Court Opinion

ID: 8373921
Source: CourtListenerOpinion
Date Created: 2022-10-18 15:00:17.64098+00
Date Added: 2024-06-11T16:46:10.164494
License: Public Domain

20-3626(L)
     Laydon v. Coöperatieve Rabobank U.A., et al.

 1                  United States Court of Appeals
 2                      for the Second Circuit
 3

 4                                 August Term 2021
 5                               Argued: May 24, 2022
 6                              Decided: October 18, 2022
 7
 8                           Nos. 20-3626(L), 20-3775(XAP)
 9

10                               JEFFREY LAYDON,
11              on behalf of himself and all others similarly situated,
12                                                  Plaintiff-Appellant-Cross-Appellee,
13                                             v.
14              COÖPERATIEVE RABOBANK U.A., BARCLAYS BANK PLC,
15                           SOCIÉTÉ GÉNÉRALE S.A.,
16                                           Defendants-Appellees-Cross-Appellants,
17
18       THE ROYAL BANK OF SCOTLAND GROUP PLC, UBS AG, LLOYDS
19     BANKING GROUP PLC, UBS SECURITIES JAPAN CO., LTD., THE ROYAL
20         BANK OF SCOTLAND PLC, RBS SECURITIES JAPAN LIMITED,
21                                                              Defendants-Appellees. *
22

23                On Appeal from the United States District Court
24                    for the Southern District of New York
25

            *The Clerk of Court is respectfully directed to amend the caption
     accordingly.
                                               1
 1   Before:      POOLER, PARK, and LEE, Circuit Judges.

 2           Plaintiff Jeffrey Laydon brought this putative class action
 3   against more than twenty banks and brokers, alleging a conspiracy to
 4   manipulate two benchmark rates known as Yen-LIBOR and Euroyen
 5   TIBOR. He claimed that he was injured after purchasing and
 6   trading a Euroyen TIBOR futures contract on a U.S.-based commodity
 7   exchange because the value of that contract was based on a distorted,
 8   artificial Euroyen TIBOR.        Plaintiff brought claims under the
 9   Commodity Exchange Act (“CEA”), 7 U.S.C. § 1 et seq., and the
10   Sherman Antitrust Act, 15 U.S.C. § 1 et seq., and sought leave to assert
11   claims under the Racketeer Influenced and Corrupt Organizations
12   Act (“RICO”), 18 U.S.C. §§ 1962, 1964(c). The district court (Daniels,
13   J.) dismissed the CEA and antitrust claims and denied leave to add
14   the RICO claims. Plaintiff appeals, arguing that the district court
15   erred by holding that the CEA claims were impermissibly
16   extraterritorial, that he lacked antitrust standing to assert a Sherman
17   Act claim, and that he failed to allege proximate causation for his
18   proposed RICO claims.
19
20          We affirm.        The alleged conduct—i.e., that the bank
21   defendants presented fraudulent submissions to an organization
22   based in London that set a benchmark rate related to a foreign
23   currency—occurred almost entirely overseas. Indeed, Plaintiff fails
24   to allege any significant acts that took place in the United States.
25   Plaintiff’s CEA claims are based predominantly on foreign conduct
26   and are thus impermissibly extraterritorial. See Prime Int’l Trading,
27   Ltd. v. BP P.L.C., 937 F.3d 94, 106 (2d Cir. 2019). The district court
28   also correctly concluded that Plaintiff lacked antitrust standing
29   because he would not be an efficient enforcer of the antitrust laws.
30   See Schwab Short-Term Bond Mkt. Fund v. Lloyds Banking Grp. PLC, 22
31   F.4th 103, 115–20 (2d Cir. 2021). Lastly, we agree with the district
32   court that Plaintiff failed to allege proximate causation for his RICO
33   claims. The judgment of the district court is thus AFFIRMED.

                                        2
 1
 2
 3   ERIC F. CITRON, Goldstein & Russell, P.C., Bethesda, MD
 4   (Vincent Briganti, Margaret MacLean, Lowey
 5   Dannenberg, P.C., White Plains, NY, on the brief), for
 6   Plaintiff-Appellant-Cross-Appellee Jeffrey Laydon.
 7
 8   THOMAS G. HUNGAR, Gibson, Dunn & Crutcher LLP,
 9   Washington, DC (Russell B. Balikian, Gibson, Dunn &
10   Crutcher LLP, Washington, DC; Mark A. Kirsch, Eric J.
11   Stock, Jefferson E. Bell, Gibson, Dunn & Crutcher LLP,
12   New York, NY, on the brief), for Defendants-Appellees UBS
13   AG and UBS Securities Japan Co., Ltd.
14
15   MARC J. GOTTRIDGE, Hogan Lovells US LLP, New York,
16   NY (Lisa J. Fried, Benjamin A. Fleming, Hogan Lovells
17   US LLP, New York, NY, on the brief), for Defendant-
18   Appellee Lloyds Banking Group plc.
19
20   NICOLE A. SAHARSKY, Mayer Brown LLP, New York, NY
21   (Steven Wolowitz, Andrew J. Calica, Mayer Brown LLP,
22   New York, NY, on the brief), for Defendant-Appellee-Cross-
23   Appellant Société Générale S.A.
24
25   David R. Gelfand, Tawfiq S. Rangwala, Milbank LLP,
26   New York, NY; Mark D. Villaverde, Milbank LLP, Los
27   Angeles, CA, for Defendant-Appellee-Cross-Appellant
28   Coöperatieve Rabobank U.A.
29
30   David S. Lesser, King & Spalding LLP, New York, NY;
31   Robert G. Houck, Clifford Chance US LLP, New York,
32   NY, for Defendants-Appellees The Royal Bank of Scotland plc,
33   The Royal Bank of Scotland Group plc, and RBS Securities
34   Japan Ltd.
35

                           3
     20-3626(L)
     Laydon v. Coöperatieve Rabobank U.A., et al.

