Document: 478 U.S. 833 106 S.Ct. 3245 92 L.Ed.2d 675 COMMODITY FUTURES TRADING COMMISSION, Petitioner,v.William T. SCHOR et al. CONTICOMMODITY SERVICES, INC., Petitioner, v. William and Mortgage Services of America. Nos. 85-621, 85-642. Argued April 29, 1986. Decided July 7, Syllabus Section 14 the Commodity Exchange Act (CEA) provides that any person injured by a commodity broker's violation or regulations Futures Trading Commission (CFTC) may apply to CFTC for an order directing offender pay reparations complainant enforce in federal district court. The promulgated regulation allows it proceeding adjudicate counterclaims "aris[ing] out transaction occurrence series transactions occurrences set forth complaint." Respondents filed separate complaints (later consolidated) with against petitioner futures broker (petitioner) one its employees, alleging debit balance their accounts petitioner, resulting from respondents' trading losses expenses being excess funds deposited accounts, was result petitioner's violations CEA. In meantime, diversity action Federal District Court recover balance, but, after respondents moved dismiss on ground would resolve all rights parties, voluntarily dismissed presented claims as proceeding. Administrative Law Judge (ALJ) ruled favor both counterclaims. then first time challenged CFTC's statutory authority ALJ rejected challenge, declined review decision, allowing become final. petition Appeals, which upheld decision most respects, but ordered dismissal lacked common law court held light constitutional problems posed adjudication such counterclaims, CEA should be construed authorize only arising regulations. Held: 1. empowers entertain state proceedings. Pp. 841-847. (a) While Appeals' reading permitted avoid potential Article III problem, did so doing violence statute, distinction between based statute cannot drawn statute's language history nor reconciled congressional purpose creating proceedings promote efficient dispute resolution. 841-842. (b) 8a(5) CEA, promulgate are reasonably necessary "to effectuate provisions accomplish purposes [the CEA]," clearly authorizes providing To require bifurcated examination single destroy efficacy remedy. 842-844. (c) longstanding interpretation empowering take jurisdiction over is reasonable, well within scope delegated authority, accordingly entitled considerable weight, especially where Congress has twice amended since issued counterclaim without overruling indeed explicitly affirmed dictate jurisdiction. 844-847. 2. assumption does not violate Constitution. 847-858. As personal right, III's guarantee impartial independent judiciary subject waiver. Here, indisputably waived right they have had full trial before expressly demanding proceed rather than Court. Even if there were no express waiver, election forgo seek relief constituted effective 847-850. Nor contravene nonwaivable protections affords separation powers principles. Examination scheme number factors, including extent "essential attributes judicial power" reserved courts, conversely, non-Article forum exercises range normally vested origins importance adjudicated, concerns drove depart requirements III, yields conclusion limited asserts incident willingly submitted parties initial agency impermissibly threaten institutional integrity Judicial Branch. 850-856. assuming principles federalism relevant analysis, those do invalidation fact resolved tribunal objectionable because courts can, hazard, decide under ancillary Moreover, identified historical support argument embodies compact among Framers heard adjudicated judges possessing tenure salary III. 856-858. 248 U.S.App.D.C. 155, 770 F.2d 211, reversed remanded. O'CONNOR, J., delivered opinion Court, BURGER, C.J., WHITE, BLACKMUN, POWELL, REHNQUIST, STEVENS, JJ., joined. BRENNAN, dissenting opinion, MARSHALL, joined, post, p. 859. Lawrence G. Wallace, Washington, D.C., No. 85-621. Robert L. Byman, Chicago, Ill., Leslie J. Carson, Jr., Philadelphia, Pa., cases. Justice O'CONNOR 1 question whether (CEA Act), 7 U.S.C. § seq., (CFTC Commission) reparation and, so, grant violates 2 * broadly prohibits fraudulent manipulative conduct connection transactions. 