Renaire Corporation (Pennsylvania)

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IN THE MATTER OF REXAIRE CORPORATION (PENNSYLVANIA) ET AL. ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT !Jocket 6555. CU'J'lJlaint Mall 1.956-Decision, Feb. , 1959 Order requiring an eleven-company corporate family engaged in the sale of home freezcrs and foods under its " Rena ire Plan " to cease representing falsely in advertising in nc"\v5papers, by radio and television, etc. , that participants in its said I' Plan" could buy a freezer and food for the same amount as ",vauld be required to buy the same quantity of food in regular retail channels and save enough to pay for a television set, vacation, or freezer, remodel a home, or buy an auto; to cease describing sales personnel as "expert food analysts accn dited food budget analyst.s or " trained qualified food consultants; and to crase representing falsely that ot.her food ell('rs did not 5('11 Government inspected meats, that each carton of food they sold carried a l:'united States Department of Agriculture seal, and that they could control the cost of food because it was inspected hy U. S. inspection offcials.

Mr. Flo!ld O. Collins supporting the complaint. M,' . Ecl1cin P. Rome of the firm of Blank, Ruden/co & Klaus of Philadelphia, Pa., for respondents.

I"'ITIAL DECISION BY JOSEPH CALLAWAY , HEARING EXAMINER STATEMENT The Federal Trade Commission issued its complaint Mar 17, 1956 , charging respondents with unfair methods of competition and unfair and deceptive acts and practices in commerce in connection ,,'ith the sale of freezers and food. Such unfair methods and unfair and cleceptive acts were a1Jeged to consist of false ac1vertising of their products and of their food plan, The complaint further a1Jeged in part that the individual respondents directed and controlled the policies and practices of the corporate respondents; that a1J of the corporate respondents were operated as a joint enterprise; that they \\'ere al1 engaged in interstate commerce in the sale of freezers and food and were in substantial competition in commerce with others engaged in the sale and distribution of freezers and food.

J oint answer vvas filed by all respondents, which admitted the corporate set up; that the various corporate respondents were operated as a j oint enterprise; that they were engaged in the sale Findings 55 F.

and distribution of freezers and food; that they were engaged in interstate commerce (Jater changed to denial in amendment to answer) and that they were in substantial competition with others engaged in the sale of freezers and food in commerce. Dissemination of some of the advertising alleged to be false and deceptive was admitted, some denied. It was denied that any of the advertising was false or deceptive or that respondents had otherwise violated the law as alleged in the complaint. Hearings were held in Philadelphia, Pennsylvania and Washington, D.C. for the taking of evidence in support of and in opposition to the allegations of the complaint. Some delay was caused by court appeal of denial of motion to dismiss as to alj respondents at the end of the evidence in chief in support of the complaint. Motion to dismiss as to respondent Henaire Corporalion (Pennsylvania) was granted by the hearing examiner, the 8 (e)ruling being entered on the record in accordance with Rule 3. of the Commission s Rules of Practice.

Proposed findings, conclusions and orders were submitted by conclu-both sides and have been considered. Alj such findings, sions and O1.cters not herein adopted, found or concluded are hereby specifically rejected.

Upon the entire record of the proceeding and from the observation of the witnesses while testifying, the hearing examiner makes the following findings as to the facts, conclusions and order:

FINDINGS AS TO TIIE FACTS AND CONCLUSIONS 1. (a) lkspondent Renaire Corporation (Pennsylvania) is a corporation organized and existing under and by virtue of the laws of the State of Pennsylvania. Respondents Bertram P. Schrank, Harold B. Saler, Leonard S. Cohen, William Speckman Morton Saler, Joseph Sherwood are president, executive vice president and assistant treasurer, vice president, vice president, secretary and ireasurer, respectively, of said corporate respondent. (b) Respondent Renalre Corporation (Washington, D. ) is a corporation organized and existing under and by virtue of the laws of the State of Delaware. Respondents Bertram Schrank, Joseph Sherwood and Jules Hecht arc president, secretary-treasurer and vice president, respectively, of said corporate respondent. Respondent IIaro1c1 B. S,lier is also an officer of said corpon te respondent.

, is a corpol'a- (c) Respondent Renaire of South Delaware, Inc. RENA IRE CORPORATION (PENNSYLVANIA) ET AL. 1171 1169 Findings tion organized and existing under and by virtue of the laws of the State of Delaware. Respondents Wiliam Speckman, Leonard S. Cohen, Harold B. Saler, and :vorton Saler are president vice president, secretary-treasurer, and assistant treasurer, respectively, of said corporate respondent. (d) Respondent Renaire Corp. of Wilmington is a corporation organized and existing under and by virtue of the laws of the State of Delaware. Respondents Morton Saler, Bertram P. Schrank, Leonard S. Cohen, Harold D. Saler and William Speckman are president, vice president, treasurer, secretary, and assistant treasurer, respectively, of said corporate respondent. (e) Respondent Renaire of Maryland, Inc. , is a corporation organized and existing under and by virtue of the laws of the State of Maryland. Respondents William Speckman, Leonard S. Cohen, Harold B. Saler and Morton Saler are president, vice president, secretary-treasurer, and assistant treasurer, respectively of said corporate respondent.

(f) Respondent Renaire of New Jersey, Inc., is a corporation organized and existing- under and by virtue of the laws of the State of New Jersey. Respondents Samuel Saler, Leonard S. Cohen, Harold B. Saler, William Speckman and Morton Saler are president, vice president, s€cretary- treasurer, assistant secretary and assistant treasurcr, respectively, of said corporate respondent.

(g) Respondent Renaire Corp. of Delmont is a corporation organized and existing under and by virtue of the laws of the State of Pennsylvania. Respondents Joseph Sherwood, Leonard S. Cohen, Harold B. Saler, Wiliam Speckman and 'Iorton Saler are president, vice president, secretary-treasurer, assistant secretary and assistant treasurer, respectively, of said corporate respondent.

(h) Respondent Renaire of Allentown, Inc. , is a corporation organized and existing under and by virtue of the la \vs of the State of Pennsylvania. Respondents Bertram P. Schrank, Leonard S. Cohen, Harold B. Saler, William Speckman and Morton Saler arc president, vice president, secretary-treasurer, assistant secretary and assistant treasurer, respectively, of said corporate respondent.

(i) Respondent Renaire of Philadelphia, Inc., is a corporation organized and existing under and by virtue of the laws of the Findings 55 F.

State of Pennsylvania. Respondents Morton Saler, Lconard S. Cohen, Harold D. Saler and Wiliam Speckman are president vice president, secretary-treasurer, and assistant treasurer, respectively, of said respondent corporation. (j) Respondent Rcnaire Corp. of Lancaster is a corporation org,mized and existing under and by virtue of the laws of the State of Pennsylvania. Responnents Leonard S. Cohen, William Speckman, Harold B. Saler and Morton Saler are president, vice president, secretary-treasurer, and assistant treasurer, respectively, of said responnent corporation.

(k) Respondent Henaire of South Jersey, Jnc. , is a corporation organized and existing under and by virtue of the la\vs of the State of Pennsylvania. Hespondcnts Leonard S. Cohen, Bertram P. Schrank, Haroln B. Saler, Willam Speckman and Morton Saler are president, vice president, secretary-treasurer, assistant secretary and assistant treasurer, respectively, of said corporate respondent.

The home offce and principal place of business of a1l respondcnts is located at 770 Baltimore Pike, Springfield, Pennsylvania. J urisdidion 2. Each of the corporate respondents is now and has been for more t.han two years last past engaged in a separate trade are in the sale and distribution of home freezers and food under H food purchase plan, but they are all operated as a joint enterprise. The l' respondents Leonard S. Cohen, Joseph Sherwood Samuel Saler, Harold E. Saler, Morton Saler, William Speckman and Bertram P. Schrank own all the stock of all the corporate respondents, with the exception of Henaire Corporation (\Vashington, D. ) and direct and control their management, policies and operations. The individually'respondents above named together with the respondent Jules Hecht own all the stock of Hcnaire Corporation (Washington, D. ) and direct and contl"j thc management, policies and operation of that corporate respondent. 3. The specific territories in ,'which each of the corporate respondents solicit the sale of and sell freezers and food are as follows:

Henaire Corporation (Pennsylvania) in the general Philadelphia, Pa., area; Renaire Corporation (Washington, D. ) in the general trading area of \Vashingtol1, D. C. including the outlying surburban districts in Maryland, and Virginia; Renaire of South RENA IRE CORPORATION (PEKNSYLVANIA) ET AL. 1173 1169 Findings Delaware, Inc., in an area south of Dover, De1. to the Maryland State border; Renaire Corporation of Wilmington, in the general trading area of Wilmington, Del. which comprises that area between the northern boundary of Wilmington and up to the Dover area; Renaire of Maryland. Inc., operates in Eastern Shore :Maryland and in the Salisbury area; Renaire of New Jersey Inc. in the immediate vicinity of Trenton, N. , the Trenton trading area; Renaire Corporation of Delmont in Delaware County and Montgomery County of Pennsylvania; Renaire of Allentown, Inc. operates in the general trading area of Allentown, Pa. , which runs from Allentown to thc general area of Lansdale, Pa. ; Renaire of Philadelphia, Inc., operates in the nortbeastern sedion of Philadelphia over to the Delaware River at Korristown, Pa. ; Renaire Corporation of Lancaster in the general area of Lancaster and Harrisburg, Pa. ; Renaire of South J crsey, Inc., operates between Camden, N.J. and the South Jersey seaboard area of A tlantic City to Cape May.

