Case 2:25-cv-00978-APG-BNW Document 42 Filed 08/04/25 Page 4 of 26
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noting concerns that “states . . . might step in to regulate the futures markets themselves.” Am. Agric. Movement, Inc. v. Bd. of Trade , 977 F.2d 1147, 1156 (7th Cir. 1992), abrogated on other grounds by Time Warner Cable v. Doyle , 66 F.3d 867 (7th Cir. 1995). As one Senator warned, applying varied state laws to futures trading “would just lead to total chaos.” Senate Hearings, 93rd Cong., 2d Sess. 685 (1974) (statement of Sen. Clark). The 1974 amendments further provided that “[n]othing in this chapter shall supersede or preempt” the application of state statutes to a transaction “that is not conducted on or subject to the rules” of a federally licensed exchange or to “any person required to be registered” who fails to do so. 7 U.S.C. § 16(e)(1) (emphasis supplied). Congress also removed an existing provision from the CEA that preserved state authority over transactions governed by the CEA. 7 U.S.C. § 6c (1940); see 120 Cong. Rec. 30,464 (Sept. 9, 1974) (statements of Sen. Curtis, supported by Sen. Talmadge). Accordingly, the 1974 amendments left intact only the states’ authority to police “transactions outside those preserved exclusively for the jurisdiction of the CFTC.” H.R. Rep. No. 97-565, pt. 1, at 44 (1982). Indeed, after the House introduced a state-law savings clause to the CEA’s exclusive jurisdiction provision, the Senate revised it to include in the final bill “except as hereinabove provided,” making it clear state law could not encroach on CFTC jurisdiction over transactions in derivatives on registered exchanges. S. Rep. No. 93-1131, at 5870 (1974). Two later amendments to the CEA broadened the scope of commodities subject to its regulatory scheme to include derivatives for which the underlier was a specified event and re-affirmed the CFTC’s exclusive jurisdiction over transactions that occur on regulated exchanges. First, in 2000, Congress expanded the definition of “commodity” to include what it called “excluded commodities,” which by definition include events. See Pub. L. No. 106-554, 114 Stat. 2763 (2000). Specifically, the definition of “excluded commodity” includes “an occurrence, extent of an occurrence, or contingency” that is both “beyond the control of the parties to the relevant contract, agreement, or transaction; and associated with a financial, commercial, or economic consequence.” 7 U.S.C. § 1a(19)(iv). Second, with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), Congress added “swaps” to the CEA’s exclusive jurisdiction provision. See Pub. L. No. 111-203, 124 Stat. 1376, 1672 (July 21, 2010).
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