Association of National Advertisers, Inc. v. Federal Trade Commission

627 F.2d 1151, 201 U.S. App. D.C. 165
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 16, 1980
Docket79-1117
StatusPublished
Cited by182 cases

This text of 627 F.2d 1151 (Association of National Advertisers, Inc. v. Federal Trade Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Association of National Advertisers, Inc. v. Federal Trade Commission, 627 F.2d 1151, 201 U.S. App. D.C. 165 (D.C. Cir. 1980).

Opinions

TAMM, Circuit Judge:

Plaintiffs, appellees here, brought an action in the United States District Court for the District of Columbia to prohibit Michael Pertschuk, Chairman of the Federal Trade Commission (Commission), from participating in a pending rulemaking proceeding concerning children’s advertising. The district court, citing this court’s decision in Cinderella Career & Finishing Schools, Inc. v. FTC, 138 U.S.App.D.C. 152, 425 F.2d 583 (D.C.Cir.1970), found that Chairman Pertschuk had prejudged issues involved in the rulemaking and ordered him disqualified. We hold that the Cinderella standard is not applicable to the Commission’s rulemaking proceeding. An agency member may be disqualified from such a proceeding only when there is a clear and convincing showing that he has an unalterably closed mind on matters critical to the disposition of the rulemaking. Because we find that the appellees have failed to demonstrate the requisite prejudgment, the order of the district court is reversed.

I

On April 27, 1978, the Commission issued a Notice of Proposed Rulemaking that suggested restrictions regarding television advertising directed toward children.1 The decision to commence rulemaking under section 18 of the Federal Trade Commission (FTC) Act2 was accompanied by a state[1155]*1155ment setting forth “with particularity the reason for the proposed rule.” 3 The Commission explained that it had decided to propose a rule limiting children’s advertising after consideration of a staff report that discussed

facts which suggest that the televised advertising of any product directed to young children who are too young to understand the selling purpose of, or otherwise comprehend or evaluate, commercials may be unfair and deceptive within the meaning of Section 5 of the Federal Trade Commission Act, requiring appropriate remedy. The Report also discloses facts which suggest that the current televised advertising of sugared products directed to older children may be unfair and deceptive, again requiring appropriate remedy.

43 Fed.Reg. 17,967, 17,969 (1978) (footnotes omitted).4 The Commission invited interested persons to comment upon any issue raised by the staff proposal.5

On May 8, 1978, the Association of National Advertisers, Inc. (ANA), the American Association of Advertising Agencies (AAAA), the American Advertising Federation (AAF), and the Toy Manufacturers of America, Inc. (TMA) petitioned Chairman Pertschuk to recuse himself from participation in the children’s advertising inquiry. The petition charged that Pertschuk had made public statements concerning regulation of children’s advertising that demonstrated prejudgment of specific factual issues sufficient to preclude his ability to serve as an impartial arbiter. See Appendix (A.) at 11, 15. The charges were based on a speech Pertschuk delivered to the Action for Children’s Television (ACT) Research Conference in November 1977, on several newspaper and magazine articles quoting Chairman Pertschuk’s views on children’s television, on the transcript of a televised interview, and on a press release issued by the Commission during the summer of 1977.6

On July 13, 1978, Chairman Pertschuk declined to recuse himself from the proceeding. Pertschuk stated his belief that the disqualification standard appropriate for administrative adjudications did not apply to administrative rulemaking, id. at 57-58, and that, even if adjudicative criteria were relevant, his remarks did not warrant disqualification because they did not concern the petitioners in particular; rather, they addressed the “issue of advertising to children and the policy questions raised by it,” id. at 64 (emphasis in original). Five days later, the Commission, without Pertschuk participating, also determined that Pertschuk need not be disqualified. Id. at 65.

In August 1978, ANA, AAAA, AAF, and TMA petitioned the district court to declare that Chairman Pertschuk should be disqualified from participating in the children’s television proceeding. ANA, AAAA, AAF, and TMA also sought preliminary and permanent injunctions barring Pertschuk’s participation and an order requiring the remaining Commissioners to reconsider all matters previously decided in the inquiry. The plaintiffs introduced copies of three letters, sent by Chairman Pertschuk on the day after he delivered the ACT speech, as additional evidence of his alleged prejudgment. The letters accompanied a copy of the speech.

