The Logan-Long Company

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IN THE MATTER OF THE LOGAN-LONG COMPANY ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2(a) OF THE CLAYTON ACT AND THE FEDERAL TRADE COMMISSION ACT Docket 7906. Complaint, May 20 1960 Decision Dec. , 1965 Order dismissing a complaint which charged an Illnois manufacturer of asphalt roofing with unlawfully discriminating in price among its customers and suppressing competition.

COMPLAINT The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof, and hereinafter more particularly designated and described, has violated, and is now violating, the provisions of subsection (a) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act (15 U. 9 13), and the provisions of Section 5 of the Federal Trade Commission Act (15 U. C. 9 45), and it appearing to the Commission that a proceeding by it in respect thereof would be to the interest of the public, hereby issues its complaint stating its charges with respect thereto as follows:

COUNT I Charging violation of subsection (a) of Section 2 of the Clayton Act, as amended, the Commission alleges:

PARAGRAPH 1. The Logan-Long Company, respondent herein, is a corpora tion organized, existing and doing business under and by virtue of the laws of the State of Ohio, with its principal office and place of business located at 6600 South Central Avenue, Chicago Ilinois.

PAR. 2. Respondent is now, and for many years has been, engaged in the manufacture, distribution and sale of asphalt roofing products. It also is engaged in the distribution and sale of certain specialty items, including asbestos siding. It sells a1l these products for lise, consumption or resale within the various States of the United States.

Respondent' s asphalt roofing products are sold and distributed under the names Logan-Long and Amalgamated Roofing MiHs and such trade names as Tapers and Perma-Tabs. Respondent's sales are and have been substantial. Net sales during the fiscal year ended March 31 , 1958, were $10 311 944.

THE LOGAN- LONG CO. 1017 1016 Complaint PAR. 3. Respondent is one of the major manufacturers of asphalt roofing materials in the United States. It owns and operates four asphalt roofing manufacturing plants located in Chicago, Ilinois; Franklin, Ohio; Fulton, New York; and Tuscaloosa, Alabama. PAR. 4. In the course and conduct of its business, respondent has been, and is now, engaged in commerce, as "commerce" is defined in the Clayton Act. It transports or causes to be transported its roofing products from the State of manufacture to purchasers located in other States. There is and has been a constant stream of trade and commerce in these products between and among the various States of the United States. PAR. 5. In the course and conduct of its business in commerce respondent is now, and has been, in substantial competition with other corporations, individuals, partnerships and firms engaged in the manufacture, sale and distribution of asphalt roofing products. PAR. 6. In the course and conduct of its business in commerce and particularly during and since 1956 , respondent has discriminated in price between and among different purchasers of its asphalt roofing products of like grade and quality. This it has done by selling to some purchasers at prices higher than those charged other purchasers.

Among and typical of the discriminations alleged are transactions relating to 15-pound and 30-pound asphalt saturated felt in 60-pound rolls (sometimes hereinafter referred to as asphalt felt), and 215-pound asphalt shingles (12-inch standard 3-tab strip shingles, sometimes hereinafter referred to as shingles). These products respondent has sold to customers in certain geographical areas of the United States at prices substantially higher than those charged others of its customers outside such geographical areas. In the sale of the aforesaid products, particularly during and since 1956, respondent has adopted and used a pricing system and pattern resulting in lower prices in the southeastern and southwestern areas of the United States than in other areas. This it has accomplished through a series of price lists and price bulletins establishing various systems of area and zone pricing, and through the application of varying discounts to an ostensibly uniform price. For example, in November 1956, respondent charged certain customers in Wisconsin $6.24 per square for shingles while, for products of like grade and quality, it charged certain customers in Mississippi $5.55 per square. On asphalt felt, during the same period, certain customers in Wisconsin were charged $2.35 per roll, while, for products of like grade and quality, certain customers in Mississippi and Alabama were charged $2.01 per roll.

Complaint 68 F.

Similarly, in May 1958 , certain customers in Mississippi and Tennessee were charged $1.63 per roll for asphalt felt, while, for products of like grade and quality, certain customers in Wisconsin were charged $2.02 per roll. In the sale of shingles during the same period, certain customers in Mississippi and Tennessee were charged $4.98 per square, while, for products of like grade and quality, certain customers in Wisconsin were charged $5. 90 per square These examples are illustrative of the pricing practices of respondent, and other price lists and bulletins, and sales made pursuant thereto, during the period 1956 to date reflect a similar pattern of discrimination.

PAR. 7. The effect of these discriminations in price, as alleged in Paragraph Six of this complaint, has been or may be to divert to respondent, or to respondent's customers, substantial business from competitors; and such discriminations are and have been sufficient to divert substantial business from competitors to respondent, or to respondent's customers, in the future. Where business has not been actually diverted, competitors have been required to meet, directly or indirectly, the discriminatory prices of respondent, with the result, actual or potential, of substantially impairing their profits and consequently lessening their a bility to compete.

Thus, the effect of the aforesaid discriminations in price, as alleged in Paragraph Six of this complaint, has been or may be substantially to lessen competition or to tend to create a monopoly in the lines of commerce in which respondent, its customers and its competitors are engaged, or to injure, destroy, or prevent com. petition with respondent or its customers. PAR. 8. The foregoing discriminations in price by respondent are in violation of subsection (a) of Section 2 of the Clayton Act, as amended.

