Chicago Mercantile Exchange v. Deaktor 8212 241

Decision Date03 December 1973
Docket NumberNo. 73,73
Citation414 U.S. 113,94 S.Ct. 466,38 L.Ed.2d 344
PartiesCHICAGO MERCANTILE EXCHANGE v. Darryl B. DEAKTOR et al. —241
CourtU.S. Supreme Court

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 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, 93 S.Ct. 573, 34 L.Ed.2d 525 (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 the court, although retaining final authority to interpret...

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