Economou v. Butz, 71 Civ. 1263.

• Citation: 370 F. Supp. 361
• Decision Date: 09 January 1974
• Docket Number: No. 71 Civ. 1263.,71 Civ. 1263.
• Parties: Arthur N. ECONOMOU et al., Plaintiffs, v. Earl L. BUTZ, Secretary of Agriculture, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

370 F. Supp. 361

Arthur N. ECONOMOU et al., Plaintiffs, v. Earl L. BUTZ, Secretary of Agriculture, et al., Defendants.

No. 71 Civ. 1263.

United States District Court, S. D. New York.

January 9, 1974.

Arthur N. Economou, pro se.

Paul J. Curran, U. S. Atty., S. D. New York, for defendants; Daniel H. Murphy, II, Asst. U. S. Atty., of counsel.

GURFEIN, District Judge:

This is an action against Earl L. Butz, Secretary of Agriculture, the Commodity Exchange Authority, and Alex C. Caldwell, Act Administrator under the Commodity Exchange Act, 7 U.S.C. § 1 et seq. The plaintiff, Arthur N. Economou, is president of an Association of Commodity Traders, and a general partner in the Economou Grain Futures Trading Syndicate, a co-plaintiff. Economou appears pro se.

This is a motion by the defendants for summary judgment pursuant to Fed.R. Civ.P. 56. Plaintiffs commenced this action on March 18, 1971 with a motion seeking a preliminary injunction that would have stayed the Commodity Exchange Authority from holding an oral hearing on March 19, 1971 concerning the raising of speculative limits on daily trading of soybeans and corn from 2,000,000 to 3,000,000 bushels. By an order entered March 29, 1971, Judge Cannella denied plaintiffs' motion. Judge Cannella, in his opinion of March 29, 1971, noted that the plaintiffs, armed with the materials supplied by the Government on March 22, 1971, had until April 16, 1971 to submit written arguments. He also noted that if the plaintiffs were unsuccessful before the Authority they could still appeal the final agency action and obtain a stay pending review, citing 5 U.S.C. §§ 704, 705, Sinclair Oil Corp. v. Smith, 293 F.Supp. 1111, 1116 (S.D. N.Y.1968), and Sperry & Hutchinson v. F. T. C., 256 F.Supp. 136 (S.D.N.Y.1966).

As we shall see, neither the amended complaint, nor Mr. Economou's affidavit of October 15, 1973, suggest that he did anything to follow Judge Cannella's suggestion.

On May 18, 1971, the defendants moved for judgment on the pleadings (Rule 12(c)) to dismiss plaintiffs' complaint as moot.

Judge Croake, on June 8, 1971, granted the motion "insofar as it pertains directly to the hearings of March 19, 1971," but he refused to grant "judgment for the defendants on the pleadings with regard to future hearings." He inferentially denied plaintiff's request for information from the Government for his use in preparing for the hearing on the ground that it, too, was moot.

In fact, the hearing was held as scheduled on March 19, 1971, but the study requested by the plaintiff was not furnished to him until March 22, 1971, after the hearing was concluded, though it bears the date of March 16, 1971. That was not as futile a gesture as it might seem, for the plaintiff had four weeks from the conclusion of the hearing to make written comments on the evidence presented. 17 C.F.R. § 0.76(f).

In his memorandum filed March 23, 1971 in opposition to the plaintiff's motion for a preliminary injunction and in support of the defendants' motion to dismiss the complaint, the U. S. Attorney noted that (1) plaintiffs have four weeks to submit comments and (2) they may attack the final order when it is final, and, as noted, Judge Cannella incorporated these suggestions into his Memorandum Opinion.

