Case 2:26-cv-00151 Document 1 Filed 02/23/26 PageID.25 Page 25 of 27
COUNT I (Declaratory Judgment—Supremacy Clause—Preemption by Commodity Exchange Act) 77. Plaintiff incorporates all prior paragraphs by reference. 78. The Supremacy Clause, Article VI, Clause 2, of the U.S. Constitution, provides:
This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.
79. The Supremacy Clause mandates that federal law preempt state law in any field over which Congress has expressly or impliedly reserved exclusive authority to the federal government, or where state law conflicts or interferes with federal law. 80. Congress explicitly gave the CFTC “exclusive jurisdiction” to regulate futures trading on approved exchanges. 7 U.S.C. § 2(a)(1)(A). Without a unified approach to futures regulation, Congress feared that fragmented and uncoordinated state regulation would lead to “total chaos.” Senate Hearings, at 685 (statement of Sen. Clark). Having analyzed the text, purpose, and history of the CEA, courts nationwide have agreed that Congress intended to preempt state law in futures trading on CFTC-regulated exchanges. See, e.g. , Am. Agric . Movement , 977 F.2d at 1156; Leist v. Simplot , 638 F.2d 283, 322 (2d Cir. 1980) (Friendly, J.); Jones v. B.C. Christopher & Co. , 466 F. Supp. 213, 220 (D. Kan. 1979); Hofmayer v. Dean Witter & Co. , 459 F. Supp. 733, 737 (N.D. Cal. 1978). 81. In threatening to enforce Utah’s anti-gambling laws against Kalshi, Defendants are impermissibly intruding on the CFTC’s exclusive authority to regulate futures trading on CFTC- regulated exchanges. Indeed, federal law authorizes the CFTC to “determine” whether event contracts involving “gaming” should be restricted as “contrary to the public interest,” 7 U.S.C. § 7a-2(c)(5)(C)(i)—authority that is completely incompatible with parallel state regulation of the
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