Crafts v. Federal Trade Commission

Decision Date27 February 1957
Docket NumberNo. 14972.,14972.
Citation244 F.2d 882
PartiesJames F. CRAFTS, Appellant, v. FEDERAL TRADE COMMISSION, Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

COPYRIGHT MATERIAL OMITTED

Christopher Jenks, Orrick, Dahlquist, Herrington & Sutcliffe, San Francisco, Cal., for appellant.

Earl W. Kintner, Gen. Counsel, Robert B. Dawkins, Asst. Gen. Counsel, Janet D. Saxon, Washington, D. C., Don Eastvold, Atty. Gen., Bernard C. Lonctot, Chief Asst. Atty. Gen., J. Calvin Simpson, Olympia, Wash., James E. Corkey, John W. Brookfield, Jr., Washington, D. C., Edmund G. Brown, Atty. Gen., Harold B. Haas, San Francisco, Cal., for appellee.

Before LEMMON, FEE and CHAMBERS, Circuit Judges.

JAMES ALGER FEE, Circuit Judge.

This is an appeal from an order enforcing a subpoena duces tecum issued by the Federal Trade Commission to Crafts in a proceeding against Fireman's Fund Indemnity Company. The trial court issued an order as follows:

"Order Requiring the Giving of Evidence and the Production of Documentary Evidence

"The Federal Trade Commission, having invoked the aid of this Court in requiring the attendance and testimony of James F. Crafts and the production of documentary evidence by James F. Crafts, as a witness in a proceeding instituted by the Federal Trade Commission against Fireman's Fund Indemnity Company (D. 6310), and

"The Court having considered the application, it is hereby

"Ordered: That the application be, and the same hereby is granted, and that the said James F. Crafts be, and he is, hereby ordered to appear upon not less than ten days' notice at a time and place to be set by the Federal Trade Commission or a Hearing Examiner thereof designated by the said Commission to take testimony and receive evidence, and to perform all other duties authorized by law in the prosecution of the inquiry pending before said Commission entitled, `In the Matter of Fireman's Fund Indemnity Company, a corporation, Docket No. 6310,' or an examiner subsequent hereto designated by it for such purposes, to give evidence and testimony at the aforesaid time and place touching matters brought in question by the complaint of the Federal Trade Commission against Fireman's Fund Indemnity Company, a corporation, and the answer thereto, to then and there produce the documentary evidence identified and described in a subpoena issued by the said Commission, on September 22, 1955, and already served upon said James F. Crafts, and which the said James F. Crafts has not produced, and to answer at said time and place every question relevant and material to said proceeding and necessary and proper to the conduct thereof and to attend before said Examiner of the Federal Trade Commission from day to day until his examination shall have been completed.

"It Is Further Ordered: That this Order and its effectiveness be and the same is hereby stayed for the time permitted by law for an appeal therefrom, and if such appeal is filed, thereafter until final determination of such appeal."

The subpoena which was thus enforced read:

"United States of America Federal Trade Commission

"Subpoena Duces Tecum

"To Mr. James F. Crafts, Fireman's Fund Indemnity Company, 401 California Street, San Francisco 20, California.

"You are hereby required to appear before J. Earl Cox, a Hearing Examiner of the Federal Trade Commission, at Room 261, U. S. Post Office and Court House, 7th and Mission Streets in the City of San Francisco, California, on the 17th day of October, 1955, at ten o'clock a. m., of that day, to testify at the instance of the Federal Trade Commission in the Matter of Fireman's Fund Indemnity Company, Docket No. 6310, and you are hereby required to bring with you and produce at said time and place the following books, papers, and documents: described in Schedule `A' attached hereto and incorporated by reference as if fully rewritten herein.

"Fail not at your peril.

"In testimony whereof, the undersigned, a Hearing Examiner of the Federal Trade Commission, has hereunto set his hand and the said Federal Trade Commission has caused its seal to be affixed at Washington, D. C., this 22nd day of September, 1955.

"Seal /s/ J. Earl Cox "Hearing Examiner. "Schedule `A'

"1. One copy of each form letter, bulletin, circular, folder, brochure, stuffer, newspaper advertisement, magazine advertisement, or other written or printed advertising material which was disseminated by respondent Fireman's Fund Indemnity Company (hereinafter described in this Schedule `A' as respondent) to the general public, or to its employees or agents for dissemination to the general public or which was disseminated to the general public by any person, partnership, or corporation with the permission of, request of, order by, or under the terms of any contract with the respondent from March 1, 1954, to date, which advertised, described, or related to any of the accident and health insurance policies named in the complaint or any policies issued by the respondent since March 1, 1954, as substitutes or modifications for such policies.

