Court Opinion

ID: 9458926
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:05:28.807164+00
Date Added: 2024-06-11T17:35:56.858787
License: Public Domain

LUMBARD, Circuit Judge
(concurring) :
I concur in Judge Mansfield’s separate concurring opinion insofar as it reaches and resolves the merits of this dispute.
MANSFIELD, Circuit Judge
(concurring) :
I concur in the majority opinion. However, I would also reject on the merits Bristol-Myers’ statutory claim to issuance of subpoenas during informal negotiations. While a cease and desist order may not issue, history indicates the probability of such issuance and if past delay is any criterion this will inevitably be followed by a further appeal, at which time another panel will be required once more to review the same record and arguments in order to resolve the issue. Rather than countenance such shuffling back and forth, with its consequent duplication and waste, I would decide it now.
As the majority opinion indicates, fn. 5, Bristol-Myers’ statutory claim is laby-rinthian. Reduced to simplest terms the claim is that at an informal negotiating stage it is á “party” as that term is used in the subpoena statute, 5 U.S.C. § 555 and defined in 5 U.S.C. § 551, i. e., a “person” named in an “agency proceeding”. The latter term is claimed to be a step in “adjudication”, which is defined as an “agency process for the formulation of an order”, 5 U.S.C. § 551(7). An “order”, in turn, is defined as a “final disposition”, 5 U.S.C. § 551(6). Since an informal negotiation can result in the issuance of an order, Bristol-Myers contends that it is a “party” within the meaning of 5 U.S.C. § 555(d).
The fatal defect in this tortuous syllogistic reasoning is that informal negotiations under 5 U.S.C. § 554(c) are not adjudicative in nature. See The See-burg Corp. v. FTC, 8 F.T.C. Stat. & Dec. 393 (E.D.Tenn.1966), aff’d., 425 F.2d 124 (6th Cir.), cert. denied, 400 U.S. 866, 91 S.Ct. 104, 27 L.Ed.2d 105 (1970).
“Nothing in the Administrative Procedure Act or in the basic principles of fair procedure precludes the Commission from creating and following a procedure for settling disputes without recourse to adjudication. Consent *1120negotiations are not a stage in adjudication but a means of establishing whether adjudication can be avoided altogether. Like investigations, consent negotiations are distinct from the adjudicative process and hence not governed by the standards which control adjudicative procedure.” William H. Rohrer Inc., 64 F.T.C. Dec. 1446, 1447 (1964).
Congress intended such negotiating proceedings to be informal, without the procedures inherent in trial-type hearings (right of examination and cross-examination, findings of fact and conclusions of law). Recognizing that the formalism of trial-type proceedings might not be conducive to successful settlement negotiations, Congress left to the agencies the power to develop the precise nature of the informal proceedings that might be used to implement the statute. See S.Doc. 248, 79th Cong., 2d Sess. 24 (1946), Atty. Gen.’s Manual on the Administrative Procedure Act (1947). Pursuant thereto the FTC enacted § 3.2 of its Rules of Practice for Adjudicative Proceedings, 16 C.F.R. § 3.2, which provides in pertinent part:
“Adjudicative proceedings are those formal proceedings conducted under one or more of the statutes administered by the Commission which are required by statute to be determined on the record after opportunity for an agency hearing. The term does not include other proceedings such as negotiations for the entry of consent orders . . . . ”
In an informal consent negotiation pursuant to 5 U.S.C. § 554 there is no examination or cross-examination of witnesses, no findings of fact and no conclusions of law. If the negotiations are unsuccessful, no order at all can be entered. At that stage only if the Commission decides to file a complaint does an adjudicatory stage commence. If, on the other hand, the negotiation is successful, the parties present an agreement with a staff report to the full Commission, which remains on record for 30 days. If the Commission approves the agreement, a formal complaint is issued together with a consent order which recites the history of the informal negotiations. The resulting order is final for the reason that the respondent waives further adjudicatory proceedings.
The conclusion that a company engaged in informal consent negotiations is not a “party” entitled to issuance of subpoenas accords with practical experience. At such a stage the issues have not been framed. Under such circumstances to permit a person under investigation to engage in a roving subpoena expedition upon the speculation that he might discover something that might persuade the agency to consent to his proposal could lead to substantial abuse, waste and delay.
Since Bristol-Myers’ contentions are meritless, I would act now to foreclose the renewal of the issue upon a later appeal from a final cease and desist order.