Case 1:25-cv-01283-ABA Document 29 Filed 05/19/25 Page 13 of 17
Defendants suggest (at 22) that this Court “may enforce the provisions of [Section] 40.11(a)(1).” But Defendants offer no support for the remarkable suggestion that a federal court in a preemption case could, at the defendant state officials’ suggestion, enforce an agency regulation that the agency itself has declined to enforce. If Defendants were to bring a suit against the CFTC under the APA challenging the decision not to enforce Section 40.11, that challenge would face its own obstacles. See Heckler v. Chaney , 470 U.S. 821, 832 (1985) (holding that “[a]n agency’s decision not to take enforcement action [is] presumed immune from judicial review”). But Defendants go much further, asking this Court to apply a federal law directly against Kalshi that the CFTC has declined to enforce. Defendants offer no example of a court doing anything like what they propose, and the plain terms of the CEA prohibit it. Section 13a-2 authorizes appropriate officials “of any State” to bring suit regarding “any act or practice constituting a violation of any provision of this chapter or any rule . . . of the [CFTC]” against parties “ other than a [designated] contract market .” 7 U.S.C. § 13a-2(1) (emphasis added). Congress thus expressly refused to allow state officials to bring suit against DCMs. Defendants’ claim that Maryland laws are “consistent” with Section 40.11(a) is both irrelevant and incorrect. It is irrelevant because the CEA grants the CFTC “exclusive jurisdiction” over event contracts traded on DCMs, regardless of whether concurrent regulation by states could be described as being consistent with federal law at a high level of generality. See Arizona v. United States , 567 U.S. 387, 401 (2012) (“Where Congress occupies an entire field . . . even complementary state regulation is impermissible.”) (emphasis added). And Defendants’ argument is also incorrect. Complying with Maryland’s cease-and-desist letter would squarely conflict with federal law—it would deny impartial access to Kalshi’s platform, risk market disruptions of the kind the CFTC’s core principles prohibit, and result in the
12
Made with FlippingBook - Online catalogs