Herbert R. Gibson, Sr., Etc

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IN THE MAHER OF HERBERT R. GIESO;., SR. T/A GIBSON PRODLCTS COMPANY, ETC., ET AL.

CONSENT ORDER , ETC. , IN RI:GARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COM\1JSSION ACT AND SEe. 2 OF THE CLA YTO:' ACT Docket 9016'. Complaint, Feb. 1975-Decis, Jum, 1976 Consent order requiring Progressive Brokerage, Inc., and Barshe1l, Inc., two Dallas Tex., brokerage firms and respondents in this cae, among other things to cease coJiecting brokerage fees, commissions, or other compensations from sellers while acting for, or in behalf of, buyers. A ppeara nee s For the Commission: Andre Tmwick, Jr., Paul W. Turley, and Rithard H. Gateley.

For the respondents: Bardwell D. Odum, ShJ:nrwn Jones, Jr. Passman, Jones, Andrews, Coplin, Holley Co., Robert E. Rader, Jr. John M. Gillis, Gillis, Rogers Taylar all of Dallas, Tex. and Akin Gump, Stmuss, Hauer Feld Washington, D. COMPLAII'T Thc Federal Trade Commission, having reason to believe that the above-named respondents have violated and arc now violating Section 5 of the Federal Trade Commission Act, as amended (15 L. C. 45) and Section 2(c) of the Clayton Act, as amended (15 U. C. 13), and bclieving that a proceeding by it in respect thereof is in the public interest, hereby issues this complaint, charging as follows: 1. RESPOt-DENTS PARAGRAPH 1. Respondent Herbert R. Gibson, Sr., is an individual doing business under his own name and the registered trade names of Herbert R. Gibson, Sr., d/b/a Gibson Products Company, and Herbcrt R. Gibson, Sr. , d/b/a Thc Gibson Trade Show, both unincorporated sole proprietorships. His principal place of business is 1228 East Ledbetter Dr. , Dallas, Texas. His residence address is 1358 Bar Harbor Dr. Dallas, Texas.

PAR. 2. Respondents Herbert R. Gibson, Jr., Gerald P. Gibson, and Belva Gibson arc individuals doing business under their own names or thc registercd trade names of Hcrbert R. Gibson, Sr. , d/b/a Gibson Products Company and/or Herbert R. Gibson, Sr., d/b/a Thc Gibson Complaint 87 F.

Trade Show, or employed by, representing or in some manner associated with either Herbert R. Gibson, Sr., individually or Herbert R. Gibson, Sr. , d/b/a Gibson Products Company, or Herbcrt R. Gibson Sr. , d/b/a The Gibson Trade Show. Said respondents are now and have been participating in, or aiding and abetting in the participation of, the acts and practices hereinafter set forth. Their principal place of business is 519 Gibson St., Seagoville, Texas. Belva Gibson s residence address is 1358 Bar Harbor Dr., Dallas, Texas. Hcrhert R. Gibson, Jr.'s residence address is 10412 Shiloh Road, Dallas, Texas. Gerald P. Gibson s residence address is 6814 Alexander Dr. , Dallas, Texas. Respondents Herbert R. Gibson, Sr. , Herbert R. Gihson, Sr. d/b/a Gibson Products Company, Herbert R. Gibson, Sr. d/b/a The Gibson Trade Show, Herbert R. Gibson, Jr. , Gerald Gibson, and Belva Gibson may sometimes be referred to hereinafter, collectively, as the "Gibson family respondents."

PAR. 3. (a) Respondents Gibson, Inc. , and Gibson s Discount Center Inc., Ideal Travel Agency, Inc. , and Gibson Warehouse, Inc. , are corporations organized, existing and doing business under and virtue of the laws of thc State of Texas, with their principal place of business located at 519 Gibson St., Scagoville, Texas. (b) Respondent Gibson Products Co. , Inc. is a corporation organized existing and doing business under and by virtue of the laws of the State of Texas, with its principal place of business located at 1228 East Ledbetter Dr. , Dallas, Texas. Respondents Gibson, Inc. , Gibson Discount Centers, Inc. , Idcal Travel Agency, Inc., Gibson Warehouse Inc. , Gibson Products Co. , Inc. , may sometimes be referred to hereinafter as the "Gibson corporate respondents." PAR. 4. (aJ Respondent Progressive Brokerage, Jnc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Texas, with its principal office located at 14802 Inwood Road, Dallas, Texas.

