Source: https://www.legalcrystal.com/case/100413/ftc-vs-henry-broch-co
Timestamp: 2018-02-23 12:52:18
Document Index: 30348394

Matched Legal Cases: ['§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 5', '§ 2']

Ftc Vs Henry Broch and Co - Citation 100413 - Court Judgment | LegalCrystal
LegalCrystal Citation legalcrystal.com/100413
Case Number 368 U.S. 360
.....(1962) u.s. supreme court ftc v. henry broch & co., 368 u.s. 360 (1962) federal trade commission v. henry broch & co. no. 74 argued november 16, 1961 decided january 15, 1962 368 u.s. 360 certiorari to the united states court of appeals for the seventh circuit syllabus after this court had sustained, 363 u. s. 363 u.s. 166, the finding of the federal trade commission that respondent had violated § 2(c) of the clayton act by reducing its commissions on sales by only one seller to only one buyer, the court of appeals, on remand, modified sua sponte the commission's cease and desist order so as to eliminate all references to "any other seller principal" and to "any other buyer," thus limiting application.....
FTC v. Henry Broch & Co. - 368 U.S. 360 (1962)
U.S. Supreme Court FTC v. Henry Broch & Co., 368 U.S. 360 (1962)
Held: in the circumstances of this case, the order should have been affirmed in the form entered by the Commission. Pp. 368 U. S. 361 -368.
(a) The Commission has a wide discretion to formulate a remedy adequate to prevent respondent's repetition of the violation it was found to have committed, and it cannot be said that, in paragraph (1) of its order, the Commission exceeded its discretion in banning such repetitions in connection with transactions involving an seller and buyer, rather than simply forbidding recurrence of the transgression in sales between the same seller and buyer. Pp. 368 U. S. 363 -364.
(b) In the circumstances of this case and on this record, the attempt of the Court of Appeals to redress the asserted overbroadness of paragraph (2) of the Commission's order by the inapt device of confining that paragraph to sales between the same parties was inappropriate. Pp. 368 U. S. 364 -367.
The Federal Trade Commission seeks reversal of the action of the Court of Appeals for the Seventh Circuit in modifying the cease and desist order which the Commission had issued against the respondent Broch on finding that Broch violated § 2(c) of the Clayton Act. [ Footnote 1 ] 285 F.2d 764. The action of the Court of Appeals was sua sponte, and was taken in proceedings on remand which followed our reversal of that Court's earlier action setting aside the order in its entirety because Broch's conduct was thought not to violate § 2(c). [ Footnote 2 ] Federal Trade Comm'n v. Broch & Co., 363 U. S. 166 , reversing 261 F.2d 725. We granted certiorari, 366 U.S. 923.
Canada Foods, Ltd., a processor of apple concentrate. The Commission found that Broch, to make possible Canada Foods' acceptance of an offer from J. M. Smucker Co. to buy an unusually large quantity of apple concentrate at less than Canada Foods' established price, reduced to 3%, for this sale, the agreed 5% rate of commission ordinarily payable by Canada Foods to Broch. [ Footnote 3 ] The Commission adjudged, and in our prior opinion we agreed, that this action of Broch was, in the circumstances, a violation of § 2(c).
The Commission's order was not confined to restraints against repetition of the precise violation of § 2(c) which Broch was found to have committed, nor was the application of the order limited to future sales from Canada Foods to Smucker. [ Footnote 4 ] Paragraph (1) did prohibit the
since the order was based only upon findings limited to an asserted illegal payment respecting a single sale from Canada Foods to Smucker, the Commission's ban was too sweeping in its application to sales from all seller principals to all buyers. There is no merit in this argument. The Commission has a wide discretion to formulate a remedy adequate to prevent Broch's repetition of the violation he was found to have committed. See Jacob Siegel Co. v. Federal Trade Comm'n, 327 U. S. 608 , 327 U. S. 611 -612. We cannot say that the Commission exceeded its discretion in banning repetitions of Broch's violation in connection with transactions involving any seller and buyer, rather than simply forbidding recurrence of the transgression in sales between Canada and Smucker. Federal Trade Comm'n v. Cement Institute, 333 U. S. 683 , 333 U. S. 728 -729. Compare United States v. United States Gypsum Co., 340 U. S. 76 , 340 U. S. 90 .
