Wallace v. Cutten

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Wallace v. Cutten
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Argued April 27, 1936
Decided May 18, 1936
Full case nameWallace, et al. v. Arthur W. Cutten
Citations 298 U.S. 229 ( more )
56 S. Ct. 753; 80 L. Ed. 1157; 1936 U.S. LEXIS 710
Holding
Authority under section 6(b) of the Grain Future Act is limited to suspending a trader who was currently violating provisions Act, not to punishing violations that occurred in the past.
Court membership
Chief Justice
Charles E. Hughes
Associate Justices
Willis Van Devanter  · James C. McReynolds
Louis Brandeis  · George Sutherland
Pierce Butler  · Harlan F. Stone
Owen J. Roberts  · Benjamin N. Cardozo
Case opinions
Majority Brandeis, joined by unanimous
Laws applied
Grain Futures Act

Wallace v. Cutten, 298 U.S. 229 (1936), was a case in which the Supreme Court of the United States held that the authority of the United States Secretary of Agriculture under the Grain Futures Act was limited to prevent continued violation of the act, not past violations. [1]

Supreme Court of the United States Highest court in the United States

The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. Established pursuant to Article III of the U.S. Constitution in 1789, it has original jurisdiction over a narrow range of cases, including suits between two or more states and those involving ambassadors. It also has ultimate appellate jurisdiction over all federal court and state court cases that involve a point of federal constitutional or statutory law. The Court has the power of judicial review, the ability to invalidate a statute for violating a provision of the Constitution or an executive act for being unlawful. However, it may act only within the context of a case in an area of law over which it has jurisdiction. The court may decide cases having political overtones, but it has ruled that it does not have power to decide nonjusticiable political questions. Each year it agrees to hear about one hundred to one hundred fifty of the more than seven thousand cases that it is asked to review.

United States Secretary of Agriculture position

The United States Secretary of Agriculture is the head of the United States Department of Agriculture. The Secretary of Agriculture is former Georgia Governor Sonny Perdue. Perdue took office on April 25, 2017 after being confirmed by the U.S Senate 87-11. The position carries similar responsibilities to those of agriculture ministers in other governments.

Grain Futures Act

The Grain Futures Act, is a United States federal law enacted September 21, 1922 involving the regulation of trading in certain commodity futures, and causing the establishment of the Grain Futures Administration, a predecessor organization to the Commodity Futures Trading Commission.

Contents

Background

The Secretary of Agriculture served a complaint upon the Respondent, Arthur W. Cutten on April 11, 1934 alleging that Cutten had not reported his net position in futures that he controlled to the Grain Futures Administration when he had commitments in excess of 500,000 bushels. The complaint also alleged that he conspired with other grain firms to hide his net position from the Grain Futures Administration, and he reported false information to the Administration.

Arthur William Cutten was a Canadian-born businessman who gained great wealth and prominence as a commodity speculator in the United States. He was called to appear before the Banking and Currency Committee in regard to the causes of the Wall Street Crash of 1929. He was under indictment for tax evasion upon his death in Chicago in 1936.

Cutten was barred from trade for two years after a hearing before a commission composed of the Secretary of Agriculture, Attorney General, and Secretary of Commerce. Cutten successfully appealed his claim that the sanctions could not be applied to behavior that had ceased at the time of the hearing to the Seventh Circuit, and the court set aside the prior judgment. The government appealed the verdict to the U.S. Supreme Court.

Opinion of the Court

The Court held that Section 6(b) of the Grain Futures Act could only be applied to ongoing activity, not activity that had ceased at the time of trial. The government argued that 6(b) had to apply retroactively due to the nature of ongoing investigations into reporting irregularities. The Respondent argued that the government had other remedies, so even if 6(b) were strictly construed, it would not limit the government's ability regulate the Respondent's ability to trade in grain futures. The Court declined to discuss any other possible remedies the government may have had, including section 9, and instead constructed 6(b) strictly. The Seventh Circuit decision was affirmed.

See also

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References

  1. Wallace v. Cutten, 298 U.S. 229, 235 (1936).
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