Federal District Court Judge John Blakey, as well as Kraft Foods Group, Inc and Mondelez Global, LLC, argued that the Court of Appeals for the Seventh Circuit should deny a petition of mandamus requested by the Commodity Futures Trading Commission following the food giants’ initiation of a civil contempt proceeding after entry of a consent order settling an enforcement action by the CFTC against Kraft and Mondelez.
The defendants sought a finding of contempt and other sanctions against the CFTC alleging the Commission violated a mutual gag order contained in the settlement order when, among other things, two commissioners issued concurring opinions when the CFTC publicized the settlement, and the CFTC issued its own press release and statement.
In seeking a mandamus order, the CFTC sought to preclude Judge Blakey – the district court judge that presided over the settlement process – from conducting an evidentiary hearing in connection with the contempt proceeding, claiming that it would be of the nature of a criminal inquisition. Alternatively, the CFTC requested that Judge Blakey be removed from presiding over any evidentiary hearing. (Click here for details in the article “District Court Inquisition is Unlawful Argues CFTC in Opposing Potential Contempt Finding and Other Sanctions Arising From Enforcement Action Settlement with Two Food Giants? in the October 6, 2019 edition of Bridging the Week.)
In a letter to the court of appeals, Judge Blakey said that the CFTC’s petition “is not ripe.” Although he implicitly conceded that the CFTC might have initially and fairly determined that the evidentiary hearing was intended to be a criminal proceeding, he clarified that it was intended to be a “civil proceeding” subsequent to reviewing the Commission’s appellate motion. As a result, he wrote, “I believe it’s important to note that the CFTC’s fears of an unlawful criminal inquisition are unfounded.”
Likewise, defendants filed papers with the court of appeals also indicating that the CFTC’s petition was untimely because the district court has made no ruling. Defendants argued that if Judge Blakey “in the future enters a sanction in error or based on inadmissible evidence, any error can be corrected by a direct appeal once he enters a contempt judgment.” Kraft and Mondelez also argued that no criminal inquest is “pending or threatened” and that Judge Blakey has the “inherent authority” to hold hearings to assess compliance with his own order.
My View: A litigation with three parties – a plaintiff, two defendants and the presiding judge. Wow! As I wrote before, this post-settlement proceeding is an episode out of The Twilight Zone. It only gets stranger.