Commodity Futures Trading Commission v. Hunt

This case presents several issues arising out of a complaint brought by the Commodity Futures Trading Commission, pursuant to the Commodity Exchange Act, against seven members of the Hunt family and an affiliated company. The complaint was instituted by the Commission on April 28, 1977 to compel the defendants to comply with limits established by the Commission on the speculative position that any individual or group may have in soybean futures contracts. See Commodity Exchange Act, § 4a(l), 7 U.S.C. § 6a(l) (Supp.1978); Rule 150.4, 17 C.F.R. § 150.4 (1977).

The Commission’s complaint alleges that from at least January 17, 1977 and continuing to the commencement of the court action, two brothers, Nelson Bunker Hunt and William Herbert Hunt, five of their children, and a corporation they control, had been exceeding collectively the limit of three million bushels that had been set for soybean futures contracts. The complaint sought preliminary and permanent injunctions against future violations of these limits, the disgorgement of any profits the Hunts had obtained as a result of their unlawful conduct, and an order requiring the Hunts to liquidate all existing positions in soybean futures in excess of the speculative limits. Contemporaneous with the filing of the complaint, the Commission, pursuant to section 8a(6) of the Commodity Exchange Act, 7 U.S.C. § 12a(6) (1978), publicly disclosed the soybean trading activity and positions of the Hunts.

During the first week in May 1977 the Hunts filed an answer to the Commission’s complaint in which they sought to enjoin the Commission from making any further disclosures of their soybean positions. The Hunts also asserted claims for money damages from the Commission and several of its employees for injuries incurred as a result of the Commission’s publication of their trading positions. On May 17, 1977 the Hunts moved for a preliminary injunction prohibiting any further disclosure of their soybean trading activity. The district court, on May 19, 1977, enjoined the Commission from making public the Hunts’ holdings, purchases, sales or positions in the futures market. The Commission appealed this order on May 20, 1977.

On September 28,1977, the district court, after hearings on the Commission’s motion for a preliminary injunction, issued a memorandum opinion accompanied by findings of fact and law, and entered a judgment order. Commodity Futures Trading Comm. v. Hunt, No. 77-C-1489 (N.D.Ill., Sept. 28, 1977). The lower court concluded that the Hunts, acting in concert, had acquired soybean futures in excess of the three million bushel limit prescribed by regulation, thereby violating Rule 150.4 and section 4a(l) of the Commodity Exchange Act. The court, however, denied the Commission’s motion for an order enjoining future violations of the limits and rejected the Commission’s request for disgorgement of the Hunts’ illegal profits. The lower court also rejected the counterclaim and third-party claims brought by the Hunts.

The Commission appealed from the lower court’s decision, arguing that both the injunction and the ancillary relief of disgorgement should have been granted. The Hunts cross-appealed, seeking to overturn the district court’s declaratory judgment that the Hunts had violated the speculative limit, and challenging the validity of the regulation itself. The Hunts also challenged the dismissal of their counterclaim and third-party claims. The Commission’s appeal and the Hunts’ cross-appeal were consolidated in November 1977 with the Commission’s earlier appeal of the lower court’s injunction against publication of trading information regarding the Hunts.

I. Validity of the Speculative Limit Regulation: Rule 150.4

Section 4a(l) of the Commodity Exchange Act, 7 U.S.C. § 6a(l), authorizes the Commodity Futures Trading Commission to set commodity trading limits. Congress concluded that excessive speculation in commodity contracts for future delivery can cause adverse fluctuations in the price of a commodity, and authorized the Commission to restrict the positions held or trading done by any individual person or by certain groups of people acting in concert. Pursuant to this statutory authority, the Commodity Exchange Authority, the predecessor of the Commodity Futures Trading Commission, established trading limits on a variety of commodities, including soybeans. In 1951 the Authority set the soybean speculative position limit at one million bushels, 16 Fed.Reg. 8107 (Aug. 13, 1951). The Authority raised the limit to two million bushels in 1953, 18 Fed.Reg. 7230-31 (Nov. 14, 1953), and to three million bushels in 1971, 36 Fed.Reg. 1263 (June 6,1971). This three million bushel position limit, Regulation 150.4, 17 C.F.R. § 150.4 (1977), was in effect at the time of the Hunt family soybean transactions.

The Hunts present multiple challenges to the soybean trading regulation, contending that there were procedural defects in its adoption and that it is an arbitrary and capricious exercise of administrative authority. The essence of the Hunts’ attack on the validity of the regulation is their substantive contention that there is no connection between large scale speculation by individual traders and fluctuations in the soybean trading market.

