Borman Food Stores, Inc., et al.

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

In the Marrer or BORMAN FOOD STORES, INC., ET AL.

ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF SECTION 2(C) OF THE CLAYTON ACT Docket 8789. Complaint, July 10, 1969—Decision, Aug. 3, 1972. Order dismissing the complaint, as to. two respondents, which charged two Salinas, Calif., purchasers and sellers of fresh fruits and vegetables as “ground” or “field” brokers, with violation of Sec. 2(c) of the Clayton Act, as amended, by receiving and accepting ‘brokerage, commissions, or other compensation from sellers.

ComPuAINT The Federal Trade Commission, having reason to believe that the _ parties respondent named in the caption hereof, and hereinafter more particularly described, have been and are violating the provisions of subsection (c) of Section 2 of the Clayton Act, as amended, (15 U.S.C. Section 13) hereby issues its complaint, stating its charges with respect thereto as follows: - Paracrapy 1, Respondent Borman Food Stores, Inc., hereinafter referred to as “Borman,” is a corporation organized, existing and doing business under and by virtue of the laws of the State of Michigan with its office and principal place of business located at 12800 Mark Twain, Detroit, Michigan.

Par, 2. Respondent Borman has been and is now engaged primarily in the retailing of food products and other articles for personal and household use and operates a large number of retail stores, including supermarkets, drug stores and department stores. As of January 27, 1968, Borman operated approximately 89 supermarkets 1 in the State of Michigan. Respondent Borman is also engaged in the manufacture and sale of dairy products. Borman’s volume of business is substantial, totalling in excess of $300 million annually, as of January 27, 1968. Par. 8. Respondent P & R Brokerage Co. hereinafter referred to as “P &R,” is a partnership organized, existing and doing business under and by virtue of the laws of the State of California with its office and principal place of business located at 12 East Gabilan Street, Salinas, California.

Respondent Frank V. Condello, a an individual, is a partner in respondent P & R Brokerage Co., and is located at the same address. In his capacity as a partner, he i is actively engaged in the purchase and sale of fresh fruits and vegetables. He formulates, directs and 494-841—73—__14 202. FEDERAL TRADE, COMMISSION DECISIONS Complaint: 81 FVT.C, controls the acts, practices and policies of respondent P & R » including the acts and practices hereinafter described. Par. 4. Respondent-P & BR has been and-is now. engaged in business primarily as a “ground” or “field” broker effecting sales of fresh fruits and vegetables ‘by sellers located in the State of California, and purchases by buyers located in various States of the United States other than the State of California. In such capacity, respondent has demanded and received commissions, brokerage or other « compensation in connection with effecting purchases'and sales of-fresh: fruits.and vegetables. The annual volunie of business of P &R; in its capacity'as a “ground” or “field” broker Jn. effecting, purchases and sales. ‘fresh fruits and vegetables, is substantial. 7 Par. 5. Respondent P & R, in the course and conduct, of its business as a “ground” or “field” broker, has been and is now effecting sales of fresh fruits and vegetables by sellers’ ‘Jécated ‘inthe State of California‘and purchases by‘buyers located in Various States of the United States other than the State of California i in commerce, as “commerce” ~ ig defined inthe’ Clayton “Act. Said ‘respondent “has ‘transported: or caused such products to be transported from the séllers’ plades'of business to the buyers’ places of business located in other: states. Thus, there has been, at‘all times’ mentioned. herein; ‘a Continuous course of trade in commerce in effecting purchases: and sales of such produots by said respondent P & R. i Par. 6. In the course and conduct of its business for the. past several years, respondent Borman has purchased, distributed and ‘resold, and is now purchasing, distributing and reselling, food products and other articles for personal and household use, including fresh fruit‘and vegetables, in commerce, as “commerce” is defined in the Clayton Act, which it purchased from sellers located i in'several States of the United. States other than the State of Michigan in which respondent Borman is located. Borman ‘purchases ‘these food products including fresh fruits and vegetables, and causes them to-be transported. from the growing areas or packing plants of sellers located in various States of the United States to Borman’s warehouse and. retail stores in the State of Michigan. Thus, there has been and is now a continuous course of trade in commerce in the purchase and resale of said food products by respondent Borman.

Pan. 7. In the course and conduct of its business, respondent Borman has been and is now utilizing the services of respondent P & Rasa “round” or “field” broker in the purchase of fresh: fruits.and.vegetables from numerous sellers. Respondent P & R performs valuable services for respondent Borman and other buyers by. furnishing information concerning market conditions, by maintaining contact with BORMAN. FOOD STORES, INC., ET ‘AL. . 203 201° Dissenting Statement:

various sellers, by inspecting and selecting specified qualities and quan: tities of fresh fruits and vegetables, and by. negotiating purchases of said products at the most favorable prices. Respondent P & R, in performing the services enumerated above, has been and is now acting as an agent or-representative of respondent Borman and other buyers. In such capacity, P & R is subject to.and under the direct or indirect control of Borman and other buyers of fresh. fruits and vegetables in spondent.P & R hasbeen and is now collecting and receiving brokerage, commissions or other compensation from sellers of fresh fruits and vegetables. OO Par. 8. Respondent ‘Borman and other buyers have received and are now receiving valuable “ground” or “field” broker services from respondent P & R without paying, either directly or indirectly, any brokerage, commissions or other compensation to said broker. At the same time, respondent P & R has been and is now collecting and receiving directly or indirectly, brokerage, commissions or other compensation from sellers, when, in fact, it has been and is now acting for or in behalf of respondent Borman and other buyers, or has been and is now. subject to.the direct. or. indirect control of respondent Borman and other buyers. oe NINE Par. 9. The aforesaid acts and practices of respondents and each of them in receiving and accepting, directly or indirectly, anything of value as a commission, brokerage or other compensation or any allowance or discount in lieu thereof from sellers, are in violation of subsection (c) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act. oo Commissioners Elman and Nicholson dissenting. — Dissentine Statement OF Commissioner EL.mean Issuance of these complaints is regrettable; the, violations charged are trivial, the effectiveness of the Commission’s action dubious. Instead of taking this opportunity to re-examine and reassess its administration of the Robinson-Patman Act, to reconsider the policy goals that it is attempting to implement, and to review the success of ‘its enforcement activities, undertakings that have recently been urged upon it by both the Task Force on Antitrust, Policy established by President Johnson’ and the similar body convened by President 1 White-House Task Force Report on Antitrust Policy, submitted July 5,;-1968, released May 21, 1969, reprinted in Antitrust & Trade Regulation Report, number 411, part II, May 27, 1969 [hereinafter cited as Neal Task Force Report]. ; on Dissenting Statement 81 F.T.C.

Nixon,’ the Commission has.mechanically and automatically ground out the instant complaints. :

I Although “the Robinson-Patman amendments by no means represent an exemplar of legislative clarity,” *® their essential purpose is clear and important to the functioning of a competitive economy. The “guiding ideal” of the Robinson-Patman Act was “the preservation of equality of opportunity as far as possible to all who are usefully employed in the service of distribution and production. * * *”4 “Tn short,” as the Supreme Court stated in the Sun Oil case,> “Congress intended to assure, to the extent reasonably practicable, that, businessmen at the same functional level would start on equal competitive footing so far as price is concerned.” .

None will quarrel with this basic purpose of the Act. The questions that have arisen concern the Act’s breadth of language, its seeming inconsistencies,* and its implementation and extension, partiqularly by the Federal Trade Commission, in a way that may have deleterious effects on the very competitive process that the Act was intended to preserve and promote. The Commission has distorted the Robinson- Patman Act and extended it far beyond its basic premise. A statutory instrument intended to be used skillfully and carefully like a scalpel has been wielded as a bludgeon.

_ For example, the Commission’s literal-minded enforcement of the Act has tended to rigidify prices in oligopolistic markets by preventing the kind of sporadic, unsystematic price concessions that. may be the first step toward more general price reductions in such industries.’ The Commission’s actions in the gasoline industry seem to have had this effect, dampening emerging price competition and causing gasoline marketers to engage in game promotions and other gimmicks, instead of reducing prices, as a means of attracting customers. New or potential entrants to a market may find that the inertia of established trade relationships can be overcome only by selectively re- 2 Task Force Report on Productivity and Competition, submitted March 1969, reprinted in Antitrust & Trade Regulation Report, number 413, June 10, 1969 [hereinafter cited as Stigler Task Force Report].

