Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-10-05383/USCOURTS-caDC-10-05383-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

---

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 11, 2011 Decided December 13, 2011

No. 10-5383

FEDERAL TRADE COMMISSION,

APPELLEE

v.

CHURCH & DWIGHT CO., INC.,

APPELLANT

Consolidated with 11-5008

Appeals from the United States District Court

for the District of Columbia

(No. 1:10-mc-00149)

Carl W. Hittinger argued the cause for appellant. With 

him on the briefs was Earl J. Silbert.

Mark S. Hegedus, Attorney, Federal Trade Commission, 

argued the cause for appellee. With him on the brief were 

Willard K. Tom, General Counsel, David C. Shonka, Principal 

Deputy General Counsel, John F. Daly, Deputy General 

Counsel, and Leslie Rice Melman, Assistant General Counsel. 

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 1 of 12
2

R. Craig Lawrence, Assistant U.S. Attorney, entered an 

appearance.

Before: SENTELLE, Chief Judge, GINSBURG,

* Circuit 

Judge, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge: Church and Dwight Co., Inc., 

the leading manufacturer of condoms in the United States,

appeals an order of the district court enforcing a subpoena and 

an accompanying civil investigative demand (CID) issued by 

the Federal Trade Commission insofar as the FTC would

require it to produce information related to its sales of 

products other than condoms. Church & Dwight contends 

such information is not reasonably relevant to the 

Commission’s investigation into its potentially monopolistic 

practices in the market for condoms. Because the 

Commission’s inquiry lawfully extends to the possibility 

Church & Dwight is engaged in the exclusionary bundling of 

rebates to retailers that sell condoms and other Church &

Dwight products, we hold the district court did not err in 

finding that the information on products other than condoms 

was reasonably relevant to the Commission’s investigation.

Accordingly, we affirm the order enforcing the subpoena and

the CID against Church & Dwight as issued.

I. Background

Church & Dwight sells condoms primarily under its 

Trojan brand name. According to the Commission, the 

Company accounts for “at least 70%” of the latex condoms 

 * As of the date the opinion was published, Judge Ginsburg

had taken senior status.

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 2 of 12
3

sold in the United States.

*

 In order to market its condoms, 

Church & Dwight offers retailers a discount based upon the 

amount of shelf space they devote to its condoms. Church & 

Dwight also sells a variety of other products, including such 

consumer products as cat litter and toothpaste.

In June 2009 the Commission issued a “Resolution 

Authorizing Use of Compulsory Process in a Nonpublic 

Investigation” in order to determine whether Church & 

Dwight

has attempted to acquire, acquired, or 

maintained a monopoly in the distribution or 

sale of condoms in the United States, or in any 

part of that commerce, through potentially 

exclusionary practices including, but not 

limited to, conditioning discounts or rebates to 

retailers on the percentage of shelf or display 

space dedicated to Trojan brand condoms and 

other products distributed or sold by Church & 

Dwight, in violation of Section 5 of the Federal 

Trade Commission Act ....

Pursuant to the Resolution, the Commission issued a 

subpoena duces tecum seeking, among other things,

production of documents related to Church & Dwight’s sales 

and distribution of condoms in the United States and Canada. 

At the same time the Commission issued a CID seeking 

information about cost, pricing, production, and sales of the 

Company’s condoms in the United States and Canada. 

 * Although its inquiry into the market for condoms is not limited to 

the latex variety of the product, the Commission has not provided 

an estimate of Church & Dwight’s share of a market that includes 

both latex and non-latex condoms. 

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 3 of 12
4

Although the Commission did not explicitly request 

information on products other than condoms, Specification R 

of the subpoena provides: “All Documents responsive to this 

request ... shall be produced in complete form, unredacted 

unless privileged ....”

Church & Dwight turned over to the Commission

documents and data sets relating to its condom business with 

the information on other products redacted. Church & 

Dwight petitioned the Commission either to limit or to quash 

the subpoena and the CID. The Commission denied that 

request and petitioned the district court to enforce the 

subpoena and the CID. 

In the district court, Church & Dwight argued, “Properly 

read, the FTC’s Resolution’s language concerning ‘Trojan 

brand condoms and other products distributed or sold by 

Church & Dwight’ does not include irrelevant non-condom 

products such as toothpaste, cat litter, baking soda and 

detergents.” The district court, finding the information on 

products other than condoms in documents with information 

pertaining to condoms was “reasonably relevant” to the 

Commission’s investigation and the request was not “unduly 

burdensome,” granted the petition for enforcement.

