| LAS VEGAS
LAS VEGAS Dec 5 The London Metal Exchange asked
a panel of U.S. judges on Thursday to assign a federal court in
Manhattan to handle a series of antitrust lawsuits that allege
the world's largest metal exchange, two of Wall Street's biggest
banks and big commodity merchants conspired to raise the price
The venue of lawsuits is sometimes critically important
because of the varying levels of experience among judges in
different cities, as well as other factors such as convenience
for lawyers and witnesses.
LME, which is owned by Hong Kong Exchanges and Clearing Ltd
, and other defendants including Goldman Sachs Group
Inc, JPMorgan Chase & Co and merchants Glencore
Xstrata are fighting allegations in about 30 lawsuits
that they manipulated the warehousing of aluminum in order to
lift the price of the metal. The U.S. Justice Department is also
investigating the matter.
Goldman, JPMorgan and HKEx have rejected the claims and said
they would contest them vigorously.
Many of the warehouses are in or near Detroit, Michigan, so
some aluminum buyers want their cases to be heard there.
But warehouse operators took their directions and rules from
bosses in Manhattan and London, so the U.S. District Court for
the Southern District of New York would make more sense as a
venue, said Margaret Zwisler, a lawyer at the firm Latham &
Watkins which represents the LME.
"The real issue here is what were the rules and how were the
rules made," Zwisler said at a court hearing.
The rules were not made by warehouse workers, she added.
"The truck drivers are not the relevant people who are the
witnesses here," she said.
The venue decision will be made in the coming days by the
U.S. Judicial Panel on Multidistrict Litigation, a panel of
seven judges who meet every two months to consider similar
questions in an array of matters. Its hearing on Thursday was in
Chris Lovell, a lawyer who represents many of the
plaintiffs, disputed that all key decisions were made in New
York or London. He said many were likely made in Detroit by
Goldman subsidiary Metro International Trade Services.
For that reason and because so many of the suits have been
filed in Detroit, they should all be consolidated there, he
said. "The manipulation allegedly occurred in Detroit," Lovell
The plaintiffs, though, are not unanimous. Some prefer New
York, New Orleans or Los Angeles.
Goldman said in a recent court filing that it had no
preference between the Detroit and New York courts.
The judges on the panel gave little indication of how they
would decide. U.S. District Judge Charles Breyer said many of
the relevant facts seemed to be specific to Detroit unless the
defendants decide not to contest the details of what went on in
the warehouses, while U.S. District Judge Lewis Kaplan doubted
that the specific movements of aluminum among various warehouses
would be very relevant to the outcome.