F.T.C. v. Beatrice Foods Co., 78-1673
| Decision Date | 19 September 1978 |
| Docket Number | No. 78-1673,78-1673 |
| Citation | 587 F.2d 1225,190 U.S.App.D.C. 328 |
| Parties | , 1978-2 Trade Cases 62,316 FEDERAL TRADE COMMISSION, Appellant, v. BEATRICE FOODS COMPANY and Tropicana Products, Inc. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Upon consideration of the suggestion for rehearing En banc of 188 U.S.App.D.C. 438, of 580 F.2d 701, filed by appellant Federal Trade Commission, and a majority of judges of the Court in regular active service not having voted in favor thereof, it is
Ordered by the Court, En banc, that appellant's aforesaid suggestion for rehearing En banc is denied.
Chief Judge J. SKELLY WRIGHT did not participate in the foregoing order.
Circuit Judge McGOWAN would grant appellant's suggestion for rehearing En banc.
Circuit Judges BAZELON and LEVENTHAL have abstained from voting on the suggestion for rehearing En banc.
Statement of Circuit Judge BAZELON, with whom Circuit Judge LEVENTHAL joins, on appellant's suggestion for rehearing En banc.
Statement of Circuit Judge McGOWAN, on appellant's suggestion for rehearing En banc.
Statement of Circuit Judges MacKINNON and ROBB, on appellant's suggestion for rehearing En banc.
Statement of Circuit Judge BAZELON, with whom Circuit Judge LEVENTHAL joins, on petitioner's suggestion for rehearing En banc.
The Federal Trade Commission unsuccessfully sought in district court a preliminary injunction against the merger of Beatrice Foods Co. and Tropicana Products, Inc., pending completion of administrative action against the combination. A motions panel of this court, with Judge McGOWAN dissenting, affirmed the denial of the injunction on Wednesday, August 2, and dissolved, as of 4 p.m. the following day, the administrative stay against the merger that had been entered by an earlier motions panel. On that next morning, Thursday, August 3, the Commission filed its motion for rehearing and suggestion for rehearing En banc, alleging that the trial court's findings of fact were insufficient. That afternoon the panel granted rehearing, extended the stay indefinitely, and remanded the record to the district court for specific findings of fact. The district court entered further factual findings the following morning, Friday, August 4. Although the FTC requested additional time to prepare a response to the findings of fact, the panel, acting on Friday afternoon without the participation of Judge McGOWAN, found those findings sufficient and ordered that the stay against the merger lapse at noon on Monday, August 7. The merger was consummated on Monday afternoon. 1
Under the circumstances, there was no meaningful opportunity for consideration of the En banc suggestion prior to merger. In addition to problems of legal mootness with respect to the suggestion, it would obviously be fruitless to consider the matter further in a post-merger stance. Accordingly, I have decided to abstain from voting on the suggestion for En banc hearing. This will also serve to emphasize that the views of two judges on this court on the merits of the Commission's objection to the merger and in this case the panel's order was entered on the basis of its view of the probable merits are not to be taken as reflecting the views of the court. In general a vote against En banc or a failure to vote thereon is not to be identified as a view on the merits; that proposition is underscored when there has been no opportunity to focus on the merits in a meaningful and timely way.
Statement of Circuit Judge McGOWAN, on appellant's suggestion for rehearing En banc.
I have voted to grant the suggestion for rehearing En banc, and while there are now problems of mootness I do not withdraw that vote. I concurred in the remand, but did not have an opportunity to consider the matter after the filing of the district court's findings of fact on remand.
Statement of Circuit Judges MacKINNON and ROBB, on appellant's suggestion for rehearing En banc.
As members of the panel assigned to consider this case we thoroughly read and considered the entire 300-page transcript of the two-day hearing on the preliminary injunction together with all the extensive briefs of the parties. All the legal and factual issues are thoroughly presented and discussed therein and the record and briefs fully support the conclusion that the evidence sustains the judgment of the trial court and is insufficient to sustain the shifting contentions of the Federal Trade Commission. The reasons for our conclusions, evidenced by orders issued during the proceedings, were fully set forth in accompanying memoranda, and demonstrated that the panel was thoroughly familiar with the law, the facts and the issues, and that further argument was not necessary. (See Appendix)
Judge McGOWAN's inability to participate in the matter after the filing of findings of fact pursuant to our remand was caused by his absence from the city and our inability to reach him by telephone. It was accordingly necessary to show him as not participating, as our order reflects rather than his prior position as dissenting, which would not have altered the court's order. Also the Clerk contacted all the available judges and the result indicated there were insufficient votes to order En banc consideration even if the two judges who could not be contacted voted for such rehearing. Actually, one of those judges subsequently voted against En banc hearing. Judge BAZELON was one of the first to vote. All orders issued contained a stay to permit request to the Supreme Court for further stay but the Commission did not make any such request.
