Effex Capital , LLC v. National Futures Association

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18‐1914
EFFEX C APITAL , LLC, et al.,
Plaintiffs‐Appellants,
v.
NATIONAL FUTURES A SSOCIATION,
et al.,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:17‐cv‐04245 — Andrea R. Wood, Judge.
____________________
A RGUED NOVEMBER 29, 2018 — DECIDED A UGUST 13, 2019
____________________
Before FLAUM, R IPPLE , and MANION, Circuit Judges.
R IPPLE , Circuit Judge. Effex Capital, LLC (“Effex”),
brought this action alleging that the National Futures Asso‐
ciation (the “NFA”) had defamed it in documents related to
a settlement between the NFA and one of its members, Forex

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2 No. 18‐1914
Capital Markets, LLC (“FXCM”). 1 It sought injunctive relief
and damages. The district court dismissed the action, hold‐
ing that Effex had failed to exhaust its administrative reme‐
dies.
2 Effex timely appealed the district court’s dismissal.
3
1 The district court had jurisdiction to adjudicate Effex’s due process
claims under 28 U.S.C. § 1331 and its state‐law tort claims under 28
U.S.C. § 1332.
2 The court’s dismissal was without prejudice to Effex’s pursuing its ad‐
ministrative remedies and then seeking review of its properly exhausted
claims.
3 Our jurisdiction is premised on 28 U.S.C. § 1291. In most cases, dismis‐
sal without prejudice “does not qualify as an appealable final judgment
because the plaintiff is free to re‐file the case.” Larkin v. Galloway, 266
F.3d 718, 721 (7th Cir. 2001). This rule, however, is not without exception.
A dismissal without prejudice is deemed final for the purposes of § 1291
where no amendment to the complaint “could resolve the problem.” Ka‐
ba v. Stepp, 458 F.3d 678, 680 (7th Cir. 2006). Put differently, we treat a
district court’s dismissal as final where “there are multiple indicia that
the district court was finished with the case.” Hernandez v. Dart, 814 F.3d
836, 841 (7th Cir. 2016). Here, the entirety of the district court’s dismissal
of Effex’s case suggests that it was indeed finished with the case and that
Effex could not refile after it seeks any administrative remedy that may
be available to it. First, the district court said that review of Effex’s
“properly exhausted claims” could be taken in “the appropriate federal
court,” R.89 at 15 (emphasis added), which contemplates filing in the
court of appeals pursuant to the review process Congress provided in 7
U.S.C. § 21(i)(4). Additionally, the docket entry accompanying the dis‐
trict court’s opinion indicates that “[t]his case will be closed,” R.88, and
the district court entered judgment separately pursuant to Federal Rule
of Civil Procedure 58. R.90. Taken together, it appears that Effex could
not refile suit with the district court even after seeking its administrative
remedies. Cf. Kowalski v. Boliker, 893 F.3d 987, 994 (7th Cir. 2018) (deter‐
mining there was appellate jurisdiction where the district court dis‐
(continued … )

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No. 18‐1914 3
For the reasons set forth more fully in the following opin‐
ion, we now affirm the judgment of the district court. 4 In the
Commodity Exchange Act, 7 U.S.C. § 1 et seq., Congress has
regulated comprehensively all matters relating to NFA dis‐
cipline. As such, a federal Bivens remedy is unavailable.
5 Fur‐
ther, the Commodity Exchange Act preempts Effex’s state
law claims. Any remedy available to Effex must be based on
the provisions of that statute.
I
BACKGROUND
A.
We begin our consideration of this matter with a sum‐
mary discussion of the relevant provisions of the Commodi‐
( … continued)
missed the complaint on grounds that made it “difficult to imagine” that
the plaintiff could file a new suit in the future); Hernandez, 814 F.3d at 841
(noting one indicia that the district court finished with the case was a
docket entry stating “Civil case terminated”); Gregory v. Hartman, No.
88‐3169, 1990 WL 112017, at *1 (7th Cir. 1990) (unpublished) (finding ju‐
risdiction where the district court “stated that [its] dismissal was ‘not
meant to reflect in any way on any legitimate state law claims’ that
Gregory may have had” and where “the court entered a separate judg‐
ment pursuant to [Rule] 58”).
4 We “may affirm the district court’s dismissal on any ground supported
by the record, even if different from the grounds relied upon by the dis‐
trict court.” Slaney v. The Int’l Amateur Athletic Fed’n, 244 F.3d 580, 597
(7th Cir. 2001).
5 See Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403
U.S. 388 (1971).

