American Service, Inc.

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

and form in which they have complied with this order. Ix THE l\IATTER OF AJ\ERICA SERVICE, INC., ET AL.

CONSENT ORDER , ETC. , IX REGARD TO THE ALLEGED VIOI.J_\TIO:: OF THE FEDERAL TRADE COJ'DIISSION ACT Docket 0-693. Compla.fnt fa)!. 21, 1964 Dectsioil, Jan. , 1964 Consent ordcr requiring ::lilwaukee, 'Vis. , sellers of 11 correspondence course, to cease representing falsely, in ad,ertisemcnts in the "Help Wanted" 01' Job Opportunities " columns of ne\TSpapen' , t.hat specific positions described and 11 large number of other law enforcement positions were immediately anlHable to qllnlified applicants at starting snlaries of up to , 364 FEDERAL TRADE CO ISSIQ)/ DECISIQ)/S Comvlaint 64 F, 900 a year, and that re IJonclents were affliated witll government agencies and the United States Civil Service Commission, along ,yitll other false repl'esentatiolls.

COJIPLAIKT PUlsuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Tra.ce Commission, having reason to believe that American Service Inc. , a corporation, and Hobert Hunte and Dennis Lce Hoberts individually and as officers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act, and it a.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 American Service, Inc. , is a corporation organized, existing and doing business under and by virtue of the la1\s of the State of \Viscol1sin, with its principal office and place of business located at 5810 \Vest Okbhoma A venue in the city of dilwaukce, State of ",Visconsin.

Respondents Robert Runte and Dennis Lee Roberts are offcers of the corporate respondent. They formulate, direct a,nd 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.

PAR. 2. R.respondents are now, and for some time last past have been, engag-ed in the advertising, offering for sale, sale and distribution of a course of instruction 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 course of instruction, when sold, to be shipped from their place of business in the State of \Visconsin to purchasers thereof located in various other States of the United States, and maintain, and at all times mentioned heroin have maintained, a substant.ial course of trade in said product in commerce.e, as "commerce:: is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct of their business: ancl for the purpose of obtaining leads to prospective enrollees, and for the purpose of inducing the sale of their sf1ic1 eonrse of instruction respondents have made cert.ain statements and representations in advertisements \\which they caused to be published in nerlspapers of interstate circulation. Frequently: these advertisements were caused to be placed under the "Help 'Wanted" Employment" or " Tob A::IERICAX SERVICE , INC. , ET AI 365 363 COill)laint Opport.unities" columns of the c)assificd sections. Typical. , but not inclusiyc, of such a(h ertisements are the follo"ling: LA W ENFORCE mnt WORK 1EK WANTED ME" 18 TO p to $6 000 first year APPLICA:\TS TO TRAIN FOR LAW ENFORCE !ENT POSITIONS IN TIIS AREA Radio patrol offcer, border patrolman, highway patrol, custom sen"ice officer. security offcer, corrections offcer, private investigator. ::Iany others available RIGHT NOW.

NO EXPERIE!\CE KECESSAIlY DO "OT DELA Y For free inform tion write to American Peace Offcer, Box BSO Sentinel. Out-oflawn inquiries invited.

l\IEK- lE" KEEDED Age IS to 5D t.o train for CIVIL SERVICE .JOBS Grammar School education Ilsually suffcient. Thous nds of jobs open. ='O EXPERIENCE ECESSA.RY. St:l.rt ns high as $5300 or more. No lay-offs-Securi ty. Preparatory training guamntced until appointed. DO KOT DELA Y For free information write:

IEmCAN SERVICE Box 4 , Cal umet e\vs PAll. 5. By and through the use of such stateme.llts and representations, and others of similar import not specifically set forth herein respondents have represented, and now represent, directly or by implication, that;

1. lnqui!:ies are solicited for the ultimate purpose of tendering offers of employment to qualified applicants. . The specific positions cle cribed as well as a large number of other law enforcement positions are immediately avn,iJablc in the area in "which the representation is made.

3. The specific positions described as well as a large number other 1:1"\1 enforcement positions are regularly offered to applicants who have had no prior educational or occupational experience. \\ 366 FEDERAL 'rrade CO::L\lission DECISIONS Complaint 1 F. 4. The specific positions described as well as a large number either 1ft"\y enforcement positions ftrc regularly o:f1'ereLl to applicants uct"\yeen the ages of thirty-Ii,"c flnc1 forty-nine. 5. Applicanls are regularly appointecl to la"\1 enforcement positions generally, and to the particular po itions described, at starting salaries of ;;G DOO per ;year.

6. Respondents are affliflted ith governmcnbl agencies and private firms in which law enforcement positions, including the specific positions described, ate presently available. 7. Respondents are afflifltec1 "\ith the rnitec1 States Civil Service Commission.

S. Thousands of civil service positions are immediately flTflilable ill the area in "\which the representation is made. 9. Inexperienced applicants \With no more than a grammar school education arc regularly appointed to civil service positions at tarting salaries of $3 300 per year.

10. Civil service employees ate never laid-off. 11. Respondents "ill furnish specific information regnrding the location, terms and conditions of employment of the pflrticu1ar positions described and many other presently Hyailable positions. PAR. 6. In truth and in fact:

1. Inquiries are not solicited for the ultimate purpose of tendering offers of employment to qualified applicants but for the purpose of obtaining leads to prospectiye pnrchusers of respondents' course of instruction.

2. either the specific positions described nor a htrge number of other law enforcement positions are immediately available ill the area in "which the representation is made. 3. Neither the specific positions described nor a large number of other law enforcement positions are rcgularl:.y offered to applicants ho have had no prior educational or occupational experience. 4. Neither the specific positions described nor a large number of other law enforcement positions arc r:cgularly offered to applicants between the ages of thirty-five and forty-nine. 5. Applicants arc not regularly appointed to law enforcement positions genern.lly, or to the particular positions described, at st-artjng salaries of SG 900 per year.

6. R,esponclents are not affliated "ith any gm-ernmental agency nor are they affliated "ith any pri,-ate firm in which h"\y enforcement positions nre presently aVflilahle.

7. Respondents are not affliated with rhe nitecl States Ch-il Service Commission.

AMEHICAN SERVICE ! INC. ) ET AL. 367 363 ComplaillL 8. Thousands of cials service positions arc not immediately available in the a.rea in "\yhic.h the representation is made. 9. Inexperienc.ed applicants with no )1101'0 than a grammar .school education are not regularly appointed to civil service positions at starting salaries of $5 300 per year.

10. Ciyil service employees are sometimes laid-off. 11. Respondents do not furnish specific information regarding the locat.ion, terms or conditions of employu1ellt of the particular positions described or any other presently available positions. Therefori3 t.he statements and representations as set forth in Paragraphs -1 and i5 hereof were and arc false, misleading Hnd deceptive. 1.J.\H. 7. In thc course and conduct. of their business, and for the purpose of inducing the sale of their course of instruction: respondents cause an authorized field representative to call on prospective enrollees in their own homes. At such times and places, respondents authorized field representative makes oral statements and re.presentations with respect to respondents' business. In addition, respondents have made certain statements and representations in letters and promot;ional material which they caused to be mailed to prospective enrollees, or which they otherwise caused to be read Or exhibited to prospectlve enrollees. Typical, but not an inclusive, of such statements and representations arc the following: l\Iihvaukee Association of Commerce-Founded 186J American Service is a private educational institntion devoted to preparing ambitious and honest meal in the 17 ta 49 age groul' for Peace Offcer work through manual training in their spare time in their own home. We are nationally famous for our training program and are considered to be the leaders in this particular field.

OU1" purpose is to supply you with all available information and advke and if you are sincerely interested in this type of work, to determine your qualifications, In order to determine whether or not you are qualified. our Authorized Representative wil call on you. He wil probably be limited to one interview with you due to the many, many inquiries and the necessity to adhere to a strict schedule, so please be prepared to make your decision at that time, You wil find this Representative to be courteous, helpful, and thoroughly trained in his duties. He wil give you his frank opinion ,vlwther 01' not you can qualify, anrl if approved, you would be all the first step to being a Peace Offcer. Please present this letter to our Representative so he may return it to this offce, explaining- wby you were accepted or rejected. The only way, basicall, to get a Civil Service position is to pass a Ciyil Service examination. These Civil Service examinatiom appear to be 'tricky to one who is not prepared; 4 people ant of 5 fail to pass in many instfnces. , BE PREPARED. Enroll in a course of study that covers several positiom. Increase your chances for a quick appointment. During the month of February I enrolled in your s('hool to train in the field of police work'" '" '" I have received the appointment. " G.F. (:: ote: Enrolled Feb. 1962-l'cceivert appointment Summer 1962) 368 FEDERAL TRADE COMMISSION DECISIOKS Complaint 64 F.

PAR. 8. By and through the use of oral and written statemel1ts as n-fol'esaic1, and others of similar import and meaning not specifically set forth herein, respondents hate represented, and now represent, directly or by implication, that: 1. Respondents' business is endorsed or accredited by the Iil\\rtUkee Association of Commerce.

:2. Enrollment in respondents' course is Jimited to persons who may reasonably expect to obtain employment in the positions they have selected.