APPENDIX TO JOINT STATEMENT OF JUDGES MacKINNON AND ROBB
On July 8, 1978 the Federal Trade Commission having appealed from Judge HART's order denying a temporary restraining order, Judges FAHY and MacKINNON granted a stay until further order of the court to permit fuller consideration of the appeal. On July 10, 1978 Judges FAHY and McGOWAN, by order, noted that the Commission had not sought to enjoin the shareholders' meeting of Tropicana, and accordingly authorized the holding of that meeting to approve the proposed merger with Beatrice Foods, Inc. The stockholders approve the merger.
On July 18, 1978 Judge HART, following a two-day evidentiary hearing, issued the following order in response to the petition of the Federal Trade Commission for a Preliminary Injunction to enjoin the acquisition by Beatrice Foods Company of Tropicana Products, Inc., which acquisition, originally scheduled for July 10, 1978, had been temporarily postponed.
ORDER DENYING PRELIMINARY INJUNCTION
Upon consideration of the application for a Preliminary Injunction filed by the plaintiff herein, and after a hearing held on July 17, and 18, 1978, at which the Court received voluminous documentary evidence from both parties and heard six witnesses proffered by defendants, and after consideration of the weight and competence of the evidence and argument from counsel for all parties, it appears to the Court that Beatrice Foods Company and Tropicana Products, Inc. have not been shown to be competitors in the processing, distribution and sale of ready to serve orange juice on a national basis to any appreciable degree, and that such competition as exists between them nationally is De minimus (sic).
Therefore, after weighing the equities and concluding that it does not appear likely that the plaintiff will ultimately succeed and prevail on the merits, it is by the Court this 18th day of July, 1978,
Ordered, that the Application for a Preliminary Injunction be, and the same is hereby, denied.
/s/ George L. Hart, Jr.
/s/ GEORGE L. HART, JR.
/s/ United States District Judge
The Commission appealed this order and on August 2, 1978, the current motions panel issued the following Judgment and Memorandum.
Before McGOWAN, MacKINNON and ROBB, Circuit Judges.
JUDGMENT
This case came on to be heard on the original record on appeal and motions and other pleadings have been filed by the parties. Upon consideration of the foregoing, it is
Ordered and Adjudged, by the Court, that the judgment of the District Court on appeal herein is affirmed, for the reasons set forth in the attached memorandum.
Judge McGOWAN would grant an injunction pending appeal, fix an expedited briefing schedule, and schedule oral argument for the September 1978 sitting period. See FTC v. Food Town Stores, Inc., 539 F.2d 1339 (4th Cir. 1976); FTC v. Lancaster Colony Corp., 434 F.Supp. 1088 (S.D.N.Y.1977).
MEMORANDUMThe Federal Trade Commission (FTC) is seeking to enjoin Beatrice Foods Co. (hereafter Beatrice) from acquiring "Tropicana" Products, Inc. (hereafter Tropicana). To this end it has petitioned this court, pursuant to section 13(b) of the Federal Trade Commission Act. 1 for a temporary restraining order and a preliminary injunction to prohibit Beatrice and Tropicana from carrying out the acquisition during the pendency of an administrative proceeding by the FTC under sections 7 and 11 of the Clayton Act 2 and section 5 of the Federal Trade Commission Act. 3
When the matter was first here on appeal from the District Court's denial of a temporary restraining order the Motions Panel on July 8, 1978 issued an administrative stay to preserve the status quo to permit the court to consider the matter more fully. Thereafter on July 12 we continued the injunction to permit a further hearing before the District Court. Following that hearing the District Court refused to grant a preliminary injunction 4 and the FTC appeals from that decision.
Beatrice and Tropicana entered into a merger agreement as of April 27, 1978. Thereby Tropicana would maintain its corporate identity and become a "wholly owned subsidiary" of Beatrice. All preliminary steps have been taken to complete the transaction which could have been completed on July 11, 1978, except for our administrative stay. The FTC contends that the merger would result in a single firm (B...
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