Sterling Plastics Co. et al

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

and form in which they have complied with this order. IN TH MATT STERLING PLASTICS CO. ET AL caXSEXT Order. ETC. , IN REGARD TO TH ALLEGED VIOLATION OF THE :FEDERAL TRADE co nIISSION AG' Docket 0-738. Complaint, Apr. 24, 1964-Deciion. Apr. 24, 1964 Consent order requiring Union, N. , importers of a complete line of school snpplies, some from Japan, which they sold to wholesalers, jobbers and retailers for resale, to cease sellng products such as rulers and compasses so packaged-in plastic pouches and cardboard boxes-or otherwise assembled as to obscure or conceal the mark of foreign origin appearing thereon, and sellng them with the' words "Sterling Plastics Co. Union. :N. " on the pouches and boxes, thus representing falsely that they were of domestic origin.

COl\PLAI Pursuant to the provision of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to oelievc that SterlingPhstics Co., a corporation, and George J. Staab and Jfary D. Staab inc1ivic111allyand as officers of said corporation. hereina,after referred to as respondents, have violated t.he provisions of said Act, and it appear- STERLING PLASTICS CO. ET AL. 559 558 Complaint ing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its compla,int stating its cha-rg-es in that respect as follows:

P ARAGRAPI- 1. Hesponde,nt Sterling Plastics Co. is a corporation organized, existing and doing business under and by virtue of thelaws of the State of New Jersey, with its offce and principal place of business located at 1140 Commerce Avenue, in the city of Union, State of New Jersey.

Respondents George J. Staab and Mary D. Staab are offcers of the corporate respondent. They formulate, direct and control the acts a.ncl practices of the corporate respondent, including the acts and practices hereinafter set forth. Thtiir address is the same as that of the corporate respondent.

PAR. 2. Respondents are now, and for some time last past have been, engaged in the importation, advertising, offering for sale, sa.le and distribution of a complete line of school supplies, including, but not limited to, rulers and compasses. Respondents sell their school supplies to wholesalers, jobbers and retailers for resale to the public. PAR. 3. In the course and conduct of their business, respondents now cause, and for some time last past hay caused, their said products when sold, to be sbippcd from their place of business in the State of New Jersey to purchasers thereof located in various other States of the United States, and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said products in commerce, as "commerce" is defined in the Federal Trade C0l11nission Act.

PAR. 4. Certain of the school supplies sold and distributed by respondents ate manufactured in and imported from Japan. Certain of said school supplies are packaged in plastic pouches a,nd others arc packaged in ca.rdboard boxe,s. In many instances ticl foreign made school supplies are so packaged or otherwise assembled so as to obscure or conceal the mark of foreign origin appearing thereon. In said instances there is no adequate disclosure to the public that such school supplies are not made in the United States. PAR. 5. Certain of the Japanese school supplies sold and distributed by the respondents are packaged in plastic pouches and cardboard boxes upon which appears the words "Sterling Plastics Co. Union The words "Sterling Plastics Co. Union, N. " imprinted on said pouches and boxes constitute a,n a.ffrmative representation that the school supplies contained in said pouches and boxes are of domesticrather than foreign origin. Such representation is false, misleading and deceptive as certain of said school supplies are of .J apaneae origin. PAR. 6. In the absence of a clear and conspicuous disclosure that products, including school supplies, such as rulers and compasses 560 FEDERAL TRADE CO;\L\lission DECISIO:\S Decision and Order 65 F.

are of foreign origin, the public believes and understands that they are of domestic origin, a fact of which the Commission takes offcial notice. As to the aforesaid articles of merchandise, a substantial portion of the purchasing public has a preference for said articles which are of domestic origin, of which fact the Commission also takes offcial notice. Respondents' failure to clearly and conspicuously disclose the country or origin or said articles or merchandise is, therefore, to the prejudice of the purchasing public.

PAR. 7. By the aforesaid practices, respondents place in the hands of wholesalers, distributors and retailers, the means and instrllmentalities by and through which they may mislead the public as to the country of origin of said products.

PAR. 8. In the conduct of their business, at all times mentioned herein, respondents have been in substantial competition, in commerce, with corporations, finns and individuals, in the sale or products of the same general kind and nature as those sold by respondents. PAR. 9. The use by respondents of the aforesaid false, misleading and cleeeptive statements, representations 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 products are of domestic origin and into the purchase or substantial ql1antjties or respondents' products by reason or said erroneous and mistaken belief. PAR. 10. The aforesaid acts and practices of respondents, as herein alleged, were and are to the prejudice and injury of the public and of responde,nts' competitors, and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive a.cts and practices in commerce, in violation of Section 5 of the Federal Tl':lde. Commission Act.

DECISION ..ND Onder 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 Practices proposed to present to the Commission for its consideration and which if issued 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 agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by STERLIXG PLASTICS CO. ET AL. 561 558 Decision and Order the respondents that the law has been violat"d as alleged in such complaint, and waivers and provisions as required by the Commission rules; and The Commission, having reason to believe that the respondents have violated the Federal Trade Commission Act, and having determined that complaint should issue stating its charges in that respect, hereby issues its complaint, accpts said agreement, makes the following jurisdictional findings and enters the following order: 1. Respondent Sterling Plastics Co., is a. corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey, with its offce and principal place of business Jocated at 1140 Commerce Avenue, in the city of Union, State of New Jersey. Respondents George J. Staab and Mary D. Staab are offcers of said cor,poration, and their address is the same as that of said corporation. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents and the proceeding is in the public interest.

ORDER It is ardered That respondents Sterling Plastics Co., a corporation and its offcers, and George J. Staab and fary D. Staab, individually and as offcers of said corporation, and respondents' agents, representatives and employees, directly or through any corporatc or other device, in connection with the offering for sale, sale or distribution of sehool supplies, or a.ny other products, in commerce, as commerce is defi11ed if! the Federal Trade Commission Act, do forthwith cease and desist from:

1. Offering for sale, sellng or distributing any product which is in whole, or which contains a substantial part or parts, of foreign origin or fabrication without affrmatively disclosing the country or place of foreign origin or fabrication thereof on the products themselves, by marking or stmnping on ml exposed surface or on a label or tag affxed thereto, of such degree of permanency as to remain thereon until consummation of consumer sale of the product, and of such conspicuousncss as to be likely observed and read by purchasers and prospective purchasers making a casual inspection of the product.

2. Offering for sale, selling or distributing any such product packaged, or enclosed in a container, or mounted on a display card, without disclosing the country or place of foreign origin of the product, or substantial part or parts thereof, on the front or face of said package or container, so positioned as to clearly have application to the product so packaged, and of such degree of 562 FEDERAL TRADE C01\I(SSIO DECISIONS Syllabus 65 F.

permanency as to remain thereon until COllSUll1mation of the consumer sale of the product, and of such conspicuousness as to be Jikely observed a.nc1 read by purchasers and prospective purchasers lnaking casuallllspectioll of the product.

3. Hepresenting, directly or indirectly, in any n1o.nne1' or by any means, that their ,products are of domestic origin when said products are in whole or contain a substantial part or parts which is or are, of foreign origin.

