New York Feather Company, Inc

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Ix THE JHATTR OF NEW YORK FEATHER COMPANY, INC. ET AL.

COl\IPLAIN1' , FINDINGS, AXD ORDERS IX HEGAlil TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACTOFCO GHESSAPrROVEDSEPT. 26 , 1914 Docket 5840. Complaint, Ja,n. 1951-Decision, Oct. , 1951 Where a corporation and its two offcers, engaged in the manufacture and interstate sale and distribution of pilows- Inaccurately and misleadingly labeled certain of their said products in that, as ilustrative, a pilow labeled "10% Down, 90% Duck Feathers " actually contained no down and only 24 percent duck feathers, with chicken and turkey feathers, chicken and turkey feather fiber and other materials as the remainder; one labeled "50% Down, 50% Duck Feathers " contained only 6. 7 percent down and about 82 percent duck feathers; and a third labeled White Goose Down" contaiued 46.7 percent thereof, about 47 percent white goose feathers, alid 6 percent feather fiber; With tendency anu. capacity to mislead and deceive a substantial portion of the purchasing public and thereby induce it to purchase their vroducts: Held That such acts and practices, under the circumstances set forth, were all to the prejudice of the public and constituted unfair and deceptive acts and practices in commerce.

Before fih. Wiliam L. Pade trjal examiner. Mr. Russell T. Porter for the Commission. illt. Harry Heller of Brooklyn, N. for respondents. COMPLAINT Pursuant to the provjsions 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 New York Feather Co., Inc., a corporation, and J oseph Y urkowitz and ThIandel Y urkowitz, individually and as offcers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act and it appearing to the Commjssion that a proceeding by it in respect thereof would be in the publjc jnterest, hereby issues its complaint stating its charges jn that respect as follows: 350 FEDERAL TRADE cO:\nnSSION DECISJOXS Complaint 48F. T. C. PAHAGHAI'H 1. Respondent New York Feather Company: Inc., is a corporation organized and existing under and by virtue of the laws of the Stat.e of New York "ilh it.s principal offce and place of business located at. ()2-76 Rut1ec1gc Street, Brooklyn 11, X ew York. Respondents Joseph Yllrkowitz and l\landel YUl'kowitz are now and at all Umes mentjonecl herein have beell, the president and secretary-treasurer, respectively: of the corporate respondent and as sllch offcers have formulated: directed and controlled the policies and practices of the corporate respondent, including the practices hereinafter set forth.

PAR. 2. Respondents are now and for several years hst past have been engaged in t.he manufacture and sale. of pil1my.:: to dealers for resale to the public. In the course and conduct of such business respondent.s c.anse their said pillows \"hen sold to be shipped from their place of business in the State of cw York to dealers in various other Stat.es of the United States and maintain, find at all times mentioned herein have maintninecL a course of trade in said pillo\vs commerce among and bet'H'en the various 5states of the United States. Theil' business in such trade has been snbstantinl. AR. -). RCSp01l(lents in the c.onrse and conduct of their business cause labels to be attached to their pillows purporting to state and set out the percentage of dmYll and feathers and the kind of feathers therein. Typical of the statements appearing on these labels are the fonowing:

10,;' Down-80o/ Duck Feathers " said pillo\\" being designated as "Daisy GO% Downs-50% Duck Feathel's " saill piJlo,, being designf1ted as "Lily \Vhite Goose Down " saw pillow being designated as "Gardenia i.L 4. Through the llse of the staiellBnts 1ld representations appearing on the labels aforesaid respondents represented that the filling in the pillow designated as "Dajsy ' is composed of 10% down, t.he undercoatting of waterfowl, and 90%, duck feathers; that the, filling of the pillow designated as "LiJi' is composed of B()% clOWll, the undercoating of waterfowl, and ;'30% duck feathers; nnd that the filling of the pillow designated as "Gardenia," is composed entirely or white goose down, the 11lc1ercoat1ng of a waterfowl. PAR. 5. Said statements are false, misleading and deceptive. In truth and in fact, the filling of the pillow designated as "Daisy:' was composed of 2Vfr' duck feathers, approximately 20% chicke.n and turkey feathers and approximately 51% chicken and turkey feather fiber the bn hnce being other materlal. The fining of the pil1my cbsiglluted "Lily'; ",vas composed of (j.'i9;, dO\fll, approximately 82% duck feathers and approximately Do/ hu'key and chie1len feather fiber, the ba1- 1\- W YORK FEATHER CO. , INC. ET AL. 351 348 Decisions Hnce being other material. The filling of the pillow designated as "Gardenia" was composed of 4G.7% white goose down, approximate Jy 47% ,vhite goose feathers and approximately 7% feather fiber. PAR. (L By attaching the false, misleading and deceptive Jabels to their pillows, respondents placed in the hands of dealers means and instrumentalities by and through which.h they may mislead the purchasing public as to the content of said pmows. PAR. 7. The use by respondents of the foregoing false, misleading and deceptive representations on the labels of their products has had Hnd now has the tendency and capacity to mislead and deceive a substantial portion of the purchasing public as to the content of their said pillows and to induce members of the public to purchase substan tial quantities of their said pillows because of such mistaken and cr. roneol1S belief.

PAR. S. The aforesaid acts and practices of respondents, as herein a11cged, are a11 to the prejudice and injury of the public and con- E-titute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. DECISION OF THE C01'DHSSIOX Pursuant to Rule XXII of the Commission s Rules of Practice, and' as set forth in the Commission s "Decision of the Commission and Order to File Report of Compliance " dated October 2, 1951 , the initial decision in the instant matter of trial examiner '\Villiam L. Pack, as set out as follows, became on that date the decision of the Commission.

