Opinion
June 4, 1991
Appeal from the Supreme Court, New York County (C. Beauchamp Ciparick, J.).
In this action alleging common law fraud, breach of fiduciary duty and conversion of assets, plaintiff seeks to recover $20 million he lost in 1983 and 1984 through a commodities trading account which, he alleges, he was fraudulently induced to open by a certain Jean Hindi, who was held out to be defendant's agent. Plaintiff also seeks $25 million in punitive damages. In dismissing the amended complaint, the IAS court found that plaintiff's claims are preempted by the Commodity Exchange Act ( 7 U.S.C. § 1 et seq.) and, relying on 7 U.S.C. § 25 (c), held that the U.S. District Courts have exclusive jurisdiction to hear claims such as plaintiff's. That section specifically states, however, that it applies only to private rights of action brought under that section.
We agree with the overwhelming body of case law which holds that, while establishing a wide-ranging scheme for the regulation of commodities trading, nothing in the Act preempts or abolishes traditional common law claims for damages. (See, e.g., Kerr v First Commodity Corp., 735 F.2d 281, 288; Kotz v Bache Halsey Stuart, 685 F.2d 1204; Khalid Bin Talal Bin Abdul Azaiz Al Seoud v Hutton Co., 720 F. Supp. 671, 679-682; Patry v Rosenthal Co., 534 F. Supp. 545.)
Concur — Sullivan, J.P., Carro, Rosenberger, Kupferman and Rubin, JJ.