The procedures used in the adoption of the speculative limits contemplated in the Commodity Exchange Act § 4a(l), 7 U.S.C. § 6a(l), must satisfy the rules of the Administrative Procedure Act regarding informal agency rulemaking. 5 U.S.C. § 553. See United States v. Allegheny-Ludlum Steel Corp., 406 U.S. 742, 92 S.Ct. 1941, 32 L.Ed.2d 453 (1972); United States v. Florida East Coast RR, 410 U.S. 224, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973). These rules were followed by the Commodity Exchange Authority when it raised the soybean trading limit from two to three million bushels. The Authority published the proposed changes in the Federal Register, 36 Fed.Reg. 1340 (1971), and there was opportunity for written comment. In addition, the Authority held a hearing on the proposal. The agency considered the material presented and ultimately amended Regulation 150.4 by raising the limit.

The Hunts also claim that Regulation 150.4 is invalid and unenforceable because it represents an arbitrary and capricious decision by the Commodity Exchange Authority. They argue that the Authority failed to consider relevant factors in its decision to set the soybean trading limit at three million bushels. The substance of the Hunts’ argument is that the Authority made no analysis of the relationship between the size of soybean price changes and the size of the change in the net positions of large traders. They argue that there is no direct relationship between these phenomena, and, therefore, the regulation limiting the positions and the trading of the large soybean traders is unreasonable.

The appropriate standard for reviewing agency decision-making pursuant to section 553 of the Administrative Procedure Act is described by the Supreme Court in Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971):

Section 706(2)(A) requires a finding that the actual choice made was not “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A) (1964 ed., Supp. V). To make this finding the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. . . . Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.

Id. at 416, 91 S.Ct. at 823. See also American Meat Inst. v. Environmental Protection Agency, 526 F.2d 442, 452-53 (7th Cir. 1975). In assessing whether the Commodity Exchange Authority’s three million bushel limit was an arbitrary or capricious means to achieve the congressionally articulated purpose of preventing excessive speculation, it must be remembered that the fact that “some other remedial provision might be preferable is irrelevant.” Mourning v. Family Publications Service, Inc., 411 U.S. 356, 371, 93 S.Ct. 1652, 1662, 36 L.Ed.2d 318 (1973). In situations in which

reasonable minds may differ as to which of several remedial measures should be chosen, courts should defer to the informed experience and judgment of the agency to whom Congress delegated appropriate authority. Northwestern Elec. Co. v. FPC, 321 U.S. 119, 124, 64 S.Ct. 451, 88 L.Ed. 596 (1944); National Broadcasting Co. v. United States, 319 U.S. 190, 224, 63 S.Ct. 997, 87 L.Ed. 1344 (1943); American Telephone & Telegraph Co. v. United States, 299 U.S. 232, 236, 57 S.Ct. 170, 81 L.Ed. 142 (1936).

Id. at 371-72, 93 S.Ct. at 1662.

The Hunts point to a variety of sources to substantiate their claim that the soybean position and trading limit is arbitrary and capricious. For the most part they allege that the Commodity Exchange Authority failed to consider the relevant factors in reaching its determination. The Hunts cite the Ham Study of 1971, the Imel Study of 1973, the testimony of their expert ■witness, (Dr.-.T. A. Hieronymus, and even recent statements by a commissioner of the Commodities Futures Trading Commission questioning the three million bushel limit. Virtually all of the evidence the Hunts offered to challenge the three million bushel limit, however, was not part of the administrative record which formed the basis for the Commodity Exchange Authority’s 1971 decision to raise the limit to three million. The law is well settled that the administrative record already in existence — not some new record made initially in the reviewing court — should be the focus of judicial review. Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973); United States v. Nova Scotia Food Products Corp., 568 F.2d 240, 250 (2d Cir. 1977). In fact, most of the evidence cited by the Hunts is found in reports or testimony developed well after the promulgation of the 1971 trading limit. Last term the Supreme Court stated:

As we have said in the past: “Administrative consideration of evidence . always creates a gap between the time the record is closed and the time the administrative decision is promulgated [and, we might add, the time the decision is judicially reviewed], ... If upon the coming down of the order litigation might demand rehearing as a matter of law because some new circumstances has arisen, some new trend has been observed, or some new fact discovered, there would be little hope that the administrative process could ever be consumated in an order that would not be subject to reopening.” Interstate Commerce Commission v. Jersey City, 322 U.S. 503, 514-515, [64 S.Ct. 1129, 88 L.Ed. 1420] (1944). See also United States v. Interstate Commerce Commission, 396 U.S. 491, 521 [90 S.Ct. 708, 24 L.Ed.2d 700] (1970).

Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 554, 98 S.Ct. 1197, 1217, 55 L.Ed.2d 460 (1978). In Vermont Yankee the Court remonstrated a party objecting to an administrative regulation for cryptically referring to matters that “ought to be” considered in the administrative proceedings, and then judicially attacking the agency’s determination for failing “to consider matters ‘forcefully presented.’ ” Id. 435 U.S. at 544, 98 S.Ct. at 1217. And while an administrative agency must consider “the relevant factors” in its decisionmaking, Citizens to Preserve Overton Park, supra, 401 U.S. at 416, 91 S.Ct. 814, we cannot permit this requirement to become a device by which parties can thwart enforcement of an established regulation by offering new evidence challenging the wisdom of the regulation in the context of the judicial enforcement proceeding.' The reports and testimony presented by the Hunts simply provide different opinions regarding the need for the three million bushel limit in the present soybean market. There is no indication that the Commodity Exchange Authority ignored any particular set of “relevant factors” in reaching its determination. See Citizens to Preserve Overton Park, supra, 401 U.S. at 411-13, 91 S.Ct. 814.

The Hunts do rely on one report, the Callander Report, which was prepared by the Commodity Exchange Authority to guide its decision regarding soybean trading limits and, importantly, was made part of the administrative record of the agency’s decision to raise the limit from two to three million bushels. The Hunts isolate a sampling of quotations from this report which would seem to suggest that the dangers of large scale commodity trading are minimal. The Callander Report at other points, however, does discuss the adverse effects large scale trading can have on the market. And the report concludes that the soybean limit should be raised from two to three million bushels. The statements in the report minimizing the dangers of large scale trading should be viewed in the context in which they were written. The Commodity Exchange Authority, operating under an express congressional mandate to formulate limits on trading in order to forestall the evils of large scale speculation, was deciding whether to raise its then existing limit on soybeans. Naturally the language in a report concluding that the limit should be raised would not constantly focus on the dangers of large scale trading; a case had to be made to justify raising the trading limits. Thus, it is not unusual that the administrative record supporting the June 1971 soybean trading regulation is not constantly focused on the relationship between large scale trading and adverse price fluctuations. Neither this fact, nor the possibility that reasonable men may disagree about the wisdom of the agency’s conclusion, renders the regulation arbitrary or capricious. See City of DesPlaines v. Metropolitan Sanitary Dist., 552 F.2d 736, 737 (7th Cir. 1977). There is ample evidence in the administrative record to support the regulation.

II. Violation of the Speculative Limits

The district court found that Nelson Bunker Hunt and William Herbert Hunt, five of their children, and a corporation they control had exceeded the speculative limit of three million bushels that had been established for soybean futures contracts by Rule 150.4, promulgated pursuant to section 4a(l) of the Commodity Exchange Act. 7 U.S.C. § 6a(l). The Hunts claim that the district court misinterpreted section 4a(l) in applying it to the Hunts’ activities, and that there was no factual basis for a finding that the Hunts had violated the statute and its corollary regulation.

Section 4a(l) provides for the aggregation of commodity positions for purposes of determining whether the speculative limit has been exceeded, when one person “directly or indirectly” controls the trading of another, or when two persons are acting “pursuant to an express or implied agreement or understanding . . . .” 7 U.S.C. § 6a(l). Thus, even though two persons acting in concert might each individually have a commodity position below the limit, if their combined position exceeds the limit they have violated the statute. Further, contrary to the arguments advanced by the Hunts, there is nothing in either the statutory language or legislative history which suggests that intent — either to affect market prices or specific intent to exceed the speculative limits — is a necessary element of a violation of section 4a(l). In fact, the Senate Report to the 1968 amendments to the statute states that a speculative futures position exceeding the limit can constitute a statutory violation “regardless of how or when or for what purpose such position was created.” 1968 U.S.Code Cong. & Admin.News 1673, 1678. A violation occurs simply when an individual or several individuals acting in concert exceed the commodity position limits set pursuant to the statute.

The Hunts contend that the evidence compiled in the district court is insufficient to prove a violation of the statute. In assessing the district court’s findings, we must defer to the reasonable inferences of the trial court. Fed.R.Civ.P. 52(a). See SEC v. Parklane Hoisery Co., 558 F.2d 1083, 1086 (2d Cir. 1977); Markiewicz v. Greyhound Corp., 358 F.2d 26 (7th Cir.), cert. denied, 385 U.S. 828, 87 S.Ct. 64, 17 L.Ed.2d 65 (1966). Under this rule, the trial court’s conclusion that the Hunts violated section 4a(l) by collectively exceeding the speculative limits of Rule 150.4 must be upheld.

A brief survey of the Hunt family’s complicated soybean trading substantiates this conclusion. Nelson Bunker Hunt and William Herbert Hunt were the principal family figures in these transactions. They are brothers, and the chief officers of the Hunt Energy Corporation. In mid-1976 N. B. and W. H. Hunt entered the soybean market. By August 1 each brother consistently held a long position at the three million bushel limit, usually for the closest delivery month. Through a series of purchases — the date, timing, and size of which were virtually identical — each brother, by January 1977, held a three million bushel position in March 1977 soybeans. Over the next six weeks each of the Hunt brothers entered into eight transactions — on the same days, using the same broker, involving virtually identical quantities and prices. Throughout this time an employee of the Hunt Energy Corporation, Charles Mercer, prepared commodity position statements for the brothers reflecting their combined holdings and unrealized profits and losses.

