United States Steel Corporation

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Ix THE MATTER OF UNITED STATES STEEL CORPORATION ET AL.

Dockct 6078, Order and. opini, , Sept. 24, 1954 Order denying appeal of steel drum manufacturers from hearing examiner adverse ruling on their request for an order authorizing an informal stipulation-agreement in settlement of the ('charge of unla,yful combination and agreement to fix prices of steel drums; and granting in part respondents motion for a bil of particulars, Before111r. Abner E. L7:psc01nb hearing examiner. Mi'. Fletche!' G. Cohn, Mr. J amesl. Rooney, 11h. Paid R. Dixon, Mr. Everette 11faclntyre and 11h. William A. Mulvey for the Commission. MI'. Thomas Lynch of Xew York City, and 11h. L. L. Lewis, 11h. Merrill R1t8sell, lift. John C. Bane !T. and Reed, Smith, Shaw Mc- Clay, of Pittsburgh, Pa., for United States Steel Corp. and United States Steel Co.

llir. J, Theodore Ross of Pittsburgh, Pa., lor Jones &: Laughlin Steel Corp. and Jones&Laughlin Steel Barrel Co.

May61' , Froedlich, Spiess, Tier"ney BI'01J;n Platt of Chicago, Ill" for Inland Steel Co. and Inland Steel Container Co. lift. Gordon W. M allaiTatt of Richmond, Calif. , and Dick/er II albert of K ew York City, for Rheem :\Iannfacturing Co. lift. Thmnrts F. Patton, lift. H ahold C. Lnm /; and lift. William Lancey, of Cleveland, Ohio, for Republic Steel Corp. ORDER R.RULING O RESPOXDENTS' A1'PEALS AXD DntEcTlxG C01;NSEL SUrrOHTIXG THF. COJ.\IPLAJNT TO F"GHNISI- CERT.\.X IXFOIDfATIOX This matter having come on for hearing upon the respondents appeal dated October 26, 1953, from the hearing examiner s order of October 15 , 195:J, and the appeal additionally filed by them on November 5 , 1953, from the hearing examiner s order of October 28 1953 denying respondents' joint motion for a bill of part.iculars and upon the briefs and other memoranda filed in support of and in opposition to such appeals and oral arglUIlents of counsel; and The Commis ioll having clu1y considered the appe.als and having determined, for reasons st,ated in the accompanying opinion, that the appeal dated October 26 , 195:J, should be denied and that the appeal filed on ovember 5 , 1953, should be granted.n in part and denied in part: It is ordered that respondents' appeal of Odoher 26 , H);,:J, from the hea.ring examiner 8 order of October 15, 19;'3, be, and the same hereby , denied.

UNITED STATES STEEL CORP. ET AL. 377 376 Opinion It is further ordered that respondents' appeal from the hearing examiner s order of October 28, 1953, denying respondents' request for a bill of particulars be, and the same hereby is, granted in part and denied in part as noted in this order and in the accompanying opinion. I t is further ordered that counsel in support of the complaint be and he hereby is, directed to file in this proceeding, on or before the 29th day of October, 1954, a statement disclosing the period of time to be covered by the evidence to be offered by him in the course of his ca,se-in-chief and additionally identifying illustrative drums among a repre entative number of product types Iyhich he wid contend have been designated or adopted by the respondents as "st.andard" for pncmg purposes.

Cormnissioner 1\leacl dissenting to the extent that. he ,"auld deny both appeals filed by respondents, OPIXIQ.x OF THE COJ\UIISSlO.x By Carretta: Commissioner:

