Premier Pillow Corporation

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

IN THE MA'l"fer OF PREMIER PILLOW CORPORATION T AL.

Order, ETC., IN REGARD TO Tile ALLEGED VIOLATIOS OF THE FEDERA TRADE CO).DUSSIOX ACT Docket 6136. Complaint, Oct. 28, 1958~Decision, May 25, 1956 interlocutory order reversing the hearing examiner s ruling that he is "without authority to rule on respondents' motion " to dismiss at the close of the prosecution s case-in-chief, and remanding the matter to him for decision, Before Mr. J. Earl Corn hearing examiner. Mr. Ames W. Williams and 1111. Oharles S. Oorn for the Commission. Mr. Edward L. Smith of Washington, D. C., for respondents. ORDER REMANDIXG CASE TO HEARNG EXAMINER This matter having come on to be heard by the Commission upon the hearing examiner s ruling referring respondents' motion to dismiss to the Commission for disposition; and The Commission having determined, for the reasons appearing in the accompanying opinion of the Commission, that the hearing examiner erroneously concluded that he is without authority to rule upon respondents' motion to dismiss, and that the case should be reInanded to the hearing examiner:

It is ordered That this case be, and it hereby is, remanded to the heating examiner with instructions to proceed in accordance with the Commission s opinion.

OPIN"IOX OF THE CO:aOHSSION :MSON, Commissioner:

This matter is before the Commission upon the hearing e-examiner ruling referring to us respondents' motion "to dismiss the complaint 1 herein for the reason that, under the testimony and evidence, the proceeding lacks 'thepnblic interest ne.cessary to support the Commission s jurisdiction The examiner indicates the issue raised by respondents' motion in t.his proceeding is based on a procedural record similar to that presented in the Florida Citrus case 2 and accordingly ruled: "Complaint issued Oct. 28, 1953, charging violation of the Federal Trade Commission Act.

2 In the l\atter of Florida Citrus :\lltual, Docket 6074, May 10, 1054. 1418 FEDERAL TRADE COM1USEYIOX DECISIONS Opinion 52 1-' . C. Under' this decision of the Commission, the hearing examiner is without authority to rule 011 respondents~ motion, and it ll1USt, therefore, be referred to the Commission for consideratioll. However, the record shows that the motion in the instant case challenging the existence of public interest was filed after the close of the prosecution s cR,se-in-chief.

Th is is the significant and distinguishing factor-the point of departure as it \were-from the Florida Citrus matter wherein the proceedings had advanced only so fat as the preliminary hearing stagc. The Florida Citrus respondents sought dismissal of their suit on lack of public interest prior to the prosecution s case-in-chief. To prevent future misconception and eliminate areas of doubt say it is not our intention to foreclose the hearing examiner s consideration of the question of "public interest" after full presentation of the government~ s case.

Prior-he cannot do it. After-he can.

To say that he has this former power would be to recognize ill the hearing examiner the right to sit in judgment on discretionary administrative decisions of the Commission.

In the matter now before us government counsel has completed its ease-In-chief and the question of whether an order to cease and desist would be in the "public interest" becomes justiciable in nature and rests within those judicial powers we have delegated to hearing examiners. In the instant proceedings the prosecution has presented its full case and rested. \With the facts upon which the government has predicated its charge thus disclosed, the hearing examiner may apply the crit.eria upon which to base his adjudicatory conclusion. The hearing examiner here in no way assumes the achninistrative function of the. Commission.

This case is remanded to the heating examiner to rule on the. respondents' motion.

Chairman IIoWREY, with whom Commissioner SECHEST joins, concurring:

\Ve agree that the hearing examiner should have entertained and ruled upon the mot.ion to dismiss at the close of the case-in-chief. ,Ne disagree with the majority opinion to the extent that it makes t.he added observation that an examiner is not empowered to entertain and rule upon a motion to dismiss for lack of public interest at any prior stage of the case.

For the reasons set forth in the dissenting opinion in the Florida CitTUS 11Jrutual ease 3 we feel the majority view on this point is con- 3 Docket ::o. 6074, Decided May 14, 1054.

PREMIER PILLOW Calif. ET AL. 1419 1417 Opinion trary to the provisions of the Administrative Procedure Act, decisionallaw, and the Commission s own Rules of Practice. Public interest is a jurisdictional.l prcrcquisite to proceedings underthe Federal Trade Commission Act. To suggest that such an issue can never be adjudicated all the basis of a preliminary motion, properly filed and supported, is to favor-literally-the imposition upon parties of the onerous burden to litigate the merit.s even in a case where a jurisdiction defect may be self evident. In the dissenting opinion in the Florida DitTus j1futllal case supra it was stated:

Counsel supporting the complaint also question the wisdom of ruling on the 'public interest: issue prior to a hearing on the merits They suggest that public interest cannot be determined until all the facts are in the record. There is much to be said for the argument and certainly restraint should be exercised in ruling on such motions before counsel in support of the complaint have closed their case-inchief. As I have indicated, public interest lacks specificity and cannot be directly measured; it is usually determined from all the facts and circumstances of the particular case: However, this is not to say that such motions should never be granted. In exceptional instances, like the !(lesnel' case, for exalnple, the hearing examiner should by an means consider and decide the matter on a preliminary motion. Section 7 (b) of t.he Administr'ltive Procedure Act provides, among other things, that hearing examiners shan have the authority to make decisions or recommended decisions and to take "any other action authorized by agency.y rule * * * " 4 Rule X of the Comllission s Rules of Practice provides in part that "During the time a proceeding is pending before a trial examiner all motions * , * shall be addressed to and ruled upon by him * * * ~' This includes motions to dismiss at any stage of the proceedings.

