United Farmers of New England, Inc., et al.

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IN THE MATTER OF ITED FARMERS OF KEW EKGLA , B'C. , ET AL. COXSEN1' ORDER ETC., IN REG.\RD TO THE ALLEGED VIOLATION OJ.! SEes. 2(a) AND 2(d) OF TH" CLAYTON ACT Docket 8.16. C01nlJla1:nt, .JfaJj 196I J)eci8ion Mm' . 22 19U2 Consent order requiring a marketing cooperative composed of dai1'' fanners In the ::ew I'Jngland States to cease c1isel'minating in price n:mung Hs customers in violation of Sec. 2(a) of the Clayton Act \)y charging some l'ctailcl'-pul'cJwsers substantially higher prices thall their cumpetitors, the differentials ranging as high as 40% for cream alld 137;' fur fluid milk; and to cease violating Sec. 2(d) of the Act by such vractices as granting large grocery chains preferential cash payments for promotional advertising', display cabi. nets, and nev sture opcnings, while making no such allowances available 011 proportionally equal terms to all other competing customers. C03IPLAINT The Federal Trade Commission, having reason to believe that the parties respondent named in the caption hereof, and hereinaft.er more particular'y designated and described, have violated and are now violating the provisions of subsections (a) and (d) of Section 2 of the Clayton Aet (U. C. Title 15, Sec. 13), as amended by the Ilohinson- Patman Act, approved June 19, 193G, hereby issues its complaint stating its charges with re::pcct thereto as follOlYs: COCXl' I PARAGRAPH 1. Respondent, United Farmers of NC"\" England, Inc. sometimes hereinafter referred t.o as United Farmers, is a cooperative 111marketing association organized and existing under the laws of the State of Vermont, \with its principal oHico and place of business located at JHorrjsviJle Vt. Respondent. l nitpd Farmers is composed of ap- 586 FEDERAL TRlI.DE COM:\nSSION DECISIOXS Complaint 60 F.

proximately 2 200 members who are dairy farmers in the States Maine, New Hampshire and Vermont.

The control, direction and management of re.sponclent -United Farmers' affairs, policies, practices, and actions are vested in respondent United Farmers' offcers, directors and members. Respondents Earl N. Gray, Eldon J. Corbett, "\Villiam F. Sinclair and J. C. Thomas, are offcers, directors and Inembers of respondent United Farmers and are sometimes hereinafter referred to as respondent oilcials.

The membership of respondent United Farmers constitutes a class so numerous and changing as to make it impracticable to specifically name each member as a party respondent herein. Thereiore, there are named a,nel included as respondents herein the respondent offcials in their individual and offcial capacities and since they are likewise members of respondent United Farmers and are representative of the entire membership, they are also named as representative of all the members of respondent United Farmers as a class, so that those members not specifically named are also made parties respondent herein.

The principal offce and place of business of each of respondent offcials and all other members is in care of United Fanners of X England, Inc., Morrisvil1e, V t.

PAR. 2. Respondent -United Farmers is extensively engaged in the business of processing, manufacturing, purchasing and selling on its OWll account and as-agent for its members fluid 111ilk and other dairy products throughout the States of 1\Iaine, K ew IIampshire ew Yark Vermont, Connecticut, Rhode Island, and 1\Iassachusetts. United Farmers' annlla.l net sales flre in excess of $24 million. PAR. 3. Respondent sells fluid milk and other dairy products of like grade and quality to a large number of purchasers located throughout the States of 3riail1e, New Hampshire, R,rhode Island, Connecticut Vel'111ont, K sw York and lassachl1setts for sale, consllmption or resale therein.

Respondent owns, maintains and operates a large llumber o_f receiving statiolls, processing and 111manufacturing plants, and distribution depots located in the above-named states, fronl which it sells and distributes its said products to purchasers. PAR. 4. In the course and conduct of its business respondent is now, and for many years past has been, transporting fluid milk and other dairy products, or causing the same to be transported, from dairy farms and other points of origin to respondent's receiving sta- UNITED FARMERS OF NEW E:0 GLAXD , IXC., ET AL. 587 585 Complaint tions, processing and Inanufacturing plants, and distribution depots located in states other than the state of origin. Respondent is now, and for many years past has been, transporting fluid milk and other dairy products, or c,tising the same to be transported, from the state or states where such products are processed manufactured or stored in anticipation of sale or shipment, to purchasers located jn other States of thc United States. Respondent also sells and distributes its said fluid milk and other dairy products to purchasers located in the same states and places where such products are processed, manufactured or stored ill anticipation of sale.

