Diamond Shamrock Corporation

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IN THE MATTER OF DIAMOND SHAMROCK CORPORATION SET ASIDE ORDER 1:- REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C- 93. Consent Order, Mar. 1974-Set As :de Order, Apr. 30, 1990 The Federal Trade Commission has set aside a 1974 consent order as it applies to Occidental, a successor to a part of Diamond Shamrock Corporation, (83 FTC 1389), thus removing the order s prohibition of reciprocal dealing with customers and suppliers and certain related conduct. Occidental argued, among other things that the restrictions in the order constrained its ability to compete, and that reopening and vacating the order would be in the public interest. ORDER REOPENING AND SETTI:-G ASIDE ORDER Occidental Chemical Corporation ("Occidental" ), a successor to a part of the business of Diamond Shamrock Corporation ("DSC"), 1 has filed a "Request of Occidental Chemical Corporation To Reopen and Vacate a Consent Order Request"), pursuant to Section 5(b) of the Federal Trade Commission Act, 15 U. C. 45(b), and Section 2.51 of the Commission s Rules of Practice, 16 CFR 2. 51. In the Request Occidental asks the Commission to reopen the proceeding in Docket No. 2493 and set aside the consent order issued by the Commission on March 18, 1974 insofar as it applies to Occidental." Request at 1. In support of its Request, Occidental states that the relief it seeks is required by changed conditions and the public interest. Request at 3. Occidental's request was placed on the public record for thirty days pursuant to Section 2. 51 of the Commission s Rules of Practice. No comments were received. For the reasons stated below, the Request is granted.

The Commission issued its complaint and order in this matter March 18, 1974. The complaint alleged that DSC had engaged in reciprocal dealing by "systematically utiliz(ings its actual or potential purchases to obtain or increase sales of its products, services or raw 1 The order applif's to DSC and its " subsidiaries, successors, and assigns. " 83 FTC at 139 . Occidental:5 a successor by acqu:sition. Request at 1 DIAOND SHAROCK CORPORATION 317 316 Set Aside Order materials to certain companies. " 83 FTC at 1390. The complaint further alleged that DSC's conduct had the effect, among other things, of foreclosing actual or potential suppliers of DSC, foreclosing DSC' s competitors from selling to DSC's suppliers or giving DSC an unfair competitive advantage over its competitors. ld. at 1391. The order prohibits DSC from engaging in reciprocal dealing with its suppliers and customers and from engaging in certain conduct that was thought to foster reciprocal dealing. Although some of the order provisions expired in 1984, DSC stil is prohibited from, among other things, discussions with another company "to ascertain, develop, faciltate, or further any relationship between purchases and sales of the nature prohibited by (the) order." 83 FTC at 1393, DSC also is prohibited from making purchasing data available to its sales personnel and from making sales data available to its purchasing personnel. ld. at 1394.

I1.

The order in Occidental Petroleum Cor. Docket C-2492, 83 FTC 1394 (1974), like the Diamond Shamrock order, prohibited Occidental from engaging in reciprocal dealing and contained various fencingprovisions to prevent opportunities for reciprocal dealing. In 1982 Occidental asked the Commission to reopen the order in Occidental Petroleum Cor. and set it aside, limit its duration to ten years or bring it in line with current case law and enforcement attitudes, Request at 20. Occidental asserted that modification was warranted by changed conditions of law, fact and the public interest. Occidental argued, among other things, that similar orders entered against its competitors had expired, that the Commission and the Department of Justice were unlikely to challenge reciprocal dealing arrangements and that the order impeded Occidental's ability to compete. Request at 11.

On March 9 , 1983 , the Commission set aside the fencingprovisions of the Occidental order and ordered that the remaining provisions of the order should expire ten years from the date of their original entry based on public interest considerations. Occidental Petroleum Cor. Docket C-2492 , 101 FTC 373 (1983) (Reopening and Vacating in Part and Modifying in Part Order Issued March 18 1974). The Commission concluded that the fencing-in provisions ofthe Occidental order, with the passage of time, prohibited innocuous and Set Aside Order 113 F.

possibly procompetitive conduct, resulting in competitive harm that outweighed any continuing need for them. The Commission concluded that the same public interest considerations warranted setting aside the remaining order provisions at the end of the specified ten-year period. ld. at 373-74.