INITIAL DECLSIOK BY WILLIA?,( L. PACK, TRIAL EXA:i\HXER Pursuant to the provisions of the Federal Trade Commission Act the I, ecleral Trade Commission on January 18, 1851, issued and subsequently serve.d its complaint in this proceeding upon the respondents named in the caption hereof, charging them with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of' that act. After the filing by respondents of their answer to the complaint, a stipulation was entered into whereby it ,vas stipulated and agreed that a statement of facts executed by counse) supporting the complaint and counsel for respondents might be taken 9S the fads in this proceeding and in lieu of evidence in support of and in opposition to the cllarges stated in the complaint, and tblt such statmnent of facts might serve as the basis for findings as to the facts and conclusion based thereon and an order disposing of the proceeding. 1Vhi1e counsel for respondents reserved in the stipula. :21::;84(1- J4- 2(;

Findings 48 F. T. C.

tion the right to file proposed findings and conclusions and to argue the matter o1'ally before the trial examiner, such reservations were subsequently waived. The stipulation further provided that upon appeal to or review by the Commission such stipulation might be set aside by the Commission and this matter remanded for further proceedings under the complaint. Thereafter the proceeding regularly came on for final consideration by the trial examiner upon the complaint, answer and stipulation, the stipulation having been approved by the trial examiner, who, after duly considering the record herein finds that this proceeding is in the interest of the public and makes the following findings as to the facts, conclusion drawn therefrom and order.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent N ew York Feather Co., Inc., is a corporation organized and existing under and by virtue of the laws of the State of New York, with its offce and principal place of business located at 62-76 Rutledge Street, Brooklyn, N. Y. Respondents J 0seph Yurkowitz and Mandel Yurkowitz are president and secretarytreasurer, respectively, of respondent corporation. The individual respondents formulate, direct and control the policies and practices of the corporation.

PAR. 2. Respondents are now and for several years last past have been engaged in thc maufacture and sale of pilows, the pilows being sold to dealers for resale to the public. Respondents cause and have caused their pilows, when sold, to be shipped from their place of 1-msiness in the State of K ew Yark to purchasers in various other States of the United States. Respondents maintain and have maintained a ('course of trade in their pillows in commerce among and bcbveen the various States of the United Sbtes.

PAll 3. In the course and conduct of their business respondents attach to their pilows labels purporting to state or set forth the materials of which such pillows atc made. In some instances sllch labels have been inaccurate and misleading. In one instance a pillow lobe led "10% Down DO% Duck Feathers" actually contained no down the undercoating of waterfowl, and only 24 percent duck featbers, the remaining content being chicken and turkey feathers and chicken and turkey feathcr fiber and other materials. In another instance a pillow Inbeled "50% Down, 50% Duck Feathers" was found to contain only 7 percent down, and approximately 82 percent duck feathers and approximately percent turkey and chicken feather fiber, the remaining content being other materials. In a third instance a pillow labeled "White Goose Down" actually contained only 46.7 percent white goose NEW YORK FEATHER CO., INC. ET AL. 3:;3 349 Order Ilown, approximately 47 percent white goose feathers and approximately 6 percent feather fiber.

PAR. 4. The acts and practices of respondents as set forth above have the tendency and capacity to mislead and deceive a substantial portion of th purchasing, pubhc with respect to respondents' products, and the tendency and capacity to cause such portion of the public to purchase respondents' products as a result of the erroneous and mistaken belief so engendered.

COXCLUSION The acts and practices of the respondents as hereinabove set out are aU to the prejudice of the pubEe and constitute unfair and deceptive -acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER It i8 ordered That the respondents, New York Feather Co" Inc., a corporation, and its officers, and Joseph Yurkowitz and Mandel Yurkowitz, individually and as offcers of said corporation, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection 'ivith the offering ror sale sale and distribution of pillows in commerce, as "c.commerce" is dehlled jn the Federal Trade Commission Act, do forthwith cease and desist from:

Misrepresenting in any manner or by any means, directly or by implication, the materials of which respondents' pilows are made. ORDER TO FILE REIJOH'l OF COMPLIANCE It i8 ordered That the respondents herein shall, within sixty (60) days after service upon them or this order, fie with the Commission a report in writing setting forth in detail the manner and fonn in which they have competed with the order to cease and desist r required by said declaratory decision and order of October 2, 1951). 354 FEDERAL TRADE CO::nnSSIO:\ DECISIOXS Order 48 F. T. C.

IN THE J.1ATTR OF ARABIAN TOILET GOODS COJiP ANY MODIFIED Order TO CRASE AND DESIST Docket 2.981. Order, Oct., 4, 195.1 Order further modif3'ing prior modified order in said matter.-in which findings and cease and desist order issued on January 20, 1938, 26 F. T. C. 441, and prior modified order issued on December 16, 1939, 30 F. T. C. 76- So as to require respondent and its repl'€s€ntati\. , in connection with the offer etc., of cosrnetics in interstate commerce, to cease and desist from using tbe term " Certified Cosmetic" or other term of similar ilnport, etc., to refer to cosmctic products "unless the identity of the certifier is clearly;)T disclosed in direct connection therewith" ; and from otherwise misrepresentillg its \Vrinkle Creme " or any similar skin cream, as in said ol'1el' below set out.

