Court Opinion

ID: 2659411
Source: CourtListenerOpinion
Date Created: 2014-04-03 02:32:43.192745+00
Date Added: 2024-06-11T12:58:08.967531
License: Public Domain

UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLUMBIA
____________________________________
                                    )
DTCC DATA REPOSITORY                )
(U.S.) LLC, et al.,                 )
                                    )
                  Plaintiffs,       )
                                    )
      v.                            )               Civil Action No. 13-0624 (ABJ)
                                    )
UNITED STATES COMMODITY             )
FUTURES TRADING COMMISSION,         )
                                    )
                  Defendant.        )
____________________________________)

                                 MEMORANDUM OPINION

       The financial crisis of 2007 and 2008 has been widely attributed to the lack of regulation

of certain derivatives markets, including the swaps market. Responding to that crisis, in 2010,

Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-

Frank”), which established oversight for previously unregulated markets. Dodd-Frank granted

the United States Commodity Futures Trading Commission (“CFTC” or “Commission”)

exclusive jurisdiction over the regulation of swaps, the type of derivative at issue in this case.

The Commission, in turn, has promulgated new regulations establishing a framework for the

oversight of swaps that will reduce risk and promote transparency, in line with the goals of

Dodd-Frank.

       Plaintiffs, The Depository Trust & Clearing Corporation (“DTCC”) and DTCC Data

Repository (U.S.) LLC (“DDR”), challenge three separate but interrelated actions taken by the

Commission, all of which relate to the Commission’s new requirements for swaps. Defendants

have moved to dismiss all but one count of the amended complaint. The Court will grant
defendant’s motion to dismiss Counts I, IV, and V because these counts do not allege any final

agency action that is reviewable by this Court, and therefore fail to state a claim. The Court does

not find, however, that Count III duplicates Count II, as defendants claim, and so it will deny the

motion to dismiss Count III. Defendants do not seek to dismiss Count II.

I.     Factual Background

       A. Dodd-Frank and Swaps Regulation

       A swap is a type of derivative that generally consists of an “agreement, contract, or

transaction” between parties that is based on the value of an underlying asset or event. See 7

U.S.C. § 1a(47)(A) (2012). Until 2010, the Commission was precluded from regulating most

swaps by its own policies and by Congressional mandate. See 54 Fed. Reg. 30,694 (July 21,

1989) (Commission policy statement); Commodity Futures Modernization Act of 2000, Pub. L.

No. 106-554, 114 Stat. 2763 (2000). Then, in the wake of the financial crisis, Congress amended

the Commodity Exchange Act, 7 U.S.C. § 1 et seq. (“CEA”), through the Dodd-Frank Act, Pub.

L. No. 111-203, 124 Stat. 1376 (2010), and established an oversight and reporting regime for

swaps. Congress vested authority to implement that regime in the Commission. 7 U.S.C.

§ 2(a)(1)(A).

       Dodd-Frank requires that most swaps be “cleared” by a derivatives clearing organization

(“DCO”). 7 U.S.C. § 2(h). DCOs are regulated by the Commission. See 17 C.F.R. § 39.11

(2013). In the clearing process, a DCO substitutes its own credit for the credit of the original

parties to a swap, thereby reducing risk and assuring the financial integrity of a swap transaction.

See 7 U.S.C. § 1a(15)(A). To that end, the Commission requires DCOs to maintain significant

financial resources. 17 C.F.R. § 39.11(a). The Commission also oversees DCOs in a variety of

other ways, including by requiring them to submit changes to their internal rules for review. See

                                                 2
17 C.F.R. § 40.5 (voluntary submission of rules for Commission review and approval); id. § 40.6

(self-certification of rules).