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4 No. 18‐1914
ty Exchange Act. In its current form,
6 the Commodity Ex‐
change Act seeks to curb price manipulation, ensure the fi‐
nancial integrity of commodities transactions, avoid system‐
ic risk, protect market participants from fraud or abusive
sales practices, and promote responsible and fair competi‐
tion within the commodities market. 7 U.S.C. § 5(b). The
Commodity Exchange Act serves these public interests
“through a system of effective self‐regulation of trading fa‐
cilities, clearing systems, market participants and market
professionals under the oversight of the Commission.”
7 Id.
6 The Commodity Exchange Act was enacted in 1936 to amend the Grain
Futures Act of 1922. Its original goal was to “prevent and remove ob‐
structions and burdens upon interstate commerce in grains and other
commodities by regulating transactions therein on commodity futures
exchanges, to limit or abolish short selling, [and] to curb manipulation.”
Commodity Exchange Act, Pub. L. No. 74‐675, 49 Stat. 1491, 1491 (1936).
The Commodity Exchange Act has been amended many times since,
most significantly with the Commodity Futures Trading Commission
Act of 1974, § 1(a)(5), Pub. L. No. 93‐463, 88 Stat. 1389 (1974) (establishing
the independent Commodity Futures Trading Commission), the Com‐
modity Futures Modernization Act of 2000, Pub. L. No. 106‐554, 114 Stat.
2763 (2000) (among other things, renewing the Commission’s mandate,
clarifying regulation of over‐the‐counter derivatives, and repealing a ban
on trading single stock futures), and the Dodd‐Frank Wall Street Reform
and Consumer Protection Act, Pub. L. No. 111‐203, 124 Stat. 1376 (2010)
(in part, expanding the Commission’s authority to oversee the swaps
marketplace).
7 Congress created the Commodity Futures Trading Commission as an
independent commission to address concerns that the self‐regulatory
framework of the Commodity Exchange Act as previously enacted no
longer met the changing needs of the commodity futures markets with‐
out some oversight. See, e.g., H.R. Rep. No. 93‐975, at 34–38 (1974);
S. Rep. No. 93‐1131, at 18–19 (1974).

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No. 18‐1914 5
As part of this regulatory scheme, the Commodity Futures
Trading Commission Act of 1974 authorized the creation of
registered futures associations as self‐regulatory organiza‐
tions (“SRO”) to complement the Commodity Futures Trad‐
ing Commission’s (the “Commission” or the “CFTC”) regu‐
lation of commodity futures markets and their participants. 8
The Commodity Exchange Act requires that SROs set
forth many types of regulations and rules, including rules
that “provide that its members and persons associated with
its members shall be appropriately disciplined … for any vi‐
olation of its rules.” 7 U.S.C. § 21(b)(8). Moreover, discipli‐
nary proceedings against members and persons permitted to
8 See Commodity Futures Trading Commission Act of 1974, § 301, 88
Stat. at 1406–11 (1974) (codified at 7 U.S.C. § 21). The House version of
the Commodity Futures Trading Commission Act included the relevant
section authorizing SROs and delineating their roles and responsibilities
whereas the Senate bill included an amendment striking such authoriza‐
tion and instead providing for further study of the appropriateness of
SROs. See H.R. Rep. 93‐1383, at 39 (1974) (Conf. Rep.). The Conference
adopted the House provision with an amendment providing for annual
reports to Congress so that Congress could continually review the effec‐
tiveness of SROs. Id. The House Committee on Agriculture indicated that
permitting self‐regulation through registered futures associations, under
the supervision of a federal agency, struck an appropriate balance be‐
tween self‐regulation and direct federal regulation of futures trading. See
H.R. Rep. 93‐975, at 48 (“The Committee bill does not propose that self‐
regulatory activities of the exchanges be abolished in favor of continued
and direct federal regulation of all aspects of futures trading. … Yet, with
proper Federal supervisory authority, needed self‐regulatory efforts of
the exchanges can live a useful life into the 21st Century and, hopefully,
beyond.”); id. at 58 (“Association activity would serve solely as a com‐
plement rather than a displacement to the authority of the new Commis‐
sion.”).

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6 No. 18‐1914
register as “associate[s]”
9 of a member must follow “fair and
orderly procedure[s].” Id. § 21(b)(9). This mandate includes
requiring “that specific charges be brought; that such mem‐
ber or person shall be notified of, and be given an opportuni‐
ty to defend against, such charges; that a record shall be
kept; and that the determination shall include” statements
setting forth the impermissible acts the member or person
took, the rules violated, and penalty imposed. Id.; see also 17
C.F.R. § 170.6(b) (requiring the SRO to “[c]onduct proceed‐
ings in a manner consistent with the fundamental elements
of due process”).
The statute provides for CFTC review of an SRO’s disci‐
plinary action. It requires that SROs “promptly shall give
notice” of any final disciplinary action against a member or
person associated with a member “to such member or per‐
son and file notice thereof with the Commission.” 7 U.S.C.
§ 21(h)(1). Final disciplinary actions are “subject to review by
the Commission on its motion, or on application by any per‐
son aggrieved by the action.” Id. § 21(h)(2).
10 The accompa‐
9 An associated person is a person who solicits orders, customers, or cus‐
tomer funds on behalf of the NFA member. See 7 U.S.C. §§ 6k, 21(b)(2).
10 Any application for CFTC review “shall be filed within 30 days after
the date such notice is filed with the Commission and received by the
aggrieved person, or within such longer period as the Commission may
determine.” 7 U.S.C. § 21(h)(2). Although application for CFTC review
does not automatically stay a final disciplinary action, the Commission
may order a stay “summarily or after notice and opportunity for hearing
on the question of a stay,” id. § 21(h)(3)(A), and “[t]he Commission shall
establish procedures for expedited consideration and determination of
the question of a stay,” id. § 21(h)(3)(B). See generally 17 C.F.R. § 171.22(b)
(regulations pertaining to stays).

