FTC v. Kujawski

• Decision Date: 03 April 1969
• Docket Number: Civ. A. No. 12430-12432.
• Parties: FEDERAL TRADE COMMISSION, v. Joseph S. KUJAWSKI, Vice President, National Institutional Food Distributor Associates, Inc. FEDERAL TRADE COMMISSION v. Julius LEVITT, Vice President, Frozen Food Forum, Inc. FEDERAL TRADE COMMISSION v. Joyce ALEXANDER, an employee of Frozen Food Forum, Inc.
• Court: U.S. District Court — Northern District of Georgia

298 F. Supp. 1288

FEDERAL TRADE COMMISSION, v. Joseph S. KUJAWSKI, Vice President, National Institutional Food Distributor Associates, Inc.

FEDERAL TRADE COMMISSION v. Julius LEVITT, Vice President, Frozen Food Forum, Inc.

FEDERAL TRADE COMMISSION v. Joyce ALEXANDER, an employee of Frozen Food Forum, Inc.

Civ. A. Nos. 12430-12432.

United States District Court N. D. Georgia, Atlanta Division.

April 3, 1969.

William D. Ruckelshaus, Asst. Atty. Gen., Civil Division, Harland F. Leathers, Chief, General Litigation Section, Civil Division, Dept. of Justice, Jerold D. Cummins, Atty., F. T. C., Washington, D. C., Charles L. Goodson, U. S. Atty., Atlanta, Ga., for plaintiff; James McI. Henderson, Gen. Counsel, J. B. Truly, Asst. Gen. Counsel, of counsel.

Ellis Arnall, Atlanta, Ga., for defendants; Arnall, Golden & Gregory, Atlanta, Ga., of counsel.

SIDNEY O. SMITH, Jr., Chief Judge.

The within matters were brought to enforce related subpoenas and are formally consolidated by the court for disposition.

Jurisdiction of this proceeding is provided by the second and third paragraphs of 15 U.S.C. § 49. Unlike other orders a subpoena issued by the Commission need not be enforced by first applying to the Attorney General. F.T. C. v. Continental Can Co., 267 F.Supp. 713 (S.D.N.Y.1967). Contra, F. T. C. v. Guignon, 261 F.Supp. 215 (E.D.Mo.1966), affirmed 390 F.2d 323 (8th Cir. 1968). The District Court may consider such questions as self-incrimination, undue breadth of the subpoena, improper inclusion of irrelevant information, administrative authority to make the particular investigation, power to require disclosures concerning activities outside the agency's regulatory authority, and proper issuance of the particular subpoena. Davis, Administrative Law Text § 3.12 at 64 (1959). However, it is significant that this case involves only an investigative subpoena. See discussions of the distinctions between investigative and adjudicative proceedings in Hannah v. Larche, 363 U.S. 420, 445-446, 80 S.Ct. 1502, 4 L.Ed.2d 1307 (1960); In re Groban, 352 U.S. 330, 333, 77 S.Ct. 510, 1 L.Ed.2d 376 (1957); United States v. Morton Salt Co., 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 400 (1950); Kennedy v. Lynd, 306 F.2d 222, 225 (5th Cir. 1962).

The following general statement as to the enforcement of administrative subpoenas is found in 7 Moore's Federal Practice ¶ 81.061 (2d ed. 1968).

The Federal Rules being primarily designed for plenary litigation were not wholly applicable to proceedings for the enforcement of administrative subpoenas, which are summary in character, but were partially applied prior to the 1946 amendment of Rule 81(a) (3). The 1946 amendment added the following and concluding sentence to Rule 81(a) (3):

"These rules apply (1) to proceeding to compel the giving of testimony or production of documents in accordance with a subpoena issued by an officer or agency of the United States under any statute of the United States except as otherwise provided by statute or by rules of the district court or by order of the court in the proceedings, and (2) to appeals in such proceedings."

Clause (1) "allows full recognition of the fact that the rigid application of the rules in the proceedings themselves may conflict with the summary determination desired * * * it is drawn so as to permit application of any of the rules in the proceedings whenever the district court deems them helpful." (Citing Committee Note of 1946 to this subdivision). Subject to this proposition, the Federal Rules are generally applicable to the district court enforcement proceeding; but they do not apply in the administrative proceeding itself.

Id. at 4442. However, Rule 45, which regulates the use of subpoenas in federal court, does not apply, as the enforcement by the district courts of administrative subpoenas is regulated by appropriate statutes. 5 Moore's Federal Practice ¶¶ 45.012, 45.022 (2d ed. 1968). These rather vague pronouncements found above reflect a definite tension between the need to allow administrative agencies to investigate matters fully without undue hinderance in the federal courts and a need to allow the investigated party some recourse at this early stage to check any abuses by that agency. An accommodation of these two needs is the focal point of the reported cases dealing with the enforcement of administrative subpoenas.

A large number of the reported cases in this area have dealt with the enforcement of a tax summons under 26 U.S.C. §§ 7602 and 7402(b). The Fifth Circuit has recently summarized the appropriate guidelines.

We do not find that there was any prejudice in this procedure, as the information which Venn sought would have been irrelevant to the issues in this proceeding. This does not mean that discovery would always be improper in cases of this nature. Citing a case where discovery of a limited nature was proper. Although a footnote in United States v. Powell * * * indicates that the Federal Rules of Civil Procedure apply to proceedings to enforce a tax summons, we have

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