Judson Dunaway Corporation

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IN THE MATTER OF JUDSOK DUNAWAY CORPORATION CONSENT Order, ETC., 1'1" REGARD TO THE ALLEGED VIOLATION OF SECS. 2(d) A"!D 3 OF THE CLAYTON ACT Docket 6,925. CO'JljJlairll" Oct. 1957-Decision, July 24. 1958 Con:wnt order l' eCjuiriJlg a n a11,JfactL1rer of a line of household cleaning, deodorizing, mothproofing, and related products, with plants in Dover , and Kentland, In(L, to cease: (1) cliscriminatinf!; in JJl'ice in violation of Section 2 (d) of the Cl yton Act by such practices as paying substantial sums of mcney to Grand Union chain of supermarkets and retail food stores in the form of advertising of its products on an illuminated "spcctacniar" at 4Gth and Broadway, ).ew York City, and by in-store promotional disrJ1ays while not giving- Grand Union s competitors similar treatn e))t; and (2) allo wing a discount 1'rom, or rebate upon, the pricr, of its products to Gl and Union on condition that the latter not deal in products of its competitors.

COMPLAINT The Federal Trade Commission, having reason to be1icvc that Judson Dunaway Corporation, a corporation . has violated the provisions of Section 2, su bsection (d), and Section 3 of the Clayton Act, as amended (15 D. C. Sec. 13 and 14) hereby issues its complaint, stating its charges as follows: Count I PARAGRAPH 1. Judson Duna\vay Corporation is a corporation org"anizcd, existing and doing business under and by virtue of the Jaws of the State of New Hampshire. It has its principal offce and a manufacturing plant at Dover, N. , and an addibonal manufacturing plant at Kentland, Ind. (It may be referred to hereinafter as Judson Duna\vay or respondent. PAR. 2. Judson Dunaway is no\v, and for many years has been, engaged in the manufacture of a line of household cleaning, deodorizing, moth-proofing and related products, including Delate, a rllst and stain remover; Vanish, a cleaning and deodorizing agent for hathroom fixtures; Elf, a drain clearing agent; Expello, moth crystals and insect bombs; Bug- Boo, moth crystals and aerosol insecticides.

Judson Dunaway sells its products to customers with places of business located throughout the several States of the United States and in the District of Columbia for resale within the JUDSON DUNAWAY CORPORATION 137 136 Complaint United States to consumers. Among these customers are retail grocery chains, supermarkets and independent retail grocery stores. Its sales are suhstantial, aggregating more than $3 500 000 in 1955.

PAR. 3. Judson Dunaway is now, and for many years has been engaged in commerce as that term is defined in the Clayton Act. It transports, or causes to be transported, its products from the States of manufacture to customers located in other States of the United States, as well as in the States of manufacture. There is, and has been, a constant stream of trade and commerce in these products among the various states and the District of Columbia.

PAR. 4. In the course and conduct of its business in commerce during the past three years, Judson Dunaway has contracted to pay, and has paid, money, goods or other thing-s of value to or for the benefit of certain of its customers. It has made these payments as compensation or in consideration for services or facilities furnished by or through these customers in connection with the sale or offering for sale of products manufactured, sold or offered for sale hy Judson Dunaway. But such payments or consideration have not been available on proportionally equal terms to all other customers competing in the sale and distribution of such products.

PAR. 5. Among and typical of the discriminations alleged in paragraph 4 are transactions between .Judson Dunaway and The Grand Union Corporation. Grand Union operates a chain of supermarkets and retail food stores in New York, New Jersey, Pennsylvania, Vermont and other States. Judson Dunaway has paid to or for the benefit of Grand Union, directly or indirectly, substantial sums of money for services and facilities furnished it by or through Grand Union in the form of advertising of Judson Dunaway products on an illuminated "spectacular " animated sign leased and controlled by Grand Union at 46th Street and Broadway, Nev,' York City, and in the form of in-store promotional displays. These payments have been made and the services and facilities furnished in connection with the handling, sale and offering for sale of Judson Dunaway products. These payments were not available, however, on proportionally equal terms to all other customers competing in the distribution and sale of Judson Dunaway products.

PAR. 6. The acts and practices of Judson Dunaway, as a11egcd in Count I of this complaint, arc in violation of Subsection (d) 138 FEDERAL TRADF: COMMISSION DECISIONS Complaint 55 F.

of Section 2 of the Clayton Act, as amended (J 5 U. C. Section 13).

Count II PARAGRAPHS 1 through 3. For its charges under paragraphs 1 through 3 of this Count II , the Commission relies upon the matters and things set out in paragraphs 1 through 3 of Count I to the same extent and as though they were set out in full herein, and paragraphs 1 through 3 of Count I are, therefore, incorporated herein by reference and made a part of the allegations of this Count.

PAR. 1. In the course and conduct of its business in commerce as above described, Judson Dllna\Vay is now, and for many years has been, in substantial competition with other corporations persons, firms and partnerships in the sale and distribution in commerce of household cleaning and deodorizing preparations insecticides and related products.

