Case Summary

Imagine traveling the same stretch of road for years, obeying the posted 55 mph speed limit faithfully. Now imagine law enforcement redefined the speed limit without informing drivers and started sending retroactive speeding tickets going back years.

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 CFTC suddenly changed its interpretation of the rules and sought to punish the company. Sudden rule changes and retroactive enforcement not only infringe on constitutional due process protections, they put citizens, businesses and the economy at risk.

Join the Fight

Since 1977, MSLF has fought to protect private property rights, individual liberties, and economic freedom. MSLF is a nonprofit public interest legal foundation. We represent clients pro bono and receive no government funding. Make your 100% tax deductible contribution today and join the fight.

Donate Now

Status

What’s Next

The case awaits Supreme Court action, either granting or denying certification

Case History

Monex is a company that sells precious metals to retail buyers on margin, using the purchased metals themselves as collateral. Their business model, unchanged since 1987, was specifically designed to comply with all applicable laws, including the Commodities Exchange Act (“CEA”). For years, the Commodity Futures Trading Commission (“CFTC”), the federal agency responsible for enforcing the CEA, explicitly stated that Monex was operating within the law. This remained true even after the 2009 enactment of Dodd-Frank heavily tightened regulation on commodities trading. A CFTC official even testified to that fact before Congress during debates on the new law.

That changed in 2017, when the CFTC reversed its own longstanding interpretation of the law. Despite affirming the legality of Monex’s business model for years, the CFTC slapped it with a $290 million enforcement action, claiming that their interpretation of a term (“actual delivery”) had changed and Monex was now violating the law. Worse still, not only did the CFTC reverse its position and upend an entire industry overnight with little-to-no notice, but the agency also decided to retroactively punish Monex for activities that, for years, no one had any reason to believe were (or would ever be) illegal. 

Monex won their case in the district court, but the Ninth Circuit reversed the decision. The company is now seeking Supreme Court review of the case. MSLF filed an amicus curiae brief in February 2020 supporting Monex’s petition. In it, we argue that the CFTC’s actions constitute a gross violation of due process, particularly in light of the Supreme Court’s decision in Kisor v. Wilkie last year significantly limiting the deference courts give to agency interpretations.

Case Documents
Explore More

Archer Case Earns More Media Coverage

Colorado educator and MSLF Client Celeste Archer in this piece explains to Denver’s CBS News affiliate why she’s suing her employer, the University of Colorado-Denver, for barring her from campus without first investigating whether there was any truth to an anonymous allegation that she had Covid-19. That allegation was false. But the school’s reflexive rush to judgment — something that’s become alarmingly commonplace as a result of the witch-hunting atmosphere produced by the panic — denied Archer her due process rights, according to the lawsuit.

Trachman Talks Due Process on Campus During a “Devil’s Advocate” Appearance

“Devil’s Advocate” Host Jon Caldara sits down with MSLF Associate General Counsel Will Trachman, former Deputy Assistant Secretary in the Office for Civil Rights for the U.S. Department of Education, to discuss Title IX and how it has changed over the years in regards to due process in sexual harassment cases.

Get the latest updates from MSLF
News Updates