Case 2:25-cv-00575-APG-BNW Document 45 Filed 04/09/25 Page 12 of 17
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Even if section 2’s plain and unambiguous language does not amount to express preemption, it reflects congressional intent to occupy the field of regulating CFTC-designated exchanges and the transactions conducted on those exchanges. 5 I agree with the Second Circuit that section 2’s “exclusive jurisdiction” language “preempts the application of state law.” Leist v. Simplot , 638 F.2d 283, 322 (2d Cir. 1980), aff’d sub nom. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran , 456 U.S. 353 (1982). That is consistent with “Congress’ goal of conferring the CFTC with sole regulatory authority over futures contract markets or other exchanges.” F.T.C. v. Ken Roberts Co. , 276 F.3d 583, 590 (D.C. Cir. 2001) (simplified); see also Lillard , 935 F.3d at 833 (“To determine plain meaning, [courts] examine not only the specific provision at issue, but also the structure of the statute as a whole, including its object and policy.” (quotation omitted)). The CFTC also views its exclusive jurisdiction as preempting state law. In its brief on appeal in the D.C. Circuit, the CFTC stated that “due to federal preemption, event contracts never violate state law when they are traded on a DCM.” KalshiEX LLC v. U.S. Commodity Futures Trading Commission , 2024 WL 4512583, at *27 (Appellant CFTC’s Br.). The defendants have not cited any authority that the CFTC does not have exclusive jurisdiction over the exchanges it designates. To the extent I would move beyond the CEA’s plain and unambiguous language, legislative history supports the conclusion that Congress intended to occupy the field and preempt state law from applying to CFTC-designated exchanges. See, e.g. , Am. Agric. Movement, Inc. v. Bd. of Trade of City of Chicago , 977 F.2d 1147, 1155-56 (7th Cir. 1992) (describing the legislative history surrounding the 1974 amendments and preemption, noting that
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5 The defendants argue that Congress did not intend to occupy the field of gaming, but that designates the relevant field too broadly. Congress occupied the field of CFTC-designated exchanges.
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