Malcolm E. Smith, Jr.

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IN THE J\iatter OF :\IALCOLJ\ E. SMITH , ET AL.

DOING BUSINESS AS LOAMIUM CO:IP ANY OF AMERICA COXtiENT ORDER , ETC. , IX REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COl\IMISSIOX ACT Docket 6130. Oo)/ plaint, Oct, 27, 1953-Decision, Nov. , 1954 Consent order requiring a partnership in Harrison, K J., to stop claiming that their chemical products "Kern-Kut" would produce an even lawn, make lawn mowing unnecessary, make grass greener, thicker, and more luxurious \vas safe, and would not adversely affect the appearance of a la\vn. Before 311'. Abner E. Lipscomb hearing examiner. 311' . Terral A. Jordan for the Commission. 11'1. Harry T. Davimos of ewark, N. . , for respondents. COMl'LAINT Pursuant to the provisions of the Federal Trade Commission Act and hy virtue of the authority vested in it hy said Act, the Federal Trade Commission, having reason to believe that l\Ialcolm E. Smith Jr., Casper Pinsker, Jr., and Richard H. Davimos, individuals and copartners doing business as Loamiul1 Company of America, hereinafter referred to as responde,nts, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof ,\yould be in the public interest, hen by issues its complaint, stating its charges in that respect as :follows: PARAGRAPH 1. Respondents Malcolm E. Smith, Jr., Casper Pinsker Tr. and Richard H. Davimos are individuals and copartners doing business as Loamium Company of America, with their office and principal place of business located at. 2 Kingsland Avenue, I-Iarrison New.Jersey.

PAR. 2. Since February 1933, respondents hayc been engaged selling a product designated ICem-Kut and chemiea1Jy known as maleic hydrazide, a preparation represented as effective in controlling the growth of lawn grass. Respondents' cause said product, when sold 10 be transported from their place of business ill the State of New J ersey to purchasers thereof located in various other States of the Tlnited States and in the District of Columhia. Respondents maina substantialtAin, and at all times mentioned herein have maintained, . :! 484 FEDERAL TRADE COMMISSIO DECISIONS Complain t 51 F. T. C. course of trade in their said product in commerce as "co11merce defined in the Federal Trade Commission Act. PAR. 3. In the course and conduct of their business as aforesaid and for the purpose of inducing the purchase of Kem-Kut, respondents have made numerous statements and representations concerning their said product by means of advertisements caused to be published in newspapers having a large circulation outside the State of New Jersey and by means of c.il'culars disseminated among ret.ail outlets, Among and typical of sllch statements and representations, but not all inclusive thereof, afe the following:

NOW! TRIM YOUR LAWN JUST O;\CE A YEAR WITH ;\OTHING BUT A 'YA'lERIXG CAX REVOLCTIO:\TARY KEW " KE;\l-KUl'" SAFELY SLOWS GRASS GROWTH, NO MOItE BACKACHES! .ICST SPRINKLE OK! AT LAs e! U. s. HUEBER COMPA:\Y DEVELOPS AJIAZIXG CHE:\I- ICAL THAT "CVTS" GRASS CHEMICALLY! KEEPS GItASS FROM GUUWING TALLER! MAKES 1'1' THICKEH, GREE:\TER! It' s amazing, yet it' s true! :Modern Science now makes it possible for you to trim your lmvn with a watering can! Just imagine! :L o more hard work! No more backaches! Xo more sweating under 11 hot Summer Sun *" * '" thanks to a new miracle chemical! This Spring' and Summer while your neighbors are huffng and puffng cutting their grass, shnply dissol,e an amazing new chemical in a watering can saunter around yum lawn edges sprinkling as yuu go * * *" and presto: YOl1" grass is "cut" hat' s more, it will stay "cut" al! Summer IODg! Yun do this simple easy thing once early in the season * '" * and ;YOUI' grass trimming is finished for the whole Summer.

