Opinion ID: 478562
Heading Depth: 2
Heading Rank: 3

Heading: Defendants' Constitutional Defenses

Text: 54 Defendants contend that the district court erred in dismissing their constitutional defenses to the present action. These included principally the assertions that the present suit violates their First Amendment rights and that the Act and the Commission's regulations violate notions of substantive due process and equal protection. We conclude that the district court did not err in dismissing these claims summarily. 55 With respect to their First Amendment claim, it is not entirely clear whether defendants contend that the present suit is designed to punish them for their past efforts to have the Act amended or to silence them in the future, or both. In any event, defendants sought to support this claim by pointing to the following statement in a 1976 memorandum from one CFTC commissioner to another: 56 Economou will argue that because he is selling options on a physical commodity he is therefore not subject to the exclusive jurisdiction provisions of the CFTC. However, we will argue against this, but, even if we would fail to prevail, the end result should be the same, i.e., Economou is still subject to our regulations. Therefore, his options program should be out of business. 57 Defendants made no other factual allegations, relying solely on allegations that the district court accurately termed conclusory, vague, and general. 58 We agree with the district court that the memorandum does not appear to have any bearing on the claim that CFTC sought to interfere with defendants' First Amendment rights. It speaks solely in terms of defendants' business, the applicability of CFTC regulations to that business, the anticipated effect of those regulations, and the statutory interpretation argument Economou was expected to make. It contains no suggestion that the Commission's concern with defendants related to defendants' past or future exercise of their First Amendment rights or to any other impermissible factors. In the absence of any factual allegations as to specific instances of misconduct, the court properly dismissed the First Amendment claim. See San Filippo v. U.S. Trust Co., 737 F.2d 246, 256 (2d Cir.1984), cert. denied, 470 U.S. 1035, 105 S.Ct. 1408, 84 L.Ed.2d 797 (1985); Ostrer v. Aronwald, 567 F.2d 551, 553 (2d Cir.1977) (per curiam). 59 Nor does the fact that Economou is mentioned, as described above, in a Commission memorandum suffice to permit defendants to pursue a claim of selective prosecution, since they have failed to proffer any facts that could show that the Commission's effort to regulate defendants was based on impermissible factors. See United States v. Moon, 718 F.2d 1210, 1229 (2d Cir.1983) (factual showing required in order to obtain pretrial discovery on claim of selective prosecution), cert. denied, 466 U.S. 971, 104 S.Ct. 2344, 80 L.Ed.2d 818 (1984). 60 Defendants' contention that Secs. 4c(b) and (c) of the Act and the Commission's regulations violated their rights to substantive due process and equal protection, based on their assertion that these provisions cannot be said to be remotely related to the objective which they were intended to secure, is entirely frivolous. It has long been settled that in assessing a substantive due process attack on economic legislation, our inquiry must be restricted to the issue whether any state of facts either known or which could reasonably be assumed affords support for [the legislation]. United States v. Carolene Products Co., 304 U.S. 144, 154, 58 S.Ct. 778, 784, 82 L.Ed. 1234 (1938). Indeed, the existence of facts supporting the legislative judgment is to be presumed, for regulatory legislation affecting ordinary commercial transactions is not to be pronounced unconstitutional unless ... it is of such a character as to preclude the assumption that it rests upon some rational basis. Id. at 152, 58 S.Ct. at 783 (emphasis added). Similar considerations inform our review of a claim that regulation of commercial activities amounts to a denial of equal protection: 61 When ... economic regulation is challenged solely as violating the Equal Protection Clause, this Court consistently defers to legislative determinations as to the desirability of particular statutory discriminations.... Unless a classification trammels fundamental personal rights or is drawn upon inherently suspect distinctions such as race, religion, or alienage, our decisions presume the constitutionality of the statutory discriminations and require only that the classification challenged be rationally related to a legitimate state interest. 62