Inc. and Da Vid E. Royal Appliance Company, Resnick

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IN Tile MATT INC. AND DA VID E. ROYAL APPLIANCE COMPANY, RESNICK CONSENT SETTLEMENT IN REGARD TO THE ALLEGED VIOI,ATION OF THE FEDERAL TRDE COMMISSION ACT Docket 6122. Oomplaint, Aug. 1953-Dccision, Jan. 14, 1954 Where a corporation and its responsible offcer competitively enr;aged in the sale and distribution in the District of Columbia and adjoining States among other things, of television receivers and replacement parts and in the furnishing of television repair services under contracts whereby they undertook to keep sets in good repair; in advertising their products in newspapers and other advertising mcclia- (a) Ileprcsented that they would keep television receivers sold by them in good working order for a period of two years, any necessary repairs to be made within a reasonable time after being requested; The facts being that while such contracts, issued for a consideration, so provided, they did not in many instances comply with such contracts during the second year or provided such service only after unduc and unreasonable delay;

(b) Represented that they would either remove television receivers t.o one of their four places of business and return them the same day fully repaired and in proper working order, or repair such receivers in the homes of the owners;

The facts being their repairmen constantly refused to repair such receivers in the home; and when they were removed to respondents' place of business for repair, respondents returned them to their owners in many instances only after many days or weeks of delay;

(c) Falsely represented that they would estimate the cost of necessary parts or services or both parts and services to place television receivers in proper working order and would provide such service and parts for approximately the amount of such estimate;

'l' he facts being their estimates were not bona fide; prices ultimately charged by them for repair in virtually all instances did not approximate their estimates and sometimes exceeded them by more than twice as much; and in most instances where the final charge exceeded the estimate, they failed to apprise the customers of such increase to obtain authorization for the performance of the work, but required nevertheless the payment of the total amount before they would release the receivers to the owners; and (d) Hepresented that they owned, operated, or maintained offces or branches in four different locations in the metropolitan area of Washington, D. C. when in fact they operated one place of business only in said area: Held That such acts and practices were all to the prejudice and injury of the public and of their competitors, and constituted unfair and deceptive acts and practices in commerce and unfair methods of competition therein. Before Mr. John Lewis hearing examiner.

Mr. Harold A. J( ennedy for the Commission. Oostantini Raffel of vVashington, D. for respondents. ROYAL APPLIANCE CO, ) INC.) ET AL. 611 610 Findings CONSENT SETTLEMENT 1 Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission on August 31, 1953, issued and subsequently served its complaint on the respondents named in the caption hereof, charging them with the use of unfair and deceptive acts and practices and unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act. The respondents, desiring that this proceeding be disposed of by the consent settlement procedure provided in Rule V of the Commission Rules of Practice, solely for the purposes of this proceeding, any review thereof, and the enforcement of the order consented to, and conditioned upon the Commission s acceptance of the consent settlement hereinafter set forth and in lieu of answer to said complaint, hereby in the (1) Admit all the jurisdictional allegations set forth complaint.

(2) Consent that the Commission may enter the matters hereinafter set fort.h as its findings as to t.he fact.s, conclusion, and order to cease and desist. It is understood t.hat t.he respondents, in consenting to the Commission s entry of said findings as to the facts, conclusion, and order t.o cease and desist, specifically refrain from admitting that t.hey have engaged in any of the acts or practices stated therein to be in violation of law.

(3) Agree that this consent settlement may be set aside in whole or in part under the conditions and in the manner provided in Paragraph (f) of Rule V of the Commission s Hules of Practice. The admitted jurisdictional facts, the statement of the acts and practices which the Commission had reason to believe were unlawful, t.he conclusion based thereon, and the order to cease and desist, all of which respondents consent may be entered herein in final disposition of this proceeding, arc as follows :

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent Royal Appliance Company, Inc., is a corporation, organized and existing under the laws of the Stat.e of 1faryland, which had it.s principal offce and place of business at 1911 :l The Commission s "Notice" announcing and promulgating the consent settlement as published herewith, follows:

The consent settlement tendered by the parties in this proceeding, a copy of which is served herewith, was accepted by the Commission on January 14 , 1954 , and ordered entered of record as the Commi,ssion s findings as to the facts, conclusions, and order in disposition of this proceeding.