4. In all, respondent corporations operate in five states and the District of Columbia. To show the specific area of operations of each corporate respondent see map which is Respondents exhi bi t G.

5. The food offered for sale and sold by respondents consists of what may be called perishables, excluding milk and eggs. They do not sell items kno\\rn as staples, for instance, sugar, flour bread or cereal. The record shows that from 30 ()( to 55 the average family food budget is spent for staples, milk and eggs. Respondents do sell frozen fruits, juices, vegetables, meat fish and poultry. In such business respondents are now and have been in substantial competition with other corporations, firms and individuals engaged in the saJe and distribution of freezers and food in commerce.

G. It is admitted that Renaire Corporation (Pennsylvania) sells in commerce and that the sales of Henaire Corporation (Washington, D. ) are in commerce by statute, so far as the Federal Trade Commission is concerned.

7. The first contested issue to decide is whether the other nine corporate respondents are engaged in commerce. On this point the facts as to respondents' methods of doing business, as shown in the record, are as follows:

(a) None of the cQ) porate respondents Q\vn or carryon hand any stock of freezers. They are all owned by the Gilbert Distributing Company, another corporation, not a respondent. The Findings 55 F.

stock ownership and control of the Gilbert Distributing Company is vested in the individual respondents. Occasionally one of the corporate respondents will sell one of the freezers in its display room, which has been loaned to it for display purposes by the Gilbert Distributing Company. The Gilbert Distributing Company maintains a stock of freezers at the food processing plant of the Renaire Corporation (Pennsylvania) at Springfield, Pa. (b) The Renaire Corporation (Pennsylvania) is the only respondent that owns or operates a food processing plant. It also sells freezers . In its plant at Springfield, Pa. , foods including meats and meat products arc processed, prepared for sale, frozen and kept until sold by one of the corporate respondents. (c) The initial contract of sale of a freezer and supply of food by each of the corporate respondents is taken in the name of Renaire Corporation. A sort of c1caring house for processing all such orders by all corporate respondents is maintained at the Springfield, Pa. plant of Renaire Corporation (Pennsylvania). A copy of the contract of sale is sent to the Gilbert Distributing Company and a copy is sent to the Renaire Corporation, (Pennsylvania). unless that concern is the corporate respondent making the sale to consumer. The particular corporate respondent that makes the sale makes the necessary financing arrangement for a credit sale with its own bank, indorsing the contract of sale to the bank. After these financial arrangements are made, the freezer is invoiced to the corporate respondent making the sale and that respondent pays the Gilbert Distributing Company for the freezer. The Gilbert Distributing Company ships the freezer direct to the consumer-purchaser. Except in the case of the Henaire Corporation (Washington, D. ) the food in the purchase order is shipped direct by the Renaire Corporation (Pennsylvania) from its plant at Springfield, Pa. to the consumerpurchaser and is paid the full price in the sale contract for tbe food including meat and meat products by the corporate respondent making the sale. The corporate respondents, other than the Renaire Corporation (Pennsylvania) make no profit on the sale of foods, but rely for their profit on the difference between what they pay the Gilbert Distributing Company for the freezer and the price for which they sell the freezer to the retail purchaser. (d) The Renaire Corporation (Washington, D. ) maintains its own storage warehouse for food in Washington, D.C. The food stored there, including meat and meat products, is prepared RENAmE CORPORATION (PENNSYLVANIA) ET AL. 1175 1169 Findings and processed at the plant at Springfield, Pa., and shipped to the Washington, D. C. storage plant. Sales of food by the Renaire Corporation (Washington, D. ), both original sales and repeat orders for food are shipped from the Washington, D. C. storage warehouse to the retail customers. Other than as above mentioned a1l sales by Renaire Corporation (Washington, D. ) are handled in the same manner as sales by the other corporate respondents. Repeat orders for food, other than in the territory of the corporate respondent, Renaire corporation (Washington ) are direct sales by and are shipped direct by the Renaire Corporation (Pennsylvania) to the retail purchaser. When they occur in the territory of the other corporate respondents, the corporate respondent in whose territory the sale is made merely acts as a conduit for funneling the repeat order for food to Renaire Corporation (Pennsylvania).

(e) Each corporate respondent files separate income tax return and pays its own tax. There is central bookkeeping for a1l corporate respondents maintained at the Springfield plant and the cost is charged proportionately to each corporate respondent, as are costs of other central services. They advertise jointly, a proportionate part of the cost of each advertisement being charged to each corporate respondent participating therein. 8. When sales of freezers and food are made by the corporate respondents Renaire of South Delaware, Inc. , Renaire Corporation of Wilmington, Renaire of Maryland, Inc. , Henaire of New Jersey, Inc., and Renaire of South Jersey, Inc., they do literally in the words of the complaint cause the freezers and food sold to be transported from the State of Pennsylvania to the state in which the sale is made.

9. As to the corporate respondents who limit their sales to the State of Pennsylvania, Renaire Corporation of Delmont, Renaire of A1Ientown, Inc. , Renaire of Philadelphia, Inc. , and Renaire Corporation of Lancaster, they are a1l part of the family of corporations, admittedly operated as a unit with a common purpose and seeking a common goal by j oint means, the goal being to sell freezers and food and the means being advertising over the radio, in the newspapers and by pamphlets, letters, booklets and leaflets, the cost of which is borne hy a1l the corporate respondents. To illustrate, Commission s exhibit 206 is an advertisement appearing- in the Philadelphia Evening Bulletin, dated May 15 1955. It is a joint advertisement of Renaire of Philadelphia, Inc. Renaire of New Jersey, Inc., Renaire Corporation of Wilming- Findings 55 F.

ton, Renaire Corporation of Lancaster, and Renaire of Allentown, Inc. Thus, Renaire Corporation of Lancaster was by this advertising helping Renaire Corporation of Wilmington to sell freezers and food in commerce. This advertisement looks like the advertisement oJ one concern with branch offces in the various places in Pennsylvania, New Jersey and Delaware. In fact all of the advertising in evidence appears to be that of one concern. Ey thus joining in the common undertaking the respondent corporations who limit their sales to Pennsylvania become jointly liable under the Federal Trade Commission Act with the respondents \vho do sell in commerce€.

10. Thus it is found that all respondents were engager1 in commerce in the sale of freezers and food, and with the exception of Renaire Corporation (Pennsylvania) subject to Commission jurisdiction.

11. We hold here that the processing activities performed by persons not members of the slaughtering and meat packing industry \which are similar to those customarily engaged in in furtherance of the retail merchandising of meat do not constitute the manufacture or preparation of meat or meat food products within the intent and meaning of the Packers and Stockyards Act. IRefer to opinion for further diseussiol1.

The Representatiuns 12. Among t.he representations found in the advertising in evidence are the follmving:

Our main purpose: is to provide you with more food, better food. . . tleliV€lcd to your home . plus a specially design ell Renarie Freezer. . . for no marc than you now spend for just foo(l. Amazing as it may seem-impossible as it may appear-- Henaire is nm\' doing this for thousands and thousands of families.

No waste fat with meats. From many " food plans" or department stores you get lip to 25";/(; waste :fat with meats (Com. ex. 5). Proof of Hcnairf' claims in impartial survey tabulated by Hemington Rand. Over 85 ; of Renaire memuers reJHuted that joining- Renaire \Vas a wise decision. Thousands of Renaire ml-mlJfrs get food plus freezer fO!" less than they formerly spent just for food. Savings of the e families average 18. monthly ( 2Hj. 24 per year) less than their fol'"HT food budgets. 92.7% save time; B5 ;'r save work through Hcnairc membership (Com. ex. 6). Renaire' processes food in its own "huge gov( rnmpnt inspected plant. . 1 F. C. CcrJlt'l1t jl1Btlt1Ltc, ct 01 3 e. s. 6B3. 2 Sri' Cornrnis ion Op;union In tie Marter of Food Fair Store." l?lc D() kd '!' o. r,4 'i, issued September27 19Iii.

