Bunte Bros. v. Federal Trade Commission

Decision Date08 July 1939
Docket NumberNo. 6651.,6651.
Citation104 F.2d 996
PartiesBUNTE BROS., Inc., v. FEDERAL TRADE COMMISSION.
CourtU.S. Court of Appeals — Seventh Circuit

Samuel G. Clawson, of Chicago, Ill. (Samuel G. Clawson and Le Roy R. Krein, both of Chicago, Ill., of counsel), for petitioner.

W. T. Kelley, Chief Counsel, Federal Trade Commission, Martin A. Morrison, Asst. Chief Counsel, and P. C. Kolinski and James W. Nichol, Sp. Attys., all of Washington, D. C., for respondent.

Before SPARKS, MAJOR, and TREANOR, Circuit Judges.

MAJOR, Circuit Judge.

This is a petition to review an order of the Federal Trade Commission entered February 19, 1938 under Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45, 15 U.S.C.A. § 45, in reference to unfair methods of competition in commerce, which order involves, among other things, the interstate shipment of candy described as "break and take" and "punchboard assortments." The order is based on findings of the Commission made after hearings held on an amended complaint issued January 7, 1936. The original complaint against petitioner was issued May 1, 1930, involving only the "break and take" assortments. As to this, petitioner did not contest and an order was entered by the Commission April 3, 1934. This order was set aside January 17, 1936, when the amended complaint was filed, covering both candy assortments.

The Commission found, among other things, that petitioner is an Illinois Corporation, with its principal place of business in Chicago; that it has been for several years engaged in the manufacture of candies and in the sale and distribution thereof to wholesalers, jobbers and retail dealers located in all states of the United States, and makes its shipments interstate. It was found that petitioner, prior to April 1, 1934, shipped in interstate commerce assortments of candy known in the candy trade as "break and take" assortments; that such assortments consist of a number of pieces of candy retailing for one cent each and with differently colored centers and a few larger bars; that the smaller pieces of candy purchased for one cent each are broken open by the purchaser to determine the color of the center; that some pieces with certain colored centers and the last piece in the assortment entitle the purchasers thereof to a larger bar of candy free of charge; that the assortments comprise both the smaller pieces of candy and the prizes and are sold by the petitioner as a unit to the purchasers of such assortments. The Commission found that on or about April 1, 1934, the petitioner discontinued the sale and distribution of assortments similar to those just described to purchasers located in states other than the State of Illinois.

The Commission also found, among other things, that the petitioner ships in interstate commerce, assortments of candy consisting of a number of boxes of candy accompanied by a punchboard; that a punchboard is a cardboard device containing pieces of paper with printed numbers; that the numbers on each board are effectively concealed from the purchasers until a punch or selection has been made and a particular punch selected from the board; that the punches or chances sell for five cents each; that purchasers of chances who select winning numbers are given one of the boxes of candy without additional charge; that the purchasers of chances who do not select winning numbers receive nothing but the privilege of punching a number from the board; that some of the boards distribute boxes of candy and other articles of merchandise as prizes to purchasers selecting or punching particular numbers. The packages of candy in the assortments consist of one or two pound boxes which range in retail price from sixty cents to $5 per box; these assortments consisting of boxes of candy and a punchboard are sometimes referred to as "deals."

The above related facts as to both the "break and take" and "punchboard assortments" are not in dispute. In fact, they are conceded by petitioners. It is also admitted that each candy assortment involves the use of chance and that such use is contrary to public policy.

It is also agreed by the petitioner that the use of chance prior to April 1, 1934, in the "break and take" assortments constituted an unfair method of competition under the Act in question. It is agreed that the sale of penny candies by the aid of the element of chance in such assortments necessarily injures its competitors and that proof of such is unnecessary. The only question raised with reference to the Commission's order insofar as it pertains to this assortment is that inasmuch as petitioner had made a report of compliance to the Commission, that it would cease and desist from selling such assortments in interstate commerce and that a finding to such effect was made by the Commission, that the Commission's order in respect thereto is unauthorized or justified. This contention can not be sustained. The Act in question provides: "Whenever the Commission shall have reason to believe that any such person, partnership, or corporation has been or is using any unfair method of competition or unfair or deceptive act or practice in commerce * * * it shall issue and serve * * * a complaint, etc. * * *."

