(Adds LME owner in 5th paragraph, role and background)
By Jonathan Stempel
NEW YORK Aug 26 A judge has dismissed London
Metal Exchange Ltd as a defendant from U.S. antitrust litigation
accusing banks and commodity companies of conspiring to drive up
aluminum prices by restricting supply, hurting manufacturers and
In a decision made public on Tuesday, U.S. District Judge
Katherine Forrest in Manhattan concluded that the LME was an
"organ" of the UK government, and therefore immune from the
lawsuit under the Foreign Sovereign Immunities Act.
Forrest acknowledged that her decision may at first glance
seem "somewhat surprising and counterintuitive," noting that the
LME is a privately-held, for-profit company subject to extensive
But she said the relevant case law "tips decidedly" toward a
grant of immunity, noting that the LME is required by law to
perform "the decidedly public function of market regulation."
Established in 1877, the LME was bought in December 2012 by
Hong Kong Exchanges and Clearing Ltd. The LME said
more than 80 percent of non-ferrous metals futures business is
transacted on its platforms, totaling $14.6 trillion in 2013.
The decision does not affect other defendants in the case,
which include the large mining company Glencore Plc,
Goldman Sachs Group Inc, JPMorgan Chase & Co, and
various commodity trading, metals mining and metals warehousing
It is nonetheless a setback for the commercial and consumer
plaintiff groups, as well as other entities pursuing the
They accused the defendants of having conspired since May
2009 to drive up aluminum prices by hoarding supply, causing
delays, known as queues, of up to 16 months to fill orders.
The LME allegedly profited illegally from its share of the
higher storage revenue collected by the warehouses, plaintiffs
have said. It does not own the warehouses or metal stored there.
Christopher Lovell, a partner at Lovell Stewart Halebian
Jacobson representing some plaintiffs, said there will be an
"Although the opinion is reasoned, plaintiffs' position is
that the court believed that it was constrained by precedent,"
The LME in a statement said it was pleased with the
decision. "We continue to take action to manage queue-related
issues in accordance with our obligations," it added.
Margaret Zwisler, a partner at Latham & Watkins representing
the LME, had told Forrest during oral argument in June that the
LME's main job under UK law was to maintain an orderly market in
metals, including by consulting with market participants through
a process similar to processes used by U.S. government agencies.
Forrest oversees 26 lawsuits that were combined before her
last December. Her decision is dated Aug. 25.
The case is In re: Aluminum Warehousing Antitrust
Litigation, U.S. District Court, Southern District of New York,
(Reporting by Jonathan Stempel in New York; Additional
reporting by Josephine Mason; Editing by Lisa Von Ahn and Tom