USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 62 of 97
jurisdiction. 7 U.S.C. § 7a-2(c)(5)(C). The district court never addressed the
Special Rule ’s reference to “ gaming ” or explained how the CFTC ’s authority
to approve or prohibit gaming contracts could be reconciled with its theory
of concurrent state authority. W here “the CFTC has jurisdiction, its power is exclusive, ” Chi. Mercantile Exch. , 883 F.2d at 548, and nothing in the CEA
allows states to retain authority to approve or prohibit trading of the very
same instruments the CFTC may unquestionably approve or prohibit.
The district court cited a different Special Rule category involving
“activity that is unlawful under any Federal or State law . ” 7 U.S.C. § 7a -
2(c)(5)(C)(i)(I). According to the court, this provision reflects an “ intent to preserve state laws ” and to allow states to regulate all contracts on DCMs
they deem unlawful. JA164. That interpretation would have dramatic
consequences; it would eliminate the uniform system Congress enacted the
1974 amendments to impose. It also misreads the Special Rule, which
provides that “ the Commission ”— not 50 different states —“may determine”
that contracts “are contrary to the public interest” if they involve activity
unlawful under state law. 7 U.S.C. § 7a-2(c)(5)(C)(i)(I). Congress thus authorized the CFTC to determine whether a contract should be prohibited.
It certainly did not allow 50 different states to substitute their own regulation
for the CFTC’s public-interest judgment. This case therefore bears no
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