ST. REGIS PAPER CO. v. UNITED STATES.
No. 47.
SUPREME COURT OF THE UNITED STATES
Argued November 9, 1961.—Decided December 11, 1961.
368 U.S. 208
Solicitor General Cox argued the cause for the United States. With him on the briefs were Assistant Attorney General Loevinger, Acting Assistant Attorney General Kirkpatrick, Daniel M. Friedman, Lionel Kestenbaum and Richard A. Solomon.
MR. JUSTICE CLARK delivered the opinion of the Court.
Pursuant to § 6 (b) of the Federal Trade Commission Act,1 the Commission issued orders directing the petitioner and corporations acquired by it to submit various
The District Court found that some of the requests were unenforceable because of vagueness and that others had been answered either specifically or by reference to materials previously furnished. Petitioner was directed to answer the remaining items, including those calling for file copies of census reports. However, because some of the requests were too vague to be enforced, the District Court did not award the statutory forfeitures. 181 F. Supp. 862. The Court of Appeals affirmed insofar as the District Court ordered compliance, but reversed that portion of the decision refusing to award the statutory forfeitures. 285 F. 2d 607. We granted a limited writ of certiorari because of a conflict in the circuits on the question of compulsory production of the copies of census reports and the general importance of certain other questions in the administration of the investigatory pro
Petitioner contends that it cannot lawfully be required to produce copies of statutory reports made by it to the Census Bureau because of their confidential nature. The remainder of the inquiries found enforceable by the District Court are not now contested by the petitioner. As to the forfeitures, petitioner advances several arguments: (1) The statutory forfeiture of § 10 is not applicable because it applies only to a failure to furnish “reports” while the inquiries directed to petitioner called for answers to specific questions; (2) No forfeitures can be imposed because the orders were only partially enforceable; and (3) It is a denial of due process to assess penalties for failure to obey orders during a time petitioner was without remedy to test their validity.
I.
The controversy culminating in this litigation had its inception in September 1956. At that time the Commission requested petitioner to furnish voluntarily information concerning certain of its corporate acquisitions to enable the Commission to determine whether there had been any violations of the antitrust laws. A year later, having failed to obtain the bulk of the requests, the Commission served a subpoena duces tecum on petitioner. It covered somewhat the same information as was previously requested but, in addition, required similar data concerning three more corporate acquisitions effected in the interim. In due time petitioner fully complied with the subpoena, and the hearing before the Examiner was concluded. After reviewing the material, however, the Commission found that it needed additional information and
II.
Among the items ordered enforced and with which the petitioner still refuses to comply are requests for file copies of certain reports previously made to the Census Bureau. The petitioner claims each of these to be confidential. There is a conflict between the Courts of Appeal on the point.4 Here both the District Court and the Court of Appeals have held these file copies not restricted, and with this conclusion we agree.
Petitioner‘s claim is based on §§ 8 and 9 (a) of the Census Act,
The prohibitions of § 9 (a) apply to the Secretary, and other officers and employees of the Department of Commerce. Each of them is prohibited from using the infor-
Similar contentions were considered by the Court of Appeals for the Seventh Circuit in Federal Trade Comm‘n v. Dilger, 276 F. 2d 739 (1960), where it was held that these “assurances of confidentiality and protection constitute a pledge of good faith on the part of the Congress, the President and the Department of Commerce. ... The United States has given its word and should be permitted to keep it.” 276 F. 2d, at 744. It concludes that since the Commission cannot obtain the original it should not be permitted “to do indirectly that which it cannot do directly.” Id., at 743.
The Solicitor General contends that for the purposes of this case petitioner has waived the point by voluntarily submitting like data to the Commission during its investigation herein. We cannot agree. Reaching the merits of the issue he points out that the government agencies are at loggerheads on the problem, the Department of Commerce, Census Bureau and the Bureau of the Budget believe that the copies are not subject to legal process, while the Federal Trade Commission and the Antitrust Division of the Department of Justice, which filed this suit, contend to the contrary. The Solicitor General, “fully recognizing the delicate balance of opposing considerations,” has concluded “on balance” that the copies are not subject to compulsive production. As has been noted, we do not agree.
As we have seen, the prohibitions against disclosure contained in § 9 run only against the officials receiving such information and do not purport to generally clothe
census reports, are made confidential within the government bureau, Internal Revenue Code of 1954, §§ 6103, 7213 (a), copies in the hands of the taxpayer are held subject to discovery.10 Likewise the Criminal Code,
This conclusion is buttressed by the fact that though petitioner furnishes the required reports to the Census Bureau it is not relieved from furnishing the same information to the Federal Trade Commission. This is made certain by an Act of Congress specifically providing that nothing in the Census Act “shall be deemed to revoke or
III.