After Mr. Economou's unsuccessful effort to restrain the hearing and Judge Croake's subsequent partial dismissal, in June of 1971, the action lay still without movement until, when the matter was assigned to me under the individual calendar system on July 1, 1972, a motion for leave to amend the complaint was made on April 23, 1973, which the Government did not oppose. Plaintiffs then amended their complaint pursuant to leave granted on May 13, 1973. Jurisdiction is based inter alia, upon the Agricultural Marketing Agreement Act of 1937, 7 U.S.C. § 608a(6); the Administrative Procedure Act, 5 U.S.C. §§ 701-706; the Review Act of 1950, 5 U.S.C. § 1031; and the Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202, and 28 U.S.C. §§ 1337, 1338.

The amended complaint now seeks to nullify the amendments to the corn and soybean limits on speculative trading¹ issued on June 23, 1971, 36 Fed.Reg. 12163-4, on three grounds: (1) that the notice of hearing failed to disclose that the limit on the amount of trading on wheat, as well as soybeans and corn, was also at issue; (2) that the impetus for the hearing was unlawfully prompted by the Chicago Board of Trade, a party in interest; and (3) that there should have been an adjudicatory hearing under Sections 7 and 8 of the Administrative Procedure Act, rather than a rule-making hearing. Plaintiffs seek a permanent injunction ordering the Commodity Exchange Authority to comply with its own regulations and the requirements of the Administrative Procedure Act in conducting rule-making proceedings in the future.

The defendants suggest the plaintiffs are wrong when they allege that the speculative limits on wheat were involved in the hearing on soybeans and corn. They say further that the Authority gave proper notice of its proposed rule-making with respect to speculative limits on soybeans and corn, (see Fed.Reg. of January 28, 1971 and March 5, 1971) and has consistently done so. They, accordingly, move for summary judgment.

Plaintiffs complain because the rule-making proceeding was allegedly initiated by an interested party, the Chicago Board of Trade. But the applicable regulations provide for proceedings to be initiated in that manner. 17 C.F.R. § 0.73. Interest of a party to support the proposed rule does not make the hearing improper if adequate notice is given to all other interested parties, and they are allowed to participate.

In the amended complaint filed in May, 1973, the plaintiffs seek to nullify the order made on June 23, 1971, almost two years before. There may be serious grounds for reviewing the order, and the plaintiffs may have standing to do so on their claim that they simply cannot trade in corn or wheat when the corn and soybean daily speculative limit is 3,000,000 bushels a day, while the daily speculative limit for wheat remains only 2,000,000 bushels a day. But the attempt to review a final order of an agency which deals with daily trading activity, almost two years after the issuance of the order, on alleged procedural deficiencies in its promulgation, does not commend itself to a court of equity, and seems inexcusable even in the case of a pro se plaintiff. See Abbott Laboratories v. Gardner, 387 U.S. 136, 155, 87 S. Ct. 1507, 18 L.Ed.2d 681 (1967). See also, Haas v. Overholser, 96 U.S.App.D.C. 22, 223 F.2d 314 (1955); Chiriaco v. United States, 235 F.Supp. 850 (N.D.Ala. 1963), aff'd, 339 F.2d 588 (5 Cir. 1964); Brown v. United States, 418 F.2d 442 (5 Cir. 1969).

Moreover, the complaint that the hearing should have been conducted as an adjudicatory hearing rather than as a rule-making hearing is, I think, without merit. Congress created the Commodity Exchange Commission, consisting of the Secretary of Agriculture, the Secretary of Commerce, and the Attorney General. 7 U.S.C. § 2. Under the Act, excessive speculation was deemed a burden on interstate commerce, and authority was delegated to the Commission "after due notice and opportunity for hearing, by order to proclaim and fix such limits on the amounts of trading which may be done or positions which may be held by any person under contracts of sale of such commodity for future delivery on or subject to the rules of any contract market as the commission finds are necessary to diminish, eliminate, or prevent such burden." 7 U.S.C. § 6a. Perhaps anticipating Mr. Economou's complaint, the statute specifically provides that "nothing in this section shall be construed to prohibit the commission from fixing different trading or position limits for different commodities. . . ." Id.

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