HomeMy WebLinkAboutAgreement A-15-442 with JP Morgan Settlement Agreement.pdfAgreement No. 15-442
SETTLEMENT AGREEMENT
This Settlement Agreement (hereinafter, "Agreement") is made and entered into
this 22nd day of Sept., 2015, by and among Defendants JPMorgan Chase & Co. and J.P.
Morgan Securities LLC (collectively, "Defendants") and Plaintiff Fresno County
Financing Authority ("Plaintiff'). This Agreement is intended by Defendants and Plaintiff
to fully, finally and forever resolve, discharge and settle the Released Claims, upon and
subject to the terms and conditions hereof.
RECITALS
WHEREAS, Plaintiff has alleged, among other things, that: (1) Defendants
violated Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, the California Cartwright
Act, Cal. Bus. & Prof. Code Section 16720, et seq., the California Unfair Competition
Law, Cal. Bus. & Prof. Code Section 17200, et seq., and the California False Claims Act,
Cal. Gov. Code, Section 12650, et seq., by illegally rigging bids, limiting competition, and
fixing prices in the alleged market for Municipal Derivative Transactions in the United
States and its territories; and (2) these acts caused Plaintiff to incur damages;
WHEREAS, Defendants have denied and continue to deny: (1) each and all of the
claims and allegations of wrongdoing made by Plaintiff and maintain furthermore that they
have meritorious defenses; (2) all charges of wrongdoing or liability against them arising
out of any of the conduct, statements, acts or omissions alleged, or that could have been
alleged, in the Actions, and Defendants vigorously contend that the factual allegations in
Plaintiffs complaint relating to it are materially inaccurate; and (3) the allegations that
Plaintiff was harmed by any conduct by Defendants alleged in the Actions or otherwise;
WHEREAS, Plaintiff and Defendants agree that neither this Agreement nor any
statement made in the negotiation thereof shall be deemed or construed to be an admission
1
2
or evidence of any violation of any statute or law or of any liability or wrongdoing by
Defendants or of the truth of any of the claims or allegations alleged in the Actions;
WHEREAS, arm’s length settlement negotiations have taken place between
Defendants and Plaintiff’s Counsel, and this Agreement embodies all of the terms and
conditions of the settlement between Defendants and Plaintiff;
WHEREAS, Plaintiff has concluded, after due investigation and after carefully
considering the relevant circumstances, including, without limitation, the claims asserted
in the Joint Second Amended Class Action Complaint filed in MDL Docket No. 1950
(dated December 15, 2009), the legal and factual defenses thereto, and the applicable law,
that it would be in Plaintiff’s best interests to enter into this Agreement in order to avoid the
uncertainties of litigation; and
WHEREAS, Defendants, despite the belief that they are not liable for the claims
Plaintiff asserts against them and that they have good defenses thereto, have nevertheless
agreed to enter into this Agreement to avoid further expense, inconvenience, and the
distraction of burdensome and protracted litigation, and thereby to put to rest this
controversy with respect to Plaintiff and avoid the risks inherent in complex litigation.
AGREEMENT
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and
among Plaintiff and Defendants that the Actions and the Released Claims as against
Defendants and other Releasees shall be finally and fully settled, compromised and
dismissed on the merits and with prejudice upon and subject to the terms and conditions of
this Agreement, as follows.
3
A. Definitions
1. As used in this Agreement the following terms have the meanings specified
below.
(a) “Actions” means In re Municipal Derivatives Antitrust Litigation,
MDL Docket No. 1950, Master Docket No. 08-2516 (VM) (GWG),
and the individual case filed by Plaintiff and consolidated and/or
included as part of that MDL, captioned Fresno County Financing
Authority v. AIG Financial Products Corp., et al., No. 09 Civ. 1199
(VM).
(b) “Court” means the United States District Court for the Southern
District of New York.
(c) “Defendants” mean JPMorgan Chase & Co. and J.P. Morgan
Securities LLC (on its own behalf and as successor to Bear, Stearns
& Co., Inc.).
(d) “Effective Date” shall have the meaning set forth in Paragraph C.1
of this Agreement.