All of the matters and things, including the acts, practices, sales and distrjbution by respondent of its said fluid milk and other dairy products, as hereinbefore alleged, were and are performed and done in a constant current of commerce, as "commerce" is defined in the Clayton Act.

PAR. 5. Respondent sells its fluid milk and other dairy products to retailers and consumers. Respondent's retailer-purchasers resell to consumers. J\lany of respondent's retailer-purchasers are in competition with other retailer-purchasers of respondent. Respondent, in the sale of its fluid milk and other dairy products to retailers and consumers, is in substantial competition with other manufacturers, distributors and sellers of said products. PAR. 6. In the course and conduct of its business in commerce, respondent has discriminated and is now discriminating in price in the sale of fluid milk and other dairy products by selling such products of like grade and quality at clift'erent prices to different purchasers at the same Jevel of trade.

Included ill, but not lirnitec1 to, the discriminations in price, as a,bove alleged, respondent has discriminated in price in the sale of said products by charglng many retailer-purchasers in the Stale of :Massachusetts substantially higher prices than respondent charged to other retailer-purchasers, lnany or Wh0111 are competing purchasers. Such diflercnces in price ha'lTc nllged as high as 40 IJcl'cent for cream and 15 percent for fluid milk.

\u. 7. The effect, of su(:h discrimina.tions in price by respondent in the sale of fluid milk and other cla.iry products has been or may be subst.ant.ially to lessen, injure, destroy or prevent competition: 1. Between respondent and its competitors in the processing, manu. facture, sale and dist.ribution of such products. 2. Between retailers paying higher prices and competing retailers paying lower prices for respondent's said products. 588 FEDERAL 'TRADE COMMISSION DECISIONS Decision and Order 60 F.

PAR. 8. The discriminations in price, as herein alleged, a.re in violation of subsection (a) of Section 2 of the Clayton Act, as amended. COUNT II Charging violation of subsection (d) of Section 2 of the Clayton Act, the C011mission alleges:

PAR. D. Par"gT"phs 1 through 5 of Count I hereof "re hereby set forth by reference "nd made" p"rt of this COlUlt as fully anel with the Bame effect as if quoted herein verbatim.

PAH. 10. In the course and conduct of its business in commerce, as aforesaid, respondent has paid, or contracted for the payment of 111Oney, goods, or other things of value to or for the benefit of some of its custOluers as compensation or in consideration for services or facilities furnished or agreed to be furnished by or through sllch cllstomers in connection with the Imndling, sale, or offering for sale of respondent' s dairy products and respondent has not made or contracted to mako such payments, allowances, or consideration available on proportionally equal terms to all of its other cllstomers competing in the sale and distribution of such products.

Included among such discriminatory and disproportionate allow anees, respondent has paid and a.llo\ycd axlvertising, promotional and other allowances in connection -y..ith the resale of its said products to some of its customers whDe not offering or othenyise making available on proportionately equal terms such payments ami allowances to other competing customers. As iJlustl'ative of such practices, respondent has paid certain amounts of money to selected customers, principally to large grocery store chains, for promotional advertising, display cabinets, andne\' store openings. Respondent has not oJ1'erec1 or otherwise macleavaiJable on proportionately cquf11 tends she,h al1mntnces and payments to many of its customers ,yho compete with those \yho lecl;l , such benefits. Such discriminatory payments and al1mnmces, as herein aJ1egec1 , Imve been made by respon.dent to its cllstomers located and doing business in the State of J\Iassaehusetts. -\R. 11. The able 8.ud )lactic'2s as alleged in paragraph 9 above rue in violation of subsection (d) or Section 2 oft he aforesaid Clayton Act. DECISION \XD Order This matter hftl,lng come on to be heard by t1Je COJ1nnission upon a record consisting of the Commission\) complaint charging the responc1pnts maned in 1:he c, ption hereof \Tith yiolation of subsections (a) llnd (d) of the Chyton Act, as amended by the Robinson- Patnmll Act, and an agrc:cllcmt by and uet\1,cen respondent united UNITED FARMERS OF :KEW E: 'WLA , INC. , ET AL. 589 585 Decision and Order Farmers of New Engla.nd, Inc., a.nd counsel supporting the complaint, which agreement contains an order to cease and desist, an admission by said respondent of all the jurisdictional facts alleged in the complaint, a statement that the signing of said agreement is ior settlement purpose only and does not constitute an admission by said respondent that it has violated the law as alleged in the complaint, and waivers and provisions as required by the Commission s HultS, and which agreement further provides for dismissal of this proceeding as to respondents Earl N. Gray, EJdon J. Corbett ,Yiliam F. Sinclair and J. C. Thomas; and The Commission ha dng considered said agreement and the affdavits made a part thereof which state, among other things, that one of the above named respondent individuals is deceased, that two others have severed all connection ",with the corporate respondent and that none of the respondent individuals participated as offcers or otherwise in t.he acts md practices challenged in the complaint; and The Commission having determined that the agreement provides an adequate basis for appropriate disposition of the proceeding, the agre.ement is hereby accepted, the folloi\ing jurisdictional.l findings are HInde, a.nd the follmying order is entered. 1. Respondent l.nit.cc1 Fa.rmers of Kew England, Inc., is an incorpo:mtec1 cooperative marketing association organized and existing under the la WB of the State of Vermont with its principal offce and place of business lecated at )Iorrisvil1e, Vt. 2. The Federal Trade Commission has jurisdiction of the subject matter o-r this proceeding and of the respondent, Lnited Farmers of :K ew England, Inc.

