FTC v. JANTZEN, INC.
Legal provision: Clayton
Argument of Ralph S. Spritzer
Chief Justice Earl Warren: Number 310, Federal Trade Commission, Petitioner versus Jantzen Incorporated.
Mr. Ralph S. Spritzer: Mr. Chief Justice may it please the Court.
This case involves the legal status of an order of the Federal Trade Commission.
The order in question was issued in January of 1959 and the date is important here, issued upon the consent of the respondent Jantzen.
In substance the order directed the Jantzen to cease-and-desist from further discrimination in advertising and promotional allowances granted its customers, a form of discrimination covered by Section 2(d) of the Clayton Act.
Unknown Speaker: Was this a consent?
Mr. Ralph S. Spritzer: Yes Your Honor it was a consent order.
And the only statutory problem which is here results from the fact that later in that same year 1959, specifically in July, the Clayton Act was amended so as to provide both new and strengthened methods of enforcement of cease-and-desist orders.
Now respondent contends and the Ninth Circuit has agreed that a practical consequence albeit an inadvertent one of this amendment was to make the preexisting January 1959 order wholly unenforceable and it consequently acknowledged violations of this 1959 order, violations which were found some years later in 1964 cannot be reached through the 1959 cease-and-desist order.
We urge of course that this was not an intended result, a point on which there appears to be little if any basis for dispute and that it is not a result which is required by the amendatory language.
We make the further I would say complementary argument that if the amendment should be read as creating a gap and leaving this former order unenforceable, then we say alternatively that gap would be filled by the general savings statute 1 USC 109.
Justice Potter Stewart: I didn't understand the Court of Appeals opinion to be so clear in not thinking that this was an inadvertent result?
Mr. Ralph S. Spritzer: I expected parochial language it said perhaps inadvertent.
I am going to argue on the basis of the legislative history and that plainly Congress thought it was protecting and strengthening the Act.
It also made reference in the committee report which is printed as an appendix to the government's brief to numerous compliance investigations which the commission had underway and there's not a whisper in the entire history that Congress thought it was going to make any orders unenforceable.
So I think there is little basis at least for any suggestion that Congress thought this result was going to fallout.
I might note incidentally that the Second Circuit has reasonable come out in direct opposition to the conclusion reached by the Ninth Circuit in this case and that in earlier -- at an earlier date the District of Colombia Circuit had indicated although that precise issue was not before it for a decision that it excepted the commission's view which I shall explain as I go along that the old orders continue to be enforced by that.
Justice Mr. Justice Bernnan: May I ask what [Inaudible]
Mr. Ralph S. Spritzer: We have printed it since it's not available in the reports in the supplemental memorandum that Your Honor should have.
Now before I attempt to develop our arguments, let me seek if I may to clarify the issue by recalling to Your Honors' the pre-1959 procedures and then comparing them to the procedures for judicial review and enforcement as provided in 1959 by the so called Finality Act of 1959.
Now prior to that year, Clayton Act orders, cease and desist orders could come before the Court of Appeals in one of two ways.
The party subject to the order could bring a review proceeding to set it aside or to modify it.
There was no period of limitations prior to 1959 so that the order might stand for years and then ultimately a review proceeding might be instituted.
The next paragraph of the old statute provided that the commission for its part could go to the Court of Appeals in order to seek enforcement, but it was only entitled to enforcement if it could show two things.
First that it's cease and desist order was valid and second that its order had been violated since it had been issued, in other words it had to show a post order violation, a second act.
Sanctions attached only if an order of enforcement was obtained and a third violation thereafter shown at which point of course the contempt power of Court of Appeals would be available.
Now as I've indicated accordingly there might be -- there might have been under the 1953 -- pre-1959 procedures two proceedings in the Court of Appeals preliminary to a decree enforcing the commission's order, the one proceeding by the responded company seeking review of the order, the other proceeding by the commission seeking enforcement.
A ruling by the Court of Appeals on a respondent's appeal that the order was valid did not automatically carry enforcement with it.
Indeed this Court made it clear in the old Ruberoid decision that even if a commission order was affirmed that enforcement would not follow unless in addition violation, post order violation was shown.
Now these old procedures as I've outlined initially applied both to orders issued under the Clayton Act and to orders issued under the Federal Trade Commission Act, both of which statutes of course were roughly contemporaneous.
They were cumbersome and in 1938 Congress changed them so far as cease and desist orders issued under the Federal Trade Commission Act were concerned.
That was done by the so called Wheeler-Lea Amendments and in large part though not in toto, the Finality Act of 1959 or Clayton Act orders what the Wheeler-Lea Amendments had done in 1938 for Federal Trade Commission Act orders.
And the new procedures brought into the law by Wheeler-Lea can be simply stated.
It provided that if an order issued under the Trade Commission Act was not appealed within 60 days, it would become final.
