Gavin Bros., Inc.

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IN Tile ",fatter OF GAVIN BROS. , INC., ET AL.

Coors"E)IT ORDER, ETC. I:- REGARD TO 'f1-IF ALLEGED VIOLATIO:' OF SEC. 2(C) OF THE CLAYTON:- ACT Docket orne. Camploint., Dec. Jr!57-Dccision, .July 1.958 Comment onp)' requiring a Seattle broker of canned salmon and other sea food to cease Inaking a110wanccs in lieu of brokcmg-e to certain bUj/crs in violation of Section 2(c) of the Clayton Act by such pradices as (1) selling at nd prices 10\v('I' than those accounted for to its pad::erprincipals; (2) granting price reuuctioI!s, a part or all of ,,,hieh .were not charged b2Ck to the peck('rs.; nnd en taking: reduced brokcl"age on saics which involved price concessions.

COMPLAINT The Federal Trade Commission, having reason to believe that the parties re ponclent named in the ca!)tion hereof, and hereinafter more particularly designated and described, h;:we violated and are now violating the provisions of subsection (c) of Section 2 of the Clayton Act (U, C. Tille 15, Sec. 13), as amended by the Robinson-Patmml Aet, approved June 19 , 19:36, hereby isst"'S its complaint, stating its charges with respect thereto as follo\vs: PARAGRAPH 1. Respondent Gavin Eros. , Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Washington, Respondent T. Jay Gavin is president of said corporation and formulates, directs and controls the act.s, practices and policies of the said C01"porate respondent. The principal offce and place of business of said corporate and individual respondent.s is located at l5UO vVestlake Avenue North, Seattle, Wash.

PAR. 2. Respondents are now, and for many years prior hereto have been, engaged in the business of distributing food products including canned salmon. Responclent distribute as primary brokers, negotiating sales for the account of a number of packers located in \'arious areas within and bc?ond the continental -enited States, including the PUW:t Sound and Columbia River areas nnd the Territory oJ Alnska.

PAR. 3. Respondents are a substantial factor in the sale and distribution of canned salmon in the United States, and sell and distribute such food products generally through secondary or fie1(1 brokers in various marketing areas to buyers for resale located GAVIN BROS., INC., ET AL.

Complaint throughout the United States. Respondents have directly or indirectly caused such food products, when sold, to be transported from the canning plants of the respective packers thereof, or from their warehouses, to buyers thereof located in various States of the United States other than the State or Territory of origin of such food products. Thus respondents are, and have been for many years prior hereto, engaged in a continuous course of trade and commerce, as "commerce" is defined in the Clayton Act, as amended by the Robinson-Patman Act.

PAR. 4. Respondents are usually compensated for their services in arranging for the sale and distribution of such food products by deducting a brokerage commission from the proceeds in their account of sale to their packer-principals. Said account of sale also itemizes various discount.s and allowances granted to the purchaser, sllch as for dents and swells, cash, or for labeling, all of which are sho\vn as deductions from the purchase price and are charged back to t.he packer-principals in the usual course of business. The brokerage commission deducted by respondents is customarily 516 of the net selling price. The field brokers are customarily compensated for their services by receiving from respondents as primary brokers, a brokerage commission in the amount of 2Y2 (/, of the net selling price. PAR. 5. Respondents, in the "course anc! conduct of their business in commerce as primary brokers for various packer-principals, have made grants or allo\vanccs in substantial amount in lieu of brokerage to certain buyers of said canned salmon by affording differentials or concessions in price and various rebates and allowances, a part or all of '\which were not charged back to the various packer-principals but were, on the contrary, taken from a11 or a portion of the brokerage earnings of respondents and of their field brokers.

, the Among and including, but not necessarily limited to n1ethods or means employed by respondents in RO doing v\"ere the following:

(a) SeWng to certain buyers. at net prices which were Jess than those accounted for to the packer-principals. (b) Granting to certain buyers deductions from price hy way of allovi'ances or rebates, a part or all of which were not charged back to the packer-principals.

(c) Taking reduced brokerage on sales whicb involved price concessions to certain buyers.

PAR. 6. The ads and practices of respondents, as herein ?) Decision 55 .F.'f.

alleged, constitute violations of the provisions of subsection (c) of Section 2 of the Clayton, as amended by the Robinson- Patman Act.

Mr. Cecil G. Miles and Mr. John .1. McNally supporting the complaint.

