F. T. C. v. Miller
| Citation | 549 F.2d 452 |
| Decision Date | 16 March 1977 |
| Docket Number | No. 76-1499,76-1499 |
| Parties | 1977-1 Trade Cases 61,265 FEDERAL TRADE COMMISSION, Petitioner-Appellee, v. Ralph H. MILLER, President, et al., Respondents-Appellants. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
John C. Christie, Jr., Chicago, Ill., Paul D. Borghesani, Elkhart, Ind., for respondents-appellants.
Robert J. Lewis, Jr., Gen. Counsel, Denis E. Hynes, Atty., F. T. C., Washington, D. C., John R. Wilks, U. S. Atty., Fort Wayne, Ind., for petitioner-appellee.
Before CLARK, Associate Justice (Retired), * SPRECHER and TONE, Circuit Judges.
The issues before us are whether common carries subject to the Interstate Commerce Act are exempt from the Federal Trade Commission's investigatory power and, if so, whether that exemption may be asserted by a carrier as a defense in a subpoena enforcement proceeding. The District Court answered the second question in the negative and ordered enforcement of subpoenas the FTC had served. We reverse.
Respondent Morgan Drive Away, Inc. is a common carrier engaged in the business of transporting mobile homes. As such it is subject to regulation under Part II of the Interstate Commerce Act, 49 U.S.C. § 301, et seq., and operates pursuant to a certificate of public convenience and necessity issued by the Interstate Commerce Commission.
In January 1974 the Federal Trade Commission adopted a resolution authorizing an investigation to determine whether Morgan and unnamed parties were engaged in violations of § 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, "including false and misleading advertising or misrepresentation in connection with the solicitation of persons to become owner-operators in the nationwide mobilehome (sic) transporting industry." The resolution recited that the investigation was being conducted under the authority of §§ 6, 9, and 10 of the Act, 15 U.S.C. §§ 46, 49, and 50. The Commission issued and served a subpoena duces tecum upon respondent Ralph H. Miller, Morgan's President, and a subpoena ad testificandum upon respondent Bill R. Privitt, Morgan's Executive Vice President, each subpoena reciting that the witness was "to testify in connection with the Commission's investigation of Morgan Drive Away, Inc.," authorized by the resolution.
Morgan's motion to quash the subpoenas on the ground that it is statutorily exempt from FTC regulation and investigation was denied by the Commission. Upon being advised that respondents, relying upon the advice of counsel, did not intend to comply with the subpoenas, the Commission filed this enforcement action in the District Court pursuant to § 9 of the Act, 15 U.S.C. § 49. From the judgment granting enforcement, respondents appeal.
As we have noted, the purpose of the Commission's investigation was to determine whether Morgan "and others" may be violating § 5, which prohibits "(u)nfair methods of competition . . . and unfair or deceptive acts or practices in or affecting commerce," and also provides, in subsection (a)(2), as follows:
"The Commission is empowered and directed to prevent persons, partnerships, or corporations, except banks, common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to the Federal Aviation Act of 1958, and persons, partnerships, or corporations insofar as they are subject to the Packers and Stockyards Act, 1921, as amended, except as provided in section 406(b) of said Act, from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce." 15 U.S.C. § 45(a)(2) (Supp. V, 1975).
The phrase "Acts to regulate commerce" is defined in § 4 of the Act to include "the Act entitled 'An Act to regulate commerce', approved February 14, 1887, and all Acts amendatory thereof and supplementary thereto." 15 U.S.C. § 44. The note to this section in the United States Code points out that the date should be corrected to February 4, 1887 and states that the Act of that date "is classified to chapters 1, 8, 12, 13 and 19 of Title 49, Transportation." Those chapters contain what is now known as the Interstate Commerce Act. 1 Morgan, as we have said, is regulated and holds a certificate under Part II of that Act, Chapter 8 of Title 49, dealing with motor carriers.
Section 6 of the Federal Trade Commission Act, on which, with §§ 9 and 10 of that Act, the Commission based its authority to investigate whether Morgan was violating § 5, gives the Commission, in subsection (a), the power
"(t)o gather and compile information concerning, and to investigate from time to time the organization, business, conduct, practices, and management of any person, partnership, or corporation engaged in or whose business affects commerce, excepting banks and common carriers subject to the Act to regulate commerce, and its relation to other persons, partnerships, and corporations." 15 U.S.C. § 46(a) (Supp. V, 1975).
Subsection (b) of § 6 authorizes the Commission to require
". . . corporations, engaged in or whose business affects commerce, excepting banks and common carriers subject to the Act to regulate commerce, or any class of them, or any of them, respectively, to file with the Commission in such form as the Commission may prescribe . . . reports or answers in writing to specific questions, furnishing to the Commission such information as it may require as to the organization, business, conduct, practices, management, and relation to other corporations, partnerships, and individuals of the respective . . . corporations filing such reports or answers in writing." 15 U.S.C. § 46(b) (Supp. V, 1975).
