Wilson Tobacco Board of Trade, Inc.

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Ix THE MATTER OF WILSON TOBACCO BOARD OF TRADE, IKC., ET AL. Docket 6262. Order and opinion, Apr. , 19.56 Denial of leaye to intervene in cross-appeals from hearing examiner s initial decision to applicant having a substantial pri.ate controversy with respondents.

Before 1111'. ank Hier hearing examiner. Mr. R"f"s E. lVilson fo!' the Commission. 11/1'. ChfJ. B. Lucas, Rand Rose, GaJ'dneT , Cannot Lee McLean and Car,' Gibbon.; of Wilson, K. C. Battle, Wimlow , Blackwell Canady,Merrell of Rocky Mount, N. C. Blackwell of "'Vinston-Salem N. anclSandwl's, GT(Jelle, 1Vhitlock J.lfa'lkey, Diamond B1'yla1Dski and H O?/wey Simon of \Va,shington, D. C. for re,spondents.

ORDER DENYING J,,PPLICATIOX Fon LEAVE TO INTERVENE An appEcation lmying been filed by C. 13 Renfro, of 'Wilson North Carolina, requesting leave to intervene in this procee,ding for the purpose of filing a brief amicus curiae and participating in oral argument before the Commission on the pending cross-appeals from the hearing examiner s initial decision; and The Commission having c1etermined for the reasons set forth in the accompanying opinion, that the request should not be allowed: It is o1Ylered That the aforesn,id applic.ation for leave to intervene , and it hereby is, denied.

Commissioner l\:e1'n not participating.

OX APPLICATION FOl LEAVE TO INTERVEXE By SECHEST: Commissioner:

, filed This matter is before, the Commission upon an application by C. B. Henfro, requesting leave to intervene in this proceeding for the purpose of filing a brief amicus curiae and pa.rticipating jn oral argument before the Commission. The application is Ullopposed by counsel in support of the complaint, at least insofar as filing brief is concerned, but is resisted by respondents. The complaint charged the respondents, the "'Vilson Tobacco Board of Trade, Inc.. and its member warehousemen, \with an unlawful conspira.cy to suppre,ss competition in the sale and purchase of leaf tobacco on the \Vilson, Korth Carolina, tobacco market. The con- \VILSON TOBACCO BOAHD OF TRADE INC" ET AL. 1149 1148 Opinion spiracy ,vas carried out, it was alleged, through t.he adoption of rules and regulations having the effect of preventing the erection of new tobacco auction warehouses or the expansion of existing warehouses anel excluding would-be traders from the 'Vilson tobacco market. After the holding of twenty-two hearings over a period of six months, resulting in a record of 3163 pages of transcript and 215 exhibits, the hearing examiner on December 20, 1955 filed his initial decision which satisfied neither side, and both counsel in support of the complaint and the respondents have appealed. The case has been scheduled for oral argument on the merits on May 2, 1956.

In support of his application for permission to intervene the. applicant states that he is the operator of the Liberty 'Varchouse which was constructed in 'Vilson, North Carolina, just prior to the adoption of the r,,ulations challenged by the complaint. He states further that since he ,vas not joined as a party respondent nor called as a witness in the hearings, he has had no opportunity.y to be heard. I-Ie alleges, however, that hc has been highly prejudiced before the Commission in that the examiner erroneously found that he, as a recently admitted member of the respondent Boa.rd of Trade, voted for the perfornmnce system of allocating sellng time among the warehouses which was adopted by the respondents on April 8 , 191)2, and states that as thc operator of a tobacco warehouse on the 'Wilson market, he will be bound by any order the Commission may issue. His right to exist in competition with other warehousemen in 'Vilson, he says, may be, and in all probability will be, eonc1nsively determined in this proceeding. Under Section 5 of the Federal Trade Commission Act, any person, partnership or corporation may make applicfttion, and upon good cause shmvn " may be anowed by the Commission intervene in a proceeding. Under S 3. 11 of the Commission s Hules of Practice, opportunity may likewise be aft'orcled of fil111g an appropriate brief as amicns curiae. "Gnder both the statute and the rule, however, intervention ltnc1 the extent thereof is at the discretion of the Commission, and in the exercise of its discretion the Commission must necessarily examine all the pertinent circ,umstances.

