Shapiro, Minnin

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IN THE MATI'ER OF MINNIN SHAPIRO AND JACK WINKLER, TRADING AS A. S. BUTLER & COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Do(·ket 4l92. Complaint, July 18, 1940-Decision, Sept. Z"', 1940 1Vhere two individuals engaged in sale and distribution of second-hand fruit jars which they purchased as such second-hand, old, used, and discarded product, from junk dealers, and which they thereafter caused to be cleaned, and to which they caused to be attached new rubber bands and new caps and to be placed in new cardboard cartons with 12 jars in each, and which products, after being cleaned and packed as aforesaid had appearance of new fruit jars never used, and cost of which to them and aforesaid steps was much less tlum that to mannfnetnrers and wholesnlet·s of manufacturing and pllcking, or obtaining and packing, new fruit jars, so as to enable them to sell their said product to retailers, and through them to purchasing publi(', at prices substantially lower than those at which the new product could be sold; and as aforesaid engaged In sale and distribution thereof to purchasers in various other States, in substantial competition with others engaged in sale and dil'<tribution in commerce among the various States of fruit jars adapted to and used for same general purposes as their said pro<luctf:lold their said jars, with apllf'arance aforesaid and with no label, marking, or designlltion on or about them or rubber bands, caps, or cartons, or elsewhere, to indicate tllat they were in fact old, second-hand, used, and discarded products, to retailers who resold to public without disclosing fact that said jars were used or old, second-hand or discarded; With effect of misleading and deceiving retailers and members of purchasing public, with both of whom it is common belief and lmderstauding that fruit jars hnvlng appearm1ce of being new and unused and bearing no marking indicating that they are not new and unused, are in fact new jars never previously made use of, into erroneous and mistaken belief that said products were new and unu>'ed fruit jars, and into purchase of substantial quantities tlH'reof, and of thereby unfairly dh·erting trade to them from competitors, many of whom do not en~a11:e in such practices; to the substantial injury of competition:

Held, That such acts and pt·actices, under the circumstances set forth, were all to the prejudice and injury of the public and competitors, and constituted unfair methods of' competition in commerce and unfair and deceptive acts and practices therein.

Mr. Dono~·a.n R. Dh·et for the Commission.

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 l\linnin Shapiro and 1012 FEDERAL TRADE COJ\IMISSION DECISIONS Complaint 311<'. T. C. Jack "Winkler, individually, and trading as A. S. Butler & Co., hereinafter referred to as the respondents, have violated the provisions of said act, and it appearing to the Commission that a proceeding uy it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows: PARAGRAPH 1. The respondents, M:innin Shapiro and Jack 'Vinkler, are individuals trading under the name of A. S. Butler & Co., and having their principal place of business at 667 North Clark Street in the city of Chicago and State of Illinois. Respondents are now and for more than 3 years last past have been engaged in the sale and distribution in commerce between and among the various States of the United States of second-hand fruit jars. Respondents cause and have caused their said prod nets, when sold, to be transported from their aforesaid place of business in the State of Illinois to the purchasers thereof located in various other States of the United States. PAR. 2. During the time above mentioned other indiviunals, aml firms and corporations, in various States of the United States have been and are now engaged in the sale and distribution, in commerce among and between the various States of the United States) of fruit jars adapted to and used for the same general purposes as respondents' said fruit jars. Respondents have been, during the time aforesaiLl, and now are, in substantial competition with such other individuals, and with such firms and corporations.

PAR. 3. In the course and conduct of their aforesaid business, re~ spondents buy second-hand, old, used, and discarded fruit jars hom junk dealers which said fruit jars they cause to be cleaued and to which they cause to be attached new rubber bands and new caps. After the said second-hand fruit jars have been cleaned and the rubber bands and caps have been so attached as aforesaid, respondents cause said second-hand fruit jars to be placed in new cardboard cartons with 12 jars in each carton.

PAR. 4. The aforesaid second-hand, old, used, and discarded fruit jars, after being cleaned and packed as aforesaid, have the appearance of new fruit jars which have never been used, and are sold by ree>pondents to retail dealers without any label, marking, or designation on or about said jars, rubber bands, caps or cartons, or elsewhere, to indicate that they are in fact old, second-hand, used and discarded fruit jars. Such retail dealers resell said jars to the public without disclosing the fact that said jars are used, old, second-hand, and discarded. The cost to respondents of obtaining, cleaning, refitting, and packing said second-hand fruit jars is much less.than the cost to manufacturers and wholesale dealers of manufacturing and packing or of obtaining and packing new fruit jars, and respondents are thereby able to sell A. S. BUTLER & CO. 1013 1011 Findings said second-hand fruit jars to retailers, and through them to the purchasing public, at prices which are substantially lower than the prices at which new jars can be sold.

PAR. 5. It is the common belief and understanding among retail dealers and the purcl1asing public that fruit jars having the appearance of being new and unused, and bearing no marking indicating that they are not new and unused, are in fact· new fruit jars which have never been used previously. Retail dealers and members of the purchasing public, when buying fruit jars having the appearanre of being new and unused, and without any marking indicating the contrary, expect to receive, and understand that they are receiving. new and unused fruit jars, and not second-hand, old, used, and discarded fruit jars which have been cleaned and refitted as aforesaid. PAR. 6. The practice of the respondents in failing to disclose that their said fruit jars have been previously used has the tendency a1Hl capacity to, and does, mislead and deceive retail dealers and members of the purchasing public into the erroneous and mistaken belief that such fruit jars are new and unused fruit jars, and into the purchase of substantial quantitit>s of such jars. As a rt>sult, trade has been unfairly diverted to respondents from their competitors, many of whom do not engage in the practices herein set forth. In consequence, substantial injury has been done and is now being done by respondents to competition in commerce between and among the various States of the United States.