4. Placing- in the hands of jobbers, retailers, dealers and other means and instrumentalities by and through which they may deceive and mislead the purchasing public concerning any merchandise in respect to the origin of respondents' merchandise. It i8 jnTthe)' o)'dered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the C01mnisslon a report in writing setting forth in detail the manner and form in which they have complied with this order.

Ix THE I\Iatter OF KAISER JEEP CORPORATION ET _\L.

CONSENT ORDER , ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COJ,nnSSIQX ACT Docket C--739. GOJiplafnt, Ap/'. 1964-lJecision !ljJr, ;27, 190. Consent order requiring two corporations engaged ill the manufacture and di trilmtioll of "Jeep" motor ..ehicles and its parts and accessories to cease attempting to prevent it:' franchised dealers from .'tocldng or selling items of special equipment supplied by otller manufacturers by such acts or p1'Ctices as threatening to c.ancel dealers' franchises, to install an additional dealer in a dealer s area, to refuse to honor warranty claims on Jeeps on which nnfa,ored manufacturers ' equipment had been installed, and to delay deliveries to a franchised dealer; polidng activities of dealers in connection with the handling of special equipment they clid not svonsor, setting an nnrensonahly high 'early quota for sales of special equipment they handled to keep dealers from sellng other items, and cooperating with favored manufacturers of special equipment to preyent dealers from stocking tliat of others; and to cpase coercinp; or intimilating any Vendor of their products to preyent his bn ing slJecial equipment not sold by them. ), KAISER ,JEEP CORP. ET AL. 563 562 Complaint n'L. UNT Pursuant to the provisions of the Federal Trade Commission Act (15 U. C. Sec. 41 et seq. and by virtue of the authority vested in it by said Act the Federa.l Trade Commission, ha,ving reason to beEeve that the respondents named in the caption hereof and 110re particularly described hereinafter, have been, and a.re llow violating, the pro Ylsions of said Act, and it appea.ring that a proceeding by it in resiJect there-of would be in the public interest, hereby issues its compla.int, stn.t.ing its 'charges in respect thereto as follo"Ts: I.RAGRAPH 1. R.respondent ICaiser Jeep Corporation is a corporation organized and existing under the laws of the State of Kevada, with headquarters Joeated at plant site, 940 Cove Avenue, Toledo, Ohio. Until March 18, 1963. respondent Kaiser Jeep Corporation ,,' as named ,Yil1ys Motors, Inc. Respondent J(aiser Jeep Corporation is n wholly O\yned subsidiary of Kaiser Industries Corporation, which has heac1 quarters in J\.aiser Center, 300 Lakeside Drive, Oakland 12, California. Respondent Kaiser .J eep Sales Corporation is a corporation orga nized and existing under the laws of the State of Michigan. Until March 12, 1963, Kaiser Jeep Sales Corporation "as named '\Vi11ys Sale, Corporation. Kaiser Jeep Sales Corporation is a \yho11y owned ubsidiftry of Kaiser J ecp Corporation and has its headquarters atthe same address as ICaiser Jeep Corporation, 9-40 Coye ..A. "enue, Toledo Ohio.

PAR. 2. llespondent J(aiser .J eep Corporation since on or about 1953 has been and is now engaged in the business of the manufacture, sale and distribution in the united States and foreign countries of two and four wheel drive motor vehicles marketed under tlle trade nRllle Jeep . Hesponclent Kaiser Jeep Corporation also manufactures, sells and distributes parts and accessories for saiel vehicles. In addition respondent I\:aiser J cep Corporation purchases certain equipment used on or in connec-hereimdter referred to as "special equipment::, tion with said vehicles for specialized tasks and functions. Said "spe. cial equipment:' is resold or otherwise distributed by respondent Kaiser Jeep Corporation to its franchised dealers, as more fully hereill after set forth.

For many years JCaiser J ccp Corporation nncl its predecessor cor. poration, \Vil1ys Overland 1motors, was the sale manufacturer of such type vehicles and presently remains as the largest and predominant domestic sales of vehicles, parts andmanufacturer in the field. Tot.al , a nccessories, and special equipment reached 870 670 000.00 in 1959 24% increase over 1958.

g. g. 564 FEDERAL TRADE CO:\L\HSSION DECISIONS Complaint 65 F.

Respondent Kaiser Jeep Sales Corporation was organized in 1955 by its parent corporation Kaiser Jeep Corporation. Under the direction and control of Kaiser Jeep Corporation, it handles dealer relationships and promotes the sale of ",Jeep" vehicles, parts and accessories and "special equipment . Kaiser Jeep Sales Corporation conducts its operations through eight regions (sometimes referred to as zones) each with an offce, and a regional manager in charge of operations and personnel attached thereto. Each region is divided into districts, each district, encompassing approximately 30 retail dealers iR serviced by a district manager directly responsible to his regional manager. The regional offcers and district managers 111maintain close association with the dealers in their regions and districts, working constantly on improvement of all aspects of the dealership and espeeia1Jy to increase or attempt to increase the sales of eep " vehicles, parts and ac.essories, and "special equipment" through its franchise dealers. Kaiser Jeep Sales Corporation enters into agreement.s, commonly caned a "franchise " with retail dealers throughout the United States Ior the distribution and sale of "Jeep" vehicles, parts and accessories with the exception of four small areas wherein agreements are with ,vholesa1er distributors, who in turn distribute said goods through Tetail dealers.

PAR. 3. The respondents in the course and conduct of the aforesaid businesses sen and transport or cause to be transported thc aforementioned vehicles, parts and accessories and "special equipmenf' to their ira.nchised dealers or custom1ers in States other than the States in which said vehicles, parts and accessories and "special equipment" are manufactured. There has been and is now a continuous and substantial trade in conuerce in said products between and among the sevenlI States of the United States and the District of Columbia within the intent and meaning of the Federal Trade Commission Act. PAR. 4. Respondents, in the course and conduct of their businesse in commerce, as aforesaid, are now and have been at all times mentioned herein in competition with other corporations. individuals partnerships and firms likewise engaged in the sale and distribution of similar products as described herein.

PAR. 5. There a.re more than 30 items of "special equipment" which are adaptable to the basic "Jeep" vehicles, and which are produced by manufacturers other than Kaiser Jeep Corporation. Examples of said items are devices which modify the vehicles' capabilities and body (e.g. selective drive hubs and body cabs or bumpers) or deviccB which enable the performa.nce of numerous specialized functions (e. snow plows and street sweepers), or devices which take advantage of the vehicles' power take-off features (e. post hole diggers and winches). KAISER JEEP CORP. ET AL. 565 562 Complaint Respondents, pursuant to agreements or other arrangements with certain Inanufacturers, are appointed the exclusive sales outlet for certain items of "special equipn1ent" produced by such manufacturers which respondents promote and advertise to its dealers and the public as "Approved ' Jeep' Equipment" (sometimes hereinafter referred to as "approved special equipment" ). In return for every order the dealers place with respondents for an item of approved "special equipment", the manufacturer pays respondents a sum of money equal to a percentage of the mmmfacturer s sellng price of said equipment (E3metimes hereinafter referred to as an "override commission However, respondents do not receive an override commission on purchases of "special equipment" by its dealers from manufacturers who have not entered into the above described arrangements or agreements with respondents.

