Document: 519 U.S. 465117 S.Ct. 913137 L.Ed.2d 93 William C. DUNN and Delta Consultants, Inc., Petitioners,v.COMMODITY FUTURES TRADING COMMISSION et al. No. 95-1181. Supreme Court of the United States Argued Nov. 13, 1996. Decided Feb. 25, 1997. Syllabus * The Commodity Futures Trading Commission (CFTC) brought this action, claiming that petitioners solicited investments in operated a fraudulent scheme involving transactions foreign currency options violation Exchange Act (CEA) CFTC regulations. Petitioners allegedly engaged by contracting directly with international banks others, rather than using regulated exchange or board trade. This is known as trading "off-exchange'' "over-the-counter'' market. Both their customers suffered heavy losses. District appointed temporary receiver to take control petitioners' property, rejecting defense were exempt from CEA under so-called "Treasury Amendment,'' which excepts "transactions currency'' unless they involve sale "for future delivery'' "conducted on trade.'' Appeals affirmed. Held: Treasury Amendment exempts regulation off-exchange options. Options (transactions buyer purchases right, but not obligation, buy sell an agreed amount commodity at set rate any time prior option's expiration) like those issue here are plainly within statute's meaning. persuaded CFTC's arguments support narrower reading would futures contracts (agreements specified quantity particular price for delivery date) without exempting normal last-quoted phrase encompasses all fungible good whose fluctuating market provides motive trading. Reading text include only actual purchase currency, urges, violates ordinary meaning key word "in.'' On reasoning, exemption's application could be sustained, clear contravention Congress' intent regulation. interpretation also render provision mere surplusage, supported Amendment's legislative history. Given history evolving congressional area, it natural read exemption complete exclusion regulatory scheme, except extent proviso trade'' qualifies exclusion. Contrary position, there little suggest elsewhere Congress used term "involving'' describe options, "in'' indicate does aid cause because broad both faithful contemporary legal context amendment was drafted. favoring each side important public policy dispute over whether should best addressed Congress, Courts. Pp. ___-___. 58 F. 3d 50, reversed remanded. STEVENS, J., delivered opinion Court, REHNQUIST, C.J., O'CONNOR, KENNEDY, SOUTER, THOMAS, GINSBURG, BREYER, JJ., joined. SCALIA, filed concurring part judgment. Gary D. Stumpp, New York City, petitioners. Jeffrey P. Minear, Lexington, VA, respondents. Justice STEVENS Court. 1 question presented has authorized (CFTC Commission) regulate currency. 2 action 1994, alleging that, beginning 1992, (CEA), 7 U.S.C. §1 seq., regulations.1 App. 10. See §6c(b); 17 CFR §32.9 (1996).2 complaint, affidavits, declarations submitted told funds invested complex strategies various currencies. 8. apparently did fact engage many such transactions. Ibid.; F.3d 51 (C.A.2 1995). To do so, contracted others making use In parlance business, traded (OTC) market.3 Ibid. No ever sold customers. However, positions tracked through internal accounts, investors provided weekly reports showing putative status holdings. Id., 51-52. Subsequently, commenced these proceedings. 3 Rejecting CEA, property benefit Pet. Cert. 5b-6b. Relying circuit precedent,4 acknowledging conflict another Circuit,5 F.3d, 54. We granted certiorari resolve conflict. 517 ____, 116 1846, 134 947 (1996). For reasons follow, we reverse remand further II 4 outcome case dictated Amendment'' CEA. 88 Stat. 1395, §2(ii). have previously reviewed generally described how authorizes "volatile esoteric'' commodities. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 353, 356, 357-367, 102 1825, 1828-1834, 72 182 (1982). As 1974 amendments created dramatically expanded coverage statute nonagricultural commodities "in presently dealt in,'' see §2 (1970 ed., Supp. IV), enacted following exemption, come Amendment'': 5 "Nothing chapter shall deemed govern way applicable security warrants, rights, resales installment loan contracts, repurchase government securities, mortgages mortgage commitments, thereof conducted §2(ii) (emphasis added). 6 narrow must decide italicized ("transactions currency'') includes An option, understood trade, transaction seller consideration expiration.6 think plain statute. advanced date)7 III " [A]bsent "indication doing so frustrate Congress's intention yield patent absurdity, our obligation apply wrote it.''' Hubbard States, 514 115 1754, 1759, 131 779 (1995) (quoting BFP Resolution Trust Corporation, 511 531, 570, 114 1757, 1778, 128 556 (1994) (SOUTER, dissenting)). argues, held, option itself just contract right date. Brief Respondent 30-31; 53. Hence, submits "actual exercise (i.e., currency)'' itself. 