Federal Trade Commission v. Claire Furnace Co, 1
Decision Date | 18 April 1927 |
Docket Number | No. 1,1 |
Citation | 71 L.Ed. 978,274 U.S. 160,47 S.Ct. 553 |
Parties | FEDERAL TRADE COMMISSION et al. v. CLAIRE FURNACE CO. et al. Re |
Court | U.S. Supreme Court |
[Argument of Counsel from pages 160-162 intentionally omitted] The Attorney General and Mr. W. D. Mitchell, Sol. Gen., of Washington, D. C., for appellants.
Messrs. Paul D. Cravath, of New York City, and W. D. Stewart, of Pittsburgh, Pa., for appellees.
[Argument of Counsel from pages 163-164 intentionally omitted] Mr. Chief Justice TAFT delivered the opinion of the Court.
This was a bill in equity, brought in the Supreme Court of the District of Columbia on behalf of 22 companies of Ohio, Pennsylvania. West Virginia, New York, Delaware, New Jersey, and Maryland, in the coal, steel, and related industries, to enjoin the Federal Trade Commission from enforcing or attempting to enforce orders issued by that Commission against the complainant com- panies, requiring them to furnish monthly reports of the cost of production, balance sheets and other voluminous information in detail upon a large variety of subjects relating to the business in which complainant corporations are engaged. The authority under which the Commission professed to act was expressed in the following resolution adopted by the Commission December 15, 1919:
'Whereas, at a hearing held by the committee on appropriations of the House of Representatives on August 25, 1919, the Federal Trade Commission was requested to suggest what it might undertake to do to reduce the high cost of living; and
'Whereas, the Commission recommended to the said committee that it would be desirable to obtain and publish from time to time current information with respect to 'the production, ownership, manufacture, storage, and distribution of foodstuffs, or other necessaries, and the products or by-products arising from or in connection with the preparation and manufacture thereof, together with figures of cost and wholesale and retail prices,' and particularly with respect to various basic industries, including coal and steel; and
'Whereas the said committee recommended an appropriation of $150,000 for the current fiscal year for the said commission in consequence of this recommendation and the same was duly made by authority of Congress, and made available on November 4, 1919: Now, therefore, be it
'Resolved, that the Federal Trade Commission, by virtue of section 6, paragraphs (a) and (b), of the Federal Trade Commission Act, proceed to the collection and publication of such information with respect to such basic industries as the said appropriation and other funds at its command will permit. And be it further 'Resolved, that such action be started as soon as possible with respect to the coal industry and the steel industry, including in the latter closely related industries such as the iron ore, coke, and pig iron industries.'
Purporting to proceed under this resolution, the Commission served separate notices upon the 22 appellees and many other corporations, engaged in mining, manufacturing, buying, and selling coal, coke, ore, iron and steel products, etc., which directed them to furnish monthly reports in the form prescribed showing output of every kind, itemized cost of production, sale prices, contract prices, capacity, buying orders, depreciation, general administration and selling expenses, income, general balance sheet, etc. Elaborate questionnaires, accompanying these orders, asked for answers revealing the intimate details of every department of the business, both intrastate and interstate. A summary of these printed in the margin sufficiently indicates their contents.1 The concluding paragraph of the notice de- clared:
'The purpose of this report is to compile in combined or consolidated form the data received from individual companies and to issue currently in such form accurate and comprehensive information regarding changes in the conditions of the industry both for the benefit of the industry and of the public.'
Appellees did not comply with the inquiries in the notices but filed in the Supreme Court District of Columbia, their joint bill against the Commission and its members, wherein they set out its action, alleged that it had exceeded its powers, and asked that all defendants be restrained 'from the enforcement of said orders, and from requiring answers to said questionnaires, and from taking any proceedings whatever with reference to the enforcement of compliance with said orders and answers to said questionnaires'; also for general relief.
Without questioning the appellees' right to seek relief by injunction, the appellants answered, admitted issuing of the orders, claimed authority therefor under sections 6 and 9, Federal Trade Commission Act (Act Sept. 26, 1914, c. 311, 38 Stat. 717, 721, 722 (Comp. St. §§ 8836f, 8836i)), and further alleged and said:
That the reports were required 'for all the purposes and under all the authority granted to them by law, including the purpose of gathering and compiling said information for publication and the consequent regulation of the interstate commerce of said complainants resulting from such publication of the true trade facts as to all of the business of complainants and of others en- gaged in commerce in those commodities, and including the purpose of making reports to Congress and of recommending additional legislation to Congress.
'Defendants allege that all of the information to be acquired through the answers to said questionnaires is necessary and has direct relation to regulation and control of the interstate and foreign commerce of complainants and others answering said questionnaires, and is sought by the Federal Trade Commission for the purpose and in necessary aid of the regulation of said commerce.
'Defendants admit that no complaint has been filed or is now pending before the commission against any of complainants for a violation of section 5 of the Trade Commission Act, but aver that the activities sought to be enjoined were instituted and are sought to be carried on under the provisions of said Trade Commission Act.
The cause was heard upon motion to strike the answer from the files because it contained no adequate defense. The trial court concluded that, as the propounded questions were not limited to interstate commerce, but asked also for detailed information concerning mining, manufacture and intrastate commerce, they were beyond the Commission's authority. It accordingly held the answer insufficient, and, as defendants declined to amend, granted the injunction as prayed. The Court of Appeals affirmed this action. 52 App. D. C. 202, 285 F. 936. The cause, here by appeal, has been twice argued.
Appellees were not charged with practicing unfair methods of competition (section 5, Act of Sept. 26, 1914 (Comp. St. § 8836e)), or violating the Clayton Act, c. 323, §§ 2, 3, 7, 8 (38 Stat. 730, 731, 732, being Comp. St. §§ 8835b, 8835c, 8835g, 8835h)....
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