Graber Manufacturing Company, Inc., et al.

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IN THE lVA TTER OF GRABER MANUFACTURING CO:VIPAKY, INC., ET AL. CONSENT ORDER, ETC. , IK REGARD TO THE ALLEGED VIOLATION OF SEC. 2 (a) OF THE CLAYTON ACT Docket 80J8. Cumplaint, July 1960-Decis"ion, May, 1967 Consent order requiring a Middleton, Wise., manufacturer of drapery hardware and rclated products to cease discriminating in price among competing reseUers of its products.

COMPLAINT The Federal Trade Commission, having- reason to believe that the named respondents have violated and are now violating the provisions of subsection (a) of Seclion 2 of the Clayton Act (U. , Title 15, Section 13), as amended by the Robinson- Patman Act, hereby issues its complaint, stating its charges with respect thereto as follows:

PARAGRAPH 1. Respondent Grabel' Manufacturing Co. , Inc., is a ReslJondent Grauer Manufacturing Company, Inc. noneously rdcned to in the complaint as Graber Manufacturing Co" Jr.

Complaint 71 F.

corporation organized and doing business under and by virtue of the Jaws of the State of Wisconsin, with its principal offce and place of business located at 2615 University A venue, :viddleton Wisconsin. Individual respondents John N. Graber, Joseph V. Graber and Marie Graber are now, and were, during all times hereinafter stated, offcers of said corporate respondent. These individual respondents are and have been controlling and directing the operations of the corporate respondent during the period from 1955 to date.

Respondents Marie Graber, Joseph V. Graber, and Arthur R. J ones, as trustee, are copartners, trading and doing business as Graber Company, a partnership, with their offce and principal place of business located at 2615 University A venue, Middleton Wisconsin. Marie Graber and Joseph V. Graber are and have been directing the operations of Graber Company during the period from 1955 to date.

Respondent Arthur R. Jones is trustee of a trust established by John K. Graber and he, with the other two copartners, Joseph V. Graber and Marie Graber, shares in the benefits as one of the copartners doing business as Graber Company. Both Graber Manufacturing Co. , Inc. , and the copartners trading and doing business as Graber Company, are jointly and severally named as respondents herein.

PAR. 2. Respondent Grabel' Manufacturing Co. , Inc. , is engaged in the business of manufacturing a complete line of drapery hardware, including curtain rods, traverse rods, cafe rods and accessories. All of its production is sold or transferred to the Graber Company, the partnership, which acts as its selling agent and is engaged in the business of distributing and selling drapery hardware. Graber Company s net sales amounted to approximately $2 000 000 in 1959.

PAR. 3. In the course imd conduct of its business Graber Manufacturing Co., Inc., ships, or causes to be shipped and transported its drapery hardware from the State where such products are manufactured to branches of Graber Company, its selling agent located in other States.

In the course and conduct of its business Graber Company ships, or causes to be shipped and transported, its drapery hardware from the State where such products are manufactured, or are temporarily stored in anticipation of sale and shipment, to purchasers located in other States.

In the aforesaid manner and method, respondents are now, and GRABER MANUFACTURING CO. , INC. , ET AL. 707 705 Complaint have been at al1 times referred to herein, engaged in commerce, as "commerce" is defined in the amended Clayton Act. Such products are, and have been, sold by respondents to purchasers for use or resale in the various States of the United States. PAR. 4. In the course and conduct of their business in commerce, respondents have been, and are now, in competition with other corporations, partnerships, firms and individuals engaged in the manufacturing, selling and distributing of drapery hardware.

Many of the purchasers of respondents ' products are competitively engaged with each other and with customers of respondents' competitors in the resale of drapery hardware. PAR. 5. Respondents sell their drapery hardware primarily to retailers and also to wholesalers who resell1 it to retailers. When sales are made to such wholesalers and delivered to them, respondents customarily grant a 20 % discount from the list price charged retailers. When sales are made to such wholesalers but delivery is made to the wholesaler s customer, respondents customarily grant the wholesaler a 15 % discount from the list price PAR. 6. In the course and conduct of their business in commerce, respondents have sold, and are now selling, drapery hardware to some purchasers at p,ices substantially higher than those charged other purchasers of these products of like grade and quality who have been, and are now, competing with said unfavored purchasers.

