United States v. Morton Salt Co United States v. International Salt Co, Nos. 273 and 274

CourtUnited States Supreme Court
Writing for the CourtJACKSON
PartiesUNITED STATES v. MORTON SALT CO. UNITED STATES v. INTERNATIONAL SALT CO
Docket NumberNos. 273 and 274
Decision Date06 February 1950

338 U.S. 632
70 S.Ct. 357
94 L.Ed. 401
UNITED STATES

v.

MORTON SALT CO. UNITED STATES v. INTERNATIONAL SALT CO.

Nos. 273 and 274.
Argued Dec. 14, 1949.
Decided Feb. 6, 1950.

[Syllabus from pages 632-634 intentionally omitted]

Page 634

Mr. Philip Elman, Washington, D.C., for petitioner.

Mr. L. M. McBride, Chicago, Ill., for Morton Salt Co.

Mr. Frederic R. Sanborn, New York City, for International Salt Co.

Mr. Justice JACKSON delivered the opinion of the Court.

This is a controversy as to the power of the Federal Trade Commission to require corporations to file reports showing how they have complied with a decree of the Court of Appeals enforcing the Commission's cease and desist order, in addition to those reports required by the decree itself.

Page 635

Proceedings under § 5 of the Federal Trade Commission Act1 culminated in a Commission order requiring respondents Morton Salt Company and International Salt Company, together with eighteen other salt producers

Page 636

and a trade association, to cease and desist from stated practices in connection with the pricing, producing and marketing of salt. The Court of Appeals for the Seventh Circuit affirmed the order with modifications and commanded compliance. Salt Producers Ass'n v. Federal Trade Comm., 134 F.2d 354. The decree directed that reports of the manner of compliance be filed with the Commission within ninety days, but it reserved jurisdiction 'to enter such further orders herein from time to time as may become necessary effectively to enforce compliance in every respect with this decree and to prevent evasion thereof.' The decree expressly was 'without prejudice to the right of the United States, as provided in Section 5(l) of the Federal Trade Commission Act, to prosecute suits to recover civil penalties for violations of the said modified order to cease and desist hereby affirmed, and without prejudice to the right of the Federal Trade Commission to initiate contempt proceedings for violations of this decree.' The reports of compliance were subsequently filed and accepted, and there the matter appears to have rested for a little upwards of four years.

On September 2, 1947, the Commission ordered additional and highly particularized reports to show continuing compliance with the decree. This was done without application to the court, was not authorized by any provision of its decree, and is not provided for in § 5 of the statute under which the Commission's original cease and desist order had issued. The new order recited that it was issued on the Commission's own motion pursuant to its published Rule of Practice No. XXVI2 and the authority granted by subsections (a) and (b) of § 6 of the Trade Commission Act. It ordered these and other parties restrained by the earlier decree to file within thirty days 'additional reports showing in detail the

Page 637

manner and form in which they have been, and are now, complying with said modified order to cease and desist and said decree.' It demanded of each producer a 'complete statement' of the 'prices, terms, and conditions of sale of salt, together with books or compilations of freight rates used in calculating delivered prices, price lists and price announcements distributed, published or employed in marketing salt from and after January 1, 1944.' From the Salt Producers Association it required information as to its activities and services. The Association and some of the producers reported satisfactorily. These two respondents did not. Instead, each informed the Commission in general terms that it had complied with the decree in the manner previously reported, but that it doubted the Commission's jurisdiction to require further reports and declined to supply the particulars demanded. Neither asked any hearing or made objection to the scope of the order.

The Commission next gave respondents notices asserting their default and calling attention to penalties provided in § 10 of the Act. Neither respondent asked any hearing on the notice of default. These suits were then commenced in the name of the United States in District Court under §§ 9 and 10 of the Trade Commission Act, asking mandatory injunctions commanding respondents to report as directed, together with judgment against each for $100 per day while default continued. Respondents answered. Both sides moved for summary judgments. The court found no dispute as to material facts and dismissed the complaints for want of jurisdiction. 80 F.Supp. 419. The Court of Appeals, by divided vote, affirmed. 174 F.2d 703. We granted certiorari, 338 U.S. 857, 70 S.Ct. 100, because the case involved issues of some importance to enforcement of the Act and of court decrees under it and under other Acts which provide similar methods to enforce orders of administrative bodies.

