Blackstone College of Law, Inc.

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IN THE MATJ'EH OF' BLACKSTONE COLLEGE OF LA vit, ING ET AL.

DECISION AND OPINION IN HEGAHD TO TIm ALLEGED YJOLATION OF THE FEDERAL TRADE Commisslon ACT Docket S906. Complai.nt . July 18, lD51-Dccision, June 2.0 , 1951, 'Vhere a corporation and its president, engaged in the operation of a correspondenc!? sehool which sold courses of study and instruction in law, in advertising their said courses (in connection \Vitll which they inlposed no requirements as to previous formal education for admission) in Inagazines of national circulation, in which, under the caption "LA "7" and "The Law-Trained Man " tlley invited tile reader to send for a free copy of their bool,let thus entitled, showing how to (jllaiify at home for the LL. B. degree and a bar examination through their course, aud in which they referred to judg.es and lawyers as among their graduatcs- (a) I"aJsely represented that their course ami the degree of Bacheior of Laws which they there offered to ('onf(: r upon students successfully cnn1pleting the same would fulfill the requirements for education and legal training requisite to participating in the bar examination of Ow respective States; The facts being that while the minh-nul requil'ellJPJ1ts for admission for examination varia those imposed by the vast majority of the jurisdictions concerned follow a pattern \vl1ic11 excludes applicants whose legal training has been secured solely through home study, or whose education or legal training" areliInitec1 to completion of respondents' course, and in only a very fevi States would recipients of respondents' degrees \v11o are edueated or trained as above indicated be allowed to participate in bar t XamiIlati()nS; and (h) Ii"falsely represented and ilnplied that their school was a college of law within the generally accepted meaning of that tenn, i. e., an institntjoll of higher learning specializing in legal suhiPcts, with a resident faculty and student body, and library and classroom facilities, through use of the word collegc" in the trade name IIRlackstone College of Law, fpntllrpd in all advertisements and in its corporate n lll1e anel in otla r statements desiglluting the school as a college;

The facts being the school carried on all its operations from a slUall offce: its full-time employees comprised fj,,€ perSOliS, four of \whom \\'ere engaged in clerical work exclusively; the fifth was an attorney ,yIlo 111unaged the of lite and did lllOst of the teaching "work consisting, UlllOng other things, of forwarding lessons to students, grading examination papers, and corresponding with the students; another attorney who assisted the latter, cugag"ed in the practice of law in Chicago, 311fl devoted a portion of his time to the school in return for n small weekly salary; the sehool had no huildings or facilities for resident study, and its said JJresident, who "' as not at attorney, RJJ(-!!t little time at tJH school in Chicago, and had bis ottke in New York City:

Held That such misrepresentations wpre to the prejudice and injur:.' of the Imblic and COIl8tituted unfair ancl deceptivp acts ann practicps in t'OIlt1lPl'Ce. Before Mr. William. L. Pack hearing examiner. Mr. William L. Pencke for the Commission. Mr. (Jurnthcr W. Harms of Chicago, Ill., for respondents. BLACKSTONE COLLEGE: OF LAW , INC. , ET AL. 1071 lO7Q Findings DECISION OF THE CO Li\llSSlON AND ORDER TO FILE REPORT OF cO:lIPLL\.NCE Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission on July 18, 1951 , issued and subsequently served its complaint in this proceeding upon the parties named above, charging them with the use of Imfair and deceptive acts and practices in violation of the provisions of that Act. After the filing of respondents' answer, hearings were held before a hearing examiner of the Commission, duly designated to act in this proceeding, and testimony and other evidence were introduced and duly recorded and fied in the offce of the Commission. On April 4, 1952, the hearing examinerfjled his initial decision sustaining certain allegations of the complaint and closing the proceeding without prejudice insofar as it related to others and, within the period of time permitted by the Commission s Rules of Practice, counsel supporting the complaint appealed from that initial decision.

This matter came on for nnal hearing upon the entire record including the brief in support of the appeal and the brief filed by counsel for respondents in opposition to such appeal. The Commission, for the reasons stated in the opinion which is separately issuing herein, having determined that the rulings of the initial decision which are specifjcany excepted to in the appeal ,were erroneous rulings and that they should be reversed, hereby grants the appeal of counsel supporting the complai nt; and being of the opinion that this proceeding is in the interest of the public, the Commission hereby issues its findings as to the facts, conclusion, and order, the same to be in lieu of the initial decision of the hearing examiner. FINDINGS AS TO THE FACTS Blackstone College of Law, Inc., is a corporation organized and doing business under and by virtue of the laws of the State of Illinois its principal offce and place of business being at 225 :North Michigan Avenue, Chicago, Illinois. Harold R Lister, who is erroneously referred to in the complaint as Harold L. List.er, is president of the corporate.e respondent. and, as such, controls and direct.s it.s policies and practices and is responsible for it.s operation and management. His business address is 25 ,Vest. 45th St.reet, New York, New York. The respondents are engaged in t.he operation of a correspondence school sening courses of study and instruct.ion in law which are pursued by correspondence through the medium of the Unit.ed States mails. During the period to ,which this proceeding relates, a subst.antial course of trade in such courses of instruct.ion has been maintained by respondents in commerce between and among the yariOI1S States of the Vnited States and in the District of Columbia.

Pin dings 50 P. T. C.

The courses have been advertised by respondents in magazines having national circulation, and typical of their advertisements appearing in such media are the following:

Law-Free Book-The Law-Trained 1IIan 'VriLc-- \Vrite today for a Ij Reli copy of "The Law-'rrained l\fan ,which shows how to qualify at home for the LL. B. degree ami a bar examination through the famous Biackstone Jaw course eOlIpiled by 60 expert law authorities. Big 17volume Law Library furnished. '\Ioderate tuition; easy terms. BLACKS'l' ONE COLLEGE OP LAW, 225 N. Michigan Ave. , Dep1: Chicago 1, Ill. A CorresponcIence Institution Pounded in 1890.

LA W-Free book-The Law-Trained '\Ian Your FHEE copy of "The Law- rrainec1 1\lan" shows how to gain prestige and greater earnings through Blackstone home law study. All instruction materiai furnished including 17-volume law Library written by 6;= well-known law authorities. Lawyers, judges amollg our graduates. LL. B. degree. Low cost; easy terms. Write today.

BLACKSTONE COLLEGE (n' LAW Dep1: 125 , Cl1icago, Ii!. 225 N. :\lichigan A vc.

A Correspondence Institution Founded in 1890. In addition to those charges of the complaint pertaining to use of the word "college" in the corporate nalle and otherwise which elsewhere are discussed and separately considered in this decision, the complaint has charged that, through statements contained in their advertising including the statement that the degree of Bachelor of Laws is conferred, respondents falsely represent that their enterprise is a recognized and standard law school, that its courses ale comparable to those used in reeognized and accredited resident schools and that studel1s completing the courses and obtaining respondents' degrees are thereby qualified and eligible to be admitted to the bar examinations of the respective states. Inasmuch as the hearing examiner found that the Commission s action in an earlier proceeding was a bar to consideration of these matters on their merits, no determination thereof appears in the initial decision.

As background to their consideration, it ltppears here that, among other things, an earned degree represents an academic rank awarded by colleges or universities in re.cognition of attainments on the part of their scholars. The professional degree of Bachelor of Laws has been awarded for many decades by resident law schools. In all saye a few states, in order to be admitted to bar examinations at the outset, candidates must corn ply with minimum requirements as to education and legal training imposed by the states' local regulations or statutes. The baccalaureate in hlw, when awardc(l by an accredited institution, is ;

BLACKSTONE COLLEGE OF LAW, INC.) ET AL. 1073 1070 Pindings accepted by examining authorities of states where these requirements prevail as satisfactory evidence of their completion academically by the applicant. Such applicants accordingly are eligible and enabled to participate in bar examinations providing that they fulfill other requisites unrelated to education and training but instead pertaining to age, moral character or residence.

Testimony was received into the record indicating that the award of an LL. B. degree connotes successful completion by the recipient of a resident course of study at an approved or accredited institution and tending to show additionally that such degree attests that the recipient has training and competency of the types warranting him to apply for an examination for the practice of law. The greater weight of the evidence manifestly establishes that to members of the' legal profession, including teachers and attorneys, the baccalaunmte in law, among other things, symbolizes snccessful completion of a residEmt course of study in Jaw whereby the holder of such degree has fulfilled the requirements for education amllegal training which wil enable him, if otherwise eligible, to sit for the bar examinations of the respecti ve states. On the other hand, however, the evidence received into the record appears inadeqnatefor an infOlmed detej' lIinatioll as to whether the foregoing beliefs ,tS to the connotati()J of the LL. B. degree mid the impressions necessarily engendered by offers to ('onfer it, likewise arc shared by members of the purchasing public to whom respondents' ad \'eltising and offers of their course" and degrees are directed. These conclusions notwithst'l1ding however, it seems clear that when made against the background of additional advertising statements expressly referring to lawyers and judges among the corporate respondent's graduates mlll to the effect that prospective enrollees will be able to qualij'y at home for bar examinations, respondents' offers to (\onfer the degree of Bachelor oj' Laws llpOI stl1dellts successfully completing the C01JrSeS indeed sene to represent, and have represented to prospective students, that such course and degree will fnlfil1 the requirements for education ,md legal training requisite to participating in the ba.r examinatjons of the respective states.

