Grosser v. Commodity Exchange, Inc.

Citation: 639 F. Supp. 1293Docket: 84 Civ. 412(MEL)

Court: District Court, S.D. New York; September 11, 1986; Federal District Court

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Rochelle Grosser filed a lawsuit against multiple defendants, including commodities exchanges, clearinghouses, and various individuals and firms, regarding significant events in the silver market during the late 1970s and early 1980s. The lawsuit stems from the sharp increase in silver prices in 1979 followed by a market collapse in March 1980, events that received extensive media attention and led to congressional investigations and litigation. Grosser represents herself and all individuals who held long silver futures positions from January 8, 1980, to March 27, 1980, and who incurred losses during this period. The claims include violations of the Commodities Exchange Act, antitrust laws, and the Racketeer Influenced and Corrupt Organizations Act (RICO). The case is presided over by District Judge Lasker in the United States District Court for the Southern District of New York.

Defendants in this case include both exchange defendants (e.g., Commodity Exchange, Inc., Board of Trade of the City of Chicago) and non-exchange defendants (e.g., Nelson Bunker Hunt, Merrill Lynch). Most defendants seek dismissal of the claims against them. The amended complaint alleges that the non-exchange defendants conspired to artificially inflate the price of refined silver and silver futures contracts by purchasing large amounts of silver futures, controlling silver suppliers, and manipulating vault receipts. This conspiracy allegedly caused the price of physical silver to rise from $11 per ounce in September 1979 to $50 per ounce by January 1980.

The complaint claims that the exchange defendants were negligent or acted in bad faith by failing to intervene despite being aware that the price increases were not due to natural market forces but were a result of the defendants' unlawful actions. The exchanges did not implement regulatory controls until January 1980, when they instituted position limits and “liquidation only” rules, which caused a rapid price decline and harmed market liquidity. It is alleged that some governing board members of the exchanges held short positions and sought to profit from these rule changes after being adversely affected by rising silver prices. The clearinghouses are also accused of complicity in both the failure to maintain market order and the implementation of manipulative rule changes. Grosser, representing the proposed class, purchased silver futures contracts through Merrill Lynch shortly before the price manipulation.

Grosser incurred losses of $16,030 and $23,870 from liquidating long silver positions on March 17 and May 14, 1980. The amended complaint includes six claims against various defendants. The first claim accuses defendants, excluding exchanges and clearinghouses, of conspiring to manipulate silver contract prices, violating Section 9(b) of the Commodity Exchange Act (CEA). The second claim alleges that all defendants defrauded Grosser and the silver markets in connection with silver futures contracts, violating Sections 4b and 4c of the CEA. The third claim charges defendants with conspiring to unreasonably restrain interstate trade in silver, violating the Sherman Antitrust Act. The fourth claim accuses defendants of attempting to monopolize trade in silver, also under the Sherman Antitrust Act. The fifth claim alleges that the exchanges and clearinghouses acted in bad faith by violating CEA provisions regarding price manipulation and enforcement of trading rules. The sixth claim asserts that all non-exchange defendants engaged in racketeering activity through mail and wire fraud, violating the RICO statute. The complaint seeks treble damages under the Clayton Act and RICO.

Defendants have filed motions to dismiss the amended complaint, arguing that the CEA claims are time-barred. They propose applying either a two-year limitations period from other CEA sections or the two- and three-year periods from New Jersey and Illinois blue sky laws. Grosser contends that New York’s six-year statute for common law fraud applies. The complaint was filed on January 18, 1984, after the alleged losses, and would be time-barred under defendants' suggested periods but would survive under Grosser's proposed six-year period. In cases where a federal cause of action lacks a specific statute of limitations, federal courts may adopt the most appropriate state law or, if applicable, a federal law that serves as a closer analogy.

The exchange defendants advocate for a two-year limitations period from CEA Section 14(a) to govern private actions under the Commodity Exchange Act (CEA). They reference the case Fustok v. ContiCommodity Services, Inc., where it was noted that the two-year period from Section 14(a) had never been applied to implied private rights of action, despite its existence since 1974. Historically, courts have relied on state statutes of limitation for CEA actions, irrespective of the 1982 amendment that created an express private right of action with a two-year limit.

