Ben Arnovitz

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IN THE MATI'ER OF BEN ARNOVITZ AND WILFORD ARNOVITZ;· TRADING AS ·. UTAH·;DEVERAGE ·AND DISTRIBUTING COMPANY COlil>LAINT, FINDINQS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC, 5 OIJ' AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4591. Complaint, Sept. 16, 1941-Decision, Oct. 21, 194! 'Where two l~dividuals, engaged In competi;lve lntersta_te sale of various assortments of merchandise, including candles, gums, nuts, glassware, clocks, and handkerchiefs, which involved use of lottery schemes in sale and dlstribu· tlon to public, a typical assortment consisting of a number of uniform candy bars together with a push card for use In their sale and distribution Under a plan, as there explained, by which a customer of said "Baseball" assortment received for 5 cents from 5 to 1 bars, dependent upon receipt of ''Home Run," "3-Base Hit," or other legend concealed in that one of the board's 110 disks selected by him, with maker of "Last Play" in first section receiving 2 bars 'and of "Last Play" on card receiving 3; Sold such' assortments to retailers by whom they were exposed and sold to the Purchasing public in accordance with said sales plan, and thereby supplied to 'and placed in the bands of such retailers means of conducting lotteries ln the sale of their products, contrary to an established public policy of the United States Government, and ln competition with many who do not use chance or lottery methods ;

\Vtth effect, by reason of such element of chance, of diverting substantial trade Unfairly to themf'!elves from their said competitors: 1Field, That such acts and' practices, under the circumstances set forth, were an to the prejudice of the public and competitors, and constituted unfair methods of competition in commerce and unfair acts and practices therein, Before lfr. Miles J. Furnas, trial examiner. M,., J, lV. Brookfield, Jr., for the Commission. Complaint Pursuant to the provisions of the Fed~ral Trade Commission Act ;nd by virtue of the authority vested in it by said act, the Federal ' ~ade Commission having reason to believe that Den Arnovitz and 'Wilford Arnovitz, individuals, trading and doing business as Utah ~everage and Distributing Co., hereinafter referred to as respondent~, ~ve. violated the provisions of said act, and it appearing to the Com- ~Ission that a proceeding by it in respect thereof would be in the ~nterest of the public, hereby issues its complaint, stating its charges ln that respect as follows :

PARAGRAPH 1. Respondents, Den Arnovitz and 'Vilford Arnovitz, are individuals, trading and dfing business as Utah Beverage and 658 FEDERAL TRADE. COMMISSION DECISI<>NS Complaint 35F.T.C.

Distributing Co., with their office and principal place of business located· at 166 Southwest Temple Street, Salt Luke City, Utah· Respondents are now and during the year last past have been engaged • in the sale and distribution of candies, gums, nuts, glassware, clo~ks, · handkerchiefs~ luggage, cigars, cig~rettes, and n.ove~ty. m_merchan~tsef to dealers ana other pur~hasers thereof located·m varwus States 0 the United States and in the District of Columbia. Respondents cause and have caused said merchandise· when sold to be transported from their said place of business in tlie State of Utah to purchasers thereo~ at their respective points of location ·in the various other States .0 the United States other than Utah and in the District of Columbia· There is now and has been ·during the year last past a course of trade by respondents in such merchandise in commerce between and amo~g the various States of the United States and in the District of Columbl~ In the course and conduct of their business, respondents are an have been in competition with other individuals and with corp~ra­ tions and firms engaged in the sale and distribution of like or simd,ar articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia. PAR. 2. In the course and conduct of their business as described in paragraph 1 hereof respondents sell and have sold to dealers and other purchasers various assortments of merchandise so packed and assem~, bled as to involve the use of a lottery scheme when sold and distribute tothe consumers thereof. .· • ' . ' f One of said assortments is as follows: This assortment consists 0 a number of bars of candy of u~iform size and value, together with a device commonly called a push card. The push card contains 11° partially perforated disks, on t~e face of which is print~d t~1e wo~~ "Push." Sales are 5 cents each. Concealed within each of sal disks is a legend which corresponds with a legend appearing ·on the face of said card. The legend or instructions on the face of . ~be card are as follows: . B A S E B A L L , . . . (5¢) HOME RUN receives------~-------------------------------~----~---- 5 nars 3-BASE HIT receives ____ :_ _________________________________________ ~- 3 nars 2-BASE HIT receives---------------------------~--------------------- 2 nars I-BASE lilt receiver;~ _______________________________________________ 2 Bars B,ASE ON BALLS receives-------------------------------~----------- 2 Bill'~ FOUL receives ----------------------------:.. __________ .: ______________ 1 nar OUT receives---------------~---------------------------------------- 1 Bar· Last Play First Section Completed receives ______ :_ ____________________ 2 Bnf8 Last Play on Card receives--------------·---------------------------- S. nars Sales of respondent's candy by:m~ansoisaid push cards are m~de in accordance with the above legend or instructions. The legends or UTAH"iiEIVERAGE AND. DISTRIBUTING CO. 659 657 .. ; !': Complaint histructions aforesaid are effectively concealed from purchasers and Prospective purchasers until a purchase has been made ancl the disks separated or removed from said card'. The number of said candy bars to be procured by a purchaser ·for 5 cents is thus determined \\'holly ~y lot or chance.. . . Respondents sell and distribute and have sold and distributed various· other assortments of merchandise involving a lot or chance feat~re but the sales plans or mfthods by which ·said merchandise is distributed are similar to the one hereinabove· described, varying only in detail.

