United States v. Union Oil Company of California

343 F.2d 29, 1965 U.S. App. LEXIS 6190, 1965 Trade Cas. (CCH) 71,403
CourtCourt of Appeals for the Ninth Circuit
DecidedMarch 18, 1965
Docket19179_1
StatusPublished
Cited by10 cases

This text of 343 F.2d 29 (United States v. Union Oil Company of California) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Union Oil Company of California, 343 F.2d 29, 1965 U.S. App. LEXIS 6190, 1965 Trade Cas. (CCH) 71,403 (9th Cir. 1965).

Opinions

ORR, Circuit Judge:

On August 19, 1963, the Department of Justice of the United States issued a Civil Investigative Demand to the Union Oil Company of California. The demand recited that it was issued pursuant to the Antitrust Civil Process Act (herein ACPA), 15 U.S.C. §§ 1311-1314, and requested documents relating to an investigation of “proposed acquisitions of fertilizer companies by petroleum companies”, for the purpose of “ascertaining whether there is or has been a violation of the provisions of [Section 7 of the Clayton Act]”.1

On August 27, 1963, pursuant to Section 5(b) of the ACPA, 15 U.S.C. § 1314 (b), Union filed a petition in the United States District Court for the Southern District of California to have the demand set aside. The petition contained six grounds. It was granted upon the ground that the ACPA may not be used to investigate prospective acquisitions, which, if consummated, might violate Section 7 of the Clayton Act.

For purposes of this opinion we assume, without deciding, that the demand made was upon a “person under investigation”, that it was sufficiently definite and certain, and that it otherwise constituted a proper request for the production of documents which Union may have had in its possession from which it may have been determined that Union’s activities were possibly in violation of Section 7 of the Clayton Act.

The issue in this case is clearly presented. The government states in its demand that it is investigating possible violations of Section 7 of the Clayton Act by proposed acquisitions of fertilizer companies by petroleum companies. Hence, it appears — and the government so concedes — that it intended to investigate only Union’s proposed acquisitions, if any, of fertilizer companies. This being so, we are presented with the question of whether the ACPA authorizes the use of the civil investigative process to inquire into proposed acquisitions to determine whether they would be prohibited by Section 7 of the Clayton Act.

In seeking an answer to this question we examine first the wording of the statute.

Section 3(a) of the ACPA, 15 U.S.C. § 1312(a), reads as follows:

“Whenever the Attorney General, or the Assistant Attorney General, in [31]*31charge of the Antitrust Division of the Department of Justice, has reason to believe that any person under investigation may be in possession, custody, or control of any documentary material relevant to a civil antitrust investigation, he may, prior to the institution of a civil or criminal proceeding thereon, issue in writing, and cause to be served upon such person, a civil investigative demand requiring such person to produce such material for examination.”

The section clearly imposes the requirement that the demand be for material relevant to a "civil antitrust investigation”.

“Antitrust investigation” is specifically defined in the Act, Section 2(c), 15 U.S.C. § 1311(c), as follows:

“The term ‘antitrust investigation’ means any inquiry conducted by any antitrust investigator for the purpose of ascertaining whether any person is or has been engaged in any antitrust violation." (emphasis provided)

Thus, it is apparent that a demand must be confined to material relevant to the ascertainment of whether or not a person “is or has been engaged in any antitrust violation”. Obviously this does not include investigations of activity that will be a violation in the future.

An “antitrust violation” is defined in Section 2(d) of the ACPA, 15 U.S.C. § 1311(d):

“The term ‘antitrust violation’ means any act or omission in violation of any antitrust law or any antitrust order.”

In view of the clear import of the cited provisions, the question posed is: Can a proposed acquisition be a past or present violation of Section 7 of the Clayton Act for purposes of the ACPA?

The foregoing requires a negative answer, if the word “violation” is used in a normal sense. Under Section 7 of the Clayton Act an acquisition can be a violation — a proposed acquisition cannot. That is to say, a proposed acquisition cannot be violative of the operative language of Section 7: “No corporation * * * shall acquire * * * ” An acquisition itself — the taking of ownership — is the only type of conduct made illegal, the only type of conduct which may constitute a “violation” of the section.

While it is true that under Section 15 of the Clayton Act, 15 U.S.C. § 25, a proposed acquisition — a proposed violation of Section 7 — may, if imminent, be enjoined by the Attorney General, this authorization does not transform a proposed violation of Section 7 into a violation. No logical contention can be made that a proposed acquisition can be made a “violation” of the Clayton Act by virtue of Section 15. That section is not a part of the substantive group of sections delineating that conduct which the Clayton Act prohibits. It gives the Attorney General power to seek, and the District Court power to grant, injunctions against “violations” of the Clayton Act, violations being set out in Sections 2, 3, 7, and 8. 15 U.S.C. §§ 13,14, 18, and 19. A proposed acquisition is not, then, a violation of the Clayton Act.

Appellant, however, does not read “antitrust violation”, as used and defined in the ACPA, to mean conduct made unlawful by the antitrust laws. It interprets the word to mean “any conduct for which the United States could bring an action and obtain relief under any antitrust law.” We take a look at the reasoning employed by the government in support of its argument that the disputed language of the ACPA can reasonably be so interpreted, so as to permit proposed acquisitions to be investigated as past or present “violations” of Section 7 of the Clayton Act.

First, the government argues, pointing to the title of the ACPA, that the Attorney General’s civil investigative authority is made co-extensive with his powers of civil antitrust enforcement. The title of the ACPA is: “An Act to authorize the Attorney General to compel the production of documentary evidence required in civil investigations for the [32]*32enforcement of the antitrust laws, and for other purposes.” This title is generally descriptive, and is as appropriate to describe the Act, as the trial court interpreted it, as it would be to describe the Act as the government interprets it.

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Bluebook (online)
343 F.2d 29, 1965 U.S. App. LEXIS 6190, 1965 Trade Cas. (CCH) 71,403, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-union-oil-company-of-california-ca9-1965.