Presented for onr determination here are two interlocutory appeals filed by the respondents prior to the reception of evidence in this proceeding. The appeals challenge adverse rulings made by Lhe hearing xnminer on motions ,,-hieh ,were filed by the respondents. ndeI' the first of these interlocutory appeals, respondents urge in effect that the COllllnission issue an orde.r anthorizing or permitting eounse.l supporting the complaint to proceed to negotiate in settlement of this proceeding a stipulat.on agreement with respondents under' which respondents will agree to limit or discontinue "Voluntarily suc. i11acts or practices as may be agreed upon, defined and described that agreement. In denying respondents' similar request directed to him, the hearing examine.r stated that the Commission s statement of policy as prumulgated through the Ferleral Register of August 29 1947, in reference to settlement of cases by trade practice conference and stipulation agreements c.constitutes an expression that the privilege of settling formal cases through such ngre,ements will not be extended by the Commission to respondents charged with suppression or restraint of competition through conspiracy.y or monopolistic. practices. In support of tlleir appeal herb, respondents rontend, among other things, that it is probable, that, frank discussions between counsel of the issues may satisfy counsel supporting the complnint that there is no justificntion for a c.charge of c.onspiracy or other deliberate violation of Jaw and that ne-gotiation and accept.ance of an agreement on respondents' part V'olunta.rily to limit or discontinue practices defined 378 :FEDERAL TRADE COMMISSION DECISIONS Opinion Gl F. '1, C. described and agreed upon would reduce unnccessary delay and expense resulting from litigating this matter. It does not appear that questions pertaining to the Commission policy expression on settlement of cases under the trade practice conference and stipulatioll procedures have been presented heretofore for the COllnnission s consideration directly through the medium of an interlocutory appeal under Unlo XX of the Commission s Rules of Practice, and the llatters to which the appeal of October 26, ID33 relates, therefore, must be regarded as no\'e1. ,Without passing upon the question as to ,Whether this appeal properly Jies within Rule XX of the Commission-because oral ill'gmnent herein Influ hcanlaccordingly are of the yic\y that respondents' appeal should be considered and ruled upon by the Commission.

The complaint in this proceeding alleges that respondents, for many years last past and continuing to the time of its issuance, have acted unlawfully to suppress and prevent competition by entering into and carrying out an understanding and planncrl eonunon course of action, and pursuant thereto formulated and put into efI'ort certain practices, methods and policies under \I-which they agreed, among other things, to fix and maintain llnifol'm base prices, uniform price differentials, and uniform terms and conditions of sale in the oflering lor sale and distribution ill commerce of their sieel drums, The acts and practices alleged in the complaint to have been engaged in, manifpstly fall within the eategory of matters involving suppression or restraint of competition through conspiracy or monopolisbc practices and the privilege of settling forlTal cases of this type through stipulation agree,ments is foreclosed in the Commission s statement of policy)' referred to above.

In formulating flnd publishing its policies in reference to the settlement of cases under the trade practice conference and stipulation procedures, the Commission published simultaneously also an explanation of the considenltions underlying their adoption and stated that. the cooperative procedures anorc1ed for the settlement of cases noted should never be permitted as an easy esca.pe for willful violators of t.he Inws admillistered by the Commission or for avoiding or delaying t.he efl'ediveness of its corrective action. The circumstance that the explanator:v statement additionally contained an assertion that eonsipiracies and monopolistic practices are, ,,,ith few exceptions deliberately engaged in for the purpose of restraining competition and with knmdedge of their illegality and that violations of this type frequently also are crintinal violations of the Sherman Aet serves in 110 ma.nner to suggest that, under the Comllission s policy, inquiry UNITED STATES STEEL CORP. E1' AL. 379 376 Opinion or negotiations might be carried on and proceedings suspended in order to appraise the motives inspiring formation and adoption of the alleged conspiracy or monopolistic practices all directed to ascertaining if an agreement voluntarily to discontinue the acts or pract.ices could be negotiated and properly accepted in the circumstances. "\Ve are of the view that the hearing examiner correctly interpreted the Commission s here pertinent statement of policy to preeInde settlement of cases through the cooperative procedures there referred to when the practices charged involve suppression or restraint of competition through conspiracy or monopolistic practices. Respondents appeal of October 26, 1053, accordingly is deemed to be without merit. The other or eompnnion appeal challenges the hearing examiner order denying respondents' joint. motion . for n bill of particular.rs. Respondents contend that the complaint inadequately informs as to the period of time to which the alleged combina tion or c011spiracy relates and fails to define or limit properly the specific acts and praetires to which the complaint is directed. They submit also that it fails to identify the agents through whom the alleged agreements were entered into or the time or times to which the evidence will relate, and these Rsscl'ted omissjons, respondents Ul'gc improperly dellY them the right to reasonable notice of the charges and adequate opportunity to meet such charges. Among other things, respondent. additionally :state in this connection that, while such infoi'miltioll as they now possess indicates that the particular practices to ,vhieh the complaint is a.ddressed originated many years ago and ,vpre carried on during 20 years 01' more, any inquiry embracing thi$ period by l respondents into their corporate records and corporate reeords of predecessors no longer in existence would entail great e.xpensE' and would be needlessly wasted should counsel snpporting the complaint have in mind presenting evidence only with re,spect to a more recent period. OJle beginning, for exarnpJe, in 1945.

