most Dairies, Inc., Docket 6495, CCH Trade Reg. Rep., para. 27,844 (Transfer Binder 1959-60)..

The "visitation" power of the Commission under Section 9 is also available for the purpose of obtaining information. The first part of that Section states:

"That for the purposes of this Act the commission, or its duly authorized agent or agents, shall at all reasonable times have access to, for the purpose of examination, and the right to copy any documentary evidence of any corporation being investigated or proceeded against;

2. Post-Complaint Investigation

The Commission's power to subpoena documentary evidence in connection with Section 5 of the Federal Trade Commission Act proceedings may be taken as firmly established.

A recent series of cases upholding the use of the subpoena power of Section 9 of the Federal Trade Commission Act in Clayton Act proceedings has made abundantly clear the validity of the power respecting any matter within the Commission's jurisdiction: FTC v. Rubin, 245 F. 2d 60 (2d Cir. 1957); FTC v. Tuttle, 244 F. 2d 605 (2d Cir.), cert. denied, 354 U. S. 925 (1957); FTC v. Reed, 243 F.2d 308 (7th Cir.), cert. denied, 355 U. S. 823 (1957); Menzies v. FTC, 242 F. 2d 81 (4th Cir.), cert. denied, 353 U. S. 957 (1957); FTC v. Bowman, 149 F. Supp. 624 (D. C. Ill.), aff'd, 248 F. 2d 456 (7th Cir. 1957).16 The conclusion is inescapable that if valid in Clayton Act proceedings, a fortiori, the subpoena power is valid in Federal Trade Commission Act proceedings. See also FTC v. Hallmark, Inc., 170 F. Supp. 24 (D.C.N.D. III. 1958), aff'd, 265 F.2d 433 (7th Cir. 1959); FTC v. Scientific Living, Inc., 150 F. Supp. 495 (D. C. Pa. 1957), aff'd, 254 F. 2d 598 (3d Cir.), cert. denied, 358 U. S. 867 (1958).

Also pertinent here is the case of FTC v. Waltham Watch Co., 169 F. Supp. 614 (S. D. N. Y. 1959). That case held that an investigational subpoena will be enforced even though it “may cover ground which is already the subject matter of an adjudicative proceeding." Id. at 620.

Standards for testing the validity of a Commission subpoena have been aptly synthesized by the Supreme Court in the Morton Salt case, supra, where it distilled Oklahoma Press Publishing Co. v. Walling, 327 U. S. 186, 208 (1946), as holding in effect that a subpoena under Section 9 of the Federal Trade Commission Act is valid "if the inquiry is within the authority of the agency, the demand

46 Any doubts which may have been raised by Crafts v. FTC, 244 F.2d 882 (9th Cir. 1957), were dispelled when that decision was summarily reversed by the United States Supreme Court, 355 U. S. 9 (1957).

is not too indefinite and the information sought is reasonably relevant." 338 U. S. at 652.

Although ordinarily demand for documents for use as evidence in the course of trial is by subpoena duces tecum, there are occasions when Section 6 may also be utilized. The use of Section 6 might be appropriate, for example, in a Sherman Act-type case where comparable cost data were to be sought for a number of companies. In such a case the Commission might prefer “special reports” or “answers in writing to specific questions" to the production of individual company records pursuant to subpoena duces tecum, which records possibly could not be properly compared without extended testimony to explain variations in cost accounting methods, etc. For an example of the use of Section 6 during litigation, see Crown Zellerbach Corporation, Docket No. 6180, 51 F. T. C. 1105 (Order Ruling on Interlocutory Appeal, May 16, 1955).

The cases also indicate that the "visitation” powers of the Commission under Sections 6 and 9 have been used in the course of precomplaint investigation. In an appropriate case it may be that information required in the actual course of trial could be similarly obtained. Flotill Products, Inc. v. FTC, 1960 Trade Cases, para. 69,740 (9th Cir. 1960).

3. Commission Treatment of Claims of Confidentiality

Even if the "confidential cost data" involved here were equated with "trade secrets," this would be no bar to a Commission subpoena requiring their production. A recent case making clear that "trade secrets" are not privileged from production under a Commission subpoena is FTC v. Tuttle, 244 F. 2d 605 (2d Cir.), cert. denied, 354 U. S. 925 (1957). In that case the court stated:

"The respondents contend that the information sought by the Commission under the subpoena in the case at bar would include the sales records of the individual companies and that those records may be properly classified as 'trade secrets'. Assuming, arguendo, that sales records of the individual companies are trade secrets under Section 6(f), all that that section forbids is the publication of 'trade secrets and names of customers,' in public reports that the Commission may make 'from time to time' which it 'shall deem expedient in the public interest.' That does not mean that 'trade secrets and names of customers' may not be subpoenaed by the Commission in any proceeding or investigation under the Act. They may be subpoenaed in litigation in the Federal Courts, if the information is relevant and necessary to the presentation of a case. 4 Moore, Federal Practice, §26.22 p. 1087." Id. at 616.

