FTC v. Guignon

• Decision Date: 06 March 1968
• Docket Number: No. 18716.,18716.
• Parties: FEDERAL TRADE COMMISSION, Appellant, v. Paul C. GUIGNON, Divisional Vice President, Anheuser-Busch, Incorporated, and John H. Pahlman, Controller, Anheuser-Busch, Incorporated, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

390 F.2d 323 (1968)

FEDERAL TRADE COMMISSION, Appellant, v. Paul C. GUIGNON, Divisional Vice President, Anheuser-Busch, Incorporated, and John H. Pahlman, Controller, Anheuser-Busch, Incorporated, Appellees.

No. 18716.

United States Court of Appeals Eighth Circuit.

February 9, 1968.

Rehearing Denied March 6, 1968.

Gerald J. Thain, Atty., Federal Trade Commission, Washington, D. C., for appellant; James McI. Henderson, Gen. Counsel, J. B. Truly, Asst. Gen. Counsel, and Charles C. Moore, Jr., Atty., Federal Trade Commission, were on the brief with Gerald J. Thain, Washington, D. C.

Harold F. Baker, Washington, D. C., for appellees; Terrence C. Sheehy, Washington, D. C., and Dwight D. Ingamells and Thomas J. Carroll, St. Louis, Mo., were with Harold F. Baker, Washington, D. C., on the brief.

Carl Eardley, Acting Asst. Atty. Gen., and Morton Hollander and Richard S. Salzman, Attys., Dept. of Justice, Washington, D. C., on brief and reply brief for United States as amicus curiae.

James McI. Henderson, Gen. Counsel, J. B. Truly, Asst. Gen. Counsel, and Charles C. Moore, Jr., and Gerald J. Thain, Attys. for the Federal Trade Commission, on brief for the Federal Trade Commission in response to brief for the United States as amicus curiae.

Before VOGEL, Chief Judge, BLACKMUN and HEANEY, Circuit Judges.

VOGEL, Chief Judge.

The Federal Trade Commission here appeals from the dismissal of its action seeking a District Court order to enforce two discovery subpoenaes issued pursuant to §§ 6 (b) and 9 of the Federal Trade Commission Act as amended, 15 U.S.C.A. § 45 et seq. We are principally concerned with whether the Federal Trade Commission, acting under § 9 of the Federal Trade Commission Act, 15 U.S.C.A. § 49, may, without the aid or consent of the Attorney General of the United States, seek enforcement of its own subpoenaes in the Federal District Courts. No factual determinations are necessary. The rather complicated background may, however, be found from a consideration of our earlier opinion in Anheuser-Busch, Inc. v. Federal Trade Commission, 1966, 359 F.2d 487, and Chief Judge Harper's opinion in this case, published at D. C., 261 F.Supp. 215.

The District Court held herein that the Commission may not seek enforcement of its own subpoenaes in a Federal District Court without the aid or consent of the Attorney General of the United States. Since that determination, another District Court in Federal Trade Commission v. Continental Can Co., Inc., S.D.N.Y., 1967, 267 F.Supp. 713, reached the opposite conclusion. We affirm the District Court herein.

We preface discussion of the issue involved here with the basic statutory provisions that in all litigation to which the United States or an agency thereof is a party, the Attorney General is given plenary power and supervision. 28 U.S.C.A. provides:

"§ 516. Conduct of litigation reserved to Department of Justice

"Except as otherwise authorized by law, the conduct of litigation in which the United States, an agency, or officer thereof is a party, or is interested, and securing evidence therefor, is reserved to officers of the Department of Justice, under the direction of the Attorney General."

§ 519 of the same title further provides:

"Supervision of litigation

"Except as otherwise authorized by law, the Attorney General shall supervise all litigation to which the United States, an agency, or officer thereof is a party, and shall direct all United States attorneys, assistant United States attorneys, and special attorneys appointed under section 543 of this title in the discharge of their respective duties."

It will be noted that Congress provided an exception — "except as otherwise authorized by law" — so that when an agency is given specific authorization to proceed without the advice, assistance or supervision of the Attorney General it may do so. Such an exception was found by the Supreme Court as to the Emergency Price Control Act when it said in Case v. Bowles, 1946, 327 U.S. 92 at page 96, 66 S.Ct. 438 at page 441, 90 L.Ed. 552:

"* * * that Act specifically empowers the Administrator to commence actions such as this one and authorizes attorneys employed by him to represent him in such actions. § 201(a)."

See, also, Confiscation Cases, 1869, 7 Wall. (74 U.S.) 454, 457, 19 L.Ed. 196; Sutherland v. International Ins. Co. of

New York, 2 Cir., 1930, 43 F.2d 969, 970, cert. denied, 282 U.S. 890, 51 S.Ct. 103, 75 L.Ed. 785.

