Wilson Chemical Company, Inc., et al.

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

IN Tile :YlATI'ER OF WILSON CHE~IICAL COMPANY, I:'C., ET AI,.

ORDER, OPIXIOX , ETC. , IN REG_-\RD '1'0 THE ALLEGED VIOL.-\TION OF THE FEDERAL TRADE COl\I:IISSIOK ACT Docket 8474, Complaint, Mar. 2C, 1962-Decision, Jan. 14, 1964 01'1f1' 1'1'l1Uilillg T:n' unl' , Fa" c1istrilmtors of "1Vl1ite Cluyel'ine Bl'cUH1 Snh- " to cew.,e making decepti\"e oflers of "free " merchandise in 8(h-erti:-ing, directed llKtillly at chi1drE'll- by Udl statements 8S "GEXCISE NICKEL SIL VEn SIGNET EISG ABSOLLTELY FREE YOl:HS FREE' REAL FOR- EIGS COIKS" lO recruit sales agent,; for their " '",white Clm-Nine El'fllH1 Sa lye " and using tbreats uf legal aC:ion and other forms of intimidation to enforce payment of a serted delinCjuent I1CCOlmt WILSON CHEMICAL CO. , I),C.) ET AI.. 169 168 Complaint C01lPLAIX' 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 ,Vilson C-hemi'cal Company, Inc., a corporation, and George C. "Wilson, III, Charles A. ,Vilson, and Sarah A. Hooker, individually and as officers and directors of said corporation, and Sally Ann ,Vilson and jUichael E. ,Vilson, irnc1ividually and as directors of said corporation, and all said individuals also as partners trading and doing business as \Vilson Chemical Company, and J. )icClellan Davis, an individllf1J hereina.after 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 iVould be in the public interest, hereby issues its complaint stating its charges in that respect as fOJlO\TS: PARAGlL\PH 1. Respondent ,Vilson Chemical Company, Inc. , is a corporation orga,nized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal otHec and place of busin1ess located at Tyrone, State of Pennsylvania. Respondents George C. "Wilson, III, Charles A. "Wilson, and Sarah A. IIooker are officers and directors of the corporate respondent. Respondents Sally Ann "Wilson and Michael B. Wilson arc directors of the corporate respondent. Said individuals formulate direct and control the acts and practices of the corporate respondenl including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent. respondents George C. "Wilson, III, Sally Ann Wilson, Charles A. "Wilson, Miehael B. "Wilson, and Sarah A. Hooker are also partners trading and doing business as ,Vilson Chemical Company. They formulate, direct and control the acts and practices of said partnership, including the acts and practices hereinafter set forth. Their address is the same as the corporate respondent. Respondent J. McCle1lan Davis is the collection attorney for the aforesaid respondents trading and doing business as partners under' the name of 1Vilson Chemical Company. 1-1is address is Filrmers and l\1merchants Ba,nk Building, Tyrone, Pennsylva,nia. The corporate respondent and the indi,vicluaJs cooperate and act together in carrying out the acts and practices hereina,after alleged. PAH. 2. Hcspondents arc no\\, and for some Limb last past hnye been: engaged in t.he advertising, oilering for sale, sale and clis tribl1tion of a salve designated as ""Vhite Cloverine Brand Sahe to sales agents and others for resale to the public. PAR. 3. In the course and conc1utt of their bl1siness respondents now cause, and for some time last past have caused, their said 224-069--70-- :

170 FEDERAL TRADE COMMISSION DECISIO:\S Complaint 64 F.

product, when sold, to be shipped from their place ot business in the State of Pennsylvania to purchasers thereof locate-' d in various other States of the Gnited States, and maintain, and at all times mentioned herein have mainta.ined, a substantial course of trade in .said product in commerce, as "commerce" is defined in the I, ederal Trade Commission Act.

\R. 4. In the course and conduct of their business, and for the purpose of inducing the sale of their pro duet, designated "'White Cloverine Brand Salve, respondents have made certain.n statements nd representations in advertisements in comic books of national circula,ion to which children of tender years are attracted, and by other media, of which the following are typical: 1VIX A. BEACTIFUL SIGXET RIXG. IT' S FU2\ IT' S EASY: AU You Do Is Xame These FamOlls C. S. Presidents (Pictures) t Get All 4 Hight'" "' * We ll Send Your GE.:TCI:\E i\ICKEL BILYER SIGXET RIXG ABSOLl'TELY FHEE * ..

'iVin Genuine Xickel Silver SIGKET RIKG- ADSOLCTELY FREE! .Just Kame Correctly the 4 Famous American Presidents Pictured Abo,e, Check Xames on Coupon-Fil in Rest of Coupon and Mall to us, IT' S l-Jj, TO WIj\- ACT KGW GIVEX: Gn-EX! YES, lye GIVE YOC I'HE::lIlnrS or CA;:II YOURS FREE: Gelluine ::Ioney From ations of tbe World" '" * For sending coupon ::O\Y! HEAL FOUElG.: COl::S. PAR. 5. By and through t.he use. of the aforesaid statements and representations, and others of similar import but not specifically set forth herein, responde,nts represented directly or by implication: (1) That merchandise is sent free without ob1igatioll. (2) That free merchandise is being offered for some purpose other than the recruitment of sales agents. P.o. 6. The aforesaid statements and representations were, and a.re, false, misleading and deceptive. In truth and in fact: (1) ~lerehandise is not sent free without obligation. (2) The free offer is for the sole purpose of recruiting sales agents.

PAR. 7. In the course and conduct of their business, respondents have from time to time shipped merchandise to children of tender years who have by signing and mailing in the said coupon unknowingly ordered merchandise for resale and thereby purportedly obligated themselves as sales agents of respondents. Said merchandise would not have been unknowingly ordered by children of tender years except for the confusing, obscure, and deceptive manner in which the conditions of the free after were presented in the advertising. Misled by respondents' advertising, such children were not capable of suflciently understanding or accepting the terms and 'VILSON CHEMICAL CO. ) I:\TC. , ET AL. 171 Complaint conditions or the offer. In their correspondence with such pur-1(.' ported sales agents, respondents have contended that there is an indebtedness resulting from a bona fide order placed by such chilclren. In some instances, in their attempt to enrorce payment for their merchandise, respondents have written, or caused to be written threatening letters on the stationery or the "\Vilson Chemical Company and attorney s demand letters on the stationery or the respondent J. McClellan Davis, to be sent to children of tender years threatening legal action, thereby rrightening said innocent and unsuspect ing children into believing that they would be subjected to legal action if no payment were made. Said statements and representations were false and misleading and const.ituted unfair and deceptive acts and practices.

-\R. 8. Respondents: merchandising program reatures advertising im comic books directed to children, a consumer group unqualified by age or experience to judge soundly the merits of respondents offers or to recognize the obligations attending accept.ance of shipments of respondents' merchandise ror resale. Furthermore the purpose fUlcl objective or respondents' program arc to pl,lce shipments or respondents' merchandise, in the hands of children without the prior knowledge or consent or t.their parents. Respondents' program is designed and tailored to exploit, unfairly and for commercial purposes, the affection and responsibility that aclu1ts and especially parents, feel ror children. Respondents traffc in the aflcction or adults ror children to the exclusion of any sio'nificant ' b attempt to sell the product on its merits. Hesponclents: practic.es in the foregoing respects are contrary to public policy and constituted unfair and deceptlve acts and pract.ices. Pall 9. In the conduct of their business, and at all times mentioned herein, respondents have been in substant.ial competition, in commerce, with corporation, firms and individuals in the sale or products oJ the same general kind and nature as those sold by respondents.

PAH. 10. The use by respondents of the aloresaic1 false, misleading and deceptive statements, representations and practices has hall, and now has, the capacity and tendency to mislead children of tender years and other members or the purchasing public into the erroneous and mistaken belief t.hat said statements and representations \were and are true and into the ordering of substantial quantities of respondents' prmlucts by reason of sflic1 erroneous and mistaken belief.

PAR. 11. The aforesaid acts aIHl practices of respondents, as herein alleged, \Yere, and are, all to t.he prejudice and injury of the public and of J'respondents competitors and constituted, and now 172 FEDERAL TRADE CO)'L\IISSIO DECISIOXS Decision 64 F.

constitutes, unfair methods of competition in commerce, and unfair and deceptive acts and practices in commerce, in violation of Section 5 of t.he Federal Trade Commission Act.

ilfT. Herbert L. Blume and lift. Robert C. Harrington for the Commission.

Romeika, Hedlner, Fish cO ScheckteT Philadelphia, Pa. , by ilh. Alplwl18//8 R. Romeil.:a for the respondents. IXITL\L DECISION BY "\VILLIAl\I L. PACK , HEARING EX.-DIINER APRIL 25 , 1963 1. The respondents are charged with violation of the Fede.ral Trade Commission Act through the use of misleading advertising and other unfair and deceptive practices in promoting the sale, and distribution of a medicinal product, a salve intended for use in the t.re.atment of minor skin disorders. The therapeutic properties of the salve are in no way involved in ihe proceeding; t.he Commission s complaint relates to entirely diiIerent matters. Evidence both in support of and in opposition to the complaint has been received, Propo ed findings and conclusions have been submitted by counsel for the parties, oral argument not having been requested, and the case is now before the hearing examiner for final consideration. Any proposed findings or conclusions not included herein have been rejected as not material or as not warranted by the record 01' the applicable law 2. As will be observed from the nmnes of the parties respondent appearing above, the two business concerns involved have almost identical names. The corporate responelent is ,Vilson Chemical Company, lrw. (emphasis added), anel the partnership is ,Vilson Chemical Company. In referring to them in this decision the. terms corporation and partnership ,will frequently be used. The i.ndividual respondents (except J. :lIcClel1an Davis) are joined in the proceeding both because of their alleged relationship to the corporation and because they are members of the. partners11ip. 3. One of the principal issues in the proceeding involves the relationship beti\een the corporation and the partnership; that is whether the business operations anel practices here involved 'YBre carried on by the corporation and partnership together as charged in the complaint, or whether such operations a.nd practices "Were those of the partnership only, as urged by responelcnts. As ,,,ill be seen 1at81'j the hearing examiner has concluded that, at least inmIal' as the matters involved in the present proceeding are concerned, the activities of the corporation and of the partnership were inseparable, WILSON CHEMICAL CO ) INC. , ET AL. 173 168 Decisioll The practices in question were ca.rri.ed on by both acting in cooperation each with the other.

4. Respondent 'Wilson Chemieal Company, Inc., is a Delaware corporation, with its principal offce and place of business located in Tyrone, Pennsylvania.

5. Respondent. George C. 'Wilson, III, is president of the corporation and has virtually sale responsibility for the operation of its business. He formulates the policies of the corporation and directs and controls a11 of it. major acts and practices. 6. Four of the other individual respondent.s, Charles A. 1Vilson Sarah A. Hooker, Sally Ann 1Vilson and ~liehael B. 1Vilson are offcers and/or directors of the corporation. I-Iowever, they have litte to do with the actual operation of the business. None of them resides in or near Tyrone, Pennsylvania, Iyhe1'e the corporation s principal offce and place of bus ness arc Jocatecl. Actually their main participation in the affairs of the corporation consists of attending a directors or stockholders meeting in Tyrone once or twice a year. It is therefore concluded that the complaint has not been sustained as to these four individuttls insofar.r as their relationship to t.he corporation in their individual capacities ils concerned. They, of course, can properly be held in their offcial capacities. 7. The fa-ilure of the record to establish a case against these four respondent.s in their individual capa,cities (insofar as their relationship' to t.he corporation is concerned) would seem to make little prac.tical difference because, as will shortly be seen, all of them are. mem bel's of the partnership aud as such can properly be held in their individual capacities. That is to say, they can properly be held indiviclua11y as members of the partnership, regardless of what their rela tiollShip to the corporation may be. 8. Respondents George C. 1Yilson, III, Charles A. 1Vjlson, Sarah A. Hooker, Sally Ann Wilson, and Michael B. 1Yilson are partners trading and doing business under the name \Vilson Chemical Company. The address of the partnership is the same as that of the corporation- Tyrone, Pennsylvania.

9. For reasons which will be set out later, the hearing examiner has eonc1uded that the complaint should be dismissed as to respondent T. J\fcClcllan Davis, and the terms respondents or individual respondents as used hereinafter will not include :Mr. Davis, unless the contrary is indicated.

10. In summary, t.he t.erm respondents as used hereinaft.er will unless the contrary is indicated, include the corporate respondent Wilson Chemical Company, Inc. ; George C. 1Vilson, Ill, individualJv and as an offcer of the corporntioll; Charles A. \Vilson, Sarah 174 FEDERAL TRADE COMMISSION DECISIOKS Declsiol1 64 F.

A. Hooker, Sally Ann 1Vilson, and Michael B. \Vilson as offcers and/or directors of the corporation; and George C. 1Vilson, III Charles A. \Vilson, Sarah A. Hooker, Sa1Jy Ann 1Vilson and ~Iichael B. '\Vilson, individual11y and as partners trading under the name \Vilson Chemical Company.

respondents 11. In the course and conduct of their business, cause their salve product, when sold, to be shipped from their place of business in the State of Pennsylvania to purchasers 10cat811 in various other States of the United States. At a11 times mentioned herein respondents have maintained a substantial course of trade in their product in commerce, as that term is deHned in the Fec1el' Trade Commission Act.

