This is an appeal from a district court order requiring appellants Jerry L. Feld-man, President, Checker Taxi Company, Inc. and Checker Taxi Company, Inc., (hereafter referred to jointly as “Checker”), to comply with subpoenas duces tecum issued - in connection with an investigation presently being conducted by the Federal Trade Commission. 1
Section 6(a) of the Federal Trade Commission Act (15 U.S.C. § 46(a)) authorizes the Commission “to investigate from time to time the organization, business, conduct, practices, and management of any person, partnership, or corporation engaged in or whose business affects commerce, . and' its relation to other persons, partnerships, and corporations.” Section 9 (15 U.S.C. § 49) empowers the Commission “to require by subpoena the attendance and tеstimony of witnesses and the production of all such documentary evidence relating to any matter under investigation.” The nature of the present investigation is, as stated in the resolution of the Commission, directing use of compulsory process, dated January 3, 1973:
To determine whether or not the activities and practices by Checker Motors Corporation, Checker Taxi Cab Company, Inc., Yellow Cab Company, Inc. (Chicago), in connection with the regulation, ownership and operation of taxi services, in commerce, are conducted in an unfair manner for the purpose or with the effect of restraining or foreclosing competition, in violation of Section 5 of the Federal Trade Commission Act (15 U.S.C. § 45).
15 U.S.C. § 45(a)(1) declares unlawful “unfair methods of competition in or аffecting commerce, and unfair or deceptive acts or practices in or affecting commerce.” 2
The Commission issued subpoenas duces tecum seeking documents dealing with the business operations of Checker, its subsidiaries and affiliates. Checker filed a motion to quash the subpoenas and to close the investigation. By order and opinion issued January 31, 1974, the Commission denied the motion. A petition for enforcement оf the subpoenas was subsequently filed in the district court. On April 30, 1975, the court issued a final order granting enforcement, although reserving jurisdiction to alleviate vexation and hindrance. Checker appealed.
I
Appellants assert that the district court erred in failing to apply the doctrines of res judicata and collateral estoppel. They rely on the judgment and decisions reached in an actiоn brought by the United States in the 1940’s against Yellow Cab Company and others to restrain alleged violations of §§ 1 and 2 of the Sherman Act. They contend that these decisions establish, since appellants have presented affidavits showing that relevant practices have not changed, that the present FTC investigation and any complaint proceeding which could result are foredoomеd to futility.
*1094
In the
Yellow Cab Co.
action, the district court first dismissed the complaint,
United States v. Yellow Cab Co.,
A similar subpoena, directed to others, but part of the same investigation, was considered in
F.T.C. v. Markin,
In the instant case, the district court said:
[A] decision by this Court on the res judicata effects of the two Yellow Cab cases would seem to be premature in light of the potential differences in facts and law between those two cases and the alleged scope of the current FTC investigation. Similarly, a decision on the ‘in commerce’ issue would be premature. In its first Yellow Cab decision, the Supreme Court expressly stated that it did not intend to establish any absolute rule that local taxi service was ‘beyond the reach of federal power.’332 U.S. at 232 ,67 S.Ct. 1560 .
We agree with the district court.
In
U. S. v. Yellow Cab, supra,
The Court said:
. These taxicabs, in transporting passengers and their luggage to and from Chicago railroad stations, admittedly cross no state lines; by ordinance, their sеrvice is confined to transportation ‘between any two points within the corporate limits of the City.’ None of them serves only railroad passengers, all of them being required to serve ‘every person’ within the limits of Chicago. They have no contractual or other arrangements with the interstate railroads. Nor are their fares paid or collected as part of the railroad fаres. In short, their relationship to interstate transit is only casual and incidental.332 U.S. at 230-31 ,67 S.Ct. at 1567 .
The Court went on to hold that “a restraint on or monopoly of that general local service, without more, is not proscribed by the Sherman Act,” and that as to local service of that type, the complaint failed to state a cause of action under the Sherman Act.
On the basis of a showing by affidavit that the relevant character of their activity has not changed, appellants argue that the Commission is barred from relitigating whether practices in the operation of taxis, including advertising for drivers, constitute a restraint of competition in or affecting commerce. They would, in effect, require that in order to obtain enforcement, the FTC must at this preliminary stage, postulate factual сhanges in the operation of appellants’ business or changes of law or relevant differences between the Sherman *1095 Act and the FTC Act sufficient to demonstrate that an FTC proceeding could be brought in 1975 which could escape the res judicata defense.