The Fustok decision emphasized that the new federal limitations period could not retroactively apply to actions that accrued before the amendment, citing the Second Circuit's ruling in EEOC v. Enterprise Association Steamfitters Local 638, which held that later-enacted limitations cannot reflect prior congressional intent. The current defendants did not offer compelling reasons to deviate from Fustok's precedent of not borrowing the federal two-year limit.

Despite the defendants’ suggestion to adopt state limitations that are similar in length to the federal period, there is a disagreement among the parties regarding which state law should apply. Federal courts must apply the law of the state where they sit, including its borrowing statute, which New York has. This statute mandates that if a cause of action arises outside New York, the shorter limitations period from either the foreign jurisdiction or New York law applies. Since the plaintiff, Grosser, is a nonresident, the exception for residents does not apply. The court must establish whether the plaintiff's claims under the CEA accrued outside New York, and if so, determine the analogous state limitations period for the foreign state and New York, applying the shorter of the two. If the claims accrued in New York, then the appropriate New York limitations period is applied.

The Court of Appeals for the Second Circuit interprets the New York borrowing statute to mean that a tort cause of action accrues at the "place of injury." For fraud, this place is typically where the economic impact is felt, often the plaintiff's residence, but other factors can be considered. In this case, the defendants argue that New Jersey and Illinois are the relevant states for determining where the cause of action accrued. Grosser, a New Jersey resident, suffered a financial loss from futures transactions in New Jersey, but her injury could also be linked to the liquidation of her contracts in Illinois. 

The next step involves determining the applicable statute of limitations for Grosser's Commodity Exchange Act (CEA) claims. Courts have found that state blue sky laws can serve as analogs for CEA claims, suggesting the application of state securities law limitations. New Jersey's Uniform Securities Law has a two-year limit, while Illinois' Securities Law had a three-year limit at the time of the action. Even if a six-year fraud statute of limitations from New York is considered, the borrowing statute requires that the shorter limitations from New Jersey or Illinois apply, resulting in Grosser's claims being time-barred.

The plaintiff asserts two main arguments against the application of New Jersey and Illinois statute of limitations. First, she claims her cause of action accrued in New York, which negates the need to compare limitations periods under the New York borrowing statute. She supports this by stating that New York was the headquarters of the brokerage involved, the center of the alleged conspiracy to manipulate silver prices, and where the primary effects of the market disruption occurred. Additionally, she argues that New York has the greatest interest in the litigation and that federal courts should apply the broadest statute of limitations relevant to federal claims, rather than adhering strictly to state interests.

However, the document clarifies that the location of the injury, rather than the defendant's actions or the business's principal place, determines where a cause of action accrues under the New York borrowing statute. The district courts remain bound by the Second Circuit's interpretation that the "place of injury" rule is controlling. The plaintiff's argument regarding the protection of New York resident-defendants is countered by the fact that the Second Circuit has consistently applied the "place of injury" rule even for federal claims. Furthermore, the limitations periods of New Jersey and Illinois are equal to or exceed those for private CEA actions established by Congress in 1982, undermining the plaintiff's policy argument for a longer statute of limitations.

The second argument against applying New Jersey and Illinois limitations hinges on the precedent set in Stafford v. International Harvester Co., which states that the borrowing statute does not necessitate applying a jurisdiction's statute of limitations if the cause of action could not have been brought there due to lack of personal jurisdiction over all defendants. The plaintiff contends that because personal jurisdiction could not be established over all defendants in either New Jersey or Illinois, her cause of action should therefore be governed by New York's statute of limitations.

Plaintiff misinterprets Stafford's ruling regarding the borrowing statute, which aims to prevent forum shopping. Stafford mandates that a shorter limitation period be applied only when a suit could have been brought against each defendant in the foreign state from which the statute is borrowed. The ruling clarified that Pennsylvania's statute of limitations applied to claims against a defendant amenable to suit there, while claims against a defendant not amenable were not subject to that statute. Grosser's CEA claims, for borrowing statute purposes, would have accrued in New Jersey or Illinois. The plaintiff has not provided evidence showing that any moving defendants were not amenable to suit in those states, thus the burden lies with her to prove lack of personal jurisdiction. Consequently, the New Jersey and Illinois limitations periods apply, barring Grosser's CEA claims under their respective blue sky laws.

