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FTC v. ORTON

July 10, 1959

FEDERAL TRADE COMMISSION, Petitioner,
v.
Douglas T. ORTON, Secretary, The Borden Company, Respondent



The opinion of the court was delivered by: DAWSON

See 177 F.Supp. 241.

This is a motion, pursuant to the provisions of § 9 of the Federal Trade Commission Act, 15 U.S.C.A. § 49, for an order requiring respondent to appear before the petitioner's hearing examiner and produce certain documentary material referred to in a subpoena duces tecum served upon the respondent. The only issue relates to that portion of the subpoena duces tecum which would require respondent to produce

 'all schedules submitted to the Bureau of the Census on Form MC 20C by all plants, manufacturing establishments or units owned or controlled by your concern in conjunction with the 1954 census of manufacturers together with copies of all correspondence clarifying or amending said schedules or reports.'

 It is to be noted that the subpoena duces tecum does not require the respondent to submit any work papers or other material used by the respondent in compiling the information submitted to the Bureau of the Census, or file copies thereof, but requires production of the actual schedules submitted to the Bureau, together with all correspondence clarifying or amending said schedules or reports.

 Respondent contends that this subpoena duces tecum calls for confidential and privileged data and it cannot be compelled to produce the documents required.

 It is to be noted that Form MC 20C has at the top of it the following statement:

 'Confidential -- This report should be returned within 30 days of its receipt. This report is required by Act of Congress (13 U.S.C. § 131). Your report is confidential and only sworn Census employees will have access to it. It cannot be used for purposes of taxation, investigation or regulation.'

 The subpoena duces tecum has been issued in connection with a proceeding now pending before the Federal Trade Commission in which the Federal Trade Commission alleges that The Borden Company and other companies have violated the provisions of the Federal Trade Commission Act and § 7 of the Clayton Act, 15 U.S.C.A. § 18. This subpoena was issued in connection with this investigation by the Federal Trade Commission by virtue of the regulatory authority of the Federal Trade Commission.

 The Federal Trade Commission has broad powers to secure information or data from companies subject to its regulatory authority. See 15 U.S.C.A. § 49. It cannot, however, require that the respondent produce the schedules submitted by it for the 1954 Census of Manufactures.

 The census was taken pursuant to the provisions of Title 13 U.S.C. § 131, providing for preparation by the Secretary of Commerce, in each fifth year, of a census of manufactures.

 Section 9 of Title 13 U.S.C., provides that neither the Secretary of Commerce, nor any other officer or employee of the Department of Commerce or bureau or agency thereof, may use the information furnished under the provisions of this title for any purpose other than the statistical purposes for which it is supplied, or 'make any publication whereby the data furnished by any particular establishment or individual under this title can be identified.'

 Where information is given under such a statute, the information so furnished is privileged. See 8 Wigmore, Evidence, § 2377 (3d ed. 1940):

 'The policy underlying the principle of § 2374 ante, is that where the Government needs information for the conduct of its functions, and the persons possessing the information need the encouragement of privacy in order to be induced freely to make full disclosure, the protection of a privilege should be accorded.

 'In that well-settled common-law application of this policy, the privilege concerned information relating to the conduct of third persons. But many situations exist where the information can best be obtained only from the person himself whose affairs are desired to be known by the Government. An attempt to do so by mere compulsion might be tedious and ineffective. And where the ultimate purpose to be served is administrative, and not penal, it may well be that the Government can afford to promise secrecy in respect ...


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