Beforellr. Johns. lIornor trial examiner. lir. Dewitt T. Puckett and 3fT. Joseph Callaway ror the Commission.

lir. George J. Crane or Chicago, Ill., ror respondent. MODIFIED ORDER 'I'O CEASE A:!'W D1 SIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondent testimony and other evidence taken before a trial examiner of the Commission theretofore duly designated by it, in support or the allegations of said complaint and in opposition thereto, and briefs in support or the complaint and in opposition thereto (no oral argument having been requested), the Commission, having made its findings as to the facts and its conclusion that saiel respondent had violated the provisions of the Federal Trade Commission Act, 011 J anu nry 20, 1938, issued and subsequently served upon the respondent said findings as to the facts, conclusion and its order to cease and desist. Thereafter: upon motion or the Chier Counsel for the Commission to modify the order to cease. and desist in certain respects, proper notice and opportunity to be heard having been given to respondent, the Commission on December 16, 193D issued and subsequently served upon the respondent its modified order to cease and desist. Thereafter: this matter Glm( on for reeonsirleration by the Commission upon its own motion to reopen this proceeding for the pl1r- ARABIAN TOILET GOODS CO. 355 354 Order pose of further modifying the order to cease and desist herein, no answer having been filed by respondent in response to an order served on it by the Commission notifying respondent of the Commission said motion and granting to it leave to show cause why the order to cease and desist should not be so modified, and the Commission having reconsidered the matter and being of the opinion that its modified order to cease and desist issued on December 16, 1939 should be further modified in certain respects:

It is ordered That the respondent, Arabian Toilet Goods Co., Inc. a corporation, its offcers, representatives, agents, and employees, in connection with the offering for sale, sale and distribution of cosmetics in interstate commerce or in the District of Columbia, do forthwith cease and desist from:

(1) Using the term "Certified Cosmetic" or any other term of similar import or meaning to describe or refer to cosmetic products unless the identity of the certifier is clearly disclosed in direct connection tnerewith.

(2) Representing that its skin cream now designated as Wrinkle Creme, or any other cream containing substantially the same ingredients or possessing the same properties, sold under that name or any other name (a) wil nonrish or rejuvenate the skin;

(b) will remove wrinkles and lines from the skin; (0) contains turtle oil or is guaranteed by the United States Government to contain pure turtle oi1.

(3) Representing that turtle oil has been successfully used by the United States Government in Tcmovingscar tissue and wrinkles from wounded soldiers.

(4) Representing that the use of turtle oil has been indorsed or approved by the United States Government as a skin food and rejuvenator.

356 FEDERAL TRADE COMMISSION" DECISIONS Syllabus 48 F, T, Co Ix THE MATI'ER OF PE="NSYLVANIA OIL TERMINAL, INC. ET AL.

COMPLAINT, FINDINGS , AND ORDERS IN REGARD TO THE ALLEGED VIOLATION m' SEC. 5 OF AX OF CONGRESS APPROVED SEPT. 26 , 1014ACT Docket 5868. Complaint, Mar. 2"1, 1951-Decision, Oct. 4, 1951 The term "Pennsylvania oil" is recognized throughout the trade and by a sub. stantinl portion of the purchasing public as meaning oil refined from crude oil produced in the geographic area known as the Pennsylvania oil field, which includes the western portion of Pennsylvania and contiguous portions of Xew York, Ohio, and West Virginia. Pennsylvania oil has for some time been well and favorably known to the purchasing public, and there is the preference on the part of a substantial portion of the public for such oil over oils refined from crude oil produced in other localities.

Where oil, with the appearance of the new and unused product, is sold in eontainers of the same general size, kind and appearance as those used for new oil, the general understanding and belief on the part of dealers and the purchasing public, in the absence of a disclosure on the container that the oil is reclaimed or reprocessed, is that it is in fact new. There is a marked preference on the part of a substantial portion of the purchasing public for new and unused oil over used and reclaimed 01' reprocessed oil, due in part to the belief that new and unused oil is superior in quality to oil that has been used and reclaimed or reprocessed. Where a corporation, its president, and its former president, holder of an exclusive franchise to sell its products within a certain territory, engaged in the interstate sale and distribution to retail distributors under the brand name "Penolube Motor Oil " of a product which consisted in whole or in part of used oil, reclaimed, from drainings of motor crankcases . and. other sources- (a) Falsely represented by the use of its corporate name including the \words Pennsylvania Oil Terminal " in conjuIlction with the word "Penolube in their brand name, through statements in trade journals and other advertising and on the labels, that the said lubricating oil, packaged and sold by them, was refined and processed entirely from oil produced in the Pennsylvania oil field;

(b) Sold said oil, which had the appearance of new and unused oil, in containers of the same general size, kind and appearance as those used for Dew oil, with no markings of any kind indicating that it was reclairoed or reprocessed;

With the result of placing in the hands of retailers a means of misleading the purchasing public, and with capacity and tendency to mislead a subsrantial number of retailers and members of the purchasing public, and PENNSYLV A:\IA OIL TERMD,TAL , INC. E,T AL. 357 356 Complaint with effect of thereby causing purchase of substantial quantities of theirsaid product:

Held, That such acts and practices, under the circumstances set forth, wereall to the injury and prejudice of the public, and constituted unfair and deceptive acts and pl'articE's in commerce. As respects respondents' l:contention that the brand name "Penolube" was not of itself misleading or deceptive, since it did not alone connote oil derived from crude oil produced in the Pennsylvania field-while admitting that the corporate name was misleading and deceptive and that the representations and container labels were likewise so by reason of the use of the brand name and the corporate name together-there was no charge in the complaint that said brand name alone was false, deceptive or misleading, the charge being confined to the use of both names in conjunction. Before llfr. F1'ank H'ie1' trial examiner. Mr. Jesse D. Kash forthe Commission.

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 Pennsylvania Oil Terminal, Inc., a corporation, Douglas Price, Clara Price, Muriel C. Johnson, individually and as offcers of said corporation, and Eugene K. Johnson, an individual, hereinafter referred to as respondents have violated the provisions of said Aet and it appearing to the ComrrLission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Pennsylvania Oil Terminal, Inc., is a corporation or.ganized, existing and doing business under and by virt.ue of the laws of the State of Delaware with its offce and principal place of business located at 3500 Branch Avenue, Silver Hill, Md. Respondents Douglas Price, Clara Price, and :Muriel C. Johnson are president vice president and secretary, respectively, of said corporate respondent, with their business address the same as that of corporate respondent. Respondent Eugene K. Johnson, an individual, was formerly the president of corporate respondent and now holds an exclusive "franchise to sell corporate respondents' product ,within a fifty-miJe radius of IV aehington, D. C. His offce anel resident address is Jocated at 1000 Eleventh Street, NIV., IV ashington, D. C. The said offcers, together ,with respondent Eugene K. Johnson, formulate and direct the policies and practices of the corporate respondent. PAR. 2. Respondents are now and for more than one year last past have been engaged in the sale and distribution of motor oil to retail 358 FEDERAL TRADE COMMISSIO!\'" DECISIONS Complaint 48 F.

distributors for resale to the public. Responde.nts sell said product under the brand name "Pcnolllbe JH:motor Oil." PAR. 3. Respondents cause and have caused their said product, when sold, to be transported from their place of business in the State of :Maryland to purchasers thereof located in various other States of the L"united States and in the District of Columbia. Hcspondents maintain and have maintained a eoul'SC of trade in tlwir product in commerce among Rlld between the various States of the United States. Their volume of business in the sale of said product in commerce "has been substantial.

