                             In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 02-2250
ROBERT E. STEPHAN, et al.,
                                              Plaintiffs-Appellants,
                                 v.

S. JAY GOLDINGER, et al.,
                                                         Defendants,
                                and

REFCO, INC.,
                                                Defendant-Appellee.
                          ____________
         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
           No. 99 C 525—Hon. Joan B. Gottschall, Judge,
                  and Hon. Samuel P. King, Judge.
                          ____________
      ARGUED FEBRUARY 10, 2003—DECIDED APRIL 8, 2003
                          ____________


  Before POSNER, MANION, and KANNE, Circuit Judges.
  POSNER, Circuit Judge. Ludwig Stephan, whose estate is
one of the plaintiffs (we can disregard the others), opened
a commodity futures trading account with defendant
Refco (we can disregard the other defendants as well), lost
his investment, and sued Refco, charging fraud in viola-
tion of the Commodity Exchange Act. The Act contains
a two-year statute of limitations, 7 U.S.C. § 25(c), and the
2                                                 No. 02-2250

plaintiff sued within two years (or so we may assume,
though Refco, as an alternative ground for affirmance,
argues that the plaintiff missed that deadline too). But
Stephan’s contract with Refco provided that no suit aris-
ing out of the contract or out of transactions made under its
authority could be brought “more than one year after the
cause of action arose,” and this deadline the plaintiff ad-
mits having missed. The contract also provided that any
dispute arising out of the contract or the transactions under
it “shall be litigated at the discretion and election of Refco
only in a court in Chicago.” The plaintiff sued Refco in
Nevada, and although the suit was duly transferred to
Chicago in conformity with the clause just quoted, Refco
counterclaimed for the legal expenses that it incurred in
removing. Judge Gottschall, to whom the case was first
assigned, granted Refco’s motion for summary judgment
on the plaintiff’s claim, holding the claim barred by the
contractual limitations period. Judge King later, after an
evidentiary hearing, awarded Refco $9,067 on its counter-
claim. The appeal challenges both rulings, certified by the
district judges as final and thus appealable under Fed. R.
Civ. P. 54(b). Other pieces of the suit, including other par-
ties, remain before the district court.
  The plaintiff argues that the two-year statutory limitations
period is exclusive; it cannot be shortened by contract.
There is no basis for such an interpretation in the language
of section 25(c), which states simply that no suit shall
be brought “later than two years after the date the cause
of action arises.” Despite this language, Refco could have
agreed to a longer limitations period, Lawyers Title Ins. Corp.
v. Dearborn Title Corp., 118 F.3d 1157, 1166 (7th Cir. 1997);
Hunter-Boykin v. George Washington University, 132 F.3d 77,
79-80 (D.C. Cir. 1998), because a statute of limitations is
intended primarily for the benefit of the defendant, to
protect him from having to defend against stale claims.
No. 02-2250                                                   3

United States v. Kubrick, 444 U.S. 111, 117 (1979); National
Railroad Passenger Corp. v. Morgan, 122 S.Ct. 2061, 2079
(2002); Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486
U.S. 888, 893 (1988); Tyler v. Runyon, 70 F.3d 458, 465
(7th Cir. 1995). “Statutes of limitation . . . are designed to
promote justice by preventing surprises through the re-
vival of claims that have been allowed to slumber until
evidence has been lost, memories have faded, and wit-
nesses have disappeared. The theory is that even if one
has a just claim it is unjust not to put the adversary on
notice to defend within the period of limitation and that
the right to be free of stale claims in time comes to prevail
over the right to prosecute them.” Order of Railroad Telegra-
phers v. Railway Express Agency, Inc., 321 U.S. 342, 348-49
(1944). A secondary purpose is to spare the courts the
burden of having to adjudicate claims that because of their
staleness may be impossible to resolve with even minimum
accuracy. Lawyers Title Ins. Corp. v. Dearborn Title Corp.,
supra, 118 F.3d at 1166; Doe v. Blue Cross & Blue Shield United
of Wisconsin, 112 F.3d 869, 877 (7th Cir. 1997). That it is
secondary is shown by the willingness of courts to en-
force agreements to extend the limitations period.
  There is no tertiary purpose of benefiting plaintiffs. There
is not even a tiny handle in the statutory language for a
bar against a potential plaintiff’s agreeing to shorten the
statutory period, and there is nothing in the policy of the
statute of limitations either to which a plaintiff might
appeal. It is of course true that the Commodity Exchange
Act is intended for the protection of investors rather than
brokers, but the statute of limitations in the Act limits that
protection and is as deserving of judicial enforcement as
the provisions that favor investors. A statute is a compro-
mise and must be enforced as such, and thus with due
recognition of the various interests that gained recognition
in the legislative process.
4                                                  No. 02-2250

