Opinion for the court filed by Circuit Judge EDWARDS.
The appellants - Ken Roberts Company (“KRC”), Ken Roberts Institute, Inc. (“KRI”), United States Chart Company (“Chart”), and Ted Warren Corporation (“Warren”) (collectively “Ken Roberts”) - sell instructional materials that purport to teach would-be investors how to make money investing in the commodities and
Ken Roberts contends that, pursuant to the express terms of the Commodity Exchange Act (“CEA”), the CFTC has exclusive jurisdiction to regulate the disputed business practices of Ken Roberts Company and United States Chart Company. Ken Roberts claims further that, because Ken Roberts Institute and Ted Warren Corporation are subject to pervasive regulation by the SEC under the Investment Advisors Act (“IAA”), the FTC’s authority to investigate these companies has been impliedly preempted. Therefore, according to Ken Roberts, because the FTC is without authority to regulate the cited advertising and promotional practices of Ken Roberts, the CIDs cannot be sustained. We disagree.
With rare exceptions (none of which applies here), a subpoena enforcement action is not the proper forum in which to litigate disagreements over an agency’s authority to pursue an investigation. Unless it is patently clear that an agency lacks the jurisdiction that it seeks to assert, an investigative subpoena will be enforced. Whatever the ultimate merit of Ken Roberts’ preemption arguments - and we believe they have little - appellants cannot overcome the long-standing doctrine that precludes courts from entertaining challenges to the jurisdiction of administrative agencies during subpoena enforcement proceedings. Because under no reasonable reading of the CEA or the IAA does either of those statutes manifestly strip the FTC of its broad power over deceptive advertising, we affirm the District Court’s decision that appellants must comply with the FTC’s compulsory process.
I. BACKGROUND
KRC and Chart market courses in commodities trading and are therefore subject to the jurisdiction of the CFTC. KRI and Warren offer instruction in securities trading, which places them within the regulatory ambit of the SEC. These companies rely heavily on Internet advertising: their websites feature grandiose claims about potential earnings by investors and testimonials from persons who have allegedly benefitted from Ken Roberts’ instructional materials.
Since 1994, the CFTC has carefully monitored the activities of KRC to determine whether the company had violated various sections of the CEA, particularly the statute’s antifraud provisions, 7 U.S.C. § 6o (1999). In at least four separate investigations, the Commission sought to determine whether KRC’s advertising claims, both in print and, more recently, on-line, can be substantiated. To this end,
In 1999, the FTC, in conjunction with the CFTC and the SEC, announced a coordinated investigation of deceptive day trading promotions. In early September 1999, the FTC formally authorized the use of compulsory process to determine whether various on-line merchants were engaged in deceptive marketing practices. With an investigative agenda aimed at high-risk/ high-yield investment activity and suspicious Internet advertising, the Commission soon focused on Ken Roberts. On September 30, 1999, the FTC issued CIDs requesting a wide variety of information through written interrogatories and documents relating to Ken Roberts’ business practices. The CIDs were designed to reveal whether the companies had mislead the public in promoting their instructional courses. To this end, the Commission demanded a full accounting of the companies’ sales volume, as well as evidence underlying the claims made in their testimonials and other advertising materials.
Appellants resisted complying fully with the CIDs, believing them to be duplicative of the subpoenas that .had already been issued by the CFTC and beyond the FTC’s power to issue. Thus, Ken Roberts responded only to some of the interrogatories and produced none of the requested documents. They then filed an administrative petition with the FTC to quash the CIDs. In that proceeding, Ken Roberts argued, as they do here, that the CEA and the IAA deprive the Commission of its jurisdiction to regulate - and therefore to investigate - deceptive advertising practices of, respectively, CTAs and investment advisers. The FTC rejected this petition, holding that the subpoenas were issued as part of a lawful investigation, one fully authorized by the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 41 et seq. (1997), and not foreclosed by any rival regulatory statute. See In re Petition of The Ken Roberts Co. et al. to Quash Civil Investigative Demands, File No. 9923259 (Feb. 25, 2000), reprinted in Joint Appendix (“J.A.”) 72. When Ken Roberts persisted in refusing to comply with the CIDs, the FTC petitioned the District Court to compel enforcement pursuant to 15 U.S.C. § 57b-l(e). In a brief order, the District Court granted the agency’s petition to enforce. See FTC v. Ken Roberts Co., Order, Misc. No. 00-204 (May 26, 2000), reprinted in J.A. 248. Ken Roberts now appeals.
