Commodity Futures Trading Commission v. Alexandre

Background

The Commodity Futures Trading Commission (CFTC) sued Eddy Alexandre and EminiFX, Inc. for alleged violations of the Commodity Exchange Act and related regulations. Alexandre answered the complaint and asserted a counterclaim against the CFTC for “contributory negligence.” He also asserted claims against the court-appointed equity receiver, but later withdrew those claims.

The CFTC moved to dismiss or strike Alexandre’s counterclaim. The Receiver moved to dismiss Alexandre’s claims against him and to strike any affirmative defense of contributory negligence asserted against him. The court had previously dismissed the Receiver’s motion in part as moot to the extent it addressed Alexandre’s withdrawn claims. The remaining issue concerned the proposed defense against the Receiver.

Analysis

The court held that Alexandre’s counterclaim did not satisfy Federal Rule of Civil Procedure 8, which requires a pleading to provide a short and plain statement giving the opposing party fair notice of the claim and its basis. Although Alexandre was representing himself and his filings were therefore read liberally, the answer contained no allegations describing negligent or other conduct by the CFTC. It did not explain what the CFTC allegedly did, how that conduct was negligent, or how it contributed to Alexandre’s fraud.

The court also held that dismissal with prejudice was appropriate. It reasoned that, even if Alexandre could supply additional facts, contributory negligence is an affirmative defense rather than an independent cause of action. The court further noted that the answer asserted the contributory-negligence defense against the CFTC, not against the Receiver. Because there was no basis to conclude that Alexandre intended to assert that defense against the Receiver, the remaining part of the Receiver’s motion was moot.

Disposition

The CFTC’s motion to dismiss was GRANTED, and Alexandre’s counterclaim against the CFTC was DISMISSED WITH PREJUDICE. The portion of the Receiver’s motion seeking to strike any contributory-negligence defense against the Receiver was DENIED AS MOOT. The court also certified that an interlocutory appeal would not be taken in good faith and DENIED permission to proceed without paying filing fees on such an appeal. The Clerk was directed to close the two open motions.