dismissed those claims because the benchmark—which

“reflect[ed], in part, the value of Brent crude physically traded in

Northern Europe”—was “foreign.” Id. at 106. Moreover, “[t]he

alleged misconduct … was also entirely foreign”; there was no

allegation that “any manipulative oil trading occurred in the United

States.” Id. Instead, the plaintiffs alleged only that the defendants—“a

diverse group of entities involved in various aspects of the production

of Brent crude”—“execut[ed] fraudulent bids, offers, and transactions

in the underlying physical Brent crude market.” Id. at 98, 100. Because

“[n]early every link in Plaintiffs’ chain of wrongdoing is entirely

foreign,” we held that the facts in Prime International were

predominantly foreign. Id. at 107.

This case is different. In Prime International we considered both

the benchmark and the misconduct by which the benchmark was

manipulated to be “entirely foreign.” Id. at 106. In this case, however,

the benchmark prices are based on the trading activity of BASF,

Goldman Sachs, HSBC, and ICBC, each of which conducts precious

metals trading in the United States. Furthermore, the alleged

misconduct of manipulating the benchmark prices involved both

foreign and domestic activity. According to the complaint, the

defendants “colluded to manipulate the price at which the chair

opened the Fixing on a given day by placing ‘spoof orders,’ engaging

34

in ‘wash sales,’ as well as collusively sharing and acting on non-public

information regarding client orders (including stop-loss orders)

shortly before and during the AM and PM Fixing.” App’x 485. “[B]y

moving Physical and NYMEX Platinum and Palladium prices in

advance of and even during the Fixing,” the plaintiffs allege, the

defendants “alter[ed] the starting price” for the Fixing and “g[ave]

cover to an auction-rate that would otherwise have stood out.” Id. at

355. The alleged “constant communication” between the defendants’

domestically based “precious metals traders” and “the participant[s]

in the Fixing” shows that much of the alleged manipulation was

domestic. Id. at 365, 368, 376.

The district court erred in discounting the defendants’ domestic

activity in furtherance of manipulating the Fixing. The district court

discounted the plaintiffs’ claim that the defendants traded in the

physical and NYMEX markets to influence the Fixing because it

“reject[ed] it as implausible.” Platinum II, 449 F. Supp. 3d at 332.

According to the district court, “[t]he suggestion that Defendants …

traded to further depress the price of platinum and palladium when

they had—according to Plaintiffs’ allegations—a tailor-made

opportunity to manipulate that price via the Fixing does not make

sense and is inconsistent with the allegations in the [third amended

complaint].” Id. But the plaintiffs did not allege that the defendants

traded to depress the market in a scheme independent of the Fixing;

the plaintiffs’ theory is that “[t]hese schemes were undertaken for the

purpose of manipulating the benchmark price.” App’x 485 (emphasis

added). The defendants’ collusive trading allegedly affected the

operation of the Fixing by “altering the starting price” and “inducing

clients to change their directions to the Defendants.” Id. at 355. The

35

collusive trading also served the purpose of “giving cover” to the

defendants’ manipulation of the Fixing. Id.

Because the district court dismissed the plaintiffs’ claims as

impermissibly extraterritorial, it did not consider the defendants’

additional arguments that the plaintiffs failed to plead the required

elements of a CEA claim. We hold only that the plaintiffs have alleged

sufficient domestic activity to invoke the CEA’s private remedy.

Accordingly, we vacate the district court’s dismissal of the plaintiffs’

CEA claims.

III

We turn to the issue of personal jurisdiction. In Platinum I, the

district court held that it lacked personal jurisdiction over the Foreign

Defendants: BASF Metals, ICBC, and the LPPFC. Platinum I, 2017 WL

1169626, at *44. In Platinum II, it held that BASF Metals and ICBC were

subject to conspiracy jurisdiction in light of Schwab I. 449 F. Supp. 3d

at 323. Because the plaintiffs did not replead their claims against the

LPPFC in the third amended complaint, the district court did not

revisit its earlier dismissal of the LPPFC in Platinum II. Id. at 300 n.4.

BASF Metals and ICBC argue that the district court erred in

Platinum II when it concluded that it had personal jurisdiction over

BASF Metals and ICBC. The plaintiffs argue that the LPPFC is the

alter ego of the Fixing Members and that the district court therefore

has personal jurisdiction over the LPPFC. We affirm the district

court’s judgment as to personal jurisdiction over the Foreign

Defendants.

