Industrial Plants Corp

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IN THE }.latter OF INDUSTRIAL PLANTS CORPORATION COMPLAINT, FINDINGS, AND ORDER IN REG.\RD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3835. Complaint, June 21, 1939-Deoision, July 30, 19-10 Where a corporation engaged in sale and distribution of various products, including pliers, to purchasers in various other State':! and in District of Columbia, in subj;[antial competition with others engaged in sale and distribution of said last-named product in comml.'rce as aforesaid; in describing its said pliers In advertisements and catalogs and other printed mattet· distributed to members of the purchasing public In the various State~ and the District of Columbia- Falsely represented said products as nickel plated, tht·ough such statements as "l\lachine nickel pliers are furnished and nickel plated" and "Nickel plated pliers are ground and polished all over, heavily nickel plated and buffed to a high lus1ter" ;

With effect of misleading and decl.'iving m~>mbers of purchasing public into erroneous and mistaken belief that such false and misleading statements and representations were true, and Into purchase of l'ltlbstantial quantity of its said product by reason of such belief, and with direct result that trade in commerce was diverted unfairly to it from its said competitors who do not falsely represent as nickel plated their respective products; to the injury of competition in commerce:

Held, That such acts and practices, undl.'r the circumstances set forth, Wl.'l'e all to the prejudice and injury of the public and competitors, and con~ltituted unfair methods of competition in commerce and unfair and deceptive acts and practices therein.

Mr. Maurice 0. Pearce for the Commission.

Mr. Jerome N. Sewards, of New York City, for respondent. Complaint Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said act, the Federal Trade Commission having reason to believe that Industrial Plants Corporation, a corporation, hereinafter referred to as respondent,.has violated the provisions of said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest hereby issues its complaint, stating its charges in that r£'spect as follows:

PARAGRAPH 1. Respondent Industrial Plants Corporation, is a corporation organized, existin~, and doing business undf:lr and by virtue of the laws of the State of New York and having its office nnd principal place of business at 90 West Broadway in the city of Nt>w York, State of New York.

654 FEDERAL TRADE C01\IMISSION DECISIONS Complaint SlF.T.O.

PAR. 2. Respondent is now, and has been for several years last past, engaged in the business of selling and distributing various products, including pliers and wrenches. Respondent causes said pliers and wrenches, when sold, to be transported from its aforesaid place of business in the State of New York to the purchasers thereof at their respective points of location in various States of the United States other than the State of New York and in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in said pliers and wrenches in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. In the course and conduct of its business as aforesaid, respondent is now, and has been during all the times mentioned herein, in substantial competition with other corporations and with firms, individuals and partnerships selling and distributing pliers and wrenches in commerce between and among the various States of the United States and in the District of Columbia. PAR. 4. In the course and conduct of its aforesaid business and for the purpose of inducing the purchase of its said pliers and wrenches, respondent has caused various statements and representations relative to said pliers and wrenches to be inserted in advertisements in catalogues and other printed matter all of which are distributed to members of the purchasing public situated in the various States of the United States and in the District of Columbia. Among and typical of said statements and representations by respondent relative to said pliers and wrenches are the following:

Machine Nickel Pliers are finished and nickel plated. Nickel Plated Pliers are ground and polished nll over, heavily nickel plated and buffed to a high lustre.

Nickel Plated Wrenches.

Through the use of the aforesaid statements and representations, and others of similar import and meaning not herein set out, the respondent has represented that the aforesaid pliers are nickel plated, and that the aforesaid wrenches are nickel plated. PAR. 5. The aforesaid statements and representations by respondent relative to said pliers and wrenches are false and misleading. In truth and in fact, the pliers which the respondent represents as aforesaid as being nickel plated are not nickel plated. The wrenches which the respondent represents as aforesaid as being nickel plated are not nickel plated.

PAR. 6. There is a preference on the part of a substantial number of members of the purchasing public for pliers and wrenches which are nickel plated because of the durability nnd resistance to rust and corrosion of such pliers and wrenches.

