James v. Federal Trade Commission, 12106.

Decision Date31 March 1958
Docket NumberNo. 12106.,12106.
Citation253 F.2d 78
PartiesR. B. JAMES and Patrick Zurla, Individuals and Co-partners, Trading as Chicago Board Company, Petitioners, v. FEDERAL TRADE COMMISSION, Respondent.
CourtU.S. Court of Appeals — Seventh Circuit

Marvin H. Ruttenberg, Chicago, Ill., Frank W. James, Glenview, Ill., for petitioner.

Earl W. Kintner, Gen. Counsel, John W. Carter, Jr., Federal Trade Commission, Washington, D. C. (James E. Corkey, Asst. Gen. Counsel, E. K. Elkins, Washington, D. C., on the brief), for Federal Trade Commission.

Before MAJOR, FINNEGAN and SCHNACKENBERG, Circuit Judges.

FINNEGAN, Circuit Judge.

Section 5(a) (1) of the Federal Trade Commission Act in relevant part1 provides: "Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are hereby declared unlawful." The co-partner petitioners have brought here for review a cease and desist order2 issued against them by the Commission acting under § 5(a) (1) based upon undisputed facts showing the following. For two years these petitioners engaged in the sale and distribution in commerce, within the statutory meaning of that word, of pushcards and punchboards, for use by retail dealers when selling merchandise to the public. These pushcards and punchboards are designed and arranged for use in games of chance, gift enterprises or lottery schemes by retailers when selling and distributing merchandise to the buying public. Petitioners' sales in 1954 and 1955 amounted to roughly $500,000 annually, and their pushcards and punchboards are transported from their Illinois place of business to purchasers in various parts of the United States and the District of Columbia. Other significant factual aspects of this situation are adequately summarized in the Commission's opinion:

"Some of said pushcards and punchboards have printed on the faces thereof, legends or instructions which explain the manner in which said devices are to be used in the sale or distribution of various specified articles of merchandise. Others have blank spaces where the user may place his own legends or instructions. The prices of the sales on the pushcards and punchboards vary with the individual device. Upon payment of the amount specified, each purchaser is entitled to one punch or push from the punchboard or pushcard, and when a punch or push is made, a disc or printed slip is separated from the device and a number is disclosed. The number is effectively concealed from the purchaser or prospective purchaser until a selection has been made and the push or punch completed. Certain specified numbers entitle purchasers to designated articles of merchandise, and purchasers securing lucky or winning numbers receive articles of merchandise without additional cost at prices which are much less than the normal retail price of said articles of merchandise. Purchasers who do not secure such lucky or winning numbers receive nothing for their money other than the privilege of making a push or punch from said card or board. The articles of merchandise are thus distributed to the public wholly by lot or chance. Some of these devices may be, and sometimes have been, used to distribute cash prizes, but the primary and usual use is for the sale and distribution of merchandise.
"Many persons, firms and corporations who sell and distribute, and have sold and distributed, candy, cigarettes, clocks, razors, golf equipment, cosmetics, clothing, and other articles of merchandise in commerce between and among the various states of the United States and in the District of Columbia, purchase and have purchased respondents\' pushcard and punchboard devices, and pack and assemble, and have packed and assembled, assortments consisting of various articles of merchandise together with said pushcard and punchboard devices, and have sold said assortments to retail dealers and others for resale to the public. Respondents thus supply to and place in the hands
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7 cases
  • Oneida Tribe of Indians of Wisconsin v. State of Wis.
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • December 20, 1991
    ...Descriptions of these games may be found in Wolf v. Federal Trade Comm'n, 135 F.2d 564 (7th Cir.1943) (pull-tabs); James v. Federal Trade Comm'n, 253 F.2d 78 (7th Cir.1958) (punch boards); Ore. Att'y Gen. OP-6300, n. 2 (September 26, 1990) (punch boards and tip-jars); Md. Att'y Gen. Opinion......
  • Marco Sales Company v. FTC
    • United States
    • U.S. Court of Appeals — Second Circuit
    • December 16, 1971
    ...804, 5 L.Ed.2d 809 (1961); Goldberg v. FTC, 283 F.2d 299 (7th Cir. 1960); Surf Sales Co. v. FTC, 259 F.2d 744 (7th Cir. 1958); James v. FTC, 253 F.2d 78 (7th Cir.), cert. denied, 358 U.S. 821, 79 S.Ct. 34, 3 L.Ed.2d 62 (1958); Drath v. FTC, 99 U.S.App. D.C. 289, 239 F.2d 452 (1956), cert. d......
  • Surf Sales Company v. Federal Trade Commission
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • October 9, 1958
    ...199 F.2d 417; Zitserman v. F.T.C., 8 Cir., 1952, 200 F. 2d 519; Gay Games, Inc., v. F.T.C., 10 Cir., 1953, 204 F.2d 197; James v. F.T. C., 7 Cir., 1958, 253 F.2d 78. The petitioners have offered no good reason, and we certainly know of none, why we should hold to the contrary The only other......
  • Gellman v. FTC
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • May 26, 1961
    ...Mfg. Co. v. Federal Trade Commission, 1952, 90 U.S.App.D.C. 169, 194 F.2d 346, 348 ("intended to be used"); James v. Federal Trade Commission, 7 Cir., 1958, 253 F.2d 78, rehearing denied March 31, 1958, certiorari denied 358 U.S. 821, 79 S.Ct. 34, 3 L. Ed.2d 62, rehearing denied 358 U.S. 89......
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