UNITED STATES of America, Appellant, v. ST. REGIS PAPER CO., Appellee.
No. 16, Docket 26413.
United States Court of Appeals Second Circuit.
Argued Sept. 30, 1960. Decided Dec. 16, 1960.
285 F.2d 607
It would serve no useful purpose to discuss the evidence of the prosecution further than has already been done. It suffices to say that the evidence is overwhelming that Sandoval had the heroin in his possession and on his person when he came to the automobile occupied by Chavez,3 and that he sold the same to Chavez for $35, and that the packets containing the heroin were the ones introduced in evidence. See Harbold v. United States, 10 Cir., 255 F.2d 202.
Finally, it is contended that the agents of the United States entrapped Sandoval into making the sale, and that the conviction should be reversed for this reason. Sandoval‘s defense was that of alibi, and he offered evidence that he was in Denver, Colorado at the time the sale was made. Entrapment was not considered during the trial of the case, and is first mentioned on appeal. While it would appear that the trial court did not err in failing to submit the issue of entrapment to the jury on its own motion, we are convinced that the evidence does not show an issue of entrapment. It is well settled that while the law will not permit decoys to be used for the purpose of luring or inducing innocent or law-abiding citizens into the commission of a crime, still officers may offer an opportunity to one who is intending or willing to commit a crime. Bush v. United States, 10 Cir., 218 F.2d 223; Ryles v. United States, 10 Cir., 183 F.2d 944, certiorari denied 340 U.S. 877, 71 S.Ct. 123, 95 L.Ed. 637. It is quite clear that Sandoval was not entrapped into making the sale to Chavez. The evidence is without conflict that he approached the car driven by Chavez and, when he recognized him, entered the automobile with the narcotics in his possession. He had known Chavez for a long time, and he made the sale without asking any questions, immediately after Chavez asked him if he had any heroin. He was ready, willing and able to make the sale when he entered the automobile.
Affirmed.
Richard H. Stern, Washington, D. C. (Robert A. Bicks, Asst. Atty. Gen., Richard A. Solomon, Washington, D. C., S. Hazard Gillespie, Jr., U. S. Atty., Southern Dist. of New York, New York City, Daniel J. McCauley, Jr., Gen. Counsel, Federal Trade Commission, Alan B. Hobbes, Asst. Gen. Counsel, Federal Trade Commission, J. B. Truly, Atty., Federal Trade Commission, Washington, D. C., on the brief), for appellant.
LUMBARD, Chief Judge.
These are appeals from a judgment of the United States District Court for the Southern District of New York, Ryan, J., in which the court partially enforced nine orders issued by the Federal Trade Commission against the St. Regis Paper Company and seven of its subsidiary corporations directing that special reports be filed and dismissed a claim for statutory penalties brought by the United States against St. Regis. By resolution of January 6, 1959, the Federal Trade Commission instituted an investigation into the acquisition by St. Regis of the stock and/or assets of other corporations engaged in interstate commerce in order to determine whether § 7 of the Clayton Act,
Upon deciding that the material submitted to it did not meet its demands, the Commission filed notices of default against St. Regis and its subsidiaries on June 18 and July 22. The United States then brought suit in the Southern District of New York under § 9 of the Federal Trade Commission Act,
I.
Were we to accept literally the language of § 2 of the Expediting Act,
* Sitting by designation.
Nonetheless, we feel that a reasonable construction of the Expediting Act grants this court jurisdiction over appeals such as the one now before us. The writ of mandamus authorized by § 9 is, it is true, very much like a mandatory injunction, cf. Miguel v. McCarl, 1934, 291 U.S. 442, 452, 54 S.Ct. 465, 78 L.Ed. 901, particularly since it is addressed not to some public official or body but to a private corporation.5 But it would be unreasonable to hold that the type of relief sought here by the Commission or the kind of determination which is to be made on such petitions for mandamus were deemed important enough by Congress to require a clear path from the
Under
II.
The information requested by the Commission was to be submitted in “special reports” pursuant to § 6(b) of the Federal Trade Commission Act,
In United States v. Morton Salt Co., 1950, 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 401, the Supreme Court upheld a Commission order requiring corporations to file reports, showing how they had complied with an earlier order of the Commission. The respondent corporation in that case contended that § 6(b) could be used only in aid of the Commission‘s power to compile information for gen-
The respondents here maintain, however, that the statement in Morton Salt, insofar as it authorizes antitrust investigations, should be read as referring to §§ 6(c), (d), and (e) which explicitly delegate to the Federal Trade Commission the following duties: at the behest of the Attorney General to investigate compliance with antitrust decrees; upon the direction of the President or either House of Congress to investigate alleged violations of the antitrust acts; and upon application by the Attorney General to recommend readjustments in the business of any corporation alleged to be violating the antitrust acts. These investigations, when carried out by the use of the usual discovery tools provided for in § 9, it is argued, constitute the limit of the Commission‘s authority with regard to the antitrust acts. The legislative history of the statute, as well as reasonable statutory construction, belie these contentions.
