Top Value Meats, Inc. v. F. T. C., 77-1799
| Decision Date | 16 November 1978 |
| Docket Number | No. 77-1799,77-1799 |
| Parties | 1978-2 Trade Cases 62,362 TOP VALUE MEATS, INC.; Guaranteed Quality Meats, Inc.; Twin City Beef Company; Prime Meats, Inc.; Freezer World, Inc.; and Midwestern Meat Processors, Inc., Appellants, v. FEDERAL TRADE COMMISSION; Louis A. Engman; Paul Rand Dixon; Mayo J. Thompson; M. Elizabeth Hanford; Stephen Nye; and F. Kelly Smith, Appellees. UNITED STATES of America, Appellee, v. GUARANTEED QUALITY MEATS, INC., Appellant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Patrick Faltico of Faltico, Bertram, Bony & Associates, Kansas City, Mo., argued, for appellant; James Wyrsch, Kansas City, Mo., on brief.
Denis E. Hynes, Atty., Federal Trade Commission, Washington, D. C., argued, for appellees.
Ronald S. Reed, Jr., U. S. Atty., E. Eugene Harrison, Asst. U. S. Atty., Kansas City, Mo., John H. Shenefield, Asst. Atty. Gen., Antitrust Div., Charles R. McConachie, Chief, Consumer Affairs Section, James A. Calderwood, Atty., Consumer Affairs Section, U. S. Dept. of Justice, Washington, D. C., on brief, for appellees; Michael N. Sohn, Gen. Counsel, Gerald P. Norton, Deputy Gen. Counsel, W. Dennis Cross, Asst. Gen. Counsel, F. T. C., Washington, D. C., of counsel.
Before GIBSON, Chief Judge, HENLEY, Circuit Judge, and EISELE, Chief District Judge. *
This is an appeal from a summary judgment rendered by the United States District Court for the Western District of Missouri (Senior District Judge William H. Becker) in favor of the Federal Trade Commission in litigation between the Commission and six corporations which are or have been engaged in the freezer meat business in the Kansas City area. 1 The corporations are identified as Top Value Meats, Inc.; Guaranteed Quality Meats, Inc.; Twin City Beef Company; Prime Meats, Inc.; Freezer World, Inc.; and Midwestern Meat Processors, Inc.
In early 1974 the Commission, acting under the authority of § 6 of the Federal Trade Commission Act, 15 U.S.C. § 46, launched an investigation to determine whether fraudulent and deceptive practices were being carried on in the freezer meat industry in violation of § 5 of the Act, 15 U.S.C. § 45. The corporations above mentioned were subjects of the investigation, and the investigation extended to other corporations and to an individual, Patrick R. Faltico, a Kansas City lawyer and business man who has been closely connected with the freezer meat business in Missouri and Illinois. 2
In late 1974 the Commission called on the meat companies that have been mentioned to file special reports, as provided by § 6(b) of the Act, setting out under oath detailed information with respect to the organization, business, conduct, practices, and management of the respective meat companies and also describing their relationships with other business enterprises.
One of the companies, Guaranteed Quality Meats, Inc. (Guaranteed), filed a motion with the Commission to quash the order calling for a special report from Guaranteed. The Commission denied that motion. None of the other companies sought any administrative relief from the report requirements, and none of the six companies complied with the requirements within the time prescribed by the Commission.
In due course the Commission issued to the respective companies notices of default demanding that they comply with the report requirements within thirty days. The companies did not comply with those notices, and their failure triggered at the end of the thirty day period the per diem penalties of $100.00 per day prescribed by the third paragraph of § 10 of the Act, 15 U.S.C. § 50.
Before any government action had been taken to enforce the report requirements or to collect accrued and accruing penalties the meat companies filed six separate suits in the district court seeking to enjoin the enforcement of the report requirements. The defendants in the cases were the Commission itself, the individual members of the Commission and the Commission's staff attorney who was handling the investigation at the time. We will refer to the defendants collectively as the "Commission." 3
The Commission answered the complaints and denied that the plaintiffs were entitled to any relief. The Commission also filed counterclaims seeking enforcement of its orders and the collection of the $100.00 per day penalties prescribed by § 10 of the Act.
