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R. H. MACY & CO. v. TINLEY

December 17, 1965

R. H. Macy & Company, Inc. Plaintiff,
v.
Wilmer L. Tinley, et al. Defendant


Corcoran, Judge.


The opinion of the court was delivered by: CORCORAN

CORCORAN, Judge:

 I.

 Having grounds to believe that woolen sweaters manufactured in Italy and imported into the United States were mislabeled as to their mohair content, the Federal Trade Commission (herein the Commission) commenced an investigation to determine whether or not such sweaters were being imported in violation of the Wool Products Labeling Act (15 U.S.C. §§ 68-68j).

 The Commission conducted an industry-wide investigation which led to cease and desist orders being entered by consent against numerous importers. The Commission offered R.H. Macy & Company a consent order similar to that accepted by other importers but Macy rejected the proffer. Further negotiations with Macy failing, the Commission filed a formal complaint against Macy alleging importation of sweaters mislabeled as to mohair content in violation of the Wool Products Labeling Act.

 In answer to the Commission's complaint Macy asserted a defense charging that the Commission was acting arbitrarily in that it had issued a complaint against Macy while excluding from the complaint major competitors of Macy which import mohair-blend sweaters from the same Italian manufacturer which supplies Macy, and by failing to apply the same criteria to all industry members involved. (See Moog Industries, Inc. v. Federal Trade Commission, 355 U.S. 411, 2 L. Ed. 2d 370, 78 S. Ct. 377 (1958)).

 Seeking evidence to substantiate its charge Macy requested the issuance of Subpoenas Ad Testificandum to compel three Commission employees and two employees of the Customs Bureau to appear and testify. The three Commission employees whose testimony was sought were those who had acted administratively for the Commission in negotiations with Macy and with its competitors concerning the importation of the allegedly mislabeled sweaters.

 Subsequently Macy filed a request for the issuance of a Subpoena Duces Tecum to compel the Commission's Secretary to appear and produce

 
1. "All memoranda or other documents transmitted to the Commission by the staff of its Bureau of Textiles and Furs relating to any investigation of any company importing mohair-blend sweaters from Italy for sale in the United States where said staff recommended closing of the file after developing evidence indicating that the company under investigation had mislabeled said mohair-blend sweaters.
 
2. "All investigative records, including attachments, submitted by Albert Posnick, Charles T. Rose and/or Robert Scott relating to mohair-blend sweaters imported from Italy in connection with their investigation in the Matter of R. H. Macy & Co., Inc., Docket No. 8650."

 The Hearing Examiner certified these requests to the Commission. By order issued September 30, 1965 the Commission instructed the Hearing Examiner not to issue the subpoenas ad testificandum directed to the three Commission employees and not to issue the subpoena duces tecum directed to the Secretary. The Commission opinion* underlying the order stated in part:

 
"Respondent's claim of alleged difference of treatment does not create or even suggest any inference or even a suspicion that the Commission's action was in any way the result of discrimination or bias, conscious or unconscious, intentional or unintentional. The mere assertion of such a plea, without more, cannot enable a respondent to interrogate Commission employees or to rummage through investigative reports and staff memoranda in the hope that something will turn up to support the claim . . .
 
"Finally, it should be pointed out that the files in question, to the extent they exist, will ordinarily contain a variety of documents, all relating to the internal operations of the Commission, such as letters of complaint, reports on investigations, staff memoranda with advice and recommendations to the Commission, Commission directives and other like working documents. Not only will some of these records contain strictly privileged information such as trade secrets, they will primarily be the 'work product' of the Commission's staff. Documents of this kind, i.e., those in the work product category, are the essence of the internal administrative process, and they are ordinarily privileged against disclosure in an adjudicative proceeding." Opinion, page 5.

 Upon receipt of the Commission order and opinion Macy instituted this action for a declaratory judgment that the refusal by the Commission to honor requests for the subpoenas was in violation of the Administrative Procedure Act and of the Fifth Amendment of the Constitution. The Commission has moved this Court to ...


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