*1 Petitioners, Inc., GOODWIN, Before KENNEDY v. ALARCON, Judges. Circuit COMMISSION, FEDERAL TRADE Respondent. GOODWIN, Judge. 79-7647, 79-7654.
Nos.
Ford,
petitions
Inc.
this court
Francis
finding
order
it in viola-
review an F.T.C.
Appeals,
United States Court
Act,
tion
5 of the F.T.C.
15 U.S.C. §
Ninth Circuit.
(unfair
practices). We have reviewed
trade
5,May
1981.
Argued and Submitted
petition,
and set aside the order.
24, 1981.
Aug.
Decided
Ford,
Oregon
Inc. is an
automo-
practice
dealership.
repossessing
bile
Its
Rehearing En
Rehearing
Banc
cars has been to credit the debtor for
5, 1982.
April
Denied
car,
charge
value of the
him
wholesale
(i. e.,
and lost
expenses
indirect
overhead
e.,
(i.
profits)
expenses
well as
as
direct
refurbishing)
repossession
associated with
resale,
repossessed
and sell the
vehicle
doing
“surplus.”
keeping
at retail
so,
doing
claims
what is
Francis Ford
it is
throughout
industry.
done
commonly
does not
of the de-
approve
of a
practice.
approve
Nor does it
scribed
now com-
number of other
monly
variety
in a wide
of industries.
in use
business,
investigations
the credit
In re
attempted rulemaking.
and its recent
Regulation
Proposed Trade
Rule:
16,347 (1975).
Practices,
Fed.Reg.
commodity options
regulation of
times
involve
trading,
Act,
ALJ’s
decision refers several
initial
4c(b)
subject
is the
of §
which
think that this reflects
4b of the Act. We
to §
6c(b).
analysis
7 U.S.C.
typographical
facts
error. The
*2
”
Co.,
practice,
294,
Ford’s
....
Bell Aerospace
to attack Francis
416
In order
U.S. at
an
began
adjudicatory
F.T.C.
1976
problem
the
sion below so ly by rulemaking,” issue therefore whether addressed it should also precise law, existing adjudication changes problem accounting address the for sur- does, It widespread application. pluses by rulemaking proceeding, and not rulemak- be addressed the matter should by adjudication.
ing. however, Ultimately, are-persuaded we *3 industry practice admits that The F.T.C. set aside this order because the rule of what Francis Ford does— has been to do general applica- case made below will have wholesale value the debtor with the just will to Francis Ford. apply tion. It not expenses. indirect charge the debtor for practices similar to those of Francis Francis Ford’s But the F.T.C. contends that widespread dealership in the car Ford are (ORS violates state law particular practice industry; and the U.C.C. section the F.T.C. 79.5040); will not be that the violation interpret to exists in 49 states. wishes us rule on credit by proposed trade reached already The is aware of this. It has F.T.C. adjudication will and that this practices; appended “Synopsis a of Determination” to arguments The only application. have local order, apparently purpose for the of persuasive. are not dealerships of the advising other automobile adjudication. results of this To allow the adjudication is the By accounts all. presently order to stand as written would against a dealer for vio- action remedy do far more than a discrete viola- by doing what Francis lating ORS 79.5040 singular Oregon tion of a law as the Although the U.C.C. counter- F.T.C. Ford does. contends; states, 79.5040is in 49 would create a national inter- part of ORS enacted word, for we have been cited to of 9-504 and in nearly pretation word effect § U-C.C. interpreted provision precise no case which has enact the rule the F.T.C. has creditor to credit the promulgated. to a secured posed, yet but possible price” debtor for the “best circumstances, these Under charge profits. him for overhead and lost authority by proceeding exceeded to cre- its will may Oregon It well be that courts adjudication by by ate new law rather than manner interpret U.C.C. 9-504 § rulemaking. question if the by advocated the F.T.C. The order is vacated. speculation But it is to con- put to them. here, tend, as does the F.T.C. existing Oregon Ford is in violation of law. ORDER of the basic characteristics of law is One deny petition voted to for have, obtain, potential violators or can rehearing reject suggestion and to for view notice of it. No notice the F.T.C.’s rehearing en banc. pointed of the law has been out to us. having The full court been advised of the po- The F.T.C. could have formulated suggestion rehearing, for an en banc application on U.C.C. 9-504 and its sition judge in requested active service that a dealerships in practices
to the credit of car suggestion vote be taken on the for rehear- practices. trade rule on credit ing 35(b). en Fed.R.App.P. Upon banc. pending rulemaking It not do so. The did eligible judges the vote of the in active to proceeding and this seek service, majority against voted en banc less, prac- remedy, more or the same credit rehearing. Although is directed tices. the former . petition rehearing for is denied and alia, practices, inter of car deal- against the suggestion rehearing en for banc deficiencies, accounting in their ers rejected. against by is directed a car dealer the latter failing of his to account reason REINHARDT, by Judge, dissenting matters are covered surpluses, both rehearing denial of en banc: 9-504. If the rule for deficiencies
U.C.C. I dissent from the court’s refusal within the Thus, Board’s discretion. this case en banc. I believe the rehear mere fact that the Board created a bind- unnecessary ing creates and undesirable policy by does not affect as to the state the law in our the policy’s validity especially confusion where it <?f circuit, appear and that the standard we covers an area in which the Board is general princi- permitted announce conflicts with the pursuant act to its discre- law, ples previously enun- tion. Court, ciated the Supreme which will- (citations omitted). F.2d at 414 remain in the rest of the nation. Nor panel’s explanation can the of its deci- certiorari, grants Unless the sion be reconciled with NLRB v. Bell Aero- applies a different standard than we space U.S. appear adopting, government to be (1974), L.Ed.2d 134 NLRB v. Wyman-Gor- required will be to ask us on a case don, 394 U.S. 89 S.Ct. 22 L.Ed.2d limit, narrow, explain basis to away the (1969), or Securities Comm’n v. Chenery
overly
opin-
broad rationale set forth in the
194,
Corp.,
1575,
332 U.S.
67 S.Ct.
91 L.Ed.
ion.
