A commodities newsletter “transacts business” in Kansas where two of its subscribers are based in Kansas, rendering venue proper in the federal district court in Kansas under the Commodity Exchange Act.
Budicak, Inc. vs. Lansing Trade Group, LLC, No. 2:19-CV-2449 (D. Kan., 2/14/20).
In this putative class action, plaintiff alleges defendant Lansing Trade Group manipulated the wheat futures market in violation of the Commodity Exchange Act and the Sherman Antitrust Act. In an amended complaint, plaintiff adds defendant Cascade Commodity Consulting as a defendant, alleging that Cascade, which publishes a commodity newsletter from its office in Oregon, helped manipulate the market by amplifying false signals Lansing was sending. Cascade moves to dismiss for improper venue and lack of personal jurisdiction. The Court denies the motion.
Under both the Commodity Exchange Act and the Sherman Act, venue is proper in any judicial district where, among other things, defendant “transacts business.” Two of Cascade’s 82 subscribers reside in Kansas. Moreover, Cascade updates its subscriber content daily, meaning it has continuous interaction with its Kansas subscribers. As such, Cascade transacts business in Kansas and venue is proper there. Nor would it violate Cascade’s due process rights to make it defend this case in Kansas. Cascade admittedly has very few contacts with Kansas, but they are not so de minimis as to violate due process. Cascade regularly conducts business across state lines and modern technology and transportation make defending a case in a foreign jurisdiction much easier than it used to be.
(J. Komie: It has been a very long time since I’ve read a case construing International Shoe. One of the many benefits of being a Contributing Editor to this publication is dusting off seldom used parts of one’s legal education.) (EIC: See SOLA Ref. No. 2019-36-03 for an earlier decision in this case by the Northern District of Illinois, ordering a transfer of venue. Mr. Komie also summarized that decision.)
(SOLA Ref. No. 2020-13-04)
NOTICE: The court decision synopsis published above represents an abbreviated description of the actual decision and is re-printed here for its educational value. The author's effort is to report concisely the substance of the decision or a selected portion of the decision; commentary or analysis is generally reserved for the italicized section at the bottom of the summary. Subscribers to SAC's Online Litigation Alert (SOLA), from which this synopsis is excerpted, have immediate access to the full decision, in addition to the synopsis.
Like what you see here?
Twice a week we present blog posts consisting of one write-up from each of our two flagship weekly online Alert services. Consider a subscription to these publications to receive the full array of coverage right on your desktop every week. Give it a try and sign up for a free trial to the Securities Arbitration Alert and the Securities Litigation Alert.