Lam Fi Corp.

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

IN THE MATTER OF LAM FI CORP. ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMISSION ACT Docket C-223. Compla.-int, Sept. 1962-Decision, Sept. 1962 Consent order requiring Rochester, N. , distributors of a plastic metal mender designated "Jiffy Black" to consumers to cease representing falsely that such product was nontoxic, and to label containers clearly and conspicuously with adequate warnings as to possible danger attendant on its use and directions for safe handling.

Complaint 61 F.

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 Comj11ission, having reason to believe that Lain Fi Corp. , a Corpol\'l.t.ion, and Howard L. Guenther, Earl J. Guenther, and Joseph L. Demske, individually and as officers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act and it appearing to the Cormnission 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. Respondent Lam Fi Corp. is 'a corporation organized existing and doing business under and by virtue of the laws of the State of New York, with its principal office and place of business located at 1929 East J\lain Street, in the city of Rochester, State of New York.

Respondents Howard L. Guenther, Earl J. Guenther and Joseph L. Demske are officers of the corporate respondent. They formulate direct and control the acts land practices of the corporate respondent including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent. PAR. 2. Respondents are now, and for some time last past have been engaged in the advertising, offering for sale, sale and distribution of 'among other things, a plastic metal mender designated "Jiffy Black" to the consmner.

PAR. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said product when sold, to be shipped from their place of business in the State of New York to purchasers thereof located in various other States of the Vnited States, and maintain, and at all times mentioned he-rein have maintained, a substantial course of trade in said product in commerce, as "commerce" is defined in the Federal Trade Commission Act. PAR. 4. In the course and conduct of their business, and for the purpose of inducing the sale of their plastic metal mender designated Jiffy Black", respondents have made certain statements and representations in advertisements in a magazine of national circulation, in circulars and on labels, and by other media, of which the following are typical:

NON-TOXIC CREAM HARDENER JIFFY BLACK BODY-FILL With The Non-Toxic CREAl\! HARDENER NO ITCH LAM FI CORP. ET AL. 493 491 Complaint PAR. 5. By and through the use of the aforesaid statements, and representations, and others of similar import but not specifically set forth herein, respondents represented, directly or by implication: (1) That the cream hardener is nontoxic.

(2) That the plastic metal mender is nontoxic and will not cause itching.

PAR. 6. In truth and in fact:

(1) The cream hardener is not nontoxic and may cause itching or skin irritation as it contains benzoyl peroxide, which is a primary irritant and sensitizer to the skin.

(2) The cream hardener must be combined with the putty to make the plastic metal mender and when this is done the product resulting therefrom may cause itching or skin irritation and is not nontoxic under all conditions of use.

Therefore, the statements and representations set forth in paragraph 4 were, and are, false, misleading and deceptive. PAR. 7. The benzoyl peroxide contained in the crealll hardener may through prolonged or repeated contact with the skin irritate or sensitize the skin and, therefore, in case of contact should be flushed from the skin. Because it contains benzoyl peroxide, the cream hardener is toxic if taken internally and, therefore, should be kept out of reach of children. If the cream hardener is ingested, vomiting should be induced and a physician consulted. Because it contains benzoyl peroxide, the cream hardener 111ay be flamma.ble if coming in contact with heat or flanle. The label on the respondents' cream hardener is misleading in that it fails to reveal these material facts with respect to the consequences which may result from the use of said product as directed on the label for the putty and with respect to conditions of storage of the cream hardener. The label on the respondents' putty is misleading in that it fails to reveal the material fact that after it is mixed with the cream hardener the product resulting therefrom may through prolonged or repeated contact with the skin irritate or sensitize the skin and, therefore, in case of contact should be flushed from the skin.

PAR. 8. In the conduct of their business, and at all times mentioned herein, respondents have been in substantial competition, in commerce, with corporations, firms and individuals in the sale of plastic metal menders of the same general kind and nature as that sold by the respondents.

PAR. 9. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices and failure to warn the purchasing public on the labels of the product or the dangers . :

494 FEDERAL TRADE CO:MMISSION . DECISIONS Decision and Order 61 F.

attendant to the use of the product have had, and now have, the capacity and tendency to mislead Inembers of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true, and that there is no danger. in use of the product and into the purchase of substantial quantities of the respondents' product by reason of said erroneous and mistaken beliefs. PAR. 10. The aforesaid acts and practices of respondents, as herein alleged, were, and are, all to the prejudice and injury of the public and of the respondents' competitors and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce, in violation of Section 5 of the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Colllmission having initiated an investigation of certain acts and practices of the corporation named above, and the respondents mulled in the caption hereof having been furnished thereafter with a copy of a draft of complaint which the Bureau of Deceptive Practices proposed to present to the Commission for its consideration and which, if issued by the Commission would charge the respondents with violation of the Federal Trade C011l1nissioll Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an acbnission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the sig1ling of said agreement is for settlelllent purposes only and does not constitute an a,admission by CO111- the respondents that the law has been violated as ,alleged in such plaint, and waivers and provisions as required by the Commission rules; and The Comnlission, having reason to believe that the respondents have violated the Federal Trade Collllnission Act, and having determined that complaint should issue stating its charges in that respect, hereby issues its complaint, a:ccepts said agreelnent makes the following jurisdictional findings and enters the following order: 1. Respondent Lam Fi Corp., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at 1929 East ~lain Street, in the city of Rochester, State of New York. Respondents Howard L. Guenther, Earl J. Guenther and Joseph L. Demske are officers of said corporation and their address is the same ~s that of said corporation.

LAM FI CORP. ET AL. 495 491 Decision and Order 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It ordered That respondent Lam Fi Corp., a corporation, and its officers, and respondents I-Ioward L. Guenther, Earl J. Guenther, and Joseph L. Demske, individually and as officers of said corporation, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution in commerce, as "commerce" is defined in the Federal Trade Commission Act of a plastic metal mender designated "Jiffy Black", or any other product of similar composition or possessing substantially similar properties, under whatever nalne sold do forthwith cease and desist from:

1. Representing, directly or by implication: (a) That the cream hardener is nontoxic or will not cause itching or skin irritation.

(b) That the plastic metal mender is nontoxic or will not cause itching or skin irritation.

2. Using a label on the container for the cream hardener which does not set forth in a clear and conspicuous manner the following statements:

CAUTION: ICeep away from heat or flame. Keep out of reach of children. If taken internally, induce vomiting; consult physician. Avoid prolonged or repeated contact with skin. In case of c.contact, flush skin with water. 3. Using a label on the container for the putty which does not set forth in a clear and conspicuous Inanner the following statements:

CAUTION: After 111ixing with creml1 hardener, avoid prolonged or repeated contact with skin. In case of contact flush skin with water.

It is further ordered That the respondents herein shall, within sixty (60) days after service upon t:hem of this order, file with the Commission a report in writing setting forth in detail the nlanner and form in which they have complied with this order. 4nG FEDERAL TRADE COMMISSION DECISIONS Complaint 61 F.