Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-00-05266/USCOURTS-caDC-00-05266-0/pdf.json

Parties Involved:
Federal Trade Commission
Appellee
Ken Roberts Company
Appellant
Ken Roberts Institute, Inc.
Appellant
Managed Funds Association
Amicus Curiae for Appellant
Ted Warren Corporation
Appellant
United States Chart Company
Appellant

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 4, 2001 Decided December 28, 2001

No. 00-5266

Federal Trade Commission,

Appellee

v.

Ken Roberts Company, et al.,

Appellants

Appeal from the United States District Court

for the District of Columbia

(No. 00ms00204)

Neil A. Goteiner argued the cause for appellants. With

him on the briefs was Richard E. Nathan.

Lawrence DeMille-Wagman, Attorney, Federal Trade

Commission, argued the cause for appellee. With him on the

brief was John F. Daly, Assistant General Counsel.

John G. Gaine was on the brief for amicus curiae Managed Funds Association.

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Before: Edwards, Rogers, and Tatel, Circuit Judges.

Opinion for the court filed by Circuit Judge Edwards.

Edwards, Circuit Judge: The appellants - Ken Roberts

Company ("KRC"), Ken Roberts Institute, Inc. ("KRI"),

United States Chart Company ("Chart"), and Ted Warren

Corporation ("Warren") (collectively "Ken Roberts") - sell

instructional materials that purport to teach would-be investors how to make money investing in the commodities and

securities markets. In an effort to determine whether Ken

Roberts had engaged in deceptive advertising or selling of

goods or services in violation of sections 5 and 12 of the

Federal Trade Commission Act, 15 U.S.C. ss 45, 52, the

Federal Trade Commission ("FTC") issued civil investigative

demands ("CIDs") requiring Ken Roberts to produce documents and to respond to interrogatories relating to the companies' business practices. The appellants answered some of

the interrogatories, but declined to respond to most of what

had been requested. Ken Roberts then filed a Petition to

Quash with the FTC. The appellants claimed that, because

the regulation of their advertising practices was subject to the

exclusive jurisdiction of the Commodities Futures Trading

Commission ("CFTC") or the Securities and Exchange Commission ("SEC"), the FTC lacked authority to investigate.

The FTC denied the petition and then filed its own petition in

District Court seeking an order to enforce the CIDs. On

May 26, 2000, the District Court granted the FTC's petition

and ordered Ken Roberts to comply with the CIDs. The

appellants now seek review of that judgment.

Ken Roberts contends that, pursuant to the express terms

of the Commodity Exchange Act ("CEA"), the CFTC has

exclusive jurisdiction to regulate the disputed business practices of Ken Roberts Company and United States Chart

Company. Ken Roberts claims further that, because Ken

Roberts Institute and Ted Warren Corporation are subject to

pervasive regulation by the SEC under the Investment Advisors Act ("IAA"), the FTC's authority to investigate these

companies has been impliedly preempted. Therefore, according to Ken Roberts, because the FTC is without authority to

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regulate the cited advertising and promotional practices of

Ken Roberts, the CIDs cannot be sustained. We disagree.

With rare exceptions (none of which applies here), a subpoena enforcement action is not the proper forum in which to

litigate disagreements over an agency's authority to pursue

an investigation. Unless it is patently clear that an agency

lacks the jurisdiction that it seeks to assert, an investigative

subpoena will be enforced. Whatever the ultimate merit of

Ken Roberts' preemption arguments - and we believe they

have little - appellants cannot overcome the long-standing

doctrine that precludes courts from entertaining challenges to

the jurisdiction of administrative agencies during subpoenaenforcement proceedings. Because under no reasonable

reading of the CEA or the IAA does either of those statutes

manifestly strip the FTC of its broad power over deceptive

advertising, we affirm the District Court's decision that appellants must comply with the FTC's compulsory process.

I. BACKGROUND

KRC and Chart market courses in commodities trading and

are therefore subject to the jurisdiction of the CFTC. KRI

and Warren offer instruction in securities trading, which

places them within the regulatory ambit of the SEC. These

companies rely heavily on Internet advertising: their websites feature grandiose claims about potential earnings by

investors and testimonials from persons who have allegedly

benefitted from Ken Roberts' instructional materials.