Regarding RICO claims, since there is no specific federal statute of limitations for civil RICO actions, state limitations must be selected based on the most appropriate state law. The court must determine which New Jersey and Illinois limitations statutes govern these claims, aligning with principles from previous rulings, including Wilson v. Garcia, which guide the selection of statutes for civil rights actions. A recent Illinois federal court case emphasized that the treble damages provision is a distinguishing characteristic of civil RICO, aimed at incentivizing private citizens to aid in combating organized crime.

The court characterizes RICO as a treble damages action, concluding that the appropriate statute of limitations for federal civil RICO actions in Illinois is the two-year period for "actions for damages." This mirrors prior applications of the same limitation to federal antitrust actions in Illinois. The court acknowledges a potential conflict with the New York decision in Fustok, which favored a six-year period for fraud actions, but favors the Illinois determination due to the Illinois court's expertise in state law and the purpose of the New York borrowing statute, which aims to reflect limitations applicable in other jurisdictions. 

In New Jersey, there is no established decisional law on the applicable limitations period for federal RICO actions. However, non-exchange defendants argue that New Jersey's two-year statute, akin to Illinois', would likely apply to RICO claims, based on its historical application to federal antitrust claims. The complexities of determining the proper limitations period across jurisdictions are noted, particularly if the Supreme Court weighs in on the matter. There is a tendency in case law for courts to select limitations based on the specific facts of each RICO claim, especially when fraud is involved. Despite this complexity, the argument for utilizing New Jersey’s two-year statute is compelling, supported by precedent from the Third and Seventh Circuit Courts of Appeals, which have similarly applied two-year limitations to federal antitrust claims, highlighting the treble-damage aspect as crucial.

Antitrust laws and the racketeering statute share similarities in their dual criminal and civil aspects, venue provisions, and private treble-damage remedies. The New Jersey limitations period of two years under N.J.Stat. Ann. 2A:14-10 applies to the plaintiff's RICO claims. Dispute arises over the New York limitations period, with non-exchange defendants advocating for a three-year period under N.Y.Civ. Prac. Law. 214(2) for statutory liabilities, while the plaintiff favors a six-year period under Section 213(8) for fraud-based actions. However, the borrowing statute mandates the application of the shorter limitations periods from New Jersey or Illinois, rendering the plaintiff's claims time-barred.

MACE moves to dismiss the complaint, asserting lack of personal jurisdiction and improper venue. MACE claims it does not fall under New York's long-arm statute. It argues that the antitrust laws' nationwide service provisions are irrelevant due to the absence of a valid antitrust claim. The plaintiff counters with four potential bases for personal jurisdiction over MACE: conducting business in New York, conspiring with tortfeasors in New York, committing tortious acts outside New York that caused injuries within the state, and being subject to nationwide jurisdiction under the Clayton Act.

MACE is a commodity contract market licensed in Illinois, with its principal operations based in Chicago, where all trading occurs. It functions solely as a clearinghouse and does not directly engage in buying or selling commodity futures contracts. As MACE is not a New York domiciliary, personal jurisdiction can only be established through New York's long-arm statute, which specifies the acts that warrant jurisdiction.

A court may assert personal jurisdiction over a non-domiciliary or their executor/administrator if they engage in certain activities related to the state, including: 1) transacting business or supplying goods/services within the state; 2) committing a tortious act within the state; or 3) committing a tortious act outside the state causing injury within the state. For jurisdiction under N.Y.Civ. Prac. Law § 302(a)(1), it is essential that the defendant purposefully avails themselves of conducting activities within the state, thereby invoking the protection of its laws. The plaintiff acknowledges that MACE has no physical presence in New York, which is not a barrier to jurisdiction; however, there must be purposeful activity tied to the state. In this case, the plaintiff has not shown that MACE engaged in any relevant business activities in New York, nor is there a clear nexus between MACE's activities and the cause of action. The plaintiff argues for jurisdiction based on policy reasons related to interstate commerce, asserting that the silver futures market operates as a unified economic entity centered in New York, despite no direct link established between MACE and New York transactions.

The silver market operates internationally with active cash and futures markets primarily in London and New York, where prices are closely linked due to global arbitrage. MACE benefits significantly from its participation in this market by establishing trading in silver futures contracts, thus engaging in business activity as defined by Section 302(a)(1). Since Grosser's cause of action stems from trades conducted through MACE, asserting jurisdiction under this section is deemed appropriate.

