Petition for Writ of Certiorari — Jeffrey Laydon, Individually and on Behalf of All Others Similarly Situated, Petitioner v. Cooperatieve Rabobank U.A., et al.

Supreme Court briefJul 24, 2023

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APPENDIX

TABLE OF CONTENTS

Appendix A, Court of Appeals Decision (Amended)

(Dec. 8, 2022) ........................................................ 1a

Appendix B, Court of Appeals Decision

(Oct. 18, 2022) ..................................................... 27a

Appendix C, District Court Decision

(Aug. 27, 2020) .................................................... 55a

Appendix D, District Court Decision

(March 31, 2015) ................................................. 62a

Appendix E, District Court Decision

(Mar. 28, 2014) ..................................................... 79a

Appendix F, Order Denying Rehearing

(Feb, 24, 2023) .................................................. 111a

Appendix G, Relevant Statutory Provisions ........ 113a

APPENDIX A

[PUBLISH]

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

___________________

August Term 2021

Argued: May 24, 2022

Decided: October 18, 2022

Amended: December 8, 2022

Nos. 20-3626(L), 20-3775 (XAP)

___________________

JEFFREY LAYDON,

on behalf of himself and all others similarly situated,

Plaintiff-Appellant-Cross-Appellee,

COÖPERATIEVE RABOBANK U.A., BARCLAYS BANK PLC,

Société Générale S.A.,

Defendants-Appellees-Cross-Appellants,

THE ROYAL BANK OF SCOTLAND GROUP PLC, UBS AG,

LLOYDS BANKING GROUP PLC, UBS SECURITIES JAPAN

CO., LTD., THE ROYAL BANK OF SCOTLAND PLC, RBS

SECURITIES JAPAN LIMITED,

Defendant-Appellees,*

___________________

On Appeal from the United States District Court

for the Southern District of New York

___________________

Before POOLER, PARK, and LEE, Circuit Judges.

Plaintiff Jeffrey Laydon brought this putative

class action against more than twenty banks and

brokers, alleging a conspiracy to manipulate two

benchmark rates known as Yen-LIBOR and Euroyen

TIBOR. He claimed that he was injured after

purchasing and trading a Euroyen TIBOR futures

contract on a U.S.-based commodity exchange because

the value of that contract was based on a distorted,

artificial Euroyen TIBOR. Plaintiff brought claims

under the Commodity Exchange Act (“CEA”), 7 U.S.C.

§ 1 et seq., and the Sherman Antitrust Act, 15 U.S.C.

§ 1 et seq., and sought leave to assert claims under the

Racketeer Influenced and Corrupt Organizations Act

(“RICO”), 18 U.S.C. §§ 1962, 1964(c). The district

The Clerk of Court is respectfully directed to amend the

caption accordingly.

court (Daniels, J.) dismissed the CEA and antitrust

claims and denied leave to add the RICO claims.

Plaintiff appeals, arguing that the district court erred

by holding that the CEA claims were impermissibly

extraterritorial, that he lacked antitrust standing to

assert a Sherman Act claim, and that he failed to

allege proximate causation for his proposed RICO

claims.

We affirm. The alleged conduct — i.e., that the

bank defendants presented fraudulent submissions to

an organization based in London that set a benchmark

rate related to a foreign currency — occurred almost

entirely overseas. Indeed, Plaintiff fails to allege any

significant acts that took place in the United States.

Plaintiff’s CEA claims are based predominantly on

foreign conduct and are thus impermissibly

extraterritorial. See Prime Int’l Trading, Ltd. v. BP

P.L.C., 937 F.3d 94, 106 (2d Cir. 2019). The district

court also correctly concluded that Plaintiff lacked

antitrust standing because he would not be an efficient

enforcer of the antitrust laws. See Schwab Short-Term

Bond Mkt. Fund v. Lloyds Banking Grp. PLC, 22 F.4th

103, 115–20 (2d Cir. 2021). Lastly, we agree with the

district court that Plaintiff failed to allege proximate

causation for his RICO claims. The judgment of the

district court is thus AFFIRMED.

_______________

ERIC F. CITRON, Goldstein & Russell, P.C.,

Bethesda, MD (Vincent Briganti, Margaret

MacLean, Lowey Dannenberg, P.C., White Plains,

NY, on the brief), for Plaintiff-Appellant-CrossAppellee Jeffrey Laydon.

THOMAS G. HUNGAR, Gibson, Dunn & Crutcher

LLP, Washington, DC (Russell B. Balikian,

Gibson, Dunn & Crutcher LLP, Washington, DC;

Mark A. Kirsch, Eric J. Stock, Jefferson E. Bell,

Gibson, Dunn & Crutcher LLP, New York, NY, on

the brief), for Defendants-Appellees UBS AG and

UBS Securities Japan Co., Ltd.

MARC J. GOTTRIDGE, Herbert Smith Freehills New

York LLP, New York, NY (Lisa J. Fried, Herbert

Smith Freehills New York LLP, New York, NY;

Benjamin A. Fleming, Hogan Lovells US LLP,

New York, NY, on the brief), for DefendantAppellee Lloyds Banking Group plc.

NICOLE A. SAHARSKY, Mayer Brown LLP, New

York, NY (Steven Wolowitz, Andrew J. Calica,

Mayer Brown LLP, New York, NY, on the brief),

for Defendant-Appellee-Cross-Appellant Société

Générale S.A.

DAVID R. GELFAND, Tawfiq S. Rangwala, Milbank

LLP, New York, NY; Mark D. Villaverde, Milbank

LLP, Los Angeles, CA, for Defendant-AppelleeCross-Appellant Coöperatieve Rabobank U.A.

DAVID S. LESSER, King & Spalding LLP, New

York, NY; Robert G. Houck, Clifford Chance US

LLP, New York, NY, for Defendants-Appellees The

Royal Bank of Scotland plc, The Royal Bank of

Scotland Group plc, and RBS Securities Japan

Ltd.

_______________

PARK, Circuit Judge:

Plaintiff Jeffrey Laydon brought this putative

class action against more than twenty banks and

brokers, alleging a conspiracy to manipulate two

benchmark rates known as Yen-LIBOR and Euroyen

TIBOR. He claimed that he was injured after

purchasing and trading a Euroyen TIBOR futures

contract on a U.S.-based commodity exchange because

the value of that contract was based on a distorted,

artificial Euroyen TIBOR. Plaintiff brought claims

under the Commodity Exchange Act (“CEA”), 7 U.S.C.

§ 1 et seq., and the Sherman Antitrust Act, 15 U.S.C.

§ 1 et seq., and sought leave to assert claims under the

Racketeer Influenced and Corrupt Organizations Act

(“RICO”), 18 U.S.C. §§ 1962, 1964(c). The district

court (Daniels, J.) dismissed the CEA and antitrust

claims and denied leave to add the RICO claims.

Plaintiff appeals, arguing that the district court erred

by holding that the CEA claims were impermissibly

extraterritorial, that he lacked antitrust standing to

assert a Sherman Act claim, and that he failed to

allege proximate causation for his proposed RICO

claims.