The retail dealers are restricted under their franchise agreements to solicit retail sales for "Jeep" vehicles, parts and accessories supplied to the dealers exclusively by respondents only within a specified territory designated by respondents. However, said dealers are not required under the franchise agreement to resen "special equipment" supplied the dealers by respondents.

fupondents' retail dealerships represent the most effective and productive outlets for the display, sale and distribution of "special equipment" to consumers and therefore they are solicited for orders by ma.nufacturers of equipment which is adapt",ble to the "Jeep" in the same maner as the approved "special equipment" supplied by reRpondel1t to these dealershi ps.

The total dollar sales by respondents of "special equipment" in 1961 was $5 719 575. The total manufacturer s override commission received by respondents from manufacturers of sa:id "special equipment" in 1961 was $314 732.

PAR. 6. In order to lncrease override commissions, respondents, on or ",about 1955 and continuing to the present time, adopted and placed into effect a policy or program designed to re-strict, prevent, restrain haInper, hinder, pressure or discourage their franchised retail dealers from l-nwing ':special equipment" from any suppEer other than respondents. This is hereinafter dpsignated and referred to as "nonapproved special equipment". For the purpose of carrying out and sllcoosfully e-ii'ectuating such policy or program respnndents engaged and now engage in various acts and practices to coerce" influence, harass and intimidate respondents' franchised dealers to. purchase " approved special equipment" from respondents, as follows: (1) Threatened to cancel the franchise of dealers who did not discontinue the handling of "non-approved special equipment" and in 566 FEDERAL TRADE COJ,LY!ISSION DECISIONS Complaint 65 F. T.

some Cases did cancel the franchises of dealers who refused to discontinue the handling of "non-approved spec.al equipmene' (2) Threatened to install additional dealers in an established dealer s market area who refused to discontinue the handling of "nonapproved speci"! equipment" and in some instances did install additional dealers ,, here established dealers refused to discontinue handling "non-approved special equipment"

(3) Threatened to refuse to honor warranty claims made with respect to vehicles with "non-approved special equipment" installed thereon and in some instances did actually refuse to honor said warranty claims because of this fact.

(4) Planned and keyed advertising programs, and promotional sales efforts and sales and promotion literature to the exclusive promotion and sale of approved "special equipment" to the exclusion of non-approved special equipment" and cooperated extensively with one particular manufacturer of "special equipment" to effectuate such a restrictive and exclusive practice.

(5) Kaiser Jeep Sales Corporation regional and district managers acting pursuant to insti'1actions by respondents, made and do now make frequent visits or calls on the franchised dealers for the purpose of determining whether the franchised dealers are sellng only "special equipment" approved by respondents to the exclusion of "non-approved special equipment:: and for the purpose of exerting pressure on said dealers to conform to this policy.

(6) Delayed the delivery of vehicles and threatened to delay the delivery of vehicles ordered by franchised dealers who would not cliscontinue the sale of "non- approved special equipment" (7) Set uJleasonably high yearly quotas for unit sales of "approved special equipment" in order to prevent the franchised dealer' from selling "non-approved special.l equipmenf' (8) Coerced, intin1ated or otherwise compelled franehised dealers andto buy only "approved special equipment" from respondents, deprived said dealers of their right to deal with any other supplier of such special equipment.

PAR. 7. The aforesaid acts and practices of respondents as hereinbefore alleged have had and are now having the capacity, tendency and effect of:

(1) Restraining, lessening and eliminating competition bet'\,een manufacturers of " a.approved special equipmene' a.nd ma,nufacturers of ':non-approyed special equipment"

(2) Depriving resp011(lents: franchised dealers of their dghts and privileges as independent businessmen to purchase "special equipment'" from the manufacturer of their choice.

KAISER .JEEP CORP. ET AL. 567 562 Deci jon and Order (3) Causing respondents' franchised dealers substantial monetary loss by cancelling their franchises in reprisal for their handling of llon-approved1 special equipment"

C:!) Creating an arbitrary division or customers and allocation or territories as betiYCen cooperating and non cooperating dealers, and favored and non-favored manufacturers or " special equipment" (5) Foreclosing, preventing, restricting, restraining, hampering, hindering, and discouraging manufacturers or "non-approved special equipment" from making sales or their products to respondents' clealers, thereby restricting their markets and restraining the free flo,, or trade.

PAR. 8. Respondents' acts and practices as hereinabove alleged are all to the prejudice of the public and have a dangerous tendency to, and are now, unduly frustrating, hindering, suppressing, lessening, restraining, preventing and ehminatingcompetition in the purchase and mle of various items of special equipment in commerce and constitute unfair Inethods of competition and unfair acts and practices ",vir-hin the intent and meaning of Section 5 of the Federal Trade Comlnission ct.

DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the re,spondents named in the caption hereof with violation of tJIe Federal Trade Comlnission Act, and the respondents lH1.ving been served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a proposed for:nl of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondents of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said agreement is for ettlement purposes only a.nd does not constitute an admission by respondents that the law has been violated as set forth in such complaint, and waivers and provisions as required by the Commission rules; and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agrcement makes the foJlm'ling jurisdictional Enelings, and enters the follmying order:

1. Re pondent. ICaiser J ccp Corporation, is a corporation organized existing and doing business under and by virtue of the laws of the State of Ncyada, with its offce and principal piace of business located fit. D-JO Cove Avenue, in the city of Toledo, State of Ohio. Decision and Order 65 F.

Respondent Kaiser Jeep Sales Corporation, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Michigan, with its offce and principal place of business located at 940 Cove A venue, in the City of Toledo, State of Ohio. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER I. It is ordered That respondents Kaiser Jeep Corporation, a corporation, and Kaiser Jeep Sales Corporation, a corporation, and their offcers, agents, representatives, employees, successors and assigns rectly or through any corporate or other device, in connection with the promotion, offering for sale, sale or distribution of special equipment in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist, directly or indirectly, as a means of preventing or attempting to prevent any of its dealers or distributors or other vendors from stocking or sellng any item of special equipment not manufactured or sold by respondents, from engaging in any of the following acts or practices: 1. Threatening to cancel or cancelling the franchise of any dealer or distributor.

2. Threatening to install or installng an additional dealer or distributor in a franchised dealer s or distrrbutor s area. 3. Threatening to refuse or refusing to honor a warranty claim made on a vehicle manufactured and sold by respondents on which had been installed equipment not approved, sponsored, recommended or favored by Tespondents unless respondents produce substantial evidence showing that such claim arose because of the installation, operation or use of such special equipment. 4. Policing or otherwise engaging in any investigation of the activities of any dealer or distributor in connection with the handling or sellng of special equipment not approved, sponsored, recommended or favored by respondents.

5. Threatening to delay or actually delaying the delivery of any vehicles, parls or accessories to any franchised dealer or distributor.

