United States v. Morton Salt Co.
The Supreme Court ruled that the Federal Trade Commission could order two salt companies to file additional, more detailed reports on how they were complying with a court-enforced cease-and-desist order, even though the court's own decree hadn't required those extra reports.
The decision recognizes that federal agencies like the FTC have their own independent power to investigate compliance with the law -- similar to a grand jury's power to look into possible wrongdoing without first proving a violation -- separate from and not dependent on the courts.
“It has a power of inquisition, if one chooses to call it that, which is not derived from the judicial function.”
Explaining that agencies like the FTC can investigate compliance without first proving a violation, unlike courts.
How it got here: A district court dismissed the government's suit to enforce the FTC's demand for lack of jurisdiction, the court of appeals affirmed, and the Supreme Court took the case.
The Case in Depth
What happened
The FTC had ordered Morton Salt Company, International Salt Company, and other salt producers to stop certain pricing and marketing practices. A federal appeals court affirmed that order and told the companies to file reports proving they had complied. Years later, the FTC demanded much more detailed follow-up reports on its own, and two of the companies refused to provide the extra detail, arguing the FTC had no power to ask for it.
The question before the Court
After a court had already ordered two salt companies to report on complying with an antitrust order, could the Federal Trade Commission demand even more detailed compliance reports on its own?
The Court's answer
Yes -- the Supreme Court ruled that the FTC had the legal authority to demand these additional compliance reports on its own, without going back to the court that issued the original decree. The Court found nothing in the FTC Act limiting the agency's report-gathering power to only the reports the court's decree specifically listed, and held that a separate section of the Act authorizing "special reports" from corporations covered exactly this kind of follow-up compliance check.
The Court also rejected arguments that this violated the companies' constitutional rights or unlawfully intruded on the court's own authority. It reasoned that agencies like the FTC have an independent, ongoing duty to make sure companies are actually obeying the law, and that this investigative power exists apart from -- and doesn't take away from -- the court's power to interpret and enforce its own decree.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
The ruling gives federal regulatory agencies broad authority to demand information from companies to check on continued compliance with the law, even without evidence of a new violation. Businesses subject to agency oversight can be required to keep answering detailed follow-up questions long after a case is technically over, and courts generally won't second-guess that unless the demands are clearly excessive.
What changes now
The case is sent back for further proceedings consistent with the ruling that the FTC had authority to demand the additional reports. The salt companies must now comply with the FTC's more detailed reporting demands or face the civil penalties the government sought. The decision leaves open whether courts could step in if an agency's reporting demands were shown, in some future case, to be genuinely excessive or unreasonable.
What this does not decide
The Court did not decide whether the FTC's specific demands here were unreasonably burdensome, because the companies never asked the FTC to narrow or clarify the order first. The Court also left open what remedy would be available if an agency's reporting demands were later shown to be truly excessive or used to harass a company.
How the Court got there
The legal reasoning, step by step
- The Court first addressed whether the FTC's demand improperly interfered with the court of appeals' authority over its own decree. It held that a court's power to interpret and enforce its decree is separate from an agency's own ongoing duty to investigate whether companies are obeying the law, so the agency's information-gathering did not usurp judicial power.
- The Court explained that agencies like the FTC have investigative powers more like a grand jury's than a court's: they can look into a company's conduct just to make sure the law is being followed, without first having to show an actual violation. This is sometimes called an agency's 'power of inquisition,' separate from the courts' power to decide actual disputes.
- Turning to whether the FTC's published rules satisfied the Administrative Procedure Act's notice requirements, the Court found the agency had properly published its rule allowing further compliance reports, so that objection failed once the Court confirmed the FTC had authority to issue such orders at all.
- The Court then looked to the FTC Act itself and found that its provision letting the Commission demand 'special reports' from corporations was not limited to routine economic surveys, but could be used to check compliance with a cease-and-desist order that had already been turned into a court decree.
- Finally, the Court rejected the companies' constitutional objections, holding that corporations don't have the same privacy protections as individuals and that requiring reasonably relevant business information is not an unreasonable search as long as the agency's demand isn't excessive or unrelated to a legitimate inquiry.