(b) Respondent Barshell, Inc. , is a corporation organized, existing and doing business under and by virtue ' of the laws of the State of Texas, with its principal office located at 14802 Inwood Road, Dallas Texas.

(c) Respondent AI Cohcn & Associates, Inc. is a corporation organized, existing and doing business under and by virtue of thc laws of the State of Texas, with its principal office located at 12514 Gulf Freeway, Houston, Texas.

II. BUSINESS PAR. 5. Respondents Herbert R. Gibson, Sr. , Herbert R. Gibson, Sr. ,Jib/a Gibson Products Company and respondents Herbcrt R. Gibson HERBERT R. GIBSOK , SR., ET AL. 1391 1389 Complaint Jr. , Gerald P. Gibson, and Belva Gibson, individually or as agents or associates of Herbert R. Gibson, Sr., are now and for many years have been engaged in the operation and control of a number of retail stores (hereinafter sometimes referred to as "Gihson family-owned stores reselling sundry types of products, including but not limited to soft goods, beauty aids, health supplies, automotive supplics, housewares toys and hardware to the consuming public. Said products are purchased from a number of manufacturers, suppliers and handlers of such products.

PAR. 6. Respondent Herbert R. Gibson, Sr., Herbert R. Gibson, Sr. d/b/a Gibson Products Company and Herbert R. Gibson, Sr., d/b/a The Gihson Trade Show, together with or acting through respondent Gibson Products Co., Inc., selJ or grant license or franchise agreements to retail stores which permit individuals or corporations in several States to use the trademarks, service marks and trade names of Gibson Gibson" (with design), "Gibson Products Company" and Gibson Discount Center " (which stores may be referred to hereinafter as "Gibson franchised stores ) and conduct trade shows for and/or attended by Gibson stores. There arc presently in excess of 536 such retail stores in the States of Texas, Oklahoma, Kansas, Colorado and Arkansas among others. Sales of products by said retail stores including the sales by the Gibson family-owned stores, are substantial and are believed to exceed $1 500 000 000 (One billion, five hundred milion dollars) annually.

PAR. 7. (a) Respondents Gibson, Inc. and Gibson s Discount Center Inc., are now and for many years have been engaged in the business of controlling and operating Gibson family-owned stores, warehousing and selling to the consuming public sundry products in addition to selling or granting licenses or franchises to retail stores as described in Paragraph 6 herein. Said respondents have also served as instrumentalities for conducting other aspects of the Gibson family business including the various practices described herein. (b) Respondent Ideal Travel Agency, Inc. , is now and for many years has been engaged in the business of arranging transportation and accommodations for suppliers selling to some or alj Gibson franchised stores and Gibson family-owned stores and has acted as a depository for the payments of induced promotional allowances. (c) Respondent Gibson Warehouse, Inc. is now and for many years has been engaged in the business of receiving sundry products from some suppliers for resale and/or distribution to some or all Gibson franchised stores and Gibson family-owned stores. (d) Respondent Gibson Products Company, Inc. is now and for many years has been engaged in the business of selling to the consuming 1392 FEDERAL TRADE COM:.ISSIOJ\ DECISIONS Complaint 87 F.

public sundry products and, in addition, conducting and/or serving as an instrumentality for conducting various other aspects of the Gibson family business and various practices as described herein. PAR. 8. Respondents Progressive Brokerage, Inc., Barshell, Inc. , and Al Cohen and Associates, Inc. are now and for many years have been engaged primarily in the business of affecting sales of sundry products for sellers located in various States of the United States and purchases by buyers located in the State of Texas. In such capacity, said respondents have demanded and received commission, brokerage and other compensation in connection with affecting purchases and sales of sundry products described herein.

II. CO\1MERCE PAR. 9. In the course and conduct of their business, the Gibson family respondents and the Gibson corporate respondents have engaged and are now engaged in commerce or their acts and practices affect commerce, as "commerce" is defined in the Federal Trade Commission Act, as amended, in the following manner:

(a) They solicit, handle, arrange for the purchase and sale of products to retail stores from a large number of suppliers located throughout the United States and respondents cause these products when solicited, handled, arranged for or purchased by them to be transported from the place of manufacture to retail stores in several1 States for resale to the consuming public. There is now, and for many years has been, a constant current of trade in commerce in these products between and among various States of the United States. (b) They have induced or induced and received payment or consideration from suppliers in various States of the United States for promotional services or facilities. There is now, and for many years has been, a constant current of trade in commerce in these promotional services or facilities between and among the various States of the United States.

