Effex Capital, LLC v. National Futures Association, No. 18-1914 (7th Cir. 2019)

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Justia Opinion Summary

NFA is a self‐regulatory organization registered under the Commodity Exchange Act, subject to the authority of the Commodity Futures Trading Commission (CFTC), 7 U.S.C. 21, including review of NFA disciplinary actions. Effex, a closely held, foreign‐currency trading firm controlled by Dittami, is not subject to NFA regulation. NFA determined that its member, FXCM, had violated NFA rules. NFA released several documents related to a settlement, including allegations that Effex was involved in FXCM's misconduct. The press release did not specifically reference Effex but directed the public to the NFA’s website. Effex alleged that NFA’s findings are false and that their publication was defamatory. NFA had not contacted Effex or provided Effex notice of the investigation. CFTC conducted its own investigation, subpoenaed documents from Effex, and took the depositions of Dittami and other Effex employees. Effex alleged that NFA obtained documents from CFTC despite Effex’s request that its responses as a third party be kept confidential. CFTC issued its decision, finding that FXCM had concealed an improper trading relationship with a “high‐frequency trader” and the trader's company (HFT). Although not explicitly named, HFT is Effex. CFTC found materially the same facts as NFA did regarding Effex. The Seventh Circuit affirmed the dismissal of the suit. The Commodity Exchange Act regulates comprehensively all matters relating to NFA discipline, so a federal Bivens remedy is unavailable, and preempts Effex’s state law claims.

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In the United States Court of Appeals For the Seventh Circuit ____________________ No. 18 1914 EFFEX CAPITAL, LLC, et al., Plaintiffs Appellants, v. NATIONAL FUTURES ASSOCIATION, et al., Defendants Appellees. ____________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:17 cv 04245 — Andrea R. Wood, Judge. ____________________ ARGUED NOVEMBER 29, 2018 — DECIDED AUGUST 13, 2019 ____________________ Before FLAUM, RIPPLE, and MANION, Circuit Judges. RIPPLE, Circuit Judge. Effex Capital, LLC (“Effex”), brought this action alleging that the National Futures Asso ciation (the “NFA”) had defamed it in documents related to a settlement between the NFA and one of its members, Forex 2 No. 18 1914 1 Capital Markets, LLC (“FXCM”). It sought injunctive relief and damages. The district court dismissed the action, hold ing that Effex had failed to exhaust its administrative reme 2 3 dies. Effex timely appealed the district court’s dismissal. 1 The district court had jurisdiction to adjudicate Effex’s due process claims under 28 U.S.C. § 1331 and its state law tort claims under 28 U.S.C. § 1332. 2 The court’s dismissal was without prejudice to Effex’s pursuing its ad ministrative remedies and then seeking review of its properly exhausted claims. 3 Our jurisdiction is premised on 28 U.S.C. § 1291. In most cases, dismis sal without prejudice “does not qualify as an appealable final judgment because the plaintiff is free to re file the case.” Larkin v. Galloway, 266 F.3d 718, 721 (7th Cir. 2001). This rule, however, is not without exception. A dismissal without prejudice is deemed final for the purposes of § 1291 where no amendment to the complaint “could resolve the problem.” Ka ba v. Stepp, 458 F.3d 678, 680 (7th Cir. 2006). Put differently, we treat a district court’s dismissal as final where “there are multiple indicia that the district court was finished with the case.” Hernandez v. Dart, 814 F.3d 836, 841 (7th Cir. 2016). Here, the entirety of the district court’s dismissal of Effex’s case suggests that it was indeed finished with the case and that Effex could not refile after it seeks any administrative remedy that may be available to it. First, the district court said that review of Effex’s “properly exhausted claims” could be taken in “the appropriate federal court,” R.89 at 15 (emphasis added), which contemplates filing in the court of appeals pursuant to the review process Congress provided in 7 U.S.C. § 21(i)(4). Additionally, the docket entry accompanying the dis trict court’s opinion indicates that “[t]his case will be closed,” R.88, and the district court entered judgment separately pursuant to Federal Rule of Civil Procedure 58. R.90. Taken together, it appears that Effex could not refile suit with the district court even after seeking its administrative remedies. Cf. Kowalski v. Boliker, 893 F.3d 987, 994 (7th Cir. 2018) (deter mining there was appellate jurisdiction where the district court dis (continued … ) No. 18 1914 3 For the reasons set forth more fully in the following opin 4 ion, we now affirm the judgment of the district court. In the Commodity Exchange Act, 7 U.S.C. § 1 et seq., Congress has regulated comprehensively all matters relating to NFA dis 5 cipline. As such, a federal Bivens remedy is unavailable. Fur ther, the Commodity Exchange Act preempts Effex’s state law claims. Any remedy available to Effex must be based on the provisions of that statute. I BACKGROUND A. We begin our consideration of this matter with a sum mary discussion of the relevant provisions of the Commodi ( … continued) missed the complaint on grounds that made it “difficult to imagine” that the plaintiff could file a new suit in the future); Hernandez, 814 F.3d at 841 (noting one indicia that the district court finished with the case was a docket entry stating “Civil case terminated”); Gregory v. Hartman, No. 88 3169, 1990 WL 112017, at *1 (7th Cir. 1990) (unpublished) (finding ju risdiction where the district court “stated that [its] dismissal was ‘not meant to reflect in any way on any legitimate state law claims’ that Gregory may have had” and where “the court entered a separate judg ment pursuant to [Rule] 58”). 