U.S. Futures Exch., LLC v. Bd. of Trade of Chi., Inc. (346 F. Supp. 3d 1230, 2018)

Honorable Thomas M. Durkin, United States District Judge

Plaintiffs U.S. Futures Exchange, LLC ("USFE") and U.S. Exchange Holdings, Inc. ("UEH") bring this antitrust case against defendants Board of Trade of the City of Chicago, Inc. ("CBOT") and Chicago Mercantile Exchange, Inc. ("CME"). Plaintiffs allege that defendants engaged in anticompetitive conduct to block plaintiffs from successfully entering the U.S. Treasury futures and options exchange market. Pending before the Court are: (1) defendants' motion for summary judgment [708]; and (2) plaintiffs' motion for partial summary judgment [712]. For the reasons that follow, the Court grants defendants' motion [708]. The Court denies plaintiffs' motion for partial summary judgment [712] as moot.

Background

A. Factual Chronology

1. CBOT's Launch Of U.S. Treasury Futures And Options Trading

In the 1970s, CBOT created and launched what later became its flagship product: futures contracts on U.S. Treasury notes and bonds. Futures and options contracts can be traded in the United States only on an exchange like CBOT that is approved by the U.S. Commodity Futures Trading Commission ("CFTC") as a designated contract market. R. 742 ¶ 1 (Defendants' Response to Plaintiffs' L.R. 56.1 Statement of Additional Facts).

2. CBOT-Eurex License Agreements

In the 1990s, UEH's parent Eurex Frankfurt AG ("Eurex") developed an all-electronic trading exchange in Europe. Id. ¶ 4. CBOT licensed Eurex's electronic trading platform in October 1999, and the parties signed a non-compete to prevent Eurex from, among other things, offering U.S. Treasury futures itself. Id. ; R. 731 ¶ 6 (Plaintiffs' Response to Defendants' L.R. 56.1 Statement of Facts). The parties entered into a new license agreement in July 2002. R. 731 ¶ 6. That agreement was set to expire on December 31, 2003, and the non-compete was set to expire on January 30, 2004. Id. In early January 2003, CBOT notified Eurex that it intended to terminate the license agreement the day it was set to expire (December 31, 2003). R. 742 ¶ 5.

3. Eurex's Plan To Launch USFE As A Competing Exchange

Both CBOT and Eurex made public announcements on January 10, 2003. R. 731 ¶¶ 6-8. CBOT announced that it had entered into a contract to use a different trading platform after December 31, 2003 when its licensing agreement with Eurex expired. Id. ¶ 7. And Eurex announced its intent to launch a U.S. Treasury futures and options exchange, USFE, to compete head-to-head with CBOT. Id. ¶¶ 2, 8. The planned launch date for Eurex's competing exchange was February 1, 2004, the earliest date possible under the non-compete agreement. Id. ¶¶ 6, 8.

While planning for its U.S. launch, Eurex created a business case defining the two most likely outcomes as: (1) winning the entire futures market by 2007; or (2) failing and quickly exiting from the market. Id. ¶ 9. The business case assumed a "binary outcome" was most likely because "the nature of ... the futures business is that [in] any one product, there is a tendency to concentrate the market or liquidity into one market." Id. Eurex cited "the 'network effect' of CBOT's large volume" as a "barrier to entry" into the U.S. Treasury futures market. Id. ¶ 10. In a March 17, 2003 presentation, Eurex assessed the probability of USFE's success at "10%, however increasing to 50% if achieving mile-stones." Id. ¶ 11. Defendants' executives readily acknowledged the business threat posed by USFE's planned entry into the market, including in light of Eurex's low-cost, all-electronic trading platform (which market participants were familiar with, having used it during the years that CBOT licensed it). R. 742 ¶¶ 6, 8, 16.

4. CBOT And Eurex's Competing Clearing Agreements

All futures contracts and options traded on an exchange must be submitted to a clearinghouse for clearing. Id. ¶ 1. A clearinghouse is a financial institution formed to facilitate the exchange of transactions. It stands in between the two firms participating in a trade and guarantees all trades it clears, and its purpose is to reduce the risk of a firm failing to honor its obligations. Eurex and CBOT separately began negotiations with two clearinghouses for their competing exchanges: (1) defendant CME; and (2) the Board of Trade Clearing Corporation ("BOTCC"), which was CBOT's prior clearinghouse. R. 731 ¶¶ 12-13. BOTCC was an independent corporation not owned by CBOT.

During CBOT's negotiations with BOTCC, CBOT requested that BOTCC act as an exclusive clearinghouse for CBOT's key products, including U.S. Treasury futures and options, but BOTCC was resistant. R. 742 ¶ 24. Prior to this, CBOT and BOTCC never had a written agreement, and there was no restriction on BOTCC's ability to provide clearing services for other exchanges. Id. CBOT encountered less resistance in its request for exclusivity from CME. Id. ¶ 25. In a March 25, 2003 email summarizing the negotiations, CBOT explained: "CME wants flexibility in providing clearing services for other exchanges, however, CBOT would have exclusivity for the core products .... Only concern is with respect to anti-trust considerations but CME intent is to grant us exclusivity." R. 733 Ex. 145.

From the time the buyer or seller of a futures contract opens the contract until the counter-party closes it, the contract is considered "open." Contracts that are outstanding at the clearinghouse-i.e. , that have not been offset by delivery-are called "open interest." See R. 742 ¶ 1. As part of CBOT's negotiations with CME, they debated whether a bulk transfer of open interest from BOTCC to CME would be possible as part of a CBOT-CME agreement. Id. ¶ 27. Defendants understood that "interjecting CFTC into the process" by submitting rules for "approval of the CFTC" could reduce risk and "act[ ] as an insulator against liability." Id. ¶ 28.

Defendants began discussions about this with the CFTC in April 2003. R. 731 ¶ 18.

On April 16, 2003, CBOT entered into a clearing services agreement ("clearing link") with CME set to begin on January 2, 2004. R. 742 ¶ 25; R. 731 ¶¶ 13-14. Under that agreement, CME could provide clearing services for products competing with CBOT products only after first giving 30 days' notice to CBOT, at which time CBOT had the right to terminate the agreement. R. 731 ¶ 14. Although this provision was not framed in terms of exclusivity, construing emails in the light most favorable to plaintiffs supports an inference that defendants had an internal understanding that CME would grant CBOT exclusivity. R. 742 ¶ 25. CBOT subsequently attempted to acquire BOTCC, but BOTCC refused CBOT's acquisition overture. Id. ¶ 26.

