*1
841
larger
1951,
eting
Commission, Cir.,
and Trade
practices
186 F.2d
their
while
competitors 810, 813,
818,
culpable
allegedly
certiorari denied
U.S.
proceedings
34,
Marlene’s,
against
72 S.Ct.
96 L.Ed.
whom Commission
may persist
Commission, Cir.,
in
v.
presently pending
Inc. Federal Trade
are
1954,
556,
there-
practices.
would
216 F.2d
Petitioners
disadvantageоus
com-
placed in a
be
authority
Commissionhas
heavy
petitive position,
sustain
would
Cogan
Magnus
capac
bind
in their
possibly
loss,
be
financial
and would
through
corporate
ities as
whom
officials
competition by termina-
eliminated from
Company
operate
Clinton Watch
must
in
enterрrise.
of
tion
their
practices.
the transaction of its
theory
without
Petitioners’
is not
court will not
its wisdom for
substitute
assuming
They
prematurely
flaws.
are
respect
of
that
Commission
to the
against
pending proceedings
com-
that
petitors
practice
naming
specifi
of
these officers
findings
of viо-
cally
referring
will culminate
rather than
to them
of
lations of the
and in the issuance
Act
corporate
Brothers,
their
titles. Mandel
Further, peti-
and desist.
orders
cease
Commission, Cir.,
Inc. v. Federal
Trade
asking
1958,
to assume
tioners
court
are
this
18, 22-23,
254 F.2d
reversed on
they
prejudiced by
will
discon-
grounds
1959,
385,
other
U.S.
рractices.
deceptive
tinuance
818,
S.Ct.
resort to the court’s
interference with the Commission’s ex-
ercise
its wide discretion
the choice
remedy
adequate
cope
deemed
deceptive
practices.
trade
Petitioners
have failed to
been
show that there has
patent
abusе of discretion
the Com-
Moog Industries,
mission.
v. Fed-
Inc.
C. J. D. RUDOLPH and Irma M.
Commission, 1958,
eral Trade
355 U.S.
Rudolph, Appellants,
78 S.Ct.
unfair trade does not Appellee. preclude issuance a cease and desist No. 18788. order. The ordеr to from aban desist an practice doned unlawful in the nature Appeals United States Court of safeguard Fifth Circuit. of a for the future. Other than mere discontinuance at un June practice relating disclosed time their Rehearing July Denied guarantee merchandise, to the of their petitionеrs have shown no facts before require
the Commissionwhich would portion of the set order be aside. Cf. Dietzgen Eugene Co. v. Federal Trade Commission, Cir., 1944, certiorari denied 323 U.S. 89 L.Ed. S.Ct. Gaiter v. Federal
Court on March 1961. No factual application differences for of a call reaching different or dif- rule a ferent result than in Patterson judgment district Thomas. of the The court is Affirmed. Judge (dis- BROWN, JOHN R. Circuit
senting) urged by my To what dissent was Thomas, Cir., Patterson v. 108, page F.2d would add brief 114. I bearing em- comments aon matters few phasis in this record. big happy The notion that this was one company-paid-for-holiday in New City first a formal for thе where session day tip-of-the-hat a half was mere give working appearances trip is of a Rudolph, simply unfounded. Mr. Taxpayer, companion, co- and his wife—a partner-in-fact worker, fel- as well as insurance business of life nothing Taxpayer to do with low —had pro- selecting time, place, gram. precisely planned, as to All was eligible par- moment, locality, event not, Moreover, ticipants. it was Freling, B. Mc- Richard Thomas A. appear, a make it seeks to Government Tex., Elroy, Atwood, Dallas, Felix for day’s long formal for half of trek appellants. activity. Thosе selected Jackson, Meyer Rothwacks, A. Lee Company were Insurance Life Southland Washington, C., Dept, Justice, Wil- D. together. group required travel III, West, Atty., Fort liam B. U. S. up 151 men and made of 293 Smith, Worth, Tex., Asst. U. S. W. E. from South- wives drawn South Sellers, Tex., Dallas, Atty., Abbott M. compelled to come to Dallas west were Acting Atty. Gen., Louis F. Ober- Asst. passengers on “two became where Henry Kutz, Atty. Gen., dorfer, I. Asst. special trains trains.” The convention departed Wolfe, Attys., Dept, of Jus- H. Norman Tuesday, December on Washington, C., appellee. tice, D. p. Nearly later about 3:00 hours BROWN, Circuit Thursday, JONES Before trains December m. Judge. YANE, Judges, District Jеrsey City, DE Jer- arrive at New special sey, took chartered buses where PER CURIAM. On to the Waldorf-Astoria. the travelers morning opinion Sunday forth in similar buses took all are set facts Rudolph trains the re- v. United hotel to the court. from the district of the applicable special F.Supp. trains States, 2. The convention turn arriving in Dallas some in Patterson v. back time be found is to law Thomas, Tuesday, December 