The Commission consistent with its decision to modify and set aside the Occidental order, set aside two additional orders that prohibited the respondents from engaging in reciprocal dealing. In The Southland Corp. Docket 8915 , 102 FTC 1337 (1983), the Commission set aside the fencing-in provisions of a 1974 order " at this time " and ordered that the remaining provisions be set aside ten years from the date of their original entry. ' The Commission set aside a 1973 order prohibiting reciprocal dealing in Georgia-Pacific Corp. Docket C- 2402, 103 FTC 203 (1984).

In its Request, Occidental asserts that changed conditions and the public interest require the Commission to set aside the Diamond Shamrock order, which now applies to Occidental as a result of Occidental' s acquisition of part of DSC's business. Request at 3. Occidental argues that the order prohibits conduct that the Commission described as "innocuous and often procompetitive" in its decisions to set aside the reciprocal dealing orders against Occidental Southland and Georgia-Pacific. Request at 2. Occidental also argues that because the public policy considerations that "motivated (the Commission s decision to modify and set aside the Occidental order J have not changed " it would be "illogical and manifestly unfair" to subject Occidental, by reason of its acquisition of a part of DSC' business, to the same order provisions that the Commission decided should not apply to Occidental. Request at 4. Finally, Occidental asserts that it is "injured by the continued applicability of the Diamond Shamrock order to it, especially when similar consent orders applicable to several of its competitors have been permitted to expire. Request at 2 and 5 n.4.

2 The original S01(th!and order wa issued January 24 , 1974. See 83 vrc 1282. 3 Tr.e order inGeOl"gia-Pad/j 82 FTC 1428 (1973), which had been in effect for more :han ten years when the Commission issued the 1984 order, was set aside in its entirety DIAMOND SHAMROCK CORPORATION 319 316 Set Aside Order IV.

Section 5(b) of the Federal Trade Commission Act, 15 U. C. 45(b), provides that the Commission shall reopen an order to consider whether it should be modified if the respondent "makes a satisfactory showing that changed conditions of law or fact" require such modification. A satisfactory showing sufficient to require reopening is made when a request to reopen identifies significant changes in circumstances and shows that the changes eliminate the need for the order or make continued application of it inequitable or harmful to competition. Louisiana-Pacfic Cor. Docket 2956 Letter to John C. Hart (June 5 , 1986), at 4.

Section 5(b) also provides that the Commission may modify an order when, although changed circumstances would not require reopening, the Commission determines that the public interest so requires. Respondents are therefore invited in petitions to reopen to show how the public interest warrants the requested modification. 16 CFR 2.51. In such a case, the respondent must demonstrate as a threshold matter some affrmative need to modify the order. Damon Cor. Docket C-2916, Letter to Joel E. Hoffman, Esq. (March 29, 1983), at 2 ("Damon letter ). For example, it may be in the public interest to modify an order "to relieve any impediment to effective competition that may result from the order. Damon Cor. Docket C-2916, 101 FTC 689, 692 (1983). Once such a showing of need is made, the Commission wil balance the reasons favoring the modification requested against any reasons not to make the modification. Damon letter at 2. The Commission also wil consider whether the particular modification sought is appropriate to remedy the identified harm. The language of Section 5(b) plainly anticipates that the burden is on the petitioner to make a "satisfactory showing" of changed conditions to obtain reopening of the order. The legislative history also makes clear that the petitioner has the burden of showing, by means other than conclusory statements, why an order should be modified. If the Commission determines that the petitioner has made the necessary showing, the Commission must reopen the order to determine whether modification is required and, if so, the nature and extent of modification. The Commission is not required to reopen the order however, if the petitioner fails to meet its burden of making the satisfactory showing of changed conditions required by the statute. The petitioner s burden is not a light one in view of the public interest in repose and the finality of Commission orders. Set Aside Order 113 F.