II. Analysis

Church & Dwight appeals the district court’s order 

insofar as the subpoena and the CID relate to its products

other than condoms. The Company first contends the district 

court departed from the legal standard prescribed in precedent 

because it (1) did not interpret the scope of the Resolution, (2) 

did not identify the materials sought in the subpoena and the 

CID, and (3) required that the materials sought in the 

subpoena and the CID be only plausibly, rather than 

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 4 of 12
5

reasonably, relevant to the Commission’s investigation. It 

also argues that, even if the district court applied the correct 

legal standard, the court clearly erred when it found the 

disputed materials were in fact reasonably relevant to the 

investigation.

A. Standards of Review 

Whether the district court applied the correct standard in 

deciding an investigative subpoena should be enforced is a 

question of law, which we decide de novo. See U.S. Int’l

Trade Comm’n v. ASAT, Inc., 411 F.3d 245, 253 (D.C. Cir. 

2005); FTC v. Texaco, 555 F.2d 862, 876 n.29 (D.C. Cir. 

1977) (en banc). We review the district court’s determination 

of relevance, a question of fact, only for clear error. See FTC 

v. Invention Submission Corp., 965 F.2d 1086, 1089 (D.C. 

Cir. 1992). 

In the last-cited case we explained “a district court must 

enforce a federal agency’s investigative subpoena if the 

information sought is ‘reasonably relevant’—or, put 

differently, ‘not plainly incompetent or irrelevant to any 

lawful purpose of the [agency]’—and not ‘unduly 

burdensome’ to produce.” 965 F.2d at 1089 (brackets in 

original) (internal citations omitted) (quoting Texaco, 555 

F.2d at 872, 873 n.23, 881). We also reiterated a longestablished point quite pertinent to the dispute here: “[T]he 

validity of Commission subpoenas is to be measured against 

the purposes stated in the resolution ....” 965 F.2d at 1092 

(quoting FTC v. Carter, 636 F.2d 781, 789 (D.C. Cir. 1980)).

B. Scope of the Resolution 

The main dispute in this case is whether the 

Commission’s inquiry, as defined by the Resolution, extends 

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 5 of 12
6

to Church & Dwight’s products other than condoms. The 

Resolution indicates the Commission is investigating various 

of Church & Dwight’s practices, including its “conditioning 

[of] discounts or rebates to retailers on the percentage of shelf 

or display space dedicated to Trojan brand condoms and other 

products ....” Despite the seemingly unqualified reach of the 

phrase “and other products,” the Company argues we should 

interpret it narrowly to mean “and other [condom] products.” 

For its part, the Commission maintains the Resolution 

comprehends an investigation into Church & Dwight’s 

possible bundling of rebates based upon the retailer’s sales of 

both its condoms and its other products. Under the 

Commission’s interpretation, the information concerning

products other than condoms is unquestionably relevant to its

investigation, and the district court was correct to enforce the 

subpoena and the CID.

As an initial matter, Church & Dwight is incorrect in 

claiming the district court “failed to interpret” the Resolution; 

the district court simply interpreted the Resolution as being

more broad than Church & Dwight had argued. The question 

properly before us is whether the district court correctly 

interpreted the Resolution to include an inquiry that 

implicated Church & Dwight products other than condoms. 

Contrary to the Company’s urging, we defer to the 

Commission’s interpretation of its own Resolution. Cf. FTC 

v. Ken Roberts Co., 276 F.3d 583, 586 (D.C. Cir. 2001) 

(“courts of appeals have consistently deferred to agency 

determinations of their own investigative authority”); EEOC 

v. Lutheran Social Servs., 186 F.3d 959, 965 (D.C. Cir. 1999) 

(“agency’s interpretation of relevance of subpoena deserves 

deference because the scope of the investigation is very much 

dependent on the agency’s interpretation and administration 

of its authorizing substantive legislation” (internal quotation 

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 6 of 12
7

marks, alterations, and citation omitted)). So long as the 

material the Commission seeks is “relevant to the 

investigation—the boundary of which may be defined quite 

generally,” Invention Submission, 965 F.2d at 1090, see also 

Texaco, 555 F.2d at 874 n.26 (“resolutions of [a broad] sort 

are not uncommon in the investigative process”), the district 

court must enforce the agency’s demand.

