Russell-Ward Co., Inc.

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I X THE I.A TTER OF R1:SSELL-ward CO., IKC.

COXSEXT ORDER, ETC. , IX REGARD TO THE ALLEGED VIOLATION OF SEC. 2 (c) OF THE CLA YTQX ACT Docket 820,. Complaint, Dec. 1960-Decision, May, 1961 Consent order requiring a Seattle, Wash., distributor of food products to cease violating Sec. 2 (c) of the Clayton Act by accepting commissions from suppeers on substantial purchases of food products for its own account for resale, such as a discount usually at the rate of 10 cents per 1% bushel box RUSSELL-WARD CO. , INC. 793 792 Complaint of citrus fruit from Florida seners, or a lower price which reflected BUch discount.

CO:;\lPLAIXT The Federal Trade Commission, having reason to believe that the party named in t.he caption hereof, and hereinafter more particularly described, has been and is now violating the provisions of subsection (c) of Section 9 of the Clayton Act, as amended (u. C. Title 15 Section 13), hereby issues its complaint stating its charges with respect thereto as follows:

PAHAGRAPI- 1. Respondent Russcll-\Vard Co. , Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of vYashington, with its offce and principal place of business located at 1528 Occidental Avenue, Seattle 4 vYashington.

Paint. 2. Hcspondent is no\', , and for the past several years has been engaged in business primarily as a distributor, buying, selling and distributing, for its own account, citrus fruit, produce and other food products, a11 of which are hereinafter sometimes referred to as food products. Respondent purchases its food products from a large number of suppliers located in many sections of the 1Jnited States.

In many transactions respondent also ads in the capacity of a broker, representing packer-principals, located in many sections of the united States, in the sale and distribution of their citrus fruits fiDel produce, and is paid for its services in connection therewith the packers' usual rate of brokerage on the particular type of product, sold. For example, some of the packer- principals so represented by respondent are citrus fruit packers located in the State of Florida. ,Yhen so representing these packer-principals located in Florida, as their broker, responrlent is paid for its services in connection with the sale of their citrus fruit, a brokerage or commission usually at the rate of 10 cents per 1% bushel box, or equivalent. The annual volume of business clone by respondent, both as a distributor and as a broker, is substantial. PAR. 3. In the course and com1uct of its business for the past sf,vernJ years, responde-nt has purchased and distributed, and is nmv purchasing and distributing, food products in comme-rce, as "commerce" is defined in the aforesaid Clayton Act, as amended, from suppliers or sellers located in several States of the 1 united States other than the State of vYashington, in which respondent is located. Respondent t.ransports, OJ' Clluses such food products, "hen purchased, t.o be transported from the places of business or packing plants of its suppliers located in yarious ot.her States of the 1Tnited , 794 FEDERAL TRADE CO::IMISSION DECISIONS Decision fir F, States to respondent who is located in the State of -Washington, or to respondent s customers locat,ed in said State, or elsmvhere. In addition, respondent, when representing packer-principals, has, directly 01' indirectly, caused such food products, when sold or purchased, to be shipped ttncl transported from various packers' packing plants or places of business to respondent or to respondent:s customers located in states other than the state of origin of the shipment. Thus, for the past several years, respondent. has been, and is Ilo\V, engaged in a continuous course of trade in commerce, as commerce:' is defined in the aforesaid Clayton Act, as amended. PAR. 4. In the course and conduct of its business for the past several years, but more parties-ulady since January 1 , 1958 , respondent has been and is now making substantial purchases of food products for its OIyn account for resale fr01TI some, but not all, of its suppliers, and on a large number of these purchases respondent has received and accepted, and is now receiving and accepting, from said suppliers, a brokerage, commission, or other compensation, or an allowance or discount in lieu thereof, in connection therewith. For example, respondent has made substantial purchases of citrus fruit for its own account from suppliers or sellers located in the State of Florida and has received from these suppliers or sellers on said purchases, a brokerage or commission, or a discount in lieu thereof, usually at the rate of 10 cents per 1% bushel box, or equivalent. In many instances, respondent receives a Jower price from the suppliers or sellers \which reflects said brokerage or connnission. PAR. 5. The acts and practices of respondent in recejving and accepting a brokerage or commission, or an allowance or discount in lieu thereof, on its o"n purchases, as h( rein alleged flnd described are in violation of sllbseetion (c) of Section 2. of the Clayton Act as amended (TJS. C. Tit 18 15 , Section 13). iJir. Cecil G. Jl1iles, iJfT. E1'7est G. Bomes and 3fT. George TV. Elliott for the Commission.

iJIT. K. Dennis Jones of Seattle Wash. , for respondent. I),TITIAL DECISION BY LOREN II. LXC'GHLIX, HK\llXG EXAMTNEH The Federal Trade Commission (sometimes also hereinafter 1'efelted to as the Commission) on December 7, 1960, issued its complaint herein, charging the respondent, Russell-\Vard Co. , Inc. , a corporation, with having violated the provisions of S2(c) of the Clayton Act, as amended (U. C. Title 15 , P3), and respondent 'yas duly served with process.