3. By virtue of special training, respondents and their agents are qnalii1ed to determine whether or not prospective enrollees possess the requirements necessary to obtain employment in specific positions. 4. Prospective enrollees "\will receive a frank anc111nbiasecl opinion as to ",whether or not respondents' course "Till be of substantial assistance to them in obtaining employment. 5. A test administered by respondents' agents provides a reliable indication as to whether or not a prospective enrollee will be materialJy benefited in obtaining employment fls a result of respondents course.

G. In most cases respondents) course will enable graduates to pass examinations which they would otherwise fl1il. 7. Civil service examinations are tricky and require special preparation.

s. Respondents offer separate and distinct courses for the "\"ariolls positions in "\which enrollees are seeking employment. 9. TIespondents course is designed to ten.ch the basic subject matter of a pfuticllhr occupationa.l field, as distinguished from a course in general examina.tion preparation.

10. Hespondents will furnish authoritative textbooks and other source mftterials covering the basic subject. matter of t.he occupational field for "which the student is enrolled.

11. One of respondents' enrollees completed the entire law enforcement course in about seven months and obtained an appointment in the position for which he was preparing.

12. The time of respondents' agent is limited and prospects who do not contract for the course at the time of his vi it must forego inr1efinitelv the opportunity to enroll.

13. All persons who are present at the time respondents' agent inj-erviews a prospective enrollee are required t-o sign the enrollment contract .

14. Rpsponc1ents are l1lltionally famolls and 8.1'e eonsidererlleac1ers in the field of 1rw enforcement. inst.ruction. AMERICA SERVICE , INC. , ET AL. 369 363 Complaint 15. H,respondents receive adva.nce information regarding civil serVlce openings.

PAR. 8. In truth and in fact.:

1. Hespondents: business is not endorsed or accredited by the lIIiI"\yaukee Associa,tion of Commerce.

2. Enrollment in respondents: course is not limited to persons who may reasonably expect to obtain employment in the positions they have selected.

3. Neither respondents nor their agents are qualified, by virtue of special training or otherwise, to determine whether or not prospective enrollees possess the requirements necessary to obtain employment in and unbiased specifica. Prospectivepositions. enrollees do not receive a fra,nk opinion as to whether or not respondents' course will be of substantial assistance to them in obtaining employment. 5. The test administered by respondents' agent does not pl'yide a reliable indication as to whether or not a prospective enrollee will be materially benefited in obtaining employment as a result of respondents' course.

6. Respondents' course will not usually or customarily enable graduates to pass examinations which t.hey "\yould otherwise fail. 7. Civil service examinations are not tric.ky and do not require spec.ial preparation.

8. Respondents do not offer separate and distinct courses for the various positions in which enrollees arc seeking employment. 9. R,respondents' course is not designed to teach the basic subject matter of a particular occupational field, as distinguished from a course in general examination preparation. 10. Respondents do not furnish authoritative textbooks or other source materials covering the basic subject matter of the occupational field for which the student is enrolled.

11. None of respondents' enrollees has completed the entire law enforcement course.

12. The time of respondents' agent is not limited and prospects need not contract for the course at the time of his yisit or forego indefinitely the opportunity to enroll.

13. All persons who are present at the time respondents: agent intervie"\vs a prospective enrollee are not required to sign the enrollment contract.

14. R,espondcnts are not nationally famous and are not considered leaders in the field of law enforcement instruction. 15. Respondents do not receive advance information regarding civil service openings.

370 FEDERAL TRADE CO::JMISSIO:N DECISIO Decision 64 F.

Therefore. the statements and representations as set forth in Paragraph 8 hereof "'ere and are false, misleading and deceptive. \R. 10. In the course and conduct of their business, at all times mentioned herein, respondents have been in substantial competition in commerce, "\with corporations, finns and individuals ill the sale of a course of instruction of the SaIHe general kind and nature as that soJ d by responden ts.

PAR. 11. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and pra.cices has had, and has the capacity and tendency to misleacl members of the purchftsing public into the err on eons and mistaken belief that said statements and representations "\were and are true and into the purchase of substantial quantities of respondents ' course of instruction by reason of saill erroneous and mistaken belief. \H. 12. The aforesaid acts and pradices of responclents, as herein aJ1egecl: \'I 1"e flncl are all to the prejudice and injury of the public and of respondents' competitors and constituted. and now constitute. unfn.il. llethoc1:.; of competition in commerce and ' unfair and dece,ptive acts and practices in cOlnmer('e, in dolation of Section 5 of the Federal Tracie Commission Act.

DECISION AXD ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof and the respondents having been furnished thereafter with a copy of a draft of complaint which the Bureau of Deceptive IJractices proposed to present to the Commission for its consideration and which, if issllc(l by the Commission, would charge respondents .with violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agrecment containing (t consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statenlent that the signing of said agree men/: is for settlement purposes only and does not constitute an admission by the respondents that the Ia"\y has been violated as alleged in such complaint, and waivers and provisions as required by the Commission s rules; and The Commission, having reason to believe that the respondents ha' e violated the Federal Tra,de Commission Act, a,nel having determined that complaint should issue stating its charges in that respect hereby - issues its complaint, accepts said agreement, makes the follow' ing jurisdictional findings, and enters the following order: 1. Respondent American Service, Inc., is a corporation organized existing and doing bl1sille s under and by virtue of the laws of the Al\IERICAN SERVICE , INC. , ET AL. :17 363 Order Sta.te of ,Yisconsin ) "ith its oifce and principal place of business located at c,810 ,Yest Oklahoma \Yenue in the city of :'lihmukee State of "Wisconsin.

R.esponclents Robert Hunte and Dennis Lee Roberts are offcers of said corporation, and their address is the same as that of said corporation.

2. The Federal Trade Commission has jurisdiction of the subject matter of thjs proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered That respondents American Service, Inc., a corporation, and its oiIcers, and Hobert Huntc and Dennis Lee Roberts individually and as ofiicers of said corporation, and respondents agents, representatives .and employees, directly or through any corporate or other device, in connection "\with the offering for sale, sale or distribution of a course of instruction 01' any other product or service in commerce, as "commerce" is defined in the Federal Trade Commission Ac.t. do forthvdth cease and desist from: 1. Advertising in any manner or using any s:lles presentation "\which does not clearly, conspicuously ancl speciilcally disclose the nature of the business "\with respect to which the advertisement or presentation is made and the identity of the product or service "\yJlich is being sold.

2. Representing, directly or by implication, that: (a.) Employment is being offered unless such employment is ill fact being offered.

(b) Any employment opportunity exists, or is expected to exist, "without disclosing the nature of the position, the identity of the prospecti,ce employer, the specific location of the employment, the salary which is being offered or "which is expected to be offered, as "\yell as any consideration "it:h respect to age, sex, physical condition, education, training, veterans status, mal'ita.l status or other factor which would tend to materially reduce the number or class of persons who might reasonably expect to obtain such employment. (c) Any person, product, service or business is affiliated "ith or endorsed, approved or accredited by any person firm, organization, goyernment or government agency "ithout specifically disclosing the nature and extent of the affliation endorsement, approval or accreditation 372 FEDERAL TRADFJ COvL\1JSSION DECISI01\S Order 64 F.

(c1) ..\.ny person, product, service or business is affliated with or endorsed, approved or accredited by Ihe United States Civil Service Commission.

(e) Enrollment in respondents' course of instruction is limited or restricted to persons who may reasonably expect to obtain employment in any position or class of positions. (f) Any of the respondents or any of their agents are qualified, by virtue of special training or othenyise, to determine whether or not any person possesses the requirements necessary to obtain employment ill any position. (g) Any opinion or recommendation with respect to the enrollment of any person is conditioned upon Or influenced by a. frank or unbiased determination that respondent.s course of instruction will be of substantial assistance to such person in obtaining employment.

(h) Any test administered by respondents or any of their agents provides a reliable indication that any persoll will be sllbstantial1y benefited in obtaining employment as a result of respondents' course of instruction.

(i) Respondents offer more than one course of instruction or that respondents' course of instruction encompasses the body of knowledge of any particular occupational field as distinguished from a course in general examination preparation, or that any study material is furnished unless the nature and extent of the materials \Which are actually furnished are fully and specifically disclosed. (j) Civil Service employces are never laid-all, or otherwise misrepresenting t.he job security of ci'ril service employees.

(k) Respondents furnish specific information regarding the location, terms or conditions of employment of any available position unless in every instance such information is actually furnished.

(l) Hesponclents' course will usually or customarily enable graduates to pass an examin(ltion "\which they \yollJd othenyise fail, 01' that any improvement ill the grade or score that. any particular person may reasonably expect to aehieye as a result of respondents' course. is greater than the true such improvement.

(m) Civil Service examinations are tricky or that special preparation is ordinarily required to pass a ciyil service examination.

BEARINGS INC" ET AL. 373 363 Complaint course of (n) Any person has completed respondents' instruction, unless such person "\Hls a bona fide enrollee who aiel in fact complete respondents' course. thi.Lt (0) The time of respondents' agent is limited or prospects '\",ho do not enroll at the time of his visit must forego indefinitely the opportunity to enroll. (p) Any person other than the enrollee or the husband wife or legal guardian of an enrollee is customarilly expected to sign a contract of enrollment.

(q) Respondents are nationally famous or are considered leaders in the field of law enforcement instruction or any other type of instruction.

(r) Respondents receive any information regarding ciyil service positions "\which is not generally available. 1 t is That the respondents herein shall within futthel' ordered 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 this order. IN THE :\IATTER OF BEARIKGS, I , ET AL.