We affirm. The alleged conduct—i.e., that the

bank defendants presented fraudulent submissions to

an organization based in London that set a benchmark

rate related to a foreign currency—occurred almost

entirely overseas. Indeed, Plaintiff fails to allege any

significant acts that took place in the United States.

Plaintiff’s CEA claims are based predominantly on

foreign conduct and are thus impermissibly

extraterritorial. See Prime Int’l Trading, Ltd. v. BP

P.L.C., 937 F.3d 94, 106 (2d Cir. 2019). The district

court also correctly concluded that Plaintiff lacked

antitrust standing because he would not be an efficient

enforcer of the antitrust laws. See Schwab Short-Term

Bond Mkt. Fund v. Lloyds Banking Grp. PLC, 22 F.4th

103, 115–20 (2d Cir. 2021). Lastly, we agree with the

district court that Plaintiff failed to allege proximate

causation for his RICO claims. The judgment of the

district court is thus affirmed.

BACKGROUND

A. Factual Background

Yen-LIBOR and Euroyen TIBOR

Plaintiff alleges the manipulation of two

benchmark rates known as Yen-LIBOR and Euroyen

TIBOR, which reflected the interest rates at which

banks can lend Japanese Yen outside of Japan.1 There

The names are short for “Yen London Interbank Offered

Rate” and “Euroyen Tokyo Interbank Offered Rate,” respectively.

The Euroyen, also known as offshore yen, refers to deposits

denominated in Japanese Yen held outside of Japan. Yen-LIBOR

and Euroyen TIBOR are based on “the interest rates at which

banks offer to lend unsecured funds denominated in Japanese

Yen to other banks in the offshore wholesale money market (or

interbank market).” Third Am. Compl. ¶ 122.

were two key differences between Yen-LIBOR and

Euroyen TIBOR. First, different entities set the rates.

During the relevant period, the Japanese Bankers

Association (“JBA”) set Euroyen TIBOR by accepting

submissions from a panel of banks headquartered

primarily in Japan. Each bank submitted to the JBA

the interest rate at which it could borrow offshore Yen.

The JBA then calculated Euroyen TIBOR for various

maturities by discarding the two highest and two

lowest submissions and averaging the remaining ones.

Yen-LIBOR, on the other hand, was a London-based

benchmark set by the British Bankers’ Association

(“BBA”). Each bank sitting on a panel of Londonbased banks submitted to the BBA the rate at which it

could borrow Yen outside of Japan.

The BBA

calculated Yen-LIBOR by discarding the highest and

lowest 25% of submissions and determining the

average of the remaining 50%. The second major

difference between the rates was that they were set at

different times. “Euroyen TIBOR [was] calculated on

each business day as of 11:00 a.m. Tokyo time,” while

“Yen-LIBOR [was] calculated each business day as of

11:00 a.m. London time.” Third Am. Compl. ¶¶ 126,

130.

The Alleged Conduct

Plaintiff Laydon is a U.S. resident who traded

three-month Euroyen TIBOR futures contracts

between January 1, 2006 and June 30, 2011 (the

“Class Period”). This type of contract is an “agreement

to buy or sell a Euroyen time deposit having a

principal value of 100,000,000 Japanese Yen with a

three-month maturity commencing on a specific future

date.” Third Am. Compl. ¶ 134.2 Plaintiff placed these

trades on the Chicago Mercantile Exchange (“CME”),

a U.S.-based futures exchange.

Specifically, he

“initiated a short position by selling five . . . Euroyen

TIBOR futures contracts on July 13, 2006 at a price of

$99.315 per contract” and then “liquidated that

position by purchasing five long . . . futures contracts

on August 3, 2006 at a price of $99.490 per contract for

loss of $2,150.35.” Id. ¶ 911. Defendants-Appellees

served as panel banks for the BBA in setting YenLIBOR during the relevant period.3 Plaintiff also sued

several derivatives brokers who allegedly helped

Defendants manipulate Yen-LIBOR and Euroyen

TIBOR.4

Plaintiff maintains that Defendants conspired to

manipulate Yen-LIBOR and Euroyen TIBOR by

giving false Yen-LIBOR submissions to the BBA,

Unlike an “ordinary bank deposit” that is “payable on

demand,” a time deposit cannot be withdrawn from the bank

before a set date. See 10 Am. Jur. 2d Banks and Fin. Insts. § 641.

These include UBS AG and UBS Securities Japan Co., Ltd.

(“UBS”); the Royal Bank of Scotland Group plc, The Royal Bank

of Scotland plc, and RBS Securities Japan Limited (“RBS”);

Lloyds Banking Group plc (“Lloyds”); Barclays Bank PLC

(“Barclays”); Société Générale S.A. (“SocGen”); and Coöperatieve

Rabobank U.A. (“Rabobank”) (collectively, “Defendants”).

The broker defendants who initially joined this appeal were

ICAP plc and ICAP Europe Limited (collectively, “ICAP”) and

Tullett Prebon plc. We granted Plaintiff’s motion to sever and

stay the appeal with respect to ICAP and Tullett Prebon and

remanded to allow the district court to consider a proposed classaction settlement between Plaintiff and these parties.

which affected the price of Plaintiff’s three-month

Euroyen TIBOR futures. Although Defendants did not

serve as panel banks for the JBA in setting Euroyen

TIBOR, Plaintiff alleges that their purported

manipulation of Yen-LIBOR—which is set earlier in

the day—affected Euroyen TIBOR. See Third Am.

Compl. ¶¶ 844, 845 (alleging that “[c]hanges in YenLIBOR will be immediately reflected in Euroyen

TIBOR rates . . . once Euroyen TIBOR opens” and that

“the reporting of false and inaccurate Yen-LIBOR

rates . . . cause[d] artificial Euroyen TIBOR rates and

artificial Euroyen TIBOR futures prices”).

He further asserts that the “driving force[s]

behind Defendants’ manipulation” were conflicts of

interest. Id. ¶ 167. Namely, Plaintiff claims that

Defendants

held

their

own

“Euroyen-based

derivatives positions” and that their traders’

“compensation was based in part on the profit and loss

calculation” of Defendants’ trading books. Id. And

“even very small movements in Yen-LIBOR . . . would

have a significant positive impact on the profitability

of” trading positions, so Defendants’ traders had

incentives to manipulate Yen-LIBOR. Id.

To support these allegations, Plaintiff relies on

information revealed in various domestic and foreign

enforcement proceedings. He points to Defendants’

admissions concerning actions taken by their

employees at overseas trading desks.

These

allegations describe Defendants’ foreign-based

employees submitting false rates to the BBA, as well

as traders asking other employees responsible for

sending submissions to the BBA to move the

benchmark rate in a direction that would benefit the

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trader’s trading position. 5 As for domestic conduct,

Plaintiff primarily relies on a handful of

communications sent from Defendants’ foreign-based

employees through or to servers located in the United

States. 6 Plaintiff does not allege that Defendants’

employees sent artificial submissions to the BBA from

within the United States.