One of the grounds upon which the applicant bases his application is that he, as a \varehouseman on the 'Vilson market, has had no opportunity to be heard in this proceeding. Just why he was not called as a witness does not appear. In fact, as the examiner pointed out in the initial decision, a showing of the applicant's experience after his entry into the market might have shed consider- 451524 59-- 1150 FEDERAL TRADE CO:MMISSIOX DECISIONS Oviniol1 52 F. T. C. able light on the reasonableness or unreasonableness of the regulation of the Doard of Trade concerning which the applicant now complains. But, be that as it may the record does not support an inference that the applicanes position was wholly disregarded. It strongly indicates, on the other hand, tllltt Mr. Renfro has taken a rather active interest in this case, even to the ext.ent of cooperating with counsel in support. of the complaint in obtaining and interviewing prospective witnesses. He obviously had the opportunity of calling to the attention of trial counsel those facts which believed would assist in the making of it proper record and the Commission cannot take too seriously the applicant's argument that he has had no opportunity to be heard. Having stood qnietly by during the six months the hearings were in progress, it in behooves him to nmv c.omplain of results, the possibility of which \vas a.apparent from the very beginning of the proceeding. The Commission like,,'ise does not understand the applicant's assertion that he wil be bound by any order the Commission may issue, or that his right to exist in competition with other WUTChousemen in 'Vilson will be determined in this proceeding. It is elementary that the Commission s orders, when issued, go no further than to require the respondents in a proceeding and their privies to refrain in the fut.ure from engaging in the unla,wful acts or practices in which they were found to have been engaged in the past. And, except in a class action, no person is bound even to that extent, by an order arising out of a proceeding in which he was neither served with process nor given an opportunity to litigate his claims or defenses. Accordingly, the applicant, who was not a party responde-nt in this proceeding and whose rights have not been determined herein, will not be bound by any order the Commission may issue and could not be subjected to penalties for exist inacts done cont.rary thereto. The applicanfs right to competition with other warehousemen in ,Vilson will be. det.ermined not by any order the Commission may issue, but by conditions and c.iremnstances ,yh011y separate therefrom. It is apparent to the Conllnission that this application must be denied for still anot.her and even more persuasive reason. The record discloses that. :\lr. TIenfro at one time filed a private lawsuit in n state court against the re ponc1ents in thie proceeding. The record further discloses that thereafter he instituted another action in a United States District Court under t.he Sherman Antitrust Act against the same parties. Thus, ,yhilo the nature of those pro ceedings is not shown: it is npparent that there exists bet,veen :Mr. Reniro and the respondents heroin a substantial private controversy. WILSON TOBACCO BOARD OF TRADE INC. ET AL. 1151 lles Opinion The C01nmission acts only in the public interest, any protection afforded private persons being only incidental, and it must be ever vigilant against the possibility of its processes being used to further the private interests of any party. This consideration alone would be suffcient to require a denial of the applicant' s request for permission to intervene, especially in the absence of any showing that the ease will not be adequately presented by counsel in support of the complaint whose duty it is to call to the Commission s attention any errors or inequities in the initial decision. The application for leave to intervenc win be denied and an appropriate order wil be entered.

Commissioner ICern di.d not participate in the decision of this Jnatter.

1152 FEDERAL TRADE cO nnssIOX DECISIONS Opinion 52 F. '1. C. IN THE :MATTER 01"

FOOD FAIR STORES, I"C., ET AL.

GIANT FOOD SHOPPING CENTER, INC.

Dockets 6458, 6459. Order and opinion, Apr. , 1956 Order denying respondents ' appeal from hearing examiner s denial of their motion for consolidation of hearings in cases involving charges of knowing acceptance of ilegal payments from suppliers by food retailers in violation of Sec. 5 of the FTC Act with hearings in cases charging suppliers with granting promotional allowances to said food retailers in violation of Sec. 2 (el) of the Clayton Act.

Before Mr. Frank HieT hea,ling examiner. Mr. And?'ew O. Goodhope and Mr. Frederic T. S"88 for the Commission.

Stein, Ste-ln cD Engel of .Jersey City, N. J. , and Gr(welle, Whitlock cD Markey and H010rey cD Selmon of 'Yashington, D. for Food Fair Stores, Inc.

Danzansky cD Dickey, of 'Vashington, D. for Giant Food Shopping Center, Inc.

ORDER RULIXG ON RESPO.:DEXTS' INTERLOCUTORY APPEALS The respondents having filed appeals from the hearing examiner s order denying their motions for consolidation of certain hearings in this and other pending proceedings designated in the motiolls; and The matt.er having been heard all the appeals and the answer in opposition thereto, and the Commission having determined, for tsons stated in its accompanying opinion, that the appeals should be denied:

It is O'ylel'ed That the respondents' appeals be, and they llereby are, denied.

OPINION OF THE COJnnssIOX Per Curiam:

The respondents in the above-captioned proceedings have separately filed interlocutory appeals from orders by the hearing examiner denying their respective motions to consolidate the hearings therein with those in other pending proceedings designated in their motions.