 1   PARK, Circuit Judge:

 2          Plaintiff Jeffrey Laydon brought this putative class action
 3   against more than twenty banks and brokers, alleging a conspiracy to
 4   manipulate two benchmark rates known as Yen-LIBOR and Euroyen
 5   TIBOR.       He claimed that he was injured after purchasing and
 6   trading a Euroyen TIBOR futures contract on a U.S.-based commodity
 7   exchange because the value of that contract was based on a distorted,
 8   artificial Euroyen TIBOR.             Plaintiff brought claims under the
 9   Commodity Exchange Act (“CEA”), 7 U.S.C. § 1 et seq., and the
10   Sherman Antitrust Act, 15 U.S.C. § 1 et seq., and sought leave to assert
11   claims under the Racketeer Influenced and Corrupt Organizations
12   Act (“RICO”), 18 U.S.C. §§ 1962, 1964(c). The district court (Daniels,
13   J.) dismissed the CEA and antitrust claims and denied leave to add
14   the RICO claims.         Plaintiff appeals, arguing that the district court
15   erred by holding that the CEA claims were impermissibly
16   extraterritorial, that he lacked antitrust standing to assert a Sherman
17   Act claim, and that he failed to allege proximate causation for his
18   proposed RICO claims.

19          We affirm.           The alleged conduct—i.e., that the bank
20   defendants presented fraudulent submissions to an organization
21   based in London that set a benchmark rate related to a foreign
22   currency—occurred almost entirely overseas. Indeed, Plaintiff fails
23   to allege any significant acts that took place in the United States.
24   Plaintiff’s CEA claims are based predominantly on foreign conduct
25   and are thus impermissibly extraterritorial. See Prime Int’l Trading,
26   Ltd. v. BP P.L.C., 937 F.3d 94, 106 (2d Cir. 2019). The district court

                                               4
 1   also correctly concluded that Plaintiff lacked antitrust standing
 2   because he would not be an efficient enforcer of the antitrust laws.
 3   See Schwab Short-Term Bond Mkt. Fund v. Lloyds Banking Grp. PLC, 22
4    F.4th 103, 115–20 (2d Cir. 2021). Lastly, we agree with the district
5    court that Plaintiff failed to allege proximate causation for his RICO
6    claims. The judgment of the district court is thus affirmed.

7                              I.   BACKGROUND

 8   A.    Factual Background

 9         1.      Yen-LIBOR and Euroyen TIBOR

10         Plaintiff alleges the manipulation of two benchmark rates
11   known as Yen-LIBOR and Euroyen TIBOR, which reflected the
12   interest rates at which banks can lend Japanese Yen outside of Japan.1
13   There were two key differences between Yen-LIBOR and Euroyen
14   TIBOR.     First, different entities set the rates.   During the relevant
15   period, the Japanese Bankers Association (“JBA”) set Euroyen TIBOR
16   by accepting submissions from a panel of banks headquartered
17   primarily in Japan. Each bank submitted to the JBA the interest rate
18   at which it could borrow offshore Yen.          The JBA then calculated
19   Euroyen TIBOR for various maturities by discarding the two highest
20   and two lowest submissions and averaging the remaining ones.
21   Yen-LIBOR, on the other hand, was a London-based benchmark set

           1   The names are short for “Yen London Interbank Offered Rate” and
     “Euroyen Tokyo Interbank Offered Rate,” respectively. The Euroyen, also
     known as offshore yen, refers to deposits denominated in Japanese Yen
     held outside of Japan. Yen-LIBOR and Euroyen TIBOR are based on “the
     interest rates at which banks offer to lend unsecured funds denominated in
     Japanese Yen to other banks in the offshore wholesale money market (or
     interbank market).” Third Am. Compl. ¶ 122.

                                          5
 1   by the British Bankers’ Association (“BBA”). Each bank sitting on a
 2   panel of London-based banks submitted to the BBA the rate at which
 3   it could borrow Yen outside of Japan.         The BBA calculated Yen-
 4   LIBOR by discarding the highest and lowest 25% of submissions and
 5   determining the average of the remaining 50%. The second major
 6   difference between the rates was that they were set at different times.
 7   “Euroyen TIBOR [was] calculated on each business day as of 11:00
 8   a.m. Tokyo time,” while “Yen-LIBOR [was] calculated each business
 9   day as of 11:00 a.m. London time.” Third Am. Compl. ¶¶ 126, 130.

10         2.     The Alleged Conduct

11         Plaintiff Laydon is a U.S. resident who traded three-month
12   Euroyen TIBOR futures contracts between January 1, 2006 and June
13   30, 2011 (the “Class Period”). This type of contract is an “agreement
14   to buy or sell a Euroyen time deposit having a principal value of
15   100,000,000 Japanese Yen with a three-month maturity commencing
16   on a specific future date.”     Third Am. Compl. ¶ 134. 2         Plaintiff
17   placed these trades on the Chicago Mercantile Exchange (“CME”), a
18   U.S.-based futures exchange.        Specifically, he “initiated a short
19   position by selling five . . . Euroyen TIBOR futures contracts on July
20   13, 2006 at a price of $99.315 per contract” and then “liquidated that
21   position by purchasing five long . . . futures contracts on August 3,
22   2006 at a price of $99.490 per contract for loss of $2,150.35.”   Id. ¶ 911.
23   Defendants-Appellees served as panel banks for the BBA in setting

           2 Unlike an “ordinary bank deposit” that is “payable on demand,” a
     time deposit cannot be withdrawn from the bank before a set date. See 10
     Am. Jur. 2d Banks and Fin. Insts. § 641.