In the leading case of C. v. Klesner 280 U.S. 19 (1929), the Supreme Court stated that a complaint should be dismissed " at any time during the course of the proceeding" if it is shown that the matter is not in the public interest. In ;11oTetrench Corp. v. 127 F. 2d 792 (C.A. 2, 1942), Judge Learned Hand observed that the !(lesneJ' case "did indeed decide that the public interest in the controversy was a justiciable issue * * * ;

In our view, there is no validity in the. position that an examiner can rule on a motion to dismiss after the close of the case-in-chief but that he cannot rule on a motion prior to the reeeption of evidence OIl the merits, no matter hmvstrongly supported. '5 V. S. C. 1006 (b).

1420 DERAL TRADE COl\.nnSETON DECISIOl\ Appeal 52P.

It is true that the decision of the Commissiun to issue a complaint is a discretionary, administrative function. It is equally clear-at the same time-that Commission proceedings become judicial in character immediately upon issuance and service of complaint. In considering the jurisdictional issue of public interest after complaint-whether not hearings have been held wit.h respect to the allegations of the complaint--the hearing examiner is performing a judicial function. Obviously if he should rule for or aga.inst a motion to dismiss without compelling supporting evidence his decision should and would be event that anreversed. This would also be true in the unlikely examiner, without evidence, substituted his judgment for that of the Commission in issuing the complaint. IIowever, the question raised is whether or not the hearing examiner has authority to rule on the motion, not whether he misuses-or lnight misuse-that authority. Authority is always subject to error and abuse. But the contingency of error should not impair the effcient administration of justice. Interlocutory order remanding case to hearing examiner for further proceedings to harmonize with Burton-Dixie case.

ORDER HEl\ANDING PROCEEDTXG TO HEARING EX. IINER Counsel supporting the complaint hav.ing filed t1J1 appeal from the hearing examiner s initial decision dismissing the complaint herein at the close of presentation of the case in support of the complaint; and the matter having been heard on briefs and oral argument, and the Commission having rendered its decision vacating and setting aside said initial decision:

1 t is o/'de1' That this case be, and it hereby is, remanded to the hearing examiner for further appropriate proceedings. ON APpgAL FROl\I INITIAL DECISION By SECREST, Commissioner:

This is one of a group of ten cases, all tried and considered together involving the use on labels of allegedly false and deceptive representations with respect to the filling material contained in feather and down pillows. This ease differs from the others, however, in that it is an appeal from the hearing examiner s initial decision granting the respondents' motion to dismiss the complaint made at the close of the case in chief, whereas the appmlls in the other cases "ere from sale question forinitial decisions filed after fun hearings. The decision is whether or not the hearing examiner was correct in his conclusion that there is no public inte.rest in the proceeding. 51 F. T. C. 1330.

PREMIER PILLO\V CORP. ET AL. 1421 1417 Decision The representations alleged in the complaint to have been false and dceeptive relate solely to pillows filled with crushed feathers. Similar representations were involved in the matter of Burton-Dixie Corporation, et al. , Docket :Ko. 6134, in which case the hear exr.mi.uer.ftlS0 held that there wfjs 110 J2ublic il there ttacking the representations and in that case t!liQ_ommiSBinIEli r;a:n- lOnIlOlding in so doing YJ-ie XXQX. J):LY_ !i32 J3_ 1i- g the cases, theopiilion in the Burton-Dixie case is equally applicable here, and for the reasons there stated, the appeal of cOlilseI supporting the complaint in this case is granted and the initial decision of the hearing examiner is vacated and set aside. In consequence of this action, it will be necessary for the case to be remanded to the hearing examiner for further proceedings.

Order requiring a manufacturer in Brooklyn, i'T. Y., to cease labeling pilows as All New Material Consisting of" variousl Crushed Goose E'eathers, Crushed Duck Feathers Crushed Duck Quill " or " Crushed Goose Quill" when analysis of the content of the pilows showed that they were not accurately labeled within the 15% tolerance specified in the feather industry trade practice rules.

INITIA DECISION BY J. EARL COX, Healing EXAMINER The complaint charges that respondents have violated the prmrisions of the Federal Trade Commission Act by misrepresenting the contents of feather pillows which they manufacture and distribute In commerce.

After the filing of an answer, hearings were held, at which testimony and other evidence was presented in support of the allegations of the complaint, duly recorded and filed in the offce of the Commission. Thereupon respondents, without w Living any other rights in the proceeding, filed a motionto dismiss the complaint "for the reason that, under the testimony and evidence, the proceeding Jacks- the public interest necessary to support Commission s jurisdiction. ' This motion was granted by the Hearing Examiner in an Initial Decision which, upon appeal, was vacated and set aside. The case was rpmanded to the Hearing Examiner for further appropriate proceedings, and thereafter a hearing was held at \which respondents ,waived the presentation of evidence in their behalf and the right to file proposed findings. Counsel supporting the complaint later submitted proposed findings and conclusions, and the proceeding is presenffd for Initial Decision upon the entire record. THE FACTS 1- Eespondent Premier Pillow Corporation is a ew York corporation, with its principal offce located at 121 Korth 11th Street 451524--59-- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1422 FEDERAL TRADE CO:VIMISSTON DECISIOXS Decision 52 F.

