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May 27, 2016
Via ECF and Hand Delivery
The Honorable Naomi Reice Buchwald
United States District Judge
Daniel Patrick Moynihan Courthouse
500 Pearl Street
New York, New York 10007-1312
Re:
MATTHEW W ABBOTT
EDWARD T ACKERMAN
JACOB A A D L E R S T E I N
A L L A N J ARFFA
ROBERT A A T K I N S
DAVID J B A L L
SCOTT A B A R S H A Y
JOHN F BAUGHMAN
LYNN B BAYARD
DANIEL J SELLER
CRAIG A B E N S O N
M I T C H E L L L BERG
MARK S BERGMAN
BRUCE B I R E N B O I M
H CHRISTOPHER BOEHNfNG
A N G E L O BONV1NO
J A M E S L BROCH1N
RICHARD J BRONSTEIN
DAVID W B R O W N
SUSANNA M BUERGEL
PATRICK S C A M P B E L L "
J E S S I C A S CAREY
JEANETTE K CHAN
YVONNE Y F CHAN
GEOFFREY R C H E P I G A
ELLEN N CHING
WILLIAM A CLAREMAN
LEWIS R CLAYTON
JAY C O H E N
KELLEY A CORNISH
CHRISTOPHER J CUMMINGS
CHARLES E DAViDOW
T H O M A S V DE L A B A S T I D E t i l
ARIEL J DECKELBAUM
A L I C E B E L I S L E EATON
ANDREW J EHRLICH
GREGORY A EZRING
L E S L I E G O R D O N FAGEN
MARC F A L C O N E
ROSS A F I E L D S T O N
ANDREW C FINCH
BRAD J FINKELSTE1N
BRIAN P FINNEGAN
ROBERTO F I N Z I
PETER E FISCH
ROBERT C F L E D E R
MARTIN FLUMENBAUM
A N D R E W J FOLEY
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M A N U E L S PREY
ANDREW L GAINES
KENNETH A GALL0
MICHAEL E GERTZMAN
A D A M M GIVERTZ
SALVATORE G O G L I O R M E L L A
ROBERT D G O L D B A U M
NEIL GOLDMAN
ROBERTO J GONZALEZ- 1
CATHERINE L GOODALL
ERIC GOODISON
C H A R L E S H GOOGE JR
A N D R E W G GORDON
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NICHOLAS GROOMBRIDGE
BRUCE A G U T E N P L A N
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JUSTIN G HAMILL
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THEODORE V W E L L S JR
STEVEN J W I L L I A M S
L A W R E N C E I W1TDORCH1C
MARK B W L A Z L O
J U L I A MASON WOOD
JENNIFER H W U
J O R D A N E YARETT
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TONG YU
T R A C E Y A ZACCONE
TAUR1E M ZEITZER
T ROBERT Z O C H O W S K I JR
lAL'MIITEDTt UU N t . V V O K K y A I l
In re LIBOR-Based Financial Instruments Antitrust Litigation,
No. 1 l-cv-2613 (NRB), Master File No. 1 l-md-2262 (NRB)
Dear Judge Buchwald:
We represent Defendant Deutsche Bank AG ("Deutsche Bank") in the
above-captioned litigation, and we write in response to the Exchange-Based Plaintiffs'
("Exchange-Based Plaintiffs") letter of May 17, 2016, ECF No. 1411 ("May 17 Letter"),
regarding their request for leave to file a motion to compel the production of documents.
Exchange-Based Plaintiffs' letter is premature as to Deutsche Bank and
does not accurately reflect the parties' ongoing negotiations concerning production. Until
recently—April 15, 2016, when this Court granted leave to amend in In re LIBOR-Based
Fin. Instruments Antitrust Litig., ll-md-2262 (NRB), 2016 WL 1558504 (S.D.N.Y. Apr.
15, 2016) (the "April 15 Order")— Exchange-Based Plaintiffs had no live claims against
Deutsche Bank. Specifically, the April 15 Order permitted Exchange-Based Plaintiffs to
proceed with trader-based manipulation claims against Deutsche Bank on two dates
within "Period Zero," i.e., January 1, 2005 through August 8, 2007. Id.9at*ll.
Deutsche Bank began to meet and confer with Exchange-Based Plaintiffs promptly after
Case 1:11-md-02262-NRB Document 1427 Filed 05/27/16 Page 2 of 3
PAUL, W K I S S , R I I - K I N P , W H A R T t ^ N & C i A R R I S O N L
The Honorable Naomi Reice Buchwald
the April 15 Order, on April 27, 2016, and that process remains ongoing. Indeed, it was
not until Exchange-Based Plaintiffs filed their May 17 Letter that Deutsche Bank learned
that the parties had apparently reached an impasse in their negotiations.1
Accordingly, Deutsche Bank does not agree with the claims in the May 17
Letter that the parties have reached an impasse requiring this Court's intervention, or that
Deutsche Bank has flatly refused to provide certain categories of documents to
Exchange-Based Plaintiffs. For example, it is not the case that Deutsche Bank is
unwilling to produce "search terms, custodians and server locations, as well as a list of
materials provided to government regulators (or cover letters)," as suggested by the May
17 Letter. See May 17 Letter at 2. To the contrary, at a meet-and-confer conference on
May 6, 2016, Deutsche Bank offered to produce much of this requested information as
part of a proposed compromise regarding Request Nos. 39 and 40 of Plaintiffs' First
Coordinated Set of Requests for Production. Deutsche Bank reiterated this offer in
subsequent meet-and-confer conferences held on May 23, 2016 and May 26, 2016, both
following the filing of the May 17 Letter. We understand that Exchange-Based Plaintiffs
are considering our proposal, and we await their response.
