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FTC v. UNITED STATES PIPE & FOUNDRY CO.

October 3, 1969

Federal Trade Commission. Petitioner,
v.
United States Pipe and Foundry Co., Respondent


Pratt, D.J.


The opinion of the court was delivered by: PRATT

PRATT, D.J.:

 This matter having come before the Court on the petition of the Federal Trade Commission for an order requiring the respondent United States Pipe and Foundry Company to produce documents in accordance with a subpoena duces tecum issued by a hearing examiner in the course of an adjudicative matter before the Commission, and the Court having considered the petition, its attachments, and the memoranda in support and in opposition filed herein, and having heard oral argument in open court, it hereby finds the facts and states the conclusions of law as follows:

 Findings of Fact

 1. The Commission is presently conducting an inquiry upon a complaint issued by it on January 17, 1968, against the Koppers Company, Incorporated (Koppers) charging it with methods of competition and acts and practices violative of Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, in connection with the production of resorcinol (an industrial chemical), including acts by Koppers to foreclose entry into the resorcinol market by the United States Pipe and Foundry Company (U.S. Pipe). According to the complaint, Koppers' actions have had the effect of causing the failure of U.S. Pipe to establish itself as an alternate producer and viable competitor in that market. Koppers filed an answer denying the charges.

 2. During prehearing discovery proceedings upon the complaint and answer, a duly appointed hearing examiner of the Commission on November 20, 1968 issued and caused to be served upon U.S. Pipe a subpoena duces tecum returnable within the jurisdiction of this Court. *fn1"

 3. As later modified by the hearing examiner, the subpoena calls for production of records and documents covering the period April 1, 1965 to March 12, 1968 (except for items 5 and 6 for which the time period is January 1, 1962 to March 12, 1968), and pertaining to U.S. Pipe's production of resorcinol, including documents showing prices, sales, production costs, profit or loss, and documents comparing these figures with past estimates or forecasts. *fn2" In requesting this subpoena Koppers pointed out to the Commission and its examiner that counsel supporting the complaint had given notice that they intended to call U.S. Pipe officials as witnesses at the hearings. Koppers argued that it needed the data in the subpoena for purposes of cross-examination and to defend against the charge in the complaint that it had prevented U.S. Pipe's entry into the resorcinol market, contending that any difficulties U.S. Pipe had were due to its own high production costs and not to anything which Koppers had done.

 4. Also sought in the subpoena are underlying documents prepared in connection with certain pre-April 1965 market entry "study" or "studies" which U.S. Pipe had returned under the previous subpoena. Koppers had contended that the return on that subpoena was incomplete, as there was only one basic "study" and that study was couched in generalized language and referred to other underlying documents and data not returned by U.S. Pipe. Although the hearing examiner declined to rule that U.S. Pipe was in default under the first subpoena, he did agree that Koppers was entitled to get such underlying material under the second subpoena.

 5. In opinions dated July 2, 1968, and November 1, 1968, the Commission upheld Koppers' right to both subpoenas. In the latter opinion, dealing with Koppers' request for the second subpoena, the Commission ruled:

 6. After issuance of the subpoena on November 20, 1968, U.S. Pipe moved to quash the subpoena on several grounds. The hearing examiner denied the motion but ruled that descriptions of secret processes could be omitted by U.S. Pipe in making return on the subpoena. He also entered an order which provided that "the contents of the documents shall not be disclosed to anyone except counsel of record of the parties pending decision of a motion which may be made by United States Pipe and Foundry Company for a protective order within ten days after production of such documents." *fn3"

 7. U.S. Pipe appealed to the Commission from the hearing examiner's denial of the motion to quash, raising numerous objections, including objections to the propriety of a second subpoena, its scope, the relevance of the documents called for, and the adequacy of any protective order that could be entered by the examiner. After full briefing by both parties, the Commission issued an opinion, dated January 15, 1969, in which it found no impropriety in the examiner's rulings.

 8. Subsequent to the ruling of the Commission, the hearing examiner issued an order scheduling the return date on the subpoena, setting it for January 31, 1969.

 9. On January 31, 1969, respondent U.S. Pipe, appeared but refused to produce records and documents in ...


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