Benjamin L. Grabosky

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

IN THE MATI'ER OF BENJAMIN L. GRABOSKY AND SAMUEL GRABOSKY, TRADING AS GRABOSKY BROTHERS COMPLAINT, I<'INDI:-\GS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF REC. 2 (1!) OF AN ACT· OF CONGRESS APPHOVED OCT. l:i, 1914, AS AMENDED BY ACT OF JUNE HI, 1!130 Docket 4740. Complaint, Mar. 2G, 1942-Deciswn, Apr. 6, 1943 Where a firm, engaged in the manufacture and interstate sale and distribution of cigars to retail drug chains and independent retailers- Contracted to make, and made, valuable payments to certain selected chain store customers, as compensation for the furnishing of services or !acUities, such as counter, showca.se, ot' wiwlow displays for the advertising of their cigars, ·making payments amounting to as much as $255 a month to a single customer on the basis of $1.fi0 per month per branch stot·e, and to as much as $500 a month on a fiat sum basis, while refusing ft·equent requests to make such payments available on proportionally equal or any terms to independent retail customers and other chain store customers who were able and wllllng to furnish the same services and facilities and were competiti-ve with customers compensated as aforesaid: I1cld, That aforesaid payments, and contracts for such payments, were in violation of subsection (d) of sec. 2 of the Clayton Act, as amended. llfr. lV. O.l{ern for the Commission.

Blumberg <f: Kleeblatt, of New York City, for respondents. CO:!IIPLAINT The Federal Trade Commission, havin~ reason to believe that the parties respol~<lent named. in the caption hereof and hereinafter more particularly designated and <lt>scribed, since June 19, 1936, have violut('d anJ. are uow violating the provisions of subsection (d) of srction 2 of the Clayton Art (U. S. C. title 15, sec. 13) as amended by the Robinson-J>atman Act, approved June 19, 1936, hereby issues its complaint, stating its charges with respect thereto as follows:

PARAGRAPH 1. Respondents, Benjamin L. Grabosky and Samuel Grabosky, are copartners, tra<ling as Gtabosky Bros., having their principal office and place of business at Northeast Corner Eleventh and Wood Streets, Philadelphia, Pu. Respondent's operate and maintain manufacturing plants at Philadelphia, Pa., and at Perth Amboy, N.J.

PAR. 2. Respondents are now, and have been since June 19, 1936, engaged in the manufacture, sale, and distribution of cigars. Re- Findings 36F.T.C.

spondents sell and distribute their cigars to purchasers in the vari· ous States of the United States and in the District of Columbia, and cause the said cigars, when sold, to be shipped and transporte<;l from the States in which they are manufactured across State lines to the purchasers thereof in other States of the United States and in the District of Columbia. There is, and has been at all times men~ tioned herein, a constant current of trade and commerce in the said cigars between the respondents and purchasers in other States. Respondents' cigars are sold by them for use, consumption, or resale within the United States and in the District of Columbia. PAn. 3. In the course and conduct of their business respondents sell their cigars to retail drug chains and to independent retailersi who in turn sell to the consuming public. Respondents, since June 19, 1936, have contracted to make and have made, and are now mak· ing, valuable payments to some of their chain store customers se· lected by respondents, as compensation or in consideration for. the furnishing by the said selected customers of services or facilities, such as counter, showcase, or window displays, for the advertising of respondents' cigars. Respondents have not made such payments ~r considerations available on proportionally equal terms to all o~ their customers competing with the aforesaid compensated customers in the distribution of respondents' cigars. As examples of these practices respondents, during. such period, as consideration for the aforesaid displays, have contracted to pay and have paid some chain store customers $1.50 per month per branch store, the total monthly payments amounting to as much us $255 to a single customer. 'With other chain store customers respondents have contracted to pay and have paid, during such period, flat sums for the said displays amounting to us much as $500 per month to a siugle customrr. Although often requested so to do by respondents' independent retailer customers and other chain store cus .. tomers competing with these compensutrd customers, and who are able and willing to furnish the same services and facilities, respond· cnts have refused to make such payments available to them on proportionally equal terms, or on any terms. PAn. 4. The above-described acts and practices of respondents are in violation of subsection (d) of section 2 of the Clayton Act as amended by the llobinson-Putman Act, approved June 19, 1936 (U.S. C. title 15, sec. 13}.

