J.D. Fine Candy Co

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IN THE !fATI'ER OF J.D. FINE, TRADING AS J.D. FINE CANDY COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. :i OF AN ACT 'OF CONGRESS APPROVED SEPT. 26, 1914 Doclo;et 4709. Complaint, Feb. 13, 1942-Decision, Apr. 13, 194~ Where an Individual, engaged In the manufacture and competitive Interstate sale and distribution of assortments of candy so packed or assembled as to Involve the use of games of chance, gift enterprises, or lottery schemes when sold and distributed to the consumers, a typical assortment being com· posed of 72 uniform pieces of candy together with a push card for use in their sale under a plan by which purchaser of 1 for 5 cents became entitled to a push and, if he pushed one of certain numbers, was entitled to exchange bls candy piece for from 2 to 4 of said pieces- Sold such assortments to wholesalers, jobbers and retailers, by whom they were exposed and sold to the purchasing public In accordance with aforesaid sales plan Involving game of chance or sale of chance to procure candy at prices much less than Its normal retail price; and thereby supplied to and placed In- the bands of others means of conducting lotteries In the sale of his productst contrary to an established public policy of the United States Government, and in competition with many who do not uae any method Involving chance or contrary to public policy; With the result that many persons were attracted by such sales plan and thereby Induced to buy and sell his products In preference to those of said competitors, with tendency and capacity thereby to unfairly divert trode to him from them:

Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and injury of the public and his competitors, and constituted unfair methods of competition fn commerce and unfair acts and practices therein.

Mr. J. W. Brookfield, Jr. for the Commission. Mr. D. G. Johnson, o£ Oklahoma City, Okla., £or respondent. COMPLAINT Pursuant to the provisions o£ the Federal Trade Commission Act, and by virtue o£ the authority vested in it by said act, the Federal Trade Commission, having reason to believe that J.D. Fine, an indi· vidual trading as J. D. Fine Candy Co., hereinafter referred to as respondent, has violated the provisions o£ said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the interest of the public, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, J.D. Fine, is an individual trading and doing business under the name of J. D. Fine Candy Co., with his J. D. FINE CANDY CO. 1067 1066 Complaint office and principal place of business located at 222 Northwest Fourth Street, Oklahoma City, Okla. Respondent is now, and for more than 6 months last past has been, engaged in the manufacture and in the sale and distribution of candy to wholesale dealers, jobbers, and retail dealers located at points in the various States of the United States and in the District of Columbia. Respondent causes and has caused said candy, when sold, to be transported from his place of business in Oklahoma City, Okla., to purchasers thereof at their respective points of location in various States of the United States other than Oklahoma and in the District of Columbia. There is now, and has been for more than 6 months last past, a course of trade by ~respondent in such candy in commerce between and among the vanous States of the United States and in the District of Columbia. In the course and conduct of said business respondent is and has been in competition with other individuals and with partnerships and corporations engaged in the sale and distribution of candy in commerce between and among(J' the various States of the United States and in the District of Colu~bia.

PAR. 2. In the course and conduct of his business, as described in ~aragraph 1 hereof, respondent sells and has sold to wholesale dealers, Jobbers and retail dealers, certain assortments of candy s9 packed an~ assembled as to involve the use of games of chance, gift enter- Prises, or lottery schemes when sold and distributed to the consumers thereof. One of said assortments is hereinafter described for the purp?se of showing the method used by respondent, and is as follows: ;I'his assortment includes 72 pieces of candy of like size and shape and ; push card. Appearing on the face or the push card is the following egend:

KnEMY DIP GOOD CANDY .ADVERTISING IS MEDIUM: 5¢ llii:.AI.TBFUL You Buy A Five Cent Kremy Dip And Get One Pu.sh FREE If You push out One of the Following Numbers or Last Push you can exchange (without extra cost) The 5¢ KREMY DIP for the MEBCliANDISE INDICATED.