PAR. 4. In the course and eoncluct of their aforesaid business and for the purpose of inducing the purchase of their said product in commerce, as "commerce" is defined in the Federal Trade Commission Act, the respondents have made and now make certain representations regarding the origin and quality of their oil, in advertisements ihserted in trade journals and in other advertising media and on the label of their product. Among and typical of said representations are the following:

Representations in advertising:

PEKOLUBE Motor Oil is not just an ordinary motor oil.

PEKOLUBE carries a high fire and flash and is over 100 V. I.

A PREMIUM OIL THAT MEANS EXTRA PROFITS TO YOU Lltbel on product:

Penol u be A High Quality MOTOR OIL SYLVANIA OIL TERMI . I Main Offce WASI1INGTO , D. C.

PAR. 5. Through the use of the abbreviation "Pen" as a part of the brand name "Penolube " and the v'lOrd " Pennsylvania" as a part of the corporate name, respondents have represented and now represent that their oil product is refined and processed entirely from oil produced in the Pennsylvania oil field.

PAR. 6. The aforesaid representations were and are false, mislead. ing and deceptive. In truth and in fact, respondents' Penolube oil PENXSYLVAXIA OIL TERMINAL) INC. ET AL. 359 356 Complaint was not and is not refined entirely from oil produced in the Pennsylvania oil field, and consists entirely or in substantial part of oil produced in oil fields other than the Pennsylvania field. PAR. 7. The term "Pennsylvania Oil" is recognized throughout the trade and by a substantial portion of the purchasing public as meaning oil refined from crude oil produccd in a geographical area known as the Pennsylvania oil field which includes the western portion of Pennsylvania and contiguous portions of New York, Ohio, and West Virginia. Pennsylvania oil has for some time been well and favorably known to the purchasing public and there is a preference on the part of a substantial portion of the, public for such oil over oils reGned from crude oil produced in other localities. PAR. 8. Respondents' oil consists in whole or in substantial part of used oil obt.ained from drainings of motor crank cases and from other sources which is thereafter ree1aimed or reprocessed. Said oil is sold in containers of the same general size, kind and appea.rance as those llsed for new oil and ha.s the appearance of new and unused oil. The containers bear no markings of any kind indicating that said product is reclaimcd or reprocessed oil. In the absence of a disclosure on the containers that the oil therein is reclaimed or reprocessed, the general understanding a.nd belief on the part of dealers and the purchasing pubhc is that oil sold in containers such as are used by respondents is, in fact, ne-", oil and not reclaimed or reprocessed oil There is a marked preference on the pa.rt of a substantial portion of the purchasing public for new and unused oil over used and reclaimed or reprocessed oil, such preference being due in part to the belief that new and unused oil is superior in quality to oil that has been used and recla-ime,d or reprocessed.

PAR. 9. The respondents' said acts and practices further serve to place in the hands of retailers a mp ns and instrumentality whereby such persons may mislead the purchasing public in respect to the origin and quality of respondents' product.

PAR. 10. The use by respondents of the aforesaid false, deceptive and misleading statments and representations with respect to their product ane! the faiJme to disclose that their oil is composed in whole or in part of used oil which has been reclaimed or reprocessed, has had nd now ha, , the tendency and capacity to mislead and deceive a substantial number-r of retailers and members of the purchasing public into the erroneous and mistaken belief t.hat such statements and representations were and are true and CRuses and has caused a substantial number of the purchasing public to purchase substantial quantities of respondents' product because of such erroneous and mistaken belief. Order 48 F. T. C.

PAR. 11. The aforesaid acts and practices of the respondents, as herein alleged, are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. ORDERS AND DECISION OF THE CO:Ul\I1SSlOX Order denying appeal from initial decision of trial examiner and decision of the Commission and order to file report of compliance Docket 5868, October 4, 1951, follows:

This matter coming on to be heard by the Commission upon . the 1l1otion of counsel supporting the complaint that the initial decision of the trial examiner issued on June 11, 1951, be placed on the Commission s own docket, that said initial decision be vacated and set aside, and that Paragraph Five of the complaint herein be amended and the case thereafter be remanded to the trial examiner for the purpose of receiving proof in support of the complaint as amended, which 111otion the Commission has considered an appeal by counsel supporting the complaint from the trial examiner s initial decision; and It appearing that the grounds relied upon in support of said appeal Hre that the trial examiner construed the allegations of Paragraph File of the complaint in a manner different from that which was intended and that the public interest requires the action requested; and The Commission having duly considered said appeal and the record herein and being of the opinion that the trial examiner was not in error in construing the complaint herein as not charging that respondents' use of the brand name "Penolube " alone is false, misleading, or deceptive, and that it would not be proper to amend the complaint at this stage of the proceeding to include such a charge, and being of the further opinion that the trial examiner s initial decision is appropriate in all respects to dispose of all the issues in this proceeding:

It is ordered That the appeal of counsel supporting the complaint from the initial decision of the trial examiner and the request therein , and they hereby are, denied.

