FTC can
issue
rules,
after all
By CAROLE SHIFRIN
(c) 1973, The Washington Post
WASHINGTON — Now that its rule
making powers have been confirmed by
the courts, the Federal Trade Commission
is expected to let loose a backlog of rules it
has wanted to issue for more than a year.
The agency also is expected to propose
some additional ones.
The FTC got its shot in the arm last
month when the United States Court of
Appeals for the District of Columbia
circuit ruled that the consumer protection
agency does have the authority to issue
rules defining unfair and deceptive trade
practices.
That authority has been suspended since
April. 1972, when U.S. District Court Judge
Aubrey Robinson ruled in Washington that
the agency didn’t have the authority to
require oil companies to post octane
ratings on gasoline pumps, or to make any
rules at all.
Commission officials were elated when
the unanimous three-judge appeals court
opinion was handed down. FTC chairman
Lewis Engman called the decision “great.
It appears to be a total endorsement of
commission arguments,” he said,
promising that the agency now will issue
rules which have been held in abeyance for
more than a year and propose others.
At the time of the district court decision,
the legality of a score of existing rules had
been in doubt. Also included was one
recently issued rule barring food stores
from advertising “specials” unless they
had an adequate supply of sale goods on
hand, and another requiring clothes
manufacturers to put permanent labels
with washing or cleaning instructions on
all garments.
PROCEDURES QUESTIONED
Pending rules, whose issuance was
suspended, dealt with door-to-door sales,
undelivered mail-order merchandise,
franchising operations and unfair credit
practices.
The specific rule at stake — the posting
of octane ratings — will not go into effect
immediately for the appeals court sent the
case back to the district court for a hearing
on whether the procedures the FTC used in
issuing the rule were fair.
There is also the possibility that the 34
petroleum refiners and two trade
associations which brought the challenge
will appeal to the Supreme Court. Urvan
Sternfels, an attorney for the national
petroleum refiners — one of the
associations which challenged the
association rule — said the plaintiffs
haven’t decided yet how to proceed but
probably would do so within the next week.
The rule, which would have gone into
effect in March, 1972, was designed to tell
motorists the octahe ratings of the various
gasolines available to them to help them
make better buying decisions. Each auto
engine needs gasoline with an octane
number high enough to prevent knocking,
but gasoline with a higher-than-needed
rating usually costs more and adds nothing
to the car’s performance.
Motorists pay between $50 and $75 too
much each year for gasoline with a higher
octane number than their cars need,
commission staff estimated. Failure to
post octane numbers would have been
considered an “unfair method of com
petition” under the rule and companies
could have been sued for violations.
THE ONLY WAY
A spate of differing state regulations
requiring octane ratings could cause oil
companies with interstate business much
more trouble and expense than the FTC’s
rule with nationwide application.
Although in business since 1914, the FTC
had been issuing rules only since 1962 when
it became increasingly convinced that the
only practical and fair way to deal with
industry-wide practices it believed illegal
was through broad rules binding on all in
ihe industry, and promulgated after all
who had an interest in a proposed rules
had a chance to convey their views to the
agency.
Noting that the agency is required under
the administrative procedure act to allow
the public “a significant opportunity” to
present views in a rule-making procedure,
and that any rules are subject to judicial
review, the Court of Appeals said, “Any
fears that the agency could successfully
use rule-making power as a means of
oppressive or unreasonable regulation
seem exaggerated. .
Although the agency had moved along
with work on some of the rules so that they
could be issued if their authority was
confirmed, it is clear that an adverse
decision would have severely hampered
the resource-limited agency in its antitrust
enforcement and consumer protection
work. The Court of Appeals said in its
decision that the result of the lower court
opinion “would render the commission
ineffective to do the job assigned it by
Congress.”
The appeals court panel, comprised of
Chief Judge David Bazelon and Circuit
Judges J. Skelly Wright and Spottswood
Robinson III, endorsed the agency’s
contention that, in fact, rule-making “was
fairer to industry than case-by-case ad
judication.”
The issue of the octane-rating rule and
rule-making generally, should this
decision be appealed, is not yet resolved.
The refiners’ lawyer suggests that at least
two of the three judges in the panel are
considered “liberal” and could be
reversed in the high court.
Others note that the supreme court has
come down on the side of the agencies in
recent decisions when the question of their
powers was raised.
A standoff: Energy, ecology, Indians rights
By GEORGE C. WILSON
<C) I973, The Washington Post
LAME DEER, Mont. — The
political leaders on this northern
Cheyenne reservation close to the
Custer battlefield are preparing
for another last stand — this time
to save what land they have left
from being strip-mined for coal
on the white man’s terms.
The stakes could hardly be
higher. For the Northern
Cheyennes, the stakes include
“tribal survival,” as some of the
Indians here see it; millions —
and maybe billions — of dollars,
and the land Cheyenne forbears
walked from Oklahoma to claim
for their people.