Respondents' motion for a bin of particulars ns directed to the hearing eXfunine1' was not fied until mole than eight months after service of the complaint. in this proceeding. During thc intervenjng period, however, pursuant to requests on behalf of counsel for respondents, the hearing examiner on ten occasions granted extensions of time within "hi('h to fiJe answers, the last of ,,,which extended the title therefor until October 16 , 1853, Respondents: answers "\were submitted and filed with the Commission on the same day t.hn.t counsel for respondents filed with the hearing examiner their joint motion for a bill of particulars. In circmnstances thus characterized by delay in submitting the original motion Hnd considering the fact that 380 FEDERAL TRADE CmIMISSIO DECISIONS Opinion 51 F.

the complaint in this proceeding clearly states a cause of action, the Commission perhaps might be warranted in summarily rejecting this application for leave to appeal.

IVe have decided, nevertheless, that this appeal should be duly considered on its merits in order to ascertain if the hearing examiner fuling on that motion was a correct ruling. One of the charges to which challenge was directed in the motion below is subparagraph (1) of paragraph 8, which alleges that the respondents have agreed to adopt and maintain uniform "standards," or specifications, for pricing purposes and respondents in effect urged below that the failure to identify any of such standards or specifications in the charges contributes to prejudicing their preparations for the defense, Al though this charge serves to state a. cause of action and therefore must be regarded as valid from that standpoint, -it can be concluded that, the failure to identify the drums mentioned more part.icuhuly needlessly might place an undue burden on the respondents incident to investigation and prepa.ring thelr defense as to this aspect of the proceeding. The probability of undue investigatory expense in such connection "would be greatly reduced if counsel supporting the complaint were to furnish to respondents information identjfying typical drums among a representative number of product types which he will contend have been designated or adopted through agreement as standard" for the purpose aforementioned. Our accompanying order directs that counsel supporting the complaint furnish information in that respect and the respondents' appeal is to this extent being granted.

Turning now to consideration of other charges \which allege, among other things that respondents have agreed to fix and maintain uniform base prices, difierentials, terms and conditions of sale these matters arc closely related to additional charges to the effect that the respondents have agreed to adopt, maintain and utilize a pricing formula or mathematical device there described in detail allegedly in order to calculate price revisions and to fix and maintain prices. l"With respect to these charges, the Commission is of the view that the complaint clearly is legally slliIcient and fairly apprises respondents with respect to the acts and practices charged. The hearings or the Commission are held at intervals, a responde,nt is not required to proceed with his defense until after completion of the case-in-chief and the absence of additional particulars as to these charges will not here deprive respondents of reasonable notice or adequate opportunity to meet the charges.

WilTED STATES STEEL CORP. ET AL. 381 376 Opinion This conclusion, not.vithstanding, the Commission is not in a position to gainsay counsel's statement that substantial expense may be incurred by respondents incident to investigating their files back 20 30 or more years to the time when respondents state they now believe various of the practices referred to in the complaint originated. Should it come about, as respondents suggest, that counsel supporting the complaint has in mind presenting evidence only with respect to some more recent period, some of the expense incident to thus examining their records might be considered unnecessary expense. The probability of such undue expense, if any, would be obviated if counsel supporting the complaint were to furnish information as to the period of time to be covered by the evidence which wil be offered by him in the course of the case-h1-chief. Considerations of fairness, therefore warrant that counsel supporbng the complaint be directed likewise to :furnish this information.

Nothingcontained herein should be interpret.ed to mean that counsel in support of the complaint may not brh1g the evidence up to date and introduce evidence of relevant and material facts occurring subsequent to the date of the complaint.

Commissioner :Lleacl dissents to the extent that he \Vould deny both appeaJs filed by respondents.

Complaint 51 F. T, C.