On behalf of a putative class, Plaintiff sought an

unspecified amount in regular and treble damages, as

For example, Plaintiff alleges that RBS Yen traders

“attempted to manipulate Yen-LIBOR by making hundreds of

manipulative requests of RBS’ Primary Submitter, Paul White,

and London-based traders.” Third Am. Compl. ¶ 267 (“RBS’

derivatives traders’ requests for artificial Yen-LIBOR

submissions were common and made openly on the trading floors

in Asia and London.”). Similarly, Plaintiff asserts that UBS

began tendering “false Yen-LIBOR and Euroyen TIBOR”

submissions as early as 2006. Id. ¶ 241. Plaintiff focuses on the

actions of UBS Yen Traders Tom Hayes and Roger Darin, who

operated from UBS desks in Tokyo, Singapore, and Zurich, and

were prosecuted in the United States and the United Kingdom

for manipulating Yen-LIBOR.

Plaintiff cites a criminal complaint brought by U.S.

prosecutors against UBS Yen Trader, Tom Alexander William

Hayes, which alleges that Hayes “caused confirmations . . . to be

transmitted from outside the United States to a counterparty

based in Purchase, New York, for transactions involving interest

rate derivative products tied to a benchmark interest rate which

[Hayes] was secretly manipulating.” Joint App’x at 2036. Plaintiff

also relies on the testimony of a Rabobank employee, Anthony

Allen, from his trial for wire fraud stemming from manipulation

of Yen-LIBOR, reflecting that Allen knew that some of the

counterparties to Rabobank’s transactions were in the United

States. See Third Am. Compl. ¶¶ 92–93.

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well as an injunction prohibiting Defendants from

continuing their alleged unlawful conduct.

B. Procedural Background

Plaintiff filed this action in 2012. On April 15,

2013, before the district court resolved any

substantive motions, Plaintiff filed the Second

Amended Complaint, alleging claims under the CEA,

7 U.S.C. § 1 et seq., and Section 1 of the Sherman

Antitrust Act, 15 U.S.C. § 1 et seq.7

Over nearly a decade of litigation, the district

court issued several orders dismissing various claims

and defendants. First, on March 28, 2014, the court

granted Defendants’ motion to dismiss Plaintiff’s

antitrust claims, finding that Plaintiff lacked

antitrust standing in part because he would not be an

“efficient enforcer” of the alleged antitrust violation.

The court allowed the remaining CEA claims to

proceed.

Plaintiff next sought leave to file the Third

Amended Complaint to add RICO claims and

additional defendants. On March 31, 2015, the district

court allowed Plaintiff to file the new pleadings but

denied leave to add the RICO claims, finding that

Plaintiff did “not show a sufficiently direct connection

between the alleged misconduct and the injury to

support a RICO claim.” Special App’x at 58. That

Plaintiff also brought an unjust-enrichment claim and a

CEA vicarious-liability claim, but he does not appeal the

dismissal of those claims.

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same day, the court also dismissed several defendants

for lack of personal jurisdiction, rejecting Plaintiff’s

conspiracy theory of personal jurisdiction.

Two years later, on March 10, 2017, the district

court dismissed several new defendants named in the

Third Amended Complaint—including the broker

Defendants ICAP and Tullett Prebon plc—for lack of

personal jurisdiction, finding that their alleged

conduct did not create a substantial connection with

the United States and once again rejecting Plaintiff’s

“‘conspiracy theory’ of jurisdiction.” Special App’x at

73–79.

Finally, on August 27, 2020, the court

dismissed the surviving CEA claims against the

remaining

defendants,

finding

the

claims

impermissibly extraterritorial because “Defendants‘

alleged wrongful conduct . . . is almost entirely

foreign.” Id. at 86. Plaintiff filed a timely notice of

appeal.8

II. DISCUSSION

Plaintiff argues that the district court erred by

dismissing his CEA claims as impermissibly

Defendants Barclays, SocGen, and Rabobank filed a crossappeal, challenging the district court’s November 10, 2014 order

denying them leave to file a motion to dismiss based on lack of

personal jurisdiction. We severed the main appeal and the cross

appeal as to Barclays and ordered a limited remand for the

district court to consider the approval of a proposed class action

settlement between Plaintiff and Barclays. As to SocGen and

Rabobank, we need not reach the issues in their cross-appeal —

which concern whether the district court properly found that they

forfeited or waived their personal jurisdiction arguments —

because we affirm the district court’s dismissal orders on the

merits.

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extraterritorial. He also challenges the district court’s

decisions to dismiss his antitrust claims for lack of

standing and to reject his RICO claims for lack of

proximate causation. 9 “We review de novo the

dismissal of a complaint for failure to state a claim

upon which relief can be granted.” Myun-Uk Choi v.

Tower Rsch. Cap. LLC, 890 F.3d 60, 65 (2d Cir. 2018)

(citation omitted). “The denial of leave to amend is

similarly reviewed de novo because the denial was

based on an interpretation of law, such as futility.”

Gelboim v. Bank of Am. Corp., 823 F.3d 759, 769 (2d

Cir. 2016) (cleaned up).

We agree with the district court that Plaintiff

failed to state a claim under the CEA because the

alleged conduct occurred predominantly outside the

United States. We also agree that Plaintiff lacks

antitrust standing and failed to allege proximate

causation for his RICO claims.

Plaintiff also argues that the district court erred by

dismissing several defendants for lack of personal jurisdiction.

We do not reach this issue because our decision on the merits

provides an alternative ground for affirmance. See Chevron Corp.

v. Naranjo, 667 F.3d 232, 246 n.17 (2d Cir. 2012); 4 C. Wright &

A. Miller, Fed. Prac. and Proc. § 1067.6 (4th ed. 2022) (“[A] court

simply may avoid the issue [of personal jurisdiction] by resolving

the suit on the merits when they clearly must be decided in favor

of the party challenging jurisdiction, thereby obviating any need

to decide the question.”).

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A. Commodity Exchange Act Claims

Legal Principles

The

CEA

prohibits

“manipulat[ing]

attempt[ing] to manipulate the price of any commodity

in interstate commerce.” 7 U.S.C. § 13(a)(2). Section

22 of the CEA provides a private right of action,

permitting a party to sue “[a]ny person . . . who

violates this chapter” and hold that person liable “for

actual damages resulting from one or more of the

transactions” listed in the statute. Id. § 25(a)(1).

“We interpret the CEA in light of the presumption

against extraterritoriality, a canon of statutory

interpretation that is a ‘basic premise of our legal

system.’“ Prime, 937 F.3d at 102 (quoting RJR

Nabisco, Inc. v. Eur. Cmty., 579 U.S. 325, 335 (2016)).

“This canon helps avoid the international discord that

can result when U.S. law is applied to conduct in

foreign countries” and “reflects the commonsense

notion that Congress generally legislates with

domestic concerns in mind.” In re Picard, Tr. for

Liquidation of Bernard L. Madoff Inv. Sec. LLC, 917

F.3d 85, 95 (2d Cir. 2019) (cleaned up).

We decide questions of extraterritoriality using a

two-step framework. First, we “ask[] whether the

presumption against extraterritoriality has been

rebutted” by “text [that] provides a clear indication of

an extraterritorial application.” WesternGeco LLC v.

ION Geophysical Corp., 138 S. Ct. 2129, 2136 (2018)

(cleaned up). “Absent clearly expressed congressional

intent to the contrary, federal laws will be construed

to have only domestic application.” RJR Nabisco, Inc.,

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579 U.S. at 335; see also Morrison v. Nat’l Austl. Bank

Ltd., 561 U.S. 247, 255 (2010) (“When a statute gives

no clear indication of an extraterritorial application, it

has none.”).