PAR. 5. In the course and conduct of its business in commerce, as above described, Judson Dunaway has made sales and contracts for the sale of its products and has fixed a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement or understanding that the purchaser shah not deal in similar products of a competitor or competitors. PAR. G. Among such sales and contracts of sale are transactions entered into between Judson Dunaway and a large chain store organization, The Grand Union Company, whereby Granel Union agreed to handle and sell Judson Dunaway products exelusively in its retail stores and refrain from handling- or selling products of one or more competitors of Judson Dunaway. PAR. 7. Judson Duna\vay s sales of its products pursuant to the conc1iticms, agreements and understandings described in paragraphs 5 and 6 above have been and are substantial. Competitors of Judson Dunav\ray have been and are now unable to make sales of their products to customers of Judson Dunaway which they could have made but for the conditions, agreements and understandings described above in Paragraphs 5 and 6. PAR. 8. The effect of such sales and contracts of sale on such conditions, agreements or understanding-s may be substantially to lessen competition or to tend to create a monopo)y in the Ene of commerce in which Judson Duna\vay has been and is engaged. PAR. 9. The acts and practices of Jl1c1son Dunaway, as alleged .JUDSOK DU~AW A Y CORPORATION 139 1.3G Decision in Count II of this complaint, are in violation of Section 3 of the Clayton Act (15 U. C. Sec. 14).

MT, Donuld R. Moore and lvIr. Charles J. Steele supporting the complaint.

MT. Charles F. HU1lnett of Dover, N. , for respondent. INITIAL DECISION OF JOH;- LEWIS, HEARING EXA Imr The Federal Tracie Commission issued its complaint 2.against the above-named respondent on October 31 , 1957, charging it with having violated Section 2 (d), as amended, and Section 3 of the Clayton Act. After being served ""ith said complaint respondent appeared by counsel and filed its answer thereto. Thereafter the parties entered into an agreement, dated May 14 1958, containing a consent order to cease and desist purporting: to dispose of all of this proceeding as to all parties. Said agreement, 'i'ihich has been signed by respondent, by counsel for sairl respondent, and by counsel supporting the complaint, and approved by the director and assistant director of the Commission Bureau of Litigation, has been submitied to the above-named hearing examiner for his consideration, in accordance with Section 3.25 of the Commission s Hules of Practice for Adjudicative Proceedings.

Respondent, pursuant to the aforesaid agreement, has admitted all the jurisdictional 3llcgations of the complaint and agreed that the record may be taken as if findings of jurisdictional facts had been dul:l made in accordance with such allegations. Said agreement further provides that respondent waives any further procedural steps before the hearing examiner and the Commission, the making of fmdings of fact or conclusions of law and all the rights it may have to challenge or contest the validity of the \with suchorder to cease and desist entered in aecordance agreement. It has been agreed that the order to cease and desist issued in accordance with said agreement shall have the same force and effect as if cntercd after a full hearing and that the complaint n1ay be used in cunstruing the terms of said order. It has also been agreed that the record herein shall consist solely of the complaint and saiel agreement, and that saiel agreement is for settlement purposes only and does not constitute an admission by respondent that it has violated the law as alleged in the complaint.

140 FEDERAL TllADE CCnIMISSION DECISIONS Order 55 F.

This proceeding- having now come on for final consideration on the complaint and the aforesaid agreement containing consent order, and it appearing that the order provided for in said agreement covers a1l the allegations of the complaint and provides for an appropriate disposition of this proceeding as to all parties said agreement is hereby accepted and is ordered filed upon this decision s becoming the decision of the Commission pursuant to Sections 3.21 and 3.25 of the Commission s Rules of Practice for Adjudicative Proceedings, and the hearing examiner, accordingly, makes the follc)\ving jurisdictional findings and order: 1. I\€spondent .Judson Dunaway Corporation is a corporation existing and doing business under and by virtue of the laws of the State of New Hampshire, with its offce and principal place of business located at Third and Grove Streets, in the city of Dover, State of J\ew Hampshire.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent hereinabove named. The complaint states a cause uf action against said respondent under the provisions of the Clayton Act. ORDER It is ordered That respondent .Judson Dunaway Corporation a corporation, its offcers, employees, agents and repre:",entatives directly or throug"h any corporate or other device, in connection with the sale or offering for sale in commerce (as "commerce is defined in the Clayton Act) of insecticicles, household cleaning, deodorizing- and mothproofing preparations, and other products clo forth\with cease and desist from:

Paying or contracting to pay to or for the benefit of any customer anything of value as compensation or in consideration fur an:,/ advertising or for any promoUona1 displays furnished by or through such customer in connedion \\'iih the handling, processing, sale or offering for sale of respondent's products unless such payment or considerat.ion is available on proportionally equal terms to aU other customers competing jn the resale of such products.

ft is fl/rther o)"dered That rec,ponclent .Judson Dunaway Corporation, a corporation, its offcers, employees, agents and representatives, directly or through any corporate or other device in connection with the sale or offering for sale in commerce (as commerce" is defined in the Clayton Act) of insecticides, house- JUDSO~ DUNAWAY CORPORATION 141 136 Decision hold cleaning, deodorizing- and mothproofing preparations, and other products, do forthwith cease and desist from: 1. Selling or making any contract or agreement for the sale of any such product on the condition, agreement or understanding that the purchaser thereof shall not use or deal in or sell products supplied by any competitor or competitors of respondent; 2. Enforcing or continuing in operation or effect any col1clibon, agreement or understanding in, or in connection with, any existing contract of sale, which condition, agreement or under standing is to the effect that the purchaser of said products shall not use or deal in or sell products supplied by any competitor or compeUtOl"S of respondent.

DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section ;,. 21 of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 24th day of July 1958 , become the decision of the Commission; and, accordingly:

It is onle/cd That the respondent herein shall within sixty (60) duj's after service upon it of this order, file with the Commission a report in 'writing setting fort.h in detail the manner and forra i" which it has complied with the order to cease ancl clesist. 142 FEDr:RAL TRADr: COMi\IISSION DECISIONS Decision 55 F.