Since 1994, the CFTC has carefully monitored the activities

of KRC to determine whether the company had violated

various sections of the CEA, particularly the statute's antifraud provisions, 7 U.S.C. s 6o (1999). In at least four

separate investigations, the Commission sought to determine

whether KRC's advertising claims, both in print and, more

recently, on-line, can be substantiated. To this end, the

CFTC repeatedly used its subpoena power to compel KRC to

turn over business records and detailed documentation supporting the promotional claims that it has made. The company always has responded to CFTC subpoenas, and never has

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been sanctioned or forced to admit any wrongdoing. While

one investigation did lead to a consent decree, pursuant to

which KRC and Chart registered with the CFTC as commodity trading advisers ("CTAs"), see 7 U.S.C. s 1a(5), the Commission has never taken enforcement action against KRC.

In 1999, the FTC, in conjunction with the CFTC and the

SEC, announced a coordinated investigation of deceptive day

trading promotions. In early September 1999, the FTC

formally authorized the use of compulsory process to determine whether various on-line merchants were engaged in

deceptive marketing practices. With an investigative agenda

aimed at high-risk/high-yield investment activity and suspicious Internet advertising, the Commission soon focused on

Ken Roberts. On September 30, 1999, the FTC issued CIDs

requesting a wide variety of information through written

interrogatories and documents relating to Ken Roberts' business practices. The CIDs were designed to reveal whether

the companies had mislead the public in promoting their

instructional courses. To this end, the Commission demanded a full accounting of the companies' sales volume, as well as

evidence underlying the claims made in their testimonials and

other advertising materials.

Appellants resisted complying fully with the CIDs, believing them to be duplicative of the subpoenas that had already

been issued by the CFTC and beyond the FTC's power to

issue. Thus, Ken Roberts responded only to some of the

interrogatories and produced none of the requested documents. They then filed an administrative petition with the

FTC to quash the CIDs. In that proceeding, Ken Roberts

argued, as they do here, that the CEA and the IAA deprive

the Commission of its jurisdiction to regulate - and therefore

to investigate - deceptive advertising practices of, respectively, CTAs and investment advisers. The FTC rejected this

petition, holding that the subpoenas were issued as part of a

lawful investigation, one fully authorized by the Federal

Trade Commission Act ("FTC Act"), 15 U.S.C. s 41 et seq.

(1997), and not foreclosed by any rival regulatory statute.

See In re Petition of The Ken Roberts Co. et al. to Quash

Civil Investigative Demands, File No. 9923259 (Feb. 25, 2000),

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reprinted in Joint Appendix ("J.A.") 72. When Ken Roberts

persisted in refusing to comply with the CIDs, the FTC

petitioned the District Court to compel enforcement pursuant

to 15 U.S.C. s 57b-1(e). In a brief order, the District Court

granted the agency's petition to enforce. See FTC v. Ken

Roberts Co., Order, Misc. No. 00-204 (May 26, 2000), reprinted in J.A. 248. Ken Roberts now appeals.

II. DISCUSSION

Appellants ask this court to hold that the jurisdictionconferring provisions of the CEA and the IAA preempt - the

former expressly, the latter implicitly - the jurisdiction that

the FTC would otherwise possess over appellants' allegedly

deceptive marketing of their investor-training courses.

Though the nature of our analysis obliges us to investigate

these questions, we need not answer them definitively, for we

have concluded that Ken Roberts' challenge is premature.

A. Jurisdictional Challenges to Agency Subpoenas

The threshold issue in this case is whether the appellants

may raise their challenge to the Commission's jurisdiction

now, or instead whether they are obliged to await an actual

enforcement action. In upholding the judgment of the District Court, we are governed by the long-standing doctrine

that administrative agencies must be given wide latitude in

asserting their power to investigate by subpoena. As the

Second Circuit has noted:

[A]t the subpoena enforcement stage, courts need not

determine whether the subpoenaed party is within the

agency's jurisdiction or covered by the statute it administers; rather the coverage determination should wait until

an enforcement action is brought against the subpoenaed

party.

United States v. Construction Prods. Research, Inc., 73 F.3d

464, 470 (2d Cir. 1996).

The Supreme Court first articulated this doctrine in Endicott Johnson Corp. v. Perkins, 317 U.S. 501 (1943). Endicott

established that, as a general proposition, agencies should

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remain free to determine, in the first instance, the scope of

their own jurisdiction when issuing investigative subpoenas.