Petitioner next claims that the orders required “answers in writing to specific questions” under § 6 (b) as distinguished from the “special reports” also authorized by that section, but that the forfeiture provision of § 10 penalizing the failure to file “any annual or special reports” does not include the phrase “answers in writing to specific questions” and is, therefore, inapplicable. We do not agree.
The Commission contends that its orders here in fact called for information in the nature of “special reports,” and it so designated each of the nine orders at the time of their issuance. Examination of the orders by no means proves the Commission to be in error, for it appears that practically all of the requests called for the furnishing of statistical or like information, details of organization and operation, specific documents, etc. As the Court of Appeals stated, “the cumulative effect of all the questions is substantially that of a request for a report.” 285 F. 2d, at 615.
While this is true, it cannot be denied that in many instances specific information was requested and “answers in writing to specific questions” were contemplated. But this does not disqualify the materials from being special reports, for the statutory reference to “answers in writing to specific questions” merely elaborates the power to require special reports.
Moreover, the legislative history of the Act does not support petitioner‘s theory that the phrase “answers in writing to specific questions” refers to a separate power of the Commission. Both the House and Senate bills dealing with the Federal Trade Commission (or Interstate Trade Commission, as it was called in the House) had provisions enabling the Commission to order annual and
“The commission, under this section, [later 6 (b)] may also require such special reports as it may deem advisable. By this means, if the ordinary data furnished by a corporation does not adequately disclose its organization, financial condition, business practices, or relation to other corporations, there can be obtained by a special report such additional information as the commission may deem necessary.” H. R. Rep. No. 533, 63d Cong., 2d Sess. 4.
The phrase “answers in writing to specific questions” first appeared in the Conference Report, but the report by the House Managers explaining the modifications of the House bill did not mention it (although it discussed some other changes in the annual and special report provisions of the House bill). H. R. Rep. No. 1142, 63d Cong., 2d Sess. Similarly, the explanation of the Conference Report by the Senate Managers in debate makes it clear that the changes made in conference were of the nature of new, clarifying phraseology (with two exceptions not relevant here). 51 Cong. Rec. 14768–14769. If the conference had intended to give the Commission a separate, new power which was not included in either the House or Senate bill, surely there would be some mention of it in the reports by the managers.
Finally, it should be noted that a construction of the statute which empowers the Commission to particularize its requests for annual and special reports with specific questions will tend to avoid objections of vagueness. The requests directed to petitioner which were not particularized—items 1 (h); 3 (j), (k); 5 (j), (k); 6 (j); 7 (j); 8 (j); and 11 (a)–(l) of the first order; and item 5 of the seventh order—were struck down by the District
IV.
The District Court held that since the Commission orders were “partially defective,” petitioner had a valid reason for challenging them, and therefore no forfeitures accrued. Petitioner supports this holding by asserting that many of the items included in the Commission‘s orders were held unenforceable by the District Court, and that under Bowman Dairy Co. v. United States, 341 U. S. 214 (1951), forfeiture should not be imposed for noncompliance with substantially defective orders. The Court of Appeals disagreed, holding that forfeiture had occurred and that the daily penalty began to run 30 days after the notice of default on the first set of the Commission‘s orders.12 We agree with the Court of Appeals and conclude that the single daily penalty runs until the date of our stay, February 7, 1961.
Petitioner‘s figures relative to the percentage of defective inquiries are based on analysis of all nine orders. However, the suit for forfeiture was brought only in respect to the two orders directed to petitioner, and we will restrict our consideration to the 134 inquiries included therein. Prior to the judgment 63 of these items remained unanswered. The trial judge struck 10 of them as unenforceable, leaving 53 which he ordered to be answered. However, whether one takes the above figures, or those of the petitioner asserting that only 37% of the questions were enforced by the trial court, or the Government‘s claim that two-thirds of the questions were
Petitioner asserts that even partial invalidity of the order prevents the application of the forfeiture provision, arguing that the case is controlled by the rule in Bowman Dairy Co., supra. In that case the Court concluded that “one should not be held in contempt under a subpoena that is part good and part bad.” 341 U. S., at 221. But that rule cannot be considered apart from its facts. There the defendant could not appeal from the contested order, but was able to challenge it only by disobeying and appealing the contempt conviction. It was in review of that conviction—the defendant‘s first opportunity to review the validity of the order—that this Court held that its partial invalidity barred the punishment. Here petitioner might have delayed accrual of the forfeitures pending determination of the merits or obtained a separate judicial determination of the validity of the orders before the penalties began to accrue, as we point out infra. Rather than attempting such procedures it defied large parts of the orders. It cannot now be heard to complain because such defiance was in error.
