Nc St. Bd. of Regis. for Pro. Eng. v. FTC

615 F. Supp. 1155
CourtDistrict Court, E.D. North Carolina
DecidedAugust 15, 1985
Docket84-517-Civ-5
StatusPublished

This text of 615 F. Supp. 1155 (Nc St. Bd. of Regis. for Pro. Eng. v. FTC) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nc St. Bd. of Regis. for Pro. Eng. v. FTC, 615 F. Supp. 1155 (E.D.N.C. 1985).

Opinion

615 F.Supp. 1155 (1985)

NORTH CAROLINA STATE BOARD OF REGISTRATION FOR PROFESSIONAL ENGINEERS AND LAND SURVEYORS, Plaintiff,
v.
FEDERAL TRADE COMMISSION, Defendant.

No. 84-517-Civ-5.

United States District Court, E.D. North Carolina, Raleigh Division.

August 15, 1985.

*1156 Wright T. Dixon, Jr., Carolin Bakewell, Raleigh, N.C., for plaintiff.

Fred Dooley, F.T.C., Office of Gen. Counsel, Washington, D.C., for defendant.

ORDER

TERRENCE WILLIAM BOYLE, District Judge.

Plaintiff, North Carolina State Board of Registration for Professional Engineers and Land Surveyors [hereinafter "Board"], brought this action pursuant to 5 U.S.C. § 704; 15 U.S.C. § 49 and 28 U.S.C. §§ 1331, 1337 and 2201. Plaintiff named as defendant the Federal Trade Commission [hereinafter "Commission"]. The plaintiff Board, an entity created by the North Carolina General Assembly, alleges that the defendant Commission's issuance of a subpoena ad testificandum and a *1157 subpoena duces tecum was an ultra vires action not authorized by the Federal Trade Commission Act[1] [hereinafter "FTCA"]. The Board further alleges that the administrative review procedures utilized by the Commission deprived it of procedural due process as guaranteed by the fifth amendment.

The Board seeks declaratory and injunctive relief. Specifically, it requests that the court restrain the Commission from enforcing the two subpoenas issued to the Board and from issuing further subpoenas. Furthermore, the Board requests that the court declare a rule of professional conduct promulgated by the former to be exempt from FTC investigation. The Board has apparently dropped its request for a temporary restraining order in this matter.

The Commission filed a motion to dismiss, alleging that no statutory basis for subject matter jurisdiction exists in this case, and that the plaintiff in any event has failed to state a claim upon which relief may be granted. For the reasons given hereafter, the Commission's motion to dismiss is granted.

FACTUAL BACKGROUND

The facts regarding the Commission's investigation of the plaintiff Board are, for the most part, undisputed. The North Carolina State Board of Registration for Professional Engineers and Land Surveyors was created by the North Carolina General Assembly in 1921. See N.C.Gen.Stat. § 89C-4 (1981). All members of the Board are appointed by the Governor. Id. The Board consists of four registered professional engineers, three registered land surveyors and two public members who are neither professional engineers nor land surveyors. Id. The Board is responsible for promulgating and adopting rules of professional conduct applicable to the practice of engineering and land surveying. N.C.Gen. Stat. § 89C-20 (1981). The Board is required to submit its proposed rules to the North Carolina Attorney General. N.C. Gen.Stat. § 150A-59 (1981).

Pursuant to this legislative authority, the Board in 1979 promulgated and approved Rule 56.071(e)(8) and incorporated the same into its Rules of Professional Conduct. Rule 56.0701(e)(8) provides:

The [Engineer or Land Surveyor] shall not attempt to supplant another engineer or land surveyor in a particular employment after becoming aware that the other has been selected for the employment.

On April 2, 1984, a staff attorney for the Commission notified the Board's executive secretary that the agency was conducting an investigation to determine whether Rule 56.0701(e)(8) was in violation of § 5 of the FTCA, i.e., 15 U.S.C. § 45. The Commission requested that the Board provide it with certain information regarding the rule. On April 12, 1984, the Board informed the Commission that it would not voluntarily furnish the information requested.

Faced with the Board's refusal to voluntarily submit information pursuant to an investigation, the Commission resorted to compulsory process and issued a subpoena ad testificandum to the Board's Chairman and a subpoena duces tecum to the Board's Executive Secretary. The Board filed a petition to quash these subpoenas on January 16, 1985. The Commission granted the Board an oral hearing on the petition in Washington, D.C. on January 29, 1985. The hearing was held before a single FTC Commissioner, i.e., Commissioner Terry Calvani.[2] Commissioner Calvani denied the Board's petition to quash in a written decision dated February 11, 1985.

In the second paragraph of the opinion, Commissioner Calvani directed the Board's attention to FTC Rule 2.7(f), which provides for a three day period within which to file a request with the Secretary of the FTC for a full Commission review. Commissioner *1158 Calvani also referred to a notice found in the Federal Register which explicitly stated that full Commission review of an initial ruling would be available only "if a request for a review is received within three days after service of the ruling." 49 Fed.Reg. 6089 (February 17, 1984).

The Board submitted a request for a full Commission review of Commissioner Calvani's decision. This request was mailed on February 14, 1985, and received by the Commission on February 19, 1985 — the first working day following the three-day time period established by Commission Rule of Practice 2.7(f). The Commission denied the Board's request for a full Commission hearing on March 8, 1985. The full Commission cited the Board's failure to timely file its request as the reason for refusing to review Commissioner Calvani's decision.

The Commission set March 14, 1985, as the deadline for compliance with its subpoenas. On March 13, 1985, the Board filed a motion for a rehearing on its request for a full Commission review of Commissioner Calvani's decision. That motion was denied by the Commission on March 22, 1985. The Board filed this complaint on March 28, 1985. Thereafter, the Commission filed a request for documents with the Board pursuant to the North Carolina Public Records Act, N.C.Gen.Stat. §§ 132-1 through -9 (1981). The Board has complied with this request.

APPLICABLE LAW

The Board's complaint effectively contains two causes of action. The Board alleges a deprivation of its constitutional right to due process of law, and also maintains that Rule 56.0701(e)(8) is exempt from FTC investigation. The latter claim arises under two separate theories, i.e., that the rule in question does not affect interstate commerce, and that the rule constitutes "state action" exempt from antitrust scrutiny pursuant to Parker v. Brown and its progeny.

A. Due Process Claim

The court considers the Commission's motion to dismiss the Board's due process claim to be a 12(b)(6) motion to dismiss for failure to state a claim: the court has subject matter jurisdiction over these claims by virtue of the constitutional implications which they raise. Since this motion was accompanied by affidavits and exhibits, the court will treat it as a motion for summary judgment. Fed.R.Civ.P.

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