Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

SELIGSON v. NEW YORK PRODUCE EXCH.

July 19, 1973

Charles Seligson, as Trustee in Bankruptcy of Ira Haupt & Co.
v.
New York Produce Exchange, New York Produce Exchange Clearing Assn., Donald V. MacDonald, Fahnestock & Co., Harry B. Anderson, Merrill Lynch, Pierce, Fenner & Smith, Inc., Walter C. Klein, Bunge Corp., Harold H. Vogel, Continental Grain Co., Sidney Fashena, I. Usiskin & Co., Carl R. Berg, Solomon J. Weinstein and David L. Boyer


Carter, D.J.


The opinion of the court was delivered by: CARTER

CARTER, D.J.

Defendants have moved to stay this action pending referral to the Commodity Exchange Commission. The case is one of the oldest pending before me, and counsel for plaintiff have estimated that it will be ready for trial on October 1 of this year (letter of Harold Klapper, dated March 16, 1973). In response to an identical motion filed in 1971, Judge Palmieri noted that:

 
"This action was initiated on April 11, 1966. Its already long procedural history reveals massive discovery and extensive pretrial activity over a period of more than five years. To date, this action has proliferated to such an extent as to require entries filling five and one half sheets of the docket records of this court.
 
* * *
 
". . . more than five years have elapsed during which the parties have vigorously pursued their preparations for trial and massive accumulations of papers and documents already form a part of the current proceedings. To thrust all this aside in medias res to permit administrative intervention would not serve the orderly disposition of this litigation."

 The 1971 motion was based primarily on the decision of the Seventh Circuit in Ricci v. Chicago Mercantile Exchange, 447 F.2d 713 (1971). The Ricci complaint alleged that the Chicago Mercantile Exchange had transferred the plaintiff's membership in violation of its rules and the Commodity Exchange Act, and that the transfer was part of an unlawful conspiracy to restrain trade. The Court there held that since the conduct complained of was subject to the jurisdiction of the Commodity Exchange Commission, and since, in its view, the Commission should consider antitrust legislative policies in reviewing the conduct of commodity exchanges, the matter should be first presented to the Commission under the doctrine of primary jurisdiction. Judge Palmieri declined to follow Ricci, noting that the view of the dissenting judge was more consonant with his own views, and that

 
"[apart] from any question of the validity of the Ricci view of primary jurisdiction, it is clear that the parties therein did not raise the issue belatedly."

 In January of this year the United States Supreme Court, 409 U.S. 289, 93 S. Ct. 573, 34 L. Ed. 2d 525 affirmed the Seventh Circuit's decision to refer the Ricci matter to the Commodity Exchange Commission, not on the theory that the Commission should weigh the antitrust considerations involved in the litigation, but on the basis of the following three premises:

 
". . . (1) that it will be essential for the Antitrust Court to determine whether the Commodity Exchange Act or any of its provisions are 'incompatible with the maintenance of an antitrust action,' Silver v. New York Stock Exchange, 373 U.S. at 358, 83 S. Ct. at 1257, 10 L. Ed. 2d 389; (2) that some facets of the dispute between Ricci and the Exchange are within the statutory jurisdiction of the Commodity Exchange Commission; and (3) that adjudication of that dispute by the Commission promises to be of material aid in resolving the immunity question." 93 S. Ct. at 580

 It is on the strength of this opinion that defendants renew their motion to stay these proceedings.

 In discussing the first of its three premises for referral to the Commodity Exchange Commission, the Supreme Court noted that if the challenged membership transfer was made in accordance with a valid Exchange rule:

 
"the immediate question for the antitrust court is whether the rule itself and Ricci's exclusion under it are insulated from antitrust attack." (93 S. Ct. at 581)

 It is evident, therefore, that the Court based its application of the doctrine of primary jurisdiction on the possibility that conduct alleged as violative of the antitrust laws was authorized by the Commodity Exchange Act and immune, by virtue of that authorization, from antitrust attack. As a consequence, it would appear that where a complaint alleges conduct under color of Commodity Exchange Act authority which is clearly violative of the Act and outside the scope of any authority granted to the defendant exchange members, referral to the Commission would not be, in the language of the Court's third premise, "of material aid in resolving immunity question."

 Thus, in Deaktor v. Schreiber Co., 479 F.2d 529 (Phillips v. Chicago Mercantile Exchange, et al.) (decided May 21, 1973), an action which alleged violations of both the Commodity Exchange and the Sherman Acts, the Seventh Circuit upheld the district court's denial of a stay pending Commission referral on the ground that the conduct alleged by Phillips to be violative of the antitrust laws was "in no way arguably ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.