If it were appealed within that 60-day period, it would become final upon the conclusion of the review proceedings.
Under this scheme, the Wheeler-Lea scheme final orders were equipped with teeth.
Violation of any such final order would carry civil penalties.
Now there were numerous cease and desist orders outstanding when the Wheeler-Lea Amendment was passed too and the happily the Wheeler-Lea amendment made some specific provision for that which the statute, we are dealing with today did not make.
Wheeler-Lea in a separate section said that all Federal Trade Commission Act orders which had not already been taken to the Courts would become final if the private party affected by that order did not seek judicial review within 60 days of the enactment of the new enforcement procedure.
And as a result all Federal Trade Commission Act orders would become final and self executing either by the failure of the party to seek judicial review within the 60 days allowed by the statute or if he did seek review by his failure to sustain it's challenge.
Now, the commission sought similar legislation in relation to Clayton Act cease-and-desist orders over a period of years and various bills differing somewhat in their details were sporadically introduced.
It was not until 1959 that the comparable legislation was adopted.
I say comparable because there are some differences and those differences do concern us in this litigation.
First very briefly as to the similarities; the Finality Act of 1959 like the Wheeler-Lea Amendments upon which it was patterned, substituted new, review and enforcement procedures for the old.
Just like Wheeler-Lea it provided that the Clayton Act orders would become final 60-days after service upon the respondent company unless judicial review were sought and further of course if review were thought they would become final to the extent sustained upon the completion of the review proceeding.
Again like Wheeler-Lea, it provided that final Clayton Act orders would be self executing and would carry penalties also that they might be imports through the injunction process.
In short then so for as Clayton Act orders issued after July 1959 are concerned one may say that the Wheeler-Lea and the Clayton Act and the Finality Act procedures are for all practical purpose is same.
Now Wheeler-Lea as I indicated earlier contained this separate section which provided in substance that in the case of an already outstanding order the respondent would have 60 days to go to Court and failing that the order would become final.
The Finality Act which was Senator Sparkman's Senate Bill enacted in the law, adopted a different approach for already outstanding orders than it adopted cease-and-desist orders thereafter to be issued.
Section 2 of the Finality Act which appears at page 39 in the government's brief, states that the review and enforcement procedures provided by the new statute and the amendments made by Section 1 shall have no application to any proceedings initiated before the date of enactment of this Act, and then it goes on, that each such proceeding shall be governed by the provisions of such section as they existed on the day preceding the date of enactment of this Act.
Thus the statute tells us quite explicitly that if a Court of Appeals proceeding involving the cease-and-desist order in this case had been pending, when the Finality Act was passed in July 1959 that the old procedures would govern and that the commission could seek enforcement in the case of post order violation.
What the statute fails to tell us in terms, is what procedures are to govern cease-and-desist orders issued prior to July of 1959, in relation to which no proceeding was pending in the Court of Appeals as of July 1959 and that of course is the factual situation that we have in this case.
Chief Justice Earl Warren: We'll recess now.
Mr. Ralph S. Spritzer: -– substituted new review and enforcement procedures for the old and that these were prospective in their operation, they were going to govern all orders thereafter issued.
The statute also explicitly provided that in respect of any proceeding that was already in Court, the earlier pre 1959 procedures would govern.
Jantzen argues the Congress repealed the old provisions except in so for as it enacted an explicit savings provision and that in consequence there is a gap because although Congress provided for the continuance of the old methods of enforcement in respect to cases already pending in Court, it did not in terms provide any method of enforcement in respect of pre-1959 cease-and-desist orders which had not yet been taken to Court.
It seems hardly likely that Congress engaged as this Congress was in urging of sponsor in strengthening and protecting the act would have knowingly discarded the vast majority of the cease-and-desist orders and cast them in limbo making them a wholly unenforceable.
In fact when the 1959 legislation was passed, there were some 440 Clayton Act cease-and-desist orders outstanding, some 50 of which have been affirmed or enforced and in additional 11 then pending on review in the Courts of Appeals.
The respondent's argument would mean that the remaining 379 orders with many of them entered after protracted and strenuously contested proceedings would be unenforceable.
I think it's been conceivable that Congress would have knowingly discarded this large number of orders without even a whisper in the entire legislative history and there is none of this is what it was about or this is what it intended.
I think it also offends the commonsense considerably to suppose that Congress would make explicit provision for commission of enforcement of an order which is then being challenged in the courts but makes no allowance whatever for the commission to enforce an order which has not even been questioned, but yet that would be the consequence.
Justice Potter Stewart: But that's what the statute do in terms?
Mr. Ralph S. Spritzer: Yeah, in terms it does.
There is clearly a inartful drafting, assuming that I am --
Justice Potter Stewart: To say the very least.
Mr. Ralph S. Spritzer: Saying that this was unintended.