On May 20, 2003, USFE and BOTCC signed a letter of intent to enter into a clearing services agreement. R. 731 ¶ 16. The parties dispute the extent to which USFE was already committed to or leaning towards BOTCC at the time defendants announced their clearing link. R. 731 ¶¶ 15-16; R. 742 ¶ 25. USFE and BOTCC's plans raised a concern for defendants that if USFE gained access to BOTCC before open interest was transferred to CME, "CBOT's customers could effectively become Eurex US customers without the need to change any clearing procedures." R. 742 ¶ 27.

5. CBOT And CME's Submission Of Clearing Link And Open Interest Transfer For CFTC Approval

Defendants' clearing link agreement required them to "draft and submit to the CFTC for approval rules that provide for the clearing of CBOT products at the CME clearing house ... and facilitate the transfer of open interest in CBOT [p]roducts from BOTCC to CME." R. 731 ¶ 17. On June 3, 2003, CME submitted a request for the CFTC to approve proposed rules to implement the clearing link. Id. ¶ 19. On June 13, 2003, CBOT submitted a request for the CFTC to approve a proposed rule ("Regulation 701.01") requiring transfer of CBOT members' open interest from BOTCC to CME. Id. ¶ 20; R. 742 ¶¶ 28, 32; R. 733 Ex. 162.

Although the CFTC had no obligation to publish these rule submissions or to provide an opportunity for public comment, on July 8, 2003, the CFTC made defendants' proposed rule changes available for comment on the CFTC website by July 14, 2003. R. 731 ¶ 21; R. 742 ¶ 29. This was far shorter than that 45-day review period allowed (but not required) by a commission rule. R. 742 ¶ 29. CBOT had requested quick CFTC approval of the proposed rules in June 2003, citing a provision in the clearing link agreement allowing CME to walk away from the agreement by July 15, 2003. Id . However, CME's Board Steering Committee had decided on July 7, 2003 to allow the walkaway provision to lapse. Id.

During the review period between July 8 and July 14, 2003, numerous industry participants, including USFE and BOTCC, submitted comment letters. R. 731 ¶ 22. USFE's letter raised antitrust concerns, explaining that "an analysis of the anti-competitive impact of the [open market transfer rule] CB[O]T Regulation 701 under the factors of section 15(b) of the [Commodity Exchange Act ('CEA') ] precludes the CFTC from approving it." Id. ¶ 23. Other market participants likewise raised competition and market-based concerns in their comment letters. R. 742 ¶ 30. USFE and other market participants also requested that the CFTC extend the comment period. Id.

The CFTC did not extend the comment period. On July 15, 2003, CFTC staff provided a 17-page memorandum addressing the proposed rules and comment letters.

R. 731 ¶ 24; R. 742 ¶ 32. That memorandum explained that the comment letters had raised the concern that the proposed rules "would violate the obligations of [CBOT] and the Commission in light of the antitrust provisions of the Act," including "Section 15(b)." R. 731 ¶ 24. CFTC staff

acknowledge[d] that these rules relate to important policy and legal issues of market structure and competition that the Commission has been addressing since June, 2002. However, ... 'despite all the discussion about alternative clearing models embracing choice in one form or another, to-date no alternatives to the use of a single dedicated clearinghouse exist and none have been proposed in an implementable form.

Id. ¶ 25. CFTC staff recommended approving the rules, including Regulation 701.01, "[i]n order to move forward to implement the Link in an orderly manner, and to enhance legal certainty concerning the procedures to implement the Link." Id. CFTC staff subsequently explained:

The staff recognizes that the Clearing Services Agreement between CBOT and CME could appear to raise antitrust issues. However, the staff believes that any potential antitrust issues are outweighed by the benefits to be gained including potential clearing efficiencies, significant cost savings for members and customers, and systemic risk abatement.... On balance, the staff believes that ... the Commission's approval of the CBOT as DCO would not be inconsistent with the Commission's obligation under Section 15(b) of the CEA.

Id. ¶ 29.

On July 15, 2003, the CFTC unanimously approved the clearing link and open interest transfer rules submitted by defendants. Id. ¶ 26. The same day, the CFTC issued a press release announcing the approval and stating:

[T]he policy and legal issues involved have been well known to interested parties since they were initially raised at the CFTC Clearing Roundtable held almost a year ago. CBOT, CME, and the Board of Trade Clearing Corporation have consulted widely with their members and the Commission about this project and submitted to the Commission an agreed transition schedule on June 13.

Under the Commodity Exchange Act, the Commission is not obligated to publish rule submissions of self-regulatory organizations. Nevertheless, based upon the many expressions of interest in this matter, the Commission decided to provide a short comment period....

The rules are necessary for the orderly implementation of the Link and will provide continuity of financial integrity and customer protection in the futures markets. The Commission believes that the Link and these rules further the Commodity Futures Modernization Act's goal of supporting innovation in the futures industry.

The Commission's decision was based upon the information before it, including comment letters from several interested parties. The Commission is aware of public and industry interest in related policy issues regarding market structure and competition, and looks forward to hearing more on these issues. The Commission believes, however, that this broader dialogue should not impede the planning necessary to move forward to implement the Link in an orderly manner. The Commission believes it is of paramount importance to enhance legal certainty concerning the procedures to implement the Link.

Id. ¶ 27.

6. USFE's CFTC Application And Preparation To Enter The Market

Knowing that it needed CFTC approval to become a designated contract market ("DCM") before it could launch, USFE pre-filed its DCM application with the CFTC in July 2003. R. 742 ¶ 15. USFE attended meetings with the CFTC that month to discuss its application. Id.

On September 3, 2003, USFE, Eurex, and BOTCC officially entered into their clearing services agreement. R. 731 ¶ 39. That agreement prohibited BOTCC from making USFE's contracts "fungible with contracts traded on exchanges other than [USFE] or Eurex" without prior written consent of USFE. Id . If the agreement was terminated, USFE could require BOTCC to "facilitate the transfer of open positions and collateral with respect to [USFE] Contracts as to which [BOTCC] maintain[ed] open positions" to another clearing service provider. Id. ¶ 40. In other words, the agreement gave USFE the right to transfer open interest in USFE contracts to another clearinghouse upon termination, just as CBOT had arranged to do with CME. In the wake of USFE's clearing services agreement with BOTCC, CBOT proposed crediting the account of any BOTCC member who became a CME-CBOT clearing link member with "the net book value ($16,628 per share) of up to 150 shares of the clearing member's BOTCC stock." R. 742 ¶ 33; R. 733 Ex. 189.

Around the same time, USFE entered into a regulatory services agreement with the National Futures Association ("NFA") for the NFA to perform market and trade practice surveillance for USFE for an initial term of three years. R. 731 ¶ 42. Prior to this agreement, defendants made efforts to hamper an agreement between USFE and the NFA, including by arguing that the NFA should be precluded from providing regulatory oversight services to USFE on numerous grounds that were ultimately rejected by the CFTC. R. 742 ¶ 34.

