Acme Sparkler & Specialty Company

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IN THE JIA TTER OF ACME SP,\RKLER & SPECIALTY CmIPANY ET AL. COXSEXT OIWEH , ETC., I REGAIW TO THE ALLEG:ED YJOLATIOX OF THE FEDERAL TRADE CO)BIISSION ACT Docket 8288. Complaint, Feb. lS, 1961-Decision, June 14, 1961 Consent order requiring a River Grove, 111., distributor of fireworks to cease representing falsely that foreign-made products were domestic, through such practices as packaging a Japanese import known as "Black Python Snake" in cartons either printed with the words "Made in V, S. A. " or not adequately marked to inform purchasers of its foreign origin. COl\IPLAIXT 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 Commission, having reason to believe that Acme Sparkler & Specialty Company, a corporation, and I-Iarry Callen and Lawrence Canen, individually and as offcers of said corporation, also doing business as Acme Specialties Corporation, 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:

P ARAGRAPI 1. Respondent Acme Sparkler & Specialty Company is a corporation organized, existing and doing business under and 1116 FEDERAL TRADE CQIV1MISSION DECISIONS Complaint 58 F.

by virtue of the laws Or the State of Ilinois. Respondents Harry Callen and Lawrence Callen are individuals and are offcers or said corporate respondent. The said individual respondents also do business as Acme Specialties Corporation. The individual respondents formulate, direct and control the policies, acts and practices or the corporate respondent, including the acts and practices hereinafter set forth.

Respondents' offce and principal place of business is located at 2000 North River Road, Hiver Grove, Illinois. PAR. 2. Respondents are now, and for some time last past have been, engaged in the advertising, offering for sale, sale and distribution of celebration fireworks and other products to jobbers and retailers, one of which, known as "Black Python Snake, is imported from Japan.

PAR. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said products, when sold, to be shipped from their place of business in the State of illinois t.o purchasers thereof locat.ed in various other States of the l:united States, and maintain, and at all times mentioned herein have maintained, a course of trade in said products, in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct of their business, respondents sell and distribute, to jobbers and ret.ailers, their "Black Python Snake, which is imported from Japan. .When said product is offered for sale or sold it has been packaged in cartons which have printed thereon ":Made in U. " or in cartons which are not suffciently labeled or adequately marked to inform the purchasing public that such product is of foreign origin. PAR. 5. Vhen imported products are offered for sale and sold in the channels of trade in commerce throughout the United States they are purchased and accepted as and for, and are taken to be, products of domestic manufacture and origin, unless the same are labeled and marked in a manner which informs the purchasers that said products are of foreign origin. A substantial portion of the purchasing public has a preference ror products, including fireworks, which are wholly of domestic manufacture or origin, a,s distinguished from products of foreign manufacture or origin.

PAR. 6. Respondents, by placing their said products in the hands of jobbers and retailers, provide said jobbers and retailers a means and instrumentality whereby they may mislead and deceive the purchasing public as to the place of origin of said products. ACME SPARKLER & SPECIALTY COMPANY ET AL. 1117 1115 Decision PAR. 7. Hespondents, in the course and conduct of their business are in substantial competition, in commerce, with corporations, firms and individuals engaged in the sale of products of the same kind and nature as those sold by respondents, including products of both domestic and foreign origin.

PAIL 8. The practice of respondents, as aforesaid, in offering for sale, BoDing and distributing their said product without marking the product or the cartons in which it is packed to indicate to purchasers that said product is of Japanese or other foreign origin has had, and now has, the tendency and capacity to mislead and deceive purchasers or members of the buying and consuming public into the false and erroneous belief that said product is wholly of domestic manufacture and origin and into the purchase of substantial quantities of such product in reliance upon such erroneous belief. As a result thereof, substantial trade in commerce has been unfairly diverted to respondents from their competitors and substantial injury has been, and is being, done to competition in commerce.

