Appendix — Idaho Sheet Metal Works, Inc. v. Wirtz

Supreme Court brief1966

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TABLE OF CONTENTS OF APPENDIX.

VOLUME I.

Answer to amendment to complaint ...............

Request for acuission of facts .....................

Replies to request and supplemental request for

oe ERE Me hea a ere

RAT REP ee Ee ee POR Realy a eRe

IIb Wd Gals oa ks 0 Gh a eo bein bee ce ooiecks

Order amending order for judgment ..............

ihe RII rere iret eoarae yar medenen ts

Notice of cross-appeal as to part of the judgment ...

Plaintiff’s Evidence.

A. E. Steepleton (Deposition) .....................

A. E. Steepleton—

oc i'n o So cwn eencwnee coasts

Cross-examination .................... eieeurey

Arnold E. Hirsch—

I a wae Uuekoo dee crea.

Howard Croom—-

ES on. i ec cbebeouseneecesounc 120a

Cross-examination ..........cccccccccccccccece 120a

Recross-examination ..............-.e2+2- 22... 1228

James H. Micklish—

BN I gon ev ccvecncvadvccceuseeg 123a

Crogs-examination ........ccccccccccccccccuces 136a

Redirect examination .................0cc cece 158a

Frank Phillips—

CROGB-GRBMMIMAEION 2... cc cc cc cc cece cece 16la

Redirect examination ...................-.005- 163a

John K. Wood—

a 166a

ESI I ES PE DOT PLT APRS 167a

Redirect examination ...................00000- 169a

Recross-examination ...............0cceeececee 17la

O. D. Black—

Beipeet emmnminatian .... ...osc cc ccvaiccuctccecees 173a

Edwin W. Andrews—

EEE OCT eae ere 173a

Cross-examination ...........cccccccccccccccce 175a

Redirect examination .................00ce eee 175a

Woody Herrin—

Direct examination ..............ccccceseseectbe 176a

CN oe baw cwabeeaeueen 179a

John S. Robilio—

ee re kun buteeteees 180a

I on kad wkneviles tadendhels 182a

Redirect examination ................0.cc0eeee 184a

Warner Swett—

nee vtineineuueaeel 185a

A. L. Benning—

Bpereet emmieiios .....1..<cvewscascesceedess 187a

I gg. kd cu ewccceeauakcwnaaeen 188a

7 <Pmg ’

k OE naliagh

_—

ill

James H. Micklish-—

Redirect examination (Further) ...............

Recross-examination ..........................

Milo J. Albonetti—

SEOUL GROMINIIO. «5 oo oa occ ncccccvvcveedces..

B. E. Moody—

Direct examination ......:........cccccccecs.,

C. E. Griffth—

en I aa

Cross-examination ............................

James H. Micklish (Further)—

Redirect examination .........................

Recross-examination ..........................

Redirect examination .........................

Defendant’s Evidence.

A. E. Steepleton—

ee... a kee ciate ead Ei

Walter E. de Bruin—

Direct examination itdersedevneeusecitek condi

Cross-examination ............................

Winston W. Marsh (Deposition) —

cpt... JRC oleate AE Eup EAE get

ne ens, eee

Mrs. Virginia Lauderdale—

Direct examination ........5...00.0...00055....

Cross-examimation ..................60.0.......

Mrs. Virginia Lauderdale (Deposition)

Direct examination .........-..eeeeee eee eeeee 377a

Swayne Latham-—

Direct examination .........--- te weeds se ote 395a

Cross-examination .........-+++065 seebdubawas 399a

Redirect examination .............- ey ye ... 408a

Recross-examination .........02 eee eee cee eeeee 404a

Redirect examination ............05:+e ee eee ees 404a

William O. Sturdivant—-

Direct examination ..........cccccccceecceees 405a

Cross-examination ...........-- SEETETTEEL ER .. 408a

Redirect examination ........ 0.500500 seen eres 412a

Richie I. Brunskill—

Direct examination ........... 0c cece eee ee eeee 413a

Cross-examination .........0... eee eee ee eeeees 416a

Redirect examination ...........-.-eeceeeees 420a

Recross-examination ............cceeeeeeeeeees 422a

Dr. Warren W. Leigh—

Direct examination ............cccccescecceees 423a

Cross-examination .......--.++55 swaeukase seul 448a

Redirect examination .........--. ade baw eee 458a

Reeross-examination .............-e cece eee eres 460a

VOLUME IL.

Ted Curry (Deposition)—

Direct examination ............0 00 eee eee reece 463a

Cross-examination ........-.+-- te nd ees ae 477a

Redirect examination .....0 0.6.56 2 eee ee ee eee 492a

Milan Zaveson (Deposition)—

Direct examination .........--00. cece e cere ees 493a

Cross-examination ..........es ccc eeeeeeetceees 518a

Redirect examination .........5- 5000s eee eee . dd4e,

Recross-examination ........66 00 eee eee eens 559s

—

Raymond L. Davis (Deposition) —

ee sn os cds dc os ch ccwbanaaae 562a

iss. cos pess ev eedesaewel 579a

Redirect examination ....................0000. 600a

Recross-examination .............0.0000 cee eee 603a

KE. A. Hinderscheid (Deposition) —

en. gale dc us scampemaans 605a

a 633a

Redirect examination ...............0 cece eens 646a

Reuben E. Hedlund (Deposition)— af

Se IE Fs ac ccdvresceeccewes 647a

ee oe i cxcunsee bacesdwacaee 664a

Ps CIO 3 > svn vcck caccacucuessccece 686a

POP I 6 6 kh. vnc hkdu wwe oecsedsvos 690a

Plaintiff’s Rebuttal Evidence.

Dr. Robert C. Brooks, Jr.—

Be I noc is c os 04605 e dalek dda 696a

Ne a a os eueea stat 709a

errr re 728a

Recross-examination ..............cccccccccece 729a

Dr. John R. Moore—

RE ET See IR ST He 733a

I io ee ee 747a

Miss Sarah Ginsberg—

ee MID 0), week sowie peace owewnas 763a

Cross-examination .............. PE NP RAEN Se 78la

Fs puecdnedsacarev deena Pertivessiaelisisncecdi 789a

iste civavevssnndvbenehaalerwouuteruieaeebueonl 790a

hancedevscbraSetcGavNees nkcuuvicysseuL tial 793a

ine Wh One ROM ad SC bua avd dca Nokes wer vcden meal 796a

Cue GseOGOR «occ cccccucscvecvseteccensovesenes 836a

i . PPPTETSTTITTCLIT TTT TTT Teri ee 837a

ATA Sind ce dd ee eN ee isaiaeeseniciees 838a

ee ). PPPET PEP T ETE TCL ITT Teer 839a

Rede Tg vo cc ciccvetecss Clevecunourbecsaness 84la

Feng TOG. io iiicccccck csc tacsedacugestssecaseneas 842a

Qe Brmim . nc ccc csessevcceccccesccveseseseneee 856a

ne FE. sca ccacctcavestccsecerstranasstastans 860a

Be UD gk ssc écced cin becenvewcseteesaswseres 863a

RM cca vnccccncancccseccevedvesseunvussnaes 864a

D—-Mardh— oer ceerererrrerecescesseene 873a

oebeewwrs sey sere e ers Tee eS Ee ee hee eet es 877a

D—Marsh 885a

E—Marsh

F—Marsh

PF RN PS ee

Original

Proceedings in the United States Court of Appeals for the

Sixth Circu:t (omitted in amet eR 894

Minute entry +f argument and submission (omitted in

ND Ser sibsivun —seccunecencareiedensssoss....., 895

NN Rtas bocicwemacieiinasiaccs<. 896

Seinen tiwiksiircachinimicceececuwddacc.,... 904

Petition for rehearing (omitted in i SEE 906

Order on TN meee n9 assists cewinccecccsc..... 924

Order denying SO id wlehdels eelsageuiweidtiiea sack... 925

Clerk's certificate (omitted in | ES 926

Orders extending time to file petition for writ of certiorari_. 927

Viner eiowing certioret 8... 929

PEEL REPLY. eet On ee iesiaeaiaaibat

i... 2

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

ARTHUR GOLDBERG, Secretary of ,

Labor, United States Department of

Labor,

Plaintiff,

vs. No. 4344,

f Civil.

STEEPLETON GENERAL TIRE COM-

PANY, INC., and A. E. STEEPL!"-

TON,

Defendants. J

VOL. I.

DOCKET ENTRIES.

October 13, 1961 Filed Complaint

November 1, 1961 Filed Answer of Defendant

November 2, 1961 Filed Interrogatories by Defendants

November 4, 1961 Filed Plaintiff’s Interrogatories to

Steepleton General Tire Company,

Ine., Defendant

November 13, 1961 Filed Plaintiff's Objections to De-

fendant’s Interrogatories

November 13, 1961 Filed Objections to Interrogatories by

Defendant

November 24, 1961 Filed Plaintiff’s Reply to Defend-

ant’s Objections to Interrogatories

November 30, 1961 Filed Notice to Take Deposition

Upon Oral Examination

‘November 30, 1961 Filed Notice to Take Deposition

Upon Oral Examination

December

January

February

March

¥ 2 —

FE FE ROR ERASE I RE POOR SEA RINT R NE RTC EN RAY wo

16,

1962

—

Docket Entries

Filed Notice to Take Depositions

Upon Oral Examination

Filed Amended Notice to Take Depo-

sitions Upon Oral Examination

Filed Notice to Take Depositions

Upon Oral Examination by Plaintiff

Filed Notice to Take

Upon Oral Examination

Filed Notice to Take Depositions

upon Oral Examination—Mr. R. E.

Hedlund

Filed Amendment to Complaint, Con-

sented to by Defendant

Deposition

Filed Answer to Amendment to Com-

plaint, Consented to by Plaintiff

Filed Motion for Production of Docu-

ments

Filed Affidavit of James H. Micklish

Filed Notice to Take Depositions

Upon Oral Examination

Filed Request For Admission of Facts

Filed Order On Motion For Produc-

tion of Documents

Filed Objections to Requested Ad-

mission of Facts

Filed Motion and Notice of Motion

Filed Supplemental Request for Ad-

mission of Facts

Filed Motion and Notice of Motion

PMG PYAAR

March

16, 1962

23, 1962

30, 1962

11, 1962

li, 1962

11, 1962

21, 1962

Docket Entries

Filed Objections to Supplemental Re-

quest for Admission of Facts

Filed Order on Objections to Plain-

tiff’s Request fer Admission of Facts

and Supplemental Request for Ad-

mission of Facts

Filed Replies to Request and Supple-

mental Request for Admission of

Facts

Filed Replies to Request and Supple-

mental Request for Admission of

Facts

Filed Deposition of Winston W.

Marsh

Filed Deposition of Reuben E. Hed-

lund

Filed Deposition of Milan Zaveson

Filed Deposition of Raymond L.

Davis

Filed Deposition of E. A. Hen-

derscheid

Filed Deposition of Ted Curry

Filed Deposition of Robert L. Saw-

yer

Filed Deposition of James Herman

Micklish, Part 1

Filed Deposition of James Herman

Micklish, Part 2

Filed Deposition of Mr. A. E. Steeple-

ton

May

23, 1962

— 4a —

Docket Entries

Filed Deposition of Miss Virginia

Lauderdale

July 27, 1962. Filed Findings of Fact, Conclusions

of Law and Order for Judgment

July 31, 1962 Filed Motion to Amend Findings of

Fact, Conclusions of Law and Order

for Judgment

July 31, 1962 Filed Final Decree

August 2, 1962 Filed Order Amending Order for

Judgment by Striking the Words

‘‘at the Plaintiff's cost’? from Para-

graph VII

September 27, 1962 Filed Notice of Appeal

September 27, 1962 Filed Notice of Cross-Appeal as to

Part of the Judgment

September 27, 1962 Filed $250.00 Appeal Bond

October 22, 1962 Filed Reporter's Transeript—7 Vol-

umes

Certificate.

I, W. Lloyd Johnson, Clerk of the United States Dis-

trict Court for the Western District of Tennessee, do

hereby certify that the above index of docket entries is a

true and correct copy of all relevant docket entries which

appear on the docket in this office,

This first day of November, 1962.

W. LLOYD JOHNSON,

Clerk,

By V. LaFON,

Deputy Clerk.

(Seal)

—zZ

~— Sa

Clerk's Certificate

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

ARTHUR GOLDBERG, Secretary of ;

Labor, United States Department of

Labor,

Plaintiff,

Vs No, 4344,

> = Civil.

STEEPLETON GENERAL TIRE COM-

PANY, INC., and A. FE. STEEPLE-

TON,

Defendants. |

CLERK'S CERTIFICATE.

I, W. Lloyd Johnson, Clerk of the United States District

Court for the Western District of Tennessee, do hereby cer-

tify that the pxpers and exhibits transmitted herewith and

enumerated below comprise the Record on Appeal in the

above entitled matter.

k 1, Complaint

2. Answer of Defendant

3. Interrogatories by Defendants

4. Plaintiff's Interrogatories to Steepleton General

Tire Company, Inc., Defendant

5. Plaintiff's Objections to Defendant's Interroga-

tories

6. Objections to Interrogatories by Defendant

7, Plaintiff's Reply to Defendant's Objections to In-

terrogatories

8. Notice to Take Deposition Upon Oral Examina.-

tion

—

Clerk’s Certificate

9. Notice to Take Deposition Upon Oral Examina-

tion

10. Notice to Take Depositions Upon Oral Examina-

tion

11. Amended Notice to Take Depositions Upon Oral

Examination

12. Notice to Take Depositions Upon Oral Examina-

tion by Plaintiff

13. Notice to Take Deposition Upon Oral Examina-

tion

14. Notice to Take Depositions upon Oral Examina-

tion—Mr. R. E. Hedlund

15. Amendment to Complaint, Consented to by De-

fendant

16. Answer to Amendment to Complaint, Consented

to by Plaintiff

17. Motion for Production of Documents

18. Affidavit of James H. Micklish

19. Notice to Take Depositions Upon Oral Examina-

tion

20. Request for Admission of Facts

21. Order on Motion for Production of Documents

22. Objections to Requested Admission of Facts

23. Motion and Notice of Motion

24. Supplemental Request for Admission of Facts

25. Motion and Notice of Motion

26. Objections to Supplemental Request for Admis-

sion of Facts

27. Order on Objections to Plaintiff’s Request for

Admission of Facts and Supplemental Requesi for Ad-

mission of Facts

—7a—

Clerk’s Certificate

28. Replies to Request and Supplemental Request

for Admission of Facts

29. Replies to Request and Supplemental Request

for Admission of Facts

30. Deposition of Winston W. Marsh, with exhibits

attached

31. Deposition of Reuben E. Hedlund, with exhibits

1 through 4 attached

32. Deposition of Milan Zaveson, with exhibits 1

through 6 attached

33. Deposition of Raymond L. Davis, with exhibits

1 through 3 attached

34. Deposition of E. A. Henderscheid, with Firestone

exhibits A through K attached

35. Deposition of Ted Curry, with B. F. Goodrich ex-

hibits 1 through 10 attached

36. Deposition of Robert L. Sawyer

37. Deposition of James Herman Micklish, Part I,

with exhibits 1 through 7 attached

38. Deposition of James Herman Micklish, Part II

39. Deposition of Mr. A. E. Steepleton

40. Deposition of Miss Virginia Lauderdale

41. Findings of Fact, Conclusions of Law and Order

for Judgment

42. Motion to Amend Findings of Fact, Conclusions

of Law and Order for Judgment

43. Final Decree

44. Order Amending Order for Judgment by Strik-

ing the Words ‘“‘at the Plaintiff’s cost’? from Para-

graph VII

45. Notice of Appeal

ne en eae ee were es . on ELMER

sensilla

Complaint

46. Notice of Cross-Appeal as to Part of the Judg-

ment

47. Reporter’s Transcript—7 Volumes

In Witness Whereof, I have hereto subscribed my name

and affixed the Seal of said Court at Memphis in said Dis-

trict, this 2nd day of November, 1962.

W. LLOYD JOHNSON,

Clerk,

By V. LaFON,

Deputy Clerk.

(Seal)

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

ARTHUR GOLDBERG, Secretary of 5

Labor, United States Department of

Labor,

Plaintiff,

va. Civil Action.

r Wile No. 4344.

STEEPLETON GENERAL TIRE COM-

PANY, INC. and A. Kk. STEEPLE.

TON,

Defendants, /

COMPLAINT.

(Filed Oct, 18, 1961.)

Plaintiff brings this action to enjoin the defendants from

violating the provisions of Sections 15 (a) (1), 15 (a) (2)

— 9 —

Complaint

and 15 (a) (5) of the Fair Labor Standards Act of 1938

(52 Stat. 1060, as amended, 29 U. 8. 201, et seq.), herein-

after referred to as the Act.

Il.

Jurisdiction is conferred upon the court by Section 17

of the Act and by Section 24 (8) of the Judicial Code, re-

vised effective September 1, 1948, 28 U.S. C. 1337,

TIT.

The defendant Steepleton General Tire Company, Ine.

is & corporation organized and existing under the laws of

the State of Tennessee, having its principal office and

place of business in Memphis, Shelby County, Tennessee,

within the jurisdiction of this court, where it is engaged

in the production, sale and servicing of new and recapped

tires,

The defendant A. EB. Steepleton, who resides in Mem-

; phis, Shelby County, Tennessee, within the jurisdiction of

this court, is now and at all times hereinafter mentioned

has been president of the defendant Steepleton General

Tire Company, Inec., in which position he has actively

managed and controlled the operations of the corporate

defendant,

TV.