INDUSTRIAL PLANTS CORP. 655' 1 r ,. 'I"

G:J3 Findings PAR. 7. The use by the respondent of the aforesaid false and misleading statements and representations has the tendency and capacity to, and does, mislead and deceive members of the purchasing publio into the erroneous and mistaken belief that the aforesaid false and misleading statements and representations are true and into the purchase of substantial quantities of respondent's pliers and wrenches because of said erroneous and mistaken belief. As a direct result thereof, trade in commerce between and among the various States of the United States and in the District of Columbia has been diverted unfairly to the respondent from its said competitors who do not falsely represent that their respective pliers and wrenches are nickel plated. In consequence thereof, injury is being, and has been, done by respondent to competition in commerce between and among the various States of the United States and in the District of Columbia. PAR. 8. The aforesaid acts and practices of the respondent as herein alleged are all to the prejudice and injury of the public and o:f respondent's competitors and constitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on the 27th day of June 1939, issued and thereafter served its complaint in this proceeding upon respondent. Industrial Plants Corporation, a corporation, charging it with the u~e of unfair methods of competition and unfair and deceptive acts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondent's answer, the Commission, by order entered herein, granted respondent's motion for permission to withdraw said answer and to substitute therefor an answer dated J nne 19, 1940, admitting all the material allegations of fact set forth in said complaint, except those allegations contained therein referring to wrenches, which are denied~ and waived all intervening procedure and further hearing as to said facts, which substitute answer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said complaint and the substitute answer and the Commission, having duly considered the matter 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 Tile FACTS PARAGRAPH 1. Respondent, Industrial Plants Corporation, is a corporation organized, existing, and doing business under and by virtue Findings 31F.T.O.

of the laws of the State of New York, and having its office and principal place of business at 90 \Vest Broadway, in the city of Xew York, State of New York.

PAR. 2. Respondent is now and has been for several years last past, engaged in the business of selling and distributin~ various products including pliers. Respondent causes said pliers wlwn sold to be transported from its aforesaid place of business in the State of New York to the purchasers thereof at their respective points of location in Yarious States of the United States other than the State of New York and in the District of Columbia. Respondent maintains and at all times mentioned herein has maintained. a course of trade in said pliers in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. In the course and conduct of its business as aforesaid, respondent is now, and has been during all the times mentioned herein, in substantial competition with other corporations ~nd with firms, individuals, and partnerships selling and distributing pliers in cum-. merce among and between the various States of the Unitf·d States and in the District of Columbia.

PAR. 4. In the course and conduct of its aforesaid busine::;s and for the purpose of inducing the purchase of its said pliers, respondent has caused various statements and representations relative to said pliers to be inserted in advertisements and catalogues and other printed matter, all of which are distributed to members o£ the purchasing public situated in the various States o£ the United States and in th~ District o£ Columbia. Among and typical of said statements and representations by respondent relative to said pliers are the following:

Machine niekel pliers are furnished and nickel plated. Nickel plated pliers are ground and polished all over, lleavily niekel plated and buffed to a high lustre.

Through the use of the aforesaid statements and representations and others of similar import and meaning, not herein set out, the r&;pondent has represented that the aforesaid pliers are nickel plated. PAR. 5. The aforesaid statements and representations by respondent relative to said pliers are false and misleading. In truth and in fact the pliers which the respondent represents as aforesaid as being nickel plated are not :nickel plated.

P A.R. 6. There is a preference on the part of a substantial number of the members of the purchasing public for pliers which are nickel plated because of the durability and resistance to rust and corrosion of such pliers.

INDUSTRIAL PLANTS CORP. 657 ~53 Order PAR. 7. The use by the respondent of the aforesaid false and misleading statements and representations has had and now has thecapacity and tendency fo, and does, mislead and deceive members of the purchasing public into the erroneous and mistaken belief that the .aforesaid false and misleading statements and representations are true and into the purchase of a substantial quantity of respondent's pliers, because of said erroneous and mistaken belief. As a dired result thereof trade in commerce between and among the various States of the United States and in the District of Columbia has been diverted unfairly to the respondent from its said competitors who do not falsely represent that their respective pliers are nkkel plated. In ·consequence thereof, injury is being and has bet>n done by respondent to competition in commerce between and among the various States of the United States and in the District of Columbia. CONCLUSION The aforesaid acts and practices of the respondent as herein found M'B all to the prejudice and injury of the public and of re.spondent's -competitors and constitute unfair methods of competition in commerce :and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answer of respondent, in which answer respondent admits all of the material allegations of fact set forth in said complaint except those allegations -contained therein referring to wrenches which are denied, and states that it waives all intervening procedure and further hearing as to said facts and the Commission having made its findings as to the facts and its conclusion that the said respondent has violated the provisions of the Federal Trade Commission Act. It i8 ordered, That the respondent, Industrial Plants Corporation, a corporation, its officers, representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of its products in commerce, as commerce is defined by the Federal Trade Commission .Act, do forthwith cease and desist from representing, directly or indirectly, that pliers or any other tools which are not plated with the metal nickel are nickel plated.

It is further ordered, That the respondent shall, within GO 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 jt has complied with this order.

Syllabus 31 F. T. C.