On March 28, 2014, Judge Daniels of the Southern District of New York dismissed antitrust and unjust enrichment claims against over 20 banks accused of manipulating prices in the Euroyen interbank lending market by submitting false rate quotes to Yen-LIBOR and Euroyen TIBOR rate-setting organizations.  Laydon v. Mizuho Bank, Ltd., No. 12-cv-3419 (S.D.N.Y. Mar. 28, 2014).  The plaintiff, a short purchaser of Euroyen TIBOR futures contracts, also brought claims under the Commodities Exchange Act, which the court allowed to go forward.

The court based its dismissal of the price-fixing claim on lack of antitrust standing and failure to allege a restraint of trade.  The plaintiff lacked antitrust standing for two reasons: (1) failure to plead antitrust injury and (2) the indirect, remote and speculative nature of his alleged injury—while the alleged misconduct involved manipulating present-day interbank lending rates, the alleged injury was suffered in the futures market.  Although the plaintiff alleged that prices were distorted, he failed to allege that the distortion resulted from a reduction in competition.  The ruling was partially based on the unique nature of the rate-setting process, which is neither supposed to be competitive nor collaborative.  Instead, “each bank was supposed to independently contribute its submission to be evaluated collectively with other bank submissions.”

In holding that the plaintiff failed to allege a restraint of trade, the court noted, “Plaintiff merely alleges that prices may have been different.  Plaintiff does not, however, allege that trades in Euroyen TIBOR futures contracts were in any way restrained by the alleged misconduct.”  The court analyzed the alleged misconduct under the rule of reason and found that the plaintiff had failed to plead any anticompetitive effects.  “There are no allegations that banks competed less, or were forced out of any of these markets.  Nor is there any allegation that output of Euroyen futures contracts was eliminated or diminished.  Absent any such allegations, Plaintiffs’ claim does not sufficiently plead a violation of the Sherman Act.”