Jordan Stevens Co

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IN THE MA Tler OF JORDAN STEVENS COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SIDE. 5 OF AN ACT OF CO.SGRESS APPROVED SEPT. 26, 1914 Docket .fi!69. Complaint, Aug. '27, 1940-Decision, Oct. 7, 1940 Where a corporation engaged in sale and distribution of coffee, including certain assortments thereof which were so packed and assembled as to involve use of a lottery scheme when sold and distributed to the consumers thereof, and which included (1) 100 1-pound packages of said product and 25-piece set of dishes, together with advertising poster or card for use in sale and distribution of product and dishes under a plan in accordance with which that purchaser of pound of coffee whose name was placed on card opposite number corresponding to number concealed under card's seal received, without additional cost, such 25-piece set of dishes, and others not successful in so doing secured only coffee purchased by them; and (2) various other assortments of coffee involving lot or chance feature and sales plans or methods which were similar to that above described and from which they varied in detail only- Sold said assortments to dealer or retailer purchasers, by whom, as direct or indirect buyers thereof, same were exposed and sold to put·chasing public in accordance with such sales plans, involving game of chance or sale of a chance to procure set of dishes without cost, and thereby supplied too and placed in the bands of others means of conducting lotteries in sale of its said merchandise in accordance with such sales plans or methods, contrary to an established public policy of the United States Government and in violation of criminal laws, and in competition with many who sell and distribute coffee and are unwilling to adopt and use said or any method involving use of a game of chance or sale of a chance to win something by chance, or any other method contrary to public policy, and refrain therefrom;

With the result that many persons were attracted by its said methods and by element of chance involved in sale of coffee as above described, and were thereby induced to buy and sell its product in preference to that offered and sold by said competitors who do not use same or equivalent method, and with effect, tht·ough use of such methods and because of said game of chance, of unfairly diverting trade to it f1·om its competitors aforesaid, who do not use such or equivalent methods; to the substantial injury of competition in commerce:

Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and injury of the public and competitors, and con· stituted unfair methods of competition in commerce, and unfair and deceptive acts and practices therein.

Mr. D. 0. Daniel for the Commission.

Complaint 31 F.T.C. Complaint Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that Jordan Stevens Co., a corporation, hereinafter referred to as respondent, has violated the provisions of said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

'paragraph 1. Respondent, Jordan Stevens Co., is a corporation organized and existing under the laws of the State of Delaware, with its principal office and place of business located at 200 Third A venue, North, Minneapolis, l\Iinn. Respondent is now., and for more than 2 years last past has been, engaged in the sale and distribution of coffee to dealers located in various States of the United States. It causes and has caused said coffee, when sold, to be shipped or transported from its aforesaid place of business in the State of Minnesota to purchasers thereof in various other States of the United States at their respective points of location. There is now, and for more than 2 years last past has been, a course of trade by said respondent in such coffee in commerce between and among the various States of the United States. In the course and conduct of said business, respondent is and has been in competition with other corporations and with individuals and partnerships engaged in the sale and distribution of like or similar merchandise in commerce between and among the various States of the United Stat~s.

PAn. 2. In the course and conduct of its business as described in paragraph 1 hereof, respondent sells and has sold certain assortments of said coffee, so packed and assembled as to involve the use of a lottery scheme when said coffee is sold and distributed to the consumers thereof. One of said assortments was, and is, sold and distributed to the purchasing public in the following manner: This assortment consists of 100 1-pound packages of coffee and a 25-piece set of dishes, together with an advertising poster or card. Said card has space provided for the recording of 100 names, and the name of the purchaser of each pound of said coffee is recorded on the said card. The card contains a seal and concealed under said seal is a number corresponding to one of said numbers appearing elsewhere on said card. When the 100 pounds of coffee have been sold, the seal is removed and the number thereunder is disclosed. The person whose name is recorded opposite the number corresponding to the number under the seal is entitled to and receives, without additional cost, the JORDAN STEVENS CO. 1071 1069 Complaint said 25-piece set of dishes. The number under said seal is concealed from purchasers and prospective purchasers until the 100 pounds of coffee have been sold and all of the names recorded on said card. Persons who are not successful in securing the set of dishes secure only the coffee purchased by them. The said set of dishes is thus distributed wholly by lot or chance. Respondent sells and distributes, and has sold and distributed, various assortments of coffee involving a lot or chance feature, but the sales plans or methods employed in connection with each of said assortments are similar to the one hereinabove described, varying only in detail.

PAR. 3. Retail dealers who purchase respondent's said assortments of coffee, directly or indirectly, expose and sell the same to the purchasing public in accordance with the aforesaid sales plans. Respondent thus supplies to and places in the hands of others a means of conducting lotteries in the sale of its merchandise in accordance with the sales plans or methods hereinabove set forth. The use by respondent of said methods in the sale of its coffee and the sale of said coffee by and through the use thereof and by the aid of said methods is a practice of the sort which is contrary to an established public policy of the Government of the United States and in violation of criminal laws.

