Simplicity Pattern Company, Inc.

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IN THE MATTER OF SIMPLICITY PATTERN COMPANY, INC.

Docket 6221. Order (/'d opinioll, Mav 1956 Interlocutory order denying (1) re:'flondcnt' s motion that hearing examiner partial oral dismissal be construed as an initial decision, and (2) complaint counsel' s appeal from such dismissal as untimely. Before lift. rVilliam L. Pack hearing examiner. Afr. lViliiam Ii. Smith, Aft. B,'oc!.man Horne and 3fT. R. D. Young, Jr. for the Commission.

llause, Gro881nan, FOTha'll8 Elendey: of Nmv York City, and 1111'. lV7:Uimn Simon of \Vashington, D. C., for respondent. ORDER DEX1' T:-W INTERLOCUTOHY Appeal 010 Couxsm. SCPPORTIXG THE COl\IPLAIXT AXD ::fOTION OF TI-IE R.ESPOXDENT Counsel in support of the complaint having filed an appe,al from the hearing examiner s ruling of February 13 , IB5G, granting the respondenes lootion to dismiss Count J of the complaint in this proceeding; and The respondent having subsequently filed a motion for n,n order construing said rulings as an initial decision under Section 3.21 of the Commission s Ilules of Practice, rather than interlocutory rulings; and The Commission, for t.he reasons stated in its accompfL1ying opinion, having concluded that said appeal and motion should not be granted:

It is ordered. That the appeal of connsel snpporting the complaint and the respondent's motion for an order construing the rulings below as an initial decision, be, and the same hereby are, denied. Commissioner Gwynne not participating.

OPINION OF THE CO)DUSSlOS Per Curiam:

After the reception of evidence in support of the case-in-chief was closed, oral arguments were heard by the hearing examiner in support of and in opposition to the responclenfs motion to dismiss the complaint on grounds that a prima facie ease was not established. The hearing examiner thereupon stated his reasons why he deemed the motion to be well taken as to the first of the two counts contained in the complaint and without merit as to the second, and orally ruled that Count I was dismissed, accordingly. In his interlocutory appeal SIMPLICITY PATTERN CO., INC. 1207 1206 Opinion filed wldcr Section 3.20 of the Commission s Rules of Practice, counsel supporting the complaint requests that we reverse the hearing examiner s rulings with respect to Count 1. The answer filed by the respondent jnterposes no objection to review by the Commission or the action below, but opposes reversal or those rulings; and the respondent contends that any appeal instituted by cOllnsel supporting the complaint should be filed not under Section 3.20 which authorizes interlocutory appeals to the Commission in situations there specified, but., instead, under Section 3. which is the rule. applicable to review\y or initial decisions filed by hearing examiners. This position also is adopted by the respondent in its subsequently filed mot.ion requesting that the Commission construe the determinations below as an initial decision, so we address oUl'sclves first to the 'juestion of the status of those rulings. Section 3.1:j conrers on hearing examiners the duty or conducting imV1Ttial hearings and empowers them, among other things, to make and file initial decisions. Under the procedure provided ror in Section , an initial decision becomes the Commission s decision thirty days after service thereor upon the parties in the absence or appeal or review or ent.ry or an order staying the proceedings. Because the provision whereby such decisions may become decisions or the Commission by operation of the rule is contingent on date of "Service upon parties and the rule a.dc1it.ionaJly requires that a "copy" be served upon counselor other representatives, it is clear that the rule contemplates that initial decisions of hearing examiners be made and filed in documentary form. Hence, one of the indispensable prerequisites to heating offcers rulings being regarded as initial decisions under the Commission s Rules of Practi( e is that such adjudications be submitted in documentary form.