(c) In the course and conduct of their business for the past several years, they have purchased, distributed and resold, and are now purchasing, distributing and reselling sundry products in commerce or affecting commerce, as "commerce" is defined in the Clayton Act and the Federal Trade Commission Act, as amended, which they purchased from sellers located in various States of the United States other than the States in which said respondents arc located. Said respondents have transported or caused such products to be transported from the sellers' places of business in various States of the United States to the buyers' places of business located in other States. PAR. 10. Respondents Progressive Brokerage, Inc., Barshell, Inc. , and .

HERBERT R. GIBSON , SR. , ET AL. 1393 1389 Complaint AI Cohen and Associates, Inc. , in the course and conduct of their business as manufacturers representatives or brokers have been and are now affecting sales of sundry products including but not limited to soft goods, beauty aids, health supplies, automotive supplies, housewares, toys and hardware by sellers located in various States of the United States other than the State of Texas, and purchases by buyers located in the State of Texas, in or affecting commerce, as "commerce is defined in the Clayton Act and the Federal Trade Commission Act as amended. Said respondents have transported or caused such products to be transported from the sellers' places of business in various States of the United States to the buyers' places of business located in other States.

IV. COMPETITION PAR. 11. In the course and conduct of their business in or affecting commerce, except to the extent limited or restrained by the practices identified hereinafter, respondents, individually or in concert, are now and have been in competition with other corporations, persons, firms and partnerships in the soliciting, handling, arranging for or purchasing for resale or sale and distribution of sundry products including but not limited to soft goods, beauty aids, health supplies, automotive supplies, housewares, toys and hardware.

V. COUNT J - INDlJCING DISCRIMI?\ATORY ALLOWA'r' CES PAR. 12. The allegations of Paragraphs 1- , 5- , 9 and 11 are incorporated herein by reference.

PAR. 13. In the course and conduct of business in or affecting commerce, and particularly since 1959, thc Gibson family respondents and the Gibson corporate respondents, acting individually or in concert have knowingly induced and received, or received, from suppliers payment of something of value to or for said respondents' benefit as compensation or in consideration for services or facilities furnished by or through said respondents in connection with said respondents offering for sale, selling, soliciting, handling or arranging for sale of products to Gibson family-owned stores and to Gibson franchised stores or resale thereof.

PAR. 14. (a) For example, during February, May, August and K ovember of each year, said respondents conduct, hold or direct or assist in conducting, holding or directing a trade show (hereinafter sometimes called thc " Gibson Trade Show ) at which products of suppliers are displayed. The Gibson Trade Shows are attended by employees, agents and associates of said respondents; franchisees and Complaint 87 F.

licensees of respondents Herbert R. Gibson, Sr., and Herbert R. Gibson Sr., d/b/a Gibson Products Company and their employees, agents and associates.

(b) In the course of the Gibson Trade Shows held during February, May, August and )!ovember of each year for 1969, 1970 , 1971 and 1972 said respondents solicited and induced from most, if not all, suppliers one or more of the following payments or considerations: (1) Payment for booth rental.

(2) Payment for services in connection with bcoth rental including but not limited to electrical contractor services and furnishings. (3) Payment for advertising in a booklet or tabloid which was circulated among persons attending the Gibson Trade Show. (4) Special trade show prices on one or more of the suppliers products offered for sale at the Gibson Trade Show. (5) Provision of personnel to prepare and attend the booth throughout the time the Gibson Trade Show was open. (6) Special biling terms on all sales made at the Gibson Trade Show. (7) Special allowances on all sales made at thc Gibson Trade Show calculated from a predetermined percentage of all such sales. (c) Said respondents received from participating suppliers substantial sums each year for the 1969 , 1970, 1971 and 1972 Gibson Trade Shows.

PAR. 15. In the course and conduct of business in or affecting commerce, and particularly since 1959, the Gibson family respondents and the Gibson corporate respondents, acting individually or in concert have knowingly induced and received, or received, from suppliers the furnishing of services or facilities in connection with the selling, offering for sale, soliciting, handling or arranging for the sale of products sold to Gibson family-owned stores and Gibson franchised stores or resale thereof.

PAR. 16. For example, during the Gibson Trade Shows, agents employees or rcpresentativcs of suppliers performed valuable services such as staffing the booths rented by suppliers from respondents and demonstrating the suppliers ' products therein. In addition to the furnishing of such services, other services were performed by suppliers which aided said respondents in the resale of suppliers' products. PAR. 17. TY1,ical of the suppliers who participated in the Gibson Trade Show at least once during the years of 1969, 1970, 1971 or 1972 and granted one or more of the special payments or considerations described above are:

Doranne of California, Inc.