6. Setting an unreasonably high yearly quota for dol1aT or unit sales of special equipment approved, sponsored, Tecommended or favored by respondents for the purpose or with the effect of preventing any franchised dealer or distributor from handling and seIJing any other item of special equipment. 7. Cooperating or agreeing to cooperate in any way with any manufacturer of special equipmeut to prevent or attempt to pre- STIFEL AND TAYLOR' S VALUE CITY , INC. , ET AL. 569 562 Syllabus ,-ent any dealer or distributor or other vendor from stocking or selling any item of special equipment not manufactured or sold by respondents by means of any of the foregoing acts or praotices. II. It i8 further ordered That respondents Kaiser .Teep Corporation a corporation, and ICaiser Jeep Sales Corporation, a corporation and their offcers, agents, representatives, employees, successors and assigns, directly or through any corporate or other device, in connection ,,,ith the promotion, offering for sale, sale or distribution of special equipment in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist, directly or indirectly, by any means or methods, from coercing or intimidating a franchised dea.ler, distributor, or any other vendor of respondents' products, ,as a means of preventing, in any way, such dealer, distributor or other vendor from buying or selling any item of special equipment not manufactured or sold by respondents.

III. It i8 further ordered That respondents Kaiser Jeep Corporation and Kaiser Jeep Sales Corporation, corporations, shall withn sixty (60) days after service upon them of this Order, inform ,and ad- ,-ise their appropriate personnel that, pursuant to this Order, dealers and ctistributors are not under any Testriction, requirement, restraint or limitation to handle or sell only items of special equipment approved, sponsored, recommended or favored by respondents, and in so doing, forward to such personnel a true and correct copy of this Order.

It is further ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Com.mission a report in writing setting forth incletail the manner and form in which they have complied with this order. I:N THE 1:ATTEH OF :-TIFEL AND TAYLOR'S VALUE CITY, IXC., ET AL. ORDER, ETC.. IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO)DnSSION ACT DOGket 8440. Complaint, Jwne JD61-TJeuis'ion, Apr. 30 , 196. Order requiring the operator, to all intents and purposes, of a l' etail "r1iseollnt house" in \Vheeling, W. Va.. under the trade name " value Cit;- actually the lessor of a building in \which it subleased space' to 10 01' 12 firm:, who operated different departments fld sold their merchandise at discount prices all under the management and supervision of aforesaid le!'sor- and two responsible individuals, to cease misrepresenting prices of merchandise of- 1..'J- 121-70- 570 FEDERAL TRADE CO:;\DlISSION DECISIQSS Compli.linr Gfi F. fered for sale in "Value City:" by using such fictitious retail price representations in newspaper advertising as Hep:. :'308. 8:) jJ(' Living" Boom DiSCOlmt Price $278. R,E;g. Price $269. )lngic Chef Gas Range Discount Price $17S. \Then the IJiglWl' vrice were not their usual prices and tl1c purchaser did nnr, realize a sadnp; of till" ditfel'elH:f' bet\yef'll tlle higlJer ancllowel' prices. CO:HPLAINT Pursuant t.o the. provisions of the Federal Trade Commission Act and by virtue of t.he. authority ve ted in it by saiel Act: the Federal Trade Commission, h:nting- lea on to believe that Stifel and Taylor Value City, Inc., a corporation, and Henry Krouse, David E. ICahn and ::Ie,yer Denma.rk, individually and as offcers of said corporation I Top Value- Furniture and _Appliance Corporation, a corporation doing business as Top Value Furniture a.nd Appliance, and Top Vallle Furniture and Appliance Corp. of ' Theeling, a corporation and Harry A. SigesHlnnd, Phillip Brown, Shirley Sigesmllnd and Roberta Brown, individually and as offcers of Top Value Furniture and Appliance Corporation and Top Value Furniture and Appliance Corp. of "Theeling, 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 t.he public interest, hereby issues its complaint stating its charges in: that respect as follmys:

PARAGRAPH 1. Respondent Stifel and Taylor s Value City, Inc., is a corporation organized, existing and doing business under and by virtue of the Jaws of the State of West Virginia, with its principal office and place of business located at 1156 Main Street, in the city of 'Wheeling, State of ,Yest Virginia.

Respondents Henry 1\.rouse, David E. Kahn and :L\eyer Denmark are offcers of said corporate respondent. They formulate, direct and control the act.s and practice of said corporate respondent, including those hereinafter set forth. Their address is the same as that of the corporate respondent.

Respondent Top Value Furniture and Appliance Corporation doing business as Top Value Furniture and Appliance, is a corporation organized. existing and doing business under and by virtue of the Jaw,: of the Stftte of ,Vest Virginia, with its principal offce and phce of business Jocated at 3047 l'lain Street, in the City of ,Yeirton, ,Vest 6nja.

Respondent Top Value Furniture and Appliance Corp. of ' Wheeling is a corporation organized, existing ftncl doing' bu"iness under rmc1 by virtue of the bws of the State of "'Vest Virginia, with its principal S'TIFEL \ND TAYLOR' S VAL-CL CITY , IKC. ) ET AL. 571 569 COn1lJluiJJt offce and place of business located at 1156 :Main Street, in the city of Wheeling, divest Virginia. It is a wholly o;med subsidiary of respondent Top i' value Fumiture and Appliance Corporation. Respondents Harry A. Sigesmund, Phillip Brown, Shirley Sigesmund and Roberta Brown are offcers and directors of the last two named corporate respondents. They formulate, direct and control the acts and practices of said corporate respondents, including those hereinafter set, forth. Their address is the same as that of said corporate respondents.

All of the aforesaid respondents have coopernted in and acted jointly in the' advertising practices hereinafter set forth and referred to. PAR. 2. Respol,dents Top Value Furniture and Appliance Corporation and Top Value Furniture and Appliance Corp. of "'heeling, are now, and for some time last past have been, engaged in the offering for sale, sale and distribution of general merchandise, including furniture and household appliances, to the public.

PAR. 3. In the course and COllChICt of their businesses the respondents named in Paragraph Two hereof, nmy cause, and for some time last past have caused, some of their sai(l products, vd1en sold, to be shipped from their respective places of busil1es in the State of "'Vest Virginia to purchasers thereof located in other States of the United States and maintain, and a,t flll times mentionel1 herein have 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 businesses, at all times mentioned herein, the respondents named in Paragraph '1'"0 hereof have been in substantial ompetition, in commerce, with corporations, firms a,ncl individuals in the sale or general merchandise, including rurniture and household appliances, of the saine general kind awl nature as that solei by said respondents.

PAR. 5. Respondent Shfel and Taylor s Value City, Inc., o\ms a building in the city of 'Yheeling, ,Vest Virginia. It leases space in said building to various mercantile establishments, inc1ucl-ing Top Value Furniture and Applianee Corp. of iYheeling, "which pay a fixed percentage of their gross dollar volume or sales to said lessor respondent as rental anrl other charges, including a designated portjon thereof for advertising costs. The lessees submit to the lessor the price figures with reference to their articles of merchandise to be advertised and thc lessor prepares and places the said advertising matter ror publicat.ionin newspaper.rs. Said lessor respondent thereby acts not only as the advertising agent ror said lessees, including the other named. rcc:ponclents, but flJ.O shares in the gross proceeds accruing rrom the sale or the merchancli e sold by said Je 'Oce 572 FEDERAL TRADE coj.nnSSIQN DECISIOr-- Complaint 65 F.