36

A

We start with the district court’s most recent holding on

personal jurisdiction—that it had personal jurisdiction over BASF

Metals and ICBC. Platinum II, 449 F. Supp. 3d at 327. BASF Metals and

ICBC argue that the district court’s application of conspiracy

jurisdiction was inconsistent with the Due Process Clause of the Fifth

Amendment. In the context of personal jurisdiction, “due process

demands that each defendant over whom a court exercises

jurisdiction have some ‘minimum contacts with the forum such that

the maintenance of the suit does not offend traditional notions of fair

play and substantial justice.’” Schwab II, 22 F.4th at 121 (alteration

omitted) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

This inquiry usually proceeds in two steps—an analysis of whether

each defendant has “minimum contacts” with the forum state, and an

analysis of whether exercising jurisdiction would “comport with fair

play and substantial justice.” Licci ex rel. Licci v. Lebanese Canadian

Bank, SAL, 732 F.3d 161, 170 (2d Cir. 2013). We address each step, and

we affirm.

1

We begin with minimum contacts. There are two types of

personal jurisdiction: specific jurisdiction and general jurisdiction.

Bristol-Myers Squibb Co. v. Superior Court of Cal., 137 S. Ct. 1773, 1779-

80 (2017). Specific jurisdiction exists when a court “exercises personal

jurisdiction over a defendant in a suit arising out of or related to the

defendant’s contact with the forum,” and general jurisdiction “is

based on the defendant’s general business contacts with the forum

state and permits a court to exercise its power in a case where the

subject matter of the suit is unrelated to those contacts.” SPV OSUS,

37

Ltd. v. UBS AG, 882 F.3d 333, 343 (2d Cir. 2018) (quoting Met. Life Ins.

Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996)). When

specific jurisdiction is asserted, “minimum contacts necessary to

support such jurisdiction exist where the defendant purposefully

availed itself of the privilege of doing business in the forum and could

foresee being haled into court there.” Licci, 732 F.3d at 170 (alteration

omitted) (quoting Bank Brussels Lambert v. Fiddler Gonzalez &

Rodriguez, 305 F.3d 120, 127 (2d Cir. 2002)).

In this case, the district court employed a conspiracy theory of

specific jurisdiction. So-called conspiracy jurisdiction “is based on the

time-honored notion that the acts of a conspirator in furtherance of a

conspiracy may be attributed to the other members of the

conspiracy.” Textor v. Bd. of Regents of N. Ill. Univ., 711 F.2d 1387, 1392

(7th Cir. 1983) (internal quotation marks and alteration omitted).

Under that theory, “one conspirator’s minimum contacts allow for

personal jurisdiction over a co-conspirator,” even when the

co-conspirator lacks such contacts itself. Schwab I, 883 F.3d at 86. 8 In

Schwab I, this court laid out three requirements for imputing the

8 “The essence of [the conspiracy theory of personal jurisdiction] is its

reliance on the conspiracy as an independent source of jurisdiction over a

nonresident defendant, irrespective of his own contacts with the forum. …

Once the court finds a conspiracy, it simply asserts its power over all

defendants shown to be coconspirators.” Stuart M. Riback, Note, The Long

Arm and Multiple Defendants: The Conspiracy Theory of In Personam

Jurisdiction, 84 Colum. L. Rev. 506, 507 (1984) (footnote omitted); see also

Alex Carver, Note, Rethinking Conspiracy Jurisdiction in Light of Stream of

Commerce and Effects-Based Jurisdictional Principles, 71 Vand. L. Rev. 1333,

1337 (2018) (“Conspiracy jurisdiction is an application of specific

jurisdiction: courts attribute the purposefully established, conspiracy-

related forum contacts of one conspirator to a second conspirator who lacks

such contacts.”).

38

minimum contacts of one co-conspirator to another: “the plaintiff

must allege 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.” 883 F.3d at 87.

In Schwab II, this court held that a complaint alleged personal

jurisdiction under a conspiracy theory over the defendants’ objection

that the third Schwab I factor was not met. 22 F.4th at 122. In that case,

the plaintiffs alleged that the defendant banks had executives and

managers in the United States who would direct subordinates to

manipulate the LIBOR. Id. at 123. The directions took the forms of “a

standing directive to submit low LIBOR contributions” and “emails

between a senior [bank] executive in New York … asking the [bank’s

LIBOR submitter] to err on the low side when setting LIBOR.” Id.