RENAlRE CORPORATION (PENNSYLVANIA) ET AL. 1177 I1G9 Findings assuring quality control and prices far below average retail prices! (Com. ex. 7).

Only Renaire Cnn Bring You All of These Advantages! Don t Settle for Less: You own a specially designed freezer and your payments for freezer AND food arc no more than you now spend for food alone. After freezer is all paid for YOur savings arc vastly increased. (Com. ex. 8). Government Inspected Meats. . U.S. Department of Agriculture inspector on our premises at all times assures you protected quality . . A Renaire exclusive.

Lowest Food Prices. . . Because we actually process and manufacture under S. Government inspection, we control costs. You buy direct from our plant. . . with no in-between handling costs 01' profits! OUl" tremendous volume, largest in the inctustry, means added savings Each package bears Department of Agriculture seal of inspection and approval1.

Trained Food Consultants. Not just freczer salesmen but trained qualified food consultants. . . assuring you IJ1oper planning :for long' term satisfaction. A Rerlairc exclusive! (Com. ex. 10).

Trained foo(l consultants, not just "freezer salesmen " plan your food budget for greatest saving. (Com. ex. 11) Your initial food order was carefully worked out for you by one of our act rer1ited food bl1uget analysts, (Com. ex. 2) For only TIerjaire has its own Government-Inspected Food Processing Plant \vhere aJl our foods an: prepared under the protedive scrutiny of a U. S. Depnl'tlll'11t of Agriculture Inspector: (Com. ex. 13) Learn ho\v we deliver food to your name at prices :far be-Jow rdail. (Com. ex. 15) Hcnaire saved us enough on food to mate our new car possible" says Mr. and ='Il's. P. SCf\rpa, 114 Rhode Island Avenue, Collingsdale, Fa. lVI's. :Marcl1s CuJlen, No. 9 highway " ve l'ccenlly moved into our new home and the money saved with H.enail'€ freezer helped to pay the cost." (Com. ex. 20) enaire even has a $1 000 food bond with Century Indemnity Company to further protect YOLl. (Com. ex. 2) 13. Through these representat.ions and others similar in evidence it is alleged in the complaint that respondents have falsely represented directly and by implication: (1) That the participants in their " Renaire Plan " can obtain a well balanced food ordcr al prices below prices they would pay for Jood if purchase d in usual retail channels. (2) That a participant is able to obtain a freezer and a supply of food for the same amount of money as would be required to Findings 55 F.

obtain the same quantity of food if purchased in regular retail channels.

(3) That a participant is able to buy food at wholesale prices. (4) That a participant is able to save the difference between the wholesale prices and the prices at which the retailer sells food.

(5) That the overall cost of frozen food to the customer is less than the overall cost of corresponding food in other forms. (6) That a participant is able to save enough to: (a) Pay for a TV set;

(b) Remodel a home;

(c) Pay for a vacation;

(d) Buy an automobile;

(e) Pay for a freezer.

(7) That the initial food order of a participant is worked out by an expert food analyst.

(8) That participant will have the services of a trained and qualified food consultant in planning food purchases. (9) That Government inspected meats is an exclusive with Renaire.

(10) That each carton of food purchased from respondent carries a United States Department of Agriculture inspection label. (11) That by having their food inspected by United States inspection oflcials respondents are enabled to control production cost.

(12) That a participant is fully protected in the purchase of food from respondents by the Century Indemnity Company. 14. It is found that the alleged representations have been made by the advertising in evidence.

15. It is apparent that charges of false advertising represented by subparagraph 1 , 2 and 6 of paragraph 6 of the complaint must stand or fall on a comparison of respondents' food prices with those of their competitors in the retail sale of food. In this connection attention should be called to the representation in subparagraph 2 , alleged to be false and deceptive, which reads as follows:

That a participant is able to ouiain a freezer and a supply of food for the same amount of money as would be lec)uired to obtain the same quantity of food if purchased i1J l'cguJar retail channels. 16. As thus stated, the charge in the complaint is indefinite because no time is given. The case was tried on the theory, RENAmE CORPORATION (PENNSYLVANIA) ET AL. 1179 1169 Findings justified by the advertising, that the representations in this subparagraph and subparagraph 6 related to a credit sale of 24 months which was respondents' plan at the time the advertisements in evidence were disseminated. The record shows that the aJlcredit was later extended for a longer period of time but comparisons and a1l arguments by counsel supporting the complaint are based on a 24-month credit sale. In such sales eight percent per year of the deferred balance on the freezer was added as a finance or interest charge and the total was divided into 24 equal monthly payments. The first order of food was sold on an estimated four months supply on a credit with a finance charge of $8.00 added, with the total divided into four equal monthly payments. On subsequent credit food purchases $7. 00 was added as a finance charge for each estimated four months supply. 17. Counsel supporting the complaint has taken the initial contract of 33 participants in respondents' plan in evidence showing- monthly payments on the freezer and the monthly payments on the estimated first four months supply of food and has made a chart, attached to the proposed fmdings, in which the cost of the food and total cost of fooel anel freezer anel finance charges over a period of 24 months for each of the 33 participants arc estimated. The chart further purports to show the required savings on food purchases necessary to pay for freezer and finance charges over a 24-month period. The percentage of the required savings to the total 2 years cost is also shown. Comparison of Respondents' Fooel Prices With Prices of Competing Retail Stores 18. Counsel supporting the complaint seeking- to sustain the burden of proof as to the falsity of the representations set forth in subparagraphs 1 , 2 and 6 of paragraph 6, pickeel out the Acme grocery chain as competitors of grocery chain and the A & P respondents in the sellng of food in the area in which respondand ents do business in PennsylVallia, Delaware, New .Jersey Maryland (excluding that part of Maryland within the Washington metropolitan area) and the Safeway grocery chain as competitors 01' respondents in the Washington metropolitan area. He then introduced the price list of respondents' food products for the period April 20, 1955 to :May 21 , 1955 and price lists of the competing Acme stores, (of which there were 268 supermarkets in the area) for the same period of time. (The price list of the A & P chain was not complete. Hence it drops out of j;:

Findings 55 F.

the picture. ) He also introd uccd into evidence the price list respondents for the period April 2, 1956 through April 30, 1956 and the price list at which the competing Safeway stores (of which there were 178 or 179) in the Washington metropolitan area sold the same foods during the same period of time. Comparisons of such prices have been made in charts attached to the proposer! finr!ings.

19. In the comparison between Henaire and Acme prices it is shown that considering the whole list of compared prices Renaire s price \\118 1/3 of 1 cheaper than Acme s. In this comparison there ,vas no attempt to compare br;mcl named products. This wouJr! have been impossible aU the way through the list. For instance Renaire sold only Snow Crop brand frozen fruits juices and vegetables. Acme solar! various brands, Ideal, P.L., Bil'dseye and others. Rerwire had only one price for the period April 20 , 1955 to i\lay 21 , 1955. Acme had four different price lists on frozen juices, fruits and vegetables during the period and more than twenty-five different price lists during the period that included meat, fish and poultry. \Vhen Acme s prices changed on anything a new bulletin would be gotten out to the different store managers. In making" the comparison of Acme s prices with Renaire, Acme s cheapest price during any part of thc period for the chcapest b1'a11(l of frozen Jruits, juices and vegetables ,vas taken.

20. The comparison oetween Renairc and Safev, ay prices in the \Vashington metropolitan area 1'01' the period of April 2 1956 to April 30, ) 956 was on a different basis. Hespondents have four different suggested food plans. Each plan sets forth the amount of frozen fruits, .iuices, vegetables, meats, fish and poultry that is expected to give a family of a certain size a well balanced diet of these items over a four months period. Respondents' food plan No. 1 for a small family offers the items there listed for approximately $180. Plans :-0. 2 , 3 and 4 are suggested for larger families and cost more according to the size of the family. Each of the suggested food plans are subject to variance according to the family s eating habits. 21. In the comparison uetween Henaire and Safeway prices the cost of the various items from Henaire and from Safeway making up each of the sugge ted food plans are compared. This is not a comparison of the price per pound or per item although those ::re shown in some instances, out a comparison of toted RENA IRE CORPORATION (PENNSYLVANIA) ET AL. 1181 IIC9 Findings cost of the same items if bought from each source. According to the comparison made Safeway was cheaper on each suggested food plan. Here again Renaire had one price list for the whole period, while Safeway s prices varied during the period and Safeway had various brands of frozen fruits, juices and vegetables the cheapest of which for the lowest price during the period compared with Renaire s Snow Crop brand. 22. All of these charts have been checked by the hearing examiner against the fig-ures in evidence on which they \were based and no error has been found. Furthermore these same charts were attached to answer of counsel supporting the complaint to respondents' motion io dismiss. Respondents ' evidence has g-one into the record since that time. Respondents have therefore had an opportunity to point out any errors in the calculations and none have been 8hO\V11.