However, the plaintiff's argument for jurisdiction based on a "unitary market" theory is insufficient. MACE does not directly buy or sell futures contracts but rather serves as a local facilitator for trades. While the silver futures prices may align due to market conditions, this does not imply that MACE's activities constitute purposeful availment of business in New York. The court draws an analogy to agricultural markets, suggesting that merely being part of a competitive market does not automatically subject a non-domiciliary entity like MACE to jurisdiction in every state where market activities occur. The plaintiff has failed to provide legal support for extending New York's long-arm jurisdiction to MACE under these circumstances, particularly under the constitutional due process limitations.

MACE is not alleged to have committed any tortious acts directly within New York but is accused of conspiring with defendants who did engage in such acts. The plaintiff claims the amended complaint sufficiently alleges MACE's involvement in two conspiracies: a "long" conspiracy involving non-exchange defendants and a "short" conspiracy involving exchanges. Under New York law, the actions of co-conspirators can be attributed to an out-of-state defendant for personal jurisdiction purposes, provided there is a prima facie showing of conspiracy. However, mere assertions of conspiracy are inadequate for establishing jurisdiction, and plaintiffs must present specific facts connecting the defendant to the transactions in New York.

In this case, the plaintiff failed to provide sufficient factual allegations to establish a prima facie case of conspiracy involving MACE or to reasonably infer MACE's connection to the alleged conspiracies. The allegations regarding the exchanges' actions, including inaction against market manipulation and adoption of emergency trading rules, do not sufficiently link MACE to the conspiratorial activities or demonstrate MACE's culpability in the context of the alleged tortious acts occurring within New York.

Exchange members on the governing boards of the Defendant Exchanges held short positions relevant to the action and were adversely affected by rising silver futures prices leading up to January 20, 1980. To mitigate their losses and avoid bankruptcy, these members, acting through the Exchanges, attempted to manipulate the market to reduce prices, which resulted in harm to the Plaintiff and the public interest while benefiting the short position holders. The Defendant Clearinghouses, in conjunction with the Exchanges and their members, engaged in price manipulation and restraint of trade. They concealed relevant facts and engaged in actions to further this manipulation.

The amended complaint primarily summarizes prior allegations or states legal claims in vague terms, lacking clear, direct allegations that MACE conspired with non-exchange defendants or other exchanges. It is unclear whether the plaintiff alleges a single conspiracy involving all parties or separate conspiracies among different groups. The complaint does not adequately specify whether the exchanges colluded to support or facilitate the alleged manipulations. While conspiracy claims can often rely on circumstantial evidence, the complaint fails to provide sufficient detail or clarity to support such claims against MACE concerning actions by New York actors, resulting in a determination that the conspiracy allegations are insufficient. Courts have noted that a lack of direct agreement allegations is not necessarily detrimental, yet the plaintiff must present a coherent narrative of interconnected acts to establish a conspiracy.

The amended complaint lacks sufficient specific facts and clarity regarding the conspiracy involving MACE, failing to meet even the relaxed pleading standards for conspiracy. The court notes that the plaintiff alleges a per se violation of Section 1 of the Sherman Act concerning trade restraint in silver and a Section 2 violation regarding attempted monopolization. However, since the exchanges are not direct competitors in the silver market, they cannot monopolize or attempt to monopolize, reducing the Section 2 claim to an allegation of conspiracy to monopolize.

For both antitrust claims against the exchanges, including MACE, conspiracy is a necessary element. The complaint is ambiguous about whether the exchanges' alleged failure to fulfill their duties was merely passive or intended to facilitate the conspiracy. Even if bad faith is established, it does not alone prove conspiracy, as agreement among parties is essential, and the complaint does not clearly allege such an agreement. The Section 1 claim similarly lacks clarity regarding who conspired and fails to provide facts suggesting a tacit agreement among the exchanges.

Additionally, the exchanges' actions, such as imposing "liquidation only" rules, align with permissible emergency measures under CFTC regulations, complicating the allegation of conspiracy. The necessity for detailed allegations is heightened in cases involving potential market manipulation, which typically requires discovery to uncover evidence. The court emphasizes that jurisdictional fact questions should not lead to dismissal of the complaint without further discovery, particularly when detailed allegations have been made in similar past cases.