The Court therefore held that the Secretary of Labor was

entitled to enforce a subpoena for payroll records issued in an

effort to determine whether Endicott Johnson had run afoul

of the Walsh-Healey Public Contracts Act. The District

Court had scheduled a trial to determine whether Endicott

was covered by the Act, but the Supreme Court rejected this

approach. Rather, the Court held that, because "[t]he evidence sought by the subpoena was not plainly incompetent

or irrelevant to any lawful purpose of the Secretary in the

discharge of her duties under the Act ... it was the duty of

the District Court to order its production for the Secretary's

consideration." Id. at 509 (emphasis added).

Following Endicott, courts of appeals have consistently

deferred to agency determinations of their own investigative

authority, and have generally refused to entertain challenges

to agency authority in proceedings to enforce compulsory

process. See, e.g., United States v. Sturm, Ruger & Co., 84

F.3d 1, 5 (1st Cir. 1996) ("We have repeatedly admonished

that questions concerning the scope of an agency's substantive authority to regulate are not to be resolved in subpoena

enforcement proceedings."); Construction Prods. Research,

73 F.3d at 468-73 (enforcing subpoena issued by Nuclear

Regulatory Commission over objection that the subject matter of the agency's investigation was reserved by law for the

Department of Labor); EEOC v. Peat, Marwick, Mitchell &

Co., 775 F.2d 928, 930 (8th Cir. 1985) ("The initial determination of the coverage question is left to the administrative

agency seeking enforcement of the subpoena."); Donovan v.

Shaw, 668 F.2d 985, 989 (8th Cir. 1982) ("It is well-settled

that a subpoena enforcement proceeding is not the proper

forum in which to litigate the question of coverage under a

particular federal statute."); FTC v. Ernstthal, 607 F.2d 488,

490 (D.C. Cir. 1979) (acknowledging a concession that "an

individual may not normally resist an administrative subpoena on the ground that the agency lacks regulatory jurisdiction

if the subpoena is issued at the investigational stage of the

proceeding").

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Subpoena enforcement power is not limitless, however. In

United States v. Morton Salt Co., 338 U.S. 632, 652 (1950),

the Court emphasized that a subpoena is proper only where

"the inquiry is within the authority of the agency, the demand

is not too indefinite and the information sought is reasonably

relevant." Accordingly, "there is no doubt that a court asked

to enforce a subpoena will refuse to do so if the subpoena

exceeds an express statutory limitation on the agency's investigative powers." Gen. Fin. Corp. v. FTC, 700 F.2d 366, 369

(7th Cir. 1983). Thus, a court must "assure itself that the

subject matter of the investigation is within the statutory

jurisdiction of the subpoena-issuing agency." FEC v. Machinists Non-Partisan Political League, 655 F.2d 380, 386

(D.C. Cir. 1981); see also FTC v. Texaco, Inc., 555 F.2d 862,

879 (D.C. Cir. 1977) (en banc) (administrative subpoenas

should be enforced unless the information sought is irrelevant

to "a lawful purpose of the agency"). These cases amply

demonstrate that while the courts' role in subpoena enforcement may be a "strictly limited" one, it is neither minor nor

ministerial. See FTC v. Anderson, 631 F.2d 741, 744 (D.C.

Cir. 1979).

In adhering to the foregoing principles, we have held that

enforcement of an agency's investigatory subpoena will be

denied only when there is "a patent lack of jurisdiction" in an

agency to regulate or to investigate. See CAB v. Deutsche

Lufthansa Aktiengesellschaft, 591 F.2d 951, 952 (D.C. Cir.

1979); see also Gov't of Territory of Guam v. Sea-Land

Servs., Inc., 958 F.2d 1150, 1155 (D.C. Cir. 1992); Ernstthal,

607 F.2d at 492 (declining to relax "the well-established

barrier against ruling on the agency's regulatory jurisdiction

in subpoena enforcement proceeding ... where the absence

of jurisdiction is not patent, and there are no allegations of

agency bad faith"). As the following discussion will demonstrate, there is no "patent lack of jurisdiction" in this case.