23. With respondents' advertising and the evidence in the reconl from \which ihe above mentioned charts were compiled, counsel supporting the complaint resied his case on the charges in the complaint that the representations set forth in subparagraphs and 6 of paragraph G were false.

24. Among other defenses, respondents contend that it is manifestly unfair to permit counsel supporting the complaint to choose the competitors \\'ith \which their prices are to be compared; to choose the date for the comparison; the period of time for which the comparison is to be made; to pick out the lowest price of the competitor on each separate item on any day during the 30-day comparison period and to compare this with respondents' constant price for the 30 days.

25. Hespondents have also challenged the accuracy and suffciency of the comparison between their prices and those of these two competitors on several additional grounds. 26. One ground of challenge is that the goods sold by them other than the meats, were Snow Crop brand which is claimed to be a superior brand, because of national recogniti()J, whereas the brands of these competitors \were not nationally recognized. This ground of challenge is disregarded, for the reason that in the advertising better foods \\'ere offered as a bonus in addition to cheaper price, which is attacked by the allegations of the complaint.

27. . Another ground of challenge is that the comparison of respondents' meat prices with the prices of these two competitors is unfair. In selling primal units of meat, both Acme and Safe- Findings .I.I F, way charge for the weight of the meat as a primal unit and then cut it up into steaks, roasts, etc. for the use of the purchaser. Thus the purchaser pays for any waste of bone and fat. Respondents also sell their meat in primal units but when preparing it into cuts for table use remove all excess hone and fat from some of the cuts or all bone and excess fat, depending on the type of cut. The customer is charged only for the net weight of the meat furnished plus any bones delivered for use in preparing soups or other dishes. The record further shows that the amount of bone and excess fat will vary widely with the contour of the animal, its age and other factors. Also testimony was introduced to show that respondents have to strictly comply with Department of Agriculture standards in naming their various cuts of meat while Acme and Safeway do not; that comparing prices by name only is unfair because cuts of meat bearing the same name may not actually be comparable. 28. Counsel supporting the complaint seeks to meet this last mentioned challenge by showing that, based upon the figures for the two 30-day periods mentioned and projecting them over 24 months, if the participants in respondents' plan paid nothing for their meats, still the savings "voulc1 not be suffcient to enable the participants to save enough to pay for the freezer and the financing cost. This could bear on the charges in regard to the representations in subparagraph 2 and 6, but not on the charges in subparagraph J.

29. Respondents in their defense also have shown that during other recent periods of time, within a 24-month period, beginning with the two 30-day periods of comparison, their then current prices compared with Acme s and Safeways, in the respective areas, showed respondents' prices to be lower than either of these competitors on a majority of items advertised by Acme and Safeway. They have also shown that other comparisons more favorable to them, pricewise may be made from the figures for the two 30-day periods.

30. Respondents also placed in the record the testimony of a number of participants in their plan who said that after making the payments on freezer, food and financing charges to respondents and buying their staples, they still had saved varying amounts of money over what they had previously paid for foor! RENAIRE CORPORATION (PENNSYLVANIA) ET AL. 1183 1169 Findings alone. This testimony was based on estimates of previous expenditure and cannot stand up against actual records of food prices, and comparisons of these food prices, if fair and accurate. 31. There is nothing unfair in counsel supporting the complaint picking out one competitor of respondents in each competitive area for a comparison of prices. If respondents' food prices by comparison with those of any general competitor in the area for a 24 month's period show the representations here being considered to be false, no comparison with any other competitors' prices is necessary on the representations in subparagraphs 2 and 6. By picking out only Acme and Safeway for comparison counsel supporting the complaint narrowed the proof respondents were required to meet.

32. The hearing examiner is of the opinion that the comparisons in the charts presented by counsel supporting the complaint are made OIl an erroneous basis, although the calculations are correct. For instance in the comparison with Acme s prices for the period April 21 , 1955 to May 20, 1955 the chart shows rcspondents offered six 6-02. packages of Snow Crop orange juice for $0.83 (Comm. ex. 26). As against that it is shown that Acme oflerecl six 6-02. P. L. orange juice for $0. 75 during the same period of time. The four price lists of Acme s frozen juices fruits and vegetables in evidence show varying prices of orange juice during the 30-day period. The price list of Acme for six oz. P. L. orange juicc from April 25 , 1955 through April 30 1955 was $0. 85 (Com. ex. 29) as compared with respondents constant price of $0. 83 during the 30-day period for six 6-oz. Snow Crop orange juice. On Acme s price list for May 9 , 1955 through :llay 14 , 1955 (Com. ex. 31) thc price had dropped to six 6-oz P.L. orange juice for $0. 75. The 80.75 figurc is taken for comparison with respondents' constant price of $0. 83 in counsel's chart. The same method is followed in all of the comparisons in the charts. No customer on any particular day could have bought all of the things from Acme for the prices shown in the charts. 33. If any further proof is needed that the comparisons in the charts of counsel supporting the complaint are made on an erroneous basis a comparison between respondents' prices on frozen vegetahles with those of Acme for the period :llay 9, J 955 to May , J 955 has been worked out. It is as follows: ,, ,,!) , . :! (p :::, :;.;,, . . . . . ( : . (j(j(j(j (,(j ,,! .. Findings 55 F.

Hpspunuents ' pri"es Acme pri"eo, .snow Crop, rdc A(Jri121 , 10,,;) to :\hy20 , 195, \Iay g lD55 tD ),111', 20. H!.'i,) getable Y('7.rt:!blc' ;e;1 I .t:;:

10 BC:U1S , cut 10 Be ntn . 2\J Ill';, C'.lt "n-'PH Bp:LJ'", FI',"nr.IJ ell! 10 Br.w 2\J (i,(j :010 10, , Fleur::! Clit (;fj 11 BnH:culi, 10 1 17 . n, 10 Br,1cpr,!i, 37 I Bn:-H.l ,,1 10 J 7c1 I))':)llt.,!Jell':;,;hupped G G.Lj I 101010 !::\opcoIJ. BriJ(";UliBrdc",el cl)f)IJ)Jc."peal's. 2 ()J I', 1)lU\lt,'i, g i _ 10 Cu''' . 10 Corn, 10 n . , 1 85'4:'\ elt 1'1;1,.1 pl.",. lnJIJY fj \. 3. baby. . 10 LimasLimn', Fed!,oo;, Lnll:l",Will Fl1!'llwok fj 1 lU10: 1 n :'I;\ed C'lty,, \':J IJlei; J() Mi\ed 10 I 17 J 1:J Yeget,dJle" 1 () 10 I'n Put3tle" French 1 O;j 1J 1J PuhtDC. , Full:h G .!H). 8!J \, f, i, "w",,,,,, Ii i " S" . Ii''''"p,,1 " . SI);J\ , l,. 1:! S;Jin1cil, leJ-i U!I I II10 fifi 1 OS:H; ' SLC lIcDta.;lL . 10 (, I 1 , Pe:ls and P":L l1"d 1n 1(1 G H, u")()h \Ii I \Ii I Si"" C3.J'.Jts G I , Ot1IJ ;1. ; 1 " I II 34. Thus, while the chart of counsel supporting the complaint shows the \whole order of vegetables from respondents costing $25. 26 as against $25.76 from Acme a difference of fifty cents this chart sho'\vs th(.; order of vegetables from respondents costing $25. 2G as against S27.09 from Acme, a difference of $1.83. Prices on peas and carrots and squash were not obtainable from Acme price list of l\1ay 9, 1955 to May 20, 1955 and it. was necessary to go to the price list of May 25, 1955 to May 30, 1955 to obtain these prices. The point is however that the relationship bebveen respondents' prices and Acme s during the 30-day period of comparison did not remain steady.