3 Federal Trade Commission v. Fred Meyer, Inc., 390 U.S. 341, 349 (1968). See Automatic Canteen Oo. v. Federal Trade Commission, 346 U.S. 61, 65 (1953) (“precision of expression is not an outstanding characteristic of the Robinson-Patman Act’). 4H.R. Report No. 2287, 74th Cong., 2d Sess. 6 (1936). 5 371 U.S. 505, 520 (1963). .

' 8 See, ¢.9., Federal Trade Commission v. Fred Meyer, Inc., 390 U.S. 341, 359-60 (1968) (Harlan, J., dissenting), asserting that “the statute imposes a hodgepodge of confusing, {nconsistent, and frequently misdirected restrictions’ (footnotes omitted). 7 See, e.g., Neal Task Force Report 9.

BORMAN FOOD STORES, INC., ET AL. 205 201 Dissenting Statement ducing prices to buyers in that market. Such temporary promotional activities constitute an important form of competition and may be the only means by which a new entrant can come into an existing market. Insistence on price uniformity in such situations may deter new entry, entrench existing competitors, and vitiate emerging competition. But this is precisely the result the Commission has reached in enforcing the. Act.° Competition and efficiency in distribution have been impaired by the Commission’s enforcement of the Act. There is no question that a bona fide functional discount or allowance to customers, offered and paid on a proportionally equal basis as compensation for warehousing and similar services rendered to the manufacturer, may increase efficiency, decrease costs, expand service to the consumer, and reduce prices. Such nondiscriminatory distribution methods promote competition, encourage innovation, benefit the consuming public, and thus advance the basic goals of the antitrust laws. Yet, “the Commission has in recent years waged a vigorous war against ‘functional discounts,’ which are discounts offered to middlemen who perform certain distributive functions (such as warehousing) that.other middlemen, who are not given the discounts, do not perform.” *° In the automotive parts cases,!! for example, the Commission has striven mightily to prevent small jobbers from adopting new marketing methods—in particular, affiliating with or forming warehouse distributors to enable them better to compete with their larger, more fully integrated competitors. These new organizations performed warehousing and related functions which helped promote efficiency in distribution but the Commission has repeatedly held that they are not entitled to be compensated for their services on the same basis as their integrated competitors. Neither competition nor the small businessmen whom the Robinson-Patman Act was intended to protect were served by the Commission’s actions.

8 See, e.g., National Dairy Prods. Corp., F.I.C. Docket No. 8548 (June 28, 1967) (dissenting opinion [71 F.T.C. 1448]); Edwards, The Price Discrimination Law 637 (1959) [hereinafter cited as Edwards]; Henderson, The Federal Trade Commission 251-52 (1924) ; Neal Task Force Report 9.

® See, e.g., National Dairy Products, Corp., F.T.C. Docket No. 8548 (June 28, 1967 [71 F.T.C, 1833]) ; cf. Sunshine Biscuits, Inc., 59 F.T.C, 674 (1961), reversed, 306 I. 24a 48 (7th Cir. 1962).

10 Stigler Task Force Report X-3; see, ¢.g., Report of the Attorney General’s National Committee to Study the Antitrust Laws 207-09 (1955); Annual Report of the Council of Economic Advisers 109 (1969).

11 See, ¢.g., Alhambra Motor Parts, F.T.C. Docket No. 6889 (December 17, 1965 [68 F.T.C. 1089]) ; Purolator Prods., Inc., F.1.C. Docket No. 7850 (April 8, 1964), order enforced, 352 F. 2d 874 (7th Cir. 1965), cert. denied, 389 U.S. 1045 (1968) ; National Parts Warehouse, F.T.C. Docket No. 8039 (December 16, 1963 [63 F.T.C. 1692]), order enforced sub. nom. General Auto Supplies, Inc. v. Federal Trade Commission, 346 F. 2d 811 (7th Cir.), cert pet. dismissed, 382 U iS. 923 (1965). Dissenting Statement 81 F.T.C, Undaunted, the: Commission has more recently. held that stocking dealers, those: retailers -who maintain-an inventory of the manufac: turer’s product, may not be compensated by the manufacturers for performing. this service. In effect, the Commission declared: that since some of the manufacturer’s customers—é.e.,: the non-stecking dealers— would not provide the services or. facilities that. the manufacturer requested in the interest of promoting more economical distribution, the manufacturer could not reimburse the stocking dealers, who. were ready, willing, and able to furnish such services or facilities. Functional compensation could. not be paid to customers who had earned it by performing servicés. the manufacturer needed. unless it was also paid to other customers who: had ‘not earned and had. performed. no services at all. Here too the Robinson-Patman Act was converted into an anticompetition, antiefficiency, anticonsumer statute.” The Commission’s insistence that the law requires payment for services or facilities that are.of no value is' pervasive, Sections 2(c)—(e) of the Act have been applied to discourage experimentation with mar keting techniques and. further rigidify existing distribution. arrangements."* Manufacturers have been. forced to choose. between paying for promotional activities of no value to them or abandoning cooperative advertising that they found necessary and profitable.’ Similarly, as the instant complaints show, the brokerage clause has been given an expansive reading by the Commission. As interpreted, it has become a “featherbedding guarantee” for brokers in many industries, preventing buyers or sellers from developing more efficient, less costly methods of distribution.** Here again, in addition to being anticompetitive, the Commission’s actions have penalized the very small businessmen the Act was intended to help.?¢ Finally, the statutory defenses of meeting competition 1” and, perhaps to a lesser extent, cost justification ** have been given unduly 322 See Advisory Opinion Digest No. 268 (July 9, 1968) and accompanying dissenting opinions.

18 See, e.g., Neal Task Force Report 9; Annual Report of Council of Hconomic Advisers 109 (1969).

44 See, €.9., House of Lords, Inc., F.T.C. Docket No. 8631 (January 18, 1966) (dissenting opinion 10-28 [69 F.T.C. 84-97]) ; Edwards 629-80. Cf. Henry Broch & Co. v. Federal Trade Commission, 363 U.S. 166, 180 (1960) (dissenting opinion).

18 See, ¢.9., National Retailer-Owned Grocers, Inc., 60 F.T.C. 1208, 1241 (1962) (dis. senting opinion), reversed, 319 I, 2d 410 (7th Cir. 1963). 17 See, ¢.9., Sunshine Biscuits, Inc., 59 F.T.C. 674, 681 (1961) (dissenting opinion), reversed, 306 F. 2d 48 (7th Cir. 1962) ; American Oil Co., 60 F.T.C. 1786, 1824-26 (1962) (dissenting opinion), reversed, 325 F. 24 101 (7th Cir. 1963), cert. denied, 877 U.S. 954 (1964) ; Callaway Mills Co., F.T.C. Docket No. 7634 (February 10, 1964) (dissenting opinion [64 F.T.C. 743-7591), reversed, 362 F. 2d 435 (5th Cir. 1966). 18 See, e.g., Report of the Attorney General’s National Committee to Study the Antitrust Laws 170-76 (1955) ; Neal Task Force Report 10, 20, citing Federal Trade Commtssion v. Standard Motor Prods., Inc., 371 F. 2d 613 (2d Cir. 1967) ; cf. Edwards 611-133 Automatic Canteen Co. v. Federal Trade Commission, 346 U.S. 61, 68-69 (19538). ‘BORMAN FOOD STORES, INC., ET AL: | 207 201: Dissenting Statement narrow constructions. A. requirement of precision in cost: accounting and an unrealistic obligation to check and verify: competitive: offers have been imposed where the statute requires no such: degree of cer- ; tainty. ‘These decisions: too have tended to stifle rather than promote price competition.

~ Even this brief: survey 1 indicates that there are substantial problems with the: Robinson-Patman Act, both in -its textual difficulties and in its ‘administration by the Commision which: has. tended to magnify rather’ than: eliminate the problems. The Commission has failed to see the: Robinson-Patman Act in the context of overall antitrust andeconomic policy 2 and has made no effort to harmonize it: with the philosophy: ‘and purposes of the antitrust laws. The Commission today compounds these problems by- adhering toits established pat tern and 'dutomatically issuing the instant complaints instead of using this opportunity to respond to the increasing calls—by economists, lawyers and’ businessmen who share the Commission’s desire for a strong antitrust policy but: want to insure the rationality, consistency and wisdom of that policy—for fundamental review and reappraisal of where we are and where we are going under the Robinson-Patman Act. | _ : .

a When the Commission first issued these complaints for consent negotiations, two members of the Commission expressed considerable doubts about the validity of the Commission’s economic theory. We pointed out the inflationary impact that these cases would have if the Commission’s economics were right, and the results that could be anticipated from litigation. These cases involve what is essentially a private controversy as to whether buyers or sellers should pay brokerage in the fruit and vegetable industry; there is no economic or competitive injury from the practice—similar to that used in compensating real estate brokers and advertising agencies—of having the broker’s commission paid out of the selling price. Moreover, since these brokers perform services for sellers as well as buyers, these cases do not involve the use of “phony” brokerage, or price concessions given to favored large buyers which are disguised as brokerage to avoid the proscriptions of Section 2(a). It was this practice that Section 2(c) was designed to outlaw.”° 19 For a more extensive discussion of many of these issues see The Robinson-Patman Act and Antitrust Policy: A Time for Reappraisal, 42 U. Wash. L. Rev. 1 (1966). 2 Sections 2(d) and (c) were similarly intended to prevent circumvention of Section 2(a) but have been applied broadly and indiscriminately by the Commission. Dissenting Statement 81 ¥F.T.C.