(internal quotation marks and alteration omitted). We held that “these

communications would establish overt acts taken by co-conspirator

Banks in the United States in furtherance of the suppression

conspiracy, vesting the district court with personal jurisdiction over

each Defendant”—including those defendants who did not engage in

such overt acts. Id.

Our decision in Schwab II requires the conclusion that there are

minimum contacts to establish conspiracy jurisdiction in this case.

The plaintiffs have adequately alleged that a conspiracy existed to

manipulate the platinum and palladium benchmark prices. “At the

pleading stage, a complaint claiming conspiracy, to be plausible, must

plead enough factual matter (taken as true) to suggest that an

agreement was made.” Gelboim, 823 F.3d at 781 (internal quotation

marks omitted). We have said that allegations that “evince a common

39

motive to conspire” combined with “a high number of interfirm

communications” are adequate to plead a conspiracy. Id. at 781-82.

Here, the plaintiffs allege that the defendants were “net short” in their

platinum and palladium positions and that the defendants “could

and did cash in on the foreknowledge that the Fix price, and thus the

prices of platinum and palladium generally, was going to go down on

a given day, at a given time.” App’x 460, 357.

The plaintiffs allege not only a common motive but also

numerous interfirm communications. According to the complaint, via

the Fixing the defendants “met twice daily on … private phone

call[s]” that “involved the direct exchange of intended or future price

information among horizontal competitors.” Id. at 448. Interfirm

communications included “the sharing of client orders and imminent

orders” as well as “chat rooms, instant messages, phone calls,

proprietary trading venues and platforms, and e-mails to coordinate

among themselves … to ensure … that attempts to move the market

in one way or the other were not undone (unwittingly or not) by the

contrary efforts of other members or other large banks.” Id. at 448-49.

Because the plaintiffs allege that BASF Metals and ICBC

participated in a conspiracy, we have personal jurisdiction over those

parties at this stage if “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.” Schwab I, 883 F.3d at 87. That

is not a difficult requirement to meet: “[a]n overt act is any act

performed by any conspirator for the purpose of accomplishing the

objectives of the conspiracy.” United States v. Lange, 834 F.3d 58, 70 (2d

Cir. 2016) (quoting United States v. Tzolov, 642 F.3d 314, 320 (2d Cir.

2011)). The complaint alleges that precious metals traders—based in

40

the United States and employed by co-conspirators of BASF and

ICBC—“would update order information during the Fixing and

provide this updated order information to” BASF’s and ICBC’s

“participant[s] in the Fixing as the Fixing was conducted.” App’x 365,

368. According to the complaint, such communications were

necessary to “coordinate” members of the conspiracy so that the

conspiracy’s “attempts to move the market in one way or the other

were not undone” by individual orders. Id. at 449. The alleged sharing

of “client orders and imminent orders” also enabled manipulation of

the benchmark prices because it provided the defendants “access to

nonpublic, real-time information about changes in the price of

platinum and palladium” and “future price information among

horizontal competitors.” Id. at 448. Because these communications

occurred in the United States, the complaint in this case satisfies

Schwab I’s third prong and our requirements for minimum contacts

under conspiracy jurisdiction.

BASF Metals and ICBC argue that they “could not have

reasonably anticipated being haled into court in the United States as

a result of participating with other London-based parties in London-

based activity that concerned London- and Zurich-based materials.”

Cross-Appellants’ Supp. Br. 20 (internal quotation marks and

alteration omitted). Perhaps not. The allegations in the complaint

might not establish that BASF Metals or ICBC themselves had

minimum contacts with the forum state. But we have already held in

Schwab I that “a co-conspirator’s minimum contacts … in furtherance

of the conspiracy” fulfills the requirement that the “defendant must

have purposefully availed itself of the privilege of doing business in

the forum.” 883 F.3d at 85-87 (emphasis added) (internal quotation

marks omitted). Such purposeful availment is the sort of “conduct

41

and connection with the forum State” that should lead a defendant to

“reasonably anticipate being haled into court there.” World-Wide

Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).

