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EXXON Corp. v. Federal Trade Commission

decided: December 7, 1978.

EXXON CORPORATION, GULF OIL CORPORATION, MOBIL OIL CORPORATION, STANDARD OIL COMPANY OF CALIFORNIA, STANDARD OIL COMPANY (INDIANA), AND ATLANTIC RICHFIELD COMPANY
v.
FEDERAL TRADE COMMISSION, CALFIN J. COLLIER, CHAIRMAN, PAUL RAND DIXON, MEMBER, DAVID A. CLANTON, MEMBER, AND M. ELIZABETH HANFORD DOLE, MEMBER EXXON CORPORATION AND GULF OIL CORPORATION, APPELLANTS (D.C. CIVIL NO. 77-61)



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

Before Aldisert and Higginbotham, Circuit Judges, and Meanor, District Judge.*fn*

Author: Higginbotham

Exxon Corporation and Gulf Oil Corporation, in response to a subpoena Duces tecum, have turned over to the Federal Trade Commission a substantial volume of documents many of which are confidential. They then joined with other plaintiffs in the filing of a complaint in the United States District Court for the District of Delaware seeking a declaratory judgment to the effect that the FTC was not providing and could not provide adequate protection for its confidential documents and that those documents are not obtainable pursuant to the Freedom of Information Act. The district court recognized that it possessed jurisdiction to decide the merits of appellants' claims. The district court decided, however, that it had discretion not to exercise this jurisdiction and dismissed the complaint. Exxon Corp. v. FTC, 436 F. Supp. 1019 (D.Del.1977). Because we conclude that the district court did not have discretion to decline to hear a portion of appellants' claims, we will reverse with respect to certain claims and remand for a decision on the merits of those claims.

I. A HISTORY OF THE PROCEEDINGS

The genesis of this litigation was the filing by the FTC on July 18, 1973 of a complaint (FTC Docket No. 8934) against Exxon Corp., Texaco, Inc., Mobil Oil Corp., Standard Oil Co. of California, Standard Oil Co. (Indiana), Shell Oil Corp. and Atlantic Richfield Co. The FTC alleged that these oil companies have engaged in a variety of anti-competitive practices. On November 24, 1976, a Commission Administrative Law Judge issued substantially identical subpoenas Duces tecum to the respondent companies. The information sought related to the companies' organizational structure, record keeping systems and refining operations. On December 9, 1976, the respondent companies jointly moved for the entry of a protective order by the ALJ. The companies did not, however, withdraw the contention they had previously made, in seeking to limit the scope of the subpoenas, that the FTC did not have the authority to issue an order that would adequately protect the confidentiality of the subpoenaed documents.

On January 4, 1977, the ALJ, acting under the powers provided in 16 C.F.R. ยง 3.42(c), issued a protective order covering all the documents subpoenaed. Paragraph 9 of that order provided:

9. Notwithstanding any of the foregoing provisions, in the event of a Freedom of Information Act request or an official request from any Congressional committee or subcommittee for disclosure of any document designated "Confidential" hereunder or any information contained therein, authorized representatives of the Commission's Office of General Counsel may inspect the document for purposes of advising the Commission on the request and defending the Commission's interests in court. Furthermore, the Commission shall provide the party which supplied a confidential document with ten (10) days' notice prior to releasing the document in response to such a request or otherwise.

The Commission, on January 31, 1977, approved this paragraph with one modification. In the event of a request for confidential documents through congressional or judicial process, the ten-day notice requirement would not apply. Instead, ten days notice would be given where possible, and as much notice would be given as is reasonably possible under the circumstances.

On August 1, 1978, the Commission issued an order stating that it was the Commission's intent, in issuing its January 31, 1977 order, to retain the requirement that respondents always be given ten days notice before their documents are turned over to anyone unless in response to congressional or judicial requests. Congressional or judicial requests remain subject to the qualified notice provisions just described.

All respondents to the FTC proceedings other than Texaco and Shell filed the instant suit against the FTC on February 18, 1977, seeking injunctive relief. On March 3, 1977, the plaintiffs, now including Shell, filed an amended complaint seeking declaratory as well as injunctive relief.

On August 19, 1977, the district court granted the FTC's motion to dismiss the complaint without prejudice. A motion for relief from that dismissal was denied on September 30, 1977.

Of the companies to whom subpoenas were issued, only Exxon and Gulf decided to comply. As a result, the FTC commenced an enforcement proceeding against the other companies in the District Court for the District of Columbia on July 27, 1977. That court granted enforcement without modifying the Commission's protective order and rejected claims essentially identical to those made here. FTC v. Anderson, 442 F. Supp. 1118 (D.D.C.1977).

II. VENUE

At the outset, we must face the FTC's contention, not decided below, that venue was ...


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