At all times hereinafter mentioned the defendants have

t employed and are employing approximately forty-seven

: (47) employees in the production, handling, servicing, sell-

| ing and distributing of new and recapped tires. Substan-

| tial quantities of the tires produced, handled, serviced,

sold and distributed by the defendants’ said employees

have been, and are being, produced for commerce as de-

ae ee ° ae CP ORR LHV ORS EE RE EEO

— 10a —

Complaint

fined by the Act and have been, and are being, received,

transported, offered for transportation, shipped, delivered

and sold into and from states other than the State of Ten-

nessee, and have been, and are being, shipped, delivered

and sold with knowledge that shipment, delivery and sale

thereof in commerce is intended from defendants’ business

premises in Tennessee to other states. By reason of their

activities, as aforesaid, the defendents and their employees

are engaged in commerce and in the production of goods

for commerce as defined by the Act.

During the period since May 1, 1959, the defendants re-

peatedly have violated and are violating the provisions of

Sections 7 and 15 (a) (2) of the Act by employing many of

their employees in commerce and in the production of

goods for interstate commerce, within the meaning of tho

Act, for workweeks longer than forty (40) hours, without

compensating the employees for such excess hours of em-

ployment at rates not less than one and one-half (1%)

times the regular rates at which they are employed.

VI.

On October 21, 1938, the Administrator of the Wage and

Hour Division, United States Department of Labor, pur-

suant to the authority conferred upon him by Section

11 (ec) of the Act, duly issued and promulgated regulations

prescribing the records of persons employed and of wages,

hours and other conditions and practices of employment

to be made, kept and preserved by every employer sub-

ject to any provision of the Act. The said regulations and

amendments thereto were published in the Federal Reg-

ister and are known as Title 29, Chapter V, Code of Fed-

eral Regulations, Part 516.

Ne a a te Oe ae ee aa eat eee ee ‘ area src i nec,

g eas

. i gy

Complaint

VII.

During the period since May 1, 1959, the defendants,

employers subject to the provisions of the Act, repeatedly

have violated and are violating the provisions of Sections

11 (c) and 15 (a) (5) of the Act in that they have failed

to make, keep and preserve adequate and accurate records

of the wages, hours and other conditions and practices of

employment maintained by them, as prescribed by the

aforesaid regulations, with respect to their employees.

VITI.

During the period since May 1, 1959, the defendants

have violated, and are violating, the provisions of Section

15 (a) (1) of the Act in that they have transported, of-

fered for transportation, shipped, delivered or sold in com-

merce and have shipped, delivered or sold with knowledge

that shipment, delivery or sale thereof in commerce was

intended, from their said place of business to other statey

goods, to wit, tires, in the production of which many of

their employees were employed in violation of Sections

6 and 7 of the Act, as alleged.

IX,

The defendants have, since May 1, 1959, repeatedly vio-

lated the aforementioned provisions of the Act. A judg-

ment enjoining and restraining the violations hereinabove

alleged is specifically authorized by Section 17 of the Act.

Wherefore, cause having been shown, plaintiff prays

judgment permanently enjoining and restraining the de-

fendants, their officers, agents, servants, employees, attor-

neys and all persons acting or claiming to act in their

behalf and interest, from violating the provisions of See:

— 12a —

Complaint

tions 15 (a) (1), 15 (a) (2) and 15 (a) (5) of the Act, and

for such other and further relief as may be necessary or

appropriate.

CHARLES DONAHUE,

Solicitor,

JETER S. RAY,

Regional Attorney,

FRANCIS J. STEINER, JR.,

Attorney,

United States Department of Labor.

Post Office Addresses:

U. S. Department of Labor,

Office of the Solicitor,

725 U. S. Courthouse,

801 Broad Street,

Nashville 3, Tennessee,

U. S. Department of Labor,

Office of the Solicitor,

Washington 25, D. C.

ep a aD ie ae LO VOTRE SRY PBN ih te Te AED

EN a NS Time sansa es .

ws LET EFL DIME SE Te BEM OY Sh iter mee

— 13a —

Answer

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

ARTHUR J. GOLDBERG, Secretary of >

Labor, United States Department of

Labor,

Plaintiff,

vs. | Civil Action.

No. 4344.

STEEPLETON GENERAL TIRE COM-

PANY, INC.,, and A. E. STEEPLE-

TON,

Defendants. ;

ANSWER.

Come now the defendants, Steepleton General Tire Com-

pany, Inc., and A. E. Steepleton, and, for answer to the

complaint herein, state:

(1) On information and belief defendants admit the al-

legations of Paragraph I of the complaint insofar as same

pertain to plaintiff’s purpose or object in filing his com-

plaint.

(2) Defendants admit the allegations of Paragraph IT of

the complaint.

(3) Defendants admit their status, residency and rela-

tionship as alleged in Paragraph ITI of the complaint; de-

fendants deny that Steepleton General Tire Company, Inc.,

hereinafter referred to as the Company, has been engaged

in the production of goods as defined by the Fair Labor

Standards Act of 1938, as amended (29 U. SS. G 201

et seq.), hereinafter referred to as the Act, and deny al)

other allegations of paragraph ITT of the complaint.

—

— l4a—-

Answer

(4) Defendants deny that the Company, at any time men-

tioned in the complaint, employed as many as forty-seven

(47) employees in addition to its employees specifically ex-

cluded from coverage of Sections 6 and 7 of the Act by

Sections 13 (a) (1), 13 (a) (2) or 13 (a) (4) thereof; deny

that the Company engaged in the production of any goods

for commerce as defined in the Act; deny that any sub-

stantial quantity of tires were sold or distributed by the

Company in commerce as defined by the Act, and deny all

other allegations of Paragraph TV of the complaint.

(5) Defendants deny that they violated Section 7 of

the Act and therefore deny any violation of Section 15

(a) (2) thereof as alleged in Paragraph V of the complaint.

(6) Defendants are without knowledge or information

sufficient to form a belief as to the truth of the allega-

tions in Paragraph VI of the complaint that regulations

were issued, promulgated, published and are known as there

alleged, and strict proof thereof is demanded; defendants

deny that said regulations affect or apply to the defend-

ants or any other employer exempted or excluded from

coverage by the Act by specific provisions thereof; deny

that said regulations accurately reflect the section of the

Act pursuant to which they were purportedly issued and

therefore deny that said regulations are valid or were in

fact or substance authorized by said Act.

(7) Defendants deny that they violated Section 11 (c)

of the Act and therefore deny violation of Section 15

(a) (5) thereof as alleged in Paragraph VII of the com

plaint; defendants aver that the Company makes, keeps

and preserves adequate, accurate payroll and other ree:

ords with respect to its employees which comply fully

with the requirements of all laws affecting, concerning or

controlling defendants and aver that defendants are not

ee es

— lia —

Answer

affected or controlled by Section 11 (¢) of the Act, but are

specifically exempted and excluded from coverage there-

under.

(8) Defendants deny that the Company has, during the

period since May 1, 1959, engaged in the production of

tires or other goods as defined by the Act; deny that the

Company was covered by or could have violated Sections

6 and 7 of said Act during such period, deny that said

sections apply to or affect the Company, therefore deny

any violation of Section 15 (a) (1) of said Act as alleged

in Paragraph VIII of the complaint; and deny all other

allegations in the said Paragraph.

(9) Defendants deny all violations of provisions of the

Act alleged in Paragraph IX of the complaint; deny that

any section thereof authorizes any judgment against de-

fendants; deny that complainant is entitled to any relief

and deny that there is any basis upon which complainant

should be granted any relief.

And now having answered the allegations of the com-

plaint, defendants, without waiving but expressly relying

upon all the above defenses and denials, also rely upon

the following defenses:

(A) The Company is and during the period since May 1,

1959 has been engaged in the sale of new and recapped

tires at retail.

(B) The Company is and at all times during such period

has been an exempt “‘retail’’ establishment as defined in

Section 13 (a) (2) of the Act; the Company at all such

times has also qualified under Section 13 (a) (4) of thea

Act; therefore the provisions of Sections 6 and 7 of the

Act relied upon by the plaintiff do not apply with respect

to the Company.

— FEMI ER LETT ILL LLNS EOE TEES ELIOT TINO LE LOE. TIS sia

Sere

— l6a —

Answer

sales ‘‘recognized as retail sales or services in the par-

ticular industry’’ in which an employer is engaged shal}

be considered retail sales for purposes of this Section;

Section 13 (a) (4) of the Act provides in part that the

recognition of an employer ‘‘as a retail establishment in

the particular industry’’ in which it is engaged shall de.

termine whether a given employer qualifies as an exempt

retail establishment for purposes of this Section. These

mandatory provisions were ignored or violated when di-

rectives, bulletins and other publications by the Depart-

ment of Labor, binding upon its agents and employees,

were promulgated and published. Contrary to these pro-

visions such bulletins and directives classify sales recog-

nized as retail sales in the tire industry by vendors recog-

nized as retail establishments in the tire industry as non.

retail sales by non-retailers. Such bulletins and directives

are contrary to the classifications recognized in the tire

industry expressed by leaders in that industry at hearings

preceding the publication of same. Such bulletins and di-

rectives are contrary to express legislative mandate and

therefore are invalid. Pursuant to such invalid publica-

tions plaintiff’s agents and employees conducted an ex-

tensive investigation of and made completely inaccurate

and unwarranted findings in respect to the Company, which

inaccurate, unwarranted and invalid findings serve as the

basis for the complaint.

(D) Section 6 of the Act, also relied upon in the com-

plaint, does not apply to the Company because it is exempt

therefrom pursuant to Section 13 (a) (2) and because tha

minimum wage of $1.00 per hour has been maintained by

the Company.

(E) Section 11 (ce) of the Act relied upon in the com-

plaint applies only to employers subject to some other

—_—_

— 17a —

Answer

provision of the Act or subject to some order issued there-

under; the defendants are not subject to any provision of

the Act and are not the recipients of any order there-

under.

(F) These defendants have not violated those Sections

of the Act which would make Sections 15 (a) (1), 15 (a)

(2) or 15 (a) (5) thereof applicable as alleged in the com-

plaint.

(G) In this suit plaintiff attempts to have this Court

sanction and enforce invalid and illegal bulletins and di-

rectives which are contrary to and in violation of express,

mandatory provisions in the sections of the Act to which

such publications refer and by which plaintiff would have

this Court believe such publications were authorized.

Wherefore, defendants pray that they be allowed to go

hence with their proper costs.

BURCH, PORTER & JOHNSON,

By TOM MITCHELL, JR.,

Attorneys for Defendants,

I, Tom Mitchell, Jr., certify that the foregoing answer

was served upon plaintiff by mailing copies, postage pre-

paid, to one of plaintiff’s attorneys of record addressed as

follows:

Jeter S. Ray, Regional Attorney

U. S. Department of Labor

Office of the Solicitor

725 U. S. Courthouse

801 Broad Street

Nashville 3, Tennessee

This 1st day of November, 1961.

TOM MITCHELL, JR.,

TOM MITCHELL, JR.

— 18a —

Amendment to Complaint

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

ARTHUR J. GOLDBERG, Secretary of 5

Labor, United States Department of

Labor, Plaintiff,

-— Civil Action.

r —s No. 4344.

STEEPLETON GENERAL TIRE COM-

PANY, INC., and A. E. STEEPLE-

TON, Defendants. .

AMENDMENT TO COMPLAINT.

Pursuant to Rule 15 (a), Federal Rules of Civil Pro-

cedure, and by written consent of the defendants as evi-

denced by the endorsement of counsel hereon, the plain-

tiff amends his complaint heretofore filed by adding

thereto immediately following Paragraph No. IV and im-

mediately preceding Paragraph No. V the following:

IV-A.

Since September 3, 1961 the defendants repeatedly have

violated and are violating the provisions of Sections 6

(a) (1) and 15 (a) (2) of the Act by paying to many of

their employees employed in commerce and in the produc-

tion of goods for commerce, as aforesaid, wages at rates

less than one dollar and fifteen cents ($1.15) an hour.

CHARLES DONAHUE,

Solicitor,

JETER S. RAY,

Regional Attorney,

MARVIN M. TINCHER,

Attorney,

United States Department of Labor,

Attorneys for Plaintiff.

RE i ie "PP seapeN eR

=e OES Ree a S

= a = es ‘,

— 19a ~—

Answer to Amendment to Complaint

Defendants consent to the filing of the foregoing amend-

ment by the plaintiff to the complaint in this cause.

BURCH, PORTER and JOHNSON,

By TOM MITCHELL, JR.,

Attorneys for Defendants.

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

ARTHUR GOLDBERG, Secretary of |

Labor, United States Department of

Labor,

Plaintiff,

vs. Civil Action.

j No. 4344.

STEEPLETON GENERAL TIRE COM-

PANY, INC., and A. E. STEEPLE-

TON,

Defendants. :

ANSWER TO AMENDMENT TO COMPLAINT.

Come now the defendants and for answer to the Amend-

ment to Complaint heretofore filed in this cause by plain-

tiff, state:

Defendants deny that since September 3, 1961 they have

repeatedly violated and deny that they are violating Sec-

tions 6 (a) (1) and 15 (a) (2) of the Act, deny that em-

ployees of the corporate defendant are employed in com-

merce and deny that said employees are engaged in the

production of goods for commerce. The corporate defend-

ant is a retail establishment as defined in Section 13 (a)

(4) of the Act; it qualifies as same pursuant to Section 13

(a) (2) thereof. The provisions of Sections 6 and 15 of the

— 20a —-

Request for Admission of Facts

Act relied upon by plaintiff in his Amendment to Com-

plaint do not apply with respect to defendants.

Wherefore, defendants pray that they be allowed to go

hence with their proper costs.

BURCH, PORTER & JOHNSON,

By TOM MITCHELL, JR.,

Attorneys for Defendants.

Plaintiff consents to the filing of the foregoing Answer

to Amendment to Complaint by defendants; the under-

signed attorney for plaintiff acknowledges receipt of a

copy of the foregoing Answer to Amendment to Complaint

on the 19th day of February, 1962.

/s/ MARVIN M. TINCHER,

Attorney for Plaintiff.

UNITED STATES DISTRICT COURT

For the Western District 0: Tennessee,

Western Division.

ARTHUR J. GOLDBERG, Secretary of

Labor, United States Department of

Labor,

Plaintiff,

vs. Civil Action.

r File No. 4344.

STEEPLETON GENERAL TIRE COM-

PANY, INC., and A. E. STEEPLE-

TON,

Defendants.

REQUEST FOR ADMISSION OF FACTS.

Plaintiff Arthur J. Goldberg requests the defendants,

Steepleton General Tire Company, Inc., and A. E. Steeple-

ton, within ten days after service of this request to admit

ERI ENCORE RR EN NE a

— 2la—

Request for Admission of Facts

for purposes of this action, subject to all pertinent objec-

tions to admissibility which may be interposed at the

trial, that each of the Following statements is true:

1. The defendant, Steepleton General Tire Company,

Inc.,! is the franchised dealer for General Tire and Rubber

Company, in the Memphis trade area which includes parts

of Arkansas and Mississippi.

2. In carrying on its business the defendant company

regularly employs approximately 47 to 50 employees, in-

cluding approximately 5 to 7 outside salesmen who are

employed to call on various commercial and industrial busi-

ness establishments and local governmental representatives

for the purpose of making sales of automotive tires, tubes

and tire recapping services.

3. The defendant company has one such salesman who

each week calls on customers in Arkansas and another who

each week calls on customers in Mississippi. Throughout

the period since May 1, 1959, the said defendant repeatedly

has made sales of tires, tubes and recapping service to

business establishments and local governmental units lo-

cated in Arkansas and Mississippi.

4. Throughout the period since May 1, 1959, the defend-

ant company has employed several employees in its recap-

ping shop whose duties regularly have included the re-

capping of automotive tires belonging to customers of the

said defendant whose places of business were located in

Arkansas and Mississippi. Substantial numbers of such

tires, after being recapped, have been transported or de-

livered by the said defendant for transportation to their

owners’ places of business in Arkansas and Mississippi.

a . ® e e * e

ES eS

1 Hereinafter this defendant will be referred to herein simply as the

defendant company.

ve - ental

— 22a —

Request for Admission of Facts

7. The defendant company is billed for the merchandise

which it obtains from General Tire and Rubber Company,

and it has not been the practice of said defendant to ob-

tain such merchandise on consignment during the period

since May 1, 1959.

8. Throughout the period since May 1, 1959, the defend-

ant company repeatedly has obtained tires and other prod-

ucts which were delivered to or received at its place of

business directly from points outside the State of Ten-

nessee,

9. Throughout the period since May 1, 1959, the defend-

ant company repeatedly has made sales of tires, tubes and

other products and services for resale.

10. The defendant company has a,number of employees

in its recapping shop and in its sérvice department, who

regularly since September 3, 1961, have been paid at rates

less than $1.15 an hour.

11. Throughout the period since May 1, 1959, the defend-

ant company has employed a number of employees, includ-

ing but not necessarily limited to office, recapping shop

and service department employees, who regularly havo

worked in excess of 40 hours per week and who have been

compensated for such excess hours of employment at

their regular rates of pay rather than at rates not less

than one and one-half times the regular rates at which

they are employed.

* * * o oe . *

13. During the calendar year 1960 the defendant com-

pany derived a gross income from its sales of goods and

services totalling not less than $903,520.00,

POPLIN INTRON AT SIH IN TH

-— 23a —

Supplemental Request for Admission

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

ARTHUR J. GOLDBERG, Secretary of >

Labor, United States Department of

Labor,

Plaintiff,

vs.

| Civil Action.

