UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK IN RE: SSA BONDS ANTITRUST LITIGATION This Document Relates To All Actions 1:16-cv-03711-ER MEMORANDUM OF LAW IN SUPPORT OF FOREIGN DEALER DEFENDANTS’ MOTION TO DISMISS THE SECOND CONSOLIDATED AMENDED CLASS ACTION COMPLAINT FOR LACK OF PERSONAL JURISDICTION AND IMPROPER VENUE Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 1 of 50 TABLE OF CONTENTS Page PRELIMINARY STATEMENT .................................................................................................... 1 BACKGROUND ............................................................................................................................ 4 A. Plaintiffs and General Allegations in the SAC ....................................................... 4 B. Foreign Dealer Defendants ..................................................................................... 5 C. Jurisdictional Allegations........................................................................................ 5 LEGAL STANDARDS .................................................................................................................. 6 ARGUMENT.................................................................................................................................. 7 I. FOREIGN DEALER DEFENDANTS ARE NOT SUBJECT TO SPECIFIC JURISDICTION IN NEW YORK...................................................................................... 7 A. Plaintiffs Fail to Allege that Manipulative Conduct Occurred in New York or the United States........................................................................................ 8 B. Plaintiffs’ Remaining Allegations Do Not Establish Sufficient Contacts with the United States to Establish Personal Jurisdiction..................................... 11 1. Plaintiffs’ Allegations Do Not Establish Purposeful Availment or the Causal Nexus Necessary to Support Personal Jurisdiction..............13 2. Plaintiffs Fail to Allege Foreign Dealer Defendants Expressly Aimed Their Conduct at New York or the United States ..........................20 II. PLAINTIFFS MAY NOT IMPUTE OTHER DEFENDANTS’ JURISDICTIONAL CONTACTS TO FOREIGN DEALER DEFENDANTS ............... 26 A. Plaintiffs’ Allegations Regarding the Contacts of Affiliates Fail to Confer Jurisdiction Over Foreign Dealer Defendants .......................................... 27 B. Plaintiffs’ Conspiracy Allegations Are Insufficient to Confer Jurisdiction over Foreign Dealer Defendants ....................................................... 29 1. Plaintiffs’ Conspiracy Allegations Do Not Comport with Due Process .......................................................................................................30 2. Plaintiffs’ Conspiracy Allegations Do Not Satisfy Any Applicable Jurisdictional Rule or Statute ..................................................32 Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 2 of 50 -ii- III. THE FEDERAL STATUTE ON WHICH PLAINTIFFS RELY DOES NOT PROVIDE ANY ALTERNATE BASIS FOR JURISDICTION...................................... 34 IV. PLAINTIFFS’ FAILURE TO ALLEGE PROPER VENUE UNDER THE CLAYTON ACT PRECLUDES PERSONAL JURISDICTION OVER VENUE DEFENDANTS.................................................................................................. 35 V. FOREIGN DEALER DEFENDANTS ARE NOT SUBJECT TO GENERAL JURISDICTION ............................................................................................................... 36 A. Foreign Dealer Defendants Are Not “At Home” in New York ............................ 36 B. Foreign Dealer Defendants Are Not Subject to General Jurisdiction by Registering Their New York Branches................................................................. 37 VI. CONSIDERATIONS OF FAIR PLAY, SUBSTANTIAL JUSTICE, AND INTERNATIONAL COMITY SUPPORT DISMISSAL................................................. 38 CONCLUSION............................................................................................................................. 40 Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 3 of 50 -iii- TABLE OF AUTHORITIES Page(s) Cases 7 W. 57th St. Realty Co. v. Citigroup, Inc., 2015 WL 1514539 (S.D.N.Y. Mar. 31, 2015) ................................................................. passim In re Aluminum Warehousing Antitrust Litig., 2015 WL 6472656 (S.D.N.Y. Oct. 23, 2015) ............................................................................7 In re Aluminum Warehousing Antitrust Litig., 90 F. Supp. 3d 219 (S.D.N.Y. 2015)................................................................................ passim AmTrust Fin. Servs., Inc. v. Lacchini, 260 F. Supp. 3d 316, 333 (S.D.N.Y. 2017)............................................................................23n Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (1987).................................................................................................................39 Axiom Foods, Inc. v. Acerchem Int’l, Inc., 874 F.3d 1064 (9th Cir. 2017) ...............................................................................................23n Beach v. Citigroup Alternative Investments LLC, 2014 WL 904650 (S.D.N.Y. Mar. 7, 2014) .......................................................................9n, 14 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)...............................................................................................................15n In re Braskem S.A. Sec. Litig., 246 F. Supp. 3d 731 (S.D.N.Y. 2017)......................................................................................19 Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017).......................................................................................................11, 14 Brown v. Lockheed Martin Corp., 814 F.3d 619 (2d Cir. 2016)....................................................................................... 36-37, 39n Calder v. Jones, 465 U.S. 783 (1984)...................................................................................................................8 Charles Schwab Corp. v. Bank of America Corp., 883 F.3d 68 (2d Cir. 2018)............................................................................................... passim Chew v. Dietrich, 143 F.3d 24 (2d Cir. 1998).........................................................................................................8 Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 4 of 50 -iv- Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158 (2d Cir. 2010).....................................................................................................38 Daimler AG v. Bauman, 571 U.S. 117 (2014)......................................................................................................... passim Daniel v. American Bd. of Emergency Med., 428 F.3d 408 (2d Cir. 2005).....................................................................................................35 Davis v. Farmers’ Co-op. Equity Co., 262 U.S. 312 (1923)...............................................................................................................37n Dennis v. JPMorgan Chase & Co., 2018 WL 6169313 (S.D.N.Y. Nov. 26, 2018)................................................................. passim In re Dental Supplies Antitrust Litig., 2017 WL 4217115 (E.D.N.Y. Sept. 20, 2017) ........................................................................30 Expoconsul Int’l, Inc. v. A/E Systems, Inc., 711 F. Supp. 730 (S.D.N.Y. 1989) ........................................................................................35n Famular v. Whirlpool Corp., 2017 WL 2470844 (S.D.N.Y. June 7, 2017) ...........................................................................14 In re Foreign Exch. Benchmark Rates Antitrust Litig., 2016 WL 1268267 (S.D.N.Y. Mar. 31, 2016) .................................................................38n, 38 Gates v. Wilkinson, 2003 WL 21297296 (S.D.N.Y. June 4, 2003) .........................................................................35 Gerstle v. Nat’l Credit Adjusters, LLC, 76 F. Supp. 3d 503 (S.D.N.Y. 2015)................................................................................10n, 28 Gmurzynska v. Hutton, 257 F. Supp. 2d 621 (S.D.N.Y. 2003)................................................................................ 39-40 Grove Press, Inc. v. Angleton, 649 F.2d 121 (2d Cir. 1981).....................................................................................................31 Gucci America, Inc. v. Weixing Li, 768 F.3d 122 (2d Cir. 2014)................................................................................. 34, 37n, 38-39 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984)...........................................................................................................26, 31 Indosuez Int’l Fin. B.V. v. Nat’l Reserve Bank, 98 N.Y.2d 238 (2002) ..............................................................................................................38 Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 5 of 50 -v- Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945).................................................................................................................26 Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984).............................................................................................................6, 30 Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595 (2013)...............................................................................................................37n Laydon v. Bank of Tokyo-Mitsubishi UFJ, Ltd., 2017 WL 1113080 (S.D.N.Y. Mar. 10, 2017) ................................................................. passim Laydon v. Mizuho Bank, Ltd., 2015 WL 1515358 (S.D.N.Y. Mar. 31, 2015) ................................................................. passim Leasco Data Processing Equipment Corp. v. Maxwell, 468 F.2d 1326 (2d Cir. 1972)...................................................................................................31 Legal Servs. Corp. v. Velazquez, 531 U.S. 533 (2001)...............................................................................................................37n In re LIBOR-Based Fin. Instruments Antitrust Litig., 2015 WL 6243526 (S.D.N.Y. Oct. 20, 2015) .................................................................. passim In re LIBOR-Based Fin. Instruments Antitrust Litig., 2015 WL 6696407 (S.D.N.Y. Nov. 3, 2015)...........................................................................27 In re LIBOR-Based Fin. Instruments Antitrust Litig., 2016 WL 1558504 (S.D.N.Y. Apr. 15, 2016)........................................................................38n In re LIBOR-Based Fin. Instruments Antitrust Litig., 2016 WL 7378980 (S.D.N.Y. Dec. 20, 2016) .......................................................................20n Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161 (2d Cir. 2013).................................................................................................8, 38 In re London Silver Fixing, Ltd., Antitrust Litig., 2018 WL 3585277 (S.D.N.Y. July 25, 2018) ..........................................................................17 Lopez v. Shopify Inc., 2017 WL 2229868 (S.D.N.Y. May 23, 2017) .....................................................19, 26, 37n, 38 Madison Capital Markets, LLC v. Starneth Europe B.V., 2016 WL 4484251 (S.D.N.Y. Aug. 23, 2016).......................................................................39n Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560 (2d Cir. 1996).......................................................................................................40 Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 6 of 50 -vi- Morill v. Scott Fin. Corp., 873 F.3d 1136 (9th Cir. 2017) ...............................................................................................23n Motorola Credit Corp. v. Uzan, 132 F. Supp. 3d 518 (S.D.N.Y. 2015)....................................................................................38n In re N. Sea Brent Crude Oil Futures Litig., 2017 WL 2535731 (S.D.N.Y. June 8, 2017) ...........................................................................30 Papasan v. Allain, 478 U.S. 265 (1986)...............................................................................................................15n Penguin Group (USA) Inc. v. American Buddha, 609 F.3d 30 (2d Cir. 2010).........................................................................................................6 Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952)...............................................................................................................36n Pincione v. D’Alfonso, 506 F. App’x 22 (2d Cir. 2012) ...............................................................................................35 In re Platinum & Palladium Antitrust Litig., 2017 WL 1169626 (S.D.N.Y. Mar. 28, 2017) ...................................................3, 10n, 20n, 23n Porina v. Marward Shipping Co., 521 F.3d 122 (2d Cir. 2008)...................................................................................................34n In re Roman Catholic Diocese, 745 F.3d 30 (2d Cir. 2014).........................................................................................................7 Rush v. Savchuk, 444 U.S. 320 (1980).................................................................................................................26 In re Shulman Transp. Enterprises, Inc., 744 F.2d 293 (2d Cir. 1984).....................................................................................................31 Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221 (2d Cir. 2014).....................................................................................................36 Sonterra Capital Master Fund Ltd. v. Credit Suisse Group AG, 277 F. Supp. 3d 521 (S.D.N.Y. 2017)................................................................................7, 20n In re SSA Bonds Antitrust Litig., No. 16 Civ. 3711 (ER), slip op. (S.D.N.Y. Aug. 28, 2018)............................................... 