ORDER, OPINION, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COlVDIlSSIO:N ACT Doclwt 7134. Compla-Int, Apr. 29, 1958 Decision, Jan. , 1964 Order dismissing without passing on the merits because the record was composed of "cold and stale evidence tlle alleged ,iolatioTI hadng taken place as long as 14 years ago-complaint charged respondents with (1) using their purchasing power as an economic wcapon against ,arious bearings manufacturers to prevent the establishment of new distributorships and to bring about the cancellation of certain already existing competitive distributorships, (2) trying to create a monopoly in the bearings replacemcnt market by exclmlillg and limiting potential and actual competiton through coercive tactics, and (3) conspil"ng among themselves to me ecoliomic pressure to suppress competition.

COl\IPLAIXT Comlnission Act Pursuant to the provisions of the Federal Trade the Federaland bv virtue of the authority vested in it bv said Act, that the respondents Trac1p Commission, having ;pa.son to believe herein-named in the caption hereof and more particularly described 374 FEDERAL TRADE Cm1MISSION DECISIONS Complaint 04 P.

after, have violated the provisions of said Act, and it appearing that a proceeding by it ill respect thereof would be in the public interest hereby issues its complaint stating its charges ill respect thereto as follows:

CO"CNT I UU,GK\PH 1. Bearings, Inc. (Dela"\yare), is it corporation organized and existing Ululer the laws of the State of Delawal' , "\with its prillcipaJ offce and place of business located at 3634 Euclid A venue Cleveland 15, Ohio.

All of the following corporations are wholly mynecl sllbsicliaries of Bearings, Inc. (Dela are), and arc nameu herein as separate corporate respondents:

Balanrol Corp. is a corporation organized and existing under the laws of the State of Ohio, ,with its principal offce and place of business located at i13 Niagara Street, Buffalo, Kmv York. Bearings, Inc. CMarylancl), is a corporation organized and existing under the laws of the State of Iaryiand, with its principal notice and place of business located at 1801 ""orth Howard Street, Baltimore Maryland.

Dixie Bearings, Incorporated, is a corporation organized and existing under the laws of the State of Tennessee, with its principal,l oflce and place of business located at 276 l\IenlOl'ial Dl'iye \Y. Atlanta. Georgia.

I\:entucky Ball & Holler Bearing Co. is a corporation organized and existing under the la,ws of the State of Kentucky, wit.h its principal notice and place of business located at 3634 Euclid A venne, Cleveland , Ohio.

Tennessee Bearings, Inc., is a, corporation organized and existing under the laws of the State of Tennessee, with its principal offce and place of business located at 3634 Euclid Avenue, Cleveland 15, Ohio. Carolina Bearings, Inc. , is a corporation organized and existing under the laws of the State of North Carolina, with its principal offce aud plaee of business located at 3634 Euclid Avenue, Cleveland , Ohio.

oseph I. Bruening and ,Villiam J. Scully are president and vice president, respectively, of each of the respondent corporations, and are named as respondents herein, both individually and as offcel's of said corporations. Their principal offce and place of business is 3634- Euclid Avenue, Cleveland 15, Ohio.

Tohn F. Haymond is vice president of respondent Bearings, Inc. (Delaware), and respondent Kentucky Ball & Roller Bearing Co. fwd is named as a respondent herein, individually and as an offcer , .:.

BEAHI INC. J EI' AL. 375 373 Complaint of said corporations. I-lis principal offce and place of business is 3634: Euclid AYenue Cleveland 15, Ohio.

Eel ward F. 13rmn1 is vice president of respondent Dixie Bearings Incorporated, and isnamcd as a. responllent herein indiYiduall y alld as an offccr of said corporation. His principal offce and place of Dusiness is 276 i1Iemoria1 Dri\'e 'V. Atlanta, Georgia. The conduct of the affairs of all of the aforementioned corporate respondents with respect to t.their business practices and policies are nmy, and haye. been during all the times mentioned herein, uucleI' the control, direction, domination, and supervision of the illdiyidual respondent offcers, named and described herein. PAR. 2. The corporate respondents, collectively a.nd individually, flre no,y and for a number of years la.st past, have been engaged in the business of purchasing ball, roller, anti-friction anti-thrust, and thrust. bearings transmission units bearing specialities, accessories and other related bearing products, for resale a11l1 distribution to users thereof, including manufacturers find various repairers of machinery, vehicles, and other industrial equipment which utilize said bearing products. Said business is carried on through approximately '12 store outlets located in Indiana, Ohio, Pennsy!nnia, X ew York, :Xe"\y Jersey: Kentucky, ,Vest \:'virginia, :JIarylancl, Delaware Tennessee, Korth Carolina, Louisiana.) Georgia, South Carolina and Florida.

PAR. 3. The corporate respondents, in the course and conduct of the aforesaid busin2ss, ate now making, a.nd ha.ve continued to ma.ke purchases of the aforesaid bearing products from different manufacturing suppliers located ill the several States of the United States and, after purchase, said bearing products are now, and ha 'i- e been transported from the said States where manufa.cturec1 to the places of business of the corporate respondents, located in other States of the I united States, from- "Whence such bearing products are now being, and hayc been, offered for sale, sold, and distributed to purchasers thereof in commerce, as "commerce" is defined in the Federal Trade Commission Act, a.nd at all times mentioned herein the corporate respondents ate now and have been engaged in a constant current and COllrse of trade in said commerce bebveen and among various States of the l:nitecl States. The 'i-volume of t.trade in said commerce of the corporate respondents is substantial. \JL 4:. A..t al1 times mentioned herein the corporate respondents collectively and individually, are nO"y and have been in direct and substantial competition with each other and "\with other individuals corporations, partnerships and firms engaged in the saJc and distribution of said bearing products in commerce, except to the extent that 376 FEDERAL TRADE COM1fISSIOX DECISIONS CQmplain t G4 ,' ",ueh competition has been restrained lessenc(1 , or eliminated by the l1n1a\yfu1 acts and practices hereinafter fl,llege(l. P.c\R. 5. Respondent Joseph :.1. Bruening organized the Ohio Bal! Bearing Company ill 10:22, "\which subsequently "\yas incol'poraj- ec1 in the State of Ohio during 1025. In ray 1952, respondent Bruening and other illdjyiclnaJs cfll1secl the combination and mcrger of the Ohio Bfll1 Bearing Compa,ny "\with Indiana Bearings, Inc.. , IYest Virginia, Bearings, Inc. , and Pennsylvania Bearings, Inc. , into a ne"\y and separate corporation, Bearing Specialists, Inc., incorporated in the State of Delaware. In February 19;')3, Bearing Specialists Inc., combined and merged with Jim Brown Stores, a corporation of the State of Dela"\ynre, retajnjng the name 13enring Specialists Inc. In ,June 1853, Bearing Specialists, Inc" combined and merged with Bparings Inc., a corporation or the State of Pennsyhania\ and by assnrning that corporation s name became Bearings, Inc. (Dela ware), respondent herein. In July 1957, respondent Dixie Bearings Incorporat.ed: "\yas a.acquired by respondent Bearings, Inc. (Delaware), as a wholly o"\yned subsidiary. Prior to that time respondent Brnening possessed a substantial financial interest in and performc(l an active managerial role with respect to respondent Dixie Eenrings Inc.orporatec1, and its predecessor corporations. In Septelnber 1957 respondent Dixie Bearings, Incorporated, purchased certain assets of Southern Bearings Company of ,Jacksonvillc Florida, for the use of respondent Bearings, Inc. (Delaware), and its wholly owned subsidiaries in their aforesaid business activities. Respondent Bearings Inc. (Delaware), respondent Dixie Bearings Incorporated, and the other five "\1holly owned subsidiaries of Dearing3, Ine. (Delaware), collect.iyely maintain a yolnme of trade amounting to approximately $25 000 000 per year in ag:iTegnte sales. respondent Bearings, Inc. (Dela"\1are), singly 01' In combination "\lith its holly mynec1 subsidiaries, serYes as the bl' est distributor in the "l':nirec1 States for many of the major mnnnf,lctnrers of the afore:: lid bearing products. The corporate responclents acting c.oJ- Jec.i'l" e1y, arc the largest" distributors of said be 1rjng products in the fifteen-state area in which they operate, and as a result thereof, are able to, and do exercise snHicient economic pO"\Y8r and control 11pon the manufacturing suppliers of said bearing products to Cflllse (exclusion of some potential. and the limitation of som( actual C011petition in t118 sale and distribution of such products: and sneh exc1nsion and limitation cannot be solely attributed to the ability, business flCllmen or 11l1tllraJ economic and other advantages of the corporate respondents, or to their adaptation to ineyjtab1e economic-. laws.

BEARINGS, I , ET AL. 377 3i3 Complaint PAR. 6. From time to time, as hereinafter allegcd, respondent Bearings, Inc. (Dela"are) acting individually or through its wholly owned subsidiaries, has engaged in certain acts and practices for the purpose and with the objective of monopolizing, or attempting to monopolize, the sale and distribution of the aforesaid bearing procluets, and of eliminating and suppressing, or attempting to eliminate and suppress, the competition of others engaged in the sale and distribution of the same or similar products, and of otherwise furthering the leading and dominant position of the corporate respondents in the sale and distribution of the aforesaid products III commerce.