1995
Those cases make it clear that
I believe that our circuit
agencies
would be better
are authorized to
necessary job
engage
served if we did the
making
ourselves.
decision
which results in
I
applied
think that
is our function to correct our
standards to be
in all future cases.
general
panel’s
errors in
The
importance, espe-
cases of
statement
that rulemaking is
required
cially when our
because the
decision conflicts with earli-
decision would have
“general application,”
binding precedent
er
in our
circuit and
because it will
have an
long
effect
in the
distinguish,
persons
when we have failed to
run on
or even
discuss,
other than the individual whose case
applicable precedent.
that
The
was
best
agency,
the
constitutes an unwar-
way
through
to do this is
our en banc
unique
ranted and
acceptance of the “per-
process.
plaint”
ennial
that decisions of administra-
panel
The
explains
by stating
its decision
tivos
should be invalidated because
however,
“[ultimately,
persuaded
we are
“general”
of their
impact.
British
Cal-
set aside this order because the rule of the
CAB,
Airways,
edonian
Ltd. v.
584 F.2d
made
general applica-
below will have
(D.C.Cir.1978).
just
It will
apply
tion.
not
to Francis
The panel’s opinion pays lip service at
Supra,
Ford.”
This statement
at 1010.
principle
most to the basic
of administrative
simply cannot be reconciled with our recent
law that “the choice between rulemaking
decision in
Hospital
NLRB v. St. Francis
lies in the first
instance
(9th
Lynwood,
1979),
labor (1) factors: a rule on two. which would have that effect but ing in turned Patel regarding job cre- my colleagues’ “confusion” enacted it.2 If is yet I&NS’s not. 1205; Ruang- at cf. requirement, id. ation view, panel’s damage caused I&NS, swang v. 591 F.2d I temporary. will be minor and J., (2) (Sneed, concurring); and “the 1978) however, served, would be better think we ” Patel, . .. . resulting hardship to Patel if we would the law of the circuit clarify of those factors F.2d at 1205. Neither now, through procedure, en banc rather here, holding in Patel does present and the unnecessary than allow the which confusion support panel’s analysis. inevitably exist in the field of adminis- will en banc vote failed the call for an Since pending law the time that we ex- trative major- support of an absolute to muster the majority’s opin- plain the limitations court who members of this ity of the active subsequent ion in our decisions. vote,1 appear it would eligible to were provides us with a procedure The en banc colleagues not as con- my number of are valuable tool. It allows us to function effi- between as I am with the conflict cerned to resolve intracircuit conflicts and ciently, broad, generalized statement in the major importance ensure that cases of prior prece- our own panel’s opinion and are decided in a manner which reflects the carefully apply dents which circuit, law as we see it as a and as we will cases in this area. Supreme line of long it in the run. When we fail to apply broad, colleagues may believe that My tool, advantage of we create un- take spe- statement generalized limited Court, work for necessary *5 explanations subsequently offered in cific for ourselves if the Court fails to panel’s opinion. Specifically, they may regret act. I that we did not take the only for the feel stands opportunity clarify the law in the case proposition an administrative before us. I am confident that had we done creates a new and different decision which expressed so we would have uniform law interpretation national law in principles a differ- Code) (in this case the Uniform Commercial ent and more traditional manner than the applicable in all of the states of this nation making pow- panel decision does here. beyond agency’s an rule, “improper rule-making proce- for an 1. Under our limited en banc a call circumvention of prevails only en banc vote when affirmative dure.” We stated: by majority votes are cast of the 23 active before, Only recog- months the INS itself had disqualified who are not members of court desirability establishing job- nized the voting. banc We then form a limited en by rulemaking creation standard when it judges judges, comprised of 11 of 10 posed regulation. Fed.Reg. the 1973 (1972); See 37 Judge. When drawn at random and the Chief Fed.Reg. deny request, a vote is we an en banc after eventually job-cre- INS failed to include the for, number of called we do not announce the ation standard in its rule. Under the authori- judges grant request. voted All that who ty Wyman-Gordon, we conclude that if the we our announcement that an unsuc- reveal job-creation INS wished to add the criterion, cessful vote was taken is the fact that fewer rulemaking proce- it should have done so in a judges than 12 active voted to hear the case en dure. require- banc. The reference in the text to the INS, Patel v. 638 F.2d majority ment of an absolute therefore does any constitute indication as the number of Here, adoption had judges supporting request in this case or regulation part of a of the standard as was any indication as to how the court divided. To considering, adopted but the standard in an merely contrary, it is a reflection of the rule adjudicatory proceeding rule-making Thus, we follow in all cases. process completed. my colleagues was that, Patel, may believe as in cir- that, holding rule-making process 2. while our was limited to the cumvented the text, supra, general notwithstanding panel’s described in the we also broad factors statements, panel opinion will be so limited Heitland rule es- concluded that so-called adjudicatory proceeding if we are asked to consider it in future cases. tablished in an was an