Los Angeles, California Ceramic Warcs HERBERT R. GIBSON , SR., ET AL. 1395 1389 Complaint Armstrong Environmental Industries Los Angeles, California Water Sprinklers Revel, Inc.

Venice, California Toys (model kits) L. M. Becker & Company Appleton, Wisconsin Housewares Beagle Manufacturing Compa- EI Monte, California Housewares Bomar Manufacturing Co. Inc.

Dallas, Texas Jewelry Ben Mont Corporation Bennington, Vermont Gift Wrapping Paper PAR. 18. Many suppliers participating in the Gibson Trade Show for the years 1969 , 1970, 1971 or 1972 did not offer or othenvise make available to all their customers competing with respondents in the sale and distribution of their respectivc products payments, allowances services, facilities or other things of value on terms proportionally equal to those granted respondents.

PAR. 19. When the Gibson family respondents and the Gibson corporate respondents induced and received or received, payments allowances, services, facilities or other things of value from suppliers said respondents knew or should have known that they were inducing and receiving, or receiving, payments, allowances, services, facilities or other things of value from suppliers which said suppliers were not offering or otherwise making available on proportionally equal terms to all other customers of such suppliers who were competing with respondents.

PAR. 20. The acts and practices of respondents, as herein alleged, arc all to the prejudice of the public and constitute unfair methods of competition in or affecting commerce and unfair acts and practices in or affecting commerce within the intent and meaning and in violation of Section 5 of the Federal Trade Commission Act, as amended (15 C. 45).

VI. COUNT II - BOYCOTTING PAR. 21. The allcgations of Paragraphs, 5- , 9 and 11 are incorporated herein by reference.

1396 FEDERAL TRADE COMMISSIO:; DECISIONS Complaint 87 F.

PAR. 22. The Gibson family respondents and the Gibson corporate respondents, in combination, agreement, understanding and conspiracy with al1 or some of the Gibson family-owned stores and Gibson franchised stores, have established, maintained and pursued a course of conduct eliminating or boycotting suppliers which did not grant al1 or some of the special allowances on sales during or incident to the Gibson Trade Show as described in Count I herein. PAR. 23. Said respondents are now engaged and for many years have been engaged in the following unfair acts and practices, among others in furtherance of the hoycott:

(a) Dissemination of bulletins advising the Gibson family-own cd stores and Gibson franchised stores not to purchase from designated suppliers.

(b) Communicating, directly or indirectly, to the Gibson familyowned stores and Gibson franchised stores not to purchase from designated suppliers.

of said PAR. 24. Such acts and practices, as herein alleged, respondents are al1 to the prejudice of the public and constitute unfair methods of competition apd unfair acts and practices in or affecting commerce within the intent and meaning and in violation of Section 5 C. 45).of the Federal Trade Commission Act, as amended (15 D. VII. COC T II ILLEGAL BROKERAGE PAR. 25. The allegations of Paragraphs 1-11 are incorporated herein by reference.

PAR. 26. (a) In the course and conduct of their business, the Gibson family respondents and the Gibson corporate respondents have been or are now utilizing the services of various manufacturers representatives and brokers such as respondents Progressive Brokerage, Inc., Barshel1 Inc. , and AI Cohen and Associates, Inc. , to perform services for the Gibson family respondents and the Gibson corporate respondents by: (1) Furnishing information concerning market conditions; (2) Maintaining contact with various sellers; (3) Inspecting and selecting specified qualities and quantities of sundry products; and (4) Negotiating purchases of said products. (b) Such manufacturers representatives and brokers, in performing the services enumerated above, have been or are now acting as agents or representatives of thc Gibson family respondents and the Gibson corporate respondents. In such capacity, said manufacturers representatives and brokers, were or are subject to and under the direct or indirect control of the Gibson family respondents and the Gibson corporate respondents.

