CFTC v. John Robert Blakey

Citation: Not availableDocket: 19-2769

Court: Court of Appeals for the Seventh Circuit; October 22, 2019; Federal Appellate Court

Original Court Document: View Document

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The Seventh Circuit Court of Appeals considered a petition for a writ of mandamus filed by the Commodity Futures Trading Commission (CFTC) against Kraft Foods Group and Mondelēz Global, stemming from a civil action initiated by the CFTC in 2015 and settled in August 2019. The consent decree from the settlement included a provision restricting public statements about the case. After the CFTC issued a press release regarding the settlement, Kraft and Mondelēz sought to hold the CFTC and its Commissioners in contempt of court. The district judge scheduled a hearing requiring the Commission and its officials to testify under oath, indicating potential criminal contempt implications. In response to the lack of action on their motion to lift the hearing demands and threats of sanctions, the CFTC filed for a writ of mandamus, resulting in a stay from the appellate court and a directive to make all filings public, countering the district judge's confidentiality order. The court noted that previous rulings established that confidentiality clauses do not permit secret adjudication. Although the district judge indicated he would no longer consider criminal contempt, the case now revolves around civil contempt. The court granted the motion for the Chairman and Commissioners to intervene, recognizing their right to protect their personal interests amidst the contempt proceedings. The court affirmed that mandamus is a viable remedy for urgent needs when a clear right to relief exists and noted that the district court’s order for questioning cannot be appealed from a final decision.

Time spent away from official duties is permanently lost. Cheney asserts that mandamus is the appropriate remedy when a district court orders an inquest into the internal deliberations of senior Executive Branch officials. This aligns with prior decisions where mandamus was deemed suitable if a federal official is compelled to appear in person rather than through counsel. The district court's order for the Chairman, Commissioners, and staff to testify is potentially justifiable on two grounds: the risk of contempt and the necessity of their testimony to assess the Commission's contempt. However, neither justification holds. The individuals compelled to appear are not parties to the consent decree, and any adjudication of contempt against them would only be valid if the Commission could bind its members under Fed. R. Civ. P. 65(d)(2)(B). The Commission cannot negate each member's right to publish dissenting opinions, as stipulated in 7 U.S.C. § 2(a)(10)(C). Thus, a consent decree aimed at silencing individual members is ineffective unless another statute grants such power, which none do.

Furthermore, while the district judge suggested that only the Chairman and Commissioners could provide evidence of the Commission's intent to support a contempt ruling, the Supreme Court mandates that civil contempt disputes must be resolved based on objective evidence.

The agreement, consent decree, and press release are interpreted solely based on their explicit content. Any alleged wrongdoing by the Commission arises from its documented actions, not from the personal views of its members. Judicial review is confined to the agency's official actions and the administrative record, with exceptions for extraordinary circumstances. Intra-agency discussions are protected by various privileges, which have not been sufficiently challenged in this case. As a result, there is no justification for requiring testimony from the Commission's leadership or staff, leading to the issuance of a writ of mandamus to stop the district court from compelling their appearance or holding them in contempt. 

The Commission faces claims from Kraft and Mondelēz that certain statements in its press release breach the confidentiality of the consent decree. The statements in question pertain to a $16 million penalty, the resolution of litigation, the mission to ensure open markets, and expectations regarding future language in settlements. The Commission argues that these statements do not violate the confidentiality clause, but the mandamus request regarding this issue is deemed weak. If the district court finds contempt, the Commission can appeal. The request to transfer the case to another judge is denied, as the original judge is best suited to evaluate potential violations of the decree. The motion to intervene is granted, while the petition for mandamus is granted in part and denied in other respects.