P. E. Harris Company, Inc.

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

IN THE MATTER OF P. E. HARRIS COMPANY, INC.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VJOLATIOK OF SEC. 2(c) OF THE CLAYTON ACT Docket 72GS. Complaint. , Jvly 1,958--Decision, Feu. , 1959 Consent order requiring a canner and primary broker of seafood products in Seatte, Wash., to ced.se violating the brokerage section of the Clayton Act (Scc. 2(c)) by p yjng or allowing brokerage to certain buyers for their own aCCC1lilt and making gra11ts in lieu of brokerage by IJrice concessions or recates, a part or all of "\'/11ich were not charged back to the pachr-principals but were taken from its brokerage or that of its field b1'o1-(,1'5.

COMPLAIKT The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof, and hereinniter more particularly designated and described, has been and is now violating the provisions of subsection (c) of Section 2 of the Clayton Act, as amended (L'. , Title 15, See. 13), hereby issues its complaint, stating its charges with respect thereto as follows:

PARAGRAPH 1. Hcspondent P. E. Harris Company, Inc., hereinafter sometimes referred to as re ponclent Harris or as carp01' aie respondent, is a corporation organized, existing and doing business under and by virtue of the laws of the State of \Vashington, ,with its principal offce and place of business located at 1220 Dexter Horton Dui1ding, Seatte. Wash. Respondent is a substantial factor in the sale and distribution of seafood products, particularly canned salmon.

PAR. 2. Respondent is now and for the past several years has been engaged in the business of canning, packing, selling- and distributing seafood, including canned salmon, hereinafter referred to as seafood products. A substantial part of the seafood products sold and distributed by respondent are canned and packed in its own plants. HO\vever respondent also distributes seafood products as a primary broker, negotiaiing sales for the account of a number of packer-principals located in various areas within and beyond the continental United States, including the Puget Sound and Columbia Hiver arep. , and the Territory of Alaska.

Complaint 55 F.

PAR. 3. Respondent generally sells and distributes both its own and its principals' seafood products through field brokers located in various marketing areas, to buyers located throughout the United States. Respondent has directly or indirectly shipped or transported or caused such seafood products, when sold, to be shipped or transported from its canning plants or warehouses or from the canning plants or warehouses of its packer-prin cipals to buyers thereof loeated in various States of the L' united States other than the State or territory of origin of said seafood products. Thus respondent has been for the past several1 years and is now engaged in a continuous course of trade in commerce as "commerce" is defmed in the aforesaid Clayton Act. PAR. 1. When acting as a primary broker in negotiating salcs for its paeker-principal1s, respondent is usually compensated for its services at the rate of 5 percent of the net selling price of the merchandise as established by said packer-principals by deducting the brokerage from the proceeds in its account of sale to its packer-principals. The field brokers employed to negotiate sales for respondent are usually compensated at the rate of 2 percent of the net selling price of the merchandise sold. However some field brokers received percent for said services. PAR. 5. In the course and conduct of its business in commerce for the past several years both as a packer and as a primary broker, respondent has paid, granted or allowed a brokerage or commission in substantial amounts to certain buyers for their own account, and has made grants or allowances in substantial amounts in lieu of brokerage by affording price concessions or rebates or allowances, a part or al1 of which ,were not charged back to its various packer-principals but ,were, on the contrary:y, taken from all or a portion of the brokerage or commission earnings of respondent and of its field brokers. Among and including, but not neeessariJy limited to, the methods or means employed by respondent in so doing are the following:

(a) Selling to certain buyers, purchasing for their own account. on which purchases respondent paid, granted or allowed the buyer the customary fielel brokerage. (b) Selling to certain buyers at net prices which were less than those accounted for to its packer-principals, a part. or all of the difference jn prices being taken from respondent' s brokerage or commission.

P. E. HARRIS COMPANY, INC. 1221 1219 Decision (c) Granting to certain buyers deductions from price by way of allowances or rebates, a part or all of which were not charged back to its packer-principals but were taken from respondent' brokerage.

PAR. 6. The acts and practices of respondent as herein alleged and described constitute violations of the provisions of subsection (e) of Section 2 of the Clayton Act, as amended (V. Title 15, Sec. 13) .

Ml' Cecil G. Miles for the Commission. MI'. James Wm. Johnston of Seattle, Wash. , for respondent. INITIAL DECISION BY LOREN H. LAI;GHLIN, HEARIC'G EXAMINER This proceeding involves alleged violations of 92 (e) of the Clayton Act, as amended (D. , Title 15, 913), it being charged in the complaint, in substance, that the respondent named therein, in the course and conduct of its business of canning and packing seafood, including cannerl saJrnon, and selling and distributing in commerce its own seafood products and those ofa number packer-principals for \whom it acts as a primary broker, has paid, granted or allowed a brokerage or commission in substantial amounts to certain buyers for their own account, and has made grants or allo\vances in lieu of brokerage by affording price concessions or rebate.es or allowances, a part or all of which were not charged back to its various packer-principals, but were taken from all or a portion of the brokerage or commission earnings of respondent and of its field brokers.

