Parliament Appliances, Inc.

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

In THE MATTER OF PARLIAMENT APPLIANCES, INC., ET AL.

ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 6568. Complaint, June 7, 1956—Decision, Mar. 5, 1957 Consent order requiring a Chicago seller to cease advertising falsely in connection with its home freezers and freezer food purchasing plan, that sale of the freezers was incidental to its wholesale food business, that it had a food plant, bought food by the carload for resale at wholesale prices to participants in the “plan” who could thus effect large savings, and that the freezer was given free at the end of a two-year period of participation, among other things.

Mr. Floyd O. Collins for the Commission.

Mr. Lewis W. Schlifkin, of Chicago, Ill., for respondents. Inirrau Decision sy Earu J. Kos, Heartne ExaMINEeR The complaint in this proceeding issued June 7, 1956, charges the respondents Parliament Appliances, Inc., a corporation trading as Parliament Food Plan, located at 1601 South Michigan Avenue, Chicago, Illinois, and O. G. Fishbain, M. S. Gottesman and E. M. Levin, individually and as officers of respondent corporation, whose address is the same as the corporate respondent, with violation of the provisions of the Federal Trade Commission Act in the sale of electrical appliances, including home freezers, and soliciting subscribers to a freezer food purchasing plan. After the issuance of the complaint, the respondents Parliament Appliances, Inc., a corporation trading as Parliament Food Plan, and O. G. Fishbain, individually and as an officer of respondent corporation, entered into an agreement containing consent order to cease and desist with counsel in support of the complaint, disposing of all the issues in this proceeding, which agreement was duly approved by the Director and Assistant Director of the Bureau of Litigation. It was expressly provided in said agreement that the signing thereof is for settlement purposes only and does not constitute an admission by respondents that they have violated the law as alleged in the complaint.

By the terms of said agreement, the said respondents admitted all the jurisdictional facts alleged in the complaint and agreed that the record herein may be taken as if the Commission had made findings of jurisdictional facts in accordance with the allegations. 74S FEDERAL TRADE COMMISSION DECISIONS Order 538 B.T.C..

By said agreement, the parties expressly waived any further procedural steps before the hearing examiner and the Commission; the: making of findings of fact or conclusions of law; and all the rights. they may have to challenge or contest the validity of the order to. cease and desist entered in accordance with the agreement. Respondents further agree that the order to cease and desist, issued. in accordance with said agreement, shall have the same force and effect as if made after a full hearing.

It was further provided that said agreement, together with the complaint, shall constitute the entire record herein, that the complaint herein may be used in construing the terms of the order issued pursuant to said agreement, and that said order may be altered, modified or set aside in the manner prescribed by the statute for orders of the Commission.

Attached to and made a part of said agreement were separate affidavits of respondents E. M. Levin and M. S. Gottesman supported by an affidavit of respondent O. G. Fishbain, President of said corporate respondent, to the effect that although E. M. Levin and M. S. Gottesman were Secretary and Treasurer, respectively, of corporate respondent, their said offices were nominal ones, that they at no time actively engaged in the operation or management of the respondent corporation, that they set no policy as to advising or any other policy, that their only interest in the respondent corporation was that of stockholders, and that they had no other or further interest in the said respondent corporation, that they drew no salaries from the said respondent corporation and had nothing whatsoever to do with the management or operation of the said respondent corporation. The hearing examiner has considered such agreement and the order therein contained, and, it appearing that said agreement and order provides for an appropriate disposition of this proceeding, the same is hereby accepted and is ordered filed upon becoming part of the Commission’s decision in accordance with Sections 3.21 and 3.25 of the Rules of Practice, and, in consonance with the terms of said agreement, the hearing examiner finds that the Federal Trade Commission has jurisdiction of the subject matter of this proceeding and’ of the respondents named herein, that this proceeding is in the interest of the public, and issues the following order: ORDER It is ordered, That respondents, Parliament Appliances, Inc., a corporation, and its officers, and O. G. Fishbain, individually and as an officer of respondent corporation, and respendents’ representa- PARLIAMENT APPLIANCES, INC., ET AL. 749 447 Decision tives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, or distribution of food freezers and in the solicitation of subscribers to their food purchase plan in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing directly or indirectly:

(a) That respondents buy food for resale to participants in their. freezer food purchasing plan;

(b) That respondents buy food in carload quantities; (c) That respondents are wholesale food dealers; (d) That respondents have a food plant;

(e) That respondents will place a freezer in a participant’s home and supply the necessary food for such participant for 24 months at a total cost to the participant of $12.46 per week or any other amount that is not in accordance with the facts; (f) That participation in respondents’ freezer food purchasing plan enables a participant to eliminate the retail grocer and purchase food at wholesale prices;

(g) That participation in their freezer food purchasing plan will enable a participant to effect a net saving from 25% to 50% in their food cost or any saving or percentage saving that is not in accordance with the facts;

(h) That the carrying charges on a participant’s deferred payments is 6 percent or any percent other than the true amount; (i) That participants are able to purchase all their necessary food from respondents;

(j) That the monthly payments specified in the contracts include the cost of food unless expressly limited to the food included in the initial order;

(k) That the freezer is given free at the end of a two year participation in the plan, or is ever given free; (1) That respondents’ primary business is that of selling food; (m) That any meat supplied by respondents is U.S. Government graded, except beef.

It is further ordered, That complaint be, and the same hereby is, dismissed as to the respondents M. S. Gottesman and E. M. Levin. DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission’s Rules of Practice, the initial decision of the hearing examiner shall, on the 5th day of- Decision 53 F.T.C.

March, 1957, become the decision of the Commission; and, accordingly:

It is ordered, That respondents Parliament Appliances, Inc., a corporation trading as Parliament Food Plan, and O. G. Fishbain, individually and as an officer of said corporation, shall within sixty (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. BOURJOIS, INC. 751 Decision