        Dodd-Frank also requires that data about swaps be reported to new entities called

“registered swap data repositories” (“SDRs”), which are also regulated by the Commission. 7

U.S.C. §§ 2(a)(13)(G), 24a. This reporting requirement is intended to increase transparency by

providing data both to the public and to regulators. See 17 C.F.R. §§ 43, 45. The data to be

reported includes data about the creation and confirmation of swaps. See 77 Fed. Reg. 2136

(Jan. 13, 2012). It also includes “continuation” data, which encompasses any changes made to

the terms of a swap over its lifetime, including clearance by a DCO. Id.

        B. Plaintiffs’ Claims

         Plaintiff DDR is a provisionally registered swap data repository, or SDR, and a wholly-

owned, indirect subsidiary of plaintiff DTCC, which “provides critical infrastructure to serve

participants in the financial industry.” Am. Compl. ¶¶ 24–25. According to the amended

complaint, plaintiff DDR is the only SDR that is not affiliated with a derivatives clearing

organization, or DCO. Id. ¶ 80.

        This litigation centers on the question of whether it is lawful for the Commission to

permit DCOs to require that cleared swap data be reported to their affiliated, or “captive,” SDRs.

Plaintiffs believe that the Commission has violated the letter and spirit of Dodd-Frank and its

own regulations by failing to prohibit what they characterize as “anticompetitive tying

arrangements” between DCOs and their captive SDRs. Id. ¶ 78(b). Plaintiffs allege that these

arrangements elbow any independent SDRs (that is, plaintiff DDR) out of the marketplace and

reduce market participant choice. Id. ¶ 81. Plaintiffs also claim that permitting DCOs to require

that cleared swap data be reported to their affiliated SDRs injures the public interest by imposing

                                                3
increased costs on market participants and by causing “duplication and fragmentation of swap

data” that “[has] the potential to create significant systemic risk to the market as a whole.” Id.

¶ 85–85(a) (citation and internal quotation marks omitted). Finally, plaintiffs allege that the

Commission has unlawfully reversed course, and that until November 2012, it had clearly

expressed that it would not permit DCOs to require that cleared swap data be reported to their

captive SDRs. Id. ¶ 47.

       Plaintiffs allege that the CFTC violated the Administrative Procedure Act (“APA”), 5

U.S.C. § 551 et seq., and the Commodity Exchange Act in three separate ways in connection

with its regulation of swaps.     First, in Count I, plaintiffs challenge the revisions of the

Commission’s published answers to Frequently Asked Questions (“FAQs”) that originally

indicated that DCOs would be prohibited from requiring that cleared swaps data be reported to

their captive SDRs. Am. Compl. ¶¶ 88–91; id. Annex A at 3 [Dkt. # 15-1] (“FAQs”). The three

FAQs in question were withdrawn on November 28, 2012. 1 FAQs at 1. Plaintiffs claim that the

withdrawal of the FAQs was the first step in the Commission’s reversal of its position regarding

the relationship between DCOs and SDRs. Am. Compl. ¶ 89.

       Second, in Counts II and III, plaintiffs object to the Commission’s approval of a new rule

submitted by a DCO, the Chicago Mercantile Exchange, Inc. (“CME”), that would require that

cleared swaps be reported to CME’s captive SDR. Id. ¶¶ 82, 92–99. CME is a wholly-owned

subsidiary of the CME Group, a prominent derivatives marketplace. Id. ¶ 48. After a notice and

comment period that included participation by plaintiffs, the Commission approved a new

1       Plaintiffs characterize the withdrawal of the FAQs as an action of the Commission itself,
but the Commission insists that the withdrawal was a decision made by its staff, Def.’s Mem. of
P. & A. in Supp. of Mot. to Dismiss Counts One, Three, Four, & Five at 17 [Dkt. # 17-1]
(“Def.’s Mem.”).
                                                4
Chapter 10 and Rule 1001 of CME’s SDR Rulebook on March 6, 2013. Commission Letter,

Am. Compl. Annex B at 1 [Dkt. # 15-2] (“Commission Letter”).

