August 29, 2014
Latham’s antitrust practice group achieved a major victory for its client The London Metal Exchange (LME) on August 26, 2014, when a federal district court held that it is immune from suit in the U.S. under the Foreign Sovereign Immunities Act. The LME—a 140-year old global commodities exchange—is the world center for options and futures trading of non-ferrous metals, like aluminum, copper and zinc.
In a large multidistrict class action centered in the Southern District of New York, plaintiffs alleged that the LME conspired with several investment banks to restrict supply and inflate the price of physical aluminum. The case has made headlines around the world, drawing interest from regulators on several continents.
Latham moved to dismiss the claims against the LME on the ground that it is an agency or instrumentality of the government of the United Kingdom, and is therefore immune from the jurisdiction of U.S. courts under the Immunities Act. Although there are numerous cases in which plaintiffs in the U.S. have attempted to state antitrust claims against entities or individuals who trade on the LME, the LME itself has never before been a defendant in a U.S. litigation.
Latham persevered through numerous supplemental legal and evidentiary submissions and a lengthy oral argument to show that the LME qualified as an “organ” of the UK government and that the conduct about which the plaintiffs complained was not “commercial activity” within the meaning of the Immunities Act. Latham ultimately convinced the Court that prevailing case law dictated only one result – that the LME is immune from the jurisdiction of U.S. courts.
Latham partners Peggy Zwisler, Bill Sherman and Jenn Giordano headed the team, along with associates Jeff Newhouse, Chris Fawal, Will Rawson and Derek Linkous.
Several news outlets including Reuters, Law360 and Global Competition Review hailed Latham’s innovative approach and win. AmLaw wrote, “When the New York Times reported last year on warehousing practices that drive up the cost of aluminum, plaintiffs lawyers might have thought a winning case fell into their laps. But the resulting litigation lost a bit of its firepower this week, thanks to a daring and novel argument by Latham & Watkins on behalf of the London Metal Exchange Ltd.”
Further recognizing the skill and effort that went into this winning strategy, both AmLaw and Global Competition Review named Peggy Zwisler “Litigator of the Week.”