'R. 6. In the conduct of its business, at all times mentioned herein respondent Stifel and Taylor s Value City, Inc., has been in substantial competition, in commerce, with other corporations, firms and individ uals engaged in the advertising business.

PAR. 7. Respondents named in Paragraph Two hereof, and their offcers, for the purpose of inducing the purchase of their aforesaid merchandise, have engaged in the practice of using fictitious retail price representations in connection with the sale thereof, in advertisments prepared and placed by respondents named in Paragraph One hereof in newspapers that have an interstate circulation. Among and typical, but not all inclusive, of said representations are the following: Reg. $399.95 2-pc Living Room-Discount Price $278.00 Reg. Price $269.95 Magic Chef Gas Range Discount Price $178.

$79.95 Modern Swivel Rocker Discount Priced $50. Reg. Price $159.95 Gas Range with GriddIe DisCOlllt Price $108.

PAR. 8. Respondents, through the use of the aforesaid statements and others of similar import not specifically set out herein, represented diredly or by implication, that the higher stated prices were the usual and customary retail prices charged by the selling respondents for said merchandise in their recent regular course of business and that they had reduced said prices from the stated higher prices to the stated 10'Oer prices and that purchasers of the merchandise so advertised realized a saving of the differences between the said higher and lower prices.

PAR. 9. Said statements and representations were false, misleading and deceptive. In truth and in fact, the higher prices appearing in said advertisements were fictitious. Said selling respondents had no usual or customary retail prices at which their products were sold in the usual course of business and they did not customarily sell said articles of merchandise at said advertised higher prices. Therefore, the purchasrs of said respondents' merchandise did not realize a saving of the differences between the said higher and lower prices. Ym. 10. The use by respondents of the aforesaid false, misleading and deceptive statements, representations a.nd practices has had, and 110" has, the capacity and tendency to mislead members of the purchasing public inw the erroneous and mistaken belief that said statements and represent.ations were, and are, true and into the purchase of substantial quantities of said selling respondents' products by reason of said erroneous and mistaken belief. As a consequence thereof subst.antial trade in commerce has been, and is being, unfairly diverted to said respondents from their competitors and substantial injury has thereby been, and is being, done tn competition in commerce. STIFEL A!\-cD TAYLOR' S VALLE CITY , INC. ) ET AL. 573 569 Inital Decision PAR. 11. The aforesaid acts and practices of respondents, as herein alleged, were, and are, all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of the Federal. Trade Commission Act.

M1'. De Witt T. Puckett supporting the complaint. Mr. Thomas Hollander of Evans, Ivory and Evans Pittsburgh, Pa. for respondents.

INITIAL DECISION BY Jar:.'" B. POINDEXTER, HEARING EXAMINER FEBRUARY 28, 1964 Under date of June 28, 1961, the Federal Trade Commission issued a complaint charging Stifel and Taylor s Value City, Inc., a corporation, and Henry Krouse, David E. Kahn, and Meyer Denmark, individually and as offcers of said corporation; Top Value Furniture and Appliance Corporation, a corporation doing business as Top Value Furniture and Appliance, and Top Value Furniture and Appliance Corp. of Wheeling, a corporation, and Harr A. Sigesmund, Philip Brown, Shirley Sigesmund and Roberta Brown, individually and as offcers of said corporations, hereinafter called respondents, with false advertising and fictitious pricing in violation of Section 5 of the Fed. eral Trade Commission Act.

Subsequent to the issuance of the complaint, some of the respondents answered and rcquested that the matter be setted by consent order procedure. Accordingly, on August 29, 1961, the matter was referred to the Offce of Consent Orders for disposition under the Consent Order procedure, and the undersigned hearing examiner was relieved of all further responsibility in the proceeding. An agreement containing a consent order not having been negotiated, on May 14, 1963, the proceeding was returned to the Offce of Hearing Examiners for ap propriate action. The undersigned was again designated as hearing examiner.

Pursuant to notice, a he.aring was held in ",VheeIing, "'Vest Virginia on October 22 al1c123 1963. At this hearing, both documentary e..idence and oral testimony \were received in support of and in opposition to the allegations of the complaint. Proposed findings have been filed by respective c.ollnseJ and the matter is now before the hearing examiner for initial decision. All proposed findings of fact and conclusions of law not found or c.concluded herejn are rejected. Upon the basis of t.he 574 FEDERAL TRADE CQ:\L\lISSIQX" DECISIO Inital Decision 65 JI entire record, .the hearing examiner makes the followino' findino's of fact Hnd. conclusions ba ec1 thereon and issues the followino' order' FIXDIXGS OF FACT 1. The respondent, Stifel and Taylor s VaIlle City, Inc., is a, earporation organized and doing business under the laws of the state of ",Ve, Virginia., with its offce and place of business located at 1156 l\Iain Street., ,Vhcelil1g, ,Yest Virginia. The individual respondent David E. Kahn is president, and the individual respondent /Icyer Denmark is one of the vice presidents of the corporation. The individual respondent Henry Krouse is no longer an offcer of said corporation. 1-Ie was formerly president and served in sajd capacity until January or Febl'Utl'Y, 1963 , when he ceased to be president. He "as never a stockholder in said corporation. The business address of the individual respondent David E. Kahn is the same as that of the corporation. Mr. ICahn resides in Columbus, Ohio. The individual respondent Ieyer Denmark resides in Steubenyillc, Ohio.

2. The respondent Top Value Furniture and Appliance Corp. of Vhee1ing ,,- s formerly a corporation incorporated under the laws of the state of ,Vest Virginia in April 1860. The individual respondent Iarry A. Sigesmund ",.as president of said corporation. The other offc('l'S of said corporation were Shirley Sigesmund, \vife of respondent IIarry A. Sigesmuncl, and Roberta Brown and Phillip Brown f;istel' a.nd brothcr-in-la\\, respectively, of respondent Harry A. Sigesntunc1. The principal offce and place of business of said corporation \YR,S at 1156 fain Street, V\Thee1ing, Vest Virginia. Said corporation was dissolved sometime during the month of August or September 1D6;-L prior to the hearing herein.

3. The named respondent Top Value Furniture and -\ppliallce Corporation was a corporation incorporated in 1961 under the Jaws of the State of Vest Virginia. It too \-as dissolved during the month of Allgust or September 106;-( There is no evidence in the record to E'srablish t.he allegation that said corporation participated in 0.1' had ::ny coj11ec6on with the. acts or practices complained about..in this proceeding. For this reason, counsel for respondents mon d that the complaint be, rlismissed as to that respondent. Counsel snpporting the complaint c1idllOf, opp() e sairl1nobon. A('corr1ingl the complaint i lming (li8s('d as against that respondent.