35. The comparison of responclenb1' food prices with Acme was for the period April 20 , 1955 to May 31 , 1955 and in the area in Pennsylvania ew Jersey, Del,l\vare and Maryland in which respondents did business, except that portion of IVlaryland in the \Vashin,Q:ton metropolitan area. The comparison of respondents' food prices wit.h Safe\vay s was for the period April 2 , 1H5G to April 30, 1956, in another area in \which respondents did business, the \Va hington metropolitan area. The comparison with Safel'vay s prices in the Washington metropolitan area from April , 1956 to April 30, 1956 cannot be taken as proof that Acme prices in the other geographical area 'A' ere the same as Safeway in the Washington metropolitan area for that. period of time. The RENA IRE CORPORATION (PENNSYLVANIA) ET AL. 1185 1169 Findings in thecase was tried on the theory on these two charges, correct headng examiner s vievv, that respondents' representations related to a credit sale of 24 months, ,,,hleh \vas respondents' plan at the time the representations, here considered, were made. (Refer to opinion.

36. The hearing examiner has given consideration to reopening the proceeding for further evidence on these issues as has been done by the Commission in some cases. The conclusion is that the public interest would not Ivarrant a reopening for the following reasons: (1) there is no jurisdictional question involved; (2) these charges are only three out of a total of twelve charges; (3) there is no indication that additional evidence for a proper comparison of prices is available and (4) there has been no request for reopening.

Wholesale Prices 37. It has been found that respondents have made the representations set forth in subparagraphs 3 and 4 of paragraph 6 of the complaint. These representations were: That. a participant is able to buy food at wholesale prices; That a participant is able to save the difference between the wholesale prices and the prices at which the retailers sells food. 38. These representations are alleged to be false. . The applicable dictionary clefinitions of wholesale are a follows:

Sale of goods by the piece or in large quantity; distinguished from retail; selling to retailers or .iobbEJ' S rather than consumers; as wholesale l:Jice. The applicable dictionary definitions of retail are as follows: the sale of commodities in small quantities or parcels ;- (lPlJosed to wholesale; to sell directly to the consumer.

40. The business of respondents for the most. part consist of selling directly to the consumers and under the above definition they arc retailers although the record shows they do make some sales of their foods to retail stores, at the same prices they seil to the participants of their plan. The record further shows that wholesale prices vary in accordance llo'ith the quantities bought; that t.he quantity of meat sold to participants in a four months supply is equal to the quantity of meat bought at one time by some small retailers; that at least onc wholesaler and one packer have complained to respondents that the prices at which their products were sold to participants \were so low that small retail- Findings 55 F.

ers could not compete; that respondents do sell some frozen foods to their part.icipants at. the same price or less t.han some wholesalers seJl in small quantity.ies.

41. Thus, while respondents are retailers according t.o t.he dictionary definition, in selling t.o the part.icipant.s of their plan their prices t.o them are the same or less t.han wholesale prices are to some ret.ailers. These two charges in the complaint. must. be dismissed.

That the Overall Cost. of Frozen Food t.o the Cust.omer is Less than the Overall Cost. of Corresponding Food in Ot.her Forms 42. There was no evidence on this charge of false represent.at.ion, counsel supporting the complaint. does not propose any finding on it. This charge must therefore be dismissed. That t.he Init.ial Food Order of a Participant is Worked out. by an Expert Food Analyst.

That. Participant. Wi1 Have the Services of a Trained and Qualified Food Consultant. in Planning Food Purchases 43. The record shows t.hat. t.he "t.trained qualified food consultants" and the "accredited food budget analysts" were in reality salesmen for respondent.s who, when t.hey st.art.ed out, had been given one week of schooling by respondents. After t.hat. they were assigned to a more experienced salesman for the observation of one or t.wo sales until t.hey could make t.he present.ation t.o the older salesman s satisfaction. It is evident that the essential part of the work was to sell freezers. One of the meanings of "consultant" is one who gives professional advice or services as a consulting physician . Also the phrase "aceredited food budget. analyst" has a professional ring to it as if the salesman had a degree from some accredit.ed institution. Respondents required no educational qualifications for their salesmen nor \vas any knowledge of food an initial requirement. respondents did employ some t.trained diet.it.ians, but these persons did not call on prospects. It is clear that. the advertising had reference to respondents' freezer salesmen. These representations were definite.ely false and misleading and it. is so found. That. Government. Inspected Meat.s is an Exclusive with Renaire 44. Some of the advertising indicat.es that this claim is made in comparing Renaire with other sellers of freezers and food plans. Respondents contend that the claim \vas only made during RENAIRE CORPORATION (PENNSYLVANIA) ET AL. 1187 1169 Findings a period when none of their competitors in sale of freezers and food plans had a government inspector on their premises. Some advertising however (Com. ex. 10 among others) does not limit the claim to such comparison. The record shows that some competitors of respondents in the sale of food sold government inspected meat that had been bought from packers who had government inspectors on the premises. This representation was false and deceptive and it is so found.

That Each Carton of Food Purchased from Respondents Carries a United States Department of Agriculture Inspection Label 45. The record shows the United States Department of Agriculture inspection label only went on respondents' meat and meat products. The advertising indicates that aJl food carried such inspection labels. This representation was false and deceptive and it is so found.

That by Having Their Food Inspected by United States Inspection Offcials Respondents are Able to Control Production Costs 46. Upon examination by counsel supporting the complaint Mr. Harold B. Saler, an offcial, of the corporate respondents and an inividual respondent himself stated that the United States Department of Agriculture Inspector on the premises has nothing to do with the prices at which respondents sold their merchandise; that he had nothing to do with the pricing structure at all On later examination by his own counsel he stated that clue to the inspector s examinatjon of incoming products "we are able by uniformity of conformation, proper identification of the wholesale units (presumably of meat) which we purchase, we can therefore put these products on our assembly Jine production system, so that we in turn can process in uniformity and rapidity and with speed. " He further said that respondents were benefited by the inspector s ability to reject any products shipped to them on the basis that they did not meet Federal requirements. This prevented respondents from having to argue with the suppliers. He also gave other instances of heneflt to respondents from having a Federal inspector on the premises. 47. Taking aJl of these claimed benefits at their face value they faJl far short of enabling respondents to control the cost of their products to their participants, or to themselves. It is therefore found that this representation is false and deceptive. Order 55 F, That a Participant is Fully Protected in the Purchase of Food from Respondents by the Century,Indemnity Company 48. There is some talk in the Teeord in regard to the protection furnished participants by insurance policies of various kinds and also by respondents' warranties. At one time Mr. Harold R. Saler, above mentioned was requested to furnish counsel supporting the complaint with copies of a1l insurance policies given to participants, but they are not in thc record. The name of the Century Indemnity Company was not connected with any insurance policy except in the advertising nor is there any proof that such policy was not outstanding. Counsel supporting thc complaint does not propose any finding on this charge. Under this state of the record the charge must be dismissed. FINAL CONCLUSIONS 49. The record shows that since this proceeding began respondents have changed their method of operation to some extent. According to this testimony the selling and advertising are now done by what are called franchise distributors. Respondents retain some control over what is said in the advertising of the franchise distributors. Also at the time the testimony was given such arrangement did not apply to the Renaire Corporation of Washington, D.C. The hearing examiner is unable to see how such new arrangement has any bearing on the issues in the pres cni proceeding.

50. The use by the respondents of the representations herein found to be false and deceptive had the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that said representations were true and to induce the purchase of substantial quantities of respondents' freezers and foods by reason of such erroneous and mistaken belief and as a result thereof trade has been unfairly diverted from respondents' competitors. 51. The aforesaid acts and practices of respondents as herein found are a11 to the prejudice and injury of the public and respondents ' competitors and constitute unfair and deceptive acts and practices and unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER It is orde7"d That respondents, Henaire Corporation (Penl1syJ- , , , .

RENAIRE CORPORATION (PENNSYLVANIA) ET AL. 1189 1169 Ord.er , Inc. , a cor-vania), corporation, Renaire of South Delaware poration, Renaire Corp. of Wilmington, a corporation, Renaire of , aMaryland, Inc. , a corporation, Renaire of New .Tersey, Inc. corporation, Renaire Corp. of Delmont, a corporation, Renaire of Allentown, Inc. , a corporation, Renaire of Philadelphia, Inc., a corporation, Renaire Corp. of Lancaster, a corporation, Renaire of South Jersey, Inc., a corporation, and their offcers, and respondents, Leonard S. Cohen Joseph Sherwood, Samuel Saler, Morton 1Jertram B.Saler, Harold B. Saler, William Speckman and Schrank, individually and as officers of said corporations as set forth in the findings herein, and Renaire Corporation (Washington, D. ), a corporation, and its of!cers, and respondents, Bertram Schrank, Joseph Sherwood, and Harold B. Saler, as of!cers of said corporation, and respondent Jules Hecht, individually and as an offcer of said corporation, and respondents' agents, representatives and employees directly or through any corporate or sale or dis-other device in connection with the offering for sale, " istribution of foods and freezers in commerce, as "commerce defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Using the terms " expert food analyst accredited :food budget analyst, trained qualified 1'00(1 consultant" or any other term or terms denoting expertness in referring to their salesmen or saleswomen;

2. I\representing directly or by implication: (a) That their customers or participants in their plan will have the services of an expert in planning their food purchases; (b) That other sellers of food do not sell government inspected meat;

(c) That each carton or package of food sold by them or any of them carries a United States Department of Agriculture inspection label;

(d) That having their food inspected by United States inspection of!cia!s enables them to control the cost of food. (e) That a participant is ah1c to obtain a freezer and a supply of food fol" the same amount of money as would be required to obtain the same quantity of food if purchased in regular retail channels.