On September 16, 2003, USFE filed its formal DCM application with the CFTC. R. 731 ¶ 44; R. 742 ¶ 16. Shortly after USFE's September 16, 2003 application, defendants pursued separate FOIA requests regarding the application and requested extensions of the CFTC comment period until 45 days after receipt of the requested FOIA documentation. R. 742 ¶ 16.

By regulation, USFE's application was initially eligible for fast-track, sixty-day review. R. 731 ¶ 44; R. 742 ¶ 15. But the CFTC removed USFE's application from fast-track review on October 14, 2003, with the stated intent "to ensure that it ha[d] an adequate opportunity to consider fully the issues presented by [USFE's] application." R. 731 ¶ 44. The same day, the CFTC postponed a hearing on USFE's application originally set for October 16, 2003 before the House Agriculture Subcommittee. R. 742 ¶ 16.

The hearing before the House Agriculture Subcommittee was rescheduled for November 6, 2003. Id. ¶ 18. At that hearing, the CFTC Chairman testified that because USFE's application was "large" and "extensive," the CFTC had determined that it would be "very difficult to get to a point where we are comfortable within [the 60 day, fast-track] time frame." R. 731 ¶ 45. But he also testified that the application "include[d] all general information required by our rules to be considered complete." R. 742 ¶ 15.

During the review period, CFTC staff themselves raised numerous issues with USFE, sending over 75 questions (in at least four sets) for USFE to answer regarding its application. R. 731 ¶ 48. The CFTC sent copies of USFE's application to the Federal Reserve and the Department of Treasury on November 3, 2003, and the Treasury and Federal Reserve submitted their comments on December 18 and 19, 2003, respectively. Id. ¶ 53.

CFTC also made non-confidential portions of USFE's application publicly available on its website for comment. Id. ¶ 49. CBOT and CME separately submitted a series of comment letters raising concerns with USFE's application. R. 742 ¶ 19. Several of defendants' comments focused on discrepancies between USFE's public marketing and what was disclosed in USFE's application. Although the application represented that all USFE-listed contracts would be cleared by BOTCC, USFE was publicly marketing a "global clearing link" that would allow products to be cleared at either BOTCC or Eurex Clearing, the latter of which was not Commission-registered. R. 731 ¶ 50. The application also did not mention a rebate plan that USFE was publicly marketing. Id. ¶ 51. Additionally, defendants raised an issue regarding USFE's one-member Board of Directors. Id. ¶ 52.

On December 9, 2003, the CFTC announced that it would hold a hearing on USFE's application on December 17, 2003. Id. ¶ 54; R. 742 ¶ 20. Later that day, CME and CBOT submitted nearly identical letters to the CFTC stating that they had previously scheduled meetings that conflicted with the December 17 hearing and requesting that that hearing be rescheduled (a) based on the conflict and (b) to address questions raised at the November 6, 2003 House Agriculture Subcommittee hearing. R. 731 ¶ 55; R. 742 ¶ 20.

The next day, on December 10, 2003, the CFTC cancelled the December 17, 2003 hearing, citing "scheduling conflicts of some market participants." R. 731 ¶ 56. It also reopened the public comment period through December 19, 2003 to respond to questions raised at the House Agriculture Subcommittee hearing. Id. ¶¶ 56-57. Id. The CFTC received 27 more comment letters in response. Id. ¶ 56.

On December 19, 2003, the CFTC sent a letter to BOTCC, Eurex, and USFE regarding "misleading" statements made in a December 16, 2003 joint press release claiming that USFE would launch on February 1, 2004. Id. ¶ 58. The CFTC said that the deadline for action on the application was March 15, 2004, and that the CFTC "cannot and has not committed itself to any earlier date ..., and certainly cannot and has not committed itself to a favorable decision on the application." Id.

By early January 2004, CBOT had transitioned to a new electronic trading platform, and defendants had implemented their clearing link and transfer of open interest, resulting in a $1.4 billion reduction in performance bond requirements for their members and $200 million in reduced security deposits. Id. ¶ 72.

On January 23, 2004, USFE submitted to the CFTC revised rules, bylaws, and an LLC agreement relating to its DCM application. Id. ¶ 64. USFE submitted a letter to the CFTC on January 26, 2004 committing itself to four "undertakings," including a commitment not to use a non-Commission-registered clearing service like Eurex Clearing without permission (a concern defendants raised in their comments) and a commitment to provide the Commission with one-month notice of "any non-traditional form of incentive program" (another concern defendants raised in their comments).Id. ¶ 65.

The CFTC announced on January 27, 2004 that it would hold an open meeting on February 4, 2004 to consider USFE's DCM application. Id. ¶ 66. USFE's 30(b)(6) deponent testified that this announcement "was the first time USFE received any indication concerning the timing of the CFTC's decision." Id. ¶ 67.

On February 2, 2004, CFTC staff issued a 142-page memorandum recommending approval of USFE's application. Id. ¶ 68. Staff observed that with respect to CBOT's concerns about USFE's use of a single-person board, USFE had since amended its bylaws to establish a 12-person board. Id.

The next day, on February 3, 2004, CBOT reduced exchange transaction fees for customers trading U.S. Treasury futures. Id. ¶ 73; R. 742 ¶ 38. CBOT also negotiated an amendment to its clearing link agreement with CME to lower clearing fees for all financial products for a six-month period. R. 742 ¶ 38.

The CFTC approved USFE as a DCM on February 4, 2004. R. 731 ¶ 69. The CFTC required USFE to comply with its agreed undertakings to use only CFTC-registered clearing organizations (i.e. , not Eurex Clearing) and to provide any incentive program to the CFTC for review one month before the proposed effective date. Id. The CFTC explained during the approval hearing, "we found nothing in th[e] comments that made us feel [USFE] had not or would not be in compliance with [the criteria for DCM designation] and core principles." R. 742 ¶ 23. The CFTC reviewed each objection raised by defendants and rejected the majority of them as without merit. Id.

7. USFE's Launch

USFE launched its exchange on February 8, 2004, with BOTCC providing clearing services and the NFA performing market and trade practice surveillance. R. 731 ¶¶ 43, 74. USFE ultimately "failed to capture more than a trivial portion of the market." Id. ¶ 74.

8. Subsequent Events

In January 2005, CBOT increased average exchange fee rates. R. 742 ¶ 38. In 2007, in the course of evaluating CME's proposed merger with CBOT, the DOJ Antitrust Division conducted an "extensive investigation" of the CBOT-CME clearing link agreement. R. 731 ¶ 36. The DOJ Antitrust Division concluded "that the evidence does not indicate that ... the clearing agreement is likely to reduce competition substantially" or that the clearing agreement "will foreclose entry by other exchanges." Id.

