Joseph M. Moore trading as J. M. Moore Importexport Co.

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

IN THE MATfER OF JOSEPH M. MOORE TRADING AS J. M. MOORE IMPORT- EXPORT CO.

Docket 6087. Oomplaint, Mar. 20, 1953-0,' der and dissenting opinion, Mar. , 1954 Charge: l'eglecting- to disclose source of "Valiant Knight" and "Mor-Flex expansion watch bands.

Before Mr. John Lewis hearing examiner. Mr. Jesse D. Kash for the Commission. DECISION OF THE COlWlI1TSSION Pursuant to Rule XXII of the Commission s Rules of Practice, the attached initial decision of the hearing examiner shall, on JVfarch 13 1954, become the decision of the Commission. Commissioner Mead dissenting.

OUDER DISMISSING CmlPLAJXT 1VlTIIOUT PUE,JUDICE INITIAL DECISION BY ;JOHN LEWIS, BEAHING EXAMIXEH Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission on March 20, 1953, issued and subsequently served its complaint in this proceeding upon the above-named respondent, charging him with the use of unfair and deceptive acts and practices and unfair methods of competition in commerce in violation of the provisions of said Act. After the issuance of said complaint, motions were filed by both respondent and counsel supporting the complaint requesting that all further proceedings in this matter be suspended pending the decision of the Commission in Matter of 1anco 1Vatch Strap Co., Inc., Docket K o. 5854, a case involving issues substantially the same as the instant case. By order of the undersigned dated May 22 195i\ all proceedings in the instant case were suspended pending the issuance of a decision in Matter of Manco Watch Strap Co. , Inc. Thereafter, by order and decision issued December 21 , 1953, the Commission ordered the dismissal of the complaint in Matter of Manco 'Watch Strap Co., Inc. This matter has now come before the hearing examiner on motion of counsel supporting the complaint, requesting that the complaint herein be dismissed without prejudice, 1'01' the reason that the facts in this proceeding are substantially the same as those in the Manco case and in the interest of uniform treatment of related cases. ._ J. M. MOORE IMPu,,"- 824 Opinion The undersigned hearing examiner having duly considered said motion and the record herein, and it not appearing therefrom that the public interest requires any further proceedings upon the complaint at this time, and respondent not opposing the relief requested It is onlered that the complaint herein be, and it hereby is, dismissed, without prejudice to the right of the Commission to institute such further proceedings as futllre facts may warrant. DISSENTING OPINION OF COJlfJlUSSlONER MEAD A complaint in this case has been dismissed on the basis of the Commission action in dismissing the complaint in re Manco \Vatch Strap Company, Inc., Docket 58;"14. I dissented in the Manco case but did not state for the record the reasons for my dissent. In view of the fact that this complaint is being dismissed because of the Commission action in the Manco case, I am stating herewith my reasons for disagreeing with such action, and these reasons apply to both cases.

In the Manco case the respondent imported watch bands from China and .Japan into the United States. Respondent sold the bands in interstate commerce without adequately informing retailers and the ultimate consumers that the bands were imported from China and .r apan.

The Commission on December 21, 1953 issued an order dismissing the Manco complaint and in such order stated: The evidence in the record indicates that there are no domestic watch or wrist bands which are sold at prices comparable to the prices at which the respondent's imported bands are sold. There is no evidence in the record showing a preference on the part of a sulJstantial number of members of the purchasing public Jor the higher priced domestic bands over respondent's lower priced imported bands. The Commission is therefore oJ the opinion that the complaint herein should be dismissed.

Commissioners Howrey and Gwynne did not participate in the decision in the Manco case, and I dissented. The decision was made b) a majority of a quornm.

The Commission has found in a number of cases that a substantia numbet of persons in the United States believe that any commoditi! offered for sale in retail stores in the United States are manufactun in the United States unless the comrnodities are marked to indic foreign origin.

In Segal vs. Fedeml Trade Commission (142 F. 2d 2,55), the Co' referred to such a finding by the Commission and affrmed an order J..rave COMMISSION DECISIONS Opinion 50 F. T. C.

the Commission requiring adequate markings of foreign-made goods. The Court referred to the testimony of a disinterested witness as follows:

One witness was, for example, a buyer from the Woolworth Stores become accus-who testified that in his opinion American buyers had tomed to the marking of foreign goods, and assumed that goods were made at home when they carried no foreign mark." The Commission in its decision in the Manco case substantially narrowed and qualified the principle that sellers of foreign-made goods should disclose the fact that the goods are manufactured abroad. The Commission in effect stated that this disclosure is necessary only if there is a domestic product sold at a price comparable to the price at which the imported product is sold. That decision introduced into the law a principle which wil be very diffcult and complicated to what is a (Ccomparable" price? If theenforce. For illustration, price of a domestic product is $5.00 and the price of the imported is inproduct is $'too-are such prices comparable? If the answer the negative, what are the exact prices expressed in terms of dollars and cents for the prices to be "comparable?" Is not quality as well as price important to the consumer? In my opinion the decision of the majority in the Manco case places an intolerable burden on the Government in enforcing the statute in this particular field. Under the decision the Government must attempt to prove the particular price range in which the American consumer will refuse to pay a higher price for the domestic product and will choose to purchase in turn the foreign-made product. In my opinion the correct approach has been and should be to determine:

(1) whether or not the fact that products made in America or abroad is a material fact to a substantial number of consumers in the United States because such consumers prefer to buy American made oods ;

(2) whether or not the failure to reveal the foreign origin of prodin the lcts causes such consumers to believe the products are made )united States.

f the answers to Questions (1) and (2) are in the affrmati ve then it an unfair practice for the seller to fail to reveal the material fact at the products are made in a foreign country. This approach does not favor American-made products or foreign- ,de products. It simply requires the seller to state a material fact arding his foreign-made product, that is, the fact that such product foreign made, and the country of origin. The consumer, thus in- !Ied, can make up his own mind.

J. M. MOORE IMPORT-EXPORT CO. c"-, 824 Opinion The Commission does not have to guess what is in the consumer mind regarding comparative prices or quality. This principle is enforceable, informative, and effective.

For the reasons stated, I dissent from the action of the Commission in the Manco case and in this case in adopting a new principle regarding foreign markings. In my opinion this new principle wil prove inadequate and ineffective.

828 FEDJCRAL TRAm; COMMISSION DECISIONS Decision 50 F. T. C.