## Facts

- The Federal Trade Commission (FTC) sought to compel American Tobacco Co. and P. Lorillard Co., Inc. to produce business records for inspection and copying.
- The FTC relied on § 9 of the Federal Trade Commission Act and a Senate resolution directing the FTC to investigate the “tobacco situation,” including domestic and export trade conditions and prices to producers.
- The Senate resolution did not direct an investigation into alleged violations of the antitrust laws.
- The FTC petitioned the U.S. District Court for the Southern District of New York for writs of mandamus to enforce production.
- The district court denied mandamus, and the FTC sought review in the Supreme Court.

## Issues

1. Whether § 6(d) of the Federal Trade Commission Act authorized compulsory disclosure of corporate records when the Senate-directed investigation was not based on alleged violations of the antitrust laws.
2. Whether the FTC Act otherwise granted the FTC power to compel broad production of a private corporation’s papers in the absence of a properly instituted Commission proceeding or a valid congressionally directed antitrust investigation.
3. Whether § 9’s access-to-documents and compulsion provisions could operate as a freestanding basis for compelled inspection and copying outside the Act’s specified investigative and adjudicative contexts.

## Decision

- The Supreme Court affirmed the district court’s denial of mandamus.
- The Court held that § 6(d) did not support the demand because the Senate resolution was not directed to alleged antitrust violations.
- The Court rejected reading the FTC Act to authorize wide-ranging compelled disclosure on the mere possibility that violations might be found.
- The Court construed § 9 as ancillary to lawful FTC proceedings or investigations authorized by the Act, not as an independent power to inspect corporate papers at will.

## Legal Principles

- The FTC’s power under § 6(d) to investigate at the direction of Congress is conditioned on a direction to investigate and report facts concerning alleged violations of the antitrust laws; general industry or economic inquiries do not satisfy that condition.
- Courts will not attribute to Congress an intent to authorize broad compulsory rummaging through private corporate papers absent explicit statutory language, especially where such demands resemble exploratory searches inconsistent with basic principles of justice and the spirit of Fourth Amendment limits.
- The fact that a business engages in interstate commerce and is incorporated does not, by itself, render its internal affairs public or subject to unrestricted governmental inspection.
- § 9’s document-access and compulsory process provisions must be read in context as tools to obtain evidence for authorized FTC proceedings and investigations, not as a general warrant to demand corporate records.

## Conclusion

The Court refused to compel production of the tobacco companies’ records because the FTC lacked clear statutory authority: the Senate resolution was not tied to alleged antitrust violations under § 6(d), and § 9 could not be used as an independent basis for a broad, exploratory demand for private corporate papers.


FTC v. Am. Tobacco Co., 264 U.S. 298 (1924)