(f) That a participant is able to save enough to (1) pay for a , (4) television set, (2) remodel a home, (3) pay for a vacation buy an automobile, or (5) pay for a freezer. Opinion 55 F.

3. Misrepresenting in any manner the savings afforded to responelents' purchasers.

OPINION ON CROSS APPEALS FROM HEARING EXAMINER S INITIAL DECISION By SECREST, Commissioner, The complaint charges that the respondents, in violation of the Feeleral Trade Commission Act, have misrepresented the benefits and advantages afforded by the freezers and frozen foods distributed anel solel by them in commerce under a food purchase plan. In the initial decision filed after hearings were concluded the hearing examiner held that the complaint should be dismissed as to one of the corporate respondents for lack of jurisdiction that certain of the charges were sustained by the evidence as to the remaining respondents and that others were not so supported. Counsel supporting the complaint has appealed from various of the rulings including the jurisdictional ruling. The respondents who are appealing are those named in the initial decision s order to cease and desist and they request dismissal of the charges against them for lack of jurisdiction and on their merits. The respondents named in the complaint are eleven corporations and eight individuals who are their stockholders and offcers and direct their activities and practices. The hearing examiner held that one member of the Henaire corporate family, namely, respundent Renaire Corporation (Pennsylvania), was a packer within the intent and meaning of the Packers and Stockyards Act of 1921 1 and that its participation in the deceptive practices found to have been engaged in were matters committed to the exclusive jurisdiction of the Secretary of Agriculture and accordingly not within the Commission s jurisdiction. Respondents do not purchase any livestock for purposes of slaughter and do no slaughtering. The above corporation does, however, purchase carcasses of meat from packing houses and further processes such products in its plant at Springfield, Pa. under regulations governing meat inspection which are promulgated by the United States Department of Agriculture. These processing activities include cutting, boning, grinding and freezing of the meat food products for retail sale and delivery to buyers of respondents' freezers and participants in their food purchase plan; and it appears from the advertising exhibits that competition of those operations, including the products' wrapping 142 Stat. 160: 7 C. 181 etseq.

RENA IRE CORPORATION (PENNSYLVANIA) ET AL. 1191 1169 Opinion and freezing, requires 27 minutes. Such promotional material additional1ly states that the foods offered are limited to national and local leading brands and includes representations that the meats are "Armour s Star Grade" and the smoked meats are Oscar Mayer Of the definitions appearing in Section 201 of the Packers and Stockyards Act, those here relevant define "packer " as any person engaged in the business (a) of buying livestock in commerce for purposes of slaughter, or (b) of manufacturing or preparing meats or meat food products for sale or shipment in commerce. When previously considering this statutury language, we held in the matter of Giant Food Shopping Cent.er, Inc. D. 6459 (decision on appeal December 19 1957), that the grinding and seasoning of meatloaf and country sausage incident to over-thecounter sale of meat purchased from packer suppliers by a retailer operating a chain of grocery supermarkets in the District of Columbia and elsewhere did not confer packer status on that processor. As we stated there, Congress' purpose "vas to regulate the business concerns which compose the slaughtering and meat packing industry. The legislative target was the packer as Congress knew him, namely, the concern engaged in purchasing animals, slaughtering them, selling food products and processing the by-products tu a greater or lesser degree. In the matter of C1' osse Blackwell C01nlJany, D. 6463 (decided November 1:3 1957), we he1cl that the granting of discriminaiory promotional allowances in violation of Section 2 (d) of the Clayton Act, as amended, by a canner of table foods, some of which contained meats purchased by that food processor from packers, were activities subject to the jurisdiction of the Commission. That holding was affrmed on January 5, 1959, by the United States Conrt of Appeals for the Fourth Circuit.

We hold here that the processing activities performed by persons not members of t.he slaughtering and meat packing industry which are similar to those customarily engaged in in furtherance of the retail merchandising of meat do not c01)stitute the manufacture Ql' preparation of meat or meat food products within the intent and meaning of the Packers and Stockyards Act. The circumstance that the respondents' meat products are not merely refrigerated at the plant but also initially frozen there instead of in the consumer s own home fn!ezer docs not render their activities essentially different in character from that engaged in by retailers of meat. That the business role of respondent Renaire Opinion 55 F.

Corporation (Pennsylvania) is essentially restricted to the retail marketing of meats in commerce also is corroborated by the fact that respondents have elected in the advertising to feature packer products having an established public acceptance. The hearing examiner s conclusions that respondent Renaire Corporation (Pennsylvania) should be deemed to be a packer within the meaning of the original Packers and Stockyards Act are erroneous. On September 2, 1958, which date was subsequent to the time when the parties filed their appeals herein, Public Law 85-909 became effective. This enactment amends both the Packers and Stockyards Act and the Federal Trade Commission Act. Its effect, among others, is to confer on the Commission j ufisdiction over unfair practices in commerce, in connection with all transactions by packers involving (1) commodities other than livestock meats, meat food products, livestock products in unmanufactured form, poultry or poultry products and (2) with exceptions not here material, retail sales by packers of al1 products. For reasons hereinafter stated, we construe the amendment to be retrospective in operation, and, accordingly, applicable to proceedings pending before the Commission at the time of its enactment. Hence, even though the hearing examiner s interpretation of the Packers and Stockyards Act as effective prior to its amendment by Public Law 85-909 were adopted, it follows that the Commission nm,v has jurisdiction over all practices charged in the complaint which are violative of the puhlic policy expressed in the Federal Trade Commission Act if engaged in in commerce by the corporate respondent retailers.

A statute or amendment will be regarded as solely prospective in its operation if in derogation of common law rights or if the effect of giving it retroactive operation will be to interfere with an existing contract, destroy a vested right, or create a new liability in cunnection with a past transaction. Leu.:ellyn v. Frick 268 l:. S. 238 , 252 (1925); Valley town 1')1. v. Women s Catholic Ord.er of Foreste?'s 115 F. 2d 459 , 562 (C.A. 4 , 1940) ; 50 A. p. 500. On the other hand, when not excluded by the terms or implications of the language of the act, statutes and amendments which do not have the foregoing dIects and are directed to changing remedies ur modes of procedure for enforcing existing obligations have retrospective effect. Beatty v. 191 F. 2d 317 (C.A. 8 , 1951); S. v. National City Lines 80 F. Supp. 784 (D. C. S.D. Cal. , 1948), cert. den. 337 U. S. 78; Bowles v. Stricklewd. 151 F.2d 419 (G.A. 5 , 1945); Bowles v. Miller' 151 F. RENAIRE CORPORATION (PENNSYLVANIA) ET AL. 1193 1169 Opinion 992 (C.A. 10 , 1945); Fedeml Bro(J,/casting System v. 239 F.2d 941 (C. C. 1956) ; 50 A.J. p. 506. The bil which was enacted by Congress as Public Law 85-909 was introduced as H.R. 9020. Although it was the subject of a committee report in the first session of the 85th Congress, none was made on it in the second session where it was enacted in a revised form. In the latter session, however, the Committee on Interstate and Foreign Commerce did report on a companion bill which adopted the same general legislative approach and had many provisions similar to H .R. 9020 as ultimately enacted. Such report described that bill to deal "with a reassignment of jurisdiction over unfair trade practices, but leaves unchanged the present substantive provisions of law regarding such practices. " (Rep. No. 1507 (p. 3), 85th Cong. , 2d Sess. The original Packers and Stockyards Act conferring exclusive jurisdiction on the Secretary of Agriculture respecting certain proceedings involving packers did not repeal any of the statutes administered by the Commission as to packers. As to them, it had merely tolled or suspended the Commission s power and jurisdiction to enforce the organic Act and other acts imposing statutory responsibilities similar in vein to those provided in the original Packers and Stockyards Act, Congress' disclaimer respecting changes in substantive la\v \vhen redistributing enforcement responsibilities between the hvo enforcement agencies concerned is to be accorded great weight. It follows, therefore that the purpose of the amendment restoring Commission jurisdiction "'as limited to changing the forum for adjudicating complaints with respect to certain r.ategories of statutory violations by packers. An amendment which merely provides additional machinery f(;r enforcing preexisting statutory responsibilities does not affect substantive rights and wil be accorded retrospective effect. IVIalto:c v. 187 F.2d 406 (C.A. 9, 1951), cert. den. 342 U.S. 820. The same holds true for acts effecting changes in jurisdiction and venue. Larkin v. Saffa?' ans 15 Fed. 147 (Cir. Ct. W. D. Tenn. , 1883); Hadl,:c7c v. American Mail Line, 82 F. Supp. 562 (D. C. N. D. CaJ. , 1949). Hence, we construe the amendment as essentially procedural in character and hold retrospective in its effect as to violations of substantive law by packers. As previously noted, this conclusion likewise requires reversal of the initial decision s holding of lack of jurisdiction by the Commission as to respondent Renaire Corporation (Pennsylvania) .

