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Arenson v. Chicago Mercantile Exchange

decided: July 11, 1975.

GLADYS ARENSON, GENE J. SHAPIRO, AND NICHOLAS A. KARRIS, ON THEIR OWN BEHALF, AND ON BEHALF OF A CLASS OF PERSONS BEING ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS-APPELLANTS
v.
CHICAGO MERCANTILE EXCHANGE, ET AL, DEFENDANTS, BOARD OF TRADE OF THE CITY OF CHICAGO, DEFENDANT-APPELLEE



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division No. 71-C-854. WILLIAM J. BAUER, Judge.

Stevens and Tone, Circuit Judges, and William J. Campbell,*fn* Senior District Judge.

Author: Campbell

CAMPBELL, Senior District Judge.

In early 1971, a number of class action antitrust suits were filed in several district courts against various commodity exchanges and their members alleging that the minimum rates of commission established by the exchanges to be charged by exchange members to nonmembers for the purchase or sale of commodities, and the members' observance of such minimum rates, violated Section 1 of the Sherman Act, 15 U.S.C. § 1. Plaintiffs sought elimination of the minimum commission rates and treble damages. Pursuant to 28 U.S.C. § 1407, all cases*fn1 were transferred to the Northern District of Illinois and eventually all were consolidated before Judge Bauer.

Subsequently, the parties submitted a Master Settlement Agreement to the district court for approval. Under the Agreement, plaintiffs abandoned their claims for monetary relief and defendants agreed to "phase-out" minimum commission rates over a 4 1/2-year transitional period. The parties further agreed that "no exchange will increase any minimum rates of commission in effect as of November 1, 1972."

In approving the Master Settlement Agreement, Judge Bauer found that it represented "a fair compromise between the competing positions of the plaintiff class . . . and the participating exchanges and their members . . . . [It] satisfies the desires of the plaintiff class for a complete transition to fully competitive nonmember commission rates, but allows the participating exchanges and their members a reasonable phase-out period to adjust to the elimination of a commission rate structure which has been an integral part of the exchanges' operations for many years."

Accordingly, Judge Bauer entered an order requiring, inter alia, that:

"C. Each participating exchange, within sixty days after this order becomes final, is ordered to amend its rules or by-laws to provide that not later than the dates listed in the following schedule, nonmember rates of commission shall be subject to free and open competition on that portion of each commodity transaction . . . exceeding the number of contracts specified opposite such dates:

That Portion of Each

Schedule of Dates Transaction Exceeding:

60 days after this order

approving the settlement

becomes final 24 contracts

1 year thereafter ...


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