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No. 18‐1914 7
nying regulations permit appeal to the Commission by
“[a]ny party aggrieved by the final decision of the National
Futures Association in a disciplinary … action.” 17 C.F.R.
§ 171.23(a). The regulations define a party as “any person
who has been the subject of a disciplinary action … by the
National Futures Association; the National Futures Associa‐
tion itself; [and] any person granted permission to partici‐
pate as a party pursuant to § 171.27 of these rules.” 17 C.F.R.
§ 171.2(i). Section 171.27 provides that, “[u]pon motion of
any interested person or, on its own motion, the Commis‐
sion may permit, or solicit, limited participation in the pro‐
ceeding by such interested person.” 17 C.F.R. § 171.27(a). In‐
terested persons include “parties and any other persons who
might be adversely affected or aggrieved by the outcome of
a proceeding; … and any other person having a direct or in‐
direct pecuniary or other interest in the outcome of a pro‐
ceeding.” Id. § 171.27(b). Intervention by such an interested
person is appropriate “[i]f the Commission determines that
participation would serve the public interest.” Id. § 171.27(a).
Beyond these specific regulations regarding application for
Commission review of an SRO’s disciplinary action, there is
a general regulation that permits the Commission to “waive
any rule” in § 171 “in a particular case” and “order proceed‐
ings in accordance with its direction” if waiver would “pre‐
vent undue hardship on any party or for any other good
cause shown.” 17 C.F.R. § 171.14. An order under this provi‐
sion “shall be based upon a determination that no party will
be prejudiced thereby and that the ends of justice will be
served,” and “[r]easonable notice” shall be “given to all par‐
ties of any action taken.” Id.
The CFTC has the power to “set aside the sanction im‐
posed by the [SRO] and, if appropriate, remand the case to

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8 No. 18‐1914
the [SRO] for further proceedings.” 7 U.S.C. § 21(i)(1)(B); see
also 17 C.F.R. § 171.33(a) (“Upon review, the Commission
may affirm, modify, set aside, or remand for further pro‐
ceedings, in whole or in part, the decision of the National
Futures Association.”). The Commission’s decision may be
appealed to the appropriate United States Court of Appeals.
7 U.S.C. § 21(i)(4) (“Any person aggrieved by a final order of
the Commission … may file a petition for review with a
United States court of appeals … .”).
B.
The NFA is an SRO that is registered under the Com‐
modity Exchange Act. 11 It is subject to the broad authority of
the CFTC. See 7 U.S.C. § 21. This authority includes review
of NFA disciplinary actions or denials of membership. Id.
§ 21(h).
Effex is a closely held, foreign‐currency trading firm
managed and controlled by John Dittami. It operates as an
institutional over‐the‐counter, foreign‐exchange liquidity
provider and engages solely in transactions with other eligi‐
ble contract participants such as financial institutions or
highly capitalized trading counterparts. Because of the na‐
ture of Effex’s trading, it is not subject to regulation by the
NFA and is therefore not a member of the NFA.12
11 See In re the Application of the Nat’l Futures Ass’n, 1981 WL 762560, at *37
(CFTC Sept. 22, 1981) (approving the NFA as an SRO under 7 U.S.C.
§ 21).
12 R.45 ¶¶ 21, 24. See also 17 C.F.R. § 5.22 (delineating persons working
within the foreign exchange market who must register with a futures
association).

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No. 18‐1914 9
In accordance with its responsibilities under the Com‐
modity Exchange Act, the NFA initiated an investigation in‐
to an association member, FXCM, and found that the com‐
pany had engaged in several practices that violate the NFA’s
rules. FXCM chose to settle with the NFA, and on February
6, 2017, the NFA released several documents related to the
settlement (collectively, the “FXCM Settlement Docu‐
ments”).
13 These documents include: (1) a complaint setting
forth the NFA’s allegations against FXCM; (2) a decision by
the NFA Business Conduct Committee finding that FXCM
committed the violations outlined in the complaint and de‐
tailing the terms of a settlement between the NFA and
FXCM; (3) a publicly accessible narrative summarizing the
decision; and (4) a press release announcing the decision and
directing the public to the narrative posted on the NFA’s
website.
The NFA’s complaint against FXCM alleged that FXCM
failed to comply with a litany of NFA rules. More pertinent‐
ly, the NFA claimed that Effex was involved in the miscon‐
duct allegedly committed by FXCM. The resulting decision
outlined the allegations in the complaint, including those in‐
volving Effex, and accepted them as true. The accompanying
narrative summarized the decision, including its statements
about Effex. The press release, although it did not specifical‐
ly reference Effex, noted that FXCM committed numerous
deceptive and abusive actions and directed the public to the
narrative on the NFA’s website. Effex alleges that the NFA’s
13 The district court refers to these documents as the “NFA Publications.”
See R.89 at 2.

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10 No. 18‐1914
findings in the FXCM Settlement Documents are false and
that their publication is defamatory.
Although its investigation into FXCM implicated Effex,
the NFA did not contact Effex or provide Effex with notice of
the investigation. The CFTC, on the other hand, conducted
its own investigation into FXCM. As part of its investigation,
the Commission subpoenaed documents from Effex and
took the deposition of Mr. Dittami and other Effex employ‐
ees. Effex alleges that the NFA obtained documents neces‐
sary for its investigation from the CFTC despite Effex’s re‐
quest that its responses as a third party be kept confidential.
On the same day that the NFA announced its settlement
with FXCM, the CFTC issued its own decision about FXCM
and its business practices.
14 It determined that FXCM had
concealed an improper trading relationship with a “high‐
frequency trader” and a company the trader formed (which
the Commission termed “HFT Co”).
15 Although not explicit‐
ly named, the HFT Co is Effex. The CFTC found materially
the same facts as the NFA did regarding Effex.
Effex did not seek review of either the NFA’s decision or
the Commission’s decision regarding FXCM. Rather, four
months after the decisions were released, Effex filed this ac‐
tion against the NFA in the district court.
14 See In re Forex Capital Mkts., LLC, CFTC No. 17‐09, 2017 WL 564341
(Feb. 6, 2017).
15 Id. at *3.

