Mercury Tube Corporation

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IN THE MA TnH OF MERCURY Tube CORPORATION ET AL.

ORDER , ETC., IX REGARD 'ro THE ALLEm D VIOLATIO:K OF THE FEDERAL TRADE CO::\:DnSSIOK ACT Docket 8155. Complaint, Oct. 24, 1960-Dccision, Mar, , 1961 Consent order requiring a )/ewark manufacturer of rebuilt television picture tubes containing- used parts, to cease sellng such tubes with no disclosure on the tubes themselves or on invoices, and without any MERCURY T"(BE CORPORATION ET AL. 465 464 Complaint adequate notice on tbe cartons in which they were packed, that they were rebuilt and contained used parts.

CO::IPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Mercury Tube Corporation, a corporation, and Joseph Yeckstein, individually and as an offcer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Mercury Tube Corporation is a corporation organized, existing and doing business under and by virtue of the h,ws of the State of N ew Jersey, with its offce and principal place of business located at 173 Newark Street, Newark, New Jersey. Respondent J oseph Y eekstein is an individual and an offcer of said corporation. lie formulates, controls and directs the policies acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. His address is the same as that of the corporate respondent.

PAR. 2. Respondents are now, and for some time last past have been, engaged in the manufacture, offering for sale, sale and distribution of rebuilt television picture tubes containing used parts to radio and television repair shops and distributors for resale to the public.

PAR. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said product, when sold, to be shipped from their place of business in the State of New Jersey to purchasers thereof located in various other States of the United States, and maintained, and at a11 times mentioned herein have maintained, a substantial course of trade in sflid product, in cornmerc.e, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. The television picture tubes sold by respondent' are rebuilt and contain used parts. Respondents do not disclose on the tubes, or on invoiees\ or in an adequate manner on the cartons in which they "ere pac.ked, or in any other manner, that said television picture tubes are rebuilt and contain used parts. PAR. 5. \"lien television picture tubes are rebuilt containing used parts, in the absence of any disclosure to the contrary, or in the 6S1-23i-68- 466 FEDERAL TRADE CO:IMISSION DECISIONS Decision 58 F.

absence of an adequate disclosure, such tubes are understood to be and are readily accepted by the public as new tubes. PAR. 6. By failing to disclose the facts as set forth in Paragraph Four, respondents place in the hands of uninformed or unscrupulous dealers means and instrumentalities whereby they may mislead and deceive the public as to the nature of their said television picture tubes.

PAIL 7. In the conduct of their business, and at all times mentioned herein, respondents have been in substantial competition in commerce, "\with corporations, firms, and individuals engaged in the sale of television picture tubes.

Lm. 8. The failure of respondents to disclose on their television picture tubes, on invoices, or in an adequate manner on the cartons in which they are pa.cmd, or in any other manner, that they are rebuilt containing used parts, had, and now has, the capacity and tendency to mislead members of the purchasing public into the errone011S and mistaken belief that said picture tubes ate new in their entirety and into the purchase of substantial quantities of said tubes by reason of said erroneous and mistaken belief. As a consequence thereof, substantial trade in commerce has been nd is being, unfairly diverted to respondents from their competitors and substantial injury has thereby been, and is being, done t.o competi tion in commerce.

PAR. 9. The aforesaid acts and practices of respondents, as herein alleged, were, and are, a11 to the prejudice and injury of the public a.nd of: respondents' compet.itors and constituted, and now constitute, unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent. and meaning or the Federal Trade Commission Act.

Mr. Michael J. Yitale supporting the complaint. Mr. Human B. J. Weekstein, of Newark N. , for Respondents. INITIAL DECISION BY \V ALTER Ii: NETT HEARING EXA:.IIXER The Federal Trade Commission issued its complaint against the above-named respondents on October 24, 1960 charging them with unfa.ir and deceptive acts and practices in the sale in commerce or rebuilt television tubes within the intent and meaning and in violation of the Federal Trade Commission Act. Ou December 28, 1960 counsel submitted to the undersigned hearing examiner an agreement dated December 21, 1960 among respondents, counsel representing them and counsel supporting the complaint proyiding for the entry without further notice of a consent order. MERCl:RY TUBE CORPORATION ET AL. 467 464 Decision The agreement was duly approved by the Director, the Assistant c'-8sociate Director and the Director or the Bureau or Litigation. The hearing examiner finds that said agreement includes all or the provisions required by Section 3.2" (b) of the Rules of the Commission, that is:

A. An admission by aU the respondent parties thereto of jurisdictional facts:

B. Provisions that:

(1) The complaint may be used in construing the terms of the order;

(2) The order sha1J have the same force and effect as if entered after a fu1J hearing:

(3) The agreement sha1J not become a part of the offcial record or the proceeding unless and until it becomes a part of the decision or the Commission;

(4) The entire record on -which flny cease and desist order may be based shall consist so1cIy or the complaint and the agreement; (5) Thc order may be altered, modified, or set aside in the manner provided by statute for other orders;

C. 'Waivers of:

(l) The requirement that the decision must contain a statement of findings of fact and conclusion or law; (2) Further proceduml steps before the hearing examiner and the Commission.

In addit.ion the agreement contains the following permissive provisions: A ,,'aiver by the respondents of any right to challenge or contest the validity of tbe order entered in accordance with the agreement, and a statement that the signing of said 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.

Having cODsiclel'en. said agreement including the proposed order a.nd being of the, opinion that they provide an appropriate basis for settlement and disposition of this proceeding, the hearing examiner hereby accepts the agreement. but orders that it shall not become a part of the offcial record unless and until it becomes a part of the decision or the Commission.

The following jurisdictional findings are made and the following order issued:

1. Respondent Icreury Tube Corporation is a corporation existing and doing business under and by virtue of the laws of the State New ,Tersey with its offce and principal place of business located at 173 ewark Street, in the City of ewark, State of Kew Jersey. 468 FEDERAL TRADE COML\USSIOX DECISIONS Syllabus G8 F.

2. Respondent Joseph VV Eckstein is an individual and an offcer of said corporation. His address is the same as that of the corporate respondent.

3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent. ORDER It i8 ordered That respondent Mercury Tube Corporation a corporation, and its offcers, and Joseph Weckstein, individually and as an offcer of said corporation, and said respondents' representatives agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of rebuilt television picture tubes containing used parts, in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Failing to clearly disclose on the tubes, on the cartons in which they are packed, on invoices, and in advertising, that said tubes are rebuilt and contain used parts.

2. Placing any means or instrumentality in the hands of others whereby they may mislead the public as to the nature and condition of their picture tubes.

DECISION OF THE CO DnSSION AND onder TO FILE REPORT OF CO:1IPLIANCE Pursuant to Section 3.21 of the Commission s Hules of Practice the initial decision of the hearing examiner shall on the 16th day of March, 1961, become the decision of the Commission; and, accordingly:

It is ordered That the respondents herein shall within sixty (60) days after service upon them or this order, file with the Commission u, report in writing setting forth in detail the manner and form in which they have complied with the order to cease and desist.