The Federal Trade Commission yesterday voted unanimously to appeal a court order barring FTC Chairman Michael Pertschuk from taking part in his agency's deliberations on staff proposals to ban television advertising aimed at children.
U.S. District Court Judge Gerhard Gesell had ruled on Nov. 3 that complaints by cereal companies and others that Pertschuk was prejudiced in the case were founded and ordered the controversial agency head to disqualify himself.
Gesell had found that Pertschuk, an outspoken critic of children's advertising, "has conclusively prejudged factual issues which will be disputed in the rulemaking proceeding... [by] going far beyond general observations of policy and tentative statements of attitude."
Gesell further charged in his decision that Pertschuk, "by his use of conclusory statements of fact, his emotional use of derogatory terms and characterizations... made his further participation improper."
Yesterday's 3-to-0 FTC vote, in which Pertschuk and commissioner Robert Pitofsky did not participate, authorizes the Justice Department to go ahead with an appeal of that ruling, provided such a move is approved by the attorney general. Justice represents the FTC in appeal actions.
The controversial children's advertising investigation will involve extensive hearings and the study of several possible regulatory alternatives.
The FTC staff proposed new regulations for children's advertising in April after a finding that young children could not differentiate between television programs and commercials.
Hearings on the proposed regulation begin in San Francisco on Jan. 15, and will move later to Washington. Following the hearings, and an analysis of the comments filed by interested parties, the hearing officer will make his report to the commission for its decision.
Advertisers and broadcasters have criticized the proposed rules as a violation of their First Amendment rights and an example of overregulation by the government. They contend that parents, not the government, are the best judge of what their children should or should not see.
The FTC is expected to appeal to the U.S. Court of Appeals on grounds similar to those it raised before Gesell.
Specifically, the FTC will likely contend, the issues that Pertschuk discussed in public "are, without exception, issues of general legislative fact, rather than specific adjudicative fact."
The FTC will claim that Pertschuk is not yet acting as judge in the case, only as a legislator who can express any opinion he wants. When, and if, the case goes to the commission for a vote, Pertschuk then will act as a judge and evaluate the evidence that has been entered in the case.
Sources at the FTC say that agency will argue that there is a basic difference between the legislative and judicial functions of regulatory commissioners.
As the present system is structured, they will argue, commissioners first act as legislators supporting efforts of their agency, and then must change hats and become judges when the matter is up for resolution. They will contend that other regulators in other agencies have long voiced opinions about proposed rules prior to their being voted on by the respective commissions.