Kellogg Company

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

IN THE MATTER OF KELLOGG COMPANY, ET AL.

Docket 8888. Interlocutory Order, Nov. 30, 1978 ORDER DENYING MorTION TO DISQUALIFY Respondents Kellogg Company and General Mills, Inc., have moved that Chairman Pertschuk disqualify himself, or alternatively, that the Commission determine that he is disqualified from participating in any proceeding in this matter. In ‘response, Chairman Pertschuk has filed a memorandum declining to disqualify himself from the proceedings and setting forth the reasons therefor.

Upon consideration of respondents’ motions and the Chairman’s memorandum, the Commission has determined that no grounds exist for granting the requested relief. Accordingly, It is ordered, That respondents’ motions to disqualify be, and the same hereby are, denied.

Chairman Pertschuk and Commissioner Pitofsky did not participate.

MEMORANDUM OF CHAIRMAN PERTSCHUK IN RESPONSE TO MorTIoN To DisgUALIFY HIM FROM PARTICIPATION IN THIS PROCEEDING Respondents Kellogg Company (“Kellogg”) and General Mills, Inc. (“General Mills”) have filed motions asking that I disqualify myself, or that the Commission determine that I am disqualified, from further participation in this proceeding. For the reasons stated below I believe my participation in this case is proper, and decline to disqualify myself.

In support of their contention that I have made statements creating the appearance of partiality and prejudgment in this matter, Kellogg and General Mills rely on a quote from the Battle Creek Enquirer and News, June 24, 1977, at Bl, col.1 (Connelly Aff. 42; Savarese Aff. 3). There, in an article published under the byline - of the Gannett News Service, I am reported to have said: [W inning the cereal case would “be an enormous help. . . It just depends how you win it, what you win, what kind of remedy you fashion.” Interlocutory Order; 92 F.T.C.

The references to “winning the cereal case” appear outside the quotation marks,! which squares with my recollection of the interview which gave rise to the article. My recollection of the substance of the quote is that I was referring to the “big case” generically. I recall no use of the term “winning” and was solely concerned with structuring cases to see that they were shaped for trial with a carefully fashioned remedy in mind. Taken as a whole, the article reflects my own general attitude toward the “big case” approach to antitrust problems. My recollection is that the more accurate form of the above quote would have been “appropriately crafted structural cases can ‘be an enormous. help. . .’ ” I did not then, and do not now, have any opinion as to the outcome of the Kellogg, et al., litigation. In each instance in which a court has disqualified agency decisionmakers, that action has been based on comments showing what would appear to a disinterested observer as a viewpoint or prejudice concerning specific controverted factual issues, eg, American Cyanamid Co. v. FTC, 363 F.2d 757, 767 (6th Cir. 1966), or the ultimate issue of liability, eg, Texaco Inc. v. FTC, 336 F.2d 754, 760 (D.C. Cir. 1964); Cinderella Career & Finishing Schools v. FTC, 425 F.2d 583, 590 (D.C. Cir. 1970), in a pending adjudicative matter. My comments reflect no such commitment with respect to this case. See Kennecott Copper Corp. v. FTC, 467 F.2d 67, 80 (10th Cir. 1972). They can at most be read as reflecting an underlying philosophy or policy favoring effective enforcement of the antitrust laws, which would not be ground for disqualification. Cf. American Cyanamid Co. v. FTC, supra, 363 F.2d at 764.

The motions also cite numerous other statements that allegedly reflect hostility toward respondents or bias as to issues involved in this proceeding. See Connelly Aff. {{8-6; Savarese Aff. (94-7. The cited statements concern the content of television commercials, their effect on children, and the effects of advertising that stimulates brand name identity and product differentiation. These remarks reflect my views on issues of law, policy, or legislative fact, which are not grounds for disqualification. See, e.g., Laird v. Tatum, 409 U.S. 924, 889 (1972)(memorandum of: Rehnquist, J.); FTC v. Cement Institute, 333 U.S. 683, 700-03 (1948); United States v. Morgan, 313 USS. 409, 421 (1941); 2 K. Davis, Administrative Law, §12.01, at 144. ‘ General Mills’ motion erroneously creates the impression that those words were part of my quotation. Savarese Aff. #3. I have referred to the actual Enquirer and News article to verify the quote as it appears in this memorandum.

2 In fact, the same article states that I declined to comment on specific aspects of the “cereal case.” 877 , Interlocutory Order They do not touch upon specific factual issues raised in the pleadings or the ultimate issue of liability.’ :

A third category of statements relied on in the motions. to disqualify concern my professed irritation with the requirement that I not prejudge matters on which I must sit as judge. See Connelly Aff. 8; Savarese Aff. §8. Those statements bear no relation to this case. Moreover, I believe the statements, read in context, reflect my fidelity to the rule that I refrain from passing judgment on pending matters, no matter how frustrating I may find that rule to be. Finally, Kellogg cites (Connelly Aff. 7) a statement of mine in which I described a meeting with Kellogg’s President as “‘a frank and open exchange of views — in the words of cold war diplomacy. . . .” It should be clear to any reader of that statement that the words were used facetiously and do not reflect a personal animus toward Kellogg.

I reiterate that I have not arrived at any conclusions regarding the issues in this case, and will not do so until it is properly before me. Accordingly, I decline to disqualify myself from further participation in the proceeding. ;

3 See also my letter to Gilbert H. Weil, Esq., dated July 13, 1978, responding to a petition to disqualify me in the Children's Advertising Rulemaking proceeding, which discusses these issues in greater detail. Complaint 92 F.T.C.