On February 25, with both N. B. and W. H. Hunt at the personal position limit, N. B. Hunt ordered a purchase, through one of his brokers, of 750,000 bushels of May soybeans in the name of his son, Houston Hunt. On March 3 he ordered the purchase of 750,000 May bushels to be allocated equally among accounts he had opened on behalf of his three daughters. And, although the bank accounts of the various children lacked the funds to cover these purchases, the transactions were made possible by a short-term transfer of interest-free funds from their father’s account. N. B. Hunt’s children did not participate in these initial soybean transactions made in their names: they had nothing to do with opening the accounts, placing the first order, or arranging financing for their purchases. And once these family members had entered the soybean market, their transactions were added to the composite report sent to N. B. Hunt.

A similar relationship existed between W. H. Hunt and his son, Douglas. On March 1 W. H. Hunt and his wife transferred their interests in Hunt Holdings, Inc. to their three sons. Less than a week later Douglas Hunt personally and through Hunt Holdings, whose trading he controlled, began purchasing July soybeans. These purchases were financed in part by money advanced by his father.

The overall involvement of the Hunt family in the soybean market also was increased by the spread trading — purchasing old crop contracts and selling contracts in new crop markets — of N. B. and W. H. Hunt. Some of N. B. Hunt’s purchases in this period were financed by temporary advances from his brother. As of April 14, 1977 the Hunt family’s collective position involved over twenty-three million bushels of old crop soybeans: over 10.8 million in May futures, 7.7 million in July futures, and 5.2 million in August futures. These collective figures, of course, put the Hunt family well over the speculative limits in soybeans set by Rule 150.4. And the evidence presented in the district court clearly indicates that the individual positions of the family members should be aggregated. Thus, the Hunt family soybean transactions constituted a violation of section 4a(l) of the Commodity Exchange Act, 7 U.S.C. § 6a(l).

III. Lower Court’s Refusal to Grant Injunction Against Hunts

Pursuant to section 6c of the Commodity Exchange Act, 7 U.S.C. § 13a-l, the Commodity Futures Trading Commission is authorized to institute an action seeking injunctive relief whenever it appears that any person “has engaged, is engaging, or is about to engage in any act or practice constituting a violation of any provision of this Act or any rule, regulation, or order thereunder.” Section 6c further provides that upon a proper showing, a permanent or temporary injunction or restraining order shall be granted by the district court without bond. The discretion afforded the district court in deciding whether to issue such relief, while broad, see United States v. W. T. Grant, 345 U.S. 629, 633-34, 73 S.Ct. 894, 97 L.Ed. 1303 (1953), is not completely unfettered. This court has noted that when Congress has integrated traditional modes of equitable relief into a statutory enforcement scheme, the court’s equitable power should be exercised in harmony with the overall objectives of the legislation. SEC v. Advance Growth Capital Corp., 470 F.2d 40, 53 (7th Cir. 1972). In that case we cautioned that

. while trial courts should properly be accorded wide latitude in fashioning equitable remedies in cases of this type, it is the inescapable function of the appellate court to make sure that the fashioned remedy meets that criterion in accordance with the regulatory scheme and adequately serves the particularized needs of the case before the court. Although injunctive relief is never automatic upon the showing of a violation of the Act or regulations (see Hecht Co. v. Bowles [321 U.S. 321, 64 S.Ct. 587, 88 L.Ed. 754], supra), we should not hesitate to reverse an order denying such relief when it is evident that the trial court’s discretion has not been exercised to effectuate the manifest objectives of the specific legislation involved.

Id.

Actions for statutory injunctions need not meet the requirements for an injunction imposed by traditional equity jurisprudence. Once a violation is demonstrated, the moving party need show only that there is some reasonable likelihood of future violations. SEC v. Advance Growth Capital Corp., supra, at 54; Commodity Futures Trading Comm. v. British American Commodity Options Corp., 560 F.2d 135, 142 (2d Cir. 1977); SEC v. Management Dynamics, Inc., 515 F.2d 801, 807 (2d Cir. 1975). While past misconduct does not lead necessarily to the conclusion that there is a likelihood of future misconduct, it is “highly suggestive of the likelihood of future violations.” SEC v. Management Dynamics, Inc., supra, at 807. See also Commodity Futures Trading Comm. v. British American Commodity Options Corp., supra, at 142; SEC v. Advance Growth Capital Corp., supra, at 53. In drawing the inference from past violations that future violations may occur, the court should look at the “totality of circumstances, and factors suggesting that the infraction might not have been an isolated occurrence are always relevant.” SEC v. Management Dynamics, Inc., supra, at 807; SEC v. Bausch & Lomb, Inc., 565 F.2d 8 (2d Cir. 1977).