"2. All contracts, memorandums of agreement, or correspondence between respondent, its officers, agents, employees, or contractors, or any records, books of accounts, or verified summaries thereof which have reference to the following listed advertisements and which show on a state by state basis volume of dissemination of such advertisements by respondent to the general public or to its agents for redissemination to the general public during the years 1953 and 1954.

"1. Form letter of A & H No. 2.

"2. Form letter of A & H No. 7.

"3. Form letter of A & H No. 9.

"4. Form letter of A & H No. 10.

"5. Circular bearing form No. A & H 4800.

"6. Postcard bearing form No. A & H 4800-A.

"7. Circular bearing form No. A & H 4801.

"8. Postcard bearing form No. A & H 4801-A.

"9. Circular bearing form No. A & H 4803.

"10. Postcard bearing form No. A & H 4803-A.

"11. Pamphlet bearing form No. A & H 4804.

"12. Pamphlet bearing form No. A & H 4807.

"3. One specimen copy of each accident and health insurance policy issued by respondent since March 1, 1954, as a substitute or modification for any of the accident and health insurance policies named in the complaint.

"4. Original books, records, or accounts of the respondent, or verified summaries thereof, showing: the dollar volume of the premium receipts received by it from insureds residing in each of the several states of the United States and in the District of Columbia during the years 1953 and 1954 to whom respondent has issued during those years one or more of the following listed policies on a family or group basis; or the total number of such policies issued by respondent during the years 1953 and 1954 in each of the several states of the United States and the District of Columbia:

"1. The Basic Equity Accident Policy (No. BA).

"2. The Basic Income Equity Accident Policy (No. BAI).

"3. The Basic Equity Life and Limb Accident Policy (No. BAL).

"4. The Basic Health Policy (No. BHP).

"5. The Budget Hospital and Medical Policy (No. GMA).

"6. The Hospital Nurses and Expense Policy (No. HNE).

"7. Hospital and Medical Policy (No. IMH).

"8. Polio Policy (No. PS).

"Endorsed: Filed October 18, 1955."

The complaint in the original proceeding is of extremely broad scope:

"United States of America Before Federal Trade Commission Docket No. 6310

"In the Matter of:

Fireman's Fund Indemnity Company, a Corporation

"Complaint

"Pursuant to the provisions of the Federal Trade Commission Act, as that Act is applicable to the business of insurance under the provisions of Public Law 15, 79th Congress (Title 15, U.S.Code, Sections 1011 to 1015, inclusive), and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Fireman's Fund Indemnity Company, a corporation, hereinafter referred to as respondent, has violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

"Paragraph One: Respondent, Fireman's Fund Indemnity Company, is a corporation, duly organized, existing and doing business under and by virtue of the laws of the State of California, with its office and principal place of business located at 410 California Street, San Francisco, California.

"Paragraph Two: Respondent is now, and for more than two years last past has been, engaged as an insurer in the business of insurance in commerce, as `commerce' is defined in the Federal Trade Commission Act, by entering into insurance contracts with insureds located in various States of the United States in which the business of insurance is not regulated by state law to the extent of regulating the practices of respondent alleged in this complaint to be illegal. Respondent maintains, and at all times mentioned herein has maintained, a substantial course of trade in said insurance policies in commerce between and among the several States of the United States.

"Respondent, during the two years last past, has sold insurance indemnification in a variety of policies, among which are the following:

"1. The Basic Equity Accident Policy (No. BA).

"2. The Basic Income Equity Accident Policy (No. BAI).

"3. The Basic Equity Life and Limb Accident Policy (No. BAL).

"4. The Basic Health Policy (No. BHP).

"5. The Budget Hospital and Medical Policy (No. GMA).

"6. The Hospital Nurses and Expense Policy (No. HNE).

"7. Hospital and Medical Policy (No. IHM).

"8. Polio Policy (No. PS).

"Paragraph Three: Respondent is licensed, as provided by the respective State laws, to engage in the business of insurance, as heretofore generally described, in all of the forty-eight States of the United States and the District of Columbia.

"Paragraph Four: In the course and conduct of its aforesaid business, respondent, during the two years...

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