A reciprocal dealing arrangement exists when two parties deal with each other as both a buyer and seller, one party offering to buy the other party s goods conditioned on the second party buying goods 4 The elements of proof required to show thatfrom the first party. reciprocal dealing violates the antitrust laws are equivalent to "the elements required to provide an unlawful tying arrangement, in which, similarly to reciprocal dealing, a party s wilingness to enter one transaction is conditioned on the other party s wilingness to enter into a different one too. Unilateral conduct, such as buying from a present customer in order to give that customer an incentive to keep , r,buying from it, or to maintain "goodwil " does not violate the law nor does two parties maintaining a consensual relationship to purchase each other s products. Continued order restraints against unilateral and consensual reciprocal dealing are legally unsupportable. Coercive reciprocal dealing may violate the law, if there is an actual agreement between the parties to make reciprocal purchases, if one party has substantial market power that tends to coerce the reciprocal transaction 8 and if the reciprocal dealing arrangement forecloses a substantial amount of commerce. 9 Occidental demonstrates that orders against reciprocal dealing, of all forms, by its competitors have now expired. See Georgia-Pacific Corp. Docket C-2402 , 103 FTC 203 (1984); United States v. PPG lndustries, lnc. 1970 Trade Cas. (CCH) "173 373 (W. D. Pa. 1970). Occidental demonstrates that it has lost caustic soda business as a result of not having the ability to enter into reciprocal dealing arrangements. Public Record at 49- 53. This showing supports Occidental' s assertions that the restrictions in the Order constrain its Betaseed, Inc. v. U and line. 681 F. 2d 1203 , 1216 (9th Cir. 1982);Spu1"/an GJ'in Mfi Co. v. Ayers 581 F.2d 419, 424 (5th Cir. 1978), C€'r. denied 444 U. S. 831 (1979); T. Banl.1ck fnd1!slnes, Inc. Waller E. Heller Co. 692 F. Supp. 1331 , 1337 (N. D. Ga. 1987); Skepton v. COllnty of Bucks, PennsyIVC1H1a G13 F. Supp. 1013 , 1018 (E.D. Fa. 1985).

E.T. Barwick lndw;tries, Inc. 692 F. Supp. at 1337; Skeplon 613 F. Supp. at 1018, citing Retaseed, Inc. 681 F.2d at 1216- 17; Spa/"tan Grain and Mill Co. 581 F. 2d at 425. Great Escape, Inf:. v. Union City Body Co. 791 F. 2d 532 , 537 (7th Cir. 1986). See Dams v. 1"1 1"5/ Natimwl Bank of IVes/vil/e 868 F. 2d 206 , 208 (7th Cir. 1989). Great Escape, I11 791 F. 2d at 537: see Davis 868 F. 2d at 208 Grea.t Escape, Inc. 791 F. 2d at 537; T. Bm' wick, Inc. 692 F. Supp. at 1331; Skepton 613 F. Supp. at 1018. See Davis 868 F,2d at 208; Brace v, First Fedeml SQ1)111gS and Loan Association o/Coil"oe, Inc. S37 2d 712 , 718 (5th Cir. 1988).

Bruu 837 F. 2d at 718, citing, Jefferson Parish Hospital DisU' lct Va. :: F.Hyde 466 L' S, 2, 13- (1984) DIAMOND SHAMROCK CORPORATION 321 316 Dissenting Statement abilty to compete, and that reopening and vacating the order would thus tend to serve the public interest.

V1.

In modifying and setting aside the Occidental order, the Commission said that the conduct prohibited by the order is "innocuous :!d may, in certain circumstances, be procompetitive." 101 FTC at 373- 7 4. The Commission believes that there is no sound reason to deny Occidental now relief equivalent to what the Commission already granted it in 1983.