For a reason that is not material here, the United States commenced an action in its own name against Guaranteed to enforce the Commission's order and to collect the per diem penalties. 4 Guaranteed answered and denied that the government was entitled to any relief and also filed a counterclaim for damages based on alleged abuse of process.
After various preliminary proceedings, the cases, or at least the first six of them, were finally submitted to the district court on motions for summary judgment pursuant to Fed.R.Civ.P. 56. 5
Summary judgment in favor of the Commission was granted on November 27, 1976. The complaints of the meat companies were dismissed, and the Commission was granted judgment on its counterclaims. The judgments in favor of the Commission were to the effect that the meat companies were to comply with the report requirements by a date set by the court and were to pay the § 10 per diem penalties.
The meat companies sought post-judgment relief on a number of grounds. One of their contentions was that the Commission's investigation had not been undertaken in good faith but rather for the sole and impermissible purpose of developing evidence to be used in possible criminal prosecutions of the meat companies and some of the individuals in control of them, including Faltico and John Patrick Cuezze who was the president and ostensibly the sole stockholder of Guaranteed.
Judge Becker held an evidentiary hearing on the particular contention just mentioned and found it to be without merit. We find it convenient at this point to say that the judge's finding has substantial evidentiary support, is not clearly erroneous, and is upheld by us. Other questions in the case will be considered in more detail.
The post-judgment motions of the meat companies were finally overruled by the district court on July 1, 1977. Since the government and one of its agencies were involved, the companies had sixty days within which to appeal to this court. Fed.R.App.P. 4(a). That sixty day period expired on August 30, 1977.
On that day the meat companies filed timely notice of appeal in the cases wherein they had been plaintiffs. But, for some reason no appeal was taken by Guaranteed in the case in which it had been a defendant.
On September 9 the meat companies, including Guaranteed, filed an amended notice of appeal for the purpose of making Guaranteed an appellant in the seventh case in which case it had been the defendant.
The amended notice was filed after the expiration of the sixty day appellate period. There is no suggestion that the meat companies ever received any permission from the district court or from this court to amend their original notice or notices of appeal, and there is no suggestion that Guaranteed's time to appeal in No. 75CV578-W-2-3 was ever extended by the district court or that any extension of time was ever requested.
The Federal Trade Commission Act was passed originally in 1914 and appears as 15 U.S.C. § 41 Et seq. The Act has been amended frequently, and it was substantially amended in 1973 and again in 1975. 6 Those amendments taken together substantially broadened the Commission's regulatory jurisdiction and also increased the powers of the Commission to enforce the provisions of the Act and of its orders in actions prosecuted or defended in its own name without recourse to the Department of Justice.
As far as jurisdiction is concerned, the original Act limited the Commission's jurisdiction to business enterprises that were engaged "in interstate or foreign commerce." The 1975 amendments extended the Commission's jurisdiction to businesses, the activities of which were either "in" or which "affected" interstate or foreign commerce. P.L. 93-637, § 201(a), 15 U.S.C. § 45(a) (1978). 7
We take up, first, the belated attempt of the meat companies to join Guaranteed as an appellant in the seventh case in which the government was plaintiff and Guaranteed was the defendant and counter-claimant. In view of the procedural chronology that has been set out, we consider that Guaranteed's appeal in the seventh case is untimely. Moreover, we do not think that we have an appealable order in that case.
The counterclaim was based on alleged abuse of process by the government and sounded in tort. Prior to filing the counterclaim Guaranteed made no effort to obtain administrative relief as required by the Federal Tort Claims Act, 28 U.S.C. § 2671 Et seq., § 2675. When the government moved to dismiss the counterclaim for that reason, the district court severed the counterclaim from the principal claim and gave the counterclaim a separate docket sub-number. And the district court also called on Guaranteed to show cause why the counterclaim should not be dismissed.
The order just mentioned was entered on October 26, 1976, and as far as we can tell from what is before us, that was the last order entered in the seventh case. We are advised that the counterclaim in that case is still pending under its docket sub-number, and we are not advised that any judgment on the principal claim of the government in that case has ever actually been entered. The principal order of the district court which produced this appeal originally was filed in late November, 1976. That order refers specifically to the first six cases, including the one in which Guaranteed was plaintiff, but it makes no mention of the seventh case in which Guaranteed was the defendant.
We assume, however, at least for purposes of discussion, that the November, 1976 order and...
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