Sniado v. Bank Austria Ag

• Decision Date: 30 November 2001
• Docket Number: No. 00 Civ. 9123(AGS).,00 Civ. 9123(AGS).
• Parties: John L. SNIADO, III, on behalf of himself and all others similarly situated, Plaintiff, v. BANK AUSTRIA AG, Raiffeisen Zentralbank Österreich AG, Erste Bank Der Österreichisechen Sparkassen AG, Bank Für Arbeit Und Wirtschaft AG, Österreichische Postsparkasse, Raiffeisenlandesbank Northern Austria-Vienna, Northern Austria Landesbank-Hypothekenbank, Österreichische Volksbanken AG, ABN AMRO Bank N.V., GWK Bank N.V., Fortis N.V., ING Bank N.V., Banca Di Roma SpA, Banca Nazionale Del Lavoro SpA, Banca Intesa, Deutsche Bank AG, and Unicredito Italiano SpA, Defendants.
• Court: U.S. District Court — Southern District of New York

Page 159

174 F.Supp.2d 159

John L. SNIADO, III, on behalf of himself and all others similarly situated, Plaintiff, v. BANK AUSTRIA AG, Raiffeisen Zentralbank Österreich AG, Erste Bank Der Österreichisechen Sparkassen AG, Bank Für Arbeit Und Wirtschaft AG, Österreichische Postsparkasse, Raiffeisenlandesbank Northern Austria-Vienna, Northern Austria Landesbank-Hypothekenbank, Österreichische Volksbanken AG, ABN AMRO Bank N.V., GWK Bank N.V., Fortis N.V., ING Bank N.V., Banca Di Roma SpA, Banca Nazionale Del Lavoro SpA, Banca Intesa, Deutsche Bank AG, and Unicredito Italiano SpA, Defendants.

No. 00 Civ. 9123(AGS).

United States District Court, S.D. New York.

November 30, 2001.

Bernard Persky, Brbara J. Hart, Goodkind, Labaton, Rudoff & Sucharow LLP, New York City, for Plaintiff.

John H. Shenefield, Jonathan M. Rich, Gregory P. Asciolla, John F. Terzaken, II, Morgan, Lewis & Bockius LLP, Washington, DC, John D. Gordan III, Morgan, Lewis & Bockius LLP, New York City, for Bank Austria AG.

Paul A. Engelmayer, Wilmer, Cutler & Pickering, Washington, DC, James W. Lowe, Wilmer, Cutler & Pickering, Washington, DC, for Raiffeisen Zentralbank Osterreich AG, Raiffeisenlandesbank Northern Austria-Vienna AG, Northern Austria Landesbank-Hypothekenbank AG, and Osterreichische Volksbanjen AG.

Allen M. Unger, James D. Arden, Sidley, Austin, Brown & Wood, New York City, for Erste Bank der oesterreichischen Sparkassen AG. Dennis P. Orr, Hector Gonzalez, Mayer, Brown & Platt, New York City, Steven R. Gilford (of counsel), Chicago, IL, for ABN AMRO Bank N.Y. Inc.

Robert A. Horowitz, Karen Y. Bitar, Greenberg & Traurig, New York City, for Fortis N.V. and GWK Bank N.V.

Jerome S. Fortinsky, Brian H. Polovoy, Shearman & Sterling, New York City, for ING Bank N.V.

Michael S. Shuster, White & Case LLP, New York City, for Banca di Roma SpA.

Gordon B. Nash, Jr., Gardner, Carton & Douglas, Chicago, IL, for Banca Nazionale del Lavoro SpA.

Richard A. Martin, Kevin J. Toner, Heller, Ehrman, White & McAuliffe, New York City, for IntesaBci, SpA.

Jeffrey Barist, Brian D. Hail, Milbank, Tweed, Hadley & McCloy, New York City, for Deutsche Bank AG.

Richard L. Mattiaccio, Pavia & Harcourt, New York City, for Unicredito Italiano SpA.

MEMORANDUM ORDER

SCHWARTZ, District Judge.

In this antitrust action, plaintiff alleges that defendants conspired to fix the fees charged for exchanging one European currency for another European currency. Plaintiff seeks to represent a class of American individuals and businesses who paid supra-competitive fees for exchanging currencies that make up the Euro. Defendants move to dismiss the amended complaint for lack of subject matter jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(1), and for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6). Defendants also contend in their motions that plaintiff's claims are partially time-barred. For the reasons set forth below, defendants' motions to dismiss the action for lack of subject matter jurisdiction are granted; the Court does not reach the other issues.

I. BACKGROUND

Plaintiff John L. Sniado, III is an individual who lives in New York State. (Amended Class Action Complaint for Violation of Federal Antitrust Laws ("Am. Compl.") ¶ 5.) He "paid foreign exchange fees to defendants when exchanging certain of the currencies that make up the Euro during the relevant period and has been damaged ... by paying supra-competitive fees for such transactions." (Id.) No further information about Mr. Sniado's transaction or transactions is provided. During proceedings in this action on April 5, 2001, however, plaintiff's counsel represented to the Court that Mr. Sniado had exchanged currency in Europe but not in the United States.