Curiously, two other members of the Commission who voted for issuance of the complaints accepted this basic analysis. They agreed that if their economic analysis was sound, lettuce prices would be increased but they argued that “such factors should [not] determine whether the Commission enforces” Section 2(c) because, they said, the Commission should not be concerned about “the optimum allocation of resources among growers, distributors and consumers.” That there was no competitive injury from these practices they also deemed irrelevant, since Section 2(c) “makes no reference to competitive injury.” In their view, “the statutory scheme is plain” and it would “frustrate the legislative intent” for the Commission not to issue these complaints. Although it was recognized that “of course, an increase in cost of .4¢ on every head of lettuce sold in the country would be a significant amount,” and that if these proceedings had any economic impact it would be an inflationary one, the majority members believed that the Commission had no discretion in the matter and was compelled to proceed with these complaints, even though their issuance | might be antithetical to fundamental national policies declared by the President and Congress.

These cases thus continue a long, but scarcely venerable, tradition. The language of the Robinson-Patman Act is given application beyond any reasonable bounds and without regard to the effect of such action on the competitive process and public policy. The Supreme Court has admonished that particularly in Robinson-Patman cases, “invocation of mechanical word formulas cannot be made to substitute for adequate probative analysis.” ** The instant complaints, however, fly in the face of that admonition, exalting form over substance and substituting talismanic word formulas for intelligent legal and economic analysis. The sorry results of this literal-minded, mechanical approach to law enforcement have already been described. It is instructive to consider what will be the predictable outcome of these complaints. Recent history provides a good guide. One distinct possibility is that the complaints will engender years of fruitless litigation, peripheral to the merits of the proceeding, and. will ultimately be dismissed on the ground of staleness. The Associated Merchandising Corp2? (AMC) litigation is illustrative. The investigation in that case traced back to the 1930’s and 1940’s—just as the instant matters trace back to the 1950’s when the Commission * was first asked to intervene to help the sellers in this industry—when the Commission first became concerned about group-buying practices 1 Federal Trade Commission v.. Sun Oil Co., 871 U.S. 505, 527 (1963) (footnote omitted).

2 F.T.C. Docket No. 8651 (74 F.T.C. 1555].

BORMAN FOOD STORES, INC., ET AL. | 209 201 Dissenting Statement in the department store industry and entered orders to deal with the problem. In 1959 the Commission began a new investigation which led to the issuance of.a.complaint in April: 1964 against AMC, a buying group, Aimcee Wholesale Corp..(A WC), its wholly-owned ‘subsidiary, and the numerous individual department store stockholders. I dissented from the: issuance of the complaint, which charged that respondents acting collectively had induced and: received preferential prices and discriminatory discounts from suppliers. It was my: view that the allegedly illegal practices were symptomatic of a larger problem concerning buying practices in the department store industry— a problem that would not have been cured. by issuing the complaint and that would be better handled in a broad, industry-wide proceeding designed to elicit all the relevant facts. Moreover, the: Commission’s staff had indicated that it was ‘not: prepared to prove its case and had not even adverted to the serious problem of the burden of coming forward with evidence on the question of cost. justification.” » Respondents submitted a proposed consent order which would have terminated all the group-buying practices challenged in the complaint. It would not have included a provision binding the department store respondents acting in their individual capacity, as opposed to collectively, not to violate 2(£). However, there was no evidence that these stores had the power, acting individually, to engage in such practices, the complaint did not allege anything on this subject and complaint counsel proposed to offer evidence bearing only on the group-buying issue. The Commission rejected the settlement and issued the complaint for adjudication on October 6, 1964. I again dissented. Years of litigation ensued, most of it directed to discovery questions. It is unnecessary to recount the unhappy details here save to note that over my repeated dissent the Commission twice more rejected consent settlement offers that gave promise of ending at once the practices charged in the complaint and included order provisions never previously obtained in a Robinson-Patman case. Late in 1968, some four-and-a-half years after the AMC complaint issued and more than nine years after the investigation began, the case was still not ready for trial on the merits and promised to continue at least until the mid or late 1970’s. The Commission, in its myopia, stubbornly refused to compromise in any way its rigid insistence on an order cast in the specific language of Section 2(f). It. persisted in wanting to handle this economic problem—a problem of in- 2 See Automatic Canteen Co. v. Federal Trade Commission, 346 U.S. 61 (1953) (holding that this burden is on the Commission in a 2(f) case); Suburban Propane Gas Co., F.T.C. Docket No. 8672 (June 3, 1968) (dissenting opinion [73 F.T.C, 1276] ). Dissenting Statement 81 E.T.C..

dustrial organization and. structure—as a simple matter of illegal conduct by a few individuals. Unwilling to face reality or to accept anything less than what it considered total. victory, the Commission finally—and unanimously-——withdrew the complaint in December 1968.4 No order was entered covering any of the practices charged in. the complaint. Ten years of fruitless battle, much of it carried on over my dissent, at an expense.of millions of dollars wound up in absolutely nothing but a mountain of paper.

Yet, the Commission. has: learned nothing from this. quixotic erusade. There is now pending within the Commission, before a hearing examiner, another hoary. 2(f): case; Suburban Propane Gas: Corp. ay 25 which also dates to 1959.. Many of the Commission’s mistakes. in the AMC matter have been repeated in Suburban Propane.?® It should be obvious that the instant.complaints fit neatly into the AMO-Suburban Propane tradition, with one difference: the violations here alleged’ are far more trivial. than the violations alleged in those cases, and the public interest in these matters is far less. Nevertheless, these complaints too give Promise of ‘Spawning years: of costly but unnecessary litigation. :

Suppose, however, that instead: of degenerating into inconclusive litigation the outcome of these cases is a Commission victory. What will be the result? As I pointed out in my earlier dissenting opinion on these matters, the probable impact of these cases will be to force a mere change in bookkeeping:

If, for example, the current market price is $1.75, the seller deducts 10¢ brokerage and his net price is $1.65. Assuming the same market conditions, the only effect of the orders in these cases would probably be that the buyer would pay the 10¢ brokerage, leaving the seller with the same net price of $1.65. * * * However, while the economic impact might be zero, the cost to the Commission in time, money, and manpower would be considerable. Again, history confirms the view that these complaints will not result in any public benefit. In addition to the examples cited in part I of this opinion, there is the Commission’s action in the wearing apparel cases. Rather than undertake the kind of economic inquiry necessary to ascertain and evaluate the facts concerning competition in the department store industry, the Commission issued hundreds of orders, most of them pursuant to consent agreements, against small apparel manufacturers, suppliers of the large retail outlets, to eliminate alleged 24 Associated Merchandising Corp., F.T.C. Docket No. 8651, order withdrawing complaint (December 18, 1968 [74 F.T.C. 1555]). ° FT.C, Docket No. 8672 (77 F.T.C. 189].

