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AMERICANS BE INDEPENDENT v. COMMONWEALTH PENNSYLVANIA (06/19/74)

decided: June 19, 1974.

AMERICANS BE INDEPENDENT, JAMES E. TOLLESON AND RODNEY W. TOLLESON, APPELLANTS,
v.
COMMONWEALTH OF PENNSYLVANIA, ACTING BY ATTORNEY GENERAL J. SHANE CREAMER, APPELLEE



Appeal from the Order of the Court of Common Pleas of Erie County in case of Commonwealth of Pennsylvania Acting by Attorney General, J. Shane Creamer v. Koscot Interplanetary, Inc., a foreign corporation, No. 57 Equity, 1970.

COUNSEL

James H. Joseph, with him Donald S. Hershman and Baskin, Boreman, Wilner, Sachs, Gondelman & Craig, for appellants.

George S. Test, Deputy Attorney General, for appellee.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Kramer.

Author: Kramer

[ 14 Pa. Commw. Page 181]

This is an appeal filed by Americans*fn1 Be Independent, James E. Tolleson and Rodney W. Tolleson (hereinafter referred to collectively as Tollesons and individually by their given and surnames) from an order of the Court of Common Pleas of Erie County, dated January 18, 1973 wherein the Tollesons and Koscot Interplanetary, Inc. (Koscot) were ordered to pay, jointly and severally, the sum of $55,000 as civil penalties for violation of an order of that court dated March 25, 1971.*fn2

This case had its beginning on December 1, 1970 when the Commonwealth of Pennsylvania (Commonwealth) through its Attorney General filed a complaint in equity against Koscot, as the sole defendant, alleging violations by Koscot of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (hereinafter Act), Act of December 17, 1968, P.L. 1224, § 1 et seq., as amended, 73 P.S. § 201-1 et seq. The complaint alleged that Koscot had commenced its business in the Commonwealth of Pennsylvania on or about January 1, 1969, and that due to certain Koscot business activities, a conference was held with officials of the Commonwealth after which, Koscot on July 1, 1969, entered into an Assurance of Voluntary Compliance which in essence was an agreement on behalf of Koscot to cease and desist from certain referral selling business

[ 14 Pa. Commw. Page 182]

    activities. The complaint alleged that Koscot violated the Assurance of Voluntary Compliance in addition to other allegations of violations of the Act. After hearing, President Judge Edward H. Carney of the Court below rendered an opinion and issued an order dated March 25, 1971 whereby Koscot ". . . a Florida Corporation, or under any other name or designation, and respondent's [Koscot's] representatives, agents and employees, directly or through any corporate or other device, . . ." were directed to cease and desist from:

"(1) Paying, or promising to pay, any fee, compensation, reward or other consideration, either directly or indirectly, to a distributor, sub-distributor, supervisor, director, or beauty advisor, or to any other person who shall purchase a position in the distribution system of Koscot Interplanetary, Inc. for the procurement of a contract of purchase of a distributorship, sub-distributorship, or other similar position by another person or for bringing said other person into the Koscot distribution system.

"(2) Making representations through its representatives, officers, agents, servants, employees, distributors, sub-distributors, directors, supervisors, or beauty advisors, in its manuals, at Golden Opportunity meetings, or elsewhere relating to earnings which are not based upon the experience of a substantial number of persons engaged in the Koscot program.

"(3) Utilization of any advertisement or promotional device which would in any way be a misrepresentation or cause a likelihood of confusion.

"(4) Conducting business in the Commonwealth of Pennsylvania through any deceptive act or practices, or through any and all acts in aid or furtherance of said deceptive acts or practices.

"(5) Violating the provisions of the Pennsylvania Unfair Trade Practices and Consumer Protection Law by ...


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