No Protection for Trojan Condom Maker From FTC Probe - Contract Law - DC Circuit
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No Protection for Trojan Condom Maker From FTC Probe

In the eyes of the law, size does matter.

The D.C. Circuit Court of Appeals ruled in favor of the Federal Trade Commission on Tuesday, holding that the agency's subpoena and civil investigative demands of Trojan brand condom maker Church & Dwight Co. were appropriate.

The large subpoena suit is part of a long-running dispute with federal trade regulators regarding the company's possible monopolistic tactics in the condom market.

The company argued that the scope of the FTC probe was just too broad.

Attorneys for the Princeton, New Jersey-based company strenuously tried to squash or limit the scope of the subpoena, stating it required unnecessary information about the sale of other Church & Dwight products. The maker of "America's #1 condom" also creates such staples as toothpaste, cat litter and baking soda under the Arm & Hammer brand.

Both a U.S. District Court and the D.C. Circuit found the information "reasonably relevant" and not "unduly burdensome", however, since the FTC requested information regarding discounts or rebates given to retailers based on the percentage of shelf space available to "Trojan brand condoms and other products."

Although the company would have liked the court to interpret the statement to mean other [condom] products, the D.C. Circuit held that the subpoena had a longer reach since the company is accused of bundling discounts and tying sales to multiple products.

The D.C. Circuit partially based its holding on a Third Circuit decision construing bundling rebates for multiple products as a potentially monopolistic practice. It also preferred previous courts' decisions to defer to the agency's interpretation of the scope of the investigation.

Despite what some may argue, the scope of a subpoena is usually big enough.

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