The time for fiing report of compliance pursuant to the aforesaid order runs from the date of service hereof.

indiIlgs 50 F. T. C.

Nichols Avenue SE. , in the City of 'Washington, D. C., until approximately ,July 1, 1953, at which time, both it and respondent suspended the operation of said business.

Respondent David E. Resnick is an individual and, although presently president of said corporation, was secretary-treasurer during the pertinent and applicable time period. He individually formulated all the policies and controlled and managed all of the affairs of said corporation and would do so in future. His principal offce and place of business had been the same as that of the corporate respondent. PAR. 2. Respondents, until approximately .July 1, 1953, were engaged in the sale and distribution, among other things, of television receivers and replacement parts. An essential and integral part of respondents said business was the furnishing of television repair services. In connection with their said repair service, respondents issued contracts whereby they agreed to keep television sets in good repair for a period of two years. Respondents caused their said television sets, when sold to be transported from their place of business in the District of Colmnbia to purchasers located in the District of Columbia and in the States of Maryland and Virginia and caused their said service contracts and various other written instruments of a commercial nature, issued and made use of in connection therewith, to be transported by means of the United States mails and otherwise to various persons located in the District of Columbia and in the States aforesaid. llespondents maintained a course of trade in said products and service contracts and various other instruments issued in connection therewith in commerce in the District of Columbia and between the District of Columbia and other Stat.es, and such course of trade was substantial. PAR. 3. In the course and conduct of their said business, respondents have been in substantial competition in commerce with other corporations and with individuals and partnerships engaged in the sale of television receivers and repair parts therefor. Pall 4. In the course and conduct of their aforesaid business, respondents have made certain statements and representations concerning said products by means of advertisements inserted in newspapers and other advertising media of general circulation in the States of Maryland and Virginia and in the District of Columbia. Typical but not all inclusive, of such representations are the following: IlOYAL GIVES YOU THIS SE"-SATIONAL 2 YEARS SERVICE 0"' ANY TV SET Ol,' YOI;n CHOICE. The only Appliance Store in Washington * . . and in the United States t.o o1Ier yon one fuiJ year of unconditional guarantee * " * and an extra year of service free of any cost. ROYAL APPLIA.,,CE CO, ) INC.) ET AL. 613 610 Findings ROYAL APPLIANCE CO. INC.

SALES S JRVICE SHE' S O. K. NOW Picture of and BACK HOME man holding THE SAME DAY! t.television set ON CALL 24 HOURS A DAY AJ\Y MAKE T JLEVISION REPAIIlED 2 YEAIlS SEIlVlCE FUEE PICK UP, DELIVERY & ESTIMATES TV REPAIRS IN YOl:R HOME 1 DAY SEIlVICE FREE REI' AIRS ES'.rIMATES ON CIlEDIT DU. 1400 LU 4-7000 SILVER SPlU)JG, ARL. ALInX.

JU. 7-5484 .fA. 4-1883 IlOYAL CONSOLIDATED TV SERVICES PAR. 5. By means of the foregoing statements and representations respondents, directly and by implication, represented: 1. That they would keep television receivers sold by them in good working order for a period of two years, any necessary repairs to be made within a reasonable time after being requested. 2. That they would either remove television receivers to one of their four places of business and return them the same day fully repaired and in proper working order or repair such receivers in the homes of the owners.

3. That they would estimate the cost of necessary parts or services or both parts and services to place television receivers in propel' working order and would provide such service and parts for approximately the amount of such estimate.

4. That they owned, operated, or maintained offces or branches in foul' different locations of the metropolitan area of 'Vashington, D. C. Conclusion 50 F. T. C.

