Source: https://supreme.justia.com/cases/federal/us/368/208/
Timestamp: 2019-04-23 23:55:37+00:00

Document:
This is a civil action by the United States for (1) a mandatory injunction under § 9 of the Federal Trade Commission Act requiring petitioner to comply with orders of the Commission to file special reports containing specified information and documents, and (2) statutory forfeiture of $100 for each day petitioner was in default of those orders. Petitioner had filed only part of the informatlon called for by the Commission in connection with a formal investigation to determine whether petitioner's acquisitions of stock and assets of other corporations violated the antitrust laws. Among other items, it had declined to furnish its own file copies of reports filed with the Census Bureau on the ground that they were confidential. The District Court found that some of the orders were unenforceable because of vagueness and that others had been answered. It directed petitioner to answer the remaining ones, including those calling for copies of census reports; but it did not award the statutory forfeitures, because some of the orders were too vague to be enforced. The Court of Appeals affirmed insofar as the District Court ordered compliance; but it reversed that portion of the decision refusing to award the statutory forfeitures.
1. The Federal Trade Commission is entitled to obtain petitioner's own file copies of reports submitted by petitioner to the Census Bureau. Pp. 368 U. S. 215-220.
(a) Section 8 (a) of the Census Act, which grants the Secretary of Commerce discretion to furnish to certain authorities data taken from information furnished the Bureau on censuses of population, agriculture and housing, but provides that such data shall not be used by the recipient "to the detriment of the persons to whom such information relates," is inapplicable here, because the Commission has not been furnished any information by the Secretary and the information here involved does not relate to the particular censuses covered by that section. P. 368 U. S. 215.
purposes and forbids the improper publication or disclosure of such information, applies only to the Secretary and other officers and employees of the Department of Commerce. It does not generally prohibit the use of such information per se. Pp. 368 U. S. 215-219.
(c) By voluntarily submitting like data to the Federal Trade Commission during this investigation, petitioner did not waive its claim that its file copies of reports to the Census Bureau are confidential. P. 368 U. S. 217.
(d) The assurances of confidentiality by the President and the Census Bureau are not sufficient to extend the coverage of § 9(a). Pp. 368 U. S. 217-219.
(e) The fact that petitioner furnished certain information to the Census Bureau does not relieve it from furnishing the same information to the Federal Trade Commission, since § 132 of the Census Act provides that nothing therein contained "shall be deemed to revoke or impair the authority of any other Federal agency with reference to the collection or release of information." Pp. 368 U. S. 219-220.
2. The forfeiture imposed by § 10 of the Federal Trade Commission Act for failure to file "any annual or special report" is applicable, although the requested report is to include "answers in writing to specific questions." Pp. 368 U. S. 220-223.
3. Notwithstanding the fact that the District Court held that the Commission's orders were "partially defective," and decreed only partial compliance, forfeiture occurred because petitioner failed to comply with the valid requests; and the single daily penalty under § 10 began to run 30 days after notice of default on the first set of the Commission's orders, and it runs until the date of the stay granted by this Court. Pp. 368 U. S. 223-225.
(a) Partial invalidity of the Commission's orders did not prevent application of the forfeiture provision, since petitioner defied large parts of the orders instead of obtaining a separate judicial determination of the validity of the orders. P. 368 U. S. 224.
(b) Section 6 (c) of the Administrative Procedure Act authorized the procedure that the District Court followed in ordering partial compliance instead of striking the entire orders and requiring the Commission to issue new ones. Pp. 368 U. S. 224-225.
(c) In directing partial compliance, the District Court did not treat those items found enforceable as subpoenas, and therefore subject solely to contempt action. P. 368 U. S. 225.
(d) Once the Court of Appeals held that the default was within the forfeiture provision of §10, its penalties accrued, and it was not necessary to remand the case to the District Court for determination of whether the forfeiture should apply. P. 368 U. S. 225.
4. The petitioner, not having sought a judicial determination of the validity of the Commission's orders or a stay once this litigation had begun, cannot now say it was denied due process because it had no opportunity to prevent the running of the forfeitures pending a judicial test of the validity of the orders. Pp. 368 U. S. 225-227.
285 F. 2d 607, affirmed.
of the Federal Trade Commission Act. 365 U. S. 857. On motion of petitioner, we also granted a stay tolling the further running and accumulation of forfeitures awaiting our decision. We now affirm the judgment of the Court of Appeals.