                                         6
 1   Yen-LIBOR during the relevant period. 3 Plaintiff also sued several
 2   derivatives brokers who allegedly helped Defendants manipulate
 3   Yen-LIBOR and Euroyen TIBOR. 4

 4         Plaintiff maintains that Defendants conspired to manipulate
 5   Yen-LIBOR and Euroyen TIBOR by giving false Yen-LIBOR
 6   submissions to the BBA, which affected the price of Plaintiff’s three-
 7   month Euroyen TIBOR futures. Although Defendants did not serve
 8   as panel banks for the JBA in setting Euroyen TIBOR, Plaintiff alleges
 9   that their purported manipulation of Yen-LIBOR—which is set earlier
10   in the day—affected Euroyen TIBOR. See Third Am. Compl. ¶¶ 844,
11   845 (alleging that “[c]hanges in Yen-LIBOR will be immediately
12   reflected in Euroyen TIBOR rates . . . once Euroyen TIBOR opens” and
13   that “the reporting of false and inaccurate Yen-LIBOR rates . . .
14   cause[d] artificial Euroyen TIBOR rates and artificial Euroyen TIBOR
15   futures prices”).

16         He further asserts that the “driving force[s] behind Defendants’
17   manipulation” were conflicts of interest.         Id. ¶ 167.    Namely,

           3 These include UBS AG and UBS Securities Japan Co., Ltd. (“UBS”);
     the Royal Bank of Scotland Group plc, The Royal Bank of Scotland plc, and
     RBS Securities Japan Limited (“RBS”); Lloyds Banking Group plc
     (“Lloyds”); Barclays Bank PLC (“Barclays”); Société Générale S.A.
     (“SocGen”); and Coöperatieve Rabobank U.A. (“Rabobank”) (collectively,
     “Defendants”).
           4  The broker defendants who initially joined this appeal were ICAP
     plc and ICAP Europe Limited (collectively, “ICAP”) and Tullett Prebon plc.
     We granted Plaintiff’s motion to sever and stay the appeal with respect to
     ICAP and Tullett Prebon and remanded to allow the district court to
     consider a proposed class-action settlement between Plaintiff and these
     parties.

                                         7
 1   Plaintiff claims that Defendants held their own “Euroyen-based
 2   derivatives positions” and that their traders’ “compensation was
 3   based in part on the profit and loss calculation” of Defendants’
 4   trading books.     Id.   And “even very small movements in Yen-
 5   LIBOR . . . would have a significant positive impact on the
 6   profitability of” trading positions, so Defendants’ traders had
 7   incentives to manipulate Yen-LIBOR. Id.

 8         To support these allegations, Plaintiff relies on information
 9   revealed in various domestic and foreign enforcement proceedings.
10   He points to Defendants’ admissions concerning actions taken by
11   their employees at overseas trading desks.           These allegations
12   describe Defendants’ foreign-based employees submitting false rates
13   to the BBA, as well as traders asking other employees responsible for
14   sending submissions to the BBA to move the benchmark rate in a
15   direction that would benefit the trader’s trading position. 5     As for
16   domestic conduct, Plaintiff primarily relies on a handful of
17   communications sent from Defendants’ foreign-based employees

           5 For example, Plaintiff alleges that RBS Yen traders “attempted to
     manipulate Yen-LIBOR by making hundreds of manipulative requests of
     RBS’ Primary Submitter, Paul White, and London-based traders.” Third
     Am. Compl. ¶ 267 (“RBS’ derivatives traders’ requests for artificial Yen-
     LIBOR submissions were common and made openly on the trading floors
     in Asia and London.”).       Similarly, Plaintiff asserts that UBS began
     tendering “false Yen-LIBOR and Euroyen TIBOR” submissions as early as
     2006. Id. ¶ 241. Plaintiff focuses on the actions of UBS Yen Traders Tom
     Hayes and Roger Darin, who operated from UBS desks in Tokyo,
     Singapore, and Zurich, and were prosecuted in the United States and the
     United Kingdom for manipulating Yen-LIBOR.

                                        8
 1   through or to servers located in the United States. 6 Plaintiff does not
 2   allege that Defendants’ employees sent artificial submissions to the
 3   BBA from within the United States.

4             On behalf of a putative class, Plaintiff sought an unspecified
5    amount in regular and treble damages, as well as an injunction
6    prohibiting Defendants from continuing their alleged unlawful
7    conduct.

 8   B.       Procedural Background

 9            Plaintiff filed this action in 2012. On April 15, 2013, before the
10   district court resolved any substantive motions, Plaintiff filed the
11   Second Amended Complaint, alleging claims under the CEA, 7 U.S.C.
12   § 1 et seq., and Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 et
13   seq. 7

14            Over nearly a decade of litigation, the district court issued
15   several orders dismissing various claims and defendants. First, on
16   March 28, 2014, the court granted Defendants’ motion to dismiss

              6Plaintiff cites a criminal complaint brought by U.S. prosecutors
     against UBS Yen Trader, Tom Alexander William Hayes, which alleges that
     Hayes “caused confirmations . . . to be transmitted from outside the United
     States to a counterparty based in Purchase, New York, for transactions
     involving interest rate derivative products tied to a benchmark interest rate
     which [Hayes] was secretly manipulating.” Joint App’x at 2036. Plaintiff
     also relies on the testimony of a Rabobank employee, Anthony Allen, from
     his trial for wire fraud stemming from manipulation of Yen-LIBOR,
     reflecting that Allen knew that some of the counterparties to Rabobank’s
     transactions were in the United States. See Third Am. Compl. ¶¶ 92–93.
              Plaintiff also brought an unjust-enrichment claim and a CEA
              7

     vicarious-liability claim, but he does not appeal the dismissal of those
     claims.

