Contant v. AMA Capital, LLC

66 F.4th 59

James CONTANT, on behalf of themselves and all others similarly situated,Martin-Han Tran, on behalf of themselves and all others similarly situated,Carlos Gonzalez, on behalf of themselves and all others similarly situated,Ugnius Matkus, on behalf of themselves and all others similarly situated,Jerry Jacobson, on behalf of themselves and all others similarly situated,Paul Vermillion, on behalf of themselves and all others similarly situated,Sandra Lavender, Victor Hernandez, FX Primus Ltd.,Charles G. Hitchcock, III, Tina Porter, Plaintiffs-Appellees, v. AMA CAPITAL, LLC, Movant-Appellant.^*

No. 21-3058 (L)

No. 22-19 (Con)

No. 22-159 (Con)

August Term 2022

United States Court of Appeals, Second Circuit

Argued: February 7, 2023

Decided: April 14, 2023

Appeal from the United States District Court for the Southern District of New York, No. 17-cv-9934, Lorna G. Schofield, Judge.

Scott O. Luskin, Payne & Fears LLP, El Segundo, CA (Damian R. Cavaleri, Hoguet Newman, Regal & Kenney, LLP, New York, NY, on the brief), for Movant-Appellant.

Michael Dell'Angelo, Berger & Montague, P.C., Philadelphia, PA (Robert B. McCulley, McCulley McCluer LLC, Charleston, SC; Michael J. Kane, Berger & Montague, P.C., Philadelphia, PA, on the brief), for Plaintiffs-Appellees.

Before: Parker, Sullivan, Merriam, Circuit Judges.

Richard J. Sullivan, Circuit Judge:

AMA Capital, LLC ("AMA") is a claimant in an antitrust class-action settlement. The settlement agreement at issue required that each claimant substantiate its claims with such documents as class counsel and the claims administrator, in their discretion, deemed acceptable. The settlement agreement also provided each claimant with the opportunity to (1) remedy deficiencies in its claims before the claims administrator issued its decision, and (2) if the claims administrator rejected its claims in whole or in part, contest the claims administrator's decision within twenty days of the mailing of the rejection notice. In this case, the claims administrator rejected most of AMA's claims because, among other things, AMA repeatedly failed to provide the requisite transactional records to support its claims. The district court (Schofield, J.) agreed and also denied AMA's motion for reconsideration based on documents it submitted subsequent to the claims administrator's rejection.

On appeal, AMA argues primarily that the district court erred by failing to consider documents it submitted during the post-rejection contest process and by denying its claims on the basis of improper evidentiary requirements. Because we conclude (1) that the claims administrator was not required to accept records during the contest process that were previously available to AMA, which is akin to a motion for reconsideration, and (2) that the district court did not err by denying AMA's claims on the grounds that they lacked the requisite transactional records, we AFFIRM the orders of the district court on appeal in Nos. 21-3058 and 22-159. Moreover, because AMA has standing as a class member to appeal any denial of its claims, we DISMISS as moot the appeal in No. 22-19, which challenges the district court's denial of AMA's motion to intervene.¹

I. BACKGROUND

In 2013, individuals and entities who directly purchased foreign-exchange products from various international banks brought a class action alleging that the banks conspired with each other to fix prices in the foreign-exchange market; the parties ultimately settled that suit in August 2018. See In re Foreign Exch. Benchmark Rates Antitrust Litig. (FOREX), No. 13-cv-7789 (LGS) (Aug. 6, 2018, S.D.N.Y.). Separately, in 2017, Plaintiffs - a group of investors in foreign-exchange products - brought this class action ("Contant") against the banks, alleging that through various retail foreign-exchange dealers ("RFEDs"), Plaintiffs indirectly purchased foreign-exchange products from the banks at prices that were inflated as a result of the price-fixing conspiracy. By July 2020, the parties in this action agreed to resolve all indirect claims as part of a $23.6 million settlement. On November 19, 2020, the district court granted final approval of the settlement and dismissed the action with prejudice.