· PA~. 3. Retail dealers who purchase respondents' merchandise directly or indirectly expose and sell the same to the purchasing public 111 accordance with the· sales plans aforesaid. Respondents thus supfly to. and place in the hands of others a means of conducting a hotte.ry in the sale of their products in accordance with the sales plan eretnabove set forth. The use by respondents of said sales plans or lhethods in the sale of their merchandise and the sale of said lllerchandis.e' by and thr~ugh the use thereof and by the aid of said sales plans or' methods is a practice of a sort which is contrary to an established public policy of the Government of the United States. PAn. 4. The sale of merchandise to the purchasing public by the ~ethods or sales plans hereinabove set forth involves a .gam~ of c lance or the sale of a cha;nce to procure merchandise at a price llluch less than the normal retail price thereof. 1\lany persons, firms, an~ corporations who sell and distribute products in competition with ~respondents, us above alleged, do not use said methods, or any methods ~nvol ving a game of chance, or the sale of a chance to win something · Y chance, orany other method which is contrary to' public policy bnd such competitors refrain therefrom. 1\lany persons are attracted · Y said sales plans or methods employed by respondents in the sale and qistribution of their produ~ts and by the element of chance in- Volved therein and are thereby induced to buy and· sell respondents' Products in preference to products of said competitors of respondents 'Vho do riot use the same or equivalent methods. The use of said lllethods by respondents because of said game of chance has a tendency· and capacity to unfairly divert trade in commerce between and. ~lUong the various States of the United States and in 'the District of tholumbia to respondents from their said. competitors who do not use e same or equivalent methods. · PAn. 5. The aforesaid acts and practices of respondents, as herein11 1 leged, are all to the prejudice and injury of the public and of _respondent's competitors and constitute unfair methods of competi- 660 FEDERAL TRADE COMMISS'ION DECISIONS . Findings . 35F. T.C. tion in commerce and unfair acts and practices in commerce within the intent' and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Acj the Federal Trade Commission, on September 16, 1941, issued an subsequently served its complaint in this proceeding upon the .re· spondents, Ben Arnovitz and Wilford Arnovitz, individuals, trad~ng and doing business as Utah Beverage and Distributing Co., chargin~ them with the use of unfair methods of competition in commerce an f unfair acts and practices in commerce in violation of the provisions 0 that act. No answer was filed by respondents. Testimony and other evidence in support of the allegatio~s. of the compla.int were. introf duced by the attorney for the Commisswn before a tnal exammer 0 the Commission theretofore duly designated by it, and such testimony and ot?e: evidence were duly recorde~ and ~led in the office of th~ Commission. Thereafter, the proceedmg regularly came on for finn hearing before the Commission on the complaint,testimony and ot~e~ ' evidence, report of the trial examiner upon the evidence, and brief in support of the complaint (1no brief having been filed by respondents and oral argument not having been requested); and the Comrnissio~, having duly considered the matter and being now fully advised :n the premises, finds that this proceeding is in the interest of the pubhc and makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAGRAPH• I 1. The respondents, Ben Arnovitz and 'Wilford Arno~ vitz, are individuals, trading as Utah Beverage and Distributing Co., witli their, qffice and principal place of business located at 166 southd west Temple St~eet, Salt Lake City, Utah. Respondents art!, ~n since 1937 have been, engaged in the sale and distribution of various articles of merchandise, including, among other things, candies, gums, nuts, glassware, clocks, and handkerchiefs. t PAR. 2. In the course and conduct of their business responded~ cause arid have caused their products, when sold, to be transporte from their place of business in the State of Utah to dealers and o~he~ purchasers thereof located in various other States of the Unite f States. Respondents maintain and have maintained a course 0 trade in their products in commerce among and between the various States of the United States. •f Jl PAR. 3. Respondents are and have been in substantial competi I~ with other individuals, and with corporations and firms, engaged lll UTAH BEVERAGE AND DISTRIBUTING CO. 661 657 Findings the sale a~d distribution of similar articles of merchandise in com~ lnerce among and between the various States of the United States. PAR. ·4. In the course nnd conduct of their busmess respondents s~U to dealers and other purchasers various assortments of merchan- ~Ise which involve the use of lottery schemes when such merchandise Is sold and distributed to the public.

