New Jersey Movers Tariff Bureau, Inc

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IN THE MATTER OF NEW JERSEY YIOVERS TARIFF BUREAU, INC. , ET AL. CONSE:-T ORDER , ETC. , IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C- 3282. Complaint, Jun.. 1990-Deci:sion, Jan. 1990 This consent order prohibits, among other things, the Highland Park J. based , or movers from entering into or maintaining any agreement to fix, maintain interfere with the prices charged by movers. The order also prohibits respondents from discussing or formulating agreements among movers concerning intrastate prices to be charged for the transportation of property or related services. Appwmnces For the Commission: Eugene Lipkowitz and Michael J Bloom. For the respondents: Thomas F.x. Foley, Holmdel, N. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that the New Jersey Movers Tariff Bureau, Inc. , a corporation, and the New Jersey Warehousemen and Movers Association, a corporation (hereinafter sometimes referred to as "Tariff Bureau " and "Movers Association respectively, or as " proposed respondents " collectively), have violated and are violating Section 5 of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges as follows:

PARAGRAPH 1. Respondent New Jersey Movers Tariff Bureau, Inc. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New Jersey. Respondent New Jersey Warehousemen and YIovers Association is a corporation organized existing, and doing business under and by virtue of the laws of the State of New Jersey. Both respondents have their offices and principal places of business located at 24 North Third Avenue, Highland Park New Jersey.

Complaint 113 F.

PAR. 2. Except to the extent that competition has been restrained as alleged herein, respondents' members have been and are now in competition among themselves and with other public movers. PAR. 3. Respondents are and have been, at all times relevant to this complaint, corporations organized for the profit of their members within the meaning of Section 4 of the Federal Trade Commission Act as amended, 15 U. C. 44.

PAR. 4. Respondents share common officers and directors, including a common President. The Tariff Bureau s General Manager serves as Executive Director of the Movers Association. Individuals serving on the Tariff Bureau s Board of Directors are also officers of the Movers Association. Respondents' memberships are also largely overlapping; in 1987- 1988, each consisted of approximately 300 public movers engaged in the intrastate transportation of property in New Jersey. The members receive substantial compensation for such intrastate moves.

PAR. 5. Respondents maintain and have maintained a substantial course of business, including the acts and practices as hereinafter set forth, in or affecting commerce as "commerce" is defined in the Federal Trade Commission Act.

PAR. 6. Prior to 1981 , New Jersey s public moving industry was regulated by the Board of Public Utilities, which was empowered pursuant to the 1968 Public Movers Act, to "fix just and reasonable rates. During much of the 1970' , respondent Tariff Bureau fied, on behalf of its members, a joint and common tariff that was subject to the approval of the Board of Public Utilties. In 1978, however, after the Board determined that the Tariff Bureau had acted anticompetitively and injured consumers, public movers who had been members of the Tariff Bureau began to file their rates individually instead of through a joint and common tariff. In 1981 , the State of New Jersey decided to abandon rate regulation in favor of a regulatory system that provides greater freedom for public movers and consumers. The 1981 New Jersey Public Movers and Warehousemen Licensing Act replaced the 1968 Public Movers Act. The 1981 Act provides that each mover must fie tariffs semiannually with the Director of the New Jersey Division of Consumer Affairs, but allows each mover to choose the rates it wil charge for its moving services subject to a requirement that the rates be in accord with its filed tariff. PAR. 7. In 1982, respondent Movers Association corresponded with its members and members of the Tariff Bureau, inviting them to stop NEW JERSEY MOVERS TARIFF Bureau. INC., ET AL. 123 121 Complaint filing their tariffs individually and to participate in the filing of a new joint tariff. The Movers Association then re-activated the Tariff Bureau to design and implement the joint tariff. Acting in conjunction with the Movers Association through, among other things, joint meetings and the involvement of common employees and officers, the Tariff Bureau designed and implemented the joint tariff in a manner that had the natural tendency and effect of raising the prices of moving services. Since the inception of this effort to create a joint tariff, respondents have acted as a combination of their members or in a conspiracy with at least some of their members, and with each other to hinder, restrain, restrict, suppress, or eliminate price and service competition among public movers in the intrastate transportation household goods, office goods, and special commodities. PAR. 8. In furtherance of said combination or conspiracy, respondents and their members have engaged in the following acts, policies and practices, among others, to coordinate and raise prices for public moving services in New Jersey:

(A) Beginning in the fall of 1982, respondents surveyed their membership concerning the rates that members wanted to have published in the new joint tariff. Respondents then rejected the price preferences of their members reflected in the survey results and created instead a joint tariff containing menus of rates in tabular form. For each of several categories of moving services, members were then invited to and did select one of the tariff rate tables created by respondents.