Occidental has shown an affirmative need to reopen and modify the order, and this need is not outweighed by any reasons to continue the order. Accordingly, the Request to reopen and set aside the order insofar as it applies to Occidental, is granted. Accordingly, it is ordered, that the proceeding in Docket 2493 insofar as it applies toand it hereby is, reopened and that the order, Occidental, be, and it hereby is, set aside. Commissioner Azcuenaga and Commissioner Strenio dissenting. DISSENTING STATEMENT OF COMMISSIONER MARY L. AZCUENAGA majority of the Commission today grants the petition of Occidental Chemical Corporation to reopen and set aside the order in Diamond Shamrock Corporation Docket C-2493, insofar as it applies to Occidental 1 The majority takes this action although Occidental failed to demonstrate changed conditions of fact or law that require reopening or public interest considerations that warrant reopening. ' I cannot agree.

The majority relies on the public interest to set aside the order in Diamond Shamrock. Reopening an order may be warranted in the public interest when the respondent shows as a threshold matter some affirmative need to modify the order, usually a competitive disadvan- 1 Occidental fied the petition as a successor under the order by its 1986 acquisition of Diamond Shamrock Chemica! Corporation.

Z Although Occidental aUeges " changed conditions" generally, Petition at 3, it does not specifically identify any changed conditions of fact.

Dissenting Statement 113 F. tage resulting from the order. 3 Occidental has not made the requisite threshold showing. Instead, Occidental' s public interest arguments are vague and conclusory.

Occidental asserts that similar consent orders once applicable to several of its competitors have been set aside or permitted to expire. Petition at 2 & 5. Even if true, this assertion does not create an inference that Occidental is competitively disadvantaged. The mere fact that other firms are not precluded by order from engaging in certain conduct does not mean that the conduct is necessary to compete effectively or that Occidental is competitively disadvantaged by its inability to engage in that conduct. Occidental makes no claim or showing that it is unable to compete effectively by reason of the order. 4 Affidavits from Occidental personnel are similarly uninformative. The affants claim "instances" in the three and a half years since Occidental acquired Diamond Shamrock Chemical Corporation that Occidental has not completed transactions because it could not discuss reciprocal dealing. Not even one of these "instances" is identified, and no other specific information such as the identity of the potential customer or the volume of business is provided. One would expect that Occidental could identify any competitive disadvantage it suffers with some degree of particularity. \ Certainly that is a minimum we have required in other cases, and I see nothing here to justify a departure from our usual standards. In the absence of a showing of competitive harm, we cannot evaluate whether the order unnecessarily hinders competition, nor can we assess the appropriateness of the requested order revision to remedy the identified harm. This is law enforcement in a vacuum.

Occidental in its Petition and the majority in its order rely primarily and almost exclusively on the fact that the Commission set aside a similar order in Occidental Petroleum Corp. Docket C-2492 , 101 3 Once such a showing is made, the Commission will consider the reasons for and against modification ami whether the particular modification requested is appropriate to remedy the identified harm. See Order Reopening and Setting Aside Order, Docket C-2193 , at 4 ("Order 4 Occidental' s allegation that other orders banning recipro t dealing have expired, Petition at 5 n.4 , does not identify either a change in law or a change in fact. The orders cited by Occidental had a definite term when they were issued, and almost all of them were issued before the Commission issued the order in amond Sham/wk..

5 Despite this vagueness, the majority concludes that the affidavits show that Occidental " has lost caustic soda business as a result of not having the ability to enter into reciprocal dealing arrangements." Order Reopening and Setting Aside Order ("Order ) at 5. Occidental claimed on:y that several sales were not made to unidentified customers when it could not discuss reciprocity. Even assuming tbe truth of the claim, at most it shows a transaction cost. Occidental ncithcrclaims nor shows that it lost busincssovcmll as a result of the Diamund Slw!ll'ocl order.

