The world's largest meat-packing company yesterday failed in the Supreme Court to prevent use of sensitive business papers by congressional investigators who are looking into the industry's pricing practices.
The case involved Iowa Beef Processors Inc., a $3-billion-a-year enterprise in Dakota City, Neb., and Hughes A. Bagley, the vice president of IBP fired in 1975. He departed with what came to be known as the "Bagley papers": seven boxes of confidential papers, some relating to costs and pricing.
The first attempt to get access to the Bagley papers was made by anti-trust litigants. But a federal judge in Texas spared IBP by sealing the papers with a protective order.
After that, the House Committee on Small Business, headed by Rep. Neal Smith (D-Iowa), tried to get the papers with a subpoena for them to bagley, who evidently welcomed a chance to comply.
But this initial committee attempt failed because a second protective order, meanwhile, had been issued by Chief U.S. District Judge Edward J. McManus in Des Moines in connection with an IBP lawsuit against Bagley and two lawyers for antitrust litigants who are suing the company.
Last November, however, Bagley asked Mcmanus to modify the order to permit him to comply with the committee subpeona. Mcmanus did modify the order. Before the company knew of the modification, a committee investigator obtained the papers and kept them long enough to make copies.
To prevent disclosure of the papers by the committee, IBP asked the 8th U.S. Circuit Court of Appeals to compel the committee to return its copies.
In February, the appeals court, while terming McManus's modification of his protective order "ac lear abuse of discretion," said it had "no basis" for ordering the committee to return its copies.
Avoiding a possible consitutional crisis, the appeals court also refused to order Rep. Smith, the committee investigator and the committee counsel to show cause why they should not be held in contempt.
Yesterday, an IBP petition for review of the 8th Circuit ruling was rejected, without comment, by the Supreme Court. The committee's inquiry into industry pricing practices is set to open May 1 and is scheduled to las several weeks.
The court took other actions.
The court let stand a decision that the Federal Communications Commission may pre-empt state regulation of rates for cable television that conflicts with the commission's objective of fostering the growth of the pay-cable TV industry.
The justice acted two weeks after ruling that the Federal Communications Act of 1934 doesn't empower the FCC to order cable TV systems to designate one channel each for access by the public, educational authorities, local governments, and renters.State and local governments were left free to adopt access rules, however.
Yesterday's action involves a case that dates back to 1972, when the FCC prohibited states from regulating non-broadcast cable programming in which subscribers pay a per-program or per-channel fee for offerings such as first-run movies and sports events unavailable to the broad public television audience.
In 1976, however, the New York State Commission on Cable Television, questioning the "wisdon" of federal pre-emption, issued an order prohibiting rate changes without the prior approval of both municipal authorities and itself.
The state body was challenged by Brookhaven Cable TV Inc., which won in a trial court and then in the 2d U.S. Circuit Court of Appeals. In affirming, the appeals court said that federal pre-emption would enablr the new industry to develop in a free-market environment.
A Washington law firm with petroleum refiners among its clients lost its effot to require the Department of Energy to disclose the guidelines used by DOE auditors to investigate and verify refiners' compliance with price regulations.
The court let stand a ruling by the U.S. District Court here in a case brought by Ginsburg, Feldman & Bress. The ruling-affirmed by a 4-to-4 ruling of the U.S. Court of Appeals-was that the public has no legitimate interest in the guidelines, because the document is useful to outsiders "only for the purpose of evading regulation."
Taxation with Representation
Taxation with Representation is a non-profit corporation formed in 1970 to educate Congress and the public about the federal tax system, according to TWR's lights.
Most of TWR's educational activities are intended to influence legislation; consequently, the Internal Revenue Service refused to give it tax-exempt status-meaning that contributions made to it are not deductible.
TWR protested that the IRS permits deduction of donations made to trade, veterans' and fraternal associations, all of which exercise influence over the legislative process, while denying the same advantage to charitable groups such as itself.
Last October, the 4th U.S. Circuit Court of Appeals rejected a TRW claim that the IRS was improperly denying it corporate free speech. The Supreme Court let the decision stand.