16-18 Sullivan v. Barclays PLC, 2017 WL 685570 (S.D.N.Y. Feb. 21, 2017).................................................................... passim Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 7 of 50 -vii- In re Syngenta AG MIR 162 Corn Litig., 2016 WL 2866166 (D. Kan. May 17, 2016)..........................................................................37n Tera Group, Inc. v. Citigroup, Inc., 2018 WL 4732426 (S.D.N.Y. Sept. 28, 2018).........................................................................28 In re Terrorist Attacks on Sept. 11, 2001, 349 F. Supp. 2d 765 (S.D.N.Y. 2005)..............................................................................33n, 33 In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659 (2d Cir. 2013)................................................................................................... 6-7 U.S. Bank Nat’l Ass’n v. Bank of America, N.A., 2016 WL 5118298 (S.D.N.Y. Sept. 20, 2016).......................................................................37n U.S. v. Watchmakers of Switzerland Info. Ctr., 133 F. Supp. 40 (S.D.N.Y. 1955) ..........................................................................................35n Union of Needletrades, Indus. and Textile Emps., AFL-CIO, CLC v. U.S. I.N.S., 336 F.3d 200 (2d Cir. 2003)...................................................................................................31n Walden v. Fiore, 571 U.S. 277 (2014)......................................................................................................... passim Waldman v. Palestine Liberation Org., 835 F.3d 317 (2d Cir. 2016)............................................................................................. passim Rules Fed. R. Civ. P. 4(k) ..................................................................................................32, 33n, 33, 34n Statutes 15 U.S.C. § 22...................................................................................................................... 5, 34-35 N.Y. Banking Law § 200...........................................................................................................................37, 38n, 38 § 200(3)............................................................................................................................37, 38n § 200-b .....................................................................................................................................38 Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 8 of 50 Foreign Dealer Defendants 1 respectfully submit this joint memorandum of law in support of their motion to dismiss with prejudice the Second Consolidated Amended Class Action Complaint (Doc. 506) (the "Complaint" or "SAC") for lack of personal jurisdiction and venue pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3). PRELIMINARY STATEMENT Plaintiffs, sophisticated institutional investors, continue to claim that a small subset of traders based outside the U.S., in Europe and Asia, colluded to manipulate the prices of U.S. dollar-denominated ("USD") supranational, sovereign, and agency bonds ("SSA bonds" or "USD SSA bonds"). On August 24, 2018, this Court dismissed the Consolidated Amended Class Action Complaint ("CAC") (Doc. 306), Plaintiffs' third attempt to adequately plead its claims, as to all Defendants, because Plaintiffs failed to establish antitrust standing. Doc. 495. Like its predecessors, the CAC also failed to establish personal jurisdiction and proper venue over Foreign Dealer Defendants and Venue Defendants, respectively, though the Court did not reach those issues. Id. at 11 n.13. Now in the SAC, their fourth attempt, Plaintiffs again fail to 1 Defendants adopt Plaintiffs' defined term "Dealer Defendants" for convenience for purposes of this motion only, and notwithstanding Plaintiffs' improper group pleading. See Dealer Defendants' Memorandum of Law in Support of Their Joint Motion to Dismiss the Second Consolidated Amended Complaint for Lack of Subject Matter Jurisdiction and Failure to State a Claim ("Merits Br.") at Part III. Foreign Dealer Defendants are: Barclays Bank PLC, Barclays Capital Securities Limited, Barclays Services Limited, BNP Paribas, Citigroup Global Markets Limited, Credit Agricole Corporate & Investment Bank, Credit Suisse AG, Credit Suisse International, Credit Suisse Securities (Europe) Ltd., Nomura International pie, Royal Bank of Canada, RBC Europe Limited, and The Toronto- Dominion Bank. In support of this motion, Foreign Dealer Defendants submit the declarations of: Jason Wright (Barclays Bank PLC); Victoria E.C. Hardy (Barclays Capital Securities Limited); Hannah Ellwood (Barclays Services Limited); Stephanie Gyetvan (BNP Paribas); Thomas Reich ( ); Matt Jerman (Citigroup Global Markets Limited); Olivier Chazareix (Credit Agricole Corporate & Investment Bank); Gene Kim (Credit Agricole Corporate & Investment Bank; July 13, 2017 declaration and Dec. 11, 2017 supplemental declaration); Daniel Klay (Credit Suisse AG); Damian M. Bisseker (Credit Suisse International); Damian M. Bisseker (Credit Suisse Securities (Europe) Ltd.); Daisy Le Vay (Nomura International pie; July 14, 2017 declaration and Dec. 12, 2017 supplemental declaration); Paul Serritella (Royal Bank of Canada); Andriana Zacharia (RBC Europe Limited); and Moti Jungreis (The Toronto-Dominion Bank). All Foreign Dealer Defendants also join in the separate Motion to Dismiss the Second Consolidated Amended Class Action Complaint for Lack of Subject Matter Jurisdiction and Failure to State a Claim. Foreign Dealer Defendants Barclays Capital Securities Limited, Barclays Services Limited, Credit Suisse International, Credit Suisse Securities (Europe) Ltd., and Nomura International pie (the "Venue Defendants") also challenge venue in New York. Unless otherwise noted, all internal citations and quotation marks are omitted. Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 9 of 50 adequately plead their claims. As set forth in the Merits Brief, Plaintiffs' latest complaint still suffers from multiple flaws that compel dismissal, including the same standing flaw that warranted dismissal previously. In addition, as demonstrated herein, Plaintiffs also still fail to cure the jurisdictional deficiencies that Foreign Dealer Defendants identified in two previous rounds of briefing. For the reasons explained below, the SAC fails to plead an adequate basis for the exercise of personal jurisdiction over Foreign Dealer Defendants, which requires dismissal of all claims against them. First and foremost, Plaintiffs fail to establish that Foreign Dealer Defendants are subject to specific jurisdiction because they have not alleged that Foreign Dealer Defendants participated in any wrongful conduct within or specifically directed at New York, or elsewhere in the United States. Plaintiffs allege no misconduct occurring anywhere in the United States. Further, Plaintiffs' allegations regarding a handful of transactions with certain Defendants - purportedly manipulated through conduct outside the U.S. by traders outside the U.S. related to bonds issued by non-U.S. entities that are traded worldwide - fall woefully short of plausibly suggesting that the United States was a "focal point" of any alleged misconduct. Rather, Plaintiffs cling to the contention that Foreign Dealer Defendants are properly before this Court because it was "foreseeable" that Foreign Dealer Defendants' conduct abroad could affect the United States. But this contention is directly contrary to recent Second Circuit precedent. In Charles Schwab Corp. v. Bank of America Corp., the Second Circuit considered similar allegations that overseas manipulation affected instruments traded in the United States, and held that such allegations cannot give rise to jurisdiction because they merely establish that alleged overseas manipulation had a foreseeable effect on financial instruments traded in the United States. 883 F .3d 68, 84 (2d Cir. 2018). That decision is controlling authority that -2- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 10 of 50 compels dismissal, as Judge Kaplan recently held in addressing similar jurisdictional allegations. See Dennis v. JPMorgan Chase & Co., 2018 WL 6169313, at *54-55 (S.D.N.Y. Nov. 26, 2018) ("BBSW"). And even prior to Schwab, at least five other judges in this district recently refused to exercise personal jurisdiction over foreign banks (including most of the Foreign Dealer Defendants) for similar reasons. See In re Platinum & Palladium Antitrust Litig., 2017 WL 1169626, at *42, *44 (S.D.N.Y. Mar. 28, 2017) (Woods, J.); Sullivan v. Barclays PLC, 2017 WL 685570, at *43-45 (S.D.N.Y. Feb. 21, 2017) (Castel, J.); In re LIBOR-Based Fin. Instruments Antitrust Litig., 2015 WL 6243526, at *20 (S.D.N.Y. Oct. 20, 2015) (Buchwald, J.) ("LIBOR IV''); 7 W 57th St. Realty Co. v. Citigroup, Inc., 2015 WL 1514539, at *10-11 (S.D.N.Y. Mar. 31, 2015) (Gardephe, J.); Laydon v. Mizuho Bank, Ltd., 2015 WL 1515358, at *2, 5-6 (S.D.N.Y. Mar. 31, 2015) (Daniels, J.) ("Laydon V''). The allegations here warrant the same treatment. Plaintiffs' remaining arguments for jurisdiction fall flat. First, even if Plaintiffs had adequately alleged that a U.S.-based affiliate of any Foreign Dealer Defendant engaged in suit- related conduct, Plaintiffs cannot impute any suit-related contacts by any U.S. affiliates of Foreign Dealer Defendants, because they fail to allege the requisite agency relationship. Second, Plaintiffs cannot rely on a theory of conspiracy-based jurisdiction to extend jurisdiction over Foreign Dealer Defendants because Plaintiffs have not plausibly alleged that Foreign Dealer Defendants directed, controlled, knew about or benefitted from any in-forum conduct of other Defendants, as would be required to make any conspiracy-based theory of jurisdiction constitutionally viable. Third, the federal statute on which Plaintiffs rely does not offer an alternate basis for jurisdiction here. Fourth, to the extent that Plaintiffs' antitrust claim relies on Section 12 of the Clayton Act to assert jurisdiction, Plaintiffs have failed to allege proper venue as to the Venue Defendants. Fifth, no Foreign Dealer Defendant is subject to general jurisdiction -3- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 11 of 50 in New York, as each entity is organized under the laws of a foreign country where it also maintains its principal place of business. Because Foreign Dealer Defendants are not "at home" in New York and have not consented to suit in New York, they are not subject to general jurisdiction here. Finally, Plaintiffs' effort to assert jurisdiction in New York based on allegations of overseas misconduct with no nexus to the United States threatens international comity and would be unreasonable under the circumstances of this case. As a result, Plaintiffs' claims should be dismissed as to Foreign Dealer Defendants. BACKGROUND A. Plaintiffs and General Allegations in the SAC Named Plaintiffs are three investment funds, one based in Pennsylvania and the other two based in Alaska, which purport to have directly transacted in USD SSA bonds2 with one or more Defendants. SAC~~ 36-41. The SAC purports to allege a conspiracy among a subset of individual SSA bond traders located in Europe and Asia, stretching from January 1, 2009 to December 31, 2015 (the "Class Period"), to manipulate the price of certain SSA bond transactions. The traders named as defendants in the Complaint are all alleged to have been based in the United Kingdom, and there is no allegation that they were based in the United States for any portion of the Class Period. SAC~~ 108-14.3 Plaintiffs conclusorily allege that the . 2 Plaintiffs define sovereign debt, under the SSA bond umbrella, to include sub-sovereign debt. SAC if 117. Excluded, however, is government debt issued in a sovereign's domestic currency, such as U.S. Treasury bonds. Id. if 117 n.25. Plaintiffs' arbitrary definition of"SSA bonds" enc.ompasses an amorphous group of debt securities. See Merits Br. at Part I.A.2. 3 Among these traders are Defendants Hiren Gudka, Bhardeep Singh Heer, Amandeep Singh Manku, Gary McDonald, and Shailen Pau (to ether, the "Individual Defendants"). Plaintiffs allege that See, e.g., id. if 109. No facts are alle ed indicating that this plan was implemented. The Complaint also includes allegations relating to - , a trader who was based in - (Reich Deel. iii! 3-4 ( )), alld9 (Deutsche Bank). There is no allegation that they were employed by any of the Foreign Dealer Defendants (id. (stating that. was an employee of ); SAC if 156 (stating that_ was an employee of Deutsche Bank AG)), or any other allegations plausibly linking. and to any of the other traders identified in the Complaint. Similarly, the Complaint identifies four other traders, -4- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 12 of 50 supposed conduct of these individuals impacted the prices of all USD SSA bonds - which include hundreds of different types of bonds offered by different.issuers that trade at different prices on the secondary market - over a seven-year period anywhere in the world, including in the United States. Id. iii! 22-26. Plaintiffs do not allege any conspiratorial activities occurred in the United States.4 B. Foreign Dealer Defendants As the SAC concedes, each Foreign Dealer Defendant is headquartered in and organized under the laws of a foreign country. 5 Certain Foreign Dealer Defendants are companies that have no offices anywhere in the United States,6 and several Foreign Dealer Defendants have never employed any of the traders alleged to have carried out the purported conspiracy. Each Foreign Dealer Defendant seeks dismissal of all claims on the basis of lack of personal jurisdiction, and Venue Defendants challenge venue in New York insofar as Plaintiffs rely on Section 12 of the Clayton Act. C. Jurisdictional Allegations In factually unsupported, boilerplate allegations repeated almost verbatim for each ••••••••••••••••• none of whom are alleged to have been based in the United States. Id. ~~ 150-53. At all times during their employment at BNP Paribas, were based in London. Gyetvan Deel.~~ 6-7 (BNP Paribas). Likewise, - was based in the United Kingdom during his employment at Nomura Int~upp. Le Vay Deel.~~ 7-8 (Nomura International pie). During all relevant times that Manku, --were employed by Credit Agricole Corporate & Investment Bank, they were employed and based in London. See Kim Deel.~ 4 (Credit Agricole Corporate & Investment Bank); Supp. Kim Deel.~ 3 (same). 