Fedehal Enamieling and Stamping Co

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF FEDERAL ENAMELING AND STAMPING COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF' SEC. :J OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2842. Complaint, June 11, 1936-Decision, Oct. 1, 1931 Where a corporation engaged in manufacture, sale, and distribution of enamel kitchen and other enamelware, under trade name "FEDERALWARE," 1n competition with many engaged in sale and distribution, among the various States and iu the District of Columbia, of such ware and who do not misrepresent the quality thereof or resort to unfair acts and practices In sale and distribution of their said products; in advertising its said products through radio announcements and programs, hand bills, booklets, display cards, window trims, sales promotion announcements, letters, etc., and through advertisements In periodicals, newspapers and catalogs- (a) Represented that its said product would not chip and was thirty-six times more durable than ordinary enamelware and would save its cost to the ultimate purcllaser, in one year or less, through fuel savings, facts being said products were not, and nevet• had been, chip-proof or chip-proofed as represented, nor thirty-six times more durable, por to a substantial degree more durable, than ordinary enamelware, would not and did not save their cost to the purchaser as above set forth, nor save purchaser any material amount in fuel; and (b) Represented that its said product was stainless, facts being its said enamelware would not withstand, without showing signs of etching or stain, tentative test o! boiling in citric and malic acid solution under certain conditions arrived at by Committee on Standardization of Tests of Technical Research Service of the Porcelain Enamel Institute; With tendency and capacity to mislead and decel\·e purchasing public and retail dealers, and with effect of so misleading such public and dealers into erroneous belief that afore>:ald various repres(lntations were true, and into buying its said products on account o! such mistaken beliefs, and with effect of placing in hands of wholesalers and retailers means of deceiving ultimate purchasers through its said advertising and representations, and of unfairly diverting trade to it from competitors likewise engaged in sale, in commerce among the States and in the District of Columbia, of truthfully advertised products of the same kind and nature: 1Field, That such acts and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Before 11/r. John 1V. Addiso'(b, trial examiner. 11/r. T. H. J(ennedy and llfr. Floyd 0. Oollin.'f for the Commission. Stebbins, Blenlw & Parmelee, of Pittsburgh, Pa., for respondent. Complaint Pursuant to the provisions of an Act of Congress approved September 2G, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," the 1144 :FEDERAL TRADE COl\Il\IISSION DEUISIONS Complaint 25 I•', '1.'. C. Federal Trade Commission, having reason to believe that Federal Enameling and Stamping Company, a corporation, hereinafter referred to as respondent, has been and now is using unfair methods of competition in commerce as "commerce" is defined in said act, and it appearing to said Commission that a proceeding by it in respect thereof would be to the public interest hereby issues its complaint stating its charges in that respect as follows: PARAGRAPH 1. Respondent, Federal Enameling and Stamping Company, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Pennsylvania with its factory and principal place of business at McKees Rocks, Pa. Respondent also maintains a mailing address at Pittsburgh, Pa. Respondent is, and for more than five years last past has been, engaged in the manufacture of porcelain enamel kitchen utensils which it sells under the trade name of "Federalware," and otherwise and in the selling thereof between and among the various States of the United States and in the District of Columbia. During all of said time it has caused and still causes such products, when sold by it, to be transported from its place of business in Pennsylvania or other places within the United States to purchasers thereof, some located in the State of Pennsylvania and others located in various other States of the United States other than the State of origin of the shipment and in the District of Columbia. In the course and conduct of its said business, respondent is now, and for more than five years last past, has been in constant competition with other corporations and with persons, firms, and partnerships engaged in the sale of similar products in commerce among and between the various States of the United States and the District of Columbia. PAn. 2. In the course and conduct of its business described herein respondent, for more than two years last past, has by means of catalogues, advertising matter carried in magazines having national distribution and in metropolitan daily newspapers, radio announcements, radio programs, labels, booklets, stickers, dodgers, stufl'ers, folders, display cards, counter cards, window trims, "guarantee" cards, sales promotion announcements, letters, and by other means represented, and still represents that said products are: (a) Chip proof, (b) Chip proofed, (c) Stainless, (d) Thirty six tlnws more durable thnn ordinary enamelware, or to a substantial degree more durable than ordinary enamelware, and that (e) The covers or lids supplied with said products are chromium: (f) Said products will save their cost to the ultimate purchaser in one year or less through fuel saving.

