Two suits were brought charging petitioner, the Chicago
Mercantile Exchange, with,
inter alia, violating the
Commodity Exchange Act (CEA) and failure to enforce its own rules.
The District Court refused petitioner's applications for stays of
the suits to permit the Commodities Exchange Commission to
determine initially whether the challenged actions comported with
the CEA and petitioner's rules. The Court of Appeals affirmed.
Held: The Commission, whose administrative functions
appear to encompass adjudication of the charges against petitioner,
should pass on those charges in the first instance.
Ricci v.
Chicago Mercantile Exchange, 409 U. S. 289.
Certiorari granted; 479 F.2d 529, reversed and remanded.
PER CURIAM.
The petitioner, Chicago Mercantile Exchange, was sued in two
separate actions in the District Court. In one, the
Phillips suit, it was alleged that the Exchange had forced
sales of futures contracts in March, 1970, fresh eggs at
artificially depressed market prices, and had thereby monopolized
and restrained commerce in violation of §§ 1 and 2 of the Sherman
Act, 26 Stat. 209, as amended, 15 U.S.C. §§ 1, 2, and had violated
§ 9(b) of the Commodity Exchange Act (CEA), as amended, 82 Stat.
33, 7 U.S.C. § 13(b), by manipulating prices of a commodity for
future delivery on a contract market. The Exchange was also accused
of violating § 5a of the CEA, 7 U.S.C. § 7a(8), for failure to
enforce one of its own rules. In the second suit, the
Deaktor case, the Exchange was charged with violating the
CEA and its own rules as a designated contract market because it
had failed
Page 414 U. S. 114
to exercise due care to halt the manipulative conduct of certain
of its members who allegedly had cornered the July, 1970, market in
frozen pork bellies futures contracts.
The Exchange defended both actions on the ground that it was
faithfully discharging its statutory duty of self-regulation. It
asserted that its challenged acts in the
Phillips case
were measures taken to prevent speculation in futures contracts,
and, as such, were not in violation of the CEA. Rather, they were
authorized and required by the statute, and hence cannot be
considered within the reach of the antitrust laws. Likewise, in the
Deaktor suit, the Exchange claimed that it had taken all
proper and reasonable steps to perform its statutory responsibility
to prevent manipulation.
The Exchange further urged that, because the Commodity Exchange
Commission had jurisdiction to determine whether the Exchange was
violating the CEA or its own rules and to impose sanctions for any
such offense, both suits should be stayed to permit the Commission
to determine in the first instance whether or not the actions of
the Exchange under scrutiny were in discharge of its proper duties
under the CEA and its regulations. The District Court refused the
stay, and the Court of Appeals affirmed.
Deaktor v. L. D.
Schreiber & Co., 479 F.2d 529 (CA7 1973). Both courts were
in error.
Ricci v. Chicago Mercantile Exchange, 409 U.
S. 289 (1973), held that an antitrust action against the
Exchange should have been stayed to afford the Commodity Exchange
Commission an opportunity to determine if the challenged conduct of
the Exchange was in compliance with the statute and with Exchange
rules. Because administrative adjudication of alleged violations of
the CEA and the rules lay at the heart of the task assigned the
Commission by Congress, we recognized that
Page 414 U. S. 115
the court, although retaining final authority to interpret the
CEA and its relationship to the antitrust laws, should avail itself
of the abilities of the Commission to unravel the intricate and
technical facts of the commodity industry and to arrive at some
judgment as to whether the Exchange had conducted itself in
compliance with the law. An adjudication by the Commission that the
actions of the Exchange were authorized or required by the CEA
would not necessarily dispose of the question of immunity from
antitrust liability. We nevertheless thought the considered view of
the Commission would be of sufficient aid to the court that the
action should not go forward without making reasonable efforts to
invoke the jurisdiction of the Commission.
Id. at
409 U. S.
305-306. As we did in
Ricci,
"we simply recognize that Congress has established a specialized
agency that would determine either that a . . . rule of the
Exchange has been violated or that it has been followed. Either
judgment would require determination of facts and the
interpretation and application of the Act and Exchange rules. And
either determination will be of great help to the antitrust court
in arriving at the essential accommodation between the antitrust
and the regulatory regime. . . ."
Id. at
409 U. S.
307.
In our judgment, the Court of Appeals, as in
Ricci,
should have requested the District Court to stay the proceedings in
the
Phillips case to afford an opportunity to invoke the
jurisdiction of the Commission. For very similar reasons, the
Deaktor plaintiffs, who also alleged violations of the CEA
and the rules of the Exchange, should be routed in the first
instance to the agency whose administrative functions appear to
encompass adjudication of the kind of substantive claims made
against the Exchange in this case.
Page 414 U. S. 116
The petition for writ of certiorari is granted, the judgment of
the Court of Appeals is reversed, and the case remanded for further
proceedings consistent with this opinion.
So ordered.
MR. JUSTICE STEWART dissents. He would affirm the judgment
substantially upon the reasoning of Judge Castle's concurring
opinion in the Court of Appeals. 479 F.2d 529, 535.