247 F2d 524 Dolcin Corporation

247 F.2d 524

In re DOLCIN CORPORATION and Victor van der Linde, George Shimmerlik and Albert T. Wantz, individually and as officers of Dolcin Corporation.

Misc. No. 648.

United States Court of Appeals District of Columbia Circuit.

Argued November 8, 1956.

Decided December 18, 1956.

Certiorari Denied June 3, 1957.

See 77 S.Ct. 1285.

On Petition for Reconsideration and Rehearing June 27, 1957.

Petition for Reconsideration and Rehearing Denied July 5, 1957.

Mr. Robert B. Dawkins, Asst. General Counsel, Federal Trade Commission, appointed by this Court to prosecute the respondents for criminal contempt.

Mr. Michael F. Markel, Washington, D. C., with whom Mr. Wayne K. Hill, Washington, D. C., was on the brief, for respondents.

Mr. Paul Warnke, Washington, D. C., for respondents George Shimmerlik and Albert T. Wantz.

Before BAZELON, FAHY and WASHINGTON, Circuit Judges.

PER CURIAM.

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1

The facts essential to a decision in these contempt proceedings are not in dispute.1 The advertisements referred to in our Findings2 entered this day violated the decree of this Court of July 1, 1954. 94 U.S.App.D.C. 247, 219 F.2d 742. The question whether these violations constituted criminal contempt depends upon whether or not it was clear to respondents that they must comply with our said decree without awaiting further action by the Commission. We think the terms of our decree did make it clear that they were to do so, especially when read in the light of our opinion of July 1, 1954,3 and the opinion of Judges Edgerton, Prettyman, Bazelon, Fahy and Washington of February 3, 1955, in support of the order denying respondents' petition for rehearing en banc.4 In the latter opinion it is made explicit that respondents were to comply with our decree from and after its date, that is, that they were required, notwithstanding an interim between our decision and possible subsequent modification of its order by the Commission, to comply immediately with the terms of the order of the Commission, as modified, affirmed and enforced by our decree.5 If, however, clarity in this regard might not have carried over to respondents prior to May 17, 1955, any possible failure on their part to understand the situation was removed by the letter of the corporation's counsel to its president of that date, which stated in part:

2

"* * * [T]here is nothing to settle because the courts have settled the matter for us. Therefore, we are in no position to bargain.

3

"The F.T.C. order, as modified by the Court, speaks for itself. There is nothing further to be done now except comply with its provisions until such time when it is amended by the Commission. * * *"

4

The charges of which we find the respondents guilty embrace conduct subsequent to this letter.

Statement of Proceedings

5

The above-entitled matter came on for hearing on November 8, 1956, on an order to show cause why respondent Dolcin Corporation and respondents Victor van der Linde, George Shimmerlik and Albert T. Wantz, individually and as officers of Dolcin Corporation, should not be adjudged in criminal contempt. Before the Court, in addition to the aforesaid order to show cause, were (1) the petition of the Federal Trade Commission for prosecution of respondents for criminal contempt, (2) respondents' return to the order to show cause, including a motion to dismiss and expunge as to respondents Shimmerlik and Wantz, (3) the brief in support of the petition filed by counsel appointed by the Court to prosecute the respondents for criminal contempt, (4) respondents' brief in reply and in support of motion to dismiss the petition and to discharge the order to show cause, and (5) the answer to respondents' motion to dismiss filed by counsel appointed by the Court to prosecute the respondents for criminal contempt. The petition for prosecution and the order to show cause were served by the United States Marshal upon the individual respondents personally, and upon respondent Dolcin Corporation by serving Victor van der Linde, vice-president of said corporation. The individual respondents each waived, in writing, his right to be present at any hearing in these proceedings. Respondents by their counsel, in open Court, waived trial by jury and declined to offer oral testimony. There was no request that the Court find the facts specially pursuant to Rule 23(c), Federal Rules of Criminal Procedure, 18 U.S.C.A.