?ne of these assortments consists of a number of bars of candy of uniform .size and value, together with a device commonly known a~ a push card. The push card contains 110 partially perforated disks, on the face of each of which is printed the word "Push." All ~rsons desiring to push 1 of such disks pay 5 cents for such privilege. ?ncealed 'within each of the disks is a legend which corresponds ~I~h_one of the legends appearing on the face of the card, the legends "eing terms used in the game of baseball, such as "Home Run," · 2-Base Hit," "Foul," "Out," etc. On· the face of the push card appears the following:

BASEBALL (5¢) ~~ME RUN receives------------------------------------------------ 5 Bars O·.oase • 2·DAs~ BIT receives------------------------------------------------ 3 Bars l-DOSE lilt receives---------------------------------------·------- 2 Bars n BIT receives------------------------------------------------ 2 Bars ~~SEJ ON BALLS receives---------------------------------------- 2 Bars UL receives------------------------------------------------------ 1 Bar 00· 't T receives------------------------------------------------------- 1 Bar t a.st Play First Section Completed receives---------------------------- 2 Bars a.st Play on Card receives----------------------------------------- 3 Bars . Sales of respondents' candy are made in accordance with these _Instructions. :For example;· a person~ pushing a disk which has toncealed within it the legend "Home Run" receives five bars of caridy · or the 5, cents paid, whereas a person pushing a disk which has ~oncealed within it the legend "Out" receives only one bar of candy or the 5 cents paid. Purchasers have no information as to the llumber of bars of candy they will receive until after they have Ptlshed the disk and have had an opportunity to examine the legend concealed therein. The quantity of candy which is obtained by a bUrchaser for the amount of money paid is thus determined wholly Ylot or chance. · . · Other assortments of merchandise. sold by respondents involve lot' or chance features, but the sales plans or methods involved in such a~sortments are ~imilar in all material respects to the plan described a ove, varying only in detail.

PAR. 5. Retail dealers who putchase respondents' merchandise e:a-pose and sell such merchandise to th~ purchasing public in accordance With the sales plans referred to· above, Respondents thus supply 662 FEDERAL ITRADE COMMISSION DECISIONS Order 35 E'. T. 0 to and place in the hands of others a means of conducting .lotteries i~ the sale of respondents' products. The use by respondents of sue sales plans or mHhods in the sale of their merchandise and the sale of such merchandise to the consuming public· by and through the u:se of such plans or methods is a practice of a sort which is contrary to an established public policy of the Government of the United States .. . l?AR. 6. Many persons, firms, and corporations who sell and dis· tribute candy and other merchandise in competition with respondents do not use the sales plans or methods used by respondents, or any other sa~es plan or method involving the use of games of chance, gi.ft enter~ prises, or lottery schemes. Because of the element of chance mvolve 'in respondents' sales plans or methods, the use of such plans 0~ methods by respondents has the tendency and capacity to divert ar: has diverted substantial trade unfairly to respondents from thelr ~ompetitors who do not use the same or equivalent plans or methods. CONCLUSION The acts and practices of· the. respondents· as herein found ~re a~ to the prejudice of the public and of respondents' competitors, an constitute unfair methods of competition in commerce and unfair ac:. and practices in commerce within the intent and meaning of the Fe . e.ral Trade Commission Act. .

ORDER TO CEASE .AND DESIST · . This proceeding having been heard by, the Federal Trade Commis· sion upon the complaint of the Commission (no answer having been ' filed b~ respondent~), testi~ony and other evide~ce in su~port of ~~: allegations of the complamt taken before a tnal exami~~r o,f t. 1 Commission tlteretOfo're ·dU:ly 1designated' by it, report· ·of the tr~at examiner upon the evidence, and brief in support of· the complatn (no brief having been filed by respondents and oral argument not hn;\"· ing been requested), and the Commission having made its findings a~ to the facts and its conclusion that the respondents have violate the provisions of the Federal Tra,de Commission Act. . d • It is ordered, That the respondents,, Ben Arnovitz and Wd.fo\. Arnovitz, individually, and trading as Utah Beverage and Distribu ing Co., or trading under any other nanie, and their .agents, repre; sentatives, and employees, directly or through ariy corporate or ot?e device, in connection with the off~ring for sale, sale, and distribut1?11 i? commerce, as "~commerce" is defined in the Federal Trade C?Jlllll~; swn Act, of candies, gums, nuts, glassware, clocks, handkerchiefs, . any other merchandise, do forthwith cease and desist from: . :l1'f~:.B~!YE~A;G]i:; ~ND,~;DIST,R.IBUf'ING_ CO:. 663 '· . :657. r · .,., 1. Supplying to or placing in the hands of others push or pull cards, Punch boards, or other lott~ry. deyicesr ~ither with merchandise or se?arately, which are to be used, or may be used·, in selling or distrtbuting respondents' merchandise; or any merchandise, to the public. ::: 2. Selling or other.rwise disposing of .any merchandise by means of a game of chance; gift enterprise, or lottery scheme. . -, 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.

664 FEDERAL TRADE COMMISS'ION DECISIONS Complaint 35F.T.O.