Other circuit decisions analyzing the problem whether or not to grant statutory injunctive relief after a violation has been proven have looked to a variety of factors to determine whether there is a reasonable likelihood of future misconduct. The fact that a violator has continued to maintain that his conduct was blameless has prompted several courts to look favorably on injunctive relief. See SEC v. Shapiro, 494 F.2d 1301, 1308 (2d Cir. 1974); SEC v. Manor Nursing Centers, Inc., 458 F.2d 1082, 1101 (2d Cir. 1972). Similarly, when a defendant persists in its illegal activities “right up to the day of the hearing in the district court . . . the likelihood of futures violations, if not restrained, is clear.” Commodity Futures Trading Comm. v. British American Commodity Options Corp., supra, at 142 (citations omitted). More importantly, courts have analyzed the nature of the past misconduct and the violator’s occupation or customary business activities to determine whether an injunction should be granted. When the violation has been founded on systematic wrongdoing, rather than an isolated occurrence, a court should be more willing to enjoin future misconduct. SEC v. Manor Nursing Centers Inc., supra, at 1100. And when a defendant, because of his professional occupation or career interest, will be in a position in which future violations could be possible, relief is appropriate. SEC v. Commonwealth Chemical Securities, Inc., 574 F.2d 90 (2d Cir. 1978).

In light of these standards, we conclude that the district court was incorrect in denying the injunctive relief sought by the Commission. It would be anomalous to conclude, as did the district court, that the carefully organized, large scale, and long term soybean trading activities of the Hunts constituted a violation of Section 4a(l) of the Commodity Exchange Act, but that relief under section 6c of the Act was inappropriate. Their misconduct was systematic and carefully preconceived. Their soybean positions which were challenged by the Commission were maintained throughout the enforcement proceedings until the futures contracts came to their natural conclusion. Further, the Hunts consistently maintained that their conduct was blameless. And finally, the prominent place of the Hunt family in the commodity markets generally, suggests that it is not unlikely that they will be regular participants in the soybean markets in the future. Thus, they will be in a position in which they are capable of committing future violations. Given the presence of all these factors, injunctive relief should have been granted.

IV. Lower Court’s Denial of Commission’s Request for Disgorgement

The original complaint of the Commission sought, in addition to injunctive relief, an order compelling the Hunts to disgorge all profits they obtained as a result of their illegal activities. Although no hearing on the merits of the propriety of this relief was held in the trial court, the request for an order of disgorgement was denied. The lower court’s rejection of the Commission’s prayer for disgorgement was precipitous, and we remand the issue to the district court for reconsideration in light of the following observations.

Disgorgement of illegally obtained profits has been ordered in a number of Securities Exchange Commission judicial enforcement proceedings. See, e. g., SEC v. Commonwealth Chemical Securities, Inc., 574 F.2d 90 (2d Cir. 1978); SEC v. Shapiro, 494 F.2d 1301 (2d Cir. 1974); SEC v. Texas Gulf Sulphur Co., 446 F.2d 1301 (2d Cir.), cert. denied, 404 U.S. 1005, 92 S.Ct. 561, 30 L.Ed.2d 558 (1971). In these cases, disgorgement was ordered despite the fact that there was no specific, express authority for this remedy in the Securities Exchange Act. Further, the Second Circuit in these cases explicitly rejected the objection that disgorgement is a penalizing rather than a remedial, equitable device, correctly reasoning that disgorgement does not penalize, but merely deprives wrongdoers of ill-gotten gains. See, e. g., SEC v. Texas Gulf Sulphur Co., supra, at 1308; SEC v. Shapiro, supra at 1309.

The question whether disgorgement is an appropriate form of ancillary relief in the Commodity Exchange Act context, as in the Securities Exchange Act setting, is, however, a closer one. Both sections 21(e) and 27 of the Securities Exchange Act discuss remedies for the enforcement of the norms of the Act. Section 21(e) only authorizes the Securities Exchange Commission to seek injunctive relief. Section 27, however, grants the district court general equitable powers to enforce the Act. The leading case authorizing the disgorgement remedy rested its conclusion, in part, on the general remedial powers possessed by the district court pursuant to section 27. SEC v. Texas Gulf Sulphur Co., supra, at 1307. Section 21(e) was relevant to that court’s reasoning only insofar as the court rejected the objection that section 21(e) limits the type of remedy the Securities Exchange Commission can pursue to injunctions.

Section 6c of the Commodity Exchange Act tracks the injunction language of section 21(e), but adds the broadening language that the Commodity Futures Trading Commission may bring an action in the district court “to enforce compliance with this chapter, or any rule, regulation or order thereunder . . . .” 7 U.S.C. § 13a-l. There is, however, no provision in the Commodity Exchange Act comparable to the express grant of equitable authority found in section 27 of the Securities Exchange Act. Thus, the principal statutory authority the Second Circuit has relied on in approving disgorgement in the Securities Exchange Act context is absent from the Commodity Exchange Act.

