Pierce Oil & Refining Company

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

Ix THE JUATTEH OF PIERCE OIL &0 REFINING COyiPAXY ET AL.

CONSENT ORDER , :ETC., IN REG.-\RD TO THE ALLEGED VIOLATION OF THE FEDERAL TR.-\DE CO;\DIISSION ACT Docket 0-80. Complaint, Feb. 19G2-Decision, F'eb. , 1962 Consent order requiring Springfield, Ill. , concerns engaged in the sale to the public of reclaimed lubricating oil obtained from motor crankcase draill iugs to cease sellng their . said product in the same kind of containers as those used for new and unused oil, with no markings to indicate its reprocessed nature, which furthered the deception by the words "crude" and '; perfected blend" printed thereon; and to cease gimi1al' deceptive nse of the .word "guaranteed"

COMPLAINT 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 Pierce Oil & Refining Company, " corporation, Springfield Refinoil Company, a corporation, and Perry IV. Pierce and Twylah J\. Pierce, individually and as offcers of said corporations, and Perry VY. Pierce, individually and trading as Sorco Oil & Refining Company, as Springfield Refinoil Conlpa,ny, and as Perry 'V. Pierce, hereinafter referred to as respondents, have violated the provisions of the said A. , and it appearing to tho Commission that a proceeding by it in respect thereof ,yould be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRA.PH 1. Respondents Pierce Oil &, Hefining Company and Springfield Refinoil Company are corporations organized, existing and doing business under and by virtue of the Jaws of the State of Illnois. Individual respondents Perry IV. Pierce and Twy lah M. Pierce are offcers of said corporate respondents. They formulate direct and control the acts and practices of the corporate respondents including the acts and practices hereinafter set fort.h. Individual respondent Perry 'V. Pierce is also doing business as Sorco Oil & Refining Company, as Springfield Refinoil Company and as Perry IV. Pierce. All respondents have a principal offce and place 01 business "t 1023 E. vI' ashingt.on Street in the city of Springfield, St.ate of' Illinois.

PAR. 2. R.respondent.s are no," a,ncl for more than (1 year last past have been, engaged in the sale and distribution of reclaimed, or reprocessed, used lubric.ating oil to dealers for resale to the purcha,sing public. Among brand names under wllich their saiel products are sold is that of "Saf T lube . Respondents cause and have caused PIERCE OIL & REFINING CO. ET AL. 343 342 Complaint said products when sold to be tn111sportcd from their place or business in the State of Illinois to purchasers t.hereof located in yarious other states of the United States.

PAR. 3. In the course and conduct or their business, respondents are now, and lUlve been, in cOlnpetition with individuals and with firms and other corporations engaged in the sale and distribution or lubricating oil in COlllmerce between and among the various states of the United States.

PAR. 4. Respondents' oil consists in -whole or in substantial part or used oil, obtained from drainings or motor crank cases and from other sources, which is thereafter reclailned or reprocessed. Said oil is sold in containers or the same general size, kind and appearance as those used for new oil and has the appearance of new and unused oil. The containers bear no markings of any kind indicating that said product is reclaimed or reprocessed used oil. In the absence of a disclosure on the containers that the oil therein is used, reclaimed, or reprocessed, the general understanding and belief on t.he part of dealers and of the purchasing public is that oil sold in containers such tls are used by respondents is, in fact, new oil and not used, recla.imed or reprocessed oil. This belief is enhanced by the representations printed on respondent.s' oil containers as follows:

1. Refined from special crudes selected for maximum lubrication qualities under extreme temperatures and conditions.

2. SAF-'l' LUB motor oil, guaranteed to give instant protection and safe lubrication to the motor. A high grade-superior motor oil perfected for maximum performance and longer life.

3. SAF T LUB. A Perfected blend for instant protection MOTOR OIL. 4. Heat resisting with maximum lubrication for automobiles, trucks, tractors. busses.

PAR. 5. Through the use of the words "crude" and " a perfected blend" on their containers, respondents have represented that their oil is made from nmv unused blends of crude oils. In truth and in fact, respondents' oil is reclaimed from used motor oil and contains oils of various types.

PAR. 6. Through the use of the word "guaranteed" respondents have represented that their said products arc guaranteed in every respect. PAR. 7. Said statement and representation was false, misleading and deceptive. In truth and in fact, the guarantee provided did not disdose the name of the guarantor, nor the te.rm8 conditions or e.extent of the application of the guarantee.

