Opinion ID: 385703
Heading Depth: 2
Heading Rank: 3

Heading: The Appropriate Interpretation of Congressional Intent Regarding FTC Subpoena Service

Text: 57 In the Federal Trade Commission Act, Congress empowered the FTC to prevent persons, partnerships, or corporations ... from using unfair methods of competition in commerce and unfair or deceptive acts or practices in commerce. 122 The Act went on to define commerce to include both interstate and international commerce; 123 furthermore, the Commission was statutorily empowered to gather and compile information and 58 (t)o investigate, from time to time trade conditions in and with foreign countries where associations, combinations, or practices of manufacturers, merchants or traders, or other conditions, may affect the foreign trade of the United States ... 124 59 Courts have customarily granted broad deference to an agency's own initial determination of the scope of its investigatory authority. 125 Indeed, there can be little doubt that when the FTC has sought to carry out its statutory mandate within the borders of the United States, the federal courts have chosen to construe its subpoena powers very broadly. 126 60 It is essential to bear in mind, however, the distinction between the narrow issue addressed in this case namely, the validity of the method of subpoena service actually employed by the FTC and the larger question of the FTC's authority to investigate both domestic and foreign corporations whose actions have harmful effect on U.S. commerce. Clearly, the FTC has subject matter jurisdiction to investigate and regulate any of respondent's activities which affect United States commerce. Yet the fact of this broad subject matter jurisdiction in no way warrants the presumption that the FTC can use any technique to serve a subpoena compelling a foreign company residing abroad to produce live witnesses and documents. 127 61 Liberal judicial interpretations of agency power are not justified when agency action threatens to have extraterritorial, rather than merely national, impact. In Foley Bros. v. Filardo, the Supreme Court stated: 62 The canon of construction which teaches that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States ... is a valid approach whereby unexpressed congressional intent may be ascertained. 128 63 Furthermore, as we noted in our original opinion ordering remand, 129 courts are bound wherever possible to construe strictly federal statutes conferring subject matter jurisdiction on domestic agencies to avoid possible conflicts with contrary principles of international law. 130 64 The reverse side of this general canon of statutory construction, of course, is that courts of the United States are nevertheless obligated to give effect to an unambiguous exercise by Congress of its jurisdiction to prescribe even if such an exercise would exceed the limitations imposed by international law. 131 Given the plain intrusion upon French national sovereignty resulting from the FTC's direct service of its compulsory process abroad 132 and the violation of international law which would result if the district court were to enforce the subpoena here, 133 the only issue is whether the provisions which governed subpoena service within the FTC Act at the time of the challenged service could have been sensibly construed so as to avoid conflict with international law. 65 In view of the international interests at stake, we suggest that, at the time of service, the best reading of congressional intent with regard to permissible modes of subpoena service was one authorizing the FTC to use all customary and legitimate methods of service of compulsory process commonly employed by American courts and administrative tribunals. 134 Such a reading would have imposed the requirement of personal service found in Federal Rule of Civil Procedure 45(c), governing permissible methods of subpoena service by a federal court, 135 upon FTC subpoenas as well. It would have further required that wherever possible, an agency attempting subpoena service on foreign citizens residing on foreign soil should make initial resort through established diplomatic channels or procedures authorized by international convention. 136 66 To interpret the congressional intent underlying the FTC Act as authorizing methods of agency subpoena service abroad less rigorous than the means used to serve judicial subpoenas domestically have run counter to common intuition. To illustrate, if a civil litigant sought to subpoena a California corporation to appear and produce documents in a Washington, D.C. federal court proceeding, that litigant would, under the Federal Rules, be required to have his subpoena delivered in person by a United States marshal or another responsible adult. 137 Were the litigant simply to send the subpoena by registered letter to the corporation's principal offices in California, and the corporation were to resist compliance, the Washington, D.C. district court would refuse to enforce the subpoena. Even if the district court had personal jurisdiction over the foreign corporation, based upon the existence of minimum contacts between the corporation and the District of Columbia, and even if the witness had received actual notice of the proceeding, the improper technique of service employed would cause the court to refrain from citing the recalcitrant witness for contempt. In accordance with rule 45, the district judge would direct the litigant to obtain personal service upon the witness in California, or alternatively, to serve the corporation's agent in Washington, D.C. 138 We cannot imagine that when Congress enacted the FTC Act in 1914 it could have intended an administrative agency such as the FTC to procure witnesses and documents from abroad by means which no civil litigant had ever been able to employ within the borders of the United States. Nor can we imagine that Congress originally intended that the federal courts exercise their enforcement powers to aid administrative agency investigations initiated by registered mail, without making provision for the inevitable infringements upon foreign sovereignty which would result from such exercises. 139 67 Should the FTC be able to obtain personal service upon the president, an officer, or a director of SGPM within the territorial boundaries of the United States, it could validly obtain a judicial enforcement order for that subpoena. Furthermore, we take judicial notice of a recent congressional amendment to the FTC Act, enacted after the subpoena challenged here issued, which apparently gives the FTC express authority to serve its civil investigative demands upon any person who is not found within the territorial jurisdiction of any court of the United States, in such manner as the Federal Rules of Civil Procedure prescribe for service in a foreign nation. 140 Because we are concerned here solely with interpreting the congressional intent underlying the FTC Act as it existed at the time of the challenged service, we need not express any opinion at this time as to whether the FTC could now lawfully serve its compulsory process abroad by registered mail as a civil investigative demand governed by the terms of the amended provision. We note only that, even if expressly authorized by statute, such a mode of service might still be subject to a due process attack if the witness so served both refused to concede the personal jurisdiction of the agency and lacked the requisite minimum contacts with the United States. 141 Furthermore, under the principles of international law discussed above, such a manner of statutory service might still violate international law. 142 68 Even if the agency could accomplish proper service by the means we have described, the issue of whether it could actually obtain the documents in question is far from settled. Proper service of the FTC's subpoena would merely create an obligation upon SGPM under American law to furnish the documents. The zeal with which American litigators have recently engaged in antitrust discovery abroad and the willingness of American courts to order production of foreign documents have not only triggered international controversy 143 and academic debate; 144 they have prompted passage of a fresh wave of foreign non-disclosure laws as well. 145 Indeed, since the instant litigation began, the French government has enacted a statute which would not only subject SGPM to criminal and monetary penalties for producing the documents sought here, 146 but would also potentially subject the FTC to criminal penalties under French law merely for ask(ing) for ... information of an economic, commercial, industrial, financial or technical nature that may constitute proof with a view to legal or administrative proceedings in another country. 147 Though we express no view here as to whether SGPM's noncompliance with a properly served subpoena would be excused in light of the French statute 148 the potentially dire consequences of properly obtained service for both the agency and the respondent influence our decision strictly to construe the congressional intent underlying the statutory provisions relevant here. Without granting undue deference to the mandate of foreign nondisclosure laws, 149 we note simply that where two constructions of a statute are possible, the one less likely to conflict directly with regulations of other nations should be chosen. 150