Iv Ar Wendt

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IN THE MATTER OF IV AR WENDT CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2(C) OF THE CLAYTON;. ACT Docket GD8::. CO'lp/aij1f, Det. If!, l,95' Dccis' ioll, Jv!y.' , jf).'R Consent ordet" requiring a Seattle broker of canned salmon and other sea food to cease making allowances in lieu of brokerage and illegal price concessions, in violation of Section 2(c) of the Clayton Act, including such practices as: (l) selling at net prices lower than those accounted for to his pad er-principals, w:th the difference absorberl out of his brokerage fees; (2) gnmting deductions from price 1))' way of rebates, a part or all of which were not charged back to the packer-principals but \were aborl;ed by him; and (;)) taking a reduced uroJ,eragc from his principals on substantial sales which involved price conecssions. CO:lplaint The Federal Trade Commission, hC1ving; reason to believe that the party respondent named in the caption hereof and hereinafter more particularly designated and clescribed has violated and is now violating the provisions of subsection (c) of Section 2 of the Clayton Act, as amended, hereby issues its complaint stating its charges with respect thereto as follows: PARAGRAPH 1. The respondent Ivar 'Vendt is an individual proprietor of a brokerage firm operated in his own name-IvaI' Wendt. His place of business is Jocated at 701 Central Building, Seattle, Wash. Respondent Wendt controls, directs and formulates the affairs and operat.ing policies of said brokerage firm. PAR. 2. The respondent is now and has been for the past several years engaged primarily in the business of distributing , c.rabscanned salmon and various other types of canned fish and crab meat, lobsters, clams, shrimp, etc. , hereinafter sometimes referred to as food products. He operates as a primary broker negotiating sales for the accounts of a number of packers located in various areas within and beyond the contincnta1 United States, including the Pugci Sound and Columbia River areas. Respondent also makes suostantial purchases of canned salmon for his own account for resale.

PAR. 3. Respondent Wendt is a substantial factor in the sale and distribution of food products selling and distributing these products in the various States of the United States but prin- IV AR WENDT Complaint cipally in the States of New York and Florida. He distributes said products generally through secondary or field brokers located in the marketing areas of the buyers. In the conduct of his business, as aforesaid, respondent has, directly or indirectly, shipped or transported, or caused said food products, when sold to be shipped or transported from the canning plants or warchouses of the packers thereof to buyers ioeated in various States of the United States other than the State or territory of origin of said food products. Thus respondent is now, and has for many years, been engaged in a continuous course of irade in commerce as "commerce" is defined in the Clayton Ad, as amended. PAR. 4. Respondent \Vendt is usually compensated for his services in arranging for the sale and distribution of said food products for the account of his various packer-principals at the j-irate of 5 of the net seJ1ng price of the merchandise. Respondeut deducts the brokerage commission from the proceeds of the sale when accounting to his packer-principals. The account of sales also itemizes other discounts and allowances granted to the purchaser, such as allowances for dents and swells, cash discounts, and discounts for labels, al1 of vi'which are shown as deductions from the selling price, and charged back to the packerprincipals in thp. usual course of business. In a majority of sales made for his pacJ(er-principals, respondent utilizes the services of field brokers located in the various marketing areas of the buyers. When such field brokers are utilized in making the sale the 5 + brokerage is customarily split evenly between the re- , re-spondent and the field brokers. In many instances, however spondent negotiates sales direct to large volume purchasers, such as retail chain outlets, without utilizing the services of field brokers.

PAR. 5. In the course and conduct uf his business in commerce respondent, as a primary broker for various packer-principals has made grants, al10wanccs or rebates in substantial amounts in lieu of orokerage and price concessions which reflect brokerage to certain buyers of said food products, a part or a11 of which were not charged back to the various packer-principal1s but on the contrary, were taken from the brokerage earnings of the respondent. In some instances these allo\va'11ces, rebates or price concessions made to buyers were shared proportionally by the primary and the field broker out of their brokerap;e earnings on the particular transaction.

Among and including, but not necessarily limited to, the meth- Decision 55 F.

ods or means employed by the respondent in so doing- were the following:

(a) Selling to certain buyers at net prices which were Jess than those accounted for to his packer-principals with the diffen::J1ce absorbed by respondent out of his brokerage earning-so (b) Granting- to certain buyers deductions from price by "vay of allowances or rebates a part or al1 of \which \were not ehargec1 back to his packer-principals and was absorbed by respondent out of his brokerage earnings.

(e) Taking a reduced brokerage from his packer-principals on substantial sales which involved price concessions to certain buyers.