(e) “Municipal Derivative Transactions” means any transactions that
government, quasi-government, non-profit, private and other
entities eligible to issue tax-exempt debt now use or have used at
any time since January 1, 1992 to the Effective Date to (i) invest the
proceeds of tax-exempt debt offerings or (ii) hedge or manage the
interest rate risk associated with such debt offerings. These
investment vehicles include, but are not limited to, all of the types of
transactions described in the complaints and amendments thereto
4
filed by Plaintiff in the Actions, including but not limited to all of
the types of transactions described in Paragraphs 61-79 of the Joint
Second Amended Class Action Complaint filed in MDL Docket No.
1950 (dated December 15, 2009), as well as the allegations by the
class plaintiffs in Paragraphs 64 to 77 of the Second Consolidated
Amended Class Action Complaint filed in MDL No. 1950 (dated
June 18, 2009).
(f) “Person(s)” means an individual, corporation, limited liability
company, professional corporation, limited liability partnership,
partnership, limited partnership, association, joint stock company,
estate, legal representative, trust, unincorporated association,
government or any political subdivision or agency thereof, and any
business or legal entity and any spouses, heirs, predecessors,
successors, representatives or assignees of any of the foregoing.
(g) “Plaintiff” means the Fresno County Financing Authority.
(h) “Plaintiff’s Counsel” means Scott+Scott, Attorneys At Law, and
Lieff Cabraser Heimann & Bernstein, LLP.
(i) “Released Claims” means any and all manner of claims, demands,
rights, actions, suits, causes of action, fees, costs, penalties,
damages whenever incurred, and liabilities of any nature
whatsoever, known or unknown (including, but not limited to,
“Unknown Claims”), suspected or unsuspected, asserted or
unasserted, in law or in equity, which Releasors or any of them,
whether directly, representatively, derivatively, or in any other
5
capacity, ever had, now have or hereafter can, shall or may have,
relating in any way to any conduct prior to the Effective Date and
arising out of or related in any way to the purchase of Municipal
Derivative Transactions in the United States or its Territories during
the period from January 1, 1992 to the Effective Date, or any
conduct alleged in the Actions or that could have been alleged by
Plaintiff in the Actions, including but not limited to any conduct or
legal claims similar to those alleged in United States v.
Rubin/Chambers, et al., 09 Cr. 1058 (VM) (S.D.N.Y.), United
States v. Carollo, et al., 10 Cr. 0654 (HB) (S.D.N.Y.) and/or United
States v. Ghavami, et al., 10 Cr. 1217 (KMW) (S.D.N.Y.), against
the Releasees by Releasors (including, but not limited to, all claims
under the Sherman Antitrust Act, California’s Cartwright Act, the
California Unfair Competition Law and the California False Claims
Act, and any other federal or state statute or common law, or the law
of any foreign jurisdiction). Released Claims shall be released by
Releasors against Releasees only as provided in this Agreement, and
all of Releasor’s claims against any Person other than Releasees
shall remain in the Actions, as more fully set forth in Paragraph C.2
of this Agreement.
(j) “Releasees” means Defendants and their direct and indirect parents,
subsidiaries, affiliates, and predecessors, including but not limited
to Bear, Stearns & Co. Inc., J.P. Morgan Securities, Inc., and
JPMorgan Chase Bank N.A., and each of their respective present and
6
former officers, directors, employees, managers, members, partners,
agents, shareholders (in their capacity as shareholders), attorneys,
and legal representatives, and the predecessors, successors, heirs,
executors, administrators and assigns of each of the foregoing. As
used in this paragraph, “affiliates” means entities controlling,
controlled by or under common control with a Releasee.
(k) “Releasors” means Plaintiff on its own behalf and on behalf of its
respective direct and indirect parents, subsidiaries, affiliates,
divisions, and agencies, including but not limited to the County of
Fresno, and the present and former officers, directors, employees,
agents, legal representatives, predecessors, successors, heirs,
executors, administrators and assigns of each of the foregoing. As
used in this paragraph, “affiliates” means entities controlling,
controlled by or under common control with a Releasor.
Notwithstanding anything to the contrary herein, Releasor does not
include The California County Tobacco Securitization Agency.
(l) “Settlement” means the settlement of the Released Claims set forth
herein.
