Court Opinion

ID: 6903284
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:57:09.021109+00
Date Added: 2024-06-11T16:06:14.435483
License: Public Domain

MINTON, Circuit Judge
(dissenting).
A cease and desist order of the Federal Trade Commission that has become final without review or after review by this Court and is not complied with, may result in judgment by a District Court for a civil penalty under 15 U.S.C.A. § 45 (Z) or enforcement proceedings before the reviewing Court of Appeals, 15 U.S.C.A. § 45(d). Noncompliance may result in dual action — one, for a penalty before the District Court; two, for enforcement by contempt proceedings by the Court of Appeals; or a choice between the two remedies. Punishment for past delinquencies would seem to lie with the District Court. Enforcement looking to the future would seem to lie with the Court of Appeals. Whether to proceed for punishment or enforcement, or both, would require someone to produce the facts. This is the Commission’s job. As I understand the instant proceeding, it is not an attempt at enforcement of this Court’s decree by the proceeding here instituted in the District Court, and is therefore by no stretch of imagination an interference with the exclusive jurisdiction of this Court to enforce its orders. The instant proceeding is an attempt by the Commission to get the facts upon which to base a judgment as to whether there has been compliance, which, if present, results in no further proceedings ; or noncompliance, which, if present, may lead to action for penalty or enforcement, or possibly both.
Does the Act authorize the Commission to use the procedure it has adopted here to get the facts ? We must assume that the Commission is unable to tell from the data furnished whether there has been compliance. Public officers are presumed to act in good faith until the contrary has been made to appear. The Commission finds the authority for the present procedure to obtain the facts under 15 U.S.C.A. § 46(a) and (b) and under Rule 261 promulgated by the Commission. It is the position of the Commission that either the rule or the statute is sufficient to justify its action.
It seems to me that when Congress enacted the Federal Trade Commission Act, it was providing an integrated act and not a compartmentalized act, as the majority of this Court seems to think. In my view of the case, it is unnecessary to deal with Sec. 46(a) and (b) and the narrow, restricted construction thereof, as indulged in by the majority of this Court. I find ample support for the procedure of the Commission contained in its rules, read in conjunction with the provisions of the statute. Sec. 46(g) of the statute provides:
“Sec. 46. Additional powers of Commission.
“The Commission shall also have power—
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“(g) From time to time to classify corporations and to make rules and regulations for the purpose of carrying out the provisions of sections 41-46 and 47-58 of this title.”
This, it will be noted, is a part of Sec. 46 which the majority of this Court holds applies only to corporations. The section just quoted specifically refers to Secs. 41-46. Sec. 45, which is within this, reference, deals with persons, partnerships, and corporations, and the cease and desist order here involved arose out of a Sec. 45 proceeding. It seems clear to me that Congress by Sec. 46(g) gave a broad power to make rules for the carrying out of the provisions of the whole Act. Under this power, the Commission promulgated Rule 26, the pertinent provisions of which read as follows:
“In every case where an order to cease and desist is issued by the Commission for the purpose of preventing violations of law and in every instance where the Commission approves and accepts a stipulation in which a party agrees to cease and desist from the unlawful methods, acts, or practices involved, the respondents named *710in such orders and the parties so stipulating shall file with the Commission, within sixty-days of the service of such order and within sixty days of the approval of such stipulation, a report, -in writing, setting forth in detail the manner and form in which they have complied with said order or with said stipulation; provided, Jwwever, that if within the said sixty (60) day period respondent shall file petition for review in a circuit court of appeals, the time for filing report of compliance will begin to run de novo from the final judicial determination ;
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“Within its sound discretion, the Commission may require any respondent upon whom such order has been served and any party entering into such stipulation, to file with the Commission, from time to time thereafter, further reports in writing, setting forth in detail the manner and form in which they are complying with said order or with said stipulation.”
We are dealing here with a cease and desist order that has been reviewed by this Court. The rules of the Commission provide that in such a case, the time for filing a report of compliance begins to run from the final judicial determination. Nothing is said as to how long after the time 'commences to run the report of compliance 'shall be filed with the Commission. Apparently the reviewing court’s order fixes that time and in the instant case, this Court fixed it at ninety days. Obviously, this rule in no manner interferes with the jurisdiction of this Court to make or enforce its order. Under this rule, whose validity is not challenged here, and which rule has the effect of law, the Commission may require a party to such cease and desist order “to file with the Commission, from time to time thereafter, further reports in writing, setting forth in detail the manner and form in which they are complying with said order.”
What the Commission did on September 2, 1947, in the instant case was to require the defendants to file within thirty days after the service of notice additional reports showing in detail the manner and form in which the defendants had been and were complying with the cease and desist order and the decree of this Court, together with some supporting data. On September 22, 1947, the Commission, at the request of one of the respondents in the cease and desist order, but not one of the defendants here, extended the time for filing the additional reports and data to November i, 1947. The other eighteen respondents in the order complied. Apparently the Commission’s procedure did not impress them as unusual. The defendants refused to comply and, being in default for more than thirty days after November 1, 1947, the Commission on February 27, 1948, served notice of default upon the defendants, and, upon their further failure to comply within thirty days, instituted the instant proceeding, pursuant to IS U.S.C.A. § 50, which provides:
“If any corporation required by said sections 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 * *
This Sec. 50 refers to “special reports” required by "said sections,” that is, Secs. 41-46 and 47-58 which are the essential provisions of the Act. True, the Commission’s proceedings refer not to “special reports” but to “additional,” “further” and “supplemental” reports. It seems to me to say the latter are not special reports is to indulge in a refinement in language that would not be countenanced even in a criminal proceeding. I think “additional,” “further” and “supplemental” are the equivalent of “special,” since they are all reports not required in the usual course.
The majority have stressed what it sees as an interference with this Court’s jurisdiction to enforce its decree. This is a bit unsubstantial, it seems to me. If the facts obtained justify proceedings, the Commission might proceed only for the penalty under Sec. 45(l). In that instance, the Commission would not have to consult this Court at all. If it sought enforcement it could only be in this Court in full recognition of its jurisdiction.
*711What this case adds up to it this; That the defendants have refused deliberately, and with full consciousness of the consequences, to comply with an order of the Commission made pursuant to lawful authority, and such deliberate refusal comes squarely within the punitive provisions of Sec. 50. The Commission’s rules have been published in the Code2 as a part thereof, following 15 U.S.C.A. § 45. Since the regulations, which are authorized by the statute, together with the statute authorized the procedure which the Commission has followed, the defendants have certainly not been misled. I would reverse the judgment of the District Court.

 12 Fed.Reg. 5448, August 12, 1947.

 The present rule is Rule 26 in the Code. This rule is number 25 in prior publications of the rule in 11 Fed.Reg. 7074-7075, June 26, 1946; 10 Fed.Reg. 7388, June 20, 1945.