Petitioner contends that it cannot lawfully be required to produce copies of statutory reports made by it to the Census Bureau because of their confidential nature. The remainder of the inquiries found enforceable by the District Court are not now contested by the petitioner. As to the forfeitures, petitioner advances several arguments: (1) the statutory forfeiture of § 10 is not applicable because it applies only to a failure to furnish "reports," while the inquiries directed to petitioner called for answers to specific questions; (2) no forfeitures can be imposed because the orders were only partially enforceable; and (3) it is a denial of due process to assess penalties for failure to obey orders during a time petitioner was without remedy to test their validity.
failure to respond to orders numbered 1 and 7, which were directed specifically to petitioner. The other seven orders had been directed to corporations acquired by petitioner, rather than to it.
Among the items ordered enforced and with which the petitioner still refuses to comply are requests for file copies of certain reports previously made to the Census Bureau. The petitioner claims each of these to be confidential. There is a conflict between the Courts of Appeal on the point. [Footnote 4] Here, both the District Court and the Court of Appeals have held these file copies not restricted, and with this conclusion we agree.
Petitioner's claim is based on §§ 8 and 9(a) of the Census Act, 13 U.S.C. §§ 8-9(a), and assurances of confidentiality by the Government. It can be noted immediately that § 8 does not in any way support petitioner's position. This section grants the Secretary of Commerce the discretion to furnish to named authorities data taken from information furnished the Census Bureau on censuses of population, agriculture and housing. Subsection (c) thereof provides that, when the Secretary furnishes such data, it shall "[i]n no case" be used by the recipient "to the detriment of the persons to whom such information relates." Not only has the Commission not been furnished any information by the Secretary, but the information involved does not relate to the particular censuses covered by the section, and so this section is clearly inapplicable here.
employee of the Census Bureau is prohibited, under heavy penalty, from disclosing any information which may thus come to his knowledge. [Footnote 7]"
Petitioner also relies upon an opinion of the Attorney General, 36 Op.Atty.Gen. 362 (1930).
"assurances of confidentiality and protection constitute a pledge of good faith on the part of the Congress, the President and the Department of Commerce. . . . The United States has given its word, and should be permitted to keep it."
276 F.2d at 744. It concludes that, since the Commission cannot obtain the original, it should not be permitted "to do indirectly that which it cannot to directly." Id. at 743.
The Solicitor General contends that, for the purposes of this case, petitioner has waived the point by voluntarily submitting like data to the Commission during its investigation herein. We cannot agree. Reaching the merits of the issue, he points out that the government agencies are at loggerheads on the problem, the Department of Commerce, Census Bureau and the Bureau of the Budget believe that the copies are not subject to legal process, while the Federal Trade Commission and the Antitrust Division of the Department of Justice, which filed this suit, contend to the contrary. The Solicitor General, "fully recognizing the delicate balance of opposing considerations," has concluded "on balance" that the copies are not subject to compulsive production. As has been noted, we do not agree.
census reports, are made confidential within the government bureau, Internal Revenue Code of 1954, §§ 6103 7213(a), copies in the hands of the taxpayer are held subject to discovery. [Footnote 10] Likewise, the Criminal Code, 18 U.S.C. § 1905, [Footnote 11] prohibits federal employees generally from disclosing trade secrets and other business data received in the course of their official duties, but the same information is obtainable from the reporting company's files or personnel by judicial process.
impair the authority of any other Federal agency with respect to the collection or release of information."
13 U.S.C. § 132. It appears, therefore, that, through the use of special reports, the Commission could require the petitioner to supply the identical information from its files. Hence, by securing the retained file copy, the Commission is merely obtaining in a form already prepared that information which it has the power to require petitioner to furnish from its records.
Petitioner next claims that the orders required "answers in writing to specific questions" under § 6(b), as distinguished from the "special reports" also authorized by that section, but that the forfeiture provision of § 10 penalizing the failure to file "any annual or special reports" does not include the phrase "answers in writing to specific questions" and is, therefore, inapplicable. We do not agree.
The Commission contends that its orders here in fact called for information in the nature of "special reports," and it so designated each of the nine orders at the time of their issuance. Examination of the orders by no means proves the Commission to be in error, for it appears that practically all of the requests called for the furnishing of statistical or like information, details of organization and operation, specific documents, etc. As the Court of Appeals stated, "the cumulative effect of all the questions is substantially that of a request for a report." 285 F.2d at 615.
While this is true, it cannot be denied that, in many instances, specific information was requested, and "answers in writing to specific questions" were contemplated. But this does not disqualify the materials from being special reports, for the statutory reference to "answers in writing to specific questions" merely elaborates the power to require special reports.