Pursuant to and in order to effectuate and candy out such purposes and objectives ill the sale and distribution of such products in COll1merce, respondents from time to time have engaged in, performed and carried out, by various means and methods, the following acts and practices:

Coerced, intimidated, or otherwise compelled certain manufacturing suppliers of the afore,said bearing products (a) to refuse to deal ith or otherwise supply such bearing products to some of the corpora.te respondents c.ompetitors; (b) to canceJ certaill franc.hises given by such manufacturing suppliers to some of the corporate respondents: competitors to sell, distTibutc: and market such bearing products; and (c) to refrain from offering or giving such franchises to some of the corporate respondents: competitors. PAR. 7. The acts and practic.es, as hereinbefore alleged, hate had flnd now ha\'e the tendency and capacity unlawfully to restrain Jessen, a.nd eliminate competition ill the sale and distribution 01 the aforesaid bearing- products. in commerce; unreasonably to restrain ('om petition among. the manufacturing suppliers of sncll products: to coerce such supplier!' to deal on rpspondents ' terms; to prevent the corporate respondents' competitors from obtaining: in commerce, at competitive and non-discriminatory prices, supplies of certain nationally recognized popular lines of the aforesaid bearing- prodnets: and to create in the. respondent corporations ,t monopoly in the sale fUld distribution of such products ill commClce \within the intent and meaning of Sertion 3 of the Federal Trflde Commission Act. (,OE T II \R. 8. The alJegfltions of Paragraph J through 5, inrlusiye, of Count I of this c.complaint arc hereby adopted, and incorporated herein by referenec andlnnde a part of this COllnt 11 ns if they were repeated herein verbatim.

224 069-70.- 2:i 378 FEDERAL TRADE CO:MvlISsro DECISIONS Complaint 64 F. T.

PAR. 9. From time to time, as hereinafter alleged, the corporate respondents, acting through their corporate offcers, entered into maintained, and effectuated an understanding, agreement, combination, and conspiracy to pursue, and they ha VB pursued, a planned common course of action between and among" themselves to adopt and adhere to certain practices and policies to restrain, lessen and eliminate competition betv;een and among themselves and with others in the sale and distribution of the aforesaid bearing products, in commerce; to monopolize the sale and distribution of such products in commerce; ancl otherwise to further the leading and dominant position of the corporate respondents in the sa.le and distribution of the aforesaid products, jn commerce.

Pursuant to, and in furtherance of, said understanding, agreement. combination, conspiracy, and planned com11on COurse of action respondents from time to time have engaged in, performed, and carried out, by various means and methods, the following acts and practices:

Persuaded, induced, cocrc.ed, inthnidatecl, c.ompcJJed; caused, or otherwise influenced, or attempted to influence, certain manufacturing suppliers of the aforesaid bearing' products (a) to refuse to deal with oI'otherwise supply such bearing products to some of the corporate respondents' competitors; (b) to cancel certain franchises given by such manufacturing suppEers to some of tile corporate respondents' competitors to sell distribute, and market sneh bearing products; and (c) to refrain from offering or giving such franchises some of the corporate respondents' eompetitors. PAR. 10. The acts, pnlctices, understandings, agreements, combinations conspiracies, and planned common courses of action, as aJJe,ged in Paragnlph 9 of Count II, haye had and no,,- have the tendency and capacity unlawfully to restrain; lessen, and eliminate eompetit.ion in the sale and distribution of the aforesaid bearing products, in commerce; unreasonably to restrain competition among the manufacturing suppliers of such products; to coerce, persuade or otherwise influence such suppliers to deal on respondents' terms; to prevent the corporate respondents' competitors from obtaining, in commerce, at competitive and nondiscriminatory prices, supplies of certain nationally recognized, popular lines of the aforesaid bearing products; and to create in the respondent corporations, -a monopoly in the sa.Ie a.nd distribution of such products in comlnerce, within the intent a.nd meaning of Sect.ion 5 of the Federal Trade Commission Act.

PAR. 11. The acts and practices of the respondents, all and si ngnlarly as hereinabove alleged jn Connt I and Count II are to the BEARIKGS ) INC. , ET AL. 379 373 Decision prejudice and injury of the public and constitute unfair methods of competition and unfair acts and practices, in commerce, within theintent and meaning of Section 5 of the Federal Trade Commission Act.

JIJ'. Rufus E. lvi18on JIJ'. Thonws A. Ste? ne1' : 1111'. Anw1,ico ill. illinotti and Mr. Daniel R. !(ane for the Commission. C,.egg, Fillion, FilenwaTth di IJ1Ighes by Mr. John D. 1111ghes Indianapolis, Ind. , for respondent .lb-. John F. Raymond; Falsg,'af, l(1!ndtz, Reidy and 8ho1lp, by .lh. Wendell A. Falsgraf and illr. William 11. Talmage Cleveland, Ohio, for all other respondents. INITIAL DECISION BY AB ER E. LIPSCO , HEARlXG EXAl\Il)TER MARCH 6 , 1962 THE COMPLAINT 1. The complaint herein was issued on April 29, 1958; contains two counts; and charges as follows:

o aunt I a. That Bearings, Inc. (Delaware), and the six wholly owned subsidiaries thereof, named above, ha.ve been engaged for a number of years in the business of purchasing hall, roller, anti-friction, amithrust, and t.hrust bearings, transmission units, bearing special.lties accessories and other related products for resale in commerce through approximately forty-two store outlets, variously located in New Jersey, Kentucky, Vcst Virginia laryland, Delaware, Tennessee North Carolina, Louisiana, Georgia, South Carolina and Florida respondents' collective yearly sales aggregating approximately $25 000 000 ;

b. That respondent Bearings: Inc. (Delaware), sjngly or in combination with its who.1.1 O"vncd subsidiaries, serves as the largest distributor in the United States for ma.ny of the major manufacturers of the aforesaid bearing products;

c. That the corporate respondents have been, collectively and individnalJy, in direct a.nd substantial competition with each other and with other firms and individuals engaged in the sale and distribution cf bearing products, except to the extent that such competit.ion has been restrained, lessened or eliminated by the unlawful acts alleged in the complaint;

d. That respondent Bearings, Inc. (Delaware.), acting individually or through its wholly O"ynecl sllbsi(liaries, IHls engaged in certain nets and praetjces for the pnrposc of monopolizing or attempting to g.

380 FEDERAL TRADE CO MISSION DECISIO Decision 64 F. T, monopolize the sale and distribution of bearing products, and of eliminat.ing and suppressing, or attempting to eliminate and suppress the competition of others engaged in the sale and distribution of the same or similar products;

e. That respondents, particularly, have coerced, intimidated or otherwise compelled certain manufacturing suppliers of benring l)roducts:

(1) To refuse to deal with or otherwise supply bearing products to some of respondents' competitors;

(2) To cancel certain franchises given by such ma,nufacturing suppliers to some of the corporate respondents' competitors; and (3) To refrain from offering or giving such franchises to some of respondents' competitors;

f. That the business practices and policies of all of the aforementioned corporate respondents are now, and eluring all the times relevant hereto have been, conducted under the control, direction, domination and supervision of the individual respondent offcers named aoove; and That the above-described acts and practices hate the tendency ilnd ca.pacity unlawfully to restrain, lessen and eliminfLte compet.ition in the sale and distribution of bearing products in commerce; unreasonably to restrain competition among the lnannfacturing suppliers of such products; to coerce such suppliers into dealing on respondents' terms; to prevent the corporate respondents ' cOlnpetitors froln obtaining in commerce, at competitive and non '-discriminatory prjces , popular lines of bearingsupplies of certain nationally-recognized products; and to create in the corporate respondents a monopoly in , in violation of 5 of thethe sale and distribution of such products Federal Trade Commission Act;

Gount II a. That the unlawful acts a,nd practices charged in Count I have been promoted by the corporate respondents, acting through their corporate offcials, entering into an agreement, combinflt1on and conin violation of spiracy to effectuate such unlawful acts and practices: 5 of the Federal Trade Commission Act.

II. The Answers F. Raymond, in t.their ans"\'icr 2. Respondents other than John admit:

A. That t.he identity of the various corporations and of the corporate offcials named is as alleged, except that they allege that John F. BEARINGS , INC. , ET AL. 381 373 Decision Raymond was dismissed as a vice president of both Bearings, Inc. (Delaware), and Kentucky Ball & Roller Bearing Co. on January , 1958;

B. That Bearings, Inc. (Delaware), Bearings, Inc. (Maryland), Balanrol Corp. and Dixie Bearings, Incorporated, are in substantial competition in commerce with others engaged ill the sale of bearing products in commerce;

C. That Bearings, Inc. (Delaware), Bearings, Inc. ( iaryland), Balanrol Corp. and Dixie Bearings, Incorporated, maintained a gross sales volume of approximately 825 000 000 for the fiscal year ending June 30 , 1957.

3. Respondents other than John F. Raymond, in their answer deny:

A. That Kcntucky Ball & Roller Bearing Co., Tcnnessee Bearings, Inc., and Carolina Bearings, Inc., are engaged in competition 11 commerce;

B. That any of the respondent corporations have been engaged in any substantial competition with each other; C. That Kentucky Ball & Roller Bearing Co., Tennessee Bearings Inc., and Carolina Bearings, Inc., maintained any gross sales volume what.socver during 1957 or any other year; D. That respondent Bearings, Inc. (Delaware), singly or in combination with its wholly owned subsidiaries, is the largest distributor of bearing products in the United States;

E. That respondents have sumcicnt economic power over the manufacturing suppliers of bearing products to cause any of the injury to competition alleged in the complaint; and F. That they have at any time engaged in the acts or practices a1Jeged in Counts I and II of the complaint, or that they have engaged in any acts or practices to the prejudice or injury of the public or in violation of 5 of the Federal Trade Commission Act. 4. Respondent John F. Raymond answcred separately that he ,,no longcr associated with the other respondents, and prayed for dismissal of the complaint against him.