12. In the sale and distribution of their product respondents are in substantial competition ill commerce with other corporations. partnerships and individuals engaged in the sale and clistribmion of products intended for llse in the treatment of the same conditions as those for which respondents' products is intended. 13. Respondents' product is known as " 'Vhite Cloverine Brand Salve . The business of manufacturing and marketing the salve had its inception more than half a century ago and has from the first been operated by members of the \Vilson family. 17pon tile death, in October 1051, of George C. 1Vilmn, Jr. (husbancl of ~Irs. Sarah A. Hooker and father of the other individual respondents), respondent George C. \Vilson, III, assumed charge of the buslnc::s. \VflS inAt that time ::\1'. \Vilson was about twenty years old and college. He left college, returned to Tyrone, and has since been thc operating head of the business, being not only president, of the corporation, but also the managing partner of the partnership. 14. \Vhile the salve is to some extent marketed through wholesalers and retail stores, most of the sales are made through members of the public. In order to obtain members of the public to act as sales agents for the salve respondents make extensive use of aehertisements inserted in c.amic books which have wide distribution throughout the United States. The principal appeal of the adwrtisements is to children or young people. 15. Under t11e sales plan, if a member of the public sends in a coupon -which.h is included in thettdvertisement respondents send him fourteen cans of salve which he is to sell to other members of the public at 65 cents (formerly 50 cents) per can. After a11 fourteen ca,ns have been sold, the sales agent may deduct from the total amount collected a stated cash commission and remit the remainder to responclents or he may elect to receive for his services instead of (he cash commisslon, a premium selected by him from L premium book supplied by respondents. In tlle latter cvent he remit , WILSON CHEMICAL CO, ) IXC. , ET AL. 175 1u8 Decision respondent the total amount collected from the sale of the fourteen cans of salve. Along with the fourteen cans of salve respondents send to the agent a "free" article offered in the advertisement. 16. Featured in the advertisements are expressions such as "free given absolutely free, etc. For example, one advertisement reads in part:

LOOK KIDS! RIG POlVERFUL MAGIC IAGNIFIER For Your Very Own! IT' S FREE! lust Mail Coupon HURRY Get Yours While The Supply Lasts! Magnifier Sent Absolutely FREE! Toward the bottom of the advertisement appears the following: Just Clip and Mail Coupon for FREE Magnifier, Big Catalog and Order of Sah' Yes- ll send you the ),lagic :\IAGl\IFIER absolutely FREE! Alsoll send Salve, Pictures and Big Catalog showing dozens of wonderful premiums you can have, Cameras, Fishing Outfits, Dolls, Rifles, Radios. 'Vatches, etc. (Sent postpaid). SDIPLY GIVE pictures with WHITE CLOYERIN"E brand SALVE easily sold to frjends, relatives and neigh- Dots at 50e a Tube (with Picture). Rush coupon to start. The coupon in the advertisement reads as follows: ),IAIL Corpon-l\agnifier sent FHEE! 'Vilsan Chemical Co. , Dept. 115-12 Tyrone, Pa. Date - Gentlemen: Please send me au trial 14 colorful art pictures \with 14 tubes of White CLOVERINE Brand SALVE to sell at 50e a tube (with picture). I \"il remit amount asked within RO days, select a Premium or keep Cash Commission as explained under Premium wai1ted in catalog sent \with order, postage paid to start. Be sure to send m:- FREE "l\IAGIC :\lag:;IFIER" (Follo\ving are spaces fol' narue and address of sender. J (CX 1A) Another advertisement reads in part:

BOYS! GIRLS: LADIES! MEN! GIVEN! GIVE Yes, We Give Premiums or Cash! YOURS FREE! Genuine Money From Kations the o1'Jc1 For sending coupon Now! REAL FOREIGX COINS JUST MAIL COUPO Yes! We ll send YOIl Genuine Foreign Coins absolutely free! Be a coin collector! Trade with otller kids Also, we ll send "'WHITE CLOVERI:-E Brand Salve and Big Catalog showing dozens of wondrrful , , Decislon 64 F.

premiums you can have. Cameras, Watches, Radios, Rifles, Fishing Outfits, Dolls, etc. (Sent ppd.

You simply offer 'VI-IITE CLOVERIXE Brand SALVE-easily sold to friends, relatiyes and neighbors at 30(' a package. Rush coupon to start. 1Iail Coupon for FREE FOREIGN COIXS, BIG CATALOG and ORDER OF SALVE (eX 4A) Another advertisement reads in pa.rt:

BOYS GIRLS! LADIES! ME:.! W I K A BEAUTIFUL SIGXE1' RI:\G Engraved 'With Your Own Initial IT' S FUN! IT' S EASY! All You Do is NAME THESE FAMOUS U. S. PRESIDEXTS (Pictures) Just Get All 4 Right - 'Ve ll Send Your UINE KICKEL BILVEU SIGNE'l' IUKG ABSOLUTELY FREE: (eX SA) 17. The complaint charges that through the use of such advertisements respondents represent, eontra.ry to fact, that the articles of merehandisc ofiered (magnifier, coins, ring, etc. ) are sent. free and without any obligation on the part of t.he recipient, and that such merchandise is offered for some purpose other than the obtaining of sales agents.

18. In the cxa,miner s opinion, these charges ate \Tell i-ounded. ,Vhile a ca.reful and thoughtful reader of the entire aclvertiseml including the coupon, probably would understand that the advertisement is for the purpose of obtaining sales agents and that the "free" Rrticle is available only if the salve is ordered, this would not be true of the average reader. The words featured in the nc1vertilsements arc "free gtven absolutely free \ etc. :Moreover, it must be remembered that the a,advertisements are directed primarily to persons of immature age. Unquestionably the advertisements have the tendency and capacity to 1nislead a substantial number of such persons.

19. Actually, of c.course, the sale purpose of the advertisements is t.o obtain sales agents and thereby promote the sale of the salve. The so-called free articles are never sent by respondents except along with a shipment of the sal, e; that is, the coupon ordering t.he salve must be sent to respondents before they win forward the free ' article.

20. The hearing examiner was favorably impressed with 1\11'. George C. 1Vilson, III, and does not believe that there was any element of willfulness or "Tongful intent on his part in the use of the advertisements. It is elementary, hO\vever, that neither wilIfulness nor \Trongful intent is an essential element in a, violation of the Fcd- WILSON CHEMICAL CO. , INC. , ET AL. 177 168 Decision eral Trade Commission Act. The test is the eiTect or probable eiIect of the advertisements.

21. It is urged by respondents that the corporation has nothing whatever to do with the advertising and marketing of the salve that these functions are performed by the partnership alone. The testimony on behalf of respondents is that the corporation purchases the raw ingredients which go into the salve (petrolatum, turpentine wax, perfume, etc. ) and the 111etal containers in which the salve is packaged and also the eartons in which the salve is mailed to purchasers, and that all of these materials are sold by the corporation to the partnership, which ma.nufactures, advertises, and sells the salve.

22. In the cX tmincr s opinion this position is untenable in the face of the circumstances disclosed by the record. In the first place there is the fact of the relationship of the parties. The entire project is a family enterprise. The same persons who own the corporation are members of the partnership. Mr. George C. 1Vilson, III, is the active head of both. An of the land and buildings used in the enterprise are the property of the corporation, as is all of the maehinery used in the manufacture of the salve. The land, bui,ldings and machinery are leased by the corporation to the partnership. Thus a situation is presented in which in practical effect the parties are sening to themselves, buying from themselves, and leasing property to and from themselves.

The facts already mentioned probably would be suffcient to negate any concept that the corporation and partnership are separate and distinct entities in the purchase of materials and supplies, on the one hand, and the manufacture, advertising, and sale of the sal ve, on the other.

23. But there ate other circumstances. The very containers in which the salve is packaged and sold to the public bear on both front and back the statement: "~1anufacturec1 by the .Wilson Chemieal Co. line. (Emphasis added) (CXs 17, D5). Frequently, orders for supplies and raw materials were placed by the partnership, as well as by the corporation. In numerous instances, communications ostensibly from the partnership "cre signed by All'. George C. "'\Tilson III as "President", just as he "auld sign for the corporation.

24. Viewing the record as a whole, it is impossible to escape the conclusion that actual11y the entire enterprise of obtaining the materials and supplies and the manufacturing, advertising, and selling of the salve was a single enterprise carried on by both the corporation and the partnership acting in cooperation each with the other. Decisioll 64 ,' . T.

25. Another defense interposed by respondents is that the present ease is barred by a former proceeding instituted by the Commission; that is, that the former proceeding is res judicata of the present one. 26. The former proceeding, Docket 2874, 23 F. C. 301, was directed solely against the corporate respondent, '\'\ilson Chemical Company, Ine. As the other respondents were not parties to the proceeding, it is obvious that the defense of res judicata is without merit as to them. As to the corporate respondent, comparison of the complaint, findings, and order in the former case with the complaint in the present case makes it reasonably clear that at least one of the prerequisites for the application of the doctrine of res jndicata-identity of issues-is lacking here.

,Yhereas the former case dealt with misrepresentations regarding the amount of salve to be sold and the amount of money to be remitted ill order to obtain va60us premiums, the present case is eol1cerned largely with (be offer of so-called "free" goods for the purpose of inducing the prospect to send in an order. Another practice charged here, \which was not involved in the former case, is the alleged use of high-pressure collection methods. 1\loreover, the present complaint., unlike the former one, appears to attack respondents' enthe sales plan as inherently unlawful. Fina.lly, the former case \vas instituted and decided in 1936, p60r to the enactment of the ,Vheeler-Lea amendments to the Federal Trade Commission Act. Thus the complaint charged only the use of unfair methods of competjtion in commerce. The cOlnplaint in the present case, on the other hand, charges that the pract.ices challenge.d conshtute not only unfair methods of competitjon in commerce, but unfair and deceptive acts a,nd practices in commerce as well. This alone probably would be suffcient to distinguish the two cases and preclude applicat.ion of the res judicata principle. 27. It is therefore concluded that the defense of res judicata has not been sustained.

28. As indicated above, a further charge in the present complaint is that respondents employ high-pressure collection methods; specifically, that they send threatening letters to persons who have ordered the salve and have not remitted the purchase price. Examples of the letters challenged, a11 of which are printed form Jetters appear in t.he record as Commission E,xhiibits 28-35. Some of the letters are on stationery of respondents, while others are on the letterhead of respondent J. McCleHan Davis, who is a pract.icing attorney at law in Tyrone, Pennsylvania. As to the letters which bear his name, Mr. Davis testified that he either prepared them or approved them. The actual printing and mailing of all of the letters is usually done by the other respondents. WILSON CHEMICAL CO. , INC. , ET AL. 179 168 Order The hearing examiner sees nothing illegal in the use or the letters. They appear to follow the forms frequently used by creditors, collection agencies, and attorneys.

It is respondents' practiec to accept return of the salve in settlement or the obligation, so long as the return is made within a. re-a. sonable time. In fact, one of the letters, Commission Exhibit 30 specifically refers to the option to return the salve. 'Where the salve is in fact ordered and received, respondents would appear to be within theil' legal rights in insisting that the salve be paid for or returned, even though the persons involved may be of immature years.

29. It is therefore concluded that this charge in the complaint has not been sustained. And this being the only charge ,which involves respondent Davis, it follows that the complaint should be di,smissed as to him. Additional reasons ror dismissing as to respondent. Davis are that he has no financial interest ,-.whatever in the business; his relationship to the business is nothing more than that of attorney.

30. Finally, the complaint (Paragraph 8) appears to attack respondents' entire merchandising program as inherently unlawful. The hearing examiner is unable to concur in that view. If respondents will remove from their advertisi1ng the misleading features pointed out above no legal reason is seen why they may not continue \with their sales program.

31. The use by respondents of the misleading aclYertisements discussed above has the tendency and capacity to cause a substantial portion of the public to purchase respondents' salve a.nd to agree to act as sales agents for such salve, with the result that substantial trade is diverted unfairly to respondents from their competitors. The acts and practices of respondents are therefore to the prejudice of the public and of respondents' competitors, and constitute unfair methods of competitiiQn in commerce and unfair and deceptive acts and practices in commerce in violation of the Federal Trade Commission Act. The proceeding is in the public interest. ORDER It is ordered That respondent ' Wilson Chemical Company, Inc. a corporation, and its offcers, and respondent George C. 'Wilson, III individually and as an offcer of said corporation, and respondents Charles A. IVilson, Sarah A. Hooker, Sally .Ann Wilson and ~lichael B. ,Yilson as offcers or directors of said corporation, and respondents George C. IYilson, III, Charles A. IYilson, Sarah A, Hooker, Sally .Ann IVilson and Michael B. IVilson, indiviclua1ly and OIJinion 64 F.

as part.ners trading under the nan1C ,Vilson Chemical Company and respondents' agents, representatives 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 respondents product \Vhite C10ve1'inc Brand Salve or any other merchandise, do forthwith cease and desist from:

1. Representing as free or "j,thout cost. any article of merchandise the obtaining of which is contingent upon the purchase of other merchandise 01" the performance of some se.rvice unless the terms and conditions upon which such article may be obtained are clearly and conspicuously set forth in immediate conjunction with such representation.

2. Representing directly or by implication that any llerehandise offered for the purpose of obtaining sales flgents is ofiered for any other purpose.