No requirements as to previous formal education are imposed by respondents for adrnission to their course. ;\n intelleetual capacity on the p:ut oj' its prospective students exceeding tlu1t necessary to understanding of a. news item is deemed desirable by respondent " and if its absence were apparent on the face oj' the appJicatio11 , it is imlicated th:1,t enrol1mellt would be denied llelenmt also, among other matters, to a consideration tbe truth 01' falsity of respondents C:\');- :4'1. 57- Findings 50 P. T. C.

representations respeeting the eligibility for bar examinations afforded by their degrees and courses is the circumstance that, in 24 States of the United States, admission to the practice of law is limited to those whose legal studies have been pursued in whole or in part in a resident law school. In some of these states, the period of study required is contingent on whether the school is approved by the American Bar Association or local examining authorities and, in such instances, a longer period of study is specified if attendance is at an institution not so approved or in the event studies are to be pursued on a part-time basis. In 20 of the remaining states where an alternative to resident school training and attendance is open to students, study in a law offce is permitted. This method is a tradition in the legal profession and contemplates study under the supervision of a practicing member of the bar of the state where the student aspires to practice to the end that his training be secured in the atmosphere of its courts and of the law offce. Students whose education and legal training are limited solely to respondents' home study courses would not be admitted to the bar examinations of any of the 44 foregoing states. As of 1950, the four remaining states did not require that bar candidates, be pursued in a resident law school or law offce. Montana however, required that applicants have two years of college or its equivalent prior to beginning any legal studies. At such time, however, no specific requirements as to education or legal training appear to han been imposed by Georgia as a condition to taking its bar examination, and Mississippi likewise imposed none respecting an aspirant' s educational status prior to the beginning of his legal studies although a high school education has been a prerequisite t.o taking the final examination. California, although requiring two years pre-legal study of applicants under 25, waives this for those who an' over 25 years of age at the time they begin the study of law, and that State requires applicants training outside of accredited law schools to register when their legal studies are begun. It accordingly will be observed that while the minimal requirements for admission to examinations VlU'y among the states, those imposed by the vast majority of the jurisdictions follow a pattern which excludes applicants whose legal training has been secured solely through home study or whose education or legal training is limited to completion of respondents course. In only a very few states, therefore, may recipients of respondents' degrees who are educated or trained as above indicated be allowed to participate in bar examinations. That respondents' representations respecting the eligibility of recipients of their degrees and of students satisfactorily completing the course to participate in bar examinations of t.he respective st.ates are false is clearly demonst.rated by the record.

..,, BLACKSTONE COLLBGE OF LAW , IXC. , ET AL. 1075 1070 Pindings Respondents contend that no deception of enrollees stems from their advertising for the reason that pussession of an LL. B. degree does not entitle its holder to become a member of the legal profession. Tho record suggests that the so-ea Hed " diplOJmr privilege" under which graduates of certain law schools might be ac1mitted to the bar of particular jurisdiction without examination may still apply in a very few states. Assuming, however, that the diploma privilege has disappeared entirely, the circumstance that students may know that candidates for the bar must stand i'm' an examination 01' comply with other requisites pertaining to residence and moral character in no manner supports a view that a capacity to mislead and deceive does not inhere in the previously noted false j' epresentations respecting eligibility of recipients of respondents' degrees and the school's graduates for admission to bar examinations. Respondents have urged also that certain statements in reference to qualifying for bar examinations, as contained in their booklet "The Law-Trained Man " serve to dispel any misunderstanding on the part of their enrollees as to admission to bar examinations. In this connection, it is to be noted at the outset that the information to which respondents refer is entirely absent from those advertisements through which contact with pl'spectiYe students is initially established by respondents. Their booklet, moreover, when urging that enrollees plan to sit for bar examinations, reiterates that the effcacy of respondents' method is attested by a long list of successful attorneys among their graduates and expressly assnres that "the formalities of gaining admittance to the examinatiun ,u'e nut difficult to meet" On the subject of education preliminary to undertaking the study of law, the booklet reports that a high school education or its equivalent is sllffcient in certain designated states, a grammar school education suffces in another, and that in all others "the equivalent" of two years' college work prior to taking up the subject of law meets such requirements. On the subject of legal study, the booklet states that "a few states there na,ming 14, demand that the required period of study be in a resident school and that one other stipuhtes that one year be in a resident school, and thereupon adds that, in the other states, the private attorney who sponsors the applicant certifies that such aspimnt has spent the proper length o"f time in law study. Upon the ba,sis of the ana,lysis of suites' requirements set out in the second preceding paragraph, it is readily apparent that ee).taiu of the stdements uf the booklet are untrnc and that others, particularly the la,st one which presumably h:, s reference to law offce tmining a,nd study, are misleading and bcking in candor. It is accordingly concluded tha,t the statements to. hieh l'esponuellts refer are entirely il1a,dequa,te to dispel the false 1076 FEDERAL TRADE COMMISSIOK DECISIONS Pindings 50 P. T. C.

impressions elsewhere conveyed in respondents' promotional matter. The Commission is of the opinion, however, that the record does not suffce for an informed determination as to whether respondents' advertised offers to confer their degrees within themselves, or when made in connection with the additional statements referred to above have constituted representations to their purchasers, in the circumstances here, that the enterprise is a recognized and standard law school or that its courses are comparable to those used in recognized und accredited resident schools. Further consideration of the additional allegations of the complaint relevant to these matters, therefore appears umvarranted here and these additional charges accordingly are to be deemed as dismissed hereby.

Another of the issues presented for consideration, as referred to at the outset, relates to the charge of the complaint that, through use of the word "college" in the name of the respondent corporation and otherwise in the advertising, respondents have represented that their enterprise is a college or an educational institution of higher learning specializing in legal subjl'cts. This allegation and others relevant to it are found to have been sustained under the initial decision wherein the conclusion is expressed that respondents' use of such word as a designation for the school is unwarranted and misleading and a provision absolutely forbidding its use or any simulation thereof as a part of the corporate or trade name in promoting sales of the courses likewise appears in that decision s order.

llespondents' use of the word " College" in the trade name "Blackstone College of Law " which is Prominently featured in all the advertising, and in its corporate name "Blackstone College of Law Inc. " and in other statelnents de"ignating respondents' SdlOOl as :t college, represents and implies that their school is a college of law within the generally accepted meaning of that term, that is, an institution of higher learning specializing in legal subjects with a resident faculty and iitudent body and Jibrary and classrooll facilities. Supporting conclusionii that the corporate respondent is not a college of JaI , as such term is generally understood, and that respondents representations in that respect are false, is the circumstance that the school has no buildings but carries on al1 of its operations from a small Oflcf . The full-time employees of the school comprise five persons, four of whom are engaged in clerical work exclusively. The fifth is an attorney who manages the ofii( e and also does most of the teaching "ork \which consists, among other,' things, of forwarding lessons to students, gnldiug examination papers, and cOlreSpOIll illg Ifit) the st11lents. In this work, he i" ac;sjstecl by another uttorney who pngngec; in the practice of lay, in Chief;2o but deyotes a portion BLACKSTONE COLLEGE OF LAW , INC. , ET AL. 1077 1070 Pindings of his time to the school. For his services to the school, the latter receives a small weekly salary. The school has no facilities for resident study, all work being done exclusively by correspondence. Respondent Harold R. Lister, who is not an attorney, spends little time at the school in Chicago, his offce being located in New York City. In the course of the proceedings, respondents l1aye contended they have never used the word "college" alone in their promotional literature but immediately qualify Sllch word with the phrase "A correspondence institution founded in 18UO " and in effect mge that their designation of the school as a college, even if consirlered false, has lacked any capacity and tendency to mislead. It is to be noted in passing that the term "Incorporated" is omitted from desigmltions of the school in certain of the lnagazine arlvertising and other promotional material so responrlents in effect there offer their course under a trade name, namely "Blackstone College of Law." The magazine advertisements and the corponlte letterhead contain reference to the school' s correspondence aspects. The cover of the ;)2-page booklet The Law-Trained Man " is imprinted with the scllOol's trade name. A statement to t.he efrect that the school is chartered as a correspondence institution under the laws of the State of Illinois, together with another affrming that it is empowered by statute to confer degrees appears on this booklet's first inside page but such statement is not reiterated at points where nddit ionalreferences are made t.o the corporate respondent by its trar1e name 0" as "The College. Disclaimers are omitted, mOleoYer, from certain of the textbooks known as "JVIodern American Law " and f1'lI various lecture bulletins and lists of answers distributed to enrollees. As evidenced by the facsimile of the respondents' diploma which is featured in the promotional literature, it i,; apparent that respondents likewise fail to mention the correspondence character of the enterprise on their diplomas. It would not be proper to conclude, therefore, that respondents never use the word "College" aloue or without using the qualifying phrase to which they have referred. On the contrary, the omission oJ language 0 f explanation and disclaimers from certain of the promotional matter and the inadequacy in othm. instances of such disclosures as do a appear are appareut, and the record clearly establishes that respondents' designation of their school as a college has been decepti ITe and misleading.

Relevant to a consideration of an appropriate form of remedy with respect to the foregoing matters is the circumstance that this enterprise appeals to have been established in 1890 and the record contains no indication that its corporate name has not been in use for many years. Among its competitors is La Salle Extension University, Conclusion 50 F. T. C.

Chicago, Illinois, named as the respondent in a proceeding earlier instituted by the Commission. Under the terms of the modified order to cease and desist wlli('h issucd on '\'fay 18 , 1938, in disposition of that proceeding (26 F. T. C. 1277), use of the expression "lTniversity" in its corporate name or otherwise was forbidden to such school unless clear disclosure of the correspondence character of the ent2rprise appeiued when eyer used in textbooks, pamphlets and other advertising matter. In the circumstances here, the Commission has concbded that the public interest will be adequately sened if a similar requirement for disclosure likewi e is imposed respecting :my future use by respondents of the word "college " OJ' words of imilar import. The requirements of the, order to cease and desist as contained in this decision are in accord and the form of 01'1er which appears in the initial decision is not being adopted.

CONCLrsTON On the basis oJ the facts above stated, the Commission has eonduded that respondents hine :lalsely J'epresented that recipients of their purported ac.ademie degrees in Jaw and students satis:actorily completing the sdJOol's courses of study through correspondence will be eligible and enabled by reason 01' such training to participate in the bar examinations 01' the respective states, and that the corporate respondent is H college. As made in the circumstances here, respondents' misrepresentations to prospcctive students manifestly have had the capacity and tendency to deceive members 01' the public into the erroneous and mistaken belief that such representations arc true and to induce the purchase of substantial numbers of respondents' courses of instrm tion in commerce. The Commission accordingly,\ concludes that respondents' misrepresentations have been to the prejudice and injury 01' the public and therefore constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trftde Commission Act.

Obyjol1s1y material to persons urged iu nation-wide offers of courses of instruction to follow the law as ft pro:lession is accurate information as to where or in what jurisdictions the method or Jorm of training offered is acceptable toward Julfil1ing the goal which such advertising seeks to inspire. A provision insuring such disclosure in connection with any Juture offers by respondents of their courses likewise directe.d to encourage such aspirfttions is plainly warrant.ed and necessary and docs not appear burdensome in the circumstances here. The order which follows is in accord.

