Electronic Video, Inc.

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

IN Tile MATTER OF ELECTRONIC VIDEO, INC., ET AL.

CONSENT OImER ETC. , IN REGARD TO THB ALLEGED VIOLATION OF THE FEDERAL Thane CO:lIMISSION ACT Docket 7911,. Complaint, June 1960-Decisi-on, Ap1. , 1961 Consent order requiring Brooklyn . Y., manufacturers of rebuilt television picture tubes containing used parts to cease representing falsely that such tubes were entirely new and were guaranteed by attaching tags stating Tills IS A BRAND NEV;, FULLY GUARANTEED '1'. V. PICTCRE TCBE", or hy other means; and to disclose clearly that such tubes were rebuilt and contained used parts.

CO:MPLAINT Pursuant to the provisions of the Fec1ela.1 Trade Commission Act, and by virtue of the authority vested in it by said Act. the Federal Trade Commission, having re(180n to belie.ye that Electronic Video Inc., a corporation, and Jerome D. Farkas, individually and as an offcer of said corporation, hereinafter referred to as respondents have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect at follows:

PARAGRAPH 1. Respondent Electronic Video, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its principal offce and place of business located at 1946 Pitkin Avenue, Brooklyn, New York. Complaint 58 F.

Respondent Jerome D. Farkas is president of said corporate respondent. He IOT111Ulates, directs and controls the acts a,ncl practices of the corporate respondent, including the acts and practices hereinafter set forth. His address is the same as that of the corporate respondent.

PAn. 2. Respondents are now, and for some tiIne last past have been, engaged in the manufacturing, ouering for sale, sale and distribution of rebuilt television picture tubes containing used parts to wholesalers who in turn sell to retailers and television repair111Cn for resale to the public.

PAR. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said products, when sold, to be shipped from their place of business in the State of ew York to purchasers thereof located in various other states of the United Stat.es\ anc1maintain, and at a11 times mentioned herein have maintained, a course of t.trade in saiel product, in COIDmerce as "commerce:' is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct of their business, and for the purpose of inducing the sale of their products, respondents made certain statements concerning their products on tags and labels and by other media. Among and t.typical of such statements is the following:

THIS IS A BRAJ\T1 KEW FULLY GCARANTEED T. V. PICTURE TCBE PAR. 5. Through the use of the aforesaid statement, respondents represent eel :

1. That certain of their television picture tubes were new in their entirety.

2. The guarantee provided for respondents' television picture tubes was limited both as to time and extent. PAR. 6. Said statements and representations were false, misleading and deceptive. In truth and in fact:

1. The television picture tubes represented as being "brand new are not nmv in their entirety.

2. The guarantee provided for respondents' television picture tubes were limited both as to time and extent. PAR. 7. Thc television picture tubes sold by respondents are rebuilt and contain used parts. Respondents do not (1isclosc on the tubes. or on the cartons in which they are packed, or on invoices, or in any other marmer that said television picture tubes are rebuilt and contain used parts.

, , ELECTRONIC VIDEO , IKC. , ET AL. 587 585 Complaint 'Yhen television picture tubes are rebuilt containing used parts in the absence of a disclosure to the contrary, such tubes aTB understood to be and are readily accepted by the public as new tubes. PAR. 8. By failing to disclose the facts as set forth in Paragraphs Six and Seven, respondents place in the hands of uninformed or unscrupulous dealers mea,ns and instrumentalities whereby they may 111mislead and decei VB the public tS to the nature of their said television picture tubes.

PAR D. In the conduct of their business, and at all tilnes mentioned herein, respondents l1ave been in substantial competition, in commerce with corp.orations, firms and individuals engaged in the sale of television picture tubes.

PAIL 10. The use by respondents of the af01'8Sa,id false, misleading a.nd deceptive statements and representations and the failure of respondents to disclose on their television picture tubes, and on the cartons in which they are packed, on invoices, or in any other manner that they Hrc rebuilt containing used parts, has had, and nOli has, the capacity a,nd tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations "\Were and are true and into t.he purchase of sub stantial quantities of respondents' said tubes by reason of sflid erroneous and mistaken belie,f. As a eOllsequence thereof, substantial trade in commerce has been, and is being, unfairly directed to respondents from their competitors and substa,ntial injury has thereby been, and is being, done to competition in commerce. PAn. 11. The aforesaid acts and practices of respondents, as herein alleged were, and arc, a11 to the prejudi.ce and injury of the public and of respondents' competitors a, nc1 constituted, and now constitute unfair and deceptive acts and practices and unfair methods of competition in commerce, wit.hin the intent and meaning of the Federal Trade Commission Act.