No. 13, Four 5¢ Kremy Dips No. 23, Three 5¢ Kremy Dips Numbers 5, 10, 20, 25, 30, 40, 50, GO----------- 'lwo 5¢ Kremy Dips LAST PUSH, LARGE BOX HAND ROLLED CHOCOLATES .Said candy is distributed to the purchasin(Y public in accordance 'With the foregoing. legend and in the followi~(Y0 manner: Push card Complaint 34F.T.C.

contains 60 pushes, each concealing a number. Said numbers are not therein arranged in numerical sequence. Each purchaser of a "Kremy Dip'' candy is entitled to a push. If he pushes 1 of the numbers designated on the card, he receives 2 or more additional pieces of candy without the payment of any additional sum. If he pushes 1 of the other numbers, he receives only the 1 Kremy Dip. The numbers are effectively concealed from purchasers and prospective purchasers until a push selection has been made and a: disk separated from the board. The fact as to whether a purchaser of the candy and push receives 1 or more than 1 piece of candy for his purchase price is thus determined wholly by lot or chance.

The respondent furnishes and has furnished various push board and candy assortments for use in the sa]e and distribution of his candy by means of a game of chance, gift enterprise, or lottery scheme. Such push boards or push cards and candy assortments are similar to the one herein described and vary only in detail. PAR. 3. Retail dealers who purchase respondent's candy, directly or indirectly, expose and sell the same to the purchasing public in accordance with the sales plan aforesaid. Respondent thus supplies to and places in the hands of others the means of conducting lotteries in the sale of his products, in accordance with the sales plan herein~ above set" forth. The use by respondent of said sales plan or method in the sale of his candy, and the sale of said candy by and through the use thereof and by the aid of said sales plan or method, is a practice of a sort whicll is contrary to an established public policy of the Government of the United States.

PAR. 4. The !iale of candy to the purchasing public by the method or plan hereinabove set forth involves a game of chance or the sale of a chance to procure c:mdy at prices much less than the normal retail price thereof. Many persons, firms and corporations who sell and distribute candy in competition with respondent, as above alleged, do not use said method or any method involving a game of chance and the selling of 11 chance to win something by chance, or any other method contrary to public policy. Many persons are attracted by said sales plan or method employed by respondent in the sale or dis· tribution of his candy and in the element of chance involved therein1 and are thereby induced to buy and sell respondent's candy in prefer· ence to candy of said competitors of respondent who do not use the same or equivalent methods. The use of said method by re~pondent, because of said game of chance, has a tendency and capacity to un .. fairly divert trade in commerce between and among the various States of the United States and in the District of Columbia to respondent J. D. FINE CANDY CO. 1069 ]066 Findings from his said competitors who do not use the same or equivalent methods.

PAR. 5. The aforesaid nets and practices of respondent as herein alleged are all to the prejudice and injury of the public and of re· spondent's competitors, and constitute unfair methods of competition in commerce and unfair 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 February 13, 1942, issued and subsequently served its complaint in this proceeding upon respondent, J.D. Fine, an individual, trading as J.D. Fine Candy Co., charging him with the use of unfair methods of competition and unfair acts and practices in commerce in violation of the provisions of said ad. On March 16, 1942, the respondent filed his answer, in which answer he admitted all the material allegations of fact set forth in said complaint and waived all intervening procedure and further hearing as to said facts. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said complaint and the answer thereto; 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, J.D. Fine, is an individual, trading and doing business under the name of J. D. Fine Candy Co., with his _office and principal place of business located at 222 Northwest Fourth Street, Oklahoma City, Okla. Respondent is now, and for more than 6 months last past has been, engaged in the manufacture and in the sale and distribution of candy to wholesale dealers; jobbers, and retail dealers located at points in the various States of the United States and in the District of Columbia. Respondent causes and has caused said candy, when sold, to be transported from his place of business in Oklamoma City, Okla., to purchasers thereof at their respective points of location in various States of the United States other than Oklahoma and in the District of Columbia. There is now, and has been for more than 6 months last past, a course of trade by respondent in such candy in commerce between and among the various States of the United States and in the District of Columbia. Findings 34F.T.O.

In the course and conduct of said business respondent is and has been in competition with other individuals and with partnerships and corporations engaged in the sale and distribution of candy in commerce between and among the various States of the United States and in the District of Columbia.