       Third, in Counts IV and V, plaintiffs challenge the self-certification of a substantially

similar rule by ICE Clear Credit (“ICE”), another DCO. Am. Compl. ¶¶ 100–107. According to

plaintiffs, ICE is the world’s largest clearinghouse for credit default swaps. Id. ¶ 71. On April

10, 2013, ICE followed a different procedure than that used by CME and submitted its amended

Rule 211 to the Commission pursuant to the self-certification provisions of the Commodities

Exchange Act, 7 U.S.C. § 7a-2(c)(2), and Commission rule 40.6, 17 C.F.R. § 40.6. Def.’s Mem.

at 10. Under these provisions, if the Commission does not notify an entity within ten business

days that it will stay the self-certification for further analysis or public comment, a rule becomes

effective on the entity’s self-certification alone. 7 U.S.C. § 7a-2(c)(2); 17 C.F.R. § 40.6(b)–(c).

       Like CME Rule 1001, ICE Rule 211 provides that all swaps cleared by ICE must be

reported to ICE’s SDR. Def.’s Mem. at 10; Am. Compl. ¶ 72. Plaintiffs petitioned the CFTC to

stay ICE Rule 211, arguing that the rule would violate the CEA and APA. Id. ¶ 73. The

Commission did not respond to plaintiffs’ petitions and took no action with respect to the

proposed rule, which was deemed certified on April 25, 2013. Id. ¶¶ 74–75; Def.’s Mem. at 10.

II.    Defendant’s Motion to Dismiss

       The Commission has moved to dismiss Counts I, III, IV, and V of the Complaint. It

argues, and the Court finds, that Counts I, IV, and V fail to state a claim upon which relief can be

granted because they do not allege any final agency action. See 5 U.S.C. § 704 (provision of the

APA providing for review of “final agency action”). The Commission asks the Court to dismiss

Counts III and V on the grounds that Count III is duplicative of Count II, and that Count V is

duplicative of Count IV. Def.’s Reply in Further Supp. of Its Mot. to Dismiss Counts One,

                                                 5
Three, Four, & Five at 14 [Dkt. # 21] (“Def.’s Reply”).      Defendant’s motion to dismiss Count V

as duplicative will be denied as moot. Furthermore, the Court finds that Count III does not

duplicate Count II – which defendant has not sought to dismiss – and so both Counts II and III

will remain in the case.

                                    STANDARD OF REVIEW

        “To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must contain sufficient

factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted); accord Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007). In Iqbal, the Supreme Court reiterated the two principles

underlying its decision in Twombly: “First, the tenet that a court must accept as true all of the

allegations contained in a complaint is inapplicable to legal conclusions.” 556 U.S. at 678. And

“[s]econd, only a complaint that states a plausible claim for relief survives a motion to dismiss.”

Id. at 679.

        A claim is facially plausible when the pleaded factual content “allows the court to draw

the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678.

“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a

sheer possibility that a defendant has acted unlawfully.” Id. A pleading must offer more than

“labels and conclusions” or a “formulaic recitation of the elements of a cause of action,” id.,

quoting Twombly, 550 U.S. at 555, and “[t]hreadbare recitals of the elements of a cause of

action, supported by mere conclusory statements, do not suffice.” Id.

        When considering a motion to dismiss under Rule 12(b)(6), the complaint is construed

liberally in plaintiff’s favor, and the Court should grant plaintiff “the benefit of all inferences that

can be derived from the facts alleged.” Kowal v. MCI Commc’ns Corp., 16 F.3d 1271, 1276

                                                   6
(D.C. Cir. 1994). Nevertheless, the Court need not accept inferences drawn by the plaintiff if

those inferences are unsupported by facts alleged in the complaint, nor must the Court accept

plaintiff’s legal conclusions. See id.; Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002).

In ruling upon a motion to dismiss for failure to state a claim, a court may ordinarily consider

only “the facts alleged in the complaint, documents attached as exhibits or incorporated by

reference in the complaint, and matters about which the Court may take judicial notice.”