4 We “may affirm the district court’s dismissal on any ground supported by the record, even if different from the grounds relied upon by the dis trict court.” Slaney v. The Int’l Amateur Athletic Fed’n, 244 F.3d 580, 597 (7th Cir. 2001). 5 See Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971). 4 No. 18 1914 6 ty Exchange Act. In its current form, the Commodity Ex change Act seeks to curb price manipulation, ensure the fi nancial integrity of commodities transactions, avoid system ic risk, protect market participants from fraud or abusive sales practices, and promote responsible and fair competi tion within the commodities market. 7 U.S.C. § 5(b). The Commodity Exchange Act serves these public interests “through a system of effective self regulation of trading fa cilities, clearing systems, market participants and market 7 professionals under the oversight of the Commission.” Id. 6 The Commodity Exchange Act was enacted in 1936 to amend the Grain Futures Act of 1922. Its original goal was to “prevent and remove ob structions and burdens upon interstate commerce in grains and other commodities by regulating transactions therein on commodity futures exchanges, to limit or abolish short selling, [and] to curb manipulation.” Commodity Exchange Act, Pub. L. No. 74 675, 49 Stat. 1491, 1491 (1936). The Commodity Exchange Act has been amended many times since, most significantly with the Commodity Futures Trading Commission Act of 1974, § 1(a)(5), Pub. L. No. 93 463, 88 Stat. 1389 (1974) (establishing the independent Commodity Futures Trading Commission), the Com modity Futures Modernization Act of 2000, Pub. L. No. 106 554, 114 Stat. 2763 (2000) (among other things, renewing the Commission’s mandate, clarifying regulation of over the counter derivatives, and repealing a ban on trading single stock futures), and the Dodd Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111 203, 124 Stat. 1376 (2010) (in part, expanding the Commission’s authority to oversee the swaps marketplace). 7 Congress created the Commodity Futures Trading Commission as an independent commission to address concerns that the self regulatory framework of the Commodity Exchange Act as previously enacted no longer met the changing needs of the commodity futures markets with out some oversight. See, e.g., H.R. Rep. No. 93 975, at 34–38 (1974); S. Rep. No. 93 1131, at 18–19 (1974). No. 18 1914 5 As part of this regulatory scheme, the Commodity Futures Trading Commission Act of 1974 authorized the creation of registered futures associations as self regulatory organiza tions (“SRO”) to complement the Commodity Futures Trad ing Commission’s (the “Commission” or the “CFTC”) regu 8 lation of commodity futures markets and their participants. The Commodity Exchange Act requires that SROs set forth many types of regulations and rules, including rules that “provide that its members and persons associated with its members shall be appropriately disciplined … for any vi olation of its rules.” 7 U.S.C. § 21(b)(8). Moreover, discipli nary proceedings against members and persons permitted to 8 See Commodity Futures Trading Commission Act of 1974, § 301, 88 Stat. at 1406–11 (1974) (codified at 7 U.S.C. § 21). The House version of the Commodity Futures Trading Commission Act included the relevant section authorizing SROs and delineating their roles and responsibilities whereas the Senate bill included an amendment striking such authoriza tion and instead providing for further study of the appropriateness of SROs. See H.R. Rep. 93 1383, at 39 (1974) (Conf. Rep.). The Conference adopted the House provision with an amendment providing for annual reports to Congress so that Congress could continually review the effec tiveness of SROs. Id. The House Committee on Agriculture indicated that permitting self regulation through registered futures associations, under the supervision of a federal agency, struck an appropriate balance be tween self regulation and direct federal regulation of futures trading. See H.R. Rep. 93 975, at 48 (“The Committee bill does not propose that self regulatory activities of the exchanges be abolished in favor of continued and direct federal regulation of all aspects of futures trading. … Yet, with proper Federal supervisory authority, needed self regulatory efforts of the exchanges can live a useful life into the 21st Century and, hopefully, beyond.”); id. at 58 (“Association activity would serve solely as a com plement rather than a displacement to the authority of the new Commis sion.”). 6 No. 18 1914 9 register as “associate[s]” of a member must follow “fair and orderly procedure[s].” Id. § 21(b)(9). This mandate includes requiring “that specific charges be brought; that such mem ber or person shall be notified of, and be given an opportuni ty to defend against, such charges; that a record shall be kept; and that the determination shall include” statements setting forth the impermissible acts the member or person took, the rules violated, and penalty imposed. Id.; see also 17 C.F.R. § 170.6(b) (requiring the SRO to “[c]onduct proceed ings in a manner consistent with the fundamental elements of due process”). The statute provides for CFTC review of an SRO’s disci plinary action. It requires that SROs “promptly shall give notice” of any final disciplinary action against a member or person associated with a member “to such member or per son and file notice thereof with the Commission.” 7 U.S.C. § 21(h)(1). Final disciplinary actions are “subject to review by the Commission on its motion, or on application by any per 10 son aggrieved by the action.” Id. § 21(h)(2). The accompa 9 An associated person is a person who solicits orders, customers, or cus tomer funds on behalf of the NFA member. See 7 U.S.C. §§ 6k, 21(b)(2). 10 Any application for CFTC review “shall be filed within 30 days after the date such notice is filed with the Commission and received by the aggrieved person, or within such longer period as the Commission may determine.” 