It is further ordered That the complaint be diEmissecl as to the charges discussed in paragraphs 28, 29 and 30 of this decision. It i8 furtlLeT ordered That the complaint be dismissed as to respondents Charles A. 'Wilson, Sarah A. Hooker, Sany Ann 'Wilson. and :Michael B. "Vilson ill their indiividual eapaeities insofar as their relationship to the corporate respondent is concerned. It is further ordered That the complaint be dismissed in its entirety as to respondent J. ~fcCleJlan Davis. OPINION OF THE CO)nnSSION By Axmmsox Convn,issionel':

The complaint in this matter alleges that the reslJondent sn1ye manufacturers violated the Federal Tnlcle Commissioll c\.C' S D, ;is Stat. 719 (1914), as amended, 52 Stat. 111 (1938), 15 FS. C. -15 (1958), by the use of misleading and cleceptjyc achel'tisemenh to recruit children and adults to sell ",Vhite Cloverinc Brand Sahe and by the employment of a system of threatening Hnd cleceptil' collectiml letters to coerce payment for the salve from children and adults to iVhom it had been sent as the result of contacts achicI' through the deceptive advertising. One of the respondents .1. Ic- CleJjnn )):lyis, nil :tttOl'l1PY admitted to lH'ilcti('e in the oSlntL' of Pennsylvania: is charged with aiding the respondents in their scheme by a.lloiVillg threateni11g and decepti,-e Coollection letters to be sent on his letterhead to recipients 01 respondents' snlve. The hearing examiner found that the advertisements had the tendency and C'a.pacitv to mislead the public and issued an order \VILSON CHE nCAL co., I ) ET AL. 181 168 Opinion prohibiting their use without the addition of qualjfying language. , ho\Y-He found nothing illegal in the use of the collection letters ever and dismissed the charge relating to this practice as to all respondents and dismissed the complamt as to respondent J. 11c- Clel1an Davis. Counsel supporting the complaint has appealed the initial decision insofar as it concerns the dismissal as to the collection letters and J. l\IcClel1an Davis. Respondent' s counsel, in hi,s brief and argument before the Commission, contends that the collection letter of an attorney is not ' commerce:' as that term is used ill the Federal Trade Commission Act and that, therefore, the Commission has no jurisdiction to consider whether the employment of the letters is unlawful. Hespondents have taken no appeal from the examiner s findings as to the deceptive nature of the advertiseme,nts, and that matter is therefore settled by the initial decision. The ,Vilson companies manufacture anel sen a product called ,V11ite Cloverine Brand Salve. n Although other means of distribution are useel, the primary method is to send the product to chilell' en or adults who are induced to order the salve by advertisements ill comic books. The majority of persons so responding are children. These uch' ert.isements offer "free" and "absolutely free') rings, magnifiers, and coins to those per::ons that send in the coupon ,which is attached to each advertisement. However, the ad does not clearly and adequately inform the reader that by sending in the coupon he is obligating himself to become a sales agent for the '\Vilson Chemical Company. This fai,lurc to disclose that the so-calleu '; tree goods were given with an obligation was the basis of the hearing examiner s finding that the advertisements Ivere misleitding and decepti VB.

,Vhen a coupon was received, the child or adult who mailed in the coupon would then be sent a package containing fourteen cans of salve, whose collective retail value was approximately seven dollars (87), the "free" goods, and a booklet. The booklet informed the addressee for the first time in conspicuous type that he ,,;as now a salesman, instructed him how to sell, and illustrated premillns that he could earn. If the recipient was dissatisfied with the manner in \Thi h he was made a sa,1esman he, was told to pay the po tage and return the salve. l-Iowever, if he did not do so within forty five days, a follow-up notice was sent, informing the addressee that this mea,ns of terminating the obligation was ioreclosed and that only the cash value of the shipment would be suffcient to close the account. If no reply was received from any person to whom the sa.lve was sent within sixty days, the company began to use a series of letters in an attempt to induce payment in cash for the salve. 182 FEDERAL TRADE COMMISSIOK DECISIONS Opinion 64 F.

The letters that were sent always used the same language, without regard to whether the recipient was a child or an adult. The first three letters of the series are written under the letterhead of the 'Wilson Chemical Company. Their tone changes from R friendly reminder to t.hreats of legal action and consequent embarrassment and penalty if the recipient makes it nec.essary for the compa,ny to turn over the account to an attorney in the recipient' s home town for collection by ,legal process. If the first three letters do not accomplish their pUlpose of obtaining a cash settlement, the child or adult receives a series of letters under the letterhead of "J. i\fcClel1an Davis, Attorney At La,,,. :' In these letters the recipient is ini'ol'med, among other things, that DRVis has been retained by the "Tilson Chemical Company to contact the addressee, that there is DO question of the recip. ienrs liability in this matt.er, t.hat legal.l action would begin in ten days if cash was not rcmHted at once, that embarrassment and added cost could be saved by remittlng now, and that ilf no payment was received promptly, legal action would be instituted by i\lr. Davis' corresponding attorney in the recipienfs home town. If the Davis letters failed to produec the desired cash, Wilson Chemical Company took no further action. The company merely placed the name of the recipient on a bad debt list. Although suit was threatened as a means of ultimate collection, there is not a single ase where suit v,as ever begun. The respondent, George C. ,Vilsoll III testified to the effect that he had no intention of instituting suit on the small claims involved. Furthermore, respondent Dayi testified that he never had any corresponding attorneys nor would he insult one, by referring such a small claim. The ,Vilson Chemical Company has never referred, nor do they intend to refer, an individual account to respondent Dayis. )11'. Davis has no records of his sta,ted representation of the company as its collection attorney. In 1945, at the request of the 'Wilson Chemi,cal Company, he prepared the wording of the letters which are purportedly sent by him. Then he delegated the authority to the Wilson Chemical Company to decide when the letters would be used how they would be used, to whom they would be sent., and the number of letters that would be used in connection with any given child or adult. 1-Ie receives compensation for the use of the letterhead and occasiona.lJy receives responses in the mailbox listed on the letterhead, which hc then delivers directly to the company. He is familiar with the type of advertising used by the company. He also knew that some of the letter recipients were children and t.hat no eft' ort was made in the letters to distinguish between children and adults.

WILSON CHElvICAL CO" INC. , ET AL. 183 168 Opinion As stated, vVi,lson Chemieal Company, through respondent George C. Wilson III decides each month which Jetters will be sent and to whom they will be mailed by eousulting aeconnting records which are kept at the company s offce. All other aspeets of the operation are under the control of the company. It prints the letters in its plant as the needs of business require, addresses the envelopes, and mails them at the local post offce. Any responses to the communications are usually picked up by company employees from the post office box listed on :Mr. Davis' letterhead, to which the company had access. An expenses of this scheme are paid by the company, including paper, printing, postage, and rental on the post ollce box. The advertisements which are used by the vViJson Chemical Company to induce persons to send for the salve have the tendency and capacity to mislead a substantial segment of the public. The misrepresentation in the advertisements that "free:' goods arc sent without obligation is material, for it induced readers to send in the attached coupons, a course they may not have taken if they had realized that by doing so they were eommitting themselves to becomi' l1g a CIa verine salve salesman. This misleading enticement to become a sales agent is the foundation for the order in the initial decision to clearly disclose the conditions under which the "free goods are being offered, It also forms the basis for counsel supporting the complaint's eontentiDn that the collection letters violate Section 5 because they use threats to institute legal proceedings in a context of deceptive practices.

Several of the letters which are sent by the respondents to dun the children and adults contain threats to institute legal proceedings. These statements are coercively phrased, stating that prompt legal action wi1 be taken if there is no answer within a few days; tlmt penalty will be imposed upon the child if he does not respond quickly; and that embarrassment will occur if the account is referred to au attorney in the addressee s home town. These statements, taken together in the series of letters sent over a pe.riod of time, are definitely calculated to induce the recipient to respond immediately. They are strong letters to send to adnlts. Their coercive nature is increased when it is considered that in the majority of cases the recipients of these letters are probably children. The Commission and the courts have had prior occa.sions to consider cease and desist orders against threats to sue in a context of deceptirve practices. Jlmvevcr, noble of these cases has involved situations which are on " ll fours" with the present case. Tillie a rcvie , Opinion 64 F, of these decisions is necessary to delineate the scope of this form of unfair trade practice. In one case, a circuit court. sustained a Com. mission order which required the interstate seller to cease and desist from using threats to sue in an attempt to force customers to accept goods in excess of the quantities ordered or to pay larger sums of money than that agreed to be paid or to pay damages for eamenatian of quantities of goods in excess of amounts ordered. DOJ'fnuln V. Federal Trade Commission 144 F. 2d 737 (8th Cir. 1944). The seller in DOT/man used deceptive and misleading statements to gain orders for his goods, which he then " padded" by unilateral1Jy increasing the quantities ordered' or the money required to be paid. The Commission held, among other things, that the practice of padding orders was in violati'Ol of Section 5 and accordingly ordered the respondent to cease order "padding" and the accompanying use of thrcats to sue. The court affrmed and with reference to tile threats of legal proceedings, said:

.. 0; .. threats to suc for tlle purpose of extorting money from customers where no money is due ll.1.' be forhidden by tlle Feclel'Dl Trade Commission (144 F. 2d at 740, In NOi' man Co. 40 F. C. 296 (1945), after adversary proceedings the Commission issued an order against a sener, requiring it to cease, and desist 1"rom shi1pping unordered goods to depflrtmcnt stores nnd from using threats of legal proceedings to -induce payment for the unordered goods. B. 1V. Coolee 9 F. C. 283 (1925), presents a situation where the seller respondent used grossly false statements to induce persons to sign contracts for correspondence courses. After obtaining their signatures, the seller used threats of legal suits to TeCOYer from the cllstomers who 1'\'8re induced to sign through the false statements. The Commission, on stipulated facts, issued an order to cease and desist t.he false advertising in all events and the threats to Ene, except when the respondents in good faith believed them necessary to collect amounts legally due the seller for services rendered. Several.l other proceedings which have involved fact sitl1a- Lions simiuar to the above cases ha.ve resulted in stipulations and consent orders.

These decisions adequately demonstrate that Section 5 is violated where an interstate sener of goods uses threats of legal proceeding:; in an attempt to coerce his customers to pay for goods ,which have been placed into the recipient's hands t.through practices which nre unfair and deceptive. In this context for the seller to assert through coercive 111ean8 t.hat he will commence legal proceedings is unlawful. The foregoing conclusions are controlling in the present case. The company, by misleading advertisements, placed their products into WILSO CHE:\ICAL CO. , INC. , ET AL. 185 160 Opinion the hands of children. It then proeeeded to dun them with threats of legal proceedings if they did not send the retail value of the salve. .Whether each individual who dealt with the company was Jega11y bound on the contract is beyond the nature of these proceedings. However, it can be sa.id, after considering the TI1misleading a.advertisements and the fact many of the persons who sent in the coupons from the cOlnic books were children, t.hat the company did not have an unassailable claim to the full retail value of t.he salve. 1'0 use threats to SlIe under these cil'nunstances is a "Violation of Section 5. See DOl'll/wn Y. Fedel' ul T'i(de Commission 8l1prrJ/ l\'oT- Inan Co. , 8Upraj B. lV. Ooolce, supra. The eol1ection practices of respondents contained another violation of Section :5 in the use of t111'cats to sue when they had no intent of ever cOllmeneing legal proceedings. Several of the collection let.. ters used threats to institute legal proceedings unless the account was settled quickly. however, they never resorted to such action nor did they intend to on the small claims which were involved. These practices have the tendency and capacity to mislead persollE receilVing the threats. Recently the Comlnission issued an order against such a practice Fmnily Publications Service, Inc. No. C-604 (i3 F. C. 971, September 27, 19(-3. The respondents in that case among other thillg, were allegc(l to hate t.hreatened their debtors ,-.ith legal proceedings unless the debtor paid the lid)!. within a stated period. It IYi1S further alleged that respondents (Ed not resort to legal action to collect acc.onnts fi1d hac1no intentioll of doing so. \.s to this practice, the Commission s order prohibits them from falsely representing thatnccounts lw.ve been refenec1 to Hll attorllcy for c.ollect,jon. The. respondents in the present. case han' used a imilar practic . A pr:H'Jicp, l1nla,yful when llsed to collect :1 yalid (lebt is of course unlawful I\"hen it, takes place in a merchandising program f0l1lciecl on deceptive advertising, The letter writing campaign contained a thjrd unlawful practice in that the source of the' " attorney demand" letters was misrepresented. The final letters in the series sent to the reci1pients of the salve were on the stationery of J. ?\IcClellan Davis 'Lttorney j \t. I-Iaw. These letters were phrased in terms of " : and " " thus representing to the receiver that the attorney was nmy writing them and that I" intend to take certajn .Jegal actions if the account. is not pajd. In effect, a child or adult reading these letters would be led to believe, contrary to fact, that an attorney was now contacting him at the instigation of the compa,ny.