HERBERT R. GIBSON , SR., ET AL. 1397 1389 Decision and Order (c) In connection with such transactions, such manufacturers representatives and brokers, including respondents Progressive Brokerage, Inc., Barshell, Inc., and Al Cohen and Associates, Inc., are now or have been ca11ceding and receiving brokerage, commissions, or other compensations from sellers of sundry products, when in fact they have been or are now acting for or in behalf of the Gibson family respondents or Gibson corporate respondents or are subject to the direct or indirect control of said respondents. PAR. 27. The aforesaid acts and practices of said respondents individually or in conjunction with each other, in receiving or accepting, or paying and granting, directly or indirectly, anything of value as 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 (15 D. C. S 13) and are all to the prejudice of the public and constitute unfair methods of competition in commerce and unfair acts and practices in or affecting commerce within the intent and meaning and in violation of Section 5 of the Federal Trade Commission Act, as amended (15 D. C. S 45). DECISION A?',m ORDER As To RISPOI"DEKTS PROGRESSIVE BROKlRAGE , INc. AKD BARSJ-ELL, 11'c.

The Commission having issued its complaint on February 25 , 1975 charging the respondents na!1ed in the caption hereof with violations of the Federal Trade Commission Act and the Clayton Act, and the respondents having been served with a copy of that complaint; and The Commission having duly determined upon motion certified to the Commission under Section 3.25 of the Commission s Rules of Practice that, in the circumstances presented, there was a likelihood of settlement and that the public interest would be served by withdrawing the matter as to respondents Progressive Brokerage, Inc. and Barshell, Inc. , from adjudication; and Respondents Progressive Brokerage, Inc. and Barshell, Inc. , and counsel for the Commission having executed an agreement containing a consent order, an admission by respondents ProbJTcsslVC Brokerage Inc. and Barshell, Inc., of all jurisdictional facts sct forth in thc complaint, a statement that the sihrning of said agreement is for settlement purposes only and docs not constitute an admission by respondents Prohrressive Brokerage, Inc. and Barshell, Inc., that the law has been violated as set forth in such complaint, and waivers and provisions as required by the Commission s Rules; and The Commission having thereafter considered the aforesaid agreement and having determined that it provides an adequate basis for 1398 FEDERAL TRADE COM:\ISSIO DECISIONS Decision and Order 87 F. appropriate disposition in part of this proceeding, and having accepted said agreement, and the agreement containing consent order having been placed on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 3.25(d) of its Rules, the Commission hereby makes the following jurisdictional findings, and enters the following order in disposition of the proceeding as to respondents Progressive Brokerage, Inc. and Barshell Inc.

1. Respondent Progressive Brokerage, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Texas, with its principal office located at 14802 Inwood Road Dallas, Texas.

Respondent Barshell, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Texas with its principal office located at 14802 Inwood Road, Dallas, Texas. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of respondents Progressive Brokerage Inc. and Barshell, Inc., and the proceeding is in the public interest. ORDER It is ordered That respondents Progressive Brokerage, Inc. , and Barshell, Inc. , corporations (hereinafter referred to as respondents), their representatives, agents or employees, directly or through any corporate or other device, in connection with the sale of goods, wares or merchandise for any seller principal, in commerce, as "commerce " is defined in the Clayton Act, as amended, and in or affecting commerce as "commerce" is defined in the Federal Trade Commission Act, as amended, do forthwith cease and desist, except as otherwise pcrmitted hy law, from:

1. Paying, granting or allowing, directly or indirectly, to any buyer or to anyone acting for or in behalf of or who is subject to the direct or indirect control of such buyer, any allowance or discount in lieu of brokerage, or any part or percentage thereof, by selling any goods wares or merchandise to such buyer at prices reflecting a reduction from the prices at which sales of such products are currently being effectcd by respondents for any seller principal where such reduction in price is accompanied by a reduction in the regular rate of commission, brokerage or other compensation currently being paid to respondents by such seller principal for brokerage services; or 2. In any other manner, paying, granting or allowing, directly or indirectly, to any buyer, or to anyone acting for or in behalf of or who is suhject to the direct or indirect control of such buyer, anything of value as a commission, brokerage or other compensation or any HERBERT R. GIBSO;- , SR., ET AL. 1399 1389 Decision and Order allowance or discount in lieu thereof upon, or in connection with, any sale of goods, wares or merchandise to such buyer for its own account. It is furtlw-r ordered That respondents notify the Federal Trade Commission at least thirty (30) days prior to any proposed change in either corporate respondent which may affect compliancc obligations arising out of the order, such as dissolution, assignment or sale resulting in the emergence of successor corporations or the creation or dissolution of subsidiaries.

It is furtlwr O'rdered That respondents Progressive Brokerage, Inc. and Barshell, Inc., shall within sixty (60) days after service upon them of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

141J FEDERAL TRADE COYIMISSION DECISIONS Order 87 F.