Second, if we conclude that the

presumption against exterritoriality has not been

rebutted, we decide “whether the case involves a

domestic application of the statute.” RJR Nabisco,

Inc., 579 U.S. at 337. To do so, we determine whether

“the conduct relevant to the statute’s focus occurred in

the United States.” Id. “[I]f the conduct relevant to

the focus occurred in a foreign country, then the case

involves an impermissible extraterritorial application

regardless of any other conduct that occurred in U.S.

territory.” Id.

Section 22 of the CEA lacks any “affirmative

intention by Congress to give [it] extraterritorial

effect.” Loginovskaya v. Batratchenko, 764 F.3d 266,

272 (2d Cir. 2014) (cleaned up). A claim relying on

Section 22 must thus involve a domestic application of

the statute.

And the focus of the statute is

transactional, see id. at 272, so “suits funneled through

[the CEA’s] private right of action must be based on

transactions occurring in the territory of the United

States,” Prime, 937 F.3d at 103 (cleaned up).

Simply pleading a domestic transaction, however,

is not enough. Section 22 is a general provision

affording a cause of action to private litigants. Instead

of prohibiting certain, specified conduct, it applies

when a defendant commits “a violation of this

chapter.” 7 U.S.C. § 25(a)(1). A private plaintiff

pleading a CEA claim under Section 22 must thus

invoke a substantive provision of the CEA. See Prime,

937 F.3d at 105. And allowing a plaintiff to state a

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domestic application of Section 22 based merely on a

domestic transaction “would . . . divorce the private

right afforded in Section 22 from the requirement of a

domestic violation of a substantive provision of the

CEA.” Id. A plaintiff must thus plead not only a

domestic transaction, but also sufficiently domestic

conduct by the defendant. In other words, “Plaintiffs’

claims must not be ‘so predominantly foreign as to be

impermissibly extraterritorial.’“

Id. (quoting

Parkcentral Glob. Hub Ltd. v. Porsche Auto. Holdings

SE, 763 F.3d 198, 216 (2d Cir. 2014)).

Analysis

Plaintiff’s CEA claims are impermissibly

extraterritorial because the conduct he alleges is

“predominantly foreign.” Prime, 937 F.3d at 106.

First, Plaintiff traded a derivative that is tied to the

value of a foreign asset. The complaint alleges that he

was injured after purchasing and trading a Euroyen

TIBOR futures contract, which is “an agreement to

buy or sell a Euroyen time deposit having a principal

value of 100,000,000 Japanese Yen with a threemonth maturity commencing on a specific future

date.” Third Am. Compl. ¶ 134. As alleged, the value

of this asset is, in part, determined by Yen-LIBOR and

Euroyen TIBOR because these rates are meant to

capture the prevalent interest rates at which banks

lend such time deposits. So the value of this asset is

based on rates set by foreign entities (i.e., JBA and

BBA) in foreign countries (i.e., Japan and the United

Kingdom).

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Second, the alleged manipulative conduct

occurred almost entirely abroad. Plaintiff’s conspiracy

allegations describe conduct and communications that

occurred overseas on foreign trade desks. 10 Indeed,

Plaintiff focuses on the actions of employees who

worked in foreign offices. See Joint App’x at 2040,

2739.

Plaintiff’s arguments to the contrary are

meritless. His main contention is that he purchased a

Euroyen TIBOR futures contract on the CME, a U.S.based exchange. He argues that his “claims must be

domestic because they involve both core domestic

transactions (i.e., transactions on a domestic

exchange) and manipulation of a domestic commodity

market.” Appellant’s Br. at 36 (emphasis added).

Plaintiff also points to several instances of

communications that were made from or went through

See, e.g., Third Am. Compl. ¶¶ 231–33 (Rabobank’s

employees, Anthony Allen and Tetsuya Motomura, made

requests to contribute false submissions from “Rabobank’s money

market desk in London” and Rabobank’s trading desk in Tokyo,

respectively); id. ¶ 296 (a Rabobank employee “made regular

requests to Rabobank’s London-based Yen setters” to transmit

manipulated submissions); id. ¶ 269 (“a Euroyen-based

derivatives trader employed by RBS Japan sent requests for

favorable Yen-LIBOR submissions to a Yen derivatives trader in

London”); id. ¶ 243 (“UBS managers in Tokyo and Zurich” were

aware of false submission requests and “encouraged and allowed”

such conduct to occur); id. (a UBS “Yen Desk Manager in Tokyo”

engaged and encouraged the contribution of false submissions);

id. ¶ 250 (“the manager of one of the [UBS] Yen derivatives

trading desks in Tokyo exerted pressure on Yen-LIBOR

submitters to take derivatives traders’ positions into account

when setting Yen-LIBOR”).

18a

the United States. For example, Plaintiff alleges that

UBS trader Tom Hayes sent an email in furtherance

of the conspiracy while on a brief, two-day trip in Las

Vegas.

Our precedent mandates dismissal of Plaintiff’s

CEA claims. In Prime, the plaintiffs traded futures on

a U.S.-based exchange that were pegged to the Dated

Brent Assessment, a rate that “reflect[ed], in part, the

value of Brent crude physically traded in Northern

Europe.” 937 F.3d at 106. The plaintiffs alleged that

the defendants manipulated the market for Brent

crude and Brent futures by “systematically report[ing]

. . . artificial transactions” to a foreign entity

responsible for setting the Dated Brent Assessment

rate. Id. at 100. We held that the plaintiffs’ CEA

claims were impermissibly extraterritorial because

the derivatives at issue were “pegged to the value of”

foreign assets and the alleged misconduct was foreign

because the plaintiffs made “no claim that any

manipulative oil trading occurred in the United

States.” Id. at 106.

Here, as in Prime, Plaintiff purchased a futures

contract on a domestic market that incorporated an

index tied to a foreign market, with that index being

set by a foreign entity. According to Plaintiff, the

crude index in Prime would have been a commodity

and, because the futures contract traded in the United

States, any claims concerning that future would have

been domestic. But we rejected this theory and held

that the claims in Prime were impermissibly

extraterritorial because the defendants in that case

were “alleged to have manipulated the physical Brent

crude market” in Europe “by engaging in fraud there.”

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Id. at 107–08. So too here, Plaintiff alleges that

Defendants conspired to manipulate Euroyen TIBOR

(an index tied to a foreign market) by giving false YenLIBOR submissions to the BBA from foreign trading

desks (conduct abroad). We thus affirm the district

court’s dismissal of Plaintiff’s CEA claims.11

B. Antitrust Claims

Legal Principles

To state an antitrust claim, a plaintiff must first

“show . . . antitrust standing.” Gelboim, 823 F.3d at

770; see generally Associated Gen. Contractors of Cal.,

Inc. v. Cal. State Council of Carpenters, 459 U.S. 519

(1983) (“AGC”) (discussing the requirements of

antitrust standing). Standing to bring an antitrust

claim requires a plaintiff to show that (1) he has

“suffered antitrust injury,” and (2) he is an “efficient

enforcer[ ] of the antitrust laws.” Gelboim, 823 F.3d at

772. We look to four factors to determine whether a

plaintiff is an efficient enforcer:

(1) the directness or indirectness of the

asserted injury, which requires evaluation of

the chain of causation linking appellants’

asserted injury and the [defendants’] alleged

We are also unpersuaded by Plaintiff’s argument that

dismissal of his claims will “fatally undermine the ability of U.S.

law and U.S. regulators to protect domestic markets and

investors.” Appellant’s Br. at 38. The extraterritorial reach of

Section 22, which concerns private rights of action, has nothing

to do with government enforcement. See 7 U.S.C. § 25.