                                           9
 1   Plaintiff’s antitrust claims, finding that Plaintiff lacked antitrust
 2   standing in part because he would not be an “efficient enforcer” of
 3   the alleged antitrust violation.     The court allowed the remaining
 4   CEA claims to proceed.

 5         Plaintiff next sought leave to file the Third Amended
 6   Complaint to add RICO claims and additional defendants.                 On
 7   March 31, 2015, the district court allowed Plaintiff to file the new
 8   pleadings but denied leave to add the RICO claims, finding that
 9   Plaintiff did “not show a sufficiently direct connection between the
10   alleged misconduct and the injury to support a RICO claim.” Special
11   App’x at 58.      That same day, the court also dismissed several
12   defendants for lack of personal jurisdiction, rejecting Plaintiff’s
13   conspiracy theory of personal jurisdiction.

14         Two years later, on March 10, 2017, the district court dismissed
15   several new defendants named in the Third Amended Complaint—
16   including the broker Defendants ICAP and Tullett Prebon plc—for
17   lack of personal jurisdiction, finding that their alleged conduct did not
18   create a substantial connection with the United States and once again
19   rejecting Plaintiff’s “‘conspiracy theory’ of jurisdiction.”        Special
20   App’x at 73–79. Finally, on August 27, 2020, the court dismissed the
21   surviving CEA claims against the remaining defendants, finding the
22   claims impermissibly extraterritorial because “Defendants’ alleged
23   wrongful conduct . . . is almost entirely foreign.” Id. at 86. Plaintiff
24   filed a timely notice of appeal. 8

           8   Defendants Barclays, SocGen, and Rabobank filed a cross-appeal,
     challenging the district court’s November 10, 2014 order denying them
     leave to file a motion to dismiss based on lack of personal jurisdiction. We
     severed the main appeal and the cross appeal as to Barclays and ordered a

                                          10
 1                              II.   DISCUSSION

 2         Plaintiff argues that the district court erred by dismissing his
 3   CEA claims as impermissibly extraterritorial. He also challenges the
 4   district court’s decisions to dismiss his antitrust claims for lack of
 5   standing and to reject his RICO claims for lack of proximate
 6   causation. 9    “We review de novo the dismissal of a complaint for
 7   failure to state a claim upon which relief can be granted.” Myun-Uk
 8   Choi v. Tower Rsch. Cap. LLC, 890 F.3d 60, 65 (2d Cir. 2018) (citation
 9   omitted).      “The denial of leave to amend is similarly reviewed de
10   novo because the denial was based on an interpretation of law, such
11   as futility.” Gelboim v. Bank of Am. Corp., 823 F.3d 759, 769 (2d Cir.
12   2016) (cleaned up).

13         We agree with the district court that Plaintiff failed to state a
14   claim under the CEA because the alleged conduct occurred
15   predominantly outside the United States.            We also agree that

     limited remand for the district court to consider the approval of a proposed
     class action settlement between Plaintiff and Barclays. As to SocGen and
     Rabobank, we need not reach the issues in their cross-appeal—which
     concern whether the district court properly found that they forfeited or
     waived their personal jurisdiction arguments—because we affirm the
     district court’s dismissal orders on the merits.
           9  Plaintiff also argues that the district court erred by dismissing
     several defendants for lack of personal jurisdiction. We do not reach this
     issue because our decision on the merits provides an alternative ground for
     affirmance. See Chevron Corp. v. Naranjo, 667 F.3d 232, 246 n.17 (2d Cir.
     2012); 4 C. Wright & A. Miller, Fed. Prac. and Proc. § 1067.6 (4th ed. 2022)
     (“[A] court simply may avoid the issue [of personal jurisdiction] by
     resolving the suit on the merits when they clearly must be decided in favor
     of the party challenging jurisdiction, thereby obviating any need to decide
     the question.”).

                                         11
 1   Plaintiff lacks antitrust standing and failed to allege proximate
 2   causation for his RICO claims.

 3   A.     Commodity Exchange Act Claims

 4          1.     Legal Principles

 5          The CEA prohibits “manipulat[ing] or attempt[ing] to
 6   manipulate the price of any commodity in interstate commerce.”
 7   7 U.S.C. § 13(a)(2). Section 22 of the CEA provides a private right of
 8   action, permitting a party to sue “[a]ny person . . . who violates this
 9   chapter” and hold that person liable “for actual damages resulting
10   from one or more of the transactions” listed in the statute.            Id.
11   § 25(a)(1).

12          “We interpret the CEA in light of the presumption against
13   extraterritoriality, a canon of statutory interpretation that is a ‘basic
14   premise of our legal system.’” Prime, 937 F.3d at 102 (quoting RJR
15   Nabisco, Inc. v. Eur. Cmty., 579 U.S. 325, 335 (2016)).    “This canon
16   helps avoid the international discord that can result when U.S. law is
17   applied to conduct in foreign countries” and “reflects the
18   commonsense notion that Congress generally legislates with
19   domestic concerns in mind.” In re Picard, Tr. for Liquidation of Bernard
20   L. Madoff Inv. Sec. LLC, 917 F.3d 85, 95 (2d Cir. 2019) (cleaned up).

21          We decide questions of extraterritoriality using a two-step
22   framework.      First, we “ask[] whether the presumption against
23   extraterritoriality has been rebutted” by “text [that] provides a clear
24   indication of an extraterritorial application.”    WesternGeco LLC v.
25   ION Geophysical Corp., 138 S. Ct. 2129, 2136 (2018) (cleaned up).
26   “Absent clearly expressed congressional intent to the contrary,
27   federal laws will be construed to have only domestic application.”