In many cases before the courts and the Commission, cease and i.h' ::13t orders have been issl1c(1 Iyhich prohilJit the seller froll repn4-06B-TO- Opinion 64 F.

resenting that a collection agency \'\RS an independent organization TVm. H. TVise Co. , Fne.in an attempt to collect their accounts. 53 F. C. 408 (1956), aff' d pel oU1'iam TVm. H. TVise Company, Inc. v. Federal Trade Commission 246 F. 2d 702 (D. C. Cir. 1957), wt. Intelinationalll1't Company v. Federaldenied 355 U. S. 856 (1957); , 397 (7th Cir. 1940), Cel.t. de-Trade C01l"nission 109 F. 2c1 393, 396 nied 310 U. S. 632 (1940); United States Pencil Co., Inc. 49 F. 734 (1953); United States Statione,'y Co. 49 F. C. 745 (1953); NO' rman Co., supra; Perpetual Encyclopedia Corp. 16 F. C. 443 (1932); B. TV. Coolee, supra; National Remedy CompOJny, 8 F. 437 (1925). ' The Wm. H. IVi,e Co., supra caee presents an appropriate vchide for an exploration of this concept because the only deceptive practice involved was the use of a purportedly independent collection agency. The respondent in that case sold various products throughout the country. 'Vhcn a customer did not pay he vIas sent several letters on the company s stationery. If these failed to produce payment, then the debtor received letters from a purportedly i1udependcllt collection agency, 'which the Commission found to be part of the seHer s enterprise and not independent from it. The Commission found that the representation that some organization other than the seller was c.ontacting the debtOl' had the tendency and capacity to mislead a,nd issued an appropriate order. The Commission believes that even delinquent debtors are entitled to knmy the source of letters which are sent to them. Sellers may not adopt a disguise to lead debtors to believe that someone other than the seller is dea.ling with the debtor s account. As Eaid by the Commission in the lY ise case in commenting on this type of violation: It is true that all persons should pa;y their justmethodsdebts, Will1inenergetically.legal limitsThatcreditors are entitled to pun;ue their collediun does not, hmvevel' , justify methuds that are deceptive under the la\v .. " "' (53 F. C. at 420.

The next issue before us is that nlised by the respondent Davis, It is his contention that Section 5 does not apply to him be,cause the collection letter of an attorney is not commerce within the Federal Trade Commission Act. 1\11'. Davis prepared the wording of the letter which was sent by the company in an attempt' to coiled eash for the salve, For this service he receive, , and continues to receive compensation. :Mr, Davis was aware that his letter ,yould be used In Perpetl/al Encyclopedia Corpomtiotl 16 F. C. 443, 525 (1932), the order a phrased seems to imply that if the seller in that ease hrH1 obtaineu an (lttorlle s COllHPnt, be would then be able to freely ll e letters on an attorney s stationery in nn attempt to force custoilel' to pay. However, we do not consider this position controlling becauHc ignoi'es the Jong lief of ease in"'olying sellers who misl'epresenled that an independent collection agency \Yi\S attellll1tmg to collect from lhe debtor. WILSO CHEI\iical CO. , I),C. , ET AL. 187 165 Final Order to dun recipients of the salve. It was to this end that he delegatell a.authority to the company to use the letters in any manner that they felt necessary. Having so part.icipated in the preparation of the heletters and their use in the collection scheme of the compa,ny, mllst be equally as liable as the company for any violation of Section 5 which arises from the letters. Unquestionably, the company is engaged in interstate commerce in the salve business. The practices which they llse to promote their sa.les in commerce are subject to the Act. Likewise :11:1'. Davis, as a participant in t.these practi, is equally liable. It is true that no case has arisen under the Act 1,which presents a fact situation similar to the present. I-Io,"ever, it has been clearly established that a person who furnishes another with the means of violating Section 5 is also subject to a cease and desist order of the Commission. Federal Trade Comin sion Y. 1Vinsted llosieTY Co. 258 u. S. 483 , 494 (1922); C. HmvaTd Hunt Pen Co. v. Federal Tmde Commission 197 F. 2c1 273, 281 (3d Cir. 1952). This principle is controlling in the present case because :111'. Davis has furnished the company with the form letters and the authority to nee them as the company decms fit as part of their method of selling salve.

Inasmuch as the Commission has found the collection letters used by the respondents to be in violation of Sect.ion 5, the headng exambler s initial decision will be mocHfiec1 by striking Findings U 28 and 29 and that portion of the order relating to the collection letters and respondent J. McClel1an Davis. The initial decision wil be further modified by the insertion therein of the Commission findings of fact and conclusions on the questions discussed in this opinion. An order adopting the initial decision as so modified win issue.

In the heariTlg examiner s view the sales program of the re,spondents would be made lawful by the removal of the deceptive advertising (i. Finding 30). This statement is not accurate bec.Ruse it overlooks the unlawful collection letters used by the respondents. Therefore, it will be stricken.

Commissioner Elman did not participate in the consideration or decision of this case.

FINAL Onder This matter ha viug been heard by the Commissi on on exceptions to the hearing examiner s initial decision, filed by counsel supporting the complaint, and on briefs and oral arguments in support thereof and in opposition thereto; and 188 :FEDERAL 'trade COMMISSION DECISIONS Final Order 04 F.

The Commission having rendered its decision ruling on said exceptions and having determined that the initial decision should be modified in accordance with the views expressed in the accompanying opinion and, as so modified, adopted as the decision of the ComillSSlOl1 :

1 t -18 ordered That paragraph 9 of the initial decision be set aside and that the following paragraph be inserted in lieu thereof: 9. Respondent J. MeClellan Davis, an attorney admitted to practice in the Commonwealth of Pennsylvania, represents himself as the collection attorney for the other respondents. In this position he has aided the other respondents in the development and use of their collection methods, which are used to obtain payment for ".White Cloverine Brand Salve. It is further ordel' That paragraphs 28 , 29 , 30, and 31 be set aside and that the following paragraphs numbered 28 through 38 be inserted in lieu thereof:

28, The respondents refuse to accept returns of salve after a limited period of time. If a return is accepted, the person who was misled into orclering the, saln is l'e(luil'ccl to pay return postage.

29. The primary purpose of the respondents is to secure the retail value or salve which is sent to pm'sons who, in the majority or instances, are children. To this end, a series or coercive and deceptive collection letters are sent to t.he salve recipients. K 0 effort is made to di'nerentiate between children or adnlt readers in the text of the letters. 30. The first series of letters are sent on the stationery of the 'Vilson Cheraical Company; they contain threats to institute legal proceedings unless the reader pays the asserted obligation. 31. In fact, the respondents have never instituted legal proceedings nor do they intend to do so.

32. The respondents' use of threat of legal proceedirngs has the tendency and capacity to mislead a substantia.l portion of the public into believing that if the recipient fails to aceede to the companies' demand for payment, he will be subjected to embarrassing and expensive litigation.

33. If the foregoing series of letters do not accomplish their purpose, then the recipient receives another series of letters on the stationery of "J. McClel1an Davis, Attorney At Law." By these letters the respondents represent. to addressees t.hat a.n attorney now has their account and is personally writing them as an attorney to effect a cash settlement and i!f said cash set- WILSON CHE nCAL CO., I , ET AL. 189 168 Final Order tlement is not made quiekly, the reader will be subject to emba.rrassing and expensive litigation which win be instituted by respondent Davis' corresponding attorney in the recipient' home to,vn.

34. In fact, the letters are sent pursuant to the complete direction and control of the -Wilson companies, who pay for all expenses in connection with their use. In effect, the companies are merely writing the addressee under a disguise. Respondent Davis prepared the wording of the letters and delegated the authority to the IVilson companies to use them; beyond this Davis has not rendered, nor was it fitended that he render, any legal services whatsoevcr in connection with the collection of outstanding accounts.

35. Respondent Davis has never referred, nor does he intend to refer, any individual account to corresponding attorneys. 36. The respondent's use of the Davis Jetters has the tendency and capacity to mislead a substantial portion of the public into believing that they are, upon receipt of these letters, being contaeted by an attorney and that if they fail to send a cash scott1ement, then they will be the subject of embarrassing and expensive litigation brought by a,l1 attorney in their home town. 37. The use of the cntlre series of letters is unfairly coercive because its use has the tendency to force children and adults to remit payment without considering whether they are actually liable to pay the claim.

38. The acts and practices of respondents, as found herein were, and are, all to the prejudice and injury of the public and of respondents' competitors and constituted, and now r.ol1stitute unfair and deceptirve acts and practices and unfair methods of conlpetition in C0l1111erCC, within the intent and meaning of Section 5 of the Federal Trade Commission Act. The proceeding is in the public interest.

It is jurther ordered That the following order be, and it hereby , substituted for the order contained in the initial decision. It is ordel'ed That respondent. ,Vilson Chemical Company, Inc" a corporation, and its offcers, and respondent George C. "\Vilmn III indi!vjdua11y and as an offcer of said corporation and respondents Charles ,L -Wilson, Sarah A. Hooker, Sally Ann IVilson and richael B. IVi1son "' offiecrs or directors of said corporation, and respondents George C. Wilson, III, Charles A. IVilson, Sarah A. Hooker, Sally Ann IVilson and ~lichael B. IVilson, individual1ly and as partners trading under the name , 190 FEDERAL TRADE Co:IMISSION DECISIONS Final Order 64 F.

of IVilson Chemical Company, and respondents' agents, representatives and employees, directly or through any corporate or other device, in connection with the offering for sa.le, sale or distribution in commerce, as "commerce:' is defined in the Federal Trade Commission Act, of respondents' product IVhite Cloverine Brand Salve " or any other merchandise, do forthwith cease and desist from:

1. Representing as free or without cost any article of merchandise, the obtaining of which is contingent upon the purchase of other merchandise or the performance of some service, unless the terms and conditions upon which such article may be obtained are clearly and conspicuously set forth in immediate conjunction with such representation. 2. Representing, directly or indirectly, or by implication that any merchandise oiIered for the purpose of obtaining sales agents is offered for any other purpose. 3. Using threats of legal action and other forms of coe1'on and intimidation to induce persons to accept and pay for merchandise which is sent to them as the result of advertisements in violation of paragntphs 1 and 2 , above.. 4. losing threa.ts of legal proceedings in an attempt to gain payment of accounts, when in fa,ct legal proceedings are not to be employed as a collection device. 5. Gsing correspondence which represents that, some person or organization other than the aforementioned respondents is engaged in attempting to effect a cash settlement of an individual's asserted delinquent account. It if f"rthe1' ordered That individual respondent.J. McClellan Davis, his representatives, agents, and employees, directly or indirectly, in connection ,with the offering for sale, sale or distribution of a preparation designated "1Vhite Cloverine Brand Salve or any other product.s of the respondent ,Vilson Chemical Company, Ine., or the other individual respondents herein, do forthwi th cease and desist from:

1. losing threats of legal action and other forms of coercion and intimidation to induce persons to accept and pay for merchandise which is sent to them as t.he result of advertisements which are ill violation of parngra,phs 1 and 2, above. 2. Using threats of legal proceedings in an attempt to gain payment of accounts, i\h8n in fact legal proceedings are not to be employed fis a. collect.ion device. 3. Permitting, aiding, or abetting the other respondents herein in the violation of paragraph rj, above. YIRE-PAK 'IAKeFACTL- HIKG co. 191 168 Complaint It i8 further ordered That the hearing examiner s initial decision as modified herein be, and it hereby is, adopted as the decision of the Commission.

It is further ordered That respondents herein shan, within sixty (60) days after service upon them of this order, file with the Commission a report, in \writing, setting forth in detail the manner and form in whi"h they have complied with the order to cease and desist. By the Commission, Commissioner Elman did not part.icipate in the consideration or decision of this case. Ix THE L4.TTEH OF JAMES ~I. DUDLEY TRADING AS FIRE-PAl\ :\lAKUFACTUIUXG CmlPAXY ORDER , ETC. , IX REGARD TO THE ALLEGRO VIOLATION OF THE FEDEK\L TRADE COl\Diissiox ACT Dopket 8542. Complaint, Nuv. 1D62 Decision, Jan. J5, 1964 Order dismissing complaint charging a Jacksonvile, Fla. , seller of a shakrrtype dry chemical fire extinguisher designated "Fire-Pak" , with misrepresenting the effectiveness, purported tests, government approval, and nperiorily oyer competitive products, CO::IPLAIKT 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 James 1\1. Dudley, an individual trading as Fire-Pak :Manufacturing Company, hereinafter.r referred to as respondent, has violated the. provisions of said Act and it appearing to the Commission that a proceeding by it respect. thereof would be in the public interest, hereby issues its COIDpin int stating its charges in that respect as follows: \RAGRAPII 1. Respondent .Tames r. Dudley is an individual trading as Fire-Pak :Manufacturing Company, with his principal office nnd place of business located at 2220 Southside Boulevard in the cit.y of .Jacksonvi1Je, State of Florida. PAn. 2. Respondent is now, and for some time last past has bren engi1Q'ec1 in the advertising, offer ng for sale, sale and distribution of a shaker-type dry chemical fire extinguisher designated "Fire-PnJ( to the public.

YIRE-PAK 'IAKeFACTL- HIKG co. 191 168 Complaint It i8 further ordered That the hearing examiner s initial decision as modified herein be, and it hereby is, adopted as the decision of the Commission.

