first being the alleged lack of jurisdiction on the part of the Administrator.
The subpoena here concerns itself with the proposed inspection of the respondents' books and other records as provided in Section 11 (a) of the Fair Labor Standards Act, as it is averred in the petitions that there was reasonable grounds to believe that the companies had been violating provisions of Sections 7, 11(c), 15(a) (1), 15(a) (5), respectively, of the Act. That Congress, in the public interest, has the power to regulate and supervise the conduct of any particular business under the commerce clause, Const. art. 1, § 8, cl. 3, and that an administrative agency may be authorized to inspect books and records regardless of whether there is any pre-existing probable cause for believing that there has been a violation of the law, can no longer be doubted. Fleming v. Montgomery Ward & Co., 7 Cir., 114 F.2d 384.
For the purpose of any hearing or investigation as provided for in Section 11 of the Act, Section 9 thereof makes applicable the provisions of Sections 9 and 10, relating to the attendance of witnesses and the production of books, papers and documents, of the Federal Trade Commission Act of September 26, 1914, as amended, U.S.C.A. Title 15, §§ 4. and 50, to the jurisdiction, powers, and duties of the Administrator. Section 9 of the Federal Trade Commission Act, after giving the Commission or its agents the right to examine any documentary evidence of a corporation being investigated or proceeded against, says in Paragraph 2 thereof: "Such attendance of witnesses, and the production of such documentary evidence, may be required from any place in the United States, at any designated place of hearing. And in case of disobedience to a subpoena the commission may invoke the aid of any court of the United States in requiring the attendance and testimony of witnesses and the production of documentary evidence". In paragraph 3 thereof: "Any of the district courts of the United States within the jurisdiction of which such inquiry is carried on may, in case of contumacy or refusal to obey a subpoena issued to any corporation or other person, issue an order requiring such corporation or other person to apper before the commission, or to produce documentary evidence if so ordered, or to give evidence touching the atter in question; and any failure to obey such order of the court may be punished by such court as a contempt thereof".
It is very definitely and plainly stated here therefore that the Administrator by or through his counsel may invoke the aid of a district court upon a failure to obey a subpoena. However, the respondents make claim that the fourth paragraph of Section 9, supra, is controlling of the action here and that the Administrator had no standing in this action by reason thereof. This paragraph is as follows: "Upon the application of the Attorney General of the United States, at the request of the commission, the district courts of the United States shall have jurisdiction to issue writs of mandamus commanding any person or corporation to comply with the provisions of this subdivision of this chapter or any order of the commission made in pursuance thereof".
It seems obvious that the most that can be said of this provision is that it affords to the Administrator an alternative method of forcing compliance with an administrative subpoena, and that it does not abolish the provisions immediately preceding it, which expressly authorize such action as was here taken. Furthermore, the word "order" as used in this paragraph may have referred solely to the "order of the commission" as it was held in Chamber of Commerce of Minneapolis et al. v. Federal Trade Commission et al., 8 Cir., 280 F. 45 at page 48, that the orders referred to in this paragraph were those involved in paragraph (b) of Section 6 of the Federal Trade Commission Act, 15 U.S.C.A. § 46(b). Accordingly I find no lack of jurisdiction here as the action by the Administrator is properly brought.
The second ground of counsel's motion to dismiss on the ground that the subpoena duces tecum served on respondents was a nullity and without any warrant or authority of law poses a question which must be answered in the affirmative.
The facts in the instant case show that the subpoena was signed by Robert M. Anderson. Robert M. Anderson is an attorney in the Wage and Hour Division of the United States Department of Labor, attached to the Regional Office at Philadelphia. He was one of four persons designated as heretofore recited by Frank J. Dorsey, Regional Director at Philadelphia, to investigate, gather data, and question the employees of the respondents pursuant to Section 11(a) of the Act, 11 U.S.C.A. § 211(a).
Section 4(c) of the Act provides as follows: "The principal office of the Administrator shall be in the District of Columbia, but he or his duly authorized representative may exercise any or all of his powers in any place." This section it seems to me gives very plainly to the Administrator the power of permitting an authorized representative of his to exercise any of the powers with which he is invested under the act. I feel that by virtue of this section and taking into consideration the legislative history of the Act, that the Administrator has the authority to delegate his power to issue subpoenas. The bill as originally reported to the Senate provided that the Administrative Board could delegate to its officers the power to issue subpoenas. The House then placed the administrative functions in the Secretary of Labor, who was given no authority to delegate this power. The bill finally went to a joint conference committee of both Senate and House which reported out a bill which became, without change, the Act. Neither Section 4(c) nor Section 9 of the present Act had appeared in any previous draft of the bill, until reported out in its final form by the conference committee, and it is apparent that the conference committee broadened the application of Sections 9 and 10 of the Federal Trade Commission Act and at the same time added Section 4(c). In conformity with this statement the Administrator has by order of April 27, 1940 authorized all Regional Directors or Acting Regional Directors to execute and issue subpoenas for the attendance of witnesses and production of books and records and it has been held that this delegation of the power to issue subpoenas by the Administrator to the various regional directors is a lawful one. Philip B. Fleming, Administrator of Wage and Hour Division, United States Dept. of Labor v. Lowell Sun Company, D.C., November 22, 1940, 36 F.Supp. 320; Fleming v. Arsenal Bldg. Corp. In the Matter the Petition of Max Wiesen, D.C.S.D.N.Y., 38 F.Supp. 675, Clancy, D.J. August 9, 1940. However, I cannot agree with the contention of the petitioner that this section envisioned the authority of the Regional Directors or Acting Regional Directors to redelegate this power to any one else or as in the instant case to an attorney in the employ of the Regional Director. While it was the evident intention of Congress in view of the multiple duties involved in the carrying out of the duties of the Administrator that he should have authority to delegate to a Regional Director the authority to sign subpoenas, yet the vast power inherent in the process of subpoenas must be closely guarded. The decision as to when a subpoena duces tecum should issue should be the judgment of a responsible official, and in every instance should receive his considered judgment; further that responsible official should extend to no one more subordinate than a Regional Director or Acting Regional Director who is immediately responsible to the Administrator. To permit this power of redelegation by the Regional Director or Acting Regional Director to some one less subordinate would be to permit a large number of minor officials to issue subpoena duces tecum, which would permit the opportunity of converting them into instruments of oppression. While it may be argued that Robert M. Anderson, the person who signed the subpoena and caused it to be issued, is a responsible attorney; that the documents called for in the subpoena are necessary and pertinent to the inquiry, yet it is the opportunity for the exercise of the power that is to be condemned, since in another instance if this redelegation of power by the Regional Director or Acting Regional Director is permitted may work oppression. Accordingly, it is held that the subpoena as issued is a nullity and the action dismissed and the order to show cause, issued as of August 13, 1940 is vacated.
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