Announced Actions for October 10, 2003

For Your Information

Commission approval of proposed asset sale: The Commission has approved the proposed sale of assets by J.W. Childs (Childs), related to the 2001 purchase of Ralston Purina Company by Nestlé S.A. (Nestlé). The final decision and order in that matter required Nestlé to divest the Ralston Assets (now called The Meow Mix Company) to Childs, and further required Childs, for five years following the divestiture, to seek prior Commission approval before reselling the Ralston Assets to anyone else. Childs now has finalized a proposed transaction to sell The Meow Mix Company to The Cypress Group, and has requested that the FTC approve the sale of these assets. The Commission vote approving the sale of the assets was 4-0-1, with Commissioner Pamela Jones Harbour recused. (FTC Docket No. C-4208, staff contact is Jeff Dahnke, Bureau of Competition, 202-326-2111; see press release dated December 11, 2001.)

Commission approval of amended complaint: The Commission has approved an amended complaint and authorized the staff to file it in the matter currently pending against Brian Silverman, doing business as Electro Depot, BES Systems, Dallas Tech Surplus, and New York Tech Surplus. The FTC's original complaint in this matter, announced on November 13, 2003, as part of the Northeast Netforce law enforcement sweep, concerned allegations of Internet auction fraud on the part of the defendants. Through the amended complaint, the FTC has added John Engholm, a/k/a John Patterson, doing business as BES Systems, Electro Depot, Dallas Tech Surplus, and New York Tech Surplus, as an individual defendant in this matter. The Commission vote authorizing the staff to file the amended complaint was 5-0. (FTC File No. X030004, staff contact is Anne F. Weintraub, Northeast Region, 212-607-2815; see press release dated November 13, 2002.)

FTC and Department of Justice joint comment on the proposed definition of the unauthorized practice of law filed with the Indiana State Bar Association: The Commission has approved the transmittal of a letter to the Indiana State Bar Association's (ISBA) Unauthorized Practice of Law Committee concerning a proposed amendment to Indiana Supreme Court Admissions & Discipline Rule 24 to define the practice of law. Indiana does not currently have a rule defining the practice of law, and the ISBA requested comments from the FTC and Department of Justice (DOJ) on a proposed amendment to define the practice of law as "ministering to the legal needs of another person for consideration given, either directly or indirectly." The proposal gives examples of "direct or indirect" ministering and lists certain activities in which non-lawyers would be permitted to engage, even if they constitute the practice of law. It also specifies ways in which non-lawyers may provide services for their employers, stating that they may engage in any activities that the Supreme Court determines are permissible.

According to the joint agency letter, the proposed definition is likely to restrict competition, harm consumers, and not serve the public interest by eliminating many forms of lawyer/non-lawyer competition currently permitted in Indiana. For example, the prohibition on lay people "directly or indirectly" engaging in certain acts the proposed amendment defines as the practice of law creates such vagueness that it is likely to greatly inhibit non-lawyers from competing with lawyers to provide services. This is particularly problematic, the staffs contended, with regard to giving "advice on a legal right." In such cases, when read literally, the rule's language could prevent any non-lawyer from giving any form of advice that concerns a legal right, or even from providing information about those rights.

In summarizing their comments, the FTC and DOJ staffs wrote, "The proposed draft definition, which has ambiguous definitions of the practice of law that go beyond existing Indiana restrictions on the unauthorized practice of law, likely would reduce competition from non-lawyers. Indiana consumers, in turn, likely would pay higher prices and face a smaller range of service options. The proposed amendment contains no showing of harm to consumers from lay service providers that would justify these reductions in competition, and the Department of Justice and the Federal Trade Commission are aware of no such evidence. Without a showing of likely harm, restraining competition in a way that is likely to harm Indiana consumers by eliminating their ability to choose among competing providers is unwarranted. We therefore recommend that Rule 24 be left in its current form, or alternatively, that the proposed revision be narrowed substantially." The Commission vote to approve transmittal of the staff letter, a copy of which is available on the FTC's Web site, was 5-0. (FTC File No. V030016; staff contact is Maureen K. Ohlhausen, Office of Policy Planning, 202-326-2632.)

Issuance of staff opinion letter: The staff of the FTC's Bureau of Competition has advised counsel for Partlinx LLC that it does not presently intend to recommend law enforcement action in connection with Partlinx's proposed e-commerce joint venture. A copy of the staff opinion letter announcing this decision is attached to this press release on the Commission's Web site. (Staff contact is Michael G. Cowie, 202-326-2214.)

Copies of the documents mentioned in this release are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

Contact Information

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202-326-2180