B. Preemption of the FTC's Power to Regulate Deceptive Advertising

On its own terms, the FTC Act gives the FTC ample

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ered, to regulate appellants' advertising practices. See 15

U.S.C. ss 45(a) (allowing the Commission to prevent unfair

competition and deceptive acts or practices in or affecting

commerce); 52-54 (allowing the Commission to regulate and

enjoin false advertising); 57b-1(c) (allowing the Commission

to issue CIDs to investigate possible s 45 violations). Therefore, the FTC is entitled to have its subpoenas enforced

unless some other source of law patently undermines these

broad powers. Appellants contend that two federal statutes

have this effect. KRC and Chart, who sell courses in commodities investing, argue that the 1974 amendments to the

Commodity Exchange Act expressly preempted the FTC's

jurisdiction over their activities as registered CTAs. KRI

and Warren, who sell courses in securities investing, argue

that the Investment Advisers Act impliedly preempts the

Commission's regulatory power over their advertisements.

We consider these contentions in turn, and conclude that

neither has merit.

1. Appellants' Claim of Express Preemption Pursuant

to the Commodity Exchange Act

Though Congress has long sought to regulate the futures

market, the Commodity Futures Trading Commission is not

very old. The first federal statute dealing with commodities

trading, the 1921 Future Trading Act, was declared unconstitutional by the Supreme Court , see Hill v. Wallace, 259 U.S.

44 (1922), and quickly replaced by the Grain Futures Act,

which the Court upheld, see Bd. of Trade of City of Chicago v.

Olsen, 262 U.S. 1 (1923). In 1936, this latter enactment was

amended and renamed the Commodity Exchange Act. That

initial version of the CEA delegated certain regulatory responsibilities to a commission composed of the Attorney

General, along with the Secretaries of Agriculture and Commerce. See Merrill Lynch, Pierce, Fenner & Smith v. Curran, 456 U.S. 353, 360-63 (1982); S. Rep. No. 93-1131, at 13-14

(1974), reprinted in 1974 U.S.C.C.A.N. 5843, 5855.

It was not until 1974, however, that the CFTC as it exists

today was born. After considerable deliberation, Congress

enacted the Commodity Future Trading Commission Act

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("CFTCA"), an extensive overhaul of the CEA that both

expanded the statute's coverage and dramatically altered its

enforcement scheme. Curran, 456 U.S. at 365-66. Most

importantly, the CFTCA for the first time brought all commodities under federal regulation; the earlier statutes had

covered only enumerated agricultural goods that in no way

represented the vast array of products that were actually

being traded on futures markets. See H.R. Rep. No. 93-963,

at 38 (1974). The Commission spawned by the 1974 statute

was an independent regulatory agency invested with broad

powers to regulate futures trading and commodities exchanges. See S. Rep. No. 93-1131, at 2-3, 1974 U.S.C.C.A.N.

at 5844-45; CFTC v. Schor, 478 U.S. 833, 836 (1986) (describing the "sweeping authority" entrusted to the CFTC). Congress authorized the CFTC to bring an action for injunctive

relief in federal district court against anyone violating the

CEA or the regulations promulgated thereunder. See Commodity Future Trading Commission Act of 1974, Pub. L. No.

93-463, s 211, 88 Stat. 1402 (1974) (codified as amended at 7

U.S.C. s 13a-1).

Moreover, and most important to the present case, the new

agency was invested with exclusive jurisdiction over certain

aspects of the futures trading market. See id., s 201, 88

Stat. 1389 (codified as amended at 7 U.S.C. s 2(a)(1)(A)

(2001)). The aim of this provision, according to one of its

chief sponsors, was to "avoid unnecessary, overlapping and

duplicative regulation," especially as between the Securities

and Exchange Commission and the new CFTC. 120 Cong.

Rec. H34,736 (Oct. 9, 1974) (remarks of House Agriculture

Committee Chairman Poage); Philip F. Johnson, The Commodity Futures Trading Commission Act: Preemption as

Public Policy, 29 Vand. L. Rev. 12-13; 16-17 (1976).