In the Texas Gulf Sulphur decision, however, the court referred to cases in other contexts in which the Supreme Court has upheld

the power of the Government without specific statutory authority to seek restitution, and has upheld the lower courts in granting restitution, as an ancillary remedy in the exercise of the courts’ general equity powers to afford complete relief. Mitchell v. Robert DeMario Jewelry, 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960); United States v. Moore, 340 U.S. 616, 71 S.Ct. 524, 95 L.Ed. 582 (1951); Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086 90 L.Ed. 1332 (1946).

Id.

And in these cases there was no explicit statutory expression, like section 27, of the court’s equitable enforcement powers; the authority to grant disgorgement is found in the traditional equity powers of a court. See Renegotiation Bd. v. Bannercraft Clothing Co., 415 U.S. 1, 19, 94 S.Ct. 1028, 39 L.Ed.2d 123 (1974).

In Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946), for example, the Supreme Court dealt with an action brought by the Price Administrator pursuant to the Emergency Price Control Act to enjoin the collection of excessive rents and to compel reimbursement of money collected by landlords as a result of past violations. Assessing language describing the authority of the district court which parallels the language of section 6c of the Commodity Exchange Act, the Court stated:

the Administrator invoked the jurisdiction of the District Court to enjoin acts and practices made illegal by the Act and to enforce compliance with the Act. Such a jurisdiction is an equitable one. Unless otherwise provided by statute, all the inherent equitable powers of the District Court are available for the proper and complete exercise of that jurisdiction. And since the public interest is involved in a proceeding of this nature, those equitable powers assume an even broader and more flexible character than when only a private controversy is at stake. . [T]he court may go beyond the matters immediately underlying its equitable jurisdiction . . . and give whatever other relief may be necessary under the circumstances.

******

Moreover, the comprehensiveness of this equitable jurisdiction is not to be denied or limited in the absence of a clear and valid legislative command. Unless a statute in so many words, or by a necessary and inescapable inference, restricts the court’s jurisdiction in equity, the full scope of that jurisdiction is to be recognized and applied.

Id. at 398, 66 S.Ct. at 1089. See also Mitchell v. DeMario Jewelry, Inc., 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960). In Porter, the Court reasoned that an order for restitution could be justified either as an adjunct to an injunction decree or as “an order appropriate and necessary to enforce compliance with the Act.” 328 U.S. at 399-400, 66 S.Ct. at 1090.

The Commodity Exchange Act contains no provision similar to section 27 of the Securities Exchange Act, but neither does it have any provision restricting the equitable power of the district court. Porter and Mitchell indicate that the latter fact is a sufficient basis for concluding that a district court possesses the authority to order restitution pursuant to the Commodity Exchange Act. Further, as the Second Circuit noted in the Securities Exchange Act context, to allow a violator to retain the profits from his violations would frustrate the purposes of the regulatory scheme. See SEC v. Texas Gulf Sulphur Co., supra, at 1308; SEC v. Manor Nursing Centers, Inc., supra, at 1104. Thus we conclude that a district court may compel a violator of regulations promulgated under the trading limit provisions of the Commodity Exchange Act to disgorge his illegally obtained profits.

This conclusion, however, does not complete our inquiry. Both the district court’s memorandum opinion and the Hunts’ briefs refer to the complex evidentiary problems involved in the attempt to isolate the profits achieved by the Hunt family members on the basis of their soybean trading in excess of the speculative limits. Further, even if it can be determined with some precision what amounts should be disgorged, the Commodity Futures Trading Commission has made no suggestion about what a court would do with the disgorged funds. This is a particularly vexing problem given the difficulty of determining injured parties in a large, complex system of exchange like the soybean market. Therefore, we remand this issue to the district court to give the Commission the opportunity to present arguments and evidence regarding the feasibility of this form of remedy in the instant case.

V. Lower Court’s Authority to Enjoin Publication of Hunts’ Trading Positions

On May 19, 1977 the district court entered an order preliminarily enjoining the Commodity Futures Trading Commission, in the absence of prior court approval, from making public the holdings, purchases, positions, or sales of the Hunts in the commodity futures market. The district court vacated this order on September 22, 1977. The Commodity Futures Trading Commission appealed the imposition of this order. We find that in light of the district court’s removal of the injunction against publicity, the issue is moot.