Page 638

The Government's suits and the Commission's order are challenged upon a variety of grounds, not all of which were considered by the Court of Appeals. They include contentions that (1) the order constitutes an interference with the decree and an invasion of the powers of the Court of Appeals; (2) the Commission's Rule XXVI is ultra vires and violates the Federal Administrative Procedure Act, 60 Stat. 237, 5 U.S.C. § 1001 et seq., 5 U.S.C.A. § 1001 et seq.; (3) the procedure is unauthorized by those sections of the Act on which it is based; (4) it is novel and arbitrary and violates the Fourth and Fifth Amendments to the Constitution. For reasons given, we reject each of these contentions.

I. Invasion of Court of Appeals Jurisdiction.

The respondents' case and the decision below are rested heavily on this argument that the Commission is invading the province of the judiciary. The Court of Appeals held that the Commission's order of September 2, 1947, represented an unauthorized attempt to enforce that court's decree. It pointed out that the statute had made the court's own jurisdiction of the proceeding 'exclusive' and its own decree final. It considered that 'every vestige of jurisdiction' (174 F.2d 703, 706) over that subject was 'firmly and exclusively lodged in (the) Court of Appeals.' It noted that it had required filing of only the original compliance reports, and that it had protected its jurisdiction by reserving power to enter further orders necessary to enforce compliance and prevent evasion. It thought that the effect of the Commission's proceedings was to assert 'such jurisdiction to reside elsewhere.'

It seems conceded, however, that some power or duty, independently of the decree, must still have resided in the Commission.3 Certainly entry of the court decree did

Page 639

not wholly relieve the Commission of responsibility for its enforcement. The decree recognized that. It left to the Commission the right and hence the responsibility 'to initiate contempt proceedings for the violation of this decree.' This must have contemplated that the Commission could obtain accurate information from time to time on which to base a responsible conclusion that there was or was not cause for such a proceeding. The decree also required the original report showing the manner and form of each respondent's compliance to be filed, not with the court but with the Commission. Presumably the Commission was expected to scrutinize it and, if insufficient on its face, to reject it and move the court to take notice of the default. And the duty likewise was left upon the Commission to move the court if any respondent made a false report. The duty would appear to be the same if a temporary compliance were truly reported but conduct resumed which would violate the decree. In addition, the Trade Commission has a continuing duty to prevent unfair methods of competition and unfair or deceptive acts or practices in commerce. That responsibility as to all within the coverage of the Act is not suspended or exhausted as to any violator whose guilt is once established.

Page 640

If the Commission had petitioned the court itself to order additional reports of compliance, it could properly have been required to present some evidence of probable violation to overcome the 'presumption of legality,' of innocence, and of obedience to the law which respondents here urge. Courts hesitate to alter or supplement their decrees except the need be proved as well as asserted. Evidence the Commission did not have; it had at most a suspicion, or let us say a curiosity as to whether respondents' reported reformation in business methods was an abiding one.

Must the decree, after a single report of compliance, rest upon respondents' honor unless evidence of a violation fortuitously comes to the Commission? May not the Commission, in view of its residual duty of enforcement affirmatively satisfy itself that the decree is being observed? Whether this usurps the courts' own function is, we think, answered by consideration of the fundamental relationship between the courts and administrative bodies.

The Trade Commission Act is one of several in which Congress, to make its policy effective, has relied upon the initiative of administrative officials and the flexibility of the administrative process. Its agencies are provided with staffs to institute proceedings and to follow up decrees and police their obedience. While that process at times is adversary, it also at times is inquisitorial. These agencies are expected to ascertain when and against whom proceedings should be set in motion and to take the lead in following through to effective results. It is expected that this combination of duty and power always will result in earnest and eager action but it is feared that it may sometimes result in harsh and overzealous action.

To protect against mistaken or arbitrary orders, judicial review is provided. Its function is dispassionate and disinterested adjudication, unmixed with any concern as

Page 641

to the success of either prosecution or defense. Courts are not expected to...