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price-fixing; (2) the existence of more direct

victims of the alleged conspiracy; (3) the

extent to which appellants’ damages 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.

Id. at 778 (cleaned up) (citing AGC, 459 U.S. at 540–

44).

Analysis

We agree with the district court that Plaintiff

failed to allege antitrust standing because he is not an

efficient enforcer of the antitrust laws.

Causation.

“For the purposes of antitrust

standing, proximate cause is “determined according to

the so-called ‘first-step rule,’” under which “injuries

that happen at the first step following the harmful

behavior are considered proximately caused by that

behavior.” Schwab Short-Term Bond Mkt. Fund, 22

F.4th at 116 (quoting In re Am. Express Anti-Steering

Rules Antitrust Litig., 19 F.4th 127, 140 (2d Cir.

2021)).

This inquiry “require[s] drawing a line

between those whose injuries resulted from their

direct transactions with [the defendants] and those

whose injuries stemmed from their deals with third

parties.” Id.

Plaintiff here failed to allege that his injury was

proximately caused by Defendants. He did not assert

that he transacted directly with any Defendants or

21a

that Defendants controlled the Euroyen TIBOR

futures contract that Plaintiff purchased. Instead,

Plaintiff traded his futures contract with unknown

third parties before the contract’s maturity date. See

Third Am. Compl. ¶ 57.

Further, Plaintiff’s theory of liability depends on

a series of causal steps that separate Defendants’

conduct and his purported injury. Plaintiff asserts

that (1) Defendants submitted fraudulent rates to the

BBA; (2) the BBA then used these artificial

submissions to set Yen-LIBOR; (3) the manipulated

Yen-LIBOR affected Euroyen TIBOR during the Class

Period; and (4) any distorted benchmark rate also

affected the market’s perception of the value of

Plaintiff’s Euroyen TIBOR futures contract. Plaintiff’s

injury thus occurred far from “the first step following”

Defendants’ “harmful behavior.” Schwab Short-Term

Bond Mkt. Fund, 22 F.4th at 116 (citation omitted).

Existence of More Direct Victims. Direct victims of

an alleged antitrust conspiracy are situated to enforce

the antitrust laws because their “self-interest would

normally motivate them to vindicate the public

interest in antitrust enforcement.” AGC, 459 U.S. at

542. When only indirect victims bring suit, “it is

difficult to understand why the[ ] direct victims of the

conspiracy have not asserted any claim in their own

right.” Id. at 542 n.47; see also Gatt Commc’ns, Inc. v.

PMC Assocs., L.L.C., 711 F.3d 68, 79 (2d Cir. 2013) (“If

the ‘superior’ plaintiff has not sued, one may doubt the

existence of any antitrust violation at all.”) (internal

quotation marks omitted) (quoting Phillip Areeda &

Herbert Hovenkamp, Fundamentals of Antitrust Law,

§ 3.01c, at 3–9 to 3–10 (4th ed. 2011)).

22a

Plaintiff here is an indirect victim of the alleged

conspiracy. Direct victims might include traders of

interest-rate swaps—contracts in which a party

exchanges one stream of fixed interest-rate payments

for another flow of payments based on a variable,

“floating” rate, such as Yen-LIBOR or Euroyen

TIBOR. See Sonterra Cap. Master Fund Ltd. v. UBS

AG, 954 F.3d 529, 532–33 (2d Cir. 2020) (explaining

interest rate swaps that incorporate Yen-LIBOR).

Such a swap trader betting on the movement of

benchmark rates like Yen-LIBOR and Euroyen

TIBOR would be more directly harmed if Defendants

had engaged in an antitrust conspiracy to manipulate

Yen-LIBOR and Euroyen TIBOR.

Speculative Damages. We next consider whether

the “asserted damages are speculative,” because “a

high degree of speculation in a damages calculation

suggests that a given plaintiff is an inefficient engine

of enforcement.” IQ Dental Supply, Inc. v. Henry

Schein, Inc., 924 F.3d 57, 66–67 (2d Cir. 2019)

(citations omitted). Damages are speculative “where

countless other market variables could have

intervened to affect . . . pricing” and the “theory of

antitrust injury depends upon a complicated series of

market interactions.”

Reading Indus., Inc. v.

Kennecott Copper Corp., 631 F.2d 10, 13–14 (2d Cir.

1980). A district court should not be required to

entertain “multiple layers of speculation” and “create[]

. . . an alternative universe” to calculate damages. IQ

Dental Supply, 924 F.3d at 67 (cleaned up).

Here, Plaintiff failed to plead any injury. He

alleges that he entered and closed a short position in a

Euroyen TIBOR futures contract in 2006. In other

23a

words, he bet that there would be “an increase in

Euroyen TIBOR rates.” Third Am. Compl. ¶ 138.

Plaintiff alleges two acts occurring in August 2006

involving three-month Euroyen TIBOR futures, both

of which involved Defendants’ alleged attempts to

manipulate Yen-LIBOR upwards. But if true and

Euroyen TIBOR rates did increase, Plaintiff would

have benefited from Defendants’ conduct. See id.

(explaining that a trader who “go[es] short” would

“profit from an increase in Euroyen TIBOR rates”).

In any event, Plaintiff’s theory of damages is also

highly speculative.

As explained above, his

allegations rely on an attenuated chain of causation

that would complicate if not render impossible any

damages calculation. See supra at [20a].

Duplicative Recovery and Complex Damage

Apportionment. Finally, we consider “the difficulty of

identifying damages and apportioning them among

direct and indirect victims so as to avoid duplicative

recoveries.” Volvo N. Am. Corp. v. Men’s Int’l Pro.

Tennis Council, 857 F.2d 55, 66 (2d Cir. 1988). The

focus of this factor is on “keeping the scope of complex

antitrust trials within judicially manageable limits.”

AGC, 459 U.S. at 543.

Here, apportionment of any damages would be

difficult and there would be a risk of duplicative

recovery because Plaintiff’s theory of liability is

indirect and imprecise.

Plaintiff had no direct

dealings with Defendants but asserts an injury based

on alleged conduct that impacted the marketplace

generally. Damages would thus have to be calculated

based on specific transactions between third parties

24a

that were indirectly impacted by Defendants’ alleged

manipulation of benchmark rates. To the extent that

Plaintiff seeks damages based on trading volume, see

Third Am. Compl. ¶ 124 (“Billions in notional value . .