In determining what Congress intended when it passed

s 2(a)(1)(A), we must focus on the precise text of the enacted

legislation. See Carter v. United States, 530 U.S. 255, 271

(2000) ("In analyzing a statute, we begin by examining the

text, not by psychoanalyzing those who enacted it.") (internal

citations omitted). Section 2(a)(1)(A) reads as follows:

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The Commission shall have exclusive jurisdiction ...

with respect to accounts, agreements (including any

transaction which is of the character of, or is commonly

known to the trade as, an "option", "privilege", "indemnity", "bid", "offer", "put", "call", "advance guaranty", or

"decline guaranty"), and transactions involving contracts of sale of a commodity for future delivery, traded

or executed on a contract market designated or derivatives transaction execution facility registered pursuant to

section 7 or 7a of this title or any other board of trade,

exchange, or market, and transactions subject to regulation by the Commission pursuant to section 23 of this

title. Except as hereinabove provided, nothing contained

in this section shall (I) supersede or limit the jurisdiction

at any time conferred on the Securities and Exchange

Commission or other regulatory authorities under the

laws of the United States or of any State, or (II) restrict

the Securities and Exchange Commission and such other

authorities from carrying out their duties and responsibilities in accordance with such laws. Nothing in this

section shall supersede or limit the jurisdiction conferred

on courts of the United States or any State.

7 U.S.C. s 2(a)(1)(A) (emphasis added). Appellants (KRC

and Chart) contend that this provision precludes the FTC

from regulating their activities as registered CTAs, because

the statute gives the CFTC "exclusive jurisdiction" over

"accounts, agreements ... and transactions involving contracts of sale of a commodity for future delivery." In other

words, Ken Roberts claims that the advertising and promotion of educational materials that purport to teach investors how to get rich trading futures are "transactions involving contracts of sale of a commodity for future delivery."

Thus, appellants would have us construe this phrase to confer

exclusive jurisdiction on the CFTC over the marketing practices of firms that sell not commodities themselves, but rather

instruction in commodities trading. We find this interpretation of the Commission's exclusive jurisdiction to be farfetched, to say the least.

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On its face, s 2(a)(1)(A) confers exclusive jurisdiction to the

CFTC over a limited, discrete set of items related to the

making of futures contracts. Specifically, these are (1) "accounts ... involving contracts of sale of a commodity for

future delivery," (2) "agreements" involving the same, (3)

"transactions" involving the same, and (4) "transactions subject to regulation by the Commission pursuant to section 23 of

this title" (dealing with so-called "margin" or "leverage"

contracts). It is certainly not obvious that the advertising at

issue in this case fits in any of these categories. "Transactions," broadly construed, is perhaps appellants' best bet.

Yet, it strains common parlance to construe "transactions

involving contracts of sale of a commodity" to include the

marketing practices of a firm that does not buy and sell

futures, but rather merely instructs others how to do so. As

it is generally understood, the word "transactions" conveys a

reciprocity, a mutual exchange, which seems absent from the

allegedly deceptive advertising materials that the FTC seeks

to investigate in this case. See Webster's Third New International Dictionary 2425-26 (defining "transaction" as, inter

alia, "a business deal" and "a communicative action or activity involving two or more parties or two things reciprocally

affecting or influencing each other").

Appellants seek to overcome this impression by pointing to

a separate provision in the statute that uses "transactions" in

a different, and more expansive, way. As part of the 1974

overhaul of the CEA, Congress made a set of legislative

findings in which it announced that the activities of CTAs,

including "their advice, counsel, publications, writings, analyses, and reports[,] customarily relate to and their operations

are directed toward and cause the purchase of commodities

for future delivery...." 7 U.S.C. s 6l. This finding then

goes on to say that "the foregoing transactions occur in such

volume as to affect substantially transactions on contract

markets." Id. (emphases added). Ken Roberts contends

that because Congress used the term "transactions" to mean

advice, counsel, publications, etc., in s 6l, we must read that

term the same way in the exclusive jurisdiction provision in

s 2(a)(1)(A). "The rule of in pari materia - like any canon of

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statutory construction - is a reflection of practical experience

in the interpretation of statutes: a legislative body generally

uses a particular word with a consistent meaning in a given

context." Erlenbaugh v. United States, 409 U.S. 239, 243

(1972). In this case, however, appellants' attempted reliance

on the in pari materia canon of construction is entirely

unconvincing, because it proves far too much.

Appellants ignore the fact that s 6l uses the word "transactions" twice in the same sentence to mean two different

things. The second appearance of the word - "transactions

on contract markets" - cannot reasonably embrace the broad

set of activities contemplated by the first. Instead, the

second reference to "transactions" in s 6l is best understood

to refer to the actual trading of futures contracts. As such,

the in pari materia rule is of little help to appellants, for it

provides no guidance as to which construction of "transactions" the court should import from s 6l into s 2(a)(1)(A).