DIAMOND SHAMROCK CORPORATION 323 316 Dissenting Statement FTC 373 (1983). According to Occidental, the 1983 decision of the Commission to set aside the Occidental order is the "most significant factor" in favor of setting aside the Diamond Shamrock order Petition at 3, and it is "obviously controllng here. " Petition at 4. Apparently acquiescing, the majority states that "there is no sound reason to deny Occidental now relief equivalent to what the Commission already granted it in 1983. " Order at 6. Occidental' s argument is tantamount to saying that a decision to set aside one order requires setting aside all orders imposed for similar violations of law, regardless of the industry involved, differences in the competitive positions of different respondents or any other factual difference. This would be an astonishing development. 6 It ignores the reality that every law enforcement order is and must be based on its particular facts. Similarly, each petition to reopen and modify an order must be decided on its own merits. The Commission did not in 1983 decide that Occidental should never be subject to an order prohibiting reciprocal dealing, see Petition at 4; Order at 6, the Commission did not in 1983 decide that all reciprocal dealing orders should be set aside and most assuredly the Commission did not in 1983 decide that Occidental should be treated differently from any other potential successor to the terms of the Diamond Shamrock order. Instead, the Commission in 1983 considered a different petition in the context of a different order and found that modification of that order Occidental Petroleum Cor. Docket 2492 was in the public interest. 7 Whatever competitive injury Occidental may have shown then, clearly the requisite showing has not been made here. Nor is the 1983 decision in Occidental controlling" by virtue of stare decisis or res judicata. Stare decisis requires that we follow established legal principles-here, the standards for reopening and modification under Section 5(b) of the Federal Trade Commission Act. Res judicata does not make the 1983 decision "controllng, " because the order at issue here is based on a cause of action different from that in Occidental and Occidental, by virtue of its 1986 acquisition of Diamond Shamrock Chemical Corporation, is different from Occidental as it was constituted in 1983.

5 By this reasoning, for example, if a firm subject to a divestiture order under Section 7 of the Clayton Act persuades the Commission to relieve it of its divestiture obligation, then all other Section 7 divestiture requirements similarly should be liftd.

7 The order modifications in Georgia-Pacfic Cor. Docket C-2402, 103 ITC 203 (1984), and The Southland Corvratiu Docket 8915 102 FTC 1337 (1983), both reciprocal dealing orders, also were based on the public int€rest. In neither case did the Commission rely "expressly on its decision inOccital Occidental erroneously claims. Petition at 6. Instead, in both cases, the Commission cited the public intercst and said that the result "is consistent" with the decision in Occital. , Dissenting Statement 113 F.

I1.

A change in law sufficient to require reopening is a change in statutory or decisional law that has the effect of bringing the provisions ofthe order in conflict with existing law, so that to continue the order would work an injustice. Louisiana-Pacific Corp. Docket 2956, slip op. at 20 (Nov. 15, 1989). Occidental fails to meet this standard, but the majority appears to conclude that the law has changed sufficiently that some provisions of the order are "legally unsupportable.

In its summary petition, Occidental alleges generally and without citation to authority that the law applicable to reciprocal dealing has changed and that it is "widely accepted" that most forms of reciprocal dealing are "entirely innocuous. " According to Occidental even in its most extreme form-so-called 'coercive reciprocity the practice is not so anti competitive in effect or lacking in redeeming virtues to justify applying a strict per se rule. " Petition at 5. These allegations fall far short of identifying a change in law sufficient to require reopening under Section 5(b). Occidental does not otherwise embellish its bare assertion on the state of the law. The cases the majority cites quite simply do not demonstrate that the law has changed. See Order at 4-5. Two of those cases Betaseed lnc. v. U and I lnc. 681 F. 2d 1203 (9th Cir. 1982), and Spartan Grain Mill Co. v. Ayers 581 F.2d 419 (5th Cir. 1978), were cited in Occidental's 1982 petition in support of its argument that the law had changed. After considering these and other cases Occidental cited, the Commission in 1983 specifically found that Occidental had failed to demonstrate a change in law.