Brooklyn, New York. Respondents Louis Silverman, Samucl Shipper and Isador Shipper are President, Treasurer and Secretary, respectively, of said corporate respondent, and direct its policies, acts practices and business affairs.

2. Respondents are now, and for more than one year prior to the filing of the complaint herein were engaged in the manufacture and sale to dealers for resale to the general public of feather and down products, specifically pillows, which they have caused and now cause to be transported from their place of manufacture to purchasers thereof located in various other states of the United States. Respondents maintain and at all times mentioned herein have maintained a substantial course of trade in said feather and down products in commerce between and among the various states of the United States. 3. In the course and conduct of their aforesaid business respondents are now, and have been, in substantial competition ill conunerce with other corporations and with firms, individuals and partnerships engaged in the sale and distribution of feather and down products including pillows, and have caused labels to be affxed to certain of their pilows, purporting to state the kinds or types of filing material contained therein. Similar identification of the kinds or types filling material contained in said pilows has also been made in Invoices.

f. There are four types of labeling involved in this proceeding, all of which are alleged to be false, misleading and deceptive. A. Some types of their pillows were labeled by respondents as containing ALL NEW :\IATgRIAL CONSISTING OF CRL'SIIED GOOSI- FEATHERS Three of such pillows were introduced as evidence in this proceeding. Their contents had been analyzed, substantially in accordance with the provisions of the Trade Practice Rules for the Feather and Down Products Industry, promulgated by the Commission on April 26, 1951, by an expert who since 1916 has been employed by the Department of Health of the State of Mary land and since 1924 has been Chief, Division of Bedding and "Upholstery of that department. The average of the analyses of the contents of these three pilows is as follows:

Percent Waterfowl feathers.,.........,....................,........ 25. Waterfo\vl fiber............................................. 10. Chicken feathers................,..,.....,.....,............ 34. Chicken fiber. 14. Pith and scale.........,.........,..,........................ 15. ... .............................................................................................................................................................,......,. ...... ..,,.........,.,.,.,.........,....,......... .....,........,..,, .. .. ., . . ... ... ;. ,. , PREMIER PILLO'V COE?, ET _ 1423 14J7 Decision Interpreting the term " waterfmvl" in the analysis to mean "goose," the analysis still shows that the pillows were no! accurately labeled.. .. .. within the 15% tolerance specified in the fearheJ' ind)lstry trad"" practice rules.

B. Others of respondents' pilows were labeled '" containing ALL NEW MATERIAL CONSISTING OF CRUSHED DnCK FEATHERS The contents of three of these pillows were similarly analyzed, and the average of the analyses shows the following: Perc:';i,l Duck feathers. 28. Duck fiber....

Chicken feathers................................. 39. Chicken fiber. 1B. Pith and scale.................................. These pillows, likewise, were not accurately Jabeled within the permissible tolerance.

C. Stil others of respondents' pillows were labeled as containing ALL EW MATERIAL CONSISTING OF CRL"SHED Drug QUILL The content of one pillow of this type was analyzed, and sho\'l1 to be as follows:

Pc;rG,iid Duck feathers. 33. Duck fiber.... 37. Chicken feathers................................. Chicken fibers.

ith and scale..........................,...,...,. 12. D. A fourth type of pilow was labeled ALL NEW MATERIAL CONSISTING OF CRCSHEV (H)OSg QUILL An analysis of the content of a single pillow of t.his type shows the following:

PO"CC;,t Goose feathers. 37. Goose fiber. 38.4 Chicken feathers........................,..,.... Quills....Chicken fibers. ... ... ... ........ ... .... '.... Pith and scale................................... The trade practice rules ,,,ere not strictly for/owed in ana.1:yzing the contents of the last two types of pilows, in that only one pilow of each type was used; yet suilcient data arc shown to justify a finding that these types of pilows were also inaccurat.ely labeled, although such a finding is not essential to the cOllclu ;(m:: reached in this proceeding.