Section 9 of the Act authorizes the issuance of subpoenas by the Commission for the purposes of §§ 5 and 6, inter alia, and authorizes their enforcement by proceedings in the district courts. Section 10, the final section mentioned in the resolution authorizing the Morgan investigation, provides for penalties for failure to comply with subpoenas and investigative orders.
Respondents concede that any right they may assert to resist the enforcement of the subpoenas must be found in § 6 of the Act, which deals with the Commission's investigatory power. They also concede that if they were insisting only on the right not to be regulated, as distinguished from the right not to be investigated, the strong policy against litigating the issue of coverage under the Act in a subpoena enforcement proceeding, discussed in Part III, below, would make their present position untenable. Nevertheless, the words used in § 5 are relevant to a consideration of § 6. Cf. R. Dickerson, The Interpretation and Application of Statutes 219 (1975).
We begin, as we must, with the words of the statute. 2 The common-carrier exemptions in §§ 5 and 6 have been in those sections since the adoption of the Act in 1914, ch. 311, 38 Stat. 717, and remain unchanged. In § 5 "common carriers subject to the Acts to regulate commerce" are expressly excepted from the class of "persons, partnerships, or corporations" which the Commission is empowered "to prevent . . . from using unfair methods of competition . . . and unfair or deceptive acts or practices in or affecting commerce." The words "Acts to regulate commerce" are defined in § 4 to include the Interstate Commerce Act, as amended. Morgan is a common carrier subject to that Act. The exemption is in terms of status as a common carrier subject to the Interstate Commerce Act, not activities subject to regulation under that Act. In contrast, the Packers and Stockyards Act exemption in § 5 is only for "persons, partnerships, or corporations insofar as they are subject to" that Act.
The exemption in § 6 of the Act is likewise cast in terms of status. The investigatory power conferred by subsections (a) and (b) extends to " any . . . corporation engaged in or whose business affects commerce, excepting banks and common carriers subject to the Act to regulate commerce." We find no significance in the use of the singular "Act" in § 6, on which the Commission relies as indicating an intention to limit the exemption in that section to railroads. 3 The note to this section in the United States Code is similar to the note to § 5 and states as follows:
Chapter 8 of Title 49 is, as we have said, Part II of the Interstate Commerce Act. The omission of the "s" in § 6 appears, like the incorrect date for the 1887 Act in § 4, to have been an inadvertent error which was not significant enough, or indeed noticeable enough, to be corrected when the Act was amended from time to time for reasons having nothing to do with the common-carrier exemptions. Moreover, even if the singular "Act" is viewed as an intentional reference to the 1887 Act, the case would be governed by the usual rule that a statutory reference to an earlier statute is construed to include amendments to that statute. Steffler v. Johnston, 121 F.2d 447, 448 (9th Cir.), cert. denied, 314 U.S. 676, 62 S.Ct. 187, 86 L.Ed. 541 (1941). To hold otherwise would be to impute to Congress the incongruous intention of incorporating into a new statute provisions of the superseded, rather than the current, version of the earlier statute.
The Commission makes two other arguments based on the language of the statute, both of which we find unpersuasive. The first is that, because the exemption in §§ 5 and 6 is not repeated in § 9's grant of subpoena power, it can subpoena Morgan's officers even if an investigation of that company is outside its jurisdiction. Section 9, however, expressly limits the agency's subpoena power to testimony and evidence "relating to any matter under investigation."...
To continue reading
Request your trial
-
University of Richmond v. Bell, Civ. A. No. 81-0406-R.
...is a purely legal one of whether or not any corporation within that category may be subjected to agency investigation. FTC v. Miller, 549 F.2d 452, 460-61 (7th Cir. 1977) (citations The Court is mindful of the Supreme Court's implicit instruction to construe the Department of Education regu......
-
National Federation of Blind v. F.T.C.
...its activity. Official Airline Guides, Inc. v. Federal Trade Commission, 630. F.2d 920, 923 (2d Cir. 1980); Federal Trade Commission v. Miller 549 F.2d 452, 455 (7th Cir.1977); Federal Trade Commission v. American Standard Credit Sys., Inc., 874 F.Supp. 1080, 1086 (C.D.Cal.1994). Applied he......
-
E.E.O.C. v. Sidley Austin Brown & Wood
...compliance with the subpoena. See also EEOC v. Shell Oil Co., 466 U.S. 54, 64-65, 104 S.Ct. 1621, 80 L.Ed.2d 41 (1984); FTC v. Miller, 549 F.2d 452, 460-61 (7th Cir.1977); FTC v. Ken Roberts Co., 276 F.3d 583, 586-87 (D.C.Cir.2001); EEOC v. Karuk Tribe Housing Authority, 260 F.3d 1071, 1076......
-
Squillacote For and on Behalf of N.L.R.B. v. International Broth. of Teamsters, Local 344
...(1947); Public Utility Commission v. United States, 355 U.S. 534, 540, 78 S.Ct. 446, 2 L.Ed.2d 470 (1958); see also FTC v. Miller, 549 F.2d 452, 460-462 (7th Cir. 1977). When judicial review before a court of appeals under § 10 will afford an opportunity to present the constitutional issue ......