A Judge Who Had Already Decided: The Constitutional Problem at the Heart of CFTC v. Ikkurty

The Fifth Amendment to the United States Constitution guarantees that no person shall be deprived of life, liberty, or property without due process of law. The Supreme Court has held, repeatedly and without exception, that due process requires a neutral decision-maker — a judge who has not prejudged the outcome before hearing the evidence.

On May 11, 2022, at 1:03 in the afternoon, a telephone hearing began in the United States District Court for the Northern District of Illinois. The hearing lasted eleven minutes. I was not there. My lawyer was not there. No one representing my interests was there. CFTC attorney Candice Haan was there, and Judge Virginia Rowland was there, and that was the entirety of the proceeding that resulted in the freezing of $209 million in assets.

The transcript of that hearing is now public. It is available at samikkurty.com/legal-documents/tro-hearing-transcript-may-11-2022. Read it.

The sentence that matters most appears on page four. Before CFTC attorney Haan had presented a single word of substantive argument, before any evidence had been discussed, before any legal standard had been applied, Judge Rowland said: "So if I entered it today, which I plan to do..."

She had already decided. The hearing had not yet begun in any meaningful sense, and the judge had already announced her conclusion. What followed was not deliberation. It was paperwork.

The constitutional problem is not subtle. The Supreme Court held in Withrow v. Larkin, 421 U.S. 35 (1975), that due process requires a decision-maker who has not prejudged the merits. The Court held in Caperton v. A.T. Massey Coal Co., 556 U.S. 868 (2009), that the appearance of bias is itself a constitutional violation when it reaches a certain threshold. And the Court held in Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423 (1974), that ex parte temporary restraining orders are "an extreme remedy" that must be followed promptly by an adversarial hearing — not a two-year prosecution.

There are other problems with the hearing. The exhibits were missing — Exhibits A through K had not been provided to the judge when she entered the orders. The receiver was appointed without the judge reviewing his qualifications: "I trust that Mr. Kopecky has done this before," she said. The CFTC attorney told the judge the agency had "remained in a covert posture" — meaning I had been deliberately kept in the dark — and the judge said "okay" and moved on.

Eleven minutes. Missing exhibits. A pre-announced ruling. A receiver appointed on trust. And $209 million frozen.

I am not arguing that judges cannot make quick decisions. I am arguing that a decision announced before argument is presented is not a decision — it is a formality. And a formality that results in the seizure of $209 million, the appointment of a receiver who has since charged $451,000 in fees, and a four-year prosecution of a fund manager whose investors all made money is not due process. It is the appearance of justice without the substance.

The Seventh Circuit will decide whether this matters. The full transcript is at samikkurty.com. The constitutional arguments are in the appellate brief. The record is complete.

What is not complete is the accounting. Not the financial accounting — the blockchain handles that. The constitutional accounting: who is responsible for eleven minutes that cost four years, and what does a government owe a citizen when it takes that much on the basis of that little?