Commodity Futures Trading Commission v. Frankwell Bullion Ltd.

Summary

The Ninth Circuit affirmed summary judgment for Frankwell Bullion Ltd., holding that the Treasury Amendment to the Commodity Exchange Act exempted its off-exchange foreign-currency transactions from CFTC jurisdiction. The court also held that sovereign immunity did not bar assessment of receivership costs against the CFTC under 28 U.S.C. § 2412(a). It affirmed the district court’s allocation of 75 percent of the receivership costs to the CFTC.

Holdings

1. The Treasury Amendment exempts all off-exchange foreign-currency transactions from CFTC jurisdiction because the phrase 'transactions conducted on a board of trade' refers to transactions conducted on an organized exchange. Frankwell therefore was not subject to CFTC jurisdiction on the facts presented, regardless of whether its transactions were futures or spot trades.
2. Sovereign immunity did not bar the district court from assessing receivership costs against the CFTC because 28 U.S.C. § 2412(a) authorizes costs against the United States that could be assessed against an ordinary citizen, including receivership costs.
3. The district court did not abuse its discretion by assessing seventy-five percent of the receivership costs against the CFTC.

Questions Presented

1. Whether Frankwell was a 'board of trade' within the meaning of the Treasury Amendment to the Commodity Exchange Act and whether the Amendment therefore exempted Frankwell's off-exchange foreign-currency transactions from CFTC jurisdiction.
2. Whether sovereign immunity barred the district court from assessing receivership costs against the CFTC.
3. Whether the district court abused its discretion by allocating seventy-five percent of the receivership costs to the CFTC.

Disposition

affirmed