A. Greenhouse, Inc., et al.

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IN THE MATTER OF A. GREENHOl:SE , INC., ET AL.

CO:-SEKT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATIO:- OF SEC. 2 (C) OF THE CLAYTON ACT Docket C-1201. Complaint, Ap1'. 1967-Decision, Apr. , 1967 Consent order requiring an Albany, N. , grocery products wholesaler and two brokerage concerns to cease engaging in ilegal brokerage praciices. COMPLAIKT The Federal Trade Commission, having reason to believe that the parties respondent named in the caption hereof, and hereinafter more particularly described, have been and are violating the provisions of subsection (c) of Section 2 of the Clayton Act as amended, (15 U. C. 9 13) hereby issues its complaint, stating its charges with respect thereto as follows: PARAGRAPH 1. Respondent A. Greenhouse, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Kew York, with its offce and principal place of business located at Doh and Railroad A venues, Albany, Ne\v York . This organization is a closed corporation, the entire stock of which is owned by respondent Saul Greenhouse. PAR. 2. Respondent A. Greenhouse, Inc., has been and is en.. gaged in business primarily as a wholesale distributor, buying, selling and distributing grocery products. This respondent purchases its grocery products from a large number of suppliers located in many sections of the United States. Its volume of business in the purchase and sale of such products is substantial estimated to be somewhat in excess of $3 million annually. PAR. 3. Respondent Saul Greenhouse is president of respondent A. Greenhouse, Inc., owns all of the capital stock of the said corporate respondent, and together with Eugene Greenhouse, directs and controls the acts, practices and policies thereof. Respondent Eugene Greenhouse was, prior to July 1 , 1963, vice president of respondent A. Greenhouse, Inc. , and owned a substantial part of the capital stock of said corporate respondent. Despite his ostensible severance of any connection with A. Greenhouse, Inc. , subsequent to that date, he continues to act as its agent in the manner described in Paragraph Ten. PAR. 4. Respondent Food Trends, Jnc. , is a corporation organized, existing- and doing- business under and by virtue of the laws Complaint 71 F.

of the State of New York, with its offce and principal place of business located in the building partially occupied by respondent A. Greenhouse, Inc., at Dott and Railroad Avenues, Albany, Kew York.

PAR. 5. Respondent Consumer Motivation, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of K ew York, with its offce and principal place of business located in the building partially occupied by respondent A. Greenhouse, Inc. , at Dott and Railroad Avenues Albany, New York.

PAR. 6. Respondents Food Trends, Inc., and Consumer Motivation, Inc., are now, and for the past several years have been engaged in the brokerage business, purportedly representing various seller-principals located throughout the United States in connection with the sale and distribution of grocery products. However, a substantial part of the business done by respondents Food Trends, Inc., and Consumer Motivation, Inc., consists of arranging sales to respondent A. Greenhouse, Inc. In representing alleged seller-principals in sales to A. Greenhouse, Inc. , respondents Food Trends, Inc., and Consumer Motivation, Inc., are paid brokerage fees or commissions by such sellers. PAR. 7. Respondent Eugene Greenhouse owns a substantial amount of the capital stock of respondents Food Trends, Inc., and Consumer l'lotivation, Inc. , and serves as an offcer of both corporate respondents. Said individual respondent, Eugene Greenhouse, along with other offcers and directors of said corporations directs and controls the acts, practices and policies of the corporate respondents Food Trends, Inc. , and Consumer Motivation, Inc., including the acts and practices hereinafter mentioned. PAR. 8. In the course and conduct of its business for the past several years, respondent A. Greenhouse, Inc. , has purchased and distributed, and is now purchasing and distributing, grocery products in commerce, as "coll1merce " is defined in the Clayton Act, as amended, from suppliers or sellers located in several States of the United States other than the State of New York, in which said respondent is located. Said respondent transports 01' causes such grocery products, when purchased, to be transported from the places of business or packing plants of its suppliers located in various other States of the l:united States to said respondent which is located in the State of Kew York or to said respondent' s customers located in said State or elsewhere. Thus, there has been at all times n1entioned herein a continuous course of trade in commerce in the purchase of said grocery products by said respondent A. GREENHOUSE, INC., ET AL. 701 699 Complaint and the sale of such grocery products by its respective suppliers. PAR. 9. Respondents Food Trends, Inc. , and Consumer Motivation, Inc., in the course and conduct of their brokerage business have been, and are now effecting the sale and distribution of grocery products in commerce, ns "commerce" is defined in the Clayton Act, as amended, for their suppliers located in the various States of the l:united States other than the State of :0ew York in which said respondents are located. Said respondents have transported or caused said grocery products, when sold to be transported from their purported principals' places of business to the buyers ' places of business located in other States, or to their customers located therein. Thus, there has been at all times mentioned herein a continuous course of trade in commerce in the sale of said grocery products by said respondents for their purported principals.

