F.T.C. v. Compagnie de Saint-Gobain-Pont-a-Mousson, SAINT-GOBAIN-PONT-A-MOUSSO

Citation636 F.2d 1300,205 U.S.App.D.C. 172
Decision Date14 February 1980
Docket NumberA,No. 78-0194,SAINT-GOBAIN-PONT-A-MOUSSO,No. 78-2160,78-2160,78-0194
Parties, 1980-81 Trade Cases 63,632 FEDERAL TRADE COMMISSION, Appellee, v. COMPAGNIE DEppellant. . Argued 18 Oct. 1979. Decided 17 Nov. 1980. Appeal from the United States District Court for the District of Columbia (D.C. Misc.). John T. Synnestvedt, John S. Child, Jr., Synnestvedt & Lechner, Philadelphia, Pa., for appellant. Thomas A. Masterson, Philadelphia, Pa., a member of the bar of the Supreme Court of the United States, pro hac vice, by special leave of court, with whom Miles W. Kirkpatrick, Charles W. Smith and D. Edward Wilson, Jr., Washington, D. C., were on brief, for appellant. David M. Fitzgerald, Atty., F. T. C., Washington, D. C., with whom Michael N. Sohn, General Counsel, Gerald P. Norton, Deputy Gen. Counsel and W. Dennis Cross, Asst. Gen. Counsel, F. T. C., Washington, D. C., were on brief, for appellee. Before McGOWAN and WILKEY, Circuit Judges and GESELL * , United States District Judge for the District of Columbia. Opinion for the Court filed by Circuit Judge WILKEY. Opinion concurring filed by Circuit Judge McGOWAN. WILKEY, Circuit Judge: This case addresses a narrow issue of broad international consequence: did Congress expressly or impliedly authorize the Federal Trade Commission (FTC or Commission) to serve its investigatory subpoenas directly upon citizens of other countries by means of registered mail? Although on the surface this question appears to rest solely upon statutory interpretation, our answer to it is primarily guided by our recognition of established and fundamental principles of international law. Federal courts have long acknowledged that the investigatory 1 and regulatory 2 reach of domestic agencies may, and often must, extend across national boundaries. This court has previously recognized that those agencies may under certain circumstances compel production of documents located abroad. 3 We cannot, however, simply assume from these precedents that Congress intended to authorize regulatory agencies in general and the FTC in part
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Appeal from the United States District Court for the District of Columbia (D.C. Misc. No. 78-0194).

John T. Synnestvedt, John S. Child, Jr., Synnestvedt & Lechner, Philadelphia, Pa., for appellant.

Thomas A. Masterson, Philadelphia, Pa., a member of the bar of the Supreme Court of the United States, pro hac vice, by special leave of court, with whom Miles W. Kirkpatrick, Charles W. Smith and D. Edward Wilson, Jr., Washington, D. C., were on brief, for appellant.

David M. Fitzgerald, Atty., F. T. C., Washington, D. C., with whom Michael N. Sohn, General Counsel, Gerald P. Norton, Deputy Gen. Counsel and W. Dennis Cross, Asst. Gen. Counsel, F. T. C., Washington, D. C., were on brief, for appellee.

Before McGOWAN and WILKEY, Circuit Judges and GESELL *, United States District Judge for the District of Columbia.

Opinion for the Court filed by Circuit Judge WILKEY.

Opinion concurring filed by Circuit Judge McGOWAN.

WILKEY, Circuit Judge:

This case addresses a narrow issue of broad international consequence: did Congress expressly or impliedly authorize the Federal Trade Commission (FTC or Commission) to serve its investigatory subpoenas directly upon citizens of other countries by means of registered mail? Although on the surface this question appears to rest solely upon statutory interpretation, our answer to it is primarily guided by our recognition of established and fundamental principles of international law.

Federal courts have long acknowledged that the investigatory 1 and regulatory 2 reach of domestic agencies may, and often must, extend across national boundaries. This court has previously recognized that those agencies may under certain circumstances compel production of documents located abroad. 3 We cannot, however, simply assume from these precedents that Congress intended to authorize regulatory agencies in general and the FTC in particular to employ any and all methods to serve compulsory process when conducting their investigations. When an American regulatory agency directly serves its compulsory process upon a citizen of a foreign country, the act of service itself constitutes an exercise of American sovereign power within the area of the foreign country's territorial sovereignty. Though some techniques of service may prove less obnoxious than others to foreign sensibilities, our recognition of those sensibilities must affect our willingness to infer congressional authorization for a particular mode of service from an otherwise silent statute. In the face of the foreign country's direct protest to the mode of service employed here, and in the absence of clear congressional intent at the time this subpoena was served to authorize that manner of exercise of American sovereign power, we decline to infer the necessary statutory authority for the FTC's chosen mode of subpoena service.

