Case 2:25-cv-00978-APG-BNW Document 42 Filed 08/04/25 Page 17 of 26
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and market disruptions.” 17 C.F.R §§ 38.250, 38.255. Abruptly cutting off Nevada residents— including those holding ongoing investments—from CDNA’s Sports Event Contracts would constitute exactly the sort of disruption the CFTC requires CDNA to prevent. In contemplating such a disruption, the Seventh Circuit emphasized that “[w]hen application of state law would directly affect trading on or the operation of a futures market, it would stand ‘as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,’ and hence is preempted.” Am. Agric. Movement , 977 F.2d at 1156–57 (citation omitted). In this scenario, it may be “impossible” for CDNA “to comply with both state and federal law”—the quintessential case for conflict preemption. Valle del Sol , 732 F.3d at 1023 (quoting Crosby , 530 U.S. at 372). 6 Because imposing Nevada sports wagering law obligations on CDNA would frustrate the purpose and effect of the CEA’s uniformity of regulation, uniformity of enforcement, and furtherance of the CFTC’s Core Principles, those laws are conflict preempted. 4. The Court Should Strike or Disregard Defendants’ Non-Substantive Denials That CDNA Is a DCM That Has Self-Certified Sports Event Contracts for Trading. Under any preemption analysis, CDNA must demonstrate only two material facts to show its Sports Event Contracts fall under the CEA’s exclusive jurisdiction provision: (1) that CDNA is a DCM; and (2) that Sports Event Contracts are listed for trading on CDNA. Both of these facts may be established by judicial notice, and Defendants cannot avoid judgment through disingenuous assertions that they lack knowledge sufficient to answer CDNA’s allegations. The Court may and should take judicial notice of CDNA’s status as a DCM and CDNA’s self-certification of the Sports Event Contracts traded on CDNA. In a motion for judgment on the 6 Many courts have extended these principles to find state laws preempted by the CEA on conflict preemption grounds. See Am. Agric. Movement , 977 F.2d at 1155–56 (holding the CEA preempted state law whose application “would directly affect trading on or the operation of a futures market”); Rasmussen v. Thomson & McKinnon Auchincloss Kohlmeyer, Inc. , 608 F.2d 175, 178 (5th Cir. 1979) (affirming dismissal of a claim that trading in futures contracts violated a Georgia gambling statute “on the ground that the [CEA] preempts all state laws inconsistent with its provisions”); Paine, Webber, Jackson & Curtis, Inc. v. Conaway , 515 F. Supp. 202, 207 (N.D. Ala. 1981) (finding application of that state’s gambling laws “would destroy the markets in this state” and holding them preempted); Sinclair & Co., Inc. v. Gurule , 757 P.2d 225, 228 (Idaho Ct. App. 1988) (holding the application of state’s gambling laws to federally regulated exchanges “could destroy the market”); see also Thrifty Oil Co. v. Bank of Am. Nat’l Trust & Sav. Ass’n , 322 F.3d 1039, 1055–57 (9th Cir. 2003) (finding CEA preempted California’s Bucket Shop Law as applied to swaps exempted from coverage by the CEA).
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