II. DISCUSSION
Appellants ask this court to hold that the jurisdiction-conferring provisions of the CEA and the IAA preempt - the former expressly, the latter implicitly - the jurisdiction that the FTC would otherwise possess over appellants’ allegedly deceptive marketing of their investor-training courses. Though the nature of our analysis obliges us to investigate these questions, we need not answer them definitively, for we have concluded that Ken Roberts’ challenge is premature.
A. Jurisdictional Challenges to Agency Subpoenas
The threshold issue in this case is whether the appellants may raise their challenge to the Commission’s jurisdiction now, or instead whether they are obliged
[A]t the subpoena enforcement stage, courts need not determine whether the subpoenaed party is within the agency’s jurisdiction or covered by the statute it administers; rather the coverage determination should wait until an enforcement action is brought against the subpoenaed party.
United States v. Construction Prods. Research, Inc.,
The Supreme Court first articulated this doctrine in
Endicott Johnson Corp. v. Perkins,
Following
Endicott,
courts of appeals have consistently deferred to agency determinations of their own investigative authority, and have generally refused to entertain challenges to agency authority in proceedings to enforce compulsory process.
See, e.g., United States v. Sturm, Ruger & Co.,
Subpoena enforcement power is not limitless, however. In
United States v. Morton Salt Co.,
338 U.S; 632, 652,
In adhering to the foregoing principles, we have held that enforcement of an agency’s investigatory subpoena will be denied only when there is “a patent lack of jurisdiction” in an agency to regulate or to investigate.
See CAB v. Deutsche Lufthansa Aktiengesellschafl,
B. Preemption of the FTC’s Power to Regulate Deceptive Advertising
On its own terms, the FTC Act gives the FTC ample authority to investigate and, if deceptive practices are uncovered, to regulate appellants’ advertising practices. See 15 U.S.C. §§ 45(a) (allowing the Commission to prevent unfair competition and deceptive acts or practices in or affecting commerce); 52-54 (allowing the Commission to regulate and enjoin false advertising); 57b-l(e) (allowing the Commission to issue CIDs to investigate possible § 45 violations). Therefore, the FTC is entitled to have its subpoenas enforced unless some other source of law patently undermines these broad powers. Appellants contend that two federal statutes have this effect. KRC and Chart, who sell courses in commodities investing, argue that the 1974 amendments to the Commodity Exchange Act expressly preempted the FTC’s jurisdiction over their activities as registered CTAs. KRI and Warren, who sell courses in securities investing, argue that the Investment Advisers Act impliedly preempts the Commission’s regulatory power over their advertisements. We consider these contentions in turn, and conclude that neither has merit.
1. Appellants’ Claim of Express Preemption Pursuant to the Commodity Exchange Act
Though Congress has long sought to regulate the futures market, the Commodity Futures Trading Commission is not very old. The first federal statute dealing with commodities trading, the 1921 Future Trading Act, was declared unconstitutional by the Supreme Court,
see Hill v. Wallace,
Moreover, and most important to the present case, the new agency was invested with exclusive jurisdiction over certain aspects of the futures trading market. See id., § 201, 88 Stat. 1389 (codified as amended at 7 U.S.C. § 2(a)(1)(A) (2001)). The aim of this provision, according to one of its chief sponsors, was to “avoid unnecessary, overlapping and duplicative regulation,” especially as between the Securities and Exchange Commission and the new CFTC. 120 Cong. Rec. H34.736 (Oct. 9, 1974) (remarks of House Agriculture Committee Chairman Poage); Philip F. Johnson, The Commodity Futures Trading Commission Act: Preemption as Public Policy, 29 Vand. L. Rev. 12-13; 16-17 (1976).
In determining what Congress intended when it passed § 2(a)(1)(A), we must focus on the precise text of the enacted legislation.