See, ¢.g., dissenting opinions accompanying order denying interlocutory appeal (September. 20, 1968 (74 F.T.C. 1606]), and order allocating burden of coming forward with the evidence (June 3, 1968 [73 F.T.C. 1269]). BORMAN FOOD STORES, INC., ET AL. 211 201 Dissenting Statement violations of 2 (d) and (e).”” If these orders have stimulated competition in the apparel manufacturing or department store industries, or if they have had any procompetitive effect, it is not discernible. ‘More directly in point is the outcome of the Commission’s famous Herzog case.* There the Commission was “successful” in litigating a 2(c) case against a broker whose position was. entirely analogous to that of the brokers in the instant matters. The Commission “won” .the case in the Court of Appeals, largely because the respondent. had filed an admission answer which the court regarded as constituting a stipulation that Herzog was the buyer’s agent and not an independent broker. Subsequently, it became clear that resident buyers (brokers). in the fur industry, like real estate brokers and the present broker respondents, perform a useful economic function, beneficial to buyers and sellers and that who paid their commission is a matter of indifference to the public interest. As a result, thé Commission, by minute of April 2, 1951, reaffirmed on November 22, 1966, determined that enforcement of ‘the Z. lerzog order would not be in the public interest. This decision it did not, of course, publicly announce. Thus, the Commission apparently believes it has no discretion when it comes to squandering scarce resources on bringing such a proceeding and litigating it, but has ample discretion thereafter, once everyone’s time and funds have been wasted, to consider the public interest and to drop the matter if necessary. Since the instant matters seem clearly parallel to Herzog, it is pertinent to ask whether, if the Commission eventually issues an order, after arduous and expensive litigation, on the ground that there has been a technical violation of Section 2(c), the public interest and economic realities will dictate that this order, too, not be enforced.

The answer to that question may be conjectural but one fact is clear: as far as the public we are supposed to represent is concerned, the outcome of these proceedings will be “heads you win, tails we lose.” Whether the Commission “wins” or “loses” this case, the public interest will suffer. Public funds will have been squandered on proceedings which can have no conceivable value in promoting competition or the interests of consumers or even the interests of those private parties at whose behest the Commission has acted.

7 See Abby Kent Co., F.T.C. Docket No. C-328 (August 9, 1965) (dissenting opinion {68 F.T.C. 407-414]).

23 Jack Herzog & Oo., 35 I.T.C. 71 (1942), afd, 150 F.2d 450 (2d Cir. 1945); see generally Hdwards 147-52.

212 FEDERAL TRADE. COMMISSION DECISIONS Dissenting Statement 81 ETC.

or One other aspect of these matters is worthy of mention. As I have noted, the Commission apparently believes it has a mandatory statutory duty. to act.in these matters. The prevailing idea seems to be that the Commission may not exercise any discretion but is compelled to’ issue complaints despite the manifest disharmony of the complaints, again accepting the Commission’s economic assumptions for purposes. of analysis, with fundamental economic policies pursued by the President and Congress. , I do not agree, of course, with the Commission’s premise. However, it seems to me that if the Commission really believes that it has no. choice or discretion under a statute and believes that it must enforce it in a way designed and calculated to achieve absurd results, it has an obligation to inform Congress of the anomalies it has found in the. statute. Not only has the Commission made no effort to do this but, when its policies and actions are challenged as wasteful and bizarre, it points to Congress and blames the legislature | for enacting foolish statutes.

It is particularly unfortunate that the Commission has shirked its obligations to Congress at the present time. As is indicated in part I, both the Johnson and Nixon White House Task Force Reports have severely criticized the Commission’s unintelligent administration of the Robinson-Patman Act. The conclusions of these bodies are obviously entitled to serious consideration, reflecting as they do the consensus of a diverse group of economists and lawyers who are of differing antitrust philosophies. These respected voices thus join the growing demand for a new look at the Robinson-Patman Act and its implementation to determine its proper place in antitrust policy.*® Yet, the Commission, the body charged with primary responsibility for enforcing the Act, has shunned this opportunity to take the lead in the important process of re-examining the Act and harmonizing it with the overall objectives of antitrust.

Instead of offering this kind of thoughtful economic analysis, which everyone but the Commission seems to agree is timely, and essential, the Commission wastes its resources on these cases. To be sure, the Commission avows that it eschews the numbers game—simply counting the number of complaints issued—as a measuring rod for agency performance, but what has been substituted for it? The number of complaints has diminished but the Commission has not channeled its ” See, eg., The Rebinson-Patman Act and Antitrust Policy: A Time for Reappraisal, 42 U. Wash. L. Rev. 1 (1966) ; Final Report of the National Commission on Food Marketing 107 (1966) ; Bdwards 627-57.

BORMAN FOOD STORES, INC:, ET AL. 213 201. Dissenting Statement resources to the other areas—like reappraisal of the Robinson-Patman Act—that cry out for attention. The paucity of complaints merely reflects the fact that more investigations are closed (because of age, staleness, etc.) with no action taken. The Commission still indiscriminately opens numerous investigations of alleged Robinson- Patman violations and pursues them at considerable expense, but now it at least has the good sense to close most of them without issuing complaints. The time has come to call a halt to this pernicious cycle, to’ re-evaluate the Commission’s enforcement program under the Robinson-Patman Act, to take inventory of the successes and failures of the Act, and to make an informed and reasoned 1 report to Congress and the public. BN The Commission performs a disservice to the public interest in ‘ignoring these larger questions and squandering its resources on’ ‘these trivial brokerage cases. I dissent.* July 10, 1969 “Tt is sad, -but not surprising, that the > only response to this ‘dissent should: consist of a personal attack on me, charging me with merely “giving lip Service to the intertion of Congress” and having “‘an’ obvious antipathy. toward the Robinson-Patman Act.” Before joining the Commission, and as, an assistant to the Solicitor. General, I successfully argued the Commission’ 's position’ before the Supreme Court in such major ‘Robingon- Patman Act cases as Federal Trade Commission v. Anheuser Busch, Inc., 363 ‘U.S. 536 (1960), and United States v. Morton Salt Co., 338 U.S. 632 (1950). Where was my “antipathy” to the Act at that time? Similarly, when I wrote opinions for the Commission reflecting an expansive interpretation of the Robinson-Patman Act, in such cases as Foremost (62 F.T.C. 1344 (1963), affirmed, 348 F. 2d 674 (5th Cir. 1965)); Continental Baking (FTC Docket No. 7630 (December 31, 1963 [63 F.T.C, 2071])) ; and Sunbeam (FTC Docket No. 7409 (January 11, 1965 (67 F.T.C..20])), I do not recall being charged at that time with “antipathy” to the Act.

