Charles N. Miller Co

Text (OCR of the scan at left; may contain errors)

IN THE l\fatter OF CHARLES N. l\filler COMPANY OPINION AND DECISION AND MODIFIED ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF .AN .ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2826. Complaint, Ua1·. 29, 1936-order, Nov. 11,, 1.936' Dismissal of complaint, hereinbefore issued, requested on ground that respond· ent had discontinued unfair methods of competition therein charged, namely, use of a lottery scheme in sale of its candy, rejected, but prior order modi· fied for reasons set forth in opinion and decision as respectively applicable. Defore Mr. Miles J. Furnas, trial examiner. Mr. Henry 0. Lank and lifr. P. 0. Kolinski for the Commission. Mr. Harold lV. Knowlton and Jacobs & Jacobs, of Boston, Mass., for respondent.

OPINION The complaint in this case charged the Charles N. Miller Company, a Massachusetts corporation, with principal office and place of busi· ·ness at Boston, in that State, with the violation of Section 5 of the Federal Trade Commission Act (38 Stat. 717, 719; 15 U.S. C. A. Sec. 45), in selling and distributing candy, in interstate commerce, by methods involving lotteries.

The respondent in due course filed answer, in which it stated that, before issuance of the complaint, it had ceased to sell its candy by the methods charged. Subsequently, it filed a second answer, admitting all the material allegations of the complaint, denying that at the time the complaint was issued or since that time it was using lottery meth· ads in the sale of its products, and waiving all further proceedings. Thereafter, the proceeding came on regularly for final hearing be· fore the Commission on the complaint and answers, and the Commis· sion, having duly considered the record and being fully advised in the premises, on August 4, 1936, made and entered its report in writing in which it stated its findings as to the facts and conclusiot1, and issued and served on respondent an order which directed the respondent, and its officers, agents, representatives, and employees, in the manufacture, E>ale, and distribution in interstate commerce of candy and candy prod· ucts, to cease and desist from :

(1) Selling and distributing to jobbers and wholesale dealers for resale to retail dealers, or to retail dealers direct, candy so packed and • For text ot eomplnint and tlndlngs, as heretofore issued, and not modiflPd, ~Pe ante at png<! 211.

CHARLES N. l\IILLER CO. 887 886 Opinion assembled that sales of such candy to the general public are to be .made or m·e designed to be made by means of a lottery, gaming device or gift enterprise;

. (2) Supplying to or placing in the hands of wholesale dealers and Jobbers or retail dealers packages or assortments of candy which are Used or are designed to be used, without alteration or rearrangement of the contents of such packages or assortments, to conduct a lottery, . gaming device or gift enterprise in the sale or distribution of the candy or candy products contained in said assortment to the public; (3) Packing or assembling in the same package or assortment, for sale to the public at retail, pieces of candy of uniform size and shape having centers of a different color, together with larger pieces of candy, which said larger pieces of candy are to be given as prizes to the purchaser procuring a piece of candy with a center of a particular color.

Respondent requested a dismissal of the complaint on the ground that it had discontinued the unfair methods of competition. Discontinuance or abandonment of such methods does not of itself constitute a ground for dismissal Only the issuance of an order to cease and desist will act as a deterrent against resumption of the unfair acts. After an order has been issued, if there is a violation, there may be a ~roceeding for enforcement without the e.xpense nnd delay incident to Instituting another case. The. Federal Trade Commission Act em- Powers the Commission to issue complaints involving unfair methods of competition that have been used, if it appears to the Commission that such proceedings would be in the public interest. It will be noted that paragraphs 1 and 2 of the order, above quoted, contain the words "are designed to." The Commission feels that a strict interpretation of these words, when referring to a method of competition employed by a respondent, might be construed as referring to the intent of such respondent; and that it would be unwise to establish a precedent by issuing an order to cease and desist which might, ~nder a certain construction, require proof of such intent. Accord- Ingly, the order will be modified by changing the words "are designed to" to the word "may."

The respondent through its counsel, seems to be a bit exercised for fear that some candy jobber or dealer might purchase some of its ''straight" merchandise and assemble the same in :t lottery assortment, Gr offer the same for sale by means of some lottery scheme. The Comlnission feels that such fears are without foundation. The language of the order, as modified, clearly indicates that, unless the respondent so Packs and assembles its merchandise in such a way that it is or may be 888 FEDERAL TRADE COl\IMISSION DECISIONS Order 23 F. T.C.

used without alteration or rearrangement as a lottery, it would not be violating the order.

Order modified by substitution of the word "may" for the words "are designed to" in paragraphs 1 and 2.

l!ODIFIED ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answer of the respondent admitting the material allegations of the complaint to be true, and waiving all further proceedings herein, and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes.'' It is orde·red, That the respondent, Charles N. Miller Co., its officers, agents, representatives, and employees, in the offering for sale, sale, and distribution in interstate commerce of candy and candy products, do cease and desist from :

(1) Selling and distributing to jobbers and wholesale dealers for resale to retail dealers, or to retail dealers direct, candy so packed and assembled that sales of such candy to the general public are to be made or may be made by means of a lottery, gaming device, or gift enterprise;

(2) Supplying to or placing in the hands of wholesale dealers and jobbers or retail dealers packages or assortments of candy which are used or may be used, without alteration or rearrangement of the con· tents of such packages or assortments, to conduct a lottery, gaming device or gift enterprise in the sale or distribution of the candy or candy products contained in said assortment to the public; (3) Packing or assembling in the same package or assortment, for sale to the public at retail, pieces of candy o'f uniform size and shape having centers of a different color, together with larger pieces of candy, which said larger pieces of candy are to be given as prizes to the purchaser procuring a piece of candy with a center of a particular color. It isfttrther ordered, That the respondent, within 30 days after the service upon it of this order, shall file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with the order to cease and desist hereinabove set forth. 1\IAJESTIC DISTILLING CO., ET AL. 889 Syllabus