File No. 4344.

STEEPLETON GENERAL TIRE COM-

PANY, INC., and A. E. STEEPLE-

TON,

Defendants.

SUPPLEMENTAL REQUEST FOR ADMISSION

OF FACTS.

Plaintiff Arthur J. Goldberg requests the defendants,

Steepleton General Tire Company, Inc., and A. E. Steeple-

ton, within 10 days after service of this request to admit

for purposes of this action, subject to all pertinent objec-

tions to admissibility which may be interposed at the trial,

that each of the following statements is true:

15. During the period beginning Janna

ending December 31, 1960, the de

eral Tire Company, Ine.,!

tires to the customer ide

subparagraphs:

ry 1, 1960, and

fendant, Steepleton Gen-

made one sale or more of truck

ntified in each of the following

a. Ace Freight Lines

b. A. §, Barboro, Ine.

ec. E. L. Bruce Company

1 Hereinafter this defendant will be referred to herein simply as the

defendant company,

EE - ate aaiata

— 24a —

Supplemental Request for Admission

d. Carters Garage Company

e. Ray E. Carter Heavy Hauling Company

f. Albert Cook Plumbing Company

g. Delta Oxygen Company

h. John A. Denies Sons Company

i. Desoto Redi-Mix Company

j. Engleberg Packing Company

k. Federal Compress, Blytheville, Arkansas

|. Federal Compress and Warehouse, Memphis, Ten-

nessee

m. Film Transit, Inc.

n. General Qutdoor Advertising Company

o. Global Moving and Storage Company

p. Gordon Foods, Ine.

q. Gordon Transports

r. Woody Herrin Produce Company

s. Hoover Motor Express

t. Klinke-Reed Dairies, Inc.

u. Kroger Company

v. Frank Phillips Produce

w. Walter Pitts

x. Robilio & Cuneo

y. Ryder Truck Lines

z. Southwestern Transportation Company

aa. Stewart’s, Inc.

— 25a ~

Supplemental Request for Admission

bb. Transports, Inc,

ce. Wesson Division, Hunt Foods & Ind. Mechanic

Dept.

dd. Wesson Division, Hunt Foods & Ind.

ee. Wesson Oil and Snowdrift Sales Compan:

ff. Wharton Transports

gg. White Rose Industrial Laundry

hh. H. R. Yost

16. During the period beginning January 1, 1960, and

ending December 31, 1960, that customer of the defendant

company identified in each of the following subparagraphs

operated tex. or more commercial vehicles;

a. Ace Freight Lines

b. A. 8. Barboro, Ine,

ce. E. L. Bruce Company

d. Carters Garage Company

e. Ray E. Carter Heavy Hauling Company

f. Albert Cook Plumbing Company

g. Delta Oxygen Company

h. John A. Denies Sons Company

i. Desoto Redi-Mix Company

. Engleberg Packing Company

k. Federal Compress, Blytheville, Arkansas

- Federal Compress and Warehouse, Memphis, Ten-

nessee

. Film Transit, Ine.

€<<¢5

Supplemental Request for Admission

. General Outdoor Advertising Company

. Global Moving and Storage Company

. Gordon Foods, Ine.

. Gordon Transports

. Woody Herrin Produce Company

. Hoover Motor Express

. Klinke-Reed Dairies, Inc.

. Kroger Company

. Frank Phillips Produce

. Walter Pitts

. Robilio & Cuneo

. Ryder Truck Lines

. Southwestern Transportation Company

. Stewart’s Inc.

. Transports, Inc.

. Wesson Division, Hunt Foods & Ind. Mechanic

Dept.

. Wesson Division, Hunt Foods & Ind.

. Wesson Oil and Snowdrift Sales Company

. Wharton Transports

. White Rose Industrial Laundry

. H. R. Yost

IBA: BAM PRO I MM rE AB. RTO SPN RRM Wom Mpa Fonte oy peng —

— 27a —

Replies to Request and Supplemental Request

In the

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

ARTHUR J. GOLDBERG, Secretary of >

Labor, United States Department of

Labor,

Plaintiff,

vs. | Civil Action.

File No. 4344.

STEEPLETON GENERAL TIRE COM.

PANY, INC., and A. E. STEEPLE-

TON,

Defendants.

REPLIES TO REQUEST AND SUPPLEMENTAL

REQUEST FOR ADMISSION OF FACTS.

State of Tennessee,

County of Shelby.

A. E. Steepleton, one of the defendants in the above en-

titled action, makes the following replies to the items

noted below in the request and the supplemental request

for admission of facts filed herein by plaintiff as required

by an order herein dated March 23, 1962, requiring an-

Swers to certain items in the said request and supple-

mental requests by one or the other of the two defendants

herein, with leave to qualify or explain such replies as

necessary in the circumstances.

1. There is no written franchise agreement and no other

written agreement between General Tire & Rubber Com-

pany and Steepleton General Tire Company; Steepleton

General Tire Company, hereinafter sometimes referred to

as the Company, is an independent tire retailer which sells

— “San

Replies to Request and Supplemental Request

General Tire & Rubber Company tires, tubes and to a

lesser extent, sells other products, The Company has no

exclusive right as a retailer of General Tire & Rubber

Company products over or in any geographic area. The

Company's store is loeated in Memphis, Tennessee, Mein-

phis, Tennessee lies at the extreme southwest corner of the

State of Tennessee, The Company's customers principally

come from the State of Tennessee, although some of the

Company's customers reside or have places of business in

the adjacent two states, namely, Arkansas and Mississippi,

2. During 1960 the Company regularly employed ap-

proximately forty-seven employees, Included among these

employees were the corporate officers, drivers of service

and delivery trucks, and approximately six salesmen who

called upon and sought to make sales to people or busi-

nesses operating any type of equipment which uses pneu

matic tires,

3. During 1960 nearby areas to the north, south, east

and west of the Company's store was served by one or

more of its salesmen, The interval between calls upon

customers by a salesman at a given point varied from

place to place and from time to time. Because the Com-

pany's store is located near the southwest corner of the

State of Tennessee, some of the nearby areas to the south

and to the west extend into the states of Mississippi and

Arkansas, respectively. The volume and value of tho

Company's sales to customers in North Mississippi during

1960 was so small that the regular solicitation of sales

from customers in that area by a Company salesman was

discontinued during 1961,

4. The regular duty of employees in the Company’s tire

recapping department was and is to recap tires for the

Company’s customers, Some of these customers have

places of business located in Arkansas or in Mississippi.

a i LEP PENNTIEM EL RI PNM INT FNC NS IN eR RETR RE tHe fy

— 29a —

Replies to Request and Supplemental Request

The recapping done for such customers is not a ‘‘substan-

tial’’ part but is, on the contrary, a small percentage of all

recapping done by the Company. After tires belonging to

such customers had been recapped they were either picked

up by the customer, shipped back to the customer via truck

line or delivered in the Company's trucks. The method

of delivery of recapped tires back to the enstomers who

owned same varied according to the customers’ practices

or preferences, the number and size of tires and other

factors,

7. This statement is correct.

8. This statement is incorrect. During 1960 and there-

after, the Company placed almost all of its orders for tires,

tubes or other products which it purchased from General

Tire & Rubber Company by telephone to a warehouse of

eneral Tire & Rubber Company located in Memphis, Ten-

nessee, Occasionally, the Company placed such an order

through a representative of General Tire & Rubber Com-

pany who called at the Company's store. The orders in

either event were filled out of stock in the General Tire &

Rubber Company warehouse in Memphis, Tennessee; tho

merchandise was delivered to the Company store or picked

up by Company truck, depending upon the size of tha

order. Oceasionally an order could not be completely

filled out of stock then in the Memphis warchouse of Gen-

eral Tire & Rubber Company. This happened only rarely.

When it did happen, the balance of such order was filled

out of stock in a General Tire & Rubber Company ware-

house at some other point and delivered to the Company

store by whatever was the most efficient means of transpor-

tation from such other point.

9. The Company during 1960 made sales of products for

resale; sales of services for resale are not considered or

identified as a separate part of any transaction by tha

a Se

Replies to Request and Supplemental Request

Company. The Company’s sales for resale during 1960

and at other times were kept to a minimum by three

factors:

a. The price of the Company’s tires is generally higher

than competitors’ prices; thus fewer sales for resale can be

made by the Company.

b. The profit element in a sale for resale is smaller than

in sales to users of tires, thus less emphasis is placed on

this type of business by the Company or by its salesmen.

ce. The Company had no customers on an active sub-

dealer basis during 1960 to whom the Company regularly

supplied an inventory of tires or tubes for resale.

10. This statement is correct.

11. This statement is correct.

The replies to Items 12, 13, 15, 16 and 17 are made by an

officer of the Company.

* _ * * * * _

13. This statement is accurate.

15. This statement is accurate.

16. The Company does not know and cannot state how

many pieces of equipment were operated by any of its

customers during 1960, for many reasons, including the

following:

a. It will be extremely poor customer relations for a

Company representative to inquire of or seek to ascertain

from any customer the total number of pieces of equipment

for which such customer was purchasing or was maintain-

ing tires at any given time.

b. During 1960 or during any year, the number of pieces

of equipment for which many customers purchased tires

varied from time to time.

ELEN LECT L INO NAL TIES TEIN EE ANE TOTO IES. BNA LN RON MEALS LIE PN WOR UR ES

— 3la ~

Replies to Request and Supplemental Request

e. The term ‘‘vehicle”’ is ambiguous. By definition in

accepted dictionaries a “‘vehicle’’ is said to mean a con-

sons or things. Some heavy industrial or construction

equipment for which the Company sells tires do not carry

persons or things and are not used as conveyances in any

way so that they do not constitute ‘‘vehicles’’ go defined.

Certain equipment on which tires of the sort sold by the

Company are installed may be used for carrying things but

such equipment is not generally considered to be ‘‘ve.

hicles’’, for example, wheelbarrows, portable conuveyon

belts or slides and many types of materials handling de-

vices. Many pieces of equipment on which pneumatic tires

are used consist of two or more units, each of which may

be considered a “vehicle”? by some persons, for example,

a tractor and one or more trailer units.

d. The rapid expansion and varied practices of indi-

viduals or businesses which lease automobiles, tractors

and trailers, industrial, construction or other equipment

to users of such equipment complicates and makes it im-

possible for a tire retailer such as the Company to deter-

mine the number of pieces of equipment for which a given

customer was buying or was maintaining tires during any

given period. Some equipment rental arrangements obli-

gate the lessee to furnish or replace rubber on the equip-

ment, some equipment lease arrangements do not so obli-

gate a lessee. The drivers of tractor-trailer units in some

instances own tractors or own trailers which they operata

for others. Thus the fact that certain equipment which

uses pneumatic tires of the sort sold regularly by the Com.

pany may be kept at a particular place of business or that

such equipment bears a business name or trademark does

not necessarily mean that the business so identified pur-

chases or maintains tires on such equipment.

— 32a —

Findings of Fact, Conclusions of Law, etc.

In the

DISTRICT COURT OF THE UNITED STATES

For the Western District of Tennessee,

Western Division.

ARTHUR J. GOLDBERG, Secretary of )

Labor, United States Department of

Labor,

Plaintiff,

vs. No. 4344.

j Civil.

STEEPLETON GENERAL TIRE COM-

PANY, INC., and A. E. STEEPLE-

TON,

Defendants. ;

FINDINGS OF FACT, CONCLUSIONS OF LAW

AND ORDER FOR JUDGMENT.

(Filed July 27, 1962.)

This cause was heard by the court sitting without a jury

upon complaint under the Fair Labor Standards Act of

1938, as amended (29 U. S. C. 201 et seq.) hereinafter re-

ferred to as the Act. The court upon the pleadings, the

proof, stipulations and briefs of counsel makes the fol+

lowing:

Findings of Fact.

1. The defendant Steepleton General Tire Company, Inc.,

hereinafter referred to as ‘‘the Company,”’ is a Tennessea

corporation having its office and place of business in Mem-

phis, Tennessee, where at all times material it has been en-

gaged in the business of selling and distributing automo-

tive tires and tubes, and providing tire recapping and re-

pair service.

FERRE NERS EH MOLE RE OBST SION OPI IP AE APIA LAR SR ns aR

— 33a ~

Findings of Fact, Conclusions of Law, ete.

2. The defendant, A. E. Steepleton at all times since

May 1, 1959 has been president of the Company and ae-

tively engaged in the management of said Company’s busi-

ness in relation to its work and its employees.

3. During the calendar year 1960, which was stipulated

by the parties to be a representative period, the Com-

pany’s gross income from sales and services to its cus-

tomers was approximately $903,520.00.

4. Employees of the defendants regularly were em-

ployed to make sales and deliveries of merchandise in ins

terstate commerce; to recap tires for delivery to customers

located outside Tennessee; to remove, repair, recap and

mount tires for use on vehicles operated by customers of

the defendants for transporting goods in interstate com,

merce; and to make and maintain sales and accounting

records with reference to sales and service transactions as

set out herein.

5. The Company serves customers within a radius of

seventy-five (75) miles of Memphis, which is located in

the southwest corner of the State of Tennessee with the

State of Mississippi immediately to the south and the State

of Arkansas to the west. The retail market zone or area

of the City of Memphis includes counties in eastern Arkan-

sas, northern Mississippi and West Tennessee.

6. During 1960 the gross value of goods and services

sold by the Company to customers with addresses outside

of the State of Tennessee was approximately $86,000.00.

This amount includes all sales and services billed to all

out-of-state customers including those sales completed or

services rendered in Memphis.

7. In order to meet the needs of many of its customers,

the Company’s servicemen do much of their work at cus-

staioatalimeesiaamertinianciemiecints < arg ‘

—— Oe

Findings of Fact, Conclusions of Law, etc.

tomers’ places of business. The work by such employees

is done on week-ends, at night, or whenever vehicles owned

by these customers are not in use so that the inspection,

repair and replacement of tires interferes as little as pos-

sible with the regular business use of such vehicles. The

Company’s servicemen are also on call at all times in-

cluding week-ends, nights and holidays to make emergency

repairs to or replacement of tires cn customers’ vehicles

so that same can be returned to regular use as promptly as

possible.

8. The total receipts from sales and services of the Com-

pany was less than one million dollars ($1,000,000.00)

during 1960 and has not been as much as one million do!-

lars ($1,000,000.00) in any year of its operation. The value

of total sales for resale during 1960 was approximately

Fifty-eight Thousand Dollars ($58,000.00) which was some

six and one-half per cent (644%) of the total value of

sales and services performed by the Company for that year.

9. In the tire industry sales for resale are recognized

to be wholesale sales. Whereas, sales of tires to consumers

or users of same are recognized to be retail sales regard:

less of the character or identity of the purchaser, the use

to which the tires may be put, the quantities purchased on

the price paid for such tires.

10. Beginning early in 1950 and continuing through

1959 the National Tire Dealers and Retreaders Association,

through its executive officer in Washington, D. C., pre-

sented extensive memoranda and participated in numerous

conferences to develop and explain upon the request of the

Wage and Hour Administration the term ‘‘retail sale’’ as

recognized in the tire industry. This trade Association’s

memoranda revealed that a retail sale is recognized in the

tire industry as including all sales to consumers or users.

— 35a —~

Findings of Fact, Conclusions of Law, etc.

11. The definitions and classification of sales by tire

dealers as published by the Wage and Hour Administra-

tor (pages 33 and 34 of the January 1960 Interpretative

Bulletin, T. 29 part 779) are contrary to those recognized in

the tire industry.

12. A national account transaction in the tire industry

is based upon a contract entered into between a tire man-

ufacturer and a user of tires who operates vehicles in dif-

ferent places in the United States. The basic features of

national account transaction include:

(a) The setting of the price and other terms of the

sale by the tire manufacturer and the national ae-

count customer.

(b) The tire dealer does not know the price at

which a national account customer purchases tires

from the manufacturer.

turer that its retail dealers will make deliveries to

manufacturer’s national account customers ont of in-

ventory carried by the dealer.

(d) The adjustment of the dealer’s purchases ac-

count with the manufacturer to credit the dealer for

the cost of tires delivered to the manufacturer’s na-

tional account customer, plus the payment of a com-

mission of 5% to 7% of that cost by the manufacturer

to the dealer to compensate him for storing and keep-

ing the tires and for delivering them to the national

account customers,

(e) The billing of and collection from the national

account customers by the tire manufacturer, not by

the tire dealer.

(f) The disallowance of the value of tires delivered

by the dealer to national account customers when the

— ——

; imal

einen

Findings of Fact, Conclusions of Law, etc.

dealer’s volume bonus is computed and allowed by the

manufacturer.

13. The Company herein is an independent tire dealer

which handles products of the General Tire and Rubber

Company. In accordance with national account contracts

entered into by the General Tire and Rubber Company

tires are delivered by its retail outlets but no participa-

tion by the dealer, other than the delivery to the cus-

tomer, is permitted. The deliveries by the Company to

General Tire Company’s national account customers are

not recognized in the tire industry as being sales by the

local dealer. Sales taxes are neither collected nor paid

by the local dealer on such transactions.

14. For purposes of more complete accounting records

and more effective managerial control some tire retailers

subdivide their retail sales into separate categories. One

covers the sale of tires under deferred payment plans,

known among tire retailers as ‘‘budget sales’’, which are

sales on installment contracts. Another category of retail

sales is known as commercial account sales covering truck

tire sales to business firms. The competition among tire

dealers for this class of business requires them to make

such sales for only a small margin over their cost. Par-

ticular salesmen may be assigned by a dealer to specialize

in sales of this nature. The dealer segregates commercial

accounts in his accounting records so that he can more

readily determine the profit or loss realized thereon. Al-

though commercial accounts are sometimes segregated for

control purposes, they are recognized in the tire industry

as being retail sales since they are made to consumers

rather than for resale.

