Levy v. BASF Metals, Ltd., No. 17-3823 (2d Cir. 2019)

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Justia Opinion Summary

The Second Circuit affirmed the district court's dismissal of plaintiff's second amended complaint, alleging claims under the Commodities Exchange Act, the Racketeer Influenced and Corrupt Organizations Act, the Sherman Act, and New York law related to alleged manipulation of the platinum futures market. At issue in this appeal were the Commodities Exchange Act claims.

The court held that the Commodities Exchange Act claims accrued when plaintiff discovered her injury in 2008, not when she discovered the manipulation scheme she alleged or the identity of defendants. Therefore, the claims were time-barred because the limitations period on those claims expired in 2010, well before she filed her lawsuit.

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17 3823 cv Levy v. BASF Metals, Ltd. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 17 3823 cv Levy v. BASF Metals, Ltd. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ____________________ August Term, 2018 (Argued: October 18, 2018 Decided: February 28, 2019) Docket No. 17 3823 ____________________ SUSAN LEVY, Plaintiff Appellant, v. BASF METALS LIMITED, BASF CORPORATION, GOLDMAN SACHS INTERNATIONAL, GOLDMAN SACHS GROUP, INC., GOLDMAN SACHS & CO., GOLDMAN SACHS EXECUTION & CLEARING, L.P., ICBC STANDARD BANK PLC, UBS AG, UBS SECURITIES LLC, HSBC BANK USA, N.A., LONDON PLATINUM AND PALLADIUM FIXING COMPANY LIMITED, Defendants Appellees. 1 ____________________ 1 The Clerk of the Court is directed to amend the caption as above. 4 Before: WINTER and POOLER, Circuit Judges, and ABRAMS, District Judge.2 Appeal from United States District Court for the Southern District of New 5 York (Gregory H. Woods, J.) dismissing appellant Susan Levy’s second amended 6 complaint in which she alleges claims under the Commodities Exchange Act, the 7 Racketeer Influenced and Corrupt Organizations Act, the Sherman Act, and New 8 York law related to alleged manipulation of the platinum futures market. We 9 affirm the bulk of the district court’s decision in a summary order published 1 2 3 10 simultaneously with this opinion. We write separately to address Levy’s 11 Commodities Exchange Act claims and hold that they accrued when she 12 discovered her injury in 2008, not when she discovered the manipulation scheme 13 she alleges or the identity of the defendants. Therefore, the limitations period on 14 those claims expired in 2010, well before she filed the present lawsuit. 15 ____________________ 16 SUSAN LEVY, pro se, New York, N.Y., Plaintiff Appellant. 17 18 19 Affirmed. Judge Ronnie Abrams, United States District Court for the Southern District of New York, sitting by designation. 2 2 1 MICHAEL F. WILLIAMS, Kirkland & Ellis LLP (Peter A. Farrell, on the brief), Washington, D.C., for Defendants Appellees BASF Metals Limited and BASF Corporation. DAMIEN J. MARSHALL, Boies Schiller Flexner LLP (Leigh M. Nathanson, Laura C. Harris, on the brief), New York, N.Y., for Defendant Appellee HSBC Bank USA, N.A. STEPHEN EHRENBERG, Sullivan & Cromwell LLP, New York, N.Y., for Defendants Appellees Goldman Sachs International, The Goldman Sachs Group, Inc., and Goldman Sachs & Co. LLC f/k/a Goldman, Sachs & Co. ROBERT G. HOUCK, Clifford Chance US LLP, New York, N.Y., for Defendant Appellee ICBC Standard Bank PLC. ERIC J. STOCK, Gibson, Dunn & Crutcher LLP (Mark A. Kirsch, D. Jarrett Arp, Melanie L. Katsur, Indraneel Sur, on the brief), New York, N.Y., for Defendants Appellees UBS AG and UBS Securities LLC. ETHAN E. LITWIN, Dechert LLP (Morgan J. Feder, on the brief), New York, N.Y., for Defendant Appellee The London Platinum and Palladium Fixing Company Ltd. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 PER CURIAM: 28 29 in an effort to be made whole for her 2008 losses in the platinum futures market. 