National Tube Corporation et al.

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IN THE :MATTER OF NATIONAL TCBE CORPORATION ET AL.

CQ1,,-'-SENT ORDER, ETC" IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE Color1nsslOX ACT Docket 8126. Complaint, Sept. iD60-Decision, June, 1.961 Consent order requiring South Xorwalk, Conn. , distributors to cease selling to dealers television tubes .which were reactivated, reconditioned, or rebuilt containing used parts, without disclosing clearly on the tubes, on the carton containers, and on invoices that such was the case. CO:\Ilr, AIXT Pursua,nt to the provisions of the Federal Trade Commission Act and by virt.ue of the authority vested in it by said Act, the Federal that ational TubeTrade Commission, having reason to belie-vc Corporation, a corporation, and Ernest Kochies, Frank Cooke and J\1ilton J\1mitchell, individually and as officers of said corporation hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the COInmission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: PARAGRAPH 1. Respondent National Tube Corporation is a, corporation organized, existing and doing business under and by virtue of the Jaws of the State of Connecticut, with its offce and principal place of business located at 7 Lexington A venue, South Norwalk Connecticut.

Respondents Ernest Kochies, Frank Cooke and Iilton Mitchell ate individuals and offcers of said corporation. They formulate control and direct the policies, acts and practices of t.he corporate respondent, including the acts and practic€shereina.after set forth. Their address is the same as that of the corporate respondent. PAR. 2. Respondents are now, and for some time last past have been, engaged in the manufacture, offering for sale, sale a.nd distribution of television picture tubes which have been reactivated or NATlO~AL TUBE CORPORATlO~ ET AL. 1131 1130 Complaint reconditioned, and which have been rebuilt containing used parts, to distributors 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 t.their place of business in the State of Connecticut t.o purchasers t.hereof located in various other states of the United States, and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said products in commerce, fis "commerce:' is defined in the Federal Trade Commission Act.

PAn. 4. Respondents do not disclose on the tubes, on the cartons in which they are packed, on in1'oic88, or in any other manner, that said television picture tubes Hre reactivated or reconditioned, or rebuilt containing previously llsed parts. PAR. 5. 'Vhen television tllbes arc reactivated or reconditioned or rebuilt containing previously used parts, in the absence of a disclosure to the contrary, such tubes are understood to be and are readily accepted by the public as new tubes. PAR. 6. By failing to disclose the facts as set out in Paragraph Four, respondents place in the hands of uninformed or unscrupulous dealers means and instrmnentfllities whereby they may mislead and deceive the public as to the nntllre of their said television picture tubes.

PAR. 7. In the conduct of their business, and at all times mentioned herein, respondents have been in substantial competition, in commerce, ",ith corporations, firms and individuals engaged in t.he sale of television picture tubes.

PAR. 8. The failure of respondents to disclose on their television picture tubes, on the cartons in -which they are packed, on invoices or in any othet manner, that thpy are reactivated or reconditioned or rebuilt containing used parts, has had, and now has the tendency and capacity to mislead members of the purchasing public into the erroneous and mistaken belief that sa.id picture tubes are new in their entirety and into the purchase of substantial quantities of respondents' said tubes by reason of such erroneous and mistaken belief. As a consequence t.hereof, substantial trade in commerce has been, and is being, nnfa.ir1y diverted to respondents from their competitors and substantial injury has thereby been, and is being, done to competition in commerce.

PAR. D. The aforesaid acts and practices of respondents, as herein alleged, were, and are, a11 to the prejudice and injury of the public and of respondents' competitors and constit.uted, and now constitute unfair and decept.ive acts and practices and unfair met.hods of com- , ,, Decision 58 F.

petition, in commerce, within the intent and meaning of the Federal Trade Commission Act.

jlfr. Michael J. Vitale supporting the complaint. Mr. Sidney Vogel X orwalk, Conn., for respondents. INITIAL DECISION OF JOHN LEWIS , IIEARING EXA finer The Federal Trade Commission issued its complaint against the above-named respondents on September 26 , 1960, charging them with the use of unfair and deceptive acts and practices and unfair methods of competition, in commerce, in violation of the Federal Trade Commission Act, by failing to disclose that television picture tubes manufactured and sold by them are reactivated or reconditioned, or rebuilt containing previously l1seu parts. After being served with said complaint, respondents appeared by counsel and entered into an agreement related February 24, 1061, containing a consent order to cease and desist purporting to dispose of all of this proceeding as to all parties. Sflid agreement hieh has been signed by all respondents, by counsel for said respondents and by counsel supporting t.he complaint, and approved by the Director Associate Director, and Assistant Director of the Commission Bureau of Litigation, has been submitted to the above-namp,d hear ing examiner for his consideration, in accordance with Section 3. of the Commission s Rules of Practice for Adjudicative Proceedings. Respondents. pursuant to the afore.said agreeme.nt, have admitted all the jurisdictional fads alleged in the complaint and agreed that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations. Said agreeme,nt further provides that respondents waive any further procedural steps before the hearing examiner and the Commission, the making of findings of fact or conclusions of law and all of the rights they may have to channel1gc or contest the va1idit.y of the order to cease and desist entered in accordance with such agreement. It has been agreed t.hat the order to cease and desist issued in accordance with said agreement shall have the same force and effect as if entered after a full hearing and that the complaint. may be used in construing the terms of said order. It has also been agreed that the record herein shall consist solely of the complaint. and said agreement, and that said agreement is for settlement purposes only and does not constitute an admission by respondents that they have violated the law as alleged in the complaint. This proceeding having now come on for final consideration on the complaint and the aforesaid agreement containing consent order, KATIO~AL TUBE CORPORATlO~ ET AL. 1133 1130 Order and it appearing that the order provided for in said agreement covers all of 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 becoming the decision of the Commission pursuant to Sections 3. and :J.25 of the Commission s Rules of Practice for Adjudicative Proceedings, and the hearing examiner, accordingly, makes the following jurisdictional iindings and order: 1. Respondent K ational Tube Corporation is a corporation existing and doing business under and by virt.ue of t.he laws of the State of Connecticut, with its aiIee and principal place of business located at 7 Lexington A venue, in the City of Sout.h Norwalk, State of Connecticut.

Respondent.s Ernest Koohies, Frank Cooke and Milton Mitchell are individuals and oflkers of said corporation. They formulate control and dire,ct the policies, acts and practices of the corporate respondent. Theil' 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 sa.id re-named. The complaint stfltes a cause of action against spondents under the Federal Trade Commission Act, and this proceeding is in the interest of the pubic.

ORDER , a It is ordered That respondents, Nationa.l Tube Corporation corporation, and its offcers, and Ernest Kochics, Frank Cooke and offcers of said corporations\1ilton ItlitcheJl, individually and as and respondents' representatives, agents and employees, directly or throllgh nny corporate or other device, in connec6on ",ith the television picture tubesouering for sale, sale or distribution of which have been reactivated or reconditioned, or rebuilt containing used parts, in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Failing to clearly disclose on the tubes, on the cartons in which they are packed, on invoices, and in advertising, that said tu bes are , asreactivated or reconditioned, or rebuilt and contain used parts the case may be.

. Pla( ing any means or instrumentality in the hands of others whereby they may mislead the public as to the nature and condition of their television picture tubes.

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1134 FEDERAL TRADE COM:\ISSIO~ DECISIONS Decision 58 P.

DECISION OF THE COllIl\IISSIOX AND ORDER 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 16th day of JUlle 1961, become the decision of the Commission; and, accordingly:

It is olde1ed That the respondents herein shah 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 form in which they have complied with the order to cease and desist.