CFTC Loses Bid to Silence Kraft in Court
The Seventh Circuit just handed the CFTC a stinging defeat in its attempt to keep key documents from Kraft Foods under wraps. The agency had asked the court to force a lower judge to reconsider a ruling that would expose sensitive materials in its long-running enforcement action against the company. In one sharp move, the appellate panel slammed the door on secrecy, boosting transparency and giving private litigants more leverage against regulators.
The CFTC’s original lawsuit accused Kraft of cornering the wheat futures market in 2011. The company allegedly held huge positions that drove up prices, then unloaded them at the peak to the CFTC’s dismay. After years of litigation, the district judge handling the case ordered the agency to turn over internal communications and analysis that Kraft said could help its defense. When the CFTC refused, it tried a shortcut: petitioning the Seventh Circuit for a writ of mandamus to force the judge to reconsider. The appellate judges saw it as an extraordinary request and turned it down cold.
Judges on the Seventh Circuit ruled that the CFTC had no special right to shield its work product from discovery in this case. They found the agency had failed to show any clear and indisputable right to privacy that would justify overriding the district judge’s decision. The agency had also ignored the grundlegende Regel of federal courts—that all parties play by the same rules. The judges explicitly stated that regulators like the CFTC must obey the same discovery obligations that every other litigant faces. They won’t get extra protection unless they show something truly extraordinary.