oHDEn Itis ordered That respondent, Linited Farmers of Kew England Inc., tL corporation, its offcers, members, employees, agents, 1'ep1'esentat.i :mCCC'3 :i0l' S and assigns, dil'cctJy or through any corporate or other ( \Tice" in connedioll with the sale 01 fluid milk and other dlLil'Y procluc.s in common.:' co., us "commerce" is defined in the Chtyton Act, (10 forth-,, ith ce lSC and desist irom discriminat.ing' in price by selling fhlicl mill;: and other t1lliry products of like grade and qunJity "/0 any pnrchnser at a price Jower thnn the. price granted to other purchasers:

(1) \ h81'8 respondent, in thc sale of said products, is in compeiition wit.h any other seller; or (2) ,Vhero any purchaser who does not receive the benefit of the 10lye.r price does, in fi:. , compete in the resale of saiel products with the purchaser who does receive the benefit of the lower price. 590 FEDERAL TRADE COMl\IISSlO:- DECISlOKS Syllabus 60 F.

It is further ordered That respondent, l:united Farmers of New England, Inc., a corporation, its offcers, members, employees, a.gents representatives, successors and assigns, directly or through any corporate or other device, in connection with the sale or fluid milk and other dairy products in conm1crce, as "commerce" is defined in the Chyton Act, do forthwith cease and desist from: Making or contra,acting to make, to or for the benefit of any customer, any pa.ymcl1t or allowance of anything of value as compensation or in consideration for any advertising or other services or facilities furnished by or through such customer, in connection with the handling, offering ror resale: or resale or products sold to him by respondent, unless such payment or fll1mYflnCe is made available on proportiona.1y equal terms to all other customers competing in the distribution or res -te of such products. It i8 j'nTlheT onlered That the complaint be, and it hereby is, dis- DTissed as to the inclividuaJs Eflrl N. Gray, Eldon IT. Corbett, ,Villimn F. Sinclair, and ,T. C. Thomas, named as respondents individually and fis offcers, directors, and members, and in their representative capacities as representative of all the members of respondent cooperative.

It is fUTthe1' oTde'tecl That respondent, United Farmers of New England, Inc., shad, ,within sixty (GO) days after service upon it of this order, file with the Commission a report in writing setting forth in detail the manner and form in Ivhich it has complied with this order. I N THE :.L""TTER OF ACME BRIEF CASE COMPANY, INC., ET AL.

CONSENT ORDER , BTC. , IN REGARD TO THE ALLEGED VIOLATION 01 Tile FEDERAL TRADE CO:\BIISSION ACT Docket 0-98. Oomplaint, Mar. 23. 19(j2-IJecision, Mar. lD(j2 Consent order requiring ).Tew York City manufacturers of brief cases, looseleaf notebooks, ring binders, school1Jags, etc., to cease surh fulRe ami misleading: practices as tagging zipper binders "Mac1o of solid one piece split cowhide leather" and "A top value in laminated split cowhide leather " \ybcn the interior surfaces and sections were made of a material simulatillg" Jeatller and labeling binders as "Virgin vinyl" and school bags as "\Tillyl Plastic when both bad outside sections made of very thin sheets of a plastic-like material backed with thicker layers of cardboard or paper'. ACIVIE BRIEF CASE CO" INC. ) ET AL. 591 590 Complaint COlUPLAI Pursuant to the provisions of the Federal Trade Commission Act; and by virtue of the authority vested in it by said Act, the Federal Trade Comnlission, having reason to believe that Acme Brief Case Company, Inc., a corporation, and Abraham IGotz, Abraham Lishinsky, and Gerald S. Klotz, individually and as offcers 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 as follows: PARAGRAPH 1. Respondent Acme Brier Case Company, 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 oftice and place of business located at 440 Nepperhan Avenue, city of Y ollkers, State of 1\ ew York.