Appellants take this position despite the fact that the Supreme Court, in Yellow Cab Co., was very careful to limit its determination to the specific facts рresented. The Court said:
We do not mean to establish any absolute rule that local taxicab service to and from railroad stations is completely beyond the reach of federal power or even beyond the scope of the Sherman Act . [W]e are not to be understood in this case as deciding that all conspiracies among local cab drivers are so unrelated to interstate commerce as to fall outside the federal ken. . . .332 U.S. at 232-33 ,67 S.Ct. at 1568 .
We deem it the more appropriate and orderly procedure for the Commission to proceed with the investigation within its discretion. If it ultimately issues a complaint, appellants will then have an opportunity, depending on the issues raised by the complaint, or the proof thereunder, to assert the defеnse of res judicata or collateral estoppel, if they see fit.
In
U. S. v. Yellow Cab Co., supra,
Appellants point in particular to a finding by the district court in Yellow Cab Co. that the companies’ decision to buy CCM “purpose built” cabs was a reasonable and natural business judgment which “should not, on the evidence, be disturbed by the Court.” Appellants, having shown by affidavit that there is presently only one source of purpose built taxi vehicles, contend that the findings of lawful motivation of purchases made in the 1940’s legally precludes the Commission’s investigation in the 1970’s of the motivation of more recent purchases. They contend that this has been made so clear that the court should stop the Commission’s activity at the beginning of the investigation stage. This argument is even less persuasive than the earlier one.
It is well settled that the courts should not interrupt the administrative process except under very limited and exceptional сircumstances.
See Myers v. Bethlehem Shipbuilding Corp.,
In discussing exhaustion of administrative remedies the Supreme Court stated in
McKart v. U. S.,
* * * * * *
A primary purpose [of the doctrine of exhaustion of administrative remedies] is, . the avoidance of premature interruption of the administrative process. The agency, like a trial court, is created for thе purpose of applying a statute in the first instance. Accordingly, it is normally desirable to let the agency develop the necessary factual background upon which decisions should be based. And since agency decisions are frequently of a discretionary nature or frequently require expertise, the agency should be given the first chance to exercise that discretion or tо apply that expertise . [I]t is generally more efficient for the administrative process to go forward without interruption than it is to permit the parties to seek aid from the courts at various intermediate stages.395 U.S. at 193-94 ,89 S.Ct. at 1662 .
The courts have been reluctant to interfere in the investigative stage of the administrative process. In
Okla. Press Pub. Co. v. Walling,
*1096 Congress has authorized [the agency], rather than the District Courts in the first instanсe, to determine the question of coverage in the preliminary • investigation of possibly existing violations; ... to exercise [the agency’s] subpoena power for securing evidence upon that question . . . and, in case of refusal to obey [the agency’s] subpoena, to have the aid of the District Court in enforcing it. .
In reference to the
Oklahoma Press
decision, the court, in
FTC v. Gibson,
The rationale of the Oklahoma Press rule is that it allows enforcement of subpoenas where the evidence necessary to establish the interstate nature of the commerce involved is in the possession of the suspected violator and can be secured only by ... a subpoena. Under this rule appellants may not litigate the jurisdictional issue as a defense in a subpoena enforcement proceeding.
In
Borden, Inc. v. FTC,
(1) the agency has clearly violated a right secured by statute or agency regulation, Leedom v. Kyne,358 U.S. 184 , 188-189,79 S.Ct. 180 ,3 L.Ed.2d 210 (1958); Elmo Division of Drive-X Company v. Dixon,121 U.S.App.D.C. 113 ,348 F.2d 342 , 346-347 (1965); (2) the issue involved is a strictly legal one not involving the agency’s expertise or any factual determinations, Jewell Companies, Inc. v. F.T.C.,432 F.2d 1155 , 1159 (7th Cir. 1970); McKart v. United States,395 U.S. 185 , 197-199,89 S.Ct. 1657 ,23 L.Ed.2d 194 (1969); or (3) the issue cannot be raised upon judicial review of a later order of the agency, Jewel, supra, at 1159.