15. (a) The Company is an establishment which serves

customers in the retail market area of Memphis, Tennes-

see, where its only place of business is located.

arene ” SLOOP ANG SPIN NET IE Ey ARNE WN mis —

PREP RRR —

— 37a —

Findings of Fact, Conclusions of Law, etc.

(b) More than fifty per cent (50%) of the defendant’s

annual dollar volume of sales of goods and services is

made within the State of Tennessee.

pany’s annual dollar volume of sales of goods and serv:

ices is not for resale and is recognized as retail sales and

services in the tire retailing industry.

(d) It is recognized in the retail tire industry that all

sales of goods or services to consumers are retail sales.

Sales of goods and services which the Company makes for

resale constitute approximately six per cent (6%) of the

total dollar volume of such sales of goods and services.

(e) The only goods which this defendant makes or proc-

esses are the tires which it retreads for its customers, all

of which is done at the Company’s place of business in

Memphis, Tennessee.

(f) More than eighty-five per cent (85%) of this de-

fendant’s sales of tires which it retreads for sale are sold

within the State of Tennessee.

Conclusions of Law.

IL.

The Court has jurisdiction of the parties and the sub-

ject matter of this litigation.

IT.

The defendant herein and its employees are engaged in

commerce and in the production of goods for commerce

within the meaning of the Act. Its employees are en-

titled to the benefits of the Act unless the Company herein

is found to be exempt therefrom. Title 29, U. S. C., See.

201, et seq., Mitchell v. Kentucky Finance Co., 359 U. S.

290.

—

RN NO o- ee,

=—

Findings of Fact, Conclusions of Law, etc.

III.

Defendant, being in commerce, must carry the burden of

proving its entitlement to the exempting provisions of the

Act. Title 29, U. S. C., See. 213 (a) 2, 4; Arnold v. Ben Ka-

nowsky, Inc., 361 U. S. 388.

IV.

Under the facts herein as found by the court more than

fifty per cent (50%) of the defendant’s annual dollar vol-

ume of sales of goods and services is produced within the

State of Tennessee. More than eighty-five per cent (85%)

of defendant’s annual dollar volume of sales of goods and

services relative to the tire recapping portion of its busi-

ness is produced in Tennessee, and more than seventy-five

per cent (75%) of its annual dollar volume of sales of

goods and services is not for resale. We, therefore, find

the defendant herein is a retail and service establishment.

Title 29, U. S. C., See. 213 (a) 2, 4.

While the exemptions under the Fair Labor Standards

Act are to be strictly construed, Arnold v. Ben Kanowsky,

supra, the legislative history of the applicable 1949 Amend-

ment to the Act clearly indicates that the ‘‘business use

test’’ theretofore adhered to is discarded by the Congress

to give recognition to the particular industry’s own classi-

fication of those sales which are by it considered to be re-

tail sales under the Act. No expansion beyond the letter

and plain intent of the Act is necessary in this case to

place the defendant under exemption in view of the proof

herein including the testimony of knowledgeable persons

in the industry. Mitchell v. Kentucky Finance Co., supra,

Mitchell v. T. F. Fertilizer Works, 233 F. 2d 284 (C. A

Sth, 1956); Boissean v. Mitchell, 218 F. 2d 734 (C. A. 5th,

1955).

— 39a —

Findings of Fact, Conclusions of Law, etc.

VI.

The court concludes under the facts and circumstances

of this case the defendant Company is not subject to the

Fair Labor Standards Act, as amended, Title 29, U.S. C,,

See. 201 et seq., since it is a retail and service establish-

ment and exempt from its provisions by reason of sec-

tions 13 (a) 2 and 4.

VII.

The complaint herein will be dismissed at the plaintiff's

cost.

Order for Judgment.

Judgment in accordance with the foregoing Findings of

Fact and Conclusions of Law will be entered within five

(5) days.

MARION S. BOYD,

United States District Judge.

A True Copy.

Attest:

W. LLOYD JOHNSON,

Clerk,

By J. W. ISELE,

7-27-62 D.C.

selnastinaiididedionieee = ———

— 40a —

Final Decree

In the

DISTRICT COURT OF THE UNITED STATES

For the Western District of Tennessee,

Western Division.

ARTHUR J. GOLDBERG, Secretary of 5

Labor, United States Department of

Labor,

Plaintiff,

Vs. No. 4344.

r Civil.

STEEPLETON GENERAL TIRE COM-

PANY, INC., and A. E. STEEPLE-

TON,

Defendants. 7

FINAL DECREE.

(Filed Jul. 31, 1962.)

This cause came on to be heard by the Court sitting

without a jury on May 21, 1962, upon complaint under the

Fair Labor Standards Act of 1938, as amended (29 U.S. C.

201, et seq.), the amended complaint, the answer to the

complaint and answer to the amended complaint, all plead-

ings in this cause, the testimony of witnesses, exhibits,

stipulations, arguments and briefs of counsel; at the con-

clusion of which the Court took this cause under advise-

ment;

Thereafter on July 27, 1962, the Court filed in this cause

its written findings of fact and conclusions of law which

are determinative of the issues presented by the pleadings

and by the proof and by which the Court directed the

entry of a judgment dismissing the complaint herein at

the plaintiff’s cost.

RRM ine . ‘ , m a

—4la—

Final Decree

It is, therefore, Ordered, Adjudged and Decreed by the

Court that the complaint of plaintiff, Arthur J. Goldberg,

Secretary of Labor, United States Department of Labor,

as amended, be and the same is hereby dismissed.

It is further Ordered, Adjudged and Decreed that the

written findings of fact and conclusions of law filed herein

on July 27, 1962 be and the same are hereby made a part

of the record in this cause.

All of which is ordered, adjudged and decreed this 31st

day of July, 1962. The matter of costs is reserved pend-

ing disposition of plaintiff’s motion to amend the find-

ings of fact, conclusions of law and order for judgment

filed herein.

MARION §. BOYD,

Judge.

Approved as to Form:

s/d JETER §. RAY,

JETER S. RAY, Regional Attorney,

s/d MARVIN M. TINCHER,

MARVIN M. TINCHER, Attorney,

Attorneys for Plaintiff,

LUCIUS BURCH, JR.,

LUCIUS E. BURCH., JR., by TM TI,

TOM MITCHELL, J R.,

TOM MITCHELL, JR.,

Attorneys for Defendant.

A True Copy.

Attest :

W. LLOYD JOHNSON,

Clerk,

By V. LaFON,

B.C

s a”

Order Amending Order for Judqment

In the

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

ARTHUR J. GOLDBERG, Secretary of >»

Labor, United States Department of

Labor, Plaintiff,

vs.

STEEPLETON GENERAL TIRE COM-

PANY, INC., AND A. E. STEEPLE-

TON, Defendants. |

ORDER AMENDING ORDER FOR JUDGMENT.

This cause came on to be heard on plaintiff’s motion that

the order for judgment herein be amended by striking

from Paragraph VII on page 8 thereof the words ‘‘at the

plaintiff's cost’? and on written memorandum by attor-

neys for both parties, from all of which it appears to the

Court that plaintiff’s motion should be granted.

Civil Action.

No. 4344.

It is, therefore, Ordered, Adjudged and Decreed, that

the order for judgment entered herein July 27, 1962, be and

the same is hereby amended by striking the words ‘‘at

the plaintiff’s cost’? from Paragraph VII on page &

thereof.

This 2 day of August, 1962,

MARION 8S. BOYD,

Approved as to Form: Judge.

TOM MITCHELL, JR.,

A True Copy. Attorney for Defendants.

Attest: W. LLOYD JOHNSON,

By J. W. ISELF, Clerk,

(Seal) D. C.

—

Notice of Appeal

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

W. WILLARD WIRTZ, Secretary of

Labor, United States Department of |

Labor,

Plaintiff,

vs. Civil Action.

f File No. 4344.

STEEPLETON GENERAL TIRE COM-

PANY, INC., AND A. KE. STEEPLE-

TON,

Defendants. |

NOTICE OF APPEAL.

(Filed Sep. 27, 1962.)

Notice is hereby given that W. Willard Wirtz, Secretary

of Labor, United States Department of Labor, Plaintiff,

successor to Arthur JJ. Goldberg, original plaintiff herein,

hereby appeals to the United States Court of Appeals for

the Sixth Cireuit from the final decree entered in this ac-

tion on July 31, 1969.

/s/ JETER S. RAY,

JETER S. RAY,

/s/ MARVIN M. TINCHER,

MARVIN M. TINCHER,

United States Department of Labor,

Attorneys for Appellant.

A True Copy.

Attest:

W. LLOYD JOHNSON,

Clerk,

By J. W. ISELE,

(Seal) D. C.

en - ——

—

Notice of Cross-A ppeal as to Part of Judgment

UNITED STATES DISTRICT COURT

For the Western District of Tennessee,

Western Division.

W. WILLARD WIRTZ, Secretary of ,

Labor, United States Department of

Labor, Plaintiff,

vs.

STEEPLETON GENERAL TIRE COM-

PANY, INC., AND A. E. STEEPLE-

TON, Defendants. |

Civil Action.

r —s No, 4344.

NOTICE OF CROSS-APPEAL AS TO PART

OF THE JUDGMENT.

Notice is hereby given that Steepleton General Tire

Company, Inc., and A. E. Steepleton, defendants herein,

hereby appeal to the United States Court of Appeals for

the Sixth Circuit from so much of the final decree entered

in this action on July 31, 1962 as effectively adjudicates, or

makes.a part of the record herein any finding, conclusion

or adjudication, that the defendant, Steepleton General

Tire Company, Inc., is engaged in commerce and in the

production of goods for commerce within the meaning of

the Fair Labor Standards Act, all as amended by the or-

der entered herein on August 2, 1962, granting the original

plaintiff’s motion pursuant in part to Rule 52 (b), Federal

Rules of Civil Procedure, for such amendment.

« LUCIUS E. BURCH, JR.,

LUCIUS E. BURCH, JR.,

By TM IT

TOM MITCHELL, JR.,

Attorneys for Cross-Appellants.

— 45a —

Deposition of Mr. A. E. Steepleton

2° DEPOSITION OF MR. A. E. STEEPLETON,

being of lawful age, being by me first duly sworn to tes-

tify the truth, the whole truth, and nothing but the truth,

as hereinafter certified, deposed as follows:

Direct Examination,

By Mr. Tencher:

Q. Will you please state your name and address?

A. A. E. Steepleton, S-t-e-e-p-l-e-t-o-n, 255 Ben Avon

Way, Memphis, Tennessee.

3 Q. Mr. Steepleton, you are the defendant in this

case of Goldberg versus Steepleton General Tire

Company and A. E,. Steepleton?

A. I am an employee of the company, yes. Just the

company is the defendant, is that correct?

Q. No, you are named as a defendant, too, and my ques-

tion simply is, are you the A. E. Steepleton who is named

as a defendant in the case?

A. If I am named in it, I am; yes, I am president of the

corporation.

Mr. Mitchell: The record reflects that he is president

of the corporation.

Q. In addition to being president of the company, I

take it, you are the active manager in directing affairs of

the company?

A. Yes, sir.

Q. Are you also the principal owner of the company?

A. Yes.

Q. Is the Steepleton General Tire Company a franchised

dealer in the Memphis area for General Tire & Rubber

Company?

A. Yes.

* Numbers appearing in outer edge of text indicate page numbers of

original stenographic transcript of testimony.

a ee

Deposition of Mr. A. E. Steepleton

Q. For how long have you been the franchised dealer of

General Tire & Rubber Company?

A. When I came here, I came here in 1944, and at

4 that time it was a company-owned operatior and

subsequently I bought the stock of the company and

became owner of all the stock.

Q. Yes, sir.

A. It was some two years later, I think 1946 or ’47. I

have forgotten the date.

Q. Mr. Steepleton, is there a written contract or dealer

agreement between you and General Tire & Rubber Com-

pany?

A. No.

Q. What territorial limits does your company have to

operate in as a dealer for General?

A. Well, generally we operate, oh, within a radius of

about 50 or 75 miles. We have no closely defined terri-

tory as such. In a case where there is another substan-

tial General dealer within tiat particular radius, then wa

refrain from stepping on his toes.

Q. Yes, sir. Are parts of Arkansas and Mississippi in-

cluded in the territory that you serve?

A. Yes.

Q. Now, as the franchised dealer for the company, I

assume that you sell and distribute various products that

are manufactured by General Tire & Rubber Company?

A. That’s right. They manufacture many products, but

ours is confined to tires and tubes.

Q. All right. Are anv batteries included?

5 A. Some few batteries, yes; however, they don’t

manufacture hatteries.

Q. And primarily the products that you deal in are

the tires and tubes, is that right?

A. Yes.

Q. And does that include, T assume that in addition to

— 47a —

Deposition of Mr. A. E. Steepleton

passenger tires and tubes and ordinary over-the-road truck

tires and tubes, that you also from time to time deal in in-

dustrial type tires and tubes, earth moving equipment

tires and tubes, and various products of that nature, too?

A. Well, we will sell anything that the company makes

that somebody will buy.

Q. Yes, sir. Do you also sell recapped tires as well as

new tires?

A. We do lots of recapping, and it is confined 99 per-

cent to—at least 99 percent to the service of recapping

other people’s tires,

Q. I assume from that you mean on more or less a

custom basis?

A. Custom basis, yes.

Q. And where is that recapping done?

A. At our place of business at 246 Monroe.

Q. Do you have a definite department of your business

which you term the recapping department, or which would

probably he termed a recapping department?

6 A. We call it a shop; it is a recapping shop.

7 Q. Now, with reference to truck tires, do your

employees remove the old tires from the customer’s

vehicle, and after they have been recapped then put

them back on the vehicle?

A. In most cases they do.

Q. And in so doing, are you able to maintain the iden-

tity of the customer’s tires so that he will get the same

tire back after it has been recapped?

A. Yes, we have a continuous record of the serial

8 number of every tire that comes into our shop, and

it is tagged in his name, and the same tire is

rr d.

Q. Yes. Could you give us an approximation of the

F ae

— 48a —-

Deposition of Mr. A. E. Steepleton

relative proportion between truck tires and passenger

tires that you perform recapping on?

A. I don’t keep any such record, but it is about 25 per

cent. Are you speaking of units or dollar volume?

Q. I believe dollar volume would be preferable. Now,

either way that you can approximate it will be satisfac-

tory to me.

A. I can approximate it in dollar volume, that the

passenger tire recapping is approximately 25 per cent

of the total.

Q. And the other 75 per cent would be trucks or heavy

equipment?

A. Right.

Q. Do you from time to time recap any passenger tires

and put them in stock for sale?

A. We do a few, but there again dollar-wise it is infini-

tesimal, the amount of the total.

12 Q. From what sources do you obtain your retread

rubber that is used in recapping?

A. We buy most of our rubber from General.

Q. Now, in addition to their retread rubber—is that

called camel-back?

A. That is a term that is quite often referred to, yes.

Q. In addition to the retread rubber, I assume you get

your tires and your tubes and other products you sell

from General Tire & Rubber Company?

A. Most of them.

Q. What places do you obtain those products from,

Mr. Steepleton?

A. Well, General has a division warehouse here in

Memphis, and all of our orders are placed at that source.

Q. Yes, sir.

A. And most of the tires and other commodities that

we buy from General come out of their warehouse.

Se a ea Ce Bg oa or ec eae oe ee Oe A 2 " e

ae ERLE EES em - , pe FRO D5 OER LER ELIOT EL LNA 1 CS ——

— 49a —

Deposition of Mr. A. F. Steepleton

Q. But do you find that from time to time that when

you place an order for something, you place the order

with the district office here of General Tire Company. Do

you find that the products you need are not in stock and

they will be shipped to you from some other point?

A. Very seldom. Occasionally some item, we may order

ten of an item and they have got nine; we get the

13 nine and they will back order the other one, and

it will come in from some source, wherever the

nearest warehouse might be.

Q. And sometimes that will be from their factory at

Mayfield, Kentucky?

A. It could be from there. It could be from Waco,

Texas, Kansas City, Atlanta, any warehouse point, but

that is very rare that we have to get anything from out

of town.

e & eo oJ o * .

15 Q. Do you sell to any fleet accounts in Arkansas

and Mississippi?

A. Well, what is a fleet account?

Q. Well, I am going to ask you that in a few minutes,

and this might be a good place to do it. Is the term

‘fleet account’’ one that is used in the tire business to

such an extent that there is & recognized meaning for

the term?

A. Well, I am sure the term is used. I still don’t know

the meaning of it.

Q. Do you use it in your business, the term ‘*fleet

account’’?

A. Not particularly with any particular distinction, no.

Q. Youn do have a number of regular customers who

operate fleets of motor vehicles, either trucks or cars or

both, do you not?

A. Yes, we have customers that have all types of

equipment.

g RDNA ney Peaanna ty re bs es

— SALLE ELLIE LE DESAI LOY! PPE NERART = taint .

— 50a —

Deposition of Mr. A. E. Steepleton

Q. Would you say that the biggest portion of your

business is done with customers who have five or more

units of motor vehicles in operation?

A. Are you referring to our total business or to

16 our new merchandise business?

Q. Well, both is what I had in mind. Now, if there

is a distinction or if you think to make the picture clear

we should break it down, then I will be glad to do that.

A. Well, of course, we have no record of how many

vehicles any customer has, but I would say, by and large,

that since almost every family has at least two auto-

mobiles, maybe everybody, every customer we have could

be considered operating a fleet.