BLACKSTONE COI"LEGE OF LAW . INC. ) ET AL. 1079 1070 Opinion ORDER It is ordered That the respondent Blackstone College of Law, Inc. a corporation, and its offcers, agents, representatives and employees and respondent Harold R. Lister, as an oflcer of said corporation directly or through any corporate or other device, in connection with the offering for sale, sale and distribution in commerce, as "commerce is defined in the Federal Trade Commission Act, of courses of study nd instruction, do forthwith cease and desist from: (1) Representing directly or by implication that recipients of respondents' purported academic degrees in law or others successfully completing respondents' course of study through correspondence will be admitted to or are otherwise eligible to participate in bar examinations, unless such representations are expressly limited to those states (specifically named) wherein the requirements for education and legal training requisite to participating in such examinations are fulfilled solely by completion of a course of legal study through correspondence.

(2) Using the word "college" or any word or words of similar import or meaning in the corporate name or in any other manner to designate or refer to respondents' school, unless, in bulletins, lesson material, textbooks, diplomas and other promotional material, and sales presentations whenever used, it is clearly and conspicuously stated in immediate conjunction with such word or words that respondents' enterprise is a correspondence school without resident facilities or that it is "a correspondence institution" or "an institution for correspondence students.

It is further ordered That the 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 the order to cease and desist. Commissioners Howrey and Gwynne not participating. OPINION OF THE COJlLMJSSTON With respect to all charges of the complaint save and except those challenging the respondent school's designation of itself in its pro' motional material as a college, the initial decision sustains respondents' contention that the Commission s decision of April 7, 1948, ib the matter of Blackstone Oollege of Law, Inc., et al. Docket No. 4929 is res judicata as to the issues presented thereunder and bars consideration of them on their merits here. Counsel for respondents did not fie notice of intention to appeal and a11 of the specific exceptions Opinion 50 F. T. C.

interposed under the appeal, as filed by counsel supporting the complaint and now before us for consideration, challenge the rulings which sustain this defense to the extent noted and which provide accordingly for closing the proceeding without prejudice in respect to the charges as relevant.

The complaint in the instant proceeding alleges that, through statements contained in their advertising including the statement that the degree of Bachelor of Laws is conferred by the respondent correspondence school, respondents represent, among other things, that their enterprise is a recognized and standard law school whose courses are comparable to those used in recognized and accredited schools and that students completing the courses and obtaining its degrees are thereby qualified and eligible to be admitted to the bar examinations of the respective states. The complaint in the earlier proceeding challenged, among other things, respondents' advertising of a so-called Emergency Graduation Plan" under which this same correspondence school was offering for a stated price to confer its LL. B. degrees upon former students who had abandoned their studies. The earlier proceeding was inst.ituted on March 15, 1943, many of the practices of respondents to which it related were inspired by the fact that World vear II was in pJ'ogress, and the advertising there considered offered respondent.s' diplomas as important evidence of qualificat.ions which would assist in securing commissions in the armed services. One of t.he provisions of the order to cease and d2sist issuing in the earlier proceeding proscribed the conferring of degrees by respondent.s unless the recipients in fact completed a regularly prescribed course under competent supervision. Should the instant proceeding culminate in issuance of an order absolutely prohibiting respondents from issuing their degrees to students complet.ing their courses of home study through correspondence, the initial decision states, respondents would t.hen be amenable t.o two contradictory orders respecting the granting of their degrees. Such decision thereupon concludes that an identity of subject matter and issues is in fact presented in the two proceedings.

In its findings in the earlier proceeding, the Commission stated that at the very least the conferring of a degree implied that the recipient has seriously pursued and completed a prescribed course of instruction under competent supervision and that the granting thereof constitutes a representation that they arc recognized in the educational field. The Commission found additionally that the school's so-called emergency plan was unfair both to holders of bona fide degrees and to recipients of respondents' degrees and that such program constituted BLACKSTONE COLLEGE OF LAW , INC. , ET AL. 1081 1070 Opinion an imposition and fraud upon the public and our nation s educational system. Presented for consideration there was a situation where respondents' outright sale of purported aeadem5c degrees resulted unfairness and one wherein the deception involved related primarily to the general public and only incidentally to purchasers. Additional charges of the earlier proceeding likewise pertained to alleged m5sleading comp 1risons of respondents' courses with others and allc"ged misrepresentations respecting the school's standing as a law school. These and the pertinent findings as subsequently issued by the Commission were directed, however, not to respondents' offers of their degrees but to affrmative statements appearing in the advertising instead, one of which was to the effect that the instruction method used by Blackstone was the one used in all schools to which "Class A" approval had been aceorded by the American Association of Law Schools. Patently, none of the advertising statements and represent.ations in issue under the earlier proceeding relat.ed directly to degree 1101ders' eligibility to participate in bar examinat.ions. The sharp differences between the issues present.eel for consideration then and now are apparent. and the view adopted below that identity.y of subject to us, appears whollymatter and issues obtains in t.he two cases, unt.enable.

It is obvious to us also that j he decision below was based on an erroneous premise and view that. the instant proceeding looked to prohibiting absolutely respondents' offers to confer degrees in connect.ion with future distribution of their courses in interstate.e commerce. Unlike the paragraph of the proyisionary order appended to the complaint in reference to the worel "college" which proposed, in the event. of a default in fiing of answers, t.o forbid respondents absolut.ely from using" t.hat word, the corresponding prohibition in reference to the offers to eon fer degrees proposed instead that respondent.s crase through the device of such offers from making tlle represent.ations which were alleged under' the comphint to be inherent in, and ot.herwise connected wit.h, sneh offers. Under this latter provisi(JI , an intention was manifest not to preclude respondents from advertising that they conferred degrees if the promotional material additionally revealed and disclosed material facts relevant to their limitations and significanee inelnding 1he circumstance that recipients whose education and legal training were limited to pursuit. of nspondents' courses of home study, would not be admitted to bar examinations except in a very few of t.he stat.es.

Having concluded that the decision below was based on the erroneous conclusion that an identity of subject matter and issues 1082 PEDERAL TRADE COMMISSION DECISIONS Opinion 50 F. T. C. obtains in the two proceedings, we accordingly sustain the relevant specific exceptions to the initial decision as they appear in the brief in support of the appeal, and the appeal of counsel supporting the complaint is being granted.

In the briefs, counsel for respondents and counsel supporting the complaint additionally submit their respective contentions as to the merits of certain of the issues presented. We have considered these contentions and our decision which is issuing separately contains a discussion of them, and no useful purpose would be served by its repetition here.

Commissioners Howrey and Gwynne did not participate in this case.

ASAI"LE ,;XTEKSIOl\ UNIVERSITY 1083 Decision IN THE MATl LASALLE EXTENSION UNIVERSITY DEcIBION AND OPINION IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT , June, 1951, Docket 5907. Complaint, July 1951-Decision Where a (:orporatioll engaged in the sale of courses of study and instructi011 in law and other subjects by ear respondence through the mails; In advertising its courses in legal traiuing throllgh newspapers and magazines of national circlllation in which it was stated, in inviting requests for additional information, that students could train at hOlne during their spare time or at night, and that the degree of LL.B. was conferred by respondent "correspondence institution Represented that students completing its courses of study and qualifying for its degree of Bachelor of Laws were eligible from the standpoint of education and legal training for admission to the bar examinations of the respective States, through such statements in the 48-page booklet entitled "LAW TRAINING for LEADERSHIP" Hud in the booklet "Evidence, furnishcd to all prospective students, as "Preparations for Bar Examinations Degree of LL. B. Conferrcd" , and the inelusion ill the latter bookiet of a list containing the names of more than 1,500 former students located in 47 of the States and elsewhere as "* * . members who have been admitted to the bar" followed by the words "THE KAMES IN ' HIS LIST-which is far from complete-are not confined to lawyers known to be practicing now although a great many of them are. We have purposely reached back through the years to show how completely-and for how long-Lasalle Law training has demonstrated its thoroughness in preparing eandidates for the bar.

The facts being that while minimal requirements for admission to examinations vary among the States, those imposed by the vast majority of the jurisdietions follow a pattern definitely excluding applicants whose legal training had been secured solely through home study, or whose edueation or legal training are limited to completion of respondent's course, and in only a very few States, wherein no provision obtains expressly exclllding sllch form of training, might recipients of respondent's degrees who were educated or trained as ahove indicated be allowed to partielpate in bar examinations: Held That such misrepresentations were to the prejudice and injury of the public and constituted unfair and deceptive acts and practices in commerce. Before 11 r. W iZliam L. Pack hearing examiner. 11 r. William L. Pencke for the Commission. Staehlin J antorni of Chicago, Ill., for respondent. DECISION OF THE COMMISSION AND ORDER TO FILE HEPORT OF COMPLIANCE Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission on July 18 , 1951, issued and subsequently served its complaint in this proceeding upon the respondent ( :

1084 FEDERAL TRADE COMMISSION ImCISlONS :E' ilj(lil1g. 50 :B T. C. named above, charging it with the use of unfair and deceptive acts and practices in commerce in violation of the provisions 01 that Act. After the filing of respondent's answer, hearings were held before a hearing examiner of the Commission, duly designated to act in this introduced andrroceeding, and testirn011Y allll ot1,('1' e\'i(lencc were duly recorded and med in the offce of the Commission. On April 4 1952, the hearing examiner fied his initial decision containing provision :for dismissal of the complaint and, within the period of time ion s Hules of Practice, counsel supportingVCl'mitted by the Conllni:, the complaint appealed from that initial decision. This matter came on for final hearing upon the entire record, including the briefs filed in support of and in opposition to such appeal and the oral arguments of counsel. The Commission, for the reasons stated in the opinion which is separately issuing herein, having determined that such appeal should be granted in part and denied in part hereby grants the appeal of counsel supporting the complaint to the extent noted in that opinion but otherwise denies such appeal; and being of the opinion that this proceeding is in the interest of the public the Commission hereby issues its findings as to the facts, conclusion and order, the same to be in lieu of the initial decision of the hearing 'examiner.

YJNDINGS AS TO TOE FACT"

Organized as a corporation 111cler the laws of thc State of Illinois respondent Lasalle Bxtension Uniyersity has its olice Hnd princjpal place of business at 417 Scmth Ika)'bcrn St)'eet, Chicago, Illinois. The corporation is engaged in th1' operation of a coJTeSpOndPllCl; school selling courses of stllly and inst)'action in law and other subject.s \vhjeh (ll' (l by coj'' .;p(rnd2JH' (\ nl1' ollg' )l the lJH-) Jill1rl t:: Plll'Slj(' United States mails. During all t11c periods to \\ 11ieh thi proceeding reJates, a. substantinJ course of tJ'a,le in rp'Tmlclent's eOllrsp ofiust.!'lletion in law has been maintained by i1 ill COmmeJTe. between nnd 8Jn()11 the various States of t.he rnited States nnd in the Di,'lTict of Coln11bi, In order to secure inquiJ'ies horn prospectivp pm'cl1asC'J's, tlw C'011!'S"S in legal training have been adverti,;ed in newCipapm's and rnagH7:ines haviJlg Jlational eirculatioJl. These advertisements, in inyitin,": requests -for a.additional information, state ilmt stlHJcnts enrolling in such courses can train at hOln8 during their spare time or at nigh! and that the degree of LL. B. is confeJ'recl by Lasalle Bxtension University which is there designated as a correspondence institutimL Prospects responding to the advertisements fire contneted by respondent' s salesmen or through the maiJ and Hre furnished with broch tires deseriptiye of the school Hnd the course and the opportunities ,m() : , .