PAR. 6. All of the aforesaid representations, statements and implications were false, exaggerated, deceptive, and misleading. In truthand in fact: 1. While respondents issued service contracts to purchasers of television receivers, for a consideration, which provided that they would render necessary service to keep such receivers in good working order for a period of two years, they did not in many instances comply with such contracts during the second year or provided such service only after undue and unreasonable delay.

2. Respondents' television repairmen consistently refused to repair television receivers in the home; and when said receivers were removed to respondents' place of business for repair, respondents returned them to their owners in many instances only after many days or weeks of 3. The estimates given by respondents on the cost of television repairs were not bona fide estimates. The prices ultimately charged by respondents for television repairs in virtually all instances did not approximate the estimates given by them, and sometimes exceeded said estimates by more than twice as much. In most instances where the final charge exceeded the estimate, respondents failed to apprise their customers of such increase in price or to obt.ain aut.horizat.ion for the work prior t.o performing t.he same, but nevertheless required the payment of the total amount before they would release the television receivers to the owners.

4. Respondents operated only one place of business located at IDll Nichols Avenue S. K, Washington, D. C.

PAR. 7. The use by the respondent.s of the aforesaid false, misleading and deceptive statements and representations has had the tendency and capacity to lead a substantial portion of the purchasing public into the erroneous and mistaken belief that such statements were true, and to induce the purchase of said products and the entering into service contracts because of such erroneous and mistaken belief. As a result thereof, substantial trade in commerce has been unfairly diverted to respondents from their competitors and substantial injury has been done to competition in commerce.

CONCLUSlON The aforesaid acts and practices of respondents were all to the prejudice and injury of the public and of respondents' competitors and constituted unfair and deceptive acts and practices and unfair methods of competition in commerce, within the intent and meaning of the Federal Trade Commission Act.

ROYAL APPLIANCE CO. , INC. , E'l AL. 615 610 Order Order It is ordered That respondents, Royal Appliance Company, Inc., a corporation, and its offcers, and David E. Rcsnick, individually, and respondents' representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of television rcceivers or other electronic equipment and service contracts, in connection therewith, in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, directly or by implication, that they will keep such products in good working order for a period of two years or for any other specified period of time, unless in fact the services necessary to accomplish that result be provided within a reasonable time after notification by customer or vendee during such specified time period. 2. Representing, directly or by implication, contrary to the fact that repairs on such products will be made either in the home or in one day or in any other specified period of time. 3. Either giving so-called estimates or representing that they wil give estimates for repairs on such products, which are not in fact bOlla fide estimates or which bear no reasonable relationship to the prices ultimately charged for such repairs.

4. Representing, directly or by impljc ttion, that they maintaillmore places of business than is actually the fact. It is fv,rther ordered That the respondents herein 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 Rnd form in which they have complied with the order to cease and desist. (Sgd. ) Royal Appliance Co., Inc.

ROYAL Appliance CmIPANY, INC.

(Sgd. ) By David E. Resnick, Pres.

(Sgd. ) David E. Resnick DAVID E. RESNICK, individually.

Date: December 1, 1953.

The foregoing consent settlement is hereby accepted by the Federal Trade Commission and ordered entered of record on this the 14th day of January, 1954.