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No. 18‐1914 11
C.
On July 31, 2017, Effex brought this action against the
NFA. In its federal claims, Effex alleges that the NFA violat‐
ed its due process rights by not providing it with notice of
the investigation or an opportunity for a hearing before the
publication of the FXCM Settlement Documents. The federal
claims further submit that the NFA denied Effex due process
of law when it did not allow Effex access to a
post‐deprivation remedy. In its state‐law claims, Effex alleg‐
es that the statements about it in the FXCM Settlement Doc‐
uments, published by the NFA, were defamatory. Addition‐
ally, Effex alleged business tort claims and a claim under the
Illinois Trade Secrets Act, 765 Ill. Comp. Stat. 1065 et seq.
Effex sought injunctive relief, asking for an order requir‐
ing the NFA to remove the FXCM Settlement Documents
from its website, to delete all references to Effex, or, alterna‐
tively, to provide Effex with a “name clearing hearing.”16 It
further requested an order compelling the NFA to “issue a
new press release stating: (a) NFA did not make any find‐
ings against Effex or Dittami; (b) Effex was not a de facto
dealing desk of FXCM; (c) Effex was not controlled by
FXCM; and (d) FXCM was not ordered to make any custom‐
er restitution.” 17 Effex also asked for money damages of
$10,000,000 for lost profits and to redress its constitutional
injury.
16 R.45 at 29–30.
17 Id.

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12 No. 18‐1914
The NFA moved to dismiss the complaint for failure to
state a claim under Federal Rule of Civil Procedure
12(b)(6).
18 With respect to the federal claims, it submitted
that dismissal was proper because there is no federal Bivens
remedy and Effex had not exhausted its administrative
claims under the Commodity Exchange Act. As for the
state‐law claims, the NFA contended that all were preempt‐
ed by the Commodity Exchange Act. Finally, it claimed ab‐
solute immunity from any damages because the claims were
based on its disciplinary proceedings.
The district court held that Effex failed to exhaust its
remedies under the Commodity Exchange Act and dis‐
missed without prejudice. The district court determined that
the Commodity Exchange Act provides a statutorily man‐
dated exhaustion requirement and that Effex had four ave‐
nues to pursue relief under the scheme. First, it found that
Effex could have petitioned the CFTC to exercise its authori‐
ty under 7 U.S.C. § 21(h)(2) to review the FXCM Settlement
sua sponte because the statute permits the Commission to re‐
view an NFA decision “on its motion.” Id. § 21(h)(2). Second,
relying on the CFTC’s decision in Paribas Futures, Inc. v. New
York Mercantile Exchange, CFTC No. 90‐E‐3, 1990 WL 282868,
at *2 (Mar. 22, 1990),
19 the district court decided that if
Commission review under § 21(h)(2) is only available to ag‐
18 At the same time that the NFA moved to dismiss the action, Effex
brought a motion for a preliminary injunction.
19 In Paribas Futures, Inc. v. New York Mercantile Exchange, CFTC No.
90‐E‐3, 1990 WL 282868, at *2 (Mar. 22, 1990), the Commission noted that
“[i]ntervention after an initial decision for the purposes of taking an ap‐
peal is appropriate in some circumstances.”

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No. 18‐1914 13
grieved parties, Effex could have intervened to become a
party under the relevant regulations. Third, citing In re Peti‐
tion of Lake Shore Alternative Financial Asset Ltd., CFTC No.
CRAA‐07‐03, 2007 WL 2751884, at *2 (Sept. 17, 2007),
20 the
district court noted that the CFTC had previously suggested
that a nonparty could ask the Commission to waive its rules
so that the nonparty could obtain CFTC review, but Effex
had not made such a request. Finally, the district court de‐
termined that Effex could have turned to the Administrative
Procedure Act and petitioned the CFTC to revise its rules
generally to permit Commission review in such instances.
The district court rejected Effex’s argument that any re‐
sort to the Commodity Exchange Act’s remedies would have
been impossible or futile. It noted that the CFTC had the
ability to adjudicate due process claims. Moreover, the court
acknowledged that even though the Commission rarely re‐
views NFA settlements, it previously had reviewed settle‐
ments. Finally, observing that Effex’s claims “touch on the
contents of the NFA Publications—documents generated as
a result of the NFA investigation relating to a disciplinary
action,” 21 the district court rejected Effex’s contention that it
was not seeking review of an NFA disciplinary action but
rather merely was seeking a court order regarding the publi‐
20 In In re Petition of Lake Shore Alternative Financial Asset Ltd., CFTC No.
CRAA‐07‐03, 2007 WL 2751884, at *2 (Sept. 17, 2007), the Commission
considered whether it should waive its rules pursuant to 17 C.F.R.
§ 171.14 to permit the appeal of a membership responsibility action by a
nonparty to that action.
21 R.89 at 12.

