Container Stapling Corporation et al

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IN THE i"L TTER OF COJ\TAINER STAPLIXG CORPORATIO ET AL.

COX-SENT ORDER, ETC. , TN REGARD TO THE ALLEGED VIOLATJOX OF THE FEDERAL TRADE CO:iDnssIO ',T ACT AND SEC. 3 OF THE CLAYTON ACT Docket 8082. Camp/a-int, Aug. 1960-Decision, J1tnc, 1961 Consent order requiring one of the nation s largest manufacturers of carton closing staples, stapling machines, pflrts, and accessories, to cease violating Sec. 3 of the Clayton Act by sellng its products on the condition that purchasers Dot use or deal in similar products sold by its competitors and that purchasers of its staplers aud parts buy its staples for use therein. C03IrLAINT The Federal Trade Commission having reason to believe that Container Stapling Corporation, a corporation, and Dr. Blanche Schafroth, individually and as an offcer of said corporation, hereinafter referred to as respondents, have violated the provisions of Section 3 of the Clayton Act (15 U.S. C.A. Sec. 14), and the provisions of Section ,"j of the Federal Trade Commission Act (15 A. Sec. 45), and it appearing to the Commission that a procee ding by it in respect t.hereof' would be in the public interest. the Commission hereby issues its eomplaint stating its charge.s in that respect as follmys:

PARAGRAPH 1. Respondent Containcr Sta pIing Corporation, hereinafter referred to as Container, is a corporation organized and existing under the laws of the State of Kevacla with its principal place of business located at Herrin, Illinois. CONTAINER STAPLING CORPORATION ET AL. 1089 1088 Complaint Respondent Dr. Blanche Schafroth, an individual, is vice president and secretary of respondent Container and has controlled and directed the sales policies and practices of the corporate respondent, including the methods, acts and practices mentioned herein. The address of individual respondent Dr. Blanche Schafroth is the same as that of the corporate respondent.

PAR. 2. Respondents are now, and have been for some years, engaged in the manufacture, distribu60n and sale of industrial cartonclosing staples, staplers, part.s and accessories. Respondents now sell, and for some years have been selling, such products to independent distributors and dealers located throughout the United States who in turn make sales directly to users. Respondents industrial cart,on-closing staples, staplers, parts and accessories, enjoy wide sales throughout the United States and respondent Contaillcr is one of the largest manufacturers and distributors of such equipment in the industry. In the past, prior to the advent of staples for this purpose, such closing operation \\-a8 usually done by means glue or gummed paper, or similar means not here involved. Re,spondent ContaillCl' s anntlal sales of its industrial carton-closing staples, staplers, parts and accessories are substantial. being $1 884 000 in 1858.

PAR. 3. Respondents are now, and have been engaged in commerce as "commerce" is defined in the Clayton Act and the Federal Trade. Commission Act. Respondent.s cause carton-closing staples, staplers parts and accessories, manufactured by respondent Container to be transporteel from the manufacturing plant located at Herrin, Illinois to independent distribut.ors ancl customers located throughout the several states of the United States, fwd there is now, and has been for some years, a const.ant current of trade in commerce in said products between and among the various sbtes of the United States, and the District of Columbia.

PAR. 4. In the course and conduct of their business, as herein described, respondents are and have been in substantial competition in the sale and dist.ribution of industrial carton-closing sta.ples staplers, parts and accessories, ill commerce between and among the various states of the United States and the Dist.rict of Colmnbia with other persons and corporations.

PAn. 5. In the course and conduct of their business of manufacturing and selling carton-closing stflples, staplers, parts and accessories, respondents ha1'e made sales and contracts for the sale of such products, and are now making sllch sales a.ncl contracts for the sale of such products on the condition, agreement or understanding that the purchasers thereof shan not sen, cleal or distribute 68J- 20/--63-- Decision 58 F.

carton-closing staples, staplers, parts and accessories, sold or supplied by a competitor, or competitors, of respondents. Hespondents have followed a consistent. policy of requiring the independent distributors and dealers to whom they sen their carton-closing staples staplers, parts and accessories, to discontinue Ilfllclling like or similar products supplied or sold by any competitor, or competitors, of respondents and not to handle any such products except those sold to such distributors and dealers by respondents. PAR. 6. In the course and conduct of their business as hereinabove described, respondents have sold, and attempted to sen staplers, parts and accessories on the condition, agreement or understanding, that the purchasers thereof would buy the earton-closing staples for use, or for resale for use in the operation of respondents carton-closing staplers from respondents. PAR. 7. Competitors of respondents have been, and now are, unable to make sales of carton-closing .'3taplcs, staplers, part.s and accessories, because of the conditions, agreements, and understandings and practices described abo\ e in Paragraphs Five and Six. The distributors and dealers of respondents ho purchase and sell respondents ' carton- closing staples, staplers, parts and accessories constitute a large and substantial market for such products, and sales by respondents to such distributors ftl1c1 deniers have been, and are no\Y , substantial.

