Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 1 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 1 of 41
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`U.S. District Court
`District of Columbia (Washington, DC)
`CIVIL DOCKET FOR CASE #: 1:23−cv−03257−JMC
`Internal Use Only
`
`APPEAL,TYPE−C
`
`KALSHIEX LLC v. COMMODITY FUTURES TRADING
`COMMISSION
`Assigned to: Judge Jia M. Cobb
`Cause: 05:0706 Judicial Review of Agency Actions
`
`Date Filed: 11/01/2023
`Jury Demand: None
`Nature of Suit: 890 Other Statutory
`Actions
`Jurisdiction: U.S. Government Defendant
`
`Plaintiff
`
`KALSHIEX LLC
`
`represented by Jacob M. Roth
`JONES DAY
`51 Louisiana Avenue, NW
`Washington, DC 20001
`(202) 879−7658
`Fax: (202) 626−1700
`Email: yroth@jonesday.com
`LEAD ATTORNEY
`ATTORNEY TO BE NOTICED
`
`Amanda Kelly Rice
`JONES DAY
`150 W. Jefferson Avenue
`Suite 2100
`Detroit, MI 48226
`313−230−7926
`Email: arice@jonesday.com
`PRO HAC VICE
`ATTORNEY TO BE NOTICED
`
`John Henry Thompson
`JONES DAY
`Issues & Appeals
`51 Louisiana Avenue NW
`Washington, DC 20001
`202−879−3657
`Email: jhthompson@jonesday.com
`ATTORNEY TO BE NOTICED
`
`Joshua Brooks Sterling
`MILBANK LLP
`DC
`1850 K Street, NW
`Suite 1100
`Washington, DC 20006
`202−841−6384
`Email: jsterling@milbank.com
`
`1
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`

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`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 2 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 2 of 41
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`V.
`
`Defendant
`
`COMMODITY FUTURES TRADING
`COMMISSION
`
`ATTORNEY TO BE NOTICED
`
`Samuel V. Lioi
`JONES DAY
`901 Lakeside Avenue
`Cleveland, OH 44114
`216−586−3939
`Email: slioi@jonesday.com
`PRO HAC VICE
`ATTORNEY TO BE NOTICED
`
`represented by Raagnee Beri
`COMMODITY FUTURES TRADING
`COMMISSION
`1155 21st Street NW
`Washington, DC 20581
`202−418−5986
`Email: rberi@cftc.gov
`LEAD ATTORNEY
`ATTORNEY TO BE NOTICED
`
`Anne Whitford Stukes
`COMMODITY FUTURES TRADING
`COMMISSION
`Office of the General Counsel
`1155 21st Street, N.W.
`Washington, DC 20581
`202−418−5127
`Fax: 202−418−5567
`Email: astukes@cftc.gov
`ATTORNEY TO BE NOTICED
`
`Conor Barry Daly
`COMMODITY FUTURES TRADING
`COMMISSION
`Office of the General Counsel
`1155 21st Street NW
`Washington, DC 20581
`202−834−9752
`Email: cdaly@cftc.gov
`ATTORNEY TO BE NOTICED
`
`Margaret P. Aisenbrey
`U.S. COMMODITY FUTURES
`TRADING COMMISSION
`Division of Enforcement
`2600 Grand Boulevard
`Suite 210
`
`2
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`

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`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 3 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 3 of 41
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`Amicus
`
`JEREMY D. WEINSTEIN
`
`Amicus
`
`PARADIGM OPERATIONS LP
`
`Amicus
`
`JOSEPH A. GRUNDFEST
`
`Amicus
`
`ARISTOTLE INTERNATIONAL,
`INC.
`
`Kansas City, MO 64108
`816−960−7749
`Fax: 816−960−7750
`Email: maisenbrey@cftc.gov
`ATTORNEY TO BE NOTICED
`
`represented by Christopher Ernest Mills
`SPERO LAW LLC
`557 East Bay Street
`#22251
`Charleston, SC 29413
`843−606−0640
`Email: cmills@spero.law
`LEAD ATTORNEY
`ATTORNEY TO BE NOTICED
`
`represented by Scott A. Keller
`LEHOTSKY KELLER COHN LLP
`200 Massachusetts Avenue NW
`Washington, DC 20001
`512−693−8350
`Email: scott@lehotskykeller.com
`LEAD ATTORNEY
`ATTORNEY TO BE NOTICED
`
`represented by Adam Granich Unikowsky
`JENNER & BLOCK LLP
`1099 New York Avenue, NW
`Suite 900
`Washington, DC 20001−4412
`(202) 639−6041
`Email: AUnikowsky@jenner.com
`LEAD ATTORNEY
`ATTORNEY TO BE NOTICED
`
`represented by Michael James Edney
`HUNTON ANDREWS KURTH LLP
`2200 Pennsylvania Ave., NW
`Washington, DC 20037
`202−778−2004
`Email: MEdney@HuntonAK.com
`LEAD ATTORNEY
`ATTORNEY TO BE NOTICED
`
`Amicus
`
`BETTER MARKETS, INC.