.1. Stifel a,ncl Taylor s Value City Inc., fl corporation. leases fl building-located at 1156 j\Iain Street in the city of\Vheeling, Vest Virginia where. to. an intents and purposes, it operates what is commonly called fll'etnil "discount house" under the trade nflTIe "Yalue City . I-ImYC'H:r STIFEL AND TAYLOR' S VALUE CITY, mC; ET AL. 575 569 Initial . Decision St.ifel and Taylor s merely rents or sub leases space in the building at 1156 1\1:ain Street in 'Wheeling to ten or twelni firms or corporations who operate different departments. in sitid discount house, such as clothing, furniture and appliances, drugs, hardware, etc., for the sale of merchandise at retail at so-called "discount" prices. Mr. Kahn, president of Stifel and Taylor s Value City, Inc., who testified at the hearing, termed operators of these different departments as "licensees rather than lessees. Mr. Kahn further testified as follows: That the lessees or "licensees" of the different departments in "Value Citi' sell all merchandise at discount prices, which prices are below the retail prices charged by competitors in 'Wheeling, yVest Virginia; the licensees" pay a basic 1ninimum rental based on a percentage, approx imately 5 percent, of their gross volume of retail sales to Stifel and Taylor s as rent for use of their space. and an additional percentage approximately 3 percent, for advertising costs. Stifel and Taylor Value City, Ine., manages and supervises the operation of "Value City, including the advertising (Tr. 26-35). The respondent Top V olue Furniture and Appliance Corp. of W1weling was the "licensee or operator of the Furniture and Applianee Department in "Value City " from approximately May 1060 to May 1, 1061. This department sold articles of furniture, stoves, refrigerators, and the usual ho.usehold appliances. It was during the time that the respondent Top Value Furniture and Appliance Corp. of \Vheeling ,vas operating the Furniture and Appliance Department in "Value City:: that the alleged fictitious newspaper pricing advertisements appeared. 5. The evidence shows and it is found that, in the operation of due City, it was the practice or the particular department, in this instance Top Value Furniture and Appliance Corp. or'Vhceling, to select the merchandise and the price thereof to be advertised in the newspa.pel' , a so-cal1eel "regular" prjce and a "discount" price, and submit this to Stifel and Taylor s (Tr. 88- 80). Stifel and Tocylor s advertising department then prepared the copy for the advertisement and placed the advertisement in either or all or three newspapers, the JVe1JJs-Register an evening newspaper, and the Wheeling IntelligernceT a morning newspaper, both published in \Vheeling, 'Vest Virginia and/or the Thnes-Leader a newspaper published in 1ftntins Ferry, Ohio. Stifel and Taylor s would pay the bill for the advertisement to the newspaper and then bin the said department "licensee " in this instance Top Value Furniture and Appliance Corp. or 1Vheeling for its proportionate cost of the advertisement (Tr. 36-38). At the heating counsel stipulated that the circula60n of these three named newspapers cross state lines and cireulate in interstate commerce (Tr. 162-163) .

____ Initial Decision 65 F.

6. The essence of the violations charged in the complaint are that the corporate respondents and their offcers have used fictitious retail price representations in newspapers of interstate circulation to induce the sale of their merchandise, such as the following: Reg, $399.95 2-pc. Living Room Discount Price $278. Reg; Price Magic Chef Gas Range $269.95 Discount Price $178.

Reg. Price Modern Swivel Rocker $79.95 Discount Price $50.

Reg. . Price $159.95 Gas Range with griddle Discount Price $108.00 The com plaint further alleges that the higher prices appearing in said advertisements were fictitious and were not the usual or customary retail prices at which respondent corporations sold their merchandise in the regular course of business and the purchaser did not realize a saving of the difference bet\vecn the said higher price and the 10'\c1' price.

7. To establish the allegations of the complaint with respect to rhe alleged fictitious newspaper advertising, counsel supporting the complaint offered several newspaper advertisements from the "Yheeling News-Register the Wheeling Intelligence?' and the Martins Ferry, Ohio Times-Leader which had been published during the period 1960-1961 , when respondent Top Value Furniture and Appliance Corp. of Wheeling was operating the Furniture and Appliance Department in "Value City . Mr. Kahn, president of the corporate respondent Stifel and Taylor s Value City, Inc., identified the advenisements as having been placed in said newspapers on behalf of "Value City . Certain pages of these newspa per adve.rtisemcnts were recei ved in evidence as ex 2- , inclusive. The newspaper advertisements purport to be on behalf of "Value City" and list various articles of merchandise :for sale, including men, women, and children s clothing, furniture, floor coverings, stoves, refrigerators, household appliances hardware, automobile accessories, drugs, toilet articles, etc. It is only those portions of these advertisements which list "reg." aud "discount" prices for certain articles of Inerchandise that Commission counsel claims are fictitious. Some examples of this alleged false advertising wil be set ont.

8. For instance ex 2 is a one-page advertisement on behalf of Value City " which appeared in the Wheeling News-Register on January 12, 1961. Near the bottom of the page of this advertisement, under the heading "Basement Furniture Department", appear the following: Reg. 2-pe. Living ROOID--_ ------ Discount Price $278. $399.95Reg. $299.95 3-pc. Bedrooms--___------------------ Discount Price $153. , &: __ __ STIFEL AND TAYLOR' S VALUE CITY, INC. , ET AL. 577 569 Initial Decision 9. CX 3 is an advertisement on behalf of "Value City" which appeared in the Martins Ferry, Ohio Times-Leader on November 25 1960. In this advertisement, under the heading "Famous Brands Furniture & Appliances, various articles of furniture, refrigerators stoves, etc., are advertised with two prices listed for each article, the R.eg." price and "Discount" price, such Reg. Price foam rubber $79.95 Swivel Rocker, Discount Price $50.

10. CX 5 is a newspaper advertisement which appeared on behalf of Value City" in the 'Wheeling News-Register on October 2, 1960. Under I,he heading "Furniture Super Buys, all articles are listed at two prices Reg." and "Discount", among them being: Price Discount $42.Reg.95 Admiral 13.cu. ft. Refrigerator-- - $239 $159.95PriceGas Range, with griddle-----_-------------------------------- $108 11. It was the testimony of both )11'. Kahn and Mr. Harry Sigesmund, the latter being the former president of Top Value Furniture and Appliance Corp. of Wheeling, that the articles listed in the advertisements were never sold in " V value City at the "Reg. Price bul were always sold at the "Discount Price " listed in the ad rtisement. Thus, said advertised "Reg. Price" was not the price at which the particular item of merchandise was regularly and usually sold by Value City, as represented in the advertisement, but the item of merchandise was sold at a lower price, called the "Discount Price Consequently, purchasers of said merchandise did not realize a saving of the difference between the higher and the lower listed price. Said socaDed advertised "Reg. Price" was, therefore, fictitious and an unfair act and practice in violation of Section 5 of the Federal Trade Commission Act. J. Fiddleman Son, Inc., et al. Docket 8043 (58 F. 31J; A1'nold Oonstable Oorp. Docket 7657 (58 F. C. 49J and Baltimore Luggage Oorporation 296 F. 2d 608.

