United States v. Morton Salt Co.

Background

The dispute involved salt producers—Morton Salt, International Salt, eighteen other producers, and a trade association—and the Federal Trade Commission. The Commission had issued a cease-and-desist order under Section 5, which the Court of Appeals affirmed and turned into a decree that required initial compliance reports to be filed with the Commission. Years later the Commission issued a new order, under its published Rule XXVI and Section 6, demanding detailed supplemental reports. Two corporate respondents refused to provide the particulars, were declared in default, and the Government sued in district court for injunctions and daily penalties. The district court and the Court of Appeals dismissed for lack of jurisdiction, and the Supreme Court granted review.

Reasoning

The Court addressed whether the Commission could lawfully require these supplemental reports and whether Rule XXVI met notice requirements of the Administrative Procedure Act. The Court held that the published Rule XXVI provided adequate notice and that Section 6 authorizes the Commission to demand special reports from corporations, including reports about how they are complying with Section 5 decrees. The Court rejected the argument that the Commission’s investigatory step unlawfully usurped the courts’ role, explaining agencies have an investigatory duty and courts retain final adjudicatory power. The Court also rejected the respondents’ Fourth and Fifth Amendment objections on this record, noting limits exist but were not shown here.

Real world impact

The Supreme Court reversed the lower courts and upheld the Commission’s power to order supplemental compliance reports from corporations. Corporations subject to FTC decrees should expect agency follow-up inquiries. The decision leaves open judicial review of unreasonable or excessive orders, but it makes administrative monitoring and enforcement of compliance more straightforward.