`
`represented by
`
`3
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`

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`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 4 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 4 of 41
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`Stephen W. Hall
`7547 Sebago Road
`Bethesda, MD 20817
`202−549−3382
`Fax: 202−618−6465
`Email: shall@bettermarkets.org
`LEAD ATTORNEY
`ATTORNEY TO BE NOTICED
`
`Date Filed
`
`# Docket Text
`
`11/01/2023
`
`11/01/2023
`
`11/01/2023
`
`11/01/2023
`
`1 COMPLAINT against COMMODITY FUTURES TRADING COMMISSION ( Filing
`fee $ 402 receipt number ADCDC−10461631) filed by KALSHIEX LLC.
`(Attachments: # 1 Exhibit A − Order, # 2 Civil Cover Sheet Civil Cover Sheet, # 3
`Summons Summons − USAO, # 4 Summons Summons − CFTC, # 5 Summons
`Summons − Garland)(Roth, Jacob) (Attachment 2 replaced on 11/1/2023) (zljn).
`(Entered: 11/01/2023)
`
`2 LCvR 26.1 CERTIFICATE OF DISCLOSURE of Corporate Affiliations and Financial
`Interests by KALSHIEX LLC (Roth, Jacob) (Entered: 11/01/2023)
`
`3 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Samuel V. Lioi, Filing
`fee $ 100, receipt number ADCDC−10462151. Fee Status: Fee Paid. by KALSHIEX
`LLC. (Attachments: # 1 Declaration, # 2 Exhibit Certificate of Good Standing, # 3 Text
`of Proposed Order)(Roth, Jacob) (Entered: 11/01/2023)
`
`4 MOTION for Leave to Appear Pro Hac Vice :Attorney Name− Amanda K. Rice, Filing
`fee $ 100, receipt number ADCDC−10462356. Fee Status: Fee Paid. by KALSHIEX
`LLC. (Attachments: # 1 Declaration, # 2 Certificate of Good Standing, # 3 Text of
`Proposed Order)(Roth, Jacob) (Entered: 11/01/2023)
`
`11/01/2023
`
`Case Assigned to Judge Jia M. Cobb. (zljn) (Entered: 11/01/2023)
`
`11/01/2023
`
`11/06/2023
`
`11/06/2023
`
`11/06/2023
`
`11/06/2023
`
`5 SUMMONS (3) Issued Electronically as to COMMODITY FUTURES TRADING
`COMMISSION, U.S. Attorney and U.S. Attorney General (Attachments: # 1 Notice
`and Consent)(zljn) (Entered: 11/01/2023)
`
`6 NOTICE of Appearance by Raagnee Beri on behalf of COMMODITY FUTURES
`TRADING COMMISSION (Beri, Raagnee) (Entered: 11/06/2023)
`
`7 NOTICE of Appearance by Conor Barry Daly on behalf of COMMODITY FUTURES
`TRADING COMMISSION (Daly, Conor) (Main Document 7 replaced on 11/7/2023)
`(znmw). (Entered: 11/06/2023)
`
`MINUTE ORDER granting 3 Motion for Leave to Appear Pro Hac Vice: Counsel
`should register for e−filing via PACER and file a notice of appearance pursuant to
`LCvR 83.6(a) Click for instructions. Signed by Judge Jia M. Cobb on November 6,
`2023. (lcjmc3) (Entered: 11/06/2023)
`
`MINUTE ORDER granting 4 Motion for Leave to Appear Pro Hac Vice: Counsel
`should register for e−filing via PACER and file a notice of appearance pursuant to
`LCvR 83.6(a) Click for instructions. Signed by Judge Jia M. Cobb on November 6,
`2023. (lcjmc3) (Entered: 11/06/2023)
`
`11/07/2023
`
`8
`
`4
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`

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`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 5 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 5 of 41
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`11/07/2023
`
`11/09/2023
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`11/13/2023
`
`11/21/2023
`
`11/21/2023
`
`NOTICE of Appearance by Sam Lioi on behalf of KALSHIEX LLC (Lioi, Sam) (Main
`Document 8 replaced on 11/8/2023) (znmw). (Entered: 11/07/2023)
`
`9 NOTICE of Appearance by Amanda Kelly Rice on behalf of KALSHIEX LLC (Rice,
`Amanda) (Main Document 9 replaced on 11/8/2023) (znmw). (Entered: 11/07/2023)
`
`10 NOTICE of Appearance by John Henry Thompson on behalf of KALSHIEX LLC
`(Thompson, John Henry) (Main Document 10 replaced on 11/13/2023) (znmw).
`(Entered: 11/09/2023)
`
`11 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed as to the
`United States Attorney. Date of Service Upon United States Attorney on 11/6/2023.