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14 No. 18‐1914
cation of the FXCM Settlement Documents containing the
alleged defamatory statements.
Therefore, the district court dismissed Effex’s Complaint.
It did so without prejudice to any rights Effex might have to
pursue its remedies before the CFTC and then to seek fur‐
ther review of those exhausted claims in the appropriate
court of appeals. Having dismissed the complaint for failure
to state a claim, the court also denied Effex’s motion for a
preliminary injunction as moot. Effex timely appealed.
II
DISCUSSION
A.
We now turn to the merits of this appeal. 22 First, we ad‐
dress whether Effex has a federal cause of action. The com‐
prehensive nature of the federal regulatory scheme, as set
forth above, grounded in the language and structure of the
statute, makes clear that, in fashioning the disciplinary pro‐
visions of the Commodity Exchange Act, Congress certainly
did not countenance a separate federal remedy, much less a
separate federal remedy fashioned by the judiciary. Indeed,
Effex does not maintain that there is a specific federal cause
of action to redress harm inflicted by an SRO upon one of its
members. Rather, it asks that we imply a cause of action to
remedy harm to a nonmember (such as Effex) resulting from
22 The parties correctly agree that our review is de novo. Although the
district court’s opinion evinced some unease as to whether dismissal
should have been based on failure to state a claim under Federal Rule of
Civil Procedure 12(b)(6) or for want of jurisdiction under Rule 12(b)(1),
resolving that issue does not affect our standard of review or disposition.

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No. 18‐1914 15
an SRO proceeding. It casts this cause of action as one to
remedy a due process violation under Bivens v. Six Unknown
Named Agents of Federal Bureau of Narcotics, 403 U.S. 388
(1971). Bivens recognized a damages remedy to compensate
persons injured by the federal officers who violated the
Fourth Amendment even though the Amendment does not
provide for money damages “in so many words.” Id. at 395–
97. In doing so, the Court noted that Congress had not ex‐
plicitly foreclosed a damages remedy and that there were no
“special factors” counseling against authorizing such a rem‐
edy to effectuate the statute’s purpose. Id.
In the years following Bivens, the Supreme Court has lim‐
ited the application of the decision. See, e.g., Ziglar v. Abbasi,
137 S. Ct. 1843, 1857 (2017) (noting that the Court has con‐
sistently refused to extend Bivens to any new context or new
category of defendants).
23 The Court has made very clear
that the expansion of the Bivens remedy to other constitu‐
23 As Ziglar v. Abbasi, 137 S. Ct. 1843, 1857 (2017), recounts, the Supreme
Court declined to create an implied damages remedy in the following
situations: an Eighth Amendment suit against prison guards at a private
prison, Minneci v. Pollard, 565 U.S. 118, 120 (2012); a due process suit
against officials from the Bureau of Land Management, Wilkie v. Robbins,
551 U.S. 537, 547–48, 562 (2007); an Eighth Amendment suit against a
private prison operator, Corr. Servs. Corp. v. Malesko, 534 U.S. 61, 63
(2001); a procedural due process suit against a federal agency for wrong‐
ful termination, FDIC v. Meyer, 510 U.S. 471, 473–74 (1994); a procedural
due process suit against Social Security officials, Schweiker v. Chilicky, 487
U.S. 412, 414 (1988); a substantive due process suit against military offic‐
ers, United States v. Stanley, 483 U.S. 669, 683–84 (1987); a First Amend‐
ment suit against a federal employer, Bush v. Lucas, 462 U.S. 367, 390
(1983); and a race‐discrimination suit against military officers, Chappell v.
Wallace, 462 U.S. 296, 297, 304–05 (1983).

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16 No. 18‐1914
tional provisions is a “disfavored judicial activity.” Id. at
1857 (internal quotation marks omitted). Ziglar explained
that “[w]hen a party seeks to assert an implied cause of ac‐
tion under the Constitution itself,” “separation‐of‐powers
principles are or should be central to the analysis.” Id. Under
these principles, it is a “significant step” “for a court to de‐
termine that it has the authority, under the judicial power, to
create and enforce a cause of action for damages against fed‐
eral officials in order to remedy a constitutional violation.”
Id. at 1856. Such a determination is a significant step because
there are powerful countervailing considerations to the crea‐
tion of a Bivens cause of action, including that Congress “has
a substantial responsibility to determine whether, and the
extent to which, monetary and other liabilities should be im‐
posed upon individual officers and employees of the Federal
Government.” Id. Therefore, an implied cause of action un‐
der the Constitution is not available if there is a “special fac‐
tor” that “cause[s] a court to hesitate” before determining
that a court rather than Congress should provide a remedy.
Id. at 1858. Such doubt could arise where “there is an alter‐
native remedial structure present.” Id. An alternative struc‐
ture “alone may limit the power of the Judiciary to infer a
new Bivens cause of action” because Congress’s decision to
create the alternative remedial process is “convincing reason
for the Judicial Branch to refrain from providing a new and
free‐standing remedy in damages.” Id. (quoting Wilkie v.
Robbins, 551 U.S. 537, 550 (2007)).
Applying these principles, an alternative remedial struc‐
ture counseling hesitation against expanding the Bivens rem‐
edy is certainly present here. The enactment of the Commod‐
ity Exchange Act provides far more than a “doubt” about
Congress’s willingness to tolerate an alternate remedy to the

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No. 18‐1914 17
comprehensive remedial structure of federal oversight by
SROs found in the statute. In the Commodity Exchange Act,
Congress has set forth, with significant precision, the reme‐
dies available to members of an SRO and to others. Indeed,
in another Bivens case, the Court has explained that, where
Congress has exercised comprehensively its power to regu‐
late, there is no room, or justification, for additional regula‐
tion through court‐created causes of action. See Schweiker v.
Chilicky, 487 U.S. 412, 424–29 (1988) (determining that there
was no Bivens action for alleged due process violations aris‐
ing from the improper termination of social security benefits
because Title II of the Social Security Act provided an “elab‐
orate” system protecting the rights of benefit claimants).
An entity that was not a party to the SRO proceeding is
no doubt in a somewhat different position than a party to
the proceeding. We do not believe, however, that the differ‐
ence is so significant that such an entity can maintain a judi‐
cially created cause of action against the SRO for harms that
the nonparty claims to have suffered as a result of discipli‐
nary proceedings. Such a view presupposes a very narrow,
and in our view too narrow, understanding of the scope of
the Commodity Exchange Act. Effex offers no explanation or
support for why Congress, having established a comprehen‐
sive mechanism for the governance of the commodities in‐
dustry, would permit disruption of that mechanism through
a judicially created cause of action. 24
24 In light of the Supreme Court’s explanation of the Bivens remedy in
Ziglar, Effex distanced itself from its federal claims at oral argument and,
indeed, seemed to abandon them. See Oral Argument at 14:40–15:03 (“At
this point, I’ve got four other state claims and I’m not pursuing the con‐
(continued … )

