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UNION BAG-CAMP PAPER CORP. v. FTC

September 2, 1964

UNION BAG-CAMP PAPER CORPORATION, a corporation, Plaintiff,
v.
The FEDERAL TRADE COMMISSION, Paul Rand Dixon, Chairman, Sigurd Anderson, Philip Elman, A. Everette Mac Intyre, and John J. Reilly, Defendants



The opinion of the court was delivered by: COOPER

Plaintiff herein is respondent in a proceeding presently before the Federal Trade Commission, entitled 'In the Mater of Union Bag-Camp Paper Corporation,' FTC Docket No. 7946 (hereinafter called the 'Commission proceeding'), alleging violation of Section 7 of the Clayton Act (15 U.S.C. § 18) by reason of certain mergers and acquisitions by plaintiff.

During the Commission proceeding, plaintiff made several applications for issuance by the Commission of special reports pursuant to Section 6(b) of the Federal Trade Commission Act (15 U.S.C. § 46(b), hereinafter called 'Section 6(b)'), to obtain information alleged to be necessary for the defense by plaintiff of the charges asserted against it in the Commission proceeding. These applications were denied by defendant, notwithstanding the fact that on two occasions similar reports were issued at the behest of counsel for defendant.

Thus far in the Commission proceedings, defendant has called 50 witnesses during the course of 34 days of hearings and 3,649 pages of record have been taken. Commission counsel have not completed the presentation of their case.

 Plaintiff alleges that in denying it access to 6(b) reports, the Commission violated the Administrative Procedure Act (hereinafter 'A.P.A.') and the Due Process Clause of the Constitution.

 Plaintiff moves here for summary judgment. Defendant cross-moves for summary judgment and for dismissal of the complaint.

 JURISDICTION

 Jurisdiction rests upon Section 10(e) of the A.P.A. (5 U.S.C. § 1009), and the Judicial Code (28 U.S.C. §§ 1331, 1337). Section 10(e) provides, in part, that

 'Except so far as (1) statutes preclude judicial review or (2) agency action is by law committed to agency discretion. '(e) Scope of review. So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any agency action. It shall (A) compel agency action unlawfully withheld or unreasonably delayed; and (B) hold unlawful and set aside agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; * * *.'

 Plaintiff alleges that under Section 6(b) of the F.T.C. Act and Section 6(c) of the A.P.A., issuance of 6(b) special reports to private litigants is mandatory, and that by its denials of plaintiff's requests for these reports the Commission violated this alleged mandate. Plaintiff further contends such violation constitutes a denial of due process within the meaning of the Fifth Amendment. (U.S.Const. Amend. V).

 Section 10, in its entirety, compels us to review the acts here complained of to determine whether there exists facts sufficient to support the jurisdictional criteria of Section 10. Deering Milliken Inc. v. Johnston, 295 F.2d 856 (4th Cir. 1961).

 Plaintiff complains of 'Suffering legal wrong because of * * * agency action' (10(a)); that the agency action, in denying the relief is 'final' and that 'there is no other adequate remedy in any court.' (10(c)); that the 6(b) reports were 'unlawfully withheld,' and that the agency action was 'arbitrary, capricious, an abuse of discretion' and 'otherwise not in accordance with law' and that it was 'contrary to' plaintiff's 'constitutional right.' (10(e)). If the facts support these allegations, judicial review is certainly proper.

 Defendant would relegate plaintiff to review under Section 11 of the Clayton Act (15 U.S.C. § 21), which provides that all review of cease and desist orders shall be heard by the appropriate Court of Appeals. While that section allows the Court of Appeals to order additional evidence to be taken it may only do so if the party 'shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the proceeding before the commission * * *.'

 If we are satisfied that the Commission has violated a statutory mandate here, we will not require plaintiff to wait until it is ordered to cease and desist from violating Section 7 of the Clayton Act before obtaining redress.

 Viewing plaintiff's allegations as a two pronged attack on the Commissions' action, we must also consider the due process claim as it relates to our jurisdiction here.

 Assuming that the denial of 6(b) reports was so violative of plaintiff's rights as to constitute a fundamental denial of due process, the matter is presently ripe for judicial review. Leedom v. Kyne, 358 U.S. 184, 79 S. Ct. 180, 3 L. Ed. 2d 210 (1958). The 'narrowing' of the holding in Leedom by Boire v. The Greyhound Corp., 376 U.S. 473, 84 S. Ct. 894, 11 L. Ed. 2d 849 (1964) does not change this result. Plaintiff is claiming that the agency action was in direct derogation of the alleged statutory command to supply it with 6(b) reports. Clearly, the instant action falls within the ambit of both Leedom and Boire as one involving the interpretation and construction of a statute.

 Reliance is also placed on Amos Treat & Co. v. Securities E.C., 113 U.S.App.D.C. 100, 306 F.2d 260 (1962). There, the Court held that the administrative process must be attended 'not only with every element of fairness but with the very appearance of complete fairness.' (at p. 267). Here, the Hearing Examiner has granted relief to one adversary by allowing it access to 6(b) reports while denying it to the other, with the result, claims plaintiff, that the entire Commission proceeding will be vitiated unless corrected here.

 In order to decide ultimately the jurisdictional question, it is necessary to inquire into the facts going to the merits of plaintiff's claim. If we are to follow the precepts set forth above, we must determine whether the acts complained of constitute a breach of a mandatory duty or such a denial of fundamental due process as to compel us to review the Commission's determination. Tileston v. Ullman, 318 U.S. 44, 63 S. ...


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