`Answer due for ALL FEDERAL DEFENDANTS by 1/5/2024. (Roth, Jacob) (Entered:
`11/13/2023)
`
`12 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed on
`United States Attorney General. Date of Service Upon United States Attorney General
`11/14/2023. (Roth, Jacob) (Entered: 11/21/2023)
`
`13 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed.
`COMMODITY FUTURES TRADING COMMISSION served on 11/13/2023 (Roth,
`Jacob) (Entered: 11/21/2023)
`
`11/28/2023
`
`14
`
`Joint MOTION for Scheduling Order and For Other Relief by COMMODITY
`FUTURES TRADING COMMISSION. (Attachments: # 1 Text of Proposed Order
`Granting Joint Motion For Entry of Scheduling Order and For Other Relief)(Daly,
`Conor) (Entered: 11/28/2023)
`
`11/30/2023
`
`15 ORDER granting 14 Motion for Scheduling Order: As agreed to in their Joint Motion,
`the Parties are ORDERED to adhere to the following deadlines: Plaintiff will file a
`motion for summary judgment by January 25, 2024. Defendant will file a cross−motion
`for summary judgment and a response in opposition to Plaintiff's motion for summary
`judgment by February 26, 2024. Plaintiff will file a reply in support of its motion for
`summary judgment and in opposition to the Defendant's cross−motion for summary
`judgment by March 27, 2024. Defendant will file a reply in support of its cross−motion
`for summary judgment by April 10, 2024. Additionally, the Defendant is no longer
`required to file an answer and the January 5, 2024, deadline to do so is STRICKEN.
`See attached document for further details and additional deadlines. Signed by Judge Jia
`M. Cobb on November 30, 2023. (lcjmc3) (Entered: 11/30/2023)
`
`01/16/2024
`
`01/25/2024
`
`01/31/2024
`
`16 NOTICE of Filing of Certified List of Contents of the Administrative Record by
`COMMODITY FUTURES TRADING COMMISSION (Attachments: # 1
`Exhibit)(Beri, Raagnee) (Entered: 01/16/2024)
`
`17 MOTION for Summary Judgment by KALSHIEX LLC. (Attachments: # 1
`Memorandum in Support, # 2 Text of Proposed Order)(Roth, Jacob) (Entered:
`01/25/2024)
`
`18 Unopposed MOTION for Leave to File Brief as Amicus Curiae by Jeremy D.
`Weinstein. (Attachments: # 1 Exhibit Proposed Brief, # 2 Text of Proposed
`Order)(Mills, Christopher) (Entered: 01/31/2024)
`
`01/31/2024
`
`19 NOTICE of Appearance by Christopher Ernest Mills on behalf of Jeremy D. Weinstein
`(Mills, Christopher) (Entered: 01/31/2024)
`
`02/01/2024
`
`20
`
`5
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`

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`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 6 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 6 of 41
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`02/01/2024
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`02/02/2024
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`02/02/2024
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`02/02/2024
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`02/02/2024
`
`MOTION for Leave to File An Amicus Brief In Support of Plaintiff's Motion for
`Summary Judgment by PARADIGM OPERATIONS LP. (Attachments: # 1 Exhibit
`Brief in Support of Plaintiff's Motion for Summary Judgment, # 2 Text of Proposed
`Order Proposed Order)(Keller, Scott) (Entered: 02/01/2024)
`
`21 Unopposed MOTION for Leave to File Brief as Amicus Curiae in Support of Plaintiff's
`Motion for Summary Judgment by JOSEPH A. GRUNDFEST. (Attachments: # 1
`Proposed Brief of Amicus Curiae Professor Joseph A. Grundfest in Support of
`Plaintiff, # 2 Proposed Order)(Unikowsky, Adam) (Entered: 02/01/2024)
`
`MINUTE ORDER granting 18 Motion for Leave to File: Upon consideration of the
`motion, leave to file is GRANTED. It is ORDERED that the proposed brief
`accompanying the motion be filed. Signed by Judge Jia M. Cobb on February 2, 2024.
`(lcjmc3) (Entered: 02/02/2024)
`
`MINUTE ORDER granting 20 Motion for Leave to File: Upon consideration of the
`motion, leave to file is GRANTED. It is ORDERED that the proposed brief
`accompanying the motion be filed. Signed by Judge Jia M. Cobb on February 2, 2024.
`(lcjmc3) (Entered: 02/02/2024)
`
`MINUTE ORDER granting 21 Motion for Leave to File: Upon consideration of the
`motion, leave to file is GRANTED. It is ORDERED that the proposed brief
`accompanying the motion be filed. Signed by Judge Jia M. Cobb on February 2, 2024.
