MEMORANDUM AND ORDER
On Dеcember 16, 1974, this Court on plaintiff’s motion for partial summary judgment found defendant “to have been in violation of the [Federal Trade Commission] order between November 26, 1973 and March 1, 1974.”
The applicable statutes
1
entrust to the Court’s discretion — within the upper limit of $5,000 for each violation
2
— the amount of the civil penalties to be imposed for noncomplianee with final FTC orders. United States v. Ancorp National Services, Inc. (2d Cir. 1975)
“Any person who violates any order issued by the commission or board under subsection (b) after such order has become final, and while suсh order is in effect, shall forfeit and pay to the United States a civil penalty of not more than $5,000 for each violation, which shall accrue to the United States and may be recovеred in a civil action brought by the United States. Each separate violation of any such order shall be a separate offense, except that in the case of a violation through continuing failure or neglect to obey a final order of the commis- ■ sion or board each day of continuance of such failure or neglect shall be deemed a sepаrate offense.”
It is the plaintiff’s position that substantial penalties are warranted by defendant’s alleged “continuing failure or neglect to obey” its final order. It argues that this Court’s finding- — on the motiоn for partial summary judgment — that defendant was “in violation of the order between November 26, 1973 and March 1, 1974” was tantamount to a finding that defendant was in violation of the order for each of thе 94 days of
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that time period.
3
Such was not our intention. Our focus on the motion for summary judgment was on whether there was any question of fact as to whether defendants had taken necessary steps to comply between November 1, 1973 and March 1, 1974, whereas now we must determine how many specific violations were committed. Moreover, the very language of the “continuing” violation provision and the interpretation given thereto by the courts preclude its application to the facts of this case. As the Supreme Court recently observed in United States v. ITT Continental Baking Co. (1975)
“. . . intended to assure that the penalty provisions would provide a meaningful deterrence against violations whose effect is continuing and whose detrimental effect could be terminated or minimized by the violator at some time after initiating the violation.” (emphasis in original)
As examples of behavior intended to be covered by this provision, the court listed continuing conspiracies to fix prices or control production, maintenance of a billboard in defiance of an order prohibiting false advertising, failure to dissolve an unlawful merger, failure to eliminate an interlocking directorate and the acquisitiоn of assets of other companies in violation of an order.
Id.
at
Having concluded that penalties cannot be assessed on a “continuing” violation basis we turn now to the question whether or not to hold a hearing as to how many separate violations of thе order defendant committed and how much of a penalty to impose for each of those violations. Although ordinarily such a hearing would be necessary, in light of the peculiar cirсumstances of this case, I have determined not to schedule one. On the basis of defendant’s own affidavits, the court can take judicial notice that there was a continuing pattern оf violation which necessarily gave rise to a sufficient number of individual incidents to justify the penalty which it has determined to assess.
In mitigation, defendant has raised the very interesting but belated argument thаt since the FTC order became final, not only was Conso faced with new competition from
existing
competitors but it was also faced with
new
competitors offering new and lower prices to its customers. As a result, defendant argues, it was forced to continues to grant discounts to its customers in am effort to retain their business in the face of the competition from new sources. Although evidence of such events was obviоusly not “available” to defendant prior to the entry of the FTC order [see F.T.C. v. Ruberoid Co. (1952)
The amount of penalties to be assessed in a case of this nature is normally determined by taking into account the following factors: (1) the wilful
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ness of the violation, or the good or bad faith of the defendant in meeting its obligation to comply with the ordеr, (2) the ability of the defendant to pay the penalties, (3) the degree of harm to the public caused by defendant’s failure to comply, and (4) the extent to which defendant may have prоfited by failing or delaying to comply. United States v. J. B. Williams Company, Inc.,
supra,
Contrary to the plaintiff’s assertion that defendant’s failure to comply with its order was wilful and in bad faith, it is quite clear to the court that such was not the case. Defendant’s reliance upon post-order defenses as to the availability of which there is a “substantial ground for difference of opinion” 4 cannot be deemed to have been wilful or in bad faith.
In support of its argument for the assessment of nominal penalties only, defendant points to the deteriorating financial condition of its Conso Products Company Division — the reаl target of this action. As a result of its increasing losses — many of which it claims are directly linked to the market’s reaction to the FTC order — defendant contends that it is financially unable to pay anything more than a nominal penalty. Be that as it may, the threatened financial position of a division of a company (albeit the division which is the subject of this order) cannot excuse payment of penalties by the company itself — the named defendant in this action.
With respect to the third factor to be considered — that of the degree of harm to the public сaused by defendant’s failure to comply — plaintiff has conceded that such a factor is not really relevant in a price discrimination case of this nature. Unlike the situation in United Statеs v. J. B. Williams Co., Inc., supra, this case .does not involve a consumer protection-oriented order where noncompliance would directly injure the public. Rather, orders such as in the instant cаse are “inherently business — or competition — oriented matters and do not directly concern consumer protection considerations.” Plaintiff’s brief, at 8.
Finally, as to whether defendant mаy have benefited from its noncompliance, the record indicates that the opposite is true.
It is apparent, therefore, that of the five factors to be considered in determining the amount of penalty to assess, only that of the vindication of the Commission’s authority is here pertinent. As to that factor no evidentiary hearing is necessary. In my judgment and based on the record before me, I have concluded to impose a penalty of $25,000, which amount is the minimum necessary to vindicate the Commission’s authority in light of the seriousness of the matter involved. In additiоn, in light of our finding of good faith, the stepped up efforts of Conso’s new management and the ongoing settlement negotations between the parties, an injunction would not at this time be justified.
In summary, a penalty in the amount of $25,000 is assessed, and the motion for an injunction is denied without prejudice to a new motion based upon a showing that defendant is not acting in good faith.
So ordered.
Notes
. 15 U.S.C. §§ 21(0 and 45(0-
. Section 5(0 of thе Federal Trade Commission Act [15 U.S.C. § 45(0] was amended as of November 16, 1973 — ten days before the FTC order in the instant case became final — to enlarge the maximum penalty from $5,000 to $10,000 per violatiоn. Plaintiff, however, has elected to proceed under the old $5,000 provision.
. If this were true, defendant would be liable for a maximum of $470,000.
. F.T.C. v. Consolidated Foods Corporation, Memorandum and Order at 1 (December 24, 1975) (unreported).