Brandenfels v. Day, No. 16642.

• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)
• Writing for the Court: Mr. REED, retired, and EDGERTON and DANAHER, Circuit
• Citation: 316 F.2d 375
• Docket Number: No. 16642.
• Decision Date: 14 February 1963
• Parties: Carl BRANDENFELS, Appellant, v. J. Edward DAY, Postmaster General et al., Appellees.

316 F.2d 375 (1963)

Carl BRANDENFELS, Appellant,
v.
J. Edward DAY, Postmaster General et al., Appellees.

No. 16642.

United States Court of Appeals District of Columbia Circuit.

Argued November 7, 1962.

Decided February 14, 1963.

Petition for Rehearing Denied April 2, 1963.

316 F.2d 376

Mr. Frank J. Delany, Washington, D. C., for appellant.

Mr. Barry Sidman, Asst. U. S. Atty., for appellees. Mr. David C. Acheson, U. S. Atty., and Messrs. Nathan J. Paulson and Abbott A. Leban, Asst. U. S. Attys., at the time the brief was filed, were on the brief for appellees. Messrs. Frank Q. Nebeker, Asst. U. S. Atty., and

316 F.2d 377

Harry K. Schwartz, Asst. U. S. Atty., at the time the record was filed, also entered appearances for appellees

Before Mr. Justice REED, retired,^* and EDGERTON and DANAHER, Circuit Judges.

Petition for Rehearing En Banc Denied April 2, 1963.

Mr. Justice REED, sitting by designation.

In May, 1949, the Post Office Department, as complainant, charged appellant Brandenfels, plaintiff below, with distributing fraudulent advertising through the mails to promote the sale of his hair-growing treatment, in violation of 39 U.S.C. §§ 259, 732.¹ Lengthy hearings were held before a hearing examiner in Washington, D. C., Chicago, and Portland, Oregon. In February, 1954, an Initial Decision adverse to appellant was entered by the Deputy Postmaster General, the hearing examiner who conducted the hearings having resigned. Appellant filed an intra-departmental appeal from the Initial Decision which culminated, in March, 1958, in the dismissal of the proceedings without prejudice. This disposition had been sought by the complainant upon the recognition that procedural errors had precluded the issuance of a valid fraud order. Apparently the defect in the prior proceedings was that the Initial Decision rendered by the Deputy Postmaster General had been prepared by the agency officer who had prosecuted the charges against appellant, in violation of section 5(c) of the Administrative Procedure Act, 5 U.S.C. § 1004(c).² Because of the substantial expense and allegedly harmful publicity which he had already incurred, and feeling that the evidence required a decision in his favor on the merits, appellant objected to the dismissal without prejudice. In November, 1958, appellant and the newly established Judicial Officer of the Post Office Department agreed that the latter would review the record to determine whether the order of dismissal should be modified so as to be with prejudice. Briefs were filed and oral argument heard and, in October, 1959, the Judicial Officer declined to modify the dismissal on the ground that appellant's evidence presented in the original hearings failed to establish that appellant was entitled to a dismissal with prejudice. Thereafter, the Judicial Officer and his successor denied motions to reconsider and to vacate the order denying reconsideration. In these last motions, as in his pleadings in the District Court, appellant charged all postal officials who had been involved in the proceedings with bias and arbitrariness, except the original hearing examiner who allegedly left the Department in protest against the unfair procedures employed in fraud proceedings.

No Post Office proceedings are now pending against appellant, and no fraud order or other sanction has been imposed against him. However, appellant alleges that the Federal Trade Commission now "proposes to * * * institute a proceeding against plaintiff charging him with misrepresenting his treatment by claiming it to be efficacious for the purposes advertised, raising the very same issues as were involved in the Post Office proceeding * * *."

In December, 1960, appellant filed the present action in the District Court.³ The amended complaint names officials of

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the Post Office Department and the Federal Trade Commission as defendants and seeks the following relief: (1) a declaration that the Postal proceedings were conducted improperly; (2) a declaration that appellant's advertising material is not fraudulent; (3) an order enjoining both agencies from proceeding further against appellant in connection with "the same or essentially identical charges"; and (4) "such other and further relief as is meet and just." The District Court dismissed the complaint on the grounds that it failed to state a claim upon which relief could be granted, and this appeal followed

The action was properly dismissed as against the members of the Federal Trade Commission, although the dismissal should have been based upon lack of jurisdiction. There is no case or controversy between appellant and the members of the Federal Trade Commission. Rochester Telephone Corp. v. United States, 307 U.S. 125, 129-131, 59 S. Ct. 754, 83 L.Ed. 1147 (1939); Wolff v. Benson, 103 U.S.App.D.C. 334, 258 F.2d 428 (1958). The FTC has taken no action against appellant and, whatever investigation may now be under way, the nature of any charges which may hereafter be filed is necessarily conjectural. Indeed, charges may never be filed. For the same reasons, it is also true that the Federal Trade Commission has taken no final action which is reviewable under the Administrative Procedure Act. Richfield Oil Corp. v. United States, 207 F.2d 864 (C.A.9, 1953). Moreover, if and when the FTC does file charges against appellant, appellant will be required to exhaust his administrative remedies with that agency before seeking relief in the courts. Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638 (1938). Even a decision in the postal proceedings in appellant's favor would not necessarily preclude further action by the FTC since the agencies act under different statutes employing different standards⁴ and since circumstances may have changed since the postal proceedings were instituted and terminated. Cf. Federal Trade Comm. v. Raladam Co., 316 U.S. 149, 62 S.Ct. 966, 86 L.Ed. 1336 (1942); Aycock v. O'Brien, 28 F.2d 817 (C.A.9, 1928). And whether or not the FTC would be barred is itself a question for the initial determination of that agency. Securities & Exchange Comm. v. Otis & Co., 338 U.S. 843, 70 S.Ct. 89, 94 L.Ed. 516 (1949), rev'g 85 App.D.C. 122, 176 F.2d 34.

The complaint should also have been dismissed against the Post Office on jurisdictional grounds insofar as the appellant was seeking declaratory relief. Despite appellant's expenditure of funds and the alleged harm to his business reputation, he is not entitled to a determination of the abstract questions of whether or not he has been guilty of fraud and whether or not he was proceeded against properly. The Post Office has terminated its proceedings without holding that appellant's practices are fraudulent and without imposing any sanction. Appellant may not enter the District Court merely to vindicate either his feelings or his reputation. Hearst Radio Inc. v. F. C. C., 83 U.S.App.D.C. 63, 167 F.2d 225 (1948); Metropolitan Edison Co. v. F. C. C., 169 F.2d 719, 725 (C.A.3, 1948); Morton International Corp. v....