6

The parties submitted to the Court the matter of the criminal contempt on the foregoing pleadings, on the affidavits and exhibits attached thereto, and on oral argument of counsel.6

Finding of Guilt and Findings of Fact

7

The Court having considered the same now hereby finds beyond a reasonable doubt that each of the respondents is guilty of criminal contempt of this Court, in that each of them wilfully disseminated, or caused to be disseminated, in commerce,7 advertisements in the form of radio commercials which contained representations violative of the decree of this Court against respondents [petitioners there] in Dolcin Corporation v. Federal Trade Commission, 94 U.S. App.D.C. 247, 219 F.2d 742, entered on July 1, 1954, and made effective April 8, 1955, with notice and knowledge that said representations violated the aforementioned decree, as set forth more fully in paragraphs XIV(1) (f) and XIV(2) of the petition of the Federal Trade Commission for prosecution of respondents for criminal contempt, filed June 14, 1956. Said commercials were broadcast by radio at the times and places indicated below:

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8

  Radio Station Place of Broadcast      Dates of Broadcast [1955]

  Exhibit A — Dolcin Script No. 92-60
  WDAS Philadelphia, Pennsylvania       September 16

  Exhibit B — Dolcin Script No. 100-60
  WFIL Philadelphia, Pennsylvania       September 12, 13, 24, 26
                                        October 8

  Exhibit C — Dolcin Script No. 101-60
  WTOP Washington, D. C.                May 24, 25, 31
  WMAL Washington, D. C.                September 12, 15, 20, 22, 27, 30
                                        October 5, 8, 12, 17
  WWDC Silver Spring, Maryland          September 12, 15, 19, 22, 26, 29
                                        October 6, 13, 19
  WFIL Philadelphia, Pennsylvania       September 14, 27
                                        October 10

  Exhibit D — Dolcin Script No. 102-60
  WTOP Washington, D. C.                May 25, 31
  WMAL Washington, D. C.                September 12, 15, 20, 23, 27, 30
                                        October 5, 10, 13, 17
  WWDC Silver Spring, Maryland          September 12, 15, 19, 22, 26, 29
                                        October 3, 6, 10, 13
  WFIL Philadelphia, Pennsylvania       September 15, 28
                                        October 13

  Exhibit E — Dolcin Script No. 103-60
  WFIL Philadelphia, Pennsylvania       September 16, 30
                                        October 14

  Exhibit F — Dolcin Script No. 104-60
  WTOP Washington, D. C.                May 25, 26
                                        June 1
  WMAL Washington, D. C.                September 13, 16, 20, 23, 28
                                        October 3, 6, 10, 13, 18
  WWDC Silver Spring, Maryland          September 13, 16, 20, 23, 27, 30
                                        October 4, 7, 11, 14, 18
  WFIL Philadelphia, Pennsylvania       September 17
                                        October 4, 11

  Exhibit G — Dolcin Script No. 105-60
  WFIL Philadelphia, Pennsylvania       September 19
                                        October 12

  Exhibit H — Dolcin Script No. 106-60
  WTOP Washington, D. C.                May 20, 27
                                        June 1, 2
  WMAL Washington, D. C.                September 13, 16, 21, 26, 29
                                        October 3, 6, 11, 14, 18
  WWDC Silver Spring, Maryland          September 13, 17, 20, 24, 27
                                        October 1, 4, 8, 11, 15
  WFIL Philadelphia, Pennsylvania       September 20, 29
                                        October 5, 15

  Exhibit I — Dolcin Script No. 107-60
  WFIL Philadelphia, Pennsylvania       September 21
                                        October 1, 17
9

  Exhibit J — Dolcin Script No. 108-60
  WTOP Washington, D. C.                May 23, 28
                                        June 3
  WMAL Washington, D. C.                September 14, 19, 22, 26, 29
                                        October 4, 7, 11, 14, 19
  WWDC Silver Spring, Maryland          September 14, 21, 28
                                        October 5, 12, 19
  WFIL Philadelphia, Pennsylvania       September 22
                                        October 3, 6, 18

  Exhibit K — Dolcin Script No. 109-60
  WTOP Washington, D. C.                May 23, 30
                                        June 1, 4
  WMAL Washington, D. C.                September 14, 19, 22, 27, 29
                                        October 4, 7, 12, 15, 19
  WWDC Silver Spring, Maryland          September 14, 21, 28
                                        October 3, 5, 10, 12, 17, 19
  WFIL Philadelphia, Pennsylvania       September 23
                                        October 7, 19

