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Globe Readers Service Inc. v. Federal Trade Commission.

January 3, 1961

GLOBE READERS SERVICE, INC., ET AL.
v.
FEDERAL TRADE COMMISSION.



Author: Castle

Before SCHNACKENBERG, CASTLE and MAJOR, Circuit Judges.

CASTLE, Circuit Judge: Globe Readers Service, Inc., and Warren E. Brubaker, William P. Barry and James Riley, individually and as officers of the corporation, petitioners, seek review of a cease and desist order of the Federal Trade Commission, respondent. Our jurisdiction is invoked pursuant to 15 U.S.C.A. § 45(c). The petitioners were charged with violation of Section 5 of the Federal Trade Commission Act; 15 U.S.C.A. § 45(a)(1).*fn1 The hearing examiner's initial decision dismissed the complaint. On appeal the Commission made its own findings of fact, conclusion and order.

The order directs petitioners and petitioners' representatives, in connection with the sale of subscriptions for magazines, to cease and desist from:

"A. Soliciting and accepting magazine subscriptions which respondents are not authorized to solicit.

B. Refusing to refund payments received for subscriptions for magazines which are undeliverable.

C. Requiring customers to accept the substitution of magazines other than those subscribed and paid for."

The complaint on which the order was predicated, naming petitioners as respondents, charged, inter alia, that:

"In many instances respondents' solicitors sell subscriptions for magazines which are not on respondents' authorized list of magazines and are undeliverable. In these instances, respondents refuse to refund the customers' money and, in order to obtain some benefit for the money expended, such customers are required to accept a substitute magazine from the authorized list which they would not have otherwise ordered or accepted."

By their answer petitioners denied these charges and affirmatively alleged that the dealers or subscription crew managers are not employees of petitioners but are independent contractors.

The contested issues are:

1. Whether there is substantial evidence to support the commission's findings.

2. Whether the commission applied the correct legal criteria in concluding that under the facts petitioners are responsible for the acts and practices of the solicitors in the latter's solicitation of magazine subscriptions.

The facts as found by the commission insofar as pertinent to these issues may be summarized as follows:

The corporate petitioner Globe Readers Service, Inc., maintains its home office in Michigan City, Indiana. Petitioners Brubaker, ...


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