Marquette Cement Mfg. Co. v. Federal Trade Commission

• Decision Date: 27 March 1945
• Docket Number: No. 8371.,8371.
• Citation: 147 F.2d 589
• Parties: MARQUETTE CEMENT MFG. CO. v. FEDERAL TRADE COMMISSION.
• Court: U.S. Court of Appeals — Seventh Circuit

147 F.2d 589 (1945)

MARQUETTE CEMENT MFG. CO. v. FEDERAL TRADE COMMISSION.

No. 8371.

Circuit Court of Appeals, Seventh Circuit.

January 29, 1945.

Rehearing Denied March 27, 1945.

Edward A. Zimmerman, Harold W. Norman, and William R. Engelhardt, all of Chicago, Ill., and Roscoe Pound of Cambridge, Mass., for petitioner.

Walter B. Wooden, Asst. Chief Counsel, of Washington, D. C., for respondent.

Before MAJOR and KERNER, Circuit Judges, and BRIGGLE, District Judge.

MAJOR, Circuit Judge.

There are pending in this court numerous petitions to review a cease and desist order entered by the Federal Trade Commission on July 17, 1943. On July 31, 1944, this court entered two orders denying certain applications to adduce additional evidence, without prejudice to the right of renewal upon hearing on the merits. Included in such applications was that of the Marquette Cement Manufacturing Company (instant petitioner) to adduce additional evidence in support of its motion to recuse the members of the Commission from passing on the issues presented by the Commission's complaint.

On November 14, 1944, petitioner filed its motion requesting this court to reconsider and reverse its orders of July 31, 1944, insofar as they relate to petitioner's right to adduce additional evidence in support of its contention that the Commission was disqualified. We have also been urged to decide in advance of a hearing upon the merits petitioner's contention that the Commission was disqualified. Obviously, if petitioner's contention in this respect is sustained, it would follow that the Commission's cease and desist order would have to be vacated and set aside. We have concluded that it would be appropriate to hear and decide in advance this issue thus raised. We have, therefore, heard oral argument on this issue and have been favored with extensive briefs pertaining thereto.

Petitioner and seventy-four other producers of Portland cement were charged, under § 5 of the Federal Trade Commission Act, 15 U.S.C.A. § 45(b), by a complaint filed July 2, 1937, with engaging in unfair competition by entering into a combination among themselves through an agreement to employ and the actual employment of "what is known as a multiple basing point system of pricing." The substance of the charge is that by the employment of this system such cement producers violated the anti-trust laws, particularly the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1-7, 15 note, and Clayton Act, 38 Stat. 730. Such charges were denied, and upon the issue thus formed hearings were had which extended from December 1, 1937, to November 29, 1940, in which Marquette actively participated. On December 16, 1941, more than a year after the taking of testimony had been concluded, Marquette in its brief asserted for the first time that the Commission had prejudged the issues, and in support of such assertion set forth excerpts from certain publications of the Commission published both before and after the commencement of the proceedings. Not until May of 1942 and at the time of oral argument before the Commission did Marquette formally charge the Commission with being disqualified.

At that time, it filed what it termed a petition, motion and supporting affidavit by Marquette's counsel "to recuse the Federal Trade Commission from passing upon the issues." There were also submitted, in support of Marquette's petition, twenty-three exhibits, which in the main consisted of reports made by the Commission either to the Congress or to the President, as is authorized by § 6 of the Trade Commission Act, 15 U.S.C.A. § 46. These reports covered a period from 1927 to 1941, and had to do largely with the Commission's theory as to the result produced by use of the basing point price system and variations of such system, such as the multiple basing point price system. They treated of the use of such price systems by industry generally, and particularly the steel industry. They also disclose that the Commission regarded the cement industry in the same category, as far as price fixing was concerned, as steel and other industries.