LASALLE EXTENSION UNIVERSITY lU('J 1083 Pimlings s legal training.advantages stenllTIing from completion oJ respondent' At the outset of this 48-page booklet, which is entitled "Law Train ing For Leadership," the following appears in large type: LAW THAINING for LEADEHSnIl' An analysis of the opportunities open to the law-trained man-ana. a descri ption of AMEHICAN LAW AND PHOmmUHE the Lasalle legal training fol' executive business positions and preparation for bar exan1inatiolls Degree of LL. B. conferred In the booklet entitled "Evidence " which likewise is furnished tl all prospective students, the following appe,us, among other statements, in reference to a list containing the names of more than 1500 former students located in 't7 of the States and elsewhere, including American territories and possessions:

LASALLE MEl\BEHS WHO HAVI BEEN ADMITTED TO TIm BAR 'l' HE NAMES IN THIS LIST---which is far from eompicte--are not confined 11 0 '.Y , altl1oug;h a gl':at many of them are.to lawyers known to ue vracticing vVe have purpose1,' reached back through tile years to show how complcteiyand for how long--- LaSDlle La,,, training 1m8 denlODt;trated its thoroughness in preparing candidatrs for tlh: bnl Through use oj' the foregoing statements and representations and others of similar import, respondent represents tlmt students completing its courses of study and QIH1lifying for its degree of H:lchelor of Laws are eligible from the stflldpoint of education and leg:Ll training to be admitted to the bar examinations of the respectiye States. Respondent' s representation that such students are thereby eligible or enabled to p:utieipate in the. bar exnmirmtions of the respective States are false, misleading :md deceptive. A high school education fulfills the entrance reqlliremenis im posed by respondent for students who are candidates for' its degrees. No residence instruction in law is affordecl by ilw school. In 2+ States of the United St:ltes, however. admission to examinations for the pmetice of law is limited to t.hos( whose legal studies have been pursued ill whole or in part in : esident law school. III 20 of the remaillillg States where an alterml jjye to resident school training alld attend:l1c.e is open to stndent! study :md tminingin a hn\ oilice is permitted. This met.hod is jraditio l in thl' legal p1'off'ssiOJ) ,\1)(1 cOJltemplates study under' tJ EDERAL TRADE COMMISSION DECISIONS Findings 50 F. T. C.

supervision of a practicing member of the bar of the State where the student aspires to practice to the end that his training be secured in the atmosphere of its courts and the law offce. Illustrative of the requirements imposed in instances by the States with respect to students' law offce studies are those prevailing in Illinois, the State where respondent is incorporated and has its principal place of business. In order to be eligible for its bar, completion of high school and two ymlIS of co1Jege is required. Prescribed there when the applicant' s legal training is to be secured through other than resident school instruction, is four years' study while engaged during usual business hours as a law clerk in the offce and under the personal supervision of a licensed attorney there engaged in active practice during which time the applicant must pass monthly oral or written examinations on each subject given by the attorney. Annual examinations may be given by the Board of Examiners. Correspondence study though not in any sense forbidden to students in that State, must be pursued likewise under these conditions in tlw offce and under the tuition of an attorney of that State. Students whose education and legal training are limited solely to respondent' home study courses would not be permitted to participate in the bar examinations of any of the 44 foregoing States. As of 1950, the four remaining states did not require that bar candidates' studies be pursued in a resident Jaw school or Jaw offce. 1\fontana, however, required that applicants have two years of college or its equivalent prior to beginning of legal studies. At such time, however, no specific requirements as to education or legal training appear to have been imposed by Georgia as a condition to taking its bar examination, and Mississippi Jikewise imposed none as to legal training or respecting an aspirant's educational status prior to the beginning of his legal studies although a high school education has been a prerequisite to taking the final examination. California although requiring two years' pre-legal study of applicants under 25 waives this for those who are over 25 years of age at the time they begin the study of law, and that State requires applicants training mtside of accredited law schools to register when their legal studies Ire begun. It acconlingly wil bt) observed that while the minimal equirements for admission to examinations vary among the states hose imposed by the vast majority of the jurisdictions follow a patom definitely excluding applicants whose legal training has been ,cured solely through home study or whose education or legal train- 19 is limited to completion of respondents' course. In only a very ,w states wherein no provision obtains expressly excluding this form , training, Jnay recipients of respondents' degrees who are educated LASALLE EXTEXSION UNIVERSITY 1087 1083 Order or trained as above indicated, therefore, be allowed to participate in bar examinations. That respondent's representations respecting the eligibility of its students and recipients of its degrees to participate in bar examinations of the respl,ctive states are false is clearly demonstrated by the record.

CONCLUSION On the basis of the facts above stated, the Commission has concluded that respondent has falsely represented that recipients of its purported academic degrees in law and students satisfactorily completing its eonrses 01' study tltrongh cOl'espondence will b( eligible and enabled through such training to participatl' in the lmr examinations 01' the respective states. As made in the circumstances here, the respondent' s misrepJ'esentations to prospective students manifestly have had the capacity and tendency to deceive members of the purchasing public into the erroneous and mistaken belief that such representations are true and to induce the purchase of a substantial numb2r of respondent' s courses of instruction in commerce. The Cmmnission accordingly concludes that respondent's misreprpsentations have been to the prejudice and injury of the public and then'fore constitute unfair and deceptive acts and praetieps in COlluneree within the intent and meaning of thp Fpderal Trade Commission Ad. ORDEIi It is ordered, That respondent, Lasalle Extension University, a corporation, and its ojlicers, agents, representatives and employees directly or through any corporate.e or other device, in connection with the oi!'ering for sale, sale and distribution in commerce, as "commerce is defined in the Federal Trade Commission Act, of courses of study and instruction, do forthwith cease and desist from representing, directly or by implication, that recipients of respondent' s purport.ed academic degrees in law or others satisfactorily completing respondent' s course of study through correspondence will be admitted to or are otherwise eligible to partieipat.e in bar examinations, unless such representations are expressly I imit.ed to t.hose states (specifically named) wherein t.he requirements -for education and legal training requisite to part.icipating in such examinations are fulfilled solely by completion of a course of legal study through correspondence. It is fu,rther ordered That the respondent shall, within sixty (60) days after service upon it of this order, fie with the Commission a report in writing setting forth in detail the manner and form in which it has complied with t.he order to cease and desist. 1088 FEDICRAL TRADE COJVMISSJON DI,CISIONS Opinion 50 F. '1'. C. Commissioners Howrey and Gwynne not participating for the reason that oral argument was hea,rd prior to their appointment to the Commission.

OPINION OF Tile COJ"LiilSSION The initial decision provided for dismissal of the complaint and this case came before us for consideration of the appeal filed by counsel supporting the complaint from such initial decision, the briefs in support of and in opposition to such appeal, and the oral arguments of counsel.

The initial decision in effect expresses views that the allegations of the complaint have not been sustained by the greater weight of the evidence and accordingly concludes that the respondent has not engaged in unfair and deceptive acts and practices in commerce as charged. The complaint, after making reference to certain statements, allegedly appearing in the advertising, which offer courses in law for spare-time home study and which state that the degree of LL. B. is conferred by respondent upon its students, charges in eHect that these and others of similar import falsely represent that the school is a recognized and standard law school, that its courses are comparable to those used in recognized and accredited law schools, and that students completing the courses and receiving the degrees which respondent bestows are qualified and eligible to be admitted to the bar examinations of the respectiye states.

We turn, first, to a consideration of the matters relating to the last of these three charges. Certain of the witnesses appearing in the proceeding expressed opinions to the effect that the degree of LL. 13 signifies a rank conferred by a college or university for work in residence and recognized by other institutions in its field and that its holder is eligible, when otherwise qualified as to age of residence, to sit for bar examinations. when alluding to this testimony, the initial decision states that even though such expert testimony is indicative that these concepts and understandings of the LL. B. degree represent the consensus of the legal profession, it is questionable nevertheless if the record establishes that such understanding and impressions likewise arc entertained by the general public. Counsel supporting the complaint contends in his appeal that the record here does adequately support inferences that respondent's advertising, including its offers to confer degrees, has been thus understood by the purchasing public.

As background to a consideration of these matters, the record here indicates that, among other things, an earned degree represents an LASALLE EXTENSION UNIVERSITY 1089 1083 Opinion academic rank conferred by colleges or universities in recognition of their respective scholars' attainments and that the professional degree of Bachelor of Laws has been awarded for many decades by resident Jaw schools. In an save a few states, in ordcr to be admitted to bar examinations at the outset, candidates must comply with t.he minimum requirement.s as to education and legal training imposed by the states' local regulations or statutes. The baccalaureate in law, when awarded by an accredited institution, is accepted by examining authorities of the states where their requirements prevail as satisfactory evidence of their completion academically by the applicant. Such applicants, accordingly, are eligible and enabled to participate in bar examinations, provided they fulfill other requisites not primarily related to education and training and pertaining instead to age, moral character, or other matters.