PAH. 8. Respondents' said acts and practices further serve to place in the hands of the uninformed or unscrupulous dealers a means and 344 FEDERAL TRADE CO"Ii'dISSION DECISIONS Decision and Order 60 :U' instrumentality whereby such persons may mislead the purchasing public with respect to the nature of respondents' product. PAR 9. The aforesaid acts and practices of the respondents, and the failure to disclose that their oil is composed in whole or in part of used oil which has been reclaimed or reprocessed, has had, and now has the t.tendency and capacity to mislead and deceive FL substantial number of retailers and members of the purchasing public into the erroneous and lnistaken belief that said oil is refined by respondent from virgin crude oil, and to induce the purchasing public to purchase substantial quantities of respondents' product because of such erroneous and mistaken belief.

PAR. 10. The aforesaid acts and practices of respondents, as herein aUeged, were, and are, aU to the prejudice and injury of the public and of respondents' competitors and. cons6tutecl, and now constitute, unfair lnethods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of Section 5(,,) (1) of the Federal Trade Commission Act.

DECISION AND ORDER The Comulission having heretofore determined to issue its oomlo!aint charging the respondents named in the caption hereof with violation of the Federal Trade Comnlission Act, and the respondents having been served with notice of said detennination and with a copy of the cOlnplaint the Commission intended to issue, together ,with a proposed fornl of order; and The respondents and counsel for the Conllnission having thereafter executed an agreement containing a consent order, an admission by respondents of all the jurisdictional hcts set forth in the complaint to issue herein, a statement that the signing of said agreement is for settlement purposes only and does not constitute an Ldmission by respondents that the Jaw has been violated as set forth in such complaint, and waivers and provisions as required by the Commission rules; fl1d The Commission, having considered the agreement, hereby accepts sa111e, issues its complaint in the form contemplated by said agreement Jnakes the following jurisdictional findings, and enters the following order:

1. Respondents, Pierce Oil & Refining Company and Springfield Refinoil Company, are corporations organized. exisdng and doing business lmde.r and by virtue of the Jaws of the State of rl1inois with their offce and principal place of business located at 1023 East 1Vashington Street, in the city of Springfield, State of Illnois. PIERCE OIL & REFINING CO. ET AL. 345 312 Decision and Order Respondents, Perry IV. Pierce and Twylah 1\1. Pierce, are offcers of said corporations, and their address is the same as that of said corporations.

Respondent, Perry 'V. Pierce, is also doing business as Sorco Oil & Refining Comp'UlY, as Springfield Refinoil Company, and as Perry IV. Pierce, all of which have a principal offce and place of business at 1023 East Washington Street, in the city of Springfield, State of lllinois.

2. The Federal Trade Commission has jnrisdietion of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered That respondents, Pierce Oil & Refining Company, a corporation, Springfield Refinoil Company, a corporation, and their officers, and Perry ",V. Pierce and Twylah :\1. Pierce., individually and as offcers of said corporations, and Perry ,V. Pierce, individually and trading as Sorco Oil & Refining Company, a.s Springfield RefinoD Company a,nd as Perry \;Y. Pierce, or under any other name, and respondents' agents, representatives and employees, directly or through any corporate or other device, in connection ",with ofiering for sale, sale or distribution in commerce, as "co11111e1'ce " is defined in the Federal Trade Commission Act, of lubricating oil, do forthwith cease and desist froln :

1. Advertising, offering for sale or selling, any lubricating oil which is composed in whole or in part of oil "which has been reclaimed or in any manner processed from previously used oil, without disclosing such prior use to t11e purchaser or potential purchaser in the adyortising and sales promotion material, and by a clear and conspicuous statement to that etrect on the front panel or front panels on the container.

2. Representing in any manner that lubricating oil composed in "lvholo or in part of oil that has been manufactured, reprocessed or re-refined from oil that has been previously used for lubricating purposes, has been manufactured from oil that has not been previously used.

3. R.representing, directly or by implication, that their products are guaranteed, lUlless the name of the gLlanmtor is disclosed and the manner in which the guarantor will perform thereunder are cleftrly and conspicuously disclosed.

J t is tnrther ordered That the respondents herein shall, within sixty (60) days after service upon them of tllis order, file with the COlllmission a report in \vrit-ing setting forth in detail t.he manner and form in which they have complied with this order. , .

346 FEDERAL TRADE CmHJISSION DECISIONS Complaint GO F.