Federal Trade Commission v. Flotill Products, Inc./Opinion of the Court

The question in this case is whether an enforceable cease-and-desist order of the Federal Trade Commission requires the concurrence of a majority of the full Commission, or only of a majority of the quorum that participated in the decision to issue the order.

The Commission has five Commissioners, 15 U.S.C. § 41. A full Commission heard oral argument in this case involving a complaint that respondent made payments in lieu of brokerage in violation of § 2(c) of the Robinson-Patman Act and granted promotional allowances in violation of § 2(d) of that Act. 15 U.S.C. §§ 13(c) and (d). Two Commissioners retired before the Commission rendered its decision. Although one vacancy was filled in the interim, only three Commissioners participated in the decision because the new Commissioner, not having heard the oral argument, declined to participate. All three participating Commissioners concurred that respondent granted promotional allowances in violation of § 2(d). However, only two of the three concurred that respondent also made payments in lieu of brokerage in violation of § 2(c). On petition for review under 15 U.S.C. §§ 21(c) and 45(c), a three-judge panel of the Court of Appeals for the Ninth Circuit enforced the Commission's cease-and-desist order as it related to the § 2(d) violation but refused to enforce the order, one judge dissenting, as it related to the § 2(c) violation. In refusing to enforce the § 2(c) part of the order, the Court of Appeals held that 'absent statutory authority or instruction to the contrary, three members of a five member commission must concur in order to enter a binding order on behalf of the commission.' 358 F.2d 224, 228. On rehearing en banc the full court sustained the panel decision five to four. 358 F.2d, at 234. Because of a conflict with decisions of other courts of appeals, see Atlantic Refining Co. v. FTC, 344 F.2d 599 (C.A.6th Cir.), LaPeyre v. FTC, 366 F.2d 117 (C.A.5th Cir.), we granted certiorari, Federal Trade Commission v. Flotill Products, 386 U.S. 1003, 87 S.Ct. 1343, 18 L.Ed.2d 431. We reverse.

The Federal Trade Commission Act does not specify the number of Commissioners who may constitute a quorum. A quorum of three Commissioners is provided for by a rule of the Commission first promulgated in 1915; in its current version it is Rule 1.7. No challenge to the authority of FTC to promulgate Rule 1.7 is made in this case; indeed, the Court of Appeals expressly disclaimed any ' * *  * doubt as to the validity of the Commission's practice of conducting hearings before less than the full membership,' 358 F.2d, at 230. Before us for review, therefore, is only the holding of the Court of Appeals which follows that disclaimer: 'We say only that an order of the Commission must be supported by three members in order to constitute an enforceable order of the FTC. Two of five is too few.' Ibid.

The rationale of the Court of Appeals was that the FTC could act only on the concurrence of a majority of the full Commission 'absent statutory authority or instruction to the contrary.' 358 F.2d, at 228. The court cited no authority affirmatively supporting that proposition; the court simply rejected-on the ground that it is inapplicable to 'a statutorily created administrative tribunal like the Federal Trade Commission,' 358 F.2d, at 229-the rule stated by the Court of Customs and Patent Appeals in Frischer & Co. v. Bakelite Corp., 39 F.2d 247, 255, that ' * *  * in collective bodies other than courts, even though they may exercise judicial authority, a majority of a quorum is sufficient to perform the function of the body.' Further, the court rejected as 'a bare conclusion' the holding of the Court of Appeals for the Sixth Circuit in Atlantic Refining Co. v. FTC, supra, that a majority of a panel of three Commissioners could act for the Commission.

Insofar as the Court of Appeals' holding implies that the proposition state by it is the common-law rule, the court was manifestly in error. The almost universally accepted common-law rule is the precise converse-that is, in the absence of a contrary statutory provision, a majority of a quorum constituted of a simple majority of a collective body is empowered to act for the body. Where the enabling statute is silent on the question, the body is justified in adhearing to that common-law rule.

Respondent does not undertake to support the Court of Appeals' proposition as stated. Rather respondent concedes that the common-law rule is as we have stated it to be but argues that an exception allegedly recognized at common law in the case of courts should be applied to an agency like the FTC exercising quasijudicial functions; respondent cites the statement in Frischer, supra, at 255, that '(w)here courts are concerned, it has been uniformly held, so far as we can ascertain, that a clear majority of all the legally constituted members thereof shall concur or no valid judgment may be entered except such as may follow no decision.' But even on the doubtful premise that there is an exception in the case of courts, Frischer itself recognized, as we have seen, that the exception does not apply to administrative agencies with quasi-judicial functions. Ibid. It follows that the FTC is not inhibited from following the common-law rule unless Congress has declared otherwise. Since that declaration is not expressed in the Trade Commission Act, our task is narrowed to determining whether it may be read in by implication.