Mr. J1iehael J. Vitale for the Commission. Mr. George 1. Oohen of New York, K. Y., for respondents. IxrrL\L DECISION BY EDGAR A. BUTTLE, HEAin G EXA nner On June 3, 1960, the Federal Trade Commission issued its complaint against the above-named respondents charging them with violating the provisions of the Federal Trade Commission Act in connedion with the manufacturing, offering for sale, sale and distribution of rebuilt television picture tubes containing used parts. On January 25 1061 the respondents and counsel supporting the complaint entered into an agreement containing a. consent order to Order 58 F.

cease and desist in accordance with section 3.25(a) of the Rules of Practice and Procedure of the Commission. lTndcr the foregoing agreement, the respondents admit the jurisdictional facts alleged in the complaint and agree anlong other things that the cease and desist order there sct forth may be entered without further notice and shall have the same force and effect as if entered after a full hearing. The agreement includes a waiver by the respondents of all rights to challenge or contest the validity of the order issuing in accordance therewith; a.nd recites that the said agreement shall not become a part of the offcial record unless and until it becomes a part of the decision of the Commission, and that it is for settlement purposes only and does not constitute an admission by the respondents that they have violated the law as alleged in the complaint. The hearing examiner finds that the content of the said agreement meets all the requirements of section 3.25 (b) of the Rules of Practice.

This proceeding having now come on for final consideration by the hearing examiner on the complaint and the aforesaid agreement for consent order, and it appearing that said agreement provides for an appropriate disposition of this proceeding, the aforesaid agreement is hereby accepted ane! is ordered filed upon becoming part of the Commission s decision in accordance with section 3.21 of the Rules of Practice; and in consonance with the ternlS of said agreement the hearing' examiner ma,kes the following jurisdictional findings and order:

1. Respondent Electronic Video, Inc., is a corporation organized existing and doing business under and by virtue of the laws of the State of N ew York, with its offce and principal place of business located at 1946 Pitkin Avenue, Brooklyn, New York. R.respondent Jerome D. Farkas is an offcer of sa.id corporate respondent. He formulates, directs and controls the acts and practices of said corporate respondent. His address is the same as that of the corporate respondent.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents hereinabove named. The compla.int states a cause of action against said respondents under the Federal Trade Commission Act, and this proceeding is in the interest of the public.

onder It is ordered. That respondents Electronic Video, Inc., a corporation, and its offcers, and Jerome D. Farkas, individually and as an offcer of said corporation, and said respondents' representatives BRUCE A. GRAVES & SON 589 585 Syllabus agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of rebuilt television picture tubes containing used parts, in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, directly or by implication, that such television picture tubes are new.

2. Failing to disclose on the tubes, on the cartons in which they are packed, on invoices and in advertising, that said tubes are rebuilt and contain used parts.

3. Representing, directly or by implication, that said tubes are guaranteed, unless the nature and extent of the guarantee and the manner in which the guarantor will perform thereunder are clearly and conspicuously disclosed.

4. Placing any n1ean8 or instrumentality in the hands of others whereby they may mislead the public as to the nature and conc11 tion of their television picture tubes.

DECISION OF 'am COJDIISSIOX \KD ORDER TO FILE REPORT OF CO::IPLL\XCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initia.l decision of the hearing examiner shall, on the 13th day of priI1961, become the decision of the Commission; and, accordingly: It i8 ordered That respondents herein shall, within sixty (60) days after service upon them of this order, file with the COlnlnission a report in writing setting forth in detail the Inanncr and form in which they have complied with the order to cease and desist. IN THE MATTER OF BRt:CE A. GRA YES DOING BUSINESS AS BRUCE A. GRA YES & SOX COKSBNT ORDERJ ETC. , IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2(c) OF THE CLAYTON ACT Dc'cket 8063. Complaint, Aug. 3, 1960 Decision, Apt. 1S, 1961 Consent onler requiring a dealer in Nashvile, Tenn. , to cease violating Sec. 2(c) of t.he Clayton Act by accepting Oll substantial purchases of citrus fruit from a number of Florida packers, a commission or brokerage usually at the rate of 10 cents pel' 1-3/5 bushel box, and in many instances a lower price reflecting such commission. 590 FEDERAL TRADE COMl\:ISSIO:\ DECISIONS Complaint 58 F.