It is clear from the House and Senate reports that the purpose of § 6 was to give the Commission the powers with respect to investigating and reporting on antitrust matters that were previously committed to the Bureau of Corporations in the Department of Commerce. In the form first passed by the House,7 § 3 of the Act expressly transferred these functions, and § 9 required corporations of a minimum size to furnish annual and special reports and such information, state-
ments, and records relating to organization, financial condition, and relation to other corporations as the Commission would require. Section 16 then gave the Commission subpoena powers identical to those given to the Interstate Commerce Commission by the Act of 1887. The report accompanying the Committee draft of the bill, H.R.Rep. No. 533, 63d Cong., 2d Sess. (1914), said that while the investigative powers which had been given to the Bureau of Corporations had been extensive, “there was a failure specifically to require the regular gathering of certain most important kinds of information through the medium of annual reports from industrial corporations engaged in interstate commerce.” Id. at 2. The report requirement, together with a $100-a-day penalty for default, was therefore incorporated into the then § 9. The Senate, in proposing an entirely new draft,8 authorized the Commission in its § 3(b) to require corporations to furnish information and records concerning their business and their relations to other corporations and to produce for examination all papers relating to the commerce in which the corporations under inquiry were engaged. In addition, § 3(c) authorized the Commission to require annual and special reports, and § 8 gave it the investigative powers possessed by the Interstate Commerce Commission. These powers of investigation were said to be “not greatly in excess of those possessed and for years exercised by the Bureau of Corporations.” S.Rep. No. 597, 63d Cong., 2d Sess. 12 (1914). Thus, both versions agreed in giving the Commission power to investigate by requiring annual and special reports as well as by ordering records to be produced.
In conference, however, these powers were merged into §§ 6(a) and 6(b), and the subpoena power was spelled out in § 9.
The House conferees’ report said:
“The Bureau of Corporations is abolished, as in the House Bill, and
The report manifests quite clearly Congress’ intent to have the Commission assume the powers of the Bureau of Corporations and its expression of that intent in §§ 6(a) and 6(b).
Moreover, there is no indication in the statute that antitrust investigations are in any way distinguishable procedurally from investigations directed at uncovering violations of the unfair-competition aspect of § 5. The detailed enumeration of duties in §§ 6(c), (d) and (e) neither expressly nor impliedly denies the Commission the power to proceed upon the request of the Attorney General, President, or Congress by use of the powers granted by § 6(b); the inclusion of all these provisions within one section of the statute suggests the contrary. And if the Commission may investigate charges of antitrust violations filed by Congress or the President by directing that annual or special reports be filed, it would be anomalous to deny it the use of these same techniques when it is exercising its own obligation under § 11 of the Clayton Act to police violations of § 7. We therefore hold that the Commission is empowered under § 6(b) to require reports with respect to investigations into possible violations of the antitrust laws.
No challenge has been made by the appellants to the scope of the Commission‘s order, so we do not now undertake to decide whether § 6(b) and § 9 provide alternative routes or whether only material which cannot be reached by the subpoena power of § 9 may be demanded in a § 6(b) order.
III.
Among other papers which the Commission directed be produced by St. Regis and its affiliates were copies of various schedules submitted to the Bureau of Census for the 1954 and 1958 Census of Manufactures, the 1955, 1956, and 1957 Surveys of Manufactures, and correspondence relating thereto. The respondents did not contend that copies were not available but maintained instead that ordering their production violated the confidentiality provision of § 9 of the Census Act,
IV.
We turn now to the question whether, under the circumstances, the statute required the district judge to assess a penalty of $100 against St. Regis for each day on which it was in default in filing the requested reports. The district court decided that although the Commission had the power to issue the orders, some of the questions propounded and requests made were too vague to be enforced. Finding authorization to modify enforcement of the orders in § 6(c) of the Administrative Procedure Act,
The United States appeals only from the refusal to assess penalties and does not dispute Judge Ryan‘s decision that twenty-eight questions were too vague to be answered. Thus, the only question before us on the appeal of the United States is whether the district court committed error in dismissing the government‘s claim for statutory penalties.
Were this a case involving a single oversight or an honest mistake in a good-faith attempt to comply with the Commission‘s order, the statute‘s absolute and imperative terms would not prevent us from assuming that it could not have been Congress’ intent so severely to punish an innocent offender. United States v. Northern Pac. Ry., 1916, 242 U.S. 190, 37 S.Ct. 22, 61 L.Ed. 240; see Kerr S.S. Co. v. United States, 2 Cir., 1960, 284 F.2d 61, 63. The facts before us, however, suggest no such mitigating circumstances. The respondents cannot claim that theirs was merely an honest omission since they refused to accede to many of the Commission‘s requests for documents and information on the sole ground that the Commission had no authority to demand what was requested. That the respondent‘s recalcitrance was caused by a wrong guess on a disputed issue of law does not prevent it from being held to “lawful consequences attached to the refusal.” Life & Cas. Ins. Co. v. McCray, 1934, 291 U.S. 566, 574, 54 S.Ct. 482, 486, 78 L.Ed. 987; see United States v. Clyde S.S. Co., 2 Cir., 1929, 36 F.2d 691; F. T. C. v. Maynard Coal Co., 1927, 57 App. D.C. 297, 22 F.2d 873.