1974, "overhaul[ed]" institute more "comprehensive regulatory structure oversee volatile esoteric complex." H.R.Rep. 93-975, (1974). See Pub.L. 93-463, 88 Stat. 1389. also determined broad appropriately relatively immune "political winds sweep Washington." at 44, 70. It therefore created agency, CFTC, entrusted sweeping implement 3 Among duties assigned administration procedure through disgruntled customers professional brokers could redress brokers' Thus, 18 (1976 ed.),1 intended this administrative "inexpensive expeditious" alternative existing fora available aggrieved customers, namely, arbitration. S.Rep. 95-850, 11 (1978), U.S.Code Cong. & Admin.News 1978, pp. 2087, 2099. 41 Fed.Reg. 3994 (1976) (accompanying pursuant 14). 4 conformance goal promoting resolution, 1976 Id., 3995, 4002 (codified 17 CFR 12.23(b)(2) (1983)). This permissive rule leaves respondent free other fora. 5 instant arose February 1980, when Schor America, Inc., invoked filing ContiCommodity Services, Inc. (Conti), broker, Richard Sandor, Conti employee.2 account contained Schor's net expenses, commissions, exceeded account. alleged Conti's numerous App. Pet. Cert. 53a. 6 Before receiving notice commenced proceeding, balance. Conti-Commodity 80-C-1089 (ND Mar. 4, 1980). counterclaimed action, reiterating his charges due two occasions stay arguing continuation waste resources undue burden litigants view "[t]he . will fully respect matter action." 13. id., 19. Although suit, see 15, 16, claim way 29-32. denied violating instead insisted resulted trading, simple debt owed Schor. Comm'n, 239 159, 162, 740 1262, 1265 (1984); 8 After discovery, briefing, hearing, ruling, counterclaim. 62a. stating himself "bound published policies." 62a-63a. allowed final, 50a-52a, point Appeals Columbia Circuit. Prior oral argument, sua sponte, raised constitutionally Northern Pipeline Construction Co. Marathon Pipe Line Co., 458 50, 102 2858, 73 598 (1982), "Congress vest power adjudicate, render final judgment, issue binding orders traditional contract law, consent litigants, ordinary appellate review." Thomas Union Carbide Agricultural Products 473 568, 584, 105 3325, 3334, 87 409 (1985) (Thomas). 9 briefing "the lacks (subject competence) adjudicate" U.S.App.D.C., 161, F.2d, 1264. latter reasoned exercise gave rise "[s]erious problems" Pipeline. 174, 1277. concluded that, well-established construction, inquiry " 'fairly susceptible' [an alternative] construction," objections, thus unnecessary adjudication, avoided, Ibid. (quoting Ralpho Bell, 186 368, 380, 569 607, 619 (1977)). 10 examining legislative history, "clearly expressed" "explicit" intention give questionable 166, 178, 1269, 1281. "adopt[ed] construction avoids significant questions," 175, 1278. Because allege violations, adjudicating claims, ALJ's lack rehearing en banc divided vote. statement, Wald, joined Starr, urged granted panel's holding "resul[t] serious evisceration congressionally crafted compensating victims violations" practical effect "decimat[e]" "faster less expensive forum." 71a. certiorari, vacated remanded case further consideration Thomas, supra, 582-593, S.Ct., 3333-3339. (1985). We arbitration established Insecticide, Fungicide, Rodenticide (FIFRA), 136 generally, "Congress, acting valid I, create seemingly 'private' closely integrated into public appropriate resolution involvement judiciary." U.S., 593, 3339-3340. 12 On remand, reinstated prior judgment. reaffirmed earlier drew Commission's debit-balance proceedings; nothing altered view; again 157-158, 213-214 13 474 1018, 566, 551 (1985), now reverse. II correct understanding "[f]ederal statutes doubt constitutionality." Machinists Street, 367 740, 749, 81 1784, 1790, 1141 (1961). NLRB Catholic Bishop 440 490, 500-501, 99 1313, 1318-19, 59 533 (1979). Where "serious doubts" arise, determine "fairly possible" can avoided. Crowell Benson, 285 22, 52 285, 76 L.Ed. (1932). 750, 1790. equally true, however, canon prerogative ignore adjudication; '[a]lthough often strain construe legislation save attack, must carry perverting .' judicially rewriting it." Aptheker Secretary State, 378 500, 515, 84 1659, 1668, 992 (1964) Scales United States, 203, 1469, 1477, 782 (1961)). Heckler Mathews, 465 728, 742-743, 104 1387, 1396-97, 79 646 (1984). 