C01\PLAIX' The Federal Trade COll1mission, having reason to believe that the party respondent named in the caption hereof, and hereinafter 11101'e particularly described, has been and is now violating the provisions of subsection (c) of Section 2 of the Clayton Act, as amended (U. Title 15 , Section 13), hereby assues its complaint, stating its charges with respect thereto as follows:

PARAGRAPH 1. Bruce A. Graves is an individual doing business as Bruce A. Graves, under and by virtue of the laws of the State of Tennessee, with his offce and principal place of business located at 815 Fourth Avcllue Korth, Nashville, Tennessee. PAR. 2. Hesponclent is now, and for the past several years has been, engaged primarily in the business of buying, selling and distributing, for his own account, citrus rruit and produce and other food products, all of which are hereinafter referred to as food products. R.esponclent purchases his food products rrom a, large number or suppliers located in many sect.ions or the LTnited States, particularly in the State of Florida. The annual -volun1e or business clone by respondent in the purclHlse a,nd sale or food products is substantial. PAR. 3. In the course and conduct of his business for the past several years, respondent has purchased and distributed, and is now purchasing and distributing, food products in commerce, as " COlTlmerce:' is defu1ed in the aforesaid Clayton Act, as amended, from suppliers or seJlel's located in several States of the United States other than the State of Tennessee, in which respondent is located. Respondent transports or causes such food products, when purchased to be transp01:tecl fronl the places or business or packing plants or his suppliers located in various other States of the United States to respondent who is located in the State or Tennessee, or to respondent' customers located in sa,id State, or elsewhere. Thus, there has been at all times mentioned herein a continuous course of trade in commerce in the purchase or said food products across state lines behy-een respondent and his respective suppliers or such products. PAR. 4. In the course and conduct of his business for the past several years, but more particularly since J annary 1 , 1050, respondent has been and is now making substantial purchases of food products ror his own account for resale fronl some, but not alj of his suppliers and on a Jarge number of these purchases re.spondent has received and accepted, and is nOlv receiving and a,accepting, from said suppliers a commission, brokerage, or other compensation, or an R.allowance or discount in lieu thereof in connection thermvith. BRUCE A. GRAVES & SON 591 589 Complaint For example, respondent makes substantial purchases of citrus fruit from a number of packers or suppliers located in the State of Florida, and Tocci vos on said purchases, a brokerage or C0111mission or a discount in lieu thereof, usually at the rate of 10 cents per 1. bushel box, or equi','nlent. In many instances respondent receives a 10\\01' price from the supplier which reflects said commission or brokerage.

PAIL 5. The acts and pract.ices of respondent in receiving and accepting a brokerage or a commission, or an allowance or discount in lieu thereof, on his own purchases, as above alleged and described are in violation of subsection (c) of Section 2 of the Clayton Act as amended (U. C. Title 15, Section 13). Cecil O. Miles, Esq. and Emest G. Eames, Esq. supporting the complaint.

D. L. Lansden. Esq. of Wallet, Davis Lansden of Nashvile Tenn., for respondent.

INITIAL DECISION BY LEO::T R.. GROSS : I-IEAHING EXAMINER On August 3, 1960, t.he Federal Trade Commission issued a complaint against the above-named respondent, in which he was charged with violating (;2 (c) of the Clayton Act, as amended (1J. C. Title 13), by, among other t.things, receiving and accepting a brokerage or comnlission or an allowance or discount in lieu thereof, on the purchases or food products which he sells and transports in interstate commerce, as "commerce" is defined in the Clayton Act. A true ancl correct copy or the complaint was served upon respondent as required by law. Therearter respondent agreed to dispose or this proceeding without a formal hearing, pursuant to the terms of an agreement dated February 2, 1961 , containing consent order to cease and desist. The agreement was submitted to the undersigned hearing examiner on February 9, 1961 , in accordance with 25 of the Commission s Rules of Practice ror Adjudicative Proceedings. The agreement purports to dispose or this proceeding a.s to the respondent and contains the form of a consent cease and desist. order \'\hjch the parties have represented is dispositive or the issues involved in this proceeding. The agreement has ben signed by the respondent, his attorney and by counsel supporting the complaint, and has been approved by the Associate Direcjol' and the Director or the Bureau or Liiigation of the Fec1erftl Trade Commission. In said agreement respondent admits all or the juriscUctional fact.s alleged in the com- 592 FEDERAL TRADE BnSSIOK DECISIOXS :E'indings 58 F.