Q. Well, now, Mr. Steepleton, I don’t intend to make

a distinction with reference to your customers who have

one or more than one family car, but I would like to

determine from your knowledge of your business whether

or not the principal volume, dollar volume of your busi-

ness, is from customers who operate fleets of commercial

vehicles?

Mr. Mitchell: Well, I think the witness has indicated,

Mr. Tencher, that he doesn’t know the particular cate-

gory or definition for the word ‘‘fleet’’ or ‘‘fleet account”’

which you previously used, and that he does not know

how many vehicles are operated by particular customers

at a particular time. Now, within the framework of that

explanation and qualification, and if he can, I believe

you are entitled to an answer to your last question.

17 Q. Would you go ahead now, Mr. Steepleton, and

see if you can answer it?

A. Well, I would imagine that in dollar volume basis,

including service, recapping, and all of our business,

that our customers have several vehicles. I can’t say how

many.

Q. But, now, if I understand you correctly, you are

saying that the biggest portion of these, more than 50 |

PEST TNE REAP IY RRR NRRL > Is Peter eemA + Feige TOTS OS SRA GHP RNR Ter anes cre gee 97g fe

— 5la —

Deposition of Mr. A. FR. Steepleton

percent of your business dollar-wise, is obtained from

customers who have multiple units of commercial vehicles,

would that be correct?

A. I think that is substantially correct.

Q. Now, I will get back to my other question. Do you

have any such customers in Arkansas and Mississippi

that you regularly sell to?

A. We have a few customers in Arkansas and Missis-

sippi, and I imagine that, by and large, they would fall

into that category.

Q. You have salesmen who regularly travel ia those

two states as well as in Tennessee to solicit such basiness,

do you not?

A. Well, not regularly. We do regularly but not on a

daily basis. We have one man who makes one trip a week

into Arkansas, and we have one that goes one day a week

into Mississippi.

18 Q. Yes, sir. Are those your commercial salesmen?

A. Yes, sir, we generally term them commercial

salesmen because they are by and large soliciting recap-

ping business, and in our method of approach to this

business, we find that the new tire business comes as a

natural result of soliciting recapping business.

Q. Weil, now, you call them commercial salesmen

because they are soliciting recapping business. Is it cor-

rect that they are soliciting that business by and large

from the operators of multiple units?

A. They are soliciting from anybody that needs tires

or needs recapping.

Q. But your commercial salesmen, I take it, do not call

from house to house as a general proposition to call on

the individuals to solicit recapping business?

A. No.

Q. They are calling on business establishments?

A. Business establishments, yes.

— ae See

2 aati

— 52a —

Deposition of Mr. A. E. Steepleton

21 Q. With whom in the General Tire Company

organization do you transact business in day to

day activities, Mr. Steepleton?

22 A. More directly with our local division manager,

Mr. Brunskill.

Q. Now, to what extent do you deal directly with Mr.

Brunskill in your business?

A. Well, merely on the basis of placing orders through

his salesmen, sometimes through his salesmen, and most

often by direct telephone call to his office, but so far as

our business dealings with Brunskill direct, he is a source

of counsel and business management and advisory

capacity so far as the company’s policies are concerned.

Q. Is there someone else in the district office here that

you deal with directly, such as the territory manager?

A. He has a territory manager who is assigned to our

account.

Q. All right, who is that man?

A. His name is Meeks.

Q. Does Mr. Meeks call at your establishment from

time to time in the capacity of salesman or adviser or

any other capacity?

A. Yes.

Q. And what would be his function in such contacts?

A. Well, his function is to carry out his soliciting

business, I suppose, number one, to encourage us to help

carry out all the company policies such as advertising

and merchandising methods and so forth.

23 Q. Does he from time to time work with your

salesmen in calling on some of your customers or

your potentia] customers?

A. Yes.

Q. Now, would you explain the procedure by which

your company obtains merchandise from General Tire &

Rubber Company, whether by written order, telephone

order, or how?

Fae,

Gia are

— 58a —

Deposition of Mr. A. F. Steepleton

A. Well, it is 99 percent by telephone, I would say, or

it must be 100 percent by telephone. I don’t remember

of ever—no, let me change that a little bit. When this

man calls on us, if at the particular time he happens to

be in there and we want to make him feel good by giving

him an order, we give him an order verbally, and he

carries out the function of getting it placed and deliv-

ered, but in most instances we order by telephone.

Q. Who are the persons in your organization who are

authorized to place those orders by telephone?

A. Well, myself, my son, Mrs. Lauderdale, and if none

of us are available and some emergency item was needed,

I suppose anybody concerned has the authority to go

ahead and perform that function.

Q. And do those orders have to be telephoned to anyone

in particular at the district office?

A. No.

Q. When an order for merchandise is placed with the

General Tire Comrany, Mr. Steepleton, would you

24 explain the terms by which the order is transmitted

to you, the merchandise transmitted to you, whether

it be on consignment or whether you are billed, and if

so, the terms?

A. We are billed immediately or as soon as the billing

process can be completed, and the terms are 2 percent

cash discount and 10th prox. on everything except truck

tires, and I believe that is 60 days.

Q. Sixty days net?

A. No. I think we still get a cash discount.

Q. Is any substantial amount of your merchandise

delivered to you by General Tire Company on consign-

ment?

A. None of it.

Q. None. Does your company submit any regular profit

and loss statement or balance sheet to General Tire

Company?

, SARA Om aoRNe Ea REY

NOL NN RAIA DINED GSES ARERR ER Pe 1H IR RE et a ANY eB -

—

Deposition of Mr. A. E. Steepleton

A. We are required to periodically send in a statement

to the Credit Department.

Q. Does that go to the district office here?

A. I am not sure.

Q. As I understand it, the Credit Department of

General Tire Company which handles your accourt and

bills you is at Dallas, Texas, is that correct?

A. The Credit Department is at Dallas. The billing, I

think, is all essentially done on IBM machines in Akron.

Q. And when you say periodically, you submit a

25 report of some kind, what is the report? Do you

have a name for it?

A. We get out a monthly operating statement.

Q. Mr. Zaveson assigned as an exhibit to his deposition

some sheets which were marked 5-A, 5-B, and 5-C. Do

you know whether your monthly operating statement is

on any such form as that, Mr. Steepleton?

A. Yes, we use the same form. This is a form that is

used by General Tire & Rubber Company stores, divisions

and stores that they have financial interest in, and we

have adopted the same accounting procedure and the

same form mainly for comparison reasons, because we

arrive at these comparative percentages of all operating

phases of the business by conforming to their same

accounting procedure.

Q. I see. Now, I assume that your company keeps a

copy of these operating statements that you submit to

General Tire Company?

A. Yes.

. . * + * . *

26 Q. How many employees does your company have

at present?

A. I am not sure just right to the exact amount, but

on the last day of December it was an even 50. No, the

last day of November—excuse me—at the end of our

fiscal year.

— 55a —

Deposition of Mr. A. E. Steepleton

Q. Is that generally about the number that you operate

with?

A. That is about it.

Q. And as | understand it, you have two buildings

there at your location on Monroe Street?

A. Right.

Q. But you operate as just a single establishment, is

that correct?

A. Yes.

28 Q. (By Mr. Tencher) Mr. Steepleton, if I under-

stand you correctly, you/testified a few minutes

ago that you do not supply new merchandise to any

registered sub-dealers of General Tire Company, is that

correct?

A. That is correct.

Q. Do you have any General Tire Company dealers or

people who regularly sell General Tire Company products

that you do supply?

A. No. Are you speaking of right at this particular

moment or at some time in the past?

Q. Well, I had in mind at the present time, but if you

do not have any now and have had in the recent past,

I would like to get that information.

A. We have had from time to time some marketing

agreements with some of the car dealers, but we have

at the present time no sub-dealers or anyone operating

as such on any permanent arrangement. We occasionally

—some dealer will want to buy a General tire or a set

of particular tires because he has a customer that has

requested them.

Q. I notice among the customers that you had in

29 1960 one Austin-Bliss General Tire Company. Do

you know who that is or the nature of his business?

A. Austin-Bliss? Where?

— 56a —-

Deposition of Mr. A. E. Steepleton

Q. I don’t have the address.

A. There is some—I have a recollection of it as a

General Tire distributor somewhere in the United States,

but I can’t recall the name of the town, but do you have

the amount of the sale there?

Q. No, I don’t. These are simply names taken from

your records.

A. Just at this minute in trying to recollect who that

particular person is, I believe it is a General Tire dealer

that we sold a piece of equipment to somewhere and

shipped it, disposal of fixed assets or something of that

nature.

Q. Do you have any recollection with reference to

business that you did with Fagor General Tire Service

Company?

A. Fagor is a General Tire dealer in Monroe, Louisiana,

and it is possible that we probably recapped some tires

for him.

Q. Do you have any recollection concerning a Wilson

General Tire Service?

A. There is a Wilson that is a General Tire dealer in

Milwaukee. I don’t recall any business dealings with him

unless we might have sold him some used equipment.

Q. Do yon still from time to time sell tires, either

30 new tires or recapped tires, to used car dealers?

A. Occasionally, very little.

And to garages in your territory?

. Very little.

But some?

Some.

Yes, sir.

Our price is generally higher than our competitors,

so we are unable to secure thet type of business.

Q. When you do make sales of tires to garages and

used car dealers, you are aware, are you not, that those

are sales for resale purposes?

PO>OrES

— 57a —

Deposition of Mr. A. E. Steepleton

A. In most cases, yes, where they supply exemption

numbers, certificates, and our records I think will indicate

those instances,

Q. Do you prepare a daily recap sheet in connection

with your sales in the operation of your business?

A. We do by product.

Q. Does that sheet in any way reflect the type of sale,

whether it is one for resale purposes or sale for use of

customers on vehicles?

A. No.

32 Q. In connection with the new products that you

sell, does General Tire & Rubber Company provide

you with a price list to use in making those sales?

A. Yes, they provide us a suggested list price.

Q. Is that termed in the business a code price list?

A. No. In recent years, I think in the last two

33 years there has been a code put on the price list

which is a key to arrive at cost.

Q. What is the designation of price lists that you use

in making sales?

A. Well, actually in the tire business, a price list

doesn’t mean anything because nobody knows the price

of a tire from day to day, and it is just a figure that is

used as the starting point trying to arrive at some kind

% a selling point.

Q. But it is used, I take it, as a starting point or in

some other way; basically the price list is a part of your

pricing system, is it not?

A. Yes.

| Q. And is there any particular designation for this

price list as a resale list, price list or some other desig-

nation? I just wonder what you call it.

A. A price list,

Q. Now, you say that in recent years a code was put

es ey, OPE LS IRET

TET ETT LETS LTE PR me

—

Deposition of Mr. A. E. Steepleton

on it to determine cost. Would you explain what the code

is and how it is used?

A. Well, the code is an astronomical figure that is put

on there that is higher than the list price, and by deduct-

ing certain discounts from that code figure, we arrive at

our cost, merely because the list prices do not have the

same relationship to cost all the way through, but

34 the code price does.

Q. Now, does the code price which you have, I

suppose in the form of a number of sheets of paper, show

you what prices you are paying for any particular mer-

chandise that you might want to order from General

Tire Company?

A. State that again.

Mr. Tencher: Let’s have the reporter read it back.

(The reporter read the last question aloud.)

A. Well, in code prices, they are printed not on a

number of sheets of paper, but it is printed on the sug-

gested list price and opposite that list price number.

Q. And is this the document, printed price list, that

you and your salesmen ,use in making sales to your

customers?

A. Which?

Q. The one you have described.

A. The price list?

Q. Yes, sir.

A. Yes.

Q. And you use that same price then, that same price

list, to determine a beginning for bargaining with your

customer over the price you will charge him and also

as a basis of determining what your cost is, is that

correct?

A. That is correct.

Q. Does that same price list give you a guide for

35 pricing the recapping you do for customers?

A. No.

— 59a —

Deposition of Mr. A. E. Steepleton

Q. Do you have a separate printed price list for that

purpose?

A. Yes, we make up our own price list.

36 Q. From such a price list as you stated that you

could let us have, could you explain how the

wholesale price is determined from the code price

expressed there or the code symbol?

A. Well, we have no definite prices at any given time

for any particular class of people or buyer.

Q. When you make a sale to a dealer, for example,

37 is there a percentage of discount that you allow the

dealer from the retail price that is listed there

in the price list?

A. Yes.

Q. What would be the percentage of discount that you

would allow a dealer?

A. Well, that depends on the commodity. As I stated

before, there is a very inconsistent relationship to list

and cost at variance with the different sizes and types of

tires, and that discount by no means can be consistent.

Q. Well, does it follow any sort of pattern? For

example, on passenger tires which you would sell to a

dealer, would you normally allow him, say, 40 percent

discount?

A. Well, that would be a fair figure to shoot at.

Q. Would that be a typical discount to a dealer of

passenger tires?

A. Well, it would be from our list price. In some

instances we make up our own list price and don’t follow

the list that is prepared by General Tire.

Q. Yes, sir. Have you made up—— (interrupted)

A. ——because of these inconsistencies.

Q. Have you made np a list price for both truck tires

_ and passenger tires to be used in your business?

a a

—

Deposition of Mr. A. E. Steepleton

Q. On the passenger tires only?

38 A. We have made some changes in the code price

on the truck tires.

Q. And in making those changes, have you simply

penciled them in on the price list furnished you by

General, or have you made up any?

A. We have had them printed.

Q. You have had them printed? Did you have copies

of those that were in use in 1960?

A. I am not sure.

Q. Now, during the time that you would have had this

price list that you made up for use in your business with

reference to passenger tires, when you put a list price

there, would that be the price at which you would sell

passenger tires to a general member of the public who

would come in and want to buy a set of tires for his car?

A. Well, that is the price we would like to get, but

it has never happened.

Q. Even the prices that you made up have not been

used in making sales?

A. No, the price lists are made up for the purpose of

having plenty of leeway in the trading.

Q. As a part of promotion, I suppose, or bargaining on

an individual basis?

A. Correct.

39 QQ. Now, what would be the normal or typical

deviation from the list price that you would make

to a person who simply wanted one tire or four tires for

his automobile?

A. Well, usually in most cases there is some salvage-

able used merchandise involved in the deal, and we try

to trade on what its resale value is.

Q. Aside from taking in used tires in trade, and I take

it that your salesmen would have an idea how much

A. We have on the passenger tires.

— 6la —

Deposition of Mr. A. F. Steepleton

actual value that tire would have, aside from giving the

customer either the actual value to you of his used mer-

chandise, how much more adjustment or reduction from

tha‘; list price would you normally make in tis sale?

A. There again that would be determined by the

product, because in some of these the mark-up is very

inconsistent. Some cases the mark-up is probably 100 per-

cent, and on the same price list and on a different kind

of a tire and different size and a different type, it may

only be 25 or 30 percent, so there again trying to establish

discount percentages is not feasible because it just is not

practical to do so.

Q. Yes, sir. Well, take one of your standard products.

I have seen them advertised, but I don’t recall offhand

the tradename, but it is the dual or the twin tread.

A. Dual 90.

Q. Or your premium tire—what was the term?

40 A. Dual 90.

Q. Dual 90. Now, how much reduction from your

list price on the dual 90 would you be willing to make

to the ordinary individual purchaser?

A. Well, there are circumstances which alter it, and

sometimes you have got an adjustment situation involved,

but we try to sell the tire at two 10’s off. We sometimes

go three 10’s off, and we sometimes go 40 percent off.

Q. To an individual, even though he is not a fleet

owner or anyone that you would expect to help you get

business from a fleet owner?

A. That’s right.

Q. Now, how much reduction—perhaps before we go

into that, we better come down to one of your utility

type tires that would be used, for example, by a taxicab

company or some company that has a number of ten or

twenty automobiles used by its salesmen in the business,

the type of tire they might use. Do they normally buy

the dual 90 or one that is not a premium tire?

rascem on as .

— 62a — :

Deposition of Mr. A. E. Steepleton

A. Normally they would not buy a premium tire.

Q. Take the type frequently referred to as frst line

tires. Would that be the type of tire that General Foods

Company, for example, would use on its fleet of salesmen’s

automobiles?

A. It probably would be, yes, sir.

41 Q. All right, now, how much reduction from your

list price would you be willing to make io the

average individual customer for one or a set of four of

the first line tires?

A. Do you mean based on our current list price or

something that was in existence two years ago?

Q. Well, I prefer to make it for 1960. What was then

your current selling price on that particular tire if you

can recall it?

Mr. Mitchell: For the record you are talking about—

I did not follow the question perhaps. You are talking

about a sale to an individual automobile owner?

Mr. Tencher: Yes.

Mr. Mitchell: Of a product you have classified as a

first line tire?

Mr. Tencher: Yes.

Mr. Mitchell: The question then is what reduction or

what discount would be allowed on that kind of trans-

action in 1960?

Mr. Tencher: Yes.

A. Well, I don’t recall right offhand what our per-

centage of mark-up was at that time, but we would

attempt to sell the tire on the basis of trying to gross

somewhere in the neighborhood of 25 to 35 percent gross

profit.

Q. All right, now, if you were making a sale of a

42 number of tires of that first line tire in the same

period of time to a company that has a fleet of

automobiles used in its business, what would be the

reduction that you would make?

— 68a —

Deposition of Mr. A. E. Steepleton

A. We would still try to maintain the same gross profit,

maybe the minimum of it, because in all cases tires are

a commodity that we have to service and live with from

the time we put them on a man’s wheels until they are

worn out, and, therefore, it isn’t the type of merchandise

that you can expect to dump over here and forget it.

