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Callaghan & Co. v. Federal Trade Commission. Frank Shepard Co.

August 19, 1947

CALLAGHAN & COMPANY
v.
FEDERAL TRADE COMMISSION. THE FRANK SHEPARD COMPANY V. FEDERAL TRADE COMMISSION. WEST PUBLISHING COMPANY, THE AMERICAN LAW BOOK COMPANY, EDWARD THOMPSON COMPANY, VERNON LAW BOOK COMPANY, WASHINGTON LAW BOOK COMPANY, BURDETTE SMITH COMPANY AND JAMES R. SPILLANE V. FEDERAL TRADE COMMISSION.



Before AUGUSTUS N. HAND, CHASE, and FRANK, Circuit Judges.

The petitioners have presented for review, and are seeking to have set aside, an order duly entered against them by the Federal Trade Commission. They are Callaghan & Company who filed a separate petition; The Frank Shepard Company who also filed a separate petition; and West Publishing Company, The American Law Book Company, Edward Thompson Company, Vernon Law Book Company, Washington Law Book Company, Burdette Company and James R. Spillane who filed a joint petition. The petitions, which were consolidated for hearing and heard upon a consolidated record of the proceedings below, question the sufficiency of the proof to support the order; the competency of some of the evidence; and the language of the order on the ground that what is required of them is not stated with adequate clarity and precision.

The Commission, having twice modified its original order, entered on August 23, 1944, the following as its final order:

IT IS ORDERED that the respondents American Association of Law Book Publishers, an unincorporated association; The American Law Book Company, a corporation, The W. H. Anderson Company, a corporation; Baker, Voorhis and Company, a corporation; Bancroft-Whitney Company, a corporation; Matthew Bender and Company, Inc., a corporation; Bender-Moss Company, a corporation; Clark Boardman Company, Ltd., a corporation; Bobbs-Merrill Company, a corporation; John Byrne and Company, a corporation; Dennis and Company, Inc., a corporation; The Harrison Company, a corporation; The Lawyers Co-Operative Publishing Company, a corporation; Little, Brown and Company, a corporation; The Michie Company, a corporation; National Law Books Company, a corporation; Public Utilities Reports, Inc. a corporation; The Frank Shepard Company, a corporation; Burdette Smith Company, a corporation; Soney and Sage Company, a corporation; Thomas Law Book Company, a corporation; Edward Thompson Company, a corporation; Vernon Law Book Company, a corporation; Washington Law Book Company, a corporation; West Publishing Company, a corporation; Williamson Law Book Company, a corporation; Callaghan & Company, a corporation; and Fallon Law Book Company, a corporation, and their respective officers, agents, representatives, and employees, in connection with the offering for sale, sale, and distribution of law books and related legal publications in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from entering into, continuing, cooperating in, or carrying out, or directing, instigating, or cooperating in, any planned common course of action, mutual agreement, understanding, combination, or conspiracy between and among any two or more of said respondents or between any one or more of said respondents and others not parties hereto to do or perform any of the following acts or practices:

1. Establishing, fixing, or maintaining discounts, terms, or conditions of sale for law books and related legal publications or adhering to or promising to adhere to the discounts, terms, or conditions of sale so fixed.

2. Maintaining or adhering to the selling price, terms, and conditions of sale of law books and related publications fixed and established by the respondent who publishes such books.

3. Holding or participating in any meeting, discussion, or exchange of information among themselves or under the auspices of the respondent American Association of Law Book Publishers or any other medium or agency concerning proposed or future discounts, terms, or conditions of sale or concerning bids and price quotations in advance of the submission of such bids or price quotations to purchasing officials of the Federal Government or to awarding authorities of other governmental units or subdivisions or to any buyer of law books and related legal publications.

4. Arriving at the amount of any bid or the discount, terms, or conditions of sale to be submitted to purchasing officials of the Federal Government, to awarding authorities of other governmental units or subdivisions, or to any buyer of law books and related legal publications through agreement, understanding, or collusion with other bidders.

5. Establishing, fixing, or maintaining the rates of allowances to be made, used, and applied on books and other publications received in trade, or fixing and maintaining the prices, terms, or conditions of sale governing the resale of such law books and related legal publications taken in trade.

