Imagine traveling the same stretch of road for years, obeying the posted 55 mph speed limit faithfully. Now imagine law enforcement overseeing that stretch of road redefined 55 mph as 40 mph, but they didn’t inform drivers. They didn’t change the posted signs. They just started giving out speeding tickets for driving above 40. Then you receive a bill in the mail for 20 years’ worth of speeding tickets you never actually received.
This scenario would be unthinkable, yet it’s a perfect metaphor for what the Commodity Futures Trading Commission (CFTC) did to Monex Deposit Company when it slapped it with a $290 million punishment in 2017. Previously the agency had no problems with the Monex business model, then suddenly CFTC changed its interpretation of the rules and sought to punish the company.
Monex hadn’t changed anything. It has operated the same way since 1987 and on multiple occasions even had been reassured their precious metals sales methods would not run afoul of CFTC regulations.
“The agency’s sudden reversal of its interpretation was a sucker punch aimed at Monex that violates basic principles of due process,” Mountain States Legal Foundation attorneys Ronald Opsahl and David McDonald wrote in an amicus brief in Monex Deposit Company et al, v. CFTC. The brief was filed on Feb. 19, 2020.
The Monex case provides yet another example of bad behavior by powerful government agencies that shift with political winds, changing the rules that govern entire sectors of the economy – often without even notifying affected businesses.
Similar agency reinterpretations have harmed MSLF clients directly. Sidney Longwell of Louisiana bought a federal oil and gas lease in 1982, and his small business followed agency guidelines for many years preparing to drill. In spite of reassurances his claim was valid, and he would eventually be able to make use of it, the Department of Interior abruptly cancelled his lease in 2015 and voided a permit he had received in 1993. With MSLF’s help he’s continuing to fight for the right to use his lease.
In both instances, federal agencies flagrantly violated constitutional due process protections.
MSLF hopes the Supreme Court will hear the Monex case and hold the CFTC accountable because it will help hold other agencies in check and preserve Americans’ essential rights to due process.