Butz v. Economou

Arthur Economou (plaintiff) owned a company registered with the United States Department of Agriculture (USDA) as a commodity-futures commission merchant. The USDA initiated administrative proceedings to revoke or suspend Economou’s company’s license to trade commodity futures. In the proceedings against Economou, the USDA failed to fully comply with notice and warning requirements. Additionally, the USDA issued a press release about the matter that Economou found deceptive. Economou alleged that the proceeding was in retaliation for Economou’s strident criticism of the USDA and sued. Economou named the following individuals as defendants in his suit: the secretary of agriculture; the assistant secretary of agriculture; the USDA judicial officer and chief hearing examiner overseeing the case against him; officials in the Commodity Exchange Authority; the USDA attorney prosecuting the enforcement proceeding; and several of the auditors who had investigated or testified against Economou (the officials) (defendants). The trial court dismissed Economou’s suit on the basis that the officials had absolute immunity for all discretionary acts within their authorities. The United States Court of Appeals reversed, holding that the officials had only the qualified immunity similar to their counterparts in state government. The officials appealed to the United States Supreme Court.