Being a retail service establishment, that is our obligation

to follow the life of that commodity.

Q. Now, you have used the term “retail service estab-

lishment’’ in your answer, and I assume from that that

you are simply characterizing your own appraisal of the

type of business that you are carrying on, is that right?

A. That is correct.

Q. Could yon name for us one of your customers that

you had in 1960 that you sold passelger tires to on a

fleet account basis? I mean by that either he had ten or

more passenger cars used in the business?

A. Well, most of our commercial type of accounts, of

course, are truck operators and insofar as passenger car

tires go or are involved, I can’t name one that we sold

any particular quantity of tires to. Usually the

43 passenger tires that are bought by a commercial

type of account are more or less on the individual,

personal type of basis. A certain individual owns or drives

& company car, and he puts a set of tires on his car and

bills it to the company.

Q. For example, United Taxi Company is one of your

customers?

A. United Taxi would be the only one, I guess, that

we have sold any quantity of passenger tires to.

Q. What would be the typical discount that you would

give or did give to United Taxi Company?

A. I am not sure. That is handled by our retail tire

department, but I think about 30 percent, perhaps 331%,

I am not sure.

, eee

== Gig

Deposition of Mr. A. E. Steepleton

Q. Would that be reflected in your sales records or

invoices or any sort of record?

A. Not as such. It would reflect a net price, but we

don’t show discounts. I don’t believe they do. One sales-

man may write a ticket up occasionally showing a dis-

count, but for the most part, only a net price is shown.

Q. I take it from that it would be necessary then to

check the individual sales tickets and from them deter-

mine the product that was sold and the price at which

it was sold, and compare that price with the list price

in order to determine how much discount was allowed?

A. That is substantially true, yes.

44 Q. Now, in the tire trade and in your business, is

the term ‘‘national accounts’’ in general use, Mr.

Steepleton?

A. Yes, it is used by the factory.

Q. And do you in your business supply products to

some of these national accounts of General Tire Company?

A. We make deliveries for General. Our national

account arrangements are made between the two com-

panies, and we act as the delivering agent.

Q. I suppose General supplies you with a list of the

people in this particular area that have such a national

account arrangement with them?

A. Yes. When they make a national account arrange-

ment with a company, why, we are advised and asked

to cooperate in servicing them.

Q. And as I understand it, the billing for whatever

products you supply to the particular account is done

directly by the General Tire Company, the home office?

A. Yes.

Q. Could you name the national accounts that you have

been supplying products to in 1960 here in the Memphis

area?

A. I can name a few. I couldn’t begin to recall all of

Tlie tar Rea eda on Oh ee . —— : tl

spe Me koe ee et

— 65a —

Deposition of Mr. A. EF. Steepleton

them. There are some we might have been doing business

with in 1959 or took care of in 1959 that we didn’t in

1960, and vice versa, but I think that Wilson Pack-

45 ing Company would be one of the accounts that we

serviced, probably Kroger during that year——

Q. Would General Foods be one?

A. And General Foods. Have you got some more on

the list there?

Q. Yes. International Harvester?

A. International Harvester, correct, the Federal Gov-

ernment.

Q. Colonial Baking Company?

A. I don’t believe we were doing business with Colonial

Baking Company during that period.

Q. Are you at present?

A. We did some in 1961.

Q. How about Continental Baking Company?

A. But it was all recapping, all the business we did

for them. Probably Continental, yes, during 1960.

Stewart's, a subsidiary of Continental.

Q. Texas Gas Transmission Company?

A. I don’t believe we—I am not sure about them.

Q. How about Arrow Equipment Company?

A. Arrow Equipment Company, manufacturing.

Q. The products you supplied to that company would

be for use on new equipment such as boat trailers?

A. They manufacture trailers, and that is original

equipment business, yes.

46 Q. How about International Harvester, were they

getting General Tire products for use on original

equipment here?

A. Yes.

Q. Aud how about Tri-State Mack?

A. Tri-State Mack.

Q. That would be for use on original equipment?

. we

— 66a —

Deposition of Mr. A, E. Steepleton

A. That would be actually—anything that went to Tri-

State Mack would be only a delivery to them and even-

tually covered by a Mack Truck Company purchase order.

Q. For use on original equipment?

A. To General Tire for original equipment.

Q. Yes, sir. Now, let’s take Wilson Packing Company

as an example for one of your national accounts. Would

you just explain the procedure whereby you receive an

order from Wilson and how it is billed and so forth?

A. The requisition is written by the Wilson Packing

Company in Memphis, and it is sent to their Chicago

office. Their Chicago office in turn writes the purchase

order and forwards it to General Tire & Rubber Com.

pany district office here, and then we are advised of this

order and asked to deliver the merchandise.

Q. And where do you make the delivery of the mer-

chandise?

A. We make the delivery to their plant at 1400 Warford.

Q. Is a part of that delivery the mounting of the

47 tires?

A. Well, it isn’t a requirement. It is quite a bit;

in most cases they have a worn tire that needs to come

off for recapping, and we solicit that recapping business

and offer to mount this new tire in lien of getting the

tire for recapping.

Q. And if you mount it, do you also balance the wheels

for the Wilson Company?

A. Not necessarily, not unless we are asked to, and

that is a separate service charge if we do.

Q. Now, is Wilson Packing Comnany one of the largest

of the national accounts that you service? T mean by that,

do you supply more tires to them than you do to the

average national account in your territory?

A. Well, T don’t—I am not absolutely sure about that.

From time to time they have seen fit to take their busi-

~- 67a —

Deposition of Mr. A. FE. Steepleton

ness away from General and buy somebody else's tires,

so there are times that we are making deliveries and

there are times that we are not.

Q. How about the Kroger Company? Is that a pretty

consistent customer of General that you supply tires tot?

A. It is fairly consistent, but there again the same

conditions apply.

Q. Are their orders handled similarly to Wilson

Company ft

A. No. I believe their garage superintendent has

48 the authority to place the order directly on a local

basis.

Q. If the Kroger garage superintendent does place the

order, how is the order written up and delivered to

Kroger? ;

A. Well, I think in most cases we never see the actual

purchase order. He will write out a purchase order, and

he will call us or give us the order verbally to our sales-

men, and he will give us the order number, and we place

it on our national account delivery receipt that he signs.

Q. And does your service man or one of the employees

from your company take the tires to Kroger and mount

them on their equipment over there?

A. In some cases we mount them, and in some cases

we just put them in his stock.

Q. Has that been a fairly regular part of your business

during 1960?

A. Well, it is a very small amount. I wouldn’t suppose

we delivered them over 20 tires during the year.

Q. In addition to the new tires that you have delivered

Kroger, you also do recapping for Kroger, I believe?

A. Yes.

Q. Now, do you bill the Kroger Company for the recap-

ping you do for them?

A. Yes. That is our own business, yes. That is business

PRN 80 9 SMES AMRIT FC SERINE VI EPEIEIEN AIOE AER LR IOS IIE II -

-— 68a —

Deposition of Mr. A. FE. Steepleton

we solicit from Kroger just like we would from you

49 or Mr. Mitchell or anybody else that owned a truck.

Q. And you set the price on that?

A. We set the prices.

Q. So with reference to the new products that you

deliver to Kroger, do you know what the price is which

they are paying for the tire?

A. No, sir.

Q. I believe you said that part of the time you do

mount the tires that you deliver to Kroger here on that

national account, the new tires?

A. Yes.

Q. And when you mount them, do you balance the

wheels?

A. No.

Q. Is there any other service performed in connection

with the mounting of the new tires other than just

putting them on?

A. We put air in them.

Q. Get them ready to go?

A. Get them ready to go.

Q. Now, when you deliver those new tires, are they

the type that take tubes, too, the Kroger account, tires

and tubes?

A. I am not sure whether they are using tubeless tires

or not, but I don’t believe they are.

Q. In any event, if there are tires and tubes, you

50 deliver both and mount them in such a way as

to make them ready for operation?

A. We do on the—in cases where we are getting—we

render some extra service in order to get the man’s recap-

ping business, exactly like the fellow in the filling station

wipes your windshield and he supposes you will come

back and buy gasoline from him, so in order to get this

man’s recapping and other service business, we do some

— 69a —

Deposition of Mr. A. E. Steepleton

little niceties for him in order to influence him to buy

products from us.

Q. Now, the new tires and tubes that you deliver to

Kroger, I take it, are from your regular stock of new

merchandise?

A. If we have them in stock, usually for convenience

we deliver from our stock, and they are either replaced

or we are given credit by General Tire & Rubber

Company.

Q. Now, the type of tires that Kroger has used during

1960, I take it, are the usual types of truck tires that you

handle and sell every day?

A. Yes, I would SAY SO, yes.

Q. And would that be true generally with respect to

the other national accounts, that they are all using

products which you normally keep in stock?

A. In most cases, yes.

Q. And where you fill such an order for a national

account, it is your general practice to take your stock,

whatever vou have in stock, if it is there, and

51 supply the product they have ordered?

A. Yes, because we save a lot of time and expense

by doing that rather than making a trip to North

Memphis and checking the merchandise up in the General

Tire warehouse.

Q. And you don’t keep on hand any segregated stock

out of which you supply the products to these national

accounts, do you?

A. No, not unless it should be an unusual item that is’

normally not purchased by the general publie.

Q. Do you have any national accounts that fall in that

category?

A. At this particular time, no.

Q. Or in 1960 that you recall?

A. I don’t think so.

— a IN BS RRR RE AS IRE 2 ARG CE RRC PISS OF

me VESEY ERIE ORNS x

— 70a —

Deposition of Mr. A. EF. Steepleton

Q. And do any of these national accounts order pas-

senger tires as well as truck tires?

A. Yes.

Q. Where they order passenger tires, is your delivery

procedure essentially the same as with the truck tires

such as you have described?

A. Yes, except in most cases they come after them.

Q. And they would be mounted and balanced there at

your place of business, I suppose?

A. Yes, if they are willing to pay for wheel bal-

52 ancing or other services, why, we perform those

extra services.

Q. If there are other services performed such as bal-

ancing the wheels, does this national account pay you

directly for that extra service?

A. Yes.

Q. With reference to the tires and tubes that you

deliver to a national account, I assume that those are

products that you already have paid General Tire Com-

pany for or have already been billed for, whether you

have paid the account or not? Is that the usual course

of business?

A. Yes, in most-—yes, I think it would be in every

condition. In other words, every tire that we received.

Q. It is your merchandise?

A. They are billed to us.

Q. And it is your merchandise to deliver either to a

national account or one of your customers as you see fit?

A. As a matter of record in order to receive our service

commission, why, I think that is necessary.

Q. Now, what is this commission that you receive on

the delivery you make to national accounts, Mr.

Steepleton?

A. What is it? You mean dollar-wise?

Q. Yes, or percentage-wise during 1960.

—ila—

Deposition of Mr. A. E. Steepleton

A. Percentage-wise, you mean how much the total gross

amount of commission?

53 Q. No, just the rate of commission.

A. Oh, the rate of commission?

Q. Yes, sir. How are you paid for making these deliy-

eries to the national accounts?

A. Well, we are paid on a sliding scale type of com-

mission. That is, for instance, when we receive two and

a half percent of a dealer price list—a dealer cost level,

let’s put it that way—on manufacturers’ deliveries, and

we are paid five percent on governmental deliveries, that

is GSO; and ten percent on the other types of national

accounts.

Q. Commercia) type of national accounts?

A. Yes.

Q. Do you have any sort of written contract with

General Tire & Rubber Company that prescribes the

procedure by which you are expected to supply products

to the national aceounts?

A. We have no written contract. It is merely a mutual

agreement to keep our relatienship in good standing with

our supplier to carry out the servicing of their direct

customers.

Q. After you delivered, for example, a set of truck tires

to the Kroger Company, what do you do with reference

to General Tire Company in order to get paia for that

transaction?

A. General Tire has a national account delivery receipt

type of invoice which we fill out and show that we made

delivery to such and such national account on their

54 purchase order number so-and-so, and we get some

evidence of it by getting someone in that organiza-

tion to sign that invoice, and we send it in to Chicago

for us to receive our credit or replacement.

Q. Does General Tire Company then furnish you with

De ele at a eee

A a Bt

— 72a —

Deposition of Mr. A. E.. Steepleton

any sort of document or credit memorandum or anything

else showing how much they allowed you for the trans-

action?

A. We are issued a credit memorandum for the cost of

the merchandise plus delivery commission.

Q. Whatever the applicable percentage is?

A. Yes.

Q. And that percentage would be based on your cost

of the particular merchandise you supplied?

A. Yes, and we also have to supply a reference number

showing when or on what invoice number we acquired

the merchandise in *he beginning.

Q. Is the price as shown by that invoice the price at

which you are credited on your account with the value

of the merchandise you delivered to the national account?

A. The price that they credit us with is the price we

paid for it originally.

Q. Even though at the particular time you make the

delivery, it might have been costing you some other price?

A. Yes. We have to furnish the stock movement

55 number and they refer that back to their billing

to arrive at the price they originally charged us

for it, and they credit us back with the same amount.

Q. In sending delivery receipts such as you have

described to General Tire Company, do you at the same

time send any invoice or ticket showing the actual deliv-

ery of the merchandise?

A. Yes.

Q. That would be a copy of your sales ticket, I suppose?

A. A copy of our sales ticket is made out to General

Tire & Rubber Company charging the merchandise back

to them or getting it in some form showing that it was

returned, and we. get a credit for it.

Q. When you make out that invoice billing the General

Tire & Rubber Company, do you snecify on that the price

of these particular items?

_ a

-— 73a —

Deposition of Mr. A. E. Steepleton

A. You mean the price we pay for it?

Q. Yes.

A. Yes.

Q. Do you also put on there the commission that you

expect to be paid for the particular transaction?

A. Yes.

Q. In other words, you make out a sales ticket or

invoice then which reflects the amount of credit which

you expect to be given for having delivered the

56 particular merchandise to the national account?

A. Yes.

Q. After you have completed that invoice and sent it

to General Tire, if you wanted an early replacement of

the merchandise that you have delivered to the national

account, do you prepare or do you make a separate order

to the district manager or to someone else telling him

you need some more of that particular item for your

stock?

A. Yes.

Q. Where do you send the credit transaction, your

delivery receipt, to? Does that go to the district office?

A. It goes to the district office.

Q. But that in itself would not be an order for some

more merchandise?

A. No.

(Off-the-record discussion. )

Q. (By Mr. Tencher) With reference to the recapping

which you do for Kroger, for Wilson, and others of the

national accounts, are you free to set the price of their

recapping without regard to any prices that General Tire

Company might negotiate with these national accounts?

A. Yes.

Q. How does that price compare with the price which

you would charge for recapping that you do on a

57 similar size truck tire for some truck operator who

has got only one or two trucks?

Bie. et ergs LEP AA ARIA SF 8 wae : Qe

— 74a —

Deposition of Mr. A. E. Steepleton

A. Well, it depends an awful lot on some national

accounts we have. We handle the service for them, the

mounting, the dismounting, the same as we do on an

individual, and in that case we charge the same prices.

Q. Is the price you charge then determined by the

service or extra work that would be involved?

A. Yes.

Q. And is it without regard to the number of vehicles

that the particular customer operates?

A. Yes.

Q. Is that termed a commercial price on recapping?

A. Well, we have our own commercial prices, yes, that

we charge everybody, every account that we make without

an exception, that we handle the servicing, we do their

mounting, dismounting, the mating and matching, the

airing, the road servicing, all the things that are neces-

sary to perform in the function of the truck tires. Now,

we have some cases where for reasons of their own that

they would rather perform their own servicing, or per-

haps because they have a union arrangement, they won’t

permit us to handle service, why, we make a differential

in the price on a pick-up and delivery basis.

58 Q. Do you have very many such commercial cus-

tomers where you have this price differential and

do not perform the service that you have described?

A. Very, very few, not over—in 1960 I don’t suppose

we had over two that I can recall, and currently -e don’t

have over four or five right now.

Q. What approximately would be the price differential

there, Mr. Steepleton?

A. Well, it could be anywhere from 10 to 15 percent,

depending on the service that they demanded and the

number of hours that it took your people to stay there

and perform extra functions.

Q. Perhaps I didn’t understand you, but I understood

— 75a —

Deposition of Mr. A. FE. Steepleton

that you have a commercial price for recapping, which

is the same regardless of the number of vehicles your

customer has, provided you also render this extra service

of mounting or mating and matching and airing, is that

correct or not?

A. That is correct.

Q. All right. Then for those few customers where you

do not provide the extra service, you will reduce the

recapping cost by 10 or 15 percent from your commercial

price list, is that correct?

A. Well, we use—it could be—I am trying to think. We

use a suggested factory list in those instances, and

59 their relationship to our list varies considerably

from one type tire to another.

Q. But in general, you think it would run from some-

where in the neighborhood of 10 to 15 percent lower?

A. That is the difference in the cost of the performing

of the services.

Q. In other words, you do then figure into your cost of

supplying the recapping service plus the cost of the

extra service of Switching and mating and matching of

the tires and airing the tires, all of that you compute in

setting the price for your large commercial accounts?

A. Yes.

Q. Would you be able to give us the names of several

of your larger accounts? I mean those which have 10

or more vehicles for which you regularly do the recap-

ping plus the extra service?

A. Well, I don’t know how many vehicles that any

of them have, but I am sure it is a matter of record. You

already know of some of our larger accounts, and I think

Southwestern Transportation Company would probably

be our largest.