Consent Settlement 50 F. T. C. IN THE "MATTER OF Y AMI YOGURT PRODUCTS, INC., AND RICHARD TILLE INDIVIDUALLY AND AS AN OFFICER THEREOF AND ALSO DOING BUSINESS AS INTERNATIONAL YOGURT COMPANY CONSENT SETTLE IENT IN I1EGARD TO THE ALLEGED VIOLATION o ' THE FEDERAL TRADE CO BllSSION ACT Ducket 6066. Complaint, No' v. 1952-Decision, Jan. 1!J54 Where a corporation and an offcer thereof Wlll did business also at the sarno address under a separate trade name, engaged in the interstate sale and distribution of food products for, use in making yogurt, respectively known in the case of the product of the forller as " Yalli Yogurt Culture " anu ill that of the latter as "International Yogurt Culture" and "International Hoselle Yogurt Culture; in advertising their said products in newspapers and magnzilles, etc. and by radio- (a) Falsely represented that proteins in yogurt are in predigested form, that proteins and Ininerals are Inore rapidly assimilable and Inilk nutrients more easily absorbed by the blood by reason of being in the form supplied by yogurt, and that the casein and albumin of cow s milk fermented with yogurt culture arc transformed into more highly digestible form; (b) Falsely represented that yogurt. promotes digestion and intestinal hygiene J1elvs to digest other foods, promotes longevity and helps to prevent senilty; that its use builds, restores, and insures good health is e1'active in preventing typhoid, paratyphoid, diphtheria and dysentery, and is a cure or remedy for constipation, ulcers, gastritis, enteritis, colitis, dyspepsia, diarrhea, dysentery, celiac dis€nse, colon troubles, and stomach distress; (c) Falsely repl"e ented that it is a benefit in cases of pulmonary diseases, keeps the cJigestiye tract clean, lessens the nausca or stomach sickness associated with pregnancy, results in fine complexions or improves the complexion; and (d) Falsely represented that. yogurt softens or tenderizes meat and that through yogurt one Jnay eat himself to health:

II elrl Tllat such acts and practices, un!ler the circumstances set forth, were all to the prejudice and injury of the public and constituted unfair and deceptive acts and practices in commerce.

Before Mr. Earl J. J( olb hearing examiner. Mr. J. W. Brookfield, Jr. for the Commission. Mr. Alfred L. Fox of Los Angeles, Calif., for respondents. CONSENT Settle:\IENT 1 Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission, on November 25 , 1952, issued and 1 'rhe Commis ;;on s "Notice" announcing and promulgating the consent settlement as published herewith, follows:

The consent settlement tendered by the parties in this proceeding, a copy of which is YAMI YOGURT PRODUCTS.. INC. , ET AL. 617 616 Findings subsequently served its Complaint on the respondents named in the caption hereof, charging them with the use of unfair lld deceptive acts and practices in violation of the provisions of said Act. Subsequent to the issuance of the Complaint in this matter it was suggested that respondent Richard Tille was deceased, and by agreement there was substituted for respondent Richard Tille respondent Reny Tille, both as an individual respondent doing business as International Yogurt Company and as an offcer of corporate respondent Y ami Yogurt Products, Inc.

The respondents, desiring that this proceeding be disposed of by the consent settlement procedure provided in Rule V of the Commission s Rules of Practice, solely for the purpose of this proceeding, any review thereof, and the enforcement of the Order consented to and conditioned upon the Commission s acceptance of the Consent Settlement hereinafter set forth, and in lieu of answer to said complaint, hereby;

1. Admit all the jurisdictional allegations set forth in the complaint.

2. Consent that the Commission may enter the matters hereinafter set forth as its Findings as to the Facts and Conclusion and Order to Cease and Desist. It is understood that the respondents in consenting to the Commission s entry of said Findings as to the Facts Conclusion and Order to Cease and Desist specifically refrain from admitting or denying that they have engaged in any of the acts or practices st.ated therein to be in violat.ion of the Iftw. 3. Agree that the Consent Settlement may be set aside in whole or in part under the conditions and in t.he manner provided in Paragraph (f) of Rule V of the Commission s Hnles of Pmctice. The admitted jurisdictional facts, the statement of the acts and practices which the Commission hadreasoll to believe were unlawful the conclusion based thereon and the Order to Cease and Desist., all of which t.he respondents consent. may be entered herein in final disposition of this proceeding, are as follows:

FINDINGS AS TO TI-IE FACTS PAHAGHAPH 1. Respondent Yami Yogurt. Products, Inc., is a corporation organized, existing and doing business under ftnd by virtue of the serveu herewith, was accepted hy the Commission on ,Trulllf1l' " 21 , 19:14 and ordered entered of rer.or(l as the ComlJis don s findings as to the fnds, conclusion, and order disposition of this prod'cding.