The Second Circuit and the Court of Appeals for the District of Columbia have concluded that the obvious congressional purpose here was to make the old procedures applicable to pre 1959 orders and the new procedures prospective only.
Unknown Speaker: [Inaudible]
Mr. Ralph S. Spritzer: Yes sir, I certainly sir.
As I said both those circuits have concluded that the obvious purpose was to make the new provisions prospective and those Courts have concluded that the statute can fairly be read in light of it's obvious purpose as repealing the old provisions for enforcement only and respect of orders thereafter issued by the commission.
The Court of Appeals for the District of Columbia held has shortly after the Finality Act was passed in its Sperry Rand case that the new statute was prospective only and that all pre-1959 orders where to be enforced by the old statute.
Judge Fayes suggested in that opinion that the explanation of the rather limited language used the reference only to cases pending in the courts may have been prompted by the dealing on the part of Congress that otherwise some doubts might exist about proceedings which were in litigation.
In all events the commission duly advised as a result of the District of Columbia Circuit litigation that the new statute was prospective only directed an investigation and I'm now returning to the particulars of this case.
In 1964 to determine whether respondent Jantzen was in compliance with the old 1959 order.
Jantzen acknowledged in that commission proceeding that it had violated the order and indeed it stipulated two, three instances of violation.
The commission thereupon filed a petition for a court order adjoining compliance and at that point Jantzen objected that the court was without jurisdiction because on a strictly literal reading of the statute one might say there was a gap.
I've indicated already I think that we believe the other circuits that have viewed this matter are correct in believing that one may read into this language a continuation of the statute not only for pending cases, but for all of cases including those in which the respondent hadn't even challenged the order.
This brings me and I shall treat it only very briefly to the alternative argument which we think is a sound one if there is any -- if the Court finds occasion to reach it and that is the argument that if the Finality Act were read as leaving a gap, it seems to us that the general saving statute would properly be invoked.
That statute says in substance that the repeal of statutory provisions shall not release any liability incurred under the old law, unless the repealing act shall so expressly provide.
Now respondent answers that contention with this argument.
It's says that it had no liability in July 1959 when the Finality Act was passed because at that point it had not yet violated the commission's cease-and-desist order.
Now we would agree that in July of 1959 there was no fixed liability in the sense of an applicable sanction or an approved penalty or a liability for a sum certain, but we would argue that liability is satisfied by the very entry of a cease and desist order even though any penalty would be dependent upon the future event.
And in a number of labor board cases which have been decided by the Courts of Appeals that an analogous question has arisen.
The cases I refer to are cases in which the labor board issued a cease and desist order under the Wagner Act.
Before the order was judicially enforced, the provisions of the Wagner Act under which the order had been promulgated was superseded by provisions of Taft-Hartley, yet in those cases the Courts of Appeals concluded that a administrative cease and desist order is a liability within the meaning of the Savings Statute even though there is no sanction until the order, the administrative order has been judicially enforced.
Now that brings me finally to respondent's suggestion, a point to which Mr. Justice Harlan adverted a moment ago, a suggestion that the commission does not need the old remedy for old orders because when there is a violation, it can bring a new complaint and get the benefit upon it's finding a violation of the new procedures.
Now I agree, I think the commission probably agrees that there may well be cases in which it would be fully as expeditious to start a new case as it would be to pursue the old one and one of the commissioners has strongly questioned that as being of that view.
I should like to stress that nothing I have suggested would prevent the commission from pursuing its options in that regard.
Quite the contrary my only point is that it should have the option, that Congress has left it the option to enforce its old orders as well as to bring new cases.
And the commission is of the view that there are at least two situations in which it maybe considerably more difficult to prove the basis of a new cease and desist order than it would be to establish a violation of an outstanding order.
But one thing a cease and desist order may and it sometimes does direct a respondent to refrain from acts which are not in and of themselves unlawful.
Once a violation has been proved, an administrative agency or a court of equity may be empowered to take necessary steps to prevent a repetition and sweep more broadly.
As this Court put it in the National Led case a known violator may expect some fencing in.
A second led is not invariably necessary in an enforcement proceeding to litigate all of the issues which would or might have to be litigated in a brand new proceeding.
Thus the record in the earlier administrative proceeding, the proceeding leading to the initial cease and desist order may suffice in the violation proceeding to dispose of particular elements in the case at that second stage and indeed this Court's Morton Salt and Ruberoid opinions are both quite suggestive as to that possibility.
In short we think that there are circumstances in which the commission may find that enforcing old orders rather than instituting new proceedings will be to its advantage.
When it will follow up an old order rather than institute a new case it seems to us is a matter for the commission itself rather than for the courts to attempt to decide, but our point here is simply the Congress has reviewed the matter has not closed the door upon the enforcement of pre-1959 order.
Chief Justice Earl Warren: Mr. Rockefeller.
