## Facts

- Ludmila Loginovskaya, a Russian citizen and resident, invested substantial funds through entities associated with the Thor Group, an investment organization based in New York.
- The Thor Group operated multiple investment vehicles, including programs described as involving commodities options and futures and real-estate-related investments.
- Loginovskaya alleged Oleg Batratchenko and related entities induced her investments through misrepresentations and engaged in fraudulent conduct, including misuse and misappropriation of her funds.
- She sued under the Commodities Exchange Act (CEA), invoking the private right of action in 7 U.S.C. § 25 (CEA § 22), and asserted related state-law claims.
- The district court dismissed the CEA claim under Rule 12(b)(6) for failure to allege a domestic commodities transaction and declined supplemental jurisdiction over the state-law claims.

## Issues

1. Whether CEA § 22 authorizes a private suit based on non-domestic commodities transactions, or instead is limited—under the presumption against extraterritoriality—to claims alleging a domestic commodities transaction.
2. Whether the complaint adequately alleged a domestic commodities transaction sufficient to state a claim under CEA § 22.

## Decision

- The Second Circuit affirmed dismissal of the CEA § 22 claim.
- Applying the presumption against extraterritoriality as articulated in *Morrison*, the court held that a private right of action under CEA § 22 is limited to claims alleging a commodities transaction within the United States.
- The court concluded the complaint did not adequately allege a domestic commodities transaction and therefore failed to state a claim under § 22.
- Because the § 22 defect disposed of the appeal, the court did not reach arguments about the territorial scope of the substantive antifraud provision in CEA § 4o.
- The court also affirmed the district court’s decision not to exercise supplemental jurisdiction over the remaining state-law claims.

## Legal Principles

- Federal statutes are presumed not to apply extraterritorially absent a clear indication of congressional intent.
- The territorial scope of a private suit under the CEA is governed by the text and focus of CEA § 22, the remedial provision creating the private right of action.
- A private plaintiff seeking relief under CEA § 22 must plead a domestic commodities transaction; allegations of U.S.-based fraud or U.S. connections, without a domestic transaction, do not suffice.
- Even if a substantive CEA antifraud provision might be argued to reach certain conduct, a private plaintiff must still satisfy § 22’s domestic-transaction limitation to maintain a private action.

## Conclusion

The Second Circuit held that CEA § 22 does not provide a private remedy for foreign commodities transactions and affirmed dismissal where the investor failed to allege a domestic commodities transaction, leaving only state-law claims outside federal supplemental jurisdiction.


Loginovskaya v. Batratchenko, 764 F.3d 266 (2d Cir. 2014)