Court Opinion

ID: 8831096
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:03:59.531621+00
Date Added: 2024-06-11T17:04:54.477356
License: Public Domain

BLEDSOE, District Judge
(after stating the facts as above).  The statute creating the Federal Trade Commission (38 Stat. 717 et seq. [section 8836a et seq., U. S. Comp. St.]), was intended to provide an instrumentality of the government by which in a general way the injustices arising from unfair competition in business might be prevented and certain standards of business morality raised. The commission was authorized to take cognizance of complaints involving asserted unfair competition, and in addition authorized to gather and compile information with respect to the organization, business conduct, practices, and management of corporations, looking to the matters of the sort and kind of trade and commerce conducted by such corporations. Among other things, the act provided (section 9 [section 8836i, U. S. Comp. St.]) that, for the purposes of the act, the commission, or its duly authorized agent or agents, shall at all reasonable times have access to the business of any corporation for the purpose of examining it, and the right to copy any documentary evidence of any corporation being investigated or being proceeded against. The commission is given power to require by subpoena the attendance and testimony of witnesses and the production of all such documentary evidence relating to any matter under investigation. Any member of the commission may sign subpoenas, and members and examiners of the commission may administer oaths and affirmations, examine witnesses, and receive evidence. Provision for the attendance of witnesses at such places as may be desired or necessary is made. It is specially provided that:
“No person shall be excused from attending and. testifying or from producing documentary evidence before the commission or in obedience to the *520subpoena of tbe commission on the ground or for the reason that the testimony or evidence, documentary or otherwise, required of him, may tend to criminate him or subject him to a penalty or forfeiture. But no natural person shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he may testify, or produce evidence, documentary or otherwise, before the commission in obedience to a subpoena issued by it.”
From the testimony adduced at the hearing hereat, it is apparent that, pursuant to request or demand made by the commission, or one of its special examiners, the defendants gave answer to certain questions contained in a lengthy questionnaire, and permitted inspection or furnished copies of certain documentary evidence in their possession. With respect to the latter, it may be said that it all pertained and perhaps belonged to the common-law trusts which they had organized, and of which they severally were trustees. Whether as such, under the holding in Wilson v. U. S., 221 U. S. 361, 31 Sup. Ct. 538, 55 L. Ed. 771, Ann. Cas. 1912D, 558, they possessed no privilege respecting a disclosure of the same, need not now be determined. It is now asserted by them that the evidence given by them pursuant to the above-mentioned demand or request concerned and touched upon the matters embraced in the charge pending herein; that, in consequence, pursuant to the terms of the immunity provision quoted, they are immune from prosecution and should be dismissed herefrom.
It is the fact that no subpoena was issued and that neither of the defendants were sworn concerning the matters with respect to which they furnished the commission with information. It is also the fact that the questionnaire, containing some 50 or more questions, touched upon the organization and business methods, conduct, nature, and sources of the business of these common-law trusts or companies that had been organized by the defendants, and the engagement in which, and furtherance of which, it is charged, constituted a part of the scheme or device to defraud lying at the base of the present prosecution. There is undisputed testimony that the defendants at first declined, or just perhaps neglected, to make answers to the questions contained in the questionnaire- when the same was first forwarded to them by the commission. However, they were pressed for a compliance by the special examiner of the commission, he making a number of personal calls at their place of business. Finally, having certain provisions of the Federal Trade Commission statute read to them, and being advised by counsel that it was their duty, under the law, as a common-law trust, to submit to the jurisdiction of the commission and give the information desired, they acceded to the request.
It was specially developed in the evidence that at no time was the law-respecting immunity, as set forth hereinabove, read to them, and it is not only the fair, but the necessary, inference, in my judgment, frqm all of the testimony, that at no time did they give information or furnish documentary evidence to the examiner because of any reliance or belief by them that, as a consequence of the giving of such_ information or evidence, they would be the recipients of, or be entitled to, immunity with respect to any matter concerning which they were examined. It is the fact that no claim or suggestion was made by *521either of them at any time that any information sought or questions asked, or any answers required to be given, would in any wise serve or tend to incriminate them or either of them. It is also the undisputed evidence that the postal inspector, responsible for the initiating of the present prosecution, who secured the evidence and caused it to be presented to the grand jury, obtained none of his information from the Federal Trade Commission or any agent thereof. Presumably all the information secured by the commission was transmitted to its office in Washington in due course and is now on file and undisturbed among the archives.