Accord: Menzies v. FTC, 242 F. 2d 81 (4th Cir.), cert. denied, 353 U. S. 957 (1957); FTC v. Hallmark, Inc., 170 F. Supp. 24 (N. D. Ill. 1958), aff'd on other grounds, 265 F. 2d 433 (7th Cir. 1959); FTC v. Bowman, 149 F. Supp. 624 (N. D. Ill.), aff'd, 248.F. 2d 456 (7th Cir. 1957). Cf. Clarke v. FTC, 128 F. 2d 542 (9th Cir. 1942).

The Commission has weighed the necessity for the production of confidential data against the prejudice that might be incurred by the party ordered to produce. And it has, on occasion, refused to order such production. E.g., E. B. Muller & Co. v. FTC, 142 F. 2d 511 (6th Cir. 1944); The Maico Co., Inc., 51 F. T. C. 1197 (1955); Foremost Dairies, Inc., Docket No. 6495, CCH Trade Reg. Rep., para. 27,844 (Transfer Binder 1959-60) (Order ruling on interlocutory appeal, February 11, 1959) ; cf. Segal Lock & Hardware Co. v. FTČ, 143 F. 2d 935 (2d Cir. 1944), cert. denied, 323 U. S. 791 (1945).

In those cases, trade secrets or confidential data sought by respondents were protected from disclosure, the denial of the demands being rested essentially on the ground that the data were not needed under all the circumstances.

V. TECHNIQUES FOR HANDLING COST DATA AND APPROPRIATE PROTECTIVE ORDERS

To the extent that the cost data requested, or some portion thereof, are found to be relevant and material, on an appropriate showing the cost data may be held subject to a protective order preventing disclosure until its actual introduction into evidence. Moreover, in Federal Trade Commission proceedings, it is possible to maintain confidentiality even in the course of hearings and thereafter.

A. PRE-INDIctment InveSTIGATION

If the Government is able to satisfy the court that demanded cost records are relevant and material to the particular violation under investigation, the traditional secrecy of the grand jury proceedings would appear to obviate the necessity for a protective order. Rule 6(e), Fed. Rules Crim. Proc. On at least one occasion, however, a protective order has been entered. See Application of Kelly, 19 F. R. D. 269, 270 (S. D. N. Y. 1956).

B. POST-COMPLAINT DISCOVERY

Both under Rule 30(b) of the Federal Rules of Civil Procedure, and under its general equity powers, a court may enter orders preventing disclosure of all facts developed and documents produced during pre-trial discovery. Many such orders have been entered."

47 American Oil Co. v. Pennsylvania Petroleum Prod. Co., 23 F. R. D. 680 (D. R. I. 1959); American Crystal Sugar Co. v. Cuban-American Sugar Co., 23 Fed. Rules Serv. 26b.31, Case 3 (S. D. N. Y. 1956); Kurt M. Jachmann Co., Inc. v. Hartley, Cooper & Co., Ltd., 17 F. R. D. 316 (S. D. N. Y. 1955); Baim & Blank, Inc. v. Bruno-New York, Inc., 17 F. R. D. 346 (S. D. N. Y. 1955); Schwartz v. Broadcast Music, Inc., 20 Fed. Rules Serv. 33.335, Case 1 (S. D. N. Y. 1954); General Foods Corp. v. Beu, 15 Fed. Rules Serv. 30b.37, Case 1 (W. D. N. Y. 1951); and Shawmut, Inc. v. American Viscose Corp., 11 F. R. D. 562 (S. D. N. Y. 1951).

In United States v. Procter & Gamble Co., Civil Action No. 11961952, D. N. J., two substantially similar protective orders have been entered. The first (April 19, 1955) provides:

"5. ORDERED that the plaintiff will not disclose in whole or in part the contents of any document or any information derived from any document produced [by Colgate] pursuant to subparagraph 5 or sub-items b)2), b)3) or b)5) of subparagraph 11 of paragraph 1 above to anyone other than authorized personnel of the Department of Justice, whether as proffered evidence in this case or otherwise, except upon the following conditions: "a. such disclosure shall be made only in the presence of Colgate; "b. such disclosure shall be made only pursuant to a further order of this Court, entered after Colgate has had an opportunity to be heard, or with the consent of Colgate; and

"c. prior to such time as the plaintiff may desire to make such disclosure, it will show to Colgate the documents or information in the form in which disclosure is proposed to be made and afford Colgate a reasonable opportunity to argue to this Court that such documents or information should not be disclosed in that form;

Of particular interest among the private actions is American Oil Co. v. Pennsylvania Pet. Prod. Co., 23 F. R. D. 680 (D. R. I. 1959). The court there overruled objections to certain of plaintiff's interrogatories, but for the protection of defendant ordered that its answers should be filed under seal and that disclosure could be made only to counsel for plaintiff and those assisting him in preparing for trial.