PAR. 6. In addition to representing various packer-principals as a primary broker, respondent has made substantial purchases of canned salmon for his own account for resale, and on these purchases he received and accepted from the seller his usual1 5 brokerage. On the resale of a1l or a part of these salmon respofl1ent a1lawed and paid to the buyers thereof brokerage in the amount, or the approximate amount, of 2V: 6 of the net selling' price, Pall 7. The acts and practices of the respondent, as herein alleged and described, constitute a violation of the provisions of subsection (c) of Section 2 of the Clayton Ad, as amended. Mi' . Cecil G. Miles and Mr. .Juhn .J. i1JcNrLU!f supporting the complaint.

MT. Vale E. Sherrow of Seatte, Wash., for respondent. INITIAL DECISION BY JOSEPH CALLAWAY, HEARI;(G EXAMIJER The complaint herein \vas issued on December 12, 1957, charging respondent with the violation of Section 2 (c) of the Clayton Act as amended by the Robinson-Patman Act in connection with the sale of seafood products.

After being served wit.h the complaint, respondent entered into an agreement dated April 11 , 1958 , containing a consent order to cease and desist disposing of a11 the issues in this proceeding, without hearing, which ag-reement has been duly approved by the assistant director and the director of the Bureau of Litigation. Said agreement has Deen submitted to the undersig-ned, hereto- , for his fore duly designated to act as hearing examiner herein consideration in accordance with Section 3. 25 of the Rules of Practice of the Commission.

Respondent, pursuant to the aforesaid agreement has admitted IV AR WENDT Order all of the jurisdictional allegations of the complaint and agreed that the record may be taken as if findings or jurisdictional facts had been duly made in accordance with such allegations. Sairl agreement further provides that respondent waives all further procedural steps before the hearing examiner or the Commission including the making of findings of fact or conclusions of law and the right to challenge or conted the validity of the order to cease and desist entered in accordance with such agreement. It has also been agreed that the record herein shall consist solely of the complaint and said agreement, that the agreement shall not become a part of t.he offcial record unless and until it becomes a part of the decision of the Commission, that said agreement is for settlement purposes only and does not constitute an admission by respondent that he has violated the law as alleged in the complaint, that said order to cea c and desist shall have the same force and effect as if entered after a full hearing and may be altered, modified, or set m;ide in the manner provided for other oreters md thllt the complaint may be used in construing the terms of the order.

This proceeding having now come on for 6nal consideration on the complaint and the aforesaid agreement containing the 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 agreement becoming part of the Commission s decision pursuant to Sections 3.21 and 3. 2" of the Rules of Practice, and the hearing examiner accordingly makes the following findings, for jurisdictional purpo"es, and order;

1. Respondent IvaI' Wendt is an individual trading and doing business as Ivar Wendt under and by virtue of the laws of the State of Washington, with his offce and principal place of business located at 701 Central Building, Seatte, Wash. 2. The Federal Trade Commission has jurisdidion of the subject matter of this proceeding and of the respondent hereinabove named. The complaint states a cause of action against said respondent under the Clayton Act, as amended by the Robinson- Patman Act. This proceeding is in the interest of the public. ORDER It is ordered That Ivar Wendt, individually and doing business as Iva1' 'Vendt, or under any other name, and his agents, repre- FEDERAL TRADE CO:\MISSION:- DECISIONS Decision 55 F.

scntatives, or employees, directly or through any corporate, partnership, or other device in connection with the sale of seafoud products in commerce, as "commerce" is defined in the aforesaid Clayton Act, do forthwith cease and desist from: 1. Paying-, granting, or allowing, directly or indirectly, to any buyer, or to anyone acting for or in behalf of, or \vho is subject to the direct or indirect control of such buyer, anything of value as a commission, brokerage, or ot.her compensation, or an:y allowance or discount in lieu thereof, upon or in connection \with any sale of their seafood products to such buyer for his O\V11 account.

2. Paying, granting, or passing on, either directly or indirectly, to any buyer, or to anyone acting for or in behalf of, or who is subject to the direct or indirect cont.rol of such buyer brokerage earned or rcceiverl by respondent on sales made for his packer-principals, by allowing to buyers lower prices which reflect all or any part of such brokerage, or by granting them allOlvances or rebates which are in lieu of brokerage, or by any other method o!' means.

3. Receiving or accepting, directly or indirectly from any seller anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, upon or in connection \with any purchase of seafooel products by respondent for his O\vn account.

DEClS10N OF THE COMMISSION AND ORDF:R 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, ,;lccordingly:

It is ordered That the respondent herein shall within sixty (GO) 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 the order to cease and desist.

WARD' S COVF, PACKED,G COMPANY ET AL.