1424 FEDERAL TRADE C01!vTISS;ION nECISIO Order 52 F.

. 5. Upon all the facts of record, the conclusion reached is that respondents ha:ve made represent"Ltions as to the contents of their pillows which are-false, misleading and deceptive. In its decisjon in the matter of trton-Dimie Corporation, et al. Docket No. 6134, the Commission said: We conclude that' the evidence herein is reliable, probative, and substantial as $0 consumer preference for waterfowl feathers; that that preference can be assumed to carryover to crushed feathers; that from the standpoint of utilty there are distinct advantages and differences as between different types or kinds of crushed feathers and that while there may be no significant difference in price as between crushed waterfowl feathers and crushed landfowl feathers there is a significant difference in utility and the pilo\'' buyer is entited to get wha,t the label represents the contents to be. Insofar as purchasers of pilows are concerned, we see no justification for recognizing any different standards or requirements to be observed with respect to purchasers at the lower end of the , e ;mollic ladd th1ln those observed with respect to purchasers at the upper end. In the Burton Dixie case, under circumstances similar to those presented in thi proceeding, the Commission found the issuance of a cease-and-desist order to be in the public interest. Upon tJm complete record, the following conclusions are reached in this proce,eding- CONCL B"SlOXS 1.' This proceeding is in the public interest; 2. ' The use by respondents of the aforesaid false, misleading and eptive representations on the labels affxed to their pillows has had and now has the capacity and tendency to mislead and deceive dealers and the purchasing public as to the composition of the fining materials of said pilows' and to induce the purchase of substantial quantities of said pillo\v, be,ca;use of such mistaken and erroneous belief; and 3. The aforesaid acts and practices of respondents, as herein found arc all to the prejudice and injury of the public, and constitute unfair aefs and practices and unfair methods or competition in commerce will1in the intent and meaning of the Fe,deral Trade Commission Act; wherefore OIilEH ii is oTd Tfd That 'the respondents, Premier Pillow Corporation a corporatio, and Louis Silverman, Samuel Shipper, and Isador Shipper, i:ndjvjdllally, and as offcers of said corporation, and their i'epresen, agents, and employees, directly or through any corp.orate ;or ,other device, in connection with the offering for sale. sale or disttibuti0l1 in COlnTlerCe, as "commerce" is defined in the Federal Trade Commission Act, of feather and down products, including pillo\vs, do forthwith cease and desist from misrepresenting in any PREMIE-R PILLO'V CORP. ET AL. 142& 1417 Decision manner, or by any means, directly or by implication, the identity of the kind or type of filling material contained in any such products or of the kinds or types, and proportions of each, when the filling material is a mixture of more than 011e kind or type. DECISION OF THE C03Il\HSSION AND ORDER TO FILE REPORT' OF COJfPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice, the initial dccision of the hearing ex miner shah, on the 25th day of Iay, 1956, become the decision of the Commission; and, accordingly: It is ol'del'ed That respondents Premier Pillow Corporation, a corporation, and Louis Silverman, Samuel Shipper, and Isador Shipper individually, shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing sctting fbrth in detail the manner and form in which they have complied with the order to cease and desist.

Commissioner I(ern not participating.

1426 FEDER_lL TRADE cO:YnJISSlON DECISIONS Complaint 52 F. I', 11\1" THE :MA TTER ilia W,SON DEMANY FORBES ET AL.

CONSJ NT ORDER, ETC" IX REGARD TO THE ALLEGED VIOLATION OF THE DEHAL TRADE COMMISSION AXD THE FUR PROD'CCTS LABELING ACTS Docket 6513. Owrnplaint, Feb. 1956~Decision, May 1958 Consent order requirllt; furriers in Philadelphia to cease violating the Fur Products Labeling Act through abbreviating the required information on invoices which also failed to disclose that certain products were composed in substantial part f)f sides and flanks; and, in advertising in newspapers, failng to disclose the names of animals producing the fur and misrepre. f'enting prices and 'values.

Before Afr. Ja1TUYi .d. uTcell hearing examiner. Mr. John T. TValleer for the Commission. Mr. Isadore S. W'leh8 of Philadelphia, Pa., for respondents. COMPLAIN"T Pursuant to the provisions of the Federal Trade Commission Act and the Fur Products Labeling Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Iawson Dc1fany Forbes, a corporation, David DeMany, individually and as President and Treasurer of said corporation, and IIIorris B. Iarks, individually and as Vice President and Secretary of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and the Rules and Regulations promulgated under the Fur Products Labeling Act, and it appearing to the Commission that a proceeding by it in respect thereof would be II the public interest, hereby issues its complaint stating its charges in that respect as follows: PARAGRAPH 1. Rl\spondent Mawson DeMany Forbes is a corporation organized, exists. g and doing business under and by virtue of the iaws of tbe Cmnmonwealth of Pennsylvania, with its offce and principal place of business at 1113 Chestnut Street, Philadelphia Pennsylvania.

Respondent DRlcd De:Uany is President and Treasurer of said corporation, and respondent )lorris B. 1\'iarks is Vice: President and Secretary of said Gorporation. These individuals, acting in cooperation wjth each ot.her. formulate, direct and control the acts, policies and practic.es of said corporate respondent. Their addresses are the sa,me as that of said corporate respondent. MA'VSON DEMA.'ry FORBES ET AL. 1427 1426 Complaint PAR. 2. Subsequent to the effective date of the Fur Products Labeling Act on August 9 , 1952, respondents have been, and are now engaged in the introduction into commerce, and in the sale, advertising, and offering for sale in commerce, and in the transportation and distribution in commerce, of fur products, and have sold, advertised, offered for sale, transported and distributed fur products which have been made in whole or in part of fur which had been sbipped and received in commerce, as "commerce fur" and "fur product" are defined in the Fur Products Labcling Act. PAR. 3. Certain of said fur products were falsely and deceptively invoiced in that they worB not invoiced as required under the provisions of Section 5 (b) (1) of the Fur Products Labeling Act, and in the manner and form prescribed by the Rules and Regulations promulgated thereunder.