4 Although Plaintiffs allege that •••• (see, e.g., SAC~~ 392-93), they do not allege that the Individual Defendants engaged in any misconduct while in the United States, let alone that they regularly traded USD SSA bonds while in the United States. Indeed, they only allege Id. ~ 459. 5 SAC~~ 45-46, 51, 55-56, 59, 69, 73, 75, 78-79, 82, 89, 94, 97, 100, 103. 6 Hardy Deel.~~ 6-11 (Barclays Capital Securities Limited); Ellwood Deel.~~ 9-15 (Barclays Services Limited); Jerman Deel.~ 3 (Citigroup Global Markets Limited); Bisseker Deel.~ 4 (Credit Suisse Securities (Europe) Limited); Bisseker Deel.~ 3 (Credit Suisse International); Le Vay Deel.~~ 5-8 (Nomura International pie); Zacharia Deel. ~ 4 (RBC Europe Limited). -5- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 13 of 50 Foreign Dealer Defendant, Plaintiffs once again claim that this Court has personal jurisdiction over all Foreign Dealer Defendants because some Defendants allegedly: (i) transacted business in and throughout the United States, including trading in allegedly manipulated USD SSA bonds (see, e.g., SAC ~~ 31, 44 ); (ii) committed overt acts in furtherance of the alleged conspiracy in the United States (see, e.g., id. ~~ 33, 396-400); (iii) targeted the U.S. "market" for USD SSA bonds (see, e.g., id. ~~ 31-32, 396-400); and (iv) were members of an alleged conspiracy, whose effects were felt in the United States (see, e.g., id. ~~ 31-33). Plaintiffs further allege that five Foreign Dealer Defendants are registered with the New York State Department of Financial Services ("NYSDFS") to do business in New York. Id.~~ 58, 63, 74, 75, 102. As discussed below, none of these allegations establishes personal jurisdiction over Foreign Dealer Defendants or proper venue under the Clayton Act as to the Venue Defendants. LEGAL STANDARDS "A plaintiff bears the burden of demonstrating personal jurisdiction over a person or entity against whom it seeks to bring suit." Penguin Group (USA) Inc. v. American Buddha, 609 F.3d 30, 34 (2d Cir. 2010). Personal jurisdiction over a defendant may be general (all-purpose) or specific (conduct-linked). See In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659, 673-74 (2d Cir. 2013). Either way, the inquiry is defendant-specific, Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781 n.13 (1984), and focuses on the contacts "that the 'defendant himself creates with the forum State." Walden v. Fiore, 571 U.S. 277, 284 (2014); see also Daimler AG v. Bauman, 571 U.S. 117, 172 (2014). "[T]o survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that jurisdiction exists." Penguin Group, 609 F.3d at 34-35. When resolving a motion to dismiss for lack of personal jurisdiction, a court need not "accept as true a legal conclusion couched as a factual allegation," or "draw argumentative inferences in the -6- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 14 of 50 plaintiffs favor." In re Terrorist Attacks, 714 F.3d at 673. The Court may "look beyond the pleadings to affidavits and supporting materials submitted by the parties." In re Aluminum Warehousing Antitrust Litig., 2015 WL 6472656, at *2 (S.D.N.Y. Oct. 23, 2015). ARGUMENT I. FOREIGN DEALER DEFENDANTS ARE NOT SUBJECT TO SPECIFIC JURISDICTION IN NEW YORK Plaintiffs' amendments to the SAC fail to resolve the core jurisdictional deficiency of their allegations: their claims do not arise from any of Foreign Dealer Defendants' purported suit-related contacts with the forum, and therefore fail to establish specific jurisdiction over any Foreign Dealer Defendant. "[S]pecific jurisdiction cases are limited to those involving issues deriving from, or connected with, the very controversy that establishes jurisdiction." Sonterra Capital Master Fund Ltd. v. Credit Suisse Group AG, 277 F. Supp. 3d 521, 588 (S.D.N.Y. 2017) (quoting In re Roman Catholic Diocese, 745 F.3d 30, 38 (2d Cir. 2014)). The inquiry "focuses on the relationship among the defendant, the forum, and the litigation," and "the defendant's suit-related conduct must create a substantial connection with the forum State." Walden, 571 U.S. at 284. To confer jurisdiction, a defendant's contacts must be "with the forum State itself, not ... with persons who reside there." Id. at 285. Moreover, the forum must be the "focal point" or "nucleus" of Plaintiffs' underlying claim, see Waldman v. Palestine Liberation Org., 835 FJd 317, 340 (2d Cir. 2016), and specific allegations must link the elements of Plaintiffs' claim to the forum. See Sullivan, 2017 WL 685570, at *45. Where, as here, the alleged wrongful conduct occurs outside the forum state, Plaintiffs must show that Defendants had minimum contacts with the forum by alleging purposeful direction, which requires that Plaintiffs show that "the defendant took 'intentional, and allegedly tortious, actions ... expressly aimed' at the forum" and that their claims arise from those actions. -7- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 15 of 50 In re Terrorist Attacks, 714 F.3d at 674 (quoting Calder v. Jones, 465 U.S. 783, 789 (1984)); see also Schwab, 883 F.3d at 84 (holding that "where 'the conduct that forms the basis for the controversy occurs entirely out-of-forum"' jurisdiction is only "constitutionally permissible if the defendant expressly aimed its conduct at the forum") (quoting Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 173 (2d Cir. 2013) and Calder, 465 U.S. at 789). Moreover, where a foreign defendant has limited suit-related contacts with the forum state, the plaintiffs injury must have been proximately caused by those contacts, Chew v. Dietrich, 143 F.3d 24, 29 (2d Cir. 1998), and, regardless of the extent of a defendant's contacts with the forum, the Second Circuit requires at a minimum a "'but for' connection between the defendant's forum-directed activities and the claim." LIBOR JV, 2015 WL 6243526, at *28. Because Plaintiffs do not and cannot allege substantial, suit-related contacts that the Foreign Dealer Defendants established \ with New York, they fail to establish specific personal jurisdiction. A. Plaintiffs Fail to Allege that Manipulative Conduct Occurred in New York or the United States Plaintiffs try to premise specific jurisdiction on minimum contacts by Defendants with New York or, in the alternative, the U.S. as a whole. See SAC iii! 30-35. Yet the gravamen of Plaintiffs' allegations remains that a handful of SSA bond traders - none located or working in the United States - allegedly manipulated the price of certain trades and thereby somehow affected the price of every USD SSA bond sold worldwide over a seven-year period. Plaintiffs still fail to adequately allege this implausible theory. See Merits Br. at Part II. But even if they had done so, Plaintiffs still are unable to plausibly allege that traders engaged in any manipulative acts while located in the United States, or that anyone in the United States participated in the alleged manipulation. See Sullivan, 2017 WL 685570, at *45 (no jurisdiction where plaintiffs fail to plausibly "link communications, planning or enactment of the -8- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 16 of 50 [manipulation] scheme to any [defendant] office, executive or employee in the United States" and do not "allege that [defendants] made communications with any United States person in furtherance of a conspiracy"). 7 Indeed, at all relevant times, each of the traders alleged to have been involved in the purported conspiracy resided in and worked at an office located in the United Kingdom or elsewhere in Europe or Asia, 8 and Plaintiffs do not allege otherwise. See SAC~~ 108-14. See also Sullivan, 2017 WL 685570, at *44-45 (no plausible suggestion of in- forum misconduct where location of traders' desks were "not identified"). Instead, Plaintiffs rely on allegations that subsets of traders occasionally traveled to New York (SAC ~~ 109-14 ), but these supposed contacts cannot support jurisdiction because Plaintiffs do not allege any facts plausibly suggesting that these traders engaged in misconduct on these trips. See Laydon v. Bank of Tokyo-Mitsubishi UFJ, Ltd ("Laydon VI"), 2017 WL 1113080, at *4 (S.D.N.Y. Mar. 10, 2017) (visits to Las Vegas with alleged co-conspirator did not These contacts cannot support jurisdiction because (i) none involves an attempt to manipulate a bond, and thus they are not suit- related, Sullivan, 2017 WL 685570, at *44 ("This United States presence [of U.S. branches and traders] is relevant only insofar as it has a nexus to the misconduct underlyin plaintiffs' claims"); (ii) ; and (iii) the counterparty is not alleged to have been any of the Named Plaintiffs, Beach v. Citigroup Alternative Investments LLC, 2014 WL 904650, at *6 (S.D.N.Y. Mar. 7, 2014) ("Contacts with unnamed class me.mbers may not be used as a jurisdictional basis[.]"). Furthermore, these allegations do not address See infra Part II.B. 8 Wright Deel. ~ 23 (Barclays Bank PLC); Ellwood Deel. ~ 16 (Barclays Services Limited); Gyetvan Deel. ~~ 6-7 (BNP Paribas); Reich Deel. ~~ 3-4 ); Jerman Deel. ~ 5 (Citigroup Global Markets Limited); Kim Deel.~ 4 (Credit Agricole Corporate & Investment Bank); Supp. Kim Deel.~ 3 (Credit Agricole Corporate & Investment Bank); Bisseker Deel.~ 8 (Credit Suisse Securities (Europe) Ltd.); Le Vay Deel. ~~ 12-13 (Nomura International pie); Supp. Le Vay Deel.~~ 7-8 (Nomura International pie); Jungreis Deel.~ 8 (The Toronto-Dominion Bank); see also supra n.6. The Complaint alleges that defendant Shailen Pau was employed by "Credit Agricole" (see, e.g., SAC~ 113), but Pau was neither employed as a USD SSA bond trader nor sat on the trading desk responsible for the secondary market trading ofUSD SSA bonds during the time he worked at Credit Agricole Corporate & Investment Bank. Kim Deel. ~ 4. -9- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 17 of 50 plausibly allege suit-related contact absent facts suggesting the trip involved the market manipulation alleged). 9 And with only one exception, 10 Plaintiffs fail to allege that the traders engaged in USD SSA bond trading during these sporadic trips, let alone any trading involving manipulative conduct. Plaintiffs also rely on conclusory allegations that unnamed U.S.-based sales personnel conveyed inquiries, quotes, and trading decisions from London-based traders in response to inquiries from U.S.-based investors (SAC~ 396). Plaintiffs offer no facts in support of these allegations, which in any event would not establish suit-related contacts, as Plaintiffs do not allege sales personnel had any knowledge of or involvement in any manipulation of quotes. See Sullivan, 2017 WL 685570, at *45 (disregarding assertion that a defendant employing derivatives traders in New York "create[d] a substantial connection with" the United States absent any facts "link[ing] communications, planning or enactment of the Euribor scheme" to these New York traders); see also Laydon VI, 2017 WL 1113080, at *3-4 (merely brokering trades between a trader and U.S. counterparties is insufficient to create a "substantial connection" with the United States). As Plaintiffs have failed to allege any wrongful conduct in the United States, Plaintiffs fail to plead purposeful availment of a U.S. forum. 11 9 Plaintiffs' boilerplate allegations that each trader visited customers and "promote[ d] his USD SSA bond trading services" while on visits to New York (see SAC~~ 109-14) are plainly insufficient to confer jurisdiction here, as Plaintiffs fail to allege any facts supporting this conclusory assertion as to most Defendants, Gerstle v. Nat 'I Credit Adjusters, LLC, 76 F. Supp. 3d 503, 510 (S.D.N.Y. 2015) (rejecting similarly conclusory allegations and finding "[t]his lack of specificity is highlighted by, for example, the use of the same boilerplate description for the actions of [multiple defendants]"), and, to the extent they may be credited, allege no misconduct in connection with these alleged visits, see Sullivan, 2017 WL 685570, at *44. Plaintiffs' allegations that (see, e.g., SAC ~~ 11, 3 70) similarly fail to establish jurisdiction, as Plaintiffs do not allege any suit-related conduct in connection with-· See Laydon VI, 2017 WL 1113080, at *4. 11 To the extent Plaintiffs allege a nexus with the United States arising from Foreign Dealer Defendants' use of telephone calls or electronic messaging and chatrooms to further the alleged conspiracy (see SAC ~~ 130, .), this too is insufficient to confer specific jurisdiction. Courts considering similar allegations of price manipulation by -10- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 18 of 50 B. Plaintiffs' Remaining Allegations Do Not Establish Sufficient Contacts with the United States to Establish Personal Jurisdiction Unable to base their claims on any in-forum contacts that actually give rise to those claims, Plaintiffs once again resort to trying to rely on the unrelated contacts of a handful of Foreign Dealer Defendants' with the United States. Not only are these allegations insufficiently pleaded, they also cannot support jurisdiction because they bear no relation to Plaintiffs' claimed injuries and thus are not "suit-related." See Schwab, 883 F.3d at 83-84; see also Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1781 (2017) (noting that where there is no connection "between the forum and the underlying controversy ... speeific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State"). While Plaintiffs have attempted to buttress their allegations on this point in the SAC, nothing they have added remedies this fundamental defect. Earlier this year, the Second Circuit issued its decision in Schwab, which confirmed that bare allegations of ordinary business activity conducted by foreign entities in the U.S., with no causal relationship to the alleged misconduct - precisely like those Plaintiffs allege here - do not satisfy this standard. See Schwab, 883 F.3d at 84 (transactions in California did not establish specific jurisdiction over defendants where they "did not cause Defendants' false LIBOR submissions to the BBA in London, nor did the transactions in some other way give rise to claims seeking to hold Defendants liable for those submissions"). Here, as in Schwab, Plaintiffs fail to set forth any plausible, non-conclusory allegations linking Foreign Dealer Defendants' routine United States business activities with the overseas based traders' alleged misconduct. electronic communication have routinely rejected attempts to premise jurisdiction on such attenuated contacts. See, e.g., In re Platinum & Palladium Antitrust Litig., 2017 WL 1169626, at *44 (complaint's "vague references to the [defendants'] use of chat rooms and emails" were insufficient to establish specific jurisdiction); Laydon VI, 2017 WL 1113080, at *3 ("The fact that electronic communications were routed through U.S.