PAR. 4. The sale of coffee to the purchasing public in the manner above alleged involves a game of chance or the sale of a chance to procure a set of dishes without cost. Many persons, firms, and corporations who sell and distribute coffee in competition with the respondent, as above alleged, are unwilling to adopt and use said methods or any method involving the use of a game of chance or the sale of a chance to win something by chance, or any other method which is contrary to public policy, and such competitors refrain therefrom. Many persons are attracted by respondent's said methods and by the element of chance involved in the sale of coffee in the manner above alleged and are thereby induced to buy and sell respondent's coffee in preference to coffee offered for sale and sold by said competitors of respondent who do not use the sam~ or equivalent methods. The use of said methods by the respondent because of said game of chance has a tendency and capacity to, and does, unfairly divert trade to respondent from its competitors who do not use the same or equivalent methods in commerce between and among the various States of the United States. As a result thereof, substantial injury is being and has been done by respondent to competition in commerce between and among various States of the United States. PAR. 5. The aforesaid acts and practices of the respondent as herein alleged are all to the prejudice and injury of the public and of re- Findings 31F.T.C.

spondent's competitors and constitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on August 27, 1940, issued and on August 29, 1940, served its complaint in this proceeding upon re- ·spondent, Jordan Stevens Co., a corporation, charging it with the use of unfair methods of competition in commerce, and unfair and deceptive acts and practices in commerce in violation of the provisions of said act. Subsequently, the respondent filed its answer in which it admitted all of the material allegations of fact set forth in said complaint and waived all intervening procedure and further hearing as to said facts. Thereafter this proceeding regularly came on for final hearing before the Commission on the said complaint and answer, and the Commission having duly considered the matter and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Jordan Stevens Co., is a corporation organized and existing under the laws of the State of Delaware, with its principal office and place of business located at 200 Third Avenue, North, Minneapolis, Minn. Respondent is now, and for more than 2 years last past has been, engaged in the sale and distribution of coffee to dealers located in various States of the United States. It causes and has caused said coffee, when sold, to be shipped or transported from its aforesaid place of business in the State of Minnesota to purchasers thereof in various other States of the United States at their respective points of location. There is now, and for more than 2 years last past has been, a course of trade by said respondent in such ~offee in commerce between and among the various States of tho United States. In the course and conduct of said business, respond- -ent is, and has been, in competition with other corporations and with individuals and partnerships engaged in the sale and distribution of like or similar merchandise in commerce between and among the various States of the United States.

PAR. 2. In the course and conduct of its business as described in paragraph 1 hereof, respondent sells, and has sold, certain assortments of said coffee so packed and assembled as to involve the use of JORDAN STEVENS CO. 1073 106V Findings .a lottery scheme when said coffee is sold and distributed to the con- ~umers thereof. One of said assortments was, and is, sold and dis- -tributed to the purchasing public in the following manner: This .assortment consists of 100 1-pound packages of coffee and a 25-piece £et of dishes, together with an advertising poster or card. Said card has space provided for the recording of 100 names, and the name of the purchaser of each pound of said coffee is recorded on the said .card. The card contains a seal and concealed under said seal is a number corresponding to one of said numbers appearing elsewhere on said card. When the 100 pounds of coffee have been sold, the seal is removed and the number thereunder is disclosed. The person ""hose name is recorded opposite the number corresponding to the 1mmber under the seal is entitled to and receives, without additional .cost, the said 25-piece set of dishes. The number under said seal is (~oncealed from purchasers and prospective purchasers until the 100 J>ounds of coffee have been sold and all of the names recorded on said <'ard. Persons who are not successful in securing the set of dishe;;; secure only the coffee purchased by them. The said set of dishes is thus distributed wholly by lot or chance. Respondent sells and -distributes, and has sold and distributed, various assortments of coffee involving a lot or chance feature, but the sales plans or methods employed in connection with each of said assortments are similar to the one hereinabove described, varying only in detail. P.AR. 3. Retail dealers who purchase respondent's said assortments of coffee, directly or indirectly, expose and sell the same to the pur- -chasing public in accordance with the aforesaid sales plans. Respondent thus supplies to and places in the hands of others a means of .conducting lotteries in the sale of its merchandise in accordance with the sales plans or metho-ds hereinabove set forth. The use by J'respondent of said methods in the sale of its coffee and the sale of said coffee by and through the use thereof, and by the aid of said methods, is a practice of the sort which is contrary to an established pu~lic policy of the Government of the United States and in violation of criminal laws.

P .AR. 4. The sale of coffee to the purchasing public in the manner above described involves a game of chance or the sale of a chance to procure a set of dishes without cost. Many persons, firms, and -corporations who sell and distribute coffee in competition with the respondent, as above alleged, are unwilling to adopt and use said methods or any method involving the use of a game of chance or the sale of a· chance to win something by chance, or any other method which is contrary to public policy, and such competitors refrain therefrom. Many persons are attracted by respondent's said methods Order 31F.T.C.

nnd by the element of chance involved in the sale of coffee in the manner above described and are thereby induced to buy and sell respondent's coffee in preference to coffee offered for sale and sold by said competitors of respondent who do not use the same or equivalent methods. The use of said methods by the respondent because of !'laid game of chance has a tendency and capacity to, and does, tmfairly divert trade to respondent from its competitors who do not use the same or equivalent methods in commerce between and among the various States of the United States. As a result thereof, substantial injury is being and has been done by respondent to competition in commerce between and among various States of the United States.

CONCLUSION The aforesaid acts and practices of the respondent as herein found are all to the prejudice and injury of the public and of respondent's competitors, and constitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. 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 respondent, in which answer respondent admits all the material allegations of fact set forth in said complaint, and states that it waives all intervening procedure and further hearing as to the said facts, and the Commission having made its findings as to the :facts and conclusion that said respondent has violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondent, Jordan Stevens Co., a corporation, its officers, representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of coffee or other merchandise. in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Selling or distributing coffee or any other merchandise so packed and assembled that sales of said coffee or other merchandise 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 others push or pull cards, punchboards or other lottery devices, either with assortments of coffee or other merchandise, or separately, which said push or pull cards, JORDAN STEVENS CO. 1075 1069 Order punchboards, or other lottery devices are to be used or may be used in selling or distributing said coffee or other merchandise to the public.

3. Selling or otherwise distributing any merchandise by means of a game of chance, gift enterprise, or lottery scheme. It is further ordered, That the respondent shall, within 60 days after service upon it of this order, file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with this order.

Syllabus 31 F. T. C.