                                        12
 1   RJR Nabisco, Inc., 579 U.S. at 335; see also Morrison v. Nat’l Austl. Bank
 2   Ltd., 561 U.S. 247, 255 (2010) (“When a statute gives no clear indication
 3   of an extraterritorial application, it has none.”).       Second, if we
 4   conclude that the presumption against exterritoriality has not been
 5   rebutted, we decide “whether the case involves a domestic
 6   application of the statute.” RJR Nabisco, Inc., 579 U.S. at 337. To do
 7   so, we determine whether “the conduct relevant to the statute’s focus
 8   occurred in the United States.” Id. “[I]f the conduct relevant to the
 9   focus occurred in a foreign country, then the case involves an
10   impermissible extraterritorial application regardless of any other
11   conduct that occurred in U.S. territory.” Id.

12         Section 22 of the CEA lacks any “affirmative intention by
13   Congress to give [it] extraterritorial effect.”         Loginovskaya v.
14   Batratchenko, 764 F.3d 266, 272 (2d Cir. 2014) (cleaned up). A claim
15   relying on Section 22 must thus involve a domestic application of the
16   statute. And the focus of the statute is transactional, see id. at 272, so
17   “suits funneled through [the CEA’s] private right of action must be
18   based on transactions occurring in the territory of the United States,”
19   Prime, 937 F.3d at 103 (cleaned up).

20         Simply pleading a domestic transaction, however, is not
21   enough. Section 22 is a general provision affording a cause of action
22   to private litigants. Instead of prohibiting certain, specified conduct,
23   it applies when a defendant commits “a violation of this chapter.”
24   7 U.S.C. § 25(a)(1). A private plaintiff pleading a CEA claim under
25   Section 22 must thus invoke a substantive provision of the CEA. See
26   Prime, 937 F.3d at 105. And allowing a plaintiff to state a domestic
27   application of Section 22 based merely on a domestic transaction
28   “would . . . divorce the private right afforded in Section 22 from the

                                        13
 1   requirement of a domestic violation of a substantive provision of the
 2   CEA.”      Id.     A plaintiff must thus plead not only a domestic
 3   transaction, but also sufficiently domestic conduct by the defendant.
 4   In other words, “Plaintiffs’ claims must not be ‘so predominantly
 5   foreign as to be impermissibly extraterritorial.’”         Id. (quoting
 6   Parkcentral Glob. Hub Ltd. v. Porsche Auto. Holdings SE, 763 F.3d 198,
 7   216 (2d Cir. 2014)).

 8         2.         Analysis

 9         Plaintiff’s CEA claims are impermissibly extraterritorial
10   because the conduct he alleges is “predominantly foreign.” Prime,
11   937 F.3d at 106. First, Plaintiff traded a derivative that is tied to the
12   value of a foreign asset. The complaint alleges that he was injured
13   after purchasing and trading a Euroyen TIBOR futures contract,
14   which is “an agreement to buy or sell a Euroyen time deposit having
15   a principal value of 100,000,000 Japanese Yen with a three-month
16   maturity commencing on a specific future date.” Third Am. Compl.
17   ¶ 134. As alleged, the value of this asset is, in part, determined by
18   Yen-LIBOR and Euroyen TIBOR because these rates are meant to
19   capture the prevalent interest rates at which banks lend such time
20   deposits. So the value of this asset is based on rates set by foreign
21   entities (i.e., JBA and BBA) in foreign countries (i.e., Japan and the
22   United Kingdom).

23         Second, the alleged manipulative conduct occurred almost
24   entirely abroad. Plaintiff’s conspiracy allegations describe conduct
25   and communications that occurred overseas on foreign trade desks. 10

           10 See, e.g., Third Am. Compl. ¶¶ 231–33 (Rabobank’s employees,
     Anthony Allen and Tetsuya Motomura, made requests to contribute false
     submissions from “Rabobank’s money market desk in London” and

                                        14
 1   Indeed, Plaintiff focuses on the actions of employees who worked in
 2   foreign offices. See Joint App’x at 2040, 2739.

 3         Plaintiff’s arguments to the contrary are meritless. His main
 4   contention is that he purchased a Euroyen TIBOR futures contract on
 5   the CME, a U.S.-based exchange. He argues that his “claims must be
 6   domestic because they involve both core domestic transactions (i.e.,
 7   transactions on a domestic exchange) and manipulation of a domestic
 8   commodity market.”         Appellant’s Br. at 36 (emphasis added).
 9   Plaintiff also points to several instances of communications that were
10   made from or went through the United States. For example, Plaintiff
11   alleges that UBS trader Tom Hayes sent an email in furtherance of the
12   conspiracy while on a brief, two-day trip in Las Vegas.            These
13   arguments fail for several reasons.

14         First, the subjects of the alleged manipulation, Yen-LIBOR and
15   Euroyen TIBOR, are not commodities traded on a domestic exchange.
16   The CEA defines the term “commodity” to include “all services,
17   rights, and interests . . . in which contracts for future delivery are
18   presently or in the future dealt in.” 7 U.S.C. § 1a(9). It would not
19   make sense to say that the purchaser of a benchmark-based futures

     Rabobank’s trading desk in Tokyo, respectively); id. ¶ 296 (a Rabobank
     employee “made regular requests to Rabobank’s London-based Yen
     setters” to transmit manipulated submissions); id. ¶ 269 (“a Euroyen-based
     derivatives trader employed by RBS Japan sent requests for favorable Yen-
     LIBOR submissions to a Yen derivatives trader in London”); id. ¶ 243 (“UBS
     managers in Tokyo and Zurich” were aware of false submission requests
     and “encouraged and allowed” such conduct to occur); id. (a UBS “Yen
     Desk Manager in Tokyo” engaged and encouraged the contribution of false
     submissions); id. ¶ 250 (“the manager of one of the [UBS] Yen derivatives
     trading desks in Tokyo exerted pressure on Yen-LIBOR submitters to take
     derivatives traders’ positions into account when setting Yen-LIBOR”).

