Richard H. Davimos

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IN THE MATTER OF RICHARD H. DA VIMOS AND CASPER PINSKER, JR. TRADI G AS ORCHIDS, ETC.

CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COM:.fISSIOX ACT Docket 6129. Complaint, Oct. 1953-Deaision, Dee. lS, 1954 Consent order requiring hvo partners doing business in Harrison . J., and New York City, to cease representing falsely in advertising the kind and qualities of the orchids they sold, the properties and effectiveness of their chemical soil conditioner "Loamium, and that their private business was a "guild"

Before Mr. Abner E. Lipscomb hearing examiner. Ml'. Terial A . JOTdan for the Commission. M1'. H aJ'rY T. Davi1r/;os of K ewark, N. J., for respondents. COl\IPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Conuission, having reason to believe that Richard H. Davimos and Casper Pinsker, Jr., individually and as copartners, trading under the names of Orchids, Orchid Guild, and 'White House Company, hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: PARAGRAPH 1. Respondents Richard H. Davimos and Casper Pinsker, Jr., are individuals trading and doing business, or have traded and done business, as a copartnership under the names of Orchids, Orchid Guild, and 'White House Company with their principal offce and place of business located at 2 Kingsland Avenue Harrison, New Jersey, and also doing business at 8 East 54th Street New York, New York.

PAR. 2. The respondents have engaged in the sale and distribution of orchid plants and have sold and distributed and are presently selling and distributing a combination chemical soil conditioner and plant fertilizer designated as "Loamium. Respondents have caused and presently cause said products when sold to be transported from their aforesaid place of business in the State of New Jersey to purchasers thereof located in various other States of the United States ORCHIDS , INC. 527 526 Complaint and in the District of Columbia. Respondents maintain, and at all times mentioned herein have maintained, a substantial course of trade in said products in commerce between and among the various States of the United States and in the District of Columbia. P AU. 3. In the course and conduct of their said business, respond. ents, by means of statements and depictions appearing in advertising inserted by them in newspapers and by means of circulars and other advertising matter represented, di.rectly or by implication: 1. That the orchid plants sold and delivered by them wil produce flowers of the beauty, coloring, conformation, size, value and other characteristics commonly associated with it species of cattleya orchid or a hybrid orchid involving a species of cattleya. or an orchid of a species having similar characteristics.

2. That said orchid plants ,,-ill bloom within a short time after recei pt by the purchaser.

3. That the blooms will be the same as those costing $5 to $20 at floral shops.

4. Through the use of the word "guild ' that respondents ' business is an association of persons Or corporations with kindred pursuits or common interests formed for furthering some common interest and operated without profit.

PAH. 4. The statements and depictions appearing in said advertising matter "were false, InisJeading and deceptive. In truth and in fact:

1. Respondents' orchid plants were of a species capable of producing only small, relatively dull colored flowers and of little lllOne tary value. Such flowers are ,,-holly inferior to and in no wise COll parable in value to the cattleya orchid or a hybrid orchid invoh-ing a species of cattJeya or other species of orchid baving characteristics similar to the cattleya or cattleya hybrid species. 2. It is highly improbable that said orchid plants would bloom within a short time, or even during the entire senson, after receipt by the purchaser.

3. The blooms produced by respondents: pia,uts are inferior to those commonly sold in flower shops for the sum of $5 or more. 4. Hespondents' business organization is not properly characterized as a guild but is a commercial enterprise maintained, existing and operating for a profit.

PAR. u. Respondents' product Loaminm is a combination chemical soil conditioner and cOlnmel'cial fertilizer', The fonnula for Loamimn is 15% hydrolized-- polyacrylonitrile; 20% fertilizer of which 5% is nitrogen, 10S10 phosphoric acid and 5% potash; and G5ji inert ingredients. 423,S3- Complaint 51 F. T. C.

The directions for Use are that one part of Loamium be diluted in 40 parts of water and sprinkled on 1\ith a watering can or sprayed on with proportioners.

PAR. 6. Further, in the course and conduct of their said business and for the purpose of inducing the purchase of Loamium, respondents have made and arc making many statements and representations concerning said product by means of advertisements in llmvspapers having national circulation and by the aforesaid statements appearing on the label of said product. Among and typical of said statements and representations appearing in newspapers, but not all inclusive thereof are the following:

Amazing new "Loamium" changes haru clay or sandy soil into rich, fertile loam-overnite One galloil of Loamium makes 40 000 pounds of rich, fertie nourishing top soil ! See for yourself the incredible difference in soil texture. Xo raking. Ko Rpading. Ko hoeing. Just sprinkle on! . . . aile gallon rEluted in water \\'il transform up to 2000 square feet of dead, lifeless soil into the richest, most nourisl1ing" expensive loam. See hmv cllt, raked dirt has uecome rich porous loam G inches deep. . . . a special peJ.letrant ill LOllmium nHlkes even the llll'iest packed clay flbsorh it instantly.