III. Hearings and Proposed Findings As To Thc Facts 5. Hearings for the reception evidence in support of the casein-chief, in defense, and in rebuttal were held intermittently from September 17, 1958, to and including December 18, 1961. The testimony of forty. five witnesses and ma,ny exhibits were recciyed in evidence. In addition, the testimony of six additional1 witnesses was stipulated on the record. Consideration has been given to the entire record herein, including proposed findings as to the facts, proposed , .382 FEDERAL TRADE COMMISSION DECISIONS Decision 64 F. T, conclusions, and written arguments in support thereof. Each of those proposals which has been accepted has been, in substance, incorporated into this initial decision. All proposals not so incorporated are hereby rejected.

IV. The Issues 6. The plcadings raise a number of subordinate issues, but only one controlling issue appears in each of the two counts of the complaint.

7. In Count I, as correctly stated by counsel supporting the complaint the respondents " * * * are considered as a single economic unit, which, by itself, has unilaterally threatened at various times to refuse to deal with certain manufacturers un1css each of them performs certain acts beneficial to respondents 8. Counsel supporting the complaint a.lso correctly states, however that in Count II the " * * * respondents are to be considered as separate legal entities which have combined their economic power and concertedly threatened to refuse to deal with certain manufacturers unless each of those manufacturers performed some of the aforementioned ads for the benefit of the intra-enterprise conspirators 9. The controlling issues thus appear as follows: A. Has respondent Bearings, Inc. (Delaware), acting individ- TIally or through its "\wholly owned subsidiaries, coerced, intimidatec1 or otherwise compelled manufacturing suppliers of bearing products to:

a. Refuse to deal with other otherwise supply bearing products to some of the corporate respondents' competitors; b. Cancel certain franchises given by such manufacturing suppliers to some of the corporate respondents' competitors; and c. Refrain from offering or giving such franchises to some of the corporate respondents' competitors, resulting in unhndul restraint lessening, or elimination of competition in the sale and distribution of bearing products in commerce, and creating in the respondents a monopoly in the sale and distribution of such products, in violation of & 5 of the Federal Trade Commission Act B. Did the corporate respondents, acting through the,ir corporate offeers, enter into, maintain and effectuate an understanding, agree mont, combination and conspiracy to pursue, and have the r pursued, a planned common course of action between and among themselves for the purpose of restra,ining, lessening or eliminating competition, and creating in themselves a monopoly in the sale flnd distribution of such products in commerce, in "violation of S 5 of the Federal Trade Commission Act , . BEARINGS , IKC. , ET AL. 383 373 Decisioll Identification of Respondents 10. The respondents admit their identity, as follows: A. The parent corporation: Respondent Bearings, Inc. (Delaare hereinafter referred to as Bearings. Inc. is a corporation with organized and existing under the laws of the State of Delaware: its principal offce a,nd place of business located at 3634 Euclid Avenue, Cleyeland 15, Ohio.

B. Active ""holly owned subsidia.lies:

a. Respondent Balanrol Corp. , a wholly owned subsidiary of Bearings, Inc., is a corporation organized and existing under the laws of the State of Ohio, with its principal offce and place of business located at 313 Niagara Street, Buffalo, X ew York. b. Respondent Bearings, Inc. pIaryland), a wholly owned subsidiary of Bearings, Inc. , was, until its dissolution on August 12 1960, a corporation organized and existing under the laws of the State of :\laryland, with its principal offce and place of business located at 1901 North Howard Street, Baltimore, :\laryland. c. Respondent Dixie Bearings, Incorporated, a wholly owned subsidiary of Bearings, Inc., is a corporation organized and existing under the laws of the State of Tennessee, with its principal offce and place, of business located at 276 )Jemorial Drive, S.\V. , Atlanta Georgia.

C. Ina.ctive wholly Olcned subsidiaries: Respondents Kentucky Ball & Roller Bcaring Co., Tennessee Bearings, Inc., and Carolina Bearings, Inc., nil wholly owned subsidia.ries of Bearings, Inc., and organized, respectively, under the laws of the States of ICentucky, Tennessee, and X orth Caro1inrL, a.re inactive corporations not engaged in business. According to the testimony of respondents "\Villiam J. Scully and Joseph 1\1. Bruening, these presently-'existing corporations using those names are "dummy" corporations maintained only for the purpose of preserving certain trade names. D. Indicuid""Z Respondents:

a. Respondents Joseph :\1. Bruening and 'Vill am ,T. Scully are president and vice president, respectively, of each of the respondent corporations, and the principal offce and place of business of each of them is 3634 Euclid Avenue, Cleveland 15, Ohio. b. H.respondent Edward F. Brown is vice president of respondent Dixie Bearings, Incorporated, and his principal offce and place of business is 276 :\Iemorial Drive, S:W., Atlanta, Georgia. 11. Respondent .John F. Raymond was, for a considerable period of time prior to January 1958 , a vice president of Bearings, Inc. (Delaware), and Kentucky Ball & Roller Bearing Co. , with his 384 FEDERAL TRADE COMMISSION DECISIOXS Decision 64 F. T.

principal offce and place of business located in India,nap01is, Indiana. On or about .January 16, 1958, however, he was relieved of all duties in this capacity, and since then he has not been associated in any capacity with the other respondents herein. VI. Control of The Corporate Respondents 12. The. conduct of the affairs of the aforementioned corporate respondents with respect to their business pra.ctices and policies is 110"1, and has been during an the times mentioned in the complaint under the control, direction, domination and supervision of the inclivichml respondent offcers mentioned above, excepting that respondent Edward F. Brown, subject to the final authority of respondent Joseph )1: Bruening, has control, direction, domination a,nel supervision only of respondent Dixie Bearings, Incorporated, and excepting further that respondent .John F. Haymond has had no affliation since January 16, 1958 , with any of the corporate respondents. VII. Line of Commerce- InterstntB Commerce 13. It is found that the active corporate respondents, collectively and individually, arc now, and for a number of years last past have been, engaged in the business of Pllrehasing ball, roller, anti-friction auti-thrllst and thrnst bearings, transmission units, bearing specialties, accessories, and other related bearing proc111c.s for resale and distrilmtion in commerce to users thereof, inc.uding manufacturers and various repairers of machinery, vehicles, and other industrial equipment ,,-which utilize said ben.ring products; and t.hat said business, at an times set. forth in the complaint., was carried on through approximately forty-two store outlets located in Indiana, Ohio Pennsylvania, Xew York, New .Jersey, Kent.lucky, ,Vest Virginia Jfary1and, Delaware, Tennessee, North Carolina, Louisiana, Georgia South Carolina and Florida.

VIII. Competition "With Others 14. Respondents Bearings, Inc. (Delaware), Balanrol Corp., Bearings, Inc. (l\faryland), and Dixie Bearings, Incorporated, have been in direct and substantial competition with other individuals, corporations, partnerships and firms engaged in the sale and distribution of bearing products in commerce. On August 12, 1900, Bearings, Inc. (Maryland), was dissolved, and since that t.ime its business has been carried on in Bahimore, )laryland, by respondent Bearings, Ine. (Delaware), under a special permit from the State of )faryland. BEARINGS , INC.) ET AL. 385 373 Deci ion 15. Respolltlents I entucky Ball & Roller Bea.ring Co. Tennessee Bearings, Inc. , and Carolina Bearings, Inc.: arc not now, nor have they ever been, engaged ill such competition. 16. None of the respondent. c.orporations are now, nor hate they ever been, engaged in any substantial competition with each other. IX. I-Iistory of Respondents' Organization 17. It is found that respondent tJoseph )1. Bruening organized the Ohio Ban Bearing Company in 1922, "\\hic.h subsequently "\vas incorporated in the Stat.e of Ohio during 1925. In )Iay 1952, respondent Bruening and other indi"\-ic1uals caused the combination and merger of the Ohio Ball Bearing Company with Indiana Bearings, Inc. pst Virginia Bea.rings, Inc. , and Pennsylntnia Bearings, Inc. (all of which ha,cl been organized by respondent Bruening), into a new and separate c.orporation, Bearing Specialists, Inc., incorporated in the State of Ohio. In :February 195:3, Bearing Specialists, Inc. , combined and merged with Jim Brown Stores, Inc., a corporation of the State of Delaware, retaining the name Bcaring Specialists, Inc. In June, 1953, Bearing Specialists, Inc. combined and merged with Bea,rings, Inc. , a corporation of the State of Pennsylvania, and by assllming that corporation s name beea,me Bearings Inc. , a Dela,ware corporation, respondent herein. In August 19157, respondent Dixie Bea.rjngs, Incorporated, was acquired by respondent Bearings, Inc., as a. wholly owned subsidiary. Prior to that time respondent Bruening possessed the controlling financial interest in and was the chief executive offcer of respondent Dixie Bearings, Ineorporated, and its predecessor corporations. In September 1957, respondent Dixie Bearings, Incorporated, purchased cert:ain assets of Southern Bearings Company of J aeksonville, Florida.