BASF Metals and ICBC take issue with the theory of conspiracy

jurisdiction itself, criticizing it as “hing[ing] entirely on the

proposition that a court may legitimately impute the in-forum

contacts of a third party to a defendant who resides outside of the

forum.” BASF Metals’s Br. 41. Conspiracy jurisdiction, these parties

assert, is “extraordinarily broad” because “it … permit[s] the exercise

of personal jurisdiction over a defendant based on the actions of a

co-conspirator who is entirely unknown to that defendant.” Id. at 46

(internal quotation marks and alteration omitted). For these reasons,

BASF Metals and ICBC argue that “‘conspiracy jurisdiction’ violates

the Due Process Clause and Supreme Court precedent interpreting

it.” Id. at 40.

There may be grounds for those objections. Conspiracy

jurisdiction seems to have expanded beyond its more limited roots.

“[E]arly cases upheld jurisdiction over nonresident conspirators

based on the in-state acts of their coconspirators, but the courts

generally did so on the theory that the in-state coconspirators acted

as agents of the nonresident defendants.” Carver, supra note 8, at 1340.

In fact, Schwab II referenced agency principles in explaining

conspiracy jurisdiction. 22 F.4th at 122 (“Much like an agent who

operates on behalf of, and for the benefit of, its principal, a co-

conspirator who undertakes action in furtherance of the conspiracy

essentially operates on behalf of, and for the benefit of, each member

of the conspiracy.”). But the argument that our exercise of conspiracy

jurisdiction should be limited by agency principles is no longer

42

available. We have observed that “some control is necessary to

establish agency for jurisdictional purposes,” CutCo Indus., Inc. v.

Naughton, 806 F.2d 361, 366 (2d Cir. 1986) (construing New York’s

long-arm statute), but we have squarely rejected that limitation on

conspiracy jurisdiction, Schwab II, 22 F.4th at 125 (concluding that

“our caselaw does not require a relationship of control, direction, or

supervision” to establish conspiracy jurisdiction).

In doing so, we followed the suggestion that, because “for most

purposes the acts of one conspirator within the scope of the

conspiracy are attributed to the others,” there is no reason “personal

jurisdiction should be an exception.” Stauffacher v. Bennett, 969 F.2d

455, 459 (7th Cir. 1992) (Posner, J.). BASF Metals and ICBC argue that

the minimum contacts inquiry must be more “defendant-focused”

than the rules of conspiracy liability. BASF Metals’s Br. 41 (quoting

Walden v. Fiore, 571 U.S. 277, 284 (2014)). Other critics of conspiracy

jurisdiction have similarly argued that the “purposes of the law of

civil conspiracy and the law of in personam jurisdiction” are

“opposed.” Riback, supra note 8, at 530. On the one hand, “[a]

conspiracy claim serves merely to expand liability for the underlying

wrong to persons who are not directly involved in the wrongful

actions,” 15A C.J.S. Conspiracy § 18 (2022), and is “a mechanism to aid

the plaintiff,” Riback, supra note 8, at 530. The due process limitations

on in personam jurisdiction, on the other hand, are meant to “give[] a

degree of predictability to the legal system that allows potential

defendants to structure their primary conduct with some minimum

assurance as to where that conduct will and will not render them

liable to suit.” World-Wide Volkswagen, 444 U.S. at 297. In other words,

“[w]hile a solicitude for the plaintiff’s interests is central to the

determination of conspiratorial liability, it is not so in the

43

determination of jurisdiction, in which the defendant is the primary

concern.” Riback, supra note 8, at 530. Under this line of argument, the

rules of conspiratorial liability should not govern a court’s personal

jurisdiction over a conspirator. 9

While we acknowledge the debate over this question, 10 our

court has already taken a position—and we are bound to follow our

previous decision. Glob. Reinsurance Corp. of Am. v. Century Indem. Co.,

22 F.4th 83, 100-01 (2d Cir. 2021) (“[A] decision of a panel of this Court

is binding unless and until it is overruled by the Court en banc or by

the Supreme Court.”) (quoting United States v. Hightower, 950 F.3d 33,

36 (2d Cir. 2020)). Because this court held that minimum contacts were

9 See Ann Althouse, The Use of Conspiracy Theory to Establish In Personam

Jurisdiction: A Due Process Analysis, 52 Fordham L. Rev. 234, 241 (1983)

(criticizing courts for “fail[ing] to differentiate between the standards

governing liability and those governing jurisdiction”); Riback, supra note 8,

at 510 (“It is elementary that the fact of liability does not confer jurisdiction,

yet by endowing a conspiracy with an independent jurisdictional

significance, the conspiracy theory does just that.”) (footnote omitted).