FEDERAL ENAMELING AND STAMPING CO. 1145 1143 Complaint In truth and in fact each and every said representation has been and is untrue, and said products are not nor have they ever been chip proof, chip proofed, stainless, thirty six times more durable, nor to a substantial degree more durable than ordinary enamelware, nor are the covers or lids supplied with said products chromium nor have they ever been chromium, nor will said products save their cost in fuel saving in one year or less time. There is a preference by a substantial number of retail dealers in products similar to those of respondent hereinabove described and by a substantial part of the purchasing public for products that are chip proof, chip proofed, stainless, thirty six times more durable, or substantially more durable than ordinary enamelware and that have chromium covers or lids and that will save their cost to the ultimate purchaser in one year or less through fuel saving.

The aforesaid representations by the respondent have had and still have a capacity and tendency to mislead and deceive, and have misled and deceived and still mislead and deceive retailers and the purchasing public into the erroneous belief that the said products of the responuent have all of the properties, capacities or effects claimed for them by the respondent as aforesaid and the use of said misrepresentations causes them to purchase respondent's products in such f:'rroneous belief. The aforesaid representations by the respondent llave placed anu still place in the hands of retailers of the products of respondent hereinabove described the means of misleading and deceiving the purchasing public.

PAR. 3. There are among the competitors of respondent manufacturers and distributors of products similar to those of respondent hereinabove described who truthfully represent their said products. There are also among said competitors of respondent manufacturers nnd distributors who do not misrepresent the properties, capacities, or effects of their said products.

lly the representations made by the respondent as set out hereinabove, trade has been anJ still is unfairly diverted to the respondent from such competitors. Thereby substantial injury has been done and still is being done by respondent to competition in interstate commerce.

• PAn. 4. The above acts anJ things done by the respondent are all to the injury and prejudice of the public and competitors of respondent in interstate commerce within the meaning and intent of Section 5 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."

1146 FEDERAL TRADE COl\IMISSION DECISIONS Findings 25F.T.C.

REPORT, FINDINGS AS TO THE FACTS, 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 Trad.e Commission on June 11, 1936, issued and served its complaint in this proceeding upon respondent, Federal Enameling and Stamping Company, a corporation, charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondent's answer thereto, testimony and other evidence in support of the allegations of said complaint were introduced by Thomas H. Kennedy, attorney for the Commission, before John W. Addison, an examiner of the Commission, theretofore duly designated by it, and in opposition to the allegations of the complaint by ·william II. Parmelee, attorney for the respondent; and said testimony and other evidence were duly recorded and filed. in the office of the Commission. Thereafter the proceeding regularly eame on for final hearing before the Commission on said complaint,. the answer thereto, testimony and other evidence, briefs in support of the complaint and in opposition thereto, and the Commission having d.uly considered the same and being now fully advised in the premises, finds that this proceeding is in the interest of the public and. makes this its findings as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondent, Federal Enameling ami Stamping Company, is a Pennsylvania corporation, organizetl and. existing und.er and by virtue of the laws of the State of Pennsylvania. Its. principal place of business is located at McKees Rocks, Pa. Respondent maintains a mailing address at Pittsburgh, Pa. Respondent is now, and. has been since 1913, engaged in the manufacture, sale and distribution of enamel kitchenware and other enamelware and has been manufacturing, selling, and. d.istributing said. enamelware under the trade name of "FEDERAL1VARE." Respondent causes said pro1luct, when sold., to be transported. in commerce, from its different places of business, to purchasers thereof located at various points in States of the United. States other than the State of origin of said shipment, and in the District of Columbia. Respondent maintains a constant current of trade and commerce in said products among and between the various States of the United States and in the District of Columbia.

:FEDERAL ENAMELING AND STAMPING CO. 1147 1143 Findings PAR. 2. During the course and conduct of respondent's business as hereinabove set out, respondent has been, and is now, in active, substantial competition with other corporations, and with individuals, firms, and partnerships, likewise e~igaged in the sale and distribution of enamel kitchenware and other enamelware, in commerce among and between the various States of the United States and the District of Columbia. There are among respondent's competitors many who are engaged in the sale and distribution, in commerce among and between the various States of the United States and the District of Columbia, of enamelware and enamel kitchenware who do not misrepresent the quality of the enamelware and enamel kitchenware sold by them, and who do not resort to unfair acts and practices in the sale and distribution of their said products. PAn. 3. In the course and conduct of respondent's business in selling and offering for sale its enamel kitchenware and other enamelware, respondent advertises said products through radio announcements, radio programs, handbills, booklets, stickers, dodgers, stuffers, folders, display cards, counter cards, window trims, guarantee cards, sales promotion announcements, letters, and through advertisements in magazines, newspapers and through the use of catalogs. Through the use of said advertising mediums, and in other ways and by other means, respondent has represented and still represents, that said products are:

Chip-proof ;

Chip-proofed;

Stainless;

30. times more durable than ordinary enamelware or to a substantial degree more durable than ordinary enamelware; and that said products will save their cost to the ultimate purchaser in one year or less through fuel Mvings.