PAR. 4. Certain of said fur products were falsely and deceptively invoiced, in violation of the Fur Products Labeling Act, in that they were not invoiced in accordance with the Rules and Regulations promulgated therelUlder, in the following respects: (a) Hequired information was set forth in abbreviated form, in violation of Rule 4 of the aforesaid Rules and Regulations; (b) Respondents failed to disclose as part of the required information that such fur products were composed in whole or in substantial part of sides and flanks, when such was the fact, in violation of Hule 20 of the aforesaid Rules and Regulations. PAR. 5. Certain of said fur products were falsely and deceptively advertised, in violation of the Fur Products Labeling Act, in that respondents caused the dissemination in commerce, as "commerce" is defined in said Acts, of certain advertisements, by means of newspapers, which advertisements were not in accordance with provisions of Section 5 (a) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder, and which advertisements were intended to and did aid, promote and assist, directly or indirectly, in the sale and offering for sale of said fur products. Among and included in the advertisements as aforesaid, but not limited thereto were advertisements of respondents appearing under the name of Sattler, Inc., a Buffalo furrier, which appeared ill issues of the Buffalo Evening News, a newspaper published in Buffalo, New York and having wide circulation in said State and in various other States of the United States. Under an agreement with Sattler, Inc., the respondents shipped certain fur products to said Sattler, Inc., and agreed to pay to Sattler, Inc., 17 percent of the net sales of all of said fur products sold. Respondent :lfawson De:lfany Forbes assumed all of the cost of shipping and advertising said fur products and its 1428 FEDERAL TRADE co?nnSS.TOK DECISIO:\S Decision 52 F. T. C.

offcials supervised the preparation of and approved the said advert.isements.

By means of the aforesaid advertisements, and through others of the same import and meaning not specifically referred to herein respondents falsely and deceptively:

(a) Failed to disclose the name or names of the animal or animals that produced the fur contained in the fur product, as set forth in the Fur Products 1' fllle Guide, in violation of Section 5 (a) (1) of the Fur Products Labeling Act.

(b) :Misreprescnted, by means of comparative prices not based on current market values, the amount of savings to be effectuated by purchasers of said fur products, in violation of Rule 44 (b) of the aforesaid Rules and Regulations.

(c) l\fisrepr8sentecl the value of fur products, "Then such claims and representations VleTe not true in fact, in violation of R.ule 44 (c1) of the aforesaid Hules and Regulations.

Respondents, in making the pricing claims and rcpres8ntaUons referred to in subparagraphs (b) and (c) hereof, failed to maintain full and adequate records disclosing the facts upon which such claims and representations were purportedly ba,sed, in violation of Rule 44 (e) of said Rules and Hegulations.

PAR. 6. The aforesaid acts and practicps of respondents, as herein allegcd, were in violation of the Fur Products Labeling Act and the Rules and Hegulations promulgated thereunder, and constituted unfair and deceptive acts and practices in commerce under the Federal Trade Commission Act.

INITIAL DECISION BY J A1Ifit A. rUHCELL, HEARING EX-A.MIXER The complaint in this proceeding, issued February 17, 1956, charges the respondents Mawson DeYfany Forbes, a corporation, David Dei\fany, individually and as President and Treasurer of said corporation, and Morris B. .frks, individually and as Vice President and Secretary of said corporation, all hereinafter referred to as respondents, with having violated the provisions of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder as well also the provisions of the Federal Trade Commission Act. Subsequent to proper service of the complaint upon all respondents the parties hereto entered into an agreement for consent order to cease and desist, dated farch 30 , 195G, said agreement disposing of all the issues in this proceeding without hearing. Said agreement has been submitted to this Hearing Examiner, heretofore duly designated to act as such, for his consideration in accordance with Section 3. of the Rules of Practice of the Comlnission. MAVlSON DEMANY FORBES ET AL. 1429 1426 Decision Respondents, pursuant to the aforesaid agreement, have admitted all or the jurisdictional tllegt!tions or the complaint and agreed that the record may be tllken as if fimlings of jurisdictional facts had been duly made in accordance with such allegations. Said agreement further provides that respondents waive all further procedural steps before the hearing examiner or the Commission, including the making of findings of fact or conclusions of law and the right to challenge or contest the validity of the order to cease and desist entered in accordance with such agreement. It has also been agreed that the record herein shall consist solely of the complaint and said agreement; that the agreement shall not become a part of the offcial record unless and until it becomes a part of the decision of the Commission; that said agreement is for settlement purposes only and does not constitute an admission by respondents that they have violated the law as alleged in the complaint; that saiel oreler to cease and desist shall htLVe the same force and effect as if entered after a lll hearing and may be altered, modified, or set aside in the manner provided for other orders and that the complaint may be used in construing the terms of the order.