10See, e.g., Smith v. Jefferson Cnty. Bd. of Educ., 378 F. App’x 582, 586 (7th Cir.

2010) (describing conspiracy jurisdiction as “a theory that is … marginal at

best”); Chirila v. Conforte, 47 F. App’x 838, 842 (9th Cir. 2002) (“There is a

great deal of doubt surrounding the legitimacy of this conspiracy theory of

personal jurisdiction.”); Schwartz v. Frankenhoff, 733 A.2d 74, 80 (Vt. 1999)

(observing that the U.S. Supreme Court’s “decisions strongly suggest” that

“conspiracy participation is not enough” to “meet due process

requirements for personal jurisdiction”); Nat’l Indus. Sand Ass’n v. Gibson,

897 S.W.2d 769, 773 (Tex. 1995) (declining “to recognize the assertion of

personal jurisdiction over a nonresident defendant based solely upon the

effects or consequences of an alleged conspiracy with a resident in the

forum state”).

44

present in Schwab II, it follows that such contacts are present for BASF

Metals and ICBC in this case.

2

“If a defendant has sufficient minimum contacts,” we “must

also determine whether the exercise of personal jurisdiction is

reasonable under the Due Process Clause.” MacDermid, Inc. v. Deiter,

702 F.3d 725, 730 (2d Cir. 2012). BASF Metals and ICBC argue that,

even if minimum contacts are present in this case, “any exercise of

specific jurisdiction … would be unreasonable.” BASF Metals’s Br. 55.

We disagree. The reasonableness inquiry depends on five factors:

(1) the burden that the exercise of jurisdiction will

impose on the defendant; (2) the interests of the forum

state in adjudicating the case; (3) the plaintiff’s interest in

obtaining convenient and effective relief; (4) the

interstate judicial system’s interest in obtaining the most

efficient resolution of the controversy; and (5) the shared

interest of the states in furthering substantive social

policies.

Met. Life, 84 F.3d at 568. “Where a plaintiff makes the threshold

showing of the minimum contacts required for the first test, a

defendant must present a compelling case that the presence of some

other considerations would render jurisdiction unreasonable.” Bank

Brussels Lambert, 305 F.3d at 129 (internal quotation marks omitted).

“The import of the ‘reasonableness’ inquiry varies inversely with the

strength of the ‘minimum contacts’ showing—a strong (or weak)

showing by the plaintiff on ‘minimum contacts’ reduces (or increases)

the weight given to ‘reasonableness.’” Id.

BASF Metals and ICBC have not met the burden of showing

unreasonableness. According to BASF Metals and ICBC, the burden

45

of being haled into court in the United States is “severe.” BASF

Metals’s Br. 57 (quoting Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480

U.S. 102, 114 (1987)). But we have previously held with respect to a

Puerto Rican defendant sued in New York that this factor provides

“only weak support” because “the conveniences of modern

communication and transportation ease what would have been a

serious burden only a few decades ago.” Bank Brussels Lambert, 305

F.3d at 129-30. Neither do BASF Metals and ICBC make the necessary

showing on the second or third factors given New York’s interest in

adjudicating a claim concerning manipulation on the NYMEX and the

fact that the plaintiffs reside in the United States.

BASF Metals and ICBC argue that the remaining factors—

which those parties characterize as “considerations of international

rapport,” BASF Metals’s Br. 58 (alteration omitted) (quoting Daimler

AG v. Bauman, 571 U.S. 117, 142 (2014))—weigh against exercising

personal jurisdiction in this case. The Supreme Court has explained

that, in the context of an “assertion of jurisdiction over an alien

defendant,” the fourth and fifth reasonableness factors “call[] for a

court to consider the procedural and substantive policies of other

nations whose interests are affected” by the exercise of personal

jurisdiction. Asahi, 480 U.S. at 115. According to BASF Metals and

ICBC, “[i]t is insulting to the sovereignty of foreign nations to subject

their residents to personal jurisdiction in the United States” based on

a conspiracy jurisdiction theory. BASF Metals’s Br. 59.

BASF Metals and ICBC overestimate the weight of

“international rapport” in this context. That language comes from the

Supreme Court’s decision in Daimler, which rejected the Ninth

Circuit’s attempt to “subject[] Daimler to the general jurisdiction of

46

courts in California.” 571 U.S. at 142. Given the scope of general

jurisdiction, it is unsurprising that “international rapport” would be

harmed by “some domestic courts’ expansive views of general

jurisdiction.” Id. at 142. The international rapport concerns of Daimler

do not apply equally in a case, such as this one, that involves specific

jurisdiction.