The Commission maintains its Resolution contemplates 

an investigation into the possibility Church & Dwight is 

engaged in exclusionary practices in which products other 

than condoms may play a role. Such practices include

bundling discounts, as in LePage’s Inc. v. 3M, 324 F.3d 141 

(3d Cir. 2003) (en banc), and tying sales, as in Eastman 

Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451 

(1992). Church & Dwight replies that, because the initial 

clause of the Resolution authorizes an investigation into 

illegal monopolization “in the distribution or sale of condoms

... through potentially exclusionary practices including, but 

not limited to, [shelf-space discounts] on Trojan brand 

condoms and other products,” the last two words must refer 

only to Church & Dwight’s condom brands other than Trojan. 

There is, however, a reasonable interpretation of the 

Resolution that is less narrow than the one Church & Dwight 

favors. Although we will not interpret the scope of the 

Resolution so broadly as to enable the agency to investigate a 

matter beyond the reach of the laws it enforces, see Invention 

Submission Corp., 965 F.2d at 1089, we note that an inquiry 

into the bundling of rebates on condoms and other types of

products with the purpose of sustaining market power in the 

market for condoms is arguably within the condemnation of 

the Sherman Act as the Third Circuit construed it in

LePage’s, 324 F.3d at 154–57 (concluding 3M’s practice of 

bundling rebates for multiple products in order to maintain its 

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 7 of 12
8

monopoly in one of them was an exclusionary practice in 

violation of § 2 of the Sherman Act).* 

Church & Dwight suggests we should reject this 

interpretation of the Resolution because the Commission’s 

subpoena and CID are too narrowly focused to support a case 

premised upon a theory of bundling that includes products 

other than condoms. The Company reasons the Commission, 

had it wanted to pursue such a theory, would have requested 

information on products other than condoms even when that 

information appears in documents that contain no information 

on condoms. This argument fails because we do not require 

the Commission to seek in one document request all the 

information it might need in order successfully to establish a 

violation at trial.

LePage’s is of course not the law of this circuit, and it 

has been roundly criticized, see, e.g., Antitrust Modernization 

Comm’n, Report and Recommendations 94 (2007) (“The lack 

of clear standards regarding bundling, as reflected in 

LePage’s v. 3M, may discourage conduct that is 

procompetitive or competitively neutral and thus may actually 

harm consumer welfare”); Bruce H. Kobayashi, The Law and 

Economics of Predatory Pricing, in ANTITRUST LAW AND 

ECONOMICS 116, 148 (Keith N. Hylton ed., 2009) (“The 

 * The Commission’s contention its Resolution also comprehends an 

investigation into potential tying is less than persuasive. In a tying 

case, the plaintiff must allege the defendant company used market 

power in the tying product to gain market power in the tied product. 

See Eastman Kodak, 504 U.S. at 464 & n.9. Here, however, the 

Commission indicated in its Resolution it is investigating only the 

acquisition or maintenance of a monopoly in the condom market; 

that is the only product market in which the FTC has alleged 

Church & Dwight has market power, and the Commission has not 

identified any potentially tied product.

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 8 of 12
9

potential for liability will result in [firms with sufficient 

market power and multiple product lines] being deterred from 

using bundling that would have led to reduced prices for 

consumers and higher welfare”); Richard A. Epstein, 

Monopoly Dominance or Level Playing Field? The New 

Antitrust Paradox, 72 U. CHI. L. REV. 49, 71 (2005) (“highly 

unlikely that 3M would tailor practices that cover six of its 

departments solely because of the effects that it would have 

on” the one product market in which it competed with 

LePage’s); Daniel L. Rubinfeld, 3M’s Bundled Rebates: An 

Economic Perspective, 72 U. CHI. L. REV. 243, 254–56, 262–

64 (2005) (by not following test for predatory conduct from 

Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 

509 U.S. 209 (1993), or some similar standard for predatory 

conduct, LePage’s condemns behavior that does not 

obviously reduce, and may even promote, consumer welfare). 

We need not, however, pass upon the merits of the rule in 

LePage’s in order to resolve this case. 

