General Foods Corporation

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IN THE MATTER OF GENERAL FOODS CORPORATION Doket 9085. Interlouto Orr, Feb. 1980 ORDER DIRECTING GENERAL COUNSEL To CONTINUE COURT ENFORCEMENT OF SUBPOENA DUCES TECUM On November 16, 1979, the administrative law judge certified his recommendation to the Commission that the General Counsel be directed to continue proceedings for enforcement of a subpoena dues wcum issued to Hils Bros. Coffee, Inc. By motion dated December 3 1979, Hils Bros. urged the Commission to withdraw its enforcement efforts. On December 20, 1979, respondent General Foos, filed a pleading in support of the ALJ' s recommendation. Our original order for court enforcement was issued on July 12, 1979 and directed the General Counsel to seek enforcement of those portions of the subpoena that concern marketing plans for Hills Bros.' " High Yield" coffee. After enforcement proceedings were initiated in district court, we learned, through the General Counsel, that complaint counsel had informed the administrative law judge that proof of economic inj ury to Hils Bros. was not an essential element of their case. However, the ALJ had previously denied Hils Bros.' motion to quash partly because he deemed the documents on "High Yield" coffee relevant to the question of economic injury. We therefore issued an order on November 9 , 1979, directing the ALJ to reconsider his ruling in light of complaint counsel's assertions. Our order also directed the General Counsel to seek a stay of enforcement proceedings in district court pending the ALJ' s reconsideration.

The ALJ's present recommendation for enforcement recognizes complaint counsel' s statement that economic injury to Hills Bros. is not essential to their case. However, his certification is based on the fact that complaint counsel have nevertheless expressed their desire to elicit testimony on this subject. The ALJ believes that information concerning Hills Bros.' ability to introduce " High Yield" to the market after the period of General Foods' allegedly anticompetitive activities is relevant to the economic injury issue. He has limited his recommendation for enforcement, however, to marketing plans that concern only the first year in which "High Yield" coffee was introduced. This modification was suggested to conform to a similar limitation adopted by the ALJ in responding to a motion by Folger Coffee Company to quash a similar subpoena dw;es tecum. The Commission has consistently held that an administrative law judge has wide discretion in discovery matters and that his detcrmina- 306 Interlocutory Order tions should not be reversed absent a clear abuse of discretion. E. Warner-Lambert Co. 83 F. C. 485 (1973). We find no such abuse of discretion here because the documents sought from Hils Bros. may well have substantial relevance to the testimony adduced by complaint eounsc1 on economic injury. (See Commission Rule 3.3I(b)(I).) We therefore agree with the law judge s recommendation that court enforcement of the subpoena be sought to the extent its specifications cover marketing plans for the first year "High Yield" was sold. Hils Bros. has objected to the fact that the protective order issued by the ALJ on August 28, 1978, permits General Foods ' in-house counsel as well as its outside counsel free access to the requested marketing plans. In our order of J u1y 12, 1979, we observed that "the safeguards imposed by the ALJ to protect sensitive commercial data seem reasonably designed to prevent unwarranted disclosure of such information to respondent's employees." We have reconsidered these comments, however, in light of the competitive injury that Hils Bros. might suffer if its marketing plans should be disclosed to General Foods. Given the obvious competitive sensitivity of Hils Bros.' marketing plans and the fact that General Foods is represented by outside counsel, it is not clear why access to these materials should be extended to General Foods' three inside counsel of record, onc or more of whom may well have advisory responsibilities to their employer that conflict with maintaining the confidentiality of Hills Bros.' marketing plans. Accordingly, It is ordered That the General Counsel continue to seek court enforcement of the subpoena duees tecum issued to Hills Bros. in so far as it seeks marketing plans for the first year "High Yield" coffee was sold and It is further ordered That paragraph (4)(a) on page 7 of the ALJ' order of August 28, 1978 be modified to delete references to General Foods' named inside counsel. In the event that General Foods concludes that access to the Hills Bros. documents by one of its inside attorneys is essential to ensure fair representation, the ALJ is free to entertain an application by General Foods for a modification of the protective order subject to Hills Bros.' right to oppose any such application, in accordance with paragraph (6) on page 8 of the August , 1978 order.

Interlocutory Order 95 F.