Q. There is no question but what they have 40 or 50

vehicles at least? I don’t know how many.

ee = = " eon

— 76a —

Deposition of Mr. A. E. Steepleton

A. Well——

Q. No question but what Kroger has well in excess

of 10 vehicles?

60 A. Yes. Well, however, we get a very little, very

small percentage of Kroger business. Their business

is divided among five or six different companies some-

times.

Q. It wouldn’t be any question but what Wilson Pack-

ing Company operates well in excess of 10 vehicles?

. I am sure they do.

. And Stewart’s?

. Yes, sir.

And Continental Baking Company?

. Yes, sir.

And Road Builders Equipment Company?

They wouldn’t operate any. I say any—they have

a few vehicles of their own that haul heavy equipment,

but they are equipment dealers.

Q. Yes, sir. Then such business as you do for them

would be in the nature of recapping of tires to be used,

to be put on used equipment which they would resell?

A. Some would, and some would go on their own

equipment.

Q. Similarly, for Tri-State Mack the bulk of your

recapping would be on tires to be put on used equipment

for resale?

A. Well, no. During 1960 Tri-State Mack was operating

a leasing company, and some of the tires were run on

that equipment and some went on used equipment.

Q. For resale?

A. Yes.

61 Q. And I take it that there would be no question

but what DeSoto Ready-Mix Company operates

more than 10 vehicles?

A. I don’t believe they do. I think they have less than

that, considerably less than that.

PREY) WO SS MOR oy hed Ree eT ice cae + * » a . —

? THR ‘ > oe De Ae are ee ee

rPOPOoPOD

on Tg aa

Deposition of Mr. A. EF. Steepleton

Q. Are they here in Memphis or Shelby County?

A. Yes, they are somewhere south of Whitehaven, right

at the state line.

Q. I suppose you would know that Delta Oxygen Com-

pany has more than 10 vehicles, would you not?

A. No, I am not sure, no, sir.

Q. You think it might be less than 10?

A. I think it might be less.

Q. How about John A. Denie’s & Sons Company?

A. I am sure they have more than that.

| Q. And how about Ray D. Carter?

A. In 1960 Ray Carter—I don ’t know; he just started

in business, and I don’t know how many vehicles he has.

Q. He had a hauling business plus a leasing business,

I believe, didn’t he?

A. No, Carter Leasing Company is a different company.

Q. Is it? Do you know whether Mid-South Aggregates

has more than 10 vehicles?

A. I don’t know. A lot of these companies operate

leased equipment, and it also depends on what you

62 call a vehicle. There are tractors and there are

trailers, and you only license one of them, and I

don’t know how to tell how many vehicles a person has,

and there are some companies who own only trailers and

all the pulling equipment is leased from individuals or

from one company.

Q. At any rate, Mid-South Aggregates provided you

with a pretty substantial amount of business, and had a

fleet of vehicles of some number that would be more than

four or five?

A. Well, they run a construction business, and they

had some dump trucks and earth moving equipment, but

I don’t know how many.

Q. And how about Littlejohn Taxi Company?

A. They have several taxis; I don’t know how many.

—_— a la

samenennateinmnamntamshiinemeemant ~ ay

a= 78Q a=

Deposition of Mr. A. E. Steepleton

Q. I suppose United Taxi Company has 10 or more?

A. I think so. We keep no record of how many vehicles

any one customer has.

Q. If you have a customer for whom you do recapping

service who has only one or two vehicles, say, an

individual with his car, or an individual truck owner-

operator, as a part of your recapping business do you

perform this regular service of airing his tires and mat-

ing and matching his tires and so on at no extra charge?

A. To what extent we can, yes, sir.

Q. But your larger recapping customers, you have

63 employees who go around to the place of business

to check their tires and air them and mate them

and match them and so on, do you not?

A. We do. We also in our regular tire, passenger tire

business, have our customers come in and have their tires

rotated and checked periodically. Every customer is sent

a notice at, I think either three or four months, putting

him on notice that his tires have probably gone another

three or four thousand miles and that he should come

in and have them rotated and inspected, and we perform

this service consistently for all type of customers.

Q. Without charge?

A. Without charge.

Q. Now, in performing the rotating and matching

service in the customer’s place of business, you have a

published price for the service unless it is under this

arrangement where it is provided free?

A. We have a list for performing services for persons

who are not our customers as such. Quite often a person

will call us to advise us he has a flat tire or to perform

some service that has never bought a tire from us. He is

in trouble; it is an emergency, and, therefore, we make a

charge for it.

Oh ae et .

S orp ~ ee

— 79a —

Deposition of Mr. A. E. Steepleton

Q. Now, in connection with the Southwestern

64 Transportation Company, I believe you keep an

employee down at the place of business every day,

do you not?

A. Yes. Those trucks come in and out of there at all

times of the day and night, and in order to handle the

volume of business that we get from there, it takes well

over a half-day. We have a man that goes down there

in the morning, and I believe he gets there at seven

o’clock and he performs whatever jobs are to be handled

there up until the middle of the morning, and then he will

get away from there for a couple or three howrs and then

go back, and another group of equipment jas probably

come in in the late afternoon.

Q. Does the service at Southwestern Transportation

Company include removing flats and repairing punctures

at no extra charge?

A. I believe that they do their own tube repairing down

there. I am not sure; I am sure if we bring them in and

repair them, we charge them for it, but I believe they

do their own repairing.

Q. What would be the extra service amount to or what

would it involve at Southwestern?

A. Well, the number or amount of equipment they

operate, there is enough turnover of equipment in there

from day to day that we are pulling tires off for recap-

ping every day.

Q. In addition to that, you are checking the air

65 pressure and you are rotating the tires to get

maximum wear, and you are mating tires so that

on dual wheels the tires will both carry their proper share

of the load and things of that type, is that involved?

A. Yes, sir.

Q. Do you have any sort of mileage guarantee on your

recapped tires for any of your customers?

A. We have a standard guarantee to everybody that

—

cetteatatintions own ——— TT

—_— eo

Deposition of Mr. A. E. Steepleton

we will guarantee them for, in cases where they keep

mileage records, we will guarantee them on a mill a mile.

Q. On any and all your customers?

A. In most cases on over-the-highway operations, and

there again the guarantee must fluctuate according to

the type of service, the tires and all, and that is a standard

guarantee we give to everyone.

Q. Is that guarantee given in writing to your various

customers?

A. No.

Q. It is just understood?

A. It is just an understood thing.

Q. Who is the employee that regularly services tires

at Southwestern Transportation Company for you?

A. Do you mean the salesman?

Q. No, the service man that changes tires.

66 A. Well, that changes from time to time. We may

have one man down there for a week and change,

or he may be there three months and change, but that

is not a consistent thing.

Q. Is the Southwestern Transportation Company the

only one of your customers for whom you provide this

service on a daily basis?

A. I would say Southwestern is the only customer we

have that we get sufficient amount of business from to

warrant daily service, and we probably have others that

we are called to perform some type of service nearly

every day.

Q. By ‘‘some of this type of service’’, that is free

service?

A. Well, there isn’t anything free. We are getting

paid for it because we get a sufficient amount of business

at a profitable price to justify the service.

Q. Yes, sir.

A. The service this customer gets in relation to ‘‘ Joe

Doakes’’ with one truck is all relative.

WOOT RIYT ARG ere aera eon ty»

— 8la —

Deposition of Mr. A. F. Steepleton

Q. But by free, I meant at no extra charge for sending

aman to the place of business and changing the tires and

matching and mating of tires and checking the air pres-

sures and so forth. Are there other customers that you

do that for without extra charge on a daily basis?

A. We go to John A. Denie’s Ready-Mix Plant daily,

and we go to Weymouth Construction Company.

Q. Any others you recall?

67 A. I don’t know; I ean’t recall any others right

now that we are currently doing that for, but we

do it for anybody where the business and the necessity

warrants it. We would do it for you.

Q. If my volume of recapping was such to make it

worthwhile?

A. That’s right.

Q. Now, many of the other customers for whom you

do recapping, I assume, you provide this checking service

and changing of tires and so on at no extra charge, less

frequently than daily, and I have in mind some of your

customers for whom yon do it every week?

A. Yes, sir, and T think the same thing would apply

that if you drove your automobile enough that you had

to buy gasoline every day, you would get your wind-

shield wiped off every day and your floor swept out every

day and your oil checked, but if you drove your ear only

enough where you had to give us your car once a week,

why, you would probably get that service once a week,

Q. Now, you are giving me an example though of a

service that is performed at the place of business where

I buy the gas, but here my questions relate to the service

as performed at the eustomer’s place of business, rotating

the tires and mating and matching the tires and so on,

taking them off and bringing them to your shop

68 and taking them back and mounting them, which

is not done at your place of business. Now, is that

— ae yo ad

oo er then Ao crane 110 DSR EIS hee iP POLLY TA NTI BRERA aad

--- 82a —

Deposition of Mr, A. E. Steepleton

the type of service that you do on a weekly basis for

many of your customers?

A. Well, our purpose in going to anybody's place of

business to do anything is to get tires to recap, and we

certainly are not in the business of checking air pressures

and fixing flats and for any other reason other than to

get tire business, and some people, some size accounts

require this service daily; some require it semi-weekly,

some require it weekly; some require it monthly, and |

probably in the ease of the man with one truck, we may

not see him over every three or four months,

Q. And in that type of situation when you do see him,

he would normally come to your place of business rather

than you sending a man out to his place of business

A. Not necessarily, no, because in the first place we

don't have the room to service trucks at our place, We

have a terribly congested situation, and while occasion.

ally the trucks drive in there, we prefer to service it

away from our place,

Q. If he is an operator of one truck though, would you

charge him for a service call though if you go out to

match his tires or pull one off?

A, Not if he was operating our tires, If he had

69 ~— our tires and our recaps, it is our obligation to

make them perform,

Q. Well, that would be in a situation where T assume

that the tire had given away before it should have, Sup-

pose he has a set of your recapped tires which in the

normal course of his operation is simply worn slick again

and are ready to be reeapped a second time. Do you wait

until he calls you to go outt

A. Not necessarily, Our salesmen are prebably in con-

tact with him. They have a card file on him, and they

know substantially how many miles they operate ina

month, and they have got a pretty good idea of when

—_—__--

~~ RRa -—

Deposition of Mr, A.B, Steepleton

this man is going to be ready for tires again, barring any

unforeseen accident in between time, so they stay in

contact with him and they pretty well know when he is

in the market for some additional service or merchandiae.

Direct Examination,

By Mr. Tercher (Continued);

Q. Mr. Steepleton, I would like a little more clarifi-

70 cation with reference to the daily or weekly serv-

ies, as the case may be, that you previde to various

of your commercial accounts, | believe you stated earlier

that even though no separate charge is made for these

services, that they are not free services, and would you

elaborate on that just a little bit?

A, Well, now, let's look at it. We look at it this way,

You see, a lot of these trucks—in other words, you are

trying to draw a comparison between what we do for

Southwestern and what we do for somebody else,

Q. Yea.

A, Now, the very nature of their business makes or

causes a differential there. Those trucks that belong to

those people come into their terminal at all hours of the

day and night. More particularly we find a certain group

of them there in the morning, and then they will be

loaded and go out, and another group will be there in

the afternoon, so the nature of their business requires

constant surveillance plus the fact that there are a lot

of trucks involved, and there are other types of commer.

cial accounts whose trucks are constantly in operation

throughout the business day so that the only time we

can see them is on Saturday, so as a result in order to

get to those trucks and pull tires off for recapping, we

have to go see those particular trucks on Saturdays

—

=e ale comes

_—

Deposition of Mr. A. E. Steepleton

because we can find a group of them together and

71 we can more readily do a good job on mating and

matching tires by virtue of having more than one

truck to work with at one time.

Q. Would Mid-South Aggregates be a fair example of

one that you perform that service on a weekly basis?

A. Mid-South Aggregates and one of their other com-

panies are strictly on a C. O. D. basis. They owe us about

$15,000 and we will never get a dime out of it, and we

are currently not doing business with them.

Q. Could you name one that you do handle on a weekly

basis?

A. That we go by and see if their tires are available

for recapping on a weekly basis, yes, I think that you

named one a while ago.

Q. DeSoto Ready-Mix?

A. DeSoto Ready-Mix would probably be one, yes.

Q. In addition to checking to see whether the tires

need to be pulled and recapped, you do match and mate

tires of all various vehicles?

A. On that particular day if there wasn’t anything

that needed it—we very seldom go into the function of

matching and mating tires until we are ready to mount

some new tires or some recapped tires, and that is part

of the proper application of the truck tire, is to be sure

that it is running beside one that is of comparable size

and tread design.

72 Q. And in doing that, I suppose that you are

rendering a valuable service to the customer to

prolong the life of his tires and to reduce uneven wear

and things of that nature?

A. That is our intention, yes, sir.

Q. And would it be correct to say that in providing

that service, either on a daily basis for Weymouth Con-

struction Company and John A. Denie’s, for example,

PT REIORE ENA WIRY RTE IN 8 De RR Tepe?

— 85a —

Deposition of Mr. A. E. Steepleton

on a weekly basis for DeSoto Ready-Mix and other of

your customers, that it cost you a substantial amount to

provide the service?

A. Well, the service is always relative to the amount

of business involved, whether it be new tires or whether

it be recapping.

Q. Yes, sir, and in any event, the checking of the air

pressures and the mounting of the tires, the matching

and mating of tires there at the customer’s establishment,

is a service that you do not provide for an average,

individual customer?

A. We will provide it for anybody that requires it as

a part of their business.

Q. At the customer’s place of business?

A. At the customer’s place of business.

Q. Well, can you give any examples of individuals for

whom you provide this matching and mating service of

tires, and if so how?

73 A. We have quite a number of individual milk

haulers that hau! milk into the dairies. Now, while

we don’t go to that man's home at Collierville or some

other town or community that he might live in to per-

form this service, we go out to the dairy while he is

unloading and perform this service.

Q. Does he call you to come and do that?

A. Sometimes he calls us, and sometimes our salesman

has contacted him, and he meets him out there and finds

things to be done, and we go out and do it. There are

a number of individual truck operators who have in the

past leased to automobile carriers. They own one truck.

We will go to usually Commercial Carriers or Dealers

Transport or wherever this man is basing his operations,

and perform these services for him.

Q. Would that be on a call basis rather than going

periodically by prior arrangement?

- ‘ —

— 86a —

Deposition of Mr. A. E. Steepleton

A. Well, I wouidn’t necessarily say 80, because our

salesman is down there contacting those people, but I

suppose if he had a Nat tire out here with a load on it

and he is in trouble, then he is calling us.

Q. But otherwise you wouldn’t know—you could see

that fellow at a particular time or each week, on the

same day of each week to perform that service?

A. That is my salesman’s obligation to follow that

customer and determine what service he needs when.

74 Q. Then the service call or your service truck 1.0

perform the matching of tires or the removal of

a tire would be at the instance of one of your salesmen

rather than being dispatched on a schedule basis?

A. Well, that is true with the others, too.

Q. Would John A. Denie’s, for example?

A. Our salesman is responsible for what happens there.

He is the person responsible for establishing the require-

ments to properly service this customer.

Q. And this particular customer, the requirement is

to go each day, isn’t it?

A. That is correct.

Q. And your service truck docs go each day without

special call or being sent specially by the salesman, isn’t

that right?

A. Well, he goes each day. Now, if you want to get

technical about it, somebody told him to go. .

Q. But there is a distinction, is there not, between the

arrangement whereby your service man goes to John A.

Denie’s and the arrangement by which a service man

goes to the Transport Dealers’ establishment?

A. Basically I can see no distinction, and again the

service rendered is relative to the amount and type of

business involved.

75 Q. In one instance it is on a regular basis and in

the other instance it is on an unregular or indi-

vidual and specially set schedule?

Ta a RS Ne a Da i a i ge oma

ESSN RIT ES LE GING TEA ENR PT IN) Deel ESR NIN SHES HN

— 87a —

Deposition of Mr. A. E. Steepleton

A. It is regular because the requirements cause it to

be regular.

Q. Now, I believe that you have many of your fleet

account customers who in addition to the recapping

service you provide, buy their new tires and tubes from

you, is that correct?

A. Some of them do.

Q. Now, do you have your commercial salesmen to call

on those accounts with reference to selling them the new

tires and tubes? Is that part of the salesmen’s function?

A. That is part of their function.

Q. And is the salesman authorized in advance to

arrange the terms of the sale, for example, the code less

40 percent or code less 50 percent, or whatever the price

might be at that particular time?

A. Well, they are authorized usually within certain

limitations to quote whatever price is necessary to get

the business, and that thing fluctuates from day to day,

so I never know the prices myself really.

«- is it the normal thing for the salesman to check

with you with reference to each major sale that he would

make, say, to one of your commercial accounts?

76 A. Well, they occasionally advise with me on what

we are up against, a competitive situation that

hasn’t previously existed to our knowledge, and I am

advised of it, and we will confer on what we can do in

order to take this business and still make a little profit

on it.

Q. And the price that you would agree upon with that

customer for his fleet of several vehicles would be nor-

mally a lower price than you would charge for an opera-

tor of, say, one truck?

A. Well, not necessarily, because of competitive condi-

tions, the lowest available prices to fleets the size of

Gordons Transports are being extended by our competi-

tors to one truck operator.

RELL OFLC RON! ROR BEI ES

a ee

Deposition of Mr. A. E. Steepleton

Q. On occasion, is that right?

A. Yes, sir.

Q. But as a general rule, wouldn’t it be true to say

that your fleet accounts buy at lower prices than indi-

vidual truck owner-operators buy?

