U.S. Second Circuit Revives Dismissed Libor Antitrust Claims for Litigation

Policy and Regulatory Report
May 23, 2016

Jay L. Himes comments on the U.S. Second Circuit decision regarding the Libor antitrust claims


The U.S. Second Circuit Court of Appeals decision sending the Libor antitrust claims back to the trial court provides a simple approach to guide other courts in antitrust cases generally, not simply those involving financial services products, lawyers say.

The case in the Southern District of New York arises from allegations that the world’s major banks engaged in a horizontal price-fixing conspiracy to suppress the London interbank offered rate (Libor)—an interest rate benchmark set daily by a panel of 16 banks upon which trillions of dollars of financial transactions depend—between August 2007 and December 2010.

Jay Himes, Co-Chair of Labaton Sucharow’s Antitrust and Competition Litigation Practice, called the appeals panel’s unanimous Libor decision a “back-to-basics approach” in which “the Second Circuit was mindful of both the forest and the trees.”

Himes continued by saying, “the Second Circuit emphasized the US Supreme Court’s classic antitrust holding in US v. Socony-Vacuum Oil Company that the machinery employed by a combination for price‐fixing is immaterial.” The 1940 decision is widely cited for the proposition that price-fixing is per se illegal. “The appeals panel reiterated SCOTUS’s holding in Catalano v Target Sales that fixing a component of price, such as Libor, is just as much a per se violation as fixing the total price of an item itself,” Himes said.

Himes added, “the Second Circuit’s decision follows precedent on per se illegality; where plaintiffs plead that they paid higher prices caused by a price-fixing conspiracy, no further showing of actual adverse effect in the marketplace is necessary” to plead antitrust injury.