  Exhibit L — Dolcin Script No. 114-60
  WMAL Washington, D. C.                October 20, 24, 25, 27, 28, 31
                                        November 2, 3, 5, 8, 9, 11, 14,
                                                15, 17, 18, 22, 23, 24,
                                                28, 29
                                        December 1, 2, 5, 7, 8, 10
  WWDC Silver Spring, Maryland          October 20, 23, 25, 26, 28, 31
                                        November 2, 3, 5, 8, 9, 10, 13,
                                                15, 16, 18, 21, 23, 24,
                                                26, 29, 30
                                        December 2, 5, 6, 8, 9

  Exhibit M — Dolcin Script No. 115-60
  WMAL Washington, D. C.                October 21, 24, 25, 27, 28
                                        November 1, 2, 3, 7, 8, 10, 11,
                                                14, 16, 17, 19, 22, 23,
                                                25, 28, 29
                                        December 1, 2, 6, 7, 8
  WWDC Silver Spring, Maryland          October 21, 24, 25, 27, 28
                                        November 1, 2, 3, 6, 8, 9, 11, 14,
                                                15, 17, 18, 22, 23, 24,
                                                27, 29, 30
                                        December 2, 5, 7, 8, 10

Order

It Is Ordered by the Court that:

10

1. Insofar as the petition for prosecution charges contemptuous conduct prior to May 17, 1955, it is hereby dismissed;

11

2. Respondents' motion to dismiss the petition and to discharge the order to show cause is hereby denied;

12

3. Respondents' motion to dismiss the proceeding as to respondents George Shimmerlik and Albert T. Wantz, and to expunge their names from this proceeding, is hereby denied;

13

4. Each of the respondents is hereby adjudged guilty of criminal contempt of this Court; 5. Respondents Victor van der Linde, George Shimmerlik, and Albert T. Wantz, in person, and respondent Dolcin Corporation, by its above-named officers, appear before this Court on the 14th day of January, 1957, at ten o'clock A. M., for a hearing to determine the nature and extent of the punishment to be imposed;

14

6. A certified copy of the foregoing Opinion, Statement of Proceedings, Finding of Guilt and Findings of Fact, and of this Order be served upon the respondents, and upon each of them, by the United States Marshal for the District in which they may be found and that due return of such service be made.

APPENDIX

Exhibit A — Dolcin Script No. 92-60

15

Are you on a bed of torture lashed by stabbing pains of arthritis or rheumatism? Agony in every movement you make? Stop and think . . . is it necessary to suffer this way? The answer — Definitely No! Thousands of men and women know the secret. It's Dolcin . . . Dolcin tablets. Grateful users tell of pains fully relieved . . . swellings usually reduced . . . joints free and easy again . . . and, so often, — complete and long-lasting relief from such attacks. What a world of difference in their lives . . . thanks to Dolcin tablets. You, too, may escape the crucifying punishment of arthritis, rheumatism, sciatica, bursitis or lumbago. Yes . . . try Dolcin . . . the formula prescribed by so many doctors . . . used regularly by famous hospitals and clinics. Call your druggist . . . ask him to send you a bottle of Dolcin . . . D-O-L--C-I-N. Start right now to come out from under the shadow of arthritic or rheumatic pain — with effective, fast-acting, longlasting, low-cost Dolcin.

Exhibit B — Dolcin Script No. 100-60

16

Are arthritic, rheumatic or muscular pains making you feel miserable? If so . . . you should start taking Dolcin . . . D-O-L--C-I-N . . . Dolcin tablets today. What a record Dolcin has for fast long-lasting relief from such pains! A record backed by proof. Proof based on clinical studies of the Dolcin formula in America, Canada, England and other countries. Yes . . . it has been proved beyond all doubt that Dolcin tablets . . . taken as directed . . . usually bring fast relief from pain of arthritis, rheumatism, muscular aches, neuritis and bursitis. No wonder safe, non-toxic, non-habitforming Dolcin is the world's best-known, most widely-used product in its field. More than one billion, four hundred million Dolcin tablets have been used. Go to your druggist today. Ask him for Dolcin . . . D-O-L--C-I-N. He'll tell you there's nothing else so much in demand . . . so low-in-cost as Dolcin . . . for relief of pains and discomforts of arthritis and rheumatism.