  Contractual provisions that exculpate a party from
statutory liability are sometimes refused enforcement,
e.g., First American Discount Corp. v. CFTC, 222 F.3d 1008,
1016-18 (D.C. Cir. 2000); see Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 637 n. 19 (1985), notably
when they have adverse effects on third parties. Cf. Omron
Healthcare, Inc. v. Maclaren Exports Ltd., 28 F.3d 600, 604
(7th Cir. 1994). But the contractual provision challenged
in this case is not exculpatory. It would be as a practical
matter had it said that suit must be brought within five
minutes after the cause of action accrues. One year, how-
ever, is not an unreasonably short time for bringing a
suit, Taylor v. Western & Southern Life Ins. Co., 966 F.2d 1188,
1205 (7th Cir. 1992); Cange v. Stotler & Co., 826 F.2d 581, 584-
85 (7th Cir. 1987), at least given tolling doctrines that we
assume, and Refco tacitly concedes, would be read into a
contractual limitations period just as they are into a statu-
tory one, unless negatived by clear language. Doe v. Blue
Cross & Blue Shield United of Wisconsin, supra, 112 F.3d at 877;
Cange v. Stotler & Co., 913 F.2d 1204, 1209-10 (7th Cir.
1990); Koclanakis v. Merrimack Mutual Fire Ins. Co., 899 F.2d
673, 675-76 (7th Cir. 1990); Velez-Gomez v. SMA Life Assur-
ance Co., 8 F.3d 873, 876 (1st Cir. 1993); but see Curry
v. Vanguard Ins. Co., 923 F.2d 484, 486 (6th Cir. 1991). In-
deed, we pointed out in the Blue Cross & Blue Shield
case that tolling doctrines make even more sense in a
contractual than in a statutory limitations case, at least
when the contractual limitations period is not tolled be-
yond the statutory limitations period, because as long as
that condition is satisfied the public purpose of a limitations
period—protecting the court, not just the parties, from the
burden of adjudicating stale claims—is secure.
  In fact the plaintiff pleaded equitable estoppel against
enforcement of the one-year contractual limitation. It did so
on the basis of statements made by Refco’s lawyer and re-
No. 02-2250                                                   5

ported in the Wall Street Journal denying liability. The plea
fails. There is no evidence that Stephan read the article
or otherwise learned of the statements, let alone that he
relied on it or on them. And anyway a denial of liability is
not a basis for equitable estoppel—otherwise a statute
of limitations would never run unless the potential de-
fendant confessed error before he was sued! Mitchell v.
Donchin, 286 F.3d 447, 451 (7th Cir. 2002); Bishop v. Gainer,
272 F.3d 1009, 1014-15 (7th Cir. 2001); Singletary v. Continen-
tal Ill. Nat’l Bank & Trust Co., 9 F.3d 1236, 1241 (7th Cir.
1993).
   Might the contractual truncation of the statutory lim-
itations period be fraudulent or unconscionable? No.
Stephan was not an impoverished or an unsophisticated
investor, and the one-year limitations period was clearly
set forth in the contract. Notice by way of comparison
that the statute of limitations applicable to federal em-
ployment discrimination suits is only 180 or (in some
states) 300 days. 42 U.S.C. § 2000e-5(e)(1). The plaintiff
does cite to us to several Illinois cases that refuse to en-
force contractual limitations periods in insurance con-
tracts. Severs v. Country Mutual Ins. Co., 434 N.E.2d 290 (Ill.
1982); Kerouac v. Kerouac, 425 N.E.2d 543, 548-49 (Ill. App.
1981); Burgo v. Illinois Farmers Ins. Co., 290 N.E.2d 371, 374
(Ill. App. 1972). But they all arise out of suits for uninsured-
motorist coverage, and are “unique” to that issue. Kerouac
v. Kerouac, supra, 425 N.E.2d at 548-49. They reason that
the purpose of the state’s uninsured-motorist statute,
which is to place the victim of an uninsured motorist in
the same position he would occupy if the motorist were
insured, creates a nonwaivable entitlement on the part
of the victim of the uninsured motorist to the two-year
statute of limitations governing suits against insured mo-
torists. Whether or not this is sound reasoning, it is too
remote from anything in this case to dictate our decision.
6                                              No. 02-2250