If dissents from erratic and irrational Commission interpretations5 1 3 4 1 9 1714 1919 27 21 96.409409 of5 1 3 4 1 10 1762 1918 45 21 93.260445 thes 1 3 4 1 11 1828 1917 141 22 92.457069 Robinson-4 1 3 4 2 0 649 1951 1320 30 -1 5 1 3 4 2 1 649 1959 109 19 92.679405 Patman5 1 3 4 2 2 774 1957 49 21 96.722488 Acts 1 3 4 2 3 838 1962 44 16 92.163200 ares 1 3 4 2 4 897 1957 71 21 90.827026 to-be5 1 3 4 2 5 984 1956 107 25 96.857681 equated5 1 3 4 2 6 1107 1956 63 21 96.762741 with5 1 3 4 2 7 1186 1956 171 25 95.837158 “antipathy”5 1 3 4 2 8 1375 1956 26 20 96.363579 to5 1 3 4 2 9 1417 1955 45 20 96.363579 thes 1 3 4 2 10 1478 1954 108 26 96.602295 statute,5 1 3 4 2 11 1601 1953 71 22 96.478424 what5 1 3 4 2 12 1687 1953 59 21 96.533501 does5 1 3 4 2 13 1762 1957 49 15 96.244377 ones 1 3 4 2 14 1827 1957 45 19 96.000107 says 1 3 4 2 15 1888 1951 81 21 96.000107 about4 1 3 4 3 0 646 1985 1321 29 -1 5 1 3 4 3 1 646 1992 45 20 96.852158 thes 1 3 4 3 2 707 1991 113 22 95.301323 Justices5 1 3 4 3 3 836 1990 29 22 96.834641 of5 1 3 4 3 4 880 1991 44 21 96.529968 thes 1 3 4 3 5 940 1990 121 24 96.311775 Supreme5 1 3 4 3 6 1078 1990 79 21 95.413490 Courts 1 3 4 3 7 1174 1990 51 21 95.413490 ands 1 3 4 3 8 1241 1989 45 22 96.034752 thes 1 3 4 3 9 1302 1989 90 25 96.767151 judges5 1 3 4 3 10 1411 1989 27 21 96.694221 of5 1 3 4 3 11 1454 1989 45 21 96.811142 thes 1 3 4 3 12 1516 1988 103 21 96.332893 various5 1 3 4 3 13 1637 1987 87 21 96.710342 courts5 1 3 4 3 14 1741 1986 28 22 96.801537 of5 1 3 4 3 15 1787 1985 105 26 96.253235 appeals5 1 3 4 3 16 1909 1985 58 21 96.605560 who4 1 3 4 4 0 646 2019 1321 31 -1 5 1 3 4 4 1 646 2031 60 16 95.973251 overs 1 3 4 4 2 725 2025 44 21 95.973251 thes 1 3 4 4 3 787 2025 61 25 96.483437 past5 1 3 4 4 4 866 2025 70 25 96.371170 eight5 1 3 4 4 5 955 2030 75 19 96.371170 years5 1 3 4 4 6 1049 2024 65 21 96.253624 have5 1 3 4 4 7 1133 2024 94 24 95.269295 upheld5 1 3 4 4 8 1246 2029 43 20 96.752815 my5 1 3 4 4 9 1308 2022 144 26 93.302544 dissenting5 1 3 4 4 10 1471 2021 244 29 91.398575 position—findings 1 3 4 4 11 1736 2020 27 24 96.559303 it,5 1 3 4 4 12 1785 2019 51 22 96.617561 ands 1 3 4 4 13 1856 2019 45 21 96.617561 not5 1 3 4 4 14 1921 2019 46 21 96.677048 thea 1 3 4 5 0 647 2052 1322 32 -1 5 1 3 4 5 1 647 2058 146 25 92.722122 majority’s5 1 3 4 5 2 811 2058 208 26 92.629143 interpretation,5 1 3 4 5 3 1038 2058 27 20 96.451782 to5 1 3 4 5 4 1084 2058 31 20 43.582287 be5 1 3 4 5 5 1132 2058 28 20 43.582287 in5 1 3 4 5 6 1179 2057 92 22 87.186172 accords 1 3 4 5 7 1290 2056 64 22 96.782784 with5 1 3 4 5 8 1373 2057 45 20 96.782784 thes 1 3 4 5 9 1438 2055 130 22 96.172279 intentions 1 3 4 5 10 1586 2055 29 22 96.370995 of5 1 3 4 5 11 1632 2055 46 21 93.191132 thes 1 3 4 5 12 1697 2053 204 26 92.697273 Congress—in5 1 3 4 5 13 1905 2052 64 22 96.359650 such4 1 3 4 6 0 649 2086 1321 31 -1 5 1 3 4 6 1 649 2098 72 24 81.718887 cases5 1 3 4 6 2 738 2098 29 15 94.486664 as5 1 3 4 6 3 784 2092 66 21 92.119087 Fred5 1 3 4 6 4 865 2093 95 24 93.140144 Meyer,5 1 3 4 6 5 975 2092 62 25 91.022995 Inc.,5 1 3 4 6 6 1055 2091 63 22 95.726074 FTC5 1 3 4 6 7 1135 2091 96 22 95.559265 Dockets 1 3 4 6 8 1247 2091 46 21 95.559265 No.5 1 3 4 6 9 1311 2091 66 26 96.494682 74925 1 3 4 6 10 1399 2090 103 26 96.362335 (March5 1 3 4 6 11 1519 2089 40 26 96.362335 29,5 1 3 4 6 12 1578 2088 76 25 95.951294 1963)5 1 3 4 6 13 1681 2088 124 25 93.654480 (opinions 1 3 4 6 14 1816 2086 154 25 93.654480 concurring4 1 3 4 7 0 647 2120 1320 32 -1 5 1 3 4 7 1 647 2127 26 20 95.597313 in5 1 3 4 7 2 686 2127 60 25 96.778915 parts 1 3 4 7 3 759 2127 51 21 96.012360 ands 1 3 4 7 4 823 2126 144 25 95.985603 dissenting5 1 3 4 7 5 979 2126 27 20 95.985603 in5 1 3 4 7 6 1019 2127 61 24 96.560623 parts 1 3 4 7 7 1096 2125 44 25 93.296494 [635 1 3 4 7 8 1154 2124 86 22 92.985397 F.T.C.5 1 3 4 7 9 1255 2124 107 26 21.373146 74-7]),5 1 3 4 7 10 1377 2124 125 25 96.548454 modified,5 1 3 4 7 11 1517 2118 48 27 79.376884 3595 1 3 4 7 12 1579 2122 28 23 56.166100 F.5 1 3 4 7 13 1621 2122 33 21 96.774063 2d5 1 3 4 7 14 1668 2122 47 21 95.348419 3515 1 3 4 7 15 1735 2121 59 25 96.179092 (9th5 1 3 4 7 16 1810 2121 50 21 96.465500 Cir.5 1 3 4 7 17 1876 2120 91 25 95.880150 1966),4 1 3 4 8 0 646 2153 1321 32 -1 5 1 3 4 8 1 646 2160 127 25 96.409935 reversed,5 1 3 4 8 2 789 2160 47 21 96.009644 3905 1 3 4 8 3 852 2160 57 22 95.782104 U.S.5 1 3 4 8 4 925 2160 48 21 95.565758 3415 1 3 4 8 5 994 2159 109 25 91.805267 (1968)5 1 3 4 8 6 1095 2149 14 40 91.805267 ;5 1 3 4 8 7 1121 2158 129 25 95.813713 Callaway5 1 3 4 8 8 1266 2158 80 25 93.179955 Mills,5 1 3 4 8 9 1361 2158 51 25 92.643898 Co.,5 1 3 4 8 10 1427 2157 63 22 96.239250 FTC5 1 3 4 8 11 1504 2157 98 22 96.462593 Dockets 1 3 4 8 12 1618 2156 45 21 96.365662 No.5 1 3 4 8 13 1681 2155 64 22 96.195145 76345 1 3 4 8 14 1765 2154 144 26 95.852486 (February5 1 3 4 8 15 1927 2153 40 26 95.791611 10,4 1 3 4 9 0 649 2187 1320 32 -1 5 1 3 4 9 1 649 2194 77 25 95.976357 1964)5 1 3 4 9 2 751 2194 156 25 95.976357 (dissenting5 1 3 4 9 3 921 2193 104 25 96.654114 opinions 1 3 4 9 4 1044 2193 44 25 93.200180 [645 1 3 4 9 5 1104 2192 85 23 63.110039 F.T.€,5 1 3 4 9 6 1205 2192 141 26 40.596695 7438-59]),5 1 3 4 9 7 1361 2192 128 24 96.466774 reversed,5 1 3 4 9 8 1504 2190 49 22 93.283035 3625 1 3 4 9 9 1567 2190 28 21 91.106216 F.5 1 3 4 9 10 1612 2190 32 21 81.757278 245 1 3 4 9 11 1659 2190 48 21 95.640999 4355 1 3 4 9 12 1728 2189 59 26 95.670326 (5th5 1 3 4 9 13 1804 2187 50 22 94.649460 Cir.5 1 3 4 9 14 1870 2187 99 25 92.128593 1966)5 1 3 4 9 15 1955 2183 17 40 92.128593 ;4 1 3 4 10 0 650 2220 1319 33 -1 5 1 3 4 10 1 650 2229 50 23 95.588623 Fry5 1 3 4 10 2 717 2228 116 25 0.000000 Roofing5 1 3 4 10 3 851 2227 51 26 90.383034 Co.,5 1 3 4 10 4 917 2227 63 21 96.181122 FTC5 1 3 4 10 5 997 2227 97 21 96.459656 Dockets 1 3 4 10 6 1111 2227 44 21 96.459656 No.5 1 3 4 10 7 1172 2226 65 22 96.762901 79085 1 3 4 10 8 1259 2226 73 25 96.310799 (July5 1 3 4 10 9 1351 2226 39 24 96.201714 23,5 1 3 4 10 10 1408 2225 76 25 96.535591 1965)5 1 3 4 10 11 1510 2223 166 27 95.933441 (concurring5 1 3 4 10 12 1692 2222 104 26 96.091194 opinions 1 3 4 10 13 1819 2221 44 25 96.091194 [685 1 3 4 10 14 1880 2220 89 23 73.655258 EVT.C.4 1 3 4 11 0 650 2254 1320 33 -1 5 1 3 4 11 1 650 2262 123 25 90.709198 266-9]),5 1 3 4 11 2 794 2262 120 25 50.450153 affirmed,5 1 3 4 11 3 934 2262 47 20 89.205086 3715 1 3 4 11 4 1002 2261 27 21 90.200157 F.5 1 3 4 11 5 1050 2261 33 21 95.690384 2d5 1 3 4 11 6 1103 2261 56 25 96.010002 277,5 1 3 4 11 7 1179 2260 100 21 96.242699 281-875 1 3 4 11 8 1303 2260 58 25 92.283615 (7th5 1 3 4 11 9 1383 2259 50 22 95.284225 Cir.5 1 3 4 11 10 1456 2259 96 25 95.978249 1966);5 1 3 4 11 11 1573 2258 106 20 95.817383 Forster5 1 3 4 11 12 1696 2256 63 25 93.176506 Mfg.5 1 3 4 11 13 1783 2256 52 24 90.473297 Co.,5 1 3 4 11 14 1854 2255 63 24 91.512627 Inc.,5 1 3 4 11 15 1931 2251 39 25 96.412834 624 1 3 4 12 0 648 2289 1321 31 -1 5 1 3 4 12 1 648 2295 86 22 0.000000 P.T.C.5 1 3 4 12 2 755 2295 56 25 96.093094 852,5 1 3 4 12 3 831 2295 51 22 89.869606 9285 1 3 4 12 4 906 2295 102 30 5.735413 (1963).5 1 3 4 12 5 1025 2295 156 25 94.811584 (dissenting5 1 3 4 12 6 1200 2293 130 32 96.485527 opinion),5 1 3 4 12 7 1351 2293 127 25 93.775215 reversed,5 1 3 4 12 8 1499 2292 48 22 69.998680 3355 1 3 4 12 9 1569 2292 31 22 48.969971 EF.5 1 3 4 12 10 1618 2290 33 22 85.478699 2d5 1 3 4 12 11 1672 2291 31 21 85.478699 475 1 3 4 12 12 1729 2289 55 27 82.782829 (ists 1 3 4 12 13 1804 2289 52 22 93.174126 Cir.5 1 3 4 12 14 1878 2289 91 31 96.658211 1964),4 1 3 4 13 0 648 2313 1316 41 -1 5 1 3 4 13 1 648 2331 59 20 96.121880 cert.5 1 3 4 13 2 725 2329 99 25 96.223671 denied,5 1 3 4 13 3 838 2329 49 21 71.738464 3805 1 3 4 13 4 901 2328 58 23 95.947395 U.S.5 1 3 4 13 5 973 2328 50 22 95.947395 9065 1 