7 U.S.C. § 21(h)(2). Although application for CFTC review does not automatically stay a final disciplinary action, the Commission may order a stay “summarily or after notice and opportunity for hearing on the question of a stay,” id. § 21(h)(3)(A), and “[t]he Commission shall establish procedures for expedited consideration and determination of the question of a stay,” id. § 21(h)(3)(B). See generally 17 C.F.R. § 171.22(b) (regulations pertaining to stays). No. 18 1914 7 nying regulations permit appeal to the Commission by “[a]ny party aggrieved by the final decision of the National Futures Association in a disciplinary … action.” 17 C.F.R. § 171.23(a). The regulations define a party as “any person who has been the subject of a disciplinary action … by the National Futures Association; the National Futures Associa tion itself; [and] any person granted permission to partici pate as a party pursuant to § 171.27 of these rules.” 17 C.F.R. § 171.2(i). Section 171.27 provides that, “[u]pon motion of any interested person or, on its own motion, the Commis sion may permit, or solicit, limited participation in the pro ceeding by such interested person.” 17 C.F.R. § 171.27(a). In terested persons include “parties and any other persons who might be adversely affected or aggrieved by the outcome of a proceeding; … and any other person having a direct or in direct pecuniary or other interest in the outcome of a pro ceeding.” Id. § 171.27(b). Intervention by such an interested person is appropriate “[i]f the Commission determines that participation would serve the public interest.” Id. § 171.27(a). Beyond these specific regulations regarding application for Commission review of an SRO’s disciplinary action, there is a general regulation that permits the Commission to “waive any rule” in § 171 “in a particular case” and “order proceed ings in accordance with its direction” if waiver would “pre vent undue hardship on any party or for any other good cause shown.” 17 C.F.R. § 171.14. An order under this provi sion “shall be based upon a determination that no party will be prejudiced thereby and that the ends of justice will be served,” and “[r]easonable notice” shall be “given to all par ties of any action taken.” Id. The CFTC has the power to “set aside the sanction im posed by the [SRO] and, if appropriate, remand the case to 8 No. 18 1914 the [SRO] for further proceedings.” 7 U.S.C. § 21(i)(1)(B); see also 17 C.F.R. § 171.33(a) (“Upon review, the Commission may affirm, modify, set aside, or remand for further pro ceedings, in whole or in part, the decision of the National Futures Association.”). The Commission’s decision may be appealed to the appropriate United States Court of Appeals. 7 U.S.C. § 21(i)(4) (“Any person aggrieved by a final order of the Commission … may file a petition for review with a United States court of appeals … .”). B. The NFA is an SRO that is registered under the Com 11 modity Exchange Act. It is subject to the broad authority of the CFTC. See 7 U.S.C. § 21. This authority includes review of NFA disciplinary actions or denials of membership. Id. § 21(h). Effex is a closely held, foreign currency trading firm managed and controlled by John Dittami. It operates as an institutional over the counter, foreign exchange liquidity provider and engages solely in transactions with other eligi ble contract participants such as financial institutions or highly capitalized trading counterparts. Because of the na ture of Effex’s trading, it is not subject to regulation by the 12 NFA and is therefore not a member of the NFA. 11 See In re the Application of the Nat’l Futures Ass’n, 1981 WL 762560, at *37 (CFTC Sept. 22, 1981) (approving the NFA as an SRO under 7 U.S.C. § 21). 12 R.45 ¶¶ 21, 24. See also 17 C.F.R. § 5.22 (delineating persons working within the foreign exchange market who must register with a futures association). No. 18 1914 9 In accordance with its responsibilities under the Com modity Exchange Act, the NFA initiated an investigation in to an association member, FXCM, and found that the com pany had engaged in several practices that violate the NFA’s rules. FXCM chose to settle with the NFA, and on February 6, 2017, the NFA released several documents related to the settlement (collectively, the “FXCM Settlement Docu 13 ments”). These documents include: (1) a complaint setting forth the NFA’s allegations against FXCM; (2) a decision by the NFA Business Conduct Committee finding that FXCM committed the violations outlined in the complaint and de tailing the terms of a settlement between the NFA and FXCM; (3) a publicly accessible narrative summarizing the decision; and (4) a press release announcing the decision and directing the public to the narrative posted on the NFA’s website. The NFA’s complaint against FXCM alleged that FXCM failed to comply with a litany of NFA rules. More pertinent ly, the NFA claimed that Effex was involved in the miscon duct allegedly committed by FXCM. The resulting decision outlined the allegations in the complaint, including those in volving Effex, and accepted them as true. The accompanying narrative summarized the decision, including its statements about Effex. The press release, although it did not specifical ly reference Effex, noted that FXCM committed numerous deceptive and abusive actions and directed the public to the narrative on the NFA’s website. Effex alleges that the NFA’s 13 The district court refers to these documents as the “NFA Publications.” See R.89 at 2. 