United Brands Company

Text (OCR of the scan at left; may contain errors)

998 Order Here, to a large extent, if not entirely, the ouestions raised concern the protection, if any, to be given to data claimed to be confidential or trade secrets. This is an area in which the hearing examiner has a broad discretion, and his determinations will not be ordinarily disturbed except on the basis of a showing of abuse. No such showing has been made here. Accordingly the appeal is denied for that reason, although there are some aspects of the matter we believe merit some further discussion which follows.

THE USE OF SECTION 6(B) DATA IN AN ADJUDICATIVE PROCEEDING General Motors argues that responses to a Section 6(b) survey, assertedly made for investigatory purposes, cannot be used in specific litigation. It has referred to a number of cases for this proposition, but none are in point. These cases raise a different issue on the use by respondents of the authority under 6(b) or 6(b) reports in a Commission proceeding.‘ Contrary to General Motors’ assertion of a limitation, the Federal Trade Commission Act, in Section 6(f), quite clearly authorizes the Commission in its discretion to make public data received in a 6(b) response except trade secrets and names of customers. The pertinent part of this Act authorizes the Commission to “make public from time to time such portions of the information obtained by it hereunder, except trade secrets and names of customers, as it shall deem expedient in the public interest * * * .” In United States v. Morton Salt Co., 338 U.S. 632 (1950), the U.S. Supreme Court, while not dealing with the use of Section 6(b) data in 2 complaint matter, nevertheless held that the Commission’s powers under Section 6(b) could be broadly used in connection with all its functions. Therein the Court stated in part: While we find a great deal which would warrant. our concluding that § 6 was framed with pre-existing antitrust laws in mind, and in the expecta tion that the information procured would be chiefly useful in reports to the President, the Congress, or the Attorney General, we find nothing that would deny its use for any purpose within the duties of the Commission, including a $5 proceeding. A construction of such an Act that would allow information to be obtained for only a part of the Commission’s functions and would require the Conunission to - pursue the rest of its duties as if the information did not exist would be unusual, to say the least * * * . (Id. at 649.) We believe it is clear, therefore, under the Act and the Supreme Court’s interpretation thereof, that the Commission may, with certain limitations, use Section 6(b) data in adjudicative matters. +The cases relied upon hby-General Motors are Papercraft Corporation v. F.T.C.. 307 F. Supp. 1401 (W.D.Pa. 1970) } Union Bag-Camp Paper Corporation Vv. F.T.C., 233 F. Supp. 660 (S.D. N.Y. 1964) ; and Pexas Industries, Inc., Docket 8656, 67 F.T.C. Reports 1378 (1965).

Order 79 E.T.C.

Section 6(f) excepts trade secrets and names of customers. Although General Motors in its brief refers to its data as being “highly confidential in nature and represents trade secrets,” it has made no showing that such would necessarily fall within the category of a “trade secret.” In any event, even if trade secrets are to some extent involved, the protective order issued by the hearing examiner is adequate, we believe, to protect General Motors against prohibited disclosures. The examiner’s protective order assures that there would be no making “public” of any trade secret data. The information would be used only in the guarded confines of this litigation with protection against any other rele ease or disclosure.

Finally, Commission Rule 3.43(c) provides for the disclosure during adjudication of materials obtained by the Commission “under any of its powers.” * Complaint counsel was authorized to make use of the data here in issue, and, in light of this rule, it is not material as General Motors asserts, that the resolution and the report forms were silent on sach possibility.

REQUEST For “DEISSISSIPPI RIVER” TREATMENT General Motors’ second point is that if the survey data is used it should be accorded so-called “Mississippi River” treatment. The type of confidentiality treatment here sought is that which the Commission applied in the matter of Mississippi River Fuel Corporation, Docket No. 8657 (Order issued June 8, 1966 [69 F.T.C. 1186]). Therein the Commission directed that material submitted in response to subpoenas “should be submitted to a reputable and disinterested accounting firm, to be selected by the hearing examiner in consultation with the parties, which shall compile and present the material to respondent’s counsel in such manner that no individual company’s confidential arrangements or data will be revealed.” This is known as the “Mississippi River” treatment. Contrary to General Motors’ apparent position, the court, in Federal Trade Commission v. Crowther, 430 F. 2d 510 (D.C. Civ. 1970), did not lay down a rule requiring application of the “Mississippi River” formula generally. In that case the court had before it a subpoena issued by the hearing examiner in Lehigh Portland Cement Co., Docket. No. 8680, which called for data identical to the type involved in the earlier ALississippi River case, yet the Commis- 5 Section $.43(¢) reads as follows:

“(c) Information obtained in inrestigations——Any documents, papers, books, physical exhibits, or other materials or information obtained by the Commission under any of its powers may he disclosed by counsel representing the Commission when necessary in connection with adjudicative proceedings and may be offered in evidence by counsel representing the Commission in any such proceedings.”

998 Order sion had not required application of the “Mississippi River” treatment. All the court held was that the Commission, having devised the “Mississippi River” formula “in a set of circumstances closely comparable to the one at hand,” should not have abandoned the formula without sufficiently identifying and articulating its reasons for doing so.

It is apparent, however, that the data for which “Mississippi River” protection is sought in this case do not have the degree of parallelism with that involved in the Mississippi River case so as to bring the examiner’s ruling within the holding in Crowther. Nor are there any other grounds shown which would prompt us to overrule the hearing examiner’s exercise of discretion in refusing to order that procedure in this case. While we do not believe it necessary to expressly distinguish this case from Mississippi River, there are obvious differences. The information involved in Mississippi River was sought by the respondent in that case for the purpose of showing the extent to which “vertical integration” in a particular market had been avowedly accomplished through financial and other arrangements other than outright ownership of stock or assets. Data on such arrangements between certain ready-mix concrete companies and cement suppliers was sought primarily to obtain only a total industry picture without identifying details. For this and other reasons it was deemed appropriate to allow the data submitted in response to the subpoenas to be compiled by an independent accountant—essentially a ministerial act—so that no individual company’s confidential arrangements would be revealed.

In the instant case, however, complaint counsel proposes to use sales figures in the Section 6(b) survey to show market shares and sales volume of individual companies. They assert that it will not be sufficient for their purposes to rely only on total industry figures and relative rankings within the industry. Both complaint counsel and respondent argue that unless individual company sales data are available, an inaccurate picture of the market structure could result in several possible ways. Usually, of course, sales volume and market shares of companies doing business in a market constitute very important evidence in Section 7 cases. “Mississippi River” type treatment for sales data coming from the same Section 6(b) survey has been held to be inappropriate in other Section 7 cases. See Maremont, Docket No. 8763 (Order of April 2, 1969), and Avnet, Docket No. 8775 (Order of June 16,1971) (8 CCH Trade Reg. Rep. { 19,282). A further factor distinguishing this case from JJississippi River is that respondent here is represented by independent counsel. As we Order 79 F.T.C.

pointed out in Lehigh Portland Cement Company, Docket No. 8680 (Opinion of July 31, 1970 [77 F.T.C. 1638]), in the Mississippi River case, respondent’s counsel were employees of respondent (“house counsel”) and the examiner’s protective order in that case would have permitted disclosure to other employees of respondent to the extent necessary to prepare for the case-in-defense. Hence, disclosure to respondent’s counsel and other employees of respondent would probably have meant disclosure to respondent’s management. In the present case the information is to be made available only to respondent’s independent counsel and/or an independent economist. Considering the nature of the data involved and the relevance it appears to have to the allegations of the complaint, we think this is a strong protective order.