llEronT, FINDINGS AS TO TIIE F Acrs, AND ORDER Pursuant to the provisions of an act of Congress approved Oct. 15, 1914, entitled "An Act to supplement existing laws against unlawful GRABOSKY BROTHERS 479 477 Findings restraints and monopolies, and for other purposes" (the Clayton Act), as amended by the Robinson~Patman Act, approved June 19, 1936 (U. S. C. title 15, sec. 13), the Federal Trade Commission, on the 26th day of 1\farch, 1942, issued, and thereafter served, its complaint in this proceeding upon· the respondents, Benjamin L. Grabosky and Samuel Grabosky, individuals, trading as Grabosky Bros., charging them with violation of the provisions of subsection (d) of sec. 2 of the said act, as amended. After the issuance and service of the said complaint and the filing of respondents' answer, the Commission, by order entered herein, granted respondents' motion for permission to withdraw said answer and to substitute therefor an amended answer admitting all the material allegations of fact set forth in said complaint and waiving all intervening procedure and further hearing relating thereto, such admis~ions of fact being solely for the purpose of this proceeding, the enforcement or review thereof in the Circuit Court of Appeals or the Supreme Court of the United States or in any other court proceeding instituted by the Federal Trade Commission for its enforcement. Thereafter this proceeding regularly came on for final hearing before the Commission on said complaint and amended answer, and the Commission, having duly considered the same and being now fully advised in the premises, makes this its findings as to the facts and its conclusion drawn therefrom. FINDINGS AS,'l'O TITE FACTS PARAGRAPH 1. Respondents, Benjamin L. Grabosky and Samuel Grabosky, are copartners, trading as Grabosky Brothers, having their principal office and place of business at Northeast Corner Eleventh and \Vood Streets, Philadelphia, Pu. Respondents operate and maintain manufacturing plants at Philadelphia, Pa., and at Perth Amboy, N. J.

PAn. 2. Responuents are now, and have been since June 19, 1936, engaged in the manufacture, sale and distribution of cigars. Re- !Spondents sell and distribute their cigars to purchasers in the various States of the United States and in the District of Columbia, and cause the said cigars, when solu, to Le shipped and transported from the States in which they nre manufactured across State lines to the purchasers thereof in other States of the United States and in the District of Columbia. There is, and has been at all times since the above date, a constant current of trade and commerce in the said cigars between the respondents and purchasers in oth<'r States. Respondents' cigars are solu by them for use, .consumption or resale within the United States and in the District of Columbia. Ordet• 36 1<'. T. C. P .AR. 3. In the course and conduct of their business respondents sell their cigars to retail drug chains and to independent retailers, who in turn sell to the consuming public. Hespondents, since June 19, 1936, have contracted to make and have made, nnd are now making, valuable payments to some of their chain store customers selected by respondents, as compensation or in consideration for the furnishing by the said selected customers of services or facilities, such as counter, showcase or window displays, for the advertising of respondents' cigars. Hespondents have not made such payments or considerations available on proportionally equal terms to all of their customers competing with the aforesaid compensated customers in the distribution of respondents' cigars.

As examples of these practices respondents, during such period, as consideration for the aforesaid displays, have eontracteJ to pay and have paid some chain store customers $1.50 pel' month per branch store, the total monthly payments amounting to as much as $255 to a single customer'. 1With other chain store customers respondents have contracted to pay and have paid, during such period, flat sums for the said displays amounting to as much as $500 per month to a single customer. Although often requestecl so to do by respondents' independent retailer customers and other chain store customers competing with these compensated customers, and who are able and willing to furnish the same services anJ facilities, i·respondent.s have refused to make such payments available to them on proportionally equal terms, or on any terms.

CONCJ,USION The aforesaid payments, nnJ. contracts for such payments, as herein found, are in violation of subsection (d) of section 2 of un act of Congress approwd October 15, 1914, entitled "An net to supplement existing laws against unlawful restraints and monopolies, anJ for other purposes" (the Clayton Act), ns amended by the Robinson- Patman Act, approved June 19, 193G (U.S. C. title 15, sec. 13). OHDF.R TO CF..\iie A~D DESIST This proceeding having been heard by the Federal Trade Commis. sion upon the complaint of the Commission and the amended answer of re~pondents, in wh ieh amended answer re~pon<lents admit all the materialall(lgations of fact S<'t forth in said complaint and state that they wah·e all int(lrvening procPdur(l and further hearing us to said facts, and the Commission having m:Hle its findings as to the facts and its conclusion flwt respondents have violated the provisions of sub- GRABOSKY BROTHERS 481 477 Order section (d) of section 2 of the Clayton Act, us amended by the Robinson-Pat.man Act, approved June 19, 1936 (U.S. C. title 15, sec. 13). It ia ordered, That the respondents, Denjamin L. Grabosky and Samuel Grabosky, individually, and trading under the name of Grabosky Dros., or trading under any other name, their representatives, agents, and employees, jointly or severally, directly or through any corporate or other device, in connection with the sale of, any of responde)nts' cigars in commerce, as "commerce" js defined in the said Clayton Act, do forthwith cease and desist: From paying or contracting to pay, or grunting or allowing anything of value to or for the benefit of any customer as compensation or in consideration of any counter, showcase or window displays or other services or facilities furnished by or through such customer in connection with the processing, handling, sale, or offering :for sale of any such product or commodity, unless finch payments or allowances are available on proportionally equal terms to all other customers competing with such compensated customers in the distribution of such product or commodity.

It ia further ordered, That the respondents, Denjamin L. Grabosky and Samuel Grabosky, individuals, trading as Grabosky Dros., shall, within 60 days after service upon· them of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which they have complied with the order to cease and desist herein set forth.

Complaint 36F.T.C.