ILAR. 4. Said. representations had and now have the tendency and (·apacity to mislead and deceive the purchasing public and retail dealers, and have misled, and do now mislead, the purchasing public and retail dealers into the erroneous belief that said representations are true, and into the belief that said products sold and distributed by respondent will not chip and will not stain; that said products nre 30 times more durable than ordinary enamelware or are to a substantial degree more durable than ordinary enamelware, and that said products will san their cost to the purchaser in one year ur less through fuel savings.

PAR. 5. Each and erery said representation as above set out has l.>een and is untrue, for in truth, and in fact, said products are not 11ow, neither have tlh•y eyer been chip-proof. Said products are 1148 FEDERAL TRADE COMl\IISSION DECISIONS Conclusion 25F. T.C. not now, neither have they e,·er Leen chip-proofed. Said products nre not now, neither have they ever been 36 times more Jumble than ordinary enamelware nor to a substantial degree more durable than ordinary enamelware. Said products do not now, neither did they ever save their cost to the purchaser in one year or less through fuel savings. Neither' will they now nor did they ever save the purchaser any material amount in fuel.

PAR. 6. There is a preference on the part of a substantial number of retail dealers in enamelware and enamel kitchenware, and a substantial portion of the purchasing public, for enamelware and enamel kitchenware that is chip-proof, chip-proofed, stainless, 36 times more dmable, or substantially more durable, than ordinary enamelware, and for enamelware that will save fuel. At the time of the hearings in this matter the Committee on Standardization of Tests of Technical Research Service of the Porcelain Enamel Institute had arrived at a tentative test for stainless enamel kitchenware, and that test requires that enamel kitchenware rcpresenteJ. as stainless shall pass a test of boiling a 1%% citric acid solution plus a 1%% malic acid solution for one-half hour in the utensil tested and that the utensil should then not show any visible signs of etching or stain. Respondent's enamelware proj.ucts as constituted at the date of the hearings in this case will not withstand the aforementioned test without showing signs of etching or stain.

PAR. 7. The representations of respondent as hereinbefore set forth, in describing and advertising its enamelware and enamel kitchenware, are false and misleading, and have the capacity and tendency ~o deceive, and have deceived, and do deceive retailers and the purchasing public into buying respondent's products, on account of the mistaken beliefs herein set out. Through its advertising and aforesaid representations respondent has placed, and is placing, in the hands of wholesalers and retailers the means of deceiving the ultimate purchasers. The aforesaid acts and practices have the capacity and tendency to, and did, and do unfairly divert trade to respondent from respondent's competitors who are likewise engaged in selling in commerce among and between the various States of the United States and the District of Columbia, products of the same kind and nature as those of respondent's, which products are truthfully advertised.

CONCLUSION The aforesaid acts and practices of the respondent, Federal En:uneling and Stamping Company, are to the prejudice of the public and of respondent's competitors and constitute unfair methods of corn- FEDERAL ENAMELING AND STAMPING CO. 1149 1143 Order petition in commerce within the intent and meaning of Section 5 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."

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of tespondent, testimony and other evidence taken before John \V. Ad- U,i:,;on, an examiner of the Commission, theretofore duly designated by it, in support of the allegations of said complaint and in opposition thereto, briefs filed herein by Floyd 0. Collins, counsel for the Commission, and by \Villiam H. Parmelee, counsel for respondent, aud the Commission having made .its findings as to the facts and its coudusion that said respondent has violated the provisions· of an Act of Congress approved Septem~ber 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

. It is ordered, That the respondent, Fed.ernl Enameling und Stamp- Ing Company, a corporation, its officers, representatives, agents, and e111ployees, in connection with the offering for sale, sale, and distribution of enamelware or enamel kitchenware in interstate com- Jnerce or in the District of Columbia, do forthwith cease and desist from:

1. Representing that said enamelware will not chip; 2. Representing that said enamelware is 3.6 times more durable or to any substantial degree more durable than ordinary enamelware; 3. Representing that said enamelware products will save their ~ost to the ult.imate purchaser in one year or less through fuel savlngs or will save the user any material amount on fuel cost; 4. Using the Yford "stainless," or any word of similar import and tneaning, as a brand, stamp, or label upon or for enamelware or enamel kitchenware, or in advertising the same unless such enamel- Ware or enamel kitchenware is made of material which can sucee!:lsfully withstand the test of boiling in it as a container a solution of llf2% citric acid plus 1%% malic acid for a period of one-half hour without showing visible signs of etching or stain. It is further o1·dered, That the respondent shall within 60 days after service upon it of this order, file with the Commission a report in 'Writing, setting forth in detail the manner and form in which it has Cotnplied with this order, Syllabus 25F. T. C.