-wires or servers, or that recipients of those communications were located in the United States, is insufficient to establish minimum contacts with the United States."). -11- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 19 of 50 Also as in Schwab, the fact that Plaintiffs assert their claims collectively and indiscriminately against all Defendants - regardless of whether they actually traded in the United States or with United States counterparties - "only bolsters [the] conclusion" that the alleged trading and marketing activity in the United States is unrelated to the alleged conspiracy to manipulate USD SSA bonds. See id. 12 The Second Circuit also rejected plaintiffs' argument that defendants were subject to jurisdiction under the "effects test" because they traded billions of dollars of instruments in California, finding that plaintiffs failed to allege that defendants "expressly aimed" their conduct at the United States. Id. at 87-88. Schwab thus compels dismissal. BBSW, a recent decision in this district applying Schwab to allegations of overseas manipulation of financial products similar to those asserted here, confirms this. In BBSW, plaintiffs argued that foreign defendants (many of which are also defendants here) were subject to specific jurisdiction in New York with respect to claims that they allegedly manipulated BBSW- an Australian benchmark interest rate - because they had entered into BBSW-based derivatives transactions in the United States. 2018 WL 6169313, at *52. Judge Kaplan rejected plaintiffs' claim that U.S.-based trading constituted purposeful availment of the forum, holding that "Schwab controls here and precludes a finding of personal jurisdiction ... through the Foreign Defendants' direct transactions in BBSW-Based Derivatives with plaintiffs." Id. at *51- 53. Judge Kaplan also rejected plaintiffs' arguments that the alleged BBSW manipulation conspiracy was purposefully directed at the United States, holding instead that plaintiffs had merely alleged that foreign defendants "expressly aimed their conduct at counterparties to BBSW-Based Derivative transactions around the world, some of whom happened to be in the 12 Throughout the SAC, Plaintiffs resort to impermissible "group pleading" in order to circumvent the requirement to plead personal jurisdiction with specificity as to each party, which is yet another reason Plaintiffs fail to adequately plead personal jurisdiction. See infra Part II.A. -12- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 20 of 50 United States." Id. at *54-55. As set forth below, this same guiding precedent compels dismissal of Plaintiffs' similar jurisdictional arguments as to Foreign Dealer Defendants. 1. Plaintiffs' Allegations Do Not Establish Purposeful Availment or the Causal Nexus Necessary to Support Personal Jurisdiction In the latest iteration of their Complaint, Plaintiffs claim that Foreign Dealer Defendants are subject to jurisdiction in New York because they traded USD SSA bonds in the United States that were allegedly affected by the purported conspiracy. But Plaintiffs' failure to allege the requisite causal connection between Foreign Dealer Defendants' purported conspiratorial conduct - manipulation of bond trades - and any injury giving rise to this suit precludes any finding of jurisdiction here. See Schwab, 883 F.3d at 82-87. As a threshold matter, Plaintiffs fail to plausibly allege that they transacted in USD SSA bonds directly with most Foreign Dealer Defendants. Although Plaintiffs purport to allege transactions with every Dealer Defendant, 13 they only identify specific trades with - • Asto , Plaintiffs allege no facts supporting their conclusory assertions of trades with Named Plaintiffs. 14 Further, certain Foreign Dealer Defendants do not transact in any SSA bond transactions in the United States. 15 And in 13 Plaintiffs claim that: Alaska Permanent Fund traded with Bank of America, Barclays, BNP Paribas, Citi, Credit Suisse, Deutsche Bank, HSBC, and RBC (SAC~ 36); Alaska Department of Revenue traded with Bank of America, Barclays, BNP Paribas, Citi, Credit Suisse, Deutsche Bank, HSBC, RBC, and TD Bank (id.~ 38); and Iron Workers traded with Bank of America, Barclays, Credit Suisse, Nomura, RBC, and TD Bank (id. ~ 40). 14 For these Foreign Dealer Defendants, Plaintiffs have not alleged any connection, let alone a necessary "substantial connection," Walden, 571 U.S. at 284, between their claims and Foreign Dealer Defendants' alleged suit-related conduct. See Schwab, 883 F.3d at 82-87 (absent in-forum dealings through an affiliate or co-conspirator, a defendant must engage in direct transactions with plaintiffs in the forum to be subject to jurisdiction). 15 See Ellwood Deel.~ 15 (Barclays Services Limited); Gyetvan Deel.~ 7 (BNP Paribas); Jungreis Deel.~~ 8-9 (The Toronto-Dominion Bank). Because these Foreign Dealer Defendants did not enter into USD SSA bond transactions in the United States at all, they plainly lack a suit-related connection to the United States, and should be dismissed on this basis alone. See Schwab, 883 F.3d at 84-87 (affirming dismissal of"non-seller defendants" and "indirect seller defendants"); infra Part I. -13- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 21 of 50 some instances, Plaintiffs allege no specific transactions between themselves and a Foreign Dealer Defendant or even any affiliate of a Foreign Dealer Defendant. 16 The bare possibility of hypothetical transactions between Foreign Dealer Defendants and unnamed absent class members is not a sufficient basis for jurisdiction. See Famular v. Whirlpool Corp., 2017 WL 2470844, at *2 (S.D.N.Y. June 7, 2017) ("When the action is brought as a purported class action, personal jurisdiction over each defendant is assessed with respect to the named plaintiffs' causes of action."); Beach, 2014 WL 904650, at *6 ("Contacts with unnamed class members may not be used as a jurisdictional basis[.]"); see also Bristol-Myers, 137 S. Ct. at 1781 ("The mere fact that other plaintiffs were prescribed, obtained, and ingested [drug] in California - and allegedly sustained the same injuries as did the nonresidents - does not allow the State to assert specific jurisdiction over the nonresidents' claims."). And as to other Foreign Dealer Defendants, Plaintiffs claim only that they transacted directly with their U.S.-based affiliates, and even then largely without any factual support. 17 For these Foreign Dealer Defendants, Plaintiffs have not alleged any connection, let alone the necessary "substantial connection," Walden, 571 U.S. at 284, between their claims and Foreign 16 Plaintiffs do not allege that Credit Agricole Corporate & Investment Bank ("CACIB"), or any of its affiliates, directly traded with any Named Plaintiff (see SAC~~ 36, 38, 40), instead alleging only that CACIB and its affiliates traded with anonymous class members (id.~~ 73-74). Therefore, even if Plaintiffs had plausibly alleged agency relationships between Foreign Dealer Defendants and their U.S.-based affiliates (which they do not, see infra Part II.A), claims against CACIB must also be dismissed on jurisdictional grounds because there is no connection between Plaintiffs' claims and CACIB's trading. See Schwab, 883 F.3d at 82-87 (holding that, absent in-forum dealings through an affiliate or co-conspirator, a defendant must engage in direct transactions with plaintiffs in the forum to be subject to jurisdiction). 17 Named Plaintiffs allege that they transacted directly with the following Defendants (each of which is incorporated and has its principal place of business in the United States, and none of which challenge jurisdiction here): Merrill Lynch, Pierce, Fenner & Smith Inc. (SAC~ 48); Barclays Capital Inc. (id. ~ 54); BNP Paribas Securities Corp. (id. ~ 61); Citibank N.A. (id.~ 66); Citigroup Global Markets Inc. (id.~ 68); Credit Suisse Securities (USA) LLC (id. ~ 77); Deutsche Bank Securities Inc. (id. ~ 84); HSBC Securities (USA) Inc. (id. ~ 88); Nomura Securities International, Inc. (id.~ 93); RBC Capital Markets, LLC (id.~ 99); and TD Securities (USA) LLC (id.~ 105). In addition, conclusory allegations that Plaintiffs traded with unspecified entities in corporate families including Foreign Dealer Defendants (see, e.g., id. ~~ 36, 38, 40) or that U.S.-based Defendants entered into transactions with Named Plaintiffs "at the direction of and with the knowledge and consent of' Foreign Defendants (see, e.g., id. ~~ 48, 54, 61, 66, 68, 77, 84, 88, 93, 99, 105) are insufficient to establish jurisdiction. See infra Part II. -14- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 22 of 50 Dealer Defendants' overseas purported suit-related conduct. See Schwab, 883 F.3d at 82-87 (absent in-forum dealings through an affiliate or co-conspirator, a defendant must engage in direct transactions with plaintiffs in the forum to be subject to jurisdiction). Because the SAC fails to adequately allege agency or conspiracy jurisdiction, see infra Part II, the claims against Foreign Dealer Defendants that are not alleged to have traded directly with Named Plaintiffs must be dismissed. As to the two Foreign Dealer D~fendants with whom Plaintiffs now allege they directly transacted, Plaintiffs' conclusory and implausible allegations regarding such transactions are wholly without factual support and should be ignored. 18 In any event, the alleged transactions cannot constitute a basis for conferring personal jurisdiction over the two Defendants because they are not "suit-related," i.e., Plaintiffs fail to plausibly allege any wrongdoing with respect to those trades. Sales of USD SSA bonds in the United States are, in and of themselves, insufficient to confer jurisdiction without some "causal link" to the alleged London-based conspiracy. See Schwab, 883 F.3d at 84 (finding that defendants' forum trading activities "did not cause Defendants' false LIBOR submissions to the BBA in London, nor did the transactions in some other way give rise to claims seeking to hold Defendants liable for those submissions"); see also BBSW, 2018 WL 6169313, at *53 (finding no jurisdiction where "the alleged manipulation of BBSW - an Australian benchmark interest rate - was not caused by any transactions that any Defendant entered into in the United States" because "Schwab controls here and precludes a finding of personal jurisdiction ... through the Foreign Defendants' direct 18 "[A] plaintiffs obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do[.]" Bell At!. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986) (holding that on a motion to dismiss, courts "are not bound to accept as true a legal conclusion couched as a factual allegation")). Plaintiffs conclusorily allege that they transacted directly with Foreign Dealer Defendants Barclays Bank plc (SAC~ 52) and Citigroup Global Markets Limited (id. ~ 70), but fail to allege any facts regarding the details of such transactions. -15- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 23 of 50 transactions in BBSW-Based Derivatives with plaintiffs"). Furthermore, the purported transactions also cannot confer jurisdiction over either entity because none of the Named Plaintiffs is a New York resident (see SAC ~~ 36, 38, 40) and therefore any contracts to which they were a party are irrelevant to the jurisdictional analysis in New York. Cf Schwab, 883 F.3d at 79 Gurisdiction over direct sellers where plaintiffs alleged that they made their purchases in California, the relevant forum). In an attempt to manufacture a causal link here between the alleged London-based conspiracy and Defendants' alleged in-forum trading, Plaintiffs largely rely on unrelated chats from 2009 to 2015 involving certain London-based SSA bond traders. Although Plaintiffs claim that certain of these chats mention USD SSA bond transactions in the United States or with U.S.- based counterparties, these chats are insufficient to confer jurisdiction because they do not involve any misconduct, much less a transaction between one of the London-based SSA bond traders and a Named Plaintiff. As this Court previously recognized, many of these chats do not "allege[] any specific transactions that had an artificially unfavorable price that injured [Plaintiffs]." In re SSA Bonds Antitrust Litig., No. 16 Civ. 3711 (ER), slip op. at 15 (S.D.N.Y. Aug. 28, 2018) ("MTD Decision"). Furthermore, to the extent that some chats do mention specific transactions with Named Plaintiffs, they are insufficient to confer jurisdiction because Plaintiffs fail to plausibly tie these chats to their claimed injuries. See, e.g., BBSW, 2018 WL 6169313, at *53-54 (allegations of U.S. counterparties, including plaintiffs, insufficient for jurisdiction); Sullivan, 2017 WL 685570, at *44-45 (finding allegations of counterparties in the United States, including plaintiffs, insufficient for jurisdiction). For example, -16- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 24 of 50 (SAC iii! 332-34), the Court already held that Plaintiffs insufficiently allege any direct connection between the traders' discussion of their trading positions and Plaintiffs' transaction. MTD Decision, slip op. at 16 ("[T]he fact that Plaintiff[] may have traded in the same 24 hour period as traders ... discussed manipulation ... is simply too thin a basis for the Court to infer that it is plausible that the traders' employers caused the _PlaintiffT] actual damages.") (quoting In re London Silver Fixing, Ltd., Antitrust Litig., 2018 WL 3585277, at *27 n.36 (S.D.N.Y. July 25, 2018)). Even in their SAC, Plaintiffs still do not allege that , instead merely alleging that The other chats Plaintiffs have added to the SAC - --are similarly deficient. See, e.g., SAC iii! 219, 348-50, 435, 437, 439-40, 444, 475. For example, Plaintiffs point to -" See SAC iii! 6-7, 173-78, 439-40. Plaintiffs allege that Plaintiffs do not allege that Alaska Department of Revenue had any involvement with the interdealer broker "market." -and as a matter of law, Plaintiffs cannot state an antitrust claim based on conduct in an -17- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 25 of 50 interdealer "market" in which Plaintiffs, as customers, did not allegedly participate. See Merits Br. at Part I.A. l. Nor does the SAC contain any facts to support Plaintiffs' conclusory allegations that See SAC~ 174. That - IS not enough to plausibly establish that the transaction was manipulated in any way, and therefore insufficient to establish that this transaction was causally linked to the alleged conspiracy. See also Merits Br. at Part I.A. I. These chats do nothing to cure the central deficiency recognized by this Court, namely that "plaintiffs fail[] to allege any specific transactions that they entered into that harmed them through the defendants' misconduct." MTD Decision, slip op. at 15. As a result, nothing in this chat shows suit-related conduct sufficient to provide a jurisdictional link between Foreign Defendants' alleged conduct and Plaintiffs' alleged damages. Plaintiffs' remaining chats fare no better. Most of Plaintiffs' allegations involve SSA bond traders sharing non-competitively sensitive market color in the course of their ordinary business activities. 