Court Opinion

ID: 8828452
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:54:50.679659+00
Date Added: 2024-06-11T17:04:51.200461
License: Public Domain

SMYTH, Chief Justice
(dissenting). Being unable to concur in the opinion just announced, I state in a very general way the reasons for my dissent. For convenience I shall speak of the defendants as the Commission.
This case does not call for a decision as to whether or not Congress or the Federal Trade Commission, acting by its authority, has the power to regulate manufacture or intrastate commerce. The order of the Commission which is challenged does not seek to regulate anything. It simply calk- for information relative to the activities of the plaintiffs in manufacture and commerce, both interstate and intrastate. It bases its claim to that part of the information which relates to manufacture and intrastate commerce upon the postulate that it is necessary to enable Congress and the Commission to perform their respective duties with regard to commerce between the states, or at least that it is appropriate for that purpose.
The trial court sustained the plaintiffs’ motion to strike the Commis*946sion’s amended answer (hereafter called the answer), on the ground that it did not state a defense, and entered a decree for the plaintiffs. All its allegations, therefore, which are properly pleaded must be treated as admitted. Among, other things, it alleges that plaintiffs are engaged in interstate commerce; that it is necessary that the Commission procure complete information as to all the business of each of the plaintiffs in order that it shall perform its duty as to their interstate commerce; that unless the information is produced the Commission will be unable to properly perform that duty, for the reasons that all of the plaintiffs, while engaged substantially in interstate commerce, have' also certain activities which are performed intrastate, and which activities are so interwoven with their interstate business that it is impossible to separate them; and that, even if they could be separated, the separation would render the result untrue and inaccurate, and of little or no value in enabling the Commission to perform its regulatory duties as to the interstate business of the plaintiffs. The answer also alleges that the information sought is necessary to enable Congress to perform its duties with respect to regulating the interstate and foreign commerce of the plaintiffs.
It is argued that the allegations of the answer to the effect that the information sought is necessary to enable Congress and the Commission to perform their respective duties in regard to commerce between the states are mere conclusions of fact, and as such were not admitted by the motion; that the pleader should have set forth the facts from which it deduces the conclusion that the information is necessary. To this I cannot accede. The purpose of the answer was to advise the plaintiffs as to what the Commission expected to prove. This purpose was sufficiently served by stating the ultimate or operative facts. It was not required that the evidence upon which the Commission relied to establish the facts should be set out. If the plaintiffs desired a more specific statement, it was their right to move for it under equity rule 20 (198 Fed. xxiv, 115 C. C. A. xxiv) promulgated by the Supreme Court of the United States. This they did not do. A general statement of the essential ultimate facts upon which the defense rests is enough.
“It was not necessary to aver * * * all the minute circumstances which may be proven in support of the general statement. * * * ”
The answer distinctly apprised the plaintiffs of the precise case they were required to meet. St. Louis v. Knapp Co., 104 U. S. 658, 661, 26 L. Ed. 883. As was said by Mr. Justice ‘Holmes, delivering the opinion of the court in Swift & Co. v. United States, 196 U. S. 375, 395, 25 Sup. Ct. 276, 279 (49 L. Ed. 518):
“A bill in equity is not to be read and construed as an indictment would have been read and construed a hundred years ago, but it is to be taken to mean what it fairly conveys to a dispassionate reader by a fairly exact use of English speech.”
See, also, United States v. United Shoe Machinery Co. (D. C.) 234 Fed. 127, 136.
It is my opinion that the answer sufficiently alleged that the infor*947mation sought was necessary or at least appropriate for the purposes indicated, and that the motion to strike admitted it.
Plaintiffs allege in variant forms that the Commission is not authorized by the act creating it to demand the information sought. Section 6 of the act is set out in the opinion of the court. It authorizes the Commission:
“To gather and compile information concerning, and to investigate from time to time the organization, business, conduct, practices, and management of any corporation engaged in commerce,” to require, “by general or special orders, corporations engaged in commerce ° * * 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 me organization, business, conduct, [and] practices” of the corporations mentioned. And it is declared to be the duty of the Commission “to make public frpm time to time such portions of the information obtained by it * ® •" except trade secrets and names of customers, as it shall deem expedient in the public interest; and to make annual and special reports to the Congress and to submit therewith recommendations for additional legislation,” etc.
The commerce spoken of is interstate.
