Kellogg Co., a defendant in the Federal Trade Commission's shared monopoly suit against the nation's leading cereal manufacturers, has asked a federal court to order the agency to retry the now-completed proceeding.
At issue in the Kellogg petition, filed in D.C. District Court here this week, is whether the cereal company has been denied due process in light of the controversial circumstances revolving around a contract granted the FTC law judge who heard the bulk of the case.
Kellogg'ss, which as repeatedly raised the issue in proceedings at the commission, is charging that not only was the contract awarded to Harry Hinkes, a former administrative law judge, illegal, but that the FTC is obligated to retry the entire case, since Hinkes' successor in the case heard only a small part of the testimony.
The suit is similar to a complaint filed by Kellogg's last year, which the company withdrew in light of the FTC's continuing study of the issues raised by the Hinkes contract.
An FTC official said the commission staff had just begun reviewing the complaint and could not comment further. The FTC will respond within 60 days.
Alvin Berman, the new law judge in the case, is currently preparing an initial decision in the case, which is particuarly significant for the FTC since the novel charges in the action involve whether the cereal industry is a "shared monopoly." Hearings were concluded in June.
If the FTC staff is successful in the case, Kellogg's could be forced to divest itself of as many as three of its five ready-to-eat cereal plants.
"An initial decision incorporating such provisions would have far-reaching detrimental effects on Kellogg's business reputation and public image, on the market value of its securities, on its ability to consumate corporate mergers or similar transactions and on its relationships with suppliers and customers," the Battle Creek, Mich. company said in its petition.
The cereals case has been entangled in a legal fight over whether the FTC illegally awarded Hinkes a $72,000 contract in 1978 in order to keep the judge on the case. Hinkes had sought to retire from his post as the case, which began in 1972, neared the end of the hearing phase.
In filing its motion before the court, Kellogg's, which has repeatedly failed to get the FTC to begin an independent investigation of the Hinkes matter, said it had "exhausted all of its administrative remedies" connected with the issue. Kellogg's asked the court for a preliminary injunction blocking the case from going any further.