`(lcjmc3) (Entered: 02/02/2024)
`
`22 Unopposed MOTION for Leave to File Amicus Curiae Brief by ARISTOTLE
`INTERNATIONAL INC.. (Attachments: # 1 BRIEF OF AMICUS CURIAE
`ARISTOTLE INTERNATIONAL, INC., IN SUPPORT OF PLAINTIFFS MOTION
`FOR SUMMARY JUDGEMENT, # 2 (PROPOSED) ORDER GRANTING
`ARISTOTLE INTERNATIONAL, INC.S MOTION FOR LEAVE TO FILE AMICUS
`CURIAE BRIEF)(Edney, Michael) (Entered: 02/02/2024)
`
`02/02/2024
`
`23 AMICUS BRIEF by JEREMY D. WEINSTEIN. (zdp) (Entered: 02/06/2024)
`
`02/02/2024
`
`24 AMICUS BRIEF by PARADIGM OPERATIONS LP. (zdp) (Entered: 02/06/2024)
`
`02/02/2024
`
`25 AMICUS BRIEF by JOSEPH A. GRUNDFEST. (zdp) (Entered: 02/06/2024)
`
`02/05/2024
`
`MINUTE ORDER granting 22 Motion for Leave to File: Upon consideration of the
`motion, leave to file is GRANTED. It is ORDERED that the proposed brief
`accompanying the motion be filed. Signed by Judge Jia M. Cobb on February 5, 2024.
`(lcjmc3) (Entered: 02/05/2024)
`
`02/05/2024
`
`26 AMICUS BRIEF by ARISTOTLE INTERNATIONAL INC.. (zdp) (Entered:
`02/06/2024)
`
`02/07/2024
`
`27 NOTICE of Appearance by Margaret P. Aisenbrey on behalf of COMMODITY
`FUTURES TRADING COMMISSION (Aisenbrey, Margaret) (Entered: 02/07/2024)
`
`02/21/2024
`
`02/21/2024
`
`28 Unopposed MOTION for Leave to File Excess Pages by COMMODITY FUTURES
`TRADING COMMISSION. (Attachments: # 1 Text of Proposed Order)(Aisenbrey,
`Margaret) (Entered: 02/21/2024)
`
`MINUTE ORDER granting 28 unopposed motion for leave to file excess pages. It is
`hereby ORDERED that the Defendant's motion may exceed the page limit set forth in
`Local Civil Rule 7(e) by 10 additional pages. Signed by Judge Jia M. Cobb on
`
`6
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`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 7 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 7 of 41
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`February 21, 2024. (lcjmc3) (Entered: 02/21/2024)
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`02/22/2024
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`02/26/2024
`
`02/26/2024
`
`29 NOTICE of Appearance by Anne Whitford Stukes on behalf of COMMODITY
`FUTURES TRADING COMMISSION (Stukes, Anne) (Main Document 29 replaced
`on 2/22/2024) (zdp). (Entered: 02/22/2024)
`
`30 Cross MOTION for Summary Judgment and Opposition to Plaintiff Kalshi's Motion
`for Summary Judgment by COMMODITY FUTURES TRADING COMMISSION.
`(Attachments: # 1 Proposed Order)(Beri, Raagnee) (Entered: 02/26/2024)
`
`31 Memorandum in opposition to re 17 Motion for Summary Judgment and Cross Motion
`for Summary Judgment filed by COMMODITY FUTURES TRADING
`COMMISSION. (Attachments: # 1 Proposed Order)(Beri, Raagnee) (Entered:
`02/26/2024)
`
`03/04/2024
`
`32 NOTICE of Appearance by Stephen W. Hall on behalf of BETTER MARKETS, INC.
`(Hall, Stephen) (Entered: 03/04/2024)
`
`03/04/2024
`
`03/04/2024
`
`33 Unopposed MOTION for Leave to File Amicus Curiae Brief in Support of Defendant
`Commodity Futures Trading Commission by BETTER MARKETS, INC..
`(Attachments: # 1 Exhibit Brief of Better Markets, Inc., as Amicus Curiae in Support of
`Defendant Commodity Futures Trading Commission, # 2 Text of Proposed Order
`Proposed Order)(Hall, Stephen) (Entered: 03/04/2024)
`
`MINUTE ORDER granting 33 Motion for Leave to File: Upon consideration of the
`motion, leave to file is GRANTED. It is ORDERED that the proposed brief
`accompanying the motion be filed. Signed by Judge Jia M. Cobb on March 4, 2024.