3 4 13 6 1042 2328 109 26 92.075974 (1965)5 1 3 4 13 7 1146 2319 14 41 92.075974 ;5 1 3 4 13 8 1167 2328 102 21 93.291199 Borden5 1 3 4 13 9 1285 2323 51 30 92.014000 Co.,5 1 3 4 13 10 1350 2327 63 21 95.710419 FTC5 1 3 4 13 11 1428 2327 97 21 96.740356 Dockets 1 3 4 13 12 1540 2327 45 20 96.469795 No.5 1 3 4 13 13 1602 2325 65 31 96.850761 74745 1 3 4 13 14 1687 2323 143 26 92.432579 (February5 1 3 4 13 15 1846 2323 30 25 86.504944 7,.5 1 3 4 13 16 1876 2313 88 41 59.151741 1964)4 1 3 4 14 0 653 2343 1317 46 -1 5 1 3 4 14 1 653 2363 156 26 95.027512 (dissenting5 1 3 4 14 2 830 2363 105 26 96.637550 opinions 1 3 4 14 3 961 2362 45 25 93.299362 [645 1 3 4 14 4 1030 2362 85 22 23.732597 F.T.C.5 1 3 4 14 5 1140 2357 140 30 53.755226 578+81]),5 1 3 4 14 6 1303 2343 127 43 96.860756 reversed,5 1 3 4 14 7 1453 2361 49 22 92.891731 3395 1 3 4 14 8 1525 2361 28 21 77.429062 F.5 1 3 4 14 9 1578 2360 32 21 93.193573 2d5 1 3 4 14 10 1629 2353 57 27 64.005859 953°5 1 3 4 14 11 1710 2358 59 25 89.019997 (7th5 1 3 4 14 12 1793 2357 51 22 94.572105 Cir.5 1 3 4 14 13 1870 2348 75 34 89.006760 1964)5 1 3 4 14 14 1963 2361 6 7 89.006760 ;5 1 3 4 14 15 1963 2372 7 9 54.299580 H4 1 3 4 15 0 651 2391 1320 31 -1 5 1 3 4 15 1 651 2397 135 21 96.319138 Americans 1 3 4 15 2 798 2397 40 21 76.237564 Oils 1 3 4 15 3 849 2397 51 25 92.281570 Co.,5 1 3 4 15 4 911 2397 31 22 93.134842 605 1 3 4 15 5 954 2395 85 23 33.470757 F.T.C.5 1 3 4 15 6 1053 2396 72 26 96.851242 1786,5 1 3 4 15 7 1138 2396 63 22 96.259468 18145 1 3 4 15 8 1217 2395 90 26 96.709267 (1962)5 1 3 4 15 9 1328 2395 158 30 96.538940 (dissenting5 1 3 4 15 10 1496 2394 129 26 96.287292 opinion),5 1 3 4 15 11 1637 2392 126 25 96.182678 reversed,5 1 3 4 15 12 1774 2391 49 22 91.373314 3255 1 3 4 15 13 1836 2391 27 21 88.667801 F.5 1 3 4 15 14 1876 2391 34 22 86.471939 2d5 1 3 4 15 15 1922 2391 49 21 86.471939 1014 1 3 4 16 0 652 2424 1318 32 -1 5 1 3 4 16 1 652 2432 56 24 80.663673 (7th5 1 3 4 16 2 725 2431 49 21 93.979958 Cir.5 1 3 4 16 3 792 2430 89 26 96.191971 1963),5 1 3 4 16 4 897 2432 59 20 96.453346 cert.5 1 3 4 16 5 973 2430 98 25 95.380707 denied,5 1 3 4 16 6 1087 2430 47 21 94.187439 3775 1 3 4 16 7 1149 2429 56 22 83.272095 U.S.5 1 3 4 16 8 1217 2430 53 21 96.103638 9545 1 3 4 16 9 1285 2429 115 26 90.380486 (1964)5 1 3 4 16 10 1388 2425 16 35 90.380486 ;5 1 3 4 16 11 1419 2422 104 28 86.801758 Céntral5 1 3 4 16 12 1538 2426 218 23 89.272079 Retailer-Owned5 1 3 4 16 13 1773 2425 116 24 93.293999 Grocers,5 1 3 4 16 14 1904 2424 66 25 92.248558 Inc.,4 1 3 4 17 0 652 2458 1319 33 -1 5 1 3 4 17 1 652 2466 31 21 92.309067 605 1 3 4 17 2 695 2465 85 21 65.194366 F.T.C.5 1 3 4 17 3 793 2465 75 26 93.691101 1208,5 1 3 4 17 4 880 2465 64 20 96.445847 12415 1 3 4 17 5 961 2464 90 27 96.703766 (1962)5 1 3 4 17 6 1073 2464 156 26 96.239037 (dissenting5 1 3 4 17 7 1240 2463 130 26 95.292252 opinion);5 1 3 4 17 8 1382 2462 127 25 96.652466 reversed,5 1 3 4 17 9 1522 2461 47 22 83.719101 3195 1 3 4 17 10 1583 2461 27 21 81.862839 F.5 1 3 4 17 11 1624 2460 32 22 90.492920 2d5 1 3 4 17 12 1669 2459 49 22 95.037231 4105 1 3 4 17 13 1735 2460 59 25 94.663086 (7th5 1 3 4 17 14 1808 2459 50 22 93.879074 Cir.5 1 3 4 17 15 1873 2458 98 26 93.227768 1963)5 1 3 4 17 16 1959 2454 16 35 92.290588 ;4 1 3 4 18 0 649 2493 1321 31 -1 5 1 3 4 18 1 649 2500 52 20 93.218704 Thes 1 3 4 18 2 717 2500 86 20 86.810310 Nuare5 1 3 4 18 3 820 2498 52 26 66.292587 Co.,5 1 3 4 18 4 887 2500 30 20 68.707527 615 1 3 4 18 5 934 2498 87 22 31.063393 F.T.C.5 1 3 4 18 6 1038 2498 56 26 95.061996 375,5 1 3 4 18 7 1111 2498 48 21 96.055527 3945 1 3 4 18 8 1174 2497 95 26 95.247017 (1962)5 1 3 4 18 9 1297 2497 157 25 81.425331 (dissenting5 1 3 4 18 10 1469 2495 130 26 91.728989 opinion),5 1 3 4 18 11 1614 2494 127 24 96.743378 reversed,5 1 3 4 18 12 1757 2493 49 22 94.140862 3165 1 3 4 18 13 1824 2493 78 21 41.808277 F.2d5 1 3 4 18 14 1920 2493 50 21 96.212952 5764 1 3 4 19 0 653 2527 1338 31 -1 5 1 3 4 19 1 653 2534 57 24 95.484901 (7th5 1 3 4 19 2 727 2533 49 21 94.393120 Cir.5 1 3 4 19 3 792 2533 98 25 70.068611 1963);5 1 3 4 19 4 906 2533 128 21 96.469116 Sunshine5 1 3 4 19 5 1048 2532 124 25 10.587685 Biscuits,5 1 3 4 19 6 1180 2531 68 25 10.587685 'Inc.,5 1 3 4 19 7 1263 2531 32 22 92.057396 595 1 3 4 19 8 1310 2530 87 23 63.961216 F.T.C.5 1 3 4 19 9 1414 2530 55 25 73.371277 674,5 1 3 4 19 10 1486 2530 46 22 73.371277 6815 1 3 4 19 11 1554 2529 89 25 95.085350 (1961)5 1 3 4 19 12 1668 2527 158 26 96.515602 (dissenting5 1 3 4 19 13 1840 2527 130 24 90.556107 opinion),5 1 3 4 19 14 1989 2546 2 2 87.102898 .4 1 3 4 20 0 650 2560 1317 32 -1 5 1 3 4 20 1 650 2568 127 24 95.949387 reversed,5 1 3 4 20 2 795 2567 49 21 93.210930 3065 1 3 4 20 3 861 2566 28 21 87.801224 F.5 1 3 4 20 4 909 2567 32 20 79.369904 2d5 1 3 4 20 5 959 2567 32 21 95.485573 485 1 3 4 20 6 1014 2566 58 25 73.290009 (7th5 1 3 4 20 7 1090 2566 51 21 89.556656 Cir.5 1 3 4 20 8 1162 2566 97 24 69.311218 1962);5 1 3 4 20 9 1279 2566 51 21 93.293510 ands 1 3 4 20 10 1347 2564 121 26 91.808838 Shulton,5 1 3 4 20 11 1486 2564 63 25 87.475151 Inc.,5 1 3 4 20 12 1568 2563 31 21 49.641754 59:5 1 3 4 20 13 1619 2561 86 23 49.641754 F.T.C.5 1 3 4 20 14 1726 2561 57 26 96.088173 106,5 1 3 4 20 15 1803 2560 49 22 96.250038 1145 1 3 4 20 16 1876 2560 91 26 96.787682 (1961)4 1 3 4 21 0 655 2597 970 29 -1 5 1 3 4 21 1 655 2601 156 25 96.245377 (dissenting5 1 3 4 21 2 827 2601 129 25 95.888702 opinion),5 1 3 4 21 3 973 2600 127 25 94.989090 reversed,5 1 3 4 21 4 1117 2599 48 22 79.524193 3055 1 3 4 21 5 1182 2599 28 21 88.411446 F.5 1 3 4 21 6 1227 2599 34 21 79.964859 245 1 3 4 21 7 1276 2599 34 21 72.890839 365 1 3 4 21 8 1332 2599 65 25 48.450859 (7th.5 1 3 4 21 9 1409 2598 51 22 94.782799 Cir.5 1 3 4 21 10 1478 2597 90 26 95.637390 1962).5 1 3 4 21 11 1623 2601 2 2 0.000000 .3 1 3 5 0 0 648 2627 1323 67 -1 4 1 3 5 1 0 685 2627 1286 47 -1 5 1 3 5 1 1 685 2635 25 21 96.592789 It5 1 3 5 1 2 732 2635 85 21 95.970177 would5 1 3 5 1 3 839 2640 96 20 96.319031 appears 1 3 5 1 4 958 2635 59 21 96.782257 that5 1 3 5 1 5 1040 2634 44 21 96.611160 thes 1 3 5 1 6 1106 2634 33 20 57.737816 ad5 1 3 5 1 7 1163 2633 127 20 80.919449 hominem5 1 3 5 1 8 1313 2633 88 20 94.955971 attacks 1 3 5 1 9 1421 2638 62 36 39.256821 now5 1 3 5 1 10 1492 2632 89 24 94.878967 “beings 1 3 5 1 11 1603 2630 74 21 80.851913 made5 1 3 5 1 12 1700 2629 66 21 95.817711 finds5 1 3 5 1 13 1789 2634 42 16 95.817711 me5 1 3 5 1 14 1852 2628 28 21 96.497169 in5 1 3 5 1 15 1904 2627 67 26 96.889572 good4 1 3 5 2 0 648 2664 716 35 -1 5 1 3 5 2 1 648 2664 124 35 87.064987 company.5 1 3 5 2 2 784 2684 9 5 87.064987 .5 1 3 5 2 3 1325 2672 39 14 44.952885 te3 1 3 6 0 0 649 2682 1323 76 -1 4 1 3 6 1 0 684 2682 1288 49 -1 5 1 3 6 1 1 684 2702 11 20 82.324005 I5 1 3 6 1 2 719 2702 55 25 86.916779 joins 1 3 6 1 3 797 2682 203 49 38.460045 Commisstoner-5 1 3 6 1 4 1018 2684 150 38 56.875629 Nicholson:5 1 3 6 1 5 1181 2701 29 21 68.500648 in5 1 3 6 1 6 1232 2701 150 25 79.173714 .expressing5 1 3 6 1 7 1405 2683 103 42 93.606377 despair5 1 3 6 1 8 1531 2699 42 20 96.149010 for5 1 3 6 1 9 1597 2698 43 21 93.300583 thes 1 3 6 1 10 1666 2696 190 23 86.631363 Commission’s5 1 3 6 1 11 1880 2695 92 21 96.732399 future4 1 3 6 2 0 649 2728 1321 30 -1 5 1 3 6 2 1 649 2737 174 20 96.164398 enforcement5 1 3 6 2 2 838 2737 28 20 96.164398 of5 1 3 6 2 3 882 2737 44 21 93.298325 thes 1 3 6 2 4 942 2735 249 23 91.346046 Robinson-Patman5 1 3 6 2 5 1207 2734 58 24 96.146851 Act,5 1 3 6 2 6 1282 2740 28 15 92.904366 as5 1 3 6 2 7 1326 2734 104 21 4.263672 well:as5 1 3 6 2 8 1447 2734 43 21 96.807510 thes 1 3 6 2 9 1506 2733 75 21 96.375725 others 1 3 6 2 10 1597 2731 142 25 96.375725 important5 1 3 6 2 11 1755 2731 115 21 80.286484 statutes5 1 3 6 2 12 1885 2728 85 21 96.705559 which Separate Statement 81 FVT.C.