Gustave-Schmidt v. Chao, 226 F. Supp. 2d 191, 196 (D.D.C. 2002) (citations omitted).

                                           ANALYSIS

I.     The withdrawal of three FAQs is not a reviewable final agency action.

       The Commission’s withdrawal of three Frequently Asked Questions six weeks after

issuing them is not a reviewable final agency action. See 5 U.S.C. § 704. At the outset, it is not

clear that the withdrawal of the FAQs constitutes “agency action” at all, since “[a]n agency

action is not final if it is only ‘the ruling of a subordinate official,’” Franklin v. Massachusetts,

505 U.S. 788, 797 (1992), quoting Abbott Labs. v. Gardner, 387 U.S. 136, 151 (1967). The

FAQs plainly state that they reflect the views of Commission staff, not of the Commission itself.

See FAQs at 5 (“However, Staff believes that . . . .”); id. at 7 (“Accordingly, Staff believes

that . . . .”). And the Commission asserts that its staff, not the Commission, made the decision to

withdraw the FAQs at issue here. See Commission Press Release, Am. Compl. Annex B at 1

[Dkt. # 15-2] (“Commission Press Release”) (announcing that “Staff of the Commodity Futures

Trading Commission” had withdrawn three FAQs). But the Court need not decide this issue

because even if the withdrawal of FAQs could be considered an “agency action,” it was not a

“final” action, and therefore it is not reviewable. See 5 U.S.C. § 704.

                                                 7
       To be final, an agency action must not be “tentative or interlocutory,” and must “be [an

action] from which ‘rights or obligations have been determined’ or from which ‘legal

consequences will flow.’” Indep. Equip. Dealers Ass’n v. EPA, 372 F.3d 420, 426 (D.C. Cir.

2004), quoting Bennett v. Spear, 520 U.S. 154, 177–78 (1997); see also Franklin, 505 U.S. at

797 (stating that agency action is not final if it is merely “tentative,” and if the agency has not yet

“completed its decisionmaking process.”). The withdrawal of the FAQs did not determine any

rights or obligations, nor was it the culmination of a Commission decision-making process.

Rather, the Commission or its staff withdrew the advice it had been posting online about a

particular question, leaving that question open for later decision by the Commission.2 Indeed,

the Commission’s subsequent approval of CME Rule 1001, which, as plaintiffs point out,

expressly “supersede[d]” any prior conflicting guidance, underscores the fact that the withdrawal

of the FAQs was not a final agency action. See Commission Statement at 3 (“To the extent that

any guidance previously issued by the Commission Staff may be inconsistent with the

Commission’s determination herein with respect to CME Rule 1001, the Commission’s

determination supersedes any such prior Staff guidance.”) The withdrawal of the FAQs was

merely “tentative or interlocutory,” and is therefore not final agency action subject to APA

review. Thus, Count I fails to state a claim upon which relief can be granted, and the Court will

grant defendant’s motion to dismiss it.

       In their opposition to defendant’s motion to dismiss, plaintiffs attempt to clarify that they

intended in Count I to challenge a “sequence of actions” that ultimately led to the Commission’s

2      Plaintiffs assert that until the withdrawal of the FAQs, the Commission had “repeatedly
affirmed” that it would not allow a DCO to require that data be reported to its captive SDR. Am.
Compl. ¶ 47. Even if true, this would not transform the withdrawal of the FAQs into a final
agency action, because the withdrawal, on its own, was not a repudiation of the Commission’s
alleged prior statements.
                                                  8
“superseding” of the withdrawn FAQs through approval of CME Rule 1001, and not solely the

withdrawal of the FAQs. Pls.’ Mem. of P. & A. in Opp. to Def.’s Mot. to Dismiss at 11–14 [Dkt.

