Federal Trade Commission v. Guignon

261 F. Supp. 215, 1966 U.S. Dist. LEXIS 10210, 1966 Trade Cas. (CCH) 71,926
CourtDistrict Court, E.D. Missouri
DecidedOctober 28, 1966
DocketNo. 66 C 236(1)
StatusPublished
Cited by5 cases

This text of 261 F. Supp. 215 (Federal Trade Commission v. Guignon) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Trade Commission v. Guignon, 261 F. Supp. 215, 1966 U.S. Dist. LEXIS 10210, 1966 Trade Cas. (CCH) 71,926 (E.D. Mo. 1966).

Opinion

MEMORANDUM OPINION AND ORDER

HARPER, Chief Judge.

This matter is before the Court on two motions: First, the respondents, Paul C. Guignon, vice-president, Anheuser-Busch, Inc., and John H. Pahlman, controller, Anheuser-Busch, Inc., move to dismiss the application of petitioner, Federal Trade Commission, for an order requiring the respondents to testify and produce documentary evidence, and to vacate an Order to Show Cause; and, second, the petitioner moves the Court for a protective order to prevent the respondents from taking the depositions of two Federal Trade Commission attorneys, A. C. Schneeberger and J. W. Bollinger. The disposition of the respondents’ motion may have some bearing upon the petitioner’s motion. Therefore, both are treated here in one memorandum opinion.

In connection with an investigation of the yeast industry the petitioner, Federal Trade Commission (Hereinafter referred to as Commission), through its attorneys and employees, A. C. Schnee-berger and J. W. Bollinger, is investigating the Anheuser-Busch Corporation.

On July 16, 1963, the Commission sent a questionnaire to Anheuser-Busch requesting certain information, documents, and access to company records.

On August 12, 1963, Anheuser-Busch answered most of the requests, but refused to answer one question dealing with the company’s production costs and profits. In a letter dated April 8, 1964, Anheuser-Busch again refused to answer the question.

On July 1, 1964, the Commission passed a resolution (Petitioner’s Exhibit 1) directing that all necessary subpoenas be issued to supply the Commission with relevant information which any corporation had refused to give for the investigation.

On July 20, 1964, the Commission served upon Paul C. Guignon subpoenas duces tecum and ad testificandum, seeking the information that Anheuser-Busch had refused to furnish.

On July 29, 1964, Anheuser-Busch and Guignon filed with the Commission a motion to quash the subpoena duces tecum and for other relief. In said motion it was also requested that the Commission enter an order allowing Anheu-ser-Busch to file with the Commission in camera an affidavit concerning the nature of its cost data and the adverse effects which such disclosure would have upon the company.

[216]*216The motion to quash was based upon two grounds: (1) The information sought by the subpoena would reveal closely guarded trade secrets, disclosure of which would irreparably harm Anheu-ser-Busch and the Commission had failed to demonstrate the relevancy of the material requested to their investigation; and (2) Guignon would be deprived of his rights to proper representation by counsel when testifying under the Commission rules regarding investigational hearings.

On November 25,1964, the Commission issued an order denying the motion to quash and the request to allow Anheuser-Busch to file with the Commission in camera an affidavit on the cost data.

On December 16,1964, Anheuser-Busch and Guignon filed a complaint in this court (Meredith, Judge) seeking a declaratory judgment, preliminary injunction, and a permanent injunction to restrain the Commission from enforcing the subpoena. On June 10,1965, Judge Meredith dismissed the complaint on the ground that Anheuser-Busch and Guignon had an adequate remedy at law, and that, therefore, the complaint was subject to dismissal for want of equity jurisdiction (See 242 F.Supp. 122). This decision was affirmed by the Eighth Circuit Court of Appeals at 359 F.2d 487 (January 6, 1966).

On April 14, 1965, the Commission passed a second resolution (Petitioner’s Exhibit 1) directing the issuance of all necessary subpoenas to supply the Commission with relevant information which any corporation had refused in connection with the investigation.

On April 12, 1966, the Commission withdrew the subpoenas to Guignon, and on April 13, 1966, issued the subpoenas which are the subject of the present action, that is, subpoenas duces tecum and ad testificandum were issued to John H. Pahlman (respondent herein) and a subpoena ad testificandum was issued to Paul C. Guignon (respondent herein). The respondents produced everything demanded by the subpoenas except documents as to cost data, and again refused to supply cost data documents, or to testify for the same reasons that Guig-non and Anheuser-Busch had refused on the earlier subpoena and questionnaire.

On April 26, 1966, the respondents Guignon and Pahlman moved the Commission to quash the subpoenas. On April 28, 1966, the Commission entered an order denying the motion.

On June 6, 1966, Guignon, Pahlman and Anheuser-Busch formally refused the information at a Commission hearing on the investigation.

Thereafter, on June 30, 1966, the Commission, without the aid or consent of the Attorney General, instituted a proceeding in this Court for the enforcement of the subpoenas. On the same day this Court issued an Order to Show Cause why the petitioner’s application for enforcement of the subpoenas should not be granted. On July 28, 1966, the respondents filed the present motion to dismiss the Commission’s application for enforcement and to vacate the Order to Show Cause.

On July 12, 1966, the attorneys for the Commission received a notice that the respondents intended to take the depositions of A. C. Schneeberger and J. W. Bollinger. On July 18, 1966, the Commission filed the present motion for protective order to prevent the respondents from taking these depositions.

There are no factual issues relevant to the present motions, there being three legal issues only. Two of these issues are in the respondents’ motion to dismiss the petitioner’s application for enforcement and to vacate the Order to Show Cause. First, can the Commission, acting on its own without the aid or consent of the Attorney General enforce its own subpoenas? Second, if the Commission can enforce its own subpoenas, can it do so by means of a summary proceeding as the Commission asks the Court to proceed here?

The third issue concerns the petitioner’s motion for protective order. Can the ¡respondent in a proceeding in the District Courts by the Federal- Trade Com[217]*217mission to enforce a Commission subpoena make use of the Federal Rules of Civil Procedure discovery devices (specifically, depositions of adverse parties) ?

As to the first issue, the respondents contend that Section 9 of the Federal Trade Commission Act does not give the Commission standing to enforce its own subpoenas in the District Courts without the aid or consent of the Attorney General. The petitioner contends that Section 9 specifically authorizes the Commission to begin enforcement proceedings of its subpoenas in the District Courts with or without the aid or consent of the Attorney General. _

A discussion of the first issue must begin with the basic proposition that the Attorney General shall have supervision over all litigation to which the United States or any agency thereof is a party (28 U.S.C.A. § 507). This basic rule is subject to exception if an agency is specifically given the authority to proceed without the Attorney General. Case v. Bowles, 327 U.S. 92, 96, 66 S.Ct. 438, 90 L.Ed. 552.

The Court, therefore, sets forth Section 9 of the Federal Trade Commission Act, 15 U.S.C.A.

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Related

Federal Trade Commission v. Kujawski
298 F. Supp. 1288 (N.D. Georgia, 1969)
Federal Trade Commission v. Guignon
390 F.2d 323 (Eighth Circuit, 1968)
Federal Trade Commission v. Continental Can Co.
267 F. Supp. 713 (S.D. New York, 1967)

Cite This Page — Counsel Stack

Bluebook (online)
261 F. Supp. 215, 1966 U.S. Dist. LEXIS 10210, 1966 Trade Cas. (CCH) 71,926, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-trade-commission-v-guignon-moed-1966.