On March 17, 1961, there was submitted to the undersigned hearing examiner of the Commission for his considera,tion and approval RUSSELL-WARD CO., I 795 792 Decision a.n "Agreement Conta.ining Consent Order To Cease And Desist." which had been entered into by and between respondent, its attorney, and counsel supporting the complaint, under date of ).iarch 15 1961 , subject to the approval of the I3ure u of Litigation of the Commission, which had duly approved the same. After due consideration, the hearing examiner finds that said agreement, both in form a.nd in content, is in accord with 25 of the Commission s Rules of Practice for Adjudicntive Proceedings and that by said agreement the parties have speeifica11y agreed to the following matters:

1. R.respondent Russell-'Vanl Co. , Inc. , is a corporation existing and doing business under and by virtue of the laws of the State of 'Washington, with its offce and principal place of business located at 1528 Occidental A venue, Seattle, 'Vashington. 2. Respondent admits all the jurisdictional facts alleged in the comphtint and agrees that the record may be taken as if findings of jurisdictional facts had been duly IInde in accordance with such allegations.

3. This agrecment disposes of ali of this proceeding as to all parties.

4. Respondent waives:

(a) A Jly further procedural steps before the hearing examiner and the Commission;

(b) The making of findings of fact or conclusions of la\\'; and (c) Al1 of the rights it may have to challenge or contest the validity of the order to cease and desist entered in accordance ,'with this agreement.

5. The record on which the initial decision and the decision of of the Commission shall be base(1 shad consist. solely of the complaint and this agrecment.

f\. This agreement shall not become a part. of the offcial record unless and until it becomes a part of the decision of the Commission. 7. This agreement is for settlement purposes only and does not constitute an admission by respondent that it has violated the law as alleged in the complaint.

8. The following order to cease and desist may be entered in this proceeding by the Commission without, further notice to respondent. 'Vhen so entered it shall have t.he same force and effect as if entered after a fun hearing. It may be altered, modified or set aside in the manner provided for other orders. The complaint may be used in construing the terms of the order. the cpon due consideration of said complaint and agreement, hea ring examiner approves and accepts the "Agreement Containing 796 FEDERAL TRADE COMMISSIOK DECISIO Syllabus 58 )) Consent Order To Cease And Desist" ; finds that the Commission has jurisdiction of the suhject matter of this proceeding- and of the respondent herein; that the complaint states a legal cause for complaint unders2 ( c) of the Clayton Act, as amended, against the respondent, both generally and in each of the particulars alleged therein; that this proceeding is in the interest of the public; and that the order proposed in said agreement is appropriate for the just disposition of all of t.he issues in this proceeding as to all the parties hereto; and therefore issues the saiel order, as follows: It is ordered That respondent Russcll-\Vanl Co., Inc., a corporation, and its offcers, representatives and employees, directly or through any corporate or other device, in connection with the purchase of citrus fruit or other food products in commerce, as "commerce" is ddIned in the aforesaid ClaTt.on Act, do forthwith cease and desist from:

Receiving or accepting, directly or indirectly, from any seller anything of value as a commission, brokeragc, or other compensation, or any allowance or discount in lieu thereof, upon or in connection with any purchase of citrus fruit or other food products for respondent' s own account, or \"he1'e respondent is the agent, representative, or other intermediary acting for or in behaH, or is subject to the direct or indirect control, of any buyer'. DECISION OY Tile COl\DITSSION AXD QIWER TO FILE REPORT OF CO::fPLL\NCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall, on the 17th day of :Ifay 1961 , become the decision of the Commission; and, accordingly: It h; ordered. That respondent Russell- \Varcl Co. Inc., a corporation, shall, \"within sixty (GO) days after service upon it of this order file with the Commission a report in "Titing, setting forth in detail the manner and form in which it has complied \"ith the order to cease and desist.