In the circumstances, we do not believe it. has been shown that the hearing examiner abused his discretion in entering the protective order here in issue, and so we deny General Motors’ appeal, as heretofore indicated.

II The other issue before the Commission is respondent’s request for perniission to file an interlocutory appeal from the hearing examiner’s July 27, 1971, protective order in this matter. Respondent objects to only one feature of such protective order and that is the part which prohibits disclosure “(b) with regard to sales to original equipment manufacturers, either as a category or as individually * * * .” Respondent alleges that the complaint includes the original equipment market and that complaint counsel have stated they intend to offer original equipment sales data into evidence. Thus, respondent claims, the ruling will deprive it of the opportunity to review such data and would prejudice it in the preparation of its defense. Complaint counsel, in their response, acknowledge that the Section 6(b) data relative to certain original equipment. manufactured products has been in the custody of complaint counsel, was utilized in the preparation of the complaint and will be proffered in evidence. Accordingly, they state they do not oppose respondent’s request to file the interlocutory appeal.

It appears to the Commission, from the facts available, that the disputed original equipment manufacturers’ data possibly should also be disclosed subject to the provisions of the protective order. The examiner may have inadvertently excluded this information. In the circumstances, to avoid undue delay, we are going to deny the request to appeal but remand the matter to the examiner for his reconsideration in the light of the representations made, and the position taken, by com- 998 Order plaint counsel as to such original equipment manufacturers’ data. Accordingly, It is ordered, That the appeal of General Motors Corporation from the hearing examiner's protective order of July 27, 1971, be, and it hereby is, denied.

It is further ordered, That respondent’s request for permission to file interlocutory appeal be, and it hereby is, denied. It is further ordered, That the Commission’s order issued August 12, 1971, staying order of the hearing examiner be, and it hereby is, vacated.

[tis further ordered, That this matter be, and it hereby is, remanded to the hearing examiner for his reconsideration in the light of complaint counsel’s representations and for his further action on Paragraph 1(b) of the protective order as he deems appropriate in the circumstances.

Chairman Kirkpatrick not participating.

UNITED BRANDS COMPANY Docket 8835. Order and Opinion, Nov. 18, 1971 Order denying respondent’s motion to postpone hearings and dismiss the com-. plaint; ease returned to hearing examiner.

Orpm Anp Opinion or THE Coatartssion DENYING RESPONDENT'S Morton to Posrvonr Hrarines anp Disaiss CoMPpLainr This matter is before the Commission upon the hearing examiner’s order filed October 13, 1971, certifying to the Commission respondent’s motion to postpone the hearings and to later dismiss the complaint, alleging that a proposal to regulate the marketing of lettuce made by the U.S. Department of Agriculture moots the charges in the complaint. The hearing examiner held that the relief sought in the motion presents a question addressed to the administrative discretion of the Commission and that under the Commission’s rules and pertinent decisions certification is the proper procedure. He accordingly certified the motion but without recommendation.

We agree that the motion here was properly certified and we will proceed to consider the merits of respondent’s request. See First Buck- 1The papers before the Commission on the question, other than the certification, inelude the following: Respondent’s motion to postpone hearings and to dismiss the complaint, filed September 28, 1971 ; complaint counsel’s answer in opposition thereto, filed October 8, 1971; respondent’s reply memorandum in support of its motion, filed October 20, 1971; and, finally, complaint counsel’s comments on the reply memorandum, filed October 22, 1971.

Order 79 F.C.

ingham Community, Inc., Docket 8750, Order Vacating Initial Decision and Dismissing Complaint, May 20, 1968 [73 F.T.C. 938]. Respondent asserts that the hearings should be postponed and the complaint ultimately dismissed on the ground mainly that the substantive issues relating to alleged anticompetitive effects are. made moot by a proposed marketing order, covering lettuce, of the Department of Agriculture; secondarily, it contends that a continuation of the proceeding pending a decision by the Department of Agriculture would be contrary to asserted policy of the Commission not to proceed where the subject matter is, by specific legislation, the direct, responsibility of another federal agency.

On the first point, the marketing order relied upon has not yet been put into effect, and it may never become effective.? Even if adopted, it may possibly remain in effect only for a short time. Thus there is no certainty here that the market will be changed or that it will be changed on a permanent basis, as respondent seems to imply. In addition, respondent has not otherwise supported its contentions. There have been no sufficient facts presented on which to base a valid conclusion. It would be highly premature to conclude that none of the alleged anticompetitive effects can be shown as a result of the proposed marketing order. The facts on this will be developed during the course of the hearings.

Finally, there has been no showing that the existence of the marketing order would dispense with the need for enforcement of laws involved in the complaint if violations are proved, and we therefore reject the contention that there is a conflict of some kind between agencies here in administering their respective statutes. We conclude that the motion of respondent should be denied. Accordingly, It is ordered, That respondent's motion to postpone hearings and subsequently to dismiss the complaint be, and it hereby is, denied. Lt is further ordered, That this matter be, and it hereby is, returned to the hearing examiner for further proceedings pursuant to the Commission’s Rules of Practice.

4 The referendum on the proposal apparently is scheduled for some time in November or December 1971.

Opinion THE HEARST CORPORATION, ET AL.

Docket 8832. Order and Opinion, Dec. 6, 1971 Order and opinion denying interlocutory appeal by two of the respondents from examiner’s order granting motion to quash subpoena of newspaper reporter’s records.

Orinton or Tue Commission By Jonss, Commissioner:

This matter is before the Commission on the interlocutory appeal of respondents, Hearst Corporation and Periodical Publishers’ Service Bureau, Inc., from the hearing examiner’s order of September 22, 1971, granting a motion to quash a subpoena duces tecum to Arthur E. Rowse, a syndicated columnist specializing in articles of interest to consumers. Respondents are appealing this ruling on the ground that it involves substantial rights and will materially affect the final decision in this case. Since matters of discovery and claims of First Amendment violations are involved, we have concluded that‘a decision now on the merits of the appeal will substantially further the expeditious handling of this proceeding.* The subpoena which is the subject of this appeal was requested by respondents on July 13, 1971, and seeks production by Mr. Rowse of all of the documents upon which he based a newspaper article written by him about Congressman Fred B. Rooney’s efforts to eliminate abuses in the magazine sales industry.? In addition, respondents’ subpoena also asked for the production of all documents communicated between Mr. Rooney or his staff and the Federal Trade Commission, all documents dealing in any way with the efforts of Mr. Rooney or his stail to cause any government agency to take action against respondents and all documents reflecting positions by Mr. Rooney or his staff in regard to the Paid During Service (PDS) Code, a self-regulatory industry program to eliminate selling abuses in the magazine subseription industry.