31. That seems quite unnatural us, decline adopt it. 8 more "in,'' usually thought "synonymous [the] expressions regard to,' "respecting,' [and] "with respect to.''' Black's Law Dictionary 758 (6th ed.1990); Babbitt Sweet Home Chapter, Communities Great Ore., 515 _________, 2407, 2412-2413, 132 597 (1995). There can no "respecting'' equally matter purposes Amendment. 9 Indeed, adopting Commission's deprive principal effect intended. acknowledges fall squarely 30, one primary goals.8 Yet reasoning sustained. 10 A understands option. argues creates date, somehow clearly underlying currencies generates transaction. 30-32. wholly unpersuasive. changes hands made. And, existence guarantee will actually exchanged. concedes most cases, "extinguished before entry into offsetting contract.'' 30 (citing T. Snider, Regulation Commodities Markets §2.05 (2d ed.1995) (hereinafter Snider)); Munn Garcia 414. Adopting therefore place outside intent. 11 Furthermore, leave significant all, limit scope "forward contracts'' anticipate "spot transactions'' near-term delivery).9 us understand term. But neither type subject intensive passage. IV) ("term "future delivery,' chapter, cash deferred shipment delivery''); Snider §9.01; J. Markham, History Its 201-203 (1987). Our consonant doctrine enactments construed provisions surplusage. Babbitt, U.S., S.Ct., 2413, (noting "reluctance treat statutory terms surplusage''); Mountain Telephone Telegraph Co. Pueblo Santa Ana, 472 237, 249, 105 2587, 2594, 86 168 (1985). 12 Finally, including consistent purpose enacting Although drafted thriving place, closely related had yet developed. City Bar Association Committee Regulation, Evolving Regulatory Framework Foreign Currency 18, 23 (1986). suggests intended CEA's coverage. 41-42. strongly contrary provide general sophisticated trading, developed entirely free supervision laws. 13 explaining Amendment, Senate Report notes "provides inter-bank financial instruments regulation.'' S.Rep. 93-1131, 93rd Cong. 2nd Sess. (1974) U.S.Code Admin.News 1974, pp. 5843, 5848.10 Elsewhere, again explains terms-without reference distinction between futures-that legislation: 14 "included clarify bill enumerated formally organized exchange. great deal carried out informal network tellers. believes properly supervised bank agencies therefore, legislation unnecessary.'' 23. 15 Similarly, Department Chairman relevant letter original source While focusing need regulation, points "participants informed institutions,'' "the [CFTC] expertise banking function confuse already highly business sector.'' 50 (letter Donald Ritger, Acting General Counsel). explained "new limitations restrictions adverse impact usefulness efficiency markets traders investors.'' 16 OTC Department's express desire equal force today. now same markets, entities, similar purposes. Amici Curiae 19. suggestion, fulfilled giving language rejoins light regulating strictly futures. §§7.03-7.04; 38-39. motivated view lend themselves readily schemes contracts. acted reasonably consistently practice differently may true, give slight credence historical considerations, unsupported language, evidence evocative concerns focused legislators who suggests-contrary view-that relating trade ambit. enactment been unregulated 18 area. successively broadening addition legislation.11 It except, course, IV 19 buttress its statute, referred other "more encompassing terminology,'' what commodity, reserved futures, spot transactions, forward 30-33. Not unlikely subtle method drawing distinctions, so. 20 far consistent. Most strikingly, completely eviscerates argument. After setting forth exemptions for, inter alia, currency,'' contains sweeping back "such involv[ing] noted, agrees subset currency.'' uses "involve'' make inapplicable contradicts versus distinction. expect refer futures.'' instead, very respondent claims embraces distinction, weighs heavily against Congress.12 21 aids cause. sweeps jurisdiction otherwise "involve Since refers mentioning cover cannot agree anomaly. satisfied anomaly avoided broadly narrowly. 22 proviso's fairly accommodates inclusion proviso, [of currency] delivery.'' Because convey some expiration, "involv[ing]'' delivery. Thus, covered proviso. possible literal text, intend construction required "contemporary context'' Cannon University Chicago, 441 677, 699, 99 1946, 1958, 60 560 (1979); Massachusetts Morash, 490 107, 115, 109 1668, 1673, 104 98 (1989) ""in expounding [are] . guided single sentence member sentence, look whole law, object policy''') Pilot Life Ins. Dedeaux, 481 41, 51, 107 1549, 1554, 95 39 (1987)). calls attention statements 1982 CEA,13 indicating drafters believed authority "when national securities exchange.'' 