10 No. 18 1914 findings in the FXCM Settlement Documents are false and that their publication is defamatory. Although its investigation into FXCM implicated Effex, the NFA did not contact Effex or provide Effex with notice of the investigation. The CFTC, on the other hand, conducted its own investigation into FXCM. As part of its investigation, the Commission subpoenaed documents from Effex and took the deposition of Mr. Dittami and other Effex employ ees. Effex alleges that the NFA obtained documents neces sary for its investigation from the CFTC despite Effex’s re quest that its responses as a third party be kept confidential. On the same day that the NFA announced its settlement with FXCM, the CFTC issued its own decision about FXCM 14 and its business practices. It determined that FXCM had concealed an improper trading relationship with a “high frequency trader” and a company the trader formed (which 15 the Commission termed “HFT Co”). Although not explicit ly named, the HFT Co is Effex. The CFTC found materially the same facts as the NFA did regarding Effex. Effex did not seek review of either the NFA’s decision or the Commission’s decision regarding FXCM. Rather, four months after the decisions were released, Effex filed this ac tion against the NFA in the district court. 14 See In re Forex Capital Mkts., LLC, CFTC No. 17 09, 2017 WL 564341 (Feb. 6, 2017). 15 Id. at *3. No. 18 1914 11 C. On July 31, 2017, Effex brought this action against the NFA. In its federal claims, Effex alleges that the NFA violat ed its due process rights by not providing it with notice of the investigation or an opportunity for a hearing before the publication of the FXCM Settlement Documents. The federal claims further submit that the NFA denied Effex due process of law when it did not allow Effex access to a post deprivation remedy. In its state law claims, Effex alleg es that the statements about it in the FXCM Settlement Doc uments, published by the NFA, were defamatory. Addition ally, Effex alleged business tort claims and a claim under the Illinois Trade Secrets Act, 765 Ill. Comp. Stat. 1065 et seq. Effex sought injunctive relief, asking for an order requir ing the NFA to remove the FXCM Settlement Documents from its website, to delete all references to Effex, or, alterna 16 tively, to provide Effex with a “name clearing hearing.” It further requested an order compelling the NFA to “issue a new press release stating: (a) NFA did not make any find ings against Effex or Dittami; (b) Effex was not a de facto dealing desk of FXCM; (c) Effex was not controlled by FXCM; and (d) FXCM was not ordered to make any custom 17 er restitution.” Effex also asked for money damages of $10,000,000 for lost profits and to redress its constitutional injury. 16 R.45 at 29–30. 17 Id. 12 No. 18 1914 The NFA moved to dismiss the complaint for failure to state a claim under Federal Rule of Civil Procedure 18 12(b)(6). With respect to the federal claims, it submitted that dismissal was proper because there is no federal Bivens remedy and Effex had not exhausted its administrative claims under the Commodity Exchange Act. As for the state law claims, the NFA contended that all were preempt ed by the Commodity Exchange Act. Finally, it claimed ab solute immunity from any damages because the claims were based on its disciplinary proceedings. The district court held that Effex failed to exhaust its remedies under the Commodity Exchange Act and dis missed without prejudice. The district court determined that the Commodity Exchange Act provides a statutorily man dated exhaustion requirement and that Effex had four ave nues to pursue relief under the scheme. First, it found that Effex could have petitioned the CFTC to exercise its authori ty under 7 U.S.C. § 21(h)(2) to review the FXCM Settlement sua sponte because the statute permits the Commission to re view an NFA decision “on its motion.” Id. § 21(h)(2). Second, relying on the CFTC’s decision in Paribas Futures, Inc. v. New York Mercantile Exchange, CFTC No. 90 E 3, 1990 WL 282868, 19 at *2 (Mar. 22, 1990), the district court decided that if Commission review under § 21(h)(2) is only available to ag 18 At the same time that the NFA moved to dismiss the action, Effex brought a motion for a preliminary injunction. 19 In Paribas Futures, Inc. v. New York Mercantile Exchange, CFTC No. 90 E 3, 1990 WL 282868, at *2 (Mar. 22, 1990), the Commission noted that “[i]ntervention after an initial decision for the purposes of taking an ap peal is appropriate in some circumstances.” No. 18 1914 13 grieved parties, Effex could have intervened to become a party under the relevant regulations. Third, citing In re Peti tion of Lake Shore Alternative Financial Asset Ltd., CFTC No. 20 CRAA 07 03, 2007 WL 2751884, at *2 (Sept. 17, 2007), the district court noted that the CFTC had previously suggested that a nonparty could ask the Commission to waive its rules so that the nonparty could obtain CFTC review, but Effex had not made such a request. Finally, the district court de termined that Effex could have turned to the Administrative Procedure Act and petitioned the CFTC to revise its rules generally to permit Commission review in such instances. The district court rejected Effex’s argument that any re sort to the Commodity Exchange Act’s remedies would have been impossible or futile. It noted that the CFTC had the ability to adjudicate due process claims. Moreover, the court acknowledged that even though the Commission rarely re views NFA settlements, it previously had reviewed settle ments. Finally, observing that Effex’s claims “touch on the contents of the NFA Publications—documents generated as a result of the NFA investigation relating to a disciplinary 21 action,” the district court rejected Effex’s contention that it was not seeking review of an NFA disciplinary action but rather merely was seeking a court order regarding the publi 20 In In re Petition of Lake Shore Alternative Financial Asset Ltd., CFTC No. CRAA 07 03, 2007 WL 2751884, at *2 (Sept. 17, 2007), the Commission considered whether it should waive its rules pursuant to 17 C.F.R. § 171.14 to permit the appeal of a membership responsibility action by a nonparty to that action. 21 R.89 at 12. 