. in Euroyen futures contracts were transacted during

the Class Period”), such an approach would be vastly

overbroad. Cf. Gelboim, 823 F.3d at 779 (“Requiring

the [defendant] [b]anks to pay treble damages to every

plaintiff who ended up on the wrong side of an

independent LIBOR-denominated derivative . . .

would . . . also vastly extend the potential scope of

antirust liability in myriad markets where derivative

instruments have proliferated.”). The district court

thus correctly concluded that Plaintiff failed to allege

antitrust standing.

C. RICO Claims

Legal Principles

The RICO statute criminalizes certain conduct

arising from “a pattern of racketeering activity.” 18

U.S.C. § 1962(a)-(c). Congress defined “racketeering

activity” through numerous state and federal offenses,

commonly known as predicates. See id. § 1961(1).

RICO also provides “a private civil cause of action that

allows ‘[a]ny person injured in his business or property

by reason of a violation of section 1962’ to sue in

federal district court and recover treble damages,

costs, and attorney’s fees.’” RJR Nabisco, Inc., 579

25a

U.S. at 331, 136 S.Ct. 2090 (quoting 18 U.S.C.

§ 1964(c)) (alteration in original).

“To establish a RICO claim, a plaintiff must show:

(1) a violation of the RICO statute, 18 U.S.C. § 1962;

(2) an injury to business or property; and (3) that the

injury was caused by the violation of [§] 1962.” Cruz

v. FXDirectDealer, LLC, 720 F.3d 115, 120 (2d Cir.

2013) (citation omitted). As for this last requirement,

“a plaintiff must . . . establish that the underlying

§ 1962 RICO violation was the proximate cause of his

injury.” Empire Merchs., LLC v. Reliable Churchill

LLLP, 902 F.3d 132, 140 (2d Cir. 2018) (cleaned up).

“[T]he central question . . . is whether the alleged

violation led directly to the plaintiff’s injuries.” Anza

v. Ideal Steel Supply Corp., 547 U.S. 451, 461 (2006).

As with proximate causation in the antitrust context,

we “rarely ‘go beyond the first step’“ in the causal

chain. Empire Merchs., LLC, 902 F.3d at 141 (citation

omitted); see also Anza, 547 U.S. at 459–60 (looking to

the directness of injury, “speculative nature of the

proceedings,” risk of duplicative recoveries, and

existence of more immediate victims when analyzing

proximate causation in the civil RICO context).

Analysis

Plaintiff failed to allege that his proposed RICO

claims, premised on wire fraud, see 18 U.S.C. § 1343,

proximately caused his injury. As noted above, see

supra at 2[0a] Plaintiff’s alleged injury does not flow

directly from the first step in the causal chain. Not

only does Plaintiff fail to allege any direct dealings

with Defendants, but his asserted injury (a change in

26a

the value of his domestically traded Euroyen TIBOR

futures contract) is several steps removed from

Defendants’ alleged conduct (sending fraudulent YenLIBOR submissions to the BBA). See id. Plaintiff thus

cannot establish proximate causation for purposes of

his RICO claims for the same reason that he fails to do

so for his antitrust claim.12

III. CONCLUSION

For these reasons, the district court properly

dismissed Plaintiff’s CEA and antitrust claims and

denied leave to add civil RICO claims. We thus affirm

the judgment and orders of the district court and

dismiss the cross-appeal.

The parties agree that Plaintiff’s RICO claims fall or stand

with this Court’s causation analysis for antitrust standing.

27a

APPENDIX B

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

___________________

August Term 2021

Argued: May 24, 2022

Decided: October 18, 2022

Nos. 20-3626(L), 20-3775 (XAP)

___________________

JEFFREY LAYDON,

on behalf of himself and all others similarly situated,

Plaintiff-Appellant-Cross-Appellee,

COÖPERATIEVE RABOBANK U.A., BARCLAYS BANK PLC,

Société Générale S.A.,

Defendants-Appellees-Cross-Appellants,

THE ROYAL BANK OF SCOTLAND GROUP PLC, UBS AG,

LLOYDS BANKING GROUP PLC, UBS SECURITIES JAPAN

CO., LTD., THE ROYAL BANK OF SCOTLAND PLC, RBS

SECURITIES JAPAN LIMITED,

28a

Defendant-Appellees,*

___________________

On Appeal from the United States District Court

for the Southern District of New York

___________________

Before: POOLER, PARK, and LEE, Circuit Judges.

Plaintiff Jeffrey Laydon brought this putative

class action against more than twenty banks and

brokers, alleging a conspiracy to manipulate two

benchmark rates known as Yen-LIBOR and Euroyen

TIBOR. He claimed that he was injured after

purchasing and trading a Euroyen TIBOR futures

contract on a U.S.-based commodity exchange because

the value of that contract was based on a distorted,

artificial Euroyen TIBOR. Plaintiff brought claims

under the Commodity Exchange Act (“CEA”), 7 U.S.C.

§ 1 et seq., and the Sherman Antitrust Act, 15 U.S.C.

§ 1 et seq., and sought leave to assert claims under the

Racketeer Influenced and Corrupt Organizations Act

(“RICO”), 18 U.S.C. §§ 1962, 1964(c). The district

court (Daniels, J.) dismissed the CEA and antitrust

claims and denied leave to add the RICO claims.

Plaintiff appeals, arguing that the district court erred

by holding that the CEA claims were impermissibly

The Clerk of Court is respectfully directed to amend the

caption accordingly.

29a

extraterritorial, that he lacked antitrust standing to

assert a Sherman Act claim, and that he failed to

allege proximate causation for his proposed RICO

claims.

We affirm. The alleged conduct—i.e., that the

bank defendants presented fraudulent submissions to

an organization based in London that set a benchmark

rate related to a foreign currency—occurred almost

entirely overseas. Indeed, Plaintiff fails to allege any

significant acts that took place in the United States.

Plaintiff’s CEA claims are based predominantly on

foreign conduct and are thus impermissibly

extraterritorial. See Prime Int’l Trading, Ltd. v. BP

P.L.C., 937 F.3d 94, 106 (2d Cir. 2019). The district

court also correctly concluded that Plaintiff lacked

antitrust standing because he would not be an efficient

enforcer of the antitrust laws. See Schwab Short-Term

Bond Mkt. Fund v. Lloyds Banking Grp. PLC, 22 F.4th

103, 115–20 (2d Cir. 2021). Lastly, we agree with the

district court that Plaintiff failed to allege proximate

causation for his RICO claims. The judgment of the

district court is thus AFFIRMED.

_______________

ERIC F. CITRON, Goldstein & Russell, P.C.,

Bethesda, MD (Vincent Briganti, Margaret

MacLean, Lowey Dannenberg, P.C., White Plains,

NY, on the brief), for Plaintiff-Appellant-CrossAppellee Jeffrey Laydon.

THOMAS G. HUNGAR, Gibson, Dunn & Crutcher

LLP, Washington, DC (Russell B. Balikian,

Gibson, Dunn & Crutcher LLP, Washington, DC;

30a

Mark A. Kirsch, Eric J. Stock, Jefferson E. Bell,

Gibson, Dunn & Crutcher LLP, New York, NY, on

the brief), for Defendants-Appellees UBS AG and

UBS Securities Japan Co., Ltd.

