## Facts

- Pillsbury, a national flour miller, acquired Ballard & Ballard’s assets (1951) and Duff’s Baking Mix Division (1952).
- The FTC brought an administrative complaint alleging the acquisitions violated § 7 of the Clayton Act because they may substantially lessen competition or tend to create a monopoly.
- A hearing examiner dismissed the complaint for insufficient evidence.
- The FTC reversed in an interlocutory agency decision, finding a prima facie § 7 case but rejecting a market-share-only per se approach; it remanded for evidence on likely competitive effects.
- While the remand proceedings were pending, congressional antitrust subcommittees held hearings in which FTC leadership and counsel were questioned at length about the pending Pillsbury matter and criticized for the Commission’s approach to § 7.
- The congressional questioning focused on how and why the FTC reached its interlocutory decision and urged a stricter standard; the FTC chairman stated he would have to disqualify himself from further participation in the case.
- The FTC later issued a final order requiring Pillsbury to divest the acquired assets and restore the acquired firms as effective competitors.
- Pillsbury petitioned the Fifth Circuit to set aside the FTC order and sought leave to introduce additional evidence.

## Issues

1. Whether targeted congressional criticism and interrogation of FTC officials about a specific pending adjudication compromised the agency’s impartiality and denied Pillsbury due process.
2. Whether the acquisitions violated § 7 of the Clayton Act in the relevant product markets (reached only conditionally given the due process claim).

## Decision

- The Fifth Circuit vacated the FTC’s divestiture order and remanded for further proceedings.
- The court held that the nature and extent of congressional involvement in the pending case deprived Pillsbury of a fair hearing required by due process.
- The court declined to finally decide the substantive § 7 merits because the adjudicative process was tainted.
- The court indicated remand could permit a fair rehearing given the passage of time and potential changes in agency personnel.

## Legal Principles

- When an administrative agency acts in a quasi-judicial capacity, due process requires adjudicators to be free from improper influence by the legislative or executive branches.
- Congressional oversight and investigation are generally permissible as to broad policy, enforcement priorities, and completed matters, but direct pressure aimed at the outcome or reasoning in a specific pending adjudication exceeds constitutional limits.
- Procedural due process protects not only actual neutrality but also the appearance of impartiality; a substantial risk or appearance of bias in an agency adjudication can require vacatur even without proof of actual bias.
- The appropriate remedy for improper external influence on an agency adjudication is to set aside the resulting order and remand for proceedings insulated from the improper influence.

## Conclusion

The court set aside the FTC’s divestiture order because congressional scrutiny directed at the pending Pillsbury adjudication created an impermissible risk and appearance of bias, denying the fair and impartial hearing required by due process, and remanded for a renewed agency proceeding free from such interference.


Pillsbury Co. v. Fed. Trade Comm’n, 354 F.2d 952 (5th Cir. 1966)