This case is not “the ‘exceptional situation’ where exercise of

jurisdiction is unreasonable even though minimum contacts are

present.” Bank Brussels Lambert, 305 F.3d at 130. We affirm the district

court’s assertion of personal jurisdiction over BASF Metals and ICBC.

B

We next turn to the district court’s dismissal of the LPPFC as a

defendant. The plaintiffs expressly decline to challenge the district

court’s holding in Platinum I that there is no conspiracy jurisdiction

over the LPPFC and instead argue that the district court should have

exercised personal jurisdiction under an alter ego theory of personal

jurisdiction. We disagree and affirm.

This court has observed that it is “well established that the

exercise of personal jurisdiction over an alter ego corporation does not

offend due process.” S. New Eng. Tel. Co. v. Glob. NAPs Inc., 624 F.3d

123, 138 (2d Cir. 2010). “The alter-ego theory provides for personal

jurisdiction if the parent company exerts so much control over the

subsidiary that the two do not exist as separate entities but are one

and the same for purposes of jurisdiction.” Indah v. SEC, 661 F.3d 914,

921 (6th Cir. 2011) (internal quotation marks omitted). The usual

application of an alter ego theory serves to extend personal

jurisdiction over the parent company. In this case, the plaintiffs seek

47

to do the reverse—to extend personal jurisdiction over the Fixing

Members to their subsidiary, the LPPFC.

“Because we treat the parent and subsidiary as ‘not really

separate entities’ if they satisfy the alter ego analysis, there is no

greater justification for bringing the parent into the subsidiary’s

forum than for doing the reverse.” Ranza v. Nike, Inc., 793 F.3d 1059,

1072 (9th Cir. 2015) (internal citation omitted) (quoting Doe v. Unocal

Corp., 248 F.3d 915, 926 (9th Cir. 2001)). Accordingly, “[t]he crux of the

alter-ego theory of personal jurisdiction” is that “courts are to look for

two entities acting as one,” Anwar v. Dow Chem. Co., 876 F.3d 841, 848

(6th Cir. 2017), an inquiry that we have compared to piercing the

corporate veil, S. New Eng. Tel. Co., 624 F.3d at 147. The parties

disagree on whether English or federal common law governs the

question of piercing the LPPFC’s corporate veil. 11 We need not

11In diversity cases, we look to the choice-of-law rules of the forum state to

determine the veil-piercing law to apply. See Am. Fuel Corp. v. Utah Energy

Dev. Co., 122 F.3d 130, 134 (2d Cir. 1997). Because the LPPFC is “organized

and existing under the laws of the United Kingdom,” App’x 370-71, and

New York’s rule is that “the law of the state of incorporation determines

when the corporate form will be disregarded,” Fletcher v. Atex, Inc., 68 F.3d

1451, 1456 (2d Cir. 1995) (quoting Fletcher v. Atex, Inc., 861 F. Supp. 242, 244

(S.D.N.Y. 1994)), under that rule English law would apply. This case,

however, arises under federal law. Other courts have held that federal

common law governs alter-ego theories “when a federal interest is

implicated by the decision of whether to pierce the corporate veil.” Anwar,

876 F.3d at 848-49 (applying federal common law to an alter ego personal

jurisdiction claim); see also United States ex rel. Small Bus. Admin. v. Pena, 731

F.2d 8, 12 (D.C. Cir. 1984) (noting that “courts ha[ve] both a jurisdictional

and substantive basis for resorting to a federal common law of veil-

piercing” when “some federal interest [i]s implicated by the decision

whether to pierce the corporate veil”).

48

resolve that dispute because under neither approach can the plaintiffs

succeed.

The plaintiffs have not pleaded facts sufficient to pierce the

corporate veil under English law. “English law … will pierce the

corporate veil and recognize one entity as the alter ego of another only

where special circumstances exist indicating that the relationship of

one corporation to another is a mere facade concealing the true facts.”

Great Lakes Overseas, Inc. v. Wah Kwong Shipping Grp., 990 F.2d 990, 997

(7th Cir. 1993) (internal quotation marks omitted). In Great Lakes, the

Seventh Circuit observed that English courts will not “pierc[e] the

corporate veil to hold a parent company responsible for the debts of

its wholly owned subsidiary even where the subsidiary was created

to conduct the business at issue and was funded entirely by loans

advanced by the parent.” Id. (describing Atlas Maritime Co. SA v.