97-384, p. Those statements, best, might "legislative dicta'' merely resolved Securities concerning respective §10.24. made change law "dicta'' position advocates, sheds authors adopted eight years earlier. See, e.g., Mackey Lanier Collection Agency Service, 486 825, 839-840, 108 2182, 2191, 100 836 (1988).14 V 24 Underlying recognize dispute-with substantial side. Petitioners, amici, Department, argue if treated increased costs associated unnecessary well drive States.15 responds limited necessary, them, particularly susceptible fraud abuse carefully policed. 26, 49. acknowledges, however, courts. Rutherford, 442 544, 555, 2470, 2477, 61 68 (1979). Lacking assess competing claims, note "a statute'' "yiel[d] results manifestly unreasonable attributed design.'' 25 judgment reversed, remanded proceedings opinion. 26 ordered. 27 28 I it,'' ante, __, principle contradicted, Court's extensive discussion history, n. 8, __-__, though necessary confirm "plain language,'' (worse) power overcome join portions opinion, achieve nothing useful sow confusion law. syllabus constitutes prepared Reporter Decisions convenience reader. Detroit Timber Lumber Co., 200 321, 337, 282, 287, L.Ed. 499. complaint names defendants Dunn, Options, Ltd., Nopkine Ltd. 6-7. Only Dunn Consultants here. provides: "No person offer enter into, execution of, character commonly as, "option' rule, order prohibiting allowing conditions prescribe.'' §6c(b). regulations unlawful indirectly [t]o cheat defraud attempt person; false report statement entered record thereof; [or] deceive means whatsoever connection confirmation transaction.'' amici participants "highly evolved, sophisticated'' "commercial investment dealers brokerage companies, corporations, money managers (including pension, mutual fund pool managers), advisors, insurance governments central banks.'' These serve variety functions, providing ready access businesses hedge risk movements. 8-9. 53 1995) Comm'n American Bd. Trade, 803 F.2d 1242 1986)). 54 Salomon Forex, Tauber, 966 (C.A.4 1993), cert. denied, 1031, 1540, 192 (1994)). G. Garcia, Encyclopedia Banking Finance 736 (8th ed.1983) Garcia); Luca, Global 243 Luca). Participants "put,'' "call.'' 737; Luca 270, 272. traded, values vary depending upon expiration. 5, 5. 414; suggestion dramatic expansion federal expressed committee development lead, unintended 50-51 ("The feels exchanges, new agency'') tracks almost verbatim proposed cf. id., included respond concerns. correct reject Chicago Mercantile Amicus 17-18; Board Trade §9.01 (defining contracts''). Conference interbank H.R.Rep. 93-1383, 35, 5894, 5897. Grain Act, 1922 authorize Secretary Agriculture supervise grain "contract markets,'' defined "wheat, corn, oats, barley, rye, flax, sorghum.'' 42 998. 1936 add agricultural commodities, cotton, rice, butter, eggs, Irish potatoes. Ch. 545, 49 1491. —(The contrast title Act-"Commodity Act''-and predecessor-"Grain Act''-suggests easy identify regulates). 1968 expanded, livestock products. 82 26. and, appropriately, replaced commission "Commodity.'' point [t]ransactions "futures.''' §5 Had meant maintain expected Legislature words loosely informs (but "involving'') "transaction[s] §6c(f) If spoken manner suggests, instead option.'' jurisdictional fails presses. "shall exclusive agreements ), §2(i) gives §10.11, keeping scheme. 32. more. Among things, explicitly grants "transactio[n] delivery,'' minimum insists 1982, Tit. I, §102, 96 2296, §6c(f). Though brief disclaims it, 48, oral argument requested first deference agency "charged administering'' Smiley Citibank (South Dakota), N. A., 1730, 1733, 135 (1996); Tr. Oral Arg. 54; Chevron U.S.A. Natural Resources Defense Council, 467 837, 2778, 81 694 (1984). principles applicable, unsure owed deference. concedes, taken different statute-one here-to invoked. reasonable charge Treasury, Commission, administering dimensions aptly named specifically behest confine activities. Cf. Smiley, 1733 (explaining arises background presumptions intent); Martin Occupational Safety Health Review Comm'n, 499 144, 157-158, 111 1171, 1179, 113 117 (1991) (allocating "authoritatively interpret regulations'' after assessing "available indicia intent''). "resolve difficult issues regarding lurking circumstances.'' Estate Cowart Nicklos Drilling 505 469, 477, 112 2589, 2595, 120 379 (1992). whole, expresses Co ngress' intention'' administrative improper. Dole Steelworkers America, 494 42, 110 929, 938, (1990). 23-25; Credit Lyonnais 3; 6; 25.

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