Nor do the cited cases provide any support for the proposition that the law of reciprocity has changed since 1983. This is hardly surprising, because if any such authority existed, Occidental presumably would have included those citations in its petition. The court in Skepton v. County of Bucks, Pennsylvania 613 F. Supp. 1013 (E.D. Pa. 1985) (cited in the Order at 4 n.4), cited FTC v. Consolidated 8 Occidental also alleges that the Commission and the Antitrust Division " av!' disrontinued efforts to enjoin reciprocal practices." Petition at 5. It is not clear whether Occ.dental proffers this as a change in law or a change in fact. Neither, however, can be inferred from government inaction with respect to a particular restraint of trade, which reflects the exercise of prose cut oria I discretion or, perhaps, a dearth of violations. 9 Request To Reopen and Vacate or Modify Consent Order in Occlden/al Petroleum Corp. Docket C-2492 (Nov. 8, 1982), at 27 , a copy of which was attached to the 1989 petition to reopen the Diamond Shmm'Ok order " for the convenience of the Commission, " Petition at 4 n. 10 Occidentai obviously could not incorporate by reference the change of law arguments in its 1982 petitior. because the Commission already has rejected them DIAMOND SHAMROCK CORPORATION 325 316 Dissenting Statement Foods Corp. 380 U. S. 592 (1965), Betaseed and Spartan Grain for its discussion of reciprocity, and the court in E. T. Barwick lndustries lnc. v. Walter E. Heller Co. 692 F. Supp. 1331 (N.D. Ga. 1987) (cited in the Order at 4 nA), relied inter alia on Skepton. A more recent case cited by the majority, Great Escape, lnc. v. Union City Body Company, lnc. 791 F.2d 532 (7th Cir. 1986) (cited in the Order at 5 n.6), applied the same legal principles that were applied in Betaseed and Spartan Grain.

Neither Occidental nor the majority suggests that reciprocal dealing is never unlawful. Indeed, both concede that so-called coercive reciprocal dealing may be unlawful. Order at 5; Petition at 5. The majority does conclude, however, that " (cJontinued order restraints against unilateral and consensual reciprocal d aling are legally unsupportable."!2 Order at 5.

I agree with the implication of the majority s statement that unilateral reciprocity is not, indeed, never was unlawful. This does not mean that provisions in the Diamond Shamrock order barring unilateral reciprocity were or are "legally unsupportable. " At best, a finding that the order is too broad in its present context might support modifying the order to eliminate fencing-in provisions that may, with the passage of time, have served their purpose and may now needlessly impede competition. But neither Occidental nor the majority individually examines the so-called "legally insupportable provisions in this light.

I am not prepared to say, as does the majority, that consensual reciprocity can never be unlawful" A consensual reciprocity agreement, like any contract, combination or conspiracy, may constitute an unreasonable restraint of trade under Section 1 of the Sherman Act although, presumably, only the government or a foreclosed competitor would have standing to raise the issue. See lndustria Siciliana Asfalti, S. A. v. Exxon Research Engineering Co. 1977- 1 Trade Cas. (CCH) '161 256, at 70 778-80 (S. Y. 1977); Spartan Grain 1l Two cases cited by the majority,Davi v. First Natiol Bank 868 F.2d 206 (7th Cir. 1989), and B'rc v. First Federal Savings Loan, 837 F.2d 712 (5th Cir. 1988) arose under the Bank Holding Company Act which prohibits reciprocal dealing but under standards different from those applied in Shennan Act cases, and the courts in both cases expressly stated that Sherman Act standards did not apply. 12 Like all final orders, the order inDiamo Shamrock is of course presumptively valid, absent mistake or fraud see LrJmana-PacfiA Car. Docket C- 2956, slip op. at 9 (Nov. 15, 1989), yet this statement suggests that the majority is willng to second guess what the Commission did in 1974. 13 If the order appears too broad, the appropriate procedure, because Occidental has not requeswd modification and therefore has not attempted to limit the appropriate scope of modification, is to deny the petition and issue an order to show cause under Section 3. 72 of the Commission s Rules of Practice. 14 Indeed, this is a unique and inwresting departure from the rest of our enforcement agenda. Dissenting Statement - 113 F. 581 F.2d at 425 n. 5; see also Heublein, lnc. 96 FTC 385 , 596- (1980). The foreclosure and entry-deterring effects of reciprocity could be the same whether the reciprocal agreement is consensual or coercive. See V Areeda & Turner Antitrust Law 1129h, at 176- (1980).