By contrast, when "transactions" is examined in the context

of s 2(a)(1)(A), it seems most naturally read as encompassing,

like its neighbors, a set of arrangements directly related to

the actual sale of commodities futures. In statutory interpretation, after all, words are generally known by the company

they keep. Gustafson v. Alloyd Co., 513 U.S. 561, 575 (1995)

(describing and applying the noscitur a sociis canon). And

here, because "accounts" and "agreements" seem so plainly to

denote categories of financial arrangements through which

the trading of commodities occurs or is facilitated, it makes

sense to construe "transactions" in the same way.

These terms were added to the bill that became the

CFTCA in order to extend the Commission's exclusive jurisdiction over so-called "discretionary accounts," commodity

options, and other trading agreements described in the statute. See Johnson, at 14 & n.44; H.R. Conf. Rep. No. 93-1383

(1974), reprinted in 1974 U.S.C.C.A.N 5894, 5897 ("[T]he

Commission's [exclusive] jurisdiction ... includes the regulation of commodity accounts, commodity trading agreements,

and commodity options."). Noscitur a sociis instructs us to

construe "transactions" in a similar light, as denoting a set of

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actions closely linked to the actual trading of commodities.

Under this reading, all of the categories delineated in

s 2(a)(1)(A) describe business deals that involve the buying

and selling of futures, which comports with Congress' goal of

conferring the CFTC with sole regulatory authority over

"futures contract markets or other exchanges," H.R. Conf.

Rep. No. 93-1383, 1974 U.S.C.C.A.N. at 5897 (emphasis added), or "over options trading in commodities (but not in

securities)," S. Rep. No. 93-1131, at 31, 1974 U.S.C.C.A.N. at

5870 (emphasis added).

A second problem with the broad definition of "transactions" proposed by the appellants is that it produces potentially absurd results. See Griffin v. Oceanic Contractors,

Inc., 458 U.S. 564, 575 (1982) ("[I]nterpretations of a statute

which would produce absurd results are to be avoided if

alternative interpretations consistent with the legislative purpose are available."). The first use of that word in s 6l

sweeps more broadly than just the "advice," "counsel," and

"publications" of CTAs; indeed, it includes their very "operations" as well. And an interpretation of s 2(a)(1)(A) under

which the CFTC was given exclusive authority over all CTA

"operations involving contracts of sale of a commodity," especially when coupled with the expansive reading of "involving"

urged by appellants, would seem to preclude virtually any

other government regulation affecting the futures trading

industry. It could suggest, for example, that government

agencies regulating employment relations or safety and

health would be powerless to take action against CTAs. We

do not believe that this is what Congress intended when it

enacted s 2(a)(1)(A).

As noted above, the statute's legislative history repeatedly

emphasizes that the CFTC's jurisdiction was "to be exclusive

with regard to the trading of futures on organized contract

markets." S. Rep. No. 93-1131, at 23, 1974 U.S.C.C.A.N. at

5863 (emphasis added). Indeed, as the Seventh Circuit has

recognized, the goal of the CFTCA was to bring the futures

markets "under a uniform set of regulations" and that "[o]nly

in the context of market regulation does the need for uniform

legal rules apply." Am. Agric. Movement, Inc. v. Bd. of

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Trade of City of Chicago, 977 F.2d 1147, 1155-57 (7th Cir.

1992) (relying on this legislative purpose to hold that state

common law actions against commodities brokers are

preempted only when they would "directly affect trading on

or the operation of a futures market"). It is true that the

CFTC was created to regulate all commodities and commodities trading, see Point Landing, Inc. v. Omni Capital Int'l

Ltd., 795 F.2d 415, 420-21 (5th Cir. 1986); it does not follow

from this, however, that Congress intended to preempt the

activities of all other federal agencies in their regulatory

realms. "Preemption of the regulation of the market does

not also mean preemption of all law that might involve

participants in the market." Poplar Grove Planting and

Refining Co. v. Bache Halsey Stuart Inc., 465 F. Supp. 585,

592 (D. La. 1979). Appellants' position makes no sense

insofar as it suggests that the scope of the CFTC's exclusive

jurisdiction is broader than the scope of the agency's authority to regulate under the CEA.