See Carter v. United States,
The Commission shall have exclusive jurisdiction ... with respect to accounts, agreements (including any transaction which is of the character of, or is commonly known to the trade as, an “option”, “privilege”, “indemnity”, “bid”, “offer”, “put”, “call”, “advance guaranty”, or “decline guaranty”), and transactions involving contracts of sale of a commodity for future delivery, traded or executed on a contract market designated or derivatives transaction execution facility registered pursuant to section 7 or 7a of this title or any other board of trade, exchange, or market, and transactions subject to regulation by the Commission pursuant to section 23 of this title. Except as hereinabove provided, nothing contained in this section shall (I) supersede or limit the jurisdiction at any time conferred on the Securities and Exchange Commission or other regulatory authorities under the laws of the United States or of any State, or (II) restrict the Securities and Exchange Commission and such other authorities from carrying out their duties and responsibilities in accordance with such laws. Nothing in this section shall supersede or limit the jurisdiction conferred on courts of the United States or any State.
On its face, § 2(a)(1)(A) confers exclusive jurisdiction to the CFTC over a limited, discrete set of items related to the making of futures contracts. Specifically, these are (1) “accounts ... involving contracts of sale of a commodity for future delivery,” (2) “agreements” involving the same, (3) “transactions” involving the same, and (4) “transactions subject to regulation by the Commission pursuant to section 23 of this title” (dealing with so-called “margin” or “leverage” contracts). It is certainly not obvious that the advertising at issue in this case fits in any of these categories. “Transactions,” broadly construed, is perhaps appellants’ best bet. Yet, it strains common parlance to construe “transactions involving contracts of sale of a commodity” to include the marketing practices of a firm that does not buy and sell futures, but rather merely instructs others how to do so. As it is generally understood, the word “transactions” conveys a reciprocity, a mutual exchange, which seems absent from the allegedly deceptive advertising materials that the FTC seeks to investigate in this case. See WebsteR’s Third New International DiCtionary 2425-26 (defining “transaction” as, inter alia, “a business deal” and “a communicative action or activity involving two or more parties or two things reciprocally affecting or influencing each other”).
Appellants seek to overcome this impression by pointing to a separate provision in the statute that uses “transactions” in a different, and more expansive, way. As part of the 1974 overhaul of the CEA, Congress made a set of legislative findings in which it announced that the activities of CTAs, including “their advice, counsel, publications, writings, analyses, and reports[,] customarily relate to and their operations are directed toward and cause the purchase of commodities for future delivery....” 7 U.S.C. §
61.
This finding then goes on to say that “the foregoing
transactions
occur in such volume as to affect substantially
transactions
on contract markets.”
Id.
(emphases added). Ken Roberts contends that because Congress used the term “transactions” to mean advice, counsel, publications, etc., in §
61,
we must read that term the same way in the exclusive jurisdiction provision in § 2(a)(1)(A). “The rule of
in pari mate-ria
- like any canon of statutory construction - is a reflection of practical experience in the interpretation of statutes: a legislative body generally uses a particular word with a consistent meaning in a given context.”
Erlenbaugh v. United States,
Appellants ignore the fact that §
61
uses the word “transactions” twice in the same
By contrast, when “transactions” is examined in the context of § 2(a)(1)(A), it seems most naturally read as encompassing, like its neighbors, a set of arrangements directly related to the actual sale of commodities futures. In statutory interpretation, after all, words are generally known by the company they keep.
Gustafson v. Alloyd Co.,
These terms were added to the bill that became the CFTCA in order to extend the Commission’s exclusive jurisdiction over so-called “discretionary accounts,” commodity options, and other trading agreements described in the statute. See Johnson, at 14 & n.44; H.R. Conf. Rep. No. 93-1383 (1974), reprinted in 1974 U.S.C.C.A.N 5894, 5897 (“[T]he Commission’s [exclusive] jurisdiction ... includes the regulation of commodity accounts, commodity trading agreements, and commodity options.”). Noscitur a sociis instructs us to construe “transactions” in a similar light, as denoting a set of actions closely linked to the actual trading of commodities. Under this reading, all of the categories delineated in § 2(a)(1)(A) describe business deals that involve the buying and selling of futures, which comports with Congress’ goal of conferring the CFTC with sole regulatory authority over “futures contract markets or other exchanges,” H.R. Conf. Rep. No. 93-1383, 1974 U.S.C.C.A.N. at 5897 (emphasis added), or “over options trading in commodities (but not in securities),” S.Rep. No. 93-1181, at 31, 1974 U.S.C.C.A.N. at 5870 (emphasis added).
A second problem with the broad definition of “transactions” proposed by the appellants is that it produces potentially absurd results.