plaint and agrees that the record may be taken as if findings jurisdictional facts had been made in accordance '''ith such allegations. In the agreement the 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 (e) all rights respondent may have to challenge or contest the validity of the order to cease and desist entered in accordance with the agreement.

The parties further agree, in said agreement, that the record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and the agreement; that the agreement shah not become a part of the offcial record unless and until it becomes a part of the decision of the Federal Trade Commission; that the order to cease and desist entered in this proceeding by the Commission may be entered without further notice to the respondent, and when so entered such order win have the Sample force and effect as if entered after a full hearing. Said order may be altered, modified or set aside :in the manner provided for other orders, and the complaint may be used in construing the terms of the order.

The parties have convenanted that the said agreement is for settlement purposes only and does not constitute an admission by the respondent that he has violated the law as alleged in the complaint. This proceeding having now COIne on for fial consideration on the complaint and the aforesaid agreement containing consent order, and it appearing that the order which is approved in and by said agreement disposes of all the issues presented by the complaint as to all of the parties involved, said agreement is hereby a.accepted and approved as complying with gg3.21 and 3.25 of the Commission Rules of Practice for Adjudicative Proceedings. Tho undersigned hearing examiner, having considered the agreement a.nd proposed order and being of the opinion that the acceptance thereof will be in the public interest, makes the following findings and issues the following order:

FINDINGS 1. The Federal Trade Commission has jurisdiction over the parties and the subject matter of this proceeding; and this proceeding is in the public interest;

2. Respondent Bruce A. Graves is an individual doing business as Bruce A. Graves & Son, incorrectly named in the complaint as Bruce A. Graves, under and by virtue of the laws of the State of BRUCE A. GRAVES & SON 593 589 Decision Tennessee, with his offce and principal place of business located at 815 Fourth Avenue, North, in the City of Nashville, State of Tennessee;

3. R.respondent is engaged in commerce as "commerce" is defined in the pcrtincnt statutes which are invoked by the complaint herein. Now, therefore It is ordered That Brucc A. Graves, an individual doing business as Bruce A. Graves & Son, and respondent's agents, representatives and employees, directly or through any corporate, partnership, sole proprietorship, or other device, in connection with the purchase of citrus fruit or produce in commerce, as "commerce" is defined in the Clayton Act, do forthwith cease and desist from: Receiving or accepting, directly or indirectly, from any seller anything of value as a commission, brokerage, or other compensation or a.ny allowance or discount in lieu thereof, upon or in connection with any purchase of citrus fruit or produce for his own account, or where respondent is the agent, representative, or other intermediary acting for or in behalf, or is subject to the direct or indirect control of any buyer.

DECISION OF THE COJ\l\fISSION AXD ORDER TO FILE REPORT OF C03fPLlAKCE The Commission having considered the hearing examiner s initial decision, fied February 21, 1961, accepting an agreement containing a consent order theretofore executed by the respondent and counsel in support of the complaint; and It appearing that the first sentence in the initial decision, purporting to summarize the charge in thc complaint is in error; and the Commission being of the opinion that this error should be corrected: It is ordered That the initial decision be, and it hereby is, modified by striking from the sixth and seventh lines of the first paragraph on page two of said decision the words "which he sells and transports" as they appear immediately following the word "products in the sixth line.

It is further ordered That the initial decision, as herein modified shall on the 13th day of April, 1961, become the decision of the Commission.

Tt is further ordel"ed That the respondent shad, within sixty (60) days after service upon him of this order, file with the Commission a report, in writing, setting forth in detail the manner and fol1 which he has complied with the order contained in the aforec;;lid initial decision, as amended.

681-237--63-- Complaint 58 F.