(B) The joint tariff created by respondents to some extent allowed movers to "take exception" to the tariff tables and to select rates and terms of service that were not reflected in the tables. In general however, respondents designed and operated the tariff, including the exception process, in a way that discouraged and suppressed movers taking of exceptions to implement their unilateral pricing decisions. Thus, for example, some movers complained to the Tariff Bureau that the tariff tables did not contain their desired rates, but nevertheless declined to use an exception in order to obtain their desired rates. (C) In the fall of 1987, the Tariff Bureau modified several of the tariff tables. In general, the modifications eliminated lower rates and added higher rates. The Tariff Bureau eliminated tables containing lower rates from the fall 1987 tariff even where the lower rates had been, during the most recent tariff period and before, movers' most popular choice of rates for their moving services. 124 FEDERAL TRADE COMMISSION DECISIO:oS Decision and Order II3 F. (D) With respect to the fall 1987 tariff and subsequent tariffs embodying the new and higher rate tables, movers ' rate selections revealed a marked price increase for several categories of moving services. Movers who had previously selected lower rates that were now no longer presented as rate options in the tariff generally did not seek to use the exception process to continue charging lower rates. Rather, they generally selected the tariff tables containing higher rates-in some instances rates that were several rate levels higher than those they had selected prior to the fall of 1987. In addition, the Tariff Bureau often ignored movers' requests for the same rates that they had selected in the previous tariff, and assigned them to the new higher rate tables.

PAR. 9. The aforesaid acts and practices of respondents, their members and others have been and are now having the effects, among others, of:

(A) Raising, fixing, stabilizing, or otherwise interfering or tampering with the prices of intrastate movers of household goods, office goods, and special commodities;

(B) Restricting or frustrating price competition in the intrastate transportation of household goods, office goods, and special commodities; and (C) Depriving consumers of the benefits of price and service competition.

PAR. 10. The aforesaid acts and practices constitute unfair methods of competition in or affecting commerce or unfair acts and practices in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act. The acts and practices of respondents, or the effects thereof, are continuing and will continue or recur in the absence of the relief requested.

DECISION AXD ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the New Jersey Movers Tariff Bureau Inc. , a corporation, and the New Jersey Warehousemen and Movers Association, a corporation (hereinafter sometimes referred to as Tariff Bureau " or "Movers Association " respectively, or as "respondents " collectively), and respondents named in the caption hereof having been furnished thereafter with a copy of a draft of complaint which the Kew York Regional Office proposed to present to the NEW JERSEY MOVERS TARIFF BUREAU, INC.. ET AL. 125 121 Decision and Order Commission for its consideration and which, if issued by the Commission would charge respondents with violation of the Federal Trade Commission Act; and The respondents, their attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2. 34 of its Rules, the Commission hereby issues its complaint, making the following jurisdictional findings, and enters the following order:

, Inc. , is a (1) Respondent New Jersey Movers Tariff Bureau corporation organized, existing, and doing business under and by virtue of the laws of the State of New Jersey. Respondent New Jersey Warehousemen and Movers Association is a corporation organized existing, and doing business under and by virtue of the laws of the State of New Jersey. Both respondents have their offices and principal places of business located at 24 North Third Avenue, Highland Park New Jersey.

(2) The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER For purposes of this order, the following definitions shall apply: (A) Household goods means personal effects, fixtures, equipment stock and supplies, or other property usually used in or as part of the stock of a dwellng.

Decision and Order Il3 F. (B) Intrastate tmnsportation or intrastate moves means the pickup or receipt, transportation and delivery of property for compensation within the State of New Jersey by a mover authorized by state law to engage therein.

(C) Member means any mover or other person which pays dues or belongs to the New Jersey Movers Tariff Bureau, Inc. or to the New Jersey Warehousemen and Movers Association, or to any successor corporation.

(D) Office goods means personal effects, fixtures, furniture equipment, stock and supplies, or other property usually used in or as part of the stock of any office, or commercial, institutional, profession- , or other type of establishment.

(E) Person means any individual, copartnership, association company, or corporation, and includes any trustee, receiver, assignee lessee, or personal representative of any person herein defined. (F) Mover means any person engaged in the transportation of household goods, office goods, or special commodities by motor vehicle for compensation in intrastate commerce between points in the State of New Jersey.

(G) Special commodities means uncrated or unboxed works of art, fixtures, appliances, business machines, electronic equipment displays, exhibits, home, office, store, theatrical or show equipment musical instruments, or other articles.

