Ricci v. Chicago Mercantile Exchange

RESPONDENT: Chicago Mercantile Exchange
LOCATION: Wisconsin Eastern U.S. District Courthouse

DOCKET NO.: 71-858
DECIDED BY: Burger Court (1972-1975)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 409 US 289 (1973)
ARGUED: Oct 18, 1972
DECIDED: Jan 09, 1973

Jerome H. Torshen - for petitioner
Lee A. Freeman - for respondents

Facts of the case


Media for Ricci v. Chicago Mercantile Exchange

Audio Transcription for Oral Argument - October 18, 1972 in Ricci v. Chicago Mercantile Exchange

Warren E. Burger:

We’ll hear arguments now in number 71-858 Ricci against the Chicago Mercantile Exchange and others.

Mr. Torshen.

Jerome H. Torshen:

Mr. Chief Justice, may it please the Court.

This case involves the issue of primary jurisdiction.

Specifically, the issue is whether a complaint alleging a group boycott to exclude a competitor from the marketplace per se violation of the Sherman Act brought against the commodity exchange, certain of its officer, a member and another individual must first be referred to the Commodities Exchange Commission or to the Secretary of Agriculture for decision before it may be referred to the District Court, the antitrust court.

Very briefly and capsulated, the facts are that petitioner purchased the membership on the Exchange, another member claimed to be the owner of it.

It is alleged that the claimant induced the officers of the Exchange to transfer the membership to a third party and as a result petitioner was deprived of his trading privileges and excluded from the marketplace willfully, knowingly, and maliciously as a result of the conspiracy between these parties.

The history of the case too, must be stated so that we can get to the issues and clear away some of the underbrush that appears in the brief.

In the District Court, this case arose on the pleadings and was resolved on motions to dismiss for lack of jurisdiction, specifically lack of jurisdiction over the subject matter for the reason that the antitrust laws did not apply.

In the Court of Appeals, the Court filed unanimously that the complaint did allege a per se violation of the Sherman Act and hands on the pleadings, reversed the District Court.

However the Court sua sponte without the issue of having been argued, grieved, or raised at any time during the proceedings in a two-to-one opinion invoke the doctrine of primary jurisdiction and directed that the case be remanded to the District Court with the directions that the District Court stay proceedings pending reference of the matter to either the Commodities Exchange Commission and/or in the terms of the Court, the Secretary of Agriculture.

I mentioned those facts because we do have here a case upon the pleadings although depositions had been taken by one side and are quoted in the briefs here by respondent.

The deposition testimony is not properly a part of the record and was rejected by the court below.

We think, Your Honors that the extension of the doctrine of primary jurisdiction in this case involving commodities markets is particularly inappropriate especially with regard to this claim brought under the antitrust laws and particularly with regard to the policy in support of the private enforcement of antitrust laws.

It may be well in determining what the primary jurisdiction or jurisdiction if you will of the Secretary of Agriculture is to determine what his powers are under the Commodities Exchange Act.

First, the Act gives no exemption from the antitrust laws.

Secondly, --

Byron R. White:

Let’s assume a rule of the exchange that it was authorized to issue and which was not disproved by the Secretary.

Let’s assume that one of those rules in anybody’s parlance would be a violation of the antitrust laws.

Jerome H. Torshen:

Well, I think if a rule would be a violation of the antitrust laws, I suppose that could be attacked here of course we’re not --

Byron R. White:

You wouldn’t say that -- you wouldn’t say that Congress intended that any rule that the Secretary didn’t disprove should be immune from antitrust attack?

Jerome H. Torshen:

Absolutely not.

I think the mere disapproval should not ren -- their failure to disapprove should not render --

Byron R. White:

But that’s the scheme under this Act.

They submit the rules and if the Secretary doesn’t disprove them, the Acts are -- the rules are enforced, isn’t it?

Jerome H. Torshen:

With regard to trading requirements and terms and conditions of contracts this is the case.

The Secretary --

Byron R. White:

Well, let’s just assume, one of the rules about trading requirements otherwise would violate the antitrust laws?

Is that where that rule be vulnerable?

Jerome H. Torshen:

Yes, we would think that it is.