Cinderella Career and Finishing Schools, Inc. v. Federal Trade Commission

United States Court of Appeals for the District of Columbia Circuit · 1968 · Administrative Law

Administrative LawFTCagency publicitypress releasespending adjudicationpublic interest15 U.S.C. 4515 U.S.C. 46(f)

Facts

The FTC investigated appellees' business and issued an administrative complaint alleging unfair or deceptive practices and false and misleading advertising in violation of section 5 of the Federal Trade Commission Act. Before the FTC issued a planned news release about the complaint, appellees asked the Commission to defer any release until after final adjudication, but the FTC denied that request and issued a factual release announcing and describing the complaint. Appellees then alleged in district court that the release harmed their business through course cancellations, business inquiries, and general reputational and economic injury. The district court found grave doubt about the FTC's authority and enjoined further releases pending final agency adjudication.

Issue

Whether the Federal Trade Commission is authorized to issue a factual news release concerning pending adjudicatory proceedings before it. Also, whether issuing such a release violates due process by creating prejudgment or the appearance of prejudgment in the agency's own adjudication.

Rule

Where the Federal Trade Commission has statutory authority to prevent unfair or deceptive practices and to make public such information obtained by it as it deems expedient in the public interest, it may, acting in the public interest, issue factual press releases based on official Commission action and public records to alert the public to suspected violations that have led to the initiation of proceedings. The issuance of such a factual release does not, without more, deny due process merely because the agency combines investigative, accusatory, and adjudicative functions.

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The Fair Markets Board, a federal agency, is empowered by statute to prevent deceptive retail practices and to make public information it obtains whenever publication is expedient in the public interest. After filing an administrative complaint against North Shore Tuition Network in Milwaukee, the Board issues a short release stating that it has filed charges, summarizing the allegations from the complaint, and noting that a hearing will follow.

If North Shore sues to stop any further releases solely on the ground that the agency lacks authority to publicize pending adjudicatory matters before a final order, how should the court rule?

Explanation. The majority held that where an agency is broadly charged with protecting the public and specifically authorized to make public information obtained by it as expedient in the public interest, it may issue factual press releases tied to official agency action and public records, including the filing of a complaint. Business and reputational harm alone do not negate that authority. (Derived from Cinderella Career and Finishing Schools, Inc. v. Federal Trade Commission (n.d.).)