\V' e believe that the greater weight of evidence establishes that to members of the Jegal profession, including teachers and attorneys this degree symbolizes successful completion of a course of resident study in law whereby the holder of such degree has fulfilled the minimum requirements -for education and legfll training which ,viU enable him, if otherwise eligible, to participate in the bar examinations of the respective states. On the other Imnd, however, it. appears to us that. the evidence received int.o the J'eeord is inadequate for an informed det.termination as t.o whether the foregoing behefs as to the connotat.ion of the LL. B. degree and the impressions engendered incident. t.o an offer to bestow it, likewise are shared by members of the purchasing public to whom respondent' s advertising and offers of its courses have been directed. This conclusion notwithstanding, respondent' s invitations to enroll for its courst,s and become a candidatf\ for its degree have not occurred in a vacuum but are proffered instead against the background of affrmative statements offering this training as preparation for bar eXflminations flnd listings contained in its brochures of former students who are members of t.he bflr "to show how completely" respondent' s training demonstrate:; its thoroughnes in preparing candidates for t.he bar. In these circumstances, it can not be gainsflid that the record clearly establishes that respondent has represented that. its courses flnd the degrees bestowed by it wil fuHil the requirements for education and legal training requisite to participating in the bar examinations 01' the respediye states. To this extent only, therefore, the pertinent exceptions interposed to the initial decision by coum,('l supporting the complaint a, l'e sustained and his appeal in suc lJ part is being granted. Reverting now to the (wo charges mentioned jJ1'cviousJy, we hayc concluded, however, that the 1'('c01'1 does not suffice for an informed 40B4'J:: 57- - 1090 FEDERAL TRAm COMMISSION DECISIOKS Opinion GO Ii. P. determination as to whether respondel1t's offers of legal training leading to its degrees, within themselves or when considered in connection with the additional statements appearing in the advertising to which we referred, have constituted representations to purchasers, in the circumstances here, that the enterprise is a recognized and standard law school with courses comp:llable to those used in recognized and accredited resident scllOols. Further consideration of the additional allegations of the complaint relevant to these matters, therefore appears unwarranted, and the appeal, insofar as it challenges the provision of the initial decisioll for dismissal of these charges, is not b:'ing granted.

Brief reference should be made, however, in connection with the foregoing, to counsel's exceptions to certain statements in the initial decision to the effect that the conferring of a degree signifies only that the recipient has satisfactorily completed a regularly prescribed course of study under competent supervision and that a rule sounder and more reasonable than that contended for by counsel supporting the complaint was established by the Commission in an earlier decision involving another school, under which the advertising of offers of degrees in law for studies pursued solely through correspondence was not forbidden absolutely. Under our interpretation of these findings they represent conclusions to the effect that the offer of a legal degree by a correspondence school which is not accredited by other institutions meeting the requirements of and approved by the American Bar Association s Council of the Section of Legal Education and Admissions to the Bar should not be regarded as actionable as a fraud upon our educational system or as misleading to purchasers in the absence of additional evidence from which deception of students should be inferred. To such extent as the determinations made in the initial decision rest on that view, counsel's pertinent exceptions are wit.hout merit. To the extent, however, that the decision below may be construed as an expression t.hat the record supports an affrmative conclusion t.hat t.he public s understanding of an offer of a degree in connection wit.h legal instruction indeed is limited solely to satisfact.ory completion under compet.ent supervision of a regular course of correspondence study prescribed by the commercial enterprise vending the course and books used therefor, that determination would be erroneous and counsel's relevant exceptions would be regarded as well taken.

When it was found in t.he initial decision-albeit erroneously sothat none of the advertising material has represented or implied that respondent' s enrollees wil be enabled to participate in bar examinations. references also were made to certain advertising statements LASALLE EXTENSION UNIVERSITY 1091 108.'\ Opinion counseling students to consult with examining or court offcials as to rules applicable in their states and to a provision in the enrollment contract under which enrollees profess awareness that they must qualify under local rules where they will be candidates for examinations and under which respondent is released from contractual responsi bility for students' compliance with them. To the extent that this and other statements in the initial decision may imply that the advertising adequately discloses the limitations of respondent' s training in enabling students to participate in examinations, such conclu"ion is clearly erroneous. In a section of its catalog "Law Training for Leadership," respondent when adyising prospective students to inform themselves respecting the rules governing bar admissions in their states, offers upon request to furnish information in that regard, and a generally similar statement appears in t.he booklet "Evidence. In discussing pre-legal educat.ional requirement.s, the former additionally st.ates that they vary from high school t.o four years of college work and t.hat. requirements for legal t.training likewise vary from no specific requirement.s to three years in a resident school or four in an offce or night school. As t.o st.udy method, t.he brochure st.at.es also that a few states have no specific requirement.s and many specify resident. school solely but usually where the methods are specified more than one is mentioned including private study, study under the direction of a lawyer, clerkship, resident enrollment, or a combination of these. When it is considered that only in these states are students whose education and legal training consist solely of pursuit of respondent' s course of home study not foreclosed from examinat.ions the lack of candor which characterizes the statements in this category is manifest. Instead of revealing matters of relevant. fact, they essentially imply, at the very least, that respondent's training will enable aspirants otherwise qualified by reason of age, residence, and moral character t.o sit for examinat.ions in a large number of st.ates. ot to be ignored in this connection, moreover, is t.he circumstance Ihat a purpose is plainly evident. t.throughout. t.he aclYert.ising lit.erat.ure 10 creat.e impressions t.hat. respondent' s t.training fulfils st.ates' education and legal training requirements. To ilustrate, t.he catalog elsewhere st.at.es t.hat. instruction of "uni versit.y grade" is afforded. AIt hough resident. classes arb concluded in account.ing and other business subjects, this form 01' t.training is not afforded by respondent in its legal subjects. Statement.s appear in the advertising, however, to thb effect. that respondent's instruction Bxcels inasmuch as LaSal18 since 1916 bas been conducting a resident. school of the very highest grade. ,Yben designating t.hB "university.y-extension, home-st.udy, correspond- Bnce method of training" as new and progressive, t.he advert.ising as- Opinion 30 Ii' r. C.

serts that such training method is "Endorsed by University and GOY ernment Authorities." vVe accordingly conclude that the presence in the advertising of the limited disclosures noted in the initial decision has been wholly inadequate to dispel the deception necessarily engell dered by the false and misleading representations contained in the advertising insofar as they relate to student eligibiJjty to participate in bar examinations of the respective states. Obyiously material to persons urged in nation wide offers of courses of instruction to follow the IfnI' as a profession is accurate 1Iforrnation as to where or in what jurisdictions the method or form of training offered is acceptable toward fulfilling the goal which such advertising seeks to inspire. A provision insuring such disclosure in connection with any future oifers by respondent of its eOllrses likewise directed encouraging that aspiration is plainly warranted and necessary imd does not appear burdensome in the circumstances here. The order to cease and desist as contained in our decision which is separately issuing here accordingly pl'JYides that the respondent's future representatioIls to the eifect that its courses fulfill educational and legal training requisites for participftting in bar examinations be limited to those states wherein that is a fact.

In view of the conclusions expressed hereinbefore and the disposi Uons being made of the various charges, our discussion of matters :HlditionaJJy urged in support of and in opposition to the appeal, but uot controlling to those determinations is l1Twarranted. IV e :lc(:oid ingly are granting the appeal to the extent noted above b1lt it is other wise being denied.

Corumissioners Howrey and Gwynne did not participate for the reason thftt oral argument was he,ard prior to their appointment to the Commission.

\MEHICAN EXTENSION SCHOOL OF LAW 1093 Opinion IN THE MA TTEH OF .TOI-IN L. STRAUSS DOING BUSINESS AS AMERTCAK EXTENSIOX SCHOOL OF LA lJodcet 5982. Complaint, Oct. 1951-Decision and opinion, June 2.0 , n)S1, Ch(J.rgc: Falsely advertising correspondence school as a standard law school and graduates as eligible fcr bar examinations. Before 1J11. Abnl'r E. L.tpSC01nb. hearing examiner. I1r. R. T. Porter and Mr. William. L. Pencke for the Commission. Mayer 11 eyer' , A 7!str'iam Platt of Chicago, IJ1., for respondent. DECISION OF TIm CmVflTISSION HULING ox RESPONDENT S Appeal AND DrsilnssDIG CO:HPLAINT This matter came bdorc the Commission upon the appeal of respondent from the initial decision of the hearing examiner wherein it was held in efieet that the allegations of the complaint were sustained by the greater weight of the evidence. For the reasons stated in its accompanying opinion, the Commission is of tho view that the exceptions urged in support of the appeal as referred to in such opinion, should be sustained and that the findings '1nd order a.s contained in the initi,tl decision do not ha.ve adequate sllpport in the record.

It is ordered therefore That the appeal of the respondent be, and the s:ma, hereby is, granted as noted in the accomp:mying opinion. It is JUT/her ordered That tile complaint herein be, and it hereby is. dismissed.

ommission1' rs Howrey nnd Gwynne not participating for the reason that oral argument was he:lld prior to their appointment to the on11nlssion, OPINION OF THE cO",DIISSION r:nder the initi,\1 decision, tJJC allegations of the complaint, in efiect '\,ere, found to !wve been sustained by the greater weight of the evidence and this case comes before us for consideration of the respondent'" appea.l from that decision, the briefs in support of and in opposition to sllch appeal, and the ora.1 arguments of counsel. The, respondent, since November 1948, has engltged in the operation of a correspondence school. His courses of legal study and instrudion ate nn.tionally advertised ancl \"hen sold by him are pursued , no resident instruc-by student-Pllrelmsers through cOl'espondence tion being afIonled to students. The ultimate question presented for 1094 FEDERAL TRADE COMMISSION DECISIONii Opinion 50 F. T. C.

our determination under the record and appeal is whether the responrlent has engaged in unfair and deceptive acts and practices in connection with the sale and distribution of cQllinerce of such courses in the respects charged under the complaint as issued by the Commission and under which this proceeding was instituted. Typical of the advertisements used by the respondent in newspaper and magazine advertising and to which this proceeding in part relates is the following:

STUDY LAW at home! lnerease earnings and business abilty. Win advancement. LLB Degree. Text,. furnished. Easy Payments. Learn how law knowledge helps you to success. Write today for FREE book- Law and Executive Gnirance NOW. 40 years instruction to 114 000 students.

A:VIBHICAN EXTENSlOl\ SCHOOL OF LAW Dept. E- , 846 N. Miehigan Avenue Chicago 11, Illinois.

The complaint charges, in effect, that these statements falsely represent, by implication and otherwise, that the school is a recognized accredited and standard law school, that its courses are comparable to those used in recognized and accredited law schools, and that students who complete the courses and receive the degree of LL. B. are thereby qualified and eligible to be admitted to the bar examinatioll of the respective states. The initial decision expresses views that by means of the advertising noted, the respondent has implied that thc LL. B. degree as conferred by his school has value and significance equal to those conferred as symbols of scholastic achieyement by resident law schools which have been approved by accrediting agencies and that, inasmuch as the chief purpose for which legal studies are undertaken is to achieve admission to the bar, the offer by respondent to confer such degree must be cOlltrued to represent that recipients thereof will be admitted to bar examinations of the several states. It is undisputed that this school has not been accredited by either of the two agencies whose activities are national in scope and which engage in prescribing standards for resident law schools and withhold or extend their approval dependent on the chamcter of the school. the time this proceeding was instituted, students whose education and legal training consisted solely of respondent's instruction would be permitted to sit for bar examinations in only three of our states. In these circumstances therefore, if the findings of the initial decision to tho effect that respondent' s advertising implies that students wil blo admitted to bar examinations of the respective states is a correct find- AMERICAN EXTENSION SCHOOL OF LAW 1095 10D3 OpiJiinJl ing, it would follow that the J'presentation thus made by the school is false and that the respondent has engaged in unfair and deceptive acts and practices in commerce.