PAR. 10. In the course and conduct of their business for a number of years last past, but more particularly since May J 963 the individual respondents, Saul and Eugene Greenhouse have made and are now making substantial purchases of grocery products for the corporatc respondent A. Greenhouse, Inc. Many of said purchases were made from supphers through respondents Food Trends, Inc. , and Consumer Motivation, Inc. , who received a commission, brokerage or other compensation or also\vances or discounts in lieu thereof, in connection 'with such sales from said suppliers. Respondents Food Trends, Inc., and Consumer :Vlotivatjon, Inc. , are receiving assistance from full-time employees of respondent A. Greenhouse, Inc. , who are under the direct control of said corporate respondent. In addition, respondent Eugene Greenhouse, vi'ho ostensibly no longer has any connection with respondent A. Greenhouse, Inc. , continues to act as its agent jn conclucting the aftail's of said corporate respondent, particularly as they reJate to the purchase, marketing and sale of grocery products, including the grocery products purchased t11lough the brokerage operations of respondents Food Trends, Inc. , and Consumer lVlotivation, Inc.

PAR. 11. The brokerage commissions received from sellers oJ grocery products by Food Trends, Inc., and Consumer 1\Iotivation Inc., on sales made by these sellers to respondent A. Greenhouse, Inc. , are substantial. In man:y instances, respondent A. Greenhouse, Inc. , has been the principal account for Ivhich respondents Food Trends, Inc., and Consumel' l\Jotivation, Inc., have arranged sales, PAR. 12. In view of the control and relationship described Decision and Order 71 F. above, respondents Food Trends, Inc., and Consumer Motivation Inc. in the conduct of their business have been acting for and in behalf of the buyer, respondent A. Greenhouse, Inc., or have been subject to the direct or indirect control of the buyer, A . Greenhouse, Inc.

PAR. 13. The acls and practices of respondents, and each of them, in receiving and accepting a brokerage or commission, or an allo\vance or discount in lieu thereof, from sellers on their own purchases, through respondent brokerage companies, Food Trends, Inc., and Consumer Motivation, Inc., are in violation of subsection (c) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act.

Commissioner Elman dissented from the -issuance of the complaint.

DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of subsection (c) of Section 2 of the Clayton Act as amended, and the respondents having been served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as set forth in such complaint, and waivers and provisions as required by the Commission s rules; and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement, makes the following .i urisdictional findings, and enters the following order:

1. Respondent A. Greenhouse, Inc., is a corporation organized existing and doing business under and by virtue of the laws of the State of :-ew York, with its office and principal place of business located at Dott and Railj")ad Avenues, Albany, C\ew York. Respondent Saul Greenhouse is president of A. Greenhouse Inc., and his business address is the same as that of said corporation.

Respondent Food Trends, Inc., is a corporation organized, exist- A. GREENHOUSE , I:\TC., ET AL. 703 699 Order ing and doing business under and by virtue of the laws of the State of New York, with its offce and principal place of business located in the building partially occupied by respondent A. Greenhouse, Inc. , at Dott and Railroad Avenues, Albany, New York.

Respondent Consumer Motivation, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of C\ew York, with its offce and principal place of business located in the building partially occupied by respondent . Greenhouse, Inc. , at Dolt and Railroad A venues, Albany, K ew York.

Respondent Eugene Greenhouse is an offcer of both Food Trends, Inc., and Consumer .Motivation, Inc., and his business address is the same as that of said corporations. 2. The Federal Trade Commission has jurisdiction of the subject matter of this procecding and of the respondents. ORDER It is ordered That respondents A. Greenhouse, Inc. , a corporation, and its offcers, and Saul Greenhouse, individually and as an offcer and s ockholder of A. Greenhouse, Inc. , and respondents agents, representatives nnd employees, directly or through any corporate or other device, in or in connection with the purchase of grocery products in commerce, as "commerce " is defined in the Clayton Act, as amended, do forthwith cease and desist from: Receiving or accepting, directly or indirectly, from any seller, anything of value as a commission, brokerage or other compensation, or any allowance or discount in lieu thereof upon or in- connection with any purchase of grocery products for respondents' own account, or on purchases made through Food Trends, Inc. , or Consumer l\1:otivation, Inc. , or any other brokerage organization 'where, and so long as, any relationship exists between the brokerage organization and the respondents named herein, either through ownership, control management 01' representation.

It is further ordered That respondents Food Trends, Inc., Consumer l\lotivation, Inc. , corporations, and their offcers, and Eugene Greenhouse, individually and as an offcer and stockholder of Food Trends, Inc. , and Consumer l\1otivation, Inc. , and respondents ' agents, representatives and employees, directly or through nny corporate or other device, in or in connectlon with the purchase or sale of grocery products in commerce, as "com- 704 FEDERAL TRADE COM)dISSION DECISIONS Modification of Order 71 F. merce" is defined in the Clayton Act, as amended, do forthwith cease and desist from:

Receiving or accepting, directly 01' indirectly, from any seller, anything of value as a commission, brokerage or other compensation, or any allmvance or discount in lieu thereof upon or in connection with any purchase of grocery products for their own account, or for the account of A. Greenhouse Inc. so long as any relationship exists between said brokerage organizations and the buyer organization, either through ownership, control or management, Or where respondents Food Trends, Inc., Consumer Motivation, Inc. , or Eugene Greenhouse, is the agent, representative or other intermediary acting for or in behalf or is subject to the direct or indirect control of any buyer, including A. Greenhouse, Inc. It -is furthe?" ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied ,vjth this order. Commissioner Elman dissented from the issuance of the complaint.