Case 2:25-cv-00575-APG-BNW Document 237 Filed 11/24/25 Page 19 of 29
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Although Kalshi critiques my interpretations, Kalshi’s proposed reading is worse because it has no limiting principle, has similar semantic and superfluity problems it identifies in my interpretation, and goes against congressional intent. Kalshi argues that Congress defined “swap” broadly, but a “statute’s meaning does not always turn solely on the broadest imaginable definitions of its component words.” Epic Systems Corp. v. Lewis , 584 U. S. 497, 523 (2018) (simplified). In interpreting the statute, I must construe the words in context and avoid absurdities. Marinello v. United States , 584 U. S. 1, 7-8 (2018); Arizona State Bd. For Charter Sch. v. U.S. Dep’t of Educ. , 464 F.3d 1003, 1008 (9th Cir. 2006). Perhaps here, like the cases Justice Stewart mentions in Jacobellis , I am “faced with the task of trying to define what may be indefinable.” 378 U.S. at 197. But if everything a person can conceive of happening is an event or contingency, and if every downstream economic consequence someone can conjure up makes that event or contingency associated with a potential financial, commercial, or economic consequence, the words lose all meaning or render superfluous the rest of the swap definition. See United States v. Lopez , 514 U.S. 549, 565 (1995) (rejecting a “rationale [that] lacks any real limits because, depending on the level of generality, any activity can be looked upon as commercial”). Kalshi’s position also does not comport with what Congress was trying to achieve when it added swaps to the CEA. Congress was bringing risky financial products out of the shadows that had threatened the stability of the entire U.S. financial sector, and which had catastrophic ripple effects on the U.S. and world economies during the financial crisis of 2007-2008. Congress was not enabling nationwide gambling on CFTC-designated exchanges. “[I]nterpretations of a statute which would produce absurd results are to be avoided if alternative interpretations consistent with the legislative purpose are available.” Griffin v. Oceanic
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