Federal Trade Commission v. American Tobacco Co Same v. Lorillard Co

Decision Date17 March 1924
Docket NumberNos. 206,207,s. 206
Citation32 A.L.R. 786,264 U.S. 298,68 L.Ed. 696,44 S.Ct. 336
PartiesFEDERAL TRADE COMMISSION v. AMERICAN TOBACCO CO. SAME v. P. LORILLARD CO., Inc
CourtU.S. Supreme Court

Mr. James A. Fowler, of Knoxville, Tenn., and the Attorney General, for plaintiff in error.

[Argument of Counsel from pages 299-302 intentionally omitted] Mr. Wm. D. Guthrie, of New York City, for defendant in error P. lorillard co.

Mr. Junius Parker, of New York City, for defendant in error American Tobacco Co.

Mr. Justice HOLMES delivered the opinion of the Court.

These are two petitions for writs of mandamus to the respective corporations respondent, manufacturers and sellers of tobacco, brought by the Federal Trade Commission under the Act of September 26, 1914, c. 311, § 9, 38 Stat. 717, 722 (Comp. St. § 8836i), and in alleged pursuance of a resolution of the Senate passed on August 9, 1921. The purpose of the petitions is to require production of records, contracts, memoranda and correspondence for inspection and making copies. They were denied by the District Court. 283 Fed. 999. The resolution directs the Commission to investigate the tobacco situation as to domestic and export trade with particular reference to market price to producers, etc. The act directs the Commission to prevent the use of unfair methods of competition in commerce and provides for a complaint by the Commission, a hearing and a report, with an order to desist if it deems the use of a prohibited method proved. The Commission and the party concerned are both given a resort to the Circuit Court of Appeals. Section 5 (Comp. St. § 8836e). By section 6 (Comp. St. § 8836f) the Commission shall have power (a) to gather information concerning, and to investigate the business, conduct, practices and management of any corporation engaged in commerce, except banks and common carriers, and its relation to other corporations and individuals; (b) to require reports and answers under oath to specific questions furnishing the Commission such information as it may require on the above subjects; (d) upon the direction of the President or either House of Congress to investigate and report the facts as to alleged violation of the Anti-Trust Acts (Comp. St. § 8820 et seq.) By section 9 (Comp. St. § 8836i) for the purposes of this act the Commission shall at all reasonable times have access to, for the purposes of examination, and the right to copy any documentary evidence of any corporation being investigated or proceeded against and shall have power to require by subpoena the attendance and testimony of witnesses and the production of all such documentary evidence relating to any matter under investigation. In case of disobedience an order may be obtained from a District Court. Upon application of the Attorney General the District Courts are given jurisdiction to issue writs of mandamus to require compliance with the act or any order of the commission made in pursuance thereof. The petitions are filed under this clause and the question is whether orders of the Commission to allow inspection and copies of the documents and correspondence referred to were authorized by the act.

The petitions allege that complaints have been filed with the Commission charging the respondents severally with unfair competition by regulating the prices at which their commodities should be resold, set forth the Senate resolution, and the resolutions of the Commission to conduct an investigation under the authority of sections 5 and 6(a), being Comp. St. §§ 8836e, 8836f, and in pursuance of the Senate resolution, and for the further purose of gathering and compiling information concerning the business, conduct and practices, etc., of each of the resopondent companies. There are the necessary formal allegations and a prayer that unless the accounts, books, records, documents, memoranda, contracts, papers and correspondence of the respondents are immediately submitted for inspection and examination and for the purpose of making copies thereof, a mandamus issue requiring, in the case of the American Tobacco Company, the exhibition during business hours when the Commission's agent requests it, of all letters and telegrams received by the Company from, or sent by it to all of its jobber customers, between January 1, 1921 to December 31, 1921, inclusive. In the case of the P. Lorillard Company the same requirement is made and also all letters, telegrams or reports from or to its salesmen, or from or to all tobacco jobbers' or wholesale grocers' associations, all contracts or arrangements with such associations, and correspondence and agreements with a list of corporations named.

The Senate resolution may be laid on one side as it is not based on any alleged violation of the Anti-Trust acts, within the requirement of section 6 (d) of the act. United States v. Louisville & Nashville R. R. Co., 236 U. S. 318, 329, 35 Sup. Ct. 363, 59 L. Ed. 598. The complaints, as to which the Commission refused definite information to the respondents, and one at least of which, we understand, has been dismissed, also may be disregarded for the moment, since the Commission claims an unlimited right of access to the respondents' papers with reference to the possible existence of practices in violation of section 5.

The mere facts of carrying on a commerce not confined within State lines and of being...

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