It is further ordered That the attached initial decision of the trial examiner shall, on the 4th day of October, 1951, become the decision of the Commission.

It is further onlered That the respondents, except Clara Price and Muriel C. Johnson, shall, within sixty (60) days from the service of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with the order to cease and desist.

NSYLVANIA OIL TERMINAL, INC. ET AL. 361 356 indings Said initial decision, thus adopted by the Commission a its decision, follows:

INITIAL DECISION BY FRANK HIER, 'I'RIAL EXA: n::mR Pmsnant to the provisions of the Federal Trade Commission Act the Federal Trade Commission on March 27, 1951 , issued and subsequently served its complaint in this proceeding upon respondents Pennsylvania Oil Terminal, Inc., Douglas Price, J\1uriel C. Johnson and Eugene Ii:. Johnson (no service on respondent named as Clara Price), charging them with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said Act. answers thereto were filed by any respondent. On the date fixed in the complaint, May 22 , 1951, a hearing was held at which respondent Douglas Price appeared, individually and as president of the corporate respondent; and respondent Eugene K. Johnson appeared both without counsel. Thereat they agreed with eonnsel for the Commission that certain allegations of fact made in the complaint were the fa.cts, and gave t.est.imony at tl1eir own request as to certain other nllegations, which testimony was duly recorded and filed in the office of the Commission. Although time was allowed therefor no proposed findings of fact were filed. Thereafter, the proceeding regularly came on for final consideration by the trial examiner, theretofore duly designated by the Commission, on the complaint and the testimony, and said trial examiner, having duly considered the record herein finds that this proceeding is in the interest of the public and makes the following finc1ings as to the facts, conclusion drawn therefrom find order:

FINDINGS AS TO Tile FACTS P ARAGRAI'H 1. Pennsylvania Oil Terminal, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware with its offce and principal place of business located at 3600 Branch A venue, Silver Hill, Md. Hespond- .ent Douglas Price is president of said corporate respondent with his business address the same as that of the corporate respondent. Re. spondent Eugene IC J ohn8011 formerly was the president of the corporate respondent and presently holds an exclusive franchise to sell 'corporate respondent' s products ,,,within a 50 mile radius of washington, D. C. His offce and resident address is Capitol Heights, Md. Post omce Box 118.

There is no person by the name of Clara Price having or having had any connection with the corporate respondent. Florence Price, wife of Douglas Price, is an offcer of such corporate respondent, and Muriel 362 FEDERAL TRADE co:\nnSSION DECISIOXS Findings 48 F. T. C.

Clara Johnson, wife of Eugene Ir, J ohn80n, is an offcer of corporate respondent but neither were or are active in its business nor exercised any control over its policies and practices. The latter have been and are formulated and directed by respondents Douglas Price and Eugene. K. Johnson.

PAR. 2. Respond ents are now and for more than 1 year last past have been engaged in the sale and distribution of motor oil to retail distributors for resale to the public. Respondents sen said product under the brand name "Penolube :Motor Oil."

PAH. 3. Respondents cause and have caused said product, when sold to be transported from their place of business in the State of Maryland to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondents maintain and have maintained a course of trade in their product in commerce among and between thc various States of the United States. Their volume of business in the sale of said product in C011merce has been substantial.

PAn. 4. In the course and conduct of their aforesaid business and for the purpose of inducing the purchase of their said product in conlmerce, as "commerce" is defined in the Federal Trade Commission Act, the respondents have made and now make certain representations regarding the origin and quality of their oil, in advertisements inserted in trade journals and in other advertising media and on the label of their product. Among and typical of ;a id representations are tha following:

Representations in advertising:

PE::TOLUB:E Motor Oil is not jl1St an onl-ivory motor oU. OL'CBE carries a high fire and flash and is OTer 100 VI. A PREl\IIUl\I OIL THAT MEA)iS EXTRA PROFITS TO YOU Label on product:

Penolube A High Quality MOTOH OIL PENNSYLVANIA OIL TEHMINAL. I:-C.

Ml1in Offce Washington, D. C.

NSYLVAXIA OIL TER1HNAL, IXC. ET AL. 363 356 Findings PAR. 5. Through the use of the corporate respondent's name, in conjunction with the \yord "Penolube " respondents have represented that the lubricating oil packaged and sold by them is refined and processed entirely from oil produced in the Pennsylvania oil field. PAR. 6. The aforesaid representations were and are false, misleading and deceptive. In truth and in fact, respondents' Penolube oil was not and is not now refined entirely from oil produced in the Pennsylvania oil field, but consists entirely or in substantial part of oil produced in oil fields other than the Pennsylvania field. PAR. 7. The term "Pennsylvania Oil" is recognized throughout the trade and by a substantial portion of the purchasing public as meaning oil refined from crude oil produced in a geographical area known as the Pennsylvania oil field which includes the 'ivestern portion of ppnnsylvania and conbguous portions of New York, Ohio, and 'Vest Virginia. Pennsylvania oil ha.s for some time been well and favorably known to the purchasing public and there is a preference on the part of a substantial portion of the public for slich oil over oils refined from cTude oil produced in other localities.

PAR. 8. Respondents admit that the corporate respondenes name is misleading and deceptive and that the representations and container labels are likewise misleading and deceptive by reason of the. use of the brn.nc1 name and the name of the corporate respondent together.r. They contend, however, that the brand name "Penolubc" is not of itself misleading or deceptive, because they contend it does not, alone, connote oil derived from crude oil produced in the Pennsylvania field. There is no charge in the complaint that the brand name "Penolube alone, is false, deceptive or misleading. The charge is confined to the use of both names in conjunction with each other. The finding of fact is likewise similarly confined.