The court is addressing insufficient allegations of conspiracy relevant to personal jurisdiction over MACE, noting that discovery on this matter would be as extensive as discovery on the case's merits. The court concurs with Judge Griesa that compelling a defendant to engage in pretrial proceedings implies some assertion of jurisdiction, which is a significant burden. A plaintiff must provide specific factual evidence to establish such jurisdiction, rather than relying on the hope of uncovering sufficient facts later. The court identifies a "threshold failure" in proving MACE's alleged conspiracy with individuals involved in tortious acts in New York.

Regarding Section 302(a)(3) of New York's long-arm statute, the plaintiff must demonstrate that MACE's alleged tortious acts in Illinois caused an injury in New York. The law now states that for non-physical commercial injuries, the injury's situs is where the critical events occurred. The plaintiff argues that these events took place in New York; however, without adequate allegations of conspiracy involving New York actors, the connection between MACE’s actions in Illinois and New York cannot be established. Additionally, the plaintiff's contention regarding a "unitary market" theory, linking New York to the silver futures market, has been rejected, further severing the connection to New York. Therefore, the court finds it cannot assert personal jurisdiction over MACE under the first three sections of the long-arm statute.

Lastly, Section 12 of the Clayton Act allows antitrust lawsuits against corporations to be initiated in any district where the corporation can be found or conducts business, conferring nationwide personal jurisdiction. However, to invoke this provision, the plaintiff must first establish proper venue for the antitrust claim in the district where the lawsuit is filed.

Venue for the lawsuit against MACE is assessed for propriety in the Southern District of New York under either Section 12 of the Clayton Act or the general federal venue statute, 28 U.S.C. § 1391(b). Current legal precedent indicates that the general venue provisions complement the specialized antitrust venue statute. Venue is deemed appropriate if MACE is an inhabitant, is found, transacts business, or if the claim arose in this district. The plaintiff argues that MACE can be considered to transact business in New York based on a "unitary market" theory, referencing the Supreme Court's definition of "transacting business" as involving substantial commercial activities. However, previous rulings suggest that this standard has not been met for MACE.

The plaintiff further claims that the "claim arose" in New York, asserting that venue should be based on where significant events occurred, which aligns with the objective of the venue provisions to designate the most convenient forum. The Supreme Court's interpretation of § 1391(b) emphasizes protecting defendants from unfair venue selection and acknowledges a legislative intent to address venue issues when multiple defendants reside in different districts. The Court did not conclusively determine the appropriateness of multiple venues but suggested that in ambiguous cases, plaintiffs might select from districts with equal plausibility regarding where the claim arose.

Key considerations for determining venue in this legal matter include the availability of witnesses, access to relevant evidence, and the convenience of the defendant, though only the defendant's convenience is emphasized. The Supreme Court's guidance indicates that typically, the location of the actions foundational to the claim will identify an obvious venue. Lower courts are encouraged to focus on the district where significant acts and omissions leading to liability occurred, which reflects a methodology similar to the "weight of the contacts" approach used prior to the Leroy decision. 

In the current case, while the Southern District of New York appears to be the district where most defendants' actions took place, the allegations also involve substantial wrongful actions in the Northern District of Illinois, where four of five implicated defendants are located. This scenario aligns with the Supreme Court's characterization of "unusual cases" where claims arise across multiple districts. 

Despite the potential for venue to be appropriate in both districts, the challenge arises from the Supreme Court's directive to protect defendants from inconvenient trial locations, alongside the "claim arose" language intended to close venue gaps. A ruling that allows venue in New York for MACE would subject it to litigation under the nationwide personal jurisdiction of the Clayton Act, but without adequate allegations linking MACE to the conspiracies in question, its relevant activities and witnesses are primarily in Illinois. Therefore, it is concluded that venue for MACE does not exist in New York, creating a venue gap that prevents all defendants from being sued in a single district. This situation echoes the Leroy opinion, which distinguished between cases involving multiple defendants linked to a singular act and those with separate claims against different defendants.

The court determined that the statute does not allow plaintiffs the option of pursuing separate claims against MACE, as the plaintiff failed to allege MACE's involvement in a conspiracy with other defendants. Consequently, the court found that claims against MACE are distinct and that personal jurisdiction cannot be established in this district under the nationwide service provision of Section 12. Additionally, the plaintiff’s inability to adequately allege MACE's participation in a conspiracy under the Sherman Act further precludes the application of nationwide personal jurisdiction, regardless of venue compliance under 28 U.S.C. 1391(b). Thus, MACE's motion to dismiss for lack of personal jurisdiction was granted.