Respondents contend that this material may be relevant to three of their defenses to the pending Commission complaint against them 1Section 3.35(b) of the Commission’s Rules of Practice provides that appeals to the Commission from rulings on motions to limit or quash process will be entertained by the Commission on a showing that:

{T]he ruling complained of involves substantial rights and will materially affect the final decision, and that a determination of its correctness before conclusion of the hearing is essential to serve the interests of justice. *The article entitled, “New Magazine Guidelines Set,” appeared in the Washington Star | on July 11, 1971. ‘ Opinion 79 F.T.C.

charging them with violation of Section 5 of the Federal Trade Commission Act. These defenses briefly are that the Commission’s Advisory Opinion No. 128 [71 F.T.C. 1735; 16 C.F.R. § 15.128] approving the legality of the industry’s self-regulatory PDS Code barred the Commission from bringing the instant complaint while the Advisory Opinion was still in effect. This defense is the subject of a separate motion to dismiss the complaint brought by respondents which has recently been ruled on by the Commission adversely to respondents.* Respondents contend that the Rowse material may also be relevant to their other two defenses that the Commission has prejudged this matter and hence has deprived them of an opportunity to obtain a fair and impartial adjudication of the matters alleged in the complaint and that improper ex parte communications have been made to the Commission. , Mr. Rowse moved to quash the Commission subpoena issued by the examiner on respondents’ request, claiming inter alia that the subpoena was cdefectively overbroad and in effect a “fishing expedition” and that the First Amendment provides him with a journalistic privilege to refuse to disclose information obtained as a result of his efforts as a reporter. * The hearing examiner granted Mr. Rowse’s motion to quash the subpoena on the basis of his finding that the deposition of Mr. Rowse was not “essential” for discovery purposes and that even if Mr. Rowse’s article was accurate in stating that Congressman Rooney “spurred” the Commission into action, this in itself would not “constitute a defense” to the complaint in this proceeding, since such action on the part of the Congressman would not be improper. Respondents’ appeal seeks a reversal of the examiner’s ruling and contends that the examiner erred in applying the wrong test in ruling on the motion to quash and in failing to deal with the First Amendment. arguments urged by both parties.

RESPoONDENT’s CONTENTION THAT THE EXAMINER ADOPTED AN Erroneous Rute or Law The essential issue raised by this portion of respondents’ appeal is whether the documents and information sought by respondents * Order Denying Interlocutory Appeal from Denial of Motion to Dismiss Complaint, FTC Docket No. 8832 (October 29, 1971) [p. 989: herein]. 1007 Opinion under this subpoena are relevant to the proceedings and should be ordered to be produced.* In dealing with this issue, it is essential that we consider respondents’ documentary requests in the subpoena in the light of each of the defenses which they assert form the basis for their need—and indeed right—to the requested material.

1. Respondents’ Advisory Opinion Defense Respondents’ principal ground in arguing their need for the material sought under the subpoena rests on that portion of their defense directed to their claim that the Commission’s Advisory Opinion relating to the legality of their self-regulatory PDS Code barred the Commission from bringing the instant complaint without first rescinding the Advisory Opinion.* On its face, we can find no relevance of any of the material sought under the subpoena to the issues raised by respondents under this defense as to whether the Commission intended, led respondents to believe, or, in fact, committed itself not to issue any complaint against respondents or the industry in general while the advisory opinion athe Commission’s rule which governs the rights of parties to use suhpoenas duces tecum is Section 3.34(b) (2) which provides : Subpoenas duces tecum may be used by any party for purposes of discovery or for obtaining documents, papers, books or other physical exhibits for use in evidence, or for both purposes. When used for discovery purposes, a subpoena may require a person to produce and permit the inspection and copying of nonprivileged documents, papers, books, or other physical exhibits which constitute or contain evidence relevant to the subject. matter involved and which are in the possession, custody, or control of such person (emphasis added). :

Respondents argue that these words have been interpreted both by the Commission and hy the courts in decisions dealing with analogous discovery rules of the Federal Rules of Civil Procedure, as embodying production of materials which may “lead” to evidence rather than simply to materials which may ‘‘constitute or contain” evidence. We do not believe these distinctions, if they exist, are significant for the purpose of determining this particular motion. Our consideration of the arguments of counsel, therefore, will be based squarely on the issue of relevancy as it may be interpreted in the broadest possible sense without determining whether the Commission’s rule represents, in fact, a somewhat narrower view of relevancy than that embraced in Rules 26(b) and 34 of the Federal Rules of Civil Procedure. :

5'Thus respondents’ brief states that their need for thorough discovery “is supported hy far more than bare charges of prejudgment or mere suspicion of the propriety of the Commission activities.” (Res. App. Br. at 17.) The “far more” is stated to consist of their four contentions with respect to the Commission’s Advisory Opinion which formed the basis for their motion to dismiss the complaint. The facts are enumerated by respondents to consist of the following:

“4, The Commission is presently attacking practices which it approved in Advisory Opinion No. 128.

2. No notice to respondents of rescission of Advisory Opinion No. 128 has ever been given, 3. Hearst and Periodical have been given no opportunity to effect voluntary compliance in conjunction with the rescission of Advisory Opinion No. 128. 4. The press reports that Congressman Fred B. Rooney has brought pressure to bear upon the Commission during the three-year period which the Commission had approved for the operation of the PDS Code.” (Res. App. Br. at 17.) Opinion 79 F.T.C.

was still in effect. Nor can we find anything in the documentary request of the subpoena bearing on the question of whether the Commission, through the issuance of this advisory opinion, did or did not approve any of the industry’s sales practices challenged in the complaint. Nothing in respondents’ brief helps us in this respect. Respondents argue that the article by Mr. Rowse asserts that Congressman Rooney and his staff “spurred” government agencies to take action against them.° We do not see the relevance of this assertion to respondents’ arguments that the Commission’s Advisory Opinion barred it from bringing the instant complaint against respondents or ‘approved any of the practices challenged by the complaint. Clearly the validity of respondents’ claims in this respect must stand or fall on whatever is ultimately decided about the intent and effect of the Commission’s Advisory Opinion.’ However, it is our view that the validity of respondents’ contentions on this issue are neither supported nor detracted from by injecting into that issue the claimed actions of some third party vis-a-vis the Commission—whether he be a Congressman, a newspaper reporter or another member of the public. Respondents argue that whether Congressman Rooney “required” the Commission to bring this complaint, and if so, how and through what types of communications is somehow relevant to this issue. We disagree that discovery into these facts is relevant to respondents’ defense concerning the Advisory Opinion. If the Commission was barred or had barred itself, as respondents assert, from bringing the instant complaint against respondents, the reasons why the Commission chose to bring the complaint are surely wholly irrelevant to that issue. We cannot see, therefore, just how the subpoena request directed to Mr. Rowse bears in any respect on this precise issue. We conclude, that on the record before us the subpoena did not search for any information which was either essential or even remotely relevant to this part of their defense.

