9910038
B262991

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

Commissioners:
Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle

In the Matter of

Pools By Ike, Inc., a California corporation;
Isaac W. Hornsby II, an individual;
Ricky Sneed,
an individual doing business as Aloha Pools;
Crystal One, Inc.,
a California corporation doing business as Crystal Pools;
Mario F. Medina,
an individual;
Swimco Pools, Inc.,
a California corporation doing business as Executive Pools and Service;
Brad L. Ward,
an individual;
Neudeck Pools, Inc.,
a California corporation;
Robert D. Hamilton,
an individual;
Capri Pools, Inc.,
a California corporation;
M. Kirt Campbell,
an individual;
Randall R. Arvizu,
an individual doing business as Pacific Pools and Spas;
Robbie Smith,
an individual doing business as Robbie Smith Construction and Pools by Robbie;
Rock Bottom, Inc.,
a California corporation;
Chuck D. Holmes,
an individual;
W.W. Harper Enterprises,
a California corporation doing business as WW Harper Pools & Spas;
Michael J. Harper,
an individual;
Michael A. Severini,
an individual doing business as Severini Pools and Spas;
Caribbean Enterprises Construction Co.,
a California corporation doing business as Caribbean Pools & Spas;
Michael Webb,
an individual;
Sunburst Pools, Inc., a California corporation doing business as Sunnyside Pool Service;
Keith E. Kelley,
an individual;
Pamela Gates,
an individual doing business as Tiffany Pools.

Docket No. C-3902

DECISION AND ORDER

The Federal Trade Commission ("Commission"), having initiated an investigation of certain acts and practices of certain swimming pool contractors, sometimes acting collectively as the Southern Valley Pool Association, hereinafter sometimes referred to as "respondents," and the respondents having been furnished thereafter with a copy of a draft of complaint that the Bureau of Competition proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge the respondents with violation of the Federal Trade Commission Act; and

The respondents, and their respective attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission's Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Pools by Ike, Inc., a California corporation, is a licensed swimming pool contractor with its office and principal place of business at 1730 Art Street, Bakersfield, California 93312.

2. Respondent Isaac W. Hornsby II is an individual and the president of Pools by Ike, Inc, a California corporation, a licensed swimming pool contractor with its office and principal place of business at 1730 Art Street, Bakersfield, California 93312.

3. Respondent Ricky Sneed, an individual doing business as Aloha Pools, is a licensed swimming pool contractor, with his office and principal place of business at 119 Garden Drive, Bakersfield, California 93307.

4. Respondent Crystal One, Inc., a California corporation doing business as Crystal Pools, is a licensed swimming pool contractor with its office and principal place of business at 217 Mount Vernon Avenue, Suite 11, Bakersfield, California 93307.

5. Respondent Mario F. Medina is an individual and the president of Crystal One, Inc., a California corporation doing business as Crystal Pools, a licensed swimming pool contractor with its office and principal place of business at 217 Mount Vernon Avenue, Suite 11, Bakersfield, California 93307.

6. Respondent Swimco Pools, Inc., a California corporation doing business as Executive Pools and Service, is a licensed swimming pool contractor with its office and principal place of business at 5650 District Boulevard, Suite 105, Bakersfield, California 93313.

7. Respondent Brad L. Ward is an individual and the president of Swimco Pools, Inc., a California corporation doing business as Executive Pools and Service, a licensed swimming pool contractor with its office and principal place of business at 5650 District Boulevard, Suite 105, Bakersfield, California 93313.

8. Respondent Neudeck Pools, Inc., a California corporation, is a licensed swimming pool contractor with its office and principal place of business at 509 Ming Avenue, Bakersfield, California 93307.

9. Respondent Robert D. Hamilton is an individual and the president of Neudeck Pools, Inc., a California corporation, a licensed swimming pool contractor with its office and principal place of business at 509 Ming Avenue, Bakersfield, California 93307.

10. Respondent Capri Pools, Inc., a California corporation, is a licensed swimming pool contractor with its office and principal place of business at 2810 Case Street, Bakersfield, California 93308.

11. Respondent M. Kirt Campbell is an individual and the president of Capri Pools, Inc., a California corporation, a licensed swimming pool contractor with its office and principal place of business at 2810 Case Street, Bakersfield, California 93308.

12. Respondent Randall R. Arvizu, an individual doing business as Pacific Pools and Spas, is a licensed swimming pool contractor with his office and principal place of business at 12308 Clementa Avenue, Bakersfield, California 93312.