PAR. 9. Responde.nts' oil consists in whole 01' in substantial part or used oil obtained from drainings of motor cnmkcases and from other sources which is thereafter reclaimed or reprocessed. Said oil is sold in containers of the same general size, kind and appearance as those used for new oil and has the appearance of new and unused oil. The containers bear no markings of any kind indicating that said product is reclaimed or reprocessed oil. In the absence of a disclosure on the containers that the oil therein is reclaimed or reprocessed, the general understanding Hnd belief on the part of dealers and the purchasing public is that oil sold in containers such as are used by respondents is in fact, new oil and not reclaimed or reprocessed oil. There is a marked preference on the part of a substantial portion of the purchasing public for new and unused oil over used and reclaimed or !(.

Order 48 F. T. C.

reprocessed oil, such preference being due in part to the belief that new and unused oil is superior in quality to oil that has been used and reclaimed or reprocessed.

PAR. 10. The respondents' said acts and practices further serve to' place in the hands of retailers a means and instrumentality whereby such persons may mislead the purchasing public in respect to tlu, origin and quality of respondents' product. PAR. 11. The use by respondents of the aforesaid false, deceptive &nd misleading statements and representations ,,,jih respect to their product and the failure to disclose that their oil is composed in whole or in part of used oil which has been reclaimed or reprocessed, hu& had and now has, the tendency and capacity to mislead and deceive , a substantial number of retailers and members of the purchasing public into the erroneous and mistaken belief that such statements and representations were and are true and causes and has caused a substantial number of the purchasing public. to purchase substantial quantities of responde,nts' product because of such erroneous and mistaken belief.

CONCLU5IOX The aforesaid acts and practices of the respondents, as hereinabove found, are all to the injury and prejudice of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. ORDER It ,is oJ'deJ'ed That Pennsylvania Oil Terminal, Inc., a corporation its offcers, employees, agents and representatives, Douglas Price, individually and as an offcer of such corporation, and Eugene Johnson, the.ir agents, employees and representatives, through any corporate or other device, in connection with the sale, offering for sale, and distribution in commerce, as "commerce" is defined in the' Fec1ernJ Trade Commission Act, of lubricating oil, do forthwith cease and desist from:

1. Using the name "Pennsylvania Oil Terminal, Inc." or any other name containing the word "Pennsylvania" or any abbreviation, derivation or simulation of the word "Pennsylvania" in conjunction with the brand name "Penoll1be " to designate or describe lubricating oil, any part of which is not derived from crude oil which has been extracted from that portion of western Pennsylvania, and contjguous portions of Ohio, Kew Yorh:, and \Yest Virginia, generally known as the l)ennsylvania oil field;

PEl\TNSYLVANIA OIL TEJtMINAL, INC. ET AL. 365 356 Order 2. Advertising, selling, or offering for sale, any lubricating oil ,which has been previously used for lubricating purposes, without disclosing such prior use to the purchaser or potential purchaser, either directly or by clear and conspicuous appropriate statement to that effect on the container.

It is furthe)' ordered That the complaint be and the same hereby is (lismissed as to respondents Clara Price and lvfuriel C. J ohn80n. ORDER TO FILE REPORT OF CO::IPLIANCE It is jurther ordered That the respondents, except Clara Price, and: Muriel C. Johnson, shaU, within sixty (60) days from the service of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with the, order to cease and desist (as required by aforesaid order and decision, 0f the Commission J.

366 FEDERAL TRADE COMMISSION DECISIOXS Syllabus 48 F. T. C.

I" THE 1L'TTER OF CONTINE TAL RADIO TUBE cmIPAXY ET "\L.

COMPLAINT, lHODIFllD FINDINGS , A D OJUJEHS IN REGARD TO THE I.ALLEGED VIOLATION OF SEC. 1) OF AK .ACT O.F CONGRESS APPROYED SEPT. 26, IDU Docket 5725. C01nplai, , Dec. 20 , lD- Decision, Oct. 5. 19,51 .Many radio repairmen and service dealers are prejudiced against the purchase of war surplus tubes, and have a IJreferenc:e for the current commercial tubes.

As respects the removal of numbers 01' symbols placed on radio tubes by manufacturers or others for identification, and the substitution by sellers of others, the fact that many of the tubes on wJlich substitnte numbers or symbols were placed may have been identical with radio tubes genel'fllJy so identifled is no justification for such incorrect identifcation. Where a corporation and its four offcers, engaged in the interstate sale and distribution of radio tubes- (a) Incorrectly identified tubes purchased by them from the manufacturers or others, by removing the identification numbers or symbols placed thereon and substituting others, and delivered them in commerce as and for the tubes identHied in the trade by the substitutions; ('b) Incorrectly identified war surplus tubes purchased by them by buffng away the service numbers or s;symbols and substituting therefor commercial numbers or symbols, and causing them to be delivered to theil' customers in commerce as and for the tubes identified by such commercial numbers or symbols; and (0) Falsely represented that they had been licensed by Radio Corporation of America to make or distribute radio tubes, through statements to such effect on cartons packaging their said products; With capacity and tendency;y to mislead and deceive the trade and fmblic in said respects and thereb " induce purchasers of their said products, and with the result of placing in the hands of the purchasers for resale a means whereby they might pass on incorrectly identified products to the ultimate users:

Held That such acts and practices, under the circumstnnces set forth, were all to the prejudice and injury of the public, :Iud constituted unfair and deceptive acts and practices in commerce.

As respects respondents' objection to tlw last clause in paragraph one of the proposed modifed ordcl', namely, "1. RenlO' illg any identification number or symbol pla ed on radio tubes by the manufacturer thereof or others and substituting therefor any other number or s.ymbol or otheJ'u;Ise hH;orrectly identI!yfng such ra( io tnves, respomlcnts contending that the order with said clause included is indefinite anrl uncertain, that it. seeks to adjudicate as violations undefiued future action of respundents, find that. it goes beyond the facts found by the Commission: &, CONTINEKTAL RADIO TUBE CO. ET AL. 367 366 Complaint Said objections were held without merit, since the complaint was aimed, among other things, at respondents' practice of incorrectly identifying the radio tubes sold by them, and an order limited in its application to the specific ways in which their tubes bad been incorrectly identified in the past would not be adequate to prohibit a continuation or resumption of the practice by some other means.

