The provisions also show that Congress did not issue an inexorable command to the Commission to impose position limits regardless of their need—were that not the case, there would be no room left for the exchanges to determine wheth- er they believed limits were necessary and appropriate and to adopt them—or not— accordingly.10 10 In addition, subsection (e) of Section 6a provides that “if the Commission shall have fixed limits under this section . . . then the limits fixed by . . . [a] contract market, derivatives transaction execution facility, or electronic trading facility or [a] board of trade shall not be higher than the limits fixed by the Commission.” 7 U.S.C. § 6a(e) (emphasis added). The plain import of the word “if” is that that the Commission will not necessarily set position lim- Case 1:11-cv-02146-RLW Document 14 Filed 02/07/12 Page 30 of 50 23 Indeed, the Commission itself recognizes that it was not under an unwavering command to adopt position limits; its interpretation of the statute is, therefore, internally inconsistent.

At Minimum, The Commission Was Required To Find That Position Limits Were An “Appropriate” Response To A Regulatory Problem Even if one ignores the necessity requirement, the text of the provisions added by the Dodd-Frank Act required that, at minimum, the Commission determine that position limits were “appropriate” before imposing them. 7 U.S.C. § 6a(a)(2)(a), (a)(3), (a)(5)(A). The Commission, again, expressly disclaimed any such requirement.

Petroleum, 92 F.3d at 1258)—as illustrated by the CFTC Chairman’s statement that the differ- ence between a swap and a “swap future” is a mere matter of “relabeling” (see supra 5), and the acknowledgment by Congress that swaps and futures can be “economically equivalent.” 7 U.S.C. § 6a(a)(5)(A). Indeed, in a filing in the D.C. Circuit last month, the Commission charac- terized certain swaps and futures as “economically equivalent.”

A spread transaction is plainly a "transaction" involving contracts of sale of a commodity for future delivery. See 7 U.S.C. § 6a(a) (2006) (defining spreads as "transactions" and authorizing the -11 Case 1:11-cv-03543-WHP Document 51 Filed 04/26/12 Page 11 of 29 CFTC to impose or exempt such transactions from position limits); see also Dunn, 519 U.S. at 470 (interpreting the terms "transaction" and "involve" broadly in the context of the Treasury Amendment to the CEA). Accordingly, this Court declines to be the first to hold that calendar spreads fall outside the anti-manipulation provisions ofthe CEA.

Case: 1:11-cv-00618 Document #: 30 Filed: 08/05/11 Page 4 of 20 PageID #:134 4 The Administrative Settlement The complaint is premised exclusively on facts alleged in an administrative settlement between the defendants and the CFTC, which settled potential charges that defendants Daniels, Taylor and DTG violated section 4a(e) of the Commodity Exchange Act (“CEA”), 7 USC § 6a(e), by holding rice futures contracts in excess of those permitted by the position limit rules of the CBOT, and violated section 9(a)(4) of the CEA, 7 USC § 13(a)(4), by concealing the ownership of the contracts. (Compl. ¶ 1 & n.1.

Looking to the FTAIA itself, foreign activity only violates the Sherman Act if, in addition to satisfying the normal requirements, the activity has “a direct, substantial, and reasonably foreseeable effect” on domestic or import commerce, and that the effect gives rise to the plaintiff’s claims. See 15 Case 1:07-cv-06811-AKH Document 39 Filed 09/27/2007 Page 8 of 14 7 U.S.C. § 6a. Thus, the Sherman Act “does not prevent . . . business arrangements . . . , however anticompetitive, as long as those arrangements adversely affect only foreign markets.”