On September 8, 1978, the Kellogg Company (Kellogg), a food manufacturer that [1156]*1156advertises on television programs regularly viewed by children, moved to intervene as a plaintiff. The district court granted the motion on October 4,1978. Two days later, Kellogg introduced as evidence in support of the motion for a preliminary injunction a copy of a letter sent by Chairman Pertschuk on November 17, 1977, to Donald Kennedy, Commissioner of the Food and Drug Administration.

On November 3, 1978, the district court ruled on cross-motions for summary judgment. The court, relying on Cinderella, found that Chairman Pertschuk “has prejudged and has given the appearance of having prejudged issues of fact involved in a fair determination of the Children’s Advertising rulemaking proceeding.” Accordingly, the .court granted the plaintiffs’ motion for summary judgment and ordered Pertschuk enjoined from further participation. Id. at 110. This appeal followed.7

II

Before we consider the merits of the district court’s decision, we pause at a procedural way station. The Commission asserts that the district court erred in considering the disqualification issue before the rulemaking proceeding had ended. As a general matter, of course, the exhaustion doctrine provides that challenges to agency action should not be heard until relevant administrative proceedings have been concluded. McKart v. United States, 395 U.S. 185, 194-95, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969). This permits an administrative agency to develop a factual record, to apply its expertise to that record, and to avoid piecemeal appeals. Id. at 193-94, 89 S.Ct. 1657.

Application of the exhaustion doctrine, however, is not inflexible. In rare circumstances, this court has considered extraordinary prejudgment claims prior to final agency action. See Amos Treat & Co. v. SEC, 113 U.S.App.D.C. 100, 306 F.2d 260 (D.C.Cir.1962). See also Fitzgerald v. Hampton, 152 U.S.App.D.C. 1, 14, 467 F.2d 755, 768 (D.C.Cir.1972); Sterling Drug, Inc. v. FTC, 146 U.S.App.D.C. 237, 249-250, 450 F.2d 698, 710-11 (D.C.Cir.1971). The district court agreed to consider the present case prior to exhaustion of the administrative process on the basis of these decisions.

The exception to the exhaustion doctrine upon which the district court relied is extremely narrow. In SEC v. R. A. Holman & Co., 116 U.S.App.D.C. 279, 281-282, 323 F.2d 284, 286-87 (D.C.Cir.1963), for example, this court refused to review a disqualification contention when a commissioner whose impartiality was challenged denied that he had participated in earlier administrative proceedings.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Burton v. American Cyanamid Co
E.D. Wisconsin, 2021
Valoe v. American Cyanamid Co
E.D. Wisconsin, 2021
Allen v. American Cyanamid Co
E.D. Wisconsin, 2021
Gibson v. American Cyanamid Co
E.D. Wisconsin, 2021
File v. Kastner
E.D. Wisconsin, 2020
Movimiento Democracia, Inc. v. Johnson
193 F. Supp. 3d 1353 (S.D. Florida, 2016)
Libertarian National Committee, Inc. v. Federal Election Commission
930 F. Supp. 2d 154 (District of Columbia, 2013)
Flaherty v. Bryson
850 F. Supp. 2d 38 (District of Columbia, 2012)
Sherley v. Sebelius
District of Columbia, 2011
Air Transport Ass'n of America, Inc. v. National Mediation Board
719 F. Supp. 2d 26 (District of Columbia, 2010)
Nehemiah Corp. of America v. Jackson
546 F. Supp. 2d 830 (E.D. California, 2008)
Ace Property & Casualty Insurance v. Federal Crop Insurance
517 F. Supp. 2d 391 (District of Columbia, 2007)
W.D.I.A. Corp. v. McGraw-Hill, Inc.
34 F. Supp. 2d 612 (S.D. Ohio, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
627 F.2d 1151, 201 U.S. App. D.C. 165, Counsel Stack Legal Research, https://law.counselstack.com/opinion/association-of-national-advertisers-inc-v-federal-trade-commission-cadc-1980.