According to the pleadings, the respondents, Food Fair Stores Inc., and Giant. Food Shopping Center, Inc., each engage. in operating a chain of retail stores reselling all types of grocery products. The complaints in which each is named as the party respondent FOOD FAIR STORES) IXC. ) ET AL. 1153 1152 Opinion charge them with knowing inducement and I'eceipt of allegedly illegal payments from suppliers or manufacturers of grocery prod- , inucts there named, and from other unnamed suppliers as well violation of Section 5 of the Federal Trade Commission Act; and the complaints in eleven other proceedings instituted by the Commission charge that the respective manufacturers and suppliers named have granted promotional ttllowances on their purchases to one or both of the aforesaid food retailers in violation of Section (d) of thc Clayton Act. These ele,-cn complaints additionally charge that such allowances were not offered or made available on proportionally equal terms to other customers of the respective suppliers and manufacturers competitively engaged with Food Fair Stores, Inc., or Irit.h Giant I'ood Shopping Center, Inc. in the resale of those produds.

In the motion before. the hearing e.examiner, the respondent, Food Fair Stores, Inc. , requested that hearings in all thirteen proceedings be consolidated. Luder the appeal, hmyeVBT, it. alternatively requests that hearings in its case be c.combined with those in the nine wheTcin the suppliers are charged with having granted discriminatory payments to it. The appeal of Giant Food Shopping Center, Inc. , similarly requests t.hat the hearings hl its case consolidated with those in seven proceedings involving suppliers specifically charged with having gra,l1tec1 discrimina,tory payments to it.

Appellants state tllat common questions of law and fact are presented in these proceedings and contend that consolidation of hearings will save expense, promote the convenience of the parties, and expedite the hearings and thereby better serve the interests of justice. The proceedings naming the sellers were instituted under the Clayton Act and those involving the buyer-retailers under the Federal Trade Commission Act. Thus, actual identity of legal and evidentiary principles controlling to all the cases does not prevail, even though some common questions of law and fact may be presented' therein. In any event, consolidation would be warranted only upon due showing that the interests of justice would be better served thereby.

In support of the argument.s on lessening parties' litigation burdens, it is urged that if each case proceeds separately to hearings, full participation by each of the respondent suppliers will be required not only in his own case, but also in those of the respondent retailers to whom his allegedly unlawful payments were furnished. This asserted result of multiple participation does not follow, however. Although representatives of the respondent sup-- Opinion 32 F. T. Cpliers may be called upon to testify or furnish documentary evidencein one or both of the two buyer proceedings, each would remain a party Jitigant in but one proceeding. On the other hand. consolidation would in effect make every supplier a party in interest in aJl combined hearings applicable to his case under the order of consolidation. If this course were adopted, each might feel impelled to be represented in interest at an combined hearings: applicable under such order to his case, even though only a part of the evidcll(' submitted might be relevant and materifll to the issues in his CH.'-l' In these circumstances. we mllst conc.nde that. no showing ha been made in support of the appeals that parties: convenience would be promoted by the re-quested consolidation 01' that a le sellillg of trial burden or expense would result.

or can it be concluded that the c.Olll'Se of hearings ,yould be" expedited. The scheduhng of hearings under' procedures for combined hea.rings wouhl entail reconciling of or other dne regard for the convenience of a. large number of parties and their coun when designating times and pla.ces therefor, \\"which circumstance" would tend to retard rather than expedite the general ronrse of hearings. It also appears from the answers filed by counsel supporting the complaint in opposition to the appeals that hearings for the reception of evidence .1ready have been held in t.wo of the thirteen proceedings and hearings a.re scheduled for the near future in certain others. The probabilities of delay which would attend the resc.heduling of matters heretofore set for hearing arc" obvious.

In the circumstances here it is appa.rent that more expeditious and orderly disposition of the proceedings ,,-ill be afforded if these, cases separately proceed to hearings and the Commission is of rhe further vimv that granting of the respondents' requests for COllso1idation would less serve the interests of justice. ",Ve, accordingly, have determined that the motions to consolidate the hearings were not well taken and the apperds are being denied. Inasmuch as adoption of the requested program for consolidated hearings in t.these cases would be unwa.rrantet1, we note no error in the hearing officer s failure to grant the lH1ditional reque t of respondent, Food Fair Stores, Inc., that he direct a pre-heal'il1!-l: conference of the parties for identifying common issup and siwplifying the issues in the interests of conducting such consolidated hearings. Because the questions presented under the. appNds 111'e procedural in nature and informed c1etermimltions in re pect theretu can be made from the moving papers answers and orders below the responclents requests for the privilege of o1'a1 argument on their appeaJs Jikewisc are denied.

P. &; D. ),1ANUFACTURIXG co. , INC. 1155 Decision