Ilustrative of respondents ' said discriminations in price are respondents' sales of drapery hardware to the Aimcee Wholesale Corporation, New York, New York. Aimcee Wholesale Corporation is a wholly owned subsidiary of Associated Merchandising Corporation, New York, New York. All of the capital stock of Associated Merchandising Corporation, both voting and nonvoting, is O\vned by twenty-seven large department stores located in many of the principal cities of the United States. No store owns more than one share of voting stock.

These twenty-seven department stores completely dominate and control all policies and business operations of both Associated Merchandising Corporation and its wholly owned and controlled subsidiary Aimcee Wholesale Corporation. It is, therefore, alleged that Associated Merchandising Corporation and Aimcee Wholesale Corporation are the agents and instrumentalities of these twenty-seven member department stores for the buying of merchandise for the account of such stores, and for other purposes.

, Order 71 F.

Illustrative of such sales is the sale by respondents, through Aimee" Wholesale Corporation, to L. S. Ayres & Company, Indianapolis, Indiana, one of the twenty-seven member stores, of a quantity of traverse rods (Item #3(22) on August 19, 1959, at a discount of 15% off list price. This merchandise was drop shipped by respondents direct to the store of L. .0. Ayres & Company, in Indianapolis, Indiana. Aimcee Wholesale Corporation retained 3% of this discount and transmitted the remaindel', or 12%, to L. S. Ayres & Company. On September 14, 1959, respondents sold the same item to Ramsey Interiors, Indianapolis, Indiana, a competing retailer-purchaser, charging the list price with no discount.

PAR. 7. The effect of respondents' discriminations in price, as above alleged, may be to substantially lessen competition or tend to create a monopoly in the lines of commerce in which the respondents and their favored purchasers, respectively, are engaged or to injure, destroy, or prevent competition with the respondents and their purchasers who receive the benefits of such discriminations.

PAR. 8. The acts and practices of the respondents, as alleged above, violate subsection (a) of Section 2 of the amended Clayton Act.

ORDER AMEKDING CO IPLAINT AND GRA:-TING MOTIOK TO Substitute, AND DECISION AND ORDER IN DISPOSITION OF PROCEEDING The Commission having issued its complaint in this proceeding on July 12 , 1960 , charging the respondents named in the caption hereof with violation of Section 2 (a) of the Clayton Act as amended, and the respondents having been thereafter served with a copy of that complaint; and The hearing examiner having certified to the Commission a lVlotion to Amend Con1plaint" and a proposed consent agreement, and the respondents and counsel supporting the complaint having thereafter filed a joint motion requesting that an agreement dated April 4, 1967, executed by all the respondents except .Tohn X. Graber, deceased, and by their attorney and counsel supporting the complaint, be substituted for the said agreement certifled by the hearing examiner to the Commission which executed agreement dated April 4, 1967, contains intel' (tlin an admission of all the jurisdictional facts alleged in the complaint as amended in the manner requested in the above D1otion to amend, and state- ;

GRABER MANJ:FACTURING CO., INC., ET AL. 709 705 Order ments that the record on which the decision of the Commission shall be based shall consist solely of such complaint and said agreement, and that said agreement is for sett1en1ent purposes only and does not constitute an admission by respondents that they have violated the law as alleged in such complaint; and The Commission having determined that in the circumstances the public interest would be served by waiving, and hereby having waived, the requirement for the timely filing of notice of intent to enter into a consent agreement as prescribed by the Commission s l'notice of July 14 , 1961; and The Commission, having considered the aforesaid agreement dated April 4 , 1967, containing consent order, which also provides for dismissal of the complaint as to respondent John ". Graber deceased, and respondent Arthur R. Jones, trustee, and it appearing that formulation, direction and control of the policies, acts and practices of Graber Company of which respondent Arthur R. Jones, trustee, is a copartner, is exercised solely by respondents Joseph V. Graber and :Ylarie Graber and that dismissal of the proceeding with respect to respondent Arthur R. Jones is therefore \varranted; and the Commission having duly determined that said agreement constitutes an adequate basis for appropriate disposition of this proceeding and that the aforementioned joint motion for substitution should be granted; and The Commission having considered the aforesaid motion to amend the complaint wherein movants state that such motion is concurred in by counsel for respondents and the Commission having determined that it should be granted; It is ordered That the complaint herein be, and it hereby is amended as follows:

(1) By striking from Paragraph Six thereof the first sentence of the second unnumbered paragraph, the first Nord of which is "Illustrative, and substituting therefor the words "Respondents' said discriminations in price involve respondents' sales of drapery hardware to the Aimcee Wholesale Corporation ew York, New York."

(2) By striking the words "as above alleged" from the first and second lines of Paragraph Seven thereof and substituting therefor the words "as above alleged in Paragraph Six (3) By striking the words "as alleged above" from the first and second lines of Paragraph Eight thereof and substituting therefor the words I(as alleged above in Paragraph Six and Paragraph Seven 710 FEDERAL TRADE COMMISSIOK DECISIONS Order 71 F.

It -is j1athe?' o1'de?'ed That the proposed agreement certified to the Commission by the hearing examiner be, and it hereby is stricken and that the agreement dated April 4 , 1967 , be, and it hereby is, substituted therefor and accepted, Kow, therefore, the Commission makes the following jurisdictional findings and enters the following order to cease and desist: 1. Respondent Graber Manufacturing Company, Inc. , crroneously referred to in the complaint as Graber Manufacturing Co" Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Wisconsin, with its principal offce and place of business located at 7549 Graber Road, in the city of Middleton, State of Wfsconsin. Respondent John N. Graber is deccased. Respondents Joseph V. Graber and Marie Graber are offcers of respondent Graber Manufacturing Company, Inc. , and, together with respondent Arthur R. Jones, tmstee, are copartners trading and doing business as Graber Company, a partnership, with their offce and principal place of business located at 7549 Graber Road, in the city of Middleton, State of Wisconsin . Respondents Joseph V. Graber and Marie Graber solely formulate, direct and control the policies, acts and pl'aclices of Graber Company. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents. ORDER It is ordered That respondents Graber IVlanufacturing Company, Inc. , a corporation, and Joseph V. Grabcr and :Warie Graber, individually and as oftkers of said corporation, and Joseph V. Graber and :liarie Graber, copartners, trading and doing business as Grabel' Company, and their respective offcers employees, assignees, and representatives, directly or through any corporate or other device, in 01' in connection with the sale of curtain and drapery hardware, curtain and drapery hardware components, parts and accessories, and related products in commerce, as commerce is defined in the Clayton Act, as amended forthwith cease and desist twelve months from the date of service of this order from:

Discriminating, directly or indirectly, in the price of said products of like grade and quality by selling- to any purchaser at net prices higher than the net prices charged to any other purchaser who, in fact, competes with the purchaser paying the higher price in the resale and distribution of respondents' products.

MERCURY LIFE AND HEALTH CO. ET AL. 711 705 Complaint It is fUTthe,' ordered That the complaint be, and the same hereby is, dismissed as to respondent Arthur R. Jones. It is fUTtheT o1'dered That the complaint be, and the same hereby is, dismissed as to respondent John N. Graber. It is fw,thel' ordered That respondents Graber Manufacturing Company, Inc., a corporation, and Joseph V. Grabel' and Marie Graber, individually and as offcers of said corporation, and Joseph V. Graber and Marie Graber, eopartners, trading and doing business as Graber Company, sha1J, within sixty (60) days after the operative date of this order, file with the Commission a report, in wriUng, setting forth in detail the manner and form which they have complied with the order to cease and desist as set forth in this order.