                                        15
 1   contract receives a “delivery” of a price index like Euroyen TIBOR on
 2   the maturity date. 11     Here, the asset to be delivered was a “time
 3   deposit having a principal value of 100,000,000 Japanese Yen with a
 4   three-month maturity commencing on a specific future date.” Third
5    Am. Compl. ¶ 134. Just as the purchaser of a copper or wheat future
6    may receive those commodities upon maturity, the purchaser of a
7    Euroyen TIBOR future may receive a 100,000,000 Japanese Yen time
8    deposit in a foreign commercial bank. Euroyen TIBOR affects the
9    value of that time deposit, but that does not make Euroyen TIBOR
10   itself a commodity. 12

11          Also unlike commodities, benchmark rates do not themselves
12   have any value. And unlike a copper or wheat future, in which the
13   purchaser receives “rights” or “interests” in the copper or wheat, 7
14   U.S.C. § 1a(9), the purchaser of a Euroyen TIBOR future does not
15   receive “rights” or “interests” in Euroyen TIBOR itself, but in the
16   product based on that rate—i.e., the underlying 100,000,000 Japanese
17   Yen deposit. See In re LIBOR-Based Fin. Instruments Antitrust Litig.,
18   962 F. Supp. 2d 606, 612 (S.D.N.Y. 2013) (rejecting the argument that

            11 Upon maturity, most modern contracts are resolved through
     “cash settlement,” which “gives the right to payments based on future
     change in the value of the [underlying asset] [the contract] references, rather
     than any right or obligation to delivery of the [asset] itself.” Parkcentral,
     763 F.3d at 206–07; see Prime, 937 F.3d at 100. But regardless of the
     settlement method chosen by the transacting parties, futures contracts still
     deal with commodities that are usually deliverable by the seller to the
     purchaser.
            12 Just like the price of 500 bushels of wheat depends on the cash
     price of wheat at the date of maturity, the price of the 100,000,000 Japanese
     Yen deposit depends in part on Euroyen TIBOR. But in the example, the
     wheat itself is the commodity rather than the price of wheat.

                                           16
 1   U.S. dollar LIBOR is a commodity underlying a Eurodollar future
 2   because “LIBOR is a price index,” there is no “price of LIBOR
 3   independent from LIBOR itself,” and because the underlying
 4   commodity of such a future is instead a time deposit in a foreign
 5   bank). 13

 6          Second, our precedent mandates dismissal of Plaintiff’s CEA
 7   claims.     In Prime, the plaintiffs traded futures on a U.S.-based
 8   exchange that were pegged to the Dated Brent Assessment, a rate that
 9   “reflect[ed], in part, the value of Brent crude physically traded in
10   Northern Europe.” 937 F.3d at 106. The plaintiffs alleged that the
11   defendants manipulated the market for Brent crude and Brent futures
12   by “systematically report[ing] . . . artificial transactions” to a foreign
13   entity responsible for setting the Dated Brent Assessment rate. Id. at
14   100.   We held that the plaintiffs’ CEA claims were impermissibly
15   extraterritorial because the derivatives at issue were “pegged to the
16   value of” foreign assets and the alleged misconduct was foreign
17   because the plaintiffs made “no claim that any manipulative oil
18   trading occurred in the United States.” Id. at 106.

            13  Plaintiff cites several CFTC settlement orders in which the
     Commodity Futures Trading Commission (“CFTC”) referred to such
     benchmark rates as commodities. But these remarks are not formal acts of
     rulemaking or adjudication and are entitled to no deference, especially
     because the quoted statements are conclusory and fail to provide any
     supporting analysis. See United States v. Mead Corp., 533 U.S. 218, 228
     (2001) (“The weight [accorded to an administrative] judgment in a
     particular case will depend upon the thoroughness evident in its
     consideration, the validity of its reasoning, . . . and all those factors which
     give it power to persuade, if lacking power to control.”) (quoting Skidmore
     v. Swift & Co., 323 U.S. 134, 140 (1944) (first alteration in original)).

                                           17
 1          Here, as in Prime, Plaintiff purchased a futures contract on a
 2   domestic market that incorporated an index tied to a foreign market,
 3   with that index being set by a foreign entity. According to Plaintiff,
 4   the crude index in Prime would also have been a commodity and,
 5   because the futures contract traded in the United States, any claims
 6   concerning that future would have been domestic. But we rejected
 7   this theory and held that the claims in Prime were impermissibly
 8   extraterritorial because the defendants in that case were “alleged to
 9   have manipulated the physical Brent crude market” in Europe “by
10   engaging in fraud there.”        Id. at 107–08.     So too here, Plaintiff
11   alleges that Defendants conspired to manipulate Euroyen TIBOR (an
12   index tied to a foreign market) by giving false Yen-LIBOR
13   submissions to the BBA from foreign trading desks (conduct abroad).
14   We thus affirm the district court’s dismissal of Plaintiff’s CEA
15   claims. 14

16   B.     Antitrust Claims

17          1.     Legal Principles

18          To state an antitrust claim, a plaintiff must first “show . . .
19   antitrust standing.” Gelboim, 823 F.3d at 770; see generally Associated
20   Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S.
21   519 (1983) (“AGC”) (discussing the requirements of antitrust
22   standing). Standing to bring an antitrust claim requires a plaintiff to
23   show that (1) he has “suffered antitrust injury,” and (2) he is an

            14 We are also unpersuaded by Plaintiff’s argument that dismissal of
     his claims will “fatally undermine the ability of U.S. law and U.S. regulators
     to protect domestic markets and investors.” Appellant’s Br. at 38. The
     extraterritorial reach of Section 22, which concerns private rights of action,
     has nothing to do with government enforcement. See 7 U.S.C. § 25.

