Roxbury Carpet Compa Y

Text (OCR of the scan; may contain errors)

ROXBURY CARPET COMPA Y ET AL.

Docket 7637. Onie-r and Opinion, Mat. , 1%7 Order denying respondents' motion that the effective date of this cease and desist order be stayed.

OPINION OF THE COMMISSION

This matter is before the Commission upon motion filed by respondents on January 9, 1967, requesting that the effective date of the order issued on February 10, 1964 (64 F. C. 787J, be stayed. Thc Director, Bureau of Restraint of Trade, has filed an answer in opposition to the motion.

Respondents are one of a g-roup of ten rug and carpet manufacturers against whom the Commission simultaneously issued complaints on October 28, 1959, charging a violation of Section 2 (a) of the Clayton Act. Prior thereto, on February 26, 1959, the Commission had issued complaints charging two other members of this industry with violating Section 2 (a). On April 5, 1960, respondents entered into an agreement containing a consent order which was subject to the condition that the initial decision based thereon would not become the decision of the Commission until the Commission disposed of the other eleven related cases by orders to cease and desist in substantially the same form as set forth in the agreement, or by other appropriate order to cease and desist adopting-theor of dismissal. The Commission issued an order hearing examiner's initial decision containing the consent order, and on April 2, 1964 (64 F. C. 787, 793J, it issued an order which

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in effect, stayed the date for filing a report of compliance until January 12, 1967.

In the motion before us, respondents state that they have fied a petition and on information and belief aver that other manufacturers of rugs and carpets have also filed petitions, requesting the Commission to initiate a trade regulation rule proceeding for the rug and carpet industry. The purpose of respondents ' present motion is to request the Commission to stay the effective date of the order unti the Commission determines whether to initiate the trade regulation rule proceeding and, in the event it decides to proceed, to stay the effective date of the order until conclusion of such proceeding.

As stated by the Supreme Court, the Commission's obligation under the statute is "to develop that enforcement policy best calculated to achieve the ends contemplated by Congress and to allocate its available funds and personnel in such a way as to execute its policy efficiently and economically. Moog Industries, Inc. Federal Trade Commission 355 U.S. 411 (1958). It was in recognition of this statutory obligation that the Commission determined to issue complaints against twelve of the largest manufacturers in the rug and carpet industry in 1959. Respondents were well aware of the initiation of the proceedings against eleven of its competitors and in consenting to an order to cease and desist, agreed to be bound by the order even though the proceedings as to their competitors could be dismissed. There is no contention in the motion before us that the Commission abused its discretion in enforcing the statute by proceeding against twelve manufacturers in the rug and carpet industry. Respondents' request is grounded on the assertion that price competition is extremely keen and that they and the other manufacturers now under order will have to vary prices in order to meet the competition of the more numerous manufacturers not subject to orders. Respondents further assert that in light of the pricing policies pursued by other manufacturers, they are placed at an extreme competitive disadvantage by the order. Respondents have submitted no information or documentary evidence in support of their assertion concerning the pricing practices of other manufacturers. They do, however, state in their petition for a trade regulation rule accompanying their motion that the situation with which they are concerned is due in part to the "drastic change in industry technology in recent years. In the Commission's opinion, respondents' general assertions are not sufficient to warrant a conclusion that the effective date of their order should be stayed. We think it obvious that one of the several essential preconditions even to consider whether it would be appropriate to exercise our discretion to stay enforcement of the orders would be specific information as to the nature and extent of the alleged pricing practices of other ll1anufacturers and a showing that enforcement of these orders would place respondents at a serious competitive disadvantage. Moreover, it is to be noted that the trade regulation rule proceeding requested by respondents has been available since June 1962. Respondents have been aware for some time that they would be required to comply with their order. Their failure to raise any issue concerning industry pricing practices unti this time militates against a conclusion that an immediate stay of the order is required to prevent serious competitive injury.

As previously noted, respondents and other manufacturers under order have filed petitions requesting a trade regulation rule proceeding. These petitions are presently under consideration. In determining whether a trade regulation rule proceeding should be initiated and in the course of such proceeding, if commenced relevant facts upon which to base a decision as to the likelihood of competitive injury wil be developed. On the basis of these facts, the Commission can then determine, in the exerdse of its administrative discretion, whether a stay of the order or other relief is warranted.

For the foregoing reasons, respondents' request that the elective date of the order be stayed is denied. An appropriate order wi1 be entered.

COll1missioner Elman did not concur.

OIWER DENYING MOTION TO STAY EFFECTIVE DATE OF ORDER

This matter having come before the COll1rnission upon motion by respondents, filed January 9 1967, requesting' that the effective date of the order to cease and desist be stayed, and upon an answer in opposition thereto filed by the Director, Bureau of Restraint of Trade; and The Commission for the reasons stated in the accompanying opinion, having determined that the motion should be denied: It is ordered That respondents' motion, filed January 9, 1967, , and it hereby is, denied.

Commjssioner Elman not concurring.

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