14 No. 18 1914 cation of the FXCM Settlement Documents containing the alleged defamatory statements. Therefore, the district court dismissed Effex’s Complaint. It did so without prejudice to any rights Effex might have to pursue its remedies before the CFTC and then to seek fur ther review of those exhausted claims in the appropriate court of appeals. Having dismissed the complaint for failure to state a claim, the court also denied Effex’s motion for a preliminary injunction as moot. Effex timely appealed. II DISCUSSION A. 22 We now turn to the merits of this appeal. First, we ad dress whether Effex has a federal cause of action. The com prehensive nature of the federal regulatory scheme, as set forth above, grounded in the language and structure of the statute, makes clear that, in fashioning the disciplinary pro visions of the Commodity Exchange Act, Congress certainly did not countenance a separate federal remedy, much less a separate federal remedy fashioned by the judiciary. Indeed, Effex does not maintain that there is a specific federal cause of action to redress harm inflicted by an SRO upon one of its members. Rather, it asks that we imply a cause of action to remedy harm to a nonmember (such as Effex) resulting from 22 The parties correctly agree that our review is de novo. Although the district court’s opinion evinced some unease as to whether dismissal should have been based on failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) or for want of jurisdiction under Rule 12(b)(1), resolving that issue does not affect our standard of review or disposition. No. 18 1914 15 an SRO proceeding. It casts this cause of action as one to remedy a due process violation under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971). Bivens recognized a damages remedy to compensate persons injured by the federal officers who violated the Fourth Amendment even though the Amendment does not provide for money damages “in so many words.” Id. at 395– 97. In doing so, the Court noted that Congress had not ex plicitly foreclosed a damages remedy and that there were no “special factors” counseling against authorizing such a rem edy to effectuate the statute’s purpose. Id. In the years following Bivens, the Supreme Court has lim ited the application of the decision. See, e.g., Ziglar v. Abbasi, 137 S. Ct. 1843, 1857 (2017) (noting that the Court has con sistently refused to extend Bivens to any new context or new 23 category of defendants). The Court has made very clear that the expansion of the Bivens remedy to other constitu 23 As Ziglar v. Abbasi, 137 S. Ct. 1843, 1857 (2017), recounts, the Supreme Court declined to create an implied damages remedy in the following situations: an Eighth Amendment suit against prison guards at a private prison, Minneci v. Pollard, 565 U.S. 118, 120 (2012); a due process suit against officials from the Bureau of Land Management, Wilkie v. Robbins, 551 U.S. 537, 547–48, 562 (2007); an Eighth Amendment suit against a private prison operator, Corr. Servs. Corp. v. Malesko, 534 U.S. 61, 63 (2001); a procedural due process suit against a federal agency for wrong ful termination, FDIC v. Meyer, 510 U.S. 471, 473–74 (1994); a procedural due process suit against Social Security officials, Schweiker v. Chilicky, 487 U.S. 412, 414 (1988); a substantive due process suit against military offic ers, United States v. Stanley, 483 U.S. 669, 683–84 (1987); a First Amend ment suit against a federal employer, Bush v. Lucas, 462 U.S. 367, 390 (1983); and a race discrimination suit against military officers, Chappell v. Wallace, 462 U.S. 296, 297, 304–05 (1983). 16 No. 18 1914 tional provisions is a “disfavored judicial activity.” Id. at 1857 (internal quotation marks omitted). Ziglar explained that “[w]hen a party seeks to assert an implied cause of ac tion under the Constitution itself,” “separation of powers principles are or should be central to the analysis.” Id. Under these principles, it is a “significant step” “for a court to de termine that it has the authority, under the judicial power, to create and enforce a cause of action for damages against fed eral officials in order to remedy a constitutional violation.” Id. at 1856. Such a determination is a significant step because there are powerful countervailing considerations to the crea tion of a Bivens cause of action, including that Congress “has a substantial responsibility to determine whether, and the extent to which, monetary and other liabilities should be im posed upon individual officers and employees of the Federal Government.” Id. Therefore, an implied cause of action un der the Constitution is not available if there is a “special fac tor” that “cause[s] a court to hesitate” before determining that a court rather than Congress should provide a remedy. Id. at 1858. Such doubt could arise where “there is an alter native remedial structure present.” Id. An alternative struc ture “alone may limit the power of the Judiciary to infer a new Bivens cause of action” because Congress’s decision to create the alternative remedial process is “convincing reason for the Judicial Branch to refrain from providing a new and free standing remedy in damages.” Id. (quoting Wilkie v. Robbins, 551 U.S. 537, 550 (2007)). Applying these principles, an alternative remedial struc ture counseling hesitation against expanding the Bivens rem edy is certainly present here. The enactment of the Commod ity Exchange Act provides far more than a “doubt” about Congress’s willingness to tolerate an alternate remedy to the No. 18 1914 17 comprehensive remedial structure of federal oversight by SROs found in the statute. In the Commodity Exchange Act, Congress has set forth, with significant precision, the reme dies available to members of an SRO and to others. Indeed, in another Bivens case, the Court has explained that, where Congress has exercised comprehensively its power to regu late, there is no room, or justification, for additional regula tion through court created causes of action. See Schweiker v. Chilicky, 487 U.S. 412, 424–29 (1988) (determining that there was no Bivens action for alleged due process violations aris ing from the improper termination of social security benefits because Title II of the Social Security Act provided an “elab orate” system protecting the rights of benefit claimants). An entity that was not a party to the SRO proceeding is no doubt in a somewhat different position than a party to the proceeding. We do not believe, however, that the differ ence is so significant that such an entity can maintain a judi cially created cause of action against the SRO for harms that the nonparty claims to have suffered as a result of discipli nary proceedings. Such a view presupposes a very narrow, and in our view too narrow, understanding of the scope of the Commodity Exchange Act. Effex offers no explanation or support for why Congress, having established a comprehen sive mechanism for the governance of the commodities in dustry, would permit disruption of that mechanism through 24 a judicially created cause of action. 