On December 12, 1958, there was submitted to the undersigned hearing examiner 01' the Commission for his consideration and approval an "Agreement Containing Consent Order to Cease and Desist " which had been entered into by and between respondent and the attorneys for both parties, under date of November 28 1958, subject to the approval of the Bureau of Litigation of the Commission, which had subsequenUy duly approved the same. On due consideration of such agreement, the hearing examiner linds that said agreement, both in form "nd in content, is in aecord with S3. 25 of the Commission s Rules of Practice for Adjudicative Proceedings, and that by said agreement the parties have specifically agreed to the following matters: 1. Respondent P. E. Harris Company, Inc. , is a corporation existing and doing business under and by virtue of the laws of the State of Washington . with its offce and principal1 piaee of Decision 55 F.

business located at 1220 Dexter Horton Building in the city of Seattle, State of Washington.

2. Pursuant to the provisions of 2 (c) of the Clayton Act, as amended (U. , Title 15 13), the Federal Trade Commission on July 23, 1958, issued its complaint in this proceeding against respondent, and a true copy was thereafter duly served on respondent.

3. Respondent admits all the jurisdictional facts alleged in the complaint and agrees that the record may be taken as jf findings of jurisdictional facts had been duly made in accordance with such allegations.

4. This agreement disposes of all of this proceeding as to all parties.

5. Respondent waives:

(a) Any further procedural steps before the hearing examiner and the Commission;

(b) The making of findings of fact or conclusions of law; and (c) All of t.he rights it may have to challenge or contest the validity of the order to cease and desist entered in accordance with this agreement.

6. The record on \which the initial decision and the decision of the Commission shah be based shah consist solely of the complaint and this agreement.

7. This agreement shah not become a part of the offcial record unless and until it becomes a part of the decision of the Commission.

8. This agreement. is for settement purposes only and docs not constitute an admission by respondent. that it has violated the law as alleged in the complaint.

9. The following order to cease and desist may be entered in this proceeding by the Commission without further notice to respondent. When so entered it shah have the same force and efiect as if entered after a fuH hearing. It may be altered, modified or set aside in the manner provided for other orders. The complaint may be used in construing the terms of the order. Upon due consideration of the complaint filed herein and the said "Agreement Containing Consent Order to Cease and Desist the Jaiter is hereby approved, accepted and ordered filed, the same not to become a part 01' the record herein, ho\vever, unless and until it becomes part of the dccision of the Commission. The hearing examiner finds :from the complaint and the said "Agreement Containing Consent Order to Cease and Desist" that the P. E. HARRIS COMPANY , I0:C. 1223 1219 Decision Commission has jurisdiction of the subject matter of this proceeding and of the respondent herein; that the complaint states a legal cause for complaint under the provisions of 92 (c) of the Clayton Act, as amended (D. , Title 15 , 913), against the respondent both generally and in each of thc particulars alleged therein; that this proceeding is in the interest of the public; that the following order as proposed in said agreement is appropriate for the just disposition of a1l of the issues in this proceeding as to a1l of the parties hereto; and that said order therefore should be, and hereby is, entered as follows:

ORDER It -is ordel"ed That P. E. Harris Company, Inc., a corporation and its offcers, agents, representatives, or employees, directly or through any corporate or 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: 1. Paying, granting, or allovving, 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 buyers, anything of value as a cornnlission, brokerage, or other compensation, or any al- 100vance or discount in lieu thereof, upon or in connection with the sale of seafood products to such Duyer for his own 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 received by respondent on sales made for its 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 hy any other method or means.

DECISION OF THE COMMISSIOJ' AND ORDER TO FILE REPORT OF COMPLIAJ'CE The Commission having considered the hearing examiner s initial decision herein, filed December 24 , 1958, accepting an agreement containing- a consent order theretofore executed by the respondent and counsel in support of the complaint, service of which was comp1et.e on January 12, 1959; and It appearing; that through inadvertence tbe word " " was omitted from the first line of the paragraph numbered " 2" in t.he order contained in the initial decision, resulting in a variance Decision 55 F.

between said order and the order agreed upon by the parties; and The Commission being of the opinion that this clerical error should be corrected:

It is ordel'd That the initial decision of the hearing examiner , and it hereby is, modified by inserting the word " " after the word "passing" in the first line of paragraph 2 of the order contained in said initial decision.

It is furthe?' Q?'dc,' That the initial decision, as so modified shall, on the 12th day of February 1959, became the decision of the Commission.

It is fU1ther ordered That the respondent. P. E. Harris Company, Inc., a corporation, shall, within sixty (60) days after service upon it of this decision, file with the Commission a report in writing, setting forth in detail the manner and form in which it has complied with the order contained in the aforesaid initial decision as modified.

HUDSON HOUSE, INC., ET AI,. 1225 Complaint