On May 23, 2016, the Second Circuit Court of Appeals vacated a judgment which dismissed antitrust claims against 16 big banks.  The plaintiffs’ claims arose from the alleged manipulation of what has been called “the world’s most important number”—the London InterBank Offered Rate (“LIBOR”), a primary benchmark for global short-term interest rates.  According to the plaintiffs, the defendants, who are members of a panel assembled by a bank trade association to calculate a daily interest rate benchmark, conspired to submit artificial, depressed rates during the period of August 2007 to May 2010.  The plaintiffs, who are members of a class action that paid interest indexed to LIBOR, alleged that they suffered injury because they held positions in various financial instruments that were negatively affected by the defendants’ fixing of the benchmark interest rate.

The United States District Court for the Southern District of New York dismissed the plaintiffs’ claims on the grounds that the complaints failed to plead antitrust injury, which is required to successfully establish standing under the Clayton Antitrust Act.  The district court explained that because the LIBOR-setting process was a “cooperative endeavor,” there could be no anticompetitive harm.

The Second Circuit Court of Appeals disagreed, stating that “[t]he Sherman Act safeguards consumers from marketplace abuses; [plaintiffs] are consumers claiming injury from a horizontal price‐fixing conspiracy.  They have accordingly plausibly alleged antitrust injury.”  The court vacated the lower court’s decision and remanded the case to determine whether the plaintiffs sufficiently alleged the second requirement to establish standing—whether the plaintiffs are efficient enforcers of antitrust laws.

While limited in scope, this decision may affect how courts assess standing in antitrust cases involving other benchmark rates.