15 Assuming correctly discerned "serious" problem counterclaim, we nevertheless believe mistaken finding fairly read preclude Our reveals plainly asserted proceedings, just fashion manner program. 16 Congress' evident face statute. See, e.g., 18(c) (providing taken nonresidents complainants, bond cover, inter alia, "any award respondent") (emphasis added); 18(d) ("any whose benefit [a award] made" judgment court) added). 18(e) (judicial party"). Accordingly, below seriously contest some Rather, facially unqualified reference 173, court's motivating creation find basis posited Appeals. empowered make rules as, Commission, CEA]." 12a(5) Report specifically commented unambiguously demonstrates consistent define cognizable proceedings: "Counterclaims recognized [reparations] terms circumstances prescribe regulation. intent Committee section." 23 quite apart statements intent, promulgation same complaint necessary, critical, behind 19 Reference controversy illustrates crippling restrictive typical disputes customer commodities agree customer's account, deficit success market. brings claim; amount usual case, then, "arises precisely course events" principal requires many disputed factual issues. Friedman Dean Witter [1980-1982 Transfer Binder] CCH Comm.Fut.L.Rep. ¶ 21,307, 25,538 (1981). 20 Under approach, entire forum. Consequently, typically end up court, files suit compelled either compulsory expense inconvenience litigating issues remedy litigate (Schor's motion action) ("[C]ontinuation unjust [Schor] [him], great cost expense, forums. If proceeds, defendants required [Federal Rule Civil Procedure 13(a) ] file setting already CFTC"). sum, aptly summarized, "would emasculate provide inexpensive trading." 71a (Wald, denial rehearing) ("To bifurcate, requires, main realistically mean dealing these claims. faster decimated"). 21 our discussion makes manifest, long-held position eminently reasonable authority. contemporaneous administer, weight accorded position. Chevron U.S.A. Natural Resources Defense Council, 467 837, 844-845, 2778, 2783, 694 Red Lion Broadcasting FCC, 395 367, 380-381, 89 1794, 1801, 371 (1969). defer because, view, maintained specialized contrast general jurisdiction, superior expertise. 176, 1279. reasons insubstantial. 22 First, currently force program took never rule. "inconsistency" proposed rule, comment, narrower class 40 55666-55667, 55672-55673 (1975). goes saying represent agency's considered consider interpretations settling considers sound. Indeed, antithetical comment Act, 553, tax whenever circulates proposal firmly decided put subsequently reconsiders response comment. Second, incorrect facts expertise deserving deference "statutory interpretation-jurisdictional" nature issue. An centers particular "reasonably purposes" charged enforcing; position, circumstances, substantial deference. 24 Such warranted here, declared overruled assertion 1801. revisits giving pertinent change, "congressional failure revise repeal persuasive evidence Congress." Bell Aerospace 416 267, 274-275, 94 1757, 1762, 134 (1974) (footnotes omitted). FDIC Philadelphia Gear Corp., 476 426, 1931, 90 428 (1986). 25 need not, argued, rely simply "silence" approval subsequent amendments 177, 1280. 1983 Act: 26 "The rules, regulations, deems expeditious section. Notwithstanding provision prescribe, otherwise condition, limitation, matters governing 18(b). 27 97-565, pt. 1, 55 (1982) ("[T]he seeks pass upon whole surrounding each claim, counter-claims facts"). Where, kept silence refusing overturn ratified positive legislation," deem virtually conclusive. New Jersey, 461 773, 785, n. 12, 103 2187, 2194, 312 (1983). 28 abundant contemplated authorized conclude analysis untenable. empower manufacture restriction nowhere reject plain embodied mandate. 