# 19] (“Pls.’ Opp.”). To the extent that was plaintiffs’ intention, the Court’s dismissal of Count I

will not prevent plaintiffs from pressing that theory in connection with Count II. Defendants

have not moved to dismiss Count II, which directly challenges CME Rule 1001, and which also

incorporates all of the factual allegations that underlie Count I. Compare Am. Compl. ¶ 88, with

id. ¶ 92. But to the extent plaintiffs challenge the withdrawal of the FAQs as an isolated

incident, Count I must be dismissed.

II.    The self-certification of ICE Rule 211 is not a reviewable final agency action.

       Counts IV and V challenge the Commission’s tacit approval of ICE Rule 211. But that

rule was approved by operation of law, and therefore the Court finds that Counts IV and V do

not present any agency action or “failure to act” that would be subject to review under the APA.

See 5 U.S.C. § 551(13). If Congress has “spelled out the legal effect” of agency inaction without

articulating any limiting principle, that inaction is typically unreviewable. See Sprint Nextel

Corp. v. FCC, 508 F.3d 1129, 1132 (D.C. Cir. 2007); Amador Cnty. v. Salazar, 640 F.3d 373,

382 (D.C. Cir. 2011). Moreover, agency “inaction qualifies as ‘failure to act’ only where it is

‘discrete.’” Amador Cnty., 640 F.3d at 382, quoting Norton v. S. Utah Wilderness Alliance

(“SUWA”), 542 U.S. 55, 62–64 (2004).

       In Sprint Nextel, the D.C. Circuit found that a statutorily mandated consequence of

agency inaction was not the sort of failure to act that is subject to AP.A review. See 508 F.3d at

1133. The case dealt with a provision of the Communications Act that required the Federal

Communications Commission (“FCC”) to forbear from applying certain regulatory requirements

to broadband services if a service-provider’s petition for forbearance met specific requirements.

                                                 9
508 F.3d at 1131; see also 47 U.S.C. § 160. In that case, the FCC had deadlocked in a 2-2 vote

as to whether it would partially deny a forbearance petition by Verizon. 3 508 F.3d at 1131.

After the statutory deadline passed, the FCC issued a press release announcing that Verizon’s

petition had been “deemed granted by the operation of law.” Id.

       The court held that the granting of Verizon’s forbearance petition was not a final agency

action reviewable under the APA because “[i]n those instances in which the [FCC] does not deny

a forbearance petition, Congress has spelled out the legal effect: the petition ‘shall be deemed

granted.’”   Id. at 1132.   In light of this explicit statutory language, the court found that

“Congress, not the [FCC],” had granted Verizon’s petition and, therefore, there was no final

agency action to review. Id. The FCC “did nothing” and there was no “discrete” action to

review. Id. at 1131. Moreover, the court found that any review would be without standards

because there was no agency reasoning to assess, as there would have been had the FCC acted to

grant or deny the petition. Id. at 1133. Although declining to review a “deemed granted”

forbearance petition might allow the FCC to avoid judicial review through inaction, the court

found that this was simply “the consequence of the system Congress mandated.” Id.

       In Amador County, by contrast, the D.C. Circuit held that the Secretary of Interior’s “no-

action approval” of an Indian gaming compact was a reviewable final agency action. 640 F.3d at

375. The Indian Gaming Regulatory Act (“IGRA”) provided that “[i]f the Secretary does not

approve or disapprove a compact . . . [within] 45 days . . . the compact shall be considered to

have been approved by the Secretary, but only to the extent the compact is consistent with the

provisions of [the IGRA].” 25 U.S.C. § 2710(d)(8)(C) (emphasis added). In that case, Amador

County, California challenged the Secretary’s no-action approval of a gaming compact that

3      At the time of the vote, one of the five FCC seats was vacant. Sprint Nextel, 408 F.3d at
1131 n.2.
                                               10
affected tribal lands in the county. 640 F.3d at 375. The court held that the Secretary’s inaction

was reviewable and distinguished Sprint Nextel. Id. at 375, 382.