'l' be time fat' fiing- report of cOJnvlhnc(; pl1J' 1!;lnt to t.he afol'(' said order rllns from the date of service hereof.

Findings 50 F. T. C.

laws of the State of California, with its offce and principal place of business located at 8478 Melrose Place, Los Angeles, California. Respondent Heny Tile is an individual and offcer of corporate respondent, Yami Yogurt Products, Inc. , and participates in the policies and practices of said corporation. Respondent Heny Tile also trades and does business under the trade name, International Yogurt Company, whose offce is also located at 8478 Melrose Place, Los Angeles, California. All of said respondents have cooperated and acted together in the performance of the acts and practices hereinafter described.

PAR. 2. Respondents are now, and for more than one year last past have been, engaged in the selling and distribution of food products as food" is defined in the Federal Trade Commission Act. The product sold by corporate respondent is known as Y ami Yogurt Culture and that sold by Reny Tille as International Yogurt Culture and International Hoselle Yogurt Culture. Both of these products are used in making yogurt.

PAH. 3. Respondent Yami Yogurt Products, Inc., receives orders from customers located in the various States of the United States, and has its product shipped to these customers at their various locations in the United States from the RoseJJe Bacteriological Dairy Institute in La Trappe, Province of Quebec, Canada. Respondent Heny Tille trading as International Yogurt Company, causes her said food product, when sold, to be transported from her place of business in Los Angeles, California, to purchasers thereof located in various other States of the United States. Hespondents maintain, and at all times mentioned herein have maintained, a course of trade in said food products in commerce between and among the various States of the United States. Respondents' volume of business in commerce in said food products is and has been substantial.

PAR. 4. In the course and conduct of their aforesaid business, respondents, subsequent to March 21, 1938, have disseminated, and are now disseminating, and have caused, and are now causing, the dissemination of advertisements concerning their said food products by the United States mails and by various other means in commerce, as commerce" is defined in the :Federal Trade Commission Act, including, but not limited to, advertisements inserted in newspapers and magazines of general circulation, by means of radio continuities and in circulars and leaflets for the purpose of inducing, and which are and were likely to induce, directly or indirectly, the purchase of said food products; and respondents have also disseminated, and are now causing the dissemination of, advertisements concerning their said food products by the aforesaid means for the purpose of inducing, and e16 Findings which are and were likely to induce, directly or indirectly, the purchase of their said food products in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 5. Through the use of said advertisements, respondents represented, directly and by implication, that the proteins in yogurt are in predigested form; that proteins and minerals are more rapidly assimilable, and milk nutrients are more easily absorbed by the blood, by reason of being in the form supplied by yogurt; and that the casein and albumin of cow s milk fermented with yogurt culture are transformed into more highly digestible forms. Further, through the use of said advertisements, respondents represented that yogurt promotes digestion and intestinal hygiene, helps to digest other foods, promotes longevity and helps to prevent senility; that its use builds, restores, and insures good health, is eiTeetive in preventing typhoid, paratyphoid diphtheria and dysentery, and is a cure or remedy for constipation ulcers, gastritis, enteritis, colitis, dyspepsia, diarrhea, dysentery, celiac disease, colon troubles and stomach distress; that it is of benefit in cases , lessens theof pulmonary diseases, keeps the digest.ive tract clean nausea or stomach sickness associated with pregnancy, results in fine complexions or improves the complexion; that yogurt softens or tenderizes meats; and that through yogurt one Inay eat himself to health.