1396-1397. squarely faced 29 directs "judicial Power States shall supreme inferior Courts ordain establish," staffed who hold office during good behavior, compensation diminished office. prohibit authorizing adjudicatory officers enjoy 30 precedents area admit easy synthesis, establish turn conclusory 583, 3334. constitutionality given delegation adjudicative functions body assessed underlying 590, 3338; Pipeline, 64, 2867. inquiry, turn, guided principle "practical attention substance doctrinaire reliance formal categories inform application III." 587, 3336. 53, 293. A. 31 serves protect role tripartite government," safeguard litigants' "right domination branches government." Will, 449 200, 218, 101 471, 482, 66 392 (1980). 582-583, 3333-3334; 58, 2864. cases provided us little occasion discuss significance safeguard, discussions 1's intimated primarily personal, structural, interests. 90, 2881 (REHNQUIST, concurring judgment) (noting jurisdiction); 95, 2884 (WHITE, dissenting) (same). Currie, Bankruptcy Judges Independent Judiciary, Creighton L.Rev. 441, 460, 108 (1983) (Article "was designed protection risk executive pressure decision"). Cf. 87, 306 (Brandeis, dissenting). 32 demonstrate, confer absolute plenary every 3334; supra. procedures civil criminal tried. Boykin Alabama, 238, 1709, 274 (1969) (waiver guilty plea); Duncan Louisiana, 391 145, 158, 1444, 1452, 491 (1968) jury case); Fed. Civ.Proc. 38(d) cases). relevance concepts waiver challenges demonstrated absence relied factor determining forbade adjudication. 80, 31, 2876, 31; 91, 2881-2882 judgment); 591, 3334-3335, 3338. Kimberly Arms, 129 512, 96 355, 764 (1889); Heckers Fowler, Wall. 123, 759 (1864). 33 cases, he possessed demanded 13, 19, content settled selected until him counts; rendered objected challenge 34 Three years instituted private Circuit Hirk Agri-Research 561 96, 103, (CA7 1977). Merrill Lynch, Pierce, Fenner Smith, Curran, 456 353, 1825, 72 182 (affirming existence cause CEA). made clear 3995 option having knowledge chose avail quicker him. effectively agreed seeking McElrath Otto 440, 189 (1880). B 35 noted above, preserves interest "an inseparable element system checks balances." 217, 482. safeguards Branch barring attempts transfer [to tribunals] emasculating" National Insurance Tidewater 337 582, 644, 69 1173, 1209, 93 1556 (1949) (Vinson, dissenting), thereby preventing encroachment aggrandizement branch other." Buckley Valeo, 424 122, 612, 684, 46 659 (per curiam). 57-58, 73-74, 83, 86, 2864, 2872-2873, 2877, 2879; 98, 115-116, 2885, 2894 structural implicated cure difficulty reason subject-matter beyond limitations imposed Griffin, 303 226, 229, 58 601, 602-603, 82 (1938). When issue, notions dispositive serve interests expected protect. 36 business threatens Branch, adopt formalistic unbending rules. might lend greater degree coherence unduly constrict ability needed innovative I powers. reviewing challenges, weighed none been deemed determinative, eye judiciary. factors focused 589-593, 3337-3339; 84-86, 2878-2879. 37 relative allocation considerations prominence intrude province model respect: wholesale importation pendent context difficulties, decline endorse prohibition fear hypothetical "slippery slope" deposit us. type precedent. RFC Bankers Trust 318 163, 168-171, 63 518-19, 680 (1943), saw review, dispute. Similarly, Katchen Landy, 382 323, 86 467, (1966), bankruptcy referee's hear creditor transaction. matter, requiring trustee commence "meaningless gesture." 334, 475. 38 likewise persuaded deviation fatal scheme. Aside authorization far portion found unconstitutional hews approved 39 like Crowell, deals "particularized law," 85, 2878, whereas extended "all title related 11." 1471(b) (quoted 2878) orders, unlike 1978 enforceable 18(f); 85-86, 2879. reviewed "weight evidence" standard sustained deferential lacking 9; legal rulings determinations de novo review. Finally, courts," instance, preside trials writs habeas corpus. 2878. Of course, method prescribed litigation "private" decision. kind assumed "core" courts. 3336; 70-71, 25, 2870, 25; judgment). Yet inquiry; attempt determinative rights, 589, 3337, inherent accord character talismanic inquiries. 