30 She alleges, in sum, that BASF Metals Limited, BASF Corporation, Goldman 31 Sachs International, Goldman Sachs Group, Inc., Goldman Sachs & Co., Goldman 26 Appellant Susan Levy, an attorney proceeding pro se, brought this lawsuit 3 1 Sachs Execution & Clearing, LP, HSBC Bank USA, NA, ICBC Standard Bank 2 PLC, UBS AG, UBS Securities LLC, London Platinum and Palladium Fixing 3 Company Ltd., and twenty unnamed “John Does” conspired to manipulate the 4 New York Mercantile Exchange platinum futures contract market in violation of 5 the Commodities Exchange Act (“CEA”), 7 U.S.C. § 1 et seq., the Racketeer 6 Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., the 7 Sherman Act, 15 U.S.C. §§ 1, 2, and New York law. The district court (Gregory H. 8 Woods, J.) dismissed her federal claims as time barred and declined to exercise 9 supplemental jurisdiction over Levy’s state law claims. Levy v. BASF Metals Ltd., 10 1:15 cv 7317 GHW, 2017 WL 2533501, at *9 (S.D.N.Y. June 9, 2017). We affirm the 11 bulk of that decision in a summary order we publish simultaneously with this 12 opinion. We write separately to address Levy’s CEA claims and hold that they 13 accrued when she discovered her CEA injury in 2008, not when she discovered 14 the alleged manipulation scheme or the identity of the defendants. BACKGROUND 15 16 Levy began trading in the platinum futures market in 2008 at what she 17 alleges were artificially inflated prices. Based on her review of the platinum 18 market, she took a long position with the expectation that platinum prices would 4 1 soar even higher than market predictions. However, on August 15, 2008, the 2 platinum market crashed, causing Levy to lose her entire investment. 3 4 alleged manipulated the platinum market (and, by extension, the platinum 5 futures market) by engaging in so called “banging the close” transactions. She 6 claimed that the defendants in that case manipulated the value of platinum 7 futures contracts by placing large platinum orders at the end of, or immediately 8 after, the trading day, resulting in increased settlement prices of platinum futures 9 contracts. In other words, Levy alleged that the defendants in her first lawsuit Levy filed suit in April of 2012 against a different set of defendants that she 10 engaged in a “pump and dump” scheme that manipulated the value of platinum 11 futures in violation of the CEA, RICO, the Sherman Act, and New York law. That 12 case was transferred from the Eastern District of New York to the Southern 13 District of New York in 2013 so it could be before the same district court judge 14 presiding over a related class action lawsuit. See generally Levy v. Welsh, No. 12 15 CV 2056 (DLI)(VMS), 2013 WL 1149152 (E.D.N.Y. Mar. 19, 2013). Levy settled the 16 Welsh lawsuit in 2014, but the settlement did not provide Levy with a complete 17 recovery. 5 1 Levy filed the present action on September 16, 2015, after she received in 2 the fall of 2014 a copy of a class action complaint containing similar allegations to 3 the ones she now asserts. See generally In re Platinum and Palladium Antitrust Litig., 4 1:14 cv 9391 GHW, 2017 WL 1169626 (S.D.N.Y. Mar. 28, 2017). In this suit, Levy 5 claims, in sum, that Defendants Appellees conspired to fix the price of 6 platinum—and thus manipulate the platinum futures market—in a four step 7 manipulation process that involved exchanging confidential information during 8 private conference calls, in violation of the CEA, RICO, the Sherman Act, and 9 New York law. She alleges that the 2014 class action complaint first apprised her 10 of this conduct, as well as the identities of some of the parties involved. 11 12 amended complaint on April 4, 2016. On August 31, 2016, Defendants Appellees 13 moved to dismiss Levy’s second amended complaint. The district court granted 14 the motion, finding that Levy ‘s federal claims were time barred, and declined to 15 exercise supplemental jurisdiction over her remaining state law claims. Levy v. 16 BASF Metals Ltd., 2017 WL 2533501, at *9. Levy filed an amended complaint on January 14, 2016, and a second 6 DISCUSSION 1 2 We review de novo “[a] district court’s interpretation and application of a 3 statute of limitations.” Muto v. CBS Corp., 668 F.3d 53, 56 (2d Cir. 2012). 