`(lcjmc3) (Entered: 03/04/2024)
`
`03/04/2024
`
`34 AMICUS BRIEF by BETTER MARKETS, INC.. (zdp) (Entered: 03/06/2024)
`
`03/27/2024
`
`35 Memorandum in opposition to re 30 Motion for Summary Judgment filed by
`KALSHIEX LLC. (Attachments: # 1 Text of Proposed Order)(Roth, Jacob) (Entered:
`03/27/2024)
`
`03/27/2024
`
`36 REPLY to opposition to motion re 17 MOTION for Summary Judgment filed by
`KALSHIEX LLC. (Roth, Jacob) (Entered: 03/27/2024)
`
`04/10/2024
`
`04/12/2024
`
`37 REPLY to opposition to motion re 30 Cross MOTION for Summary Judgment and
`Opposition to Plaintiff Kalshi's Motion for Summary Judgment filed by COMMODITY
`FUTURES TRADING COMMISSION. (Beri, Raagnee) (Entered: 04/10/2024)
`
`MINUTE ORDER: The Parties are ORDERED to appear for oral argument on
`Plaintiff's motion for summary judgment 17 and Defendant's cross motion for summary
`judgment 30 on May 30, 2024, at 1:00 PM in Courtroom 3− In Person before Judge Jia
`M. Cobb. Signed by Judge Jia M. Cobb on April 12, 2024. (lcjmc3) (Entered:
`04/12/2024)
`
`04/24/2024
`
`38
`
`JOINT APPENDIX by KALSHIEX LLC. (Attachments: # 1 Appendix Volume 1, # 2
`Appendix Volume 2, # 3 Appendix Volume 3, # 4 Appendix Volume 4, # 5 Appendix
`Volume 5)(Roth, Jacob) (Entered: 04/24/2024)
`
`05/30/2024
`
`Minute Entry for Motion Hearing held 5/30/24 before Judge Jia M. Cobb: Oral
`arguments heard and 17 MOTION for Summary Judgment and 30 Cross MOTION for
`Summary Judgment, taken under advisement. (Court Reporter Stacy Johns) (zgf)
`(Entered: 05/31/2024)
`
`7
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`

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`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 8 of 41
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`05/31/2024
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`06/04/2024
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`39 NOTICE of Appearance by Joshua Brooks Sterling on behalf of KALSHIEX LLC
`(Sterling, Joshua) (Main Document 39 replaced on 5/31/2024) (zdp). (Entered:
`05/31/2024)
`
`40 TRANSCRIPT OF MOTION HEARING before Judge Jia M. Cobb held on May 30,
`2024. Page Numbers: 1−91. Date of Issuance: June 4, 2024. Court Reporter: Stacy
`Johns. Email address: Stacy_Johns@dcd.uscourts.gov. Transcripts may be ordered by
`submitting the Transcript Order Form
`
`For the first 90 days after this filing date, the transcript may be viewed at the
`courthouse at a public terminal or purchased from the court reporter referenced above.
`After 90 days, the transcript may be accessed via PACER. Other transcript formats,
`(multi−page, condensed, CD or ASCII) may be purchased from the court reporter.
`
`NOTICE RE REDACTION OF TRANSCRIPTS: The parties have twenty−one
`days to file with the court and the court reporter any request to redact personal
`identifiers from this transcript. If no such requests are filed, the transcript will be made
`available to the public via PACER without redaction after 90 days. The policy, which
`includes the five personal identifiers specifically covered, is located on our website at
`www.dcd.uscourts.gov.
`
`Redaction Request due 6/25/2024. Redacted Transcript Deadline set for 7/5/2024.
`Release of Transcript Restriction set for 9/2/2024.(Johns, Stacy) (Entered: 06/04/2024)
`
`06/10/2024
`
`41 MOTION for Leave to File for Leave to File Supplemental Memorandum Responding
`to New Issues Raised at May 30, 2024 Hearing by COMMODITY FUTURES
`TRADING COMMISSION. (Attachments: # 1 Text of Proposed Order Supplemental
`Memorandum, # 2 Exhibit Ex. to Memorandum − Transcript Excerpts, # 3 Text of
`Proposed Order Proposed Order Granting Motion to File Supplemental
`Memorandum)(Beri, Raagnee) (Entered: 06/10/2024)
`
`06/11/2024
`
`42 RESPONSE re 41 MOTION for Leave to File for Leave to File Supplemental
`Memorandum Responding to New Issues Raised at May 30, 2024 Hearing filed by
`KALSHIEX LLC. (Attachments: # 1 Appendix Excerpted Hearing Transcript)(Roth,
`Jacob) (Entered: 06/11/2024)
`
`06/28/2024
`
`43 NOTICE OF WITHDRAWAL OF APPEARANCE as to KALSHIEX LLC. Attorney
`Joshua Brooks Sterling terminated. (Sterling, Joshua) (Entered: 06/28/2024)
`
`06/28/2024
`
`44 NOTICE OF SUPPLEMENTAL AUTHORITY by KALSHIEX LLC (Attachments: #
`1 Exhibit Opinion in Loper Bright Enterprises v. Raimondo)(Roth, Jacob) (Entered:
`06/28/2024)
`
`07/08/2024
`
`45 NOTICE of Appearance by Joshua Brooks Sterling on behalf of KALSHIEX LLC
`(Sterling, Joshua) (Entered: 07/08/2024)
`
`08/20/2024
`
`08/20/2024
`
`46
`
`MINUTE ORDER granting 41 Motion for Leave to File: Plaintiff has withdrawn its
`objection to Defendant's motion. Accordingly, the motion is GRANTED. The Clerk of