68, 20, 20; 2885 explained doctrine reflects pragmatic selects quasi-judicial resolving 'could conclusively Executive Legislative Branches,' danger encroaching powers" purview judiciary, relegated 3337 2870). private, historically types 84, 2869-2870, 2878; improperly encroached obviously magnified "withdraw[s] cognizance which, nature, equity, admiralty" traditionally tried allocates own creation. Murray's Lessee Hoboken Land Improvement How. 272, 284, 372 (1856). stake, control searching. litigation, '[l]ooking form what" done, narrow primary, unchallenged, function threat 3337. 42 attempted "withdraw cognizance" determination sum represented matters, invoke left entirely unaffected. diminished, seems self-evident encourage settle resort impermissible incursions powers, mechanism willing may, option, elect differences. say, phalanx tribunals equipped handle supervision specific necessities, choice necessarily attack. 2872-2873. But bears resemblance scenario, saved 852-853, jurisdictional delegation, delegation. 43 primary focus making scheme, allocating tribunals. brokers. Its endow readily understandable perception political pressures, 70 (1974), obvious possesses applying itself unquestioned validity. 3337; 80-81, 2876; ensure effectiveness assert absent confounded. 44 emphasis workable. 12a(5). incidental to, completely dependent upon, actual claim. 45 magnitude intrusion termed minimis. Conversely, permit "defeat furnish prompt, continuous, expert questions peculiarly suited specially task." 46, 290. 583-584, think compels prophylaxis. Bowsher Synar, 714, 3181, 583 (1986), contrary result. Unlike Bowsher, raises coordinate branch. Instead, undermined, appreciable expansion power, have, looked evaluating endangers presented, genuine present litigation. 47 doing, faithful precedents, counsel bright-line employed yield applicable regard unique aspects plan consequences larger underlie C 48 constrains federalism, He argues transforms central trespassed Government invaded prerogatives governments. 49 At outset, note dealt concerns, impose limits delegate regarding particularly telling solely despite sought law. 57-60, 11, 2864-2865, 11. 50 unpersuaded sole said impair interests, could, here even lacking. Baker Gold Seal Liquors, 417 469, 2504, 2506, 243 (1974); Moore York Cotton Exchange, 270 609, 370, 750 (1926). Given becomes initially hears gives cognizably impairment federalism. 51 opposed acquiesced inclusion assured protected concludes, essence, compact, absolutely decisionmakers protections. novel theory, suffers flaws, important identifies critical link posits independence judiciary's reversed, opinion. 53 ordered. 54 whom MARSHALL joins, dissenting. Constitution establish." specifies exercised "shall Offices Behaviour, [who] shall, stated Times, receive Compensation, Continuance Office." 56 face, vesting has, three exceptions mandate III: territorial see, American Ins. Canter, 511, 242 (1828); courts-martial, Dynes Hoover, 65, 838 (1857); certain concerning (1856); Ex parte Bakelite 279 438, 411, 789 (1929); (1932); generally (opinion J.). limit few, long-established countenance erosion 57 knew accumulation Legislative, Executive, hands, one, many, hereditary, self-appointed, elective, justly pronounced very definition tyranny." Federalist 334 (H. Dawson ed. 1876) (J. Madison). prevent tyranny, devised governmental composed distinct branches—"a vigorous Branch," "a wholly independent." 722, 3186, balances built government operate "self-executing 683, curiam ). 'The fundamental necessity maintaining departments coercive influence, direct indirect, others, stressed hardly open question.' 725, 3188 Humphrey's Executor 295 602, 629, 869, 874, 1611 (1935)). Legislature maintain crucial structure. understood individual susceptible majoritarian pressures. placing "in insulated pressures able [federal law] reprisal rebuke." Raddatz, 447 667, 704, 100 2406, 2427, 65 (1980) (MARSHALL, Alexander Hamilton observed, "[t]hat inflexible uniform adherence Constitution, individuals, perceive indispensable justice certainly offices temporary commission." 