Exhibit C — Dolcin Script No. 101-60

17

If you suffer from arthritis or rheumatism, you've probably noticed the recent flood of sensational advertising by new products coming on the market. Before you are taken-in by the preposterous, unproved claims for many untested preparations, consider these four facts: Fact One — the best-known, best-proved, most widely-used formula for direct, fast, safe, effective relief of such pains is the Dolcin formula. Fact Two — hundreds of thousands of victims of arthritis, rheumatism, muscular pains, sciatica, neuritis and lumbago report Dolcin tablets gave them speedy, long-lasting relief from such pains. Fact Three — the Dolcin formula has been hailed by hundreds upon hundreds of doctors in America, Canada and England as vastly superior. Fact Four — Dolcin tablets are absolutely safe . . . non-toxic . . . harmless to the heart or any other organ — when taken as directed. Go to your druggist today. Ask him for Dolcin . . . D-O-L--C-I-N . . . for relief of pains and discomforts of arthritis and rheumatism.

Exhibit D — Dolcin Script No. 102-60

18

Before you try any medication for pains of arthritis or rheumatism Get The Facts. Find out if it really works. Is it safe? Is it time-tested? In the case of Dolcin the answer to all these questions is an unqualified Yes! Your doctor . . . your druggist . . . will tell you Dolcin gets results because its action is thorough and different. Dolcin tablets are safe . . . and act differently from old-fashioned aspirin. Dolcin is harmless to the heart or any other organ when taken as directed. Dolcin has stood the test of time for eight long years. Don't be fooled by phony claims of untested imitations! Rely on original, genuine, effective Dolcin. Proved by thousands upon thousands of men and women . . . proved by clinical tests . . . proved by doctors . . . proved by hundreds of hospitals . . . proved by years of use. Yes . . . for relief of pains and discomforts of arthritis, rheumatism, muscular aches, neuritis, sciatica or lumbago, try Dolcin . . . D-O-L--C-I-N. So effective . . . so safe . . . so easy-to-take. That's Dolcin.

Exhibit E — Dolcin Script No. 103-60

19

If you are a victim of arthritis or rheumatism pains listen to this vitallyimportant bulletin from the makers of Dolcin . . . the world's bestknown product for relief of such pains. We Quote: "Arthritic sufferers are being bombarded today by sensational advertising of untested, unproved so-called `miracle drugs'. No claim seems too wild, too fishy, too phony. Dolcin answers these claims with facts * * * facts we challenge any imitator anywhere to match. It's A Fact that the Dolcin formula has been judged by many doctors * * * as superior to all other medications used by them. It's A Fact that American druggists report Dolcin outsells all other preparations in its field. It's A Fact that exhaustive clinical studies prove Dolcin tablets * * * taken as directed * * * produced improvement in 95 cases out of 100." End of Quote. Friends . . . be guided by facts. If you suffer from pains of arthritis, rheumatism, muscular aches, neuritis, sciatica or bursitis . . . try Dolcin. Effective, safe, non-toxic, fast-acting Dolcin.

Exhibit F — Dolcin Script No. 104-60

20

Are you suffering from pains of arthritis or rheumatism? And . . . are you wondering whether to take a chance on one of the new, sensationally-advertised products which promises overnight relief? Then Hear This: the bestknown formula in all the world for fast, safe, long-lasting relief from such pains is the one-and-only, time-tested, medically-proved Dolcin formula. Here are facts about safe, effective, reliable Dolcin tablets: First . . . more than one billion, four hundred million Dolcin tablets have been used by men and women throughout the world. Second . . the Dolcin formula has been judged superior . . . by many doctors. Third . . . exhaustive tests in clinics . . . prove conclusively the many outstanding advantages of the Dolcin formula over the so-called "wonder-drugs" and old-fashioned aspirin as well. So, friends . . . if you suffer from arthritis, rheumatism, muscular aches, sciatica, neuritis or bursitis, don't take chances with untested, unproved preparations — try the tried and true. Try Dolcin . . . the world's favorite . . . because Dolcin gets results.

