Court Opinion

ID: 9446166
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:48:28.266129+00
Date Added: 2024-06-11T17:30:33.558130
License: Public Domain

JOHNSEN, Circuit Judge
(dissenting).
The Federal Trade Commission promulgated “Trade Practice Rules Relating to the Advertising and Sales Promotion of Mail Order Insurance”, 15 Fed. Reg. 955. It invited members of the industry to become signatories to those Rules, in indication of any such member’s desire to secure cooperative achievement, both in its own business and in the field generally, of the purposes of the Act. It set up a Rules Administration Division, in facilitation of this endeavor, to enable any signatory, among other things, to submit its forms of advertising and solicitation for scrutiny and suggestion, with either expression or implication of sanction or approval, as being in conformity with the standards of the Rules and so presumptively non-violative of the Act. It allowed the Staff of its Rules Division to exercise the functions of advisorily engaging in such sanctions and approvals of forms of advertising and solicitation thus submitted. Then, in petitioner’s case, it stepped in— without revocation of the Rules, without notice of repudiation of its Staff’s actions, and without request on petitioner to cease further use of such materials— filed a complaint requiring petitioner to show cause why a cease and desist order should not be entered against it, and on hearing, with no challenge as to the good faith of the seeking or granting of such approval, entered a cease and desist order against petitioner, as a violator of the Act, in having made use of some of such Staff-sanctioned advertising and solicitation forms.
Beyond this, it preliminarily ruled as to t^ie hearing had that evidence as to the facts referred to in the preceding paragraph could be “in no way relevant or material to any issue in the proceeding”, so that petitioner was precluded from having such evidence considered, either on the merits of the question of deceptiveness in practical aspect, or as an element on the need for a cease and desist order in the circumstances of the particular situation.
It seems to me that this constituted fundamental lack of fair play in administration and processive arbitrariness in hearing. I do not believe that a use of advertising or solicitation forms, approved by the Commission’s Staff, under trade practice rules promulgated by the Commission and under sanctioning procedures authorized by it in relation thereto, can constitute such “deceptive acts or practice” as the Act contemplates should *295be made the subject of a cease and desist proceeding, and on which the Commission may presume to speak — until after there has been a removal of its administrative insulation.
That administrative insulation has, of course, now been removed in the present situation by the indications made in the rulings and results of this proceeding. But in effecting the deinsulation, the Commission should not, within the purpose and spirit of the statute, be allowed to pillory petitioner as a law violator, in the fists of its competitors and in the eyes of the public, for what was done, not as petitioner’s act alone, but as an act of purported administrative insulation.
I would remand the case to the Commission, with leave to hold open the complaint, until it is seen whether further use is made by petitioner of the dein-sulated material, and on that basis to enter a cease-and-desist or dismissal order.