It is further ordered That respondents herein shan, within sixty (60) days after service upon them of this order, file with the Commission a report, in \writing, setting forth in detail the manner and form in whi"h they have complied with the order to cease and desist. By the Commission, Commissioner Elman did not part.icipate in the consideration or decision of this case. Ix THE L4.TTEH OF JAMES ~I. DUDLEY TRADING AS FIRE-PAl\ :\lAKUFACTUIUXG CmlPAXY ORDER , ETC. , IX REGARD TO THE ALLEGRO VIOLATION OF THE FEDEK\L TRADE COl\Diissiox ACT Dopket 8542. Complaint, Nuv. 1D62 Decision, Jan. J5, 1964 Order dismissing complaint charging a Jacksonvile, Fla. , seller of a shakrrtype dry chemical fire extinguisher designated "Fire-Pak" , with misrepresenting the effectiveness, purported tests, government approval, and nperiorily oyer competitive products, CO::IPLAIKT 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 James 1\1. Dudley, an individual trading as Fire-Pak :Manufacturing Company, hereinafter.r referred to as respondent, has violated the. provisions of said Act and it appearing to the Commission that a proceeding by it respect. thereof would be in the public interest, hereby issues its COIDpin int stating its charges in that respect as follows: \RAGRAPII 1. Respondent .Tames r. Dudley is an individual trading as Fire-Pak :Manufacturing Company, with his principal office nnd place of business located at 2220 Southside Boulevard in the cit.y of .Jacksonvi1Je, State of Florida. PAn. 2. Respondent is now, and for some time last past has bren engi1Q'ec1 in the advertising, offer ng for sale, sale and distribution of a shaker-type dry chemical fire extinguisher designated "Fire-PnJ( to the public.

192 FEDERAL TRADE COMl\IISSIOK DECISIONS Complaint 64 P, PAR. 3. In the course and conduct of his sa.id business, respondent now causes, and for some time last past has caused, his sa.id fire extinguisher, when sold, to be shipped from his place of business in the State of Florida to purc1msers thereof located in various other States of the 1Jnited States and in the District of Columbia, and maintains, and at all times mentioned herein has maintained, a substantial course 01 trade in said products in commerce, as "commerce is defined in the Federal Tracie Commission Act. \R. 4. In the course and conduct. of his business as aforesaid, and for the purpose of inducing the sale of his said fire extinguisher respondent has made certain siaiements and representations in the advertising, packaging and labeling of his said fire extinguisher with respect to the safety, utility, and effectiveness thereof. Among and typical but not all-inclusive of the statements and representations so made are the folloi)ing:

1. On the packaging:

Excellent fire protection in automobiles, boats buses, electrical equipment farms, garages, homes, house trailers, indu trial plants, institutions, service stations, school, trucks, tractors.

Safe '" " " effecti,e An a.pproTed extinguishing agent On the label:

Safe'" .. ..

Approved extinguishing agent 3. In a promotional advertising brochure, the aforementioned representations appear in the form of it reproduction of the package anel lfbel In addition thereto, the said brochure contains the follo\ying statements and representations:

Unequaled in *' Ii '" effectiveness Your best protection in '" * * boats '" ,. .. homes '" '" * house trailers .. '" '" automobiles '" '" '" industry * * '" farm equipment'" * .. heating systems '" '" '" trucks Safe An approved extinguishing agent Instantly puts out flaming grease, fuel oil, electrical, or even a butane or propane fire.

Fire-Paks are very practical as protection around the horne, industry, boats, auto, and farms, because they are effectiy(, on grease, gasoline, over-heated stoves, electrical fires, hutane and propane fires. Fire-Paks are more effective tlwn most extinguishers costing up to six times as much.

Fire-paks ale in use with: U. S. Department of Agriculture (Forest Div. .. .. .. r. S. Army Engineers" .. '"

FIRE-PAK MA UFACTUnING co. 193 191 ComIJlaint Tests revealed that one Fire-Pak has more fire kiling power than three one quart carbon tetrachloride extinguishers (at % the cost of only one C. or two 5 lb. C02 extinguishers (at 1/7 the cost of one C02) PAR. 5. Through the use of the aforesaid statements and others similar thereto not specifically set out herein, respondent has represented n,nd is no\v representing, directly and by implication, that the Fire-Pak" fire extinguisher:

1. Is excellent fire protection Tor use in boats, buses, trucks schools, service stations, institutions, and other types of vehicles and establishments.

2. \Vill extinguish fires of all sizes and types and is safe and effective Tor use on butane and propane fires. 3. Has been approved by a recognized testing laboratory or by recognized regulatory authorities for use on boats, trucks, buses, and in schools, service stations, institutions, a,nd other types of vehicles and establishments.

4. Is in regular and continuing use with, and hence is approved for use by, the l:united States Department of Agricnlture and the United States Army Corps of Engineers.

5. Is unequaled in effectiveness has greater fire extinguishing capability than other types of fire extinguishers and is more effective than extinguishers costing up to six times as much. P.:\H. 6. In truth and in fact, the "Fire-Pa.k" fire extinguisher: 1. Is not adequate protection for boats, buses, trucks sc.hools service stations institntions 01' many other types of vehicles and establishments.

:2. Is not effective in extinguishing any fires except certain small fires in their initial stages and is not of any value for nor safe for use on butane or propane fires.

3. lias not been tested nor approved by any testing laboratory nor approved by any regulatory authority for use on boats trucks buses, schools institutions, or any other type of ve.hicles or establishments.

4. Is not approved by or in continuing or regular llse with agencies of the United States Government as represented. 5. Is not uneqnalccl in effectiveness and does not. have greater Hre extinguishing capabilify than other types of fire extinguishers nor is it more effective than other types of fire extinguishers. The representations referred to in Paragraph 'l are therefore false misleading and deceptive.

\R. 7. In the, (',onrse and c.conduct of his lmsiness, at all times mentioned herein respoll(lent has been and is in sllbstantia.l competition in commerce with corporatiolls firms and individuals in the sale of fire exting.llishers.

Decision 64 F.

PAR. 8. The use by respondent of the aforesaid false, misleading and deceptive statements and representations has had, and now has the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were, and are, true and into the purchase of substantial quantities of respondent's product by reason thereof. PAR. 9. The aforesaid acts and pra,crices of respondent as herein alleged, were, and are, all to the prejudice and injury of the public and of respondent's 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.

Mr. Charles 1. Connolly for the Commission. J1r. James M. Dudley, pro 8e.

INITIAL DECISIO BY ::L-\URICE S. BUSH , HEARING EXA::IINER ISSUED AUGUST 15 , 19G3 The complaint in this matter, issued ovember 5 , 1962, charges respondent with violations of Section 5 of the Federal Trade Commission Act 1 through alleged misrepresentations "with respect to the safety, utility, and eifectiveness ' of a porta,ble fire extinguisher sold and distributed by respondent under the trade name of "Fire-Pak. R.respondent:s a.nswer, filed December 17, 1962, generally takes issue wit.h the charges of the complaint.

Pursuant to leave granted by the Commission to hold hearings herein at more than one place, hearings in this matter ,were held at \Vashingt.on, D.C. and Jacksonville, Florida. The hearing at \Yashington took phce on May 10, 1963, and that in J acksonvi1e on May 15 and 16, 1963. Respondent did not participate either in person or hy counsel at the initi,tl hearing of May 10, 1963, at 'Washington for reasons of alleged financial inability to come to \Vashington, hereinafter discussed. Complaint counsel presented his case-in-chief at the \Vashington hearing. Respondent, however, did appear and fully participate at the Jacksonville hearing where he presented his defense-in-chief and uncler\\ent cross-examination on much of the subject matter covered by the direct testimony offered by counsel supporting the compla,int at the \Vashingtoll hearing. The hearing set for rebuttal purposes on ~Iay 23 , IH63 , at "Washington was waived by counsel supporting the complaint.

:Sectioll 5(a)(1) of the Act, here pertinellt, rends: "Unfair methods of competition in commerce, and unf tir or decepti,e acts or j:ractices in commerce, are hereby declared unlawful.

:

FIRE-PAK MAXUFACTUHIXG CO. 195 191 ision Prior to the opening of the initial hearing herein at ' lashington the undersigned received a long distance telephone call from respondent at Jacksonville advising, after some discussion, that he was prepared to settle the case by stipulating to accept the proposed cease and desist order set forth in the complaint, but by subseqnent letter dated May 7, 1963, respondent notified the examiner that he "as unable to go along "ith the proposed settement because it called for a substitute answer admitting all the allegations of the complaint "which he felt" * * * is not true. " His ~lay 7 letter reads as follows: Dear )11'. Bush:

This wil acknowledge receipt of the three separate documents requiring signature from ::11'. Charles J. Connolly, counsel in support of complaint Docket No. 8542.

I regret that I have troubled you so much in this matter but I am not in position to hire needed legal counsel; therefor, I have been very awkward in handling this matter.

One document entited Substitute Ans\ver requests that "He admits all material allegations of the complaint to be true. I simply cannot sign this uucument knowing that it is not true. I do not have the money to appear in Washington for my defense Your courtesies and kindnesses in the past are most appreciated. Yours truly, James M. Dudley. (Tr. 55- , 165-174.

Under letter dated May 8 , 1963, the examiner acknowledged receipt of respondent's aforementioned Jetter and notified respondent of his right to appear at the opening hearing of Ia.y 10, 1963, at \Vashington, D. , notwithstanding his then present intention not to appear but advised him that if he did not appear the undersigned would " * * * endeavor to protect your interest at the hearing to the extent possible." The examiner also advised respondent in his said letter that: " On Iay 15, 1903, hearing will open in your case at Jackson. ville, Florida, pursuant to offcialllotice heretofore served upon you, to give you opportunity to appear and testify ill your own behalf and to call such witness es as you may desire in your behalf. ('11'. 166-174.

Prior to the initial hearing herein of J\Iay 10, 1963, at ,Yashington , respondent personally participated in a prehe(lring conference held in this matter in \Yashington on January 31, 1963. (Tr. 1-54. The record also shows that respondent came to ,Vashington on at least three different prior occasions for purposes of discussing possible settlement of the matter with Commission personnel. (Tr. 172. At the aforesaid prehearing conference of January 31, 1963, respondent gf1.ve no indication to the e.examiner that he would be unable, for financial reasons, to attend the then orally announced initial hearing to be held at \Yashington to hear six proposed witnesses for the Com- 196 FEDERAL TRADE COMMISSIO)/ DECISIONS Decision 64 F.

mission, all residents of the greater ,Vashington, metropolitan area. At :the same prehearing conference, the examiner also announcecl subject to the approval of the Commission, that a hearing would also be held at a subsequent date at J acksonvil1e to take the testimony of numerous proposed witnesses for respondent who resided at Jacksonville. Respondent expressly acknowledged at the opening of the hearing in Jacksonvile under questioning by the examiner that he had made no indication or claim at the prehearing conference that he would be unable for financial reasons to attend tbe initial hearing at Washington. ('II'. 171.) The record as a whole, including respondent's financial state.ments (RX-3), establishes that respondent had the financial resources to come to Washington for the initial hearing. ('II'. 494. At the conc1nsion of the hearing at .J acksonvil1e, respondent waived the filing of proposed findings of fact" prefcrring to leave the matter entirely in the hands of the examiner for decision. AJjhongh the examiner nevertheless established a common due date for the filing of proposed findings of fact, conclusions of la, , and order together with reasons therefor and briefs in support thereof, these have been filed only by counsel supporting the complaint. Complaint counsel's submissions have been carefully reviewed and considered and such proposed findings and conclusions \\which are not herein adopted, either in the form proposed or in substance, are rejected as not supported by t.he record or as involving immaterial matters. After the formal opening of the hearing in J acksonville on the morning of :May 15, 1963, the examiner made available to respondent for overnight use his personal copy of the transcript of testimony taken in the case at 'Vashington and offered to recess the hearing until the following morning in order to give re,spondent opportunity t.o peruse the transcript and prepa.re his defense. The after was declined because some of respondent' s witnesses "ere present and he did not want to put them to the inCOllyenicnec of coming bac.k a, second time. ('II'. 172- 173. ) But respondent did avail himself of thc use of the transcript of the .Washington hearing and user! it for the preparation of his defense. ('II'. 406 , 449. Similarly, complaint connsel also made available to respondent an oJ the Commission exhibits received in evidence at the Washington hearing. ('II'. 173. GENERAL BACKGROUND Respondent .Tames IV1. Dudley is rtn inc1ivichml trading as Fire-Pak )1anufactllring Company, with his pl'incipaJ offce and place of business located at 2220 Sonthside DouJcvard in the city of Tnckson,ille, State of Florida.

FIRE-PAK :\IA)fUFACTcRING CO. 197 191 Decision lie has been engaged since 1955 in advertising, offering for sale sale and distribution of a portable "shaker-type " dry chemical fire extinguisher sold under' the trade name or designation of "Fire Pak." The Fire-Pak extinguisher bears some resemblance in size and shape to a. quart size thermos bottle, but is considerably s11aJJe1' ana gives the impression of being quite clinlinntive. It is made up of an aluminum cylindrical container, an iron bracket or handle attached to the cap of the cOlltainer, anel a dry chemical pmwler within the container The container is 81;2 inches in height and 3 inches in diameter. holds two pounds of a dry chemical powder hereinafter described. The full ,yeight of the loacled extinguisher, including its content.s and the bracket attached to the outside of the container, is 3/1 pounds. (CX-2(a) ; 'II'. 519.