18. decided managers 17, 17; as follows: officers wives was wives The breakdown salaried field assistants wives managers 2, 3; assistant wives wives employees purpose not, therefore, case of It is Thе insidious used with —here half-day’s getting together disparagement— ses- moral no for the overtones of company’s all Friday, sion on theme on the minds December remaining approxi- captive audience, exempli- wills of its free. Out was time *3 Tuesday, mately Decem- fied in the 149 hours most intense fashion the from Friday the Tuesday, in Hotel ber neighborhood December luncheon at the to Waldorf- spent ostensibly specific were Astoria of them had no of which 96% togetherness. selling It is neither relation to of in enforced life insurance. One exaggeration outstanding require an it the nor does nаtion’s ministers and lyrist public syndi- to speakers, an a than contemplate amateur as license renowned for his rhythmic ap- writings, cated that the radio with television and clickety-clack pearances, speaker. this train as of wheels luncheon the was the City way made its to and from New But even not left to chance. this was Dallas, recipient reminded company, by letter, was and each The him outlined to syncopated company message suggested meeting in a the nature of the message way. part was inspirational And a that that the talk an na- of “of company аlong ture, achievement, that all who that the intended suc- the lines of Of happiness asked would do so. to attend cess and that can be obtained complex psychological through of proper course the attitudes of faith point practices not made personal sales business this was of the well-ordered management crudely. discussing inWhere Thomas life.” nature After the of “frowning” phrased any agent’s on de- it as who life work and es- the insurance euphe- trip, genuine clined has the Southland sential service to motivation of agency equal portent. of vice misms Its management’s clients, his estimate of the agent president, stating in- after that an importance things stamped of was dicating requir- he would not attend was by this in the “There- conclusion letter. give explanation, an that ed testified fore, degree the of success and satisfac- agent] proper he [the “if doesn’t have a depends tion obtained his work from not upon reason it would be looked with knowledge just entirely upon his of life displeasure.” serious insurance, very large degree but to a depends upon his attitudes toward his trip This convention was meant for opportunities and zeal his excel.” It agent’s good. the own Of that course surprising agency is not that the vice good equated company’s was with the for president speech testified this that psychologically ethically wise it was speaker job “did a better than I had legitimate to that conclude what was hoped speaker he would” and that the good agents good for the was for South- something specifically “did mention about emphasis really land. was not ” * * * the work of insurance an man increasing That, pointed one of sales. and “he knew more about it than I did.” company’s benefit, come was to rеassuring primarily from Unlike Thomas which concentrated on things really practice were not particular that bad as followed that High company, seemed. officials testified without life insurance this record con- contradiction the life insurance testimony tains the uneontradicted many Managing there are sales where so Director of the Life Insurance by prospects, Management Agency “turndowns” it is essential Association. This buoy up spirits organization industry-supported of these solicitors. is an in- This, experience proves, management research, is best accom- terested consul- through constant, plished tation, training, asso- pub- close education and informal ciation semi-social lications in basis life insurance business. many 30-years’ experience successful salesmen who his have From in life in- management similar weathered overcome discour- surance from the agements. view, why manage- this witness outlined good emphasis actual, psy- to iterates with it would consider ment spend $84,000, here, chological, compul- pressure on such economic as was done agents. agent leading (and He his sion under which the a convention its wife) taking is emрhasized importance personal are coerced into what among setting offered. in an informal contact flight produc- top those who either were of an The future economic livelihood promise. included ers or had shown agent granting em under contract oppоrtunities associa- intimate right ployer the of termination at