B. Evidence Related To Coordination And Intent

Plaintiffs cite numerous documents and testimony to demonstrate what they characterize as defendants' coordinated "Washington strategy" and intent to stall USFE's launch. Defendants do not meaningfully refute that they engaged in a coordinated effort to try to prevent USFE from taking over the U.S. Treasury futures and options exchange market. Instead, as discussed in more detail below, defendants argue that the actions they took as part of that coordinated effort are lobbying and related efforts immune from antitrust scrutiny.

The principal evidence on which plaintiffs focus includes:

• On May 23, 2003, CME's Director of Clearing Development sent CME's outside counsel an email titled "?State Ownership of Eurex??," asking whether "there may be some regulatory stumbling blocks that could be thrown up in front of [Eurex]?" in light of the fact that several of Eurex's members are "state-owned and operated banks - subject (I believe) to very close provincial regulation." R. 733 Ex. 70. CME's Director explained that "even small obstacles might be enough to trip them up enough to ensure our success" given USFE's "rather abbreviated window of opportunity to make inroads into U.S. markets," but also noted, "I'm not sure what CME could actually DO in this regard." Id.

• On August 4, 2003, CBOT representatives discussed in an email "the ways in which our product is better," including "(4) we will have the established liquidity and isn't our Washington strategy designed to prolong the Eurex entrance as long as possible." Id. Ex. 116.

• On September 23, 2003, an internal CBOT email described efforts to "throw some big guns around Washington" to "help us at Eurex's expense." Id. Ex. 73.

• On October 22, 2003, CME's Director of Government Relations shared with top CME executives a "CME/CBOT Washington Strategy." Id. Ex. 97. This strategy included "Plan A" of meeting "with staff of every member of the House Agriculture committee" to brief them on "five [identified] concerns," with the hope of having "members of the Ag Committee instruct the CFTC not to move forward on the Eurex application until the Committee's policy concerns have been answered," and "[t]o further delay the CFTC process" by considering "asking for a Senate hearing to be scheduled after the first of the year." Id. "Plan B" consisted of "secur[ing] statutory amendment in the form of language in the omnibus appropriations bill that would provide that no funding can be used by the CFTC for approval of the Eurex application until a study is conducted on our issues,"

which would "need to be carried out in an extremely discrete manner." Id. Plan B was intended to serve as a "concrete solution for delaying the process." Id.

• Defendants followed up on their "Washington Strategy" by meeting with Congressional members of the House Agriculture Subcommittee to discuss concerns with USFE's DCM application. R. 742 ¶ 18. Defendants encouraged members of Congress and their staff to raise defendants' concerns with the CFTC. Id.

• At the November 6, 2003 House Agriculture Subcommittee hearing, CME's Chairman explained in his written testimony: "Eurex U.S.'s evident plan was to secure CFTC designation for its empty shell of an exchange and thereafter to 'self-certify' the rules that implement its true business plan in a manner that would escape Commission review and approval .... We made a clear case that the fast track process was not appropriate, and the Commission responded accordingly." Id. ¶ 17; R. 733 Ex. 68 at 114-15. CBOT's Chairman similarly testified: "I am pleased the CFTC has agreed and decided to disallow fast track treatment of the [USFE] application." R. 742 ¶ 17; R. 733 Ex. 68 at 91-92. CME had provided comments on the draft testimony of government officials and third parties who testified at the November 6, 2003 hearing. R. 742 ¶ 18.

• In a November 18, 2003 letter drafted by CME outside counsel to the House Committee Chairman, CME's outside counsel noted that the November 6, 2003 hearing "had tremendously positive consequences on the scrutiny that is being afforded to Eurex's U.S. application." R. 733 Ex. 111. He also listed remaining concerns, including that "Eurex U.S. would operate as a branch office of Eurex Frankfurt with all of its critical governance, regulatory, operational and clearing functions outsourced to third parties," some of whom "were beyond the jurisdictional reach of the Commission." Id.

• On December 9, 2003, CME and CBOT submitted nearly identical letters to the CFTC stating that they had previously scheduled meetings and requesting that the CFTC's anticipated December 17, 2003 hearing on USFE's application be rescheduled. R. 731 ¶ 55; R. 742 ¶ 20. Defendants' counsel has conceded that these letters were the product of coordinated efforts. R. 742 ¶ 20.

• A December 29, 2003 CME powerpoint presentation explained that CBOT set up a "war chest" as part of a "pre-emptive plan to deal with the threat posed by Eurex's entrance to the U.S. market place." R. 733 Ex. 71 at 1, 3. The powerpoint noted that CME's "desired outcome" that Eurex would be "unsuccessful in establishing a viable business model in the U.S. futures space" and therefore unable "to further proceed to compete directly against CME products." Id. at 10.

• CME's Chairman stated in a January 27, 2004 email: "It has come to my attention that the CFTC will hold a public vote on the Eurex application ... on February 4.... I suspect this will come as no surprise that the vote will probably pass. But, I wanted to remind the Board of what I said at the last meeting. Because of our efforts, Eurex will not be able to implement any cross border clearing link without approval and that is not in this application.... It is due to our efforts that we will get exactly what we want and not what Eurex wants, that is, to compete on a level playing field." Id. Ex. 133.

• CBOT's Chairman acknowledged at his deposition that "the longer it takes for the DCM application to be ruled on, whether it's a denial or an approval, that's good for ... CBOT." Id. Ex. 24 at 194:5-10.

C. Evidence Related To Causation

Just before and after USFE's launch, USFE executives observed that CBOT's price cuts stole momentum and eliminated USFE's competitive advantage. R. 731 ¶¶ 73, 75-80; see, e.g. , id. ¶ 78 (USFE executive on April 24, 2004: "[T]he market got what it wanted: Lower prices and an irreversible trend towards electronic trading. Given all this, no one has an economic reason at the moment to use Eurex - US"); id. ¶ 80 (USFE executive in 2006: "[USFE] offered the same products, with much less liquidity, on an inferior platform, with a market model that was no longer unique"). Relying on these observations by USFE executives and defendants' expert testimony, as well as the fact that USFE's launch occurred only seven days after the planned date, defendants attribute USFE's failure to legitimate competition, including CBOT's new, more efficient electronic trading system and CBOT's price cuts that eliminated USFE's competitive advantage.

Plaintiffs, on the other hand, attribute USFE's failure to delay tactics on the part of defendants, which they claim resulted in traders not being technologically ready or able to trade with USFE at its launch. R. 742 ¶¶ 39, 40. Plaintiffs rely on documents indicating that potential customers delayed because of regulatory uncertainty surrounding CFTC approval of USFE's application, as well as testimony from plaintiffs' expert. Id.

D. Procedural History

This case was originally filed before Judge Zagel in October 2004. R. 44. On July 2, 2010, Judge Zagel granted defendants' motion for partial summary judgment on plaintiffs' predatory pricing theory (filed while discovery was ongoing). R. 416. Judge Zagel concluded:

CBOT has put forth uncontested facts to show that its prices for U.S. Treasury derivative exchange services exceeded its average variable cost ... [and] also its average total cost. Accordingly, I find that Defendants' pricing was above every measure of cost appropriate for a predatory pricing analysis and grant Defendants' motion for summary judgment on the issue of predatory pricing.