"Here the plaintiff and the defendant are to a certain extent competitors. Clearly the information sought by Interrogatories Nos. 13 and 20 is relevant and necessary to the plaintiff in the proper presentation of its claim and its defense to the defendant's counterclaims. However, I do feel that the disclosure of the answers to these interrogatories should be limited to counsel for the plaintiff and to such persons as he may engage to assist him in any investigation which he may make in preparation for trial, none of such persons so engaged to be employees of the plaintiff or associated with it in any other capacity. In order to effect such limitation of disclosure, the defendant shall deliver a copy of its answers to Interrogatories Nos. 13 and 20 to counsel for the plaintiff and shall file a duplicate copy thereof in a sealed envelope with the Clerk of this Court, to be opened only upon the order of this Court." Id. at 684-85.

A similar protective order was granted in Baim & Blank, Inc. v. Bruno-New York, Inc., 17 F. R. D. 346 (S. D. N. Y. 1955). Plaintiffs, who claimed damages for alleged violations of the RobinsonPatman and Sherman Acts, voluntarily produced "various books and records, including profit and loss statements and corporate income tax returns." Id. at 347. The court granted plaintiffs a protective order enjoining defendant from disclosing any of the documents produced:

"The plaintiffs are entitled to an appropriate order enjoining the publication or disclosure by the defendant or any of its representatives of the income tax returns, profit and loss statements, books and records or other abstracts thereof pending the trial of the action. This of course does not restrict the use by the defendant of the discovered information for trial preparation or at the trial proper." Id. at 349.

92394 O 6312

The Commission has weighed the necessity for the production of confidential data against the prejudice that might be incurred by the party ordered to produce. And it has, on occasion, refused to order such production. E.g., E. B. Muller & Co. v. FTC, 142 F. 2d 511 (6th Cir. 1944); The Maico Co., Inc., 51 F. T. C. 1197 (1955); Foremost Dairies, Inc., Docket No. 6495, CCH Trade Reg. Rep., para. 27,844 (Transfer Binder 1959-60) (Order ruling on interlocutory appeal, February 11, 1959); cf. Segal Lock & Hardware Co. v. FTC, 143 F. 2d 935 (2d Cir. 1944), cert. denied, 323 U. S. 791 (1945).

In those cases, trade secrets or confidential data sought by respondents were protected from disclosure, the denial of the demands being rested essentially on the ground that the data were not needed under all the circumstances.

V. TECHNIQUES FOR HANDLING COST DATA AND APPROPRIATE PROTECTIVE ORDERS

To the extent that the cost data requested, or some portion thereof, are found to be relevant and material, on an appropriate showing the cost data may be held subject to a protective order preventing disclosure until its actual introduction into evidence. Moreover, in Federal Trade Commission proceedings, it is possible to maintain confidentiality even in the course of hearings and thereafter.

A. PRE-INDICTMENT INVESTIGATION

If the Government is able to satisfy the court that demanded cost records are relevant and material to the particular violation under investigation, the traditional secrecy of the grand jury proceedings would appear to obviate the necessity for a protective order. Rule 6(e), Fed. Rules Crim. Proc. On at least one occasion, however, a protective order has been entered. See Application of Kelly, 19 F. R. D. 269, 270 (S. D. N. Y. 1956).

B. POST-COMPLAINT DISCOVERY

Both under Rule 30 (b) of the Federal Rules of Civil Procedure, and under its general equity powers, a court may enter orders preventing disclosure of all facts developed and documents produced during pre-trial discovery. Many such orders have been entered.“

47 American Oil Co. v. Pennsylvania Petroleum Prod, Co., 23 F. R. D. 680 (D. R. I. 1959); American Crystal Sugar Co. v. Cuban-American Sugar Co., 23 Fed. Rules Serv. 26b.31, Case 3 (S. D. N. Y. 1956); Kurt M. Jachmann Co., Inc. v. Hartley, Cooper & Co., Ltd., 17 F. R. D. 316 (S. D. N. Y. 1955); Baim & Blank, Inc. v. Bruno-New York, Inc., 17 F. R. D. 346 (S. D. N. Y. 1955); Schwartz v. Broadcast Music, Inc., 20 Fed. Rules Serv. 33.335, Case 1 (S. D. N. Y. 1954); General Foods Corp. v. Beu, 15 Fed Rules Serv. 30b.37. Case 1 (W. D. N. Y. 1951); and Shawmut, Inc. v. American Viscose Corp., 11 F. R. D. 562 (S. D. N. Y. 1951).