24 In light of the Supreme Court’s explanation of the Bivens remedy in Ziglar, Effex distanced itself from its federal claims at oral argument and, indeed, seemed to abandon them. See Oral Argument at 14:40–15:03 (“At this point, I’ve got four other state claims and I’m not pursuing the con (continued … ) 18 No. 18 1914 Indeed, as the CFTC points out in its brief as amicus cu riae, Congress has decided that a “person aggrieved” by the SRO’s action may seek redress before the Commission. See 7 U.S.C. § 21(h)(2). To determine who falls within the scope of the provision, the CFTC submits that, like other statutorily created causes of action, there must be an inquiry into the zone of interests sought to be protected by the Commodity Exchange Act. See Lexmark Int’l, Inc. v. Static Control Compo nents, Inc., 134 S. Ct. 1377, 1388 (2014). This inquiry utilizes “traditional tools of statutory interpretation,” id. at 1387, and “the breadth of the zone of interests varies according to the provisions of the law at issue,” id. at 1389 (internal quotation marks omitted). The statutory analysis involves “dis cern[ing] the interests ‘arguably … to be protected’ by the statutory provision at issue” and then asking “whether the plaintiff’s interests affected by the agency action in question are among them.” Nat’l Credit Union Admin. v. First Nat’l Bank & Trust Co., 522 U.S. 479, 492 (1998) (quoting Ass’n of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153 (1970)). Undoubtedly, a “person aggrieved” by an SRO’s ac tion always includes a party to the proceedings. And there may be circumstances where a nonparty may fall within the zone of interests of the statute and therefore have the right to seek redress before the CFTC. Whether a particular entity falls within the zone of interests protected by the statute is a ( … continued) stitutional claim—I’ve put that in the briefs—so I don’t think the modifi cation of the rules will do anything for us. And as Ziglar v. Abbassi has recently come down with, I don’t think the constitutional claim would get us monetary relief, which is what we are seeking.”). No. 18 1914 19 determination left to the Commission through case by case administration of the statute. B. We next address Effex’s state law claims. The compre hensive way by which the Commodity Exchange Act deals with disciplinary proceedings before an SRO also raises the question as to whether Congress intended the scheme to be free from other remedial devices based on state law. We conclude that Congress did intend to preempt state tort claims such as the ones brought in this action. The general principles governing the preemption of state law can be stated succinctly. Preemption is most obvious, of course, when the federal statute expressly commands it and defines the scope of such a preemptive effect. See Pac. Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm’n, 461 U.S. 190, 203 (1983); Frank Bros., Inc. v. Wisconsin Dep’t of Transp., 409 F.3d 880, 885 (7th Cir. 2005). Preemption also oc curs, however, where Congress manifests an intent to occu py exclusively an entire field of regulation through a com prehensive federal regulatory scheme. See Fid. Fed. Sav. & Loan Ass’n v. De la Cuesta, 458 U.S. 141, 153 (1982); Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 576 (7th Cir. 2012). Ad ditionally, a state law is preempted where it is impossible to comply with both federal and state law, see Fla. Lime & Avo cado Growers, Inc. v. Paul, 373 U.S. 132, 142–43 (1963); Kroog v. Mait, 712 F.2d 1148, 1152–54 (7th Cir. 1983), or where state law would be “an obstacle to the accomplishment and exe 20 No. 18 1914 cution of the full purposes and objectives of Congress,” 25 Hines v. Davidowitz, 312 U.S. 52, 67 (1941). We addressed preemption in the context of the Commod ity Exchange Act in American Agriculture Movement, Inc v. Board of Trade of City of Chicago, 977 F.2d 1147 (7th Cir. 26 1992). In that case, we examined claims that a contract 27 market, the Chicago Board of Trade, breached its common law fiduciary duties and acted negligently. Id. at 1150–52. We approached the preemption issue cautiously. We first noted that the Commodity Exchange Act does not expressly preempt state law nor is it impossible to comply with both state and federal law. Id. at 1154. Moreover, we determined that the Commodity Exchange Act did not manifest an intent to occupy completely the entire field of commodity futures regulation. Id. at 1155. Specifically, we pointed to the Com modity Exchange Act’s savings clause, which provides that 25 See also NCR Corp. v. George A. Whiting Paper Co., 768 F.3d 682, 711–12 (7th Cir. 2014). 