11;11'. CIa, lVL'Co'I , of Seattle, \VasI1., for respondents. INITIAL DECISION BY JOSEPH CALLAWAY , HEARING EXA1!INER The complaint herein was iSf,ued un December 12, 1957, charging respondents with the violation of Section 2 (c) of the Clayton Act as an1encled by the Robinson-Patman Act in connection \with thc sale of seafood products.

After being s2rved with ihe complaint, respondents entered(1 into an agreement related April 11 , 1958 , containing a consent order to cease and desist disposing of a1l the issues in this proceeding, without bearing, \vhieh agreement has been duly approved by the assists.l1L directci' and the director of the Bure:;m of Litigation . Said agreement has been submitted to the undersigned, heretofore duly designated to act as hearing examiner herein, for his consideration in acconlance with Section 3. of the Rules of Practice of th Commission. Respondents, pursuant to the aforesaid agreement have admitted all of the jurisdictional allegations of the complaint and agreed that the n eord may be taken as if findings of jurisclictional facts had been duly Tl1ake in accordance with such allegations. Said agreement further provides that respundents ,vaive all further pyocedural steps befoi"e the hearing examir:cr or the Commission, including the maldng of findiljgs ()f fact or conclusions of la\\' and the right to challenge or contest the validity of the order to cease :lnd desist entered in accordance with such agreement. It has also been agreed that the record herein shal! consist solely of the complaint and said agreement, that the agreement shall not become a part of the offcial record unless and unti it becomes a part of the decision of the Commission, that said agreement is for settlement purposes only and does not constitute an admission uy respondents that they have violated the Jaw as alleged in the complaint, that said order to cease and desist shall have the samf: Jorce and effect as if entered after full hearing and may be altered, modified, or set aside in the manner provided for other orders, and that the complaint may be used in construing the terms of the order. This proceeding having no\v come on Jar final consideration on the complaint and the aforesaid agreement containing the OA VI" BROS., mc., ET AL.

Dp.cision consent order, and it appearing that the order and agreement cover all of the allegations of the complaint and provide for appropriate disposition of this proceeding, the agreement is hereby accepted and ordered filed upon this decision and said agree ment becoming part of the Conlmission s decision pursuant to Sections 3.21 and 3. 26 of the Ru1cs of Practice, and the hearing examiner accordingly makes the following findings, for jurisdictional purposes, and oreler:

1. Respondent Gavin Bros. , Inc., is a corporation existing and doing business under and by virtue of the laws of the State of \Vashington, with its Off 8 and principal place of business located at 1500 Westlake Avenue Korth, Seatte, Wash. Respondent T. Jay Gavin is an individual and an offcer in respondent corporation, his address i -: the same as that of the corporate respondent.

2. The Federal Trade Commis :;ion has jurisdiction of the subject matter of this proceeding and of the respondents hereinabove named. Th(- complaint states a cause of action against said respondents under the Clayton Act, as amended by the Robinson- Patman Act. This proceeding is in the interest of the public. OImER It 'is ordered That Gavin Bros. , Inc. , a corporation, and its offcers and directors, and T. ,Jay Gavin, inc1ividuall y and as an offcer of said respondent corporation, and respondents' agents representatives, or employees, directly or indirectly, or through uny corporate or other tlevice, in connection vdih the sale oJ seafood products in commerce, as " COn1Tnerce " is defined in the aforesaid Clayton Act, do forth' vit.h cease and desist 1'roin: Paying, g-granting-, or passillg 011 , either directly or indirectly. to any buyer or to anyone acting for or in behalf of or subject to the direct or indirect control of sllch buyer, brokerage earned or received by respondents 011 sales n1ade for their packer-principals by allowing to buyers lower prices which reflect a1l or any part of sllch bruken\gc, or by granting them l1lowances or rebates ,which are in lieu of sllch brokerage, or by any other n1ethod 01' means.

DECISION OF THE COMMISSION AND ORDER TO FILE RET' ORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall, on the 3d day of FEDERAL TRADE CO DlISSION DECISIOKS Decision 55 P.

July 1958, become the decision of the Commission; and accordingly, It is ordered That the respondents herein shall within sixty (60) days after service upon them of this order, file with the Commission a report in writing- sptting forth in detail the manner and form in which they have complied with the order to cease and desist.

WALTER P. SHIEL & CO., ET AL.

Complaint 1:- THE MATTER OF WALTER P. SHIEL & CO. ET AL.

SENT ORDER, ETC., IN REGARD TO Tile ALLEGED VlOLATIOK OF SEC. 2(C) OF THE CLAYTON ACT.