COUNT II Charging violation of Section 5 of the Federal Trade Commission Act, the Commission alleges:

PAR. 9. Paragraphs One through Five of Count I hereof are incorporated herein by reference and made a part of this Count as fully and with the same effect as if set forth herein verbatim except that the reference to the Clayton Act in Paragraph Four of Count I is eliminated herein, and reference to the Federal Trade Commission Act is substituted therefor.

PAR. 10. In the course and conduct of its business in commerce and particularly since 1956, respondent has sold or offered to sell THE LOGAN-LONG CO. 1019 1016 Initial Decision and is selling or offering to sell asphalt roofing products at below cost prices or at unreasonably low prices with the intent, purpose and effect of injuring, restraining, suppressing, and destroying competition in the sale of such products in the southeastern and southwestern areas of the country.

For example, in the sale of 15-pound and 30-pound asphalt saturated felt, during and subsequent to March 1958, respondent sold to certain customers in Mississippi, Tennessee and Florida at delivered prices of $1.63 per roll. It is alleged that such price was an unreasonably low price or was below respondent' s cost of manufacture, sale and delivery, and that sales at such price were made for the purpose and with the intent and effect aforesaid. PAR. 11. The effect and result of the pricing practices of respondent, as alleged in Paragraph Ten hereof, have been or may be substantially to lessen competition in the distribution and sale asphalt roofing products, to the injury and prejudice of the public and to the injury and prejudice of respondent's competitors, as aforesaid; and such pricing practices constitute unfair methods of competition and unfair acts and practices in commerce within the intent and meaning of Section 5 of the Federal Trade Commission Act.

Mr. Bernard M. Williamson and Mr. Bernard Turiel for the Commission.

Cadwalader, Wickersham Taft 14 Wall St., New York, N.Y., attorneys for the respondent.

INITIAL DECISION BY ABNER E. LIPSCOMB, HEARING EXAMINER OCTOBER 29, 1965 I. THE COMPLAINT The complaint in this proceeding, issued on May 20, 1960, charges in Count I that the respondent named above, in the course and conduct of its business in commerce, during and since 1956 , discriminated geographically in the price charged different purchasers of its asphalt roofing products of like grade and quality, in violation of Section 2 of the Clayton Act, as amended. The complaint further alleges in Count II that respondent has sold or offered to sell asphalt roofing products at below cost prices or at unreasonably low prices with the intent, purpose, and effect of injuring, restraining, suppressing, and destroying competition in the sale of such products in the southeast and southwest areas of Initial Decision 68 F.

the United States, in viola tion of Section 5 of the Federal Trade Commission Act.

II. THE ANSWER Respondent, in its answer, denied the principal allegations of the complaint and affirmatively alleged that its lower prices in the southeast and southwest portions of the United States to any purchaser therein were made in good faith to meet an equally low price of a competitor or competitors.

III. HEARINGS A hearing was held in Chicago, Ilinois, on November 15 , 1960. Counsel supporting the complaint stated at that time, however that additional hearings would be required. Subsequently, in response to a motion by counsel supporting the complaint and beproceeding and thatcause of the similarity between the present In the Matter of Lloyd A . Fry Roofing Company, Docket No. 7908 (p. 217 hereina, an order was issued by the hearing examiner to scheduled in thethe effect that no further hearings would be present proceeding pending the decision of the Commission in the Lloyd A. Fry Roofing Company case.

. MOTION TO DISMISS AND FINDINGS AS TO THE FACTS On September 21 , 1965, subsequent to the Commission s decision in the Fry case supra counsel supporting the complaint moved that the present proceeding be dismissed without prejudice to the right of the Commission to bring a new proceeding if the facts should so justify. In their supplemental statement to the motion to dismiss, filed on October 14, 1965, counsel supporting the complaint presented reasons and factual statements in support of their motion to dismiss, as follows:

Infonnation developed through additional investigation subsequent to the 1960 , together withissuance of the complaint in this matter on May 20, other industry information coming to the attention of complaint counsel including that developed and ultimately found in the Lloyd A. Fry Rooting Company case, Docket 7908 (p. 217 hereina, disclosed facts inconsistent with some of the allegations contained in the complaint. For example, and contrary to information originally available, it does not now appear that respondent was a leader in establishing prices in this industry. In addition, for the fiscal years ending in 1959 and 1960, Logan-Long operated at substantial losses, whereas in preceding years it had operated at a profit. The foregoing statement of facts has not been contradicted or questioned by the respondent, and it is accepted as correct and adopted as the findings of fact in this proceeding. THE CELOTEX CORP. 1021 1016 Complaint ORDER Because of the above findings as to the facts It is ordered That the complaint herein be, and the same hereby , dismissed without prejudice to the right of the Commission to initiate further proceedings against the respondent, should future events so warrant.

FINAL ORDER No appeal from the initial decision of the hearing examiner having been filed, and the Commission having determined that the case should not be placed on its own docket for review and that pursuant to Section 3. 21 of the Commission s Rules of Practice (effective August 1, 1963), the initial decision should be adopted and issued as the decision of the Commission: It is ordered That the initial decision of the hearing examiner shall, on the 14th day of December, 1965, become the decision of the Commission.

By the Commission, without the concurrence of Commissioner MacIntyre.