P .AR. 2. In the course and conduct of his business, as described in paragraph 1 hereof, respondent sells and has sold to wholesale dealers, jobbers, and retail dealers, certain assortments of candy so packed .and assembled as to involve the use of games of chance, gift enterprises, or lottery schemes when sold and distributed to the consumers thereof. One of said assortments is hereinafter described for the purpose of showing the method used by respondent, and is as follows: This assortment includes 72. pieces of candy of like size and shape and a push card. Appearing on the face of the push card is the following legend: ' KREMY DIP GOOD CANDY ADVERTISING IS MEDIUM HEALTHFUL You Buy A. Five Cent Kremy Dip And Get One Push FREE If you push out One of the Following Numbers or Last Push you can exchange (without extra cost) The 5¢ KREMY DIP for the MEB· CHANDISE INDICATFD.

No. 13, Four 5¢ Kremy Dips No. 23, Three 5¢ Kremy Dips Numbers 5, 10, 20, 25, 30, 40, 50, 60----------- Two 5¢ Kremy Dips LAST PUSH, LARGE BOX HAND BOLIJID dHOCOLATEB Said candy is distributed to the purchasing public in accordance with the foregoing legend and in the following .manner: Push card contains 60 pushes, each concealing a number. Said numbers are not therein arranged in numerical sequence. Each purchaser of a "Kremy Dip" candy is entitled to a push. If he pushes 1 of the numbers designated on the card, he receives 2 or more additional pieces of candy without the payment of any additional sum. If he pushes 1 of the other numbers, he receives only the 1 Kremy Dip. The numbers are effectively concealed from purchasers and prospective purchasers until a push selection has been made and a disk separated from the board. The fact as to whether a purchaser of the candy and push receives 1 or more than 1 piece of candy for his purchase price is thus determined wholly by lot or chance.

The respondent furnishes and has furnished various push board and candy assortments for use in the sale and distribution of his J. D. FINE CANDY CO. 1071 1066 Order candy by means of a game of chance, gift enterprise, or lottery scheme. Such push boards or push cards and candy assortments are similar to the one herein described and vary only in detail. PAR. 3. Retail dealers who purchase respondent's candy, directly or indirectly, expose and sell the same to the purchasing public in accordance with the sales plan aforesaid. Respondent thus supplies to and places in the hands of others the means of conducting lotteries in the sale of his products, in accordance with the sales plan hereinabove set forth. The use by respondent of said sales plan or method in the sale of his candy, and the sale of said candy by and through the use thereof and by the aid of said sales plan or method, is a practice of a sort which is contrary to an established public policy of the Government of the United States.

PAR. 4. The sale of candy to the purchasing public by the method or plan hereinabove set forth involves a game of 'chance or the sale of a chance to procure candy at prices much less than the normal retail price thereof. Many persons, firms and corporations who sell and distribute candy in competition with respondent, as above :found, do not use said method or any method involving a game of chance and the selling of a chance to win something by chance, or any other method contrary to public policy. Many persons are attracted by said sales plan or method employed by respondent in the sale or distribution of his candy and in the element of chance involve<l there- ·in, and are thereby induced to buy and sell respondent's candy in preference to candy of said competitors of respondent who do not use the same or equivalent methods. The use of said method by respondent, because of said game of chance, has a tendency and capacity to unfairly divert trade in commerce between and among the various States of the United States and in the District of Columbia to respondent from his said competitors who do not use the same or equivalent methods.

CONCLUSION The aforesaid acts and practices of 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 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 on the complaint of the Commission and the answer of respond- Order 34F.T.C.

ent, in which answer respondent admits all of the material allegations of fact set forth in said complaint, and states that he waives all intervening proceeding and further hearing as to 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 respondent, J. D. Fine, individually, and trading as J. D. Fine Candy Co., or trading under any other name or names, his representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of candy or any other merchandise in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Selling or distributing candy, or any other merchandise, so packed or assembled that sales of such candy or other merchandise to the general public are to be.made, or may be made, by means of a game of chance, gift enterprise, or lottery scheme. 2. Supplying to or placing in the hands of others push or pull cards, punchboards, or other lottery devices, either with assortments of candy or other merchandise or separately, which said push or pull cards, punchboards, or other lottery devices are to be used, or may be used, in selling or distributing such candy or other merchandise to the public.

3. Selling or otherwise disposing of 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 him of this order, file with the Commission a report in writing setting forth in detail the manner and form in which he has complied with this order.

HOUBIGANT, INC., ET .AL. 1073 Complaint