We will give appellants the benefit of the doubt and assume

that what they really mean to argue is that the limits of the

exclusive jurisdiction provision in s 2(a)(1)(A) is coterminous

with the limits of the CFTC's regulatory authority under the

CEA. In other words, Ken Roberts appears to assume that,

at a minimum, whatever the Commission may regulate, it

regulates exclusively. This is a specious contention. Both

the text and purpose of the statute contemplate a regime in

which other agencies may share power with the CFTC over

activities that lie outside the scope of s 2(a)(1)(A), but that

still involve the activities of commodities advisers or that

implicate other provisions of the CEA. Indeed, the inclusion

of the so-called "regulatory savings clauses," s 2(a)(1)(A)(I)-

(II), makes clear that other agencies, such as the FTC, retain

their jurisdiction over all matters beyond the confines of

"accounts, agreements, and transactions involving contracts of

sale of a commodity for future delivery." Cf. Chicago Mercantile Exch. v. SEC, 883 F.2d 537, 550 (7th Cir. 1989) (noting

that s 2 "carries no implicit preemptive force").

The imperfect overlap between s 2(a)(1)(A) and the rest of

the CEA is neatly demonstrated by the statute's antifraud

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provision, on which the CFTC's own power to investigate

appellants, which it has done since 1994, presumably rests. 7

U.S.C. s 6o makes it unlawful, inter alia, for a CTA "to

engage in any transaction, practice, or course of business

which operates as a fraud or deceit upon any client or

participant or prospective client or participant." Thus, while

the CFTC has the clear statutory authority to regulate a

CTA's deceitful "practices" - and "practices," far more so

than "transactions," comfortably describes the advertising at

issue in this case - there is no reason to think that this

authority is exclusive. A "practice" or "course of business" is

quite plainly not a "transaction" - either in life or in this

statutory provision. (Nor for that matter is it an "account"

or "agreement.") As such, a comparison of the texts of s 6o

and s 2(a)(1)(A) appears to indicate that the CFTC's authority over CTAs is broader than the substantive scope of its

exclusive jurisdiction to regulate futures and futures markets.

In sum, then, both context (textual and historical) and

common sense support a reading of the exclusive jurisdiction

provision in which the phrase "accounts, agreements, and

transactions involving contracts of sale of a commodity" does

not cover the marketing of investor-education courses that

leads only tangentially to the actual purchase of futures.

While the FTC's investigation may implicate the CEA, we

believe that it falls outside of the range of subjects described

by s 2(a)(1)(A). At the very least, the foregoing discussion

illustrates that there is no "patent lack of jurisdiction" in the

FTC to investigate or regulate in this case. Appellants'

preemption arguments are simply not compelling enough to

overcome this court's long-standing chariness about entertaining jurisdictional challenges to administrative subpoenas. Accordingly, we hold that the District Court's properly allowed

the FTC to proceed with its investigation of KRC and Chart.

2. Implied Preemption Under the Investment Advisers

Act

KRI and Warren, whose businesses involve securities rather than commodities, assert that the comprehensive scope of

the Investment Advisers Act of 1940, 15 U.S.C. s 80b-1 et

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seq. (1997), preempts the FTC's jurisdiction to regulate the

fraudulent practices of "investment advisers" such as themselves. Even if there were something to this claim, which we

doubt, it does not come close to establishing that the FTC is

manifestly without jurisdiction in regard to the subject matter of its subpoenas.

In contrast to the CEA, the IAA contains no express

exclusive jurisdiction provision. As such, the only vehicle by

which the FTC's otherwise-plenary power to investigate and

uproot unfair or deceptive trade practices could be disturbed

is through the doctrine of implied repeal. We have recognized that, where intended by Congress, " 'a precisely drawn,

detailed statute pre-empts more general remedies.' " Galliano v. U.S. Postal Serv., 836 F.2d 1362, 1367 (D.C. Cir. 1988)

(quoting Brown v. Gen. Servs. Admin., 425 U.S. 820, 834

(1976)). This can occur either where the two enactments are

in "irreconcilable conflict" or where the latter was clearly

meant to serve as a substitute for the former. Posadas v.

Nat'l City Bank, 296 U.S. 497, 503 (1936); cf. Demby v.

Schweiker, 671 F.2d 507, 513 (D.C. Cir. 1981) (Wright, J.,

concurring) (describing the two kinds of implied repeals).