I. BACKGROUND

Since 1977 the FTC has been engaged in a nonpublic antitrust investigation of the U.S. fiberglass insulation industry to determine whether a number of fiberglass manufacturers and distributors have engaged in acts or practices in violation of section 5 of the FTC Act. 4 One of the principal targets of the FTC investigation has been Compagnie de Saint-Gobain-Pont-a-Mousson (SGPM), a French holding company headquartered in Paris, but with a general delegate based in New York City. 5 In September 1977 the Commission issued four identical subpoenas duces tecum directing SGPM to produce specified classes of documents relevant to the investigation. 6 One copy of the subpoena was served by registered mailing to SGPM's corporate headquarters in Paris; the second was hand-delivered to the New York office of SGPM's general delegate in the United States; the third was delivered to the New York City residence of the daughter of SGPM's general delegate; and the fourth was served upon the Washington, D.C. attorney representing SGPM in a related proceeding. 7 When SGPM refused to comply with the subpoenas, the Commission petitioned the district court for an enforcement order pursuant to section 9 of the FTC Act. 8 In response to the district court's order to show cause why the petition should not be granted, 9 SGPM asserted that it should be excused from compliance because none of the modes of subpoena service employed were authorized by the FTC Act. 10 Finding the subpoena relevant to the Commission's inquiry and the mode of service to be proper, the district court issued the requested order enforcing the subpoena on 29 September 1978. 11

On appeal from the district court's denial of SGPM's motion to stay the enforcement order, 12 this court remanded the record to the district court. 13 Addressing only the issue whether the investigatory subpoena had been served upon SGPM in a lawful manner, we concluded that the latter three methods of subpoena service employed by the Commission were improper. 14 We directed the district court on remand to "examine carefully the validity vel non of (the first method of) service by the registered mailing to (SGPM's) corporate headquarters in Paris," 15 and in particular, to construe the relevant authorizing statutes to determine the underlying congressional intent. 16 At the time we cautioned the district court to pay special attention to whether its construction of the relevant statutes conformed to accepted principles of international law, "since Congress is customarily presumed, unless a plain intention appears to the contrary, to avoid conflict with such principles as well as with the Constitution." 17

Following argument on remand, the French Embassy sent a note to the State Department, protesting that the FTC's direct transmittal of its subpoena to SGPM's Parisian headquarters via registered mail constituted an infringement of French national sovereignty. 18 The French government's protests notwithstanding, the district court concluded that neither the Constitution nor statute "intended to deny the FTC the right to send a subpoena by mail to a foreign corporation suspected ... of unfair trade practices in violation of the Federal Trade Commission Act." 19 Consequently, on 14 February 1980, the district court issued a second order reiterating its original enforcement of the FTC subpoena. 20 For reasons articulated below, we vacate both the enforcement order dated 29 September 1978 and the order dated 14 February 1980.

II. ANALYSIS

The sole issue to be resolved on this appeal is the propriety of the technique employed by the FTC to serve its subpoena abroad namely, registered mailing to a foreign citizen on foreign soil. We will begin by examining whether, at the time service was attempted, the language of the FTC Act expressly authorized service by registered mail of FTC subpoenas abroad and whether the legislative history of the FTC Act and similarly worded statutes revealed any congressional intent to authorize such a mode of service. Next, after clarification of two distinctions blurred by the opinion below, we reject the district court's conclusions that accepted principles of international law condone the mode of subpoena service employed here. We then suggest that basic canons of statutory construction do not permit authority for such a mode of subpoena service to be inferred from the FTC's general jurisdictional mandates to investigate and regulate foreign and interstate commerce.

We conclude that, at the time the subpoena was served, Congress intended to authorize the FTC to employ only those customary and legitimate methods of service of compulsory process commonly employed by American courts and administrative agencies when serving its subpoenas abroad. Because service of compulsory process by registered mail had not customarily proved a legitimate means of summoning a third-party witness to appear, with or without documents, in an agency investigation, we find that the method of service employed by the FTC in this case was unauthorized and hence invalid.

A. Statutory Language and Legislative History

Traditional techniques of statutory construction avail us little in uncovering Congress' intent regarding proper methods of subpoena service abroad. Opposing counsel acknowledge that, as of the date of the service challenged here, the language of the FTC Act nowhere expressly authorized, nor expressly prohibited, direct service of FTC subpoenas abroad by means of registered mail. 21 We shall briefly canvass those statutory provisions potentially applicable at the date of service.

Section 5(f)(c) of the FTC Act, set out in the margin provided that "(c) omplaints, orders, and other processes of the Commission under this section may be served" by registered or certified mail. 22 In ruling on SGPM's motion to quash, however, the Commission correctly read the plain language of section 5(f)(c) not to apply to the service of the investigatory subpoenas challenged here, because such subpoenas, issued under section 6, 9, and 10 of the Act 23 simply did not constitute "processes of the Commission under this section (section 5)." 24 Nor did section 6(g) of the Act, granting the Commission broad rulemaking authority to shape its investigatory procedures, 25 authorize or prohibit the manner of service employed here. It is true that this provision had previously been construed to afford the FTC broad discretion in determining which modes of service of process were appropriate. 26 In fact, under this statutory section, the FTC promulgated its Rule of Practice 4.4(a), which specifically authorized service of subpoenas by registered or certified mail. 27 Yet rule 4.4(a), as it existed at the time of service, suggested no limits as to where, or upon whom, subpoenas might properly be...

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