SEVENTH CIRCUIT–In late July, the federal appeals court in Chicago (7th Cir.) unanimously held that a publisher of nonpersonalized commodities trading information had standing to challenge on First Amendment grounds a provision of the Commodity Exchange Act that required it to register with the government.
The court observed that although the Commodities Futures Trading Commission had not yet determined whether the publisher was subject to the registration provision, the CFTC had investigated the publisher’s activities by subpoenaing documents and compelling witnesses to testify about the preparation and content of the publications.
In April 1997, Commodity Trend Service, Inc., a financial publisher, filed a complaint in federal district court in Chicago challenging the registration provisions, alleging that the registration provisions of the act were overbroad, had a “chilling effect” on speech, and are an unconstitutional prior restraint, both on their face and as applied to the publisher. Three months later, the court dismissed the complaint for lack of standing, holding that CTS’ challenge of the law as applied to the publisher was not ripe because the CFTC had not yet found that CTS was an advisor. The judge also held that CTS’ publications constituted commercial speech, and that the right to challenge laws as unconstitutionally overbroad on their face does not apply to commercial speech.
The appeals court found that a First Amendment claim is ripe for adjudication if it alleges an intention to engage in constitutionally protected speech that is restricted by statute, and there exists a credible threat of prosecution. The appeals court said that the publisher had made the necessary showing under this standard, specifically citing CFTC’s investigation into CTS’ publishing activities. The court rejected the argument that CTS was engaging in commercial speech entitled to less First Amendment protection than other forms of speech.
The financial publisher’s position was supported in an amicus brief filed by the Newsletter Publishers Association and The Reporters Committee for Freedom of the Press. A similar challenge to the licensing provision is currently pending in federal district court in Washington, D.C.
The appeals court remanded the case to the district court for further proceedings. (Commodity Trend Service, Inc. v. Commodities Futures Trading Commission; Media Counsel: William Nissen, Chicago)