Argument of Edwin S. Rockefeller
Mr. Edwin S. Rockefeller: Mr. Chief Justice and may it please the Court.
Our point here is that Congress has made it quite clear what it was doing in 1959.
The commission recognized that at that time and to some extent the commission recognizes it today.
When this proceeding that's now before the Court and we want to if we can to invite your attention to this proceeding as dramatically as we can and not some other case that might come up some day.
This proceeding when it was initiated in the summer of 1964, if the Federal Trade Commission at that time and now makes available a very handy government printing office publication containing it's rules and containing various other statutes that the commission has responsibility to enforce.
And if anyone in the summer of '64 or anytime since August 1963 looks at the copy of the Clayton Act that's printed in this publication, he doesn't find any of these provisions that the government tried to tell the Court of Appeals in San Francisco are those that their petition is filed under.
He looks in here and here is Section 11 of the Clayton Act as it now appears in the United States code and has consistently appeared United States code each time anybody considered it since 1959.
Now there is a clue in this publication and incidentally I went by there on the way up to Court this morning and asked simply for a slip copy of the Clayton Act, the legal public record section of Federal Trade Commission and it's identical to what I'm attempting to show right now.
The same thing, the statute as it appears in the United States code with a footnote then at the end of Sub Section B of Section 11 and there that footnote says that there was this amendment in 1959 Public Law 86-107 which re-designated the first two sub-paragraphs of Section 11 of the Clayton Act and then amended third, fourth, fifth, six and so on providing this procedure which Mr. Spritzer has carefully laid out is the current method for enforcement of Clayton Act orders.
It says that there was this amendment and then it goes on to say paraphrasing Section 2 of the 1959 amendment.
The amendment so made do not apply to any proceeding initiated before the date of enactment of that Act under the third or fourth paragraph of Section 11.
Now I don't know whether it was or I won't question anybody's motivation but the fact is that the counsel continually referred to that second section of the Finality Act of 1959 as referring only to pending cases.
That's just not correct and the commission lays it out in here.
That second section said that, shall – these amendments shall have no application to any proceeding initiated under the third or fourth paragraph and the third paragraph of the old Section 11.
The old Section 11, the third paragraph was reviewed, it was enforcement proceedings and the fourth paragraph was review proceedings.
So that let's not have the Court be confused as to what the Finality Act of 1959 on its face did. it specifically preserved any -- the old method of procedure for any proceedings for review or enforcement previously initiated and I would suggest that, that means all of the significant cases or close to all of them and I will come to that if I may, but for instance don't have this misunderstanding.
If in 1955, this Court or a Court of Appeals reviewed and affirmed an old Federal Trade Commission Clayton Act order this 1959 Act on its face preserves that specific method of enforcement and we are not contending that it doesn't and the Court of Appeals for the Ninth Circuit is not saying that it doesn't, those are totally unaffected by the Ninth Circuit's decision in this case.
Now to go on then as to what the Federal Trade Commission, its publication tells you about this, they tell you about the Section 2 and they each such proceeding that is, those were that was a review or enforcement proceeding previously initiated continues to be governed by the provisions of such section as they existed on the day proceeding the date of enactment of public law 86-107.
Now you don't find anywhere else unless I am mistaken in the commission's rules or its publications any clue that they are going to tend to regard some other provisions of law which have been repealed as still in effect.
The handling -- the code of files of the U.S. Code didn't do the same.
The Court will recognize that the U.S. code as prima facie that's the law here and we submit then that that's lesser some terribly persuasive reason as to why that isn't the law and that just settles the case.
Justice John M. Harlan: What was that document that you were reading?
Mr. Edwin S. Rockefeller: That's a Federal Trade Commission Publication, Organization, Procedures, Rules and Practices and Statutes, August 1963 for sale by the Superintendent of Documents U.S. Government Printing Office, list of Commissioners, list of Principle Staff Officers and it contains the commission's rules, much of it required by Federal regulations and then these statutes.
And that if you go down today and ask the Federal Trade Commission for a copy of the Clayton Act --
Justice Abe Fortas: What's your point – what is your legal point?
Is it that this demonstrates the construction that the commissions place upon the statutory situation and that that construction can be taken as binding?
Mr. Edwin S. Rockefeller: Well what I guess my point is that the law is clear on its face and they have recognized it.
And now we have -- I don't need to dispute it that the Solicitor General, Mr. Justice Fortas, he represents the Federal Trade Commission, but the only written expression, the only opinion that we have from the Federal Trade Commission on this question, are those written views of Commissioner Eleanor.
Now we can be sure some commissioners must take a different view.
Justice Abe Fortas: Now we could even decide that the Trade Commission is not correct, couldn't we?
Mr. Edwin S. Rockefeller: Yes certainly you could.
