Grolier, Incorporated

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

IN THE MATTER OF GROLIER, INCORPORATED, ET AL.

Docket 8879. Interlocutory Order, Sept. 12, 980 ORDER REOPENING PROCEEDING AND DIRECTING SUBMISSION OF FURTHER INFORMATION On January 24, 1980, the United States Court of Appeals for the Commission.' Grolier, Inc.Ninth Circuit remanded this case to the FTC, 615 F.2d 1215, 1222 (9th Cir. 1980). The purpose of the remand was to allow us to reconsider our denial of discovery "and in light of the results of that reconsideration, the disqualification motion" fied by Grolier. 615 F.2d at 1222. The Court did not require us to grant discovery but instead authorized the use of affdavits to show "the existence and extent of ALJ von Brand's involvement with the Id. Under the Grolier case while he served as attorney-advisor. procedure established by the Court, Grolier then has the burden of offering evidence to contradict these sworn statements or show any deficiency in them before it wil be permitted to subpoena agency records. Id.

The Court mandated this course of action to us because it believed that our order denying discovery (87 F. C. 179, 181 (1976)) was an improper "flat refusal" (615 F.2d at 1222) to disclose anything at all about Judge von Brand's participation in the Grolier case while he was an attorney-advisor to Commissioner MacIntyre. Since we denied the combined disqualification and discovery motion, however, Grolier has gained access to most of the information sought in its discovery request by virtue of a Freedom of Information Act ("FOIA") request that repeated the discovery request in haec verba. Indeed, most of the documents sought and an index of the few documents withheld have been available to Grolier since before Judge von Brand issued his Initial Decision. We note that the record of the district court proceeding contains much information, in affdavit form, which may make the discovery G), appeal request moot. Cralier, Inc. v. FTC, No. 76 1559 (D. pending, D.C. Cir. No. 79 2263. We invite the parties to address this issue in the fiings required by this order. Because Qur earlier view was that attorney-advisors do not perform investigative or prosecutive functions there was no need for us to determine which of the twenty documents Grolier appended to the disqualification motion actually reached the Commission or \ A petition for rehearing was deni but the opinion was ..mended nn April 17, 1980 _ ,.., . .. , ..

332 Interlocutory Order whether they involved this "or a factually related case." See 5 U. 554(d). The need for this type of analysis is apparent in view of the Ninth Circuit's ruling. We believe the parties should address these questions in their submissions.

A related concern is what effect, if any, Grolier s failure to use documents in its possession before the Initial Decision issued should have on its ability to augment the record now. Some courts have held that the failure of a party to use information in its possession (from whatever source) renders a belated disqualification challenge untimely. See, g., Marquette Mfg Co. v. FTC, 147 F. 2d 589, 592 (7th Cir. 1945), affd. 333 U. S. 683 (1978); Safeway Stores, Inc. v. FTC, 336 2d 795, 802 (9th Cir. 1966), cert. denied, 386 U.S. 932 (1967). See also MaTtus v. Director, Office of Wkrs ' Compo Prog, 548 F. 2d 1044, 1050~ 57 (D.G Cir. 1976). We urge the parties to address this issue also. To provide a complete record on review and to minimize delay Grolier is directed to supplement the record of this proceeding, within five days of the receipt of this order, with: (1) the complaint (and attachments) fied in its FOIA suit Crozier, Inc. V. FTC, No. 76~1559 (D. G); (2) the affdavit and index of documents fied by the Commission in response thereto; (3) the Commission s sworn answer to Plaintiffs' Interrogatories to Defendants-Second Set; (4) the affidavit of Carol M. Thomas dated September 15, 1977; (5) all memoranda, orders and judgments of the District Court in No. 76~ 1559 (D. ); and (6) the affdavit of Carol M. Thomas dated March , 1979.

Thereafter Grolier wil be allowed 25 days to renew its motion to disqualify Judge von Brand. At that time we expect Grolier to present evidence on: (1) the question of timeliness; (2) Judge von Brand' s involvement with ex parte matters; (3) the specific documents, and the portions thereof (and the date Grolier received them), which show Judge von Brand could have had access to "information received outside of the controlled adjudicative setting" (615 F.2d at , The Attorm y General' Manual on the Administrative Procedure Act (EJ47), charactcrized by the Court of Appeals (fi1.'J F.Zd at liu!) as an authoritative guide to the APA states (1'. 6): Thc limitation of the prohibition against consultation to those who p rform investigative or prosecuting functions "in that or a factually related case should be construed lit rally. . . . The phr "factually related case" coonotes a situation io which a party is faced with two diffp.rent proceediogsarif;i!lgoutofthe am"oraconnected set of f;lct;' . . (as distinguished from ca cs that) may form a paUern similar to those which (thetaffpersonJ had theretofore investigated or prosecuted Se also Cislerras-Esltly v, INS, 5:'1 F. 2d 15", 161 n4 (3d Cif.) (Gibbons, di!\senting), cui. denied, ) U.S. 8,,:J (1976).

Inter:.locut?ry 9rder 99 F. 1220); and (4) whether the information involves this or a factually related case.

We also direct complaint counsel to review the 28 documents withheld from Grolier in the FOIA suit and ascertain what connection, if any, they have to the facts of this case. The results of this review shall be set forth in an affdavit to be fied and served (by express mail) within 15 days of this order. Within a like period we request that Judge van Brand execute an affidavit recording his efforts to ascertain the extent, if any, of his involvement with Grolier matters while he was an attorney-advisor. The Secretary shah expeditiously serve the affdavit on the parties. Complaint counsel may respond to Grolier s renewed motion within 20 days of being served with it. At that time the Commission wil determine if any further proceedings are warranted. Commissioner Pitofsky did not participate. totes inc.

335 Complaint