19 For example, Plaintiffs allege that (SAC ~ 407) and (id. ~ 315). Traders' purported knowledge of general events in the SSA bonds "market," including in the U.S., does not support the inference that these traders manipulated the SSA bond "market" generally, or the specific bonds they were discussing (see Merits Br. at Part II.B), much less that such manipulation was targeted at the United States or Named Plaintiffs. In addition to these innocuous chats, Plaintiffs similarly rely on other examples of ordinary business activity in an attempt to confer jurisdiction over Defendants. For example, 19 See, e.g., SAC~~ 167, 237, 305-06, 314-19, 328-31, 333, 342, 354, 357, 404-11, 414-20, 423, 426-30, 432-34, 438,450,452,454,458,463-64,468-73,477-79,485-86,488-92. -18- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 26 of 50 they claim that - (see, e.g., SAC ifif 190-92, 307-16, 328-30, 412, 414-15, 418-20, 423, 426, 429, 431-34, 436, 454-57, 459-65, 468-70, 473-74, 477, 484, 488-92),20 or (see, e.g., id. ifif 370, 393-95, 399, 413, 425). These are typical business activities that are not specifically related to any attempt to sell an allegedly manipulated bond to anyone in the United States, let alone to Named Plaintiffs. Specific jurisdiction cannot be based on such contacts that have no relationship to the alleged misconduct giving rise to Plaintiffs' claims. See Lopez v. Shopify Inc., 2017 WL 2229868, at *8 (S.D.N.Y. May 23, 2017) (holding that allegations of unrelated business activity are irrelevant where they did not '"relate to' [plaintiffs] claims in any meaningful way"); 7 W. 57th St. Realty Co., 2015 WL 1514539, at *IO ("Plaintiff must demonstrate that the Foreign Banks' suit-related conduct creates minimum contacts with New York, however, not simply that the Foreign Banks have a presence here or conduct business activities here in general.") (emphasis in original). The SAC also alleges, now with the purported support of "economic analyses," that the alleged conspiracy carried out by a handful of overseas traders affected the price of every USD SSA bond transaction worldwide, causing Plaintiffs' purported injuries within the United States. See SAC ifif 508-51. But as set forth in the Joint Merits Brief, Plaintiffs' analyses plausibly suggests no such thing (see Merits Br. at Part II.C.5), and such a "sweeping and conclusory allegation[]" need not be credited. In re Braskem S.A. Sec. Litig., 246 F. Supp. 3d 731, 770 ; id. ~ 252 ( ); see also Merits Br. at Part II.B. In any event, none of these chats allegedly involves a transaction with a Named Plaintiff and, therefore, cannot confer personal jurisdiction. -19- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 27 of 50 (S.D.N.Y. 2017) (rejecting similarly broad and conclusory allegations as the basis for personal jurisdiction). In any case, this would still be insufficient to support specific jurisdiction because "[d]ue process requires that a defendant be hauled into court in a forum State based on [its] own affiliation with the State, not based on the random, fortuitous, or attenuated contacts ... with the State." Walden, 571 U.S. at 286. Plaintiffs fail to allege, as they must to comport with due process, that the trading activities reflected in these economic analyses are those of each Foreign Dealer Defendant, nor do they allege that Foreign Dealer Defendants intentionally entered into these transactions as part of a scheme intending to manipulate the price of transactions in the United States. Instead, the Complaint offers only generic and legally insufficient allegations of global misconduct, which, even when taken as true, at best allege unspecified and sporadic injury around the globe. Such allegations cannot support a claim of specific jurisdiction.21 2. Plaintiffs Fail to Allege Foreign Dealer Defendants Expressly Aimed Their Conduct at New York or the United States Plaintiffs' amendments have not salvaged their attempt to establish jurisdiction under the so-called "causal effects" test either. Plaintiffs once again try to premise jurisdiction on the 21 See, e.g., In re Platinum & Palladium Antitrust Litig., 2017 WL 1169626, at *44 ("That Defendants' alleged manipulation ... had harmful effects on U.S.-based exchanges is insufficient ... for the purpose of establishing specific personal jurisdiction."); Sullivan, 2017 WL 685570, at *44 ("Some ofUBS's counterparties were located in the United States, including [plaintiffs]. But the presence of U.S. victims alone does not make out jurisdiction .... "); Laydon VI, 2017 WL 1113080, at *5 ("The fact that some of Lloyds' counterparties in derivatives transactions ... were located in the United States is insufficient to establish minimum contacts with the United States."); Jn re LIBOR-Based Fin. Instruments Antitrust Litig. ("LIBOR VI"), 2016 WL 7378980, at * 11 (S.D.N.Y. Dec. 20, 2016) ("[I]t is black-letter law that harm experienced in a forum is not sufficient to establish specific personal jurisdiction .... "); LIBOR IV, 2015 WL 6243526, at *32 ("[I]t does not stand to reason[] that foreign defendants aimed their [allegedly] manipulative conduct at the United States or any particular forum state."); 7 W 57th St. Realty Co., 2015 WL 1514539, at *9 ("It is not sufficient that conduct incidentally had an effect in the forum ... . ");see also Waldman, 835 F.3d at 335-37 (indicating that "suit-related conduct" directed at international targets is generally insufficient to confer jurisdiction, even where U.S. citizens are among those harmed). Sonterra Capital Master Fund Ltd. v. Credit Suisse Group AG is not to the contrary because the Court there found that, unlike here, plaintiffs had alleged substantial, specific facts connecting defendants to the forum. 277 F. Supp. 3d 251, 541, 579 (S.D.N.Y. 2017) (noting that plaintiffs had alleged, among other things, that purported collusive market manipulation involved a "trader in New York conspir[ing] with an RBS trader in Europe" and that the European Commission had found that specific defendants had "colluded to 'distort the normal pricing of interest rate derivatives denominated in Swiss franc"'). -20- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 28 of 50 theory that any alleged overseas misconduct resulted in foreseeable harm to U.S.-based investors because USD SSA bonds were traded globally, including in the United States. See SAC~ 32. Plaintiffs generally allege that by purportedly manipulating certain USD SSA bonds in Europe and Asia, Foreign Dealer Defendants should have known that such conduct would have affected the price for USD SSA bonds across the globe, including prices in the United States.22 But these allegations are insufficient to confer jurisdiction because they fail to demonstrate that Foreign Dealer Defendants expressly aimed their conduct at the United States. Courts apply the "causal effects" test where, as here, "the conduct that forms the basis for the controversy occurs entirely out-of-forum, and the only relevant jurisdictional contacts with the forum are therefore in-forum effects harmful to the plaintiff." Schwab, 883 F.3d at 87. For the exercise of personal jurisdiction under this test to comport with due process, the complaint must plausibly allege that the defendant "expressly aimed its conduct at the forum." Id. Mere allegations that the defendant knew or reasonably should have known that the brunt of the injury from its misconduct would be felt in the forum are not sufficient. Id.; see also Walden, 5 71 U.S. at 290 ("The proper question is not where the plaintiff experienced a particular injury or effect but whether the defendant's conduct connects him to the forum in a meaningful way."); Laydon V, 2015 WL 1515358, at *2 ("'[F]oreseeability' alone has never been a sufficient benchmark for personal jurisdiction[.]"). Plaintiffs cannot adequately connect any Foreign Dealer Defendant's alleged wrongful activity to this forum based solely on allegations that USD SSA bonds are traded globally, 22 SAC~ 33 (alleging each Defendant "knew that the brunt of the harm caused by their scheme would be felt by investors in the United States" and "[t]o the extent that the conspiracy may also involve commerce with foreign entities, it remains the case that this scheme had a direct, substantial, and reasonably foreseeable effect on commerce in the United States"); id. ~ 575 (alleging Plaintiffs suffered injury "[a]s a direct, intended, foreseeable, and proximate result of Defendants' conspiracy"). -21- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 29 of 50 including in the United States. As the Second Circuit explained in Schwab, even Defendants' participation in billions of dollars' worth of transactions in the forum that were supposedly affected by an allegedly manipulated scheme were insufficient to establish that foreign defendants had "expressly aimed" their foreign conduct at the forum. Schwab, 883 F.3d at 88 ("That the effects of LIB OR manipulation were likely to reach an economy as large as California's does not mean that Defendants' conduct in London was 'expressly aimed' at the state."). Even if Plaintiffs had adequately alleged manipulated trades between Foreign Dealer Defendants and Named Plaintiffs, such purportedly manipulated trades would not be sufficient to establish that the U.S. was the "nucleus" or "focal point" of the alleged conspiracy either. 23 Even assuming that Plaintiffs had plausibly alleged a connection between these trades and their claimed injuries (and they have not, see supra Part 11.B.l), this is too attenuated a connection to support jurisdiction. Plaintiffs allege that, during a seven-year Class Period, shifting subsets of Europe- and Asia-based traders manipulated SSA bonds issued by a multitude of non-U.S. quasi- governmental entities and subsequently traded them with counterparties across the globe. That some of these trades allegedly happened to occur with U.S. counterparties fails to suggest that the U.S. was a "focal point" of any alleged misconduct. See BBSW, 2018 WL 6169313, at *55 (finding no jurisdiction where "[t]here are no allegations that the Foreign Defendants expressly aimed their conduct at the forum - just that they expressly aimed their conduct at counterparties to BB SW-Based Derivative transactions around the world, some of whom happened to be in the United States" and that such conduct was "connected more readily to the counterparties ... not 19, 348-350, 475. Though Plaintiffs allege , id. ~~ 173-179, 332-334, Plaintiffs do not plausibly allege mjured them in any way (see Merits Br. at 9 n. 7), let alone explain how - - during a six-year period plausibly suggest that the U.S. was the "focal point" or "nucleus" of- . (implausibly) alleged misconduct. -22- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 30 of 50 the forum in which such transactions took place or where such counterparties were located"); Waldman, 835 F.3d at 337-40 (finding no jurisdiction over wrongful conduct outside the U.S. that appeared to target "people from all over the world," because even if the alleged misconduct "continuously hit Americans," it could not be said that "the United States [was] the focal point of the torts alleged"). 24 Nor can other allegations of plaintiff-focused contacts - including that Named Plaintiffs chose to transact in SSA bonds after placing inquiries with unidentified U.S.-based salespeople (see, e.g., SAC~ 37), or (see, e.g., id. ~ 416)- support jurisdiction. See Walden, 571 U.S. at 285 ("[P]laintiff[s] cannot be the only link between the defendant and the forum."); Waldman, 835 F.3d at 338 ("[D]efendant's mere knowledge that a plaintiff resides in a specific jurisdiction [is] insufficient to subject a defendant to specific jurisdiction in that jurisdiction if the defendant does nothing in connection with the tort in that jurisdiction.") (emphasis added). For these reasons, judges in this district have repeatedly rejected attempts to premise specific jurisdiction on the foreseeable effect of alleged overseas price manipulation. 25 24 See also Axiom Foods, Inc. v. Acerchem Int 'l, Inc., 874 F.3d 1064, 1070-71 (9th Cir. 2017) (finding no specific jurisdiction in California over copyright infringement case where U.K.-based company sent an allegedly infringing newsletter to 343 e-mail addresses across the globe including to around ten recipients in California); Maril! v. Scott Fin. Corp., 873 F.3d 1136, 1144-49 (9th Cir. 2017) (finding no specific jurisdiction in Arizona over defendants for a wrongful institution of civil proceedings suit where the alleged misconduct arose from a litigation in Nevada even though defendants issued and litigated a deposition subpoena in, traveled to, and communicated with Arizona and plaintiffs resided in Arizona and felt the impact of the alleged misconduct there). 