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Commodity Futures Trading Commission 

CEA CASES 

NAME: EDWARD R. BYER 

CITATION: 13 Agric. Dec. 873 

DOCKET NUMBER: 62 

DATE: SEPTEMBER 10, 1954 

DOCUMENT TYPE: DENIAL OF MOTION TO QUASH COMPLAINT 

AGRICULTURE DECISIONS

BEFORE THE SECRETARY OF AGRICULTURE

UNITED STATES DEPARTMENT OF AGRICULTURE

(No. 4032) 

In re EDWARD R. BYER, et als. CEA Docket No. 62. Decided September 10, 1954. 

Denial of Motion to Quash Complaint and Dismiss the Proceedings -- 

Constitutionality of Act

Where motion to quash the complaint and dismiss the proceeding asserts that 

certain sections of the act are unconstitutional due to invalid delegation of 

power, failure to grant due process, and being based on an unconstitutional act, 

held, an agency charged with administering a statute cannot be expected to hold 

the statute unconstitutional, and the motion is, therefore, denied. 

Denial of Motion to Quash Complaint and Dismiss the Proceedings -- Regulation 

under the Act

Where motion to quash the complaint and dismiss the proceeding alleges that 

regulations under the Commodities Exchange Act are void because they are 

arbitrary and not reasonably necessary, but where such regulations were issued 

pursuant to authority in the act, and after notice, hearing and findings, the 

motion is denied. 

Denial of Motion to Quash Complaint and Dismiss the Proceedings -- 

Administrative Procedure Act

Where motion to quash the complaint and dismiss the proceeding claims failure 

of compliance with section 9 (b) of the Administrative Procedure Act in that the 

licensee was not afforded an opportunity to demonstrate or achieve compliance 

before proceedings were instituted for the withdrawal, suspension, revocation, 

or annulment of its license but where the complaint repeatedly alleges that the 

violations are wilful, held, the case comes within the exceptions set forth in 

section 9 (b) of that act, and the motion is dismissed. 

Mr. Benj. M. Holstein for Commodity Exchange Authority. Mr. Mitchell Edelson,

of Chicago, Illinois, and Messrs. Clark M. Clifford and William H. Dorsey, Jr.,

of Clifford and Miller, of Washington, D. C., for respondent Edward R. Byer. 

Messrs. Johnston, Thompson, Raymond & Mayer, of Chicago, Illinois, for 

respondent Joel Starrels. James T. McKerr and Company, Mr. James T. McKerr, and 

Mr. Charles J. McKerr, of Chicago, Illinois, respondents, pro se. Mr. Arnold F. 

Shaw, of Donohue & Kaufmann, of Washington, D. C., for respondent Gilbert D. 

Mathy. Mr. G. Osmond Hyde, Referee. 

Decision by Thomas J. Flavin, Judicial Officer 

DENIAL OF MOTION TO QUASH COMPLAINT
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On August 20, 1954, G. Osmond Hyde, referee in this disciplinary proceeding 

under the Commodity Exchange Act (7 U.S.C. Chapter 1), certified to the Judicial 

Officer motions to quash the complaint and dismiss the proceeding filed by the 

respondents. The respondents have moved to quash the complaint and dismiss the 

proceeding or to require that the complaint be made more specific or for a bill 

of particulars and that time to answer the complaint be extended a reasonable 

time after disposition of the other motions. The motions filed by respondent 

Byer contain grounds in support of the motions which have been adopted in the 

motions filed by the other respondents. The respondents have asked for oral 

argument upon their motions. 

Consideration will be given herein and disposition made only of the 

respondents' motions to quash the complaint and dismiss the proceeding. Oral 

argument thereon is denied. 

The motions filed by respondent Byer contend that the complaint should be 

quashed and the proceeding dismissed because of the failure of the complaint to 

state a cause of action and for failure to comply with the Administrative 

Procedure Act. 

The motions assert that sections 4a, 4b, 4c, and 4i of the act are 

unconstitutional as invalid or improper delegations of legislative power; that 

section 6(b) of the act is unconstitutional as an invalid delegation of 

legislative power, as an improper bestowal of judicial power upon the Secretary 

of Agriculture and as otherwise violative of due process; and that the rules and 

regulations under the act fall because they are based upon an unconstitutional 

statute. 

These charges of the unconstitutionality of provisions of the act, some of 

which provisions are not involved in the proceeding, must, of course, fail in 

this proceeding. The respondents cannot expect an agency charged with 

administering a statute to hold the statute unconstitutional. Panitz et al. v. 

District of Columbia, 112 F. 2d 139 (C.A. D.C.); In re Great Western 

Distributors Inc., et al., 10 Agric. Dec. 783, 825 (10 A.D. 783, 825) (1951). 

And at any rate, we find no merit in the charges. 

The motions further contend that 17 CFR 150.1 fixing position limits and 

daily trading limits in grains under contracts for sale for future delivery on 

or subject to rules of contract markets is unreasonable and void in that it 

arbitrarily and unnecessarily interfered with the business of persons trading in 

such grains 

and is not reasonably necessary to effectuate the act. These regulations of the 

Commodity Exchange Commission were issued pursuant to authority in the act and 

after notice, hearing, findings, etc. Obviously, it takes more than the 

allegations made in motions to overthrow such regulations. 

The motions further allege a number of technical defects in the complaint. 

None of these have any substance. The complaint clearly states a cause of 

action against each and all respondents. 

The motions further urge failure of compliance with that part of section 9 

(b) of the Administrative Procedure Act which provides for opportunity to 

demonstrate or achieve compliance before proceedings are instituted for the 

withdrawal, suspension, etc., of any license. If this provision of the 

Administrative Procedure Act applies to this proceeding, specific exceptions are 

made for "wilfulness" and cases "in which public health, interest or safety 

requires otherwise . . . ." The complaint in this proceeding repeatedly alleges 

that the violations charged are "wilful." 

After examining all the bases advanced in the motions to quash the complaint 

and dismiss the proceeding, such motions are denied. 

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