Seventh Amendment and CFTC Reparations Proceedings
37 Pages Posted: 5 Nov 2010
Date Written: October 1, 1982
The Commodity Futures Trading Commission (CFTC) Act of 1974 amended the Commodity Exchange Act to create the Commodity Futures Trading Commission, an independent federal regulatory agency with exclusive jurisdiction over all commodity futures transactions on exchanges such as the Chicago Board of Trade, all commodity options transactions, and all so-called leverage transactions. The CFTC Act also created a "reparations" procedure, pursuant to which persons injured by violations of the Commodity Exchange Act can seek redress before the CFTC. Since the creation of that reparations procedure, the number of complaints filed with the CFTC has increased from 6 complaints docketed in fiscal year 1976 to over 1200 in fiscal year 1981.
The CFTC Act made the CFTC the adjudicative body for resolving both questions of law and fact in its reparations procedure. Thus, while the CFTC's factual findings and holdings in reparations awards are subject to judicial review in courts of appeals, the CFTC Act makes no provision for a jury trial. Nor is a jury trial available when reparations awards are sought to be enforced in a federal district court, because the order of the CFTC awarding reparations in those actions is by statute "final and conclusive."
This Article will begin by reviewing the historical background of the commodity futures industry and, more specifically, the legislative background of the CFTC reparations procedure. Then, the precise nature of CFTC reparations proceedings will be examined. Next, the jury trial guarantee of the seventh amendment will be analyzed, followed by an application of seventh amendment principles to the CFTC's reparations procedure. Finally, it will be concluded that the denial of the right to a jury trial in CFTC reparations proceedings violates the spirit and letter of the seventh amendment.
Keywords: Commodity Futures Trading Commission (CFTC) Act of 1974, Commodity Futures Trading Commission, Commodity Exchange Act, Commodity Futures, Industry, Legislative History, Reparations, Procedure, Seventh Amendment, Jury Trial
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