Id. at 6.

Two years later, on August 3, 2012, Judge Zagel granted in part and denied in part another motion for partial summary judgment by defendants (again filed while discovery was ongoing). R. 445. In that motion, defendants tested three of plaintiffs' remaining theories of liability. Plaintiffs' first theory was that defendants obstructed the regulatory approval process in order to hamstring USFE's launch. Judge Zagel found this theory foreclosed by the Noerr -Pennington doctrine, which "extends absolute immunity under the antitrust laws to businesses and other associations when they join together to petition legislative bodies, administrative agencies, or courts for action that may have anticompetitive effects." Mercatus Group, LLC v. Lake Forest Hosp. , 641 F.3d 834, 841 (7th Cir. 2011). Judge Zagel found that "in weighing USFE's DCM application, the CFTC was acting in a legislative capacity," and that defendants' efforts to influence the CFTC were shielded by Noerr -Pennington immunity. R. 445 at 7.

On a motion for reconsideration, Judge Zagel afforded plaintiffs a narrow opportunity to proceed on their regulatory delay theory. He concluded that "it was error not to consider Defendants' [December 9, 2003] letters to the CFTC separately from the other lobbying activity." R. 460 at 1. The Supreme Court in City of Columbia v. Omni Outdoor Advertising Inc. , 499 U.S. 365, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991), stated that "[t]he 'sham' exception to Noerr encompasses situations in which persons use the governmental process -as opposed to the outcome of that process-as an anticompetitive weapon. A classic example is the filing of frivolous objections to the license application of a competitor, with no expectation of achieving the denial of the license but simply in order to impose expense and delay." Id. at 380, 111 S.Ct. 1344. Judge Zagel found that this example was "very close to what Plaintiffs allege here-that Defendants requested a change in the CFTC hearing date strictly to impose expense and delay"-and allowed plaintiffs' regulatory delay theory to proceed on that basis. R. 460 at 2.

Plaintiffs' second theory addressed in Judge Zagel's August 2012 partial summary judgment order was that defendants prevented USFE from securing competitive clearing services. R. 445 at 9. Judge Zagel explained that "[u]nder Section Two of the Sherman Act, otherwise lawful activity may be rendered unlawful if it is accompanied by a 'specific intent to accomplish the forbidden objective.' " Id. (citing Aspen Skiing Co. v. Aspen Highlands Skiing Corp. , 472 U.S. 585, 602, 105 S.Ct. 2847, 86 L.Ed.2d 467 (1985) ). Judge Zagel held that more discovery was required before intent and causation of injury with respect to this theory could be resolved. Id.

Plaintiffs' third theory was that defendants interfered with plaintiffs' customer relationships through a campaign of threats and misinformation. Judge Zagel explained: "Plaintiffs have had considerable difficulty finding traders who will support the[se] claims.... However, it is still possible that evidence exists in Defendants' own files." Id. at 10. Judge Zagel found that plaintiffs should have "full opportunity to examine appropriate documents in Defendants' possession." Id.

In March 2017, this case was reassigned from Judge Zagel to this Court. R. 610. In March 2018, defendants moved for summary judgment as to all of plaintiffs' claims (R. 708), and plaintiffs moved for partial summary judgment on the issues of the relevant market definition and CBOT's monopoly power (R. 712).

Standard

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court considers the entire evidentiary record and must view all of the evidence and draw all reasonable inferences from that evidence in the light most favorable to the nonmovant. Horton v. Pobjecky , 883 F.3d 941, 948 (7th Cir. 2018). To defeat summary judgment, a nonmovant must produce more than a "mere scintilla of evidence" and come forward with "specific facts showing that there is a genuine issue for trial." Johnson v. Advocate Health and Hosps. Corp. , 892 F.3d 887, 894, 896 (7th Cir. 2018). Ultimately, summary judgment is warranted only if a reasonable jury could not return a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

"In the field of antitrust law, summary judgment serves a vital function-it avoids wasteful trials and prevents lengthy litigation that may have a chilling effect on pro-competitive market forces." Anderson News, L.L.C. v. Am. Media, Inc. , 899 F.3d 87, 98 (2d Cir. 2018) ; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 594, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "[T]he very nature of antitrust litigation encourages summary disposition of such cases when permissible." Collins v. Associated Pathologists, Ltd. , 844 F.2d 473, 475 (7th Cir. 1988). Although there is not a heightened summary judgment standard in antitrust cases, an antitrust claimant must "present evidence that tends to exclude the possibility that the [defendants'] conduct was as consistent with competition as with illegal conduct" to survive summary judgment. Mercatus , 641 F.3d at 856.

Analysis

Plaintiffs assert antitrust claims under §§ 1 and 2 of the Sherman Act, alleging a conspiracy by defendants in restraint of trade and anticompetitive conduct by CBOT to preserve its monopoly, as well as a claim under Illinois law for tortious interference with prospective economic advantage. Section 1 of the Sherman Act "prohibits '[e]very ... combination ... or conspiracy ... in restraint of trade or commerce,' though courts have long restricted its reach to agreements that unreasonably restrain trade." Omnicare, Inc. v. UnitedHealth Group, Inc. , 629 F.3d 697, 705 (7th Cir. 2011) (quoting 15 U.S.C. § 1 ). A § 1 claim has three elements: "(1) that defendants had a contract, combination, or conspiracy ('an agreement'); (2) that as a result, trade in the relevant market was unreasonably restrained; and (3) that [the plaintiff was] injured." Id. Section 2 of the Sherman Act proscribes monopolization and attempted monopolization. 15 U.S.C. § 2. Section 2 does not make monopolies illegal, but rather forbids the exercise or pursuit of monopoly power through improper means. Mercatus , 641 F.3d at 854. To prevail on a § 2 claim, a plaintiff must show "(1) that the [defendant] possessed monopoly power in that market; and (2) that the [defendant] willfully acquired or maintained that power by means other than the quality of its product, its business acumen, or historical accident." Id.

As a threshold matter, plaintiffs argue that defendants' alleged conspiracy cannot be viewed by looking only at its component parts, and instead must be viewed as a whole. Plaintiffs rely primarily on Continental Ore Co. v. Union Carbide & Carbon Corp. , 370 U.S. 690, 82 S.Ct. 1404, 8 L.Ed.2d 777 (1962), which directed against "tightly compartmentalizing the various factual components and wiping the slate clean after scrutiny of each" in judging "the character and effect" of an antitrust conspiracy. Id. at 699, 82 S.Ct. 1404. Plaintiffs say that conduct immunized by Judge Zagel's prior summary judgment order based on the Noerr -Pennington doctrine is therefore properly considered in assessing the overall character and effect of defendants' conduct. And plaintiffs advocate for a wholistic view of the evidence in assessing whether a denial of summary judgment is warranted.