The Commission denied Marquette's motion to recuse and also denied leave to introduce Marquette's exhibits offered in support thereof. In making up the record, however, which has been certified to this court, the exhibits have been included and are before us. In view of this situation, we think there is no need of a formal ruling upon the Commission's refusal to admit such exhibits in evidence. Furthermore, we think that a detailed statement of their contents is unnecessary. The most that can be said of them is that the Commission from numerous investigations had formed an opinion that the basing point price system, as well as the multiple system, was illegal. We think it is also fairly inferable that the Commission had formulated such an opinion concerning the cement industry. We may assume, and for the purpose of the question before us do assume, that such was the case.

The basis of the charge that the Commission was disqualified from hearing, trying and passing upon the issues involved was that it "is not a tribunal free from bias and prejudice," and that prior to the filing of the complaint and subsequent thereto it had expressed a "prejudgment of the issues in this cause and was prejudiced and biased against the Portland cement industry generally," and that such industry, and particularly Marquette, could not receive a fair and impartial hearing. Petitioner, in its brief filed in this court, elaborates upon its charge that the Commission was disqualified and states:

"By that we mean that by the rules of fair play, which men of honor have followed since the dawn of civilization, * * * it has consistently been held to be fundamental and indispensable that triers of the facts shall be unbiased and nonpartisan."

The Commission, in support of its order refusing to disqualify itself, relies upon three propositions: (1) That petitioner's motion to disqualify, long after the hearings had been completed and after briefs had been submitted, was not made in apt time; (2) the facts on which petitioner relies do not constitute disqualification; and (3) the law does not permit disqualification on the basis of the facts relied on by petitioner.

As hereinafter decided, we think the Commission could not be disqualified in the manner attempted, but assuming it could be, we are of the view that the attempt to disqualify was made too late. If we were disposed to rest our decision merely upon this basis, we would set forth the substance of the affidavit made by counsel for Marquette and attached to its petition to recuse the Commission, which is relied upon as showing the reason or excuse for the delay. Inasmuch, however, as we shall consider the merits of the charge, we think it is sufficient to observe that we have read counsel's affidavit and are not impressed with the reasons assigned for the tardiness in making the motion to recuse.

On the merits, we know of no case which has expressly passed upon the question as to whether an administrative agency created by Congress can be required to disqualify itself because of bias, prejudice or prejudgment. The cases with closest analogy are those concerned with the disqualification of a judge. In sharp contrast, however, is the fact that Congress in creating the Federal Trade Commission made no provision for the disqualification of its members, while it has made such provision for the disqualification of a judge. Also, it seems plain that if the statutory reasons for disqualifying a judge be applied to the Federal Trade Commission, the showing in the instant case was insufficient for the reason that neither the motion nor affidavit contained an allegation that the prejudice or bias was "personal."

§ 21 of the Judicial Code, 28 U.S. C.A. § 25, provides for the disqualification of a judge upon the filing of an affidavit that such judge "has a personal bias or prejudice either against him (affiant) or in favor of an opposite party to the suit." It also provides that the affidavit shall state the reasons for the belief that such bias or prejudice exists, and that the affidavit must be filed ten days before the beginning of the term of court or good cause shown for failure to file within such time. It is also required that the affidavit be accompanied by a certificate of a counsel of record that such affidavit and application are made in good faith. That this section of the statute must be literally and strictly observed in order to disqualify a judge is not open to question. Cf. Ex Parte American Steel Barrel Co., 230 U.S. 35, 43, 33 S.Ct. 1007, 57 L.Ed. 1379. It has been held that the bias or prejudice alleged must be "personal," and that a mere prejudgment of the case is not sufficient. Henry v. Speer, 5 Cir., 201 F. 869, 872; Price v. Johnston, 9 Cir., 125 F.2d 806, 812. That the affidavit of personal bias and prejudice shall not be filed unless accompanied by a "certificate of counsel." Beland v. United States, 5 Cir., 117 F.2d 958, 960; Mitchell v. United States, 10 Cir., 126 F.2d 550, 552. That the affidavit of disqualification must be filed in apt time. Scott v. Beams, 10 Cir., 122 F.2d 777, 789; Refior v. Lansing Drop...