Exhibit G — Dolcin Script No. 105-60

21

Do you like to have your pocket picked? Of course you don't! But that's what happens to sufferers from arthritis or rheumatism foolish enough to fall for the bogus advertising-claims of certain new, so-called remedies now coming on the market. Before you throw away your money on such unproved preparations, Get The Facts. The world's bestknown product for relief of pains of arthritis and rheumatism . . . Dolcin . . . gives you proof. Proof of the Dolcin formula's efficacy, safety, reliability and superiority. Proof based on years of successful use . . on studies made by doctors and clinics in America, Canada, England and other countries. Yes . . . it has been proved beyond all doubt that Dolcin tablets . . . taken as directed . . usually bring fast relief from pain — even in severe cases. More than one billion, four hundred million Dolcin tablets have been used to bring blessed, merciful relief to those who suffer from pains and discomforts of arthritis, rheumatism, muscular aches or bursitis. Try effective, safe, non-toxic, fast-acting, low-cost Dolcin . . . D-O-L--C-I-N . . . Dolcin.

Exhibit H — Dolcin Script No. 106-60

22

Arthritis . . . rheumatism! If you're suffering tortures from one of these twin cripplers . . . Listen . . . You need pay so little for the finest medication money can buy! That's Dolcin . . . D-O-L--C-I-N . . . Dolcin tablets — one of the best-known, best-proved, most widely-used formulas for direct, fast, safe, effective relief of such pains. Those are Facts . . . Not Claims. Facts based on proof. Proof based on years of successful use . . . on studies made by doctors and clinics in America, Canada, England and other countries. Proof of results reported by thousands upon thousands of users. There's good reason for these proved results: Dolcin's action is thorough and different . . . different from old-fashioned aspirin . . . different from Dolcin's host of imitators . . . different from salves, rubs and liniments that just cover up your pain for a few minutes. If you want real results . . if you want real relief from pains and discomforts of arthritis, rheumatism, muscular pains, sciatica or neuritis . . . try Dolcin. That's D-O-L--C-I-N . . . Dolcin tablets.

Exhibit I — Dolcin Script No. 107-60

23

Here is a message from the makers of Dolcin of great importance to you if you suffer from pains and discomforts of arthritis or rheumatism. Here's what it says: "Many high-priced, doubtful anti-rheumatic products coming on the market . . . misleading public through sensational advertising . . . using outrageous, unsupported claims. Advise those considering purchase to get facts before they throw their money away. All our modest Dolcin claims based on eight solid years of proof, performance and fair-dealing. Clinical studies and tests by hundreds of doctors here and abroad prove fully and conclusively Dolcin formula safer, more effective, prompter-acting, longer-lasting — superior on every count to any other preparation in its field. We challenge all others to match this record." End of message. There you have it, friends! If you suffer from pains of arthritis, rheumatism, muscular aches, sciatica, neuritis or lumbago . . . be guided by facts . . don't be fooled by phony claims . . . try Dolcin. Effective, safe, non-toxic, fast-acting, low-cost Dolcin tablets.

Exhibit J — Dolcin Script No. 108-60

24

Are you the victim of a tormenting attack of arthritis, rheumatism or muscular pains? Do you know that thousands upon thousands of men and women report prompt, long-lasting relief from such attacks . . . thanks to Dolcin . . . D-O-L--C-I-N . . . Dolcin tablets? Yes . . . the Dolcin formula is the best-known, best-proved, most widely-used formula of its kind in all the world for fast, effective, long-lasting relief from such pains. Your druggist will tell you Dolcin gets results because its action is thorough and different. Different from old-fashioned aspirin! Different from untested, unproved imitators! Safe, non-toxic, non-habit-forming! Harmless to heart, stomach or any other organ — when taken as directed. Go to your druggist today! He'll tell you there's nothing else in the world . . . for relief of pains and discomforts of arthritis, rheumatism, muscular pains, neuritis or sciatica . . . more effective . . . faster . . . safer . . . so low-in-cost as Dolcin . . . Dolcin tablets.