Regarding Brodsky, he sought to dismiss claims against him based on defective service of process, not disputing personal jurisdiction otherwise. The plaintiff attempted to serve Brodsky in New York but ultimately mailed the summons and complaint to his Florida residence after unsuccessful attempts. Brodsky acknowledged receipt but argued that the extraterritorial service by mail was improper under New York law and that such service is only permitted if authorized by state law. The plaintiff contended that good faith efforts were made to serve Brodsky, and any defects were technical, not warranting dismissal. A relevant case cited illustrated that service by mail is subject to territorial restrictions and cannot occur beyond the state borders unless authorized by federal statute or rules, which the plaintiff did not demonstrate.

Extraterritorial service by mail is only authorized under Rule 4(e) if a state statute or court rule allows service of a summons, notice, or order upon a non-resident party. New York law, specifically Civil Practice Rule 308, does not permit service by mail, which aligns with the findings in previous cases, such as Catalyst Energy Development Corp. v. Iron Mountain Mines and Olympus Corp. v. Dealer Sales Service, where courts agreed with the prohibition of mail service under New York law. Consequently, the plaintiff's attempt to serve Brodsky in Florida by mail lacks support in both Rule 4 and New York law. 

Brodsky’s acknowledgment of receipt and actual notice of the lawsuit does not nullify the defective service. Judge Owen's analysis in Hyatt indicated that the language of the acknowledgment form could compel parties to return it, potentially without recognizing a valid objection to the service method. He concluded that such return does not equate to a waiver of objections to improper service. The Second Circuit has ruled that actual notice does not suffice to overcome the requirement of personal service or compliance with prescribed alternatives under Rule 4. While courts may be hesitant to dismiss cases lacking actual prejudice to the defendant, failure to adhere to the service requirements results in a lack of jurisdiction. Compliance with Rule 4 is essential, and any improper service will lead to dismissal unless proper service can still be achieved.

In *Telegraph Co. v. Merry*, 592 F.2d 118 (2d Cir. 1979), the court found that the defendant was not properly served under Federal Rule of Civil Procedure 4, which resulted in a lack of personal jurisdiction. Consequently, the District Court granted Brodsky's motion to dismiss the cross claim against the defendant. Regarding antitrust claims, the court dismissed claims against exchange defendants due to insufficient allegations of conspiracy related to trade restraint or monopolization. Non-exchange defendants challenged Grosser's standing under Section 4 of the Clayton Act, arguing that: a) their actions, even if they violated the Sherman Act, only benefited Grosser; b) her injuries were too remote from their alleged violations; c) granting her standing would lead to excessive antitrust claims; and d) she did not suffer "antitrust injury" since the actions causing the drop in silver prices were deemed "procompetitive." The court referenced two Supreme Court decisions that limit treble damages under the Clayton Act, emphasizing the need for a direct causal connection between the antitrust violation and the plaintiff's injury, and the importance of the injury being within the scope of concerns addressed by Congress in antitrust legislation.

The excerpt outlines several factors relevant to determining standing in antitrust claims, specifically the relationship of the injury to the statute's goal of protecting economic freedom in the market, the directness of the injury, the existence of an identifiable class of potential claimants, the speculative nature of damage claims, and difficulties in calculating damages to avoid duplicative recovery. It cites case law, such as Crimpers Promotions and applies the analysis from McCready and General Contractors, concluding that the plaintiff, Grosser, has standing against the non-exchange defendants.

The non-exchange defendants argue that Grosser, as a holder of long positions in silver futures, benefited from rising prices and therefore her injury lacked a significant causal link to their alleged antitrust violations. They suggest that any losses incurred were due to actions by other defendants and that her interests aligned with theirs at certain times. However, the argument neglects that Grosser purchased futures contracts at artificially inflated prices due to the defendants' alleged market manipulation, leading to losses when liquidating her positions. 

While the defendants acknowledge that antitrust suits involving parties on the same side of the market complicate damage calculations, they concede that such cases are not unprecedented. Furthermore, the distinct nature of Grosser's injury compared to short position traders does not negate her standing. Lastly, the non-exchange defendants assert that her injury is too remote from their alleged violations to be actionable under antitrust laws.