The defendants are European banks, some of whom are alleged to have offices in the United States. (Am.Compl. ¶¶ 6-22.) Defendants Bank Austria AG ("Bank Austria"), Erste Bank der Österreichisechen Sparkassen AG ("Erste Bank"), Raiffeisen Zentralbank Österreich AG ("Raiffeisen"), Bank für Arbeit und Wirtschaft AG and Österreichische Postsparkasse (together "BAWAG"), Raiffeisenlandesbank Northern Austria-Vienna ("Raiffeisenlandes-bank"), Northern Austria Landesbank-Hypothekenbank ("Northern Austria Landesbank"), and Österreichische Volksbanken AG ("Österreichische") are all Austrian banks. (Id. ¶¶ 6-12.) Defendants ABN AMRO Bank, N.V. ("ABN Amro"), ING Bank N.V. ("ING"), GWK Bank N.V. ("GWK") and Fortis N.V. ("Fortis") are all Dutch banks. (Id. ¶¶ 13-16.) Defendants Banca Intesa SpA ("BI"), Banca di Roma SpA ("BDR"), Banca Nazionale del Lavoro SpA ("BNL"), UniCredito Italiano SpA ("Unicredito"), and Sanpaolo IMI SpA ("Sanpaolo") are all Italian banks. (Id. ¶¶ 17-21.) Defendant Deutsche Bank Aktiengesellschaft ("Deutsche Bank") is a German bank. (Id. ¶ 22.) Collectively, defendants have "exchanged millions of dollars of European currency in the United States and in Europe" in exchange for certain fees. (Id. ¶ 33.)

In April 1997, the head of an Austrian bank not named in this action committed suicide. His suicide note asserted that the Austrian banks, known collectively as the "Lombard Club," had engaged in price fixing and other illegal activities. (Id. ¶¶ 39-40.) The next month, Austrian journalists reported that Austrian banks had discussed certain measures to improve their profitability. (Id. ¶ 41.) The suicide note and the media story led to an investigation by the European Commission (the "EC"), which raided several of the Austrian banks and seized documents. (Id. ¶¶ 42-43.) The EC subsequently accused the Austrian banks of fixing exchange fees for currencies that make up the Euro. According to the EC, the Lombard Club had been meeting for decades to discuss setting currency exchange fees. (Id. ¶¶ 44-47.) In September 1999, the EC sent "statements of objections" (a/k/a "warnings") to eight Austrian banks, including the seven Austrian defendants here. The warnings allegedly contained documentary evidence of the fixing of currency exchange fees. (Id. ¶ 48.) In November 2000, the EC issued supplementary warnings to the members of the Lombard Club. (Id. ¶ 62.)

In February 1999, the EC raided certain banks in Germany, France, Spain, and Italy based on evidence that large European banks had been fixing currency exchange fees. Among the banks raided was defendant Deutsche Bank. (Id. ¶ 50.) In October 1999, the EC raided certain banks in Ireland, Belgium, and the Netherlands. Among the banks raided were defendants ABN AMRO, Fortis, GWK, and a subsidiary of defendant ING. (Id. ¶ 51.) The EC also issued over 250 letters demanding information regarding the fixing of currency exchange fees. (Id. ¶ 52.) In June 2000, EC officials stated that they had uncovered evidence of price-fixing among European banks. That same month, the EC disclosed that approximately 120 banks in Ireland, Portugal, Finland, and Belgium were under investigation for fixing currency exchange fees and had been issued warnings regarding such conduct. The EC claims to have documentary evidence that certain banks, including ABN AMRO branches in Belgium and Portugal and the Deutsche Bank branch in Belgium, fixed currency exchange fees. (Id. ¶¶ 57-58.) In July 2000, the EC publicly stated that it had enough evidence to demonstrate that the 120 banks in Ireland, Portugal, Finland, and Belgium had violated European Union rules concerning competition. (Id. ¶ 59.) In August 2000, the EC issued warnings to seventeen German banks, thirteen Dutch banks, and two Dutch banking associations. The warnings stated that the EC had evidence of currency exchange fee fixing, in violation of European Union competition rules. Defendants Fortis, GWK, ABN AMRO and ING were among those receiving warnings. (Id. ¶ 61.) In November 2000, the EC held closed hearings concerning Finnish, Irish, Portugese, and Belgian banks. (Id. ¶ 69.) In April 2001, the EC ended its investigation of Dutch bank SNS Bank (which is not named in this action) after SNS Bank agreed to abolish its minimum foreign currency exchange fee. (Id. ¶ 71.)

In April 1999, Italy's central bank, the Bank of Italy, began to investigate a group known as "The Friends of the Bank Group," which included certain Italian banks and Deutsche Bank. The group allegedly met from March 1997 through January 1999 and agreed to fix currency exchange fees, among other things. (Id. ¶ 64.) In January 2000, the Bank of Italy fined thirteen banks a total of 33,000,000,000 Italian Lira (equaling approximately $17,250,000). According to the Bank of Italy, the banks had operated an illegal cartel since 1988 and had jointly set currency exchange fees. The fined banks had allegedly raised 1,000,000,000,000 Italian Lira over the previous ten years through their various unlawful activities. Among the banks fined were defendants Deutsche Bank, BDR, BNL, Sanpaolo, and Unicredito, and the predecessors of defendant BI. (Id. ¶¶ 66-68.)

Plaintiff filed this action on November 30, 2000. In March 2001, certain defendants moved to dismiss the complaint. During proceedings before the Court on April 5, 2001, plaintiff announced his desire to amend the complaint. With the consent of the parties in attendance (not all defendants having been served by that time), the motion to dismiss was withdrawn without prejudice, plaintiff was granted leave to file an amended complaint, and a schedule was set for a motion to dismiss the amended complaint. See Order dated April 5, 2001. Plaintiff filed his amended complaint in April 2001. The defendants that had been served then jointly moved to dismiss the amended complaint. Subsequently, those defendants who were later served also filed motions to dismiss, which motions adopted the arguments of the earlier joint motion. In addition to opposing the motions to dismiss, plaintiff filed a motion seeking leave to conduct discovery relating to subject matter jurisdiction. The Court denied that motion, concluding that defendants' motions make a...