In the answer it is alleged, and not denied, that all the plaintiffs are engaged in interstate commerce, and that 65 per cent, of their business, save as to three, is such commerce. They belong, therefore, to the class of corporations “concerning” which the act authorizes the Commission to gather information. Does the information requested come within the purview of the act? It relates to the “business, conduct, practices, and management” of the corporate plaintiffs. It is called for in the form of special reports, and is sought for the purpose of making it public and of laying it before Congress, with recommendations for additional legislation.
It is urged that, while the information relates to the business, etc., of the plaintiffs, this is not enough — that it must concern the interstate commerce features of that business. The answer, as we have shown, alleges, and the allegation is admitted, that the information is necessary in order that the Commission and Congress may perform their duties with respect to the interstate features of the business. Since this is true, it must concern those features, and therefore it is such as the Commission is authorized to gather.
The next inquiry is as to whether Congress had the power to confer upon the Commission authority to gather information with respect to the manufacturing and intrastate activities of corporations engaged in commerce between the states, to the end that it might regulate, either by legislation or otherwise, the commerce over which it has jurisdiction. The requiring of information concerning a business is not a regulation of that business. Interstate Commerce Commission v. Goodrich Transit Co., 224 U. S. 194, 211, 32 Sup. Ct. 436, 56 L. Ed. 729. In that case reports were called for by the Commission with respect to intrastate business. The corporation refused to supply it, on the ground 1hat the Commission had no power to demand such information, because it related to intrastate business. But the court said that, since the information was essential to enable the Commission to perform its required duties touching interstate commerce, the Commission had a *948right to require it. There are other decisions to the effect that Congress may enter the domain of intrastate activities whenever it is appropriate that it should do so, in order that it may properly exercise its regulatory power with respect to interstate commerce. Interstate Commerce Commission v. Cincinnati, New Orleans & Texas Pacific Railway Co., 167 U. S. 479, 506, 17 Sup. Ct. 896, 42 L. Ed. 243; Schollenberger v. Pennsylvania, 171 U. S. 1, 21, 18 Sup. Ct. 757, 43 L. Ed. 49; Minnesota Rate Cases, 230 U. S. 352, 431, 33 Sup. Ct. 729, 57 L. Ed. 1511, 48 L. R. A. (N. S.) 1151, Ann. Cas. 1916A, 18.
One of the briefs for the plaintiffs admits that, as soon as any concrete legislation should be submitted to or contemplated by Congress, “it would have full power to secure any and all information indispensable to a proper consideration and disposition of such proposed legislation.”
I think this concession is sound, but it is too restricted. May it not be essential that Congress should have information on a given phase of commerce before it formulates any concrete legislation or contemplates legislation with reference to it? And, if so, why should it not have the same right to gather it as it would have, according .to the concession, where legislation is actually pending? To say that it may authorize the procuring of all the facts necessary to the proper disposition of pending legislation, but that it has no power to gather what may be appropriate to enable it to determine whether any legislation is necessary, does not appeal to me as correct.
But it is argued that the regulatory power of Congress must be exercised through legislation, and that information desired for the mere purpose of publication may not be required by it. There is nothing in the Constitution which says how Congress shall exercise its regulatory power. This is left to its judgment. Former Senator Burton, of Ohio, in his work on Corporations and the State, 60, 61, after a very careful consideration of the matter, declared that “of all regulations which promise results publicity should be placed first.”
It is beyond dispute that Congress has no general visitatorial powers over state corporations, but it has been decided that it has power to visit them for the purpose of seeing “that its own laws are respected.” Wilson v. United States, 221 U. S. 361, 384, 31 Sup. Ct. 538, 55 L. Ed. 771, Ann. Cas. 1912D, 558. By a parity of reasoning may it not be said that if it is necessary to protect interstate commerce, or appropriate for that purpose, that Congress should enter the field of intrastate commerce, it may do so? Houston & Texas Railway Co. v. United States, 234 U. S. 342, 34 Sup. Ct. 833, 58 L. Ed. 1341. In that case the court said that Congress possesses—
“the power to foster and protect interstate commerce, and to take all measures necessary or appropriate to that end, although intrastate transactions of interstate carriers may thereby be controlled.” 234 U. S. at page 353, 34 Sup. Ct. at page 837 (58 L. Ed. 1341).
The power of Congress to require the production of the information in question is defended by the Commission upon several grounds in addition to those I have mentioned, but I do not think it necessary for me to go further into the subject.
*949I am satisfied that the law requires that the information demanded be supplied, and therefore I think the decree of the lower court should be reversed, and the bill dismissed.