The argument centers on the assertion that the plaintiff's injuries were caused by the price-deflating actions of the exchanges, rather than the price-inflating activities of the non-exchange defendants, who claim their actions were merely a "but for" cause of the plaintiff's injuries. They further argue that the injuries sustained by long traders like Grosser were incidental to the anticompetitive objectives of the alleged conspiracy. Citing precedent, the non-exchange defendants maintain that the speculative nature of the claimed damages indicates that the plaintiff's injury is remote.

However, it is emphasized that the plaintiff entered the market at an artificially inflated price due to the alleged actions of the non-exchange defendants, which directly influenced the extent of their losses. The conclusion would differ if the plaintiff had purchased silver futures at a competitive price and later incurred losses. The text argues that inflating silver prices was central to the alleged conspiracy, and it was foreseeable that innocent traders would suffer losses as a result.

The non-exchange defendants’ claim that the injuries were merely incidental is countered by the principle that the availability of a remedy does not depend on the specific intent of the conspirators. The manipulation of the silver futures market, leading to significant losses for innocent purchasers, is deemed central to the conspirators' scheme, contradicting the defendants' characterization of the injuries as incidental. The remoteness inquiry highlights that the plaintiff's injuries in a manipulated market align with the protective intent of antitrust laws, as Grosser seeks to recover damages resulting from the defendants' anti-competitive scheme. The non-exchange defendants also argue that the damages claimed are speculative and complex, complicating the calculation of potential damages.

Damages in this case are not deemed too speculative, as it aligns with previous cases where standing was granted, including Pollock and Strax v. Commodity Exchange, Inc. The presence of "extraneous factors" affecting price movements does not undermine the claim, which is not based on an abstract notion of harm. Concerns about managing the complexity of damage calculations are acknowledged, particularly regarding potential duplicative recoveries and the apportionment of damages among multiple defendants. While the plaintiff shares a market position with non-exchange defendants and other market actors may have contributed to her damages, this does not sufficiently differentiate her case from those allowing standing. 

The non-exchange defendants argue that granting standing to the plaintiff is unnecessary for antitrust enforcement since short traders have been recognized as having standing in similar cases. They assert that short traders' self-interest suffices to protect antitrust interests, and allowing standing for long traders could lead to excessive antitrust claims. However, this position is challenged on two fronts: it is unclear whether the plaintiff has a valid claim against other defendants, and the plaintiff's theory suggests she incurred losses irrespective of any conspiracy affecting silver futures prices.

Distinguishing between long and short plaintiffs regarding their right to recover losses is unwarranted if their injuries are distinct and not duplicative. Both groups of traders are similarly positioned as antitrust plaintiffs, and allowing recovery for both does not undermine the private enforcement of antitrust laws or create excessive liability for non-exchange defendants. The non-exchange defendants argue that the alleged drop in silver prices, linked to their manipulative conduct, does not constitute an antitrust injury, as the latest actions in the causal chain were procompetitive. They cite Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc. to support the claim that plaintiffs must demonstrate an injury that the antitrust laws aim to prevent, which should reflect the anticompetitive effects of unlawful conduct. However, the response indicates that the plaintiff's losses, incurred from contracts bought at inflated prices followed by a price decline, are directly tied to the alleged anticompetitive actions. Unlike the Brunswick case, where plaintiffs' injuries stemmed from preserved competition, the actions of the non-exchange defendants did not promote competition.

Plaintiff argues that her losses stem from entering the futures market on the long side rather than from the crash of silver prices in January 1980. The question of whether the actions of the exchanges were "procompetitive" is a factual issue that cannot be resolved at this stage. The decline in prices does not inherently indicate that the exchanges' actions enhanced competition; rather, the liquidation rules may have depressed silver futures prices by restricting market liquidity, benefiting short positions and harming long positions. Consequently, the non-exchange defendants' motion to dismiss the antitrust claims due to the plaintiff's alleged lack of standing is denied. 

