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1966 News for Corp. Counsel 1 (1966)

handle is hein.barjournals/nwsccptc1966 and id is 1 raw text is: No. 13, March, 1966 NO REHEARING ON UNIVERSAL-RUNDLE DECISION The Court of Appeals for the Seventh Circuit sticks to its guns by rejecting the Federal Trade Commis- sion's request for a rehearing on the Court's important decision of October 22, 1965, which set aside a Com- mission cease and desist order against price discrimina- tion by one member of an industry in which the pricing practice under attack was widespread. Universal-Rundle Corp. v. Federal Trade Commission, (7 Cir.) 352 F.2d 831, 1965, TC par. 71,578; rehearing denied January 7, 1966. Generally speaking, the Commission has long been sustained in acting against only one or less than all of multiple offenders, although it has, in recent years, been conscious of the business inequities which may result, and has both in litigation and in its informal procedures voluntarily sought to avoid or minimize them by, for example, deferring the effective date of an order, negotiating multiple consent orders, or working out industry agreement to trade practice rules. The significance of Universal-Rundle lies in the limitation it places on the Commission's discretion to press home or defer proceedings against one offender out of many. Universal had petitioned the Commission, after the finding of violation, to defer the effective date of the order pending an industry-wide investigation and action. The Commission refused, in part, because of a pending Department of Justice investigation. The Court of Appeals held that this refusal was, on the facts, so inequitable to respondent as to be an abuse of discre- tion. The Court seemed influenced by the fact that respondent was a small company and that there was no apparent reason for failing to proceed against its larger competitors. An investigation of an industry is ger- mane to a proceeding before the Commission, and it has a duty to proceed in a proper case. For authority, the Court relies upon Moog Industries v. Federal Trade Commission, 355 U.S. 411, 414, 1958, TC par. 68,918. In Moog, the Seventh Circuit had been reversed after suspending indefinitely an order against one industry member. But, says Judge Schnackenberg: The Su- preme Court . . . recognized that, if the Commission had patently abused its discretion . . . a Court of Ap- peals might overturn the Commission's determination. LESS DEVELOPED COUNTRIES The President has advised Congress on January 26, 1966, that by Executive Order he proposes to terminate the Less Developed Country designation of the fol- lowing countries: Abu Dhabi, Bahrain, Indonesia, Iran, Iraq, Kuwait-Saudit Arabia Neutral Zone, Libya, Qatar and Saudi Arabia. Such action will terminate the ex- emption from the interest equalization tax previously available to purchases by U.S. citizens of stock and debt obligations originating in those countries. This action is expected to be taken in early 1966. FEERAL LOBBYING ACT CHANGE The Senate Committee on Rules and Administration which conducted the inquiry into the activities of former Secretary of the U. S. Senate, Bobby Baker, has ap- proved a bill to amend the Federal Regulations of the Lobbying Act to remove the responsibility for adminis- tration of the act from the Secretary of the Senate and the Clerk of the House to the Comptroller General. The bill was introduced by Committee Chairman Jordan to implement recommendations made by the committee in its report concerning the Baker investiga- tion. Under the Act any person who shall engage himself for pay or for any consideration for the purpose of attempting to influence the passage or defeat of any legislation by the Congress is required to register and to identify himself and his principal in reports filed with the Secretary of the Senate and the Clerk of the House and to report quarterly to the same officials concerning moneys received and disbursed by him in connection with his lobbying activities. This information is re- ported publicly thereafter in the Congressional Record. Failure of lobbyists to comply with the Act carries penalties of up to one year in jail and a $5,000.00 fine. Prosecution under the act, however, has been extremely rare. The apparent purpose of the Rules Committee bill (S.2233) is to remove the administration of the act from the political climate of the Congress to the Comp- troller General, which is an agency established by Con- gress primarily to serve as its watch dog on the Executive Branch. The bill, however, does suggest that more vigorous enforcement may be contemplated, as it would direct the Comptroller General to determine whether any person has failed to file reports as required under the Act and in such event to notify such persons of this fact. It would also direct him to report violations of the act to the appropriate law enforcement agencies of the Government (presumably the Justice Depart- ment). Such directions concerning enforcement of the act are not presently contained in the Act. S.2233 was approved by the Senate Rules Committee on June 30, 1965. It has not reached the Senate floor for a vote. ANTI-TRUST AND THE McCARRAN ACT In connection with the report on United States v. Chicago Title & Trust Company, 242 F. Supp. 56 (N.D. Ill. 1965), which appeared in the September, 1965 issue (No. 11) of News for Corporate Counsel, it has been pointed out (for clarification) that whereas the court held Chicago Title's acquisition of Kansas City Life not to be within the bar of the McCarran Act, it also upheld generally the validity of state regulation of insurance and specifically, state statutes regulating insurance company mergers to the exclusion of federal anti-trust laws, such as the Clayton Act, unless state regulation does not cover the activity in question or purports to act territorially.

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