Citations
- 233 F. Supp. 660
Full opinion text
COOPER, District Judge.
Plaintiff herein is respondent in a proceeding presently before the Federal Trade Commission, entitled “In the Matter of Union Bag-Camp Paper Corporation,” FTC Docket No. 7946 (hereinafter called the “Commission proceeding”), alleging violation of Section 7 of the Clayton Act (15 U.S.C. § 18) by reason of certain mergers and acquisitions by plaintiff.
During the Commission proceeding, plaintiff made several applications for issuance by the Commission of special reports pursuant to Section 6(b) of the Federal Trade Commission Act (15 U.S.C. § 46(b), hereinafter called “Section 6(b)”), to obtain information alleged to be necessary for the defense by plaintiff of the charges asserted against it in the Commission proceeding. These applications were denied by defendant, notwithstanding the fact that on two occasions similar reports were issued at the behest of counsel for defendant.
Thus far in the Commission proceedings, defendant has called 50 witnesses-during the course of 34 days of hearings- and 3,649 pages of record have been taken. Commission counsel have not completed the presentation of their ease.
Plaintiff alleges that in denying it access to 6(b) reports, the Commission violated the Administrative Procedure-Act (hereinafter “A.P.A.”) and the Due: Process Clause of the Constitution.
Plaintiff moves here for summary judgment. Defendant cross-moves for summary judgment and for dismissal of the complaint.
JURISDICTION
Jurisdiction rests upon Section 10(e)-of the A.P.A. (5 U.S.C. § 1009), and the Judicial Code (28 U.S.C. §§ 1331, 1337). Section 10(e) provides, in part, that
“[Ejxcept so far as (1) statutes preclude judicial review or (2) agency action is by law committed to agency discretion.
* * * * * *
“(e) Scope of review. So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any agency action. It shall (A) compel agency action unlawfully withheld or unreasonably delayed; and (B) hold unlawful and set aside agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; * *
Plaintiff alleges that under Section; 6(b) of the F.T.C. Act and Section 6(c) of the A.P.A., issuance of 6(b) special! reports to private litigants is mandatory,, and that by its denials of plaintiff’s requests for these reports the Commission;' violated this alleged mandate. Plaintiff further contends such violation constitutes a denial of due process within-the meaning of the Fifth Amendment. (U.S. Const. Amend. V).
Section 10, in its entirety, compels us to review the acts here complained of to determine whether there exists facts sufficient to support the jurisdictional criteria of Section 10. Deering Milliken Inc. v. Johnston, 295 F.2d 856 (4th Cir. 1961).
Plaintiff complains of “[Sjuffering legal wrong because of * * * agency action” (10(a)); that the agency action, in denying the relief is “final” and that “there is no other adequate remedy in any court.” (10(c)) ; that the 6(b) reports were “unlawfully withheld,” and that the agency action was “arbitrary, capricious, an abuse of discretion” and “otherwise not in accordance with law” and that it was “contrary to” plaintiff’s “constitutional right.” (10(e)). If the facts support these allegations, judicial review is certainly proper.
Defendant would relegate plaintiff to review under Section 11 of the Clayton Act (15 U.S.C. § 21), which provides that all review of cease and desist orders shall be heard by the appropriate Court of Appeals. While that section allows the Court of Appeals to order additional evidence to be taken it may only do so if the party “shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the proceeding before the commission * *
If we are satisfied that the Commission has violated a statutory mandate here, we will not require plaintiff to wait until it is ordered to cease and desist from violating Section 7 of the Clayton Act before obtaining redress.
Viewing plaintiff’s allegations- as a two pronged attack on the Commissions’ action, we must also consider the due process claim as it relates to our jurisdiction here.
Assuming that the denial of 6(b) reports was so violative of plaintiff’s rights as to constitute a fundamental denial of due process, the matter is presently ripe for judicial review. Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958). The “narrowing” of the holding in Leedom by Boire v. The Greyhound Corp., 376 U.S. 473, 84 S.Ct. 894, 11 L.Ed.2d 849 (1964) does not change this result. Plaintiff is claiming that the agency action was in direct derogation of the alleged statutory command to supply it with 6(b) reports. Clearly, the instant action falls within the ambit of both Leedom and Boire as one involving the interpretation and construction of a statute.
Reliance is also placed on Amos Treat & Co. v. Securities E. C., 113 U.S.App. D.C. 100, 306 F.2d 260 (1962). There, the Court held that the administrative process must be attended “not only with every element of fairness but with the very appearance of complete fairness.” (at p. 267). Here, the Hearing Examiner has granted relief to one adversary by allowing it access to 6(b) reports while denying it to the other, with the result, claims plaintiff, that the entire Commission proceeding will be vitiated unless corrected here.