Exhibit K — Dolcin Script No. 109-60

25

Are stabbing pains of arthritis or rheumatism taking all the joy out of life? Wondering what to do to get real relief? Then Listen: Thousands upon thousands of men and women report fast, long-lasting, merciful relief by taking Dolcin . . . D-O-L--C-I-N . . Dolcin tablets. Yes . . . when Dolcin tablets were taken as directed . . . pains usually vanished quickly . . . sore, tender swellings in many cases got better and better . . . finger, wrist, knee and other joints loosened up. And then, . . . long-lasting relief from the agony. These are facts, not claims. Facts about the Dolcin formula — proved beyond the shadow of a doubt by clinical studies here and abroad. Facts which prove . . . fully and conclusively . . . that Dolcin formula is safer, more effective, prompter-acting, longer-lasting . . . superior on every count to any other preparation in its field. If you suffer from arthritis, rheumatism, muscular pains, sciatica or lumbago . . . If You Want Results . . . try Dolcin . . . safe, non-toxic, non-habit-forming Dolcin.

Exhibit L — Dolcin Script No. 114-60

26

Arthritis . . . rheumatism! If you're suffering from pains of these conditions . . . Listen . . . you need pay so little for the finest medication money can buy! That's Dolcin . . . D-O-L--C-I-N . . . Dolcin tablets — one of the best-known, best-proved, most widely-used formulas for direct, fast, effective relief of such pains. Those are Facts . . . Not Claims. Facts based on proof! Proof based on years of successful use . . . on studies made by doctors and clinics in America, Canada, England and other countries. Proof of results reported by thousands upon thousands of users. There's good reason for these proved results: Dolcin's action is thorough and different . . . different from Dolcin's host of imitators . . . different from salves, rubs and liniments that just mask your pain. If you want real results . . . if you want real relief from pains of arthritis, rheumatism, muscular pains, sciatica or neuritis . . . try Dolcin. That's D-O-L--C-I-N . . . Dolcin tablets. In case of severe or persisting pains see your doctor.

Exhibit M — Dolcin Script No. 115-60

27

Are pains of arthritis or rheumatism taking all the joy out of life? Wondering what to do to get real relief. Then Listen! Thousands upon thousands of men and women report fast, merciful relief from pains by taking Dolcin . . . D-O-L--C-I-N . . . Dolcin tablets. Yes . . . when Dolcin tablets were taken as directed . . . pains usually vanished quickly. These are facts, not claims. Facts about the Dolcin formula — proved beyond the shadow of a doubt by clinical studies here and abroad. Facts which prove . . . fully and conclusively . . . that Dolcin formula is effective, prompt-acting, and . . superior on every count to any other preparation in its field. If you suffer from arthritis, rheumatism, muscular pains, sciatica or lumbago . . . If You Want Results . . . try Dolcin . . . effective, fast-acting, nonhabit-forming Dolcin. In case of severe or persisting pains see your doctor.

28

On Petition for Reconsideration and Rehearing

29

Mr. Paul C. Warnke for respondents George Shimmerlik and Albert T. Wantz.

Notes:

1

The Statement of Proceedings, Finding of Guilt and Findings of Fact, and Order are appended hereto and may be considered part of this opinion

2

The texts of these advertisements appear in the Appendix to the original of this opinion

3

Dolcin Corp. v. Federal Trade Commission, 1954, 94 U.S.App.D.C. 247, 219 F. 2d 742, certiorari denied, 1955, 348 U.S. 981, 75 S.Ct. 571, 99 L.Ed. 763

4

Ibid., 1955, 94 U.S.App.D.C. at page 257, 219 F.2d at page 751

5

We do not read § 5(i) of the Federal Trade Commission Act, 15 U.S.C.A. § 45 (i), to the contrary, or as a limitation on our authority in the premises

6

Permission was granted to respondents during oral argument, without objection, to submit to the Court radio commercial advertising copy broadcast since October 8, 1956. Said copy was received by the Court on November 13, 1956. Said copy bears only on respondents' compliance subsequent to the date of any charges in this contempt proceeding, and therefore has not been considered on the question of guilt or innocence

7

As "commerce" is defined in the Federal Trade Commission Act § 4, 38 Stat. 719 (1914), as amended, 15 U.S.C.A. § 44

30

WASHINGTON, Circuit Judge.