It is true that courts generally view allegations of antitrust conspiracy as a whole to judge the character of the conspiracy and intent. See id. ; see also Fontana Aviation, Inc. v. Cessna Aircraft Co. , 617 F.2d 478, 481 (7th Cir. 1980) (error to isolate aspects of a "multi-faceted conspiracy" and fail to consider allegations concerning "conspiratorial motive and intent" "as parts of the whole conspiracy"). It is also true that conduct immunized from antitrust liability is still admissible to show the purpose and character of non-protected conduct. See MCI Commc'ns Corp. v. Am. Tel. & Tel. Co. , 462 F.Supp. 1072, 1084 (N.D. Ill. 1978) ; see also In re Brand Name Prescription Drugs Antitrust Litig. , 186 F.3d 781, 789 (7th Cir. 1999) (district court "erred in treating the [ Noerr -Pennington ] doctrine as a rule of evidence").

But as the Seventh Circuit explained when interpreting Continental Ore in Mercatus, the principle that a plaintiff "should be given the full benefit of [its] proof" under Continental Ore "does not mean ... that we will aggregate the effects of conduct immunized from antitrust liability with the effects of conduct not so immunized. This approach would nullify the immunity." Mercatus , 641 F.3d at 839. "For that reason," a court on summary judgment "must first identify any conduct that is immunized," and after doing so, "consider the evidence of the remaining challenged conduct in the aggregate to see if it is sufficient to support antitrust liability." Id. (emphasis added).

Additionally, as other courts interpreting Continental Ore have made clear, separate theories of antitrust liability still must be assessed individually. See, e.g. , Intergraph Corp. v. Intel Corp. , 195 F.3d 1346, 1366-67 (Fed. Cir. 1999) (" Continental Ore did not hold ... that the degrees of support for each legal theory should be added up. Each legal theory must be examined for its sufficiency and applicability, on the entirety of the relevant facts."); In re Processed Egg Prods. Antitrust Litig. , 206 F.Supp.3d 1033, 1042 (E.D. Pa. 2016) (" Continental Ore focuses on the use of evidence.... Subsequent decisions have acknowledged that the holding in Continental Ore was not intended to limit a court's individual assessment of the legality of the various components of an alleged conspiracy."). Indeed, plaintiffs themselves treat their theories as individual "claim[s]" and analyze them separately. See, e.g. , R. 732 at 10. The Court therefore addresses each of plaintiffs' remaining theories of liability in turn.

Plaintiffs' four remaining theories of antitrust liability under the Sherman Act are: (1) that defendants engaged in sham petitioning to create regulatory delay; (2) that defendants deprived plaintiffs of liquidity through (a) their clearing link and (b) the transfer of open interest from BOTCC to CME; (3) that defendants interfered with plaintiffs' customer relationships through a campaign of threats and public misinformation; and (4) that defendants interfered with plaintiffs' relationships with BOTCC and the NFA. Plaintiffs' Illinois tort claim is based on the same allegations underlying their fourth antitrust liability theory.

I. Regulatory Delay Theory

Plaintiffs' first theory is that defendants engaged in sham petitioning to delay USFE's DCM application, which resulted in lack of market readiness at the time of USFE's launch and ultimately caused USFE to fail. Despite plaintiffs' mischaracterizations of Judge Zagel's reconsideration order (e.g. , id. at 21-22), Judge Zagel's ruling in fact left only a small window open for plaintiffs to pursue this regulatory delay theory. See R. 460. That window is based on defendants' December 9, 2003 letters to the CFTC. Id. Defendants now attempt to shut that small window for two independent reasons: (1) defendants argue their scheduling letters are protected petitioning activity under Noerr -Pennington and do not qualify under the "sham" exception to that doctrine; and (2) defendants argue plaintiffs cannot show any antitrust injury resulting from the letters.

A. Noerr-Pennington

1. Key Principles Of Noerr-Pennington Doctrine And Seventh Circuit's Mercatus Decision

As explained above, the Noerr -Pennington doctrine extends absolute antitrust immunity to "businesses and other associations when they join together to petition legislative bodies, administrative agencies, or courts for action that may have anticompetitive effects." Mercatus , 641 F.3d at 841. The immunity is extended "in part because the original purposes of the Sherman Act did not include regulating political activity and in part because it is questionable whether the First Amendment allows such regulation." Premier Elec. Co. v. Nat'l Elec. Contractors Ass'n, Inc. , 814 F.2d 358, 371 (7th Cir. 1987). As the Seventh Circuit in Premier Electric explained, "people are free to try to persuade their representatives that monopoly is preferable." Id.

The Seventh Circuit's interpretation of the Noerr -Pennington doctrine in Mercatus has important implications for this case. Mercatus involved a "multi-pronged campaign" to prevent displacement of a monopoly hospital by a "huge threat" from Mercatus, a competitor. 641 F.3d at 837. This campaign involved lobbying local board members, "a public relations campaign," making "derogatory statements" about the competitor to healthcare providers, and offering physician practice groups incentives not to move their practices. Id. at 837-38. Despite finding some of this conduct "dishonest or distasteful," id. at 857, the Seventh Circuit held that the district court had properly granted summary judgment on the plaintiff's antitrust claims based on Noerr -Pennington and other grounds.

A key principle emerging from Mercatus is that "many kinds of conduct may prevent or discourage a potential competitor from entering a particular market," but "[f]ederal antitrust laws are only implicated when that conduct is predatory or unjustifiable." 641 F.3d at 854. The Mercatus court concluded that the defendant hospital in that case had not used unjustifiable means. "Even if the Hospital had monopoly power in the geographic and product markets Mercatus' economic expert endorsed, the Hospital had no duty to step aside and allow Mercatus to make off with its physicians, patients, and revenue"; "[i]t would be perverse if Mercatus' failure to prevail in that competition gave it a grievance cognizable under the Sherman Act." Id. at 857.

As the Mercatus court explained, "the sham exception" to Noerr -Pennington immunity-the exception invoked by plaintiffs in this case-allows the antitrust laws to reach otherwise protected First Amendment activity in two narrow contexts: "(1) sham lawsuits; and (2) fraudulent misrepresentations." Id. at 842 ; see also E. R. R. Presidents Conference v. Noerr Motor Freight, Inc. , 365 U.S. 127, 144, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961) ("[t]here may be situations in which a publicity campaign, ostensibly directed toward influencing governmental action, is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor and the application of the Sherman Act would be justified").