6. Jointly or cooperatively inducing or promoting adherence to, or attempting to induce or promote adherence to, agreements and understandings relative to the sale and distribution of law books and related legal publications by interchange of correspondence, by personal contact with one another individually or in groups, or by policing the bids or sales transactions of respondent members through the respondent Association or otherwise.

7. Employing or utilizing any of the actual practices specifically prohibited herein as a means or instrumentality of otherwise restricting, restraining, or eliminating competition in the sale and distribution of law books and related legal publications.

8. Employing or utilizing American Association of Law Book Publishers or any other medium or central agency as an instrument, vehicle, or aid in performing or doing any of the acts and practices prohibited by this order.

It appearing to the Commission that the record herein does not directly and specifically raise any issue of the legality of joint publication ventures and that it is not necessary to determine any such issue in the present proceeding, IT IS THEREFOR FURTHER ORDERED that the order to cease and desist herein shall not be construed as prohibiting joint publishers of any specific law book, set of law books or related legal publication, from engaging in the cooperative activities otherwise prohibited by this order, provided that such activities are pursued in good faith and solely with respect to publishing and selling such jointly published law book, set of law books, or related legal publications in the usual and ordinary course of business and are not used for the purpose of evading the terms of the order. By this action the Commission does not now pass upon the legality or illegality of joint publication ventures as such, and this action is without prejudice to the Commission's right to institute a new proceeding at any time with respect to the legality of such ventures.

IT IS FURTHER ORDERED that nothing herein contained shall be construed as prohibiting a parent corporation from directing the prices or terms at which any of its subsidiary corporations shall sell any law book or related legal publication published by the parent corporation or by any of its subsidiaries when such prices or terms have been arrived at by the parent corporation acting separately and independently of any competitor of the parent corporation or of any of its subsidiary corporations.

IT IS FURTHER ORDERED that nothing in this order is to be construed as prohibiting any of said corporate respondents from entering into such contracts or agreements relating to the maintenance of resale prices as are not prohibited by the provisions of an Act entitled, "An Act to protect trade and commerce against unlawful restraints and monopolies," approved July 2, 1890 (the Sherman Act), as amended.

IT IS FURTHER ORDERED that the complaint herein be, and it hereby is, dismissed as to George T. Bisel, an individual trading as George T. Bisel Company.

This order was entered after the commission had found facts and concluded as follows:

Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on June 30, 1941, issued and subsequently served its complaint in this proceeding upon the respondents named in the caption hereof, charging them with the use of unfair acts and practices and unfair methods of competition in commerce in violation of the provisions of said Act. After the issuance of said complaint and the filing of respondents' answers thereto, a stipulation as to the facts and a supplemental stipulation as to the facts were entered into between W. T. Kelley, Chief Counsel for the Federal Trade Commission, and the following corporate respondents; The W. H. Anderson Company; Baker, Voorhis and Company, Bancroft-Whitney Company; Matthew Bender and Company, Inc.; Bender-Moss Company; Clark Boardman Company, Ltd.; Bobbs-Merrill Company; John Byrne and Company; Dennis and Company, Inc.; The Harrison Company; The Lawyers Co-Operative Publishing Company; Little, Brown and Company; The Michie Company; National Law Book Company; Public Utilities Reports, Inc.; Soney and Sage Company; Thomas Law Book Company; Williamson Law Book Company; and Fallon Law Book Company, whereby it was stipulated and agreed that, subject to the approval of the Commission, the statement of facts contained in said stipulation and supplemental stipulation may be taken as the facts in this proceeding and in lieu of testimony in support of the charges stated in the complaint and in opposition thereto, and that the Commission may proceed upon said statement of facts to make its report, stating its findings as to the facts and its conclusion based thereon, and enter its order disposing of the proceeding without the presentation of further testimony, argument, filing of briefs, or other intervening procedure.

Thereafter, hearings were held in this matter, at which time testimony and other evidence were introduced in support of and in opposition to the allegations of the complaint as to the respondents American Association of Law Book Publishers, an unincorporated association, and its officers James R. Spillane, president, Clifford W. Mueller, vice president, Richard Reiner, treasurer, and R. Walter White, secretary; and The American Law Book Company; George T. Bisel, an individual trading as George T. Bisel Company; The Frank Shepard Company; Burdette Smith Company; Edward Thompson Company; Vernon Law Book Company; Washington Law Book Company; West Publishing Company; and Callaghan & Company, before a trial examiner of the Commission theretofore duly designated by it, and said testimony and other evidence were duly recorded and filed in the office of the Commission.

