Modernistic Candies v. Federal Trade Commission

• Decision Date: 15 November 1944
• Docket Number: No. 8356.,8356.
• Parties: MODERNISTIC CANDIES, Inc., et al. v. FEDERAL TRADE COMMISSION.
• Court: U.S. Court of Appeals — Seventh Circuit

145 F.2d 454 (1944)

MODERNISTIC CANDIES, Inc., et al. v. FEDERAL TRADE COMMISSION.

No. 8356.

Circuit Court of Appeals, Seventh Circuit.

November 15, 1944.

Irvin H. Fathchild, of Chicago, Ill., for petitioners.

Joseph J. Smith, Jr., W. T. Kelley, Chief Counsel, and Eugene W. Burr, Sp. Atty., all of Washington, D. C., for respondent.

Before EVANS, KERNER, and MINTON, Circuit Judges.

MINTON, Circuit Judge.

On July 16, 1943, the petitioners filed in this court a petition to review a cease and desist order issued by the Federal Trade Commission on May 25, 1943, in proceedings instituted by the Commission pursuant to section 5(a) of the Federal Trade Commission Act, 15 U.S.C.A. § 45(a).

The petitioners market chewing gum in various flavors by means of a "Ballgum" board. This is a punch board with pockets for 150 small balls of gum. The holes in which the gum balls are placed are pasted over with sheets of paper so that the customer, punching out one of these little balls of gum, does not know what flavor or color of gum he is going to receive. Of the 150 balls of gum on the board, 20 or 24 are of one color, and the balance are of a different color. The merchant may, of course, if he so desires, merely sell these gum balls to his customers at a penny a piece.

My colleagues and I experimented with one of the exhibits to the extent of several punches. Two of us punched out white balls, but Judge Evans punched out a red ball. The gum ball was palatable but seemed to contain less gum than the ordinary stick. There would seem to be no particular inducement to a customer to buy gum in this manner. Our experiment told us that the board was not designed to operate as simply as this. The seller of that board had something else in mind.

The evidence is that when a ball of the off-colored gum was punched out, the merchant would give a prize of some kind to the lucky customer, usually a stick of candy or a candy bar. The number of off-colored balls was printed on the face of the board, and from this information the merchant could determine what value of prize he could afford. The setup was a perfect way to garner children's pennies although the record showed that adults were equally attracted, which reminds us of what the poet said, that "the child is father to the man."

Counsel for the petitioner discussed at great length from a sociological point of view, the age-old problem of the gambling instinct in the human being. According to his analysis, gambling pervades our entire economic system; thus insurance contracts are gambles, stock and grain exchange transactions are gambles, and the farmer's dependence on the weather is a gamble. Counsel's attempts to apply this analysis to the present case left us cold and unimpressed. He even reminded us that our great idol, Mr. Chief Justice Marshall in his day attended the horse races and wagered with his clergyman. In fact, they ran a book. As indicating how times have changed, and how even our coarse nature has yielded to the protecting care of governmental policy, we confess we do not even know a bookmaker, clerical or otherwise, and our passes to the beautiful race tracks around Chicago lie in our desk unused.

There may be in every child the impulse that prompts him to take a chance, but it has been the public teaching and the public policy of the land that gambling is immoral and to be condemned. The Federal Government has made it a criminal offense to transport lottery tickets or to cause them to be transported in interstate commerce. 18 U.S.C.A. § 387. Lotteries used in the marketing of merchandise have long been condemned by the Supreme Court and by this court. The cases are legion.

In Federal Trade Commission v. R. F. Keppel & Brother, Inc., 291 U.S. 304,...