25 See, e.g., BBSW, 2018 WL 6169313, at *55 (finding no basis for jurisdiction where there were "no allegations that the Foreign Defendants expressly aimed their conduct at the forum - just that they expressly aimed their conduct at counterparties ... around the world, some of whom happened to be in the United States."); In re Platinum & Palladium Antitrust Litig., 2017 WL 1169626, at *45 ("[G]eneral allegations of price manipulation abroad alone do not establish that a foreign defendant expressly aimed its conduct at the U.S."); Sullivan, 2017 WL 685570, at *44- 45 (finding no basis for personal jurisdiction where plaintiffs failed to adequately allege that the "existence, causation or intent to manipulate the Euribor on the part of [defendant] had its 'nucleus' or 'focal point' in the United States"); LIBOR IV, 2015 WL 6243526, at *20 ("[M]ere foreseeability does not confer personal jurisdiction."); 7 W. 57th St. Realty Co., 2015 WL 1514539, at *11 ("[T]he fact that harm in the forum is foreseeable .... is insufficient for the purpose of establishing specific personal jurisdiction over a defendant."); Laydon V, 2015 -23- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 31 of 50 Plaintiffs also try to establish jurisdiction by asserting the alternative theory that the United States was the purported "focal point" of the alleged conspiracy by claiming that: (i) the "market" for USD SSA bonds is largely in the United States (see, e.g., SAC ~~ 32, 122); and (ii) (see, e.g., id ~~ 395, 459). As discussed below, these mischaracterizations are insufficient to support Plaintiffs' claim that the "express aim" or "focal point" of the Foreign Dealer Defendants' alleged conspiracy was New York or the United States. The Alleged "Market" for USD SSA Bonds: Plaintiffs allege that the market for USD SSA bonds is predominantly in the United States, in part, because "at least some" USD SSA , bonds are colloquially referred to as "Yankee" bonds. SAC~ 122. Plaintiffs' sole source for this claim, however, only defines Yankee bonds as bonds "issued by a foreign entity," "denominated in U.S. dollars," and "registered with the Securities and Exchange Commissfon," and does not even specifically mention SSA bonds. See id ~ 122 n.27 (citing Investopedia). Regardless, Plaintiffs' assertion that "some" USD SSA bonds may be referred to as "Yankee" bonds does not have any relevance to the question of whether USD SSA bonds are targeted at the U.S., much less whether the specific bonds allegedly manipulated by bond traders located in London were targeted at the United States. Nor can Plaintiffs rely on data about the percentage of SSA bond trading activity generated by U.S.-based investors, which they do not even try to claim covers the seven-year purported Class Period. Id ~ 122 (alleging that in 2013, U.S.-based customers accounted for 75 WL 1515358, at *2 ("[F]oreseability is not the standard for recognizing personal jurisdiction; the actions must instead be 'expressly aimed ... at [the forum]."'); see also Am Trust Fin. Servs., Inc. v. Lacchini, 260 F. Supp. 3d 316, 333 (S.D.N.Y. 2017) (finding a defendant's foreign conduct "quintessentially directed" outside the forum is insufficient to establish personal jurisdiction unless that defendant "schemed to cause effects in the United States or in a United States market"). -24- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 32 of 50 percent of the market). Significantly, Plaintiffs do not allege what proportion of the allegedly conspiring traders' activities in USD SSA bonds was generated by U.S. customers. Nor do these allegations provide insight into the location of Foreign Dealer Defendants' conduct in what Plaintiffs themselves identify as a global "market," see, e.g., id. iii! 126, -·contradicting any inference to the contrary. Finally, even if Plaintiffs had plausibly alleged that the "market" for SSA bonds is predominantly in the United States, this would not establishjurisdiction. See BBSW, 2018 WL 6169313, at *55 ("Plaintiffs' allegations that the United States was a substantial market for BBSW-Based Derivatives speaks only to the foreseeability of the effect of the Foreign Defendants' conduct in the United States. Such contacts therefore are too 'random, fortuitous, [and] attenuated' to be a basis for this Court's exercise of personal jurisdiction over Foreign Defendants.") (quoting Waldman, 835 F.3d at 337). Providing Quotes/Marketing in the United States: Plaintiffs also allege that the London- based SSA bond traders provided quotes to U.S.-based sales personnel (see, e.g., SAC if 396), (see, e.g., id. iii! 418, 484, 489), and marketing their services to potential U.S. customers (see, e.g., id. iii! 109-14).26 But allegations that certain Defendants transacted with U.S. customers are insufficient to establish jurisdiction without some showing that these transactions were made in furtherance of the alleged conspiracy. See Lopez, 2017 WL 2229868, at *8-9 (holding that even "substantial" contacts with the forum cannot 26 Plaintiffs allege that some London-based SSA bond traders were also licensed to transact securities in the United States. E.g., SAC~~ 65, 76, 87, 98. Regardless, even if they were licensed, this only demonstrates that they were permitted enter the U.S. market. It does not show that they sought these licenses to transact in USD SSA bonds, or to further the alleged conspiracy. Moreover, Plaintiffs' allegations regarding Shailen Pau and his alleged status as a "broker registered with FINRA" (id.~ 114) do nothing to support Plaintiffs' jurisdictional allegations as to Foreign Dealer Defendants Royal Bank of Canada or RBC Europe Limited because the SAC does not allege a single fact regarding any purported misconduct by any Defendant prior to July 2009 (see Merits Br. at Part II.B)- several months after Pau allegedly left his employment with any RBC Defendant. SAC~ 146. Plaintiffs therefore fail to plead any suit-related conduct attributable to Royal Bank of Canada or RBC Europe Limited through Pau. -25- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 33 of 50 -26- establish jurisdiction under the “effects test” without allegations that defendant “targeted” the forum). Indeed, Plaintiffs have not sufficiently alleged that any USD SSA bond transaction involving a U.S. customer was manipulated, much less that any such transaction was entered into with a Named Plaintiff. See supra Part I.B.1. Because Plaintiffs have failed to allege that New York or the United States was the focal point of the alleged misconduct, they have failed to allege specific jurisdiction. II. PLAINTIFFS MAY NOT IMPUTE OTHER DEFENDANTS’ JURISDICTIONAL CONTACTS TO FOREIGN DEALER DEFENDANTS Having failed to allege that any individual Foreign Dealer Defendant’s purported conduct can subject it to this Court’s jurisdiction, Plaintiffs try to impute the contacts of Foreign Dealer Defendants’ affiliates and alleged co-conspirators to establish personal jurisdiction. This effort also fails, however, because Plaintiffs do not plausibly allege an agency relationship between Foreign Dealer Defendants and those entities. Personal jurisdiction cannot be established over a foreign defendant “with which the state has no contacts, ties, or relations.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945). As the Supreme Court emphasized in Walden, personal jurisdiction must be based upon “contacts that the defendant himself creates with the forum State,” and cannot be based merely on “contacts he makes by interacting with other persons affiliated with the State.” 571 U.S. at 284-86 (emphasis in original); see also Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417 (1984) (“[U]nilateral activity of another party or a third person is not an appropriate consideration when determining whether a defendant has sufficient contacts with a forum State to justify an assertion of jurisdiction.”); Rush v. Savchuk, 444 U.S. 320, 332 (1980) (“The requirements of International Shoe, however, must be met as to each defendant over whom a state court exercises jurisdiction.”). Accordingly, because Plaintiffs supply no factual allegations plausibly suggesting any U.S.-based affiliate or co- Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 34 of 50 -27- conspirator engaged in any suit-related forum contacts as the agent of any Foreign Dealer Defendant, Plaintiffs’ attempt to establish jurisdiction over Foreign Dealer Defendants based on the contacts of their corporate affiliates and their alleged co-conspirators fails. A. Plaintiffs’ Allegations Regarding the Contacts of Affiliates Fail to Confer Jurisdiction Over Foreign Dealer Defendants Plaintiffs try to conflate the jurisdictional contacts of various Foreign Dealer Defendants and their U.S. affiliates by simply grouping them under the same name.27 Courts have repeatedly held that jurisdictional allegations concerning a corporate affiliate cannot be conflated with those of another affiliate - even as between a parent company and a subsidiary - based on generalized allegations of an agency relationship. See, e.g., In re Aluminum Warehousing Antitrust Litig., 90 F. Supp. 3d 219, 227 (S.D.N.Y. 2015) (“Daimler has foreclosed the establishment of jurisdiction [through agency] based only on generalized facts[.]”); BBSW, 2018 WL 6169313, at *53 n.461 (finding no personal jurisdiction where the complaint “attribut[ed] . . . transactions to corporate families and fail[ed] to distinguish between parent and subsidiary entities” because “the allegations are insufficiently individualized to make out a prima facie case of personal jurisdiction”). The Second Circuit in Schwab confirmed this rule of law, dismissing “bare allegation[s]” of an agency relationship - specifically, “sparse” claims that certain foreign defendants “controlled or otherwise directed or materially participated in the operations” of their United States-based affiliates and “reaped proceeds or other financial benefits” from the instruments they sold - as an insufficient basis for jurisdiction. 883 F.3d at 86. Rather, plaintiffs must plead that the parent “directed the specific activities that allegedly violated [the] law.” In re LIBOR-Based Fin. Instruments Antitrust Litig., 2015 WL 6696407, at *21 (S.D.N.Y. Nov. 3, 2015); see also Tera Group, Inc. v. Citigroup, Inc., 2018 WL 4732426, at *2 (S.D.N.Y. 27 See, e.g., SAC ¶¶ 36, 38, 40, 49-50, 57-58, 62-63, 71-72, 80-81, 85-86, 90-91, 95-96, 101-02, 106-07. Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 35 of 50 -28- Sept. 28, 2018) (finding no personal jurisdiction where plaintiff referred to entire corporate families as single entity and thereby failed to adequately allege that the conduct of one affiliate was attributable to its foreign affiliate). Plaintiffs make the same boilerplate, conclusory allegations purporting to establish an agency relationship between corporate affiliates within all banking groups named as Defendants. See SAC ¶¶ 44-48, 51, 53-56, 59-61, 64-69, 75-79, 82-84, 87-89, 92-94, 97-100, 103-05 (alleging that U.S.-based affiliates executed trades “at the direction and with the knowledge and consent” of affiliated Foreign Dealer Defendants); id. ¶¶ 44-46, 51, 56, 59, 65, 67, 69, 73, 75, 76, 78, 79, 82, 87, 89, 94, 97, 98, 100, 103 (alleging that some of the SSA bond traders were registered with U.K. Financial Conduct Authority and/or FINRA as “adviser[s] to perform controlled functions or otherwise act on behalf of” certain Foreign Dealer Defendants’ U.S.- based affiliates).28 These lack the factual specificity required to plead an agency relationship between two separate corporate entities, and Plaintiffs’ boilerplate allegations as to all Defendants underscore the conclusory nature of these assertions. Gerstle, 76 F. Supp. 3d at 510 (“This lack of specificity is highlighted by, for example, the use of the same boilerplate description for the actions of [multiple defendants].”). Plaintiffs allege no facts to suggest any Foreign Dealer Defendant controlled any U.S. affiliate. The SAC offers no indication as to how these foreign entities supposedly “directed and controlled” the activities of their U.S. affiliates, how “often” this occurred, or how much “profit” allegedly was booked.29 Rather, these generic, unsupported allegations, copied verbatim throughout the SAC, are precisely the kind of “legal conclusion couched as factual allegation” that the Second Circuit has rejected. In re Aluminum 28 Plaintiffs do not dispute that at all times during the Class Period these SSA bond traders resided in and worked in offices located in the United Kingdom or elsewhere in Europe or Asia. See supra n.3. 29 Indeed, the declarations submitted in support of Foreign Dealer Defendants’ motions to dismiss makes plain that the Foreign Dealer Defendants maintain separate corporate existences from any U.S. affiliates. Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 36 of 50 -29- Warehousing Antitrust Litig., 90 F. Supp. 3d at 227, 234-35; Schwab, 883 F.3d at 86 (rejecting as an insufficient basis for jurisdiction “sparse” claims that certain foreign defendants “controlled or otherwise directed or materially participated in the operations of” their U.S. affiliates and “reaped proceeds or other financial benefits” from the instruments they sold). Moreover, even if Plaintiffs had provided any basis for imputing U.S. entities’ contacts to foreign corporate affiliates, those contacts would still fail to confer jurisdiction. As to general jurisdiction, they fail to show that any subsidiary’s contacts with the forum are so great as to compel a de facto relocation of any Foreign Dealer Defendant’s principal place of business for the purpose of establishing general jurisdiction. See infra Part IV. Nor can these contacts support specific jurisdiction, as they are not “suit-related.” See supra Part I; see also LIBOR IV, 2015 WL 6243526, at *28 (“[A]llowing a defendant’s non-suit-related conduct to substitute, for personal jurisdiction purposes, for suit-related conduct” would “[c]onfus[e] or blend[] general and specific jurisdiction inquiries.”). B. Plaintiffs’ Conspiracy Allegations Are Insufficient to Confer Jurisdiction over Foreign Dealer Defendants Plaintiffs also cannot establish jurisdiction over Foreign Dealer Defendants by imputing to them the jurisdictional contacts of in-forum Defendants based on an alleged conspiracy. See SAC ¶¶ 31-35. To make a prima facie case of conspiracy jurisdiction, Plaintiffs 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.” Schwab, 883 F.3d at 87. Plaintiffs fail to meet any of these elements. As in the CAC, they have not plausibly alleged a conspiracy (see Merits Br. at Part II) and have failed to allege a single act carried out within the forum in furtherance of the conspiracy in the United States (see supra Part I). See BBSW, 2018 WL Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 37 of 50 -30- 6169313, at *47 n.396, *53 (finding that “plaintiffs have failed to make a prima facie showing of jurisdiction under a conspiracy jurisdiction theory” because Schwab precludes finding of personal jurisdiction on the basis of U.S.