## Facts

- The Commodity Exchange Act (CEA) regulates commodity futures trading and assigns primary oversight to the Commodity Futures Trading Commission (CFTC).
- The Board of Trade of the City of Chicago (CBOT) was a CFTC-designated “contract market” with federally supervised self-regulatory duties to maintain fair and orderly trading and to monitor for congestion and price distortion.
- In summer 1989, Ferruzzi Finanziaria S.p.A. and related entities held an unusually large long position in July 1989 soybean futures and a dominant position in deliverable cash soybeans, raising concerns of a squeeze.
- CBOT officials urged Ferruzzi to reduce positions; Ferruzzi largely refused.
- On July 11, 1989, CBOT’s governing board declared an emergency and adopted a resolution requiring accelerated liquidation and strict position limits in July 1989 soybean futures through the contract’s last trading day.
- CBOT notified the CFTC of the emergency action; the CFTC did not suspend or rescind the resolution.
- After the emergency resolution was publicized, July 1989 soybean futures prices declined sharply, affecting cash soybean prices.
- American Agriculture Movement, Inc. (AAM) and individual soybean farmers alleged they suffered losses and claimed the emergency action was not a good-faith regulatory response but instead artificially depressed prices.
- AAM sued CBOT and CBOT officials under the CEA, the Sherman Act, and state common-law theories.

## Issues

1. Whether AAM and its members had statutory standing to sue CBOT under the CEA for the exchange’s emergency action.
2. Whether the CEA preempted state common-law claims challenging CBOT’s emergency resolution as an exercise of federally supervised self-regulation.
3. Whether the CEA and CFTC oversight impliedly repealed or conferred immunity from Sherman Act liability for CBOT’s emergency action.

## Decision

- The Seventh Circuit affirmed dismissal of the CEA claim for lack of statutory standing.
- The Seventh Circuit affirmed summary judgment for CBOT on the state common-law claims because the CEA preempted them.
- The Seventh Circuit reversed summary judgment for CBOT on the Sherman Act claim, holding the CEA did not impliedly repeal antitrust law in this setting.
- The case was remanded for further proceedings on the antitrust claim, including unresolved questions such as antitrust standing and the merits.

## Legal Principles

- A private right of action under the CEA is limited; absent clear congressional intent, parties cannot sue an exchange under the CEA for discretionary regulatory or emergency measures subject to CFTC oversight.
- The CEA’s comprehensive federal scheme, centered on CFTC supervision of exchange self-regulation, preempts state common-law claims that would impose liability for the manner in which an exchange performed federally mandated regulatory functions.
- Implied repeal (or implied antitrust immunity) is disfavored; antitrust claims are displaced only where there is a clear repugnancy between antitrust enforcement and the federal regulatory program.
- CFTC oversight of exchange emergency actions does not, by itself, create clear repugnancy with Sherman Act enforcement; the two regimes may coexist where antitrust law targets anticompetitive restraints implemented through exchange action.

## Conclusion

The court held that the CEA neither created a private cause of action for these plaintiffs to challenge CBOT’s emergency resolution nor permitted state tort suits that would second-guess federally supervised exchange regulation, but it also held that CFTC oversight did not automatically shield the exchange from Sherman Act scrutiny, requiring further proceedings on the antitrust claim.


American Agriculture Movement, Inc. v. Board of Trade of Chicago, 977 F.2d 1147 (7th Cir. 1992)