6'The reference in the Rowse article bearing on the activities of Congressman Rooney and the Federal ‘Trade Commission’s actions relating to the magazine subscription industry appeared in the following two paragraphs:

Yo him [Congressman Rooney] belongs much of the credit for successful government actions earlier this year resulting in elimination of numerous questionable practices by some of the largest firms selling long term subscriptions via monthly payments, a system known as PDS for “Paid During Service.”

His Jonely crusade eventually spurred the Federal Trade Commission and the Post Office Department into action against deceptive sales tactics in the industry. His persistent efforts also persuaded several companies to discontinue PDS business entirely. 7The Commission in its recent opinion [989 herein] denying respondents’ motion to dismiss, which was based squarely on their contentions reflected in this defense, held that the Advisory Opinion was designed to exempt the magazine sales industry from prosecution by the Commission for antitrust violations and has no bearing on allegations of sales deceptions which are at issue in the instant proceedings. See note 3, supra. INTERLOCUTORY ORDERS, ETC. 1011 1007 Opinion 2. Respondents’ “Prejudgment” Defense _ The second ground urged by respondents in support of their need for the requested information is their contention that these documents will in some way relate to their affirmative defense that the Commission has prejudged the case.

In addition to asserting that there has been “clear prejudgment” by the Commission, respondents include within this defense contentions that the Commission has been subject to undue political pressure and that public comment on the case has created an atmosphere of adverse and unfair publicity which make it impossible for them to have a fair and impartial trial. We will consider each of these allegations in relation to respondents’ subpoena of Mr. Rowse’s files. With regard to the assertion of “clear prejudgment,” we fail to see how the documents sought by respondents’ subpoena bear in auy way on this defense.

Prejudgment occurs when there is evidence that a decision maker in an adjudicatory proceeding has irrevocably closed his mind on the specific facts of a case yet to be heard by him. FTC v. Cement Institute, 333 U.S. 683, 701 (1948). It has not been found to occur in the absence of some type of statement or expression of opinion by the decision maker as to an ultimate controverted issue in the pending case. Safeway Stores, Inc., v. FTC, 366 F. 2d 795, 802 (9th Cir. 1966), cert. denied, 386 U.S. 982 (1967). The test is whether a Commissioner or hearing examiner has “taken a position apparently inconsistent with an ability to judge the facts fairly. * * “” Teuaco, Inc. v. FTC, 38 F. 2d 754, 764 (D.C. Cir. 1964). In short, evidence of prejudgment must rest on positions or statements made by a decision maker himself which indicate that he has in some measure decided the merits of a pending case in advance of hearing the matter.

We find nothing in the actions attributed to Congressman Rooney by Mr. Rowse’s article which suggests that prejudgment as defined by the above cited case law has occurred in the instant proceeding. 8 Respondents phrase their argument in their brief in the following words : That respondent is unable to obtain a fair and impartial adjudication of the matters alleged in the complaint because of a clear prejudgment by the Federal Trade Commission ; that said prejudgment is a direct result of adverse and inaccurate newspaper and other publicity alleging directly and by implications that “all? members of the PDS industry have engaged in unlawful acts; similar adverse and inaccurate allegations in reports, speeches, press releases and other communications by legislators and other governmental personnel; and other unfair and inaccurate ex parte communications; that respondent has had and will have no opportunity to rebut such unfair communications and that said unfair communications and the Federal Trade Commission's resulting prejudgment violate the Commission’s Rules of Practice, and the Administrative Procedure Act, and deny respondent the Due Process of Law guaranteed by the Fifth Amendment of the Federal Constitution. [Periodical’s Ans., 9-10.] 470-883—73, 65 1012, FEDERAL TRADE COMMISSION DECISIONS Opinion 79 FTC.

The article indicates that the Commission took “action” against the magazine sales industry. This, in fact, was the case. The Commission filed complaints against several members of the industry, alleging that they had engaged in acts and practices which violated Section 5 of the Federal Trade Commission Act. The filing of a complaint by the Commission, however, has nowhere been held or even argued as providing any basis for a charge of prejudgment by the Commission. See FTC v. Cinderella Career and Finishing Schools, Inc., 404. F. 2d 1308 (D.C. Cir. 1968).° The cases make it quite clear that allegations of prejudgment must rest upon statements by the Commission or by Commissioners or other decision makers and not upon the mere filing of a complaint.

Respondents in the instant case have pointed to no such statements for their assertion that prejudgment has taken place, nor have they even indicated whether the prejudgment exists in the minds of a single Commissioner or in the Commission as a whole or whether it- exists rather in the mind of the hearing examiner. Certainly Mr. Rowse’s article gives no indication that there has been any prejudgment on the part of the decision makers in this proceeding. Accordingly, we cannot find any relevance which the background materials for Mr. Rowse’s article might have to respondents’ prejudgment defense, insofar as it relates to this type of asserted prejudgment of the issues in the instant complaint. Respondents, however, do not confine their “prejudgment” defense to a claim that the Commission has taken a position indicating prejudgment of the instant case. They also seem to assert that prejudgment can also be shown through evidence of undue political pressure. Such pressure they maintain has occurred here. In this connection, respondents filed a supplemental appeal brief urging that a speech by Mr. Rooney before the Women’s National Democratic Club on October 7, 1971, provides additional justification for their discovery application. In this speech Congressman Rooney stated that his “investigation of magazine subscription sales practices [has] to date produced Federal Trade Commission charges of deception and misrepresentation against 18 corporations. * * *” [Res. Supp. App. Br. at 2.] °In Cinderella, the court pointed out :

Congress has, as a general practice, vested administrative agencies with both the specific power to act in an accusatory capacity through the initiation of an action designed to enforce compliance with or prevent further violations ofa statutory provision and with he responsibility of ultimately determining the merits of charges so presented. * * * “It is well settled that a combination of investigative and judicial functions within an agency does not violate due process.” 404 F. 2d 1308, 1315 (footnotes omitted). 1007 Opinion Respondents argue that:

Under such circumstances, there can be little doubt that the Commission was and continues to be influenced by the positions taken by Congressman Rooney. A fortiori, these respondents cannot be given a fair hearing: regardless of the scrupulousness of any individual Commissioner. * * * No Commissioner could ignore the purport of Congressman Rooney’s October 7th speech any more than a Commissioner could have ignored the purport of Senator Kefauver’s publie remarks in connection with the Pillsbury case. [Res. Supp. App. Br. at 3.] Thus, respondents contend that they have been precluded from the possibility of a fair hearing of their case, such as occurred in Pillsbury Co. v. FTC, 354 F. 2d 952 (5th Cir. 1966). A review of the law and facts in that case is, therefore, warranted. The decision in Pillsbury was not based on a finding of prejudgment, but rather on a finding that powerful Congressional influence had sacrificed the appearance of impartiality in an adjudicatory proceeding before the Commission. The court found that two of the four Commissioners who participated in the final decision of the case had been substantially exposed to interference in their role as Commissioners during the course of extensive congressional hearings. The facts of the case revealed that the Commission had handed down an opinion on an interlocutory appeal reversing the hearing examiner’s ruling to dismiss the complaint. Following that interlocutory opinion, but while the case was still pending, the Commission was called to testify at hearings before the antitrust subcommittees of the Judiciary Committees in the Senate and House of Representatives. During the hearings the Chairman of the Commission was asked to explain the _reasons and rationale for the opinion in the interlocutory appeal. A “barrage” of questions directly relating to the Commission’s views about the issue involved in the appeal were put to the Chairman, and a number of committee members challenged the correctness of the Commission’s ruling. 354 F. 2d at 955-6. As a result of such questioning, the Commission Chairman disqualified himself from the case with the following statement which he read into the record at the House subcommittee hearing :

[Blecause of some of the penetrating questions [during the Senate hearings] I felt compelled to withdraw from the case because I did not think I could be judicial any more when I had been such an advocate of its views in answering — questions. 354 F. 2d at 963.

The respondents in Pillsbury moved to dismiss the complaint on the ground that the Commission had become disqualified to hear the case since none of the Commissioners could have remained free to consider the issues on their merits after this display of Senate belief as to the 1014 © FEDERAL TRADE COMMISSION DECISIONS Opinion 79 FDC.

error of the Commission’s interlocutory decision. Pillsbury Mills, Inc., 57 F.T.C. 1274, 1876 (1960). On appeal the court found that the Congressional influence was improper and sacrificed the appearance of impartiality when a congressional investigation such as occurred in that case focused “directly and substantially upon the mental decisional processes of a Commissioner in a case which [was] pending before it. * * *? 354 F.2d at 964. The gravaman of the court’s conclusion is reflected in this excerpt from its opinion in which it concluded : To subject an administrator to a searching examination as to how and why he reached his decision in a case still pending before him, and to criticize him for reaching the “wrong” decision, as the Senate subcommittee did in this case, Sac- rifices the appearance of impartiality * * *. Zd.° Thus, the improper influence which the court found in Pillsbury involved the substantial probing of the minds of the decision makers on a single and crucial issue in a pending case. It also involved the clearly and publicly enunciated view of a Senator as to what he viewed as the proper decision to be reached.

In the instant case, respondents provide no grounds for their assertions that improper political interference has occurred here as occurred in Pillsbury. Certainly nothing in Mr. Rowse’s article indicates that Congressman Rooney has in any way been probing the minds of Commissioners or the hearing examiner on any issue involved in this complaint.

All that is attributed to Mr. Rooney either by Mr. Rowse’s article or by Mr. Rooney himself in his own speech is that he spurred the Commission to take action against the magazine subscription industry. Nothing in these papers implies that even Mr. Rooney himself has reached any conclusions on the merits of the Commission’s complaint, let alone that Mr. Rooney has pressured the Commission to reach a particular conclusion. Nor is there anything in respondents’ documentation which raises the slightest implication of improper influence on the judicial functioning of the Commission within the meaning of Pillsbury.

19In so concluding, the court referred to Senator Kefauver’s statement during the hearing that he was “shocked and surprised”’ with the interpretation which had been given to the statute at issue in Pillsbury. 354 F.2d at 964 n. 5. 1. Respondents also rely upon D.C. Federation of Civic Associations v. Volpe, No. 24, 838 (D.C. Cir. October 12, 1971) to support their contentions of improper congressional pressure. That case held that a non-judicial or quasi-judicial decision by the Secretary of _ Transportation to approve plans for the construction of a bridge would be invalid if based in whole or in part on the pressures emanating from a Congressman who had stated publicly that he would do everything in his power to withhold appropriations from an area-wide rapid transport system until the bridge project was approved (slip op. at 25-27). We believe the decision in that case adds little to our consideration of the instant appeal since we are here concerned with a quasi-judicial proceeding unlike the case cited, and since again we find nothing in Mr. Rowse’s article which touches this point. 1007 | * Opiition’ Respondents’ argument, however, seems to extend even beyond their allegations of improper influerice by Mr. Rooney and suggests that as a result of his concerns, there has been created a public atmosphere against the activities of respondents which are the subject of this complaint as to render a fair adjudication of these issues impossible. Respondents rely for this aspect of their argument on various newspaper reports of the case and of Mr. Rooney’s concerns. Clearly the mere fact of public discussion of matters which ultimately may find themselves to be the subject of FTC actions, whether by Congressmen or members of the public could hardly be grounds for quashing the FTC action. Indeed some of the press articles cited by respondents in this connection are simply newspaper accounts of their instant subpoena request directed to Mr. Rowse.

Respondents’ argument is akin to claims asserted by defendants in criminal proceedings that they cannot get a fair trial before a jury in matters which have received substantial publicity. An administrative proceeding could hardly be likened to a jury trial. Moreover, the article by Mr. Rowse and the other articles generated by respondents’ subpoena request hardly constitute the type of inflammatory publicity which could possibly give rise to an issue of fair trial even if this were a criminal proceeding, which it quite obviously is not. We cannot see, therefore, that this argument adds any greater relevance of the Rowse documents to the issues in this case. In short, insofar as the Rowse article, and the documents, if any, on which it is based are concerned, we find nothing in these papers to warrant our granting the requested subpoena, with all of the attendant First Amendment issues which this subpoena raises.