provisions for enforcement of administrative orders those in § 5 of the Federal Trade Commission Act -- do not apply to enforcement of the instant order. [ Footnote 5 ] In consequence, Broch cannot be subjected to penalties except for violation of an enforcement order yet to be entered by an appropriate Court of Appeals, to be predicated upon a determination that some particular practice of Broch violated the Commission's order. Thus Broch, is not, by virtue of that order, presently acting under the risk of incurring any penalty without further administrative and judicial consideration and interpretation, despite the fact that he has already received determination of his petition for review. Federal Trade Comm'n v. Ruberoid Co., 343 U. S. 470 , 343 U. S. 477 -480. [ Footnote 6 ]
Upon any future enforcement proceeding, the Commission and the Court of Appeals will have ready at hand interpretive tools -- the employment of which we have previously sanctioned -- for use in tailoring the order, in the setting of a specific asserted violation, so as to meet the legitimate needs of the case. They will be free to construe the order as designed strictly to cope with the threat of future violations identical with or like or related to the violations which Broch was found to have committed, [ Footnote 7 ] or as forbidding "no activities except those which if continued would directly aid in perpetuating the same old unlawful practices." Federal Trade Comm'n v. Cement Institute, 333 U. S. 683 , 333 U. S. 727 . They need not -- as we have already made clear -- read the order as denying
to Broch the benefit of statutory defenses or exceptions. Federal Trade Comm'n v. Ruberoid Co., supra, at 343 U. S. 475 -476; Federal Trade Comm'n v. National Lead Co., 352 U. S. 419 , 352 U. S. 426 . [ Footnote 8 ] Nor need the order be construed as prohibiting anything as clearly lawful as a uniform reduction in commissions. [ Footnote 9 ] And, we repeat, these various interpretive aids will have to be brought to bear by a Court of Appeals upon a particular practice of Broch, and will have to yield the announced result that such practice violates the order, before Broch can be subjected to penalties because of still a second repetition of the violation.
We do not wish to be understood, however, as holding that the generalized language of paragraph (2) would necessarily withstand scrutiny under the 1959 amendments. [ Footnote 10 ] The severity of possible penalties prescribed
by the amendments for violations of orders which have become final underlines the necessity for fashioning orders which are at the outset, sufficiently clear and precise to avoid raising serious questions as to their meaning and application. [ Footnote 11 ] See Labor Board v. Express Pub. Co., 312 U. S. 426 , 312 U. S. 435 -437; Federal Trade Comm'n v. Cement Institute, 333 U. S. 683 , 333 U. S. 726 ; Federal Trade Comm'n v. Morton Salt Co., 334 U. S. 37 , 334 U. S. 54 . Compare New York, New Haven & Hartford R. Co. v. Interstate Commerce Comm'n, 200 U. S. 361 , 200 U. S. 404 ; Swift & Co. v. United States, 196 U. S. 375 , 196 U. S. 400 -401.
" It is ordered That respondents Henry Broch and Oscar Adler, copartners trading as Henry Broch & Co., their representatives, agents, or employees, directly or through any corporate or other device, in connection with the sale of food or food products for Canada Foods Ltd., or any other seller principal, in commerce, as 'commerce' is defined in the Clayton Act, as amended, do forthwith cease and desist from:"
Cf. Federal Trade Comm'n v. Morton Salt Co., 334 U. S. 37 , 334 U. S. 51 -53; Federal Trade Comm'n v. National Lead Co., 352 U. S. 419 , 352 U. S. 430 -431.
Federal Trade Comm'n v. Ruberoid Co., 343 U. S. 470 , 343 U. S. 473 .
Broch complains of the order's omission of any reference to the statutory exception for brokerage "for services rendered in connection with the sale or purchase of goods. . . ." We made it clear in our prior opinion that the order need not be read as prohibiting transactions to which the statutory exception applies. 363 U.S. at 363 U. S. 173 , 363 U. S. 177 , n. 19. Nor need the order, when viewed in the context of Broch's violation, be read as prohibiting Broch from reducing commissions competitively to gain a particular buyer's account, if the competitive setting would otherwise have afforded a defense to a charge under § 2(c).
363 U.S. at 363 U. S. 176 .
363 U. S. 363 U.S. 166, 363 U. S. 176 , and therefore the Court of Appeals was justified in limiting the Commission's order accordingly.
When its attention is focused to the appropriateness of the scope of an order to restrain illegality, the Commission has shown responsible awareness of the difference in shaping its order to a situation like the one presented by this case, to wit: a specific, closely confined illegality as distinguished from a widespread illegal practice inimical to the public interest. See opinion of the Commission in In re Colgate-Palmolive Co. and Ted Bates & Co., Docket No. 7736, December 29, 1961, CCH Trade Reg.Rep., Ĺš 15,643, pp. 20,474, 20,485. So, too, has the United States Court of Appeals for the Second Circuit shown responsive awareness and appreciation of that distinctive difference. Swanee Paper Corp. v. Federal Trade Comm'n, 291 F.2d 833, 837-838.