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FEDERAL TRADE COMMISSION v. HENRY BROCH & CO.

decided: January 15, 1962.

FEDERAL TRADE COMMISSION
v.
HENRY BROCH & CO.



CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT.

Warren, Black, Frankfurter, Douglas, Clark, Harlan, Brennan, Whittaker, Stewart

Author: Brennan

[ 368 U.S. Page 361]

 MR. JUSTICE BRENNAN delivered the opinion of the Court.

The Federal Trade Commission seeks reversal of the action of the Court of Appeals for the Seventh Circuit in modifying the cease-and-desist order which the Commission had issued against the respondent Broch on finding that Broch violated § 2 (c) of the Clayton Act.*fn1 285 F.2d 764. The action of the Court of Appeals was sua sponte, and was taken in proceedings on remand which followed our reversal of that Court's earlier action setting aside the order in its entirety because Broch's conduct was thought not to violate § 2 (c).*fn2 Federal Trade Comm'n v. Broch & Co., 363 U.S. 166, reversing 261 F.2d 725. We granted certiorari, 366 U.S. 923.

Broch is a broker selling food products on commission for some 25 seller principals. One of his principals is

[ 368 U.S. Page 362]

     Canada Foods, Ltd., a processor of apple concentrate. The Commission found that Broch, to make possible Canada Foods' acceptance of an offer from J. M. Smucker Co. to buy an unusually large quantity of apple concentrate at less than Canada Foods' established price, reduced to 3%, for this sale, the agreed 5% rate of commission ordinarily payable by Canada Foods to Broch.*fn3 The Commission adjudged, and in our prior opinion we agreed, that this action of Broch was, in the circumstances, a violation of § 2 (c).

The Commission's order was not confined to restraints against repetition of the precise violation of § 2 (c) which Broch was found to have committed, nor was the application of the order limited to future sales from Canada Foods to Smucker.*fn4 Paragraph (1) did prohibit the

[ 368 U.S. Page 363]

     repetition of the particular violation which Broch committed, but in connection with sales for Canada Foods, or for "any other seller principal," to Smucker, or "to any other buyer." Paragraph (2) also extended its prohibitions to sales from all seller principals to all buyers, but went beyond paragraph (1) to prohibit Broch from "In any other manner . . . directly or indirectly" paying, granting or allowing, in the words of § 2 (c), "anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof . . . ." The Court of Appeals excised from the order all references to "any other seller principal" and to "any other buyer," thus limiting the order's application to future sales from Canada Foods to Smucker.

The Commission renews here the argument it made in the Court of Appeals that judicial modification of the order was precluded because Broch failed to object to the scope of the order before the Commission. Broch disputes that he failed to register a proper objection before the Commission. We see no reason to determine the fact. We will assume, without deciding, that the Court of Appeals properly passed upon the scope of the order. We nevertheless think that in the circumstances of this case the order should have been affirmed in the form entered by the Commission.

Broch supports the action of the Court of Appeals as to paragraph (1) of the order ...


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