1194 FEDBRAL TRADE COMMISSION DECISIONS Opinion 55 F.

We also have considered respondents' contentions that the hearing examiner erred in failing to hold that al1 corporate members of the Henaire :family of corporations were within ihe original Act' s definitions of packers. This contention is rejected. Hespondents appeal further contends that there is no record showing that 9 of the 11 corporate respondents are engaged in interstate commerce. It is not controlling, however, that each of such corporations may restrict its free3er sales and solicitations for food orders to a trading area located within the confines of the state issuing its corporate charter. The freezers and foods arc shippcd from the plant at Springfield, Pa. , to purchasers located in other states and Renaire of South Delav,'are, Inc. , Renaire Corp. of Wilmington, Renaire of Maryland, Inc. , Rcnaire of Nc,,, Jersey, Inc., and Renaire of South Jersey, Inc., have made contracts of sale contemplating the shipment of freezers and foods across state lines and thus directly cause their movement in interstate commerce . Furthermore, the foregoing respondents and the corespondent corporations chartered under the la \vs of Pellnsylvania, in instances, advertise jointly and have at all times been operated as a joint and closely integrated enterprise. The hearing examiner s conclusion that the respondents' acts and practices were in commerce has sound leg::l1 basis. Respondents additionally except to the initi d decision s findings of misrepresent.ation in connection with the sales representatives being designated b:y respondents variously as expert food analysts trained qualified food consultants and accredited food budget analysts. The fact that suggested basic food orders prepared penmns \with long experience in the food field are furnished sales personnel for use in sales presentatio113 does not, however, support conclusions that the Jatter, in vie\V of the brief training accorded them, have the quaiifications and expertise claimed for them in the aclverti:dng. v'Ve think that the hearing examiner s findings on this aspect had sound basis in the record. We also have considered the exceptions addilionally interposed by respondents to other finding-s of fllct by the hearing examiner. Inasmuch as the reasons cited hy the hearing examiner in support of these findings appear fully controlling to decision here and have appropriate record basis, these exceptions are denier!. The hearing examiner held that there \Vas a hilure of proof respecting the matters charged in subparagraphs 1 through 6 of paragraph 6 of the complaint and the appeal of counsel supporting RENAIRE CORPORATION (PENNSYLVANIA) ET AL. 1195 1169 Opinion the complaint also asserts error as to those rulings except as to subparagraph 5. Subparagraph 1 charges that the respondents have falsely represented that participants in their program can obtain food at prices below those they would pay for food if purchased in usual retail channels. The second subparagraph alleges that the respondents have represented that a participant is able to obtain a freezer and his supply of food for the same amount as would be required to obtain the same quantity in regular retail channels; and subparagraph 6 alleges that the respondents have represented contrary to the true facts that a participant is able to save enough to pay for a TV set, remodel his home, pay for a vacation, buy an automobile, or pay for a freezer. Though finding that there was sound record basis for conclusions that the respondents had used the challenged representations in promoting the resale of their freezers and foods, the hearing examiner stated that the charges as to their falsity were not supported by the preponderance of the evidence. Renaire plan :\0. 1 affords a quantity of freezables comprising meat, fish, poultry, vegetables, juices and fruits which is of., fered as a four-month supply for a small family priced at $130. AltermLtivc plans at other prices are suggested for larger families but a11 programs arc subject to variation depending on the fami1ies' eating habits. Relevant to these charges, counsel supporting the complaint introduced in evidence price lists effective in Acme Stores in a territory which included the Philadelphia area for the period between April 25, 1955, and May 21 , 1955 , together with Renaire s listings for that period. Also received were price lists effective for Safeway Stores in the V ashington metropolitan area during April, 1956, t.together with the Renaire price list then effective. The tabulations or charts prepared and appended to counsel's appeal brief are directed to comparing Renaire and Acme prices on individual items appearing on the Renairc price list for the above period in 1955; and the tabulated comparisons for Safeway and Renaire prices for the sc1ected 1956 period primarily pertain to freezables included in the various Renaire food plans, and thus purport to con1pare total costs of the various items making up each plan jf bought from those competitive sources at that time in areas where the nrices were effective, Unlike Renaire s prices, those of the two chains \\'ere subject i/J fluctuations on certain articles during the selected p( riods. The price lists and tabulations are relied on by counsel Rli;eporting the complaint as showing that the prices of the supermarket Opinion 55 F.

umcerns were equivalent to or lower than respondent.f:' prices provided the meats were boul!ht in like quantities at the prices for primal units available in various of the chain stores. The hearing examiner expressed views that certain of counsel's tabulations purporting to show that a certain quantity of vegetables would cost $25.26 if purchased from respondents as against $25. if bought at Acme, while mathematically correct, represented an improper or erroneous comparison by reason of their being based on the latter s lowest price levels for each food item. In the tabulation prepared by him and set forth in the initial decision, the hearing examiner instead adopted as a basis for comparison certain higher levels resulting from the price variations during the period under consideration. This indicated that the above frozen vegetables would have cost $1.83 less if purchased from Renaire. Because of the price changes, the hearing examiner further concluded that an evaluation of future price relationships and differences and of whether consumer savings would be afforded by dealing with Renaire over other retailers over the twenty-four months' period of time customarily involved in respondents' credit or deferred payment sales was not possible. We agree that the foregoing evidentiary material and other record matters do not support informed determinations that savings may not be afforded in instances on purchases from respondents over prices prevailing in regular retail channels. Hence insofar as his ruling relates to qualitative claims for savings which might be realized from purchases through respondents we believe the hearing examiner correctly held that the charges of subparagraph 1 of paragraph 6 of the complaint lack sound record support. However, notwiihstanding this c.onclusion, we are also of the view that respondents' claims for average savings amounting to S18. 02 monthly (or $432. 48 for the period covered by respondents' contracts), claimed savings enabling a participant 2 In thi connection the hearing examiner related that: H may be argued that any possible comparison of fCspolldellts' food prices with those of Acme s and Safeway s duril1g either p':riud uf time for which the fir;ures are given will show that Uw pT;Ce, (IT!; o close that if e:.tended Ol.!era 2 mm1th8 1Jeriod. th.ere 1/01l1d lwt heBuffc1e?lt 6(11,;"g8 /'y'''TCh(Is;rIY food from reSl'vndcntH to pay fot the freezer ,nl. Uw financ!; dWT!le. The point is that the relatiol1ship l,.tw€€11 respondents' I,rices and their cumpetilof5 fluctuated ami the fluctuation during the two day periods of tin, demunstrate, if any demonstratioJl is neressary, that no inff'rence is possible to the effed t.hat the relatioJlohip betweell rps)Jonrlcnts' pri, ps and those of the two rornywtitors remain approximately the same for 24 month Th" evido'lce of record docs not affrmatively show the truth or the untruth of the rPI'r!' sentations embodied in subparagral)h, 2 alld 6 of parag-ravh (\ . Thereforl, the holding is that the ha"g€ as to the representations in thesp thn:e s\Jbparar;raphs bcillr; false, deceptive ill1d misleading arc 110t supported by a preponderanee of the evidence, and must be di rni"sed (Ttalic supplied. ) Paragraphs 39 and 40 of the Initial Decisioll. RENA IRE CORPORATION (PENNSYLVANIA) ET AL. 1197 1169 Opinion in their plans to obtain a freezer and food supply for the amounts required to obtain a like food supply in regular channels and claims for savings suffcient to enable participants to buy an automobile television or other items mentioned in subparagraph 6, are completely refuted by this record.