The Seventh Circuit in Mercatus held that the fraudulent misrepresentation prong of the sham exception "is based on the Supreme Court's desire to protect the integrity of non-political governmental proceedings" and therefore "does not apply at all outside of adjudicative proceedings "-in other words, even deliberate lies to legislative bodies are immunized under Noerr -Pennington . 641 F.3d at 844 (emphasis added). The Mercatus court laid out a multi-factor analysis for determining when a proceeding qualifies as adjudicative or legislative. Id. at 844-46. Applying those factors in that case, the Mercatus court concluded that "the Village Board acted in a legislative capacity when it declined to approve the proposed Mercatus physician center." Id. at 847-49. The court therefore held that the fraudulent misrepresentation exception invoked by Mercatus could not apply as a matter of law. Id. And Mercatus did not allege a sham lawsuit for purposes of the second prong of the exception. The Mercatus court therefore found that the district court properly granted summary judgment on the "antitrust claims based on the Hospital's activities during the Village Board proceedings." Id. at 849.

2. Application Of Noerr-Pennington Here

Plaintiffs do not ask the Court to revisit Judge Zagel's holding that the CFTC proceedings that defendants sought to influence were legislative, not adjudicative. This Court agrees with that holding based on the factors laid out in Mercatus . This means that under Mercatus , plaintiffs cannot invoke the fraudulent misrepresentation prong of the sham exception to antitrust immunity under Noerr - Pennington . See id. at 844 (the fraudulent misrepresentation prong "does not apply at all outside of adjudicative proceedings").

Defendants argue that the other prong of the exception-described in Mercatus as the "sham lawsuits" prong ( id. at 842 )-does not apply in the legislative context either. As defendants point out, the Seventh Circuit in Mercatus said "sham lawsuits"-not "sham proceedings." Defendants claim this choice of words means that the "sham" prong, like the fraudulent misrepresentation prong, does not apply at all in the legislative context. As defendants point out, a contrary conclusion "would ... lead to the anomalous result that Noerr -Pennington immunizes deliberate lies to the CFTC and Congress [in legislative proceedings], but leaves unprotected petitioning through the ordinary channels of legislative and regulatory process" as long as they qualify as a baseless "sham." R. 739 at 4. Indeed, prior to Mercatus , plaintiffs alleged a fraudulent misrepresentation theory ( R. 56 ¶¶ 46-47), but after Mercatus and Judge Zagel's rulings that the CFTC proceeding was legislative, plaintiffs now describe defendants petitioning as a "baseless" sham proceeding rather than as "fraudulent misrepresentation." It makes little sense to allow a claim to survive based on a simple change of adjectives like this.

Nevertheless, the Court finds that by using the term "sham lawsuits," the Seventh Circuit in Mercatus likely did not mean to entirely foreclose antitrust actions based on pure procedural abuse in the legislative context. Dicta in several Supreme Court cases supports that the sham exception could apply to baseless legislative proceedings. See City of Columbia , 499 U.S. at 380, 111 S.Ct. 1344 (sham exception could encompass "the filing of frivolous objections to the license application of a competitor"); Allied Tube & Conduit Corp. v. Indian Head, Inc. , 486 U.S. 492, 499-500 n.4, 108 S.Ct. 1931, 100 L.Ed.2d 497 (1988) ("in whatever forum, private action that is not genuinely aimed at procuring favorable governmental action is a mere sham that cannot be deemed a valid effort to influence government action").

But there is no question that if the sham exception does apply in the legislative context, it is "extraordinarily narrow." Kottle v. Nw. Kidney Ctrs. , 146 F.3d 1056, 1061 (9th Cir. 1998) ; see also Mercatus , 641 F.3d at 842 (citing Kottle approvingly for other propositions); Comm. to Protect our Agric. Water v. Occidental Oil & Gas Corp. , 235 F.Supp.3d 1132, 1155 (E.D. Cal. 2017) ("The scope of the Noerr -Pennington sham exception depends on the branch of government involved. If the relevant petitioning activity involves the legislature, the sham exception is extraordinarily narrow.") (citations omitted); I. Phillip E. Areeda & Herbert Hovenkamp, Fundamentals of Antitrust Law § 203 (4th ed. 2019) (noting that, in the context of legislative petitioning, "it is virtually impossible to identify the sham"). Although a number of courts have mentioned the possibility of a legislative sham, plaintiffs cite no court of appeals case actually applying that exception to find legislative petitioning to be a sham. See R. 732 at 18-19.

To fit within the extraordinarily narrow confines of a legislative sham exception, plaintiffs first must pass a significant threshold: showing that defendants' conduct was objectively baseless. Addressing the sham standard in the (not so narrow) context of meritless lawsuits, the Supreme Court in Prof'l Real Estate Inv'rs v. Columbia Pictures Indus. , 508 U.S. 49, 113 S.Ct. 1920, 123 L.Ed.2d 611 (1993), "reject[ed] a purely subjective definition of 'sham' " that would "undermine, if not vitiate, Noerr ." Id. at 60, 113 S.Ct. 1920. The PRE Court held that courts must first determine whether activity is "objectively baseless in the sense that no reasonable [party] could realistically expect success on the merits." Id. Only where the challenged activity is "objectively meritless may a court examine ... subjective motivation." Id.

Objective baselessness is routinely decided as a matter of law on motions to dismiss and summary judgment. R. 710 at 12 n.9 (collecting cases); see, e.g. , Associated Bodywork & Massage Professionals v. Am. Massage Therapy Ass'n , 897 F.Supp. 1116, 1120 (N.D. Ill. 1995) (granting motion to dismiss where plaintiff failed to allege plausibly that defendant "had no reasonable expectation of obtaining the favorable legislation").

Plaintiffs argue that the PRE standard does not apply here, and that a more flexible test set forth in California Motor Transp. Co. v. Trucking Unlimited , 404 U.S. 508, 513, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972), applies because defendants engaged in a pattern of petitioning. Plaintiffs therefore claim that objective baselessness is not a threshold requirement. But PRE clarified California Motor and the boundaries of "the sham exception," stressing that the assessment of "sham petitioning must be resolved according to objective criteria." 508 U.S. at 59-60, 113 S.Ct. 1920. Post- PRE , the Seventh Circuit has not recognized a different standard for "pattern[s]," see Mercatus , 641 F.3d at 842 n.3, and other courts of appeals have done so only in the adjudicatory context, including where a defendant has brought multiple lawsuits. See, e.g. , USS-POSCO Indus. v. Contra Costa Cnty. Bldg. & Constr. Trades Council, AFL-CIO , 31 F.3d 800, 810-11 (9th Cir. 1994) ("twenty-nine lawsuits" not a sham where fifteen of them proved successful; reconciling California Motor and PRE as dealing with "different situations"- California Motor with "the filing of a whole series of lawsuits" and PRE with the filing of "a single" lawsuit); Hanover 3201 Realty, LLC v. Vill. Supermarkets, Inc. , 806 F.3d 162, 180-81 (3d Cir. 2015) (four frivolous lawsuits); Waugh Chapel S., LLC v. United Food & Commercial Workers Union Local 27 , 728 F.3d 354, 364 (4th Cir. 2013) ("series of legal proceedings"); Primetime 24 Joint Venture v. NBC , 219 F.3d 92, 101 (2d Cir. 2000) ("voluminous" pre-litigation challenges).

