Document 4aNyM98bjzbb64ZBe500OvqVe

FILE NAME: National Safety Council (NSC) DATE: 1944 Jun DOC#: NSC266 DOCUMENT DESCRIPTION: Legal - U.S. Circuit Court of Appeals Petition to Review and Set Aside Order of Federal Trade Commission  IK THE UNIT EL t i m e CIRCUIT COURT OF A?.'EAL FOR THE EIXTH CIRCUIT RECORD X / NORRISTOWN MAGNESI* .Ut ASBESTOS COM."ANY e corporetion, snd 9827 ALL MOUNTAIN COMPANY, * corporition Petitioners. -ftgiiinst- FEDERAL TRa BE COMMISSION Respondent PETITION TO REVIEW ASL EFT ASILE ORDER -- OF THE FLLP.1v/L TR> LE COMMISSION To the Honortble Judges of the United E t c t c s Circuit Court of Appeeisfor the Sixth Circuits NJC COME your petitioners, NORRIS TOD?,' MAGNESIA >KL a EBcSIOS CGi --a NX, t cor. orition, snd BALL MOUNTAIN COLONY, f. cor .orition, by their tttorney, tnc jointly end sevenlly present this their petition to review m e set tside t certs in order of the Federil Trrde Comaission (h^reintfter referred to j $ the 'Conuaission''), aide end entered on the I7th dsy of April, 104.4, in certain proceedings entitled pIn the Hitter of Acme Asbestos Covering tnd Flooring Conspeny, et ftl., Locket No. 4S1S", snd in support thereof respectfully show: I Sa t u r e o f p r o c e e d i n g s /S t o w h i c h REVIEW IB SOUGHT 1. On the 10th dey of October, 1941, the- Commission issued i co^pltint ninaing i c respondents thereto nineteen corporetions, including the petitioners, tnd one Individual, Loneld Tuiloch, Jr., end on the i'7th dty of December, 1941 issued (fin amended complaint. The trended coc.plint alleged thi-t the respondent* entered into an unlawful combination to restrain competition In the sale end distribution of licensed ind non- licensed materiels (defined In the emended complaint) end also o the low-pressure asbestos covering embodying some or ell of such rasterisls, In interstate commerce, that pursuant thereto they hfd|t among other thing*, fixed fnt mtinteined prices, had fixed and e Eeintfined fired differentials in prices between different classes'" of customer*, h.'d adopted and maintained e system of selling at delivered prices only predict ted on basing points, had adopted end acinteined e plan dividing the United S t a t e s into certain orics zones, hsd edopted end used a merchandising plan, end htd entered into tnd carried out license tgreesents under the Toohey Patent. I It was alleged that these acts restrained commerce in said product ' tnd constituted unfair methods of competition in coumercc within the meaning of Section t of the Federal Trade Commission /ct. j 1. Answer* vere filed by your petitioners and by other respondents denying that they had maintained en unlawful combination to restrain competition. Your petitioners denied that 1 1 the time of the issuance of the complaint they sold licensed materials. They admitted being engaged in interstate commerce but denied ell other material allegations of the complaint. They stated that their selling methods htd been in effect for many year tnd were not edopted through understandings or agreement* with other respondent corporations. l , Thereafter the Commission designated a Trial Exeralner to take testimony in the proceeding. Testimony on behalf of the Commission was taken in Philadelphia, Brooklyn, Cincinnati, Cleveland, Chicago, Milwaukee, Minneapolis and Y<Yshlngton and on behalf of respondents in Cincinnati, Brooklyn, Boston,Chicago, . tnd Philadelphia. 4 The Trial Examiner filed his report on Ker 1945 snd a copy s served on etch of your petitioners. Pursuant p r p p n r m r r n a t t w t k j a t i o n a i m ->r u \ to th# rules of the C o m ission* your petitioners herein end other res undents filed exceptions to the report of the Triti 1 Examiner. These exceptions deelt with metters of detail therein the report res insccurtte. Tritl counsel for the Commission j ignored the re ort of the Tritl Ersoiner end filed no exceptions thereto. 5. A brief wcs filed on behelf of the Commission re resting the charges contrined in the compleint, jnd your petitioners end other respondents filed briefs siting thct the comylsint be dismissed. 6. The ctse wes trgued orelly before the Comission end wcs submitted on June l, 1943. 7. On April 17, 1344, the Commission entered its findings of fret, conclusion end order. The Commission concluded thct ell respondents, including your petitioners, were viol*ting Fection of the Federel Trtde Commission Act -me ordered them to cesse end desist end to file s report setting forth in dete.il the asnner end fora in which they hsve complied with the order, A copy of the findings, conclusion end order is ttrehed hereto tnd mede s pert hereof re Exhibit "A*. 