As relevant here, the settlement agreement approved by the district court (the "Settlement Agreement") defined the class to include "[a]ll persons and entities who . . . indirectly purchased an [i]nstrument from a [d]efendant or co-conspirator . . . by entering into an [i]nstrument with a member of the [FOREX settlement class], where the [FOREX settlement class] member entered into the [i]nstrument directly with a [d]efendant or co-conspirator."² J. App'x at 2098. To determine a claimant's class membership and its share of the settlement fund, the Settlement Agreement required that each claimant "submit a proof of claim" and provide "such documents or proof as Class Counsel and the Claims Administrator, in their discretion, may deem acceptable."³ Id. at 2113. After a claimant submitted its proof of claim and supporting documents, the Settlement Agreement authorized "the Claims Administrator" to "determine whether the proof of claim . . . is in accordance with [the] Settlement Agreement . . . and the extent, if any, to which each claim shall be allowed, subject to review by the [district court]." Id. at 2114. Each claimant also had the option of (1) "[a]uthorizing the Claims Administrator to compute [its] claim based on records obtained by" Class Counsel, id. at 2700, or (2) "completing . . . [an] 'Option Two Claim Form Spreadsheet' listing [its] transactions" and "submitting detailed transactional records to support [its] claim[s]," id. at 2702.

The Settlement Agreement further stated that "[p]roofs of claim that do not meet the submission requirements may be rejected," and required that "[p]rior to rejection of a proof of claim," the Claims Administrator "communicate with the claimant in order to remedy the curable deficiencies in the proofs of claim submitted." Id. at 2114. In the event that the Claims Administrator decided to reject a claim in whole or in part, the Settlement Agreement required the Claims Administrator to set forth the reasons for its rejection in writing. Any claimant "desir[ing] to contest such rejection" was then obligated to "serve upon the Claims Administrator a notice and statement of reasons indicating the claimant's grounds for contesting the rejection along with any supporting documentation" within twenty days of "the date of mailing of the [rejection] notice." Id. at 2115. Subsequently, "[i]f a dispute concerning a claim [could not] be otherwise resolved," Class Counsel was required to "present the request for review to the [district court]." Id.

AMA submitted its initial proof of claim on May 12, 2021, nearly two months after the March 19 deadline, but Class Counsel exercised its discretion to accept AMA's late-submitted claims for processing. In support of its claims, AMA listed over 17 million transactions in its Option Two Claim Form Spreadsheet but failed to provide any transactional documents to corroborate those transactions. Between May 24 and July 8, 2021, Class Counsel repeatedly informed AMA that its submissions were deficient as they lacked the requisite account and trade statements to substantiate the trade data provided in its spreadsheet. Moreover, because AMA had submitted claims in the FOREX settlement, which included some or all of its transactions submitted in Contant, Class Counsel also directed AMA to identify duplicate transactions it claimed in both settlements. In response, AMA only provided "exemplars" of the trade confirmation messages (known as "FIX messages") and account statements it received from various trading venues, which, according to Class Counsel, fell short of full compliance with its requests. Id. at 2749.

On August 13, based on records submitted by AMA and analyses conducted by subject-matter experts, the Claims Administrator issued an assessment that approved in part and rejected in part AMA's claims. Among other things, the Claims Administrator found that AMA had not provided documentation necessary to validate the overwhelming majority of its claims as indirect transactions pursuant to the class definition and failed to identify which transactions it had submitted for compensation in both this case and FOREX. Accordingly, the Claims Administrator rejected AMA's claims with respect to any transactions that did not qualify as valid indirect purchases or had not been sufficiently substantiated.

On August 26 and September 2, AMA submitted additional account statements and FIX messages in response to the Claims Administrator's assessment. AMA nonetheless protested that it should not have to spend innumerable hours locating documents from transactions that were more than a decade old and disagreed with the Claims Administrator's conclusion that trades could not be accepted in both Contant and FOREX. On September 15, after AMA and Class Counsel attempted but failed to resolve their dispute, Class Counsel requested the district court's review pursuant to the Settlement Agreement.

The district court agreed with the Claims Administrator's assessment, finding that "all of the claims denied by" the Claims Administrator were "denied because they all lack[ed] detailed transactional records as required by the [Settlement Agreement]." Sp. App'x at 5. AMA then moved for reconsideration, arguing that the district court had overlooked the documents that AMA had submitted during the twenty-day contest period. The district court denied that motion, explaining that the contest provision in the Settlement Agreement did not "permit yet another bite at the apple" for AMA "to remedy deficiencies" in its claims. Id. at 17. The district court reasoned that "the process of contesting a rejected claim . . . should be viewed as the functional equivalent of a motion for reconsideration and not a chance to reopen the claims...