Federal Trade Commission v. Smith
| Decision Date | 18 July 1929 |
| Citation | 34 F.2d 323 |
| Parties | FEDERAL TRADE COMMISSION v. SMITH et al. |
| Court | U.S. District Court — Southern District of New York |
Charles H. Tuttle, U. S. Atty., of New York City (Thomas J. Crawford, Asst. U. S. Atty., of New York City, of counsel), for petitioner.
Robert E. Healy and Adrien F. Busick, both of Washington, D. C., for Federal Trade Commission.
Simpson, Thacher & Bartlett, of New York City, and John F. MacLane, of Salt Lake City, Utah (John W. Davis and Louis Connick, both of New York City, of counsel), for respondents and Electric Bond & Share Co.
For the purpose of the decision to be made upon this application of the Federal Trade Commission for an order which will direct A. E. Smith to attend before the commission, and there to produce the operating expense ledgers and certain other papers of the Electric Bond & Share Company, it will be assumed that such corporation, as to a part of its business, is engaged in interstate commerce, and is thus within the provisions of the Federal Trade Commission Act of September 26, 1914 (15 USCA §§ 41-51). Furthermore, my opinion is that the commission, in the exercise of the powers of investigation, which are conferred upon it by subdivisions (a) and (d) of section 6 of the act (15 USCA § 46(a)(d), may compel the personal attendance of such witnesses as may be regarded as able to furnish information concerning the subject-matter which the commission has under investigation, and that such witnesses, when called, may be required, subject to their constitutional immunities, to testify concerning their knowledge of such subject-matter as is within the jurisdiction of the commission. McGrain v. Daugherty, 273 U. S. 135, 47 S. Ct. 319, 71 L. Ed. 580, 50 A. L. R. 1.
In connection with the adjudication just cited, attention must be had to the statement of Justice Van Devanter on page 153 of the report (47 S. Ct. 321), in which he said: "It will be observed from the terms of the resolution that the warrant calling for the arrest of Daugherty was to be issued in furtherance of the effort to obtain the personal testimony of the witness, and, like the second subpœna, was not intended to exact from him the production of the various records, books, and papers named in the first subpœna." Had Daugherty's alleged contumacy been based upon the first subpœna that the Senate directed to him, it is open to doubt if the Supreme Court would have sustained the process. The first subpœna was open to the objection that it was, in effect, a general warrant, and was bad under the decision of Federal Trade Commission v. American Tobacco Co., 264 U. S. 298, 44 S. Ct. 336, 68 L. Ed. 696, 32 A. L. R. 786.
With this latter case, and that of Harriman v. Interstate Commerce Commission, 211 U. S. 407, 29 S. Ct. 115, 53 L. Ed. 253, in mind, I think the duces tecum subpœnas of the petitioner which have issued to the present respondents are not to be sustained. The Congress has not, as yet, undertaken to regulate the interstate carrier of electricity in the same way as interstate common carriers are now supervised and controlled, and the legislative right of the Federal Trade Commission to investigate companies, which are engaged in the transmission of electric current over state boundaries, or the holding corporations, by which the activities of the producing companies are directed, and which, as a result may be also engaged in interstate commerce, is hardly comparable with that of the Interstate Commerce Commission with respect to interstate common carriers. See Smith v. Interstate Commerce Commission, 245 U. S. 33, 38 S. Ct. 30, 62 L. Ed. 135.
Until the powers of petitioner with respect to such inquiries as it may undertake shall have been enlarged by appropriate statutes, the present limitations which hedge about its inquisitorial functions must be recognized. One of them is that until particular documents, including books, become evidentiary, respondent corporation is not obligated to lay before the commission its books and papers for scrutiny in "an investigation to ascertain whether the anti-trust laws have been violated, and to report facts to Congress on a subject over which it has legislative jurisdiction and concerning which it has directed the Commission to report." (Petitioner's brief, p. 83).
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