In the instant case the FTC is conducting an investigation to determine whether there are violations of section 5 of the Federal Trade Commission Act (15 U.S.C. § 45). The subpoenas represent the Commission’s attempt to obtain factual information needed in the development of a decision as to what, if any, action should be taken, and for use in a proceeding if instituted. Interpretation of this factual information necessarily involves agency expertise and discretion. The Commission is aware, of course, of the Yellow Cab Co. case and will doubtless give consideration to the effect it would be expected to have on any proceeding the Commission might bring.
Appellants rely on two decisions which applied the doctrine of
res judicata
in a second proceeding by an agency of the federal government so as to give conclusive effect therein to a determination made in an earlier proceeding brought by a different federal agency against the same party. As a result the court vacated a cease and desist order of the FTC in
George H. Lee v. Federal Trade Commission,
Safir v. Gibson,
The federal Maritime Commission found that certain subsidized members of a steamship conference had set unreasonably low rates in an effort to drive out competitors and thereby violated 46 U.S.C. § 814. Safir brought action to compel the Maritime Administration to recover subsidies paid to the offenders. When the case first reached the Court of Appeals, the court decided that the Administration was required to make a con
*1097
sidered decision whether to recover the subsidies.
Safir v. Gibson,
The Court of Appeals recognized the “general rule against judicial interference with administrative proceedings prior to the issuance of a final order,” but felt there were two features of the case rendering appropriate the immediate application of res judicata аnd estoppel principles. One was the need to protect the party who succeeded in the first proceeding “from being vexed with needlessly duplicitous proceedings.” The other was that the proceeding before the Administration was being carried on virtually as if in response to an order of the court, and if such order had issued, “the court would have had discretionary power to modify or clarify it if such action appeared necessary because the agency misunderstood the nature of the proceeding required.” Clearly the peculiarities of the Safir situation are not present here.
In
F.T.C.
v.
Texaco, Inc.,
The Court of Appeals affirmed. After concluding that the application of collateral estoppel would be appropriate in the case, the court held that the district court was entitled to conclude that FTC desired all data in order to recompute independently the area reserves and that the FPC, after a contested hearing, had found the industry’s figures for the relevant years were accurate. In the light of these findings, the district court “has drawn a reasonable balance” between the needs and interests of the parties.
Although the panel decision, now vacated, supported thе propriety of consideration if not total application of the doctrine of collateral estoppel in judicial limitation of administrative subpoenas in a pending investigation, without awaiting a final order, it seems clear that in upholding such limitation by the district court the panel was impressed by the closeness in time between the determination of the particular fact by FPC and the proposed re-examination of the same fact by FTC.
In the case before us now, more than twenty-five years have elapsed since the earlier determinations. Not only may the immediate facts and circumstances as to the activities and practices of Checker have changed in the interim, but the more general economic and social consideratiоns which mold views as to whether activities and practices affect interstate commerce may have changed significantly.
II
Appellants also claim that the Commission’s investigation is an improper attempt to invade the regulatory authority of the City of Chicago. They contend that because the city has enacted certain ordinances providing for the regulation of local taxicab services, any activities undertaken which adhere to the regulatory scheme cannot form the basis of an antitrust violation.
*1098
Appellants rely on
Parker v. Brown,
We find this challenge premature. Whatever effect the Parker v. Brown doctrine might have in an FTC proceeding against Checker could be determined only when the issues in such proceeding become known and even then could probably not be the proper subject of judicial examination until review of a final ordеr of FTC.
Ill
Appellants’ final claim is that the district court failed to exercise proper judicial supervision by refusing to limit or foreclose certain specifications of documents required to be produced. The challenged specifications, paragraphs 10 through 15, call for details as to levels of compensation for drivers, trips performed in sample periods, identifiсation, leaves, and compensation of each driver, labor agreements and training programs.
We are not persuaded that these specifications are clearly irrelevant to an investigation within the Commission’s power.
See F.T.C.
v.
Standard American, Inc.,
The district court recognized the possibility that production of evidence in the detail specified might be shown to be more burdensome in some instances than the degree of relevance of particular items justified. The court provided in its order:
The parties will, prior to the production of evidence, pursuant to the Federal Trade Commission’s offer, meet in a good faith effort to modify the subpoena’s terms so as to make compliance with its specifications not unduly burdensome on respondents.
In the event that compliance with the subpoena’s terms becomes patently vexatious and serious hindrance to the pursuit of respondent’s business, the parties may file the appropriate supplemental motions, fully supported by briefs, and the Court will reconsider those specifications thus put in issue in supplemental proceedings.
The order appealed from is affirmed.