MARC J. GOTTRIDGE, Herbert Smith Freehills New

York LLP, New York, NY (Lisa J. Fried, Herbert

Smith Freehills New York LLP, New York, NY;

Benjamin A. Fleming, Hogan Lovells US LLP,

New York, NY, on the brief), for DefendantAppellee Lloyds Banking Group plc.

NICOLE A. SAHARSKY, Mayer Brown LLP, New

York, NY (Steven Wolowitz, Andrew J. Calica,

Mayer Brown LLP, New York, NY, on the brief),

for Defendant-Appellee-Cross-Appellant Société

Générale S.A.

DAVID R. GELFAND, Tawfiq S. Rangwala, Milbank

LLP, New York, NY; Mark D. Villaverde, Milbank

LLP, Los Angeles, CA, for Defendant-AppelleeCross-Appellant Coöperatieve Rabobank U.A.

DAVID S. LESSER, King & Spalding LLP, New

York, NY; Robert G. Houck, Clifford Chance US

LLP, New York, NY, for Defendants-Appellees The

Royal Bank of Scotland plc, The Royal Bank of

Scotland Group plc, and RBS Securities Japan

Ltd.

_______________

31a

Park, Circuit Judge:

Plaintiff Jeffrey Laydon brought this putative

class action against more than twenty banks and

brokers, alleging a conspiracy to manipulate two

benchmark rates known as Yen-LIBOR and Euroyen

TIBOR. He claimed that he was injured after

purchasing and trading a Euroyen TIBOR futures

contract on a U.S.-based commodity exchange because

the value of that contract was based on a distorted,

artificial Euroyen TIBOR. Plaintiff brought claims

under the Commodity Exchange Act (“CEA”), 7

U.S.C. § 1 et seq., and the Sherman Antitrust Act,

15 U.S.C. § 1 et seq., and sought leave to assert claims

under the Racketeer Influenced and Corrupt

Organizations Act (“RICO”), 18 U.S.C. §§ 1962,

1964(c). The district court (Daniels, J.) dismissed the

CEA and antitrust claims and denied leave to add the

RICO claims. Plaintiff appeals, arguing that the

district court erred by holding that the CEA claims

were impermissibly extraterritorial, that he lacked

antitrust standing to assert a Sherman Act claim, and

that he failed to allege proximate causation for his

proposed RICO claims.

We affirm. The alleged conduct—i.e., that the bank

defendants presented fraudulent submissions to an

organization based in London that set a benchmark

rate related to a foreign currency—occurred almost

entirely overseas. Indeed, Plaintiff fails to allege any

significant acts that took place in the United States.

Plaintiff’s CEA claims are based predominantly on

foreign conduct and are thus impermissibly

extraterritorial. See Prime Int’l Trading, Ltd. v. BP

P.L.C., 937 F.3d 94, 106 (2d Cir. 2019). The district

32a

court also correctly concluded that Plaintiff lacked

antitrust standing because he would not be an

efficient enforcer of the antitrust laws. See Schwab

Short-Term Bond Mkt. Fund v. Lloyds Banking Grp.

PLC, 22 F.4th 103, 115–20 (2d Cir. 2021). Lastly, we

agree with the district court that Plaintiff failed to

allege proximate causation for his RICO claims. The

judgment of the district court is thus affirmed.

I. BACKGROUND

A. Factual Background

Yen-LIBOR and Euroyen TIBOR

Plaintiff alleges the manipulation of two

benchmark rates known as Yen-LIBOR and

Euroyen TIBOR, which reflected the interest rates

at which banks can lend Japanese Yen outside of

Japan. 1 There were two key differences between

Yen-LIBOR and Euroyen TIBOR. First, different

entities set the rates. During the relevant period, the

Japanese Bankers Association (“JBA”) set Euroyen

The names are short for “Yen London Interbank Offered

Rate” and “Euroyen Tokyo Interbank Offered Rate,” respectively.

The Euroyen, also known as offshore yen, refers to deposits

denominated in Japanese Yen held outside of Japan. Yen-LIBOR

and Euroyen TIBOR are based on “the interest rates at which

banks offer to lend unsecured funds denominated in Japanese

Yen to other banks in the offshore wholesale money market (or

interbank market).” Third Am. Compl. ¶ 122.

33a

TIBOR by accepting submissions from a panel of

banks headquartered primarily in Japan. Each bank

submitted to the JBA the interest rate at which it

could borrow offshore Yen. The JBA then calculated

Euroyen TIBOR for various maturities by discarding

the two highest and two lowest submissions and

averaging the remaining ones. Yen-LIBOR, on the

other hand, was a London-based benchmark set by

the British Bankers’ Association (“BBA”). Each bank

sitting on a panel of London-based banks submitted to

the BBA the rate at which it could borrow Yen outside

of Japan. The BBA calculated Yen- LIBOR by

discarding the highest and lowest 25% of submissions

and determining the average of the remaining 50%.

The second major difference between the rates was

that they were set at different times. “Euroyen TIBOR

[was] calculated on each business day as of 11:00

a.m. Tokyo time,” while “Yen-LIBOR [was] calculated

each business day as of 11:00 a.m. London time.” Third

Am. Compl. ¶¶ 126, 130.

The Alleged Conduct

Plaintiff Laydon is a U.S. resident who. traded

three-month Euroyen TIBOR futures contracts

between January 1, 2006 and June 30, 2011 (the

“Class Period”). This type of contract is an “agreement

to buy or sell a Euroyen time deposit having a

principal value of 100,000,000 Japanese Yen with a

three-month maturity commencing on a specific future

34a

date.” Third Am. Compl. ¶ 134.2 Plaintiff placed these

trades on the Chicago Mercantile Exchange (“CME”),

a U.S.-based futures exchange.

Specifically, he

“initiated a short position by selling five . . . Euroyen

TIBOR futures contracts on July 13, 2006 at a price of

$99.315 per contract” and then “liquidated that

position by purchasing five long . . . futures contracts

on August 3, 2006 at a price of $99.490 per contract for

loss of $2,150.35.” Id. ¶ 911. Defendants-Appellees

served as panel banks for the BBA in setting YenLIBOR during the relevant period.3 Plaintiff also sued

several derivatives brokers who allegedly helped

Defendants manipulate Yen-LIBOR and Euroyen

TIBOR.4

Plaintiff maintains that Defendants conspired to

manipulate Yen-LIBOR and Euroyen TIBOR by giving

false Yen-LIBOR submissions to the BBA, which

affected the price of Plaintiff’s three- month Euroyen

Unlike an “ordinary bank deposit” that is “payable on

demand,” a time deposit cannot be withdrawn from the bank

before a set date. See 10 Am. Jur. 2d Banks and Fin. Insts. § 641.

These include UBS AG and UBS Securities Japan Co., Ltd.

(“UBS”); the Royal Bank of Scotland Group plc, The Royal Bank

of Scotland plc, and RBS Securities Japan Limited (“RBS”);

Lloyds Banking Group plc (“Lloyds”); Barclays Bank PLC

(“Barclays”); Société Générale S.A. (“SocGen”); and Coöperatieve

Rabobank U.A. (“Rabobank”) (collectively, “Defendants”).