Before M,' . Clyde 111. Hadley, trial examiner. Mr. Randolph TV. Branch for the Commission. KixMiler, Baar 111orris of Chicago, Ill. , for respondents. COMPLAINT Pursuant to the provisions of the F cderal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission having reason to believe that Continental Radio Tubc Co., a corporation, P. D. Jackson, Jacob L. Gaber, Erwin F. Rempcrt, and :Martin Gaber, individually and as offcers of said cor poration, hereinafter referred to as respondents, have violated the provisions of the 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 as its charges in that respect as follows:

PARAGRAPH 1. Respondent, Continental Radio Tube Co., is an Illinois corporation and has its principal office and place of business at 1800 Winnemac A venuc, Chicago, Ill. Respondents, P. D. Jackson Jacob L. Gaber, Erwin F. Rempert and :Martin Gaber, are president vice president, secretary and treasurer, respectively, of the respondent Continental Radio Tube Co. Said respondents arc now, and for several years last past have been, engaged in selling radio supplies. the course and conduct of said business, respondents use the trade names Concert 1faster Radio Tube Co., and Premier Radio Tube Co. Respondents cause said products, when sold, to be transported from their aforesaid place of business to purchasers thereof located in vari ous States of the United States and in the District of Columbia. Respondents maintain, and at all times mentioned herein, have maintained a course of trade in said products in commerce among and between the various States of the United States and in the District of Columbia.

PAn. 2. Respondents advertise their said products in trade publications, and sell the bulk of their products to jobbers, retail dealers and repairmen.

PAR. 3. In the course and conduct of their business as aforesaid and in promoting the sale of their products, the respondents have en- 213840- , 368 FEDERAL TRADE COMMISSION DECISIOXS Order 48 F. T. C.

gaged in various deceptive and misleading practices. Among those practices, respondents purchase radio tubes frolll various sources, remove therefrom the identification number or symbol placed on the tubes by the manufacturer thereof, and substitute, in lieu of said number or symbol, another number or symbol signifying a more expensive tube or a tube of current manufacture. Respondents purchase war surplus tubes, buff away the service marking thereon, and substitute therefor a commercial number or symbol, and stamp thereon the legend ":Made in U. S. A., ce." The carton in which respondents package their aforesaid tubes for shipment to the purcha.sers thereof, are marked by respondents Licensed by Radio Corporation of America, or "Licensed by RCA " when in truth and in fact., respondents were never licensed by the Radio Corporation of America. PAR. 4. By and through the aforesaid acts and practices, the respondents have sold their radio tubes and supplies to the purchasers thereof throughout the United States, who bought said tubes in the erroneOllS and mistaken belief that said tubes and supplies were correctly marked, and that they were buying current stock oT the Jatest manufacture from a dealer duly licensed by the Radio Corporation of America. By said acts and practices, respondents have also placed in the hands of the purchasers of their tubes for re aJe, a means or instrumentality whereby said purchasers may and do pass on to the ultimate users of the tubes and supplies incorrectly marked and identified products.

PAH. 5. The aioresaid acts and practices of respondents, as herein uJJegec1, are all to the prejudice and injury of the public and constitute unfair or deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. OHDIm HEOPE ING PROCEEDING AXD ::Imme"YIXG FINDINGS AS TO THE FACTS AXD ORDER 1 Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission, on December 20, 1949, issued and subsequently served its complaint in this proceeding upon the respondents, Continental Corporation (incorrectly designated in the complaint as Continental Hadio Tube Company), a corporation, and P. D. Jackson, Jacob L. Gaber: Erwin F. Rempert, and :JIartin Gaber individually and as ofi1cers of said corporation; charging them with the nse of unfair and deceptive acts and practices in commerce, in violation of the provisions of said Act. After respondents fied their 1 See 47 F. T. c. 1 j7.

CvSTINENTAL RADIO TUBE CO. ET AL. 369 366 Order answer to the complaint, a stipulation was entered into whereby it was stipulated and agreed that a statement of facts signed and executed by counsel for the respondents and counsel supporting the complaint may be taken as the facts in this proceeding and in lieu of testimony in support of and in opposition to the charges stated in the complaint and that the said statement of facts may serve as the basis for findings as to the facts and eonc1usion based thereon and order disposing of the proceeding, counsel having waived presentation of proposed findings and conc111sions and oral argument. The trial examiner there after filed his initial decision, which, on April 19, 1951, became the decision of the Commission.

Thereafter the Commission, acting Hpon its own motion, reconsidered its afore,said decision and, it appearing that said decision is deficient in certain respects and that the public interest may require that this proceeding be reopened and the findings as to the facts and order modified, issued its rule to show cause why the public interest does not require that this proceeding be reopened and the findings as to the facts and oreler modified in the respects indicated in said rule to show cause. The respondents, in answer to said rule to show cause objected to the last c1cause in paragraph 1 of the proposed modified order, contending that the order with sllid c1anse included is indefinite and uncertain; that it seeks to adjudicate as violations undefined future actions of the respondents; and that it goes beyond the fllets found by the Commission.

Respondents' objections to the proposed modified order arc without merit. The complaint in this proceeding was aimed at, among other things, the respondent's practice of incorrectly identifying the radio 1.tubes they sed. An order limited in its application to the specific ,vays in which their tubes have been incorrectly identified in the past ,vmIld not be adequate to prohibit a continuation or resumption of the practice by some other means.

The Commission l1aving duly considered tJw matter and being of the opinion that the public interest requires that this proceeding be reopened and HIe findings as to the facts and order to cea3e and desist modified:

It -28 ordered That this proceeding be, and it hereby is, reopened for the purpose of modifying the findings as to the facts and order to cease and c1esjst pre.viously issued herein. It i8 jU.JtheT ordel' That said findings as to the facts and order to cease and desjst be. a.nd they hereby are, modified to read as follows: 370 FEDERAL TRADE COM:\JISSIOX DECISIONS Findings 48 F. T. C.

