Firm Obtains Victory on Antitrust and Tortious Interference Claims Regarding Misconduct in the Municipal Bond Market

The Firm obtained a victory on behalf of its client, Preston Hollow Capital LLC (“Preston Hollow”) in a case against municipal bond giant Nuveen Asset Management LLC (“Nuveen”) and the head of its municipal bond department, John Miller. The Firm had previously obtained a trial victory in a companion case in the Delaware Court of Chancery, which found that Nuveen had engaged in a campaign designed to destroy its smaller competitor Preston Hollow by using “threats and lies” in order to persuade the largest broker-dealers in the municipal bond industry to boycott Preston Hollow. However, the Delaware Court of Chancery declined to rule on Preston Hollow’s antitrust claim, so the Firm filed an action in the Southern District of New York addressing Nuveen’s anticompetitive behavior and alleging that Miller tortiously interfered with Preston Hollow’s prospective business relations. Nuveen and Miller moved to dismiss the complaint, arguing, among other things, that res judicata barred Preston Hollow’s claims, Preston Hollow was judicially estopped from seeking damages, and Preston Hollow could not demonstrate a violation of the Sherman and Donnelly Acts.

Following briefing and oral argument, Judge P. Kevin Castel denied the motion to dismiss. Notably, Judge Castel found that “[b]ecause the Complaint plausibly alleges vertical agreements between Nuveen and [underwriters and broker dealers] as well as a horizontal agreement between and among [underwriters and broker dealers], and makes sufficient allegations concerning the relevant market, Preston Hollow has stated a claim for a per se violation” of the applicable antitrust laws. Judge Castel also rejected the defendants’ res judicata and judicial estoppel arguments, as Preston Hollow could not obtain relief on all of its claims in the Delaware Court of Chancery and it was premature to calculate damages during Preston Hollow’s 2019 trial against Nuveen. The parties are beginning fact discovery as the case heads to trial. The Firm also represents Preston Hollow in a companion case in Delaware Superior Court alleging that Nuveen defamed Preston Hollow in the municipal bond market. (Preston Hollow also is represented in the Delaware litigations by Morris, Nichols, Arsht & Tunnel of Wilmington, Delaware).

The decision can be found here.