The broker defendants who initially joined this appeal were

ICAP plc and ICAP Europe Limited (collectively, “ICAP”) and

Tullett Prebon plc. We granted Plaintiff’s motion to sever and

stay the appeal with respect to ICAP and Tullett Prebon and

remanded to allow the district court to consider a proposed classaction settlement between

35a

TIBOR futures. Although Defendants did not serve as

panel banks for the JBA in setting Euroyen TIBOR,

Plaintiff alleges that their purported manipulation of

Yen-LIBOR — which is set earlier in the day —

affected Euroyen TIBOR. See Third Am. Compl. ¶¶

844, 845 (alleging that “[c]hanges in Yen-LIBOR

will be immediately reflected in Euroyen TIBOR rates

. . . once Euroyen TIBOR opens” and that “the

reporting of false and inaccurate Yen-LIBOR rates

. . .cause[d] artificial Euroyen TIBOR rates and

artificial Euroyen TIBOR futures prices”). He further

asserts that the “driving force[s] behind Defendants’

manipulation” were conflicts of interest. Id. ¶ 167.

Namely, Plaintiff claims that Defendants held their

own “Euroyen-based derivatives positions” and that

their traders’ “compensation was based in part on

the profit and loss calculation” of Defendants’

trading books. Id. And “even very small movements

in Yen- LIBOR . . . would have a significant

positive impact on the profitability of” trading

positions, so Defendants’ traders had incentives to

manipulate Yen-LIBOR. Id. To support these

allegations, Plaintiff relies on information revealed

in various domestic and foreign enforcement

proceedings. He points to Defendants’ admissions

concerning actions taken by their employees at

overseas trading desks. These allegations describe

Defendants’ foreign-based employees submitting false

rates to the BBA, as well as traders asking other

employees responsible for sending submissions to the

BBA to move the benchmark rate in a direction that

36a

would benefit the trader’s trading position.5 As for

domestic conduct, Plaintiff primarily relies on a

handful of communications sent from Defendants’

foreign-based employees through or to servers located

in the United States. 6 Plaintiff does not allege that

Defendants’ employees sent artificial submissions to

the BBA from within the United States.

On behalf of a putative class, Plaintiff sought an

unspecified amount in regular and treble damages,

For example, Plaintiff alleges that RBS Yen traders

“attempted to manipulate Yen-LIBOR by making hundreds of

manipulative requests of RBS’ Primary Submitter, Paul White,

and London-based traders.” Third Am. Compl. ¶ 267 (“RBS’

derivatives traders’ requests for artificial Yen- LIBOR

submissions were common and made openly on the trading floors

in Asia and London.”). Similarly, Plaintiff asserts that UBS

began tendering “false Yen-LIBOR and Euroyen TIBOR”

submissions as early as 2006. Id. ¶ 241. Plaintiff focuses on the

actions of UBS Yen Traders Tom Hayes and Roger Darin, who

operated from UBS desks in Tokyo, Singapore, and Zurich, and

were prosecuted in the United States and the United Kingdom

for manipulating Yen-LIBOR.

Plaintiff cites a criminal complaint brought by U.S.

prosecutors against UBS Yen Trader, Tom Alexander William

Hayes, which alleges that Hayes “caused confirmations . . . to be

transmitted from outside the United States to a counterparty

based in Purchase, New York, for transactions involving interest

rate derivative products tied to a benchmark interest rate which

[Hayes] was secretly manipulating.” Joint App’x at 2036.

Plaintiff also relies on the testimony of a Rabobank employee,

Anthony Allen, from his trial for wire fraud stemming from

manipulation of Yen-LIBOR, reflecting that Allen knew that

some of the counterparties to Rabobank’s transactions were in

the United States. See Third Am. Compl. ¶¶ 92–93.

37a

as well as an injunction prohibiting Defendants

from continuing their alleged unlawful conduct.

B. Procedural Background

Plaintiff filed this action in 2012. On April 15,

2013, before the district court resolved any

substantive motions, Plaintiff filed the Second

Amended Complaint, alleging claims under the CEA, 7

U.S.C. § 1 et seq., and Section 1 of the Sherman

Antitrust Act, 15 U.S.C. § 1 et seq.7

Over nearly a decade of litigation, the district

court issued several orders dismissing various claims

and defendants. First, on March 28, 2014, the court

granted Defendants’ motion to dismiss Plaintiff’s

antitrust claims, finding that Plaintiff lacked

antitrust standing in part because he would not be

an “efficient enforcer” of the alleged antitrust

violation. The court allowed the remaining CEA

claims to proceed.

Plaintiff next sought leave to file the Third

Amended Complaint to add RICO claims and

additional defendants. On March 31, 2015, the

district court allowed Plaintiff to file the new

pleadings but denied leave to add the RICO claims,

finding that Plaintiff did “not show a sufficiently

direct connection between the alleged misconduct and

Plaintiff also brought an unjust-enrichment claim and a CEA

vicarious-liability claim, but he does not appeal the dismissal of

those claims.

38a

the injury to support a RICO claim.” Special App’x at

58. That same day, the court also dismissed

several defendants for lack of personal jurisdiction,

Two years later, on March 10, 2017, the district

court dismissed several new defendants named in the

Third Amended Complaint — including the broker

Defendants ICAP and Tullett Prebon plc — for lack

of personal jurisdiction, finding that their alleged

conduct did not create a substantial connection with

the United States and once again rejecting Plaintiff’s

“‘conspiracy theory’ of jurisdiction.” Special App’x at

73–79.

Finally, on August 27, 2020, the court

dismissed the surviving CEA claims against the

remaining

defendants,

finding

the

claims

impermissibly extraterritorial because “Defendants’

alleged wrongful conduct . . . is almost entirely

foreign.” Id. at 86. Plaintiff filed a timely notice of

appeal.8

Defendants Barclays, SocGen, and Rabobank filed a crossappeal, challenging the district court’s November 10, 2014 order

denying them leave to file a motion to dismiss based on lack of

personal jurisdiction.

We severed the main appeal and the

cross appeal as to Barclays and ordered a limited remand for the

district court to consider the approval of a proposed class action

settlement between Plaintiff and Barclays. As to SocGen and Rabobank,

we need not reach the issues in their cross-appeal — which concern

whether the district court properly found that they forfeited or waived

their personal jurisdiction arguments — because we affirm the district

court’s dismissal orders on the merits.

39a

II. DISCUSSION

Plaintiff argues that the district court erred by

dismissing his CEA claims as impermissibly

extraterritorial. He also challenges the district court’s

decisions to dismiss his antitrust claims for lack of

standing and to reject his RICO claims for lack

of proximate causation.9 “We review de novo the

dismissal of a complaint for failure to state a claim

upon which relief can be granted.” Myun-Uk Choi v.

Tower Rsch. Cap. LLC, 890 F.3d 60, 65 (2d Cir. 2018)

(citation omitted). “The denial of leave to amend is

similarly reviewed de novo because the denial was

based on an interpretation of law, such as futility.”

Gelboim v. Bank of Am. Corp., 823 F.3d 759, 769 (2d

Cir. 2016) (cleaned up). We agree with the district

court that Plaintiff failed to state a claim under the

CEA because the alleged conduct occurred

predominantly outside the United States. We also

agree that .Plaintiff lacks antitrust standing and

failed to allege proximate causation for his RICO