Avalon Maritime Ltd. [1991] 4 All E.R. 769 (AC)). In this case, the

plaintiffs argue that the district court should have pierced the

corporate veil because the Fixing Members “selected LPPFC’s board

members” and “conducted LPPFC’s day-to-day operations” and

because the LPPFC “was financially dependent on” the Fixing

Members and “had no function other than to implement the Fixing.”

Appellants’ Br. 55-56. But the same could be said of any single-

shareholder corporation, and “[t]he involvement of a sole or majority

shareholder in a corporation is not sufficient alone to establish a basis

to disregard the corporate entity and pierce the corporate veil.” 18

C.J.S. Corporations § 21 (2022). 12 The plaintiffs have not identified any

12See also 1 James D. Cox & Thomas L. Hazen, Treatise on the Law of

Corporations § 7:10 (3d ed. 2021) (noting that, when courts in “veil-piercing

cases” consider “whether the controlling stockholder has so dominated the

49

“special circumstances” to justify piercing the veil here. Great Lakes,

990 F.2d at 997.

Neither can the plaintiffs succeed on an alter ego theory under

federal common law. The plaintiffs in this case argue that, under

federal common law, they “need only show that Defendants

dominated LPPFC.” Appellants’ Br. 55. The plaintiffs cite Marine

Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981), for the

proposition that “veil-piercing for purposes of pleading personal

jurisdiction is relaxed.” Appellants’ Reply Br. 58. In Marine Midland

Bank, this court considered the “fiduciary shield doctrine,” which

provides that “if an individual has contact with a particular state only

by virtue of his acts as a fiduciary of the corporation, he may be

shielded from the exercise, by that state, of jurisdiction over him

personally on the basis of that conduct.” 664 F.2d at 902. We created

an exception to that rule, holding that “[i]f the corporation is merely

a shell, it is equitable, even if the shell may not have been used to

perpetrate a fraud, to subject its owner personally to the court’s

jurisdiction to defend the acts he has done on behalf of his shell.” Id.

at 903.

Even if we accept that as the federal common law test for alter

ego personal jurisdiction, the plaintiffs have not adequately alleged

that the LPPFC is such a “shell.” We have “disregarded corporate

formalities when a corporation’s owner exercises ‘total and exclusive

domination of the corporation.’” S. New Eng. Tel. Co., 624 F.3d at 139

(quoting Lowen v. Tower Asset Mgmt., Inc., 829 F.2d 1209, 1221 (2d Cir.

affairs of the corporation that the corporation has no existence of its own,”

there is usually “the additional requirement that fraud, illegality or gross

unfairness will result if the corporate existence is not disregarded”).

50

1987)). For example, in Midland Bank, the plaintiffs “made a prima

facie showing that Miller & Associates was a shell corporation” when

it “presented deposition testimony and affidavits concerning the

ownership, capitalization, and use by Miller of Miller & Associates”

as well as evidence that “Miller & Associates was no more than a

telephone number and stationery.” 664 F.2d at 904. In contrast, the

allegations that the plaintiffs highlight on appeal—that the LPPFC

“was financially dependent on Defendants” and “had no function

other than to implement the Fixing” and that the defendants placed

its employees on the LPPFC’s board, Appellants’ Br. 55-56—do not

provide a reason to treat the LPPFC differently from any corporation

operated by its owner. See Harris Rutsky & Co. Ins. Servs., Inc. v. Bell &

Clements Ltd., 328 F.3d 1122, 1135 (9th Cir. 2003) (holding that “100%

control through stock ownership” and “shar[ing] the same offices …

and some of the same staff” did not make one company the alter ego

of the other). 13

As noted above, the plaintiffs did not merely fail to argue that

we have conspiracy jurisdiction over the LPPFC but expressly

declined to make that argument. Cross-Appellees’ Supp. Reply Br. 10

n.7 (“Plaintiffs do not challenge the district court’s conspiracy

jurisdiction ruling as to LPPFC.”). “[A]rguments not made in an

13 In the third amended complaint, the plaintiffs allege that the LPPFC

“never maintained any office space” and that “its correspondence address

[is] at a corporate law firm.” App’x 371. At oral argument, however, the

plaintiffs conceded that because the LPPFC is not named as a defendant in

the third amended complaint, we “evaluate the sufficiency of the claims as

to” the LPPFC “based on the allegations in the second amended complaint.”