To hold otherwise would be to fail to view the pricing information in its proper perspective. The prices of supermarket organizations are subject to changes in marketing conditions including price changes adopted by competitors. The prices effective for the two chain retailers were available to consumers in a substantial segment of the territory in which the respondents concluded their operations . Furthermore, the periods selected for investigation and price comparisons were of reasonable duration; and the price levels effective in the chain stores and those adopted by respondents appear reasonably representative of the pricing policies of those concerns. It is true that the price changes effective on many articles sold by the supermarket retailers presented various alternative bases for price comparisons. Appended to the brief are additional charts apparently prepared by counsel for purposes of his appeal. These set forth price comparisons taking cognizance of a very substantial number though not all of the price changes made effective by the supermarket retailers in the periods covered by the prking studies. The pricing pattern indicated by the record tends to similar overall price levels bet.ween respondents and t.their compet.itors \with substantial price disparities in some product categories. Also pertinent t.o t.he respondents' quant.itative savings ' claims is the large out.lay required t.o pay for a freezer. For purchasers selecting t.he freezer list.ed at. $459 exclusive of finance charges and a t.wo-year supply of food costing $780, t.he price of food freezer and finance charges for t.he period of t.wenty-four months under respondents' then cust01nary deferred payment plan, together with finance charges on the food, tot.aled $1 352. 16. On a freezer priced at. $799 and a like two-year food supply, the aggregate cost of food, freezer and fmance charges was $1 745.24. The savings on food which would be required in those cases to pay for the freezers and al1 financing charges, respect.ively, amount to $572. 16 and $965. , or 42.3J'7 and 55.317, of the amount.s paid by t.hose buyers. An analysis of 33 of respondent.s contract.s wit.h purchasers indicat.es t.hat. the percentage of total costs required by way of food savings t.o pay the obligations Opinion 55 F.

there incurred amount to 41.32 7u. The cost of the freezers and finance charges have exceeded the cost of the two-year supply of meats called for under some of the food plans. Hence, even if the meats were furnished by respondents without charge in those cases, it would not necessarily result that savings equivalent to the cost of the freezers would be realized by purchasers. In considering the competitive price data, the hearing examiner noted, among other things, testimony to the effect that when primal units of meat, including beef, were cut by respondents into steaks and other cuts for table use, their purchasers received the meats free of bone and excess fal This nowise detracts from the conclusiveness of other evidence refuting the quantitative savings' claims. Evidence pertaining to beef orders filled by respondents shows they regularly included packages of bones. These were billed at the price per pound charged for the particular primal unit of beef sold. The tabulations introduced by respondents in support of their claimed savings included those comparing Renaire prices on a half chuck and a forequarter of beef with those charged by a competitor for like finished cuts sold over the counter. While purporting lower prices by llenaire of 15. 8:;-;, and 17.3ft: respectively, sllch levels of savings would fall far short of those promised in the advertising. Moreover trimmed primal units of beef were available at many stores of that particular chain at prices below or equivalent to respondents' prices.

In these circumstances, we conclude, and so find, that it is not true as represented by the respondents that participants in Renaire s plans are able to buy freezers and supplies of food for the same amounts of money as vvould be required to obtain the same quantity of food if purchased in regular retail channels. The headng examiner found that 30 , to 55 f/,C' of the average family food budget is spent for staples, milk and eggs. While freezables are a broad food category, any savings realized on their purchase would not extend to other articles of the family diet. It thus is clear that such advantages as are afforded to purchasers of respondents' freezers and freezables would not normally include savings approaching the amounts required for buying an automobile or the other things designated in the advertising, or afford the specified savings otherwise promised in the advertisements. We hold that the charges oJ subparagraphs 2 and 6 of paragraph 6 of the complaint have sound record support. The record also supports informed determinations that respondents have mis- RENAIRE CORPORATION (PENNSYLVANIA) ET AL. 1199 1169 Order represented the monetary savings to be realized by the average of the participants in their food program. The initial decision fmdings and conclusions which are in conflict herewith are modisupp()rting thefied accordingly. The contentions of counsel complaint, insofar as they relate to the rulings of the hearing examiner s dismissal of subparagraphs 3 and 4 of paragraph 6 of the complaint, are rejected for failure of proof. The respondents' appeal is being denied and the appeal of counsel supporting the complaint granted in part and denied in part. The record clearly shows that respondent Henaire Corporation (Pennsylvania) participated in the unlawful acts and practices which the initial decision found were engaged in and such respondent accordingly is being included as a party to the order to cease and desist. The initial decision, as modified by our accompanying order, is being adopted as the decision of the Commission. FINAL ORDER Counsel in support of the complaint and the respondents having filed cross-appeals from the hearing examiner s initial decision dated Decen,ber 6, 1957 , and the Commission having considered the same and having granted in part and denied in part the appeal of counsel in support of the complaint and denied the appeal of the respondents, and having directed modification of the inHial decision and the adoption of said initial decision, as so modified:

It is ordered That the hearing examiner s initial decision be, and it hereby is, modified as follows:

1. By striking therefrom, and particularly from paragraph 11 thereof, a1l findings and conclusions to the effect that the respondent, Renaire Corporation (Pennsylvania), is a packer within the intent and meaning of the Packers and Stockyards Act of 1921 , and that said corporation is not subject to the jurisdiction of the Commission, and by substituting for said findings and conclusions the pertinent portions of the Commission s opinion, of even date herewith, on this subject;

2. By striking the fourth and fifth sentences of paragraph 27 and substituting therefor the following: Respondents also sell their meat in primal units but when preparing- it into cuts for table use remove all excess bone and fat from some of the cuts or all bone and excess fnt., depending on the type of cut. The customer is charged only for the net weight ), , .

Order 55 F.

of the meat furnished plus any bones delivered for use in preparing soups or other dishes.

3. By striking the fourth sentence contained in paragraph 35 and all of paragraphs 36 to 40 inclusive, and by substituting for said findings and conclusions the portions of the Commission opinion relevant thereto.

4. By striking therefrom the order to cease and desist and substituting therefor the following:

It is ordered That respondents, llenaire Corporation (Pennsylvania), corporation, H.enaire of South Delaware, Inc., a corporation, Renaire Corp. of Wilmington, a corporation, Renaire of Maryland, Inc. , a corporation, Renaire of New Jersey, Inc. , a corporation, Renaire Corp. of Delmont, a corporation, Renaire of Allentown, Inc., a corporation, llenaire of Philadelphia, Inc. , a corporation, Renaire Corp. of Lancaster, a corporation, Rcnaire of South Jersey, Inc. , a corporation, and their offcers, and respondents, Leonard S. Cohen, Joseph Sherwood, Samuel Saler, Morton Saler, Harold B. Saler, William Speckman and Bertram B. Schrank, individually and as offcers of said corporations as set forth in the findings herein, and llenaire Corporation (Washington, D. corporation, and its offcers, and respondents, Bertram Schrank Joseph Sherwood, and Harold B. Saler, as omcers of said corporation, and respondent, Jules Hecht, individually and as an offcer of said corporation, and respondents' agents, representatives and employees directly or through any corporate other device in connection with the offering for sale, sale or distribution of foods and freezers in commerce, as "commerce " is defmed in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Using the terms "expert food analyst accredited food budget analyst, trained qualified food consultant" or any other term or terms denoting expertness in referring to their salesmen or saleswomen;

2. llepresenting directly or by implication: (a) That their customers or participants in lheir plan will have the services of an expert in planning their food purchases; (b) That other sellers of food do not sell government-inspected meat;

(c) That each carton or package or food sold by them or any of them carries a United States Department of Agriculture inspection label;

RENA IRE CORPORATION (PENI\SYLV ANIA) ET AL. 1201 1169 Order (d) That having their food inspected by United States inspection offcials enables them to control the cost of food. (e) That a participant is able to obtain a freezer and a supply of food for the same amount of money as would be required to obtain the same quantity of food if purchased in regular retail channels.

(f) That a participant is able to save enough to (J) pay for a television set, (2) remodel a home, (3) pay for a vacation, (4) buy an automobile, or (5) pay for a freezer. 3. Misrepresenting in any manner the savings afforded to respondents' purchasers.

It is fnrthe?' ordered That the initial decision, as so modified , and it hereby is, adopted as the decision of the Commission. It is rw.the?' (),"lend That the respondents named in the preamble of the order to cease and desist shall, within sixty (60) days after service upon them of this order, fie with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with said order to cease and desist. , , , Complaint 55 F. T.