will is high under level executives tions thing pre .stake. To take a ample time which afforded circumstances security something serve not done workaday- from the diversion free primarily personal enjoyment. *4 Con meetings undertaken рroblems such ceding that the must attrib cost $560 surroundings during work- in home office Taxpayer rejects income, uted to as it ing hours. to this record it is a matter concludethat voluntary personal enjoyment when Indeed, Thomas, inas Government the employee income, pay the must take the acknowledges, question It does not this. it, spend precisely tax on it directed as legitimate must, ex- that this is a it though donor and treat it as the then employing penditure life insur- the ordinary junket personal this were an precisely company. at this But it is ance family holiday. on a In a real and reaches its impоrtance the matter whole money spent vital sense for busi the is if an event is of such climax: only. in ness and business It is reasons certainly management’s eyes, not it is in something dispensable. indispensable What is is company considers which the ordinary certainly necessary.2 agent may accept а take- or decline the words, “ordinary what basis. In other In the realistic it-or-leave-it formula of agents’ (and necessary,” company does un- for the insurance life its) good compulsion im- both to be have known der such should like expensive. is tendered portant What treatment accorded to others. Deduc- accepted “ordinary is a real- unless there been must be tions allowed as have therefore, attending record, necessary” clergymen good re- to excuse. underlying subsidiary ap- issue Both on this and the one of allocation portionment to be the relativе cost formal able to attend the sessions income, to $560 in relation the total attributed is substantial either on basis together. or husband and In other of the husband alone -wife words it cost Tax- payer half-day to $215.41 alone a minimum of to attend the be able sessions in disputed: not New York. facts are Thеse Expense per person per couple Cost Cost Meals in New York 2.00 $ breakfast 4.00 $ 6.00 1 luncheon at Waldorf 12.00 Round train 119.40 fare 238.80 Pullman cost 37.13 74.26 Rail meals 30.54 61.08 porter Baggage, tips dining 8.23 & car 16.46 New Hotel (1 day) (approximately on% days cost) basis 3 12.11 actual 24.22
$215.41 $430.82 “although factors, convention;3 expеnses an said: most of these to
church
sense,
attending
personal
a narrow
employee
a re
affect
con-
conventions of
lawyer
traveler,
group;4
at venience of the
to a
the motivation
lated business
tending meeting
sleep
Bar
American
exi-
rest arises from the
genсies
legal secretary
Association;
employment,
attend
to a
ing
employer,
demands
national convention the Nation
relation
”
* * *
attending
Association;6
employee
physicians
employer.
al
to
to
his
conventions;
public
medical
certified
Then we
to
concluded thе correct rule to be
attending conventions;
expenditures
accountants
university
to that
made “in order to meet
exigencies
attending
employment
conven
teachers in
of his
hi,s
meetings;
profes
employment”
tions
to
or scientific
business demands of
attending
properly
political con
are
sional cartoonists
deductible. 286 F.2d
;10
attending
persons
pages
Red
ventions
339-340.
Convention;11
Cross
teachers
school
contemporary
possible
interest in
attending
school;12
attorneys
summer
legislative changes suggests
perhaps
attending an institute on Federal taxa
“ordinary
undеrstandable,
realistic
;13
employees
tion
sent to refresher
necessary”
produces
and
unsatisfactory
formula
results
acquainted
courses to
become
*5
revenue,
undesira-
processes
industry;14
new
to a
from a
ble
socio-economic
of view
sending
buyers to the
furniture store
its
imрossible
orderly
administration.
mart;15
representa
annual furniture
may
remedy
That
Congress.
be so but
is for
tives
annual
of trade associations
conventions
view
Until then we have to
;1
agent
an insurance
6
light
the formula in the
the facts.
away from
home
business.17
Here, my judgment,
these facts show
recently
This Court
held Williаms
honest, legitimate,
expense.
ethical
Patterson, Cir., 1961,
v.
5
compel
than that
facts
a find-
More
expenditures
railroad
made
ing
compulsion when
of absolute business
layover period
conductor on his
six
agent’s
standpoint
from the
viewed
though
hours were
even
all of
deductible
security.
economic
narrowly
the activities could
classified
“personal
doing
activities.” In
we
so
I therefore dissent.
Shutter,
Darling,
3. Marion D.
7. Robert v.
21 B.T.A.
sioner,
(reversed