Under Article III of the Constitution, the exercise of federal judicial power depends on the existence of a justiciable case or controversy; federal courts do not have jurisdiction to review moot cases. Liner v. Jafco, Inc., 375 U.S. 301, 306 n. 3, 84 S.Ct. 391, 11 L.Ed.2d 347 (1964). In the instant case, the alleged injury suffered by the Commission because of the imposition of the injunction is no longer extant; the district court’s order has expired. Further, this is not a case in which, because the issued is “capable of repetition, yet evading review,” we should hold that the issue is not moot. See Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515, 31 S.Ct. 279, 283, 55 L.Ed. 310 (1911); Nebraska Press Ass’n v. Stuart, 427 U.S. 539, 96 S.Ct. 2791, 49 L.Ed.2d 683 (1976). Unlike the responding parties in these cases, the Hunts, especially given the imposition of an injunction supervising their trading, are unlikely to be involved in future litigation in which they seek to enjoin the Commission publicity about their commodity trading. See also, e. g., Nader v. Volpe, 154 U.S.App.D.C. 332, 475 F.2d 916 (1973). They do not have any significant interest in the question whether, in the future, a district court can impose a publicity injunction upon the Commodity Futures Trading Commission; thus, they lack the personal interest which stimulates adverseness. See generally O’Shea v. Littleton, 414 U.S. 488, 493-94, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974). There is little likelihood that the Hunts will seek an injunction like this one in the future. Without such a likelihood of recurrence, the Southern Pacific Terminal doctrine does not apply and this controversy must be considered moot. See SEC v. Medical Committee for Human Rights, 404 U.S. 403, 92 S.Ct. 577, 30 L.Ed.2d 560 (1972).

VI. Dismissal of Counterclaims and Third-Party Claims

The Hunts have cross-appealed from that portion of the district court’s order which denied their counterclaims against the Commodity Futures Trading Commission and their third-party claims against Commissioner Bagley and unknown employees of the Commission for damages. These claims were based on the Commission’s allegedly wrongful disclosure of the Hunt’s soybean trading positions. The Commission published this information pursuant to section 8a(6) of the Commodity Exchange Act, 7 U.S.C. § 12a(6) (1976) which authorizes the Commission to publish “the full facts concerning any transaction or market operation, including the names of parties thereto, which in the judgment of the Commission disrupts or tends to disrupt any market or is otherwise harmful or against the best interests of producers and consumers.” Id. We sustain the result reached in the lower court.

Without explicit authority, or unless the agency is the offspring of a suable entity, an agency of the federal government cannot be sued eo nomine for damages. Blackmar v. Guerre, 342 U.S. 512, 72 S.Ct. 410, 96 L.Ed. 534 (1952). See also Bell v. Groark, 371 F.2d 202 (7th Cir. 1966). Congress did not write such authority into the Commodity Exchange Act. Thus, the Hunts’ counterclaim against the Commodity Futures Trading Commission as an entity cannot be maintained.

The Hunts’ third-party claims against Bagley and the unnamed employees of the Commission also fail. First, these parties were impleaded improperly by the Hunts. Fed.R.Civ.P. 14(a) authorizes the impleader of a person only when that person “is or may be liable to [the defendant] for all or part of the plaintiff’s claim against him.” Clearly the Commission employees who are the subject of the Hunts’ third-party complaint are not liable for the Hunts’ violation of the soybean trading limits. And this was the only claim brought by the plaintiff-Commission against the Hunts. Thus, Bagley and the unknown employees of the Commission cannot be brought before the court pursuant to Fed.R.Civ.P. 14(a).

More fundamentally, the Commission actions which are the substance of the Hunts’ claims — publishing the Hunt family’s positions in the soybean futures market — were dearly within the scope of the official duties of Commissioner Bagley and the other Commission employees. See Commodity Exchange Act § 8a(6), 7 U.S.C. § 12a(6) (1976). Thus, the third-party defendants enjoy immunity from the Hunts’ damage claims. Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978); Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959); Expeditions Unlimited Aquatic Enterprises, Inc. v. Smithsonian Inst., 184 U.S.App.D.C. 397, 566 F.2d 289 (1977) (en banc).

Accordingly, we remand this case for further proceedings not inconsistent with this opinion.

. Section 4a(l) of the Commodity Exchange Act, 7 U.S.C. § 6a(l), provides in pertinent part:

Excessive speculation in any commodity under contracts of sale of such commodity for future delivery made on or subject to the rules of contract markets causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity. For the purpose of diminishing, eliminating, or preventing such burden, the commission shall, from time to time, after due notice and opportunity for hearing, by order, proclaim and fix such limits on the amounts of trading which may be done or positions which may be held by any person under contracts of sale of such commodity for future delivery on or subject to the rules of any contract market as the commission finds are necessary to diminish, eliminate, or prevent such burden. In determining whether any person has exceeded such limits, the positions held and trading done by any persons directly or indirectly controlled by such person shall be included with the positions held and trading done by such person; and further, such limits upon positions and trading shall apply to positions held by, and trading done by, two or more persons acting pursuant to an expressed or implied agreement or understanding, the same as if the positions were held by, or the trading were done by, a single person. Nothing in this section shall be construed to prohibit the commission from fixing different trading or position limits for different commodities, markets, futures, or delivery months.