Each Fire-Pak is capped with a removable aluminum cap which functions very much like the metal pry caps use(l on glass jars of canned foods. (See CX-2B for physical exhibit.) A perforatecl disc, containing 4-5 evenly spaced quarter inch holes, is fitted into the top of the cylinder of each Fire-Pak directly beneath the extinguisher s removable cnp. ,Yhen the. cap is removed rrom the extinguisher, it has the appearance or a huge sa,Jt shaker. .Attached firmly to the center of eac.h cap by means of a rivet is a 114 inch iron bracket or pry handle which extends down the side of the ext.inguisher and unclerne11th its bottom. ,Vhen attached to a wall the bracket servcs as a, holder for the extinguisher but such use of the bracket is optional with the USCl' The primary purpose of the bracket is to sen-e as a lift. or pry ror the removal of the extinguisher s CRp. The cap of the extinguisher is removed by a quick jerk or the bracket from the extinguisher or of the extinguisher away from the bracket. This exposes thc dry chemical contents of the extinguisher for use through its perforated disc. Hefilling of the extinguisher is accomplished by removing the perforated disc, pouring in the dry powder, and rcplacing the elisc. H.respondent's recommended procedure for the USe or the dry chemical in his Fire-Pal\ extinguisher is to grasp the extinguisher by its base and to cast its powder content at the base or flame with long repeated sideway motions of the arm, rather than to shake or ponr the powder directly over it Gre. The evidence shows that the ca.o:ting method or applying the Fire-Pak extinguisher is the most. etIective' ,yay of using it. This method of application also enhances the S11fety of the, user by permitting him to stan(l further back from the fire than if he ,were attempting to put out a fire by shaking or pouring the contents of the Fire-Pak directly over the fire which in many 198 FEDERAL TRADE COMMISSION DECISIOKS Decision 64 F.

instances would in any e'"ent be impossible due to the intensity of the flame. (CX- , Tr. 191.

Respondent' s portable shaker-type dry chemical extinguisher must be sharply distinguished from the portable pressure-type dry chemical iire extinguisher because, as hereinafter detailed, the pressure extinguisher is an "approved" extinguisher whereas the shaker-type is not. In uapproved" extinguishers t.he dry chemicr:d is expelled by gas kept under pressure in the extinguisher as released by the opening of a valve, whereas in the Fire-Pak the powder is expelled by means of the human energy used in casting the powder on a fire. T11e sma-nest pressure- type extinguisher holds 2V2 pounds of dry chemieal as against the 2 pounds held by Fire-Pak but the pressuretype extinguisher is made in sizes holding up to a maximum of 30 pounds of powder. The discharge from a pressure extinguisher has an effective range of approximately 5 to 20 feet, depending upon the size and design of the extinguisher. (CX-5 at page 43.) The discharge range from a Fire-Pak depends upon the dexterity, vigor and experience of its user. From the record as a "whole. incluc1in9: the examiner s observation of respondents films (HX-I0) shmying the application of Fire-Pak to fire, it is found that the minimum effective discharge range of the Fire- ak in the hands of an average inexperienced user using respondent's recommended arm casting application of the dry chemical would be between 3 and 5 feet b1\t in the hands of one trained and experienced in the technique the effective range would be about 10 feet. (Tr. 435, 444. ) A prcssurctype extinguisher, like the shakerMtype Fire-Pak, also "must be oper ated in accordance with instructions which are prominent on the ext.inguisher" for maximum effective use. (CX-5 at page 43. ) From the record as a iVhole it is further concluded that skill and experience is an important factor in the use of any fire extinguisher ,,,whether it be of the shaker or pressure type or any other type. ('II' . 76. ) The use of any type of fire extinguisher is more efIectiye in the hands of a professional fire fighter than those of an amateur. The total ,,-eight of the smaller t. of pressure-type iire extinguishers including its dry chemical content 1S between.n a aIHl 11 pounels, as compared with the 2%, pound weight of the Fjre-Pak. The height of a pressure extinguisher is about 16 inches as against the Fire- Pak.s 81/" inch height. ('II'. 521-5Q2. The diameter of a pressure estingnisher is approximately 3 inches or about the same diameter as t ha t of the Fire- Pak.

The retail list price on the Fire-Pak extinguisher is $6 ('II'. 52. The list price of the lowest price pressure extinguisher put out by one of the leading fire-fighting equipment manufacturers is $19.50. (Tr. 287.

, FIRE-PAK MANUFACTURING CO. 199 191 Decision The contents of any fire extinguisher, whether it be water, foam chemical, dry powder, or some other substance, is commonly referred to as the fire extinguishing agent. (Tr. 273. The iire extinguishing agent used in the Fire- Pak extinguisher is a specially treated sodium bicarbonate powder (about 91 percent) with components (about 9 percent) for producing free flow and repellancy.

The same chemical agent is also used in " appro\"cd" dry chemical pressure-type fire extinguishers. ('II'. 254-255, CX-3 A and B CX--, CX-5 at p. 43, RX-1 A. ) To remove any mystery about this chemical agent, it may be stated that in its pure form it is the sole ingredient in the .well knoiYn and widely used Arm and Ilammer Soda Bicarbonate and that the chemical is a.lso an old stand-by for certain types of gastric distress.

It is found from the testimony of one of the complaint coullseFs expert witnesses and from the record as a whole that the powclerized sodium bicarbonate used by respondent as an extinguishing agent in his Fire. Pak extinguisher "* * * is * * * widely used in fire extinguisll1u(', nt. (Tr. 1,)c1; see also CX-5 at pp. 43, CX-9 at pp. 17. The fire e,xtinguishing agent here under discussion when used on a fire produecs a cloud of finely dispersed dust o\-er the fire. The dust separates the flame from the combustible material and thereby has the effect of smothering the fire. (Tr. 154 CX-5 at pp. 45, par. 4321. ) For all practical purposes, there arc three recognized general c.assets of fires denominated as Class " , and "c" fires. The sodium bicarbonate dry powder fire extinguisher agent is designed for use primarily on Class "B" tires which are defined as iires in flammable petroleum products or other flammable liquids or greases where the "blanketing-smothering" effect of oxyge.n-exclucling media is most effective. Dry pm,derized sodium bicarbonate is efiective on Class " ' fires involving small quantities of flammable liquids and greases in open vessels or on floors, sand, grfl \' , ancl other ground surfaces. (CX-;j, pp. 4, 43, and 43, '11'. 213 , 2;)(\ The dry ehemica.l pmnler here under consideration is also suitable for Class " fires. Class "C': fires arc deiined as fires involving electrical equipment where the electrioal nonconductivity of the extinguishing media is of first importance. Sodium bicarbonatr. , a nOllcon(lucting extinguishing agent, is eflective on Class "C" inci pient fires in ele ctrical equipment. (CX- pp. 4 , 4:J, 45 , '11'. 215 , Q50. Powc1erizccl sodium bicarbonate also has some limited eiIect on some Class '; fires. Class " ' fires arc defined as iires in ordinary combustible materials such as wood, cloth and paper where the , 200 FEDERAL TRADE CO?vlMISSION DECISIONS Decisioll 64 F.

quenching-cooling:: effect of quantiiies of ,yater or solutions containing large percent.ages of 'yater is most e:fe, ctive in reducing the temperature and i.-, therefore of first importance. The involved llry chemical is not el1'ecti,-e on deep-seated Class :' fires in ordinary combustible material but ma.y ha.ve some value on incipient surface fires in such materials. (eX- , pp. 4 , 43, 45; ex-O at p. 17. 'I,. 215, 250.

The fire e tinguishing agent use,d in Fire-Pak is purchased by respondent from the Fyr-Fightel' Company of Ne\\a.rk ei) .Jersey a manufacturer and distributor of such well-knmi"n iire extinguishers as the trade-marked " Pyrenc Fire-Fighter " and " TIYo. The company uses the same extinguishing agent in its 01,11 line of Pyrene" dry chemical fire extinguishers. It designates the extinguishing agent as its "Patented Formula H" a.nd describes it as consisting " * * "" essentially of powdered sodium bicarbonate treated in inert, non-toxic dry additives anclliqllicl synthetic resin. (Tr. 2:55- 257, eX-3 A and B, eX- , EX-1 A.

The Fyr-Fighter Company manufactures and distributes only the press' uf'i, zed type of dry chemical fire e,xtinguishers. The company does not make or distribnte any shaker- type fire extingllishers such as the File-rak. '1"he finn m,1nllfactllres and sells only ': nppron:-c1. fire extinguishers. (Tr. 260; ex- , p. 6. An "approvecF fire extinguisher is one ,which has been approved by one of two recognized laboratories for testing fire protection equipment. These are Underwriters' Laboratories ! Inc., and Factory ?\lutual Laboratories. In at least one State and in some counties in another State there is legislation prohibiting the sale " * * * of any make, type or model or extinguisher * * * unless such make, type or model is approved and labeled by the Factory l\Iutual Laboratories Unc1enn'iters ' Laboratories, Inc., or other testing laboratory approved by the Fire Marshal as providing adequate and reliable tests and examination. (Tr. 121-125: ex- , p. 2. Although the two mentioned fire, protection testing laboratories recognize dry chemica,ls m.ade from a base of sodium bicarbonate as a safe and eiTective fire extinguishing agent on Classes " and ' Tires to the extent. heretofore indicflted, they lUlI-e never approved the slwkel' type fire extinguisher employing such extinguishing n.gent but do npprove the pressure- type extingnisher using t.he same dry chem ical. ('II'. 124.

The ::national Auto Stock Racing Association of Daytona Bench Flori(1n, promoters of stock Cll' races, selected some years ago the Fire-Pak as its exclusively approved fire extingnisher for use on each autcnobile, engaged in racing at races it spon ors. X 0 other fire extinguisher ,vas thereafter aJlov;ed to be used at such car races. FIRE-PAK MAXVFAGl'UHING CO. 201 191 Decl.;ioll This was done after extensive comparative tests were made 'with variolls types 01 Ere extinguishers as to their relative rnerits for use on fuel fires in racing cars and on tire fires. Fire-Pak competed in such tests against pressurized extinguishers employing not only dry chelnicals but also carbon dioxide and ,vater \with additives as extinguishing agents. (Tr. 338--42" ,:160. Respondent operates a. one-man factory in the back of his home in Jacksonville i\here with the help of occasional day labor he manufactures the shells of the Fire-Pak extinguishers, fills them with the described dry chemical, and packages each lOfldecl extinguisher in an individual carton. His wife assists him in the offce ,york. (Tr. 18D- 1DO, 248, 416.

Although respondent's sales of Fire- Paks and refills of dry chemicals have been increasing each year since he commenced operations in HH55 , his business remains essentially a sma.ll operation. I-lis total net sales for 1HC2 was $38 318 and his net profits :from opera.t.ions for the year was $10 080. His net ,,0rt11 as of December 31 , 1D62 was $15 386. (RX- Respondent sells between 12 000 and 14 000 Fire-Paks anmmlly. Approximately 80 to 85 percent of the sales arc to customers i\within the State of Florida.. The remaining sales are principally to CllStomeI'S ill orth Carolina and J\lississippi. It is found that respondent haf3 maintained a substantial course of trade in File- Paks in commerce \ as "commerce" is defined in the Federal Trade Commission Act. (Tl' 207-238 , 241.) Hesponclent operates principally through (listributors and dealers. He has three sllch distributors, one in central Florida. \I'hose princlp;ll activity is commercial fishing, another ill orth Carolina \yho handles the File-Pak as part. of his general Jine of fire appliances: and 11 third in iississippi who sells insurance as well aE Fire-Pnks. Respondent has a total of perhaps 24 dealers I-.ho acquire their Fire- Paks almost entirely through respondent's distributors. The dealers for the most part are engaged in selling auto par s. (Tr. 237-2;)8. 240-2'12; RX- Approximately 50 pe,recent of respondents total annual sales is repeflt, bllslness. About. l;'5 percent of the total sales are for refills of the extingnishing agent. ('11' 241 , 247. R.respondent flcknmdeclges that. he is in competition \I"ith some 15 acksonyille dealers of fire extinguishers ,vho selJ onlv the approYt,c1' : type of extingllishel' Imt the eyic1ence fails to shmy that the latter arc engaged in the sale of fire extingui hers in ';commerce. ': l-Imvever, it can be inferred and is found from the record as a ,whole ihat. respondent ,\110 sells annually somewhat more than 000 Fire- lah to customers in States outside Florida out of total 22- OG!.1-70-1.f 202 FEDERAL TRADE COMMISSIOK DECISIONS Decision 64 F.

annual sales of up to 14 000 units per year is in "* * * substantial cOlnpeti6on in COlTI1erce * * *," as alleged in the complaint, with numerous distributors of fire extinguishers engaged in interstate sales of such commodities. (Tr. 33, 178 182, 448. Ninety-nine percent of the sales of Fire-Pak are for commercial or indust.rial use. The remaining on8 percent is sold to individuals for use in their homes and boats and such individual buyers are persons who have ha.d experience with the extinguisher in their occnpations in industry or government. Respondent does not solicit orders on a house-to-house or boat-to-boat basis because he has found that this is not economically feasible. Responclenfs sales are mainly in quantity msc Jots. (Tr. 52 , 459, 557 A and E. In addition to sales to commercial or industrial users of his prod nct, respondent. has made substan6a.l sales of his Fire-Pak to various Govcrnmcnta.l agencies or subdivisions as hereinafter ontlined. hns also sold thousands of his extinguishers to hundreds of fire departments. One of these is the Lake\\"ood- San Jose Fire Department, near Jacksonvile. (1'1'. 205 354 362 365 367 370 388; RX A and B; RX-4 A ,end E; 5 A and E.