31

This proceeding is before us on a petition for reconsideration of our finding that the respondents Shimmerlik and Wantz, individually and as officers of Dolcin Corporation, were guilty of criminal contempt. See In re Dolcin Corporation, 1956, 101 U.S.App.D.C. ___, 247 F.2d 524, certiorari denied, 1957, U.S. 77 S.Ct. 1285, 1 L.Ed.2d 1143.1

32

Shimmerlik and Wantz are respectively treasurer and secretary of Dolcin Corporation. Each was a named respondent — individually and as an officer of Dolcin — in the proceeding before the Federal Trade Commission. Each admitted and acquiesced in the following finding made by the Hearing Examiner and adopted by the Commission:

33

"Paragraph One: * * * Respondents * * * George Shimmerlik, and Albert T. Wantz, individuals, are now and at all times mentioned herein have been directors of said corporate respondent, and respectively, the * * * treasurer, and secretary thereof * * * and are now, and at all times mentioned herein have been, in control of the management, policies, and operation of the said corporate respondent, including the acts, practices and methods herein found." Record in No. 11,700, Dolcin Corp. v. Federal Trade Commission, supra note 1.

34

Shimmerlik and Wantz did not challenge that finding in this court when they sought review of the Commission's cease and desist order.

35

The order entered by the Commission expressly named — and ran against — Shimmerlik and Wantz. And this court's decree, effective April 8, 1955, enforcing that cease and desist order, as modified and affirmed, likewise ran against them. It directed each of them — individually and as officers of Dolcin — to cease and desist from certain specified advertising practices.

36

Shimmerlik and Wantz press two grounds for reconsideration of our finding of guilt: (1) They say they did not know of the letter from the corporation's counsel to the corporation's president dated May 17, 1955, which stated:

37

"* * * there is nothing to settle because the courts have settled the matter for us. Therefore, we are in no position to bargain.

38

"The F.T.C. order, as modified by the Court speaks for itself. There is nothing further to be done now except comply with its provisions until such time when it is amended by the Commission. * * *"

39

Since Shimmerlik and Wantz had not been alerted by the corporation's counsel to the need for immediate compliance, they say they could not have been expected to make any effort to effect a change in Dolcin's advertising policy.

40

In seeking reconsideration, Shimmerlik and Wantz do not claim that they did not know of our decree against them. They say, however, that there was a "general uncertainty" as to the effective date of that decree. In our opinion of December 18, 1956, we rejected this argument:

41

"* * * We think the terms of our decree did make it clear that they were to [comply with our decree without awaiting further action by the Commission], especially when read in the light of our opinion of July 1, 1954, and the opinion of Judges Edgerton, Prettyman, Bazelon, Fahy and Washington of February 3, 1955, in support of the order denying respondent's petition for rehearing en banc. In the latter opinion it is made explicit that respondents were to comply with our decree from and after its date, that is, that they were required, notwithstanding an interim between our decision and possible subsequent modification of its order by the Commission, to comply immediately with the terms of the order of the Commission, as modified, affirmed and enforced by our decree."

42

We adhere to our former statement and add this comment: It is clear from the above quotation that we considered Shimmerlik and Wantz guilty from and after the effective date of our decree. We chose, however, as a matter of grace, to date our finding of guilt from May 17, and to dismiss the charges as to conduct between April 8 and May 17. The evidence in the case other than the May 17 letter provided a sufficient basis for holding Shimmerlik and Wantz guilty of contempt.

43

(2) Shimmerlik and Wantz say they had no reason to know that their inaction would result in violation of this court's order by the corporation. Dolcin's advertising policy was — they say — completely controlled by Victor van der Linde, and was handled by him through his advertising agency. The petition for rehearing states:

44

"If there were any indication in the record that Shimmerlik and Wantz knew, or had reason to believe, that unless they personally took measures the Dolcin Corporation would violate this Court's order, they might conceivably be found to have failed in their duty to this Court. Without such a finding, a requirement that they insulate themselves from criminal liability by essentially meaningless articulations to van der Linde of the obvious — that they expected and wished the corporation to take all necessary and proper steps toward compliance — would be a travesty."