Complaint TN THE JVA TIER OF COMPANY ET AL. WARD' S COVE PACKING CONSENT ORDER. ETC. IN REGARD TO THE ALLEGED VlOLATIOX OF SEC. Z(C) OF Tile CLAYTON ACT Docket 701.1. CUl!plaint, J)('c. 1.957- Dcci::ioll, July 1958 Consent on-h r rrquiring a Seattle Sf'3 food packcr and its affliated seHingagent to cease violating Section 2(c) of the Clayton Act by such practices as reducing the price on direct sales to favored customer3 by the 2% percent which would ordinarily b( paid as ul"okerage fees and, on tJ"ansadions handled through field brokers, allowing favored CllstOlHelS discounts under the guise of advertisinp: allowances, acco111)lisheu by cutting the brokers ' 110rmal commission.

COMPLAINT The Federal Trade Commission, having reason to believe that the parties respondent named in the caption hereof, and hereinafter more particularly designated and described, have been and arc nm\' violating the provisions of subsection (c.) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act (U. , Title 15 , Sec. 13), hereby issues its complaint, stating its charges with respect thereto as follo\\'5: PARAGRAPH 1. The respondent \Vard' s Cove Packing Company, hereinafter sometimes referred to as the corporate respondent is a corporation organized, existing and doing business under and by virtue of the laws of the territory of Alaska, with its principal offce and place of husincss located at 303 East Norlhlake Avenue Seattle, \Vash. It is engaged in the business of canning and packing seafood, including salmon, all of which are hereinafter sometimes referred to as seafood products, for sale and distribution to purchasers Jocated throughout the United States. Respondent is a substantial factor in the canned seafood industry. PAR. 2. Respondent Frank B. Peterson Company is a partnership engaged in business, principally as sales agent for corporate respondent \Vard' s Cove Packing- Company, named herein, but also acts in a lesser degree as a primary broker or sales agent for other seafood canners or packers. Respondent Frank B. Peterson Company maintains its offce and place of business at the same address as that of the corporate respondent, or 303 East Korthlakc Avenue, Seattc, Wash.

PAR. 3. Respondents A. Winn Brindle and Harold A. Brindle FEDERAL TRADE CC);\IMISSION DECISIONS Complaint 55 P.

are president, and vice president and secretary, respectively, of corporate respondent, and are also copartners in respondent Frank B. Peterson Company. These individual respondents maintain their offces and principal place of business at the s"me address as that of the corporate and partnership respondents or 30:1 East Northlake Avenue, Seattle, Wash. These individual respondents substantially own and control both the corporate and the partnership respondents, and are also responsible for their acts and practices, including their ,aJes and distribution policies. PAR. 4. In the marketing of their s.eafood products, the respomlents and each of them, are represented by a number of food brokers in various marketing- areas throughout the United States. These brokers are generally referred to herein as field brokers. Norma1Jy, these brokers arc paid by respondents for their services a commission or brokerage fee at the rate of 21127u of the net selling- price of t.he merchandise sold. In addition to selling through bro1(ers, the respondents, and each of them, sell direct to certain favored customers, without utilizing the services of their field brokers in the particular transactions. PAR. 5. In the course and conduct of their business in commerce for the past fe\\! years, the respondents, and each of them have sold and distributed, and now sell and distribute their canned seafood products in commerce, as "commerce" is defined in the aforesaid Clayton Act, to buyers located in the several States of the United States, other than the Sbte oJ Washington in \\'which respondents are located. The rcsponc1enl;:; transport, or cause such canned seafood products, when sold, to be transported from their place of business in the State of We.shington to customers located in various other States of the Lnited States, or to other States for storage, pending sale. There has been at alj times mentioned herein a continuous course of trade in commerce in such seafood products across state Jines between the respondents, and each of them, and the respective buyers thereof.

PAR. 6. In connection \viih the sale and distribution of their seafood products, in commerce, the corporate and partnership respondents, under' the contrac and direction of the individual respondents, acting both as offcers of the corporate respondent lld in their individual capacities as copartners trading as Frank B. Peterson Company, have gra11ted discounts or allmvances in lieu of brokerage, or have made sales at reduced prices reflecting bralwrage, to buyers of such canned seafood products. \,, RD' S COVE PACKJNG CCMPA Y ET AL.

Decisiun Among alld inc:uc1ing, but not necessarily limited to, the f.l1cthods or means employed by re pondent in so doing are the following:

(a) Granting or allowing to certain buyers, or agents of buyers, reductions in prices in the approximate amount of 21/2 )c the net selling price of the merchandise in tran3actions where the services of field brok2rS were not utilized. (b) Granting or allmvillg io cert jn buyers deductions from prices by way of allo\Vanccs, discounts or rebates under the guise of advertising allo\\'anccs, \which also".\"ances are accompanied by a reduction in the b;.'cJ.crage or cOfnmission norn1al1y paid 'Lo respondents' licit! brokers- PAR. 7 . The acts and practices 01 the respondents, as alleged and described herein, alc in violatio:1 of subsection (c) of Section 2 of the Chwton Act, 23 amended by the Robinson-Patman Act (li. , Title 15, Sec. 13).

1.117'. Cecil G. J1Iiies and 1111' John J. iV/crazy supporting the comple.int.