The source of the Commission's power, as we have noted, is § 6(b), see note 1 supra, which authorizes the Commission to order corporations to file "annual or special, or both annual and special reports or answers in writing to specific questions." Since the forfeiture provision of § 10, see note 3 supra, only refers to "any annual or special report," petitioner argues that forfeiture is inapplicable to a corporation failing to give "answers in writing to specific questions," which it contends is a separate power quite distinct from the power to order reports. But, if this is true, there would be no penalty where a corporation deliberately refused to comply with a lawful Commission order to answer specific questions, for the only penalty available against corporations is the forfeiture provision. Thus, a corporation that refused to file an annual or special report would be subject to a $100 per day forfeiture. An individual under subpoena who refused to appear and testify or supply documents would be subject to a fine of $1,000 to $5,000 and/or a jail sentence up to three years. But, under petitioner's interpretation of the Act, there would be no penalty whatsoever where a corporation deliberately failed to file answers to specific questions. The only remedy would be a mandatory injunction to force it to do so. We cannot attribute such an anomaly to Congress. Rather, we would assume that, in placing the phrase "answers in writing to specific questions" in § 6(b), Congress was merely explicating what the Commission might require a corporation to include in an annual or special report.
"The commission, under this section, (later 6(b)) may also require such special reports as it may deem advisable. By this means, if the ordinary data furnished by a corporation does not adequately disclose its organization, financial condition, business practices, or relation to other corporations, there can be obtained by a special report such additional information as the commission may deem necessary."
H.R.Rep.No. 533, 63d Cong., 2d Sess. 4. The phrase "answers in writing to specific questions" first appeared in the Conference Report, but the report by the House Managers explaining the modifications of the House bill did not mention it (although it discussed some other changes in the annual and special report provisions of the House bill). H.R.Rep.No. 1142, 63d Cong., 2d Sess. Similarly, the explanation of the Conference Report by the Senate Managers in debate makes it clear that the changes made in conference were of the nature of new, clarifying phraseology (with two exceptions not relevant here). 51 Cong.Rec. 14768-14769. If the conference had intended to give the Commission a separate new power which was not included in either the House or Senate bill, surely there would be some mention of it in the reports by the managers.
Court as unenforceable. Such general requests for reports without specificity place the reporting company in a difficult position, leading to expensive and time-consuming litigation as well as frustrating the Commission's attempt to obtain information.
The District Court held that, since the Commission orders were "partially defective," petitioner had a valid reason for challenging them, and therefore no forfeitures accrued. Petitioner supports this holding by asserting that many of the items included in the Commission's orders were held unenforceable by the District Court, and that, under Bowman Dairy Co. v. United States, 341 U. S. 214 (1951), forfeiture should not be imposed for noncompliance with substantially defective orders. The Court of Appeals disagreed, holding that forfeiture had occurred, and that the daily penalty began to run 30 days after the notice of default on the first set of the Commission's orders. [Footnote 12] We agree with the Court of Appeals and conclude that the single daily penalty runs until the date of our stay, February 7, 1961.
valid and unanswered at the time of the suit, this case need not go off on a mathematical formula. The record fully supports the conclusion of the Court of Appeals that this is not "a case involving single oversight or an honest mistake in a good faith attempt to comply with the Commission's order." 285 F.2d at 614. Nor, as the concurring opinion found, is it a case of "such extensive invalidity that there is no longer an intelligible requirement" for a report. 285 F.2d at 616.
Petitioner asserts that even partial invalidity of the order prevents the application of the forfeiture provision, arguing that the case is controlled by the rule in Bowman Dairy Co., supra. In that case, the Court concluded that "one should not be held in contempt under a subpoena that is part good and part bad." 341 U.S. at 341 U. S. 221. But that rule cannot be considered apart from its facts. There, the defendant could not appeal from the contested order, but was able to challenge it only by disobeying and appealing the contempt conviction. It was in review of that conviction -- the defendant's first opportunity to review the validity of the order -- that this Court held that its partial invalidity barred the punishment. Here, petitioner might have delayed accrual of the forfeitures pending determination of the merits or obtained a separate judicial determination of the validity of the orders before the penalties began to accrue, as we point out infra. Rather than attempting such procedures, it defined large parts of the orders. It cannot now be heard to complain because such defiance was in error.
i.e., ordering partial compliance. That section directs the court to sustain "any such subpoena or similar process or demand to the extent that it is found to be in accordance with law. . . ." Nor do we see any substance to the further contention that in directing partial compliance the trial judge treated those items found enforceable as subpoenas, and therefore subject solely to contempt action. The various requests were severable, and the court's order was not in substitution of the Commission's orders, but merely an enforcement of them, in accordance with § 9 of the FTCA, authorizing the court to compel obedience to lawful Commission orders. Finally, petitioner argues that the case should have been remanded to the trial court for determination of whether the forfeiture should apply. However, once the Court of Appeals held that the default was within the forfeiture provision of § 10, its penalties accrued, and there was nothing remaining open for decision that required a remand to the District Court.