       First, the court noted the “‘strong presumption that Congress intends judicial review of

administrative action.’” Id. at 379, quoting Bowen v. Mich. Acad. of Family Physicians, 476

U.S. 667, 670 (1986). The court explained that, “[t]o overcome” that presumption, “we must

find ‘clear and convincing evidence of a contrary legislative intent.’” Id. at 380, quoting Bowen,

476 U.S. at 671–72. The court found that the statutory “caveat” that a compact would be deemed

approved “only to the extent that the compact is consistent with the provisions of” the IGRA

“invite[d] judicial review by setting out a clear standard for reviewing courts to apply.” Id.

Therefore, Congress did not clearly intend to preclude review of the Secretary’s no-action

decisions. Id.

       In addition, the court concluded that, through the caveat, Congress had imposed a duty on

the Secretary of the Interior to disapprove any compacts that would violate the IGRA. Id. at 381.

“[J]ust as the Secretary has no authority to affirmatively approve a compact that violates any of

[the IGRA’s] criteria for disapproval,” the court reasoned, “he may not allow a compact that

violates [the IGRA’s] caveat to go into effect by operation of law. Id.

       The caveat distinguished Amador County from Sprint Nextel, where the court found no

“discrete” inaction to review, and where Congress had “provided that if the FCC failed to act, a

forbearance request would be granted by operation of law without limitation.” Id. at 382. In the

Indian Gaming Regulatory Act, on the other hand, the presence of the caveat created a “discrete

agency action” for judicial review: “the Secretary’s failure to disapprove the compact despite its

inconsistency with the Act.” Id. Moreover, although as in Sprint Nextel, there was no agency

                                                11
reasoning to review, the Amador County court found that agency reasoning was not necessary to

determine whether the compact met the requirements of the IGRA. Id.

        Applying those principles here, the Court finds that since Congress has not articulated a

limitation on the approval by operation of law of a rule like ICE Rule 211, there is no “discrete”

agency action to review, and the self-certification of ICE Rule 211 is not a reviewable “failure to

act.”   ICE Rule 211 was submitted to the CFTC pursuant to the CEA’s self-certification

provisions, 7 U.S.C. § 7a-2(c). The CEA provides:

        (1) “A registered entity may . . . elect to approve and implement any new rule or
        rule amendment, by providing to the Commission . . . a written certification that
        the . . . new rule, or rule amendment complies with this chapter (including
        regulations under this chapter).”

        (2) “The new rule or rule amendment described in paragraph (1) shall become
        effective . . . on the date that is 10 business days after the date on which the
        Commission receives the certification . . . unless the Commission notifies the
        registered entity within such time that it is staying the certification because there
        exist[s] . . . a potential inconsistency with [the CEA] (including regulations under
        [the CEA]).”

        Id.

        Plaintiffs urge the Court to conclude that the approval by operation of law of ICE Rule

211 constitutes reviewable agency inaction under the APA. Pls.’ Opp. at 18. They note that the

CEA provides that a self-certified rule or rule amendment “shall become effective” after ten

business days “unless” the Commission stays the certification for specified reasons, including “a

potential inconsistency with [the CEA].” Pls.’ Opp. at 20–21; 7 U.S.C. § 7a-2(c). Likewise,

Commission rule 40.6 provides that the Commission “may stay the certification of a new rule or

rule amendment” on several grounds, including that it “is potentially inconsistent with the Act.”

17 C.F.R. § 40.6(c)(1). Plaintiffs argue that this language is comparable to the “caveat” in

                                                 12
Amador County, which led the court to conclude that judicial review was appropriate in that

case. Pls.’ Opp. at 20–21.