PAR. 7. The aforesaid acts and practices of respondents .as heart>in alleged are all to the prejudice and injury of the public and of respondents' competitors, and ctmstitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the FedHal Trade Commission Act.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant t.o the provisions of the Feuernl Trade Commission Act, the Federal Trn.-de Commission, on the 18th day of July 19-10, issued and subsequently served its complaint in this proceeding upon the respondents l\finnin Shapiro and Jack "Winkler, individually and trading as A. S. Butler & Co., charging them with the use of unfair methods of competition and unfair and lleceptive acts and practices in commerce in violation of the provisions of said act. On the 28th day of August 19-10, t>ach of the respondents filed a separate answer in which answers respondents admitted all the material allt>gations of fact set forth in said complaint and :1014 FEDERAL TRADE COMMISSION DECISIONS Findings 31 F. T. C. waived all intervening procedure and further hearing as to said facts. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said complaint and the an.swers thereto, and the Commission, having duly considered the matter, and being now fully advised in the premises, finds that this pro- ·ceeding is in the interest of the public, and makes this its findings -as to the facts and its ~onclusion drawn therefrom. FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondents, Minnin Shapiro and Jack "Winkler, are individuals trading under the name of A. S. llutler & Co., and having their principal place of business at 667 North Clark Street in the city of Chicago and State of Illinois. Respondents are now and for more than 3 years last past have been engaged in the sale and distribution in commerce between and among the various States of the United States of second-hand fruit jars. Respondents -cause and have caused their said products, when sold, to be transported from their aforesaid place of business in the State . of Illinois to the purchasers thereof located in various other States of the United States.

PAR. 2. During the time above mentioned other individuals, and firms and corporations, in various States of the United States, have been and are now engaged in the sale and distribution in commerce among and between the various States of the United States, of fruit jars adapted to and used for the same general purposes as respondents' said fruit jars. Respondents have been, during the time aforesaid, and now are, in substantial competition with such other individuals, and with such firms and corporations. PAR. 3. In the course and conduct of their aforesaid business, respondents buy second-hand, old, used, and discarded fruit jars from _junk dealers, which said fruit jars they cause to be cleaned and to which they cause to be attached new rubber bands and new caps. After the said second-hand fruit jars have been cleaned and the rubber bands and caps have been so attached as aforesaid, respondents ·cause said second-hand fruit jars to be placed in new cardboard cartons with 12 jars in each carton.

PAR. 4. The aforesaid second-hand, old, used, and disc11rded fruit jars, after being cleaned and packed us aforesaid, have the appearance of new fruit jars which have never been used, and are sold by respondents to retail dealers without any label, marking, or designation on or about said jars, rubber bands, caps, or cartons, or elsewhere, ·.to indicate that they are in fact old, second-hand, used, and discarded A. S. BUTLER & CO. 1015 1011 Order fruit jars. Such retail dealers resell said jars to the public without disclosing the fact that said jars are used, old, second-hand, and discarded.

The cost to respondents of obtaining, cleaning, refitting, and packing said second-hand fruit jars is much less than the cost to manufacturers and wholesale dealers of manufacturing and packing or of obtaining and packing new fruit jars, and respondents are thereby able to sell said second-hand fruit jars to retailers, and through them to the purchasing public, at prices which are substantially lower than the prices at which new jars can be sold. PAR. 5. It is the common belief and understanding among retail dealers and the purchasing public that fruit jars having the appearance of being new and unused, and bearing no marking indicating that they are not new and unused, are in fact, new fruit jars which have never been used previously. Retail dealers and members of the purc·hasing public, when buying fruit jars having the appearance of being new and unused, and without any marking indicating the contary, expect to receive, and understand that they are receiving, new and unused fruit jars, and not second-hand, old, used, and discarded fruit jars which have been cleaned and refitted as aforesaid. PAR. 6. The practice of the respondents in failing to disclose that their said fruit jars have been previously used has the tendency and capacity to, and does, mislead and deceive retail dealers and members of the purchasing public into the erroneous and mistaken belief that such fruit jars are new and unused fruit jars, and into the purchase of substantial quantities of such jars. As a result, trade has been unfairly diverted to respondents from their competitors, many of whom do not engage in the practices herein set forth. In consequence, substantial injury has been clone and is now being done by respondents to competition in commerce between and among the various States of the United States.

CONCLUSION The aforesaid acts and practices of respondents as herein found are all to the prejudice and injury of the public and of respondents' competitors, and constitute unfair methods of competition in commerce and unfair and ueceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answers of the respondents, in which answers respondents admit all the material 2A6at6m--4t--vol.31----67 Order 31 F.T. C.

allegations of fact set forth in said complaint, and state that they waive all intervening procedure and further hearing as to said facts and the Commission having made its findings as to the facts and conclusion that said respondents have violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondents, l\finnin Shapiro and Jack Winkler, individually, and trading as A. S. Butler & Company, or trading under any other name or names, their representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of secondhand or used fruit jars in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: Selling or distributing used or second-hand fruit jars, unless there is firmly attached to each of such jars, and to each carton or container in which such jars are packed, a conspicuous label or other marking clearly disclosing that such jars are used or second-hand jars. It is further ordered, That the respondents shall, within 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. · BADGER-BRODHEAD CHEESE CO., ET AL. 1017 Syllabus