Size of Respondents' Business 18. Respondents Bearings, Inc., Balanrol Corp. , and Dixie Beatings, Incorporated, maintained a gross sa,les T'volume of approximately $25 000 000 for the fiscal year ended June, 1057 but respondents Kent:ueky Ball & Roller Bea.ring Co., Tennessee Bearings, Inc., and Carolina Bearings, Inc., maintained no gross sales volume whatever during that year or tny other year. Hesponclent Bearings, Inc. (Dela"\yare), singly or ill combination with its wholly o,vned subsidiaries, serves as the largest distributor ill the United States for many of the major manufacturers of the aforesaid bearing products. The corporate respondents, acting collectively, are the largest distributors of said bearing products in the fifteen-state area in which they operate.

, :, Decision 64 F.

Xl. Respondents' Manufacturing Suppliers 19. The annual report for 1955 of the corporate respondent Bearings, Inc. (Delaware), and its wholly owned subsidiaries represents Bearings, Inc., as the "'W orld' s Largest Authorized Distributor for twenty-nine ma.nufacturers of bearings, and twentytwo manufacturers of bearing specialties. Among those manufacturers of bearings with which We are here concenled are the following:

A. Norma-Hoffman Bearing Company, Stamford, Connecticut; B. McGill Manufacturing Company, Inc., Valparaiso, Illinois; C. Stephens-Adamson Manufacturing Company, Aurora, Illinois; D. Fafnir Bearings, Inc., New Britain, Connecticut; E. Bunting Brass & Bronze Company, Toledo, Ohio; F. SKF Industries, Inc., Philadelphia, Pennsylvania; G. Rollaway Bearings Company, Syracuse, Kew York; H. Martin Rockwell Corporation, Jamestown, II ew York; and 1. Link-Belt Company, Chicago, Illinois.

XII. Examples of Respondents' Intimidation Tactics 20. In 1956 Palmer Bearings Company of Cleveland, Ohio, a competitor of Bearings, Inc., applied to Norma-Hoffman for a distributorship. There is considerable evidentiary confusion as to exactly what occurred between Mr. Sargent, the representative of N orma- Hoffman in the Cleveland area, and Messrs. Bruening and Scully, respectively president and vice president of Bearings, Inc. of Cleveland, concerning Palmer s application for distributorship. It is clear, however, that Mr. Sargent, in conferring with Max G. Palmer, president of Palmer Bearings, informed him that N orma- Hoffman intended to grant him a distributorship, but that before awarding it, he would, by way of business courtesy, confer with Mr. Bruening. Thereafter Mr. Sargent visited with Mr. Bruening and Mr. Scully. It is clear that one or the other of those offcials expressed displeasure at the prospect of having Palmer Bearings appointed a distributor in the Cleveland area. It is also clear that they suggested the appointment of Bearings Distributors, Inc. , of Cleveland, a larger bearings distributor, instead of Palmer Bearings. Mr. Sargent testified that Mr. Bruening stated during the conference well, don t forget that if you do appoint him, we have retaliatory methods that we can use. :\lr. Sargent also testified that before he left, Mr. Bruening walked out of the offce and left the confere-llce. Following this conference 1\1:r. Sargent, who is described as having been at that time emotionally ane! physically il, informed :\11'. BEARINGS , INC. , ET AL. 387 373 Decision Palmer that because of the disapproval of Mr. Bruening, he must defer granting the distributorship. It appears that Mr. Sargent was afraid that the respondent corporation might purchase fewer bearings from his company if a distributorship were granted to the Palmer Bearings Company. Approximately six months later Mr. Sargent resigned his position with Norma-Hoffman. Shortly theregrant after the Karma-Hoffman Bearings Corporation did in fact the desired distributorship to the Palmer Bearings Company. 21. Mr. Bruening and Mr. Scully, in expressing to the representative of Norma-Hoffman their displeasure at the possibility that Norma-Hoffman might appoint Palmer Bearings Company as a distributor, would have been within their legal rights, had they been speaking for themselves alone, or for a small corporation. The Supreme Court held in Federall'trade Oommission v. Ra.ymond Gompamy, 263 U.S. 565, that a buyer "* * . may lawfully make a fixed rule of conduct not to buy from a producer or manufacturer who sells to consumers in competition with himself. * * . Likewise a wholesale dealer has the right to stop dealing with a manufacturer 'for reasons suffcient to himself' " The Court added, however, the explanatory qualification that:

The present case discloses no elements of monopoly or oppression. So far appears the Raymond Company has no dominant control of the grocery trade, and competition between it and the Stores Company is on equal terms. do we find that the threatened withdrawal of its trade from the Snider Company was unlawful at the common law, or had any dangerous tendency unduly to hinder competition.

. The above qualification was, in substance, reaffrmed by the Supreme Court in the case of Lora.in Jou7'wl v. 342 U.S. 143, wherein the Court held that a publisher who was engaged in an attempt to monopolize advertising in interstate commerce, in violation of was properly enjoined under 4 of of the Sherman Antitrust Act, that Act from continuing such attempt. The Court stated: Unless protected by law, the consuming public is at the mercy of restraints and monopolizations of interstate commerce at whatever points they occur. Without the protection of competition at the outlets of the flow of interstate commerce, the protection of its earlier stages is of little worth. 22. Mr. Bruening and Mr. Scully, when they expressed their displeasure to the representative of orma-Hoffman concerning the appointment of a competitor, were not speaking merely for themselves, nor for a small corporation, but for the largest and most economically powerful bearings-distributing organization within a fifteen-state area, an organization with five active wholly owned subsidiary corporatiops and forty-two store outlets under its con- 388 FEDERAL TRADE COMYUSSIO=" DECISIONS Decision 64 F.

trol. Because of this real and potential economic power over the sale and distribution of bearing products, the displeasure expressed by the respondents carried too much weight to be ignored. At least Mr. Sargent thought so, and feared that if he granted a dealership to Pahner Bearings Company in the face. of such displeasure, he might expect economic retaliation in the form of smaller bearing orders from the respondents. render the circumstances, such a conclusion on his part appears to have been reasonable. Accordingly, Norma-Hoffman did not grant the distributorship to Palmer until about eight months later, after Mr. Sargent had left its employ. 23. ,Ye atc not here concerned with the question of whether Palmer Bearings Company was a good choice as a distributor for Norma Ho:fman, or whether )1:1'. Bruening a,ncl :1"1'. Scully considered that company worthy of appointment. ,Ve are concerned with the fact that Mr. Bruening and Ir. Scully, as spokesmen for a dominant segment of the bearings industry, possessed suffcient economic power to constrain a manufacturing company to withhold a distributorship at their pleasure, thereby depriving a competing company, for nearly a year, of a distributorship which it would otherwise have sooner enjoyed, and interfering with the manufac. turer s exercise of fre,e will in its choice of distributors. Acts not unlawful in thb1llselvcs become lUllawful "hen combined with such economic power that their impact upon others is jnjurious. An expression of displeasure which carries an implied threat of reprisal by reason of the economic power of the displeased entity is unlawful, because its end result is int.imidation and coercion. Thus the respondents' acts constituted an unlawful interference with competition in commerce, to the injury of both Norma-Hoffman, the manufacturer, and Palmer Bearings Company, respondent.s' competitor, as well as general injury to the public.

24. Mr. Sargent gave a further example of respondents' coercive tactics in its dealings with orma-Hoffman. He testified that he had promised, in 1956, at the instance of respondent J olm F. Raymond president of respondents' wholly owned subsidiary in Indianapolis Indiana, that Norma-Hoffman would not grant a distributorship to Aero Bearing Corporation, respondents' competitor in that city. Mr. Kelley, salesman for K orma.-Hoffman, in a report to his company, sums up the situation and expresses the effect of the intimidation exercised against his company as follows:

To sum up, I think we would be foolish to seriously consider the disturbance of this account at this time. It adds up to our risking a potential $50 000 per year account to take a chance on picking up an additonal $15,000.00 per year at the outside. I assured Bud (respondent RaymondJ that I would report the BEARIKGS , INC. , ET AL. 389 373 Decision facts to ::fr. Sargent as I saw them and that I felt sure that no changes would be made in this area at this time. However, I made sure that he understood that we wil expect his continued support as he indicated and that any sharp fall.off would cause us no end of concern. Bud was optimistic and said he could see no reason to expect any decrease and again pledged his continued support.