       But the court in Amador County found that judicial review of a no-action approval was

appropriate because of the “duty” it determined Congress had placed on the Secretary to

disapprove compacts that conflicted with the IGRA. 640 F.3d at 381, 383. The court discerned

this duty from the statutory requirement that compacts under the IGRA would be deemed

approved “only to the extent” they were consistent with the IGRA itself. Id. at 381. The CEA,

by contrast, imposes no such duty.      The CEA provides that the self-certification becomes

effective “unless” the Commission chooses to act. The Commission rule similarly provides only

that the Commission “may” issue a stay under certain circumstances. This permissive language

stands in contrast to the Congressionally-imposed mandate the Amador County court found in

the IGRA. As in Sprint Nextel, all the CEA and the Commission rules provide is that the

Commission could block an unlawful rule change – but not that it must. Moreover, the brief ten-

day review period Congress supplied in the CEA further supports the conclusion that Congress

did not intend to impose a duty on the Commission to do a searching review of every rule or rule

amendment that passes through the self-certification process.

       In addition, there is no “discrete” agency action here for the Court to review. See Norton,

542 U.S. at 62–64. As in Sprint Nextel, there is no agency decision, reasoning, or record for the

Court to assess. 508 F.3d at 1133. And while the IGRA specifically provided that a compact

approved by inaction “shall be considered to have been approved by the Secretary,” Amador

Cnty., 640 F.3d at 375, there is no similar language in the CEA that provides standards for

judicial review or transforms a regulated entity’s rule change into an action of the Commission.

Indeed, the CEA does not even require registered entities to “petition” the Commission to make a

                                               13
decision, unlike the petition for forbearance at issue in Sprint Nextel. See 508 F.3d at 1131.

Rather, here, registered entities may simply “elect” to amend or add to their own rules, and their

rule changes “shall become effective” absent intervention by the Commission. 7 U.S.C. § 7a-

2(c). Thus, a self-certified rule change under section 7a-2(c) of the CEA is not “granted” by the

Commission. There is no “discrete” agency action to review under these circumstances.

       The Court therefore concludes that the approval by operation of law of ICE Rule 211 is

not a final agency action subject to review under the APA. Plaintiffs therefore fail to state a

claim upon which relief can be granted, and Counts IV and V must be dismissed.

III.   Count III is not duplicative of Count II.

       Defendants ask the Court to dismiss Count III on the grounds that it duplicates Count II. 4

A court may dismiss duplicative claims in its discretion. See Wultz v. Islamic Republic of Iran,

755 F. Supp. 2d 1, 81 (D.D.C. 2010) (stating that, “[a]s a matter of judicial economy, courts

should dismiss” duplicative claims). Claims are duplicative when they “stem from identical

allegations, that are decided under identical legal standards, and for which identical relief is

available.” Id. at 81.

       In Count II, plaintiffs contend that the Commission’s approval of CME Rule 1001

violated sections 553 and 701–706 of the APA, and three sections of the CEA relating to

antitrust laws and considerations: sections 7a-1(c)(2)(N), 19(b), and 24a(f). Am. Compl. ¶ 94.

In Count III, plaintiffs claim that the Commission’s approval of CME Rule 1001 violated the

same sections of the APA, as well as section 7a-2(c)(5)(A) of the CEA, which governs the

Commission’s approval of new rules. Am. Compl. ¶ 99. The Court finds that the different legal

4      Defendant’s request that the Court deny Count V as duplicative of Count IV will be
denied as moot, as the Court will dismiss both Counts IV and V for the reasons stated supra in
Analysis section II.
                                               14
theories advanced in Counts II and III do not constitute “identical allegations,” and therefore it

will deny defendant’s motion to dismiss Count III as duplicative of Count II.

                                         CONCLUSION

       The Court will grant defendant’s motion to dismiss Counts I, IV, and V for failure to state

a claim because plaintiffs have failed to allege any final agency action that would be reviewable

under the APA. The Court will deny defendant’s motion to dismiss Count III because it

advances a unique legal theory and is not duplicative of Count II. Defendants do not challenge

Count II in this motion, and so Counts II and III will remain in this case.

                                              AMY BERMAN JACKSON
                                              United States District Judge

DATE: March 10, 2014

                                                 15