PAH. 6. The aforesaid statements and representations are misleading in material respects and constitute false advertisement.s as that term is defined in the Federal Trade Commission Act. In trut.h and in fact the proteins in yogurt are not predigested. The proteins and minerals are not more rapidly assimilable and milk nutrients arc not more easily absorbed by the blood, by reason of being in the form supplied by yogurt. The casein and albumin of cow s milk fermented with yogurt cultures are uot, because of that treatment made more highly digestible. Yogurt does not promote digestion or intestinal hygiene, does not help to digest other foods. Its use does not promote longevity nor help to prevent senility. It does not build, restore or insure good health. Y ugurt is not effective in preventing typhoid, paratyphoid, diphtheria or dysentery. It is not a cure for constipation, ulcers, gastritis, enteritis, colitis, dyspepsia, diarrhea, dysent.ery, celiac disease, colon troubles or stomach distress, nor is its use of benefit in cases of pulmonary diseases. Yogurt does not keep the digestive tract clean, nor is it a competent treatment for nausea or stomach sickness aSiiociated with pregnancy. The use of yogurt will not in itself result in fine complexion or improve the complexion. The application of yogurt to meats will not soften or tenderize them. The use of yogurt wil not enable one to cat himself to good health.

Order 50 F. T. C.

P AI1. 7. The use by respondent of the foregoing false and misleading statements and representations contain cd in said advertisements has had, and now has, the capacity and tendency to mislead and deceive a substantial portion of the purc hasing public into the erroneous and mistaken belief that said statements and representations are true and into the purchase of said products because of such erroneous and mistaken belief.

PAIL 8. The acts and practices of respondents, as herein found, are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

OHDEH It i8 ordered That the respondent Yami Yogurt Products, Inc. , a corporation, and its officers, and respondent Reny Tille, an individual trading under the name of International Yogurt Company or under any other name. and respondents' agents, representatives and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of yogurt cultures do forthwith cease and desist from:

1. Disseminating, or causing to be disseminated, any advertisement, by means of the United States mails, or by means in commerce as "commerce" is defined in the Federal Trade Commission Act, which advertisement represents, directly or by implication: (a) That the proteins in yogurt are in predigested form; (b) That proteins or minerals are more rapidly assimilable hy reason of being in the form supplied by yogurt; (c) That milk nutrients lle more easily absorbed by the blood by reason of being in the form supplied by yogurt; (d) That the casein or albumin of cow s milk by being fermented with yogurt culture are transformed into more highly digestible forms' (e) That yogurt promotes digestion or intestinal hygiene or helps to digest other foods;

(f) That yogurt promotes Jongevity or helps prevent senility; (g) That yogurt builds, restores or insures good health; (h) That Yogurt is effective in preventing typhoid, paratyphoid diphtheria or dysentery or is a cure or remedy for constipation, ulcers, gastritis, enteritis, colitis, dyspepsia, diarrhea, dysentery, celiac disease, colon troubles or stomach distress; (i) That yogurt is of benefit in cases of pulmonary diseases; (j) That yogurt keeps the digestive tract clean; YAMI YOGURT PRODUCTS , INC. , ET AL. 621 616 Order (k) That yogurt lessens the nausell or "stomach sickness" associated with pregnancy;

(1) That yogurt results in fine complexions or improves the complexion ;

(m) That the application of yogurt softens or tenderizes meats; (n) That one may eat himself to good health by using yogurt. Provided, however That nothing herein contained shall be construed as preventing respondents from advertising or otherwise representing that Yami Yogurt is a remmmended dietary supplement for individuals suffering from certain intestinal or digestive disturbances. It is further ordered That the respondents herein 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 the Order to Cease and Desist. Yami Yogurt Products, Inc.

By (sgcl) Heny Tille Treascurer (sgd) Heny Tille Ilk"" y TILLE, trading as Intel'mtional Yogurt Co.

Alfred L. Fox Cmtnsel for Respondents. (Sgd) Date: Nov. 20, 1953.

The foregoing consent settlement is hereby accepted by the Federal Trade Commission and entered of record on this 21st day of January 1954.

Decision 50 F.