Leitch Manufacturing Co., C. a

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IN Tile MATTER OF C. A. LEITCH MANUFACTURING COMPANY COMPLAINT (SYNOPSIS), FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 1i OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 1386. Compl-aint, May 13, 1926-Decision, Sept. f6, 19!7 Where the words "Natural Lake Asphalt" had for many years come to signify and to be understood by the purchasing public as meaning natural asphalt obtained from Trinidad Lake in the British West Indies; and thereafter a corporation engaged in the manufacture of a roofing paint or "fiuid cement," containing no Natural Lake Asphalt, and in the sale thereof, labeled its said product as "prepared from a mixture of Natural Lake Asphalt and Gllsonite Asphalt • • •," with the capacity and tendency to mislead and deceive the purchasing public in respect of the composition thereof, and thereby to divert trade from competitors truth· fully representing their products:

Held, That the sale of products labeled as above set forth, constituted an unfair method of competition.

Mr. Alfred M. Ora!Ven for the Commission.

SYNOPSis OF Complaint Reciting its action in the public interest, pursuant to the provisions o:f the Federal Trade Commission Act, the Commission charged respondent, a New Jersey corporation, engaged in the manufacture and sale of roofing paint and other roofing materials, with factory and principal place of business at Lincoln, N. J., with misrepresenting product, and misbranding or mislabeling, in violation of the provisions of section 5 of such act, prohibiting the use of unfair methods of competition in interstate commerce, in that respondent falsely described and offered a so-called fluid cement made by it £or roofing . purposes, as and for a composition of natural or Trinidad Lake asphalt and Gilsonite, with other substances, and falsely so labeled the containers thereof in which it delivered the same to its purl'hasers, and, when so requested, to the customers of said purchasers, who in turn so advertised, described, designated, offered, and sold the same, with the capacity and tendency to mislead and deceive and with the effect of misleading and deceiving a portion of the purchasing public into believing the product in question to consist of material of higher quality and greater value than the actual ingredients, i.e., that it consisted of the" Natural Asphalt" obtained from Trini- C. A. LEITCH MANUFACTURING CO. 387 386 Findings dad Lake, British 'Vest Indies, long identified by the purchasing public by the words" Natural Asphalt" or" Trinidad Asphalt", and Gilsonite asphalt, from a natural deposit in the State of Utah, both .. generally known as superior in quality and value to artificial asphalt, and with the capacity and tendency to divert and with the effect of diverting trade from competitors dealing in roofing paint and other roofing material containing natural or Trinidad Lake asphalt or Gilsonite or both, correctly described, and from those dealing in such materials·containing neither; all to the injury and prejudice of the public and respondent's competitors.

Upon the foregoing complaint the Commission made the following REPORT, FINDINGS AS TO THE F Ams, AND ORDER Pursuant to the provisions of an act of Congress approved September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", the Federal Trade Commission issued and served its complaint upon the respondent, C. A. Leitch Manufacturing Co., charging it with the use of unfair methods of competition in commerce, in violation of the provisions of section 5 of said act of Congress. Respondent having entered its appearance and filed its answer herein, hearings were had and evidence was thereupon introduced on behalf of the Commission and on behalf of respondent before an examiner of the Federal Trade Commission theretofore duly appointed.

The respondent having waived filing of brief and oral argument, this proceeding came on for decision, and the Commission having duly considered the record and being fully advised in the premises, makes this its findings as to the :facts and its conclusion drawn therefrom:

FINDINGS AS TO THE FAai'S PARAGRAPII 1. Respondent C. A. Leitch Manufacturing Co. is and since 1919 has been a corporation organized, existing and doing business under the laws of the State of New Jersey, with its factory and principal place of business at Lincoln in said State and with an office in the City of New York, State of New York. The respondent is engaged and since its incorporation has been engaged in the manufacture of roofing paint, also called "Fluid Cement", and in the sale and distribution of same from its factory in the State of New Jersey in interstate commerce to purchasers in various other States of the United States.

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In the course. and conduct of its business respondent is and has been in competition with many other individnals, partnerships and corporations likewise engaged in the manufacture of roofing paint• and the distribution thereof in interstate commerce throughout the various States of the United States.

PAR. 2. Respondent for several years las;t past has placed and does now place upon the containers, in which its roofing paint or fluid cement is packed, shipped and delivered to its customers, labels upon which appear as descriptive of the contents of the containers the following statement:

Prepared from a Mixture of Natural Lake Asphalt and Gilsonite. Asphalt combined with other resisting gums und oils and a long staple asbestos tiber. PAR. 3. The roofing paint or fluid cement thus advertised, labeled and described and sold by respondent as above set forth contains no Natural Lake Asphalt, and has never since the year 1922 contained any Natural Lake Asphalt. Natural Lake Asphalt is a brown to black solid bituminous substance obtained in its natural state from Trinidad Lake in the British "\Vest Indies, and the words "Natural Lake Asphalt" for many years have signified and have been understood by the purchasing public to mean the natural asphalt obtained from said Trinidad Lake.

PAR. 4. The representation and dt>scription of its roofing paint or fluid cement by respondent as set forth in paragraph 2 hereof is false and misleading and has the capacity and tendency to mislead and deceive the purchas;ing public into the belief that the said roofing paint or fluid cement contains Trinidad Lake Asphalt when such is not the fact, and thus to divert trade from respondent's competitors truthfully representing their products. CONCLUSION The practices of the said respondent, under the conditions and circumstances described in the foregoing findings, are to the prejudice of the public and re~poDllent's competitors and are unfair methods of competition in commerce and constitute a violation of the act of Con[:,rress approved September 2G, 1914, entitled "An act to create a Federal Trade Commission~ to define its powe.rs and duties, and for other purposes."

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondent and the evidence introduced, und the Commission having C. A, LEITCH MANUFACTURING CO, 389 388 Order made its findings as to the facts and its conclusion that the respondent has violated the provisions of an act of Congress approved September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", It is now ordered, That the respondent C. A. Leitch Manufacturing Co., its officers, agents, and employees do cease and desist from representing by means of labels, or by any other means whatever, that roofing paint or fluid cement, or any other article offered for sale by it, contains as an ingredient Trinidad Lake Asphalt or Natural Lake Asphalt; unless such roofing paint, fluid cement or other article does actually contain in substantial amount Trinidad Lake Asphalt. It is fw·ther ordered, That the respondent, C. A. Leitch Manufacturing Co., shall within 30 days after the service upon it of a copy of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which it has complied with the order to cease and desist hereinbefore set forth. Syllabus llf.T.O.