Testimony was received into till record tending to shm\', among other things, that to members of the leg tl profession the baccalaureate ill law symbolizes successful completion of a resiclent course of study enabling the bearer to sit for his bar exalninations. To members of this segment of the public, cOIlsiclerations lS to the manner in which a law course and any degree confen'ed in reeogni(lon of its eompletion would enable a eandidate to pnrticipate in bar examinations naturally would be 01' utmost importance. vVe do not believe, however, that this and the additional eyiclence received into the record afford adequate basis for an informed determination as to whether the foregoing beliefs ns to the connotation of the LL. B. degree and the impressions engendered under the respondent's offer to bestow it likewise are shared by members of the purchasing public to whom respondent' s advertising and of reis of its courses have been directed. In these circumstances, th(''efore, we are of the view that the conclusions of the initial decision, as refer'ed to above, do not h,we adequate support in the record and that they must be. rejected accordingly. Reverting now to the other charges, we have concluded that the record similarly does not suiTce for an informed determination as to whether respondent's offers of courses leading (0 his degree, within themselves, have constituted represelltations to prospec.iye students in the circumstances here that the cnt erpri:-e is a recogni;"ecl, accredited lJd standard law oc11001 with com'ses comp ll'able to those used in recognized and accredited resident schools. III the initial decjsion it was emphasized that the promotiollalliteratlll'e contains statements to the effect that the system employed by the student's instruct or has all advantages of the methods used in resident schools and that the school' method combining the tSC and text syst ems follows the standard one used in leading universities. Considering the setting in which these statements appear in the advertising, we do not sh l'e t 11C vim,- that an adequate showing has been made that the advertising in fact has the capacity and tendency to engender beliefs that the status of this correspondence enterprise is that of a recogni;"ed, accredited and standard law school and that it affords instruction in all respects comparable to such institutions. Not to be ignored when appraising these matters is the circumstance that the advertising essentially offers the training for the purpose of increasing e,earnings and business ability and winning advancement and that absent from the promotional literature is language holding ont the course expressly for training for the bar or as Opinion 50 P.

preparation for exanlinations on the part of those who would follow the law as a profession.

In accordingly granting the appeal here, we are sustaining appelplant' s exceptions to the various provisions of the order appearing in findings to the extent thatthe initial decision and to certain of its such exceptions are based on contentions that these matters are not supported by the greater weight of the evidence. Our order, which is separately issuing here, therefore, provides for dismissal of the complaint.

Commissioners I-Iowrey and Gwynne did not participate for the reason that oral argument was heard prior to their appointment to the Commission.

, , COHEN-KANIGER, INC., ET AL. 1097 Consent i'cttlement I N THE MATTER OF COIlEX-KANIGER, INC. ET AL.

CONSENT SETTLRi\ENT )1\ HEUAHD TO THE ALLEGED nOLATJON OF THE FEEHAL TRADE COJlJJ\rISSroN ACT AND THE WOOL PfWDT!CTS J"ABELINC! ACT J)cei8'i()n June, .1.954 Docket 6158. CornpfnJnt, Jan. .195 'l- Where two corporations and an individual who was president of both, engaged in the interstate sale and distribution of fabric's of which some \were wool- - (a) Falsely represented to their customers that their said fabrics could be labeled "100% Cashmere" and that they were "100% Cashmere" and falsely described the same as such orally, in correspondence, and on invoices; aud (h) In order to indllce the purchase of their said fabrics by manufacturers of garments for resale to retailers and distributors, furnished to such manufadm' ers labels for attachment thereto which falsely described said fab!'ics as "100% Imported Cashmere " ete., and "100% Pine Imported Cashmere, etc. ; and thereby placed in the hands of such Ilanufacturers means and instrumentalities hy which they might lnislead the purcbasing public. by representing said garments as composed entiJ'ely of the hair or fleece of the Cashmere goat:

Held That such acts and practicct:, under the circumstances set forth, were all to the prejudice and injury of the public and constituted unfair and decepti ve acts 2nd practices; and Where said eorporaUon and its said president., in connection ,vitll the introduetion into eommerec and the other for sale, etc. , of wool pro duets as defined in the 'Vool Products Large1ing Aet.- (a) Misbranded certain of said products in tllat. in\'oicNI as " 100% ('n,lmwrc they were not in fact c01npot:ed entirely of the IudI' 01' tiepce of Ow Cashmere goat but contained substantial quantities of fihers other than easlnnel'e; and (b) Misbranded certain of said products in that tiley were not stmnpcd, tagged or laheled as required by said Act and in the manner and form prescribed hy the Rules and Regulations promulgated thcrenmler : Held That such acts and practices, under the eln:1l111stances set forth, were in violation of the Wool Products Laheling Act ami the saw HlIIe8 and Regulations and constituted unfair and deeeptjye ne1.s nlld 1Jrartice commerce.

Before Mr. Abner E. Lipscomb hearing examiner. Mr. Charles F. Canavan for the Commission. Ducker Feldman of New York City, for respondents. CONSENT SETTLE::IENT 1 Pursuant to the provisions of the Federal Trade Commission Act and the 'Wool Products Labeling Act of 1939 the Federal Trade Commission, on ,January 21. 19;), issued and subsequpntly serypc1 its ) See footnote on following page.

indings 50 P. T. C.

complaint on the respondents named in the caption hereof, charging them with the use of unfair and deceptive acts and practices in violation of the provisions of said Acts.

The respondents, desiring that this proceeding be disposed of by consent "etUement procedure provided in Rule V of the Commission Rules of Practice, solely for the purposes of this proceeding, any review thereof, and the enforcement of the order eonsented to, and conditioned upon the Commission s acceptance of the eonsent settlement hereinafter set forth, and in lieu of answer to said complaint hereby:

1. Admit all the jnrisd ictional al1egntions set j'orth in the complaint. 2. Consent that the Commission may enter the matters hereinafter set forth as its findings as to the fads, conclusion, and order to cease and desist. It is understood that the said respondents, in consenting to the Commission s entry of said findings as to the fads, conclusion and order to cease ami desist, specifically refrain from admitting or denying that they have engagerl in any of the acts or praetiees stated therein to be in violation of Jaw.

3. Agree that this eon sent settlement may be set aside in whole or in part under the conditions and in the manner provided in Paragraph (f) of Ilule V of the Commission s Ilnles of Practice. The admitted jurisdictional facts, the statement of the acts and practices which the Commission lmd reason to believe were unlawful the conclusion based thereon, and the order to cease and desist, all of which the respondents consent may be entered herein in final disposition of this procp.ec1ing, am ns follows:

FINDINGS AS TO THE FACTS PAR,\GRAPH 1. Respondents, Cohen-Kaniger, Inc. and Lord Saxony Fabrics, Ltd., are corporations organized under and by virtue of the laws of the State of K ew York Respondent, Maxwell Kaniger, is the president of both respondent corporations. This individual fOJ'mnlates, direc:ts and controls the policies, acts and practices of the corporate respondent. The oficcs and principal place of business of all respondents are located at 257 Fourth A venue, N ew York, N. Y. PAR. 2. The respondents are now and for some time bst past have been engaged in the business of selling and distributing fabrics, some 1 The Commission s "Notice" announcing and promulgating the consent settlement as published herewith, follows:

The consent settlement tendere(l by the parties in this proceeding, n copy of which is served herewith, was accepted by the Commission on .1une 29, 1954 and ordered entered of record as the Commission s findings as to the facts, cOllclusion, and order in disposition of this proceeding.

The time for fiing report of comphance pursuant to the aforesaid order runs from the date of service hereof.

. COHEN-KANIGER, INC. , ET AL. 1099 1097 Pindings of which are wool products. The respondents cause said fabrics when sold, to be shipped and tmnsported from their place of business in New York, N. Y. to the purchasers thereof located in various other States of the United States. There is now and has been during all the times mentioned herein a course of trade in commerce by said respondents in said fabrics between and amOllF the various States of the United States and in the District of Columbia. PAR. 3. The respondents, in promoting the sale of some of their :fbrics in commerce, as aforesaid, have falsely represented to their customers by oral statements that their fabrics could be labeled "100% Cashmere " and that their said fabrics were " 100% Cashmere " and by 1.se of similar false representations, made orally, in correspondence and on invoices the respondents l1ave described their fabrics as "100% . as mere.

PAR. 4. In the course and conduct of their business as aforesaid and for the purpose of inducing the purchase of their said fabrics by manufacturers of garments for resale to retailers and other distributors, the respondents h,ne furnished to said manufacturers of garments, labels for attachment to s11id garments, reading in some cases '1S follows:

100% Imported Cashmere Collen Kaniger N. Y.

JOO% Fine Imported Cashmere Cohen-Ranigel' 1'. Y.

Said labels wpre for attachment to g'lIments made by said manufacturers of fabrics purcha.sed from the said respondents which were Hot made wholly of the hair or fleece of the Cashmere goat. The said representations as set out on said labels were blse and misleading. PAn. 15. Through the use of the labels ,tforesaid, and by furnishing garment nmnufactuJ'ers with such labels as above stated, the respondents have placed and are now placing in the hands of such manufacturers, means and instrumentalities by which such manufacturers may mislead and deceive the purchasing public, by representing that said garments arc composed entirely of the hair or fleece of the Cashmeregoat.PAR. 6. The nse by respondents of the representations herein set forth, in t.he course of selling and offering for sale their fabrics, in commerce, as above described, has the capacity and tendency to, and Conelusion 50 F. T. C.

does mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such representations were :md are true, and to induce the purchase of such fabrics on account of such beliefs induced as aforesaid. As a result thereof purchasers and tlle purchasing public have been misled and deceived. P AH. 7. The acts and practices of the respondents as set forth in Paragraphs 3, 4 , 5, and 6 hereof were all to the prejudice and injury of the public and constituted unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

P AH. 8. Subsequent to the efTeetive date of thc Wool Products Labeling Act of 1939, and more espeeiaIJy since 1951, respondents !lave introdueed into commerce, offered for sale, sold, transported distributed, and delivered for shipment, in commerce, as "Commerce is defined in the Wool Products Labeling Act of 1939, wool products as "wool products" are defined t11erein.