In order to decide ultimately the jurisdictional question, it is necessary to inquire into the facts going to the merits of plaintiff’s claim. If we are to follow the precepts set forth above, we must determine whether the acts complained of constitute a breach of a mandatory duty or such a denial of fundamental due process as to compel us to review the Commission’s determination. Tileston v. Ullman, 318 U.S. 44, 63 S.Ct. 493, 87 L.Ed. 603 (1943); Frothingham v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078 (1923).
Defendant raises the question of the timeliness of the matter before us. If, as plaintiff contends, it is entitled to 6(b) reports as a matter of right, there is no need to attempt to gain the data sought by means of a conventional subpoena, or, indeed, to exhaust any further administrative procedures. The controversy is ripe for determination now; if an error has been committed, it must be corrected now.
The relief still available to plaintiff within the administrative process is of interest to us only insofar as it bears on the due process issue. If reasonable and available procedures exist, and are as yet untried by plaintiff, a claim of lack of due process may, indeed, be premature. But, if a statutory mandate has been violated, further Commission action cannot correct it. There is a difference between additional available administrative remedies and the availability of a review procedure where the right to 6(b) x*eports may ultimately be decided in plaintiff’s favor.
We have already pointed out that the procedure under 15 U.S.C. § 21(c), allowing the production of additional evidence upon review by the Coux*t of Appeals of a cease and desist order “is not directed to the correction of errors committed by the Commission during its proceedings or at any other time; it is analogous to a motion for a new trial upon newly discovered evidence.” Fashion Originators Guild v. Federal Trade Commission, 114 F.2d 80, 82 (2d Cir. 1940). This procedure is clearly not designed to rectify the type of grievous error complained of here.
VIOLATION OF THE A.P.A.
Plaintiff claims that it is entitled to have special reports, pursuant to 6'(b), issued at its request as a matter of right.
Section 6(b) of the F.T.C. Act provides as follows:
“That the Commission shall also have power—
# # *X* *3s* -Jr
“(b) To require, by general or special orders, corporations engaged in commerce, excepting banks, and common carx-iers subject to the Act to regulate commex-ce, or any class of them, or any of them, respectively, to file with the commission in such form as the commission may prescribe annual or special, or both annual and special, reports or- answers-in writing to specific questions; furnishing to the commission such, information as it may x-equire- as to-the organization, business, conduct,, practices, management, and relation; to other corporations, partnerships,, and individuals of the respective-cox*-porations filing such reports or answers in writing. Such reports and', answers shall be made under oath, or-otherwise, as the commission may-prescribe, and shall be filed with the; commission within such reasonable-period as the commission may prescribe, unless additional time- be-gx-anted in any case by the commission.”
This section, passed in 1914, was not. used until 1950 when the Supreme Court; upheld its use by the Commission as “a. power of inquisition.” United States v. Morton Salt Co., 338 U.S. 632, 642, 70 S.Ct. 357, 94 L.Ed. 401 (1950).
The wording of the statute and', its legislative history lead us to the conclusion that the exercise of the procedure-outlined in 6(b) was reserved exclusively to the F.T.C. in its function as protector of the public interest. There is; no indication that this extraordinary-power was ever meant to be utilized by a private party to an enforcement proceeding.
This view finds substantiation in pox*-tions of legislative historical background.. In discussion on the Senate floor leading-to the adoption of the Act, Senator New-lands explained that:
“The office of subsection (b) is to get from time to time information, statements, and records conceiving the organization, business,, financial condition, conduct, practices, management, and relation to-other corporations, and so forth, of all cox*porations subject to the provisions of the bill.” (51 Cong.Rec. p. 13303, August 5, 1914).
The Senator had earlier stated:
“The reports which are required are of course thought to be neces.-sary to carry out the purposes of the ■act — that is to say, to give to the •commission information which may be needed to make the act effective— but the commission may, under sub-división (b) require any corporation ■ at any time to furnish it any information that it sees fit to ask for, the ■extent of its request being limited only by its own discretion.” (51 Cong.Ree. p. 11182, June 26, 1914).
Instances of a like governmental function, reserved to the agency and not available to private parties, are many. Ex- ■ ampies are the power to obtain assistance from other government agencies, 15 U.S.C. § 48; to conduct investigations of private files, 15 U.S.C. § 49; to require ■statements from sectors of the business community, 15 U.S.C. § 65.
Plaintiff places heavy reliance on the •opinion of Chief Judge Ryan in United States v. St. Regis Paper Co., 181 F.Supp. 862 (S.D.N.Y.1960). There, however, 6(b) reports were issued at the "behest of the Commission, and various items requested in the reports were challenged. The Court held that those portions of the 6(b) report which were valid could be enforced in tlie District Court, pursuant to Section 6(c) of the A.P.A. On appeal United States v. St. Regis Paper Co., 285 F.2d 607 (2d Cir. 1960), aff’d 368 U.S. 208, 82 S.Ct. 289, 7 L.Ed. 2d 240 (1961)), the use of Section 6(e)