Justice Abe Fortas: But you are saying and we ought to take the trade but this is a construction by the Trade Commission let us say the omission of these old provisions from the pamphlet as a construction by trade commission and we ought to take that construction as persuasive and kind of hard to correct.
Mr. Edwin S. Rockefeller: I think Mr. Justice Fortas I'm not trying to argue that simply because the Trade Commission says it or doesn't say it, is.
It's the view you want to adopt.
Our position is that it that this is the view you ought to adopt regardless of the position the commission takes.
Justice Tom C. Clark: [Inaudible], aren't you?
Mr. Edwin S. Rockefeller: Yes sir.
Now we are perfectly willing to talk about some other case but if -- just to get into what is the law here, we submit the law is clear on its face.
That the country lawyers have exacted the old provisions and pasted in the new ones and the code of files have done that.
Justice Tom C. Clark: What law does it [Inaudible]
Mr. Edwin S. Rockefeller: The new procedure applies in a way Justice Clark, but let me try to give our answer to that.
There is the basic misunderstanding here on, I submit on the part of the government at this time and of the Court of Appeals for the Second Circuit as to what the result will be or what effect on enforceability of old orders there might be and let me get into that in this way.
The Court of Appeals for the Second Circuit adopts this, what is the government position here, that if you let the Ninth Circuit Court of Appeals decision stand then all these old orders will be unenforceable.
Now we submit that that's just not the case.
That first of all the Finality Act of 1959 preserves on its face those old orders which as to which a review or enforcement proceeding had previously been initiative.
Secondly we --
Justice Tom C. Clark: You didn't have a review proceeding?
Mr. Edwin S. Rockefeller: If there were no review proceeding then we would suggest to you the views of the Court of Appeals for the Ninth Circuit and at least one member of the commission.
There maybe a variety of things that commission can do.
For one thing lets take a case in which, well first let me tell our case.
What could the commission do in our case?
The commission in our case could simply issue a new complaint, allege the violations of law and the burden would have been no greater on the commission to come up with an order which would be enforceable by civil penalties.
In our case Justice Clark--
Justice Tom C. Clark: That would abandoned the old proceeding if they completed and you had agreed to?
Mr. Edwin S. Rockefeller: Well it would abandon it only in this respect, it would abandon it because the Act of Congress in 1959 gave the commission so much better weapon.
If I try to understand really why the commission did what it in this case, why didn't they simply issue of new complaint.
I suggest to you it is because it's hard for them to come to the conclusion that the, the earlier proceeding was worthless that they were wasting their time.
I submit in those cases in which anything was established in the earlier proceeding it's still established and in those cases in which nothing was established, they aren't any farther behind and it wasn't their fault.
It isn't that they didn't do a good job prior to 1959, it's because that procedure prior to 1959 was cumbersome so laborious it didn't accomplish anything that's the reason the Congress changed the law in 1959.
Justice Byron R. White: Because you've -- but as Mr. Justice Clarke suggested they start all over on the, at the complaint stage now you can litigate that compliant, you need to concept to anything, you did concept for, and a commission would have establish every element of the whole case I take it that's so --
Mr. Edwin S. Rockefeller: Well, let me try to put that perspective, if I may, Mr. Justice White.
If the commission proceeded by way of new complaint now --
Justice Byron R. White: Which is what you say they should do?
Mr. Edwin S. Rockefeller: I'm not saying that they should do that I'm saying that's open as an alternative to them if this Court affirmed the Court --
Justice Byron R. White: Of course I understand you'd rather they didn't do anything?
Mr. Edwin S. Rockefeller: Yeah that's our basic position and the record demonstrates that.
The record shows that this respondent is now complying with the law that is instituted federal system to ensure compliance with the law and our position is that there isn't any need for any sort of proceeding.
Justice Tom C. Clark: But they admit – I understand it that they had offended the first order, is that right?
Mr. Edwin S. Rockefeller: I'm sorry I didn't understand.
Justice Tom C. Clark: They had violated the original order, they admitted that, didn't they?
Mr. Edwin S. Rockefeller: The commission alleged that Jantzen violated the statute when it started its complaint proceeding in 1958.
That was, that proceeding was disposed off by Jantzen's not -- Jantzen didn't admit or deny those that the complaint alleged that Jantzen had a plan for promotional allowances which had a minimum purchase requirement, and the commission said this doesn't comply with Section 2(d) of the Clayton Act and Jantzen said in effect under procedure that the Commission then had, all right we just won't litigate with you over that, we will consent to your issuance of what you say as an order.
Justice Tom C. Clark: What about the second complaint, what about that?
Mr. Edwin S. Rockefeller: Now in 1964 the Commission began this investigation hearing as it said to determine whether Jantzen had complied with the old order.
And we stipulated in that proceeding and this proceeding was initiated 1964, that there were two payments in 1960 and one in 1962, which are not available on proportionately equal terms to competing customers and therefore they did not, they were not in compliance with either the older order.