Dockr; rnniJ, C01J7 la.iJlt, Dec. lds7-Decision, .filly 195R Consent Ord(T requiring Seattle br()k( rs of canned salmon and other sea food products to cease making allo,vanccs in lieu of brokerage in violation of Section 2(c) of the Clayton Act, by such practices as (1) granting various discounts and rebates to certain pLlchasers which 'were not charged back to the packtT-pl'inejpals but were taken from respondents ' brokerage; and (2) gnmting discounts and rebates through deduction of :n percent instead of the customary G percent brokerage in their -settlement \with their packer-principals.

COMPLAINT The Federal Trade Commission, having reason to believe that the part:r respondents named in the caption hereof, and hereinafter more particularly designated and described, have violated and are now violating- the provisions of subsection (c) of Section 2 of the Clayton Act (V. C. Title 15, Sec. 13), as amended by the Robinson-Patman Act, approved June 19, 1936, hereby issues its complaint, stating- its charges with respect thereto as follows: PARAGRAPH J. Respondent Walter P. Shiel & Co., hereinafter referred to as corporate respondent, is a corporation organized existing, and doing business under and by virtue of the la\vs of the State of Washington, with its offices and principal place of business located at 5506 White-Henry-Stuart Building, Seattle Wash.

Respondent Walter P. Shiel is president; respondents Lawrence C. Calvert and Starr H. Calvert arc vice presidents; and respondent William Calvert is secretary-treasurer, respectively, of corpol' ate respondent, and their place of business is the same as that of corporate respondent. Said individual respondents, in conjunction with each other in their capacities as offcers of corporate respondent, as aforesaid, and as individuals, control, direct, and formulate theaffairs and policies of the corporate respondent. PAR. 2. Respondents are now, and for several years last past have been, engaged in the business of distributing canned salmon and other food products as primary brokers negotiating s;;1es for the accounts of a number of packers located in various areas within and beyond the continental United States, including the Io' EDERAL TRADE C02Vi\!ISSION DECISIONS Complaint 55 F.

Puget Sound and Columbia River areas, and ihe Territory of Alaska.

PAR. 3. Respondents are a substantial factor in the sale and distribution of canned salmon in the t:nitecl States, and sell and distribute such food products directly, and through secondary or field brokers in various markeUng areas, t.o buyers for resale located throughout the United States. Hespondents have directly or indirectly caused such food products when sold to be transported from the canning plants of the respective packers thereof or from their wr,rehouses, to buyers thereof located in various stales of lhe Unite,! States olhel' than the stale or territory of origin of such shipments. Thllt respondents are, and for several years last past have been, engaged in a continuous course of trade in commerce, as "commerce " is defined in the Clayton Act, as amended by the l1obir!son-Patman Act. PAR. 4. Respondents are usually compensated for their services in negotiating sales of cnnnecl salmon for the accounts of their various packer-principals by deducting a brokerage commission from the proceeds in their accounts of sale to such principals. The said accounts of sale also itemi::e various discounts and allo\vances granted to the purchaser, such as for clents and slveJls, cash, or for labeling, al1 oJ which are 8hO\vn as deductions from the selling price, and are charged back to the packer-principal in the usual course of business. The brokerage commission deducted by respondents, except in certain transactions wherein field brokers ',\8re not utilized, is customarily five percent of the net selling price. The field brokers are customarily compensat2d for their services by receiving from respondents as primary brokers, a brokerage commission in the amount of 2 /2 of the net seIJing- price. The direct sales negotiated by respondents without the services of a field broker arc to relatively large-volume purcha3ers such as chain S1.0re organizations, in the main.

PAR. 5. In the course and conduct of their business as primary brokers of canned salmon in commerce, respondents have made grants or allo\vances in substantial amount in lieu of brokerage generally to large-volume purchasers who dealt directly with respondents and nol through field brokers. Among and including, but not necessarily limited to, the means and methods employed by respondents in so doing \were the following: (a) Respondents have granted and allowed various discounts and rebates to certain of said purchasers which were nol charged WALTER 1'. SHIEL & CO. ET ill.

Decisjon back to the various packer-principals but, on the contrary, were taken from respondents' brokerage.

(b) Respondents have granted and allowed various discounts and rebates to certain at said purchasers which, while ostensibly charged back to the packer-principals, were ultimately borne by respondents by virtue of their deduction of but 21j2 percent of the net purchase price as brokerage (instead of the customary 5 percent on sales made through field brokers) in their settement with such packer-principals.

PAR. 6. The acts and practices of respondents as herein alleged eonstitutc violations of the provisions of subsection (c) of Section 2 of the Clayton Act, as amended by the Robinson- Patman Act.

lvh'. Cecil. G. Miles and Mr. John .1. McNally supporting the complaint.