A. It depends. Quite often prices are made not in

relation to the size, but in relation to how the man is

going to pay. Some people who are able to pay their bill

on the 10th of next month might be extended a little bit

better deal than the guy that wants to take six months

paying for it.

Q. But when all those factors (interrupted)

77 A. But in either case, they are a retail sale because

they are being sold to a consumer, and the price

has nothing to do with it.

Q. And that is your interpretation of retail sales?

A. Right.

Q. Without regard to that, where the terms of the

sale are similar with reference to the time for payment,

and where you have a customer with a fleet of 10 or

more vehicles, isn’t it the normal thing for that customer

to get a lower price, to pay a lower price for your new

products than other customers buying the same size and

type of tire, but he is operating only one vehicle?

A. Well, it isn’t my theory of business to operate in

that way. Certainly it is true that competitive retail

prices force us to make some differential, not because he

has more trucks, but because he buys more tires. Maybe

he is willing and able to pay for them immediately, we

may have some distress inventory here that we want to

move, and we might have a very logical reason to cut

the prices a little bit to get him to take an extra few tires.

Q. But whatever the reason is, wouldn’t it be fair and

correct to say that as a normal part of your business,

the fleet operator gets a lower price per tire than the

individual truck operator?

— 89a —

Deposition of Mr. A. E. Steepleton

78 A. Well, there again I don’t know what you would

call a fleet, because I can’t see any difference

between why a man should have a different price if he

owns nine trucks, and over here he has got ten.

Q. Well, let’s take the situation—— (interrupted)

A. We will say in our business the size doesn’t regulate

the price. The marketing conditions regulate the price.

Q. Well, whatever regulates the price, let’s take a

situation of an owner of ten or more vehicles as distin-

guished from an owner-operator of one vehicle. Isn’t it

the normal thing for the operator of the fleet of ten or

more to buy his tires from you at a lower unit price

than the operator of the one vehicle?

A. Well, it is normal that we are going to try to get

more.

Q. Well, would you go ahead and answer the question

and tell me whether as a normal thing it doesn’t occur

that way?

A. Well, I can’t say that it actually does, because we

have many customers who have more trucks than you

are quoting as a fleet number.

Q. Yes, sir.

A. ——who are paying more for their tires than in

some instances the man that has one or two trucks.

Q. Is that a normal situation?

A. I don’t know that it is normal. There again I

79 am trying to convey to you that the marketing

conditions from day to day and from customer to

customer fluctuate and change by the hour, by the day,

and by the week. :

Q. I still don’t believe we have an answer to the ques-

tion as posed, namely, that at any given time on any

particular day, whether the normal situation is for the

fleet operator who has not less than ten vehicles and any

number that you may select larger than that, whether

— 90a —

Deposition of Mr. A. E. Steepleton

on a given day that person, that fleet operator, would

normally buy his tires at a lower unit price than the

operator of a single vehicle?

Mr. Mitchell: I think the record reflects that same

question some five or six times.

Mr. Tencher: I concede that.

Mr. Mitchell: And since his additional explanation—

he gave an explanation first as to why he found it impos-

sible to give an empirical or definitive answer on that,

and he has elaborated on his inability four or five times,

seeking for him to explain why an answer cannot be given,

that is, in express terms to the question as you have

phrased it, but I think after this one further attempt, I

believe we should move on to something else.

Mr. Tencher: The question certainly has been asked.

I have attempted to express it in different words

80 in order that I may get across to the witness the

information that I am seeking, but so far I don’t

believe the question has been answered, or to my mind

satisfactory explanation given for not being able to

answer it.

Mr. Mitchell: I believe in essence the witness has stated

that if you are talking about a single isolated sale of a

tire or tires for one vehicle to the owner of one vehicle

as compared with the single isolated sale of a tire or

tires to the owner of several vehicles, and it has been

repeatedly explained why there is no normal selling price

in such a transaction in Mr. Steepleton’s experience in

the tire business.

Mr. Tencher: Let’s see if we can get it in this way,

Mr. Steepleton?

Q. Would it be correct to say that in the normal course

of your business, you do from time to time and frequently

make sales to fleet operators of more than ten vehicles

for commercial purposes?

ERIE PLONE LEE LMR ELE NESTLE, F

ars

—

— 9a —

Deposition of Mr. A. E. Steepleton

A. Well, I am sure we do. I have no record of the

number of vehicles they have, but I am sure that some

we have fall in that category.

Q. You know that many of your customers fall in that

category?

A. Yes, sir.

81 Q. You also are aware that as a regular and recur-

ring part of your business, you make sales of tires

of the same size and quality to individual truck operators,

don’t you?

A. Yes.

Q. Now, my question is, assuming—and I think this

would be a fair assumption that on any particular given

day, you will have sales transactions involving both types

of customers that we have just described, would that be

true?

A. Yes.

Q. Now, isn’t the nature of your business such that

you could give a fair appraisal of what would be the

normal manner in which those two types of transactions

would be handled?

A. Well, in either instance our salesman would try to

get the highest price that he could.

Q. Yes, sir.

A. But in either instance also, he would probably sell

either one of them at the iowest price.

Q. There would be a certain area within which the

salesman would be free to adjust and bargain as to price?

A. That is correct, because that salesman is paid a

percentage of the gross profits.

Q. Yes, sir.

A. ——and the higher price he can collect, the more

| 82 commission he makes, so every time he gives away

ten percent, he gives away part of his commission.

Q. Is he paid a percentage of the gross profits on each

transaction, each sale?

— 92a —

Deposition of Mr. A. E. Steepleton

A. Yes, sir.

Q. All right, and within certain limitations he wil!

adjust the prices for either of those two customers?

A. Yes, sir.

Q. And he makes sales of both types from day to day

regularly as a part of his business?

A. Yes, sir.

Q. Now, are you familiar enough with the way your

salesmen are making those sales that you could give a

fair appraisal and tell us whether as a normal proposition

the sale to the fleet owner with ten or more vehicles

would be at a lower unit price than the sale to the

individual truck operator?

A. Well, I don’t think I can.

Q. Why not?

A. You are talking about in units, in dollars, in

number of customers, or what is your basis for the

question?

Q. Simply the unit price of the same type of tire that

he might sell at any given day to the two classes ofgyour

customers that we have defined. Yas

A. I think I have already answered that - &

83 Q. No, sir.

A. That he is permitted, or he knows his cost. He is

paid on a gross profit basis. He is going to try to get the

highest price he can from either category, and that if

he gives away any of our gross profit, he gives away his

commission.

Q. You have explained that.

A. So he is permitted to take the deal at any price

within a certain scope that he has a rind to, in order

to secure the business.

Q. Yes, sir.

A. ——and the price that he quotes is aimost entirely

regulated by what our competitor is doing, and our com-

e ear _

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— 8a —

Deposition of Mr. A. E. Steepleton

petitor is selling the one truck operator at the same price

as the guy with 100 trucks.

Q. You have explained that.

A. Even though their company policy may say no, they

are finding ways to get around it and are doing it.

Q. But what you have not answered is what the normal

or based on an average, the sales your salesmen make

to the fleet operator would be at a lower unit price than

the sale that he made to the individual truck operator?

A. I don’t have those figures.

Q. Wouldn’t you be able to tell from your over-all

knowledge of how those sales are made, how they

compare?

A. Well, we are talking about today, we are talk-

&4 ing about yesterday, we are talking about 1960?

Q. Any of those times.

A. I know that in the most recent months, the indi-

vidual truck operator has been buying right down to the

bottom deal in many, many instances,

Mr. Mitchell: I believe that is as clear and elaborate

an answer as he can give. I don’t think we need to tarry

any longer with that proposition. I think the record now

reflects a frank statement by the witness that he is not

able to answer, does not have the figures available and

that with respect to his general recollection that the cur-

rent experience is that they are buying, that is, these two

types of consumers are buying at the same prices, and

that if that is normalcy, your question requests normaley,

that is what it is.

Mr. Tencher: I can’t accept counsel’s interpretation of

the answer, but I believe that with what the witness has

said, I am ready to pass on to something else.

Q. (By Mr. Tencher) Do you from time to time, Mr.

Steepleton, mail out to your larger commission customers

a quotation of prices at which you can supply their needs

for the immediate future?

orem een Rie s nn |

— 94a —- |

Deposition of Mr. A. E. Steepleton

A. No.

Q. Have you not in recent months, for example, put

85 in writing the basis on which you could sell tires,

say, to Weymouth Construction Company or to

John A. Denie’s Sons Company?

A. Not that I know of. The only thing in that category

could be that perhaps in some of our advertising in the

newspaper on yassenger car tires, our salesmen have

maybe sent cut 4 pre-advertising—pre-sale notice that we

are going to run a sale on such-and-such tire at such-and-

such a price, but I have no knowledge of any such thing

as you are referring to.

Q. Are your salesmen authorized to quote prices or

offers in writing over your signature?

A. Well, they are not authorized to do it. They might

do it. If I have made any written quotations in the last

—over how long a period did you say?

Q. I didn’t specify, but I have in mind going back to

some time in 1960.

A. Well, ii is possible that we might have been

requested to submit a bid that was current for that par-

ticular day or month. I am sure we have.

Q. All right, but other than that, you have not made

it a practice, I take it, of soliciting business in writing

by making a blanket offer?

A. No, sir.

Q. Does General Tire Company territorial manager,

86 that is Mr. Meeks, I believe you said?

A. Meeks, M-e-e-k-s.

Q. Does he ever help you or your salesmen in contact-

ing a fleet account and trying to make sales in the business

of tires and other products?

A. His function is to assist me or our company in

training salesmen or to help them in making a sale and

rendering product knowledge and quite often engineering

knowledge, as the case may be.

PD Oe , a Ty Re ERR I eT —

— 95a —

Deposition of Mr. A. E. Steepleton

Q. Now, in this competitive situation you have

described previously, your salesmen occasionally find

either your own customers being offered tires at a price

that you can’t meet, or potential customers that you

would like to sell that have been quoted prices from a

competitor that you under the normal situation cannot

meet. Do you at such time arrange to have your territory

manager help to work out an arrangement with that cus-

tomer so that you can meet the price you have to?

A. Well, we, my salesmen and myself and all the field

organization of the General Tire & Rubber Company are

certainiy alert to the marketing conditions and what

competitors are doing, and there again, to show the

instability of the tire pricing structure, we will call on

the factory representatives to see if we can get a

87 price to meet a competitive situation.

Q. And is that sometimes done, that you ‘will get

a special price for a particular customer in order that

you can get the business?

A. Yes.

Q. And when that is done, is it necessary that some

agreement or arrangement be put in writing as between

you and General Tire Company with reference to that

particular customer?

A. No.

Q. Do you have any such customer at present to whom

you sell on a fleet account basis where the ptice that he

is paying you had to be worked out with General Tire

Company?

A. Well—— (interrupted).

Mr. Mitchell: Let me ask for a clarification of that

question. Does it import the idea that there will be a

continuing availability of tires at some sutch price to a

particular customer? ’

Mr. Tencher: That is what my understanding is.

——— ts

NOa

Deposition of Mr, A,B. Steepletow

Mr. Mitchell: On eatabliahed accounts receivable now!

Mr. Tencher: No, | have in mind a continuing situation,

Mr. Miteholl: Within that frame of reference and my

understanding of it, go ahead with the answer,

gs A, 1 don’t revall what the marketing aituation waa

in 1960 in the period we are talking about, 1 am

aure xome of those conditions existed, but I can't recall

right now exactly who they were or what the conditions

WEPe,

Q. One T have in mind (interrupted)

A. But they have been existing for off and on,

Q. Yoa, air,

A. (Continuing) For a number of years, as you prob.

ably no doubt have found out,

Q. Ray Carter was one in that category, | believe,

A. The marketing situation in. the tire buainesa has

heon auch for the paat two or three years that competitive

prosaure has forced the retail price down below what we

were normally aupposed to pay for tires,

Q. And, for example (interrupted)

A. So at some periods of time during the past year,

we might have been selling a lot of people at some prices

below what we will aay it ia supposed to be,

Q. In fact, in some instances haa the price been below

what you normally are billed for the same item?

A, Yoa, air,

Q. Was Ray Carter ins that category for the same

poriod of time?

A. 1 don’t recall exactly the name of the accounts,

so and T think it ia irrelevant,

Q. Well, T would perhaps agree with you except

I wanted to use that one for illustration purposes, If it

was true, it was carried on your records as a category 4,

and 1 believe you explained that that meant he had a

apocial 10 percent additional discount on something that

had been arranged with the company f

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—

a --

Deposition of Mr, A.B. Steepleton

A, It is possible that that was true,

Q. And whether or not that partioular one was involved

and so classified, is that the situation you were describing

that you have had various accounts that continued over

a period of time with a kpecial price that would either

be below your price or below the price to which you could

soll to the customer and make a profit?

A, Well, T wouldn't say that the—1 ean't define the

longth of time because these marketing situations in the

tire business fluctuate, We get a period 0” very soft

prives, and all of the rubber companios are pa cticipating

in a soft market situation, All at once our company will

say '*No more deals’) and you are back operating within

your regular buying price, and we try to uphold that

situation until the dam breaks again, so this thing fluetu-

ates up and down,

Q. Whon there is such an arrangement made with

) Goneral Tire Company to permit you to sell ata

rato lower than you normally sell, how are you pro.

tected so that you can still make a profit on that trans.

action?

A. Wo advise them that the competitive quotation is

such-and-such, and we tell them who the competitor is

that is quoting the price, and then they bill us the mer.

chandise at 10 pervont below that figure.

Q. Now, do you have to furnish General Tire with seme

written evidence that. this competitive situation exists?

A, We don't furnish it, no,

Q. Rut you work out your arrangements through the

j district manager, TE presume t

| A. That is correct. The district manager and all of the

district managers nationally are usually aware of the

marketing situations that exist throughout the nation,

and when the same thing crops up in Memphis that is

going on in Detroit, they know beyond a shadow of a

— 98a —

Deposition of Mr. A. E. Steepleton

doubt that we are not—that we are giving them the true

information on that ard usually go along with it within

certain limits.

Q. Now, in what way does General Tire distinguish

the particular products you are selling to this account

so that you will be billed at 10 percent less than your

usual billing for the products going to that account, but

not the products that go to regular accounts?

A. By order, by a specific order.

91 Q. Then do you supply these special accounts on

special order, or do you supply them from your

regular stock and then advise the General Tire Company

of how many tires of the particular kind that you supply

to that customer?

A. That could be either way. In any case we will either

pick them up and make a direct delivery, or we will

replace our inventory.

Q. In what way would that transaction be handled

differently from the transaction involving the delivery to

a national account?

A. Well, in 1960 I think they were handling it in a

similar basis to a national account, the accounting pro-

cedure, but currently they are billing straight off the

invoice.

Q. In 1960 then would it have been your practice to

report the transaction on a national account delivery

receipt form?

A. No, oh no. We would set it up on a claim account.

Q. On a claim account?

A. The fact of the matter is, the commission is not

the same thing, but similar, but it is on a claim account

rather than a delivery receipt.

Q. But the difference would be that you would bill the ~

customer in that instance, would you not?

A. That’s right. The difference is that that customer

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— 99a —

Deposition of Mr. A. E. Steepleton

is our customer. He is our retail customer. The national

account is General Tire’s custemer.

92 Q. Whether or not he is retail or wholesale or some

other basis, you are the one who bills them and

you are the one who collects from the customer?

A. Right. |

Q. Now, your records indicate that you do a consider-

able amount of business selling to the City of Memphis.

Is that still true?

A. We do some business with the City of Memphis. I

think that—I don’t know what our total dollar volume

is, but about $15,000 a year is strictly service charge.

Q. And some of it is new tires?

A. Some of it is new tires and some is recapping.

Q. Is any part of that business obtained on a competi-

tive bid basis? .

A. All of it is, that is, all of the new tire and recapping

is on a bid basis.

Q. Now, in your business do you treat these sales to

the City of Memphis on a bid basis as wholesale sales or

as retail sales?

A. Retail sales. They are consumed by the City of

Memphis and, therefore, are retail sales.

Q. In your classification?

A. Yes, sir.

Q. How does the price that you charge to the City

93 of Memphis compare, for example, with the price

that you charge to the United Taxi Company?

A. Well, I think since it is a bid proposition, I imagine

that it is lower.

Q. The price to the City of Memphis would be lower?

A. Yes, sir.

Q. Now, does the City also buy truck tires from you?

A. Yes, sir.

Q. And those truck tires that are sold on a bid basis,

— 100a —

Deposition of Mr. A. E. Steepleton

would the price to the City of Memphis be less than the

price, for example, to John A. Denie’s Company for com-

parable tires?

A. Well, for anyone the normal would be that it is

lower. I imagine that sometimes during the extreme

pressure of competitive situations, that the reverse might

be true.

Q. Yes, sir.

A. I have no—I can’t recall the exact figures.

Q. All right, sir. Could you say whether the sales to

the City are. just for the purpose of delivery or does it

involve mounting and balancing of wheels and so on?

A. Delivery only, with the exception of some cases they

request in the bid that tires be mounted, but normally

it is a delivery proposition.

Q. And you spoke of some $15,000 a year being servic-

ing and recapping business.

94 A. Let me qualify that. Probably I said $15,000

of it would be service, and,I may be a little bit

high, but usually somewhere in the neighborhood of

between $12,000 and $15,000, that is service.

Q. All right, now, what does that involve?

A. That involves the service trucks and men that we

have doing service work for the Public Works Depart-

ment.

Q. Would you elaborate a little bit on that? What sort

of service work is that?

A. Well, they buy all of their tires on a pick-up and

delivery bid basis, not only from us, but from many ot

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