`Court is directed to docket Ex. 1 and 2 attached to 41 Defendant's motion for leave to
`file as a supplemental memorandum and exhibit thereto in support of its 30 cross
`motion for summary judgment and opposition to Plaintiff's motion for summary
`judgment. Signed by Judge Jia M. Cobb on August 20, 2024. (lcjmc3) (Entered:
`08/20/2024)
`
`8
`
`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 9 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 9 of 41
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`SUPPLEMENTAL MEMORANDUM to re 30 Cross MOTION for Summary
`Judgment and Opposition to Plaintiff Kalshi's Motion for Summary Judgment filed by
`COMMODITY FUTURES TRADING COMMISSION. (Attachments: # 1
`Exhibit)(zdp) (Entered: 08/23/2024)
`
`09/06/2024
`
`09/06/2024
`
`47 ORDER granting 17 Plaintiff's Motion for Summary Judgment and denying 30
`Defendant's Cross−Motion for Summary Judgment: See document for details. Signed
`by Judge Jia M. Cobb on September 6, 2024. (lcjmc3) (Entered: 09/06/2024)
`
`48 Emergency MOTION to Stay re 47 Order on Motion for Summary Judgment, by
`COMMODITY FUTURES TRADING COMMISSION. (Attachments: # 1 Text of
`Proposed Order)(Stukes, Anne) (Entered: 09/06/2024)
`
`09/08/2024
`
`49 Memorandum in opposition to re 48 Motion to Stay filed by KALSHIEX LLC.
`(Attachments: # 1 Text of Proposed Order)(Roth, Jacob) (Entered: 09/08/2024)
`
`09/09/2024
`
`09/09/2024
`
`09/11/2024
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`09/12/2024
`
`09/12/2024
`
`50 REPLY to opposition to motion re 48 Emergency MOTION to Stay re 47 Order on
`Motion for Summary Judgment, filed by COMMODITY FUTURES TRADING
`COMMISSION. (Stukes, Anne) (Entered: 09/09/2024)
`
`MINUTE ORDER Setting Hearing: The Court will hold a hearing in this matter on
`Thursday, September 12, 2024, at 10:30 AM. The hearing will be on the record before
`Judge Jia M. Cobb and conducted via Zoom. The Court's Deputy Clerk will provide the
`information necessary to access the conference. The Court hereby ORDERS a
`temporary administrative stay of its 47 order granting Plaintiff's motion for summary
`judgment and denying Defendant's cross−motion for summary judgment until the
`conclusion of Thursday's hearing to allow the Court time to consider the Parties'
`arguments regarding Defendant's pending motion. See, e.g., June Med. Servs., L.L.C. v.
`Gee, 139 S. Ct. 661 (2019) (granting an administrative stay to give the court "time to
`review [the] filings"); Cobell v. Norton, No. 03−5262, 2004 WL 603456, at *1 (D.C.
`Cir. Mar. 24, 2004) (granting a temporary stay "to give the court sufficient opportunity
`to consider the merits of the motion for a stay pending appeal"). This Order does not
`represent a ruling on the merits of Defendant's motion for a stay but instead grants a
`temporary administrative stay of three days until the conclusion of the upcoming
`hearing. Signed by Judge Jia M. Cobb on September 9, 2024. (lcjmc1) (Entered:
`09/09/2024)
`
`MINUTE ORDER: Members of the public who wish to listen to the motions hearing
`set in this matter for September 12, 2024 at 10:30 AM may dial in using the Court's
`toll−free public access line, found on the Court's webpage:
`https://www.dcd.uscourts.gov/public−access−teleconference−information. The public
`access line will be in listen−only mode. Signed by Judge Jia M. Cobb on September 11,
`2024. (lcjmc3) (Entered: 09/11/2024)
`
`51 MEMORANDUM OPINION re 17 Plaintiff's Motion for Summary Judgment and 30
`Defendant's Cross Motion for Summary Judgment: See document for details. Signed by
`Judge Jia M. Cobb on September 12, 2024. (lcjmc3) (Entered: 09/12/2024)
`
`Minute Entry for video proceeding held on 9/12/2024 before Judge Jia M. Cobb:
`Motion Hearing re 48 Emergency MOTION to Stay. For the reason stated on the
`record, 48 Motion to Stay is DENIED. Oral motion for stay pending appeal; heard and
`DENIED, for the reasons also stated on the record. (Court Reporter Stacy Johns.) (zed)
`(Entered: 09/12/2024)
`
`09/12/2024
`
`52
`
`9
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`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 10 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 10 of 41
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`NOTICE OF APPEAL TO DC CIRCUIT COURT as to 47 Order on Motion for
`Summary Judgment, by COMMODITY FUTURES TRADING COMMISSION. Fee
`Status: No Fee Paid. Parties have been notified. (Beri, Raagnee) (Entered: 09/12/2024)
`
`10
`
`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 11 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 11 of 41
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
`
`
`
`
`
`KALSHIEX LLC,
`
`Plaintiff,
`
`v.