For the Nixon Administration,
the contest is viewed as a highly
visible test of its new Indian
policy of “self-determination,”
with another Wounded Knee a
possibility if things go wrong. It
also affects the Administration’s
master plan for finding new
sources of energy, and holds up
for public evaluation its whole
platform on safeguarding the
natural environment.
The order of battle is different
from when Gen. George Arm
strong Custer lost to the
Cheyennes and Sioux near here in
the Little Big Horn battle of 1876.
For one thing, the white ranchers
holding thousands of acres of
land around the reservation are
allied this time with Cheyennes
against the coal companies. For
another, the Cheyennes are not as
united against the “intruders” as
they were 97 years ago.
The “intruders,” from the
viewpoint of the Indians trying to
mobilize the Cheyennes against
them, are the coal companies and
speculators who have discovered
millions of tons of coal just under
the surface of the reservation.
They want to dig it out through
strip mining.
Somewhat belatedly, the tribal
council — the ruling body for the
3,000 Northern Cheyenne enrolled
at the reservation — is trying to
keep the coal from being mined
as previously agreed under
existing leases.
The council in March asked
Secretary of Interior Rogers
Morton to cancel the contracts
for looking for coal on the
reservation and digging it out.
The council argued that the
Bureau of Indian Affairs
superintendent at the reservation
failed to follow required
procedures in granting the
permits and leases, including
failing to set forth rules for
restoring the land after it is
mined
The Seattle law firm of Ziontz,
Pirtle, Morisset and Emstoff —
specialists in Indian land law —
has just been retained by the
Northern Cheyenne tribe. The
firm asked Morton to delay ac
ting on the council resolution
until it had time to study the
whole case — a request that the
Interior Department has gran
ted
RIP UP FOR RIP-OFF?
How Morton ultimately rules
will affect coal leases on other
Indian reservations as well,
including the coal-rich lands of
the Crows adjacent to the Nor
thern Cheyennes here.
The Indians’ concern about
what will happen to their land if it
is strip-mined also is part of the
larger national picture — the
argument over whether it is
environmentally safe and sound
to rip up the often fragile prairies
to get at the coal.
The controversy, in geographic
and mineral dimensions, is much
larger than the one over strip
mining of Applachia. This is
because most of the nation’s
remaining coal within easy reach
lies in the West, not the East.
The Library of Congress, in a
report prepared this year for the
Senate Interior Committee, noted
that almost half of the western
lode of “black gold” is in Mon
tana. North Dakota and Wyoming
— the new frontier for the strip
miners.
With President Nixon urging a
stepup in coal production to ease
expected energy shortages, the
coal rush in the West is on. So,
again, the Cheyenne controversy
represents in microcosm the
tough choices which this rush
presents to the people living on
top of the land covering the coal.
Rep. John Melcher (D-Mont.),
whose congressional district
includes the reservation and who
has taken a leading role in con
trolling strip mining, said that on
the southwest flatlands of Black
Mesa and Four Corners — the
area where Arizona, New
Mexico, Utah and Colorado meet
— “they had development before
they had protection” from strip
mining.
The same thing must not
happen in Montana and other
western states where strip
mining is just getting started, he
said. “We must have protection
before we have development,”
Melcher said. He added that the
Indians’ “sacred regard for
land” and their conviction “it
should be protected so it can be
used by everybody” is “an at
titude the rest of us are just
swinging around to.”
The Indians and their allies
among the white ranchers trying
to keep the land from being
stripped are colliding with the
Nixon Administration master
plan to develop the energy
resources of the West. Allen
Rowland, the 47-year-old tribal
chairman of the Northern
Cheyennes, is the first to admit
he is outgunned in this new fight.
The land involved — a country
of prairie and roughed-rock
parapets — looks refreshingly
untrammeled, with seemingly
endless sky and prairie. In an
interview in his modest ho1 ne off
the red dirt road along
a muddy creek, Rowland said if
it’s left up to him, the land he
loves will stay this way. He is
against strip mining on any
terms. But he is not sure the
whole tribe — perhaps not even
the majority of it — stands with
him. the council resolution
asking a cancellation of the coal
leases and permits is only his
first line of defense.
If he does lose to the Interior
Department, Rowland plans to
set up a second defense line by
taking the tribe’s request to the
courts. If he loses there, too, the
tribal chairman intends to im
pose the toughest rules anywhere
concerning what the coal com
panies would have to do toward
restoring the dug-up land.
As he surveys the options,
Rowla d said he can feel the
hungdi of his fellow tribesmen for
a way out of their spiritual and
economic depression on the
impoverished reservation of
440,000 acres. He knows they are
faced with a cruel choice.
“If I got everybody in the tribe
in a room and asked who is an
environmentalist, who is for
protecting our land, why
everybody would raise their right
hand. But when it came to voting
by secret ballot who was for
selling the coal I’m not sure how
it would go.”
This is why Rowland is not
galloping into the battle with the
Interior Department and coal
companies but advancing
carefully.