Shakespeare Co. v. Federal Trade Commission, 5719.
| Decision Date | 13 June 1931 |
| Docket Number | No. 5719.,5719. |
| Parties | SHAKESPEARE CO. v. FEDERAL TRADE COMMISSION. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Robert O. Brownell, of Washington, D. C. (A. R. Serven and D. R. Forbes, both of Washington, D. C., on the brief), for petitioner.
Alfred M. Craven, of Washington, D. C. (Martin A. Morrison and Robert E. Healy, both of Washington, D. C., on the brief), for respondent.
Before MOORMAN, HICKS, and HICKENLOOPER, Circuit Judges.
The petitioner is now, and for more than thirty years has been, engaged in the manufacture and sale of fishing rods, reels, lines and other items of tackle. It sells these products through small sporting goods and hardware stores located in towns and cities in all parts of the United States and to some of the large mail order and department stores. On May 19, 1930, the Federal Trade Commission issued an order directing it to cease and desist from using certain trade methods found by the Commission to be unfair. The order is in three sections, the first of which orders the petitioner to cease and desist from entering into or procuring from its dealers contracts, agreements, understandings, promises, or assurances that its products, or any of them, are to be resold by such dealers at prices specified or fixed by it. This section of the order, as well as the other two sections, is assailed by the petitioner in this proceeding upon the ground that the findings of fact which the Commission made are not sufficient to support it and are themselves not supported by substantial evidence.
The petitioner admits that it furnishes to its customers suggested minimum resale prices, and that in several instances, where a customer has cut prices below those suggested by it, it has refused thereafter to make further sales to the customer; but it contends that it has never made any agreements with its customers, either express or implied, which undertook to obligate them to observe specified resale prices, and therefore has never adopted or engaged in any unfair trade practice within the meaning of the Federal Trade Commission Act (15 USCA §§ 41-51).
Although the evidence fails to disclose any express or formal agreement entered into by the petitioner with any of its customers, under which the customer agreed not to sell the petitioner's products below the suggested minimum prices, it is apparent from the proofs that there has been co-operation between the petitioner and its customers which was the equivalent, for practical purposes, of such formal arrangement. The record shows several instances in which the petitioner refused to fill orders except upon assurance by the customer that he would discontinue selling below the suggested minimum prices. There are to be found, too, instances of the refusal of the petitioner to make further shipments on orders that had been accepted until such assurance was given. Upon assurance being given, the orders were accepted, or, having been accepted, the further shipments were made. Thus, while the petitioner had the right to refuse to sell its goods to those who did not sell them at the suggested resale prices, with the further right, we think, to state to them its reasons for so doing, the evidence referred to shows that it put into practice "a system of co-operative effort," within the meaning of that part of the decision in Toledo Pipe-Threading Machine Co. v. Federal Trade Commission, 11 F.(2d) 337 (6 C. C. A.) upholding the order of the Commission in so far as it required the manufacturer to desist from requiring dealers placing orders to give assurance that they would be governed by the suggested resale prices as a condition precedent to the acceptance of the orders. It also brings this aspect of the case, in our opinion, within the principles announced in Federal Trade Commission v. Beech Nut Packing Co., 257 U. S. 441, 42 S. Ct. 150, 66 L. Ed. 307, 19 A. L. R. 882. We think, therefore, that the Commission's finding that petitioner enters...
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