13. Respondent Robbie Smith, an individual doing business as Robbie Smith Construction and Pools by Robbie, is licensed swimming pool contractor with his office and principal place of business at 8416 Rockport Drive, Bakersfield, California 93312.

14. Respondent Rock Bottom, Inc., a California corporation, is a licensed swimming pool contractor with its office and principal place of business at 801 Angus Lane, Bakersfield, California 93312.

15. Respondent Chuck D. Holmes is an individual and the president of Rock Bottom, Inc., a California corporation, a licensed swimming pool contractor with its office and principal place of business at 801 Angus Lane, Bakersfield, California 93312.

16. Respondent W.W. Harper Enterprises, a California corporation doing business as WW Harper Pools & Spas, is a licensed swimming pool contractor with its office and principal place of business at 2400 K Street, Bakersfield, California 93301.

17. Respondent Michael J. Harper is an individual and the president of W.W. Harper Enterprises, a California corporation doing business as WW Harper Pools & Spas, a licensed swimming pool contractor with its office and principal place of business at 2400 K Street, Bakersfield, California 93301.

18. Respondent Michael A. Severini, an individual doing business as Severini Pools and Spas, is a licensed swimming pool contractor with his office and principal place of business at 661 Delfino Lane, Bakersfield, California 93304.

19. Respondent Caribbean Enterprises Construction Co., a California corporation doing business as Caribbean Pools & Spas, is a licensed swimming pool contractor with its office and principal place of business at 5330 Office Center Court, #30, Bakersfield, California 93309.

20. Respondent Michael Webb is an individual and the president of Caribbean Enterprises Construction Co., a California corporation doing business as Caribbean Pools & Spas, a licensed swimming pool contractor with its office and principal place of business at 5330 Office Center Court, #30, Bakersfield, California 93309.

21. Respondent Sunburst Pools, Inc., a California corporation doing business as Sunnyside Pool Service, is a licensed swimming pool contractor with its principal office and place of business at 5630 District Blvd., Bakersfield, California 93313.

22. Respondent Keith E. Kelley is an individual and the president of Sunburst Pools, Inc., a California corporation doing business as Sunnyside Pools Service, a licensed swimming pool contractor with its principal office and place of business at 5630 District Blvd., Bakersfield, California 93313.

23. Respondent Pamela Gates, an individual doing business as Tiffany Pools, is a licensed swimming pool contractor with her office and principal place of business at 324 Oak Street, Suite N, Bakersfield, California 93304.

24. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER

I.

IT IS ORDERED that, for the purposes of this Order, the following definitions shall apply:

A. "Respondents" shall mean each of (1) the named individual respondents, any entity through which each of them conducts business, each of their representatives, agents, and employees; and (2) the named corporate respondents, and their respective directors, officers, employees, agents, representatives, successors and assigns, their respective subsidiaries, divisions, groups and affiliates controlled by the respective corporate respondents, and the respective directors, officers, employees, agents, representatives, successors and assigns of each such subsidiary, division, group and affiliate.
 
B. "Swimming pool contractor" shall mean any person licensed by a State to construct, renovate or remodel a swimming pool.
 
C. "Subcontractor" shall mean any person licensed by a State to perform any of the tasks involved in the construction, renovation or remodeling of swimming pools, including but not limited to excavation, structural steel installation, guniting, plumbing, electrical, concrete decking, tiling, plastering, engineering and architectural services. The term "Subcontractor" shall also mean any person performing landscaping services (including but not limited to waterfall, decorative rock or boulder work), security, and fence installation related to a swimming pool.
 
D. "Person" shall mean both natural persons and artificial persons, including, but not limited to, corporations, unincorporated entities, and governments.
 
E. "Owner-builder" shall mean any homeowner who contracts with one or more subcontractors, either directly or by using a swimming pool contractor as a consultant only, in connection with the construction, renovation or remodeling of a swimming pool.
 
F. "Meeting" shall mean any assembly of three or more swimming pool contractors, whether in person, by telephone conference or otherwise, in which one or more respondent is participating, for any purpose other than social matters or discussions relating to a specific proposed or actual business transaction or project in which those involved are or would be in a contractor/subcontractor or other joint or cooperative working relationship.

G. "Commission" shall mean the Federal Trade Commission.
 
H. "Soliciting" for the purposes of this Order means requesting, proposing, threatening, urging, recommending, advocating, or attempting to persuade in any way.