With respect to the production of underlying communications, ExchangeBased Plaintiffs' position that they are entitled to all communications about USD LIBOR
that Deutsche Bank produced to U.S. Government Regulators, regardless of time period,
ignores the narrow scope of their claims against Deutsche Bank. The April 15 Order held
that Exchange-Based Plaintiffs could assert claims under the Commodity Exchange Act
against Deutsche Bank only for trader-based manipulation and only on two dates—
November 28, 2005 and March 1, 2007—on which Plaintiffs alleged that they held net
positions. April 15 Order, 2016 WL 1558504 at *8-9; see also In re LIBOR-Based Fin.
Instruments Antitrust Litig. ("LIBOR / / / ' ) , 27 F. Supp. 3d 447, 462, 465 (S.D.N.Y. 2014).
Thus, during our meet-and-confer conferences, Deutsche Bank offered to produce
communications concerning USD LIBOR, previously produced to U.S. Government
Regulators, that were dated on or concerned the two dates for which Exchange-Based
Plaintiffs may proceed with trader-based manipulation claims against Deutsche Bank.
Deutsche Bank also indicated a willingness to produce all communications concerning
conduct on any other dates during Period Zero on which Exchange-Based Plaintiffs held
net positions. Subsequently, on the basis of representations about their net positions that
Exchange-Based Plaintiffs made after the filing of the May 17 Letter, Deutsche Bank
offered to produce all communications concerning USD LIBOR during Period Zero that
were previously produced to U.S. Government Regulators. Exchange-Based Plaintiffs
are also considering this proposal.
i
Prior to filing the May 17 Letter, Exchange-Based Plaintiffs had not provided Deutsche Bank with any
form of notice, either written or oral, that Exchange-Based Plaintiffs and Deutsche Bank had reached
an impasse in their negotiations, or that their letter to the Court was forthcoming.
Case 1:11-md-02262-NRB Document 1427 Filed 05/27/16 Page 3 of 3
PAUL, W H I S S , R I F K I N D , W H A R T O N & G A R R I S O N I.LI
The Honorable Naomi Reice Buchwald
Communications from outside Period Zero, however, are not relevant to
proving trader-based manipulation within Period Zero and, therefore, are not relevant to
Exchange-Based Plaintiffs' claims against Deutsche Bank. Although Exchange-Based
Plaintiffs assert that communications from outside Period Zero may shed light on the
truth or falsity of statements made during the alleged class period, see May 17 Letter at
2-3, this assertion is contrary to the law of the case, which holds that "[p]roof that a bank
caused an artificial price one day will not determine whether it did so on another day."
April 15 Order, 2016 WL 1558504, at *9. Deutsche Bank's conduct after Period Zero,
therefore, is not probative of its conduct within Period Zero.
Furthermore, it remains at best unclear how discovery of communications
post-dating Period Zero (or, for that matter, any communications) will assist ExchangeBased Plaintiffs in developing a "damages model that incorporates 'but-for' LIBOR."
See May 17 Letter at 4. Exchange-Based Plaintiffs state that communications relating to
LIBOR submissions "will help show intention, motive and impact on the market," id, but
they do not explain how they plan to use such communications in their motion for class
certification. On a May 11, 2016 meet-and-confer call, Deutsche Bank similarly asked
Exchange-Based Plaintiffs to elaborate on how communications could possibly relate to a
"damages model," but Plaintiffs were unable to do so. A conclusory assertion that
communications could be incorporated into a damages model, without more, is not
sufficient.
Since the Court issued its April 15 Order, Deutsche Bank has routinely
met and conferred with Exchange-Based Plaintiffs about their requests and the
appropriate scope of production. Deutsche Bank remains willing to continue that
process. It is also willing to consider providing relevant USD LIBOR communications
previously produced to U.S. Government Regulators for time periods beyond Period Zero
if Exchange-Based Plaintiffs can provide a legitimate explanation for why such
production is relevant to their claims and consistent with Rule 26. Deutsche Bank asks
Your Honor to allow the meet-and-confer process to continue on this subject.
For the reasons set forth above, Deutsche Bank respectfully requests that
the Court deny Exchange-Based Plaintiffs' request for a pre-motion discovery
conference.
Respectfully submitted,
Andrew C. Finch
cc:
All Counsel of Record (via ECF)