4 5 is silent on the issue . . . .” Rotella v. Wood, 528 U.S. 549, 555 (2000); see also Koch v. 6 Christie’s Int’l PLC, 699 F.3d 141, 148 (2d Cir. 2012). In applying this rule, it is 7 “discovery of the injury, not discovery of the other elements of a claim,” that 8 “starts the clock.” Rotella, 528 U.S. at 555. We have not yet applied this general 9 rule to CEA claims. We do so now and hold that Levy’s CEA claims accrued 10 when she discovered her CEA injury. This happened when she suffered her 11 losses in 2008. Thus, the CEA’s two year limitations period expired before she 12 initiated the present suit in September 2015. 7 U.S.C. § 25(c). 13 14 suffered her losses with the date her CEA claims accrued. The relevant inquiry, 15 however, is not whether Levy had discovered the identity of the defendants or 16 whether she had discovered the manipulation scheme she alleges in her 17 complaint. Rather, the question is when Levy discovered her CEA injury—that 18 is, a loss that was the result of a CEA violation. See 7 U.S.C. § 25(a)(1) (providing “Federal courts . . . generally apply a discovery accrual rule when a statute Levy contends that the district court mistakenly conflated the date she 7 1 a cause of action for someone who suffers “actual damages” “caused by” a CEA 2 violation); Cancer Found., Inc. v. Cerberus Capital Mgmt., LP, 559 F.3d 671, 674 (7th 3 Cir. 2009) (“A plaintiff does not need to know that his injury is actionable to 4 trigger the statute of limitations—the focus is on the discovery of the harm itself, 5 not the discovery of the elements that make up a claim.”); cf. Kronisch v. United 6 States, 150 F.3d 112, 121 (2d Cir. 1998) (“[A] claim will accrue when the plaintiff 7 knows, or should know, enough of the critical facts of injury and causation to 8 protect himself by seeking legal advice.” (internal quotation marks omitted)). 9 Here, Levy alleges that, by August of 2008, “prices started to fall for no 10 apparent reason and without any fundamental reason.” App’x at 260 61 ¶ 417. 11 And, by the end of 2008 “the market price had dropped by over 50%,” which 12 Levy describes as “an extraordinary, unprecedented and unjustified sudden 13 collapse.” App’x at 262 ¶ 423. Levy further alleges that there was “no explanation 14 for this sudden drop in price, other than market distortion due to manipulation.” 15 App’x 261 ¶ 419. In light of these allegations, we have little difficulty concluding 16 that Levy discovered her CEA injury in 2008. Once Levy was aware of this 17 injury, the CEA gave her two years to ascertain the facts necessary to bring her 18 suit. 7 U.S.C. § 25(c). 8 1 Levy primarily argues that she was not on inquiry notice of her present 2 CEA claims until 2014 when a group of investors filed a class action lawsuit 3 against Appellees. See generally In re Platinum and Palladium Antitrust Litig., 2017 4 WL 1169626. It is true that we have held that where “the circumstances known 5 to” a plaintiff, “as alleged in the complaint, were such as to suggest to a person of 6 ordinary intelligence” that she has been defrauded, “a duty of inquiry” may arise 7 that commences the CEA’s two year limitations period. Benfield v. Mocatta Metals 8 Corp., 26 F.3d 19, 22 (2d Cir. 1994); see also id. at 23 (finding constructive 9 knowledge where the loss of an entire investment within a four month period 10 “should have caused eyebrows to raise” and imposed a “duty of inquiry that 11 would . . . have disclosed the nature and extent of” the fraud). However, this is 12 not an inquiry notice case. The district court held, and we now hold, that Levy 13 had actual knowledge of her CEA injury in 2008. Levy v. BASF Metals Ltd., 2017 14 WL 2533501, at *5. That knowledge of her CEA injury “start[ed] the clock,” 15 irrespective of when she discovered the additional information necessary for her 16 to bring her suit. See Rotella, 528 U.S. at 555. 9 CONCLUSION 1 2 For the foregoing reasons, and the reasons stated in the summary order we 3 publish simultaneously with this opinion, we AFFIRM the district court’s 4 dismissal of this action. 10
Primary Holding
The Commodities Exchange Act claims were time-barred because the limitations period on those claims expired in 2010, well before plaintiff filed her lawsuit.

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