78, 546 1876). "[i]f [periodic appointments] committed Legislature, improper complaisance it; both, unwillingness hazard displeasure either; People, persons chosen them special purpose, too disposition consult popularity, justify consulted laws." 60 "Next permanency office," added, "nothing contribute fixed support" man's subsistence amounts will. 548 original). 217-218, ("A Judiciary essential government"); ex rel. Toth Quarles, 350 5, (1955) (Black, J.) ("The maximum freedom possible coercion influence Government"). 61 These incremental erosion. "certain exceptional bestowed consensus." 70, 2871 forceful extend situations distinguishable precedents. 445 engages extension. By sanctioning state-law exceeds analytic framework 62 More century ago, [Article III] admiralty." Lessee, How., 284 recently, majority breach-of-contract misrepresentation lay "at core power," 287 J.), stuff actions Westminster 1789," J), contributed significantly Court's Pipeline's common-law lightly discards alteration works today jurisprudence pointing, convenience; altogether eliminate federal-court counterclaims; "consent" ContiCommodity's counterclaims.* my effort fails. states several Ante, 851. desire brokers" concern here. 855. "[i]t counterclaims[;] confounded." Were offends declares, "it 'defeat legislation.' 856. "compe[l] prophylaxis." 64 disagree—Article prophylactic sort abdication convenience. convenience efficiency competing independence. pits benefits immediate, concrete, easily almost prophylactic, seem remote worth case. while balancing creates illusion objectivity ineluctability, foreordained, weighted Redish, Courts, Agencies, Decision, Duke L.J. 197, 221-222. approach is, accumulate finds short-term outweigh long-term independence, eviscerated. Perhaps accomplished conveniently foreswore preserve freedom. INS Chadha, 462 919, 959, 2764, 2788, 77 317 (1983): choices discern Constitutional Convention burdens processes clumsy, inefficient, unworkable, hard consciously men lived arbitrary acts go unchecked. With flaws delay [and] untidiness ., yet better carefully restraints spelled Constitution." 67 appellants' assignment Comptroller General essentially functions, stating: '[T]he efficient, convenient, useful facilitating government, standing alone, Convenience objectives—or hallmarks—of democratic 736, ---- 944, 2781). '[t]he hydraulic Branches exceed outer desirable objectives, resisted.' 727, 722 951, 2784). Despite "conflicts, confusion, discordance" times generate, --- ----, endure separated 'to secure liberty.' 721, Youngstown Sheet Tube Sawyer, 343 579, 635, 863, 870, 1153 (1952) (Jackson, concurring)). 68 impossible reconcile radically different approaches takes Bowsher. coequal others. bypass advisable, arrogate functions. According caused insignificant, shares in, displaces, involved. "sharing" justification fails reasoning used much convenient abrogation commands warranted, me complainants rarely, ever, choose instance. illusory real. importantly, emphasizing ignores establishes principle. stem allow initiate strongly suggests "legislative necessity" party consent, Branch" conceivably characterized "de minimis," ante, 856, impact substantial. dismisses warnings about dangers asserting slippery slope, 852, involve "phalanx courts." A healthy precipice stand reason: assigning away diluting And, intimations, dilution operates regardless acted "good intention" "bad strengthening Judiciary. IV 71 misplaced. erroneously division 848. separation-of-powers, preservation Judiciary's domain another 850. afforded dominated government. ----. served inseparable. exists deprived officials pressure. That harmed threatened recognizes tribunal, 2." coextensive, litigant ever waive required. words, irrelevant analysis. V enunciates principle—that States" reposed obligation zealously guard remains strong individuals continue Unfortunately, forsakes expediency. dissent. Respondents' governed revised early 1983. 1982, 97-444, 2294. changes effected became May 1983, 239, 2327. Two complaints, relating behalf mortgage banking company, president 90% shareholder. identical allegations consolidated level. petitions involved identical, refer jointly "Schor," Sandor "Conti." rests violated (1982). difference suffice defects CFTC.

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