12. One of the contentions of respondents was that they are and were engaged in the local retail trade. in Wheeling, not in interstate commerce and, therefore, the Federal Trade Commission does not have jurisdiction over this proceeding. In fact, Mr. Kahn testified that Value City" was a "cash and carry operation and did not make delivery of merchandise purchased at the store. To rebut this contention, counsel supporting the complaint offered certain so-called sales invoices, CX 14-25, issued under the name "Value City" which purport to show the sale of various items of furniture and appliances at Value City" to customers with addresses located outside the state of West Virginia. Mr. Sigesmund, formerly president of Top Value Furniture and Appliance Corp. of Wheeling, identified each of these 578 FEDERAL TRADE COlvLYIISSION DECISION"S Initial Decision 65 F.

sales invoices as having been issued by his company s salesman Al Zimbray for me.rchandise sold at "VaJlleCiti; Fo.r instance, ex 14 is a sales invoice dated J annar)' 16 , 1961, purporting to. 8hO\y the sale of a piece living room suite to a customer whose address ' was listed in Rayland, Ohio, at a price of $278. This invoice shows on its face a deposit of $20 toward the purchase price with the designation " $258.00". The "C.O.D. $258.00" indicates that the merchandise was to be delivered to the cllstomer at the address ShmYl1 in Ray land, Ohio, at which time thecustomer would pay thebaJance of the purchase price to wit $258. This 2-piece Jiving room suite meets the description of the piecc living room sllite previously advertised in the "\Vlweling 2Ve108- Register on January 12, 1961, referred to in CX2, Paragraph 8, abo'ic. 13. ex 17 is another sales invoice dated October 10 , logo, listing the sale of an Admiral Refrigerator at a price of $2.39, and a gas range at a price of $108. The address of the cllstomer sho.wn on the sales invoice was R.oute 2, Clarington, Ohio. The sales invoice also lists an additional charge of $10 for delivery of the merchandise to tbe customer. Thesnarticles of merchandise appear to be the same articles o.f merchandise as those advertised in the. \Vheeling JVe'Ws- Reqistep on October 2 1960, referred to in CX 5 , above, set ont in Paragraph 10. 14. CX 15, 16, 19 , 20, 22, 2 , and 2;) a're additional sales invoices for mercha.ndise sold at "Value City" which list the address of the customer at some location in the state of Ohio. Also, these invoices either list a specific sum as an additional charge for clelive,ry of the merchandise or Est a specific sum as a " c1(Y\Yn payment" toward the total purchase price and the balance " , thus indicating that the merchandise was delivered to the customer at the address in Ohio. Although Mr. Sigesll11ncl admjtted that Top Value Furniture and Applia.nce Corp. of \V11eeling made it a. practice to deliver bulky items of merchandise to purchasers in the State of Ohio, nevertheless, he contended t.hat the sales invoices (CX J 4-25) do not show that the merchandise described in the invoice was delivered to the named customers in Ohio because the invoices do not bear tile "signed receipt': by the Cllstomcl'. This argument has no merit. The evidence shmvs that, at the time of a sale at Value City, it was the practice for the sa.lesman to make four copies of each sales invoice. One copy ",as given to the customer, one copy given to Stifel and Taylor s Value City: Inc., one copy "as given to the delivery man: and one copy was kept by Top Value Furnitilre and Appliance Corp. of IYheeling-, the actual seller of the merchandise. CX 14-2.5 are the copies of the sales invoices kept by Top Value Furniture and Appliance Corp. of Wheeling in its offce files. Naturally, these copies do not bear t.11c signature of the. customer. If the customer signed a. receipt for c1eliyery of the merchanc1ise it "as the copy present.ed to STIFEL AKD TAYLOR' S Value CITY, INC. , ET AL, 579 569 Initial Decision him by the delivery man. A preponderance of the evidence shows that Top Value Furniture and Appliance Corp. of 'Wheeling made it a practice to deliver merchandise to customers in Ohio. It is found, therefore, that respondents' plea to the jurisdiction of the Federal Tmde Commission in this proceeding is \vithout merit. 15. The evidence shows that the sales of furniture and appliances the department operated by Top Value Furniture and Appliance Corp. of ,Yheeling during the approximate one-year period of its operation was approximately $76 000, of which amOlmt approximately 40 to 50 percent was in interstare cOlnmerce, being delivered to customers in the State of Ohio. The combined dollar volume of business done by all of the departments or so-caDed "licensees" in "Value City" amounted to approximately $3 000 000 annually. Of this amount, approximately 40 to 50 percent was in sa.les and deliveries of merchandise to customers located in the State of Ohio, located across the Ohio R.ivcr jmmediately to the west of 'Vhecling, 'Vest Virginia. CONCLUSIONS The, use by t.he respondents of the false and dece.ptive advertisements and prnct.ices found herein had the capacity and tendency to mislead members or the purchasillg public int.o tile mistaken belief that said re,prcsentations ,were true and into the purchase of substantial quantities of respondents: products by reason of said mistaken belief. Said acts and practices, herein found, were and are to the prejudice an(l injury of the public and respondents' competitors and constitute unfa.ir and deceptive practices (lnd unfair methods of competition :in " ('o11me.1(,(, . \yithiJl the intent nnd menn:ing of the Fer1ernJ Trade Commission Act. The pl1bJ:r.interest l'NJllil'r:- that ft " censp flJd de order be j:;suec1 to stop such practices.

Commission counsel has requested that the order be issued against Shfel and Taylor s Value City, Inc., and its offcers, and Henry 1(1'01158 David E. I\:ahn find l\feyer Denmark, individually and as offcers of said corporation, and Top Value Furnitllre aJld Appliance Corp. of \Yheeling. and its offcers, and Harry A. Sigesmund, Phillip Brown Shirley Sigesmund and Roberta Brown, inc1iyiclually and as ofllcers of said corporation, and respondents' a.gents: representatives and employees, etc. Commission counsel does not object to the granting of respondents' motion to di mi'3s the complaint against Top Value Furniture nncl Appliance Corporation. lie agrees thilt the evidence does not establish the alleg:ation in the compla.int that Top Va.1ue Furniture and Appli lnce Corporation participated in tJ18 \ violations a1Jegecl and fOllnd herein. .Also: that corporate respondent no longer is in existence.. 580 FEDERAL TRADE CQMMISSIOX DECISIOXS Initial Decision 65 F.

However, upon the basis of the entire record, the hearing exa.miner does not believe that it is necessary to issue a cease and desist order against each or the other respondents named in the complaint, both in their individual and corporate offcial capacities, in order to stop the violations complained about.