26 In Freightliner Corp. v. Myrick, 514 U.S. 280, 287–89 (1995), the Supreme Court clarified its decision in Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992), to reject the proposition that implied preemption analysis is only appropriate when the statute is devoid of express preemptive language, abrogating our statement to that effect in American Agriculture, 977 F.2d at 1154. The Court’s decision in Freightliner does not diminish the appli cation of American Agriculture in this case. 27 The Commission has the authority to designate organizations as “con tract markets” in which investors may trade commodity futures. See 7 U.S.C. § 7. Contract markets have some duties of self regulation, includ ing enacting and enforcing rules to ensure fair and orderly trading. See id. § 7(d). No. 18 1914 21 “[n]othing in this section shall supersede or limit the juris diction conferred on the courts of the United States or any State,” id. (quoting 7 U.S.C. § 2), and viewed “any State” as “[p]reserving in the futures trading context at least some state law causes of actions,” id. Turning to the last avenue for preemption—that applying state law would frustrate the purposes of Congress in enacting the Commodity Exchange Act—we decided that such conflict preemption could apply in certain circumstances. Id. at 1155–56. In reaching this conclusion, we noted that, in addition to the savings clause, the Commodity Exchange Act provides that “the Commission shall have exclusive jurisdiction … with respect to accounts, agreements … , and transactions involving the contracts of sale of a commodity for future de livery, traded or executed on a contract market.” Id. at 1155 (quoting 7 U.S.C. § 2). In order to give “full effect” to both the savings clause and the jurisdictional clause, we deter mined that “Congress intended to preempt some, but not all, state laws that bear upon the various aspects of commodity futures trading.” Id. Precisely, preemption is appropriate “[w]hen application of state law would directly affect trad ing on or the operation of a futures market.” Id. at 1156. Applying this determination, we decided that common law claims against brokers for breach of fiduciary duty could go forward. We noted that the Commodity Exchange Act’s structure evinced a comprehensive regulatory scheme and that the legislative history of the Commodity Futures Trad ing Commission Act of 1974 suggested that a catalyst for the significant amendments to the Commodity Exchange Act was a fear that, without increased federal regulation, the states would regulate the futures markets to a chaotic effect. 22 No. 18 1914 Id. We also recognized other court decisions holding that common law claims such as negligence, fraud, and breach of fiduciary duty could be brought by futures investors against their brokers. Id. With this background in mind, we ex plained that the claims against brokers had “little or no bear ing upon the actual operation of the commodity futures markets” and that “[o]nly in the context of market regulation does the need arise for uniform legal rules.” Id. By contrast, “there is no need for uniformity when it comes to rules that govern principal agent relationships between brokers and investors.” Id. Here, Effex does not seem to challenge that preemption applies to claims by NFA members contesting its discipli nary actions. The NFA’s discipline of its own members is a specific and central element of the role Congress delegated to SROs in its regulation of the commodities futures market. See 7 U.S.C. § 21(b); see also H.R. Rep. 93 975, at 58 (“Associa tion activity would serve solely as a complement rather than a displacement to the authority of the new Commission.”). If a member could challenge the NFA’s discipline and discipli nary process through a state tort claim, the NFA’s capacity to discipline its members—here, FXCM—for violating its rules would be impaired significantly. State courts effective ly could supervise the NFA’s regulation of its members and thus impede its federally mandated role in the Commodity Exchange Act’s overall scheme. The resulting obstacle to Congress’s purposes in creating federal regulations oversee ing the national commodities futures market is obvious. No. 18 1914 23 Our sister circuits’ approaches to cases arising under the 28 very similar Securities Exchange Act support this conclu 29 sion. Turbeville v. FINRA, 874 F.3d 1268 (11th Cir. 2017), is particularly instructive. There, the Financial Industry Regu latory Authority (“FINRA”) had disciplined a registered representative of a FINRA affiliated broker firm for conduct 30 violating FINRA’s rules. Id. at 1272. He filed a suit in Flori da state court claiming that FINRA’s issuance of a “Wells notice” making a preliminary determination against him was defamatory and tortuously interfered with his business 28 See In re Application of the Nat’l Futures Ass’n, 1981 WL 762560, at *14 (“The provisions of [7 U.S.C. § 21] were modeled closely after Section 15A of the Securities Exchange Act … . Indeed, Congress adopted some of the language of Section 15A of the Exchange Act verbatim when it drafted [7 U.S.C. § 21].”). Compare 15 U.S.C. § 78s(d)(2) (permitting Secu rities Exchange Commission review of SRO disciplinary actions for “any person aggrieved”), with 7 U.S.C. § 21(h)(2) (permitting CFTC review of SRO disciplinary actions for “any person aggrieved”). 29 See In re Series 7 Broker Qualification Exam Scoring Litig., 548 F.3d 110, 114 (D.C. Cir. 2008) (determining preemption applies under the Securi ties Exchange Act where “Congress created a self contained process to review and remedy [] complaints”); Barbara v. NYSE, 99 F.3d 49, 59 (2d Cir. 1996) (“Furthermore, allowing suits against the Exchange arising out of the Exchange’s disciplinary functions would clearly stand as an obsta cle to the accomplishment and execution of the full purposes and objec tives of Congress … .” (internal quotation marks omitted)), abrogated on other grounds by Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, 136 S. Ct. 1562 (2016). 30 FINRA is an SRO operating under the oversight of the Securities Ex change Commission. 