45

Shimmerlik and Wantz acknowledge that after April 8, 1955, they did nothing to comply with our decree. Indeed, they claim that they neither could have nor should have done anything to bring both themselves and their corporation into compliance. In essence, their claim is that this whole proceeding, insofar as it affected them, was wasted effort.

46

But this court did not impose an obligation on Shimmerlik and Wantz that they could discharge by remaining inert. We imposed an affirmative obligation upon them, individually and as officers of Dolcin, to take all reasonable steps to effect compliance with this court's order. Those steps included, at least, that they become currently informed of the advertising conduct of Dolcin. That their "articulations" to van der Linde might have been unavailing does not relieve them of the responsibility to make those articulations. And we are not prepared to predict that such efforts, had they been made, would have been "meaningless." Whatever the order of this court directed Shimmerlik and Wantz to do, it did not permit them to stand idly by while the Dolcin Corporation — their corporation — continued to flout our order. As the Supreme Court has said:

47

"When one accepts an office of joint responsibility, whether on a board of directors of a corporation, the governing board of a municipality, or any other position in which compliance with lawful orders requires joint action by a responsible body of which he is a member, he necessarily assumes an individual responsibility to act, within the limits of his power to do so, to bring about compliance with the order. It may be that the efforts of one member of the board will avail nothing. If he does all he can, he will not be punished because of the recalcitrance of others." United States v. Fleischman, 1950, 339 U.S. 349, 356-357, 70 S.Ct. 739, 743, 94 L.Ed. 906. See also Wilson v. United States, 1911, 221 U.S. 361, 376-377, 31 S.Ct. 538, 55 L.Ed. 771.

48

Were we to take the opposite view, we would be putting a premium on ignorance and offering a sanctuary for those remiss in performing their duties as corporate officers. See Fleischman, supra, 339 U.S. at page 364, 70 S.Ct. at page 746. Shimmerlik and Wantz should not be permitted to use their own inertia as a shield against the force of this court's decree.

49

We thus will not vacate our finding that petitioners are guilty of criminal contempt. They have committed a serious offense against the law and the court's authority. At the same time, in view of all the circumstances here, we should not be understood as implying that they have been convicted of a "crime" in the ordinary sense of that term. See Myers v. United States, 1924, 264 U.S. 95, 103-105, 44 S.Ct. 272, 68 L.Ed. 577; Ex parte Grossman, 1925, 267 U.S. 87, 117, 45 S.Ct. 332, 69 L.Ed. 527; Cf. Nye v. United States, 1941, 313 U.S. 33, 43-44, 61 S.Ct. 810, 85 L.Ed. 1172. Furthermore, in fixing the punishment to be imposed we have taken into account their assertions that they did not know of the May 17, 1955, letter of the corporation's counsel and that their contemptuous conduct was a result of inertia rather than of active participation in the advertising practices which violated our decree. Cf. In re Door, 1952, 90 U.S.App. D.C. 190, 194, 195 F.2d 766, 770.

50

We fix the punishment as a fine of $1,000.00 on petitioner Shimmerlik and a fine of $750.00 on petitioner Wantz, and "shall enter an order to that effect, which will state the time, place and means of payment." In re Door, loc. cit. 770, supra.

51

The petition for reconsideration and rehearing is

52

Denied.

Notes:

1

This was a contempt proceeding growing out of violations of our decree enforcing a cease and desist order. Dolcin Corp. v. Federal Trade Commission, 1954, 94 U.S.App.D.C. 247, 219 F.2d 742, rehearing en banc denied 1955, 94 U.S.App.D.C. 256, 219 F.2d 751, certiorari denied, 1955, 348 U.S. 981, 75 S. Ct. 571, 99 L.Ed. 763

53

FAHY, Circuit Judge (dissenting).

54

I would grant the petition of George Shimmerlik and Albert T. Wantz for reconsideration and rehearing.