In this case the government doesn't content that there is any distinction between the orders that was issued or what statuette would require.
Justice Tom C. Clark: You've missed this out, they didn't -- really don't have any remedy other than to proceed under a new complaint which should be strictly assumed?
Mr. Edwin S. Rockefeller: But what I submit Mr. Justice Clark is they don't have any greater remedy under the old procedure.
Justice Tom C. Clark: That didn't matter, doesn't it, but the remedy is, what's insisted in your proposal is that the old law is wiped out, the old remedy is wiped out, --
Mr. Edwin S. Rockefeller: That's our basic position yes sir we -- but we willing to go further though and talk about other cases if that's what the government wants to talk about.
Justice Mr. Justice Bernnan: If they may maintain an action on the old order based on your sections and violations of the old order would they not ensue a court order of course no sanction has been proposed on the initial violation on the old proceedings, but there now would be a court order, would there not, based on the old order and on your concession of this violation will they not get a court order under the old procedure?
Mr. Edwin S. Rockefeller: Assume say that --
Justice Mr. Justice Bernnan: Isn't that what's all, isn't that what happened?
Mr. Edwin S. Rockefeller: If the Court of Appeals in this case --
Justice Mr. Justice Bernnan: Under the old procedure your concession of violation of the old pre 1959 order would result in the court order, wouldn't it?
Mr. Edwin S. Rockefeller: In our case it's –-
Justice Mr. Justice Bernnan: Enjoining compliance.
Mr. Edwin S. Rockefeller: Not necessarily Mr. Justice Brennan, not necessarily.
Justice Mr. Justice Bernnan: Why not?
Mr. Edwin S. Rockefeller: Well for one thing the Court of Appeals' jurisdiction, if it has any, under the old procedure -- under the old provision was to modify a firm or set aside the commission's order.
The only other thing in there that said what the Court of Appeals is going to be guided by was –-
Justice Mr. Justice Bernnan: Wouldn't the, I thought what would happen in the situation as you describe is your case, would it been an order and joining enforcement that is in enforcing the issue of commission order in the form of an adjoining your compliance --
Mr. Edwin S. Rockefeller: That's correct Mr. Brennan if the Court of Appeals is satisfied, that's what it ought to do but it's not a mechanical thing.
Justice Mr. Justice Bernnan: I don't – I'm not suggesting it's mechanical but when you concede that you have violated I will suppose that would happen.
Well assume with me that's what would happen.
Now you are saying the 1959 statute for appeal, the old – well, or the old procedure they can't do that.
They have to start a brand new proceeding all over again, a brand new complaint, then get an order which then becomes enforceable under new the procedure, isn't that it?
Mr. Edwin S. Rockefeller: That's right sir.
Justice Mr. Justice Bernnan: And you don't think that's a very different situation?
Mr. Edwin S. Rockefeller: I think that's as Commissioner Eleanor suggests that's a better position for the government because then --
Justice Byron R. White: Well, then why are you into it, I would think it's the only other side there?
Mr. Edwin S. Rockefeller: That's a good question Mr. Justice White and the answer is we didn't bring this case here and we didn't take it to the Court of Appeals, and our basic position is as we have never got into the Court of Appeals that on the merits whatever jurisdiction or provisions that apply this is not -- the commission should not have initiated this proceeding.
Justice Byron R. White: We really wanted to do the government's work for it in the sense that you think the government should have a more effective [Inaudible] against us than they are claiming?
Mr. Edwin S. Rockefeller: Well, what Jantzen is doing is simply pointing out what the acts of Congress is seem to say and furthermore we are attempting to point out that the government's parade of horribles simply they require speculation, they require a guess.
This suggestion that there is a case somewhere and mind you it hasn't been pointed out yet where the commission would have a lesser burden, we submit may very well not exist.
Justice Hugo L. Black: May I ask you -- if your argument comes down to this that the act of Congress not merely prescribed a procedure to be followed in the future but obliterated all FTC orders that had occurred before the act of Congress?
Mr. Edwin S. Rockefeller: My answer to that Mr. Justice Black is that it did not obliterate any old orders.
It simply –-
Justice Hugo L. Black: But it obliterate -- that it obliterated to the extent of requiring the commission is not a new proceeding, the court could do anything against that particular defendant?
Mr. Edwin S. Rockefeller: Unless by the terms of the statute a petition had previously been filed to review or in force.
Justice Hugo L. Black: That all the other were wiped out-- I mean all the --
Mr. Edwin S. Rockefeller: Our answer -- we accept the government's figures.
They said that there are roughly 400.
Justice Hugo L. Black: And that would be the same as though the Congress come along and said on all those proceedings they have done that no value will be taken into account by the FTC?
Mr. Edwin S. Rockefeller: Mr. Justice Black I've just had made myself clear, it's my fault.
We submit that anything of value in those proceedings has been preserved.