24 No. 18 1914 31 es. Id. at 1272–73. After removal to federal court, the district court dismissed the case, finding that FINRA is absolutely immune from damages claims arising from the exercise of its regulatory functions and that there was no private cause of action. Turbeville v. FINRA, No. 8:15 CV 2920 T 30EAJ, 2016 WL 501982, at *4–5 (M.D. Fla. Feb. 9, 2016). The Eleventh Circuit affirmed, determining the Securities Exchange Act preempted these tort claims. Noting the internal appeals and administrative review process set forth in the Securities Ex change Act, the court explained that permitting the state claims to go forward “implies necessarily the existence of a private right of action against FINRA that operates parallel to the administrative review processes the Act prescribes.” Turbeville, 874 F.3d at 1276. Moreover, the statutory review process could correct the claimed injury by “removing in formation shown to be inaccurate” in the Wells notice. Id. at 1276–77. In the Eleventh Circuit’s view, the remedies pro vided by the administrative review scheme precluded a sep arate remedy under state law. Id. at 1277. It said that: Recognizing the second set of rights and remedies under state law Turbeville seeks would undercut the distinctly federal nature of the Exchange Act. If ac tions like Turbeville’s are permitted, fifty state courts would be authorized to supervise FINRA’s regulatory conduct and its application of its internal, SEC approved rules through the vehicle of state tort law. And given SROs’ front line role in enforcing fed 31 At the time he filed suit, the broker was no longer working in the secu rities industry and no longer a member of a FINRA affiliated firm. Tur beville, 874 F.3d at 1273. No. 18 1914 25 eral securities laws, such review would in turn lead to state court supervision of the Exchange Act’s securi ties regulation regime writ large. Id. The Commodity Exchange Act is a different statute, but given the similarity of the statutes, the logic of these Securi ties Exchange Act decisions applies here. Allowing suits against the NFA arising out of the NFA’s disciplinary ac tions would present a serious obstacle to the NFA’s ability to carry out its regulatory duties, especially where there are administrative remedies available. Apparently recognizing the force of these cases, Effex limits its argument. It submits only that preemption should not apply to its claims because it is not a member of the NFA and because its claims arise out of NFA’s “intentional ultra vires actions to damage Effex which it cloaked in FXCM Pro 32 ceeding [sic].” We do not believe that this distinction is a principled ground that justifies a different result. At bottom, Effex’s challenge remains a challenge to the settlement of a disciplinary proceeding before the NFA that was within the NFA’s jurisdiction. Effex claims, in essence, that the NFA improperly conducted its disciplinary proceedings. It does not matter whether Effex is a member or nonmember of the NFA or a party or nonparty to the proceedings. Permitting a collateral attack on those proceedings based on Effex’s tort claims would impair the NFA’s ability to enforce its rules and carry out its regulatory role. Preemption does not necessarily mean that Effex has no remedy; it means that it must look to the federally mandated 32 Appellant’s Reply Br. 28. 26 No. 18 1914 review scheme established by Congress. The fact that these remedies may be different from those afforded by state law, or inadequate by comparison, is not of consequence. Con gress has the right to determine the remedies available and 33 the individuals who are eligible for those remedies. 34 At our invitation, the CFTC filed an amicus brief outlin ing its view on whether a nonparty can seek review of an NFA disciplinary procedure or otherwise seek redress before the Commission. The Commission submits that although nonparties do not have a right to CFTC review of an NFA action that implicates them, the Commission does have the discretion to permit nonparties to obtain CFTC review in ex traordinary circumstances pursuant to 17 C.F.R. § 171.14. The district court was of the view that nonparties also have 33 Federal law does not need to provide a full portfolio of remedies when it preempts state law. See In re Series 7 Broker Qualification Exam Scoring Litig., 548 F.3d at 114 (noting that, although “[p]laintiffs may be troubled by the fact that Congress’s approach does not include dam age remedies,” “[b]y specifically adopting an appeals process which does not provide monetary relief, Congress has displaced claims for re lief based on state common law” because such a suit “is merely an ‘at tempt … to bypass the Exchange Act’ and the process Congress envi sioned therein” (quoting MM & S Fin., Inc. v. NASD, 364 F.3d 908, 912 (8th Cir. 2004)). 34 We invited the Commission to submit an amicus brief addressing whether a nonparty affected by an NFA disciplinary action could seek the CFTC’s review of that action. We thank the Commission for accept ing our invitation. The parties were given an opportunity to respond to the Commission’s submission and have submitted briefs stating their position. No. 18 1914 27 the right to CFTC review through intervention or by asking the CFTC to review a matter sua sponte. We do not believe it appropriate for us to delineate in any definitive way the administrative paths that may be open to Effex. It is not at all clear that Effex will choose to pursue the administrative remedies that may be open to it. If, on reflection, Effex does pursue those remedies and then seeks review in this court, we will have an opportunity to address the question of remedies with the benefit of the Commission’s views not in the abstract context of an amicus brief but after adversary litigation. Conclusion For the reasons set forth in this opinion, we affirm the judgment of the district court. AFFIRMED

Primary Holding

The Commodity Exchange Act preempts state law claims and precludes a federal Bevins action concerning alleged defamation by the National Futures Association, a self‐regulatory organization registered under the Act.

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