Western Fruit Growers Sales Co. v. FTC
| Citation | 322 F.2d 67 |
| Decision Date | 20 August 1963 |
| Docket Number | No. 18344.,18344. |
| Parties | WESTERN FRUIT GROWERS SALES CO., Petitioner, v. FEDERAL TRADE COMMISSION, Respondent. |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
James M. Dale, Beverly Hills, Cal., for petitioner.
James McI. Henderson, Gen. Counsel, J. B. Truly, Asst. Gen. Counsel, E. K. Elkins, and J. Lane Morthland, Attys., F. T. C., Washington, D. C., for respondent.
Before BARNES, HAMLIN and DUNIWAY, Circuit Judges.
The Federal Trade Commission, respondent herein, issued a complaint charging Western Fruit Growers Sales Company, hereinafter petitioner, with paying, granting or allowing to certain buyers and brokers purchasing for their own account, brokerage or allowances in lieu thereof in violation of section 2(c) of the Clayton Act, as amended by the Robinson-Patman Act (15 U.S.C. § 13 (c)). After a hearing, the hearing officer rendered a decision that petitioner had violated the Act. The respondent adopted the hearing officer's decision and issued a cease and desist order against petitioner. Petitioner now petitions this court for a review of the Commission's order. This court has jurisdiction to review the order under the provisions of section 11 of the Clayton Act (15 U.S.C. § 21(c)).
Petitioner, a corporation doing business in California with its principal place of business at Fullerton, California, has for several years been engaged in the business of packing, selling and distributing fruit. It acts as a consignment shipper for some twenty-two packing houses in California and Arizona, and sells and distributes its fruit through brokers to wholesalers, jobbers and commission merchants, as well as direct to customers located in many parts of the United States.
The evidence before the Commission related to a number of transactions which were said to be representative of a much larger number of transactions in which petitioner had sold, shipped and invoiced substantial quantities of fruit to certain firms and had paid to those firms brokerage fees or commissions. Under section 2(c) of the Clayton Act,1 a seller may not pay a buyer brokerage on the latter's purchases for his own account or for the account of another; the motive and good faith of the seller are immaterial to a violation of this section.2 The Commission concluded on the evidence presented that petitioner had violated section 2(c).
The principal issue before the hearing officer was whether a seller-buyer relationship existed between petitioner and the recipients of the brokerage in the representative sales transactions shown by the record.3 If such a relationship did exist, petitioner violated section 2(c). The hearing officer's finding that such sales were made, adopted by the Commission, is conclusive "if supported by substantial evidence" (15 U.S.C. § 21(c)) in the record.4
We hold that the findings of the respondent are supported by substantial evidence in the record and that respondent properly issued a cease and desist order. That sales were made to the brokers in the representative transactions was evidenced by the following: the goods were invoiced directly to the brokers; counsel for petitioner at the time of the trial admitted that when the goods were shipped it was considered a completed transaction; petitioner lost control of the goods after they were shipped, e. g., it did not know what the brokers' reselling prices were, the broker did not account to Western for the price the broker received upon resale of the goods, the name of the customer to whom the broker resold the goods was not known by petitioner in some instances, the broker did not bill petitioner for any loss incurred by the broker when goods were sold by him at a lower price than that invoiced to him, and once a month the broker billed petitioner for the brokerage on fruit, basing the brokerage fee on petitioner's invoice price to the broker.5
Petitioner contends that assuming that a cease and desist order should have been issued, the order issued by the Commission was too broad. We hold that petitioner's contention is without merit. The Commission's order provided:
The Supreme Court has recognized that the Commission has wide discretion to formulate a remedy adequate to prevent repetitions of a violation that has been committed.6 An agency "is not limited to prohibiting `the illegal practice in the precise form' existing in the past" and "may fashion its relief to restrain `other like or related unlawful acts'."7 Section 2(c) is narrowly drawn to condemn the practice of exchanging brokerage between buyer and seller, whether the exchange be by an open payment or disguised as a discount or allowance. We feel that the order quoted above does no more than prohibit the practices found to exist in this case and closely related acts, all of which are expressly prohibited by section 2(c). The appropriateness of an order necessarily depends upon the facts of the particular case and we merely hold here that the order quoted above was sufficiently tailored to the circumstances of this case to preclude its modification by this court.8
Petitioner's contention that the Commission cannot make its order binding upon unnamed officers, agents, representatives and employees of petitioner is similarly without merit.9
It is hereby ordered that the order of the Commission in this case be obeyed by petitioner.
1 Section 2(c) of the Clayton Act provid...
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