PAR. 9. Certain of said wool products were misbranded within the intent and meaning of Seetion 4 (a) (1) of the Wool Products Labeling Act of 193fJ and the Rules and Regulations thereunder, in that they were falsely or deceptively stamped, tagged, labeled, or otherwise identified, with respect to the character and amount of the constituent fibers contained therein, in this, that the inyoiees relating to the sale of the wool prochlcts showed the fiber content as " 100'(;. cashmere " whereas in truth and in fact, said wool products were not composed entirely of the hail' or Beece of the Cashmere goat, but contained substantial quantities of fibers other than cashmere. PAR 10. Certain of said wool products were misbranded in that. they were not stamped, tagged or labeled as required under the provisions of Section 4 (a) (2) of the 'Wool Products Labeling Act of 1939, and in the manner and form prescribed by the Rules and Regulations promulgated thereunder.

P AH. 11. The acts and practices of the respondents as set forth in Paragraphs 9 and 10 hereof were in violation of the "\Vool Products Labeling Act of 193fJ and the Rules and Hegulations promulgated thereunder, and constituted unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Tractp Commission Act.

Coxcl"GSION The acts and practices of respondents Cohen-Kaniger, Ine. , a eo)'poration, and Lord Saxony Fabrics, Ltd., a corporation, and Maxwerl Kaniger, individually, as hereinbefore found, were and are in violation of the ool Products Labeling Act of 1939, and the Rnles and COHEN-KANIGER, INC. , ET AL. 1101 1097 Order and constitute unfair and de-Hegulations promulgated thereunder, ceptive acts and practices in commerce, within the intent and meaning of the Federal Trade Commission Act.

ORDER TO CEASE AKD DESIST It is ordered That the respondents, C:ohen-Kaniger, Inc., a corporation and Lord Saxony Fabrics, Ltd., a corporation, and their offcers and Maxwell Kaniger, an individual, and respondents' respectiye agents, representatives and employees, directly or through any corporate or other device, in connection with the ofiering for sale, sale and distribution in commerce as "commerce" is defined in the Federal Trade Cominission Act of their fabrics do forthwith cease, and desist from:

(1) Misrepresenting in any way the constituent fiber or material used in their fabrics or the respective pe,rcentages thereof; (2) Using the term "100% cashmere" or the word "cashmere " to designate, describe or refer to products not composed entirely of the hair or fie,ece of the, Cashmere goat; provided, however, that nothing herein shall forbid respondents from using the, word aforesaid to refer to the cashmere, fi bel' in fabrics composed in p:ut of that fiber and ilj part of other fibers if, in immediate conjunction there,with whereyer the word "cashmere," is used, there appe,ar words truthfully and "onspicuously describing all constituent fibers therein contained. un Furnishing to or placing in the hands of others, :for use in designating the fiber content of respondents' fabrics or garments made therefrom, stamps, tags, or labels, by means of which said fabrics, or garments made therefrom, may be, falsely or deceptively stamped tagged, labeled or otherwise identified,d as to the character or amount of the constituent fibers t.here,on.

Ii /s further ordered Th:lt the respondent Cohen-Kaniger, Inc. , a corporation, and Lord Saxony Fabrics, Ltd., a corporation, and their oHicers, :Uld respondent, Maxwell Kaniger, individually, and respondents' respective, agents, represe,ntative,s and employees, directly or 111rough any corporate or other device, in connection with the introdm:Lion or manufacture for introduction into commerce, or the offering for sale, sale, transportation or distribution in commerce, as " ('om- );Hce" is defined in the Federal Trade Commission Act and the 'W 001 Jh' odncts Labeling Act of 1939, of fabrics or other " wool products" as SUd, products are defmed in and subject to the vVool Products Label- ;ng: Act of 19;)9, which products contain, purport to contain or in any 'yay are represented as containing "wool reprocessed wool" or reused wool" as those terms are defined in said Act, do :forthwith cease and desist from misbranding such products by: \, , ( \ . Order fJOjJ' r.". C. (1) Falsely or deceptively stamping, tagging, labeling, or otherwise identifying such products as to the character or amount of the constituent fibers included therein;

(2) Failing to securely affx to or place on each such product a stamp, tag, label, or other means of identification showing in a clear and conspicuous manner;

(a) The percentage of the total fiber weight of such wool product exclusive of ornamentatJoJonot exceeding five percentuHl of said total fiber weight, of (1) wool, (2) reprocessed wool, (3) reused wool (4) each fiber other than wool where said percentage by weight of such fiber is five percentum or more, and (5) the aggregate of all other: fibers;

(b) The maximuII percentage of the total weight of such wool product of any non-fibI'us loading, iiJing, or adulterating matter; (e) The name 01' the registered identification number of the manufacturer of such wool product or of one or IIore persons engaged in introducing such wool product into commerce, or in the oiIering for sale, sale, transportation, distrib11tion or delivery for shipment tlwreof in conunerce, as "commerce" is clefined in the IVool Pro(l11cts Labeling ;\ct of 1939.

PTo'uirlerl That the foregoing pJ'JIisions concerning misbnmding ,hall not be construed to prohibit acts permitted by p1tragTaphs (a) and (b) of Section 3 of the Wool Products Labeling Ad, of 1 );39; ,wd P/'()' IJidcrl fu.rther' That nothing contained in this order shan be construed as limiting any applicable plo\'isions of said "'let or the Rules and Regulations proHlulgated thereunder. I tis furtlwr OT'rleTed That the respundents herein shall, within sixty (60) days after service 11pon them of this order, file with the Commission a report in writing betting forth in c1etail the manner andf'orm ill \\which t hey have complied with the order to cease and desist. olwn-Knniger, Inc. and Lord Snxony Fabrics, Ltd..

corporations.

Cohcn-J(aniger, Inc.

(sgl1) \1ax\yell KaJligel"

Pre., Lord Saxony Fabrics Ltd.

,wd . 13\ ,\Iax\ycJ) KanigeL PI'"", :ibx\wlJ E.:lIig( \1ax\\ell Knniger. individudiy Date: Match 2\) , 19,')4.

The foregoing com;ent ,ettlenlent j" herd!)' accepted by the Feder" I Trade Commission HJll Piltered of recon1 on this 29t11 day of ,June 19Y1.

, , U,,ITIW PHOTOGRAPHY SEHYlCE , ETC. , ET AL. 1103 Syllabus IN TH MATTER OF UNITED PHOTOGRAPHY SERVICE, TRADING AS EDLYN STUDIOS; AND CHARLES .J. AKD HELEN M. FISCHER CONSENT SETTLEMENT IN HEGAHD TO THE ALLEGED VIOLATION OF TH FEDERAL TRADE cO:!fMISSION ACT , Jurw, ./954 Docket 6196. Cm1'plaint Mar. 1954-J)cei8'ioll Where a corporation and its two offeers, engaged in the sale and distribution of portraits through the solicitation, mostly, of door-to-door agents who exhibited sample portraits and a cOllpon or eertifieate- (a) Represented through the use of slleh printed coupons or certificates and through oral statements of their agents that they had offces in principal cities and operated the largest color studio in the west; The facts being that the)' never had offiecs in the principal cities; two branch offees formerly operated had been discontinued; the only offce or studio then operated by them was that located at their Hollywood address; and in the city of Los Angeles alone there were several color stlldios whose color equipment and volume of business exceeded those of respondents; (b) Falsely represented that their portraits were Kodachrome portraits ami were natural color portraits;

The facts being- that while Kodaehrome film was used, tile portraits were not printed on Kodachrome paper or proeessed with Kodachrome chemicals and, while colored in the sense that they were not a conventional black and white type, they did not portray the true color of the eyes acd complexion of the j1prson or persons photographed, and in all instances the portra its evinced a loss of brilianee and in many instances a transposition of colors; (c) Palsely represented that their finished portrait wOllld be equal in appearance, quality, and workmanship to sample portraits and proof slides exhihited to purchasers and prospective pllrchasers ; The tacts being that the portraits offered and sold by them were inferior t(l those which purchasers and prospective purehasers were led to believe they would receive as a reslllt of viewing the sample portraits and proof slides exhibited uy respondpnt ' agents; the jjlli h(-d Jjrints. in all installces, were far less brillant and colorflll than such samples aud slides and in many instances there was a loss of proper focus and distortion of features and color;

(d) Represented that purcl1users were guaranteed satisfactory portraits and that portraits ordered by customers would be c1eliyerecl within three weeks or within a reasonable period of time;

Tbe fac.ts being that many portraits delivered were unsatisfaetory; in most instances respondents did not honor their guarantee by replaeing such portraits with those satisfactory to the purchaser; and in many instances they did not deliver their product within slich a period of time, and in some instances purcbasers 'were forced to wait many weeks and even monihs for the delivery of portraits fully or partially paid for: 1104 FEDERAL TRADE COiYIMISSION DECISIONS Consent Settlement 50 P.

Held That such acts and practices, under the eireumstanees set forth, were all to the prejudice and injury of the pllbiie, and of their eompetitors and constituted unfair and deceptive acts and practices in eommeree and unfair methods of competition therein.

Before Mr. Abner E. Lipscomb hearing examiner. DrFwns for the Commission. 111". Edward F. 117'. Alfred O. Ac7cerson of Los Angeles, Calif., for respondents. consent SBTTLEMENT Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission, on March 18, HJ54, issued and subsequently served its complaint 011 the respondents naJIed in the caption hereof charging them with the use of unfair methods of competition tices in violation of theand unfair and deceptive acts and pra( provisions of said Act.

The respondents, desiring treat this proceeding be disposed of by the consent settlement procedure provided in Hule V of the Commission s Hules of Practice, solely for the purposes of this proceeding, any review thereof, and the enforcement of the order consented to and conditional upon the Commission s acceptance of the consent settlement hereinafter set forth, and in lieu of the answer to said complaint heretofore filed and which, upon acceptance by the Commission of this settlement, is to be withdrawn from the record, hereby: in the 1. Admit all the jurisdictional allegations set forth complaint.

