Paxton and Gallagher Co.

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

In tur Marrer or PAXTON AND GALLAGHER CO.

ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION oF sec. 2(d) OF THE CLAYYON ACT Docket 8176. Complaint, Nov. 17, 1960—Decision, Nov. 7, 1961 Order dismissing, due to complete change of ownership and management of respondent corporation since the time of the alleged violations, complaint charging a coffee roaster in Omaha, Nebr., with unlawfully discriminating among competing customers in paying advertising allowances, in violation of Sec. 2(d) of the Clayton Act. | Complaint The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof, and hereinafter more particularly designated and described, has violated and it now violating the provisions of subsection (d) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act (U.S.C. Title 15, Section 13), hereby issues its complaint, stating its charges with respect thereto as follows:

ParacrarH 1. Respondent Paxton and Gallagher Co. is a corporation organized, existing and doing business under and by virtue of the 6938-490—6-4 70 Decision 59 F.T.C.

laws of the State of Delaware, with its office and principal place of business located at 8401 W. Dodge Road, Omaha, Nebraska. Par. 2. Respondent is now and has been engaged in the roasting, packing, sale and distribution of coffee. Respondent sells and distributes its product to wholesalers and retailers, including retail chain store organizations and grocery co-operatives. Respondent’s sales of its products are substantial, exceeding $1,000,000 annually. Par. 3. Respondent sells and causes its products to be transported from its principal place of business in the State of Nebraska to customers located in other States of the United States. There has been at all times mentioned herein a continuous course of trade in said products in commerce, as “commerce” is defined in the Clayton Act, as amended.

Par. 4. In the course and conduct of its business in commerce, and particularly since 1958, respondent paid or contracted for the payment of something of value to or for the benefit of some of its customers as compensation or in consideration for services or facilities furnished by or through such customers in connection with their offering for sale or sale of products sold to them by respondent, and such payments were not made available on proportionally equal terms to al] other customers competing in the sale and distribution of respondent’s products.

Par. 5. For example, in the year 1959, respondent contracted to pay and did pay to Benner Tea Company, a retail grocery chain with headquarters in Burlington, Iowa, the amount of $150.00 as compensation or as an allowance for advertising or other services or facilities furnished by or through Benner Tea Company in connection with its offering for sale or sale of products sold to it by respondent. Such compensation or allowance was not made available on proportionally equal terms to all other customers competing with Benner Tea Company in the sale and distribution of products of like grade and quality purchased from respondent.

Par. 6. The acts and practices of respondent, as alleged, are in violation of subsection (d) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act.

Mr. John Perry for the Commission.

Mr, Cevit A. Johnson, Omaha, Nebr., and Mr. W. Buch Arnold, Houston, Tex., for respondent.

Inrriau Deciston py Wiuiiam L. Pack. Hearne Examiner The complaint in this matter, issued November 17, 1960, charged the respondent, Paxton and Gallagher Co., a Delaware corporation having its place of business in Omaha, Nebraska, with violation of PAXTON AND GALLAGHER CO. 1091 1089 Decision Section 2(d) of the Clayton Act, as amended by the Robinson-Patman Act. On December 8, 1960, respondent filed its answer. No hearings have been held.

A motion to dismiss the complaint has now been filed on behalf of respondent by its counsel, the grounds assigned for the motion being as follows:

1. Since the time of the alleged violations there has been a complete change of ownership of respondent. On August 2, 1961, all of the outstanding capita] stock of the company was acquired by Duncan Coffee Company, a Texas corporation, which has its office in Houston, Texas. At the present time respondent is being operated as a wholly owned subsidiary of Duncan Coffee Company, and it is contemplated that respondent will be liquidated into Duncan Coffee Company. 2. Since the time of the alleged violations there has been a major change in the management of respondent. During the period of the alleged violation and until April 15, 1961, the president and executive head of respondent was W. Clarke Swanson, who exercised complete control over all of the company’s policies and practices. On April 15, 1961, Mr. Swanson died. ‘The president executive director of respondent is Charles Duncan, who is also president and executive director of Duncan Coffee Company.

Supporting the motion is an affidavit by one of respondent’s counsel who has personal knowledge of the matters set forth in the motion. The motion is not opposed by counsel supporting the complaint. In view of the circumstances, particularly the circumstance that respondent is to be liquidated-and lose its corporate identity, it is concluded that the motion should be granted and the complaint dismissed, the dismissal, however, to be without prejudice to the right of the Commission to take any further action in the matter in the future which may be warranted.

ORDER It is therefore ordered, That the complaint be, and it hereby is, dismissed, without prejudice to the right of the Commission to take any further action in the matter in the future which may be warranted by the then existing circumstances.

DECISION OF THE COMMISSION Pursuant to Section 4.19 of the Commission’s Rules of Practice effective July 21, 1961, the initial decision of the hearing examiner shall, on the 7th day of November, 1961, become the decision of the Commission.

Complaint . 59 F.T.C.

In THE MatTvrer or