                                          18
 1   “efficient enforcer[] of the antitrust laws.” Gelboim, 823 F.3d at 772.
 2   We look to four factors to determine whether a plaintiff is an efficient
 3   enforcer:

 4         (1) the directness or indirectness of the asserted injury,
 5         which requires evaluation of the chain of causation
 6         linking appellants’ asserted injury and the [defendants’]
 7         alleged price-fixing; (2) the existence of more direct
 8         victims of the alleged conspiracy; (3) the extent to which
 9         appellants’ damages claim is highly speculative; and (4)
10         the importance of avoiding either the risk of duplicate
11         recoveries on the one hand, or the danger of complex
12         apportionment of damages on the other.
13   Id. at 778 (cleaned up) (citing AGC, 459 U.S. at 540–44).

14         2.     Analysis

15         We agree with the district court that Plaintiff failed to allege
16   antitrust standing because he is not an efficient enforcer of the
17   antitrust laws.

18         Causation. “For the purposes of antitrust standing, proximate
19   cause is determined according to the so-called ‘first-step rule,’” under
20   which “injuries that happen at the first step following the harmful
21   behavior are considered proximately caused by that behavior.”
22   Schwab Short-Term Bond Mkt. Fund, 22 F.4th at 116 (quoting In re Am.
23   Express Anti-Steering Rules Antitrust Litig., 19 F.4th 127, 140 (2d Cir.
24   2021)). This inquiry “require[s] drawing a line between those whose
25   injuries resulted from their direct transactions with [the defendants]
26   and those whose injuries stemmed from their deals with third
27   parties.” Id.

                                        19
 1          Plaintiff here failed to allege that his injury was proximately
 2   caused by Defendants. He did not assert that he transacted directly
 3   with any Defendants or that Defendants controlled the Euroyen
 4   TIBOR futures contract that Plaintiff purchased.          Instead, Plaintiff
 5   traded his futures contract with unknown third parties before the
 6   contract’s maturity date. See Third Am. Compl. ¶ 57.

 7          Further, Plaintiff’s theory of liability depends on a series of
 8   causal steps that separate Defendants’ conduct and his purported
 9   injury.   Plaintiff asserts that (1) Defendants submitted fraudulent
10   rates to the BBA; (2) the BBA then used these artificial submissions to
11   set Yen-LIBOR; (3) the manipulated Yen-LIBOR affected Euroyen
12   TIBOR during the Class Period; and (4) any distorted benchmark rate
13   also affected the market’s perception of the value of Plaintiff’s
14   Euroyen TIBOR futures contract. Plaintiff’s injury thus occurred far
15   from “the first step following” Defendants’ “harmful behavior.”
16   Schwab Short-Term Bond Mkt. Fund, 22 F.4th at 116 (citation omitted).

17          Existence of More Direct Victims. Direct victims of an alleged
18   antitrust conspiracy are situated to enforce the antitrust laws because
19   their “self-interest would normally motivate them to vindicate the
20   public interest in antitrust enforcement.”         AGC, 459 U.S. at 542.
21   When only indirect victims bring suit, “it is difficult to understand
22   why the[] direct victims of the conspiracy have not asserted any claim
23   in their own right.” Id. at 542 n.47; see also Gatt Commc’ns, Inc. v. PMC
24   Assocs., L.L.C., 711 F.3d 68, 79 (2d Cir. 2013) (“If the ‘superior’ plaintiff
25   has not sued, one may doubt the existence of any antitrust violation
26   at all.”) (internal quotation marks omitted) (quoting Phillip Areeda &
27   Herbert Hovenkamp, Fundamentals of Antitrust Law, § 3.01c, at 3–9 to
28   3–10 (4th ed. 2011)).

                                          20
 1         Plaintiff here is an indirect victim of the alleged conspiracy.
 2   Direct victims might include traders of interest-rate swaps—contracts
 3   in which a party exchanges one stream of fixed interest-rate payments
 4   for another flow of payments based on a variable, “floating” rate, such
 5   as Yen-LIBOR or Euroyen TIBOR. See Sonterra Cap. Master Fund Ltd.
 6   v. UBS AG, 954 F.3d 529, 532–33 (2d Cir. 2020) (explaining interest rate
 7   swaps that incorporate Yen-LIBOR). Such a swap trader betting on
 8   the movement of benchmark rates like Yen-LIBOR and Euroyen
 9   TIBOR would be more directly harmed if Defendants had engaged in
10   an antitrust conspiracy to manipulate Yen-LIBOR and Euroyen
11   TIBOR.

12         Speculative Damages. We next consider whether the “asserted
13   damages are speculative,” because “a high degree of speculation in a
14   damages calculation suggests that a given plaintiff is an inefficient
15   engine of enforcement.” IQ Dental Supply, Inc. v. Henry Schein, Inc.,
16   924 F.3d 57, 66–67 (2d Cir. 2019) (citations omitted). Damages are
17   speculative “where countless other market variables could have
18   intervened to affect . . . pricing” and the “theory of antitrust injury
19   depends upon a complicated series of market interactions.” Reading
20   Indus., Inc. v. Kennecott Copper Corp., 631 F.2d 10, 13–14 (2d Cir. 1980).
21   A district court should not be required to entertain “multiple layers
22   of speculation” and “create[] . . . an alternative universe” to calculate
23   damages. IQ Dental Supply, 924 F.3d at 67 (cleaned up).