Respondents imply, however, that there may have been covert political pressure on the Commission from Congressman Rooney about which Mr. Rowse knows or has evidence in his possession. On the basis of Mr. Rowse’s article, however, we find not even the slightest implication that he has such evidence. Moreover, respondents have directed a subpoena duces teewm to the Secretary of the Commission to search for these precise documents. The Commission placed this motion on its docket for consideration and simultaneously with this opinion is issuing its opinion on this matter. Under its decision, the Commission has determined to treat respondents’ motion as a request for documents under the Freedom of Information Act, and pursuant to this opinion will search its files and produce all documents to which respondents are entitled under the Information Act which reflect communications dated between January 15, 1971 and the present time between the Commission and its staff and Congressman Rooney and his staff re- Opinion 79 E.T.C.

lating to the PDS magazine subscription industry, Hearst and Periodical. In light of this decision, we find no need for respondents to seek these documents from Mr. Rowse. Whatever influence Congressman Rooney has had on the Commission during the pendency of this proceeding can be gleaned by respondents from the documents in the Commission’s files and need not be obtained from Mr. Rowse. As for Mr. Rooney’s public statements refiecting his opinions or activities in this area, there is likewise no need for respondents to obtain those statements from Mr. Rowse. Respondents cannot expect: Mr. Rowse to do their research for them. Keogh v. Pearson, 35 F.R.D. 20, 23 (D.D.C. 1964). These materials are in the public domain and readily available to respondents without the need for compulsory process. 3. Respondents’ Defense of Ex Parte Communications Respondents’ final argument in support of their need for these documents from Mr. Rowse’s file is that they are relevant to respondents’ third defense that the Commission has engaged in improper ew parte communications. While respondents do not specify any time period when the alleged ex parte communications were supposed to have taken place, it is quite clear that the only improper communications by third parties with the Commission members or the hearing examiner which could possibly be relevant would have to be communications occurring after the final complaint was issued, in this case after Januray 15, 1971. See Section 4.7 of the Commission’s Rules of Practice. Mr. Rowse’s article, on which respondents’ motion is grounded, stated only that communications from Congressman Rooney to the Commission had occurred regarding the magazine sales industry. This statement by itself can hardly constitute a basis for the sweeping dragnet of the documentary search which respondents are asking for in this subpoena designed to search out improper ex parte communications.

Clearly an ex parte communication does not embrace statements appearing in the press which are read by the public. They involve private. communications involving some aspect of the issues of a pending case which are communicated to the Commission which are not made available to both parties. It is obvious, therefore, that any publicly made observations by third parties about matters in issue in an FTC proceeding hardly constitute ex parte communications to the Commission. To so regard them would indeed put the Commission’s right to discharge its decision-making obligations in a proceeding completely at the mercy of members of the public, any one of whom is entitled 1007 ; Opinion to comment publicly on any matter pending before the Commission. Moreover, respondents’ subpoena does not even appear to search for ex parte communications. It does not specify communications directed to the Commission or to individual Commissioners or the hearing examiner after the complaint was issued in the instant case, clearly the only ex parte communications relevant to this proceeding. No such time limitation is contained in the subpoena. Thus, this asserted basis for the requested materials must fall as do the other grounds advanced by respondents.

Not only do we find the materials requested irrelevant to the defenses of respondents to which they purport to relate, but we are also of the view that the subpoena suffers from a fatal defect in that it is so broad in its scope as to require us so to strike it down on that additional ground.

For example, the first category of requested documents includes ali materials upon which Mr. Rowse based his article, “New Magazine Guidelines Set.” Yet the article contained matters not at all relevant to this. proceeding, such as an explanation of the PDS Code, references to communications by Congressman Rooney to members of the industry and descriptions of actions by industry members. That. portion of the article which respondents emphasize in support of their request for relevant document or materials which contain or constitute evidence are two short excerpts from that article referring to a Congressman’s “lonely crusade” which “eventually spurred the Federal Trade Commission and the Post Office Department inte action against deceptive sales tactics in the industry.” As we have shown above, these two statements appear to have no relevance to any of the asserted defenses of respondents. Clearly, the entire article as a whole has even less connection with the issues in this case. Discovery of all documents upon which the article was based, therefore, appears to be largely a dragnet operation by respondents in the hope of finding something useful.

The second category of specific requested documents in the subpoena covers all documents communicated between Congressman Rocney and his staff and the Commission and its staff. It thus includes all correspondence whether or not related to the PDS industry or respondents and without any limitation as to a relevant time period. Again, this request is fatally defective in its far-ranging scope. In the third category of documents, respondents seek documents reflecting communications from Mr. Rooney to “any government Opinion 79 FTC.

agency” causing it to take action against respondents. Since we are concerned in this proceeding only with actions by the Federal Trade Commission, respondents’ request includes materials which would appear to have no bearing whatsoever on this case. Finally, respondents seek ai/ documents pertaining in any way to positions taken by Congressman Rooney and his staff in regard to the PDS selling code. Again, this request is overbroad since positions taken by Congressman Rooney are not in themselves pertinent to the Commission’s actions in this case or to respondents’ asserted defenses. Thus, we conclude that respondents’ subpoena on its face is defective. Each of the four categories of requested documents ranges far beyond information which is relevant to this proceeding. Moreover, it is impossible to relate the requested documents to the specific defenses of respondents . for which the information is claimed to be relevant. Respondents nevertheless argue that the Commission’s decision in Koppers Co., Inc. FTC Docket No. 8755 (July 2, 1968 [74 F.T.C. 1579]) laid down the rule that respondents are entitled to an opportunity prior to trial to obtain information for purposes of discovery and that under the decision of that case, they have made a sufficient showing that their requested subpoena could produce documents which might, in turn, lead to evidence relevant to their case. Certainly, our Koppers decision cannot be interpreted as respondents seek to do here as having created an open door to the production of any and all materials which respondents simply assert will lead to certain evidence. Subpoenas are not issued on bare suspicions. Coro, Inc. v. FTC, 338 F.2d 149, 153 (1st Cir. 1964), cert. denied, 380 U.S. 954 (1965). Nor was Koppers designed to lay down a new standard of discovery not contained in the Commission’s rules which would eliminate any need whatsoever for a respondent seeking discovery to make some showing as to the relationship between the materials sought and the issues in the case.

In the instant case, we find that respondents have failed to make this showing of relevancy. Certainly the materials being sought under the subpoena have no bearing on the issue raised by respondents as to whether the Commission’s Advisory Opinion precluded the Commission from proceeding against respondents by formal complaint. Equally clearly they appear to have no bearing on whether the Commission as a whole or individual Commissioners have prejudged some or all of the issues in this case. Finally, they can have only the most tenuous connection with the issues of whether Improper ex parte 1007 : Opinion communications were made to the Commission as to this issue. The obvious source of relevant material on this issue is the Commission files themselves. As noted earlier, the Commission has today acted on repondents’ motion to the Commission for production of all materials to which they are entitled under the Freedom of Information Act which might bear on this defense. The disposition of this matter, therefore, may well satisfy respondents’ alleged need for obtaining documents from Mr. Rowse.

