American Agricultural Movements, Inc. v. Board of Trade of City of Chicago
United States Court of Appeals for the Seventh Circuit
977 F.2d 1147 (1992)
- Written by Brett Stavin, JD
Facts
Ferruzzi Finanziaria S.p.A. and certain others (collectively, Ferruzzi) traded futures on the Chicago Board of Trade (CBOT) (defendant). In the summer of 1989, Ferruzzi held large positions in the soybean futures market. CBOT became concerned that Ferruzzi was attempting to squeeze the market. In late June and early July, CBOT attempted to have Ferruzzi liquidate its position so as to avoid instability in the soybean futures and cash markets. Ferruzzi resisted, informing CBOT that they intended to maintain their position. In response, on July 10, CBOT’s Business Conduct Committee recommended that CBOT’s governing board take emergency action. The next day, the governing board voted to enact an emergency resolution (the resolution) declaring a market emergency. The Commodity Futures Trading Commission (CFTC) was made aware of the resolution but took no action in response. The resolution ordered any persons or groups holding positions in excess of three million bushels to liquidate their positions by 20 percent daily. No person or group would be permitted to hold positions in excess of three million bushels by July 18. By July 20, the last trading day for the July 1989 futures, no persons or groups would be allowed to hold positions in excess of one million bushels. Publication of the resolution caused a price decline in the July 1989 soybean futures market. The American Agriculture Movement (AAM) (plaintiff), a trade organization representing farmers, filed a lawsuit in federal district court against CBOT under the Commodity Exchange Act, the Sherman Antitrust Act, and state common law. [Ed’s note: The full name of AAM is given incorrectly in the casebook excerpt.] The district court granted CBOT’s motion for summary judgment on the antitrust count, holding that the Commodity Exchange Act granted CBOT implied antitrust immunity. AAM appealed.
Rule of Law
Issue
Holding and Reasoning (Flaum, J.)
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