See Griffin v. Oceanic Contractors, Inc.,
As noted above, the statute’s legislative history repeatedly emphasizes that the CFTC’s jurisdiction was “to be exclusive
We will give appellants the benefit of the doubt and assume that what they really mean to argue is that the limits of the exclusive jurisdiction provision in § 2(a)(1)(A) is coterminous with the limits of the CFTC’s regulatory authority under the CEA. In other words, Ken Roberts appears to assume that, at a minimum, whatever the Commission may regulate, it regulates exclusively. This is a specious contention. Both the text and purpose of the statute contemplate a regime in which other agencies may share power with the CFTC over activities that lie outside the scope of § 2(a)(1)(A), but that still involve the activities of commodities advisers or that implicate other provisions of the CEA. Indeed, the inclusion of the so-called “regulatory savings clauses,” § 2(a)(l)(A)(I)-(II), makes clear that other agencies, such as the FTC, retain their jurisdiction over all matters beyond the confines of “accounts, agreements, and transactions involving contracts of sale of a commodity for future delivery.”
Cf. Chicago Mercantile Exch. v. SEC,
The imperfect overlap between § 2(a)(1)(A) and the rest of the CEA is neatly demonstrated by the statute’s anti-fraud provision, on which the CFTC’s own power to investigate appellants, which it has done since 1994, presumably rests. 7 U.S.C. § 6o makes it unlawful, inter alia, for a CTA “to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or participant or prospective client or participant.” Thus, while the CFTC has the clear statutory authority to regulate a CTA’s deceitful “practices” - and “practices,” far more so than “transactions,” comfortably describes the advertising at issue in this case - there is no reason to think that this authority is exclusive. A “practice” or “course of business” is quite plainly not a “transaction” - either in life or in this statutory provision. (Nor for that matter is it an “account” or “agreement.”) As such, a comparison of the texts of § 6o and § 2(a)(1)(A) appears to indicate that the CFTC’s authority over CTAs is broader than the substantive scope of its exclusive jurisdiction to regulate futures and futures markets.
In sum, then, both context (textual and historical) and common sense support a reading of the exclusive jurisdiction provi
2. Implied Preemption Under the Investment Advisers Act
KRI and Warren, whose businesses involve securities rather than commodities, assert that the comprehensive scope of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-l et seq. (1997), preempts the FTC’s jurisdiction to regulate the fraudulent practices of “investment advisers” such as themselves. Even if there were something to this claim, which we doubt, it does not come close to establishing that the FTC is manifestly without jurisdiction in regard to the subject matter of its subpoenas.
In contrast to the CEA, the IAA contains no express exclusive jurisdiction provision. As such, the only vehicle by which the FTC’s otherwise-plenary power to investigate and uproot unfair or deceptive trade practices could be disturbed is through the doctrine of implied repeal. We have recognized that, where intended by Congress, “ ‘a precisely drawn, detailed statute pre-empts more general remedies.’ ”
Galliano v. U.S. Postal Serv.,
To prevail at this stage of the litigation, KRI and Warren must establish not merely that the IAA, properly construed, deprives the FTC of jurisdiction, but that it does so patently. However, the entire structure of the implied preemption inquiry militates against such a finding in this case. Both the Supreme Court and this court have observed that implied repeals of one statute (or a provision in one statute) by another are “not favored.”
Radzanower v. Touche Ross & Co.,
Appellants can point to nothing in the background or history of the IAA that demonstrates (or even hints at) a congressional intent to preempt the antifraud jurisdiction of the FTC over those covered by the new statute. Nor does the subsequent case law interpreting these statutes contain such declarations. The closest case is perhaps
Spinner Corp. v. Princeville Develop. Corp.,
In sum, then, whatever the ultimate force of arguments about the structure of the IAA or the FTC’s historical practice regarding securities transactions, neither of these are sufficiently forceful to deprive the Commission of its general prerogative to determine, at least in the first instance, the scope of its own investigatory authority.
III. CONCLUSION
For the reasons given above, we hold that the FTC is entitled to enforce its CIDs against all four appellants in this case. Neither the Commodity Exchange Act nor the Investment Advisers Act evince an unambiguous intent to deprive the FTC of its otherwise applicable authority to investigate possibly deceptive advertising and marketing practices merely because those practices relate to either the commodities or the securities business.
So ordered.