PAR. 7. Through the use of the statements and representations in connection with Loamium hereinabove set forth and others similar thereto, but not specifically set out herein, respondents represent and have represented, directly or by implication: A. That said product changes soil te.xture and changes hard clay Or sandy soil into loam and makes top soil. B. That said product dilutcd with water and sprinkled on the sur face will effectively condition the soil.

C. That OIle gallon of said product will condition 2 000 square feet. of soil to a depth of six inches.

D. That said product contains a special penetrant which forces it. into the soil.

-\R. 8. The foregoing claims, statements and representations with respect to Loamillm are grossly exaggerated, false and misleading. In truth and in fact:

A. Said product ,"\ilj not change soil texture and wil) not change hard chy or SRTIly soil into loam and will not make top soil. Chemical soil conditioners such as said product do nothing marc than affect soil structure. They stahilize aggregates that already exist or that are formed by mechanical manipulation of the soil. E. Said product diluted in water and sprinkled on the surface will ORCHIDS, L'\C. 529 526 Decision not. effectively condition the soil. On t.he contrary, the soil must be prepared, worked or manipulated and the product thoroughly mixed with the soil mass with which it is to react in order to be effective. C. One gallon of said product is wholly insuffcient to condition 000 square feet of soil to a depth of six inches. Even minimum effective conditioning of said area and depth would require many times more than one gallon of Loamium. The exact amount would vary considerably depe,nding upon the nature and condition of the soil and the degree of structural improvement sought. D. Loamium does not contain a penetrant which forces it into the soil.

PAR. 9. Hespondents, in the conduct of their said business, as aforesaid, have been and are in substantial competition in commerce with corporations and with other inc1ividua.1s and partnerships and others engaged in the sale of orchid plants and soil conditioners and fertilizers.

PAR. 10. The use by respondents of the aforesaid false and misleading statements, representations and pictorial depictions has had and now has the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous a.nd mistaken belief that the statements, representations and pictorial depictions were and are true and to induce t.he purchase of substantial quantities of respondents' said products by reason of such erroneous and mistaken belief. As a result thereof, trade has been unfairly diverted and is now being diverted to respondents from their competitors in commerce and substantial injury has been and is being done to competition in commerce.

\.R. 11. The aforesaid acts and practices of respondents, as herein alleged, are all to the prejudice and injury of the public and constitute unfair methods of competition and unfair a,nel deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

DEClSIOX OF THE COJ.DIISSION Pursuant to Rule XXII of the Commission s Rules of Practice and as set forth in the Commission s ':Decision of the Commission and Order to File Report of Compliance, dated December 18, 1954 the initial decision in the instant matter of hearing examiner Abner E. Lipscomb, as set out as follows, bccamc on that date thc decision of the Commission.

Decision 51 F.

IKITTAL DECISION BY ARNER E. LIPSCO:::IB, HEARlXG EXAl\Il The complaint in this proceeding charges the respondents ''.ith unfair and deceptive acts and practices in violation of the Federal Trade Commission Act, in the advertising of two products: orchid plants, and a chemical soil conditioner and plant fertilizer designated Loamium.

, On October 18, 1954, respondents entered into an agreement with counsel supporting the complaint, and, pursuant thereto, submitted t() the hearing examiner a stipulation for a consent order disposing of all the issues in this proceeding.

Respondents are identified as individuals and copartners doing business as Orchids, Orchid Guild, and 1Vhite House Company, located at 2. IGngsJand Avenue, IIarrison, New 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 in accordance with such allegations. Hespondents, in effect, request that their answer to the complaint herein, filed on November 20, 1953, be withdrawn, and expressly waive the filing of an answer to the complaint and further proceedings before the hearing examiner or the CompllSSlOn.

. It is stipulated that the signing of this stipulation is for settlement purposes only and docs not constitute an admission by respondents that they have violated the l,lW as alleged in the complaint. . HespOllclents agree that the order contained in said stipulation shan have the same force and effect as if made after full hearing, presenta ioll of evidence, and findings and conclusions thereon, and expressly waive all right, power and privilege to contest the validity of said Qrder. Said stipulation recites that said complaint may be used in construing the terms of said order, and that said order may be altered lOdifid 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 ,,,ith the complaint, shall constitute the entire record in this ;bcceding. Inasrnnch as this initial decision, and the decision of t, Gol111ission, if it affirms such initial decision, must hereafter also become part of the record, the aforesaid provision of the stipulnt.ion is interpreted to mea,n th:lt it is agree,d that the complaint and Stipuration For Consent Order shall constitute the entire record upon which the initial decision herein shan be based. It is further agreed that the order contained in sa,ieI stipulat.ion may be entered without further notice upon the record, in disposition of this proceeding. , ORCHIDS Dic. 53! 52(3 Decision The terms of the proposed order to eeascallcl desist relating to the advertising of orchid plants are the same a,s those contained in the order accompanying the complaint There arc, however, variances between the order to cease and desist accompanying the complaint and the order proposed in the stipulation. The attorney support.ing the complaint, in his memorandum transmitting the Stipulation For Consent Order to the hearing examiner, expbins and justifies these variances, as follows:

The terms of the order, asagreecl to in the said Stipulation insofar as it relates to the sale and distribution of the combina tion chemical soil conditioner and fertilizer, designated Loamium have been cha.nged to reflect more recent information on the subjec'.. and to conform to the provisions of the CommissjoJl S very recently promulgated trade practice rules for the Chemical Soil Conclitionel; Industry. Chemical soil eonditioners are a comparatively new product on the ma.rket and additional information respecting their possible llses, method of tpp1ication and results has bccomc increasingly avaihLble since this CRse was investigated and complaint issued. The Commission s trade practice conferences for this industry developed and clarified a great deal of this information so that it has been possible to redraft the proposed order set forth in the compbint and make its terms entirely consonant with the said trade practice rules. It is believed that the order which has been revised as to Loaminnm is more nearly consonant ,yjth the Commission s tnule practice rule for the Chemical Soil Conditioner Industry, is more accurate in light of recent developments in the Jnc1ustry and will inhibH, the false misleading and deceptive representations stateel in the complaiilf while permitting truthful statements respecting said producl' In view of the provisions of the stipulation as outlined above and the statements find explanntions presented hy counsel supporting the com'" plaint, it appears that the Stipulation For COl1sent Order should be accepted and that such action, together with the issuance of the order contained (herein will resolve all the issues arising by reason of Jhe complaint in this proceeding, and \\'111 sflfeguard the public interest to the same extent as could be accomplished by full hearing and all other ac1judicatiyc procedure waived in sflid stipulation. Accordingly, the hearillg examiner, in consonance with the terms of said agreement accepts the Stipulation For Consent Order submitted herein; grants respondents reCJuest th lt their answer to the comp1print herein, heretofore submitted, be ,,'ithdra,yn; and issues the following order:

532 FEDERAL TRADE COM:nSSION DECISIONS Order 51 F. T. C.

It i8 ordered That respondents, Richard H. Davimos and Casper Pinsker, Jr., individually and as copartners, trading as Orchids or Orchid Guild, or under any other name, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of their orchid plants in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from, directly or indirectly:

1. :Misrepresenting the kind and type of orchid plants offered for sale and sold by them;

2. Misrepresenting the time within which their orchid plants wil bloom;

3. Misrepresenting the retail value of the flowers which their orchid plants wil produce;

4. Using the word "guild" or any other word of similar import or meaning as a part of a trade name, or otherwise, or representing in any other manner that respondents' business is other than a commercial enterprise operated for profit.

It i8 fU1'ther ordered That said respondents, Richard H. Da vimos and Casper Pinsker, J individually and as copartners trading as the 'Vhite I-Iouse Company, or under any other name, and respondents representatives, agents and employees, directly or through any corpol' ate or other device, in connection with the offering for sale, sale or distribution in commerce, as "conunerce" is defined in the Federal Trade Commission Act, of their combination soil conditioner and fertilizer, designated Loamium, or any other product of substantially similar composition or possessing substantially similar properties, do forthwith cease and desist from representing directly or by implication:

1. That sa,icl product will change soil texture or change the clay, sand silt ratio of sailor add to the soil Blements other than those contained in said product;

2. That said product will effectively form and stabilize soil aggregates without revealing the extent to which the soil must be cultivated 01' the degree to which the product must be worked into the soil to effect the formation and stabilization of soil aggregates to the extent represented to result from the use of said product; 3. That any smaller amount of said product is needed to condition a given area of sod to a given depth than is actually required; 4. That said product contains a soil penetrant, when such is not a fact.

ORCHIDS , INC. 533 526 Order ORDER 'fO FU, E REPORT OF COMPLIANCE It is ordered That respondents Richard I-I. Davimos and Casper Pinsker, Jr., individually and as copartners trading as Orchids, Orchid Guild, White House Company, shall, within sixty (60) days after service upon them of this order, fie 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 Cas required by said declaratory decision and order of December 18, 1954). 534 FEDERAL 'TRADE COMMISSION DECISIONS Complaint 51 P. T. C.