Petition for Review from the United States Commodity Futures
Trading Commission No.: 89-R300
Before
WILSON, JILL PRYOR and TALLMAN, [*] Circuit Judges.
TALLMAN, CIRCUIT JUDGE:
Petitioner
Calvin Word seeks review of a 2016 order (the "2016
Order") entered by the United States Commodity
Futures Trading Commission (the "CFTC" or
the "Commission") denying his motion to
set aside a 1992 default judgment order (the "1992
Order") requiring him to pay $17, 511.91 in
reparations plus interest to June and Louie Stidham (the
"Stidhams") for violations of the
Commodity Exchange Act, 7 U.S.C. §§ 1, et
seq. (the "Act"). On October 11,
2016, after Word sought review of the 2016 Order, both
Respondents filed a motion to dismiss the petition for lack
of jurisdiction [Dkt. No. 14] (the
"Motion") because Word failed to post the
required appeal bond under 7 U.S.C. § 18(e). We grant
their Motion and dismiss Word's petition for want of
jurisdiction.
I
This
case has a long history. The Stidhams were customers of a
failed commodity futures trading merchant. In 1989, the
Stidhams filed a reparation complaint with the CFTC against
traders Word, Madlyn L. Ferro, Andrew C. Anderson, and their
employer, First Commodity Corporation of Boston
("FCCB"). The Stidhams alleged that Word
and the other respondents had intentionally and fraudulently
misrepresented material facts in soliciting and maintaining
an account to trade commodity futures contracts. Ferro
answered the reparation complaint and moved to dismiss the
Stidhams' claims against her, asserting that their claims
were barred by the two-year statute of limitations set forth
in 7 U.S.C. § 18(a) (1988). After being served with
legal process under the Commission's regulations,
[1]
Word, Anderson, and FCCB did not respond to the Stidhams'
complaint or otherwise participate in the proceedings. The
Stidhams moved for default against those who did not appear,
including Word.
A CFTC
administrative law judge (an "ALJ") then
issued the 1992 Order denying the motion for default against
Ferro and granting Ferro's motion to dismiss because the
statute of limitations had run. But the 1992 Order entered
default against Word and the others, stating that they also
might have been able to assert a successful
statute-of-limitations defense, but concluding that they had
waived the defense by not raising it in any answer. The 1992
Order required Word, FCCB, and Anderson to pay the Stidhams
reparation in the amount of $17, 511.91, plus 4.58 percent
interest compounded annually from April 7, 1986,
[2]until the date of payment. Significantly,
Word-unaware that the default had been entered against
him-did not appeal the default order to the Commission.
The
Stidhams then filed a complaint in the United States District
Court for the Northern District of Georgia to enforce the
reparations award against Word under 7 U.S.C. § 18(d)
(1988). After significant delay caused by Word's
recalcitrance, including avoiding service, filing a
bankruptcy petition, and refusing to participate in
discovery, the district court struck Word's answer in the
litigation and entered default judgment (the "1996
Order") against him as a sanction. The 1996 Order
required Word to pay the Stidhams $37, 402.35, which included
the original reparation award, and accumulated interest plus
costs and attorneys' fees.
In
2011, Word filed a motion to set aside the 1992 Order on
grounds of excusable neglect. An ALJ denied that motion under
17 C.F.R. § 12.23(b), which requires motions to set
aside default orders in CFTC reparation cases for excusable
neglect to be filed within one year of the issuance of the
order. On appeal, the Commission affirmed the ALJ's
decision (the "2012 Order"), declining to
waive the one-year filing deadline because doing so would
prejudice the Stidhams, who had already spent 23 years trying
to collect the money they lost. See 17 C.F.R. §
12.4(b). Word did not seek judicial review of that 2012
Order.
In
2015, Word filed a second motion to set aside the 1992 Order
and dismiss the Stidhams' reparation complaint. In his
latest motion, Word contended that the Stidhams' failure
to file their reparation complaint within the two-year
statutory time limit set forth in 7 U.S.C. § 18(a)
deprived the CFTC of jurisdiction to consider the complaint
and rendered the reparation award against him void. In
response to Word's motion, the Stidhams challenged
Word's assertion that the two-year statute of limitations
was jurisdictional.
On July
29, 2016, the Commission issued the 2016 Order denying
Word's second motion to set aside the 1992 Order, holding
that the two-year statute of limitations in § 18(a)(1)
was not jurisdictional, and, thus, the Commission had the
power to enter the 1992 Order against Word. The Commission
held that because Word had no jurisdictional challenge to the
default order, he was once again barred from moving to vacate
the order by the one-year time limit in 17 C.F.R. §
12.23(b). The Commission further held that, even if
Word's motion to vacate was properly before the
Commission, it would have denied the motion because he had
waived the statute of limitations defense by failing to raise
it in any answer to the Stidhams' original complaint. The
Commission noted that Word could petition for review of its
reparation order to a United States Court of Appeals, and
that, under 7 U.S.C. § 18(e), such a petition would not
be effective unless, in conformance with the statute, within
30 days of the date of the order he filed with the court
"a bond equal to double the amount of any reparation
award."
On
August 4, 2016, Word filed here a petition for review of the
2016 Order. He also filed a motion for leave to appeal in
forma pauperis (IFP). However, he failed to file an
appeal bond with the Clerk of Court or elsewhere.
On
September 1, 2016, according to the Stidhams, Word owed them
a total of approximately $128, 900, including still
accumulating interest, costs, and attorneys' fees. The
Stidhams collected a partial payment of $75, 211.75 from a
2016 disbursement of funds by the receiver of a limited
liability company partly owned by Word, in accordance with a
court order obtained in a state court proceeding initiated by
the Stidhams. But even after the disbursement, the
Stidhams contend that Word still owed them over $50, 000 on
account of the ever-increasing costs, fees, and interest
arising from the 1992 Order.[3]
On
October 11, 2016, both Respondents filed a motion to dismiss
Word's current petition for review for lack of
jurisdiction because Word has never posted any bond as
required by 7 U.S.C. § 18(e), the congressional
directive governing judicial review of CFTC reparation
orders. Word responded to the motion pro ...