(m) “Settlement Amount” means the amount of forty thousand dollars
($40,000.00) to be paid by Defendants for the settlement of the
Released Claims.
(n) “Settling Parties” means, collectively, Defendants and Plaintiff.
(o) “Unknown Claims” means any Released Claim that Releasor does
not know or suspect to exist in his, her or its favor at the time of the
7
release of Releasees that if known by him, her or it, might have
affected his, her or its settlement with and release of Releasees, or
might have affected his, her or its decision to enter into this
Settlement. With respect to any and all Released Claims, Settling
Parties stipulate and agree that, upon the Effective Date, Plaintiff
shall expressly waive the provisions, rights and benefits of
California Civil Code § 1542 (to the extent it applies to the Actions),
which provides:
A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THE DEBTOR.
Provided however, the foregoing provision shall not be deemed to
turn a specific release into a general release. Releasors shall, upon
the Effective Date, expressly waive rights and benefits conferred by
any law of any state or territory of the United States, or principle of
common law or foreign law that is similar, comparable or equivalent
in effect to California Civil Code § 1542. Releasors may hereafter
discover facts in addition to or different from those that any of them
now know or believe to be true with respect to the subject matter of
the Released Claims, but Releasors shall expressly have, upon the
Effective Date, fully, finally and forever settled and released any
and all Released Claims, known or unknown, suspected or
unsuspected, contingent or non-contingent, whether or not
8
concealed or hidden, that now exist or heretofore have existed, upon
any theory of law or equity now existing or coming into existence in
the future, including, but not limited to, conduct that is negligent,
reckless, intentional, with or without malice, or a breach of any
duty, law or rule, without regard to the subsequent discovery or
existence of such different or additional facts. Releasors
acknowledge that the foregoing waiver was separately bargained for
and a key element of the Settlement of which this release is a part.
B. Settlement Amount
1. Payment by Defendants. Defendants shall send a check payable to Lieff,
Cabraser, Heimann & Bernstein, LLP, which shall be for Plaintiff’s account, in the amount
of Forty Thousand Dollars and No Cents ($40,000.00) (the “Settlement Check”). The
Settlement Amount constitutes the total payment that Defendants are required t o make in
connection with this Settlement Agreement. Each party shall bear its own fees and costs.
2. No Additional Payments by Defendants. Under no circumstances will
Defendants be required to pay more or less than the Settlement Amount pursuant to this
Agreement and the Settlement set forth herein. Defendants shall have no responsibility for
the handling of the Settlement Check or any disposition of proceeds once the Settlement
Check has been delivered in accordance with Paragraph B.1 of this Agreement.
C. Effectiveness of Settlement
1. Effective Date. This Agreement shall become final, binding and
enforceable once it has been executed by all the Settling Parties on the date the last Settling
Party does so (the “Effective Date”). Within ten (10) business days of the Effective Date,
Defendants shall send the Settlement Check to Plaintiff’s Counsel in accordance with
9
Paragraph B.1 of this Agreement. Within five (5) business days of receipt by Plaintiff’s
Counsel of the Settlement Check, Plaintiff shall file with the Court a stipulation of
dismissal with prejudice. If payment of the Settlement Amount is not timely made,
Plaintiff shall be entitled to enforce this Agreement against Defendants, including under
the theory of specific performance, in the Court pursuant to Paragraphs D.5 and D.6 of this
Agreement.
2. Releases. Upon the Effective Date, the Releasors, and any other Person
claiming (now or in the future) to be acting through or on behalf of them, shall be deemed
to have fully, finally, and forever released, relinquished, and discharged all Released
Claims against Releasees and shall have covenanted not to sue the Releasees with respect
to all such Released Claims, and shall be permanently barred and enjoined from instituting,
commencing, or prosecuting any such Released Claim against Releasees. Each Releasor
intends by this release to settle and release the Releasees as provided herein and does not
intend this Agreement, or any part hereof, or any other aspect of this Agreement, or any
part hereof, to extend to, to release or otherwise to affect in any way any rights that each
Releasor has or may have against any other party or entity, other than the Releasees.
3. Final and Complete Resolution. The Settling Parties intend the
Settlement as described herein to be a final and complete resolution of all disputes between
them with respect to the Actions and/or the subject matter thereof and to compromise
claims that are contested, and it shall not be deemed an admission by any Settling Party as
to the merits of any claim or defense or any allegation made in the Actions.