BUT that' s not all. )iot only 'vil your grass KOT grow taller * '" * it wil he greener, thicker, more luxuriuus! The amazing new chemical that makes tllis labor saving dream come true is ('alled KEl\- KUT with U. S. Hubber Cumpany s patented growth inhibitor: )ofaeIic Hydrazide. This remarkable product is the result of years of painstaking research and experimen ting. It has been tested" * " and proven safe for finest lawns! It does not adversely affect grass roots. It does not harm the soil! But ,vhat a miraculous time, work and ilone,\ saver it is! Imagine 1 If the grass around your house grows so fast you have to cut it 17 times a year simply sprinkle on KE:\l-KCT with U. S. Rubher Company s disco,ery illH--0. As it touches the grass KE:Y!-KUT is absorbed into each grass blade, and slmvs down the formation of new cells inside each b1a(1e: Your grass acts as though it were already full-grown! Ke\v cells do not form on top of present cells to add additional height! Grass treated this \', ay does not have to be cut again aU season long J "That' s more, since your grass remains about the same height, your grassbecomes thicker * " * it becomes greener " * * it looks richer, heavier, more luxurious.

Yes, modern science has found a new ',-vay to save you time and money. ::0 more bending aud stooping to cut hard to reach grass around trees, stones fence posts and hedges! No more backaches and blisters cutting grass around LOAMIUM CO. OF AMERICA 485 483 Complaint paths, drive\vays, borders, shrubs and flower plots! No more sweating and straining cutting grass over and over again around your house! .And no more spending four or five dollars every week having someone do these necessary jobs! Instead you simply dissolve some miracle KEM-KUT in a watering can and sprinkle on! And you do this ONCE ONLY! Your REM-KUT treated grass wil be neat and trim al1 Summer long. You ll have a perfect edge around rour driveway and paths. You ll have short, neat grass edges around every tree every bush, every flower plot, every fence post. You ll have the neatest, trimmest, most even lawn in your neighborhood. And your grass will be greener, thicker more luxurious than ever before! PAR. 4. By and through the use of the foregoing statements and representations and others of similar import, hut not specifically set out herein, respondents have represented, directly and implication:

(1) That Kem-Kut retards the growth of lawns; (2) That Kem-Kut produces an even lawn;

(3) That Kem-Kut makes lawn mowing unnecessary; (4) That Kem-Kut makes grass greener, thicker and more luxurious;

(5) That Kem-Kut is safe and when applied to a lawn will not adversely affect the appearance of the lawn. PAR. 5. The aforesaid representations are false, misleading and deceptive. In truth aud in fact, respondents' product Kem-Kut win not retard the growth of lawns. ,Vhile it may s10w or retard the growth or some specie.s of lawn grass, it accelerates rather than retards the growth or crab grass and some other plant species round in lawns. Its use will not, therefore produce an even lawn or make it unnecessary to mow the lawn. Respondents' product wi1 not make grass greener. ,Vhen applied in suffcient quantities to be effective in retarding the growth or any species or lawn grass, it causes the grass to turn brown. The growth of new cells is necessary for grass to become thicker and more luxurious and since respondents' product inhibits the growth or new cells in existing plauts, it cannot cause grass to become thicker and more luxurious. It is not safe to apply Kem-Kut to a lawn for the reason that when applied in the prescribed quantities, it causes the grass to turn an undesirable brown color thereby adversely affecting the appearance of the lawn. PAR. 6. The use by respondents of the foregoing false and misleading statements and representations has had and now has the capacity and tendency to and does mislead and deceive a substantial portion of the purchasing public into the erroneous and mistakeu belief that said statements and representations are true and into the purchase of substantial quantities of said product because of such erroneous and mistaken belief.

486 FEDERAL TRADE CO),MISSION DECISIONS Decision 5I F. T. C. PAR. 7. The aforesaid acts and practices of respondents as herein alleged are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within (he intent and meaning of the Federal Trade Commission Act. DECISION 01' THE CO)DIISSION Pursuant to Rule XXllo! the Commission s R.ules of Practice and as set forth in the Commission s "Decision of the Commission and Order to File Report of Compliance, dated November 23 1954 the initial decision in the instant matter of hearing examiner Abner E. Lipscomb, as set out as follows, became on that date the decision of the Commission.

INITIAL DECISION BY AHNER E. LIPsco::m, HEARING EXAMINER The complaint in this proceeding charges the respondents with unfair and deceptive acts and practices in violation of the Federal Trade Commission Act, in the advertising of a prodnctdesignated as Kem-lcnt, and chemically known as maleic hydrazide. Specificandy, respondents are charged with misrepresenting that Kem-Kut ,will retard the growth of la wus; will prod uee an even la \\11 ; will make lawn-mmving unnecessary; will make grass greener, thicker and more luxurious; and that it is safe and wil not adversely affect the appearance of the lawn. At the initial hearing, the first of the above allegations, that ICem-Kut, when applied to lawns, will rctard the growth thereof, was abandoned on the record by counsel supporting the complaint as being contrary to fact.

