FTC v. Standard American, Inc., Misc. No. 2281.
| Decision Date | 21 July 1961 |
| Docket Number | Misc. No. 2281. |
| Citation | 195 F. Supp. 801 |
| Parties | FEDERAL TRADE COMMISSION v. STANDARD AMERICAN, INC., Standard American Construction Company, Inc., Mansville Construction, Inc., Val Worth Enterprises, Inc., and Wolf, Dorleg and Wolf, Inc. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Alan B. Hobbes, Asst. Gen. Counsel, Federal Trade Commission, by Alvin L. Berman, Washington, D. C., for petitioner.
Fox, Rothschild, O'Brien & Frankel, by Nathan L. Posner and Donald Brown, Philadelphia, Pa., for respondents.
This is a summary proceeding in which the Federal Trade Commission is applying for an order of this Court to compel the above five corporate entities and their duly authorized representatives to appear, testify and produce documentary evidence in an ex parte investigation being conducted by the Commission. The Commission has attempted to determine whether or not there has been a violation of Section 5 of the Federal Trade Commission Act, 15 U.S.C.A. § 45, pursuant to the authority vested in it under Sections 3, 5, 6 and 9 of the aforesaid Act, 15 U.S.C.A. §§ 43, 45, 46, 49. Section 9 vests to this Court the authority to compel obedience to proper orders of the Commission.
We have carefully examined the entire record, including the notes of testimony taken at hearings involving the five corporate respondents, and have considered the briefs and arguments of the litigants. The record is replete with charges and countercharges of harassment and avoidance on the part of the representatives of the Commission on the one hand and the respondents and their counsel on the other. It would serve no useful purpose to review that since, as we view the matter, the issue is a narrow one. In fact, counsel for respondents stated in Court and reaffirms in his brief the basic proposition that the Federal Trade Commission has the authority to subpoena business records and to compel his clients to produce them before an officer of the Commission. He further states that, "Any time the Federal Trade Commission wants a copy of these records I will give them every assistance available" and "Any time that the Federal Trade Commission wants to make any investigation at our place of business it is open to them * * *" He strenuously argues, however, that once he has produced the records before the Examiner he has fulfilled the requirements of the Act. He denies the right of the Commission to retain the corporate records for the purpose of making copies and most particularly, their right to remove them from Philadelphia to Washington, D. C. for examination and appraisal.
The basic issue here, therefore, is whether Section 9 of the Federal Trade Commission Act gives the Commission the authority and power to subpoena the records and having subpoenaed them, take them into their custody for investigatory purposes either in the City of Philadelphia where the respondents' place of business is located, or remove them physically to Washington, D. C.
Section 9 of the Act provides two methods of conducting investigations: (1) "* * * the commission * * * shall * * * have access to, for the purpose of examination, and the right to copy any documentary evidence of any corporation being investigated or proceeded against" and (2) "* * * 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." Obviously, the Act anticipates the testimony of witnesses and the production of the documentary evidence. In the case before us the Commission proceeded under the latter provision. The rules of the Commission also provide (§ 1.34(b)) 15 U.S.C.A. following section 45:
"Investigational hearings may be held * * * for the purpose of hearing the testimony of witnesses and receiving documents and other data relating to any subject under investigation * * *"
and further provide that "Any person required * * * to submit documentary evidence shall be entitled to retain or, on payment of lawfully...
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FTC v. Markin
...the Commission showed a willingness to compromise on the mechanics of compliance.5 In this situation, the District Court concluded at 195 F.Supp. 801, 803 and was affirmed by the Third Circuit in F.T.C. v. Standard American, supra "We will accordingly enter an Order, but point out that if i......
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FTC v. Standard American, Inc.
...in question; and any failure to obey such order of the court may be punished by such court as a contempt thereof." 2 Reported at 195 F.Supp. 801 (E.D.Pa. 1961). 3 Standard American Construction Company, Inc. was a party to the proceedings below and was included in the District Court's Order......
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Wirtz v. LOCAL NO. 502, INTERNATIONAL HOD CARRIERS, ETC.
...magnitude and authority of this statute also and appears to be in accord with the aforementioned cases. See F. T. C. v. Standard American, Inc., 195 F.Supp. 801 (E.D.Penn.1961), affd. 306 F.2d 231 (3 Cir. 1962). The last mentioned case set out the requirements to be met by a respondent chal......