Federal Trade Commission v. Jantzen, Inc.

PETITIONER: Federal Trade Commission
RESPONDENT: Jantzen, Inc.
LOCATION: Times Square

DOCKET NO.: 310
DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 386 US 228 (1967)
ARGUED: Feb 14, 1967
DECIDED: Mar 13, 1967

Facts of the case

Question

Media for Federal Trade Commission v. Jantzen, Inc.

Audio Transcription for Oral Argument - February 14, 1967 in Federal Trade Commission v. Jantzen, Inc.

Earl Warren:

Number 310, Federal Trade Commission, Petitioner versus Jantzen Incorporated.

Mr. Spritzer?

Ralph S. Spritzer:

Mr. Chief Justice may it please the Court.

This case involves the legal status of an order of the Federal Trade Commission.

The order in question was issued in January of 1959 and the date is important here, issued upon the consent of the respondent Jantzen.

In substance the order directed the Jantzen to cease-and-desist from further discrimination in advertising and promotional allowances granted its customers, a form of discrimination covered by Section 2(d) of the Clayton Act.

Was this a consent?

Ralph S. Spritzer:

Yes Your Honor it was a consent order.

And the only statutory problem which is here results from the fact that later in that same year 1959, specifically in July, the Clayton Act was amended so as to provide both new and strengthened methods of enforcement of cease-and-desist orders.

Now respondent contends and the Ninth Circuit has agreed that a practical consequence albeit an inadvertent one of this amendment was to make the preexisting January 1959 order wholly unenforceable and it consequently acknowledged violations of this 1959 order, violations which were found some years later in 1964 cannot be reached through the 1959 cease-and-desist order.

We urge of course that this was not an intended result, a point on which there appears to be little if any basis for dispute and that it is not a result which is required by the amendatory language.

We make the further I would say complementary argument that if the amendment should be read as creating a gap and leaving this former order unenforceable, then we say alternatively that gap would be filled by the general savings statute 1 USC 109.

Potter Stewart:

I didn't understand the Court of Appeals opinion to be so clear in not thinking that this was an inadvertent result?

Ralph S. Spritzer:

I expected parochial language it said perhaps inadvertent.

I am going to argue on the basis of the legislative history and that plainly Congress thought it was protecting and strengthening the Act.

It also made reference in the committee report which is printed as an appendix to the government's brief to numerous compliance investigations which the commission had underway and there's not a whisper in the entire history that Congress thought it was going to make any orders unenforceable.

So I think there is little basis at least for any suggestion that Congress thought this result was going to fallout.

I might note incidentally that the Second Circuit has reasonable come out in direct opposition to the conclusion reached by the Ninth Circuit in this case and that in earlier -- at an earlier date the District of Colombia Circuit had indicated although that precise issue was not before it for a decision that it excepted the commission's view which I shall explain as I go along that the old orders continue to be enforced by that.

Justice Bernnan:

May I ask what [Inaudible]

Ralph S. Spritzer:

We have printed it since it's not available in the reports in the supplemental memorandum that Your Honor should have.

Now before I attempt to develop our arguments, let me seek if I may to clarify the issue by recalling to Your Honors' the pre-1959 procedures and then comparing them to the procedures for judicial review and enforcement as provided in 1959 by the so called Finality Act of 1959.

Now prior to that year, Clayton Act orders, cease and desist orders could come before the Court of Appeals in one of two ways.

The party subject to the order could bring a review proceeding to set it aside or to modify it.

There was no period of limitations prior to 1959 so that the order might stand for years and then ultimately a review proceeding might be instituted.

The next paragraph of the old statute provided that the commission for its part could go to the Court of Appeals in order to seek enforcement, but it was only entitled to enforcement if it could show two things.

First that it's cease and desist order was valid and second that its order had been violated since it had been issued, in other words it had to show a post order violation, a second act.

Sanctions attached only if an order of enforcement was obtained and a third violation thereafter shown at which point of course the contempt power of Court of Appeals would be available.

Now as I've indicated accordingly there might be -- there might have been under the 1953 -- pre-1959 procedures two proceedings in the Court of Appeals preliminary to a decree enforcing the commission's order, the one proceeding by the responded company seeking review of the order, the other proceeding by the commission seeking enforcement.

A ruling by the Court of Appeals on a respondent's appeal that the order was valid did not automatically carry enforcement with it.

Indeed this Court made it clear in the old Ruberoid decision that even if a commission order was affirmed that enforcement would not follow unless in addition violation, post order violation was shown.