On October 4, 1954, respondents entered into an agreement with counsel supporting the complaint, and, pursuant thereto, submitted to the hearing examiner a stipulation for a consent order disposing of all issues remaining in this proceeding. Hespondents are identified as individuals and copartners doing business as Loamium Company of America, located at 2 Kingsland Avenue, Harrison, Kew Jersey.

Respondents admit all the jurisdictional allegations set forth in the complaint, and stipulate that the record herein may be taken as if the Commission had made findings of jurisdictional facts accordance with such allegations. Respondents, in eilect, request that their answer to the complaint herein, filed on November 17, 1953 be withdrawn, and expressly waive the filing of an answer to the complaint and further proceedings before the hearing examiner or the Commission.

, LOAMIUM co. OF AMERICA 487 483 Decision It is stipulated that the signing of this stipulation is for settement purposes only and docs not constitute an admission by respondents that they have violated the law as alleged in the complaint. Hespondents agree that the order contained in said stipulation shall have the same force and effect as if made after full hearing, presentation of evidence, and findings and conclusions thereon, and expressly waive al1 right, power and privilege to contest the validity of said order. Said stipulation recites that said complaint may be used in construing the terms of said order, and that said order may be altered modified or set aside in the manner provided by statute for orders of the Commission.

It is specifically agreed that said Stipulation For Consent Order together with the complaint, shall constitute the entire record hI this proceeding. Inasmuch as this initial decision, and the decision of the Commission, if it affrms such initial decision, must hereafter also become part of the record, the aforesaid provision of the stipulation is interpreted to mean that it is agreed that the complaint and Stipulation For Consent Order shall constitute the entire record upon which the initial dec.sion herein shall be based. It is further agreed that the order contained in said stipulation may be entered without further notice upon the record, in disposition of this proceeding.

In view of the provisions of the stipulation as outlined above, and the fact that the order embodied in the stipulation differs from the order accompanying the complaint only in the omission of the prohibition "\YjJ retard the growth of lawns " which was abandoned on the record by counsel supporting the complaint, it appears that the Stipulation For Consent Order should be accepted, and that such action, together with the issuance of the order contained in the stipulat.ion, will resolve all the issues arising by reason of the complaint in this proceeding, and will safeguard the public interest to the same extent as could be accomplished by full hearing and al1 other fLdjllclic.ative procedure waived in said stipulation. Accordingly the bearing examiner, in consonance with the terms of saiel agreement accepts the Stipulation For Consent Order submitted herein; grants respondents' request that tl1cir ans',er to the complaint herein, heretofore submitted, be withdnn'i- n; and issues the following order: It is or'dated That the respondents :\aJcolm E. Smith, Jr., Casper Pinsker, Jr., and Richard H. Davimos, individually and as copartners doing business as Loamium Company of America, or under any other name, and respondents' agents, representatives, and employees, directly or tlJTough finy corporate or other device, in connection with Order 51 F. T. a.

the offering for sale, sale and distribution in commerce, as "commerce is defined in the Federal Trade Commission Act, of their chemical plant growth inhibitor designated as Kem-Kut, or any other product of substantially similar composition or possessing substantially similar properties, whether sold under the same name or under any other name, do forthwith cease and desist from representing, directly or by implication, that the use of said product: 1. ,Vii produce an even lawn;

2. lakes lawn mowing unnecessary;

3. Makes grass greener, thicker or more luxurious; 4. Is safe or will not adversely affect the appearance of a lawn. It is further ordered That the answer to the complaint herein fied by respondents on November 17, 1953, be, and the same hereby , withdrawn from the record.

ORDER TO FILE REPORT OF C01IPLIANCE It is ol'del'ed That re$pondents Ialcolm E. Smith, Jr., Casper Pinsker, Jr. , and Richard H. Davimos, individuals and copartners doing business as Loamium Company of America, 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 (as Tequired by said declaratory decision and order of November 23, 1954J. WILL-WELD MANUFACTURING CO. ET AL. 489 Opinion