A consumer group working with the Federal Trade Commission has won a major legal battle that could lead to increased consumer participation in federal agency proceedings.
The case involves the Center for Auto Safety, which has been a government-funded consumer participant in the FTC's rulemaking proceedings concerning mobile home sales and service activities.
As part of its involvement, the Center called on the FTC presiding officer in the case to subpoena ten mobile home manufacturers for service and warranty records to see if the industry could back up its claims that few of their customers have had warranty problems. The FTC official issued the subpoenas.
The Nader-affilated consumer group scored its first major victory last month, when U.S. District Court Judge George L. Hart Jr. ruled that the group, when working with a federal agency, could subpoena records from private industry. The decision is believed to be the first to allow a third party to gain access, via subpoena, to such records.
The mobile home industry objected to the ruling, and appealed, asking for a stay from producing the records until the U.S. Court of Appeals rules. In the latest ruling from the appelate court, however, the firms were denied the stay, and must now produce the records as soon as possible.
The final decision by the U.S. Court of Appeals is not expected for several weeks.
Center director Clarence Ditlow called the Court of Appeals decision "a land mark victory for consumers in general and mobile home owers in particular."
"In refusing to lift the district court order requiring compliance with the FTC subpoena requested by the Center." Ditlow added, "the court has sent a message to industry that its anti-consumer positions can be exposed for the deception they are by mandatory consumer access to industry's own files."
FTC General Counsel Mike Sohn said the ruling was "a reflection on the success of the public participation program," which is an FTC program approved by Congress, that allows the the success of the public participation [TEXT OMITTED FROM SOURCE] to appear in rulemaking procedures.
"This is a prefect example of how a public interest group is enriching a rulemaking policy record in the way Congress had in mind when establishing the public participation process," Sohn said.
The industry had argued that the subpoenas were issued without proper statuatory authority, and were merely designed to harrass the firms involved.
"The arbitrary, capricious, and discriminatory use of subpoenas has made clear to respondents that the price of testifying at an informal hearing against proposed regulation can be the subpoenaing of all one's business records that a consumer group finds relevant to the testimony." The mobile home firms argued in a brief filed in support of a stay.