D. Miscellaneous
1. Confidentiality. The Settling Parties realize that this Agreement shall be
subject to public disclosure pursuant to, among others, the Ralph M. Brown Act, the
10
California Public Records Act, and all other applicable laws pertaining to disclosure by
public entities. The Settling Parties agree, unless required by law, regulation, judicial
proceeding or court order, to maintain as confidential and not disclose to the public or to
any non-party to this Agreement (other than to a regulator of Defendants) any settlement
negotiations, discussions, and communications by the parties that preceded and related to
the formation of this Agreement. The Settling Parties also recognize and agree that all
agreements and orders entered into during the course of the Actions relating to the
confidentiality of information shall, unless required by law, regulation, judicial proceeding
or court order, survive this Agreement for the term of such agreements or orders including,
but not limited to, the Protective Order Governing Confidential Information in the Actions,
dated November 5, 2008.
2. No Admissions. Neither this Agreement nor the Settlement, nor any act
performed or document executed pursuant to or in furtherance of this Agreement or the
Settlement: (a) is or may be deemed to be or may be used as an admission of, or evidence
of, the validity of any Released Claim, of any allegation made in the Actions, or of any
wrongdoing or liability of Releasees; or (b) is or may be deemed to be or may be used as an
admission of, or evidence of, any liability, fault or omission of the Releasees in any civil,
criminal or administrative proceeding in any court, administrative agency or other tribunal.
Neither this Agreement nor the Settlement, nor any act performed or document executed
pursuant to or in furtherance of this Agreement or the Settlement shall be admissible in any
proceeding for any purpose, except to enforce the terms of the Settlement, and except that
the Releasees may file this Agreement and/or the stipulation of dismissal provided for in
Paragraph C.1 of this Agreement in any action for any purpose, including, but not limited
to, in order to support a Releasee’s defense or counterclaim based on principles of res
11
judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction or
any other theory of claim preclusion or issue preclusion or similar defense or counterclaim.
3. Voluntary Settlement. The Settling Parties agree that the Settlement
Amount and the other terms of the Settlement as described herein were negotiated in good
faith by the Settling Parties, and reflect a settlement that was reached voluntarily after
consultation with competent legal counsel.
4. Consent to Jurisdiction. Defendants and Plaintiff hereby irrevocably
submit to the exclusive jurisdiction of the Court only for the specific purpose of any suit,
action, proceeding or dispute arising out of or relating to this Agreement or the
applicability of this Agreement.
5. Resolution of Disputes; Retention of Exclusive Jurisdiction. Any
disputes between or among Defendants and Plaintiff (or their counsel) concerning matters
contained in this Agreement shall, if they cannot be resolved by negotiation and agreement,
be submitted to the Court. The Court shall retain exclusive jurisdiction over the
implementation and enforcement of this Agreement.
6. Binding Effect. This Agreement shall be binding upon, and inure to the
benefit of, the successors and assigns of the Settling Parties.
7. Authorization to Enter Settlement Agreement. The undersigned
representatives of Defendants and Plaintiff represent that they are fully authorized to enter
into and to execute this Agreement on behalf of Defendants and Plaintiff. Plaintiff
represents and warrants that it has taken all necessary official action and is fully authorized
to enter into this Agreement and to provide the release in Paragraph C.2 of this Agreement
and covenants not to seek hereafter to rescind, void, or otherwise cancel this Agreement,
expressly including but not limited to Releasors’ release in Paragraph C.2 of this
12
Agreement, on the grounds that this Agreement or any part thereof was not duly authorized
by Plaintiff under any federal, state or local statute, regulation, or common law, or under
the law of any foreign jurisdiction.