The Commission s Rules of Practice contemplate that initial decisions be submitted under conditions according due notice not only to parties for seasomble appeals therefrom, but also that they be filed under circumstances affording timely opportunity ror the Commission s exercise of its right and duty to review such decisions in situations 'where appropriate. Rulings by a hearing ,offcer at the close of the case in-chief are made in the exercise of his delegated duties to conduct impartia.l hearings and with rormal notice only to parties Transcripts of hearings reflecting such rulings rrequently are not made available to thc Commjssion hy the offcial reporter until considerable time has elapsed rollowing dates or hearings. Only under rortuitous circumstances, thererore, would rulings or partial dismissal come to the Commission s offcial attention within time ror it to take seasonable steps for review within the contemplation of Section 3.21. Opinion 52 F.

Under the Commission s Rnles of Practice as now effective, a general policy on our part of conferring initial decision status on rulings in the foregoing category would thus deprive the commission of timely opportunity for their review, and, accordingly, would violate considerations of public policy.

Some of the principles of public policy which underJie our duty to review initial decisions and the comparable duty of federal courts of appeals to review " final dccisions of district courts, pursuant to Section 1291 of Title 28 of the United States Code, are common to both. By judicial definition, a final decision under that section is one terminating the litigation on its merits and disposing of the whole matter in controversy. This interpretation reflects the historic rule of federal Jaw against piecemeal disposal and review of litigation. Under Rule 54 (b) of the Federal Rules of Civil Procedure, an exception is created for avoiding the injustice of dcJay in judgment of distinctly separate claims pending adjudication of the entire case but the effect or this provision serves in no manner to overturn the settled rule noted above. The exercise by the trial judge of this discrctiona.ry provision also is contingent on an express determination in his decision of no just reason for dejay in entering final judgment and his express direction for entry of that judgment. In the instant case, the motion to dismiss was denied by the hearing offcer as to one of the two counts in thc complaint and the rulings below leave issues of Jaw and fact still to be determined. Because all rights of the parties have not been adjudicated and the oral rulings below Jack other appropriate stamp of finality, we think that they do not constitute an initial decision within the meaning of the Commission s Rules of Practice. The respondent's motion that such rulings be construed to the contrary is not well taken and we hold that no initial decision has been presented here for our review. The remaining question presented is whether the appeaJ of counsel supporting the complaint meets the requirements of Section 3.20 and should be entertained as an interlocutory appeal. Under that rule counsel, to succeed in this appeal, must demonstrate to the Commission s satisfaction that the ruling appealed from involves substantial rights and wil materially affect the fial decision of the case and further, that a determination or its correctness before conclusion of the trial would better serve the interests of justice. The appeal urges that the hearing examiner incorrectly concluded that no evidence was submitted supporting infcrences that the practices engaged in hy the respondent and challenged in the complaint have resulted or may result in injury to customers competing in the resale of the respondent's dress patterns. The jurisdictional ground SIMPLICITY PATTERN CO. 1:10. 1209 1206 Opinion relied upon in support of contentions that this interlocutory appeal should be decided now is that its decision would eliminate delay in the ultimate disposition of this proceeding in case of its subsequent remand by the Commission for the reception of testimony in defense of the charges contained in Count 1. This manifestly would result only if the Commission subsequently held in the course of an appeal or review on the merits that the hearing offcer had erred. Save in cases where palpable errors in applying the law to the facts may be apparent, the considered judgment of the hearing offcer who heard the evidence and ruled on the merits of a motion to dismiss is entitled to great weight in the interlocutory stages of the proceeding. This is particularly true where, as here, the appeal is devoid of showing of prejudice to any rights asserted by appellant with respect to the presentation of his case.

A policy of entertaining appeals from rulings of partial dismissal at the close of the case on direct would be but to encourage fragmentary submission of cases Tor decision and piecemeal determinations and inevitably would result in unjustifiable delay. This, in the opinion of the Commission, would not "better serve the interests of justice. " It follows that the appeal of counsel supporting the complaint is not one to be granted under Section 3.20 of the Commission Rules of Practice and we are entering appropriate order in that respect.

Commissioner Gwynne did not participate in the decision of this matter.

1210 FEDERAL TRADE COl\n.fISSION DECISIONS Complaint ;:2 F.