Free State Products, Inc.

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IN THE ~1A TTER OF FREE STATE PR.ODUCTS, INC., ET AL.

CONSENT ORDER ETC. IN REGARD TO THE ALLEGED VIOLATION 01' THE FEDERAL TRADE COMMISSION ACT Docket 6621. Uomplaint, Aug. .28 95fi-Dcr:isiuJI., Aug, 24, 195" Consent order requiring a manufacturer in Baltimore, Md., to cease selling' punch boards and push cards to manufacturers and dealers who assembled them with assortments of candy, cigarettes, clocks, razors, cosmetics, clothing, etc., and thereafter sold the merchandise by means of the lottery devices.

lift. John W. Brookfield, Jr. for the Commission. ..11-1'. HO'race J. Donnelly, Jr. of Washington, D. , for respondent. INITIAL DECISION BY LOREN H. LAUGHLIN, HEARING EXAMINER The Federal Trade Commission (sometimes hereinafter referred to as the Commission), on August 28, 1956, issued its complaint herein under the Federal Trade Commission Act against the abovenamed respondents, Free State Products, Inc. , a corporation, and Allen ' B. Tabakof and Jules J. Greenspan, individually and as officers of said corporation, charging said respondents with having violated the provisions of the Federal Trade Commission Act in certain particulars. The respondents were duly served with process. Respondents' answer was filed October 3, 1956. After several continuances for good cause had been granted upon the several or joint applications of counsel for the parties, the initial hearing was held April 12, 1957, in 1Vashington, D. , and a further hearing ordered to be held was subseqeuntly canceled pending the negotiation by the parties of an agreement containing a consent order to cease and desist.

On July 2, 1957, there was submitted to the undersigned hearing examiner of the Commission for his consideration and approval an Agreement Containing Consent Order To Cease And Desist " which had been entered into by and between each of the respondents and John v\!. Brookfield, Jr., counsel supporting the complaint, and Horace J. Donnelly, Jr., counsel for respondents, under date of June 21 , 1957, and subject to the approval of the Bureau of Litigation of the Commission. Such agreement had been thereafter duly approyed by the Director and Assistant Director of the Commission s Bureau of Litigation.

Decision 54 F.

On due consideration of the said Agreement Containing Consent Order. To Cease And Desist, the hearing examiner finds that said agreement both in form and content is in accord with said Section 25 of the Rules of Practice and Procedure of the Commission and that by !;laid .agreement the parties have specifically agreed that: 1. Respondent,. Free State Products, Inc., is a corporation, organized, existing and doing business under and by virtue of the laws of the State of :Maryland with its office and principal place of business .located at 425 Eastern A venue, in the City of Baltimore, Maryland. Respondent, Allen B. Tabakof is president and respondent Jules J. Greenspan is vice-president and secretary of said corporate respondent. Said individual respondents formulate, direct and control the policies, acts and practices of respondent corporation and have their office and place of business at the same address as that of corporate respondent.

2. Pursuant to the provisions of the Federal Trade Commission Act~ the. Federal Trade Commission on August 28, 1956, issued its complaint in this proceeding against respondents and a true copy was thereafter duly served on respondents. 3. Respondents admit all the jurisdictional facts alleged in the complaint and agree that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations.

4. This agreement disposes of all of this proceeding as to all parties.

5. Respondents waive:

a. Any further procedural steps before the hearing. examiner and the Commission;

b. The making of findings of fact or conclusions of law; and . c. All of the rights they may have to challenge or contest the validity of the order to cease and desist entered in accordance with this agreement.

6. The record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and this agreement.

7. This agreement shall not become a part of the official record unless and until it becomes a part of the decision of the Commission. 8. This agreement is for settlement purposes only and does not constitute an admission by respondents that they have violated the law as alleged in the complaint.

The. parties have further specifically agreed that the proposed order to ee.ase and desist in eluded in said agreement may be entered in this proceeding by the Commission without further notice to respondents; that when so entered it shall have the same force FREE STATE PRODUCTS, INC. , ET AL. 229 :227 Decision and effect as if entered after' a full hearing; that it may be altered modified or set aside in the manner provided for other orders; and that the complaint may be used in construing the terms of the order. Upon due consideration of the complaint filed herein and the said "Agreement Containing Consent Order To Cease And Desist the latter is hereby approved, accepted and ordered filed, the same not to become a part of the record herein, however, unless and until it becomes part of the decision of the Commission. The hearing examiner finds from the complaint and the said "Agreement Containing Consent Order To Cease And Desist" that the Commission has jurisdiction of the subject matter of this proceeding and of the persons of each of the respondents herein; that the complaint states a legal cause for complaint under the Federal Trade Commission Act against each of the respondents both generally and in each of the particulars alleged therein; that this proceeding is in the interest of the public; that the following order as proposed in said agreement is appropriate for the just disposition of all of the issues in this proceeding, such order to become final only if and when it becomes the order of the Commission; and that said order therefore should be, and hereby is, entered as follows: ORDER It is ordered That the respondent Free State Products, Inc. , a corporation, and its officers, and respondents Allen B. Tabakof Jules J. Greenspan, individually and as officers of said corporation and respondents' agents, representatives and employees, directly or through any corporate or other device, do forthwi t 11 cease and desist from:

1. Selling or distributing in commerce, as "commerce" is defined in the Federal Trade Commission Act, push cards, punch boards, or other lottery devices which are designed or intended to be used in the sale and distribution of merchandise to the public by means of a game of chance, gift enterprise or lottery scheme. DECISION OF THE CO1\fl\IISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall, on the 24th day .of August, 1957, become the decision of the Commission; and accordingly :

1 t is O1yle1' That respondents 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. Decision 54 F. T. C..