Federal Trade Commission attorneys have asked the commission to overturn an administrative law judge's ruling they say could be "disastrous" to the agency's antitrust case against the nation's eight largest oil companies.
The ruling -- by Judge Alvin L. Berman -- denied a comprehensive staff request for the issuance of subpoenas for documents from the oil companies on the gounds that they were "so overwhelming in scope and requirements as to be unduly burdensome and unreasonable."
The complaint charges Exxon Corp., Texaco, Inc., Gulf Oil Corp., Mobil Oil Corp., Standard Oil Co. of Calif., Standard Oil Co. (Indiana), Shell Oil Corp., and Atlantic Ritchfield Co., with monopolizing the refining of crude oil into petroleum products and with having maintained and reinforced a noncompetitive marketing structure in refining. The staff has said it believes some divestiture would be necessary to remedy the situation.
In rejecting the staff subpoena, Berman outlined "guidelines" for future subpoena requests, telling the staff they were seeking "so many avenues of investigations" that their demands would impose unduly burdensome requirements on the companies "and make the case unmanageable . . .
"It is incumbent upon (the staff) that they restructure their approach to proving the allegations of the complaint by limiting and refining their subpoena requests so that they will not be unduly burdensome and the case will be manageable -- indeed, triable," he wrote. "They must select and choose from the various possible avenues of investigation the ones they have reason to believe will be the most productive."
In an appeal to the commission, the staff attorneys argued that they had already significantly narrowed their subpoena requests, that they had offered to help screen the oil company files for the documents they sought in order to reduce the burden, and that the practical effect of the judge's "guidelines" would be to eliminate prematurely important issues from the case.
"The premature and permanent elimination of issues threatens to jeopardize the successful prosecution of the complaint," the appeal states.
The attorneys argued that at this point they couldn't make anything but "arbitrary" judgments about what issues to cut since they have obtained "no substantive discovery" from seven of the eight companies since the case was opened.
"If (the staff) cannot discover on the full range of issues, it will be an admission that large industrial enter-prises and complex industries are not subject to the same level of vigorous antitrust prosecution directed at smaller enities," the staff appeal contends.
The staff's appeal is highly critical of the law judge's management of the case. "The administrative law judge has sufficient tools to manage this proceeding if they are effectively used." the staff told the commission.
Although the staff admitted the number of documents they want the companies to produce would "dwarf" those in other FTC cases and run to millions of pages, they contended the companies' claims of burdensomeness were unwarranted in view of their proposal for screening the files.
They said the oil companies have opposed every staff request for documents, and that early depositions of company officials left a lot to be desired.
"If the commission allows this tactic to succeed again, it will have confirmed that delay bestows immunity from antitrust prosecution," the staff argued.