With respect to the offcers or Stirel and Taylor s Value City, Inc. the evidence shows that Mr. Henry Krouse was president or Stirel and Taylor s Value City, Inc., rrom the tin,e or its incorporation in 1958 or 1959 until .January or February 1963, when he was replaced by Mr. David Eo Kahn. Mr. Krouse is not now an offcer or the corporation. He was never a stockholder. The evidence does not show that he ever participated in the rormulation or policy or the advertising practices or Stirel and Taylor s Value City, Inc. During the time Mr. Krouse was president, the respondent David E. Kahn was vice-presi. dent-secretary and general manager or Stifel and Taylor s Value City, Inc. As such, Mr. Kahn directed the advertising practices and policies or Stirel and Taylor s Value City, Inc. ,With respect to the last named offcer or Stire! 'and Taylor s Value City, Inc., Mr. Meyer Denmark, the evidence shows that Mr. Denmark is and has been treasnre1' of Stifel and Taylor s since the corporation was organized in 1958 or 1959. As such, he does not perform any duties. Mr. Denmark resides in SteubenvjJe, Ohio, and, insofar as the evidence shows, he has not visited the store "Value City mote than four or five times. The 8yic1ence does not. establish that he participated in the formulation of adw,rtising policies or Stirel and Taylor s Value City, Inc. ,With respect to the respondent Top Value Furniture and Appliance Corp. of Wheeling, and its n"med offcers, the evidence shows that this corpomte respondent was dissolved in August or September 1963 prior to the hearing herein. Were it now in existence, an order would be directed against it and its 'offcers. Since tha.t corporation is not now in e1xiste.nce, no useful purpose would be served in issuing an order against a non-existing respondent. The evidence. shows that the respondent Harry A. Sigesmund was the president of Top Value Furniture and Appliance Corp. or ,Vheeling during its eorpomte life. As president fr. Sigesl1unc1 controlled and directed the policies and advertising prae"Hces of Top Value Furniture. and Appliance Corp. of ViTheeling. A n order win be directed against :Jfr. Sigesmunc1 in his capa.city as an individual. There is no evidence in the record to show that the respondents Shirley Sigesmund, Phillip Dro,,- , and Roberta. Brown partjcipated in the formulation of policy 01' advertising practices of Top Value Furniture and Appliance Corp. or Wneeling. For these reasons no order against these respondent is required. fIFEL AXD TAYLOR' S VALrE CITY , Tht, ET AI.. 581 569 Initial Decision ORDER It is oiy/ered That respondent Stifel and Taylor s Value City, Inc., a corporation, and its officers, and David E. ICahn, individually and as an offcer of said corporation, and harry A. Sigesmund, individually and respondents agents, representatives and employees directly or through any corporate or other device, in connection -with the advertising, offering for sale, sale or distribution of generalmeI' ehandise, including furniture and hol1se,hold appliances or any other article of merchandise in C0l11nerce, as ;'commerce" is defined in the Federal Trade Commi"ion Act, do forthwith cease and desist from: 1. Using the words or expressions "Reg." or "Reg. Price either of them, or any other term of similar import or lneaning to describe or refer to the retail price of any article of merchandise when the amount so described is in excess of the price at which such. article of merchandise has been usually and customarily sold by respondents, or any of them, in the recent, regular course of business.

2. Using the words or expressions "Discount price" or any other word or term of similar inlport or meaning, to describe or refer to the price of merehi1ndise unless such price represnts a reduction from the price at which such merchandise has been sold by respondents, or any of them, in the recent, regular course of bm: ness or represents a reduction from the price at which such mer chandise has been sold at retail by others in the recent, regular course of their business in the trade a.rea. in which the representation is made.

3. Representing, dire,ctly or by inlP1ication, that any amount is the usual and customary rerail price of merc.handise in a trade area or areas "when such amount is in excess of the price at ,which said merchandising is usually and customarily sold at retail in the trade area or areas 1yhel'c the representation is made. 4. ::lisrepresenting, in any manner, the amount of savings available to purcha,sers of respondents' merchandise or the amount by which the price of said merchandise has been reduced from the price at which it is usually and customarily sold at retail by the respondents, or by others: in the trade area or areas wherein the representations are made.

It is JUTther ordered That the complaint be, and the same hereby , dismissed, as to Top Value Furniture and Appliance Corp. of Wheeling and Top Value Furniture and Appliance Corporation formerly corporations incorporated under thc Jaws of the State of Deci::ion 63 F, "'Vest Virginia; and, also dismissed as to the individual respondents Henry Krouse, Meyer Denmark, Philip Brown, Roberta Brown and Shirley Sigesmund.

DECISION OF 'rub CO)BfISSION AND Onder TO FILE' HEPOR'! O:E' CO:;fPLL\1\ The complaint in this proceeding charges respondents with Jnis1'epresenting the so-called "Reg. (regula.rJ Price:' as the usual and customary reblil price at which they sold their merchandise in the- reee. regular course of their bnsil1ess and this matter is before the Commission upon the initial decision of the hearing examiner filed February 28 1964. The examiner found the. charge sustained by the evidence holding individual respondents David E. Kahn HIlcl Harry A. SigeslllLlld and corporate respondent Stiiel and Taylor s Value City, Inc. responsible for the challenged practices. lie issued an order aga,inst these respondents, ordering them in effect to refrain fr01n representing a price as the regular or usual price of their merchandise v, hen it is in excess of the price at which . respondents have usually and customarily sold such products in their recent regular course of business. To that extent the order is supported by the findings in the initial decision. The examiner went further, however, and prohibited respondents from representing directly or by implication that any mnount is the usual and customary refa il price of the Inerchandise in a trade area or areas when such anlonnt is in excess of the price at which such merchandise is usual.!Iy and customarily sold at retail in the trade area or areas v..-here such representations a.re made. The findings in the initial decision do not support the issuance of an order containing a prohibition of this nature. The order, therefore, will be revised. Accordingly, It is ordered That the order to cease and desist in the initial decision be modified to read as follows:

ORDER It is ordered That respondents Stifel and Taylor s Value City, Inc., a corporation, and its otrcers, a,nd David E. I\:ahn, individually and as an offcer of said corporation, Harry A. Sigesmund individually, and respondents' agents, representatives, and employees, directly or through any corporate or other device, in COIlnection with the advertising, offering for sale, sale or distribution of general merchandise, including furniture and household appliances or any other article of merchandise in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

; ., g. NATQXAL MARCARQ I MA'tEFACTURERS ASSN. ET AL. 583 569 Complaint 1. Representing, directly or by implication, that the regu- Jar or usual price of any item of their merchandise is any amount 'i"\which is in excess of the price at which respondents or any of them have usual.lly and customarily sold such products in the recent and reguJiLr course of business. 2. lisrepresenting inanymiul1cr the savings available to purchasers or prospective purchasers froln the prices at which responde,nts or any of them have usually and customarily sold such products in the recent regular course of business. I t -is f1trther ordered Tlmt the complaint be, and the same hereby is, dismissed as to Top Value Furniture and Appliance Corp. of VVheeling, and Top Value Furniture n,nd Appliance Corporation, forrnerly corporations incorporated under the laws of the State of west Virginia; and that the complaint be also dis- , Th:Ieyer missed as to the individual respondents 1Ion1'Y Krouse Demmuk, Phillip Brown, Robert" Brown, and Shirley Sigesmund.

1 t is further ordered That the initial decision, as modified, be, and it hereby is, adopted as the decision of the Commission. It further o1Ylered That respondents .Stifel and Taylor s Value City Inc., David E. Kahn and Harry A. Sigesmund, shall; within sixty (60) days after service upon them of this order, file with the Commission a . report" in. writing, . setting forth. in detail the maimer and f01m in which they ha:' e complied with the order to cease a.nd desist.