2. Consent that the Commission may ent.er the matters hereinaft.er set forth as its findings as to the -facts, conclusion, and order to cease 1 The Commission s "Notice of Accevtnnce of Consent Settlement and Order to File Report of Compliance" follo,ys :

The con ent settlp.mf'nt tendered by the 1)11'ties in this Vl'oceedillg. a copy of whicl1 if; served herewith, "\vas on .1 une 29 , lD54 , accepted by the Commission, subiect only to the condition that the respondents camrdy ,vitll the requirements of t11e following paragraph \vitll respect to the filing of a report sho\ving the m:mnpl' :11H1 form in which the:\' IHlYC complied \'with nil' onler to cease allll tlcsist; und subje ct to suell COlHlitioll said COll:-ellt ::dtleuwllt was onlel'cu pntcrr.c1 of record f1S the Comlli sion s findingt; aR to tlJC facts, conclusion, and oruel' jn dh;position of this proceeding. It is uuuoHlinfllv ()rdcretl TJJat the respoIJlcnts, U1listed Photog-rapll)" Service, ,1 corporation, tla(ling unller the n,1me Edlyn Studios, and Charles .T. Fischel' and Helen 1\1. Fischer, individually (lnd :Ui oflkers of saiel corporation, ::lwll within sixty ((;0) (h1 after service upon tl1Cl1 of tllis noticp awl arch:J' . fil( \with the Commission n report in \writing setting forth in detail t11e )1nnner and form in wldeh they have complied with t11e or(l1Or to ccasp and desist ('()Jli:aiupel in the cnn"itJ Jll Sl'ttJf, lJent enter d herein. UNITED PHOTOGRAPHY SERVICE. ETC. , ET AL. n05 110:\ Consent Settement and desist. It is understood that the respondents, in consenting to the Commission s entry of said findings as to the :facts, conclusion, and order to cease and desist, specifically refrain from admitting or denying that they have engaged in any of the acts or practices stated therein to be in violation of law.

8. Agree t.hat t.his consent settlement. may be set. aside in whole or in part under the conditions and in t.he manner provided in paragraph (f) of Rule V of the Commission s Rules of Practice. The admitted jurisdictional facts, the st.atement of t.he acts and practices which the Commission had reason to believe were unlawful, the conclusion based t.hereon, and the order to cease and desist, ajj of which the respondents consent may be entered herein in final disposition of this proceeding, arc as follows:

PARAGRAPH 1. Respondent United Photography Service is a corporation organized and existing under and by virtue of the laws of the State of California, with its oflce and principal place of business located at 1514 orth Gftrdner Street, Hollywood, California. It trades and does business under the name of Edlyn Studios. Respondent.s Charles T. Fischer andlIelen M. Fischel' are president and vice-president, respectively, of the corporate resp"ndent. These indiyiduals formulate, direct tld control the policies, acts and practices of the corporate respondent. Their address is the smile as t.hat of the corporate.e respondent..

PAR. 2. Respondents are now and for several YdU'S last past have teen engaged in the sale and dist.ribution of portraits. In the course and conduct of their said business respondents caused their portraits when sold, to be transported from their place of business in the State of California to purchasers thereof located in various other States. They maintain, and at ajj times mentioned herein have maintained, a course of trade in said prollucts in commerce mnong and between the various States of the United St.ates. Their volume of trade in said commerce has been and is substantial.

PAR 3. At. all times mentioned herein respondents have been, and arc now, in direct and substant. tJ competition with other corporations firms and individuals engaged in the sale and distribution of portraits In commerce.

P AH. 4. In the course and conduct of their business as aforesaid and for the purpose of inducing the purchase of their portrait.s the re- IOiJ14:1 37 - ..,,.. . .

1'JCJ.1J.1:'. -:J. -1' "'.L..-' 'V,-...... liVU Consent Settlement 50 F.

spondents and their agents have engaged in the vanous acts and practices hereinafter set forth.

PAR. 5. Most of respondents' sales of portraits are effected by means of door to door solicitation. For this purpose they employ three types of agents, namely, coupon salesmen, photographers, and proof passers. Prospective purchasers are first contacted by a coupon salesman who whichexhibits to thereadsprospect samplein partportmitsasandfollows:a coupon or certificate TI-l:: CEHTIFICATE WILL ENTITLg HOLDlen TO RleCElVE ON1', BEAUTH' UL iJ x 7 NATliHAL COLOR PORTRAIT $2. Edlyn s of Hollywood $2. Pay this amount Lnrge Color Studio All extra charge of soft to advertising in tile 'Vest for each additional per- :i.gpnt son in the portrait. Offces in Principal Cities SA'I' ISPAC'I' lon Gl:ARANTEED If the coupon salesman sllcceeds in seJIing the prospect a coupon he generally coJJects the charge of $2.00 pins ijo\ OJ' each additional person to be incl uded in the portrait. ThereaJtcr the customer is contacted by a photogrflpher Ilho take" a nllllbe,' of diij'parent poses of the subject OJ' subjects phoiogmplwd. AJter the exposed iim 1m" been processed into proof sJicles, the bul,r are turned over to a proof passer who exh ibits them to the customer for selection. At this time the proof passer attempts to flnd often does jnduce the cllstomer to place an order 1'01 additional portraits.

PAn. G. By and through the use of the ilforesaid printed cOllpon 01' certificate and by and tlll'ongh oral statements made by their agents respondents Imy( epresented, either directly or by implication: 1. That they have offces in principal cities; 2. That they operate the largest color studio in the west; 3. That their portraits are Kodachrome portraits; 4. That their portnlits are natural color portmits; ;,. That their linished portraits will be equal in appearance, quality and workmanship to sample portraits and proof sJicles exhibited to purchasers and prospective purchasers;

6. '111:11, purchasers are guaranteed satisfac:tory portraits; 7. That portraits ordered by customers ,,-ilj be delivered within 1three ,,-eeks 01' within a renscJlable period of time. AH. 7. The aforesaid representations and implications are false decep1ive and misleading. In truth and in fnet: UNITED PHOTOGRAPHY SERVICE , Efe. , ET AL. 1107 1103 Consent Settement 1. Respondents do not now and never have had ofices in principal cities. They formerly had two branch studios, one in San Diego theseCalifornia, and the other in Portland, Oregon. However, branch studios or offces were discontinued in September, 1952. The only offce or studio presently operated by respondents is that located at the Hollywood address hereinabove set forth. 2. Respondents do not now and never have operated the largest color studio in the west. In the City of Los Angeles alone there are several color studios whose studio quipmeJ1t and volume of business exceed those of respondents.

3. The pictures offered for sale and sold by respondents are not Kodachrome portraits for the reason that while Kodachrome film is used they are not printed 011 Kodachrome paper or processed with Kodachrome chemicals.

4. The portraits oiJered for saJe and sold by respondents are not natural color portraits. Although the portraits are colorell in the sense that they are not the conventional black and white type, they do not portray the true color 01' the eyes wd complexion of the person or persons photographed. In all instances the portraits evince a loss nmuy instances l tnllsposition oj' colors. Forof brilliance and in example, a pink dress may appear white in the iinished print. 5. The portraits oJIered for sllle and sold by respondents are inferior to those which purchasers and prospectiye purchasers arc led to believe they will receiye as II result of viewing the sample portraits and proof slides exhibilcd by agents of the respondent.s. In all instances the finished prints are far less brilliant and colorful than the samples and slides viewell by pun:lmsero all!, in nwny instances, there is llloss of proper focusing and II distortion of features and colors. 0. Many of the portmits delivered to customers arc u.llsRtisfactory. In most such instances l' espondconts Llo not hOllOI' their guamntee by replReing unsatisfadory pUl'jraits with portrait satisfactory to the purch laser.

7. Inl1any instances respondents do not deliver their said products to purehasers thereof within three weeks or within a reasonable period of time. In some instances purchasers arc Joreed to wait many weeks or even months 1'01' delivery of portraits fully or partially paid Jor. PAR 8. The use by the respondents of the foregoing false, deceptive and misleading statements, representations and implications has the tendency Rnd capaeity to mislead and deceive a Subst lltial portion of the purc:msing public into the erroneous ami mistaken belief that such statements, representations and implications arc true and induce the purchasing puulie to purchase substantial quantities of respondents' prod nets as the result of such el'oneous and mist.taken Order f,)Olf' T. C. belief. As a consequence thereof substantial trade in commerce has been unfairly diverted to respondents from their competitors and substantial injury has been done to competition in commerce. CONCLUSION The aforesaid acts and practices of respondents, as herein found are all to the prejudice and injury of the public and of respondents competitors and constitute unfair and deceptive acts and practices and unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act. milEH TO CI':ASE AND DESIST It is ordel'cd That respondent United Photography Service, a corporation, trading under the name of Edlyn Studios, or under any other name, and its offcers, and respondents Charles T. Fischer and Helen 1\1. Fischel' , individually and as offcers of said corporation and said respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale Ol' distribution of portraits in commerce, as commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

(1) Representing, directly OJ' by implication: (a) That they have oflces in principal cities, 01' that they have more offces than t.hey in fact have.

(b) That. they operate the largest color studio in the west, or that their studio is any larger than it is in fact. (c) That any portrait not made with Kodachrome film and paint.ed on Kodachrome paper with Kodachrome chemicals is a Kodachrome portrait.

(d) That. their portraits are natural color portraits. (e) That their finished portraits will be equal in appearance quality or workmanship to sample portraits and proof slides exhibited to purdmsers and prospective purchasers, when such is not the fact. (f) That satisfaction is guaranteed unless purchasers receive satisfactory portraits.

UNITED PHOTOGRAPHY SERVICE TC, .L- 1103 Order (2) Misrepresenting the t.ime within which their finished portraits win be delivered to purchasers.

United Photography Service By (Sgd) Charles .J. Fischer CHAHLES ,J. Flsclnm President.

Edlyn Studios By (Sgd) Charles .r. Fischer CHARLES .J. FISCHER (Sgd) Charles J. Fischer CHARLES J. FISCHEl:

(Sgd) Helen M. Fischel' HELEN M. FIScHEH May 17, 1954.

The foregoing eonsent settlement. is hereby accepted by the Federal Trade Commission and ordered entered of record on this 29th day of June, 1954, subject only to the condition t.hat t.he respondent.s shall wit.hin sixty (60) days after service upon them of a copy of t.his consent. settlement., file wit.h the Commission a report. in writ.ing setting forth in detail the manner and form in which they have complied wit.h the order to cease and desist. cont.ained in said consent settlement. &\ FEDERAL TRADE COMMISSION ' DECISIONS Order 50 F. T.