Respondents Abraham Klotz, Abraham Lishinsky and Gerald S. IGotz are individuals and are offcers of the corporate respondent. They formulate, direct and control the acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent. 'IR. 2. Respondents are now, Q,ncl for some time last past have been engaged in the manufacturing, advertising, offering for sale, sale and distribution of brief cases, looseleaf notebooks, ring binders school bags and other articles or merchandise. r AR. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their products, when sold, to be shipped from their place of business in the State of .K ew York to purchasers thereof located in various other states of the United States a.nd in the District of Columbia, and maintain, and at all times mentioned herein lmve maintained, a substantial course or trade in said products in commerce, as "commerce " is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct of their business as aforesaid and for the purpose of inducing the sale of said products, respondents have eng::lged in certain acts and practices as follows: 1. The tag attached to certain of respondents' two-ring zipper bindel' s reads in part, a trade of solid one piece split cowhide leather The interior surfaces and sections of said binders are made of a 11a, terial ellgrained, finished and colored so as to have the appearance of Jeather.

2. Certain of respondents' two- ring zipper binders have attached thereto.o a tag which reads, "A top value in laminated split cowhide , , 592 FEDERAL TRADE COMMISSION DECISIONB Complaint 60 F.

leather." The interior surfaces and sections of saiel binders arc made of a materia.! engntincd, finished and colored so as to have the appearance of le"ther.

3. Certain of respondents' three-ring zipper binders have attached thereto a tag which reads Virgin vinyl luxurious jewel tone." The extcrior and interior surfaces and various interior sections atc engrained, finished and colored so "s to have the appearance of leather. Certain of respondents) school bags have attached thereto a tag which reads, in part Vinyl Plastic Texan, The interior surfaces of said school bags are finished so as to have the appearance of cloth or plastic.

PAR. 5. Through the use of the aforesaid statements and representations and materials in the manner aforesaid, respondents represent directly or indirectly:

1. That said binders described as being made of "Solid one piece split cmvhic1e leather" are, in fact, made of one solid piece of split cowhide leather t1d that said interior portions having the appearance of leather are made of leather.

2. That the said binders described as being ma,de of "Laminated Split Cowhide Leather" are, in fact, made of successive hlyers of split cowhide leather bonded together into a whole and that the various interior portions thereof having the appearance of leather arc made of leather.

3. That said binders described as being made of "Virgin \,Tnyl" are in fact, made of solid vinyl plastic of the apparent thickness of the respective portions of said binders. That the said school bags described as being made of "Vinyl Plastic:: are in fact made of solid vinyl plast.ic of the apparent thickness of the respective portions of said school bags.

PAR. 6. Said statements and representations are false, misleading l,nd deceptive. In truth 1.ncl in fact: 1. Said binders described as being made of "solid one piece split cowhide leather" are not jn fact made of one, piece of solid split cowhide leather and snic1 interior surfaces and sections having t.he appe,arance of leather are made of snbst,ances a,nd materials other than leather. Actually t.he outside covering 01' said binders is made of very thin sheef.s of lenther laminated to or baeked with t.hicker layers of cardboard or paper finis1w,d on its uncl( Tsic1e, to resemble leather. The various other interior portions of sa.id binders having the appearance of leather are in fact made, of non leather materirLls. 2. Sn.id binders described a,g being mack of " laminated split cO\vhide leather" are not ill fact made of successive b,ycrs of split cowhide , ACME BRIEF CASE CO. INC. ET AL. 593 590 Complaint leather bonded together into a whole and said interior sections having the a.ppea,rance of leather a.re in fact made of nonleather materials. Actually said outside cov81'jngs of set.id bindings are made of very thin sheets of leather Jaminated to or backed 'with thicker layers of cardboard or paper which has been finished on its unc1ernmt.th surface to have the appearance of leather. The various interior sections of said bindcl's hu,ving the appearance of leather are, in fact, mDvde of various nonleather materials.

3. Said binders described as being made of "Virgin Vinyl" are not made of a, solid piece of vinyl plastic and the interior sections thereof having the appearance of leather are not made of least.her. Actually the outside cove.ring of said binders is made of ve.ry thin sheet.s of a plastic-Eke substance Jaminaled to or backed with thicker layers of cardboard or paper. Keither the interior nor the exterior surfaces or sections of said hinders having the appearance of leather are in fact Jeathcl'.