The Court of Appeals' opinion may be read as having found an implicit contrary declaration because Congress wrote the common-law rule into later statutes creating other agencies: ' * *  * when Congress wanted to authorize the exercise of the powers of an administrative body by less than the full body in other situations, it did not lack the words to do so expressly. Cf. National Labor Relations Board, 29 U.S.C. § 153(b); Interstate Commerce Commission, 49 U.S.C. § 17(1) (sic); Federal Power Commission, 16 U.S.C. § 792,' 358 F.2d, at 229. However, in another statute, reorganizing the Federal Maritime Commission, Congress enacted not the common-law rule but a unanimous concurrence provision, Reorganization Plan No. 7 of 1961, 75 Stat. 840; the reasoning of the Court of Appeals thus would equally justify an inference that Congress sanctioned the FTC's adherence to the common-law rule, since Congress has not lacked the words to abrogate such a practice expressly. This diversity in congressional treatment of the problem clearly forecloses reliance upon a particular choice in one statute as the basis for an inference of a contrary choice in another which says nothing on the matter.

The Court of Appeals seems also to have been of the view that there is a basis for inferring a contrary declaration from within the four corners of the Trade Commission Act itself. '(I)t is difficult to believe that Congress conceived of the five-member FTC with its politically balanced make-up, permitting two of its members to speak for the Commission, and failed to specifically provide enabling legislation.' 358 F.2d, at 229. This argument stresses the structural characteristics of the Commission-that it is a multi-membered body whose members serve long, staggered terms, and no more than three of whom may belong to the same political party. But the argument fails to take into account the fact that these features are common to almost all federal regulatory agencies, whose enabling acts, where they deal at all with the question of how many of a quorum may act for the agency, deal with it diversely. Nothing in the structure of the FTC, therefore, commands the inference that Congress intended to restrict the Commission to voting requirements not normally imposed on or adhered to by similarly structured agencies.

Respondent's final argument is that there is a basis for the inference in the action of Congress in 1961 in not disapproving the Reorganization Plan for the Commission submitted by President Kennedy. Under this plan the FTC was granted 'authority to delegate, by published order or rule, any of its functions to a division of the Commission, an individual Commissioner, a hearing examiner, or an employee or employee board, including functions with respect to hearing, determining, ordering, certifying, reporting or otherwise acting as to any work, business, or matter * *  * .' The plan further provided that 'the Commission shall retain a discretionary right to review the action of any such division of the Commission, individual Commissioner *  *  * ' and that 'the vote of a majority of the Commission less one member thereof shall be sufficient to bring any such action before the Commission for review.' Reorganization Plan No. 4, § 1(a), (b). The Commission did not purport to act pursuant to Plan No. 4 in this proceeding. Nevertheless, respondent argues that the provision assuring a minority of the Commission a means to compel review by the full Commission is a congressional expression that Commission action shall be valid only when concurred in by a majority of the full membership. This argument is not persuasive, however. The provisions of Plan No. 4 were common to most of the reorganization plans submitted for other agencies at or about the same time. As we have noted, the enabling acts creating those agencies treat differently the problem of the number of a quorum authorized to act for the agency, which makes it highly improbable that the similarly phrased review procedures set forth in the plans manifest the implicit principle for which respondent contends. Indeed, it is quite clear-both from the language of the plans and the discussions in Congress-that Plan No. 4 and those like it were concerned with establishing the authority and procedure for delegation of functions so as to enable the respective agencies to operate more efficiently. There can be little question of the desirability of the FTC's judicious use of this authority, but the case before us is not one in which there was a delegation. This was a proceeding originally heard by a full Commission and the problem of a quorum decision arose only when fortuitous circumstances reduced to three the number of Commissioners available to render a decision. Clearly, it is not a decision covered by the 1961 Plan.

The inconsistency in congressional treatment of quorum voting sometimes allowing agency action on the concurrence of a majority of the quorum, in other cases requiring unanimous concurrence, and in several statutes saying nothing at all-refutes any suggestion that Congress has regarded the problem to be such as to justify a single rule for federal regulatory agencies. Surely, if Congress at any time has regarded the case of the FTC as specially calling for unanimity in quorum voting, we might expect that Congress would have at some time addressed itself to the question during the more than half century of the Commission's existence. Thus, if any conclusion is to be drawn, it is that Congress has been and is content to acquiesce in the Commission's practice of following the long-established common-law rule.

We therefore reverse the judgment of the Court of Appeals insofar as the matter of the Commission's § 2(c) order was 'remanded to the FTC for further proceedings to determine whether a majority of the Commission join in the section 2(c) findings,' and remand to that court with direction to proceed to judgment on the merits of respondent's petition to review and set aside that order. It is so ordered.

Reversed in part and remanded with direction.

Mr. Justice MARSHALL took no part in the consideration or decision of this case.