8. Notices. All notices under this Agreement shall be in writing. Each such
notice shall be given either by (a) e-mail, (b) hand delivery, (c) registered or certified mail,
return receipt requested, postage pre-paid, or (d) Federal Express or similar overnight
courier. If directed to Plaintiff, the notice shall be addressed to Plaintiff’s Counsel at their
addresses set forth on the signature pages hereof. If directed to Defendants, the notice shall
be addressed to:
Nancy E. Schwarzkopf
Managing Director
JPMorgan Chase & Co., Legal Department
Mail Code NY1-E076,
Four New York Plaza, 19th Floor,
New York, NY 10004
nancy.e.schwarzkopf@chase.com
with copy to
Thomas C. Rice
Joshua M. Slocum
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
trice@stblaw.com
jslocum@stblaw.com
Plaintiff or Defendants may designate, from time to time, additional notice recipients by
giving notice to all parties hereto in the manner described in this Paragraph D.8.
9. Headings. The headings used in this Agreement are intended for the
convenience of the reader only and shall not affect the meaning or interpretation of this
Agreement.
10. No Party Deemed to Be the Drafter. None of the Settling Parties shall be
deemed to be the drafter of this Agreement or any provision hereof for the purpose of any
13
statute, case law or rule of interpretation or construction that would or might cause any
provision to be construed against the drafter hereof.
11. Choice of Law. This Agreement shall be considered to have been
negotiated, executed and delivered, and to be wholly performed, in the State of New York,
and the rights and obligations of the Settling Parties under this Agreement shall be
construed and enforced in accordance with, and governed by, the internal, substantive laws
of the State of New York without giving effect to any choice of law principles (whether of
the State of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
12. Amendment, Waiver. This Agreement shall not be modified in any
respect except by a writing executed by all the Settling Parties, and the waiver of any rights
conferred hereunder shall be effective only if made by written instrument of the waiving
party. The waiver by any Settling Party of any breach of this Agreement shall not be
deemed or construed as a waiver of any other breach, whether prior, subsequent or
contemporaneous, of this Agreement.
13. Execution in Counterparts. This Agreement may be executed in one or
more counterparts. All executed counterparts and each of them shall be deemed to be one
and the same instrument. Counsel for the Settling Parties shall exchange among themselves
original signed counterparts.
14. Integrated Agreement. This Agreement constitutes the entire agreement
between the Settling Parties and no representations, warranties or inducements have been
made to any party concerning this Agreement other than the representations , warranties
and covenants contained and memorialized herein.
IN WITNESS WHEREOF, the parties hereto, through their fully authorized
representatives, have executed this Agreement as of the date first herein above written.
PLAINTIFF FRESNO COUNTY
FINANCING AUTHORITY
Biu.k 1v Q . f?mtu (i~ ~
Deborah A. Poochigian, Chairper~
Dated: ltpi J.l, 2JJI5"
I
DEFENDANT JPMorgan Chase & Co.
By:
Dated:
DEFENDANT J.P. Morgan Securities LLC
By:
Dated:
ATTEST:
BERNICE E. SEIDEL, Clerk
Board of Supervisors
By !1 ,t'>l\ ""-' &'sbpp
Deputy
APPROVED AS TO FORM BY
COUNSEL FOR PLAINTIFF
By:
Eric B. Fastiff
Lieff Cabraser Heimann & Bernstein
275 Battery Street, 29th Floor
San Francisco, California 94111
Tel.: (415) 956-1000
Dated:
APPROVED AS TO FORM BY
COUNSEL FOR DEFENDANTS
By:
Thomas C. Rice
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Tel.: (212) 455-3040
Dated:
14
------------------~~
IN WITNESS WHEREOF , the parties hereto, through their fully authorized
representatives, have executed this Agreement as of the date first herein above written.
PLAINTIFF FRESNO COUNTY
FrNANCJNG AUTHORITY
By:
Deborah A. Poochigian , Chairperson
Dated:
DEFENDANT JPMorgan Chase & Co .
By :
lL---
DEFENDANT J.P. Morgan Securities LLC
Dated :
It -/)
APPROVED AS TO FORM BY
COUNSEL FOR PLArNTIFF
By :·~'{f~
Eric B. Fastiff
LietTCabraser Heimann & Bernstein
San Francisco, California 94111 o-275 Battery Street, 29th Floor 1 ~
Tel.: (415)956-1000 f b 0 -1.01)
Dated :
APPROVED AS TO FORM BY
CO UNS.~ •• ND ANTS
By : ~<f:.<.J.....
Thomas C. Rice
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Tel .: (212) 455 -3040
Dated : II fie/(\
14