The Commission contends that the exception, "except as otherwise authorized by law", applies in this instance because § 9 of the Federal Trade Commission Act, 15 U.S.C.A. § 49, set out in pertinent part in the margin,¹ grants it authority to enforce its subpoenaes in the District Courts without the aid or consent of the Attorney General. More specifically, the Commission relies on the second sentence of paragraph 2 of § 9 which states:

"* * * And in case of disobedience to a subpoena the commission may invoke the aid of any court of the United States in requiring the attendance and testimony of witnesses and the production of documentary evidence."

It is immediately obvious that this language is more ambiguous than the language of provisions which clearly come within the "except as otherwise authorized by law" exception to the Attorney General's broad authority to control and supervise government litigation under Title 28. Such provisions may expressly authorize an agency to appear by its own counsel with respect to a particular type of proceedings; as for example, under 15 U.S.C.A. § 53(a) the Federal Trade Commission is given authority to seek temporary injunctions against false advertising "* * * by any of its attorneys designated by it for such purpose * * *." The authorization may also be broader, such as a grant of general authority for the agency's lawyers to represent it in court, as in 49 U.S.C.A. § 16, par. (11), which authorizes the Interstate Commerce Commission to "employ such attorneys as it finds necessary * * * to appear for or represent the commission in any case in court * *." Another example is 29 U.S.C.A. § 154(a) of the National Labor Relations Act, which states that, "Attorneys appointed under this section may at the discretion of the Board, appear for and represent the Board in any case in court. * * *" See, also, Case v. Bowles, supra, at 327 U.S. 96-97, 66 S.Ct. 438.

Despite the obvious disparity in the provision relied upon by the Commission for its authority to bring an action to enforce subpoenaes by its own attorneys rather than proceeding through the Attorney General's office, the Commission presents us with an extensive list of citations to cases in which the Commission has successfully brought actions to enforce its subpoenaes without proceeding through the office of the Attorney General.² The citations are impressive and include a case from this court, Adams v. Federal Trade Commission, 8 Cir., 1961, 296 F.2d 861. Nevertheless, in none of the cases was the authority of the Commission to so enforce its subpoenaes questioned. The mere exercise of authority, unchallenged, cannot of itself create a power which only Congress can give to the Commission. As Mr. Justice Jackson, speaking for the Supreme Court, said in United States v. Morton Salt Co., 1950, 338 U.S. 632, at page 647, 70 S.Ct. 357, at page 366, 94 L.Ed. 401:

"The fact that powers long have been unexercised well may call for close scrutiny as to whether they exist; but if granted, they are not lost by being allowed to lie dormant, any more than nonexistent powers can be prescripted by an unchallenged exercise."

Additionally, the Commission's interpretation appears to be in conflict with the purposes of the statute as revealed by the discussions of the original bill in the House. It is noted that in responding to a question during House debates on the jurisdictional aspects of the section, Congressman Covington, the bill's sponsor and a member of the committee which drafted the measure, said:

"* * * section 9, to which the gentlemen refers, sic was dealing entirely with methods and processes — it provides that the jurisdiction of the district courts of the United States shall be invoked only upon the application of the Attorney General of the United States, and only at the request of the Commission." 51 Cong.Rec. 14,927 (63rd Cong., 2d Sess., 1914).

The Commission urges here that the 1966 holding of the Supreme Court in Federal Trade Commission v. Dean Foods, 384 U.S. 597, 86 S.Ct. 1738, 16 L.Ed.2d 802, supports its practice of proceeding in District Court by its own attorneys and without the aid or consent of the Attorney General. The Commission finds such support in the Supreme Court's language at page 607 of 384 U.S., at page 1744 of 86 S.Ct.:

"* * * There is no explicit statutory authority for the Commission to appear in judicial review proceedings, but no one has contended it cannot appear in the courts of appeals to defend its orders. Nor has it ever been asserted that the Commission could not bring contempt actions in the appropriate court of appeals when the court\'s enforcement orders were violated, though it has no statutory authority in this respect. Such ancillary powers have always been treated as essential to the effective discharge of the Commission\'s responsibilities."

Even taken out of context in the Dean Foods case, the language just quoted offers little support for the Commission's position because the language consistently refers to Commission proceedings before the Courts of Appeals, where no statutory authority is involved. Here we are concerned with proceedings in a District Court, and if there is any authority for the Commission to proceed independently of the Attorney General, it is statutory authority necessarily found within § 9 of the Federal Trade Commission Act. Placed in context, any support afforded by the above language of Dean Foods evaporates. The issue in that case was whether a Court of Appeals had...