The respondents argue, however, that the reports demanded by the Commission in the present case consisted of questions directed at particular information, and that a comparison of § 6(b) with § 10 discloses that although the Commission is empowered to order the filing of “answers in writing to specific questions” as well as annual or special reports, it is
The information requested by the Commission is indeed much like that demanded in the National Biscuit Co. case, F. T. C. v. National Biscuit Co., see D.C., 18 F.Supp. 667, at pages 669-670, but it is by no means certain that we would have agreed with the district court‘s disposition of that case had it been appealed. On the facts of this case we cannot say that the orders directed at St. Regis were requests for “answers to specific questions” rather than demands for reports. The line between the two is, by the nature of each, quite indistinct. Reports that are demanded by the Commission will necessarily be addressed towards more-or-less specific inquiries. A compliance report conveys details concerning activity undertaken pursuant to an order; an investigation report divulges facts concerning suspected violations. It would be totally unreasonable to withdraw from the Commission the coercive effect of the § 10 penalty whenever it makes its wants known in detail but permit it to use the threat of a mounting forfeiture so long as it cloaks the foci of inquiry behind general language. Although it is entirely reasonable to read the statute so as not to fine one who has failed only to respond to one or several specific interrogatories and to remit the Commission to a suit in mandamus for enforcement of such a request, when the quantity of interrogatories reaches the proportions of those in this case and the request is made pursuant to a full investigation of a respondent‘s course of conduct, the cumulative effect of all the questions is substantially that of a request for a report.
The respondents further urge that infliction of the penalty would violate the due process clause of the Fifth Amendment since they would be unable, under F. T. C. v. Claire Furnace Co., 1927, 274 U.S. 160, 47 S.Ct. 553, 71 L.Ed. 978, to test the validity of the order save by waiting and defending the suit in mandamus, with penalties accumulating all the while. If judicial review were in fact limited to enforcement proceedings instituted by the Commission, and a daily forfeiture were collected for a failure to comply, the procedure might not meet the established standards of due process. Cf. Oklahoma Operating Co. v. Love, 1920, 252 U.S. 331, 40 S.Ct. 338, 64 L.Ed. 596. However, the Claire Furnace case was decided before either the Declaratory Judgment Act of 1934, 48 Stat. 955, or the Administrative Procedure Act of 1946, 60 Stat. 237, was enacted. Mr. Justice Jackson, speaking for a unanimous Court in United States v. Morton Salt Co., 338 U.S. 632, 654, 70 S.Ct. 357, 94 L.Ed. 401, intimated broadly that Claire Furnace should not stand in the way of declaratory relief or prompt review if that be necessary to rescue the penalty provision from attack under the Fifth Amendment. We hold that under the declaratory-judgment statute as it now stands,
We are also of the opinion that a remedy was available to St. Regis under § 10(c) of the Administrative Procedure Act,
The availability of this relief also mitigates the dilemma which our decision here imposes upon district judges. Although modification of an agency‘s order under § 6(c) of the Administrative Procedure Act results in the most efficient treatment of a partially void order, it carries with it the imposition of penalties for prior noncompliance. A district judge might believe that the assessment of a forfeiture would be unfair in light of the substantial defects in the agency‘s order, and might thus be encouraged merely to deny the petition for mandamus thereby forcing the agency to re-issue the valid portions of its order. Whether, as a result of § 6(c) of the Administrative Procedure Act, such a total refusal may be sustained is a question which hinges on the construction of the word “subpoena” in the statute, and we do not decide it here. In view of the opportunity given to a respondent to attack an order requesting a special report by a declaratory-judgment proceeding, the exaction of the statutory penalties for noncompliance is fair in any case in which the respondent awaits a mandamus action before contesting the agency‘s demands, and the order is held valid.
Finally, we agree with Judge Ryan‘s decision — which the United States has not disputed in its briefs — that only one course of conduct was being investigated and that the second order issued to St. Regis was merely supplementary to the first. Thus, only one penalty of $100 should be assessed for each day of noncompliance.
The judgment below is, therefore, reversed insofar as it dismissed the demand for penalties under § 10 of the Federal Trade Commission Act, and the case is remanded with instructions to enter judgment for the United States in the amount of $100 a day for each day on which St. Regis was in default of the first order requiring a special report.
FRIENDLY, Circuit Judge (concurring).
I join in Chief Judge LUMBARD‘S disposition of the many issues in this case. But I see little basis and less occasion for the statement that the availability of methods for securing an early determination of the validity of a direction under § 6(b) of the Federal Trade Commission Act, pursuant to statutes passed long afterwards, necessarily renders exaction of the statutory penalties “fair” in any case where the respondent has not chosen to use them. If he prefers to await suit and then succeeds in demonstrating such extensive invalidity that there is no longer an intelligible requirement for an “annual or special report,” he is entitled to prevail. Per contra his utilization of the Declaratory Judgment Act or the Administrative Procedure Act will not avail him if he proves wrong, save, of course, for such periods as the direction has been stayed.