It seems obvious that the words "has been" in the language just quoted authorize the Commission to issue its cease and desist order notwithstanding the unfair method complained of has been discontinued. This construction of the statute is sustained by the great weight of authority.

In Federal Trade Commission v. Goodyear Company, 304 U.S. 257, 260, 58 S.Ct. 863, 864, 82 L.Ed. 1326, the court said: "Discontinuance of the practice which the Commission found to constitute a violation of the Act did not render the controversy moot."

This court, in Federal Trade Commission v. A. McLean & Son, 7 Cir., 84 F.2d 910, 913, with reference to this same question, said: "Discontinuance or abandonment is no defense to the order, for, if true, it would be no guaranty that the challenged acts will not be renewed. Federal Trade Commission v. Wallace (C.C.A.) 75 F.2d 733. The benefit to respondents of an abandonment may be fully protected by their report to the Commissioner as required by the Commission's order."

In Federal Trade Commission v. Wallace, 8 Cir., 75 F.2d 733, 738, the...

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11 cases
  • Bunte Bros. v. Federal Trade Commission
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • February 20, 1940
    ...the meaning of section 5 of the Federal Trade Commission Act, 15 U.S.C.A. § 45. Following this decision, we, in Bunte Bros. v. Federal Trade Commission, 7 Cir., 104 F.2d 996, upheld the Commission's order to desist from practices quite similar. We are on secure and undisputed ground, when w......
  • Hamlet Ice Co. v. Fleming
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • April 13, 1942
    ...over out-of-the-state competitors. See, also, Bunte Bros. v. Federal Trade Commission, 7 Cir., 110 F.2d 412; Bunte Bros. v. Federal Trade Commission, 7 Cir., 104 F.2d 996. Cf. California Rice Industry v. Federal Trade Commission, 9 Cir., 102 F.2d In these cases the mere fact that the practi......
  • Brown v. Douglass
    • United States
    • U.S. District Court — Northern District of Texas
    • July 17, 1943
    ...v. United States, 226 U.S. 20, 33 S.Ct. 9, 57 L.Ed. 107; Gimbel Bros. v. Federal Trade Comm., 2 Cir., 116 F.2d 578; Bunte Bros. v. Federal Trade Comm., 7 Cir., 104 F.2d 996; Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 59 S.Ct. 206, 83 L.Ed. 126; National Labor R......
  • Eugene Dietzgen Co. v. FEDERAL TRADE COM'N
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • May 3, 1944
    ...there is no reason to believe the practice will be resumed." Federal Trade Law and Practice, Beer, page 198. See also Bunte Bros. v. Federal T. C., 7 Cir., 104 F.2d 996; Federal T. C. v. A. McLean & Son, 7 Cir., 84 F.2d 910; Holloway & Co. v. Federal T. C., 299 U. S. 590, 57 S.Ct. 117, 81 L......
  • Request a trial to view additional results
2 books & journal articles
  • Deceptive and Unfair Practices
    • United States
    • ABA Antitrust Library Consumer Protection Law Developments (Second) - Volume I
    • February 2, 2016
    ...v. FTC, 104 F.2d 999 (7th Cir. 1939) (manufacture and sale of candy assortments packaged with lottery scheme unfair); Bunte Bros. v. FTC, 104 F.2d 996 (7th Cir. 1939) (manufacture of break-and-take candy and punchboard assortments unfair); Minter v. FTC, 102 F.2d 69 (3d Cir. 1939) (break-an......
  • Table of Cases
    • United States
    • ABA Antitrust Library Consumer Protection Law Developments (Second) - Volume II
    • February 2, 2016
    ...16-03-28 16:23:57 TABLE OF CASES 1451 Bumson Commc’ns. v. Arbitron, Inc., 239 F. Supp. 2d 550 (E.D. Pa. 2002), 1233 Bunte Bros. v. FTC, 104 F.2d 996 (7th Cir. 1939), 105 Burck v. Mars, Inc., 571 F. Supp. 2d 446 (S.D.N.Y. 2008), 1269 Burger King Corp. v. Mason, 855 F.2d 779 (11th Cir. 1988),......

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