Dissenting STATEMENT OF COMMISSIONER Nrowo1son ‘It was not long after I joined the Commission that it became apparent. to.me that a thorough review of both the Commission’s enforcement of the Robinson-Patman Act and the statute’s provisions was long overdue.’ However, I was of the opinion that the Commisencouraged by the persistency of Commission ‘efforts i in recent years to reevaluate its policies and procedures and make necessary changes. For one brief. moment, it appeared that this general re-evaluation would finally focus on Robinson-Patman enforcement.”. Today’s: action, however, has shattered the illusion. Apparently, Robinson-Patman policy is the Commission’s “sacred cow.” While willing to approach enforcement of its other statutes with rationality and a concern with ultimate result, the Agency has. reserved a different approach for the price discrimination statute—mechanical. Since the Commission appears either incapable ar unwilling to review internally’its Robinson-Patman Act responsibilities in the light of modern: day: business realities, it-is: now apparent that this appraisal should come from without the’ Agency. | ‘July 10, 1969 Separate STATEMENT OF COMMISSIONER Dixon The issuance of these complaints has given Commissioner Elman an opportunity to castigate not only the present Commission but its - predecessors over the past 38 years for their enforcement of the Robinson-Patman Act. And his sweeping indictment would necessarily ‘include the numerous court decisions which also reflect what Commissioner Elman characterizes as a “literal-minded” interpretation of the Act. It seems, however, that the dissenting statement is not so ‘much an attack upon the Commission’s interpretation of the Robin- ‘son-Patman Act as it is an attack upon the Act itself. But the argument is not a novel one. It has been made before by Commissioner Elman and will undoubtedly be made again whenever a majority of the Commission proceeds contrary to:his views. the Congress’ has entrusted to its stewardship. The only encouraging sign is that knowledge of the Commission’s failures and deficiencies under its present management is no longer confined to a relatively small segment of the bar and the business community, but is increasingly becoming a matter of widespread public concern. One’s faith must be that where there is knowledge and understanding, there is hope for reform. 1See, Antitrust: Sound and Fury?—Remarks before the Section of Antitrust Law, 91st Annual Meeting of American Bar Association, August.7, 1968. . 2In April, the Commission voted to reevaluate, through a trade regulation rule pro- -eeeding, the problem of functional discounts to stocking dealers. See Advisory Opinion Digest No. 333 (April 18, 1969). See also Advisory Opinion Digest No. 263 (July 9, 1968), and accompanying dissenting opinions.