However, motions to dismiss claims under the Commodity Exchange Act (CEA) and the Racketeer Influenced and Corrupt Organizations Act (RICO) are granted for all defendants based on statute of limitations. Brodsky's motion to dismiss for lack of personal jurisdiction is granted, while the non-exchange defendants' motion to dismiss antitrust claims is denied. MACE's motion to dismiss for lack of personal jurisdiction and improper venue, along with the exchange defendants' motion to dismiss antitrust claims, are granted without prejudice, recognizing the public interest involved in antitrust cases. A conference will be scheduled to discuss potential amendments to the complaint in accordance with Federal Rules of Civil Procedure. Additionally, there is a pending motion for class certification, and it has been noted that MACE, named as a defendant, does not exist as an entity. Other defendants have reached a settlement agreement with the plaintiff, pending court approval. The non-exchange defendants also seek dismissal of various claims based on statute of limitations and failure to adequately plead violations.

The exchange defendants seek dismissal of all claims against them, arguing the complaint inadequately alleges bad faith and fails to present claims upon which relief can be granted. They challenge the Commodity Exchange Act (CEA) claims on several grounds: the claims are barred by the statute of limitations; the plaintiff did not trade with the exchanges and clearinghouses named; the plaintiff failed to plead violations of CEA Sections 4b or 4c; and the fraud allegations lack specificity. Additionally, they contend the antitrust claims are invalid due to the plaintiff's lack of antitrust standing, the exchanges' antitrust immunity, and insufficient allegations of conspiracy involvement.

MACE also moves to dismiss both the CEA and antitrust claims due to lack of personal jurisdiction and improper venue, reiterating the statute of limitations and inadequate allegations of bad faith and fraud specificity. Alvin Brodsky joins the dismissal motion for the non-exchange defendants, individually seeking dismissal for lack of personal jurisdiction due to improper service, as well as for failure to state claims under the CEA and RICO.

The 1982 amendment to the CEA established a two-year statute of limitations but included a non-retroactivity clause for actions accruing before January 11, 1983. Despite this, courts may reference the amendment to infer Congressional intent regarding earlier CEA provisions. The ruling also suggests that similar considerations apply for determining where the plaintiff's CEA claims accrued, even when fraud isn't involved. The plaintiff has not proposed alternative limitations from New Jersey or Illinois, and while some federal courts have used Illinois' blue sky limitations for CEA claims, no analogous New Jersey statute has been identified. However, certain Third Circuit and New Jersey federal courts have addressed which New Jersey limitations apply to federal securities law claims.

Judge Gibbons determined that New Jersey's six-year statute of limitations for common law fraud should be applied rather than the two-year blue sky limitations period for a federal securities claim that could not be pursued under the state's blue sky law. Judge Sloviter concurred but noted that typically, the interaction of federal and state securities laws would favor the application of the state’s two-year limitation period. Dissenting, Judge Seitz argued that federal courts should adhere to the state statute of limitations governing the same regulatory area. A notable New Jersey federal district court case suggested evaluating whether the plaintiff falls within the protection of the state statute and whether the defendant's conduct aligns with the state's actionable provisions. However, it remains unclear how a New Jersey federal court would resolve limitations issues for federal commodities laws claims, as this has not been previously addressed. The court ultimately decided to adopt the two-year period from the New Jersey blue sky law, following the approach of other federal courts. Additionally, it was noted that the "place of injury" rule could allow a cause of action to accrue in multiple states, and the parties acknowledged that personal jurisdiction over MACE concerning the CEA claims must adhere to state law standards due to the CEA's lack of nationwide service provisions for private civil actions.

MACE clarifies that, in 1979 and 1980, it offered a 1,000-ounce silver futures contract, while the COMEX offered a 5,000-ounce contract. Due to brokerage and clearing fees, it was not economically viable to fill a 5,000-ounce order with multiple MACE mini-silver contracts, and MACE contracts were not deliverable on COMEX and vice versa. The document notes that the court will not address the fungibility of MACE contracts relative to other exchanges due to conclusions about the plaintiff's "unitary market" theory. Additionally, it mentions that the sale of onions for future delivery on U.S. contract markets is prohibited. The plaintiff's reference to a case regarding long-arm jurisdiction over a Japanese corporation is deemed too factually and legally distinct to be relevant here. The excerpt also discusses how antitrust violations can be characterized tortiously for assessing personal jurisdiction. A Supreme Court ruling is cited, emphasizing that distinguishing between unilateral and concerted actions requires evidence excluding independent actions. Finally, while the Clayton Act's venue provisions can theoretically be linked, courts generally interpret them as having distinct scopes. The exchange defendants challenge the sufficiency of the plaintiff's antitrust allegations regarding both long and short conspiracies.