'R. 9. The aforesaid acts and practices of respondents, as herein alleged, are all to the prejudice aud injury of the public and of respondents' competitors and constitut.e unfair methods of competition and unfair and deceptive acts and practices in commerce within the int.ent and meaning of the Federal Trade Commission Act.

fih. William A. Somers for the Commission. Mr. Lawrence Callen of Hiver Grove, Ill., for respondents. IXI'rIAL DECISION BY I-IEHMAN Tacker, HEARING EXA)!IXER The complaint in this proceeding, issued February 13 , 1961, charged the respondents, Acme Sparkler & Specialty Company (a corporation organized under' the laws of the State of Illinois), and its offcers Harry C,dlen and Lawrence Cal1en, individually and as offcers thereof, and n130 as doing busine,ss under the firm name of Acme Specialties Corporation, an of 2000 orth River Road, River Grove, Illinois, with violation of the Federal Trade Commission Act by misdescribing and failing to disclose and identify the country of origin of goods advertised and offered for sale and sold and dist.ri buted by them in commerce.

After the issuance of the complaint, respondents (with the advice of their attorney), and counsel supporting the complaint entered into an agreement, containing consent order to cease and desist disposing of all the issues as to aU parties to this proceeding. 1118 FEDERAL TRADE COMMISSION DECISIOXS Order 58 F.

It was expressly provided in said agreement that the signing thereof is for settlement purposes only and does not constitute an admission by respondents t.hat they have violated the law as alleged ill the complaint.

By the terms of said agreement, the respondents admitted all the jurisdictional facts a11egcd in the complaint and agreed that the record herein may be taken as if the Commission had made fmdings or jurisdictional fads in accordance with the allegations. By said agreement, the parties expressly 'waived any further pro cedural steps before the hearing examiner and the Commission; the making of findings of fact or conclusions of law; fmd all rights they may have to cha.llenge or contest the validity of the order to cease a.nd desist entered in aec.ordance theres\"ith. Hesponclents agreed further that the order to cease and desist issued in accordance with said agreement shall have the same force and euect as if made after a full hearing. It was further provided that said a.agreement, together with the complaint, shall constitute the entire l'ceonl herein; thftt the complaint herein may be used in construing the terms of the order issued pursllrmt to said agreement; and that said order may be altered, modified or set aside in the manner prescribed by the statute for orders of the Commission.

The hearing examiner has considered such agreement and the order therein contained, and, it appearing that said agreement. and order provide for an appropriate disposition of this proceeding, the same is hereby accepted and, upon becoming part of the Commission s deeision in accordance with Sections 3.21 and 8. 25 of the Hules of Practice shall be filed; and, in consonance ,,,jth t.he terms thereof, the hearing examiner finds that the Federal Trade Commission has jurisdiction of t.he subject matter of this proceeding and of the respondents wHIled herein, and that t.his proceeding is in the interest of the public, and issues the following order: ORDER It iR o?'de)'ed That respondents Acme Sparkler & Specinlty Company, a corporation, trading and doing business under its own name or under the name of Ac.me Specialties Corporation, or under any other name, and its offcers, and Harry Callen and Lawrence CaJ1en, indiyjduaJ1y and as officers of said Acme SparkJer & Specialty Company, and respondents' representatives, agents and employees, directly or through any corporate or other devices, jn con nection with the offering for sale, sale or distribution of fireworks , MEREDITH MILLING COMPA1- , ETC. 1119 1115 Syllabus or of any other products, in commerce, as "commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, directly or indirectly, in advertising or in labeling that products manufactured in .J apan or in any other foreign country are manufactured in the United States. 2. Offering for sale or selling products which ate, in whole or in substantial part, of foreign origin without clearly and conspicuously disclosing on such products and, if the products are enclosed in package or carton, on said paeknge or carton, in such a manner that it wil not be hidden or obliterated, the country of origin thereof.

3. Furnishing or other,ise placing in t.he hands of retailers 01 dealers in said products the means and instrumentalities by and through 'which they may mislead or decriyc the public in the manner or as to the things hereinabove inhibited. DECISION OF THE CO:iUfISSION .,\ND ORDER TO FILE Import OF CO IPLIANCE Pursua,nt to Section 3.21 of the Commission s Rules of Practice the initial de,cision of the hearing examiner shall, on the 14th day of .June, 19(51, become the decision of the Commission; and, accordingly:

It is onZel'ed That respondents herein shall, within sixty (60) clays after service upon them of this order, file Iyith the Commission a, report. in ,..Titing, setting forth in detail the manner and form in