24         Here, Plaintiff failed to plead any injury. He alleges that he
25   entered and closed a short position in a Euroyen TIBOR futures
26   contract in 2006.   In other words, he bet that there would be “an
27   increase in Euroyen TIBOR rates.”          Third Am. Compl. ¶ 138.
28   Plaintiff alleges two acts occurring in August 2006 involving three-

                                        21
 1   month Euroyen TIBOR futures, both of which involved Defendants’
 2   alleged attempts to manipulate Yen-LIBOR upwards. But if true and
 3   Euroyen TIBOR rates did increase, Plaintiff would have benefited
 4   from Defendants’ conduct.      See id. (explaining that a trader who
 5   “go[es] short” would “profit from an increase in Euroyen TIBOR
 6   rates”).

 7         In any event, Plaintiff’s theory of damages is also highly
 8   speculative.    As explained above, his allegations rely on an
 9   attenuated chain of causation that would complicate if not render
10   impossible any damages calculation. See supra at 20.

11         Duplicative Recovery and Complex Damage Apportionment.
12   Finally, we consider “the difficulty of identifying damages and
13   apportioning them among direct and indirect victims so as to avoid
14   duplicative recoveries.” Volvo N. Am. Corp. v. Men’s Int’l Pro. Tennis
15   Council, 857 F.2d 55, 66 (2d Cir. 1988). The focus of this factor is on
16   “keeping the scope of complex antitrust trials within judicially
17   manageable limits.” AGC, 459 U.S. at 543.

18         Here, apportionment of any damages would be difficult and
19   there would be a risk of duplicative recovery because Plaintiff’s
20   theory of liability is indirect and imprecise. Plaintiff had no direct
21   dealings with Defendants but asserts an injury based on alleged
22   conduct that impacted the marketplace generally. Damages would
23   thus have to be calculated based on specific transactions between
24   third parties that were indirectly impacted by Defendants’ alleged
25   manipulation of benchmark rates. To the extent that Plaintiff seeks
26   damages based on trading volume, see Third Am. Compl. ¶ 124
27   (“Billions in notional value . . . in Euroyen futures contracts were
28   transacted during the Class Period”), such an approach would be

                                       22
 1   vastly overbroad.      Cf. Gelboim, 823 F.3d at 779 (“Requiring the
 2   [defendant] [b]anks to pay treble damages to every plaintiff who
 3   ended up on the wrong side of an independent LIBOR-denominated
 4   derivative . . . would . . . also vastly extend the potential scope of
 5   antirust liability in myriad markets where derivative instruments
6    have proliferated.”). The district court thus correctly concluded that
7    Plaintiff failed to allege antitrust standing.

 8   C.    RICO Claims

 9         1.     Legal Principles

10         The RICO statute criminalizes certain conduct arising from “a
11   pattern of racketeering activity.” 18 U.S.C. § 1962(a)-(c). Congress
12   defined “racketeering activity” through numerous state and federal
13   offenses, commonly known as predicates. See id. § 1961(1). RICO
14   also provides “a private civil cause of action that allows ‘[a]ny person
15   injured in his business or property by reason of a violation of section
16   1962’ to sue in federal district court and recover treble damages, costs,
17   and attorney’s fees.’” RJR Nabisco, Inc., 579 U.S. at 331 (quoting 18
18   U.S.C. § 1964(c)) (alteration in original).

19         “To establish a RICO claim, a plaintiff must show: (1) a
20   violation of the RICO statute, 18 U.S.C. § 1962; (2) an injury to business
21   or property; and (3) that the injury was caused by the violation of [§]
22   1962.” Cruz v. FXDirectDealer, LLC, 720 F.3d 115, 120 (2d Cir. 2013)
23   (citation omitted). As for this last requirement, “a plaintiff must . . .
24   establish that the underlying § 1962 RICO violation was the proximate
25   cause of his injury.” Empire Merchs., LLC v. Reliable Churchill LLLP,
26   902 F.3d 132, 140 (2d Cir. 2018) (cleaned up). “[T]he central question
27   . . . is whether the alleged violation led directly to the plaintiff’s
28   injuries.” Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 461 (2006).

                                         23
 1   As with proximate causation in the antitrust context, we “rarely ‘go
 2   beyond the first step’” in the causal chain. Empire Merchs., LLC, 902
 3   F.3d at 141 (citation omitted); see also Anza, 547 U.S. at 459–60 (looking
 4   to the directness of injury, “speculative nature of the proceedings,”
 5   risk of duplicative recoveries, and existence of more immediate
 6   victims when analyzing proximate causation in the civil RICO
 7   context).

 8         2.     Analysis

 9         Plaintiff failed to allege that his proposed RICO claims,
10   premised on wire fraud, see 18 U.S.C. § 1343, proximately caused his
11   injury. As noted above, see supra at 20, Plaintiff’s alleged injury does
12   not flow directly from the first step in the causal chain. Not only
13   does Plaintiff fail to allege any direct dealings with Defendants, but
14   his asserted injury (a change in the value of his domestically traded
15   Euroyen TIBOR futures contract) is several steps removed from
16   Defendants’ alleged conduct (sending fraudulent Yen-LIBOR
17   submissions to the BBA).         See id.   Plaintiff thus cannot establish
18   proximate causation for purposes of his RICO claims for the same
19   reason that he fails to do so for his antitrust claim. 15

20                             III.   CONCLUSION

21         For these reasons, the district court properly dismissed
22   Plaintiff’s CEA and antitrust claims and denied leave to add civil
23   RICO claims. We thus affirm the judgment and orders of the district
24   court and dismiss the cross-appeal.

           15 The parties agree that Plaintiff’s RICO claims fall or stand with
     this Court’s causation analysis for antitrust standing.

                                          24