This proceeding having nmv come on for fial consideration on the complaint and the aforesaid agreement containing the consent order and it appearing that the order and agreement cover all of the allegations of the complaint and provide for appropriate disposition of this proceeding, the sa,me are hereby accepted and ordered filed Ui)Qll becoming part of the Commission s decision pursuant to Sections 3. and 3.25 of the R,ules or Practice, and the hearing examiner accordingly makes the following findings, for jurisdictional purposes, and 1. Respondent Mawson DeMany Forbes is a corporation existingorder:and doing business under and by virtue of the laws of the State of Pennsylvania; respondent David De fany is President and Treasurer of said corporation and respondent i\Iorris B. :'Iarks is Vice President and Secretary of said corporation. The two named individual respondents, acting in concert, formulate, direct and control the acts policies and practices of the corporate respondent. The offce and principal place of business of all of said respondents is at No. 1113 Chestnut Street, Philadelphia, Pennsylvania. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents hereinabove named. The complaint states a cause of action against the respondents under and by virtue of the provisions of the Fur Products Labeling Act and of the Rules and Hegulations promulgated thereunder, as well also 1430 FEDERAL TRADE COMMISSION DECISIO Order 52 F. T. C.

under the provisions of the Federal Trade Commission Act, and this proceeding is in t.he interest of the public. ORDER It is ordered That respondents, Mawson DeMany Forbes, a corporation, and its offcers; and David DeMany, individually and as President and Treasurer of said corporation; and :NIorris B. l\farks individually and as Vice President and Secretary of said corporation; and their representatives, agents and employees, directly or through any corporate or other device, in collection with the introduction into commerce, or the sale, advertising, or offering for sale in commerce, or the transportation or distribution in commerce, of any fur product, or in connection with the sale, advertising, offering for sale transportation, or distribution of any fur product which is made in whole or in part of fur which has been shipped and received in commerce, as "commerce fur " and "fur product" arc defined in the Fur Products Labeling Act, do forthwith.h cease and desist from: A. Falsely or deceptively invoicing fur products by: 1. Failing to furnish invoices to purchasers of fur products showing:

(a) The na,me or names of the anjmal or animals producing the fur or furs contained ill the fur product as set forth in the Fur Products Name Guicle and as prescribed under the rules and regulations; (b) That the fur product cont.ains or is composed of used fur when such is a fact;

(0) That thc fur product contaius or is composed of bleached, dyed or artificially colored fur when such is a fact; (d) That thc fur product is composed in whole or in substantial part of paws, tails, bellies, or waste fur when such is a fact; (e) The name and address of the person issuing such invoices; (I) The name of the country of origin of any imported furs contained in the fur product.

2. Setting forth the required information in abbreviated form. 3. Failing to disclose as part of the required information that fur products were composed in whole or in substantial part of sides and flanks, when such was the fact.

B. Falsely or dcceptively advert.ising fur products, through the use of any advertisement, representation, public announcement, or notice which is intended to aid, promote or assist, directly or indi redly, in the sale or offering for sale of fur products, and which: 1. Fails to disclose the name or names of the animal or animals producing the fur or furs contained in the fur products as set forth MAVlSON DEMA-,Y FORBES ET .'!. l., 14;U 1426 Decision in the Fur Products Name Guide and as presenile" under the rules and regulations.

2. Represents directly or by implication:

(a) That the regular or usual price of any Jur product is &lly amount which is in excess of the price at which the respondent has usually and customarily sold such products ):. , t1h- recent rcgnJal' course of its business;

(b) The value of fur products, when such clamn; and represent tions are not true in fact.

3. :Makes use of compa.rative prices or perc"EJjtagIJ savings claims unless such compared prices or claims are ba ed upon the current market value of the fur product or upon a bona fide compared price at a designated time.

4. :V1akes price claims and representations of thlJ type referred to in sub-paragraphs (a) and (b) and paragraph above, unless n""."e is maintained by respondents full and adequate records disclosing t.bn facts upon which such claims or representations'. aTf\ based. DECISION OP THE C02\BIISSION AND ORDER TO FILE m PORT OF COMPLIANCE Pursuant to Sec60n 3.21 of the Commission s :'hrdes of Practice, the initial decision of the hearing examiner shall, on the 26th day of :M:;;y, 1956 , become the decision of the Commission JJd? accordingly: It is onlered That the respondents herein shall, within sixty (68) 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, )432 FEDERAL TRADE C01vL\llSSroX DECISIOKS Order 52 F. T. C.

IN Til .f_A TTER OF WOHLD INSURANCE COMPANY I' I Docket 6455. Order and Opin-ion, May, 1956 Interlocutory order reversing hearing examiner s ruling limiting scope of proceeding to certain states, and denying, as not complying with the Rules of Practice, respondent' s request for consideration of alleged error in ruling denying motion to dismiss.