Oral Argument Audio Recording at 20:30. Because the allegations

concerning the LPPFC’s office space are absent from the second amended

complaint, we do not consider those allegations.

51

appellant’s opening brief are waived even if the appellant pursued

those arguments in the district court or raised them in a reply brief.”

JP Morgan Chase Bank v. Altos Hornos de Mex., S.A. de C.V., 412 F.3d

418, 428 (2d Cir. 2005). Because the plaintiffs have not adequately

alleged that the LPPFC is the Fixing Members’ alter ego for

jurisdictional purposes, we affirm the district court’s dismissal of

claims against the LPPFC.

IV

We consider last the plaintiffs’ challenge to the district court’s

dismissal of claims against BASF Corporation in Platinum I. The

district court dismissed the claims against BASF Corporation under

Rule 12(b)(6), holding that the plaintiffs’ “allegations against BASF

Corp. do not meet even the most liberal pleading standard.”

Platinum I, 2017 WL 1169626, at *52. According to the plaintiffs,

however, “BASF Corp. had every incentive and opportunity to work

closely with BASF Metals and the Fixing’s participants generally to

further the conspiracy” and the second amended complaint’s

allegations “plausibly demonstrate [BASF Corporation’s]

participation in the price fixing conspiracy.” Appellants’ Br. 59. We

disagree and affirm the district court’s judgment on this point.

Section 1 of the Sherman Act “punishes the conspiracies at

which it is aimed on the common law footing,—that is to say, it does

not make the doing of any act other than the act of conspiring a

condition of liability.” Nash v. United States, 229 U.S. 373, 378 (1913).

In other words, “the agreement itself [is] the offense” and no overt

acts are necessary to violate section 1. United States v. Sassi, 966 F.2d

283, 284 (7th Cir. 1992). Thus, “[a] plaintiff’s job at the pleading stage

… is to allege enough facts to support the inference that a conspiracy

52

actually existed,” and that may be accomplished through either direct

or circumstantial evidence. Mayor & Council of Balt. v. Citigroup, Inc.,

709 F.3d 129, 136 (2d Cir. 2013). Direct evidence is rare; it “would

consist, for example, of a recorded phone call in which two

competitors agreed to fix prices at a certain level.” Id. There is no

assertion of such evidence in this case.

“[A] complaint may, alternatively, present circumstantial facts

supporting the inference that a conspiracy existed.” Id. “[E]ven in the

absence of direct ‘smoking gun’ evidence, a horizontal price-fixing

agreement may be inferred on the basis of conscious parallelism,

when such interdependent conduct is accompanied by circumstantial

evidence and plus factors.” Todd v. Exxon Corp., 275 F.3d 191, 198 (2d

Cir. 2001). Such plus factors 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.” Mayor &

Council of Balt., 706 F.3d at 136 (quoting Twombly v. Bell Atl. Corp., 425

F.3d 99, 114 (2d Cir. 2005), rev’d on other grounds, 550 U.S. 544 (2007)).

The plaintiffs have failed to allege a conspiracy that includes

BASF Corporation. The plaintiffs’ argument relies on those parts of

the second amended complaint which assert that BASF Corporation

had a “common interest” in suppressing platinum and palladium

prices. Appellants’ Br. 59. That may demonstrate a “plus factor,” but

it does not address the primary defect of the claims against BASF

Corporation: the second amended complaint “says nothing about

BASF Corp.’s involvement—direct or indirect—in the alleged price

manipulation, BASF Corp.’s role in executing the scheme, or BASF

Corp.’s motive in artificially suppressing the Fix Price.” Platinum I,

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2017 WL 1169626, at *52. Plus factors such as common motive are

“circumstances which, when combined with parallel behavior, might

permit a jury to infer the existence of an agreement.” Mayor & Council

of Balt., 706 F.3d at 136 n.7. The plaintiffs in this case, however, have

not alleged any behavior on the part of BASF Corporation at all.

We affirm the district court’s dismissal of the claims against

BASF Corporation.

CONCLUSION

We REVERSE the district court’s dismissal of the Exchange

Plaintiffs’ antitrust claims and VACATE the district court’s dismissal

of the plaintiffs’ CEA claims. We AFFIRM the remainder of the

district court’s judgment, and REMAND to the district court for

further proceedings consistent with this opinion.

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