-based transactions). Regardless, the exercise of personal jurisdiction must also comport with both due process and the relevant jurisdictional statutes and rules. Schwab, 883 F.3d at 82. Though the Court need not reach this issue because Plaintiffs still fail to state a prima facie case for conspiracy jurisdiction, Plaintiffs’ nonetheless fail to satisfy either requirement. 1. Plaintiffs’ Conspiracy Allegations Do Not Comport with Due Process Since the Supreme Court’s decision in Walden, courts have rejected standalone conspiracy-based jurisdiction as inconsistent with due process. See In re Aluminum Warehousing Antitrust Litig., 90 F. Supp. 3d at 227 (“The rules and doctrines applicable to personal jurisdiction are sufficient without the extension of the law to a separate and certainly nebulous ‘conspiracy jurisdiction’ doctrine.”); In re Dental Supplies Antitrust Litig., 2017 WL 4217115, at *7 (E.D.N.Y. Sept. 20, 2017) (finding that “there is no doctrinal support for ‘conspiracy jurisdiction’” and “it is highly unlikely that any concept of conspiracy jurisdiction survived the Supreme Court’s ruling in Walden”). Absent plausible allegations that a co-conspirator undertook the forum contacts as the agent of a defendant such that the co-conspirator’s activities were de facto the activities of defendant, conspiracy-based jurisdiction does not comport with due process because jurisdiction must be based upon “contacts that the ‘defendant himself’ creates with the forum State,” not “a defendant’s relationship with a plaintiff or third party.” Walden, 571 U.S. at 285-86. See also Keeton, 465 U.S. at 781 n.13 (asserting that jurisdiction must be based upon “[e]ach defendant’s contacts with the forum State” which “must be assessed individually”); In re N. Sea Brent Crude Oil Futures Litig., 2017 WL 2535731, at *9 (S.D.N.Y. June 8, 2017) (“an agency relationship is required to uphold jurisdiction based on a conspiracy Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 38 of 50 -31- theory”); In re Aluminum Warehousing Litig., 90 F. Supp. 3d at 227 (same). For more than forty years, the Second Circuit has required that a co-conspirator’s conduct may be attributed to a defendant only if, consistent with traditional agency principles, that defendant directed and controlled the agent’s in-forum tortious conduct and knew o and benefitted from such contacts. See Leasco Data Processing Equipment Corp. v. Maxwell, 468 F.2d 1326, 1341 n.11, 1343 (2d Cir. 1972) (abrogated on other grounds by Morrison v. Nat’l Australia Bank Ltd., 561 U.S. 247 (2010)) (rejecting theory that defendant’s participation in a conspiracy where a purported co-conspirator committed acts in the relevant forum demonstrates jurisdiction and suggesting that relationship of control by senior partner over more junior attorney acting in forum might result in jurisdiction); see also In re Shulman Transp. Enterprises, Inc., 744 F.2d 293, 295 (2d Cir. 1984) (“An essential characteristic of an agency relationship is that the agent acts subject to the principal’s direction and control.”); Grove Press, Inc. v. Angleton, 649 F.2d 121, 122 (2d Cir. 1981) (noting that agent’s actions establish personal jurisdiction only if “the alleged agent acted in New York for the benefit of, with the knowledge and consent of, and under some control by, the nonresident [defendant]”).30 Without the direction and control inherent in a traditional agency relationship, the alleged agent’s actions are the mere “unilateral activity of . . . a third person,” insufficient to confer personal jurisdiction over the defendant. Helicopteros, 466 U.S. at 417; see also Walden, 571 U.S. at 284 (noting it is the contacts “that the defendant himself creates with the forum State” that matter) (emphasis in original); see also In re Aluminum Warehousing Litig., 90 F. Supp. 3d at 227. 30 The Second Circuit’s decision in Schwab did not change this requirement. Schwab, like the Fourth Circuit decision on which it relied, had no occasion to reach the due process question, because the Second Circuit found that plaintiffs had failed to even state a prima facie case for conspiracy jurisdiction. Schwab, 883 F.3d at 87. There is no suggestion in Schwab that the Second Circuit rejected these agency principles. To do so would have required the court to overrule decades of Second Circuit precedent, including Leasco (cited favorably elsewhere in the Second Circuit’s Schwab opinion), which is generally prohibited. See Union of Needletrades, Indus. and Textile Emps., AFL-CIO, CLC v. U.S. I.N.S., 336 F.3d 200, 210 (2d Cir. 2003). Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 39 of 50 -32- Here, Plaintiffs’ allegations supply no plausible basis from which to infer that any Foreign Dealer Defendant directed or controlled any allegedly tortious forum contacts by any other alleged co-conspirator, or benefitted from those contacts. As set forth in the Joint Merits Brief, Plaintiffs allege sporadic, mostly bilateral chat exchanges between individual traders, none of which contain facts plausibly connecting it to a broader conspiracy or any of the other chat exchanges set forth in the SAC. See Merits Br. at Part II.B. Plaintiffs allege no mechanism through which the alleged co-conspirators not involved in any discrete chat would know of or be involved in the matters being discussed in that discrete chat, and no chats contain factual suggestions of the participation or knowledge of additional traders. With respect to the alleged trades with Named Plaintiffs that Plaintiffs speculate were impacted by discrete chat exchanges allegedly occurring within the same 24-hour period, Plaintiffs allege no facts suggesting the knowledge of, direction or control by or benefit to any other alleged cartel members aside from those alleged to have been involved in those discrete chats. Absent sufficient allegations of control, imputing another Defendant’s alleged suit-related forum contacts to Foreign Dealer Defendants would violate due process. 2. Plaintiffs’ Conspiracy Allegations Do Not Satisfy Any Applicable Jurisdictional Rule or Statute Even if Plaintiffs’ conspiracy claims did satisfy due process, the SAC still fails to allege sufficient facts to invoke a statutory basis for imputing co-Defendants’ contacts to Foreign Dealer Defendants. Any attempt to rely on New York’s long-arm statute under Federal Rule of Civil Procedure 4(k)(1)(A) or to rely on Federal Rules of Civil Procedure 4(k)(1)(C) or 4(k)(2) as a basis for Plaintiffs’ federal claims remains unavailing. New York Long-Arm Statute: The allegations in the SAC once again fail to satisfy the Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 40 of 50 -33- New York long-arm statute.31 To establish personal jurisdiction based on conspiracy under New York law, Plaintiffs “must make a prima facie showing of conspiracy, allege specific facts warranting the inference that the defendant was a member of the conspiracy, and show that the defendant’s co-conspirator committed a tort in [the forum].” In re Terrorist Attacks on Sept. 11, 2011, 349 F. Supp. 2d at 805. Plaintiffs fail to meet these requirements because they (i) fail to adequately allege a conspiracy to manipulate the “market” for USD SSA bonds (see Merits Brief at Part II); (ii) fail to allege an act in furtherance of the alleged conspiracy occurred in New York (see supra at Part I); and (iii) do not meet the standard necessary to impute contacts among alleged co-conspirators, which requires Plaintiffs to allege that “(a) [Foreign Dealer Defendants] had an awareness of the effects in New York of [the conspiracy’s] activity; (b) the activity of the co-conspirators in New York was to the benefit of the out-of-state conspirators; and (c) the co- conspirators acting in New York acted at the direction or under the control or at the request of or on the behalf of the out-of-state defendant.” 7 W. 57th St. Realty Co., 2015 WL 1514539, at *12; see supra Part III.B.1. Rule 4(k): The allegations in the SAC are also still inadequate under Federal Rule of Civil Procedure 4(k)(1)(C) (establishing personal jurisdiction when authorized by federal statute) and 4(k)(2) (establishing personal jurisdiction for claims arising under federal law where the defendant is not subject to general jurisdiction of any state court) - as courts have held conspiracy jurisdiction is not recognized under federal common law unless plaintiffs can establish an agency relationship between defendants and the alleged in-forum suit-related conduct. See, e.g., In re Aluminum Warehousing Antitrust Litig., 90 F. Supp. 3d at 227 (refusing 31 Because this Court’s exercise of personal jurisdiction over Foreign Dealer Defendants is limited to the jurisdiction of a New York State court pursuant to Federal Rule of Civil Procedure 4(k)(1)(A), Plaintiffs must allege facts sufficient to satisfy both New York’s long-arm statute and the due process requirements of the Fourteenth Amendment. In re Terrorist Attacks on Sept. 11, 2001, 349 F. Supp. 2d 765, 804 (S.D.N.Y. 2005). Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 41 of 50 -34- to “find that the assertion of participation in a conspiracy generally can provide a standalone basis for jurisdiction subject only to the constraints of due process” because extension of the statute “could potentially extend jurisdiction beyond that which Congress intended,” and “[i]f Congress had wanted such a general exception, it could have so legislated”).32 III. THE FEDERAL STATUTE ON WHICH PLAINTIFFS RELY DOES NOT PROVIDE ANY ALTERNATE BASIS FOR JURISDICTION Plaintiffs cannot rely on Foreign Dealer Defendants’ purported contacts with the United States to establish personal jurisdiction under the nationwide service of process provision under the Clayton Act, 15 U.S.C. § 22. SAC ¶ 30. As an initial matter, even if the Court were to engage in an analysis of Foreign Dealer Defendants’ contacts with the United States, Plaintiffs have not identified any contacts with the United States or New York sufficient to establish personal jurisdiction over any Foreign Dealer Defendant. See supra Parts I & II. Moreover, even if it mattered whether the Court conducted a nationwide contacts approach, such an approach would violate due process. Although the Second Circuit has yet to rule on whether nationwide service of process provisions, like the one in the Clayton Act, allow plaintiffs to establish jurisdiction using a nationwide contacts analysis consistent with due process, see Gucci America, Inc. v. Weixing Li, 768 F.3d 122, 142 n.21 (2d Cir. 2014), the Supreme Court’s focus in Daimler on due process as a matter of fundamental fairness and reasonableness to the defendant compels the rejection of the nationwide contacts approach as inconsistent with due process. See 571 U.S. at 139 (determining that such “exorbitant exercises of all-purpose jurisdiction would 32 Plaintiffs also cannot avail themselves of Rule 4(k)(2) because they have not satisfied the plain terms of the rule, which contemplates a potential basis for personal jurisdiction over a defendant only when “‘the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction.’” Porina v. Marward Shipping Co., 521 F.3d 122, 126-27 (2d Cir. 2008) (quoting Fed. R. Civ. P. 4(k)(2)(A)). Courts within the Second Circuit have imposed on plaintiffs the initial burden to certify that the defendants over which personal jurisdiction purportedly exists pursuant to Rule 4(k)(2) are not subject to jurisdiction in any particular state forum. See, e.g., 7 W. 57th St. Realty Co., 2015 WL 1514539, at *13. Plaintiffs have made no such certification here. Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 42 of 50 -35- scarcely permit out-of-state defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit”). IV. PLAINTIFFS’ FAILURE TO ALLEGE PROPER VENUE UNDER THE CLAYTON ACT PRECLUDES PERSONAL JURISDICTION OVER VENUE DEFENDANTS Because Plaintiffs fail to plausibly plead venue as to Venue Defendants, they also fail to plead personal jurisdiction over them. To successfully assert jurisdiction over a defendant based on the Clayton Act’s nationwide service provision, 15 U.S.C. § 22, a plaintiff must also satisfy the Act’s venue requirements. Daniel v. American Bd. of Emergency Med., 428 F.3d 408, 424- 35 (2d Cir. 2005). For venue to be proper in a district where a defendant is not “an inhabitant,”33 the defendant must “be found or transact[] business” there. 15 U.S.C. § 22. The phrase “transacts business” refers to “business of any substantial character,” which requires “some amount of business continuity and certainly more than a few isolated and peripheral contacts.”34 Gates v. Wilkinson, 2003 WL 21297296, at *1 (S.D.N.Y. June 4, 2003); see also Pincione v. D’Alfonso, 506 F. App’x 22, 24 (2d Cir. 2012). Only contacts with the specific district in which suit was brought are relevant. Daniel, 428 F.3d at 430. Because Plaintiffs fail to allege that Venue Defendants are “found” or “transact[] business” in this District, they fail to establish personal jurisdiction over Venue Defendants. See id. at 423; see also BBSW, 2018 WL 6169313, at *47-49 (dismissing plaintiffs’ claims for lack of personal jurisdiction where plaintiffs failed to allege that “Venue Defendants satisfy the venue provision of Section 12 - that is, whether the amended complaint has sufficiently alleged that they ‘transact business’ in the Southern District 33 For a corporation, “inhabitant” means its place of incorporation. See, e.g., Expoconsul Int’l, Inc. v. A/E Systems, Inc., 711 F. Supp. 730, 732-33 (S.D.N.Y. 1989). 34 To “be found” in a district requires more than “transact[ing] business” there. U.S. v. Watchmakers of Switzerland Info. Ctr., 133 F. Supp. 40, 42 (S.D.N.Y. 1955) (“‘Found’ requires something more than ‘transacting business.’”). As Venue Defendants do not transact business in this district, they also are not found here. Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 43 of 50 -36- of New York” and noting that “[a]llegations that certain of these defendants are parent companies of subsidiaries that transact business in New York do not suffice to show that the parent companies transact business in New York”). V. FOREIGN DEALER DEFENDANTS ARE NOT SUBJECT TO GENERAL JURISDICTION A. Foreign Dealer Defendants Are Not “At Home” in New York This Court may not exercise general jurisdiction over any Foreign Dealer Defendants because no Foreign Dealer Defendant is “at home” in New York. In Daimler, the Supreme Court held that a defendant is subject to general jurisdiction in a forum “only when the corporation’s affiliations with the State in which suit is brought are so constant and pervasive as to render [it] essentially at home in the State.” 