8. Tour petitioners contend the Commission's eo-crlled findings es to the ftets conttin stny conclusions which in reflitl re not findings of ft ct ror inferences justified by thn '-vid^nce; thct the omissions from its findings, of fects shown by the evidence, render its findings mirierding ; thr t itc conclusion is not supported by its findings or the evidence end is erroneous; end thct the order to cei ee fnd desist is erroneous sod illegrl in thi t it is not btsed on ftets estfbLished by evidence. These contentions ere tmplified end more specifically set forth herein after. FACTE II f/TUT!f UPON WHICH V'r'Nr If- BAEFt A. Ftets cs to Venue Your petitioner, Sell Mountein Coo,eny, is e tele esre corporation with It? principal -It ee of business >nd it raanufic taring factory (now in course of reconstruction after a fire) in Rockdsle, Ohio. It sells the products of its acnufrctui end carries on business in Ohio tnd elsewhere, four petit?on*r, Norristown Utgnesit end Asbestos Company end many of the other respondents in the Commission proceeding likewise sell the products of their manufacture end cerry on business in Ohio and elsewhere. Other respondents, The Philip Cerey Manufacturing Company end The Clerk Asbestos Company, ere corporations orgtnixed end existing under the lews of the State of Ohio end have their principal office end piece of business in said State. B. The Statutes The statutes under which this Court has Jurisdiction and venue ere Eec. 15, Title 3, 0. . Code (Section 118 of the Judicial Code, as f tended), and ec. <5, Title 15, U. . Code (fee. 5 of the Federal Trade Commission Act). Ecc. 5, Title 8, U. . Code, t f o r e s t id, provides In paragraph (e)t "The Circuit Courts of Appeal ere further empowered to enforce, set side or modify orders of the Federal Trtde Commission ts provided in Faction 45 of Title 15;* pert* Section 45 of Title 15, provides in paragraph (c) In *(c) Any person, partnership, or corporation required by an order of the Commission to cease rnd desist frora using any method of competition or ret or practice may obtain a review of such order in the circuit court of appeals of the United States, within any circuit where the method of coar.etition or the act or practice in question was used or where such person, partnership or corporation resides or carries on business, by filing in the court, within sixty dayi from the date of the service of such order, a written petition praying that the order of the Con ission be set aside. A copy of such petition shall be forthwith served upon the Con'tssion, end thereuoon the Commissi' forthwith shall certify anc file in the court a transcript of the entire reord in the proceeding, including all the -rvicence taken rnd the reuort and order of the Co&eiission. Upon such filing of the petition and the trs uscript the court shall have jurisdiction of th- proceeding rnd of the cuestion determined therein, * * * * 4 POIfTC OK KHICH ?ETI TI O# "BE INTENT TO FELT 1. The Commission*s finding* indcete th; t the jombinetion end c!ons,drt.cy deemed to exist consisted of: (?) ne gotiations -'hich culmineted in e license sgreement ?nd numerous subiicense agreements under the Toohey pi tent i nd (b) the activities o f respondents under, end the edministrition of, the Biid license end sublicense agreements. There is no evidence to show, nor tny finding tiu t, there is or ver eny eoabinttion or cons..ire cy <ong your petitioners or m y other respondents rith respect to insuleting miteri^ls not within the scope of the Toohey pttent. i. The Comission'fi findings end the evidence indcete tht t the vrices for un. stented insultting stteri*.ls were not fixed or uniform end, therefore, the Inferred conclusion r$ to t "price-fixing combination and consplricy" with respect t such mtteriiis,end the order covering such meterais,are erroneous and umvsrrsnted by lew. There is no finding, nor evidence from which It could be found thet there rts eny purpose, intent, combination or conspiracy to fix or maintain prices of tny insultting materials not covered by the Toohey patent, or that tny uniformity of selling prices of such products in ftet existed. S. The order, in its present fore:, covering unctten as veil aa patented insultting materials, is not supported either by the findings or the evidence. 