Said "Vinyl Plastic" school bags are not nlade of a sold piece of vinyl plastic. Tlle outside sections of sa,id school bags are made or very thin sheets of a plastic-like material laminated to or backed with thicker layers of cardboard or paper.

PAR. 7. By the aforesaid practices, respondents place in the hands of retailers and dealers the 111cans and instrumen t.alities by and through which they may mislead and deceive the public as to the quality.y, leather or plastic content of said binders and school bags. Pall 8. In the conduct of their business, at all times mentioned herein: respondents h t.ve been in substantial competition, in com meree with eorporntions, firms and incli 7iduals in the sale of brief cases, looseleaf notebooks, ring binders, school bags and other articles of merchandise of the same general kind and nature as those sold by respondents.

\H. D. The use by respondents of the aforesaid false, misleading and deceptive statements, represent.ations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements fUlcl represenrations were fll1cl are true anel into the purchase of substantial quantities of respondents' products by reason of said erroneous anel mistaken belief.

m. 10. The flfore:;aic1 nets flncl practices of respondents, as herein alleged, "\Yen and are all to the prejudice and injury of the public and of respondents' competitors and constituted, a.nd now constitute, unfair methods of compet.ition in commerce and unfair and deceptive acts and practices in commerce, in vioJn60n of Section 5 of the Federa.l Trade Commission Act.

, 594 FEDERAL TRADE CO:MISSION DECISIONS Order 60 F.

DECISION AND ORDER The Commission having heretofore determined to issue its comphl,int charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act, and the respondents having been served ,with notice of said determination and ,with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set rorth in the, complaint to issue herein, a statement that the signjng of saiel agreement is for settlement purposes only and does not constitute an admission by respondents that the law lms been violated as set forth in such complaint, and \Vaivers and provisions as required by the Conllnission s rules i and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement makes t.he following jurisdictional findings, and enters the following order:

1. Respondent, Acme Brief Case C01npany, Inc. , is it corpol':ltion 01'g1luized, existing and doing business under and by virtue of the laws of the 'State of New York, with its offce and principal place or business locat.ed at 440 Nepperhan venue, in the city of Yonkers State of N ew York.

Respondents Abraham Klotz, Abraham Lishinsky, and Gerald S. Klotz are offcers of said corporation a.nd the-ir address is the same its that of said corporation.

. The Federal Trade Commission has jurisdiction of t,be subject matter of t.his proceeding and of the rcsponc1ents and the proceeding is in the public interest.

ORDER It is onlered That respondents Acme Brief Case Company, Inc., a corporation, and its offcers, and Abrahmn Klotz, Abraham Lishinsky and Gerald S. Klotz, individually and as offcers of said corporation: ftnc1 respondents' representatives, agents and employees, directly 0)' through any corporate or other c1eyice, in connection 'with the. offering for sale, sale, or distribution of looseleaf notebooks ring bind- 61' , school bags, brief cases or any other articles of merchandise in commerce, as "commerce ' is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. esing t.hE" terms "one piece split cowhide leather laminated split cOlvhic1c lcather" or any other words or terms denominating , FURS BY MIX1jDRI 595 590 Syllabus le.fther to describe any or said products or their parts '."which are not made \dlOlJy of the kind 01 leather so st.ated and '.which are made of said least.her laminated to or backed '.with ft different ldncl of leather from that so stated or with nonleather material without clearly, conspicuously and in immediate connection there\with stating that said product is laminated or backed and revealing the kind of lenJher or nonleathe1' Inaterial comprising such lamination or backing. 2. Using the words "Virgin Vinyl" Vinyl Plastic, or any other words or tenus which reveal or purport to ren al the substance from '.which said products or their parts are made, to describe any of said products or their parts which are not made v;holly of said substance and which are made or said substance Jaulinated to or backed with a material different from said substance without clearly, conspicuously and in immediate col11ection therewith stating that said product is laminated or backed and revealing the kind of material comprising such lamination or backing.

8. Offering for sa.le or selling said products l1f1de of nonleather material which simulates leather without attaching thereto or affxing thereon in such lllallner that it cannot readily be removed, and of such nntllre as to remain on the product until it reaches the ultimate consnmer, a mark, tag or label, which cle,arly and conspicuously discloses that the product is not made 01 leather. 4. Furnishing or otherwise placing in the hands of retailers or dealers in said products the Ineans and instrumentalities by and through which they may mislead or deceive the public in the manner or as to the things hereinabove prohibited.

It i8 further ordered That the respondents herein shall, within sixty (60) days alter service upon them 01 this order, J11e with the Commission a report in writing setting forth in detail the manner