   The plaintiff argues that if we uphold the one-year pro-
vision in Refco’s contract, competition will force the rest
of the commodities brokers to follow suit, to the great
detriment of commodities investors as a class. This is
an absurd argument. It is the equivalent of saying that if
one seller in a competitive market reduces the quality of
his product, competition will force the others to follow
suit, so there will be a spiral downward. Why is it then
that sellers like monopoly and consumers like competition?
At argument the plaintiff’s lawyer contradicted his own
argument by stating that some brokerage houses have a
one-year limitation and others do not, as one would ex-
pect. The shorter term is advantageous to the broker and
presumably the customer is compensated, assuming there
is competition among brokers—and of course there is.
  Invoking the ubiquitous Chevron principle, the plaintiff
notes that the Commodity Futures Trading Commission,
which along with the courts enforces the Commodity
Exchange Act, believes that one year is too short. McGough
v. Bradford, 2000 WL 33675749, at *15-16 (CFTC Sept. 28,
2000). Setting to one side all other objections to supposing
this view deserving of Chevron deference, we note that the
Commission offered this opinion not with reference to
section 25(c), which governs damages suits under the Act,
such as this suit, but rather with reference to contractual
curtailments of the two-year statute of limitations appli-
cable to actions for reparations. This is an administrative
remedy favored by small investors because it is cheap,
CFTC v. Schor, 478 U.S. 833, 836 (1986); Rosenthal & Co. v.
CFTC, 614 F.2d 1121, 1122-23 (7th Cir. 1980)—the adminis-
trative equivalent of a small claims court, Myron v. Hauser,
673 F.2d 994, 1001 (8th Cir. 1982)—but also (one reason it
is cheap) difficult to activate within a year because of
limitations on discovery. See 17 C.F.R. §§ 12.30-12.36;
Kenneth M. Raisler & Edward S. Geldermann, “The CFTC’s
No. 02-2250                                                  7

New Reparation Rules: In Search of a Fair, Responsive,
and Practical Forum for Resolving Commodity-Related
Disputes,” 40 Business Lawyer 537, 563 (1985). Although
even in federal civil cases discovery takes place (with
immaterial exceptions) after rather than before a suit is
filed, the more limited that discovery is the more pre-
litigation investigating a plaintiff must do, and so he needs
more time before suing than if he had the usual expan-
sive modern rights of discovery.
   So much for the plaintiff’s challenge to the contractual
limitations period and we turn now to Refco’s counter-
claim based on the contractual venue provision. Such
clauses generally are valid, see Carnival Cruise Lines, Inc. v.
Shute, 499 U.S. 585, 593-95 (1991), but the plaintiff argues
that in this case “the clause was obviated by fraud.” We
cannot begin to understand the argument. This is a fraud
case, all right, but the alleged fraud involves Refco’s
handling of the commodity futures trades made in the
plaintiff’s account; there is no contention that the contract
was procured by fraud. Even if it were procured by fraud,
the venue provision would be valid by analogy to the
arbitrability of disputes arising out of contracts procured
by fraud when there is no argument that the arbitration
provision itself was procured by fraud. Prima Paint Corp.
v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 (1967); Air Line
Pilots Ass’n, Int’l v. Midwest Express Airlines, Inc., 279 F.3d
553, 556 (7th Cir. 2002); Great Earth Cos. v. Simons, 288
F.3d 878, 889-90 (6th Cir. 2002); Houlihan v. Offerman & Co.,
31 F.3d 692, 695 (8th Cir. 1994). There isn’t the remotest
suggestion that the venue provision in Refco’s contract with
the plaintiff was a product of fraud.
  The plaintiff missed a better argument. The venue provi-
sion does not state that any dispute must be litigated in
Chicago—only that it must be litigated “at the election and
8                                               No. 02-2250

discretion” of Refco in Chicago. This is consistent with the
plaintiff’s having filed the suit elsewhere—for it might
have filed it in a venue in which Refco would be per-
fectly content to litigate. To the extent that the plaintiff
fought removal, it would be violating the venue provision,
but not, as it seems to us, otherwise. However, the argu-
ment has been waived, so both rulings that the plaintiff
has appealed from are
                                                 AFFIRMED.

A true Copy:
       Teste:

                          _____________________________
                          Clerk of the United States Court of
                            Appeals for the Seventh Circuit




                    USCA-02-C-0072—4-8-03