"Until the Attorney General acts, the defendants cannot suffer, and, when he does act, they can promptly answer and have full opportunity to contest the legality of any prejudicial proceeding against them."
274 U.S. at 274 U. S. 174.
"In a case of actual controversy within its jurisdiction . . . any court . . . may declare the rights . . . of any interested party seeking such declaration. . . ."
This appears sufficient to meet petitioner's needs.
"The commission shall also have power --"
"(b) To require, by general or special orders, corporations engaged in commerce, excepting banks, and common carriers subject to the Act to regulate commerce, or any class of them, or any of them, respectively, to file with the commission in such form as the commission may prescribe annual or special, or both annual and special, reports or answers in writing to specific questions, furnishing to the commission such information as it may require as to the organization, business, conduct, practices, management, and relation to other corporations, partnerships, and individuals of the respective corporations filing such reports or answers in writing. Such reports and answers shall be made under oath, or otherwise, as the commission may prescribe, and shall be filed with the commission within such reasonable period as the commission may prescribe, unless additional time be granted in any case by the commission."
38 Stat. 721, 15 U.S.C. § 46(b).
"[u]pon the application of the Attorney General of the United States at the request of the commission, the district courts of the United States shall have jurisdiction to issue writs of mandamus commanding any person or corporation to comply with the provisions [of this Act] or any order of the commission made in pursuance thereof."
"That any person who shall neglect or refuse to attend and testify, or to answer any lawful inquiry, or to produce documentary evidence, if in his power to do so, in obedience to the subpoena or lawful requirement of the commission, shall be guilty of an offense and upon conviction thereof by a court of competent jurisdiction shall be punished by a fine of not less than $1,000 nor more than $5,000, or by imprisonment for not more than one year, or by both such fine and imprisonment."
"Any person who shall willfully make, or cause to be made, any false entry or statement of fact in any report required to be made under [this Act,] or who shall willfully make, or cause to be made, any false entry in any account, record, or memorandum kept by any corporation subject to said sections, or who shall willfully neglect or fail to make, or to cause to be made, full, true, and correct entries in such accounts, records, or memoranda of all facts and transactions appertaining to the business of such corporation, or who shall willfully remove out of the jurisdiction of the United States, or willfully mutilate, alter, or by any other means falsify any documentary evidence of such corporation, or who shall willfully refuse to submit to the commission or to any of its authorized agents, for the purpose of inspection and taking copies, any documentary evidence of such corporation in his possession or within his control, shall be deemed guilty of an offense against the United States, and shall be subject, upon conviction in any court of the United States of competent jurisdiction, to a fine of not less than $1,000 nor more than $5,000, or to imprisonment for a term of not more than three years, or to both such fine and imprisonment."
"If any corporation required by [this Act] to file any annual or special report shall fail so to do within the time fixed by the commission for filing the same, and such failure shall continue for thirty days after notice of such default, the corporation shall forfeit to the United States the sum of $100 for each and every day of the continuance of such failure, which forfeiture shall be payable into the Treasury of the United States, and shall be recoverable in a civil suit in the name of the United States brought in the district where the corporation has its principal office or in any district in which it shall do business. It shall be the duty of the various United States attorneys, under the direction of the Attorney General of the United States, to prosecute for the recovery of forfeitures. The costs and expenses of such prosecution shall be paid out of the appropriation for the expenses of the courts of the United States."
"Any officer or employee of the commission who shall make public any information obtained by the commission without its authority, unless directed by a court, shall be deemed guilty of a misdemeanor, and, upon conviction thereof, shall be punished by a fine not exceeding $5,000, or by imprisonment not exceeding one year, or by fine and imprisonment in the discretion of the court."
38 Stat. 723, 15 U.S.C. § 50.
Compare Federal Trade Comm'n v. Dilger, 276 F.2d 739 (C.A.7th Cir. 1960), with United States v. St. Regis Paper Co., 285 F.2d 607 (C.A.2d Cir. 1960).
"(a) Neither the Secretary, nor any other officer or employee of the Department of Commerce or bureau or agency thereof, may, except as provided in section 8 of this title --"
"(1) use the information furnished under the provisions of this title for any purpose other than the statistical purposes for which it is supplied; or"
"(2) make any publication whereby the data furnished by any particular establishment or individual under this title can be identified; or"
"(3) permit anyone other than the sworn officers and employees of the Department or bureau or agency thereof to examine the individual reports."
