Documentos de Académico
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2d 1116
1972 Trade Cases P 74,259
Gilbert H. Weil, New York City (Weil, Lee & Bergin, New York City, on
brief), for plaintiff-appellant.
Christopher Roosevelt, Asst. U. S. Atty. (Whitney North Seymour, Jr., U.
S. Atty., S. D. N. Y., William R. Bronner, Asst. U. S. Atty., Harold D.
Rhynedance, Jr., Asst. Gen. Counsel, Federal Trade Commission, Alvin L.
Berman, Atty., Washington, D. C., on brief), for defendants-appellees.
Before LUMBARD, FEINBERG and MANSFIELD, Circuit Judges.
FEINBERG, Circuit Judge:
The factual background is not disputed. In April 1972, the Commission notified
Bristol-Myers of its intention to issue a formal complaint charging the company
with having employed unfair or deceptive acts or practices in commerce, in
violation of sections 5 and 12 of the Federal Trade Commission Act, 15 U.S.C.
Secs. 45, 52. Specifically, the proposed complaint alleged deceptive advertising
We believe that the claim is asserted prematurely and was properly dismissed
for failure to exhaust administrative remedies. Judicial review of Federal Trade
Commission proceedings is governed by section 45(c) of Title 15, United
States Code, which limits the power of review to final cease and desist orders
and which makes review available in the courts of appeals. Section 10(c) of the
Administrative Procedure Act, 5 U.S.C. Sec. 704, provides:
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Agency
action made reviewable by statute . . . [is] subject to judicial review. A
preliminary, procedural, or intermediate agency action or ruling not directly
reviewable is subject to review on the review of the final agency action.
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the proposed complaint, it concedes that this is an inadequate basis for seeking
judicial redress at this juncture. Myers v. Bethlehem Shipbuilding Corp., supra,
303 U.S. at 51-52, 58 S.Ct. 459. Moreover, as the Commission points out, it is
by no means clear that a formal complaint will ever issue on the basis of the
present investigation. It is still less certain that a cease and desist order will be
entered following formal adjudication7 -during which, in any event, the
company will have access to the precise investigatory tools it now seeks.
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Finally, we have the impression that the company has not been unaware of the
benefits of the delay in the administrative proceeding caused by the action in
the district court and by this appeal. At oral argument, one member of the panel
felt sufficiently positive about the company's intent to delay to raise the
appropriateness of taxing double costs on appeal. Fed.R.App.P. 38. Our failure
to do so should not be taken as an encouragement to further attempts to prolong
the administrative proceedings through efforts to obtain premature judicial
Judgment affirmed.
LUMBARD, Circuit Judge (concurring):
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I concur in the majority opinion. However, I would also reject on the merits
Bristol-Myers' statutory claim to issuance of subpoenas during informal
negotiations. While a cease and desist order may not issue, history indicates the
probability of such issuance and if past delay is any criterion this will inevitably
be followed by a further appeal, at which time another panel will be required
once more to review the same record and arguments in order to resolve the
issue. Rather than countenance such shuffling back and forth, with its
consequent duplication and waste, I would decide it now.
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"Nothing
in the Administrative Procedure Act or in the basic principles of fair
procedure precludes the Commission from creating and following a procedure for
settling disputes without recourse to adjudication. Consent negotiations are not a
stage in adjudication but a means of establishing whether adjudication can be
avoided altogether. Like investigations, consent negotiations are distinct from the
adjudicative process and hence not governed by the standards which control
adjudicative procedure." William H. Rohrer Inc., 64 F.T.C. Dec. 1446, 1447 (1964).
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"Adjudicative
proceedings are those formal proceedings conducted under one or
more of the statutes administered by the Commission which are required by statute
to be determined on the record after opportunity for an agency hearing. The term . . .
does not include other proceedings such as negotiations for the entry of consent
orders . . . ."
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Since Bristol-Myers' contentions are meritless, I would act now to foreclose the
renewal of the issue upon a later appeal from a final cease and desist order.
The company's statutory claim is an intricate one. It primarily argues that "any
party" is entitled to subpoenas; that a party, under 5 U.S.C. Sec. 551(3) is a
person named as a party in an agency proceeding, including adjudication; that
"adjudication," defined by 5 U.S.C. Sec. 551(7), is "agency process for the
formulation of an order"; and that the consent settlement procedure here looks
to formulation of an order. Bristol-Myers attempts to bolster this syllogism by
references to legislative history; and it finally argues that denial of subpoenas
effectively deprives it of its right to engage in meaningful settlement
negotiations