. Regulation 150.4, 17 C.F.R. § 150.4 (1977), states:

The following limits on the amount of trading under contracts of sale of soybeans for future delivery on or subject to the rules of any contract market, which may be done by any person, are hereby proclaimed and fixed, to be in full force and effect on and after June 26, 1971;

(a) Position limit. The limit on the maximum net long or net short position which any person may hold or control in soybeans on or subject to the rules of any one contract market is 3,000,000 bushels in any one future or in all futures combined.

(b) Daily trading limit. The limit on the maximum amount of soybeans which any person may buy, and on the maximum amount which any person may sell, on or subject to the rules of any one contract market during any one business day is 3,000,000 bushels in any one future or in all futures combined.

♦ * Jji * *

(e) Definition. As used in this part, the word “person” imports the plural or singular and includes individuals, associations, partnerships, corporations, and trusts.

(f) Application of limits. The foregoing limits upon positions and upon daily trading shall be construed to apply, respectively, to positions held by, and trading done by, two or more persons acting pursuant to an expressed or implied agreement or understanding, the same as if the positions were held by, or the trading were done by, a single individual.

. The propriety of the procedures employed by the Commodity Exchange Authority in the 1971 amendment to Regulation 150.4 was upheld previously in Economou v. Butz, 370 F.Supp. 361 (S.D.N.Y.1974).

. Virtually all of the planning and decisionmaking regarding the Hunts’ trading activities was done by the brothers, W. H. and N. B. Hunt. And, prior to the transactions in question here, they were the only defendants significantly active in the commodities markets. In fact, N. B. Hunt’s children had no knowledge or experience regarding commodity trading. It could be argued that an injunction is appropriate against only W. H. and N. B. Hunt and Hunt Holdings, Inc. However, the record in this case clearly indicates that the younger generation of the Hum defendants possess the financial wherewithal to be substantial participants in the soybean market. It is not unlikely that they, either personally or with the advice of the Hunt family financial counselors, will be in a position to violate the regulation in the future. This fact, coupled with their complicity in the systematic wrongdoing which constituted the statutory violation in the instant case, warrants the imposition of injunctive relief.

. The dissenting opinion argues, inter alia, that because the Commission never “lack[edj opportunity to press for the disgorgement remedy it specifically sought ... in its complaint” at the hearings held in the district court, the disgorgement issue should not be remanded for more complete consideration. Infra p. 1233. The dissent fails to note, however, that the proceedings before the trial judge were on a renewed motion for a preliminary injunction, not permanent relief. These hearings focused only on the validity of the regulation, its application to the Hunts, and the appropriateness of an injunction against the Hunts restraining their future trading; neither plaintiff nor defendants addressed the disgorgement question in their trial motions or in their posttrial memoranda and proposed conclusions of law. Plaintiffs failure to raise the disgorgement issue in these hearings must be viewed against the background of the mutual effort of plaintiff, defendants, and the court to expedite resolution of the motion for preliminary relief. See, e. g., Statement of Mr. Ryan, counsel for defendants, Transcript, July 5, 1977, p. 9; reprinted in Supplementary Appendix, Hunt v. Commodity Futures Trading Commission, No. 78-1055, p. 42sa.

The dissent also refers to a statement made by the Commission in the administrative proceeding which emphasizes the completeness of the district court hearings. Infra, p. 1232. This statement, however, presumably was made in the context of the Commission’s attempt to use the doctrine of collateral estoppel to establish only that the Hunts violated the commodity trading statute. Given that the Commission was seeking different relief in the administrative proceeding than it had in the district court, it is improbable that it would have made an argument based on principles of prior adjudication with respect to what forms of relief were appropriate. The Commission, moreover, “having recognized that the district court’s findings had been made only for purposes of preliminary relief,” Brief of Appellee, Hunt v. Commodity Futures Trading Commission, No. 78-1055, p. 10 n. 14, amended its motion for summary disposition of the administrative complaint (presumably the source for the quotation used by the dissent) and dropped its collateral estoppel contention, on February 15, 1978.

Given this background, it was not inappropriate for the Commission to postpone presentation of its evidence and arguments in support of its prayer for disgorgement until after the resolution of the motion for preliminary relief; more importantly, the Commission should not be precluded from offering these arguments to the district court on remand.

. The relevant statutory provision, section 205(a) of the Emergency Price Control Act of 1942, states:

Whenever in the judgment of the Administrator any person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of section 4 of this Act, he may make application to the appropriate court for an order enjoining such acts or practices, or for an order enforcing compliance with such provision, and upon a showing by the Administrator that such person has engaged or is about to engage in any such acts or practices a permanent or temporary injunction, restraining order, or other order shall be granted without bond. 56 Stat. 23, 33.