II.

IT IS FURTHER ORDERED that respondents, directly or indirectly, or through any corporate or other device, in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. 44, shall forthwith cease and desist from:

A. Entering into, adhering to, participating in, maintaining, organizing, implementing, enforcing, or otherwise facilitating any combination, conspiracy, agreement, or understanding, express or implied, with any person or among any persons:
 
(1) to fix, establish, raise, stabilize, maintain, adjust, or tamper with any fee, fee schedule, price, pricing formula, discount, or other aspect or term of the fees charged or to be charged for the construction, renovation or remodeling of swimming pools or fees paid or to be paid to any subcontractor in connection with the construction, renovation or remodeling of swimming pools; or
 

(2) to refuse to deal with owner-builders or home construction contractors or developers;

B. Soliciting:
 

(1) any person to fix, establish, raise, stabilize, maintain, adjust, or tamper with any fee, fee schedule, price, pricing formula, discount, or other aspect or term of the fees charged or to be charged for the construction, renovation or remodeling of swimming pools or fees paid or to be paid to any subcontractor in connection with the construction, renovation or remodeling of swimming pools;

(2) any swimming pool contractor to refuse categorically to deal with owner-builders or home construction contractors or developers;

(3) any subcontractor to refuse categorically to deal with owner-builders, home construction contractors or developers, or swimming pool contractors who act or wish to act as consultants for owner-builders; or

(4) any subcontractor with respect to the terms of that subcontractor's dealings with owner-builders, home construction contractors or developers, or swimming pool contractors who act or wish to act as consultants for owner-builders; and

C. Inducing, suggesting, urging, encouraging, or assisting any person to take any action that if taken by any of the respondents would violate this Order.

Provided, however, that nothing in Paragraph II of this Order prohibits any respondent from discussing and/or entering into a specific proposed or actual business transaction or project in which those involved are or would be in a contractor/subcontractor or other joint or cooperative working relationship.

III.

IT IS FURTHER ORDERED that for a period of five (5) years from the date this Order becomes final, respondents shall make an audible tape recording of the entirety of any meeting and shall maintain a copy of the tape recording and all materials distributed at the meeting for a period of three (3) years from the date of the meeting. For the purpose of compliance with this paragraph, respondents may designate an individual as custodian of the tape recordings and materials to be maintained.

IV.

IT IS FURTHER ORDERED that respondents shall, in the event that they, or any of them, forms an organization or trade association, a purpose of which is to represent the interests of swimming pool contractors, incorporate Paragraph II of this Order by reference in the by-laws of any such organization or trade association and shall distribute by first-class mail a copy of the by-laws to each of the members of the organization or trade association.

V.

IT IS FURTHER ORDERED that each respondent shall notify the Commission at least thirty (30) days prior to any proposed change in his/her business format, including incorporation, the creation of or dissolution of any partnership, the assignment of any license, or sale, or in the case of any corporate respondent, any proposed change in any corporate respondent, such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in the corporation that may affect compliance obligations arising under this Order.

VI.

IT IS FURTHER ORDERED that:

A. Within sixty (60) days after the date this Order becomes final, each respondent shall submit to the Commission a verified written report setting forth in detail the manner and form in which the respondent intends to comply, is complying, and has complied with Paragraphs II through V of this Order.
 
B. One (1) year from the date this Order becomes final, annually for the next five (5) years on the anniversary of the date this Order becomes final, and at other times as the Commission may require, each respondent shall file a verified written report with the Commission setting forth in detail the manner and form in which the respondent has complied and is complying with Paragraphs II through V of this Order.
 
C. The above described reports shall be submitted to:
 

Office of the Secretary
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, D.C. 20580.

VII.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order, upon written request, each respondent shall permit any duly authorized representative of the Commission:

A. Upon forty-eight (48) hours' prior notice to a respondent, access, during normal office hours and in the presence of counsel, to inspect and copy all books, ledgers, accounts, correspondence, memoranda, calendars, and other records and documents in the possession or under the control of each respondent relating to any matter contained in this Order; and
 
B. Upon five (5) business days' notice to a respondent, and without restraint or interference from that respondent, to interview that respondent or any employee or representative of that respondent.

VIII.

IT IS FURTHER ORDERED that this Order shall terminate on November 1, 2019.

By the Commission.

Donald S. Clark
Secretary

SEAL:

ISSUED: November 1, 1999