Over the years, respondent has sold his Fire-Pakextinguishers to various governmental departments or units, both at the federal, state county, and munici pal levels, including the following: ermnent unit Years of purchase ' Total number of fire. paks sold or total amount ofjJ\1cimses.

Flu. State l\OU coml April 105S-Kov. 1962-- 2 120 Vnits 362- 3).

Va. State Road Dept. ('Ir. HJ62-;darch 1963----- 18i Units 3GS).

Fla. Forest Service (Tr. Kov. 1956- Feb. 1963-- Undetermined but for 367-8). past 11 months, i2 Gnits.

S. Dept. of Ag., :Forest 19S6 1963_-- 036. Service (Tr. 3iO- 5; nx 2A-C).

$73. S. Dept. of Ag., Fish & 19Si & 1963_ \Vncllife Service (Ita:

2A'" C).

"C.S. Army, Engineers Corps. 19,59- 1063__ I $2 097. (RX 5A- B; Tc. 3 90).

S. Dept. of Interior (RX lone purchase- 1962- I $75. BA).

C:t.y of Fort Lauderdale I 1956-196L- Fla. (Tr. 353). I 253 Units S. Dept. of Ag. , Research J96L_ -- $20. Service (RX 2B).

,, FIRE-PAK MANUFACTURING CO. 203 191 Decision Respondent has also sold Fire-Paks to the ;vIississippi Forest Service, the Texas Forest Service and the Georgia Forest Service. (Tr. 205, 244.

The great bulk of respondent's sales, however, have been to private industrial users. The citrus industry is one of respondent's largest users of the Fire-Pah:. His chief customers in this Jield are various citrus producing affliates of the Minute Iaid Corporation. Other of respondent's customers include various paper manufacturing companies, a brick firm, heavy construction companies, manufacturers of fertilizers, oil companies, truck lines, and liquefied petroleum (LP Gas) firms. (Tr. 242 244 2-15 358- 383 392 393; IlX- , RX- , RX- 32.

Respondent's customers, both private and governmental, buy the Fire-Pak chiefly for use in extinguishing petroleum fires on mobile equipment, such as trucks, tractors, road machinery, and spraying equipment. In addition to gasolene, fuel used in a great deal of this equi pment is butane and propane. It is inferred and found that the fire department purchase.rs of Fire-Pak use the extinguishers on petroleum fires. (Tr. 205, 245 , 359, 360-62; RX~6A. The ultimate users of Fire-Pak extinguishers are employees of respondent' s customers. They are employed almost entirely as operators of various types of mobile motorized equipment and as rne.chanics skilled in the care of such equipment. Such men arc physical1Jy active and mechanically inclined indiyiclllals. It is fonnel that men of these occupations would be far more adept and adroit in the effective use of respondent's shaker-type of fire ext.inguisher than oflco workers or housewives or the general public. Respondent caters almost exclusively to this type of ultimate llsed. Respondent and his agents, all experts in the use of fire extinguishers, generally give demonstrations, instructions, and training in the use of the Fire-Pak extinguisher prior to setle. (Tr. 201~20" 3:34 , 346 , 355~356; RX~ , RX- , RX- , RX~6Zll, RX~()Z24 RX~6Z41, RX-6Z45.

Through the use of such demonstrations, instructions, and training, the, effectiveness and personal safety of the users of responclenfs Fire-Pak are enhanced.

The advertisement claims here under considera.tion consist of a brochure (CX-J), the printed malter on the carton (CX-2A) in hieh each Fire-Pak is packed, and the printer1matte.l' on the cylinder ,.of the Fire-Pak extinguisher (CX~2B).

204 EDERAL TRADE co nnSSION DECISIONS Decision 64 F.

F"CLL TEXT OF . BBREVU.TED ADS CHARGED TO RESPONDEXT The complaint sets out a number of respondent's advertisements in abbreviated form and in some instances does not set forth addi. tional statements in the advertisements which bear a relationship to the alleged advertisement claims. This has resulted in the opinion of the examiner in the omission of certain words, phrases and sentences which are necessary for a full understanding of the representations made by respondent in his a.advertisements. The complaint alleges that respondent has made certain representations on the "packaging" of the Fire-Pak extinguisher. The packaging" is the carton (CX~2A) in which extinguisher is packed. The carton is printed with reading matter in both black and red ink. One of the panels of the carton contains the foJJo\\ing representations, as alleged in the complaint: Excellent fire protection in automobile, lJoats, buses, electrical elll1iVJlellt farms, gamges, homes, house trailers, industrial plants, institution::, serdee stations, schools, trucks, tractors.

The above is arranged in the. panel in n:l'tical fashion and the first three words "Excellent fire protectioll ' arc in more prominent type than the words that foJJo\\.

Respondent in his allswer admits that the above representation is made all the packaging of his product but the evidence also shows that there is printed conspicuously at the bottom of the panel the following statement:

ALL FIRES START S)IALL The above is printed in larger, blacker and more attention-arres properties on the panel (i.ing type than are the listings of the recom-automobiles, boats, buses, etc. ) for which the Fire-Pak is mended as the fire e:xtingnisher in the en nt of fire. The complaint charges a further representation on the "packag- 011ing of the Fire-Pak extinguisher. This representation appears a second panel of the Fire-Pak:s carton and leads as follows: Safe * * * effcctiye Hcspondent in his answer admits that. the above representation made on the packaging of his product but tbe evidence also shows of the aforesaid wordsthat there is printed directly beneath each cerwin matter which arc pert.inent to the context in which the said words "Sa.fe and "effective" are llsed in the panel. The full pertinent text of the panel is printed vertically thereon as follows: SAFE Non Toxic FIRE-PAK I."IANlJFACTURING CO. 205 191 Decision Non Corrosive on Abrasive Non Conductor of Elcctricity EFFECTIVE Flammable Liquids Electrical Fires and wil control flame in ordinary combust.ibles (Smothers fire instantly) Finally, with respect to tbe "packaging of the Fire-Pak extingnisher, the complaint alleges that there is printed thereon a representation reading as follows:

An approvcd extinguishing agent Respondent's answer admits that the foregoing representation is made on the packaging of his product but the evidence also shows that the full related text of the printed panel which contains the said representation roads as follows:

HOW TO LSE Grasp at. base and cast contents at base of flame (Drawing depicting a Fire-Pak in use by recommended casting method. After Ese Remove perforated disc and refill with Fire-Pak dry chemical ()J 0 annual recharge necessary). SAFE-CLEAK-Odorless An Approved Extinguishing Agent Kon Toxie- )Jon Corrosive Kon Abrasin :ron Conductor of Electricity Wil not Freeze Deteriorate or Evaporate The complaint also charges respondent ,dth making certain representations "on the label of the Fire-Pak extinguisher. (For physical exhibit of I; ire-Pak, see CX~2B). Such "Jabel" representations refer to reading mat.ter affxed to the cylinder of the extinguisher. (Tr. 248.

The complaint alleges that. the Jabel on the Fire-Pak extinguisher carries the follo\'iing representations:

(:1) SD.fe * * * (b) Approved extinguishing agent Respondent in his answer admits that the above representation appears lion the label" of the extinguisher but the evidence also shows that t.he full related text of the Jabel which contains the said 206 FBDERAL TRADE CO:lMISSIOX DECISIONS Decision 64 F.

representation reads the same as the text 8101vn on the top of this page.

The complaint further charges respondent with making certain representations about the Pire-Pak extinguisher in a "promotional advertising brochure" (CX-l). The complaint alleges and respondent admits that he made the following statement in the brochure: SR,fe * * * An approved extinguishing agent.

Eut the evidence also shows that the full text of the above advertising is as fa11ows:

SAFE-CLEAN-ODO RLESS An Approved Extinguishing Agent SAFE Because it is N on-Toxic on-Corrosive Non-Abrasive on-Conductor of Electricity 'Vil Not Deteriorat€, Freezc, or Evaporate The complaint also alleges and respondent admits that representation is made in the brochure that the Fire-Pak extinguisher is: UNEQUALED IN . . . EFFECTIVENESS Eut the evidence also shows that the full text of the above representation is as folio\vs:

SPEED UNEQUALED SIMPLICITY EFFECTIVENESS (The above is set up as nearly as possible as it appears in the brochure; the ,YOI'd tI Unequaled" in the brochure is some two or three times the height of the wOJ'dsspeed, simplicity and effectiveness.

Respondent contends that the above statement does not represent. that the Fire-Pak is unequaled in effectiveness by any other extinguisher but represents only that in the combination of the factors of speed, simplicity, and effectiveness Lhe Fire-Pak is unequaled and that he sincerely be.lieves this to be true. Consideration wiu be given later to the appropriate interpretation to be given to the fuji text of tbe rep resen tati on.

Dl' CEPTIVE REPRESEXTATIONS CHARGED '1'0 RESPONDENT AXD CO:.CLUSIOXS REACHED THEREON Thc complaint charges that respondent through the advertisements in question made five separate representations with respect to the Fire-Pak extinguishcr which it alleges are false, misleading and deceptive. For cyidence that these representations were in fact ma.de FIRE-PAR i\lANUFACrrCHI.\' (; Cu, 207 191 J )ecision complaint counsel relies on the advertisements shmvn in the complaint and requests the examiner "* * * to use his expel'tisc in interpreting the meaning of the advertisements which are supported by the ads themselves " asserting that "there is no need of consumer testimony to interpret the meanings of the advertisements, In Zenith Radio C07'p. v. Federal Tmde Commission 143 F. 2d 29 (7th Cir. 1944), it was held that the Commission "* * * has a right to look at the advertisements in question, consider the relevant evidence in the record that would aid *' * * in interpreting the advertisements, and then decide * * * whether the practices engaged in by petitioner were unfair or deceptive, as charged in the complaint. Consideration must necessarily be first given to the question of whether the advertisements in question do in fact constitute ths' representations charged in the compbint. Obviously, if the conclusion is drawn that the auvertisellents do not in fact spell out the charged representations, then the evidence presented to show whether these representations are true or not is no longer relevant because a cease and desist order can be issued only with respect to representations aotually made by a "respondent which are also found to be false, misleading, and deceptive. Attention is again dire'te,J to the fact that the record is barren of any consumer testlllOny as to the meanings of the involved advertisements and that their interpretation must therefore be based all the advertisements and other1' "* * * relevant evidence in the record that would aid * * * in interpreting the advertisements * * * Zenith Radio Corp. v. Federal Trade C om1nission, 8'up1'a.

Taking up t.he five representations charged by the complaint in the order in which they are presented therein, the first charge is that respondent through the above- described advertisements has represented, directly and by implication, that the Fire-Pak extinguisher "is excelle.nt iire protection for use in boats, buses, trncks schools, service stations, institutions, and other types of vehicles and establishments.

The record shows that respondent did in fact make substantially the above statement on one of the panels of the carton (CX~2A) of the Fire-I'ak extinguishcr ancl that the brochure (CX-1) on the Fire-Pak maj.;;es a similar statement under the. heading " Your Best Protection For.

But the record also shows that the very panel of the carton on which the statement in question i, made also carries a conspicuous warning that "All Fires Start Small." The same conspicuous "'"arning is also repeaterl on ty,O of the other panels of the carton and is likewise conspicuously painted on the label of the Fire.Pak extin- , :

208 FEDERAL TRADE COMMISSIO:: DECISIONS Decision 64 F.

guisher itself preceded by the exhortation "Hemember. Similarly the aforementioned brochure statement under the caption " Y QUI' Best Protection For" is preceded by another heading conspicuously warning that "To 1Vait Can Be Too Late" and this warning, by way of illustration, shows at its side a picture of a house aflame presumably because a fire extinguisher was not used on the fire when it was in its incipient stage. Another page of the brochure carries pictures of the Fire Pak extinguisher and its caTton with their 1'8spectlY8 markings "Hemember All Fires Start Small" and "All Fires Start Small. " Even in the illustrations, these warnings stand out prominently and conspicuously.

The diminutive size of the Fire-Pak extinguisher must also be taken in consideration in construing the meaning conveyed by the advertisement in question. It is diffcult to imagine that anyone even a child of twelve, would be deceived by the wording in question into believing that the Fire Pak, not much larger than a quart size carton of milk, was being recommended for use on anythil1g other than mall ' ncipient files on the properties mentioned in the Rchertisements.