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18 No. 18‐1914
Indeed, as the CFTC points out in its brief as amicus cu‐
riae, Congress has decided that a “person aggrieved” by the
SRO’s action may seek redress before the Commission. See 7
U.S.C. § 21(h)(2). To determine who falls within the scope of
the provision, the CFTC submits that, like other statutorily
created causes of action, there must be an inquiry into the
zone‐of‐interests sought to be protected by the Commodity
Exchange Act. See Lexmark Int’l, Inc. v. Static Control Compo‐
nents, Inc., 134 S. Ct. 1377, 1388 (2014). This inquiry utilizes
“traditional tools of statutory interpretation,” id. at 1387, and
“the breadth of the zone‐of‐interests varies according to the
provisions of the law at issue,” id. at 1389 (internal quotation
marks omitted). The statutory analysis involves “dis‐
cern[ing] the interests ‘arguably … to be protected’ by the
statutory provision at issue” and then asking “whether the
plaintiff’s interests affected by the agency action in question
are among them.” Nat’l Credit Union Admin. v. First Nat’l
Bank & Trust Co., 522 U.S. 479, 492 (1998) (quoting Ass’n of
Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153
(1970)). Undoubtedly, a “person aggrieved” by an SRO’s ac‐
tion always includes a party to the proceedings. And there
may be circumstances where a nonparty may fall within the
zone‐of‐interests of the statute and therefore have the right
to seek redress before the CFTC. Whether a particular entity
falls within the zone‐of‐interests protected by the statute is a
( … continued)
stitutional claim—I’ve put that in the briefs—so I don’t think the modifi‐
cation of the rules will do anything for us. And as Ziglar v. Abbassi has
recently come down with, I don’t think the constitutional claim would
get us monetary relief, which is what we are seeking.”).

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No. 18‐1914 19
determination left to the Commission through case‐by‐case
administration of the statute.
B.
We next address Effex’s state‐law claims. The compre‐
hensive way by which the Commodity Exchange Act deals
with disciplinary proceedings before an SRO also raises the
question as to whether Congress intended the scheme to be
free from other remedial devices based on state law. We
conclude that Congress did intend to preempt state‐tort
claims such as the ones brought in this action.
The general principles governing the preemption of state
law can be stated succinctly. Preemption is most obvious, of
course, when the federal statute expressly commands it and
defines the scope of such a preemptive effect. See Pac. Gas &
Elec. Co. v. State Energy Res. Conservation & Dev. Comm’n, 461
U.S. 190, 203 (1983); Frank Bros., Inc. v. Wisconsin Dep’t of
Transp., 409 F.3d 880, 885 (7th Cir. 2005). Preemption also oc‐
curs, however, where Congress manifests an intent to occu‐
py exclusively an entire field of regulation through a com‐
prehensive federal regulatory scheme. See Fid. Fed. Sav. &
Loan Ass’n v. De la Cuesta, 458 U.S. 141, 153 (1982); Wigod v.
Wells Fargo Bank, N.A., 673 F.3d 547, 576 (7th Cir. 2012). Ad‐
ditionally, a state law is preempted where it is impossible to
comply with both federal and state law, see Fla. Lime & Avo‐
cado Growers, Inc. v. Paul, 373 U.S. 132, 142–43 (1963); Kroog v.
Mait, 712 F.2d 1148, 1152–54 (7th Cir. 1983), or where state
law would be “an obstacle to the accomplishment and exe‐

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20 No. 18‐1914
cution of the full purposes and objectives of Congress,”
Hines v. Davidowitz, 312 U.S. 52, 67 (1941).
25
We addressed preemption in the context of the Commod‐
ity Exchange Act in American Agriculture Movement, Inc v.
Board of Trade of City of Chicago, 977 F.2d 1147 (7th Cir.
1992). 26 In that case, we examined claims that a contract
market, 27 the Chicago Board of Trade, breached its common
law fiduciary duties and acted negligently. Id. at 1150–52.
We approached the preemption issue cautiously. We first
noted that the Commodity Exchange Act does not expressly
preempt state law nor is it impossible to comply with both
state and federal law. Id. at 1154. Moreover, we determined
that the Commodity Exchange Act did not manifest an intent
to occupy completely the entire field of commodity futures
regulation. Id. at 1155. Specifically, we pointed to the Com‐
modity Exchange Act’s savings clause, which provides that
25 See also NCR Corp. v. George A. Whiting Paper Co., 768 F.3d 682, 711–12
(7th Cir. 2014).
26 In Freightliner Corp. v. Myrick, 514 U.S. 280, 287–89 (1995), the Supreme
Court clarified its decision in Cipollone v. Liggett Group, Inc., 505 U.S. 504
(1992), to reject the proposition that implied preemption analysis is only
appropriate when the statute is devoid of express preemptive language,
abrogating our statement to that effect in American Agriculture, 977 F.2d
at 1154. The Court’s decision in Freightliner does not diminish the appli‐
cation of American Agriculture in this case.
27 The Commission has the authority to designate organizations as “con‐
tract markets” in which investors may trade commodity futures. See 7
U.S.C. § 7. Contract markets have some duties of self‐regulation, includ‐
ing enacting and enforcing rules to ensure fair and orderly trading. See
id. § 7(d).

