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National Petroleum Refiners Assn. v. Federal Trade Commission

United States Court of Appeals for the District of Columbia
482 F.2d 672 (D.C. Cir. 1973), cert. denied, 415 U.S. 951 (1974)


The Federal Trade Commission (FTC) (defendant) decided to make a rule declaring that the failure to post octane rating numbers on gasoline pumps at service stations was an unfair method of competition and an unfair or deceptive act or practice. Two trade associations and 34 gasoline refining companies (plaintiffs) brought suit to challenge the FTC’s authority to make substantive rules of business conduct, termed by the FTC “Trade Regulation Rules”, under the Trade Commission Act (Act). Section 5 of the Act empowers the FTC to prevent unfair methods of competition by means of an issuance of a complaint, hearing, findings as to fact, and issuance of a cease and desist order. Section 6(g) provides that the FTC may make “rules and regulations for the purposes of carrying out the provisions of [Section 5].” Plaintiffs argued that since Section 5 mentions only adjudication as the means of enforcement, rulemaking is contrary to the legislative design. The district court agreed. Plaintiffs appealed.

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