1111'. Richnnl T. Olson of the firm of Blm"iar!jj, Olson CU117.jJbcll of Seattle, Viasl!., for respondents.

II'.:TIAL DECTSlnN BY , JOSEPH CALLAVv'AY , HEARING EXA:YIl:\En Tll complaint herein \\. ;13 issued DC;f:2mber 3:1 , 19G7, chargingrespondent.s with paying, granu:1g- or allo\' 'illg, directly or indirectly, something of value as a commissicnl, brokerage, allo\' anee, discol1nt, rebate, or other compensation, upon or in connection with the sale of their canned seafood products to certain buyers, or c:gcnt3 of buyers, in violation of Sedion 2 (c) of the Clayton Act, as :\1TICnc12d by the Robinson-Fatman Act (D. C., Title 15, Sec. 13).

After being served with the complaint, respondents entered into an agreement dated April 11 , 1958 , cont.aining a consent order to cease and desist disposing of all the issues in this proceeding, which agreement has been clul:'i approved by the assistant director and the director of the Bureau of Litigation. Said agreement has been submitted to the undersigned, heretofore duJy c1e ignatecl to act as hearing examiner herein, for his consideration in accordance with Section 3.25 of the Rules of Pradice of the Commission.

Hespondents, pursuant to the nforesaid agreement have admined aJl of the jurisdictional allegations of the complaint and agreed that the record may be taken as if findings of j urisdic- FEDERAL TRADB COMMISSION DECISIONS Decision 55 F.

tional facts hacl been duly made in accordance with such allegations. Said agreement further provides that respondents waive all further procedural steps before the hearing examiner or the Commission, including the making of findings of fact or conclusions of law and the right to challenge or contest the validity of the order to cease and desist entered in accordance with such agreement. It has also been agreed that the record herein shall consist solely of the complaint and saiel agreement. that the agrecment 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 settlement purposes only and does not constitute an admission by respondents that they have violated the Jaw as alleged in the complaint, that said order to cease and desist shall have the same force and effect as if entered after a 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 now come on for final consideration on the complaint and the aforesaid agreement containing the 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 Llecision and saiel agree- Elent becoming part of the Commission s decision pursuant to Sections 3.21 and ::1. 25 of the Hules of Practice, and the hearing examiner accordingly makes the following: findings, for jurisdictional purposes, and order:

1. Respondent \Vanl's Cove Packing Company is a corporation, existing and doing business un(lcr ctld by virtue of the laws of the Territory of Alasl\:a; respondent Frank B. Peterson Company is a partnership existing and doing business under and by virtue of the laws of the State of Washington; respondents A. Winn Brindle, also known as A. \V. Brindle, and Harold A. Brindle are individuals and officers in re pont1ent \\lard' s Cove Packing Company, and cop rtncrs in re. c;ponclent Franl( B. Peterson Company. All of the respondents have their offces and principal place of business located at 303 East Northlake Avenue, Seattle, Wash.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents hereinabove named. The complaint states a cause of action against said re- WARD' S COVE PACKI!\G COMPA!\Y ET AL.

ision spondents under the Claylon Act, as amended by the Robinson- Patman Act. This proceeding is in the interest of the public. ORDER It is ordered That Ward's Cove Packing- Company, a corporation, and its offcers and directors, and A. Winn Brindle, and Harold A. Brindle, individually and as oflcers of said corporation, and respondents' agents, representatives or employees, directly or through any corporate, partnership, or other device in connection with the sale of sea food products in commerce, as commerce" is defined in the aforesaid, Clayton Act, do forthwith cease and desist from:

Paying, granting or allowing, directly or indirectly, to any buyer, or to anyone acting for or in behalf or "who is subject to the direct or indirect control of such buyer, anything of value as a commission, brokerage, or other compensation, or any al- ImNance or discount in lieu thereof, upon or in connection 'with any sale of their seafood products to such buyer for his own account.

It is fW"tW1' ordered That Frank B. Peterson Company, a partnership, and A. Winn Brindle and Harold A. Brindle, individually and as copartners in the said Frank B. Peterson Company and their agents, representatives, or employees, directly or through any corporate, partnership, or other device in connection with the sale of seafood products in commerce, as "commerce is defined in the aforesaid Clayton Act do fort.h"\with 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 who is subject to the direct or indirect control of such buyer, brokerage earned or received by respondents on sales made for their packerprincipals, by allowing to buyers lower prices \which reflect all or any part of such brokerage, or by granting them allowances or rebates which are in lieu of brokerage, or by any other method or means.

DECISION OF THE COMMISSION A!\D ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section ;J. 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 according-Iy:

Decision 55 F.

It is onlered That the respondents herein 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 fornl in 'which they have complied with the order to cease and desist.

HOLLAND FURNACr; COYIPA"Y Decision