MODIFIED FINDINGS AS TO THE FACTS PARAORAPH 1. Respondent Continental Corp. (incorrectly named in the complaint as Continental Hadio Tube Co. ) is an Illinois corporation with its principal offce and place of business now at 551-;,53 'Vest Handolph Street, Chicago, Ill. During all the times mentioned herein respondent P. D. Jackson was the president, respondent Jacob Gaber the vice president, respondent Erwin F. Rempert the secretary and treasurer, of said corporation; and l1ntillHarch 31, 1950, respondent :Martin Gaber was its manager to carry out the policies formulated by the offcers as to advertising and other operations, and since then has been its vice president and participates in formulation of policies. At the present time, neither P. D. Jackson nor Erwin F. Hempert is in any way connected \With such Continental Corporation, PAR. 2. Respondents, during all the times mentioned herein, were engaged ill selling ra.dio supplies, including radio tubes, can sing the same, when sold, to be transported from their place of business in the State of Illinois to purchasers thereof in other States and in the District of Columbia, maintaining a course of trade in saiel products jn commerce between and among the various States of the United States and in the District of Columbia.. In conducting said business respondents have also used the trade names Concert :Master Radio Tube Co. and Premier Radio Tube Co. They have advertised their said products in trade publications and sold the bulk of such products to jobbers, dealers, and repairmen.

PAR. 3. In the course and conduct of their business, and in promoting t.he sale of their products, respondents have purchased radio tubes from various sources, removed the identification numbers or symbols placed thereon by the manufacturers or by others prior to their acquisition by respondents, and have substituted in lieu thereof other numbers or symbols and delivered them in commerce as and for the tubes which are commonly and usually identified in the trade by the numbers and symbols thus substituted.

Respondents have also purchased war surplus tubes, buffed away the serviec numbers or symbols thereOll, substituted therefor commercial numbers or symbols, and caused them to be delivered to their which arc commonly andCllstomers in commerce as and for the tubes usually:v identified by such commercial numbers or symbols. Thus, a tube originally bearing the Army number "V '1-131" is marked and 128.1C7. ::lany radio repairmen offered commercially by them as " and service dealers are prejudiced against the purchase of war surplus tubes, and have a preference for the current commercial tubes. CONTINENTAL RADIO TUBE CO. ET AL. 371 366 Findings Various cartons used by respondents in packaging their tubes shipped in commerce bear the iol1owing:

Concert :\laster matched Radio Tubes "Cniformly consistent Licensed by R. C. A.

Concert Mnster Radio Tube Co.

U. S. A. Cblcago, Ill. Continental Uadia Tubes Licensed by Radio Corporation of America PAR. 4. The numbers ol'symbols placed on the aforesaid radio tubes by the ITUll1ufacturers or others prior to their Rcquisition by the respondents \\-e1'e placed thereon for the pmlJose of identification, and although the record herein does not cliselose the significance of such numbers or symbols to purchasers, other than that of identification, by removing such identification numbers 01' symbols and substituting lieu thereof other numbers or symbols the respondents caused such radio tubes to be incorrectly identified. The fact that many of the radio tubes on ,,"hieh suust.tute numbers or symbols "were placed may have been identical ,,,ith radio tubes generally so identified, although in some inst.ancps they were not, is no justificntion Jar such incorrect idESntificat.ion. The war surplus radio tubes from which the respondents removed the service numbers or symbols as aforesaid were also incorrectly iclent.ified as current commercial radio tubes. The Commission finds that the act.s and pract.ices of the respondents of incorrectly identifying as aforesaid, radio tubes sold by them are misleading and deceptive.

By the use of the aforesaid statements on cartons in which their radio tubes were packaged for shipment, the respondents represented that they have been licensed by Radio Corporation of America to make or distribute radio tubes. The respondents do not hold) and never have held, any license from Radio Corporation of America, and the misleading, andaforesnid representat.ions are, therefore. false, deceptive.

PAR. 5. The aforesaid acts and practices of respondents have had and now have the capacity and tendency to mislead and deceive the trade and the public as to their radio tubes, inducing purchasers to buy the same in the erroneous and mistaken beEef that said tubes were correctly identified by the numhers or symbols appellring thereon were of current commercial stock, and that the respondents were 372 FEDERAL TRADE COM.\USSION DECISIONS Order 48 F. T. C. licensed by the Radio Corporation of America to make 01' distribute radio tubes. By said acts and practices, respondents have also placed in the hands of the purchasers of their radio tubes for resale, a means or instrumentality whereby said purchasers may pass on to the ultimate users thereof incorrectly identified products. CONCL"'SION The acts and practices of the respondents as herein found are all to the prejudice and injury of the public and constitute unfair and decepHve acts and practices in commerce within the intent and meaning of the .Federal Trade Commission Act.

MODIFIED O1WER It is ordered That the respondent Continental Corporation, a corporation, trading under its own or under any other name, its officers and the respondents P. D. Jackson, Jacob L. Gabel', Erwin F. Rempert, and :Martin Gaber, individually, and their respective agents representatives, and employees directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of radio tubes in commerce as "'collllnerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Removing tny identification number or symbol placed on radio tubes by the manufacturer thereof or others, and substituting therefor any other number or symbol, or otherwise incorrectly identifying such radio tubes.

2. Removing the service number or symbol from war surplus radio tubes and substituting therefor any other number or symbol, or otherwise representing that such war surplus radio tubes are current commercial tubes.

3. Representing that the respondents have been licensed by Radio Corporation of America to make or distribute radio tubes, or for any other purpose.

It is further ordered That respondents shall, within sixty (60) days after service upon them of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied!! with this order. BEN SELVIZ, INC. ET AL. 373 Complaint