Petitioner also contends that the trial court, after finding the orders partially invalid, should have stricken them and required the Commission to issue new ones if it wished to proceed with the inquiry. We agree with the trial court and the Court of Appeals that § 6 (c) of the Administrative Procedure Act,
V.
Petitioner‘s final point is that to impose the forfeitures will deprive it of property without due process of law. This argument is based on the premise that the orders of the Commission were not judicially reviewable except at the risk of paying daily forfeitures accumulating throughout the period of noncompliance, including the period of judicial review. We need not consider this point at length for it appears that petitioner did not try to obtain judicial review prior to the commencement of this action by the Government, nor did petitioner seek a stay once the litigation had begun. This inaction was in part based upon petitioner‘s reliance on Federal Trade Comm‘n v. Claire Furnace Co., 274 U. S. 160 (1927). This reliance was misplaced. In that case an injunction was sought against the Commission restraining it from enforcing certain
Upon the commencement of the action by the Government, petitioner might have then sought a stay, as it did when the decision went against it in the Court of Appeals.13 Moreover, after the entry of the notices of default by the Commission, petitioner might have itself sought relief before the § 10 forfeitures began to accrue instead of waiting for the Attorney General to sue for their collection. As was said in United States v. Morton Salt Co., 338 U. S. 632, 654 (1950), “we are not prepared to say that courts would be powerless” to act where such orders appear suspect and ruinous penalties would be sustained pending a good faith test of their validity. There the record did not present and the Court did not determine “whether the Declaratory Judgment Act, the Administrative Procedure Act, or general equitable powers of the
This Court cannot forgive statutory penalties once they legally attach and, finding no grounds upon which we can strike them down, the judgment of the Court of Appeals is
Affirmed.
MR. JUSTICE BLACK, with whom MR. JUSTICE WHITTAKER and MR. JUSTICE STEWART concur, dissenting.
I dissent from the Court‘s holdings (1) that petitioner‘s copies of census reports submitted to the Census Bureau are not privileged from production by § 9 of the Census Act, and (2) that for its refusal to produce these copies and to answer certain of many questions asked it by the Federal Trade Commission, petitioner must pay a penalty of $100 for each day since that refusal up to the time, many months later, when this Court granted a stay as to future penalties.
First. Section 9 (a) of the Census Act, set out in note 5 of the Court‘s opinion, with exceptions not here material, provides that neither the Secretary of Commerce, nor any other officer or employee of the Department of Commerce or any bureau or agency thereof, may use the information
“Your report is confidential and only sworn census employees will have access to it. It cannot be used for purposes of taxation, investigation or regulation.”
The President of the United States backed up these promises of Congress and the Census Bureau with a proclamation in which he stated unequivocally: “No person can be harmed in any way by furnishing the information required.”
It is true, as the Court emphasizes, that although the Census Act, the Census Bureau and the President promised that the Census Bureau would keep census reports purely confidential, neither the Act, the Bureau nor the President literally promised in so many words that other government agencies such as the Federal Trade Commission would never subpoena and use copies of those reports prepared and kept in reliance upon the Government‘s promise of secrecy. The Court holds that, because the Government did not so expressly bind itself with respect to actions it may take against copies of these reports through the Federal Trade Commission, the
Second. The petitioner is being penalized $100 per day for its failure to produce copies of its census reports along with answers to certain of the voluminous questions propounded to it by the Federal Trade Commission. Many questions had already been answered prior to the time penalties began to run. The District Court has held that a very substantial number of the other questions asked need not be answered, and I do not understand that this Court now holds otherwise. So far as the Commission‘s demand for production of the census reports is concerned, petitioner could quite reasonably have felt that it was under no obligation to comply because of the Government‘s numerous promises that these reports would be
All of this plainly shows, I think, that, with regard to some of the information sought, indeed a very substantial part of it, there was a serious, good-faith controversy concerning the Commission‘s power to compel disclosure. Under these circumstances I agree with the District Court‘s conclusion that these heavy statutory penalties should not have been imposed. It is practically the universal rule that laws imposing penalties of this kind should be strictly, not expansively, construed. Applying that standard, I am by no means sure that the penalty provisions of the statute upon which this judgment rests can be construed so as to justify the penalties here at all.
I would reverse this judgment.