## Facts

- Cantor Financial Futures Exchange applied to the Commodity Futures Trading Commission (CFTC) in January 1998 for designation as a contract market to trade certain U.S. Treasury futures contracts.
- The CFTC approved Cantor’s application on September 4, 1998, authorizing Cantor to operate as a contract market for those contracts.
- Competing incumbent futures exchanges (including the Board of Trade of the City of Chicago, Kansas City Board of Trade, and Minneapolis Grain Exchange) sued to challenge the approval.
- The exchanges alleged the CFTC failed to determine that the designation would not be contrary to the public interest, applied a lower regulatory standard to Cantor, inadequately handled notice and public comments, and improperly accepted Cantor’s “exclusive time” trading model as consistent with competitive-trading requirements.
- The exchanges also argued that disciplinary history involving a Cantor affiliate should have weighed against approval and that Cantor’s entry would fragment the Treasury futures market.
- The CFTC moved to dismiss, asserting the designation decision was not judicially reviewable, and alternatively sought summary judgment on the merits under the Administrative Procedure Act (APA).

## Issues

1. Whether the CFTC’s approval of a new contract-market designation is subject to judicial review under the APA, including whether the exchanges had standing and whether the approval constituted final agency action.
2. Whether the CFTC’s approval of Cantor’s designation was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law under the APA.
3. Whether the CFTC sufficiently addressed public-interest considerations, competitive-trading requirements (including Cantor’s exclusive-time model), disciplinary history, and comment-related procedures.

## Decision

- The court denied the CFTC’s effort to defeat the case on nonreviewability grounds, concluding the designation approval was reviewable under the APA.
- The court held the approval was a final agency action with direct legal consequences and that the competing exchanges had standing within the relevant statutory zone of interests.
- On the merits, the court granted summary judgment for the CFTC, upholding the approval as not arbitrary or capricious.
- The court found the CFTC adequately considered public-interest factors, permissibly interpreted and applied competitive-trading requirements to Cantor’s model, reasonably evaluated affiliate disciplinary history, and sufficiently addressed comments and procedure.
- Cantor’s designation remained in effect.

## Legal Principles

- Agency actions are presumptively reviewable under the APA absent clear statutory intent to preclude review.
- A contract-market designation approval may constitute “final agency action” when it completes the agency’s decisionmaking process and produces binding legal consequences.
- Regulated competitors may have standing to challenge agency approvals that allegedly confer unlawful competitive advantages, where injuries fall within the zone of interests of the governing statute and regulations.
- Under APA arbitrary-and-capricious review, a court assesses whether the agency considered relevant factors and gave a reasoned explanation, without substituting judicial judgment for technical agency determinations.
- Courts generally defer to an agency’s reasonable interpretation of its own regulations, including judgments about market structure and trading mechanisms, unless plainly inconsistent with the regulatory text.

## Conclusion

The court held that competing exchanges could obtain APA review of the CFTC’s contract-market designation decision, but it upheld Cantor’s designation because the CFTC’s public-interest analysis, regulatory interpretations, and treatment of comments and disciplinary history were adequately explained and within the bounds of reasoned agency decisionmaking.


Bd. of Trade of Chi. v. CFTC, 66 F. Supp. 2d 891 (N.D. Ill. 1999)