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907 practice notes
  • United States v. New Orleans Public Serv., Inc., Civ. A. No. 73-1297.
    • United States
    • United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
    • November 16, 1979
    ...records, the subpoena does not violate the fourth amendment, as long as its scope is properly limited. United States v. Morton Salt Co., 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 401 (1950); Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494, 90 L.Ed. 614 (1946); see FTC v. Ame......
  • United States v. Bonnell, Civ. No. 4-78-190
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • December 27, 1979
    ...on suspicion that the law is being violated, or even just because it wants assurance that it is not." United States v. Morton Salt Co., 338 U.S. 632, 642-44, 70 S.Ct. 357, 94 L.Ed. 401 (1950). While the power of the Commissioner of Internal Revenue derives from a different body of statutes,......
  • Shell Oil Co. v. Babbitt, Civil Action No. 95-492 MMS.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Delaware)
    • November 14, 1996
    ...records Page 806 and undertakes investigatory functions related to its responsibilities is very broad. United States v. Morton Salt Co., 338 U.S. 632, 652, 70 S.Ct. 357, 369, 94 L.Ed. 401 (1950) (holding "it is sufficient if the inquiry is within the authority of the agency, the demand is n......
  • Tavoulareas v. Washington Post Co., No. 83-1688
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 15, 1984
    ...with the law and the public interest. Id. at 65-66, 94 S.Ct. at 1519-1520 (citations omitted) (quoting United States v. Morton Salt Co., 338 U.S. 632, 651-52, 70 S.Ct. 357, 368-69, 94 L.Ed. 401 (1950)). We thus conclude that while corporations do enjoy privacy protection under the fourth am......
  • Request a trial to view additional results
889 cases
  • United States v. New Orleans Public Serv., Inc., Civ. A. No. 73-1297.
    • United States
    • United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
    • November 16, 1979
    ...records, the subpoena does not violate the fourth amendment, as long as its scope is properly limited. United States v. Morton Salt Co., 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 401 (1950); Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494, 90 L.Ed. 614 (1946); see FTC v. Ame......
  • United States v. Bonnell, Civ. No. 4-78-190
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • December 27, 1979
    ...on suspicion that the law is being violated, or even just because it wants assurance that it is not." United States v. Morton Salt Co., 338 U.S. 632, 642-44, 70 S.Ct. 357, 94 L.Ed. 401 (1950). While the power of the Commissioner of Internal Revenue derives from a different body of statutes,......
  • Shell Oil Co. v. Babbitt, Civil Action No. 95-492 MMS.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Delaware)
    • November 14, 1996
    ...records Page 806 and undertakes investigatory functions related to its responsibilities is very broad. United States v. Morton Salt Co., 338 U.S. 632, 652, 70 S.Ct. 357, 369, 94 L.Ed. 401 (1950) (holding "it is sufficient if the inquiry is within the authority of the agency, the demand is n......
  • Tavoulareas v. Washington Post Co., No. 83-1688
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 15, 1984
    ...with the law and the public interest. Id. at 65-66, 94 S.Ct. at 1519-1520 (citations omitted) (quoting United States v. Morton Salt Co., 338 U.S. 632, 651-52, 70 S.Ct. 357, 368-69, 94 L.Ed. 401 (1950)). We thus conclude that while corporations do enjoy privacy protection under the fourth am......
  • Request a trial to view additional results
3 books & journal articles
  • Table of authorities
    • United States
    • Introduction to environmental law: cases and materials on water pollution control - 2d Edition
    • July 23, 2017
    ...States v. Mead Corp., 533 U.S. 218 (2001) ..................................................... 176 United States v. Morton Salt Co., 338 U.S. 632 (1959)...............................................603 United States v. Moss Am., 78 F.R.D. 214 (E.D. Wis. 1978) ...................................
  • Inspections and information gathering
    • United States
    • Introduction to environmental law: cases and materials on water pollution control - 2d Edition
    • July 23, 2017
    ...to satisfy themselves that corporate behavior is consistent with the law and the public interest.” United States v. Morton Salt Co. , 338 U.S. 632, 652 (1959). Of course an information-gathering burden that may be reasonable to set a standard or detect a violation might not be reasonable me......
  • STRAIGHT PAST GO AND COLLECT $200: A LOOK INTO THE CLAYTON ACT AND VERTICAL MERGERS WITHIN CORPORATE AMERICA.
    • United States
    • Suffolk Journal of Trial & Appellate Advocacy Vol. 24 Nbr. 2, June 2018
    • June 1, 2018
    ...receives the benefit of such discrimination, or with customers of either of them ... Id.; see also United States v. Morton Salt Co., 338 U.S. 632, 635-36 (1950) (analyzing case pertaining to salt Proceedings under [section] 5 of the Federal Trade Commission Act culminated in a Commission or......

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