PAIL 8. The efleds of the sales Hnd contracts of sale upon such conditions, agreements and understandings, and pnrsnant to the practiecs of respondents, fls herein descri beel, may be to substa,ntially Jessen competition ith respondents in sllch line of eommprce, and may tend to create a monopoly in respondents in such line of commerce, in \\ which respomlents have been, and are no\\", engaged. PAR. 9. The aforesaid acts and practices of respondents constitnte a violation of the provisions of Section 3 of the Clayton Act and Section 5 of the Federal Trade Commission Act. 3ir. Daniel H. Ila/i8co7n supporting t1 complaint. lV-inters, Pmole88 d Jl o)'gan of :\lA.rion IJ. , by Nr. C hades D. lYi:nte?'8 for respondents.

I)JITL\L DEC1SlOX BY EDWARD Cm:EL, HEARING EXAMINER The Federal Trade Commission issnc(l its complaint against the above-named respondents on August 19 , 19GO charging them with vio1atiOTI of Section 3 of t.he Clayton Act anrl S( ('tion ;) of the, Fedend Trade Commi::sion Act in connection \with the distribution and CONTAINER STAPLING CORPORATION ET AL. 1091 1088 Order sale of industrial carton closing staples, staplers, parts and accessones.

On March "0 , 1961, there was submitted to the hearing examiner an agreement uetween re,spollclents, their counsel, and counsel supporting the complaint, providing for the entry of a consent order. Attached to aur1 made a part of the agreement is an affdavit stating that respondent Dr. Blanche Schafroth has not resided in the United St.ates since September lSJ59 n.nd has not been ac6ve in the sales and distribution aetivitie,s of corporate respondent i11 the United States since tlmt date.

under the terms of the agl'pement, the respondents admit the jurisdictional fllcts alleged in the complaint. The parties agree among other things, that t.he cease and desist order there set forth may be entered without further llotice and have the same force and effect as if el1tered after a full hearing and the document includes a waiver by the respondents of all rights to challenge or contest the validity of the order issuing in accordance there"with. The agreement further recites that it is fol' settlement purposes only and does not constitute an admission by the respondents that they have violatea the hl\v as alleged in the complaint. The hearing examiner finc1s that the content of the agreement meets all of thcrcquire,me.llts of Section 3.25(b) of the Rules of the Commission.

The hearing examiner having eon.'3ic1eled the agreement and proposed order, find being or the opinion that they provide an appropriate basis for settlement. and disposition of this proc.eeding, the agreement is hereby accept:ecl, allc1 it is ordered tlw.t said agreement shall not become a IXll't of the oilcinl record unless and until it hecomes a pa.rt of the decision of the Commission. The following Jurisdictional findings are made and the follo-wing order issued: 1. R,respon(lent Container Stapling Corporation is a Xevach corporation with its offee find princ.ipal place of business located in Terrin, Illinois. Respondent Dr. Blanche Seha.froth is an offcer of respollc1ent Conta.iner Stapling Corporation and her address is t.he same as that or the COrpOl'fl1,e respondent. 2. The Federal Trade Commission has jurisdjction of the subject matter of this proeep(liJlg and of the 1'espo11lent8. ORDER It i-s o/'dpl'f'd. TJwt Contained,l' Stapling Corporation, a corpora tion, and its afEcer"': directors, agents, repl"e rl1tati'T es find employees flnc1 Dr. Dlanc.he' Sclmfroth, as an offcer of corporate respondent, directly or indirectly, or through any corporate, partnership or 1092 FEDERAL TRADE CO IMISSION DECISIONS Syllabus GS !i other device, in connection with the offering lor sale, sa.le or distribution or carton closing staples, stapling machines, parts or accessories, in COlIunerce, as "commerce" is defined in the Clayton Act and in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Selling or making any contract or agreement lor the sale of any such products on the condition, agreement or understanding that the purchaser thereof shaU not use, deal in or distribute similar products supplied by any competitor or competitors or l't'spondents. 2. Selling or making any contract or agreement ror the sale or stapling machines, parts or accessories on the condition that the purchasers thereof \\ill buy the carton closing staples for nse, ot' for resale for use, in the operation or respondents ' carton closing stapling machines from responaents only.

It is f'u,rlher o t"deied That the complaint herein be, flu(l the same hereby is, dismissed as to respondent Dr. Blanche Schafroth individually only but not in her capac.ity as an oficer of corporate respondent.

DECISION OF THE C01BfTSS1Q).T AND ORnEn TO FILE Import OF cn':\IVU.. \NCE Pursuant to Section 3.21 of the Comlnission s Rules of Practice, t.he initial decision of the hearing examiner shall on the 10t.h day of June, 1961 : become the decision of the Commission; and: accordingly:

It is o-rdered That respondents Container Staphng Corporation a corporation, and Dr. Blanche Schafroth, fls a.n offcer of s:l,id corporation, shan, within sixty (60) days after service upon them of this order, file Iyith the Commission a report in Iyriting setting forth in detail the manner find form in which thpy hflve complied