The standards under Section 5(b) of the Federal Trade Commission Act for reopening an order are stringent, and the petitioner carries a heavy burden of proof in light of the public interest in repose and the finality of orders. See United States v. Swift Co. 286 U. S. 106 (1932); United States v. Swift Co. 276 U. S. 311 (1928); United States v. Swift Co. 189 F. Supp. 885 (N. D. Il 1960), ajJd per curiam 367 U.S. 909 (1961). These interests are threatened if the Commission reopens and modifies orders absent a satisfactory showing of changed conditions or public interest considerations that eliminate the need for the order or make continued application of the order inequitable or harmful to competition. Insubstantial or frivolous petitions may be encouraged, wasting our resources. Decisions based on inadequate showings may tend to be arbitrary, resulting in inequitable treatment and lessening respect for the Commission enforcement efforts. We can avoid these dangers by adhering to the standards for reopening set forth in Section 5 (b) of the Federal Trade Commission Act.

No right of appeal obtains for today s decision, and it will be litte remarked beyond a specialized segment of the bar. Nevertheless, this kind of decision making diminishes the agency. I dissent. FITNESS QUEST , INC., ET AL. 327 327 Interlocutory Order IK THE MATTER OF FITNESS QUEST , INC. , ET AL.

Docket 9236. Interlocutory Order, April 30, 1990 ORDER AMENDING COMPLAINT Upon consideration of the parties' Joint Motion to Amend Complaint, dated April 27 , 1990, and pursuant to Section 3. 15(a)(1) of the Commission s Rules of Practice in Adjudicative Proceedings, the complaint is hereby amended as set forth below: 1. The caption of the case is amended to read: In the Matter of Consumer Direct, Inc.

The Gut Buster Corporation, and Fitness Quest, Inc.

corporations, and Richard A. Suarez and LuAnn Suarez individually and as officers of said corporations.

2. The preamble of the complaint is amended to read: The Federal Trade Commission, having reason to believe that Consumer Direct, Inc. , The Gut Buster Corporation, and Fitness Quest, Inc., corporations, Richard A. Suarez, individually and as an officer of said corporations, and LuAnn Suarez, individually and as an Inc.officer of The Gut Buster Corporation and Fitness Quest, hereinafter sometimes referred to as respondents, have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

3. Paragraph one of the complaint is amended to read: PARAGRAPH 1. Respondent Consumer Direct, Inc. is an Ohio corporation, with its office and principal place of business located at 1375 Raff Road, S. , Canton, Ohio.

Respondent The Gut Buster Corporation is an Ohio corporation with its office and principal place of business located at 1400 Raff Road, S. , Canton, Ohio.

Interlocutory Order 113 F.

Respondent Fitness Quest, Inc. is an Ohio corporation, with its offce and principal place of business located at 1400 Raff Road, S. Canton, Ohio.

Respondent Richard A. Suarez is an officer and director of each of the corporate respondents named herein. Respondent LuAnn Suarez is an offcer of The Gut Buster Corporation and an offcer and director of Fitness Quest, Inc. They formulate, direct and control the acts and practices of said corporate respondents. LuAnn Suarez s address is the same as that of respondent Fitness Quest, Inc. Richard Suarez address is the same as that of respondent Consumer Direct, Inc. The aforementioned respondents cooperated and acted together in carrng out the acts and practices hereinafter set forth. So ordered.

RHONE-POULENC S. , ET AL. 329 - 329 Complaint