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No. 18‐1914 21
“[n]othing in this section shall supersede or limit the juris‐
diction conferred on the courts of the United States or any
State,” id. (quoting 7 U.S.C. § 2), and viewed “any State” as
“[p]reserving in the futures trading context at least some
state law causes of actions,” id. Turning to the last avenue for
preemption—that applying state law would frustrate the
purposes of Congress in enacting the Commodity Exchange
Act—we decided that such conflict preemption could apply
in certain circumstances. Id. at 1155–56.
In reaching this conclusion, we noted that, in addition to
the savings clause, the Commodity Exchange Act provides
that “the Commission shall have exclusive jurisdiction …
with respect to accounts, agreements … , and transactions
involving the contracts of sale of a commodity for future de‐
livery, traded or executed on a contract market.” Id. at 1155
(quoting 7 U.S.C. § 2). In order to give “full effect” to both
the savings clause and the jurisdictional clause, we deter‐
mined that “Congress intended to preempt some, but not all,
state laws that bear upon the various aspects of commodity
futures trading.” Id. Precisely, preemption is appropriate
“[w]hen application of state law would directly affect trad‐
ing on or the operation of a futures market.” Id. at 1156.
Applying this determination, we decided that common
law claims against brokers for breach of fiduciary duty could
go forward. We noted that the Commodity Exchange Act’s
structure evinced a comprehensive regulatory scheme and
that the legislative history of the Commodity Futures Trad‐
ing Commission Act of 1974 suggested that a catalyst for the
significant amendments to the Commodity Exchange Act
was a fear that, without increased federal regulation, the
states would regulate the futures markets to a chaotic effect.

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22 No. 18‐1914
Id. We also recognized other court decisions holding that
common law claims such as negligence, fraud, and breach of
fiduciary duty could be brought by futures investors against
their brokers. Id. With this background in mind, we ex‐
plained that the claims against brokers had “little or no bear‐
ing upon the actual operation of the commodity futures
markets” and that “[o]nly in the context of market regulation
does the need arise for uniform legal rules.” Id. By contrast,
“there is no need for uniformity when it comes to rules that
govern principal‐agent relationships between brokers and
investors.” Id.
Here, Effex does not seem to challenge that preemption
applies to claims by NFA members contesting its discipli‐
nary actions. The NFA’s discipline of its own members is a
specific and central element of the role Congress delegated
to SROs in its regulation of the commodities futures market.
See 7 U.S.C. § 21(b); see also H.R. Rep. 93‐975, at 58 (“Associa‐
tion activity would serve solely as a complement rather than
a displacement to the authority of the new Commission.”). If
a member could challenge the NFA’s discipline and discipli‐
nary process through a state‐tort claim, the NFA’s capacity
to discipline its members—here, FXCM—for violating its
rules would be impaired significantly. State courts effective‐
ly could supervise the NFA’s regulation of its members and
thus impede its federally mandated role in the Commodity
Exchange Act’s overall scheme. The resulting obstacle to
Congress’s purposes in creating federal regulations oversee‐
ing the national commodities futures market is obvious.

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No. 18‐1914 23
Our sister circuits’ approaches to cases arising under the
very similar Securities Exchange Act
28 support this conclu‐
sion. 29 Turbeville v. FINRA, 874 F.3d 1268 (11th Cir. 2017), is
particularly instructive. There, the Financial Industry Regu‐
latory Authority (“FINRA”) had disciplined a registered
representative of a FINRA‐affiliated broker firm for conduct
violating FINRA’s rules.
30 Id. at 1272. He filed a suit in Flori‐
da state court claiming that FINRA’s issuance of a “Wells
notice” making a preliminary determination against him
was defamatory and tortuously interfered with his business‐
28 See In re Application of the Nat’l Futures Ass’n, 1981 WL 762560, at *14
(“The provisions of [7 U.S.C. § 21] were modeled closely after Section
15A of the Securities Exchange Act … . Indeed, Congress adopted some
of the language of Section 15A of the Exchange Act verbatim when it
drafted [7 U.S.C. § 21].”). Compare 15 U.S.C. § 78s(d)(2) (permitting Secu‐
rities Exchange Commission review of SRO disciplinary actions for “any
person aggrieved”), with 7 U.S.C. § 21(h)(2) (permitting CFTC review of
SRO disciplinary actions for “any person aggrieved”).
29 See In re Series 7 Broker Qualification Exam Scoring Litig., 548 F.3d 110,
114 (D.C. Cir. 2008) (determining preemption applies under the Securi‐
ties Exchange Act where “Congress created a self‐contained process to
review and remedy [] complaints”); Barbara v. NYSE, 99 F.3d 49, 59 (2d
Cir. 1996) (“Furthermore, allowing suits against the Exchange arising out
of the Exchange’s disciplinary functions would clearly stand as an obsta‐
cle to the accomplishment and execution of the full purposes and objec‐
tives of Congress … .” (internal quotation marks omitted)), abrogated on
other grounds by Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, 136
S. Ct. 1562 (2016).
30 FINRA is an SRO operating under the oversight of the Securities Ex‐
change Commission.