571 U.S. at 122. “[E]xcept in a truly ‘exceptional’ case, a corporate defendant may be treated as ‘essentially at home’ only where it is incorporated or maintains its principal place of business - the ‘paradigm’ cases.” Brown v. Lockheed Martin Corp., 814 F.3d 619, 627 (2d Cir. 2016). As Plaintiffs effectively concede (see SAC ¶¶ 44-107), and as each of the declarations submitted in support of Foreign Dealer Defendants’ motions to dismiss confirms, no Foreign Dealer Defendant has its place of incorporation or principal place of business in New York. To the contrary, the declarations submitted in support of Foreign Dealer Defendants’ motions to dismiss show that Foreign Dealer Defendants’ contacts with the forum reflect only a small (or non-existent) portion of their global operations.35 Plaintiffs fail to demonstrate, as they must, that any Foreign Dealer Defendant’s contacts with New York would “shift the company’s primary place of business (or place of 35 Nor do Plaintiffs come close to alleging that any Foreign Dealer Defendant presents an “exceptional case.” See Daimler, 571 U.S. at 138 n.19 (identifying as an example of an “exceptional case” the complete relocation of a Philippine corporation’s nerve center during World War II in Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952)); see also Waldman, 835 F.3d at 333 (corporations are subject to general jurisdiction only “where the entities [are] centered” and not where they engage in a “substantial, continuous, and systematic course of business”). Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 44 of 50 -37- incorporation) away from” its home country. Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221, 226 (2d Cir. 2014); see also Brown, 814 F.3d at 629. Repeated decisions in this district have refused to find general jurisdiction in New York as to global bank defendants, including several Foreign Dealer Defendants here.36 This Court should do the same. B. Foreign Dealer Defendants Are Not Subject to General Jurisdiction by Registering Their New York Branches Nor can Plaintiffs argue that certain Foreign Dealer Defendants’37 registration with the NYSDFS serves as a basis for general jurisdiction. As the Second Circuit held, “registration and the accompanying appointment of an in-state agent - without an express consent to general jurisdiction” - is insufficient to confer general jurisdiction and would result in “Daimler’s ruling [being] robbed of meaning by a back-door thief.” Brown, 814 F.3d at 639-40. Registering under N.Y. Banking Law § 200 does not amount to consent to general jurisdiction and to find otherwise would violate the Constitution.38 N.Y. Banking Law § 200(3) requires that a foreign bank operating in New York appoint a representative for service of process “on a cause of action arising out of a transaction with its New York agency or agencies or branch or branches.” N.Y. 36 See, e.g., BBSW, 2018 WL 6169313, at *1 n.3, *51 (finding no general jurisdiction over BNP Paribas, Credit Suisse AG, and Royal Bank of Canada); LIBOR IV, 2015 WL 6243526, at *1 n.3, *27 (finding no general jurisdiction over foreign defendants, including Barclays Bank PLC, Credit Suisse AG, Credit Suisse International, and Royal Bank of Canada); see also Lopez, 2017 WL 2229868, at *7; U.S. Bank Nat’l Ass’n v. Bank of America, N.A., 2016 WL 5118298, at *9 (S.D.N.Y. Sept. 20, 2016). 37 These Defendants are: Barclays Bank PLC (SAC ¶ 58); BNP Paribas (id. ¶ 63); Crédit Agricole Corporate & Investment Bank (id. ¶ 74); Credit Suisse AG (id. ¶¶ 75, 81); and Royal Bank of Canada (id. ¶ 102). 38 Any interpretation otherwise would violate the unconstitutional conditions doctrine by requiring Defendants to surrender their constitutional rights guaranteed under Daimler and Gucci in order to receive a government benefit (i.e., the privilege of registering a bank branch in New York). See Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595, 604 (2013) (noting that “the government may not deny a benefit to a person because he exercises a constitutional right”). Furthermore, such an interpretation would violate the Dormant Commerce Clause because a statute that “compels every foreign interstate carrier to submit to suit there as a condition of maintaining a soliciting agent within the state” would “impose[] upon interstate commerce a serious and unreasonable burden.” Davis v. Farmers’ Co-op. Equity Co., 262 U.S. 312, 315 (1923); see also In re Syngenta AG MIR 162 Corn Litig., 2016 WL 2866166, at *6 (D. Kan. May 17, 2016) (considering a consent-based registration statute an unconstitutional violation of Dormant Commerce Clause). Even if Plaintiffs’ reading of the relevant statutory provisions were reasonable, which it is not, those provisions should be construed so as to “avoid[] the constitutional issue.” Legal Servs. Corp. v. Velazquez, 531 U.S. 533, 545 (2001). Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 45 of 50 -38- Banking Law § 200(3) (emphasis added). This statute does not require express consent to general jurisdiction. Rather, its plain language limits consent to those suits “arising out of a transaction” with the foreign bank’s New York agency or branch. Id. Numerous judges in this district have reached the same conclusion.39 Plaintiffs also cannot rely on N.Y. Banking Law §200-b to establish jurisdiction because § 200-b merely provides a basis for subject matter jurisdiction. Indosuez Int’l Fin. B.V. v. Nat’l Reserve Bank, 98 N.Y.2d 238, 248 (2002) (noting that § 200-b confers subject matter jurisdiction); Forex, 2016 WL 1268267, at *2 (“New York Court of Appeals has interpreted § 200-b to confer subject matter jurisdiction and not personal jurisdiction.”). Moreover, foreign banks register and appoint service agents under § 200, not § 200-b, and, therefore, have taken no action from which consent to jurisdiction might be implied. See Forex, 2016 WL 1268267, at *2. No Foreign Dealer Defendant consented to general jurisdiction by registering with the NYSDFS. VI. CONSIDERATIONS OF FAIR PLAY, SUBSTANTIAL JUSTICE, AND INTERNATIONAL COMITY SUPPORT DISMISSAL In analyzing both general and specific jurisdiction, the Court must also determine whether exercising jurisdiction “would comport with fair play and substantial justice.” Gucci, 768 F.3d at 136; see also Lopez, 2017 WL 2229868, at *8. Relevant factors at this step of the analysis include: (1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; and (3) plaintiffs’ interest in 39 See, e.g., BBSW, 2018 WL 6169313, at *58 & n.501 (collecting cases and concluding that neither BNP Paribas nor Credit Suisse AG “has consented to general personal jurisdiction in New York by virtue of their registration under New York Banking Law § 200”); Sullivan, 2017 WL 685570, at *39 (noting that § 200(3) “does not establish a consent to jurisdiction by the branch’s foreign parent, and courts in this District have uniformly rejected plaintiffs’ argument”); see also In re LIBOR-Based Fin. Instruments Antitrust Litig., 2016 WL 1558504, at *7 (S.D.N.Y. Apr. 15, 2016) (registration under § 200(3) does not amount to consent to general jurisdiction); In re Foreign Exch. Benchmark Rates Antitrust Litig., 2016 WL 1268267, at *2 (S.D.N.Y. Mar. 31, 2016) (“Forex”) (same); Motorola Credit Corp. v. Uzan, 132 F. Supp. 3d 518, 521-22 (S.D.N.Y. 2015) (same); 7 W. 57th St. Realty Co., 2015 WL 1514539, at *11 (same). Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 46 of 50 -39- obtaining convenient and effective relief. Licci, 732 F.3d at 170; see also Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 164 (2d Cir. 2010). Where there is a “weak showing of minimum contacts,” there must be a “stronger showing of reasonableness” to exercise personal jurisdiction. Gmurzynska v. Hutton, 257 F. Supp. 2d 621, 628 (S.D.N.Y. 2003). Also relevant is whether exercising jurisdiction threatens “international rapport.” Daimler, 571 U.S. at 142. The Supreme Court has held that “[g]reat care and reserve should be exercised when extending our notions of personal jurisdiction into the international field.” Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 115 (1987). “The unique burdens placed upon one who must defend oneself in a foreign legal system should have significant weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders.” Id. at 114. And the Supreme Court in Daimler emphasized the importance of international comity in assessing whether personal jurisdiction may be exercised over a foreign defendant and expressly warned of “the risks to international comity” that might result from an expansive view of general jurisdiction inconsistent with due process. 571 U.S. at 140; see also Gucci, 768 F.3d at 135. Plaintiffs overstep these limits in trying to establish jurisdiction over Foreign Dealer Defendants in New York based on a purported conspiracy to manipulate the USD SSA bonds “market” through conduct occurring exclusively outside of the United States and that was not specifically directed at the United States. See supra Part II.40 This threat to international comity provides an independent basis to reject extending personal jurisdiction over Foreign Dealer Defendants, particularly when examined in the context of the United Kingdom’s interest in 40 See, e.g., Brown, 814 F.3d at 625 (“[C]onstitutional due process principles generally restrict the power of a state to endow its courts with personal jurisdiction over foreign corporate parties . . . with regard to matters not arising within the state.”); Madison Capital Markets, LLC v. Starneth Europe B.V., 2016 WL 4484251, at *11-12 (S.D.N.Y. Aug. 23, 2016) (stating that the exercise of personal jurisdiction would not “comport with fair play and substantial justice” because plaintiff failed to allege sufficient suit-related contacts between defendant and the forum); Laydon V, 2015 WL 1515358, at *6. Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 47 of 50 -40- regulating conduct within its borders. Furthermore, as all alleged relevant conduct occurred overseas and primarily in the United Kingdom, any relevant witnesses would most likely be located there if the case proceeded to trial. See Gmurzynska, 257 F. Supp. 2d at 628. Even if Plaintiffs could allege that one or more co-conspirators committed an overt act in New York or the United States, exercising jurisdiction over Foreign Dealer Defendants based on a theory of vicarious conspiracy jurisdiction, unlinked to the conduct of each Foreign Dealer Defendant directed towards the forum, would be unreasonably burdensome and threaten due process. See Laydon V, 2015 WL 1515358, at *6 (finding that “personal jurisdiction . . . would not comport with notions of fair play and substantial justice” in Euroyen TIBOR conspiracy case where foreign defendants’ TIBOR submitters were located outside the United States). Subjecting Foreign Dealer Defendants to jurisdiction based on such attenuated contacts would not “merely be inconvenient,” it “would violate our basic sense of fair play and substantial justice - and deprive the defendants of the due process guaranteed by the Constitution.” Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 575 (2d Cir. 1996). CONCLUSION As against the Foreign Dealer Defendants, the Second Amended Complaint should be dismissed with prejudice. Dated: December 21, 2018 New York, New York Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 48 of 50 -41- /s/ Barry Sher Barry Sher Anthony Antonelli PAUL HASTINGS LLP 200 Park Avenue New York, NY 10166 Telephone: (212) 318-6085 Fax: (212) 230-5185 barrysher@paulhastings.com anthonyantonelli@paulhastings.com Attorneys for Defendants Barclays Bank PLC, Barclays Services Limited, and Barclays Capital Securities Limited /s/ Carmine D. Boccuzzi Jr. ) Carmine D. Boccuzzi Jr. Martha E. Vega-Gonzalez Timothy Thomas Leech CLEARY GOTTLIEB STEEN & HAMILTON LLP One Liberty Plaza New York, New York 10006 Telephone: (212) 225-2508 Fax: (212) 225-3999 cboccuzzi@cgsh.com mvega-gonzalez@cgsh.com tleech@cgsh.com Attorneys for Defendant BNP Paribas /s/ Jay B. Kasner Jay B. Kasner Karen M. Lent SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Four Times Square New York, New York 10036 Telephone: (212) 735-3000 Fax: (212) 735-2000 jay.kasner@skadden.com karen.lent@skadden.com Attorneys for Defendant Citigroup Global Markets Limited /s/ Lisa J. Fried Lisa J. Fried Benjamin A. Fleming HOGAN LOVELLS US LLP 875 Third Avenue New York, New York 10022 Telephone: (212) 918-3000 Fax: (212) 918-3100 lisa.fried@hoganlovells.com benjamin.fleming@hoganlovells.com Benjamin Holt HOGAN LOVELLS US LLP 555 Thirteenth Street, NW Washington, DC 20004 Telephone: (202) 637-8845 Fax: (202) 637-5910 benjamin.holt@hoganlovells.com Attorneys for Defendant Crédit Agricole Corporate & Investment Bank Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 49 of 50 -42- /s/ David G. Januszewski Herbert S. Washer David G. Januszewski Elai Katz Jason M. Hall Sheila C. Ramesh Adam S. Mintz CAHILL GORDON & REINDEL LLP 80 Pine Street New York, New York 10005 Telephone: (212) 701-3000 Fax: (212) 269-5420 hwasher@cahill.com djanuszewski@cahill.com ekatz@cahill.com jhall@cahill.com sramesh@cahill.com amintz@cahill.com Attorneys for Defendants Credit Suisse AG, Credit Suisse Securities (Europe) Ltd., and Credit Suisse International /s/ John D. Buretta John D. Buretta CRAVATH, SWAINE & MOORE LLP 825 Eighth Avenue New York, New York 10019 Telephone: (212) 474-1000 Fax: (212) 474-3700 jburetta@cravath.com Attorneys for Defendant Nomura International plc /s/ Alexander J. Willscher ) Alexander J. Willscher Matthew J. Porpora Stephen H. O. Clarke SULLIVAN & CROMWELL LLP 125 Broad Street New York, New York 10004 Telephone: (212) 558-4000 Fax: (212) 558-3588 willschera@sullcrom.com porporam@sullcrom.com clarkest@sullcrom.com Attorneys for Defendants Royal Bank of Canada and RBC Europe Limited /s/ James H.R. Windels James H.R. Windels Bryan McArdle DAVIS POLK & WARDWELL LLP 450 Lexington Avenue New York, New York 10017 Telephone: (212) 450-4000 Fax: (212) 701-5800 james.windels@davispolk.com bryan.mcardle@davispolk.com Attorneys for Defendant The Toronto- Dominion Bank Case 1:16-cv-03711-ER Document 521 Filed 12/21/18 Page 50 of 50