THE FIRST AMENDMENT ISSUES One final point must be mentioned here. Respondents urge that the examiner erred because he refused to consider the First Amendment arguments presented by the parties. We disagree. — It is a recognized and salient principle of law that if nonconstitutional grounds may be dispositive of a matter, it is preferable to explore these grounds first before reaching the constitutional issues raised by the parties. Communist Party of the United States v. Subversive Activities Control Board, 351 U.S. 115, 122 (1956). Our analysis of the subpoena leads us to the conclusion that it is irrelevant to the issues te which it purports to relate, that it is too indefinite and ambiguous as to the information sought to be produced, and that it is unduly and unreasonably broad in scope.!? Much of the documentary material purportedly sought by the subpoena relates to communications by and between third parties. Indeed the bulk of the material sought would not seem to relate to communications to or from Mr. Rowse. Furthermore, it is obvious that there is nothing in the papers before us on this motion which demonstrates that the subpoena against Mr. Rowse searches for materials “which constitute or contain evidence relevant to the subject matter involved.” Commission’s Rules of Practice, Section 3.34(b) (2). It is possible that upon a review of 22 Respondents argue that the Commission rules do not limit a respondent’s discovery to materials which would in themselves constitute a valid defense. This is not the issue. But the implication of respondents’ contention is that they are entitled to any discovery on their mere assertion that it might tend to lead to relevant evidence. This too begs the issue. There are limits to discovery through subpoenas duces tecum and the limits can be broadly stated to rest on the relevancy of the material sought to the issues in the case. As expressed in the Commission’s Rules, Section 3.34(b) (2), the test is stated to be whether the materials sought are likely to “constitute or contain” relevant evidence. It is obvious that respondents cannot just ignore the fact that discovery must have some relationship to issues in the case. They must make some showing that information being sought bears some relevance to the issues beyond their mere assertion that such is the case. Respondents nowhere make this showing under whatever interpretation is given to the Commission’s rule under which their subpoena is sought. Order 79 FVL.C.

the Commission’s opinion concerning respondents’ motion to dismiss the complaint issued October 29, 1971, and upon an examination of the materials produced pursuant to our decision today on their motion for production of Commission files, respondents’ need for all or some part of the materials sought by the instant subpoena is already mooted. Accordingly, we are sustaining the hearing examiner’s decision to quash the subpoena for the reasons stated in this opinion. We agree with the examiner that the mere fact that Mr. Rowse wrote an article about the efforts of Congressman Rooney to spur government action against magazine sales subscription industry practices is not a suffi-. cient basis for granting the subpoena.

Accordingly, we approve the hearing examiner’s ruling that the subpoena to Mr. Rowse be quashed.

Chairman Kirkpatrick did not participate in this matter. Orper Denyine Inrertocutory AppraL Frost Examiner’s Orver Grantinc Motion to Quash SUBPOENA Respondents the Hearst Corporation and Periodical Publishers’ Service Bureau, Inc., having filed an interlocutory appeal from the hearing examiner’s September 23, 1971 Order Granting Motion to Quash Subpoena to Arthur E. Rowse; and The Commission having considered said appeal and the answer ot Mr. Rowse in opposition thereto, and having determined, in accordance with the views expressed in the accompanying opinion that respondents’ appeal should be denied ;

Lt is ordered, That respondents’ appeal from the hearing examiner’s September 23, 1971 order granting the motion to quash the subpoena to Mr. Rowse be, and it hereby is, denied.

Chairman Kirkpatrick not participating.

ee THE HEARST CORPORATION, ET AL.

Docket 8832. Order and Opinion, Dec. 6, 1971 Order and opinion vacating subpoena duces tecwm and remanding case to hearing examiner for reconsideration.

OrperR Vacating Susporna Ducrs Trecum AND REMANDING TO Hearing EXAMINER FOR RECONSIDERATION This matter is before the Commission on its own motion. Respondents the Hearst Corporation (Hearst) and Periodical Publishers’ Serv- Order 79 FT.C.

the Commission’s opinion concerning respondents’ motion to dismiss the complaint issued October 29, 1971, and upon an examination of the materials produced pursuant to our decision today on their motion for production of Commission files, respondents’ need for all or some part of the materials sought by the instant subpoena is already mooted. Accordingly, we are sustaining the hearing examiner’s decision to quash the subpoena for the reasons stated in this opinion. We agree with the examiner that the mere fact that Mr. Rowse wrote an article about the efforts of Congressman Rooney to spur government action against magazine sales subscription industry practices is not a suffi-. cient basis for granting the subpoena.

Accordingly, we approve the hearing examiner’s ruling that the subpoena to Mr. Rowse be quashed. - Chairman Kirkpatrick did not participate in this matter. Orpver Denyine Inrertocutrory Arprat From Examrner’s Orper Grantine Motion ro Quase SuBroEna Respondents the Hearst Corporation and Periodical Publishers’ Service Bureau, Inc., having filed an interlocutory appeal from the hearing examiner’s September 23, 1971 Order Granting Motion to Quash Subpoena to Arthur E. Rowse; and The Commission having considered said appeal and the answer of Mr. Rowse in opposition thereto, and having determined, in accordance with the views expressed in the accompanying opinion that respondents’ appeal should be denied ;

It is ordered, That respondents’ appeal from the hearing examiner’s September 23, 1971 order granting the motion to quash the subpoena to Mr. Rowse be, and it hereby is, denied.

Chairman Kirkpatrick not participating.

———a THE HEARST CORPORATION, ET AL.

Docket 8832. Order and Opinion, Dec. 6, 1971 Order and opinion vacating subpoena duces tecum and remanding case to hearing examiner for reconsideration.

Orprr Vacatine Suppornsa Ducrs Tscum Anp REMANDING TO Hearne Examiner ror RECONSIDERATION This matter is before the Commission on its own motion. Respondents the Hearst Corporation (Hearst) and Periodical Publishers’ Serv- 1020 Order ice Bureau, Inc. (Periodical), applied to the hearing examiner, under Section 3.36 of the Commission’s Procedures and Rules of Practice, for a subpoena duces tecwm directed to Charles A. Tobin, Secretary, Federal Trade Commission, to produce specified documents contained in the Commission’s records. Alternatively, Hearst and Periodical requested disclosure of the documents under 5 U.S.C. § 552 (1970) (the “Freedom of Information Act”). The examiner, on August 18, 1971, granted the motion for subpoena pursuant to Section 3.36 of the Commission’s rules and to the provisions of 5 U.S.C. § 552. By order dated September 1, 1971, the Commission, on its own motion, stayed the September 1st return date of the subpoena and by order dated December 6, 1971, the Commission, again on its own motion, placed the hearing examiner’s order authorizing the subpoena on its docket for review pursuant to Section 3.36(e) of the Commission’s rules.

Apart from the merits of the request for information, it is neéessaryto comment on the procedural aspects of seeking documents under the Freedom of Information Act by means of a motion for subpoena addressed to the hearing examiner. This procedure raises issues concerning the relationship of the Commission’s discovery rules to the Information Act. The Information Act was intended to enlarge and clarify the right of access by the public to documents in administrative files. It is not concerned with discovery procedures applicable to adjudicative proceedings, and does not authorize the issuance of subpoenas. The congressional committee report states that the Act “is not intended to give a private party indirectly any earlier or greater access to investigatory files than he would have directly in such litigation or proceedings.” * Conversely, it should be noted that the materials which are discoverable by a party under Section 3.36 of the rules include material which is not available to the public under the Information Act. While respondents in Commission proceedings are members of the public and consequently may request access to Commission records under the Information Act like any other member of the public, such requests should not be confused with subpoenas for Commission records under Section 3.36 of the rules. As the Commission has previously noted, “requests for documents and information under the Freedom of Information Act are inappropriate when made within the framework of an adjudicative proceeding.” ? Thus, a respondent’s request for ac- 1H.R. Rep. No. 1497, 89th Cong., 2d Sess., at 11 (1966). 2Ash Grove Cement Co., Docket 8785: (Order dated July 15, 1970). Order. 79 E.T.C.

cess under the Information Act should not take the form of a motion, to the examiner.’ The application should be made pursuant to Section 4.11 of the rules, directly to the Commission, addressed to the Secretary.* Furthermore, inasmuch as a respondent’s request under the Information Act is a separate matter from the pending adjudicatory proceeding the pendency of such a request is no ground for suspending or postponing the hearing in the proceeding.