BORMAN FOOD STORES, INC., ET AL. 215 201 Separate Statement Insofar as I can determine from reading the dissenting statement, ‘Commissioner Elman’s approach to enforcing the Robinson-Patman Act is essentially a negative one. While giving lip service to the intention of Congress to-assure “that businessmen at the same functional level would start on equal competitive footing so far as price is :con-_ cerned,” + he would apparently ignore discriminations causing secondary line injury, as well as various practices expressly prohibited by Sections 2(c), 2(d) and 2(e), if enforcement of the Act would in any way impede competition at the primary level. In short, it would’seem that he would resolve all’ “conflicts” between the Robinson-Patman Act and the antitrust laws against the purpose for which the Robinson- Patman Act was passed.

In the present case, there have been numerous complaints that the challenged practices have had serious anticompetitive effects. If these allegations are true, the practices would certainly violate Section 2(¢). Commissioner Elman’s characterization of the matter as “trivial” merely reflects an obvious antipathy toward the Robinson-Patman Act. July 10, 1969 SEPARATH STATEMENT OF Commissioner MacIntyre My decision to vote for the issuance of these complaints i is based upon my conviction that their issuance is justified. However, I have grave doubts that the Commission as it is now constituted will find itself able to resolve the issues presented by these complaints. I say that because it is obvious that some members of the Commission are not in sympathy with some provisions of the laws entrusted to this Commission. These complaints are based on one of those provisions. It is my view that opposition to a law should be directed to the Congress. Unless and until Congress should repeal a law, it should be obeyed. The legislative function should not be usurped by the expedient of administrative rescission. _ The current policy split at the Commission level on matters of this kind, in my view, operate as perhaps the principal deterrent to the Commission’s fulfillment of its mission. This makes it difficult indeed for the staff of the Federal Trade Commission to. pursue a coherent policy in presenting matters to the Commission for its consideration. The voting patterns of individual Commissioners speak more eloquently than the words of any of us. Consequently, for those who would have an interest in such records, I would invite a full examina- 1 Federal Trade Commission v. Sun Oil Company, 371 U.S. 505-520 (1963). 216 FEDERAL ‘TRADE COMMISSION DECISIONS Motion ‘to Dismiss 81 F.T.C.

tion of the Commissioners’ votes in this aréa for the past eight years ‘on the issuance-of complaints and orders. The question of whether our decisions ‘are governed by the statutory text or by our individual value judgments would seem worthy of Presidential and Congressional inquiry.

July 10, 1969 CrrtiricaTion or Motion to Disuiss“Responpents P & R-BroxERaGE Co. AND: Frank -V. Conpnretto From Furraer Prosecution . ‘UNDER. THE: Comensinr By Davi H. Aiarn, Hearwe Examiner:

_ Respondents P & R Brokerage-Co., a partnership, and Frank Vv. Condello, individually and.as partner, in P & R Brokerage Co., have filed a motion that it would be-“in the interests of justice and in the public interest” to dismiss the. complaint * 1 with regard to them at this time or effective on.-October 31, 1972. Since. the motion clearly, is addressed to the Commission’s administrative discretion, the examiner certifies the matter to the Commission.

Condelle.is the. partner in-charge of. P & R Brokerage Co., a brokerage business operated 1 in Salinas, California. He is the only partner actively engaged in the brokerage business under the name P & R Brokerage Co. The other partners are residents of Arizona and their business interests apparently are not involved in the proceeding. Under the partnership agreement, a 4-month notice of retirement is required. Condello has officially given that notice and the effective date of his retirement is October 31, 1972.2 On that date, P & R Brokerage Co. will cease to exist. as a brokerage business in Salinas, California, and Condello has no intention of engaging in the business again. Counsel supporting the complaint argue that the relief sought is untimely because it is grounded on an event to take place in the future and they also point out that the motion fails “to address itself to protection of the public interest against substantive continuation, or resumption of the practices charged in the complaint.” 1 Respondent, Borman Food Stores, Inc.,,did not timely file an answer to the complaint. By virtue of such default, an examiner’s initial ‘decision was filed on May 26, 1972, under the provisions of Section 3. 12(c) of the Commission’s Rules of Practice. 2 According to Condello’s affidavit, he is retiring because of his advancing age (70 plus years) and poor health; the emotional strain caused by the Commission bringing formal charges against: him in spite of the fact that he had been attempting to obtain clarification from the Commission for upwards of. 10 years about his operations in Nght of Section 2(c) of the Clayton Act, as amended by the Robinson-Patman Act (atiswer to complaint, pages 5-33) ; and the recent deaths of his wife and two of his brothérs-in-law who had been his partners.

‘BORMAN FOOD STORES, INC., BT AL. © * 217 201: - Order .

It is the examiner’s recommendation thatthe motion be granted, conditioned on the respondents filing a certification by November 10, 1972, which would attest to Condello’s retirement, the cessation ‘of P & R Brokerage Co. as a business entity, as well as Condello’s intention not to re-enter the business or for P & R Brokerage to come alive . in a new form. Based 'on:the-representations made in the affidavit, the examiner concludes there is-no reasonable basis for believing that respondents’ purposes are anything but bona fide and that respondents’ intention is not to circumvent the law. If the respondents comply with the suggested proviso of the dismissal order, there would be no successor business-entity to be'liable for violation of a Commission order. In this regard, then,-there is, in-effect no concrete case before the Commission; only an abstract controversy—“sterile. as abstract’ ‘controversies usually are.” Regal Knitwear Co. v. NLEB, 324 U.S. 9, 15 Counsel supporting the complaint cite Crowell-Collier. Publishing Company, 70 F.T.C. 977,-as an example to illustrate the proposition that the Commission is disinclined “to forego entry of an appropriate cease and desist order simply because ‘respondents have terminated | their business after the issuance of complaints.” In contrast to Crowell- Collier, here there is no indication that respondent has abused or reasonably could be expected to abuse the public by creating a new business entity to resume the assailed practices. Since counsel supporting the complaint apparently feel that the affidavit is incomplete in some ways, as an alternative, the Commission might consider referring the matter back to the examiner to take a further deposition of Mr. Condello for the limited purpose of providing counsel with the opportunity to explore the uncertainties outlined in their answer to respondents’ motion.

July 26, 1972.

Orpver Dismisstnc Complaint AS TO ResponpENTS Frank V. ConpELLo AND P & R Broxerace Co.

This matter is before the Commission on the hearing examiner’s certification of respondents Frank V. Condello’s, as an individual, and P & R Brokerage Co.’s motion to dismiss the complaint as to them. In an affidavit accompanying said motion, Frank V. Condello avers that because he is in ill health, over 70 years of age, and under strain caused by the present litigation and several deaths in his family, he plans to retire on October 31, 1972, from the brokerage business, which is the subject of the complaint in this matter. P & R Brokerage Co. 494-841—T3——_15 218 © FEDERAL TRADE -COMMISSION DECISIONS — Complaint 81 F.T:Gz is. &, partnership. solely operated; by Frank. V. Condello, ‘and. will be dissolved with the retirement of Frank V..Condello. : - Counsel. supporting . the complaint resist ‘respondents’ motion: for the reasons that, it does not: provide permanent: relief, and: is untimely as Mr.. Condello has:not-yet retired... _-The:hearing. examiner. recommends; granting ‘respondents? motion:: For. the. reasons cited by respondent: Frank V. Condello, the.Com-: mission. has decided that. it-would not. bein the. public interest.to con-: tinue these proceedings. against the instant. respondents: ‘To meet: the objections of counsel supporting the complaint,.the Commission, however, reserves the right.to.issue a:complaint against respondents, based: upon: the. same..or similar charges as. the complaint. being dismissed by:: his; action, should future-events warrant such action. Accordingly: - Itds ordered, That the complaint.in Docket No. 8789 be, and it hereby: is, dismissed as to respondents P & R Brokerage Co. and Frank: V- Condello, without. prejudice, however, to.the right. of the Commission to.issue.2 new. complaint or to take. such further or other action against’ these. respondents at.any time‘in the future as may. be warranted by the then existing clroummetances.