On October 2, 2025, the U.S. District Court for the Northern District of Texas stayed Commodity Futures Trading Commission, et al. v. TMTE Inc., et al., a case with potentially consequential implications for the commodities and derivatives markets. As we discussed in our prior update, this $185 million fraud suit was filed against two California precious metals dealers by the Commodity Futures Trading Commission (CFTC) and 30 state regulators. In July, the Court denied summary judgment to both parties. The most significant holding from that order was the finding that gold and silver are not commodities under Section 1 of the CFTC’s enacting statute, the Commodity Exchange Act (CEA).
On September 12, the Court ruled on motions for reconsideration filed by both sides. This order asked the parties to prepare amended summary judgment briefings addressing specific questions related to the definition of a commodity under the CEA. While those amended motions are still forthcoming, the parties’ briefings on their motions for reconsideration, and the Court’s questions in response, map out the key arguments in a debate that has the potential to reshape the U.S. regulatory landscape for commodities and derivatives.
Defining a Commodity
Section 1 of the CEA (7 U.S.C. § 1a) defines a commodity as follows:
The term “commodity” means wheat, cotton, rice, corn, oats, barley, rye, flaxseed, grain sorghums, mill feeds, butter, eggs, Solanum tuberosum (Irish potatoes), wool, wool tops, fats and oils (including lard, tallow, cottonseed oil, peanut oil, soybean oil, and all other fats and oils), cottonseed meal, cottonseed, peanuts, soybeans, soybean meal, livestock, livestock products, and frozen concentrated orange juice, and all other goods and articles, except onions (as provided by section 13–1 of this title) and motion picture box office receipts (or any index, measure, value, or data related to such receipts), and all services, rights, and interests (except motion picture box office receipts, or any index, measure, value or data related to such receipts) in which contracts for future delivery are presently or in the future dealt in.
As we discussed in our prior legal update, the Court held that the catch-all language “and all other goods and articles” referred only to agricultural items, reasoning that Congress would have used more specific words if it intended otherwise. The Court returned to this concern in its September 12 order on the motions for reconsideration, asking the parties whether Section 1 gives the CFTC an “intelligible principle” to guide its interpretation of the statute (a constitutional requirement under Supreme Court precedent).
The defendant metal dealers, in their briefing supporting the motion for reconsideration, did not address the “intelligible principle” standard directly. Instead, the dealers argued that Congress intended Section 1 to be read narrowly. According to their reasoning, a broad reading of the statute would grant the CFTC “virtually unlimited enforcement power.”
The CFTC, however, argued that the phrase “all other goods and articles” was added to the CEA specifically to grant the CFTC the authority to regulate the ever-expanding commodities markets. The CEA originated as the Grain Futures Act of 1922, which named seven grain commodities whose futures markets were overseen by the Secretary of Agriculture. The first iteration of the CEA, passed in 1936, defined “commodity” to include those seven grain products plus six other agricultural products. By 1970, the list had grown to 25 products. Recognizing that it was untenable to amend the CEA to itemize every conceivable commodity, Congress drafted the catch-all to ensure that the CFTC had the power to regulate products that had not yet been named.
The CFTC and courts have also consistently interpreted “commodity” to include non-agricultural products. For example, when promulgating CFTC Regulation 180.1—a violation of which is a charge in the case—the CFTC stated that the regulation applies to deceptive devices employed “to sell precious metals to customers as a way for the customers to speculate on the value of such commodities.”
More broadly, the CFTC argued that disturbing its longstanding view of its enforcement authority may greatly impact the regulation of derivatives markets. Hundreds of non-agricultural products beyond gold and silver trade on CFTC-regulated markets every day, and the CFTC plays a central role in preventing fraud on these markets and seeking restitution for victims. Moreover, states’ ability to bring causes of action for crimes related to commodities and futures rests in 7 U.S.C. § 13a-2. If regulatory authority under the CEA is curbed, states’ ability to pursue fraud may also be impacted.
In its order on the motions for reconsideration, the Court asked the parties to explain the weight that should be given to the CFTC’s past interpretations of Section 1 in light of Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which calls on courts to use their own judgment in the interpretation of laws rather than rely on federal agencies’ views. The Court also asked the parties to describe the “ordinary public meaning” of “commodity” at the time the CEA and its amendments were enacted.
The Role of Precedent
Precedent will play an unusual role in this case. The CFTC cited CFTC v. Muller, 570 F.2d 1296 (5th Cir. 1978), which involved “hard” commodities, such as gold and silver, traded on the London Metal Exchange. The defendants in that case posited a nearly identical argument to the one advanced by the TMTE dealers: that the CFTC could “regulate only option transactions involving these agricultural commodities that are explicitly listed [in Section 1].” The Fifth Circuit rejected that view, holding that this “restrictive interpretation” was “foreclosed by the wording of the Act and its legislative history.”
In its order on the parties’ motions for reconsideration, the Court asked the parties to explain whether Muller is binding precedent given the development of the Major Questions Doctrine in West Virginia v. EPA, 567 U.S. 697 (2022) and Whitman v. American Trucking Ass’n, 531 U.S. 457 (2001). Neither of these cases requires the Court to undo Muller or other precedential cases interpreting Section 1. However, they do require the parties to argue that Congress, in enacting the CEA, delegated an “intelligible principle” to guide the CFTC’s interpretation of the statute. The parties must also explain whether the CFTC regulations the agency claims have been violated (i.e., those predicated on gold and silver qualifying as commodities under Section 1) are those of “vast economic and political significance” and, if so, whether Congress has clearly authorized the CFTC to create the relevant regulations. Thus, the CFTC’s ability to rely on precedent turns largely on whether it can convince the Court that Congress intended the agency to be the authority on interpreting Section 1.
Notably, several district courts in the Fifth Circuit, including the U.S. District Court for the Southern District of Texas, have held that gold and silver are commodities as defined in Section 1. See CFTC v. Laino Group Limited, No. 4:20-cv-3317, 2021 WL 4059385 at *6 (S.D. Tex. June 30, 2021) (citing *CFTC v. Int’l Monetary Metals, Inc.*, No. 0:14-cv-62244, 2016 WL 8256852, at *4 (S.D. Fla. Aug. 1, 2016)). The Fifth Circuit has also allowed the CFTC to regulate non-agricultural commodities such as natural gas pursuant to its authority under Section 1. See United States v. Brooks, 681 F.3d 678, 694-95 (5th Cir. 2012). However, it is unclear if the Court will give these cases significant consideration.
The defendant metal dealers also pointed to Fifth Circuit case law that they argued supported their position. Specifically, they cited Clarke v. CFTC, 74 F.4th 627, 643-44 (5th Cir. 2023), for the proposition that the Fifth Circuit supports a general “reining in” of CFTC authority. They also pointed to CFTC v. EOX Holdings, L.L.C., 90 F.4th 439, 441 (5th Cir. 2024), in which the Fifth Circuit dismissed a CFTC enforcement action for lack of fair notice when the claims marked an “unprecedented interpretation” of a longstanding CFTC Rule.
What Comes Next
In its briefings, the CFTC stressed that overseeing commodity derivatives markets is one of its fundamental responsibilities and that depriving it of authority over all but agricultural commodities will confuse and harm market participants, investors, and regulators. The defendant metal dealers argued in opposition that this case represents an overreach of congressionally granted authority. The Court’s questions for the parties to be included in their amended summary judgment briefings suggest that it is concerned about the CFTC acting outside its statutory jurisdiction, but also willing to reconsider its prior holding narrowing the definition of “commodity” if it can be convinced a broader interpretation harmonizes with recent Supreme Court precedent on delegations of congressional power.