(H) Tariff Bureau means the New Jersey Movers Tariff Bureau Inc.

(I) "Movers Association means the New Jersey Warehousemen and Movers Association.

(J) Tariff" means a publication stating the prices charged by movers for services rendered in the transportation of household goods offce goods, and special commodities, within the State of "ew Jersey. II.

It is oTClered That respondents Tariff Bureau and Movers Association, their successors and assigns, and their directors, offcers committees, agents, representatives, and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the transportation of property, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, jointly and individually, do forthwith cease and desist from: NEW JERSEY MOVERS TARIFF BUREAU. INC.. ET AL. 127 121 Decision and Order A. Entering into, adhering to, or maintaining, directly or indirectly, any contract, agreement, understanding, plan, program, combination or conspiracy to construct, fix, stabilze, raise, maintain, or otherwise interfere or tamper with the prices charged by movers; B. Suggesting, urging, encouraging or persuading in any way movers to charge, file, or adhere to any existing or proposed tariff provision, or otherwise to charge or refrain from charging any particular price for any services rendered or goods or equipment provided;

C. Inviting, coordinating, or providing a torum for any discussion or agreement between or among movers concerning intrastate prices charged or proposed to be charged by movers for the intrastate transportation of property or related servces, goods, or equipment; and D. Formulating, compilng, fiing, or maintaining any tariff derived in whole or in part from price information that respondents or others have collected on forms that contain pre-selected prices or that use or refer to tables of prices.

Provided, however that nothing contained in subpart II. D. of this order shall prevent respondents from collecting and publishing individual tariffs or tariff information that movers have communicated to respondents on forms, other than forms devised, established or circulated to movers by respondents that contain pre-selected prices or that use or refer to tables of prices, in which each mover inserts or sets forth prices that are unilaterally determined by the mover, for the purpose of faciltating each mover s satisfaction of the tariff filing requirements of the State of New Jersey. And provided further that after a period of one year from the effective date of this order, nothing contained in this subpart shall prevent respondents from presenting to state regulatory authorities tariff filings that contain a tabularized or consolidated display of unilaterally determined mover prices. It is further ordered That respondents Tariff Bureau and Movers Association each shall:

(A) At the first opportunity after this order becomes final, but in no case later than six (6) months thereafter, cancel all tariffs and any supplements thereto on file with the Director of the Division of 128 FEDERAL TRADE COMMISSION DECISIO;iS Decision and Order 113 r.

Consumer Affairs in the New Jersey Department of Law and Public Safety that establish prices for transportation of property or related services, goods, or equipment by movers in New Jersey and take such action as may be necessary to effectuate cancellation and withdrawal. (B) Within thirty (30) days after this order becomes final, distribute a copy of the order to each of their members. (C) Within thirty (30) days after this order becomes final, amend their by-laws, rules and regulations, and other of their materials to conform to the provisions of this order and provide each of their members with a copy of the amended by-laws, rules and regulations and other materials.

(D) Within thirty (30) days after this order becomes final, amend their by-laws to require each of their members to observe the substantive provisions of the order as a condition of their membership. (E) At the first opportunity after this order becomes final, but in no case later than six (6) months thereafter, terminate all previously executed powers of attorney and tariff service agreements between the Tariff Bureau and any mover utilizing its services that authorizes the publication and/or filing of intrastate tariffs within the State of New Jersey; provided, however that nothing contained in this subpart shall prevent any new executions of such agreements or powers of attorney.

(F) For a period of three (3) years after this order becomes final furnish a copy of the order to each of their new members within thirly (30) days of each new member s admission.

IV.

It ':8 further ordered That respondents Tariff Bureau and :vovers Association each shall:

(A) Within sixty (60) days after this order becomes final, file a verified written report with the Federal Trade Commission setting forth in detail the manner and form in which the respondent has complied and is complying with this order. (B) In addition to the report required by Paragraph IV(A), annually for a period of three (3) years on or before the anniversary date on which this order becomes final, and at such other times as the Federal Trade Commission or its staff may by written notice to respondent require, file a verified written report with the Federal Trade NEW JERSEY MOVERS TARIFF BUREAU . INC.. ET AL. 129 121 Decision and Order Commission setting forth in detail the manner and form in which the respondent has complied and is complying with this order. (C) For a period of five (5) years after this order becomes final maintain and make available to the Commission staff for inspection and copying, upon reasonable notice, all documents that relate to the manner and form in which the respondent has complied and is complying with this order.

(D) Notify the Federal Trade Commission at least thirty (30) days prior to any proposed change in respondent, such as dissolution assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the respondent that may affect compliance obligations arising out of this order.

Initial Decision II3 F.