We submit that --
Justice Hugo L. Black: But the order?
Mr. Edwin S. Rockefeller: Pardon me sir.
Justice Hugo L. Black: Everything with the order of enforcement?
Mr. Edwin S. Rockefeller: Well if something that's raised res judicata is res judicata as Commissioner Eleanor points.
Justice Byron R. White: Because it may no longer predicate an enforcement action on those order that's one thing that -- you say that statute definitely very definitely eliminated.
Mr. Edwin S. Rockefeller: Those orders being those--
Justice Byron R. White: Well isn't that true if you do say that those orders are not – can be debated further --
Mr. Edwin S. Rockefeller: Well, Commissioner Eleanor suggested that they can take –-
Justice Byron R. White: Well that's your position.
Mr. Edwin S. Rockefeller: What I'm trying to say is that the commission will not be.
Justice Hugo L. Black: [Inaudible]
Mr. Edwin S. Rockefeller: I'm sorry sir.
Justice Hugo L. Black: Commissioner Eleanor would then be in minority, wouldn't he?
Mr. Edwin S. Rockefeller: Yes.
To go back to Justice White question if I may and it's my lack of articulacy, I'm not trying to run away from any question.
The -- if you take any particular case in which the commission might want to enforce an old order I submit to the Court if you analyze it they are just as well or better off under the new procedure.
Justice Abe Fortas: And Mr. --
Justice Hugo L. Black: Even though they have to start a new proceeding and go all the way for a new trial?
Mr. Edwin S. Rockefeller: Yes sir.
Justice Hugo L. Black: Why don't you face in that effect in which you say one problem with this was to provide that none of those old orders should be included in future?
Mr. Edwin S. Rockefeller: Well Congress--
Justice Hugo L. Black: It was argued on that basis.
Mr. Edwin S. Rockefeller: If you take the senate committee report which the government has reproduced.
Justice Hugo L. Black: And that's what you think, isn't it?
Mr. Edwin S. Rockefeller: If I—-
Justice Hugo L. Black: What Congress did was to wipe out the effectiveness of the old order, these 400 orders?
Mr. Edwin S. Rockefeller: The commission came to the Congress prior to 19--
Justice Hugo L. Black: Isn't that what they -- isn't that what you're insisting that we've done here, maybe you've tried, I am not, it seems to me like -- I guess on the basis that you are stating?
Mr. Edwin S. Rockefeller: What I am resisting Mr. Justice Black is the conclusion that anything was wiped out.
Justice Hugo L. Black: Well the orders are wiped out, aren't they?
Under your argument can the government proceed on any of those old orders?
Mr. Edwin S. Rockefeller: First of all they can --
Justice Hugo L. Black: Can they proceed under any of those old orders?
Mr. Edwin S. Rockefeller: Yes sir it can.
Justice Hugo L. Black: How?
Mr. Edwin S. Rockefeller: In the Ruberoid case, National Led case, all those cases where a petition to review had been filed prior to 1959, and they are all preserved.
Justice Hugo L. Black: But all, what about all the others, can't they all be wiped out?
Mr. Edwin S. Rockefeller: Only, sure.
Justice Hugo L. Black: The effectiveness of them?
Mr. Edwin S. Rockefeller: I submit that they are not.
For example take a case maybe like National Life where there were some fencing in, but the respondent did not petition for review and prior to 1959 no petition for enforcement was filed.
So that on the face of the 1959 act we have a case now in which in a sense we might say the old order is wiped out.
Here is what I suggest that you keep in mind.
As to that case, the commission has the record, it has the findings, which are just as valid as the other were and by – well if they start a new proceeding, secondly if you are --
Justice Hugo L. Black: You mean that they start a new proceeding without any summons or notice or evidence or conclusion, facts of any kind, they can issue an order, they can just automatically issue an order?
Mr. Edwin S. Rockefeller: But they'll have to do that even if the old provisions were preserved, but let me if I may take that hypothetically, which I submit is a hypothetical.
The government has --
Justice Hugo L. Black: It seems to me that you are bringing up a lot of hypothetical cases rather than facing the fact and I may be wrong with that, I may misunderstand rather than facing the fact that what you ask is that we construe this act of Congress in wiping out the effectiveness of a certain number of the old orders issued by the commission under the old proceedings?
Mr. Edwin S. Rockefeller: My answer is simply that you analyze that effectiveness, it disappears that these --
Justice Hugo L. Black: The order disappears you mean, don't you?
Mr. Edwin S. Rockefeller: Pardon me sir.
Justice Hugo L. Black: You think the order disappeared?
Mr. Edwin S. Rockefeller: Well but if you are down to those cases you find and in contrast what the commission has to do under the provisions of law that used to apply with what we'd have to do under the new procedure I submit there isn't a great, there isn't a significant amount of difference.
