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FTC v. RUBIN

September 27, 1956

FEDERAL TRADE COMMISSION, Petitioner,
v.
William B. RUBIN, President, The Sweets Company of America, Inc. and The Sweets Company of America, Inc., a corporation, Respondents



The opinion of the court was delivered by: DIMOCK

This is an application made by the Federal Trade Commission for the enforcement of a subpoena issued by that Commission in a proceeding instituted by it for the enforcement of the provisions of section 2(d) of the Clayton Act, 15 U.S.C. § 13, 49 Stat. 1526. It is said to be made pursuant to section 9 of the Federal Trade Commission Act, 15 U.S.C. § 49. The application is resisted on the ground that the Federal Trade Commission has no power to issue a subpoena in a proceeding before it for the enforcement of the Clayton Act.

The Clayton Act prescribes a single self-contained procedure for the enforcement of its provisions, whether by the Interstate Commerce Commission, the Federal Communications Commission, the Civil Aeronautics Board, the Federal Reserve Board or the Federal Trade Commission. Respondent asserts that the Clayton Act says not a word about the exercise of the subpoena power by any of them. Petitioner denies this but argues that if there is any deficiency it is supplied in the case of proceedings before the Federal Trade Commission by section 9 of the Federal Trade Commission Act, 15 U.S.C. 49, which provides that 'for the purposes of this Act the commission * * * shall at all reasonable times have access to * * * any documentary evidence of any corporation being investigated or proceeded against; and the commission shall have power to require by subpoena * * * the production of all such documentary evidence relating to any matter under investigation.'

The decision of these questions requires I will consider them as they stood at the I will consider them as they took at the time of their adoption since the later amendments have no bearing on the questions here presented.

 The Federal Trade Commission Act was adopted on September 26, 1914, 38 Stat. 717, now 15 U.S.C. §§ 41-77. Section 5 of the Act, now 15 U.S.C. §§ 45, declared unlawful unfair methods of competition.

 In the third paragraph of that section, which is quoted in the margin, *fn1" provision was made for the institution of proceedings by and before the Federal Trade Commission against persons charged with unfair methods of competition. Detailed provisions for the conduct of such proceedings were given, including a complaint, hearing, findings, report and order to cease and desist. Until a transcript had been filed in a Circuit Court of Appeals, the commission might 'upon such notice * * * as it shall deem proper, modify or set aside' any report or order.

 The eighth paragraph of the same section 5, which is quoted in part in the margin, *fn2" prescribed the manner of service of 'complaints, orders and other processes of the commission under this section' and the persons upon whom they might be served.

 Section 9 of the Act, 15 U.S.C. § 49, in its first paragraph which is quoted below, *fn3" provided for the subpoena power, saying 'for the purposes of this Act the commission, * * * shall at all reasonable times have access to * * * any documentary evidence of any corporation being investigated or proceeded against; and the commission 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.'

 Thus it was prescribed, by section 5, that the Federal Trade Commission could initiate and prosecute complaints and that 'Complaints, orders, and other processors of the commission under this section' should be served in a certain manner, and, by section 9, that the commission should have the subpoena power.

 A few days later, on October 15, 1914, the Clayton Act, 38 Stat. 730, now 15 U.S.C. §§ 12-27, 44, 29 U.S.C. § 52, was adopted.

 Sections 2, 3, 7 and 8, 15 U.S.C. 13, 14, 18 and 19, declared unlawful discrimination, transactions binding the purchaser not to use goods of a competitor, acquisition of stock to lessen competition and interlocking directorates. Section 11, now 15 U.S.C. § 21, vested authority to enforce compliance with sections 2, 3, 7 and 8 in the Interstate Commerce Commission, in the Federal Reserve Board and in the Federal Trade Commission, depending upon whether a common carrier, a bank or some other type of corporation was concerned.

 Then came the second paragraph of section 11, quoted in the margin, *fn4" which, in almost exactly the same language as used in the part of the earlier Federal Trade Commission Act quoted in footnote 1, supra, made provision for the institution of proceedings by and before the appropriate board or commission against persons charged with violation of sections 2, 3, 7 or 8 of the Clayton Act. Just as in the Federal Trade Commission Act, detailed provisions for the conduct of such proceedings were given, including a complaint, hearing, findings, report and order to cease and desist, and again it was provided that, until a transcript had been filed in a Circuit Court of Appeals, the board or commission might 'upon such notice * * * as it shall deem proper, modify or set aside' any report or order.

 The seventh paragraph of this section 11 of the Clayton Act, which is quoted in part in the margin, *fn5" in practically identical language with that used in the earlier Federal Trade Commission Act quoted in footnote 2, supra, prescribed the manner of service of 'complaints, orders, and other processes of the commission or board under this section' and the persons upon whom they might be served.

 In spite, however, of the substantial identity of the Clayton Act with the Federal Trade Commission Act insofar as concerned procedure and service of complaints, orders and processes, the Clayton Act omitted the provision contained in section 9 of the Federal Trade Commission Act granting the power to issue subpoenas.

 Petitioner says that, despite this omission, the Federal Trade Commission has the subpoena power in proceedings for the enforcement of the Clayton Act. This contention might be supported by demonstration either that the Clayton Act conferred the subpoena power on the commissions and board which were authorized to enforce it, or that the Federal ...


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