Appellants contend that the antifraud provision of the IAA,

which prohibit investment advisers from engaging "in any

transaction, practice, or course of business which operates as

a fraud or deceit upon any client or prospective client," 15

U.S.C. s 80b-6(2), stands as just such a specific remedy that

displaces the more general coverage of the FTC Act.

To prevail at this stage of the litigation, KRI and Warren

must establish not merely that the IAA, properly construed,

deprives the FTC of jurisdiction, but that it does so patently.

However, the entire structure of the implied preemption

inquiry militates against such a finding in this case. Both the

Supreme Court and this court have observed that implied

repeals of one statute (or a provision in one statute) by

another are "not favored." Radzanower v. Touche Ross &

Co., 426 U.S. 148, 154 (1976) (quoting United States v. United

Cont'l Tuna Corp., 425 U.S. 164, 168 (1976)); Galliano, 836

F.2d at 1369 ("strongly disfavored"). They are recognized

only where the intention of the legislature is "clear and

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manifest." Posadas, 296 U.S. at 503; Morton v. Mancari,

417 U.S. 535, 549-50 (1974) (some "affirmative showing" of

intent to repeal is necessary).

Because we live in "an age of overlapping and concurring

regulatory jurisdiction," Thompson Med. Co. v. FTC, 791

F.2d 189, 192 (D.C. Cir. 1986), a court must proceed with the

utmost caution before concluding that one agency may not

regulate merely because another may. E.g., Galliano, 836

F.2d 1369-70 (relying on the First Amendment and the canon

of constitutional doubt in holding that the Federal Election

Campaign Act partially preempted the postal fraud prescriptions of 39 U.S.C. s 3005); see also Pennsylvania v. ICC, 561

F.2d 278, 292 (D.C. Cir. 1977) ("It is well established that

when two regulatory systems are applicable to a certain

subject matter, they are to be reconciled and, to the extent

possible, both given effect."). In this case, while it may be

true that the IAA and the FTC Act employ different verbal

formulae to describe their antifraud standards, it hardly

follows that they therefore impose conflicting or incompatible

obligations. See Radzanower, 426 U.S. at 155 (repeals only

implied to the extent necessary to make the later enacted law

work). Undoubtedly, entities in appellants' position can - and

of course should - refrain from engaging in both "unfair and

deceptive acts or practices" and "any transaction, practice, or

course of business which operates as a fraud or deceit upon a

client or prospective client." The proscriptions of the IAA

are not diminished or confused merely because investment

advisers must also avoid that which the FTC Act proscribes.

And, because these statutes are "capable of co-existence," it

becomes the duty of this court "to regard each as effective" -

at least absent clear congressional intent to the contrary.

Mancari, 417 U.S. at 551.

Appellants can point to nothing in the background or

history of the IAA that demonstrates (or even hints at) a

congressional intent to preempt the antifraud jurisdiction of

the FTC over those covered by the new statute. Nor does

the subsequent case law interpreting these statutes contain

such declarations. The closest case is perhaps Spinner Corp.

v. Princeville Develop. Corp., 849 F.2d 388, 392 n.4 (9th Cir.

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1988), which notes that the "FTC has never undertaken to

adjudicate deceptive conduct in the sale and purchase of

securities, presumably because such transactions fall under

the comprehensive regulatory umbrella of the Securities and

Exchange Commission." Based on this observation, the court

held that Hawaii's "baby FTC Act," which was patterned

after the federal statute, did not regulate the purchase and

sale of securities, despite language that would seem to include

such activity. See id. Even if we agreed with the Ninth

Circuit's dubious reasoning - which implies that because a

power has not been exercised, the power does not exist - we

simply do not think that such indicia of intent are enough to

allow us to quash the FTC's subpoenas.

In sum, then, whatever the ultimate force of arguments

about the structure of the IAA or the FTC's historical

practice regarding securities transactions, neither of these

are sufficiently forceful to deprive the Commission of its

general prerogative to determine, at least in the first instance, the scope of its own investigatory authority.

III. CONCLUSION

For the reasons given above, we hold that the FTC is

entitled to enforce its CIDs against all four appellants in this

case. Neither the Commodity Exchange Act nor the Investment Advisers Act evince an unambiguous intent to deprive

the FTC of its otherwise applicable authority to investigate

possibly deceptive advertising and marketing practices merely because those practices relate to either the commodities or

the securities business. Accordingly, the decision of the

District Court is affirmed.

So ordered.

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