`
`
`
`
`
`Civil Action No. 1:23-cv-03257 (JMC)
`
`COMMODITY FUTURES TRADING
`COMMISSION,
`
`
`Defendant.
`
`
`
`
`
`NOTICE OF APPEAL
`
`Notice is hereby given this 12th day of September, 2024, that the Commodity Futures Trading
`
`Commission hereby appeals to the United States Court of Appeals for the District of Columbia
`
`Circuit from the judgment of this Court entered on the 6th day of September, 2024 [Dkt No. 47],
`
`with a memorandum opinion issued today, [Dkt. No. 51] granting Plaintiff’s, KalshiEx LLC’s,
`
`motion for summary judgment [Dkt No. 17] and denying Defendant’s cross-motion for summary
`
`judgment [Dkt No. 30].
`
`
`
`Dated: September 12, 2024
`
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
`
`
`
`
`
`
`
`
`/s/ Raagnee Beri
`
` Senior Assistant General Counsel
`
`Robert A. Schwartz
` General Counsel
`Anne W. Stukes
` Deputy General Counsel
`Margaret P. Aisenbrey
` Senior Assistant General Counsel
`Conor B. Daly
` Counsel
`Commodity Futures Trading Commission
`
`11
`
`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 12 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 12 of 41
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`1155 21st Street, NW
`Washington, D.C. 20581-0001
`Phone: (202) 418-5986
`rberi@cftc.gov
`
`
`
`
`
`12
`
`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 13 of 41
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`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on September 12, 2024, I served the foregoing on counsel of record
`
`using this Court’s CM/ECF system.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`/s/ Raagnee Beri
`
`13
`
`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 14 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 14 of 41
`
`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
`
`
`
`
`
`
`
`KALSHIEX LLC,
`
`Plaintiff,
`
`v.
`
`
`COMMODITY FUTURES TRADING
`COMMISSION,
`
`
`Defendant.
`
`
`
`
`Civil Action No. 23-3257 (JMC)
`
`
`
`
`
`ORDER
`For the reasons stated in the Court’s forthcoming memorandum opinion, the Court
`
`GRANTS Plaintiff’s motion for summary judgment, ECF 17, and DENIES Defendant’s cross-
`
`motion for summary judgment, ECF 30. Defendant’s September 22, 2023 order prohibiting
`
`Plaintiff from listing its congressional control contracts for trading is hereby VACATED.
`
`
`This is a final appealable order.
`
`
`SO ORDERED.
`
`
`
`
`
`
`
`Date: September 6, 2024
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`__________________________
`JIA M. COBB
`United States District Judge
`
`
`
`1
`
`14
`
`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 15 of 41
`USCA Case #24-5205 Document #2074424 Filed: 09/12/2024 Page 15 of 41
`
`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
`
`
`
`
`
`
`
`KALSHIEX LLC,
`
`Plaintiff,
`
`v.
`
`
`COMMODITY FUTURES TRADING
`COMMISSION,
`
`
`Defendant.
`
`
`
`
`Civil Action No. 23-3257 (JMC)
`
`
`
`
`MEMORANDUM OPINION
`
`This lawsuit concerns the interpretation of the Commodity Exchange Act (CEA)’s special
`
`rule for the review of event contracts, a type of derivative contract whose payoff is based on the
`
`outcome of a contingent event. The special rule authorizes the Commodity Futures Trading
`
`Commission (CFTC) to review, and prohibit, event contracts that it determines are contrary to the
`
`public interest if, and only if, they involve specific activities, including “activity that is unlawful
`
`under any Federal or State law” and “gaming.” 7 U.S.C. §§ 7a-2(c)(5)(C)(i)(I),(V).1 Plaintiff
`
`KalshiEX LLC (Kalshi), a financial services company, tried to offer event contracts that would
`
`allow participants to take positions and trade on the outcome of United States congressional
`
`elections. The CFTC issued an order prohibiting Kalshi from offering the contracts after it
`
`determined that such contracts involve unlawful activity and gaming, and are contrary to the public
`
`interest. Kalshi filed this suit challenging the CFTC’s decision as arbitrary, capricious, and
`
`otherwise not in accordance with the law under the Administrative Procedure Act (APA).
`
`
`1 Unless otherwise indicated, the formatting of citations has been modified throughout this opinion, for example, by
`omitting internal quotation marks, emphases, and alterations and by altering capitalization. All pincites to documents
`filed on the docket in this case are to the automatically generated ECF Page ID number that appears at the top of each
`page.