NIT. Janws IV. Johnston of th( firm of Graham, Green Dunn of Seatte, Wash. , lor respondents.

I!\ITIAL DECISlO ; BY JOSEPH CALLAWAY, IlEARING EXAMINER The complaint herein \vas issued on December 12, 1957, charging respondents with the violation of Section 2 (c) of the Clayton Act as amended by the HobinsOll-Patman Act in connection \\'ith the sale of seafood products.

After being served with the c:complaint, respondents entered into an agreement dated April 11 , 1958 , containing a con ent order to cease and desist disposing of a11 the issues in this proceeding, \vithout hearing, which agreement has been duJy approved by the assistant director and the director of the Bureau of Litigation. Said agreement has been submitted to the undersigned, heretofore duly designated to act as hearing examiner herein, for his consideration in accordance with Section 3.25 of the Rules of Practice of the Commission. Respondents, l1ursuant to the afore aid agreement have admitted all of the jurisdictional allegations of the complaint and agreed that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations. Said agreenlent Turiller provides that respondents waive all further procedural steps befm"c the hearing examiner or the Commission, inc1ucling the making- of findings of fact or conclusions of 1a\v and the right La challenge or contest the validity of the order to cea e and desist entered in accordance with SJ,(' h agreement. It has also been agreed that the record herein FEDERAL TRADE COMMISSION DECISIO:-S Order 55 F.

shall consist solely of the complaint and said ag-reement, that the ag-reement shall not become a part of the offcial record unless and until it becomes a part of the decision of the Commission that said agreement is for settement purposes only and does not constitute an admission by respondents that they have violated the law as alleg-ed in the complaint, that said order to cease and desist shall have the same force and effect as if entered after full hearing- and may be altered, modified, or set aside in the manner provided for other orders, and that the complaint may be used in construing the terms of the order. This proceeding having nmv come on for final consideration on the complaint and the aforesaid agrc"ment containing- the consent order, and it appearing that the order and agreement cover all of the alleg-ations of the complaint and provide for appropriate disposition of this proceeding, the agreement is hereby accepted and ordered filed upon this decision and said agreement becoming part of the Commission s decision pursuant to Sections 21 and 3. 25 of the Rules of Practice, and the hearing examiner accordingly makes ihe folio\ving findings, for jurisdictional purposes, and order:

1. Respondent Walter p, Shiel & Co., is' a corporation existing' and doing business under and by virtue of the la\,' s of the State of Washington, v-with its oflke and principal place of business located at 5506 White-Henry-Stuart Building, Seattle, Wash. 2. Respondent Walter P. Shiel is an individual and is an offcer of said corporate respondent with his offce and principal place of business located at 5506 White-Henry-Stuart Building, Seattle Wash. Respondents Lawrence C. Calvert, Starr H. Calvert, and \Villiam Calvert are individuals and are offcers of said corporate respondent, with their offce and principal place of business located at Pier 31 , Seatte, Wash.

3. The Federal Trade Commission has jurisdictiun of the subject matter of this proceeding and of the respondents hereinabove named. The complaint states a cause of action against said respondents under the Clayton Act, as amended by thc Robinson- Patman Act. This proceeding is in the interest of thc public. ORDER It is ordered That Walter P. Shiel & Co. , a corporation, and its offcers and directors, and Walter P. Shiel, Lawrence C. Calvert, Starr H. Calvert, and William Calvert, individually and as offcers of said respondent corporation, and respondents' agents WALTER P. SHIEL & CO. ET AL.

Decision representatives, or employees, directly or indirectly, or through any corporate Of other device, in connection with the sale of seafood products in commerce, as "commerce" is defined in the aforesaid Clayton Act, do forthwith cease and desist from: Paying, granting, or passing on, either directly or indirectly, to any buyer or to anyone acting for or in behalf of or subject to the cured or indirect control of such buyer, brokerage earned or received by respondents on sales made for their packer-principals, by a!Jowing to buyers lower prices which ' reflect a!J or any part of such brokerage, or by granting them a!Jowances or rebates lNhich are in lieu of such brokerage, or by any other method or means.

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 3d day of July 1958 , become the decision of the Commission;and,It is oTdeTedaccordingly,That the respondents herein shall within sixty (60) days after service upon them of this order, file with the Commission a report in visiting setting' forth in detail the manner and form in which they have complied with the order to cease and desist.

, ; , FEDERAL TRADI- COMMISSION DECISIO!\S Complaint 55 F.