Justice Hugo L. Black: Except that they have just started new procedure?
Mr. Edwin S. Rockefeller: That's correct.
Justice Hugo L. Black: In that wider procedure, isn't that quite something to be [Inaudible]
Mr. Edwin S. Rockefeller: Well if you compare it with what they had to do under the old statute that in a sense was, you concede the same document if – But I'm not, I wouldn't --
Justice Hugo L. Black: The same document that's lost its stinger?
Mr. Edwin S. Rockefeller: Well if you take one of these cases Mr. Justice Black which they, where they say there was some fencing in or where they say there was some issue and where no review or a court presentation had been an issue.
Take a case like that, even if the old provisions of law were still in effect the commission has to give notice, has to have a hearing, has to make a finding of violation and then when it petitions in the Court of Appeals it has to satisfy the Court of Appeals not only that the order has been violated, but that the original, the finding of fact in the old proceeding were supported by substantial evidence.
That the conclusions of all in that proceeding were correct and that the scope of the order in that proceeding was appropriate.
Now we submit that that's all litigation that's still opened to occur one way or the other.
Justice Byron R. White: Do you think that it really is a practical consideration in a consent order case?
Now let's just assume that, let's just assume that now the act has been passed, and the commission started a proceeding, an enforcement proceeding against you and what if they've noticed at a hearing in proof that you had violated the terms of this consent order and it went to the Court of Appeals, do you think you, what would be open for you in the Court of Appeals?
Mr. Edwin S. Rockefeller: Well, we argued two other things in addition to this point which is a threshold one.
One that that the commissions order was not valid in this proceeding in the original proceeding and secondly that if it was that the Court of Appeals in exercising its jurisdiction if it was going to assume it should not properly in this case order enforcement.
The Court of Appeals for the Ninth Circuit did not reach those questions.
Justice Byron R. White: Even though this is a, this was a consent case.
Mr. Edwin S. Rockefeller: Yes sir.
Justice Byron R. White: Now assume you are right and the commission had to start a new proceeding and it was to start with the facts which it says were established under the old proceeding in which you suggest a res judicata.
Do you think that really correct under consent order arrangement?
Do you there are any facts with which the, which the commission can start with as established and which you may not challenge?
Mr. Edwin S. Rockefeller: The commission couldn't, couldn't start with any more unchallenged facts one way or other in our case.
Justice Byron R. White: Well you just say that the previous order then stands for nothing as far as having established any facts?
Mr. Edwin S. Rockefeller: That's our position, yes Mr. Justice.
Justice Byron R. White: And so you don't agree with Commissioner Elanor?
Mr. Edwin S. Rockefeller: I don't agree with anything that the Commissioner Elanor --
Justice Byron R. White: Yeah and I didn't think so.
Mr. Edwin S. Rockefeller: I see my time is supposed to be up and I would like if I may just try to bring the attention back to this one question.
If the government's argument of statutory construction here what statute is it arguing should be construed and what words in what statute should be construed in what way to come out with any result other than the result reached by the Court of Appeals.
I submit that question as I never even been hinted at in any of the government's briefs or oral arguments.
Secondly I do want to try to comeback to the Second Circuit.
The Second Circuit we submit simply misunderstood this, the issue.
First of all they had a case before, the Second Circuit had a case before it in which the terms of section two of the 1959 act explicitly applied and they said so.
And then they went on gratuitously to state that they didn't like what the Ninth Circuit did here because and they don't say what they would, they don't say how they would construe the statute otherwise they just say we don't like this result because it disregards two factors and then the two factors they state are simply not correct.
They misunderstood the, in the sense of the non-enforceability of the orders issued prior 1959 no matter which methods or procedure apply and they went on just to conclude that well the Ninth Circuit opinion is somehow inconsistent with some vague general intention of Congress and we submit to you that that's not correct, that's not, they didn't need to do that and they were wrong in doing so.
And as to the Court of Appeals for the District of Columbia those cases there, question wasn't before them at all.
In those cases the court was simply reviewing the commission's attempt by blanket [Voice Overlap] to give automatic penalty within 60 days of the passage of the 1959 act to all lawyers.
And actually counsel in that case was not trying to take on an added burden when they said the commission can't do this.
Now the commission when that -- there was no petition for certiorari from those DC cases and what the commission has done here is it attempted to blanket in all these old orders in a way that that the contrast between the Wheeler-Lea amendments and the 1959 amendments just simply wouldn't permit.
It was rebuffed on that.
Rather than go back to Congress they then come along at some later year and try to get the courts now to just straighten and rewrite the 1959 act.
Now why are 1959 act and why was it written that way, for one thing we submit because the commission at that time didn't point out any of these possible horribles that it's arguing now.
If you look inside the Keith Travis (ph) committee reports, it's clear that the understanding of that committee was you had approved three violations of law to achieve anything.
I see my time is up.