"CONFIDENTIAL. -- This report is required by Act of Congress, approved August 31, 1954 (13 U.S.C. 131 and 224). 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."
Proclamation by President Hoover, November 22, 1929, 46 Stat. 3011, 3012.
"That neither said report nor any report of said investigation nor any part thereof shall be admitted as evidence or used for any purpose in any suit or action for damages growing out of any matter mentioned in said report or investigation."
36 Stat. 351, 45 U.S.C. § 41.
"(f) No report by any motor carrier of any accident arising in the course of the operations of such carrier, made pursuant to any requirement of the Commission, and no report by the Commission of any investigation of any such accident, shall be admitted as evidence, or used for any other purpose, in any suit or action for damages growing out of any matter mentioned in such report or investigation."
E.g., United States v. O'Mara, 122 F.Supp. 399 (D.C.D.C.1954). Contra, O'Connell v. Olsen & Ugelstadt, 10 F.R.D. 142, 143 (E.D.N.D.Ohio 1949).
"Whoever, being an officer or employee of the United States or of any department or agency thereof, publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties or by reason of any examination or investigation made by, or return, report or record made to or filed with, such department or agency or officer or employee thereof, which information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association; or permits any income return or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person except as provided by law; shall be fined not more than $1,000, or imprisoned not more than one year, or both; and shall be removed from office or employment."
The second set of orders was merely supplementary, so only a single daily penalty accrued.
Petitioner unsuccessfully moved in the Court of Appeals for a postponement of the effective date of the Commission's orders. Coming when it did, however, we cannot say that such denial was an abuse of discretion. Cf. Virginian R. Co. v. United States, 272 U. S. 658 (1926). Furthermore, a short while thereafter, we stayed the accumulation of further penalties when the petition for writ of certiorari was granted. If petitioner had unsuccessfully sought a stay in the District Court, a different question might have been presented. That action, after final judgment, could have been reviewed both in the Court of Appeals and here.
MR. JUSTICE BLACK, with whom MR. JUSTICE WHITTAKER and MR. JUSTICE STEWART concur, dissenting.
I dissent from the Court's holding (1) that petitioner's copies of census reports submitted to the Census Bureau are not privileged from production by § 9 of the Census Act, and (2) that, for its refusal to produce these copies and to answer certain of many questions asked it by the Federal Trade Commission, petitioner must pay a penalty of $100 for each day since that refusal up to the time, many months later, when this Court granted a stay as to future penalties.
"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."
"These assurances of confidentiality and protection constitute a pledge of good faith on the part of the Congress, the President and the Department of Commerce."
Federal Trade Comm'n v. Dilger, 276 F.2d 739, 744.
solemn and comprehensive promises of secrecy which it made need not be honored. But surely the Government's promises, fairly construed, do not indicate that the scope of the protection afforded against the use of census reports "for purposes of taxation, investigation or regulation" is limited to the originals of those reports and to the Census Bureau alone. That Bureau does not itself even engage in the activities against which the use of these reports is protected. Quite plainly, the promised protection was against governmental "taxation, investigation or regulation" generally, and, to protect the integrity of that promise, it is, of course, necessary that all of the particular arms of Government which are engaged in those activities be bound by the Government's pledges. Our Government should not, by picayunish haggling over the scope of its promise, permit one of its arms to do that which, by any fair construction, the Government has given its word that no arm will do. It is no less good morals and good law that the Government should turn square corners in dealing with the people than that the people should turn square corners in dealing with their Government. Cf. Rock Island, Arkansas & Louisiana R. Co. v. United States, 254 U. S. 141, 254 U. S. 143.
treated as confidential. Indeed, the very position taken by petitioner as to the privileged nature of its census reports was held to be correct in the Dilger case, decided just three weeks before the District Court decision in this case. All of this plainly shows, I think, that, with regard to some of the information sought, indeed a very substantial part of it, there was a serious, good faith controversy concerning the Commission's power to compel disclosure. Under these circumstances I agree with the District Court's conclusion that these heavy statutory penalties should not have been imposed. It is practically the universal rule that laws imposing penalties of this kind should be strictly, not expansively, construed. Applying that standard, I am by no means sure that the penalty provisions of the statute upon which this judgment rests can be construed so as to justify the penalties here at all.

References: § 9
 § 9
 § 132
 § 10
 § 10
 §10
 § 10
 § 8
 § 1905
 § 132
 § 6
 § 10
 § 6
 § 10
 § 6
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 § 9
 § 10
 § 46
 § 50
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 § 41
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 § 9
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