Because LePage’s is the law in the Third Circuit, and 

because Church & Dwight sells both condoms and other

consumer products within the Third Circuit, the Commission

may lawfully investigate whether the Company’s practices

would constitute a violation of the law in that circuit. 

Although this court might someday reach a different 

resolution of the issue presented in LePage’s, “a subpoena 

enforcement action is [generally] not the proper forum in 

which to litigate disagreements over an agency’s authority to 

pursue an investigation. Unless it is patently clear that an 

agency lacks the jurisdiction that it seeks to assert, an 

investigative subpoena will be enforced.” Ken Roberts, 276 

F.3d at 584. We hold, therefore, the Resolution lawfully 

encompasses an investigation into whether Church & Dwight 

has bundled discounts for condoms and other products in 

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 9 of 12
10

order to acquire or maintain a monopoly in the market for 

condoms in the United States.

C. Church & Dwight’s Remaining Contentions

We can dispose of Church & Dwight’s other contentions 

in short order. First, we reject the Company’s contention the 

district court “never described” the materials sought in the 

subpoena and the CID; in fact, the district court described the 

disputed materials the Commission sought and the Company 

“seeks to redact” as “information from the documents 

[Church & Dwight] produce[d] regarding proprietary and 

confidential information on non-condom products ....” FTC 

v. Church & Dwight Co., 747 F. Supp. 2d 3, 8 (D.D.C. 2010) 

(internal quotation marks omitted). In any event, the 

Company does not actually dispute the identity of the 

materials at issue.

Second, Church & Dwight claims the district court’s 

finding of relevance was based upon both a legal and a clear 

factual error. As for the legal error, the Company contends 

the district court was satisfied with mere “plausibility” instead 

of demanding the “reasonable relevance” required under

Texaco. It bases this claim upon the following statement in 

the opinion of the district court: “[I]t is entirely plausible that 

information [concerning other products] appearing in the 

same document with relevant information concerning ...

condoms would itself be relevant to the investigation.” That 

statement is not inconsistent, however, with the correct legal 

standard, viz., that the “requested materials ... be reasonably 

relevant to the investigation,” which appears in the next 

sentence of the court’s opinion, followed by a citation to 

Invention Submission.

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 10 of 12
11

As for the factual error, the Company erroneously argues

Texaco requires the district court to “perform an independent 

review” of the information sought and “articulate the reasons 

underlying a finding of relevancy” to the investigation. Again 

the Company would demand of the district court a more 

searching probe of the relation between the Commission’s 

inquiry and the information sought than our precedents 

require or even allow. As we said in Invention Submission,

the Commission has no obligation to establish 

precisely the relevance of the material it seeks 

in an investigative subpoena by tying that 

material to a particular theory of violation. See 

Texaco, 555 F.2d at 877. ... [I]n light of the 

broad deference we afford the investigating 

agency, it is essentially the respondent’s 

burden to show that the information is 

irrelevant. Cf. id. at 882 ....

965 F.2d at 1090.

The present Resolution, as we have explained,

contemplates an investigation into Church & Dwight’s sales 

not only of condoms but also of other products. The 

information the Commission is seeking concerning those

other products is obviously relevant to that investigation;*

 * The Commission also suggested at oral argument that the 

Company is required to produce information on products other than 

condoms even if that information is not directly relevant to its 

investigation because the Commission requested unredacted 

versions of documents containing at least some relevant 

information. We need not, however, reach the question whether the 

Commission’s anti-redaction policy is permissible because we 

conclude the subpoena and CID at issue here are directed entirely 

the 

district court had no obligation to belabor the obvious. 

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 11 of 12
12

III. Conclusion

Church & Dwight’s claims fail because they rest upon an 

unduly narrow interpretation of the Resolution, one that is

inconsistent with the principles laid out in Texaco and more 

recently applied in Invention Submission. The Commission 

contemplates an investigation into the bundling of rebates to 

retailers on sales of condoms and of other products, which 

may violate the Sherman Act as interpreted by the Third

Circuit in LePage’s. Therefore the district court did not err in 

finding that the information concerning products other than 

condoms was reasonably relevant to the Commission’s 

inquiry. Accordingly, the order of the district court granting 

enforcement of the Commission’s subpoena and the 

associated CID is in all respects

Affirmed.

 

toward information reasonably relevant to the Commission’s 

investigation. 

USCA Case #10-5383 Document #1347259 Filed: 12/13/2011 Page 12 of 12