`
`
`
`1
`
`15
`
`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 16 of 41
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`The CFTC’s order exceeded its statutory authority. Kalshi’s contracts do not involve
`
`unlawful activity or gaming. They involve elections, which are neither.
`
`Although the Court acknowledges the CFTC’s concern that allowing the public to trade on
`
`the outcome of elections threatens the public interest, this Court has no occasion to consider that
`
`argument. This case is not about whether the Court likes Kalshi’s product or thinks trading it is a
`
`good idea. The Court’s only task is to determine what Congress did, not what it could do or should
`
`do. And Congress did not authorize the CFTC to conduct the public interest review it conducted
`
`here.
`
`Accordingly, the Court GRANTS Plaintiff’s motion for summary judgment, ECF 17, and
`
`DENIES Defendant’s cross-motion for summary judgment, ECF 30.
`
`I.
`
`BACKGROUND
`
`A. Event Contracts
`
`The CFTC is an independent federal agency that regulates financial derivative markets. A
`
`derivative is a financial instrument or contract whose price is “directly dependent upon (i.e.[,]
`
`derived from)” the value of one or more underlying assets—for example, commodities (like corn
`
`and wheat), securities, or debt instruments. See Futures Glossary: A Guide to the Language of the
`
`Futures Industry, CFTC, https://perma.cc/63HY-DD7E. Derivatives take many forms, including
`
`“futures, options, and swaps.” Id. 2 These instruments “provide a way to transfer market risk or
`
`
`2 These terms refer to various agreements or contracts. A “future” is “an agreement to purchase or sell a commodity
`for delivery in the future.” Futures Glossary: A Guide to the Language of the Futures Industry, CFTC,
`https://perma.cc/63HY-DD7E. “Option” refers to a “contract that gives the buyer the right, but not the obligation, to
`buy or sell a specified quantity of a commodity or other instrument at a specific price within a specified period of
`time, regardless of the market price of that instrument.” Id. The CFTC acknowledges that the definition of “swap” is
`“detailed and comprehensive,” id., but broadly it is “a type of derivative involving the exchange of cash flows from
`financial instruments.” Inv. Co. Inst. v. Commodity Futures Trading Comm’n, 720 F.3d 370, 373 (D.C. Cir. 2013).
`
`
`
`
`2
`
`16
`
`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 17 of 41
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`credit risk between two counterparties.” Inv. Co. Inst. v. U.S. Commodity Futures Trading
`
`Comm’n, 891 F. Supp. 2d 162, 168 n.3 (D.D.C. 2012) (citations omitted).
`
`This case concerns a specific derivative called an “event contract.” An event contract is a
`
`derivative contract “whose payoff is based on a specified event, occurrence, or value.”
`
`Contracts & Products: Event Contracts, CFTC, https://perma.cc/CG2B-3YWY. For example, an
`
`event contract might involve the occurrence of a weather event (e.g., snowfall or hurricanes). See
`
`id.; ECF 38-2 at 23 (Comment Letter from John A. Phillips to U.S. Commodity Futures Trading
`
`Comm’n 3 (Sept. 23, 2022) [hereinafter Phillips Comment]). These contracts usually pose a yes-
`
`or-no question. The buyer of the event contract, for example, may take a “yes” position on whether
`
`the underlying event will happen, see ECF 38-1 at 35 (KalshiEX LLC, Commission Regulation
`
`40.2(a) Notification (June 12, 2023) [hereinafter Kalshi Notification])—such as whether the level
`
`of snowfall in a certain region will exceed a specific amount in a given timeframe. The seller
`
`implicitly takes the opposite, or “no,” position. See id.
`
`Event contract prices are based upon the current probability that an event will occur and
`
`thus, like stock prices, fluctuate. Id. at 34–35; ECF 38-2 at 27 (Phillips Comment). The contract
`
`specifies the value to be paid on the contract. See ECF 38-1 at 34–35 (Kalshi Notification). Event
`
`contracts expire at a cutoff date and can be purchased and sold at any time before that date. Id. at
`
`40. They are binary. When the contract expires, the seller must pay the buyer if the underlying
`
`event on which the buyer took a “yes” position occurs, but the buyer gets paid nothing if it does
`
`not. Id. at 35.
`
`Like derivatives generally, event contracts can be used to mitigate risk. Kalshi provides an
`
`illustrative example in its brief concerning a beachfront property owner who might purchase an
`
`event contract predicting that a hurricane will reach landfall in the area. ECF 17-1 at 15. If the
`
`
`
`3
`
`17
`
`

`

`Case 1:23-cv-03257-JMC Document 53 Filed 09/12/24 Page 18 of 41
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`hurricane hits as the owner predicted, the payout from the contract could offset the owner’s loss
`
`of rental income incurred because of the storm. Id. But, like other investments, some buyers trade
`
`event contracts simply to seek some financial return.
`