Dorfman v. Federal Trade Commission, 12653.

• Decision Date: 05 October 1944
• Docket Number: No. 12653.,12653.
• Citation: 144 F.2d 737
• Parties: DORFMAN et al. v. FEDERAL TRADE COMMISSION.
• Court: U.S. Court of Appeals — Eighth Circuit

144 F.2d 737 (1944)

DORFMAN et al. v. FEDERAL TRADE COMMISSION.

No. 12653.

Circuit Court of Appeals, Eighth Circuit.

October 5, 1944.

Roger Rutchick, of St. Paul, Minn. (W. L. Ulvin, of St. Paul, Minn., on the brief), for petitioners.

Everett F. Haycraft, Sp. Atty., Federal Trade Commission, of Washington, D. C. (W. T. Kelley, Chief Counsel, and Joseph J. Smith, Jr., Asst. Chief Counsel, for Federal Trade Commission, both of Washington, D. C., on the brief), for respondent.

Before GARDNER, THOMAS, and RIDDICK, Circuit Judges.

THOMAS, Circuit Judge.

This case is presented on a petition to review and set aside an order of the Federal Trade Commission. The scope of the relief sought is limited in the brief to the contention that the Cease and Desist Order "should only be modified, rather than reversed for any insufficiency of the evidence."

The petitioners, Meyer Dorfman and Arthur Cohler, trading under the name Stetson Felt Mills, are engaged at St. Paul, Minnesota, in the manufacture and in the sale in interstate commerce of felt rugs.

In a conventional proceeding under the Federal Trade Commission Act, 15 U.S. C.A. § 41 et seq., comprising a complaint, an answer, the taking of testimony and the report of an examiner, the Commission made findings of fact and entered the Order here sought to be modified. The complaint relates to the activities and practices of the petitioners in the sale and distribution of their products in interstate commerce. The Commission found that the proceeding is in the interest of the public, and that the acts and practices of the petitioners as found are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices within the intent and meaning of the Federal Trade Commission Act.

The findings of fact briefly summarized are (1) that the petitioners are and have been engaged in the manufacture and sale of felt rugs and other things in interstate commerce; (2) that in the conduct of their business they and their salesmen have been accustomed falsely to represent to prospective purchasers that they are connected with John B. Stetson Company, a wellknown hat manufacturer of Philadelphia, and that their rugs are made from trimmings from felt hats made by that company; (3) that petitioners and their salesmen practiced padding orders and shipping to purchasers merchandise greatly in excess of that actually ordered; that the order blanks used were to some extent confusing; that their salesmen failed to extend the totals of the various purchases on such blanks so that the purchaser could immediately determine the amount of merchandise purchased; that in some instances confusing notations were placed upon orders indicating additional purchases or purchases of more expensive merchandise than that actually ordered or desired; that petitioners when attempts were made to cancel such orders often collected as much as 19 per cent of the total amount of the order as handling charges, and in many instances large sums as damages by threats to sue and other forms of intimidation; and (4) that such acts and practices are deceptive and result in purchasers paying for rugs in excess of those ordered and paying more than they agreed or expected to pay.

Petitioners first assail paragraph Three of the findings of fact wherein the Commission found that in carrying out their false and fraudulent sales plan the salesmen padded orders and "failed and neglected to extend the totals of the various purchases on said order blanks so that the purchaser could immediately determine the amount of the merchandise which he was purchasing." The contention is that the quoted part of the finding should be eliminated as not supported by the evidence. The contention is without merit. The evidence directly and unequivocally supports the finding. The evidence of the petitioners, instead of denying the statement, tended only to show that it is not customary for salesmen for other business concerns to extend the totals on orders for merchandise.

In their brief petitioners state that they have no quarrel with items 1, 2, 5 and 10 of the Order to Cease and Desist, and in their brief these items are not discussed other than incidentally. Items 1 and 2 cover the representations that petitioners are a part of or in any way connected with the John B. Stetson Company of Philadelphia, and that their rugs are manufactured from trimmings of felt hats made by the said John B. Stetson Company. Item 5 embraces the use of a sales plan by which notations placed on customers' orders increase the amount of their purchases and make the amounts purchased not readily recognizable on the order blanks when they affix their signatures thereto. Item 10 deals with the coercion of or attempt to coerce purchasers by threats to sue or other forms of intimidation into paying damages to petitioners in order to induce them to accept the return of merchandise in excess of the amount ordered.

In three particulars, however, the petitioners seek modification of the Cease and Desist Order. First, they ask that item 4 be modified "if the same is susceptible of an interpretation requiring Petitioners to require their salesmen to extend the amounts of such orders." Second, they contend that the Order is too broad in its prohibition of the use of any sales plan which misleads or deceives purchasers and enables salesmen to obtain orders from purchasers in...