25. Bearings Service Compa,ny of Pittsburgh, Pennsylnmia, is a bearing specialist with annual sales in excess of one million dollars. This distributor of bearings has been in business in that same location since January 1933. In 1953 it applied to Xorma-Hoffman for a distributorship, and the granting thereof was delayed for approximately five years because of respondents' opposition. 1\:11'. Chase president of Bearings Service Company, testified that he was in Sargent' s offce at l\To1'ma- I-Ioffman s pla,nt in Stamford, Connecticut in 1953, renewing his request for a dist.ributorship. He testified further that on that occasion 11' Sargent left the oJIce for a few minutes, and then returned and jnfo1'med him that "J 08 (Bruening) says nothing doing . The conclusion is obvious. 26. In 1953 the above-named distributor, Bearings Service Company of Pittsburgh, had its franchise with McGill 1annfacturing Company, Inc., cancelled. )11'. 'Villiam F. Chase, president. of Bearings Service Company, testified that:

The notice of cancellation ,,,as brought to me personally by ::11'. Y. J. Brmynell who was at tliat time Sales ':lanager for lUcGill. 'Vhile the notice stated that they had appointed PemH;ylvaniR Bearings as the exclllsjye di"tribntor. ),lr. Brownell' s remarks were that the buying power of the combination of Pennsyl"ania Bearings, Ohio Ball E( arings, Indiana Deariugs, and \Vest Virginia Bearings, at that time. was suell that be had no alternative except to cancel us. 27. In 1953 McGill )lanufacturjng Company, Inc. , also caneeJ1ed the authorized distributorship of Kentucky Bearing Sen-ice of Louisville, Kentucky. A letter written by John F. Raymond, then president of Indiana Bearings: Diyision of Bearings Specialties Inc., reveals the pressure he brought to bear on the manufacturer to disfranchise t.his competitor. He wrote in part as fono,,s: This wil ill turn prove to you that with the cooperation yon have given us in Louisville b;y "canning.' one distributor, that a job can be doue " * *. and we hope that sometime ill tlie future you "\"ill filled reason to "can " the other account that you have in Louis,ille, b('c:aus€ tlIey are "ery sbar!) with their pencil and hne mfmy W of getting prices to the u er. \Ve llave not been able to get lle11nite informatioll all IcGil price irregularities, 1mt we ,,'ill. and wil let you know in detail 28. Excerpts from correspondence bet,,- een bffcials of lcGil l\Ianufacturing Company and respondent Edward F. Brown, vice president of Tennessee Bearings, Inc. , show that. leGil cancelled the distributorship of Volunteer Bearings and Tra.nsmission Com- 390 FEDERAL TRADE COMMISSION DECISIO Decision 64 F.

pany, Inc., Chattanooga, Tennessee, one of respondents' competitors, at the insistence of the respondents. Part of this correspondence is as follows:

Keith Brownell asked that I write to you in reply to your letter of January 5, after his telephone conversation of January 14, regarding your store in Chattanooga.

We are removing Volunteer Bearings and Transmission Company, Inc., at ,Chattanooga as ODe of our jobbers and have requested that they no longer advertise that they are an authorized distributor of our bearings. This letter was forwarded by respondent Brown in Knoxvile, Tennessee, to respondent Bruening in Cleveland, Ohio, who noted thereon: "Very good. J.

29. The evidence shows that in 1952 the distributorship of Bearings, Inc., Louisvile, Kentucky, a competitor of the respondents in that area, was cancelled by SKF Industries, Inc. , after 35 years as its distributor. Two years later, in an interoffce memorandum from Mr. Bruening to Mr. Raymond, Mr. Brueni11g states: As for Bearings, Inc. '" .. . Sometimes I think we should have let ' em hwve SKF-they couldn t make as much on ' em "\yhen they chiseled as they DOW make on two off brands. . .. '" J .::I.B.

vVe think this is clear evidence that respondents were responsible for this cancellation also.

30. In 1955 Max Lammers, the manager of respondent Dixie Bearings, Inc., in New Orleans, Louisiana, requested the Hollaway Bearing Company to cancel the distributorship of respondents' com- Mr.petitor, Industrial Bearings Company. Shortly thereafter, Bruening, president of the respondent company in Cleveland, joined the effort by writing to Rollaway Bearings Company, Inc., himself suggesting that they should have just one bearings distributor in New Orleans, and that he would like for that distributor to be Dixie Bearings, Inc. Soon thereafter Rollaway made the requested chang of distributors.

31. The evidence also shows that respondents' offcials endeav. ored to persuade Fafnir Bearings, Inc. , to prevent its authorized distributors, other than respondents: from shipping Fafnir bearings to unauthorized distributors competing with respondents in the Louisia,na area. Excerpts from correspondence between respondent Ray. monel and offcials of Fafnir reveal very dearly the respondents 1953 , re-efforts to eliminate this type of competition. On May 4, iJlspondent Haymond wrote to Fafnir: attent.ion of Ray :11. Page, part as follows:

, at Week before last I was in Louisiana working with Dixie Bearings, Inc. Kew Orleans and Baton Rouge. It "burns me l1P" whell I learn of the loose , BEARINGS INC. AL. 391 373 Decision should distribution that Fafnir has in the South, and I think something done about it immediately.

Wil you please check into this situation immediately and see that Bearings Chain and Supply stop "bootlegging" Fafnir bearings into Xew Orleans and Baton Rouge territories.

ason May 8, 1953, respondent Raymond again wrote to Fafnir, follows:

Thanks very much for your letter of ::Iay 6, in reply to the carbon copy of our letter Of May 4, regarding the "bootlegging" of Fafnir bearings in Baton Rouge.

\Ve appreciate your support in this matter, and you can count on us carry this thing through to some conclusion. This letter (Commission s Exhibit 78) bears the hand- written notation: "Did Ray Page answer? J.:M.B.". This notation by respondent Bruening, especially, as well as the testimony of respondent Raymond, shows that respondents were working together as corporations and individuals in following a planned common course of action designed to eliminate competition. On June 29, 1954, l)lr. Page of Fafnir wrote to J. M. O'Connell of corporate respondent Dixie Bearings, Incorporat.ed, of ew Orleans, Louisiana, as follows: 'I' hanks for your letter of June 22nd callng to our attention that Baton Rouge is doing an infinitely better job for Fafnir on radial bearings for the first five months of this year as against the same period last year. :Katul'ally, we are pleased to see this increase Please be assured that we wil immediately go to 'Work on drying up I ouisiana Bearings' source on Fafnir bearings. These exhibits prove beyond question that respondents were making a joint and concerted effort to eliminate competition. XIII. Conclusions on Count I 32. From such evidence, we must find t.hat from time to time respondent Bearings, Inc. (Delaware), acting individually or through its wholly owned subsidiaries, has engaged in acts and practices for the purpose and with the objective of monopolizing, or attempting to monopolize, the sale and distribution of bearing products and of eliminating or suppressing, or attempting to eliminate or snppress, the competition of others engaged in the sale and distribution of the same or similar products, and of otherwise furthering the leading and dominant position of the corporate re.spondents in the sale and distribution of beating products in commerce. 33. V\T e further find that respondents have coerced, intimidated or otherwise compelled certain manufaciuring suppliers of the afore- 392 FEDERAL TRADE COMMISSION DECISIOKS Decision 64 F. T.

said bearing products (a) to refuse to deal with or otherwise supply such bearing products to some of the corporate respondents' competitors; (b) to cancel certain franchises given by such manufacturing suppliers to some of the corporate respondents' competitors; and (c) to refrain from offering or giving such franchises to some of the corporate respondents' competitors, resulting in unlawful restraint, )essening or elimination of compe6tion ill the sale and distribution of bea.ring products in commerce, in Ylolation of 9 5 of the Federal Trade Commission Act.

XIV. Summary and Conclusions on Count 34. -\s heretofore pointed out, Count II charges that the col' porate respondents, acting through their corporate offcers, conspired to pnrsllc and did pursue a planned comllon course of action bet"ee,ll and among thcl1selves, for the purpose of restraining, lessening or eliminating competition and creating in themselves a. monopoly in the sale. and distribution of bearing products, ill violation of g of the Feeleral Trade Commission Act.

35. The evidence shows that during the period of time here involved, there was a continuous exchange of business information between the offcers of the respondents' subsidiary corporations and those of the parent corporation, with the offcers of the parent corpora60n directing the overall policies and practices of all the. respondent corporations. The cyidence shows, moreover, that the offcers of the pa.rent corporation were specifically informed by idi'. Brown, vice president of respondent Dixie Bearings, Inc., and by lir. John F. Raymond, vice president of respondent Kentucky Ball & nol1eI' Bearing Co. , of competitive problmns in their areas. There is also evidence that there were exchanges of information concerning such problems, and their efforts to eliminate objectionable competi. tion, between ::11' Brown and :Mr. Raymond, as well as between them and ::11'. Bruening, president of the parent corporation. All of the respondents, 111dividuals as well as corporations, followed 1 common pattern of business a.ncl a common policy designed to 11inder or eliminate ce.rtain c01npetitors. The Supreme Court, in United States v. Pai'mmmt Pictures, Inc. , et aZ. 334 U.S. 131, stated: It is not necessary to find an express agl'PpmPllt in order to find a can. spira('y. It is enough that a conccrt of action is contemplated and that the defendants conform to the arrangement.

36. The fact that respondents are a close-knit group does not immunize them against their responsibility for intra- enterprise con. spiracy which they create, just as their ma.nufactnrer suppliers a.nd , BEARINGS, I ET AL. 393 373 Decision their competitors "-ere not immnnized against the injurious result of such conspiracy. 'rhe Supreme Court found conspiracy within the so-called "single enterprises " in the " movie cases . In United States v. 1'8Cen, t A11Hlsement Oompany 323 U. S. 1 i3 (1944)" a.nd in United States v. G?'iffth. 334 U.S. 100 (1948), the conspiracies included affliated corporations and their oflcers. In Chine Chain Theaters v. United States 334 U.S. 110 (1948), the conspiracy was found to exist between patent and subsidiary corporations, together with their offcers, the Court stating in part as follows: he concerted action of tbe parent company, its snb.sicliflries. anfl the. named offcers and directors in that cndeayol' ,ya.': a conspiracy \yl1ich ,,"(1. llot immunized by reason of the fact that the mernhcrs were closel;r affliatecl rather than independent.