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24 No. 18‐1914
es. Id. at 1272–73.
31 After removal to federal court, the district
court dismissed the case, finding that FINRA is absolutely
immune from damages claims arising from the exercise of its
regulatory functions and that there was no private cause of
action. Turbeville v. FINRA, No. 8:15‐CV‐2920‐T‐30EAJ, 2016
WL 501982, at *4–5 (M.D. Fla. Feb. 9, 2016). The Eleventh
Circuit affirmed, determining the Securities Exchange Act
preempted these tort claims. Noting the internal appeals and
administrative‐review process set forth in the Securities Ex‐
change Act, the court explained that permitting the state
claims to go forward “implies necessarily the existence of a
private right of action against FINRA that operates parallel
to the administrative‐review processes the Act prescribes.”
Turbeville, 874 F.3d at 1276. Moreover, the statutory review
process could correct the claimed injury by “removing in‐
formation shown to be inaccurate” in the Wells notice. Id. at
1276–77. In the Eleventh Circuit’s view, the remedies pro‐
vided by the administrative‐review scheme precluded a sep‐
arate remedy under state law. Id. at 1277. It said that:
Recognizing the second set of rights and remedies
under state law Turbeville seeks would undercut the
distinctly federal nature of the Exchange Act. If ac‐
tions like Turbeville’s are permitted, fifty state courts
would be authorized to supervise FINRA’s regulatory
conduct and its application of its internal,
SEC‐approved rules through the vehicle of state tort
law. And given SROs’ front‐line role in enforcing fed‐
31 At the time he filed suit, the broker was no longer working in the secu‐
rities industry and no longer a member of a FINRA‐affiliated firm. Tur‐
beville, 874 F.3d at 1273.

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No. 18‐1914 25
eral securities laws, such review would in turn lead to
state‐court supervision of the Exchange Act’s securi‐
ties‐regulation regime writ large.
Id. The Commodity Exchange Act is a different statute, but
given the similarity of the statutes, the logic of these Securi‐
ties Exchange Act decisions applies here. Allowing suits
against the NFA arising out of the NFA’s disciplinary ac‐
tions would present a serious obstacle to the NFA’s ability to
carry out its regulatory duties, especially where there are
administrative remedies available.
Apparently recognizing the force of these cases, Effex
limits its argument. It submits only that preemption should
not apply to its claims because it is not a member of the NFA
and because its claims arise out of NFA’s “intentional ultra
vires actions to damage Effex which it cloaked in FXCM Pro‐
ceeding [sic].”
32 We do not believe that this distinction is a
principled ground that justifies a different result. At bottom,
Effex’s challenge remains a challenge to the settlement of a
disciplinary proceeding before the NFA that was within the
NFA’s jurisdiction. Effex claims, in essence, that the NFA
improperly conducted its disciplinary proceedings. It does
not matter whether Effex is a member or nonmember of the
NFA or a party or nonparty to the proceedings. Permitting a
collateral attack on those proceedings based on Effex’s tort
claims would impair the NFA’s ability to enforce its rules
and carry out its regulatory role.
Preemption does not necessarily mean that Effex has no
remedy; it means that it must look to the federally mandated
32 Appellant’s Reply Br. 28.

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26 No. 18‐1914
review scheme established by Congress. The fact that these
remedies may be different from those afforded by state law,
or inadequate by comparison, is not of consequence. Con‐
gress has the right to determine the remedies available and
the individuals who are eligible for those remedies.
33
At our invitation, 34 the CFTC filed an amicus brief outlin‐
ing its view on whether a nonparty can seek review of an
NFA disciplinary procedure or otherwise seek redress before
the Commission. The Commission submits that although
nonparties do not have a right to CFTC review of an NFA
action that implicates them, the Commission does have the
discretion to permit nonparties to obtain CFTC review in ex‐
traordinary circumstances pursuant to 17 C.F.R. § 171.14.
The district court was of the view that nonparties also have
33 Federal law does not need to provide a full portfolio of remedies when
it preempts state law. See In re Series 7 Broker Qualification Exam Scoring
Litig., 548 F.3d at 114 (noting that, although “[p]laintiffs may be troubled
by the fact that Congress’s approach does not include dam‐
age‐remedies,” “[b]y specifically adopting an appeals process which
does not provide monetary relief, Congress has displaced claims for re‐
lief based on state common law” because such a suit “is merely an ‘at‐
tempt … to bypass the Exchange Act’ and the process Congress envi‐
sioned therein” (quoting MM & S Fin., Inc. v. NASD, 364 F.3d 908, 912
(8th Cir. 2004)).
34 We invited the Commission to submit an amicus brief addressing
whether a nonparty affected by an NFA disciplinary action could seek
the CFTC’s review of that action. We thank the Commission for accept‐
ing our invitation. The parties were given an opportunity to respond to
the Commission’s submission and have submitted briefs stating their
position.

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No. 18‐1914 27
the right to CFTC review through intervention or by asking
the CFTC to review a matter sua sponte.
We do not believe it appropriate for us to delineate in
any definitive way the administrative paths that may be
open to Effex. It is not at all clear that Effex will choose to
pursue the administrative remedies that may be open to it.
If, on reflection, Effex does pursue those remedies and then
seeks review in this court, we will have an opportunity to
address the question of remedies with the benefit of the
Commission’s views not in the abstract context of an amicus
brief but after adversary litigation.
Conclusion
For the reasons set forth in this opinion, we affirm the
judgment of the district court.
AFFIRMED

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