This case does not involve the filing of numerous lawsuits-it involves a single legislative proceeding (i.e. , the CFTC proceeding seeking approval of USFE's DCM application). Therefore, the Court finds that PRE 's objective baselessness standard applies.

a. Objective Baselessness

Again, "in the legislative context," the sham exception to Noerr -Pennington immunity is "extraordinarily narrow," "virtually impossible," and requires a showing of "no expectation of obtaining legitimate government action." E.g. , Occidental , 235 F.Supp.3d at 1155 ; see also PRE , 508 U.S. at 60-61, 113 S.Ct. 1920 (in context of lawsuits, defining objective baselessness to mean that "no reasonable litigant could realistically expect success on the merits"). That is not what the evidence shows here.

Defendants correctly argue as a threshold matter that the December 9, 2003 scheduling letters cannot be considered objectively baseless because they succeeded in obtaining legitimate government action. The letters asked the CFTC to: (1) reschedule the December 17 public hearing on USFE's application so defendants' principals could participate (citing previously scheduled board meetings on December 16, "follow-up special strategy meetings" for CBOT on December 17 and 18, and "meetings with CME clearing firms and other CME customers in New York" for CME on December 17 and 18); and (2) respond to questions raised by House Agriculture Subcommittee members on November 6, 2003. R. 731 ¶ 55; R. 733 Exs. 120-121. The CFTC responded favorably to both requests. The CFTC explained that it was cancelling the December 17 hearing based on "scheduling conflicts of some market participants," and it replaced the public hearing with a new comment period to respond to questions raised at the House hearing. R. 731 ¶¶ 56-57.

Defendants further argue that the letters were not objectively baseless because they reflected a true scheduling conflict that prevented defendants from attending the hearing, which they had a clear interest in attending. Plaintiffs dispute whether there is evidence of an actual scheduling conflict, saying there is no evidence the conflicts described in the letters actually happened. To begin, however, even if statements in the letters were false, false representations are fully insulated in the legislative context under Mercatus .

Moreover, plaintiffs misrepresent the facts. In support of their claim of a genuine scheduling conflict (R. 731 ¶ 55), defendants cite: (1) an internal CME email on October 22, 2003 to numerous CME executives titled "December 16, 2003 Board Meeting" that describes event details (R. 718 Ex. 69); (2) a November 19, 2003 internal CBOT email explaining "The December 2003 Board of Directors meeting will be held on Tuesday, December 16, 2003" (id. Ex. 70); (3) December 16, 2003 CME board meeting minutes (id. Ex. 71); (4) December 16, 2003 CBOT board meeting minutes (id. Ex. 72); (5) an itinerary for a CBOT executive's speaking event in New York from December 15-17 (id. Ex. 73); and (6) deposition testimony from a CME employee describing the long-scheduled December 16 CME board meeting in New York, followed by client visits and receptions involving "[a]lmost the entire board" on December 17 and 18 (id. Ex. 74 at 264:18-266:16).

Clearly, the board meetings were long scheduled and took place on the December 16 date listed in defendants' letters. And there is unrefuted evidence that follow up CME meetings took place on December 17 and 18. The exhibits do not appear to corroborate the "follow-up special strategy meetings" on December 17 and 18 mentioned by CBOT in its letter, but it is clear that at least one CBOT executive was tied up in meetings in New York during those days.

Plaintiffs emphasize that defendants' letters are nearly identical, and that defendants' counsel has conceded the letters were the product of coordinated efforts. But that does not make them an objectively baseless abuse of process. They were not.

Plaintiffs also focus on the larger set of defendants' petitioning, claiming that the CFTC disagreed with all of it, and it was a baseless sham. First , however, all of this petitioning aside from the letters already has been immunized. As the Seventh Circuit instructed in Mercatus , the court extracts "any conduct that is immunized" under Noerr -Pennington from its assessment of "the evidence of the remaining challenged conduct in the aggregate to see if it is sufficient to support antitrust liability." 641 F.3d at 839. Plaintiffs' attempt to shoehorn into their regulatory delay claim ample evidence that Judge Zagel already excluded as immunized runs afoul of this instruction in Mercatus.

Second , even if it had not already been immunized, defendants' other legislative petitioning does not meet the very high bar for objective baselessness in the legislative context. The CFTC agreed with or held USFE to its proposed "undertakings" to address a number of defendants' comments and concerns, including defendants' objections to USFE's one-member board, USFE's proposed global or cross-border clearing link, and USFE's proposed incentive programs. R. 731 ¶¶ 48, 50-52, 62, 68-69. CME's Chairman noted that defendants' efforts succeeded because USFE "will not be able to implement any cross border clearing link without approval," meaning that competition would occur "on a level playing field." R. 733 Ex. 133.

Moreover, defendants are correct that the fact that the CFTC staff addressed all of the issues raised by defendants speaks to their substantiality. The CFTC did not even address many of the other comments filed. See R. 718 Ex. 67. The Court therefore concludes as a matter of law that defendants' conduct did not rise to the level of objective baselessness, a standard that is "virtually impossible" to meet in the legislative context. See Areeda & Hovenkamp, supra , § 203.

b. Subjective Evidence

In discussing their regulatory delay theory, plaintiffs focus heavily on evidence of defendants' subjective intent without grounding that discussion in the governing legal standards. Plaintiffs try to put the December 9 letters in the context of "a larger course of conduct designed to delay USFE's entry," relying on the coordination and intent-related evidence summarized above. See R. 732 at 28-29. But because the Court concludes that defendants' challenged activity was not objectively baseless, it does not reach the issue of defendants' subjective motivation under PRE . See 508 U.S. at 60, 113 S.Ct. 1920. Indeed, the Supreme Court in Noerr found political activity immunized despite the fact that petitioners' "sole purpose ... was to destroy [their rivals] as competitors," and their efforts were conducted unethically. 365 U.S. at 138-41, 81 S.Ct. 523. And the Supreme Court in PRE expressly "dispelled the notion that an antitrust plaintiff could prove a sham merely by showing that its competitor's purposes were to delay [the plaintiff's] entry into the market." 508 U.S. at 59-60, 113 S.Ct. 1920. Evidence of defendants' subjective intent is therefore irrelevant.

2. Antitrust Injury

Defendants maintain that there is an independent basis for granting summary judgment on plaintiffs' regulatory delay theory based on the scheduli