37. The above c1cc.isiOllS art' exactly in point "\dlell considered in conjunction ,,'ith the facts oJ the present proceeding and we art' therefore compelled to conclude that the corporate respondents acting through their corporate offcers, entered into, mainta.ined, and effect.uated an understanding, agreement, combination ana conspiracy to pursue, and they have pursued, a planned COlnrnon course of action between and among themselves to adopt. and adhere (0 certain practices and policy.es to restrain, lessen, and eliulinate competition between themselves and with others in the sa.le and distribution of the aforesaid bearing products, ill commerce; and otherwise to further the leading and dominant position of the corporate respondents in the sale and distribution of the aforesaid products in commerce.

38. vVe further find that the acts and practices, as hereinbefore set. forth, have had and now have the tendency and capacity unlawfully to restrain, Jessen and eliminate competition in the sale and distribution of the aforesaid products, in commerce; unreasonably to restrain competition among the manufacturing suppliers of such products; to coerce such suppliers to deal on respondents' terms; and to prevent. the corporate respondents competitors from obtaining in commerce, at competitive and nondiscriminatory prices supplies of certain nationally recognized popular lines of the aforesaid bearing products, all in violation of s;) of the Ferleral Trade Commission Act.

39. Individual respondent John F. Raymond has moved that the complaint be dismissed as to him because he, has not, since ,J anuary , 1958, been associated with any of the, other respondents herein nor hns he, since that time, participated in the acts and practjces herein found to be violative of law. His participation with the other respondents in the past, hm1ever, and the existing reasonable possi- 24-069--70-- 394 FEDERAL TRADE COM.\IISSION DECISIONS Order 64 F.

bility of a resumption of such acts and practices by him in the future, require that his motion be, and it hereby is, denied. 40. It is obvious that in the interest of the public, the practices herein found to be violative of law should be terminated, and their repetition prohibited. Accordingly, It i8 ordered That respondents Bearings, Inc. (Delaware), Balanrol Corp. , Dixie Bearings, Incorporated, Kentucky Ball & RoHer Bearing Co. Tennessee Bearings, Inc., and Carolina Bearings, Inc. all corporations, and their respective offcers, agents, representatives and employees; Joseph :i. Bruening and 1YiJiam J. Scully, individuaHy and as offcers of said corporations; John F. Raymond individually and as a former offcer of corporate respondents Bearings, Inc. (Delaware) and Kentucky Ball & Roller Bearing Co. and Edward F. Brown, individually and as an offcer of corporate re,spondent Dixie Bearings, Incorporated, directly or through any corporate or other device, in connection with the purchase, resale and distribution of ball, roller, anti-friction, anti-thrust, and thrust be,arings, transmission units, bearing speeialties, accessories, and other related bearing products, in commerce as "commerce ' is defined in the Federal Trade Connnission Act, do forthwith cease and desist from, directly or indirectly:

1. Coercing, intimidating, or otherwise compelling, or attempting to compel, manufacturing suppliers of thc aforementioned bearing products:

. To refuse to deal with or otherwise supply such bearing products to respondents' competitors;

b. To cancel franchises given by such manufacturing suppliers to respondents' competitors to sell, distribute, or otherwise maI'ket such bearing products;

c. To refrain from offering or giving such franchises to respondents' competitors;

2. Preventing, or attempting in any ,vay to prevent, their competitors from obtaining, in commerce, at competitive and non-discriminatory prices, supplies of certain nationally-recognized, popular lines of the aforesaid bearing products; 3. Devising, entering into, continuing, cooperating in, or carrying out any planned common course of action, mutual agreement, understanding, combination, or conspiracy between and among any two or more of said respondents, or between anyone or 1110re of said respondents and others not parties hereto, to do or perform any of the acts and practices prohibited by Paragraphs 1 and 2 hereof.

BEARINGS , INC. , ET AL. 395 :373 Opinion It is further ordered That the complaint herein be, and the same hereby is, dismissed insofar as it relates to respondent, the former corporation, Bearings, Inc. (Mary land) .

OPINION OF THE COJ\nnssIOX By DIXON Commissioner:

Section 5 of the The respondents are charged with violating C. 45 (1958), 38 Stat. 719Federal Trade Commission Act, 15 U. (1914), as amended, 52 Stat. 111 (1938), and they have appealed from an order to cease and desist entered by the hearing examiner. The complaint charges the respondents with using their purchasing power as an economic weapon against various bearings manufacturers to prevent the establishment of new distributorships and to bring about the cancellation of certain already existing distributorships with which the respondents were required to compete for sales. The respondents are further charged with trying to create a monopoly in the bearings replacement market by excluding and limiting potential and actual competition through the device of employing coercive tactics, such as threats to withdraw their purchases from bearings manufacturers who did not make distributi011 decisions to the respondents' liking.

In a separate count, the complaint also cha.rges the respondents with engaging in an "intra-enterprise" conspiracy to bring about the results just described. The charge in this count is that the respondents conspired not with bearings manufacturers or with other bearings distributors, but amongst themselves to use economic pressure to suppress competition.

The hearing examiner found that Section 5 had been violated on both the economic coercion and conspiracy charges and entered an order to cease and desist. Respondents base this appeal primarily on the ground that substantial evidence to support the order is lacking in the record.

The complaint in this case was issued on April 29, 1958. Hearthese was ins were shortly thereafter scheduled and the first of Yd in Cleve1an, Ohio, on September 17, 1958; this was followed by other hearings in several cities around the country. The taking of evidence was completed and the record closed at the fina.l hearing held in \Vashington, D. , on November 21, 1061. The hearing examiner then commenced consideration of the record that had been ompiled and on March 7, 1962, filed his initial decision and order to cease and desist.

On April 13, 1962, respondents filed a petition for review of the initial decision, which petition we granted on Iay 10, 1962. Both 396 FEDERAL TRADE CO:-.f1viission DECISIO),TS Opinion 64 F. T.

sides then filed briefs and "\ve heard oral a.rgnment on September 20 1062.

During the course of our detailed examination of the record on appeal, we could not fail to be impressed by the fact that the ,-ast majority of the evidence has to do with incidents, events and conversations, the most recent of which took place ill 1957. :!\ol'cover' that. portion of the evidence 1110st relevant to the c.charges of the complaint, upon which t.he hearing examiner re.liecl and upon which we must also rely if we arc to adopt the initial decision, relates to the years 1052-1056.

In effect what we arc faced with is a record in which the alleged violations of Section 5 took place as much as fourteen years ago. 'Ve have no way of knowing from this record what the current lmsiguendo thatness practices of the respondents are or, assmning (tJ' what the respondents did "\yas violative of t.he Federal Trade. Commission Act, whether they have continued their opprcssive laeties , beenagainst their compet.ition. I.t is also noted that there han several.l changes in the corporate organization and relationship of the respondents: Q.f the seven named corporate. respondm1ts, one has been dissolved and three are totally inactive their corporate status being retained solely to protect their trade names. Further. respondent Raymond, who is essentially involved in the alleged viola tions ill this case, has not been connected in all Y capacity with the other respondents for some six years no,Yo _Although named in the order entered by the hearing examiner, Raymond took no a.ppelll from that order. Despite the fact that on )Iarch 26, 1062, \wentered our own order docketing this appeal also as to Raymond, he has not. been represented by the counsel who appeared for the other respondents, nor has he personally ta.ken any part in this appeal. It is well settled that respondents who appear before this Commission cannot preclude us from entering an order by stating that violations once committed have no"\"\ been discontinued. If the rule were otherwise, the Federal Trade Commission would be renc1ere(1 impotent for as soon as a complaint was issued: a respondent could eYelldefeat its effect by saying "we stopped yesterday.'; Therefore, if the respondents here have in fact ('easell the.ir alleged anticompetitive practices, this would not be a defense if the record establishes the violations. Hmyeve.r, our decision 11(1'0 docs not. rest upon the defense of discontinuance, "\which defense it. must be acknowledged the respondents do not strongly press upon us but rather on our belief that it would serve no useful purpose. to make all adiucljcation on a record composed as this onc is of cold and stale evidence. Lest this opinion be misconstrued, we wish to make jt clear that we do not in any way pass on the merits of this case one way or the WM. H. 'WISE & CO. INC. 397 373 Syllabus other. Should facts later present themselves indicating that the respondents are in violation of any statute administered by this Commission, action on our part will not be slow in forthcoming. For now we hold only that, because of the lapse of time that has occurred since these alleged violations have taken place, the initia.l decision of the hearing exmninel' is hereby set aside and the eomplaint: insofar as the hearing examiner has not already done so, is ordered to be and is hereby dismissed. Rules of Practice 24 (a), (b), 28 Fed. Reg. T080 , T091 (July 11 , 1963). Commissioner Andcrson concurred in the result and Commissioner MacIntyre did not concur.

FI),TAL ORDER This matter having been heard by the Commission upon respondents: appeal from the hearing examiner s initial decision, and briefs and oral argument in support of said appeal and in opposition thereto; and The Commission, for the reasons stated ill the accompanying opinion, having rendered its decision ordering that the initial decision anel the complaint, insofar as thc hearing examiner has not already done so, be dismissed:

It is th61'efor.e o1'lcl'ed That the initial decision and the complaint , and they hereby are, dismissed.

By the Commission, Commissioner Anderson concurring in the result and Commissioner :Maclntyre not concurring.