Before ./11/. Franlc Bier hearing examiner. Mr. , William A. Somers for the Commission. Ml'. J. TV. J1a?' of Omaha, Nebr., for respondent. OIIDER GRANTING ApPBAJ, FROThf I-learing EXAJIINER RULXG LIMITING SCOPE Q:' PnOCEEDIXG Counsel in support or the complaint having filed an int.erlocutory appeal froin a ruling of the hearing examiner limiting the scope or theproceecling. ,in some respects to respondent's advertising representations disseminated in the States of lissonri, Mississippi, Rhode Isl ncl, 3fontana and in the District of Colmnbia, and respondent in its answer h i.ving requested for the first time consideration or alleged errql' 'in the . hearing examiner s ruling denying a motion to dismiss; and The Comnii sion having concluded, for the reasons set forth in its opinion in the 'matter or The ..'-american I-Iospital and Life Insurance Company, Docket No. 62:17, issued April 24, 1956, that the examiner was in error in the ruling appealed from by counsel supporting the complaint; and It appearing to the Commission that it can consider alleged error in an interlocutory ruling of a hearing examiner only when it is made the basis of an interlocutory appeal in accordance with 20 of the Rules of Practice and that respondent's request for consideration of alleged error in the further ruling of the hearing examiner does not comply with the aforementioned section of the Rules of Practice: It is o1'dered That the appeal of counsel in support of the complaint , and it hereby is, granted; and It is fUJ,ther ordered That insofar as the hearing examiner s ruling of February 29, 1956 , purports to limit the scope of this proceeding in some respects to the advertising representations disseminated in Missouri, :Mississippi, Hhode Island, Montana and in the District of Columbia, said ruling is hereby reversed; and , , ! WORLD INSURA.'lce CO. 1433 1432 Opinion It is ful,ther ordered That respondent's request for consideration of alleged error in the hearing examiner s ruling .denying the motion to dismiss be, and it hereby is, denied.

Chairman Gwynne and Commissioner l\fason dissenting ill part and concurring ill part.

JOINT OPINIOK OF CHAIRl\AN GWYX),"' AND COM.:ISSIONER :1IASON DISSENTING IN l' AH'r AND CONCURilNG IN PART 1Ve concur in the order herein to return this prqc eding to the. hearing examiner, but, in accord with our partial dissent to. the interlocutory order of May 11 , 1956 in Federal Life ' and Casu:lty Company, Docket No. 6312, would do so for the limited purpose of determining whether there are here particular advertising practice for instance radio or TV-effectively beyond the reach of state regulation and subject to the exercise of our jurisdiction under Section 5 of the Federal Trade Commission Act.

1434 J.' RAL TRADE COllllIISSiON DECISIONS Complaint 52 I" . T, C. l1- THE M:TTER OF TRION, INC.

CONSENT ORDER, E'TC. , IN REGARD TO THE ALLEGED VIOLATION OF HE FEDERAL TRADE COl\nHSSION ACT Doclcet 650'1" OQ'rnpla.int . Feb. 14, 1956-Decision, May 29, 1956 Consent order requiring a manufacturer in McKees Rocks, Pa., to cease repref,;Gnting falsely;y in Cldvertisements in newspapers, periodicals, circulars, etc., that use of its " Trion Electronic Air Cleaner" device would afford pro tee- Fon from colds f1nri other respiratory infections. Before illi'. Hobwrt L. Piper hearing examiner. . Floyd O. (/nl,Uns for the Commission. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it hy said Act, the Federal 'l' trade Commission having reason to believe that Trion, Inc., a corporation, hereinafter referred to as respondent has violated the provisjons of said Act a,nd it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest hereby j::sues its complaint sL1ting its charges in that respect as follows: PARAGRAPH 1. Tnrm Inc.. ! is a corporation organized and existing under and by virtue of ihe bws of the State of Pennsylvania ,,'ith its home offce tend principal place of business located fet 1000 Island Avenue, JUcICecs .Horks, Pp,nnsyJvania..

PAR. 2. Respondent is now, and for more than Olle year last past has been, engaged m the lnanufacture, sale, and distributiOll of an air clear.ning device variously designated as "Trion Electronic Air Cleaner Trion Electric Air Cleaner," and "Trion Electric Air F.later." Said product is represented to be of value in the prevention cf disease and is 11pvice as "device" is defined in the Federal Trade Commission Act.

Pt\R. 3. Uespolldenc C,fluses said product when sold to be transported from its place of business ill the State of Pennsy Ivania to purchasers thereof lacat-pel in Vn,l'ious other states of the "Cnitcel States and maintains and at all time mentioned herein has rnaintained a constant course of trade in Raid product ill commerce among and between the vftTious states of HIe Cniteel States. Its volume of business in sajd product is and has bee.n substantial.

R. 4. In the course and conduct of its business respondent has s('rninated and eau8ec1 the dissemination of ce.rtain advertisements TRION, INC. 1435 1434 Complaint concerning its said device by the United States mails and by various means in commerce, as "commerce" is defined in the Federal Trade Commission Act, for the purpose of inducing and which were likely to induce, directly or indirectly, the purchase of its said device including but not limited to advertisements inserted in newspapers and periodicals and by means of circulars and other advertising literature; and respondent has disseminated and caused the dissemination of advertisements by various means, including but not limited to the means aforesaid, for the purpose of inducing and which were likely to induce, directly or indirectly, the purchase of its said device in commerce, as "commerce ' is defined in the Federal Trade Commission Act.

PAR. 5. Among and typical, but not all inclusive, of the statements contained in the advert.isements, disseminated as aforesaid, are the following:

Fewer colds and other diseases.

Over 90% of air-borne bacteria and virus is removed. Lower doctor and drug- bils.

A healthful atmosphere reduces sickness.

'" * '" bacteria and virus are elimina ted. '" * * germ- free "* '" " air.

* * * banishing ' germs from the air in homes, offces, plants, theaters hospitals.

PAR. 6. Through the use of the advertisements contH,ining the aforesaid statements, and others of the same import, but not specifically set out herein, respondent represented, directly and by implication that the use of its device will afford protection from colds and other respiratory infections.