Because respondents’ request under the Freedom of Information Act was not properly before the hearing examiner, who lacked authority to issue a subpoena under the Act, that portion of his order granting the subpoena pursuant to the Act must be vacated. To avoid unnecessary delay, however, the Commission will not exclude the request from its consideration because of the improper procedural approach, but will treat the motion for subpoena as a request under the Act. In order to facilitate consideration of the request for access, the staff is directed to gather any documents specified in the request to which the applicants are entitled under the Freedom of Information Act. The staff is further directed to keep a detailed record of the time expended in gathering such records to enable the Commission to determine the search fee to be charged pursuant to Rule 4.8(c). It should be noted that in determining whether the applicants are entitled to access to the records under the Information Act, the Commission will be acting in a purely administrative rather than in an adjudicative capacity. Consequently, problems relating to ew parte communications, which might arise in an adjudicative context, will not be present. The hearing examiner also granted respondents’ motion for subpoena under Section 3.36 of the Commission’s rules. A cursory reading of the subpoena specifications, which are extremely broad, raises doubts as to whether the material to be produced is specified “as exactly as possible” and whether there has been a sufficient showing of “the reasonableness of the scope of the application” as required by Section 3.36 (b). Our granting respondents access to the material to which they are entitled under the Freedom of Information Act, however, will moot 3 Section 3.22 of the rules, which states that during the time a proceeding is before a hearing examiner, all motions therein, except those filed under Section 3.42(g) (disqualifieation of hearing examiner) shall be addressed to the hearing examiner, does not apply because a request under the Information Act is not a discovery motion in the adjudicative proceeding. :

athe Commission is aware of language in a prior opinion which may be construed to indicate that a different procedure should be followed. Koppers Co., Docket 8755 (Order dated July 2, 1968 [74 F.T.C. 1579]). To the extent that such language conflicts with the present opinion, it is disapproved.

G 1020 Order the issue of their right to the same records under Section 3.36. Also, our disposition of respondents’ Appeal from Denial of Motion to Dismiss Complaint may render much of the material specified in the subpoena no longer relevant to respondents’ case. It is appropriate, therefore, that we vacate the examiner’s order of August 13, 1971, and remand the matter to him for a reconsideration, in the light of our denial of respondents’ appeal, of the general relevancy of any material respondents originally requested which has not been made available to them under the Information Act. Accordingly, It is ordered, That the hearing examiner’s Order Authorizing Subpoena for Documents in Commission Records, dated August 13, 1971, be, and it hereby is, vacated and the matter remanded to the hearing -examiner for the reasons expressed in this opinion. Chairman Kirkpatrick not participating.

PHILIP MORRIS, INCORPORATED Docket 8838. Order and Opinion, Dec. 6, 1971 ‘Order granting complaint counsel’s appeal from the hearing examiner’s order staying the proceedings pending the United States Supreme Court’s decision in Federal Trade Commission v. The Sperry and Hutchinson Co., 405 U.S. 233; vacating and setting aside hearing examiner's order of Sept. 23, 1971; denying respondent’s motion for a stay of all further proceedings; and remanding the matter to the hearing examiner for further proceedings. ‘Orver AND Opinion Grantine AppraL, Serrinc Asinn Examrner’s Orver Wuicn Strays Procexpine, AND RemanpING ror Furrurr Procervines This matter is before the Commission upon complaint counsel’s interlocutory appeal, filed November 5, 1971, from the hearing examiner’s order staying the proceeding herein pending the United States Supreme Court’s decision in Federal Trade Commission v. The Sperry and Hutchinson Co., No. 70-70, October Term 1971 (S&H) [405 U.S. 238, 1972], requesting that the Commission reverse the hearing examiner; and upon respondent’s answer thereto filed November 23, 19712 1 The Commission, by order issued November 1, 1971, granted complaint counsel’s re- ‘quest for permission to file interlocutory appeal. 470-883—73——66 Order 79 F.T.C.

The hearing examiner had no authority to order a stay in this proceeding on the ground of the possible effect of the decision in the St case. A question such as this is not directed to the hearing examiner's fact-finding function. Rather, it is addressed to the Commission’s administrative discretion. Graber Manufacturing Company, Inc., Docket. No. 8088, 66 F.T.C, 1548 (1964); O.K. Rubber Welders, Inc., et al., Docket No. 8571, 63 F.T.C. 2213 (1963). Of. First Buckingham Community, Inc., Docket No. 8750, Order Vacating Initial Decision and Dismissing Complaint, May 20, 1968 [73 F.T.C. 938]; United. Brands Company, Docket No. 8835, Order and Opinion of the Commission Denying Respondent’s Motion to Postpone Hearings and Dismiss Complaint, November 18, 1971 [p. 1005 herein]. Since the hearing examiner had no authority to rule on respondent’s motion requesting a stay, he should have certified it to the Commission. As the matter has now been fully briefed on both sides on the appeal of complaint counsel and respondent’s answer thereto, the Commission will proceed to consider the issue as though it were before it de novo. Respondent argues that there is a fundamental legal issue which is common to both this case and the S&H case, that is, the scope of the term “unfair” in Section 5 of the Federal Trade Commission Act. It asserts that the framing of the issues in this case, the scope of discovery and the character of the evidence to be presented at the hearing could be significantly affected by the Supreme Court’s disposition of the SéH case. Thus it states that a stay in the proceeding will promote the orderly and efficient administration of this case and, further, that it can result in no possible harm to the public interest since assertedly the practice challenged in the complaint was discontinued by respondent more than eight months ago.

We have carefully considered respondent’s position, but we do not think the arguments made justify a suspension of the proceeding in this matter for an indeterminate period of time. The two cases are not so closely related that the Supreme Court’s decision in S&H will likely have a bearing on the taking of the evidence in this case. Moreover, respondent has made no showing of any harm or injury which it will suffer by the continuation of this proceeding other than the inconvenience and the expense of continuing to defend itself, but such alone are not sufficient grounds to justify a suspension. Finally, we conclude that a stay in the proceeding of an indefinite duration would, in fact, lead to excessive delay in finally disposing of this case on its merits.