These being the facts, the question presented is: Does the transaction in its entirety, as I have sketched it, suffice, under the provision of the Federal Trade Commission Act, to operate as a general amnesty of these defendants concerning all the matters having to do with their operation, management and conduct of the business of these three common-law trusts? It has been decided by the Supreme Court of th© United States in Brown v. Walker, 161 U. S. 591, 606, 16 Sup. Ct. 644, 40 L. Ed. 819, that a statute essentially similar, respecting the giving of testimony before the Interstate Commerce Commission and the resultant immunity provided for therein, operates to secure a general immunity, applicable whenever and in whatever court a prosecution may be attempted. In other words, the law of the United States being the.supreme law of the land, any law of the United States operating as a grant of general immunity operates throughout the United States in both federal and state courts. So, then, we have this situation:
Because of some complaint filed with the Federal Trade Commission, or some criticism irtdulged in, or perhaps because of some general investigation being conducted by the commission, an investigation of the conduct of the business of these particular concerns was instituted. In response to a somewhat insistent request for information, and in obedience thereto, such information was furnished. At no time during the conduct of the investigation was any suggestion made or tendered that incriminating matter was being called for or given. Similarly, at no time during the proceedings was any suggestion made, tendered, or even entertained that immunity from criminal prosecution was to accrue as a result of the disclosures being, indulged in. Under the conditions obtaining, to hold with the defendants is to hold that, with no preliminary assertion of privilege, suggestion of incrimination, or previous notice of any sort to the government at all, they are forever immunized from prosecution in any court of the United States, or of any state of the United States, with respect to any act committed or transaction had by them concerning which information was given to the Federal Trade Commission. That is the situation in its nakedness. Tn its nakedness it. is so abhorrent to my sense of justice that I believe it merits unqualified condemnation.
Tustice is our aim, and justice is based upon reason and fairness. In criminal justice there must be fairness to the government, as well as fairness to the individual. In order that no man might be convicted of crime out of his own mouth, bv constitutional enactments the absolute privilege was guaranteed to him of declining to testify at all *522with respect to any matter which might tend to incriminate him, and therefore subject him to possible prosecution or punishment. It was long since made manifest, however, that it might be better in certain matters of public moment for the public to waive all right to impose criminal punishment on the individual, and in consideration of such express waiver compulsorily to demand and secure from him any and all evidence deemed relevant and material in respect to designated matters more or less vitally affecting the common good. Because of the obvious fairness of the situation thus presented, the people have provided, by law binding upon all the courts of the United States and the various ’ states, that if the government, through any of its specified Instrumentalities, does exact information from a man, does compulsorily require him to testify respecting matters that might incriminate him, he shall thereafter be free in every court of the country from prosecution or 'the possible exaction of a penalty or forfeiture.
But, in order that the statute may have a reasonable construction; in order that there may be a rational operation of the obligations resting no less upon the individual than upon the government; in order that society itself may receive some fair measure of protection; in order that the criminal law may not be rendered impossible of enforcement; and in order that opportunities and avenues of escape may not be opened up, so that sundry clever criminals in our midst may be permitted to go hence unwhipped of justice — I am persuaded that at some time during the course of the proceeding resulting in the compulsory furnishing of information, and in virtue of which a valid claim of immunity is thereafter to be urged, the question of possible incrimination should be broached, and, upon the notice thus given, organized government, representing the people, should be accorded the right of election as to whether the nature of the matter under investigation justifies the compulsory exacting of the testimony asserted to be incriminating and the consequent immunizing of the witness.
Now, in dealing with this claimed immunity, though the argument took rather a wide range, it is not necessary to determine whether a subpoena should have issued, or whether the men ought actually to have been sworn, or' whether they should actually have claimed their constitutional privilege, and positively or even tentatively refused to answer, because of their belief that their answers might serve to incriminate them. In a proper case, one or more of these circumstances might justify careful consideration. Here, however, as already indicated, there was no suggestion at any time by anybody of a possible claim of, or a reliance upon, expected immunity. Neither of the defendants entertained any idea, in my judgment, that they were to be the beneficiaries of any immunity in virtue of their giving information relative to the business they were conducting, and of course nobody representing the government had any suspicion that such would be claimed or a possible consequence.
From their own attitude and admissions, it is apparent they knew nothing about any possible immunity until they had employed astute counsel in the case now pending. I am persuaded, therefore, that it is a reasonable construction of the statute to hold that one who would *523seek to take advantage of it must make it appear, or at least take such steps as to put the government upon notice, at such time as will enable the government to elect as to the course it desires to pursue, that there are matters with respect to which he is being or about to be interrogated, which may tend to incriminate him, and that, in consequence, if-he testifies or yields information, it must be in consideration of immunity being accorded to him, pursuant to the terms of the law. Any other construction of the statute will make it possible for an individual who has been guilty of perhaps a heinous crime concerning, or in connection vyith, some business transaction that may touch upon commerce, to have initiated some sort of an investigation by the Federal Trade Commission, and then, upon an inquiry being made, to give some information touching the matter concerning the crime, and thereafter, as a legal consequence, be exempt from prosecution in any court of the land. See U. S. v. Bryant (D. C.) 245 Fed. 682. If such should be rendered possible, practical and positive law enforcement would be reduced to a very low ebb in this country.
In the absence of any showing or suggestion of the sort indicated, and consequent election or opportunity of election on the part of the government, it must be held that the information furnished by the defendants to the Federal Trade Commission was essentially voluntary in character and that no immunity results as a legal or other consequence.
Defendants have cited U. S. v. Armour & Co. (D. C.) 142 Fed. 808, 824, 825, and U. S. v. Bell (C. C.) 81 Fed. 837. The inappositeness of these decisions, in the light of the facts detailed herein, clearly appears. The government cites the decision of Judge Grubb, in U. S. v. Skinner (D. C.) 218 Fed. 870, with the logic and reasonableness of which I am in wholehearted accord, and also that of Judge Hunt, in U. S. v. Elton (D. C.) 222 Fed. 428, which is equally persuasive.
The pleas of immunity of the defendants named are overruled and disallowed.