4. Tour petitioners having withdrawn from the sub-' license agreements under the Toohey patent to which they had been parties , prior to the service of the Complaint and rior to the investigation preceding the service of the Complsint, the Commission erred in entering its order against them end should heve dismissed the complaint. S* ;-vsre if no finding nor any evidence in the record ' that the prices, terms, conditions of sale, seles methods and practices of your petitioners subsequent to their respective j `: withdrawals from their sublicense agreements, were fixed, enterec | into, continued, cooperated in or carried out pursuant to or under any planned common course of action, understanding, agreement, combination or conspiracy. 6. The Commission erred in concluding that your petitioners violated the provisions of Section 5 of the Federal Trade Commission Act. 7. The Commission erred in ordering your petitioners, and each of them, to cease and desist from doing or performing any of the seven practices numbered 1 through 7 inclusive in said order with respect to insulating materials of its manufacture, the same not being within the scope of the Toohey patent, nor made nor sold under any sub-license agreement. 8. The Commission erred in ordering your petitioners, and each of them, to cease and desist from continuing to do or perform any of the seven practices numbered 1 through 7 inclusive in said order, independently and without any agreement or underst= ing with any other respondent or other person. 9. The Commission erred in not including in its order a provision that nothing therein contained shall be construed to prohibit the owner of the Norristown flexible range boiler jacket patent from granting lawful licenses to others to use said patent, or to prevent any respondent or others from taking lawful licenses to use said patent. 10. The Commission erred in not including in its order a provision that nothing contained therein should prevent any of the corporate respondents from establishing and maintaining prices and terms of sale for its products independently and from determining independently whether or not and to what extent it will use price zones or freight equalization in the sale of its - 6- / ! products, end h-- fc*r tu6 extent It will elf8If7 custom I bne to establish or atintsin t. formult for cxlcuUting unit pric ; or for cslcultting tottl .rices from unit prices, >r use t.ny existing forauls. for such purposes. IV PFi/YCR FOR R E L IE F VvHEhEF 'RE, believing thtt the sforeseid findings, conclusion sne order of the Commission ere erroneous, untuthorizet end without foundstion in lte? or in feet, your petitioners prey: 1. Thrt & certified copy of this petition be forthwith served by the Cler< of this Court upon the Federal Trtde Cornu!ssi m d th- t &fid Commission be required forthwith, in conformity with the stfctute, to certify end file ith this Court e trinscrio: of the entire record in the proceeding fores, id. F. Thtt the Federal Tr&de Commission be required to include in sfcid record the corapleint, the mended console int, the fenswers, the order pointing the Tritl Ereminer, ell the evidence ttken, the report of the Tritl Examiner, the exceptions thereto, the findings is to the fsets tnd conclusion end order to cetse tnd desist entered by the Commission. Z>. Thtt this Court review the -proceeding end set sside tnd vecste stid findings, conclusion tnd order to cetse tnd desist, tnd thet this Court order stid Commission to dismiss the corr,:itlnt issued b> it igfinst your petitioners. 4. tr.d thf t tnis Court give these petitioners such other end further relief ts .-.ey be ir.eet. uuy Gporge Gtbrieison 70 Pine Street Hew York 5, Hew York Attorney for Sell Mountain Compsny tnd Norristown Mtgnesie end Asbestos Company , . Hmtpi lites (Etmtii (Enurt of Appeals FOR THE SIXTH CIRCUIT i I , ..............S. s ......... , Clerk of the United States j'ji Circuit Court of Appeals for the Sixth Circuit, do hereby certify I j that the foregoing is a true and correct copy of ,...?.e. t i t i o n . t o ; R eview ana S e t A sid e O rder o f th e F e d e r a l T r M e ...C .Q .tp a is s ip n ........................................................................................... j in the case of ..N o r r i s t o w n M a g n e s ia an d A s b e s t o s C o . , j a n d S a l i o u n t 'a in 'Com pany.............................................. I vs. j t F e d e r a l T rade Com m ission I ng 07 No. ......... , as the same remains upon the files and records of said United States Circuit Court of Appeals for the Sixth Circuit, and of the whole thereof. In T estimony Whereof, I have hereunto subscribed my name and affixed the seal of said Court at the City of Cincinnati, Ohio, this i