Thereafter, this proceeding regularly came on for final hearing before the Commission on said complaint, answers thereto, stipulation and supplemental stipulation as to the facts executed by certain of the respondents (such stipulations having been approved, accepted, and filed), testimony and other evidence, report of the trial examiner upon the evidence and exceptions filed thereto, briefs in support of the complaint and in opposition thereto, and oral argument of counsel; and the Commission, having duly considered the matter and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS

Paragraph One: Respondent American Association of Law Book Publishers (hereinafter referred to as "respondent Association") is an unincorporated, voluntary, nonprofit trade association, organized to promote the mutual interests of its members. The membership of this Association was composed of individuals, partnerships, and corporations engaged in the publication of law books and related legal publications. Respondent Association was dissolved by motion adopted by its members on September 5, 1940. During the time of its existence the headquarters of the respondent Association were in the offices of its secretary R. Walter White, who was associated with respondent The Lawyers Co-Operative Publishing Company, Rochester, New York.

With the exception of the period from from September 1924 to September 1927, respondent R. Walter White was at all times secretary of respondent Association until the date of its dissolution. The individual respondent James R. Spillane, Clifford W. Mueller, and Richard Reiner were president, vice president, and treasurer, respectively, of respondent Association from September 1939 until dissolution of said Association on September 5, 1940.

Paragraph Two: Respondent The American Law Book Company is a New Jersey corporation, having its office and principal place of business at 272 Flatbush Avenue Extension, Brooklyn, New York.

Respondent The W. H. Anderson Company is an Ohio corporation, having its office and principal place of business at 524 Main Street, Cincinnati, Ohio.

Respondent Baker, Voorhis and Company is a New York corporation, having its office and principal place of business at 119 Fulton Street, New York City.

Respondent Brancroft-Whitney Company is a California corporation, having its office and principal place of business at 200-214 McAllister Street, San Francisco, California.

Respondent Matthew Bender and Company, Inc., is a New York corporation, having its office and principal place of business at 109 State Street, Albany, New York.

Respondent Bender-Moss Company is a California corporation, having its office and principal place of business at 91 McAllister Street, San Francisco, California.

Respondent George T. Bisel was an individual trading as George T. Bisel Company, with his office and principal place of business at 724 Sansom Street, Philadelphia, Pennsylvania. Said respondent George T. Bisel died on March 28, 1941, and answer on behalf of his estate was filed in this proceeding by the Pennsylvania Company for Insurance on Lives and Granting Annuities and Raymond M. Remick, executors and trustees under the will of George T. Bisel, deceased.

Respondent Clark Boardman Company, Ltd., is a New York corporation having its office and principal place of business at 11 Park Place, New York City.

Respondent Bobbs-Merrill Company is an Indiana corporation, having its office and principal place of business at 724 North Meridian Avenue, Indianapolis, Indiana.

Respondent John Byrne and Company is a District of Columbia corporation, having its office and principal place of business at 1324 Eye Street, N.W., Washington, D.C.

Respondent Dennis and Company, Inc., is a New York corporation, having its office and principal place of business at 269 Main Street, Buffalo, New York.

Respondent The Harrison Company is a Georgia corporation, having its office and principal place of business at 141 Spring Street, N.W., Atlanta, Georgia.

Respondent The Lawyers Co-Operative Publishing Company is a New York corporation, having its office and principal place of business at Rochester, New York.

Respondent Little, Brown and Company is a Massachusetts corporation, having its office and principal place of business at 34 Beacon Street, Boston, Massachusetts.

Respondent The Michie Company is a Virginia corporation, having its office and principal place of business at Charlottesville, Virginia.

Respondent National Law Book Company is a Maryland corporation, having its office and principal place of business at 1110 - 13th Street, N.W., Washington, D.C.

Respondent Public Utilities Reports, Inc., is a Delaware corporation, having its office and principal place of business at 1329 E Street, N.W., Washington, D.C.

Respondent The Frank Shepard Company is a New York corporation, having its office and principal place of business at 76-88 LaFayette Street, New York City.

Respondent Burdette Smith Company is an Illinois corporation, having its office and principal place of business at 111 West ...


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