PAR. 7. The said advertisements are misleading in material respects and constitute "false advertisements" as that term is defined in the Federal Trade Commission Act. In truth and in fact, colds and other respiratory infections are contracted, in practically all instances, by germs, bacteria, ana viruses spread through close personal contact between persons and from droplets sprayed from the mouth during coughing, sneezing, and td.Jking. The likelihood that such infectious materials would pass through respondents device is so . remote that from any practical standpoint, said device ",'ould be of no value in preventing colds 01' other respiratory infections. PAR. 8. The use by respondent of the foregoing false misleadillg and deceptive statements contained in said advertisements ha :nld and nQ\v has the te,ndeney and c.apacity to mislead a substantial portion of the purchasing public into the erl' meous and mistaken belief that such statmnents and representations are true and to induce 1436 FEDERAL TRADE COMlvHSSI0N DECISIONS Decision 52 F. T. C.

s11bstantial portion of the purchasing public to purchase respondent' . said product because of said erroneous and mistaken belief. . PAR. 9. The aforesaid acts and practices of respondent, as herein alleged, are and were all to the prejudice and injury of the public and constituted and no\v constitute lUlfair and deceptiyc acts and practices, in commerce, within the intent and meaning of the Federal Trade Commission Act.

I:;"lTIAL DECISION BY ROBERT L. PIPER, HEARING EX.4.l\UNDER The Federal Trade Commission issued its complaint against the above-named respondent on February 14, 1956, charging it \with having violated the Federal Trade Commission Act. After being served with said complaint, respondent entered int.o an agreement dated :.\itLrch 29, 1956, containing a consent order to cease and desist disposing of all the issues in this proceeding without hearing. Said agree,ment has been submitted to the undersigned, heretofore duly designated to act as hearing examiner herein, for his consideration in accordance with Section 3.25 of the Rules of Practice of the Commission.

Respondent, pursuant to the aforcsaid agreement, has admitted all of the jurisdictional allegations of the complaint and agreed that the record may be taken as if findings of jurisdictional facts had been duly lllade ill accordance with such allegations. Said agreement further provides that respondent ,;,aive all further procedural steps before the hearing examiner or the Commission, including the making of findings of fact or conclusions of law and the right to challenge or cont.est the validity of the order to cease and desist entered in accordance with such agreement. It has also been agreed that the record herein shall consist solely of the complaint and said agreement, that the agreement shall not become a part of the offcial record unless and until it becomes a part of the decision of the Commission that saiel agreement is for settlement purposes only and does not constitute an lldmission by respondent that it has violated the law as alleged in the complaint, that said order to cease and desist shalllmve the sa,me force and effect as if entered after a full hearing and may be altered, modified Of set aside in the manner provided for other orders and that the complaint may be used in construing the terms of the order.

This proceeding having now come on for final consideration on the complaint and the aforesaid agreement containing the consent order and it appearing that the order and agreement cover all of the allegat.ions of t.he complaint. and provide for appropriate disposition of this proceeding, the same are hereby a.accepted and ordered filed upon TRIOR, INC. 1437 1434 Decision becoming part of the Commission s decision pursuant to Sections 21 and 3.25 of the Rules of Practice, and the hearing examiner accordingly makes the following findings, for jurisdictional purpuses and order:

J. Respondent is a corporation existing and doing business under and by virtue of the laws of the State of Pennsylvania, with its oflee and principal place of business located at 1000 Island Avenue, in the City of IcKees Rocks, State of Pennsylvania. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent hercinabove named. The complaint states a ca.use of a,dion against said respondent under the Federal Trade Commission Act, and this proceeding is i-j" the interest. of the public.

ORDER It is therefore ordered That the respondent Trion, Inc., a corporation, its offcers, agents, representatives, and employees, directly or through any corporate or other device, in connection with the sale offering for sale or distribution of a device designated as Trion Elec.tronic Air Cleaner, or any other de,, ice of substantia.lly similar character, whether sold under the S Lme name or any other name, do forthwith cease and desist from, directly or indirectly: 1. Disseminating or causing to be disseminated by means of the United States mails, or by any other means in commerce, as "commerce" is defined in the Federal Trade Commission Act, any advertjsement which represents directly or by implication that the use of respondent's device will afford protection from or "\vill e,iIectively prevent the spread of colds or similar respiratory infections; 2. Disseminating 01' causing to be disseminated, any advertisement by any means for the purpose of inducing, or which is likely to induce directly or indirectly, the purchase in commerce, as "commerce ' i defined in the Federal Trade Commission Act, of respondent~s c1eviCB, which advcrtiscment bils to comply with the requirements set forth in Paragraph 1 hereof.

DECISION OF THE COl\IlIISSION AXD ORUER TO FILE REPORT OJ.' COl\IPLIAXCE Pursuant to Section 3.21 of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 2Dth day of I\f ay 195G, become the dccision of the Commission; and, accordingly: It is o1'dered That the respondent herein shall, within sixty (60) days after service upon it of this order, file with the Commission a report in writing setting forth in det.ail the manner a,nel form in which it has complied with the order to cease and desist. 45152-!- !J- &:

1438 FEDERAL 'trade C01L\IISSION DECISIONS Complaint 52 F. T, C.