It is found that the stat.ement in the involved advertisement that the Fire-Pak extinguisher "Is Excellent Itire Protection in Automobiles, Boats, Buses, Electrical Equipment, Farms, Garages, flomes etc. , w hen cone dered in conjunction with (a) the conspicuous warnings on the "advertisement that "A1I Fires Start Small" and (b) the tiny size and appearance of the :Fire-Pak extinguisher, constitutes an advertisement only to the fact that the Fire-Pak is cfl'ectiveon 8?nall 'incipient fiTCS in such properties. Conversely, it is fonnel that the advertisement in question is not a representation that the Fjre- Pak fire extinguisher is ",,: : : adequate protection for boats, buses trucks, schools, service stations, institutions, or many other.r types of vehicles and establishments. (See Par. SIX of complaint.) The proposed cease and desist order set forth in the complaint does not seek to prohibit respondent from advertising that the Fire-Pal\ extinguisher \"ill be of value in extinguishing small fires in their initifll stages. The charge here under consideration \"ill be (lismissal for failure to sho\" that respondent made t.he nnqnaZified l'€presentatjon wit.h which he is charged. Secondly, the compbint. alleges that respondent through various advertisements has represented, directly a,nel by implication, tllat the Fire- Pak extinguisher ",Vill extinguish fires of all sizes and types and is safe and effective for use on butane and propnne fires. " Since there is more than one representation inyolyec1 in this allegation, the representations tl1erein win be dealt \"ith separately. FIRE-PAK IANUFACTlJRIXG CO. 209 191 Decision Respondent in his answer vigorously denies that he has anywhere in his advertisements claimed that the Fire-Pak extinguisher ,,,ill extinguish "fires of all sizes The examiner has carefully examined all of the involved advertisements and finds no evidence therein of a. claim that the Fire-Pak extinguisher will extinguish fires of all sizes. \Vhile as shmvn in the preceding issue the advertisements do state that the extinguisher is "excellent fire protection in automobiles, boats, buses:' and so forth such advel'tisernent ,yhen considered in conjunction with the many warnings in the advertisements that "All Fires Start Small' and the diminutive size of the extinguisher D1flkes it clear that respondent has not representeu his extinguisher as erlectiye on "fires of all sizes" but only on fires in their initial stages. The charge here under considcraJion \will be dismissed because of failure to show that respondent made the representation with which he is charged. The comphtint as seen also alleges that respondent through the above described advertisement represented that his Fire-Pale extinguisher will extinguish fires "of all types Respondent in his answer alleges that the only representation he has made in this connection is that the Fire-Pale extinguisher will be "effective on flammable liquids, electric fires and controls flame in ordinary combustibles." The examiner finds that this statelnent is the only direct representation made by respondent in any of the involved advertisements as to the types of fires on which the Fire- P"k would be effective. The statenlCnt appears on both the brochure and the carton of the extinguisher. As heretofore shown fires arc generally classiiiecl i11to Class ': , Class :: , and Class ' fires and that a Class "A" fire involves ordinary combustibles (wood, paper, c.loth), Class "B" involves flammable liquids, and a Class "C" Iire involves electrical fires. The examiner has carefully examined alj of the involved advert.isements and finds that respondent has not represented therein, directly or by implication, that. the File- Pak ,,-ill ext.inguish all types of fires but. only a representation that it \\ill extingllish the described fires which fall into Classes Jr' and Yit.h respect to Class "A" fires, the ads represent only that the extinguisher will "contror' , not extinguish, such fires by smothering. Since there has bee.n a fa.ilure to show that respondent ha.s represented that his fire extinguisher will extinguish all types of fires, the charge that respondent made such representations will be dismissed.

The remaining portion of the alleged representation here under consideration charge.':: respondent ,,,itlt representing that. the Fire- Pak extinguisher is ;'safe and effective for llse on butane and propanc , :

210 FEDERAL TRADE CO:VLVIISSION DECISIO Decision 64 F.

fires." The reference here is to a, single non-conspicuous statement on the la.st page of the four page brochure which reads: "Fire-Paks are practical as protection around the home, industry, boats, auto and farms, because they are effective on grease, gasolene, overheated stoves, electrical fires bnt"ne "nd prop"ne pressure fires. (The underscoring has been supplied; it is not present in the brochure. ) It should be noted that there is no claim in the above statement that the Fire-Pak extinguisher is "safe J for use on butane and propane pressure fires but only that it is "practical" for such purpose. The above statement is the only reference in all the involved flch-ertisements iyith respect to the llse of the Fire-Pak extinguisher on butane a,nc1 propane pressure fires.

The examiner has carefully examined the advertisements in question and finds that the word "safe has been used therein only in 1 sense claimed by respondent. As heretofore found, the achcrtisements in question represent that the Fire-Pak' s extinguishing age. is "safe" in the sense of being " K on Toxic Non Corrosive Non Conductor of Electricity. ,ViJ Not Dcteriorate or Evaporate." The Tecord establishes that the treated sodium bicarbonate used as an extinguishing agent in the Fire-Pak extinguisher is "safe" to humall beings in the sense that word is used in the ad vertiseme.nts in that it is non-toxic and a non-conductor of electricity and is "safe" with respect to machinery and other properties in that it will not cause corrosion or abrasion and is "safe" in the further sense that t11e dry chemical will not freeze, deteriorate or ",-aporate. (Sec '1r. 8ch86 for testimony of onc of t.he Commission s expert witnesses which is found that in the sense the word "safe" has beenhA.s183~185.)been adoptedIt by all other Commission expert witnesses; Tr. used in the advertisements in question there has been no misrepresentations or false, misleading or deceptive statements. But it should be again noted that in the particular representation here under consiclerrttion (see above) the \'ord " safe" is not used at an. The respondent has not anywhere in his advertisements re.prc sented that the use of his extinguisher is the safest "ay to extinguish a fire of butane or propane origin. The record shows that the safest ",ay to extinguish such fifire is to I-nrn off the vahe to the bo which holds the. ga . ",Vhcn this is done' and t.he surroundings ", are kept cool below their point of combustion * * *," the fire will bnrn itself ant of its own occoril. On the other honil, if the fire is extinguished by means of an e:!:tinguishing agent without shutting off the valve, this may cause an explosion from accumulated vapors ,which couJ(1 be more of a hazard Own the fire itself. For Uli., reason the stanchI'd instructions for pxtillgnishill: a butane or prOpftle fire FIRE-PAK :MANUFACTURING CO. 211 191 Decision is to turn off the valve. This is well known to all industrial users of the gases in question. (Tr. 87- , 323-325. ) However, there arc occasions when it is impossible to get to the valve because of surrounding fire or to turn off the valve because it has been broken or damaged. In such event, an extinguisher must be used and presumab1y other measures are taken, if possible, to prevent an explo sion. (Tr. 324-325. ) Required by Jaw, it is standard practice for bulk transport trucks and storage plant.s of the liquefied gas under 288.consideration to be equipped with fire extinguishers. (Tr. 283 In view of the fact that respondent has not made any representations in the advert.isements in question that the Fire-Pak extin guisher a* * * is safe * * * for use on butane or propane fires" in the sense that an extinguisher is the best way to put out such fires the charge here under consideration will be dismissed. There is an indication in the record that respondent would be quite wiDing to revise his advertisements to include a warning that the safest way to extinguish a butane or propane pressure fire is to turn off the outlet valve. (Tr. 470. ) Respondent is advised to make this change in all future advertisements in which the Fire-Pak is recommended for use on butane or propane pressure fires in the interest of placing the fullest. possible informat.ion before his purchasing public about recommended procedures for dealing with butane and propane fires. As to the alleged representation that the Fire-Pak extinguisher is e.fectivc: on butane and propane pressure fi.res, respondent admits in his answer, as the above quoted excerpt froln his brochure shows that he made this claim but respondent vigorously alleges that such claim is true. The record is clear that the extinguishing agent in the Fire-Pak wiJJ readily put out a pressure fire of butane or propane gas origin. This is admitted by the Commission s key expert wjtnes, , R.oger C. l-late, who stated on direct examination that the extinguishing agent used in the Fire Pak "* '" * has been used successfuJJy under high pressure in dense, large clouds to put out some spectacular butane or propane fires. (Tr. 88; Mr. HaJc is a "key ,vitness in the sense that all of complaint counsel's expert witnesses adopted or concurred in the expert test.imony given by Mr. Hale. A film introduced by respondent with verbal descriptions in the record of its fite extinguishing scenes demonstrates the spectacular extinguishment of fl. large combination gasolene and butane fire tl1rongh ihe use of the Fire-Pak extinguisher in some six or seven seconds. (Tr. 543.

Since there has been" failure to show that respondent's representation that the Fire-Pak extinguisher is not effective on b1 ttane 01' propane Gres, the chflrge that such l'epl'csrnrntion is fa1sc, misleading: an(l deceptive win be clismissE'(1. Decision 64 P.

Thirdly, the complaint aneges that respondent through his advertisements has represented, directly and by implication, that the Fire-Pak extinguishe.r: "I-Ias been approved by a recognized testing Jaboratory or by recognized regulatory authorities for use on boats trucks, buses,. and in schools, service stations, institutions, and other types of vehicles and establishments. The complaint further charges that said representation is fa.1se, misleading, and deceptive. It win be recalled tlmt complaint counsel has not adduced and does not rely on any consumer testimony on the interpretation or meaning to be given to any of respondent's advertisements but requests the examiner to make such determination from the advertisements themselves.

The examiner has carefully examined all of the involved advertisements and finds that thc only sllltement therein that uses the word "approved" is the following: "An Approved Extinguishing Agent." This appears on the Jabel of the Fire-Pak extinguisher and on the fun size ilustration thereof on the brochure and is also repealed on one of the panels of the extinguisher s carton. The statement is a part of other surrounding statelnents on the label and carton panel which refer only to the dry chemical content of the extinguisher and not to the extinguisher as a unit. (See CX~ and 2A.

As heretofore shown, one of the panels of the carton does state that the Fire Pak affords fire protection in schools, service stations institutions, and other types of vehicles and establishments, but there is nowhere in this statement or elsewhere in responde,nt' advertisement any claim that the Fire-Pak extinguisher as a unit has been approved by a recognized testing laboratory or by recognized regulatory authorities for use" on such properties, as charged in the complaint.

It should be not.ed that thc issue in question under the pleadings is not wbetber the respondent has represented that his extinguisher employs "an approved ex6nguishing agent" but whether respondent has represented, directly and by implication, that his Fire-Pak extinguisher as a unit (i. tbe metal container with its appendages and its dry chemical content) has been approved by a recognized testing laboratory or by recognized regulatory authorities for use on the aforementioned properties. On the latter the examiner finds a.after careful study of all the involved advertisements that respondent has not ruade such a representation either directly or by implication. Since respondent did not. make the representation, the charges in the complaint involving sneh alleged misrepresentation must necessarily be dismissed.

FIRE-PAK MA:\UFACTURING CO. 213 191 Decision Although the question of whether or not respondent' s extinguishing agent is 'Ian approved extinguishing agent" has not been placed in issue by the pleadings in t.his proceeding, it may be noted in passing that the dry chemical that respondent uses in his Fire-Pak extinguishers is approved by the National Board of l ire Underwriters and also, as noted earlier, is in ,, de Use. (CX- , p. 43; CX~ , p. 17. FourthJy, the eampJaint alleges that respondent through his advertisements has represented, directly and by implication, that the Fire- Pak extinguisher Ills in regular and continuing use with, and hence is approved for use by, the United States Department of Agriculture and the United States Army Corps of Engineers." The complaint further alleges that such representations are false. The brochure is the only advertisement of those here involved in which respondent makes a claim that the Fire-Pak is in use by the Cnited States Department of Agriculture and the United States Corps of Engineers. The claim appears in a small space in the last page of the brochure and reads in part as follows: FIRE-PAKS are in use 'with:

S. Department of Agriculture (Forest Division) S. Army Engineers State Forestry Services State Highway Departments County Law Enforcement Agencies City Fire Departments It -will be noied that respondent has not anywhere stated or claimed in the above advertisement that the Fire-Pair extinguisher is "in regular and continuing use \\"ith, and hence is approved for use" by the United States Department, Forest Division, and by the United States Army Engineers.

The evidence presented by respondent, shows that the two agencies have been in fact fairly regular and substantial purchasers of the Fire-Pak extinguishers over a period of years extending into Ole c.Nlent year. (See page 202 sUFi' Thus, the Department of Agricnltl1re, has purchase,c1 more than $2 000 in hire- Pi1ks in the years 1956 to 1DG3 \which if compntec1 on the ba.sis of the l'cgnlal' Est price of SG pel' File- ak would constitute purc.hases in excess of 700 File- Paks. \ctually respondent gives substantial discounts on the list price on quantity orders. Similarly the 'Cnited States Corps of Engineers purchased about $2 100 in Fire-Paks in the years ID59 to 196(3. One i",' oice to the Corps totaled $736. (RX- A and B.) , :

214 FEDERAL TRADE CO::IMISSION DECISIONS Decision 84 F.

It is found that respondent has not represented, directly and by implication, as c.charged in the complaint, that the Fire-Pak extinguisher is approved for use by the lJ nitecl States Department of Agriculture and the l7united States Army Corps of Engineers. It is further found that respondent has not directly representpd as chnrgecl in the complaint, that the File-Pak extinguisher " is in regular and continuing use': by the lJ niteel States Depa.rtment of Agriculture and the United States Corps of Engincers but insofar as such representation can be implied from the advertisement. ill question, complaint counsel has failed to establish that the imp!ie') representation is not true in view of respondent's substantial sales to the said agencies over the years. Accordingly the charges here under' consideration \vill be dismissed.

Thc fifth ane! final charge of the complaint is tJUlt respondent has falsely represented in his advertisements that the Fire-Pak extinguisher "Is uneqmded in effectiveness, has gnmter fire extinguishing capability than other types of fire extinguishers and is more elIectin than ext.inguishers costing up to six times as much. It \fill be noted that the quoted paragraph charges three separate representations. The first of these alleged representations is that the Fire-Pal\ extinguisher "is unequaled in effectiveness.:' Hesponclent in his answer expressly denies that he has made this representation, but states affrmatively that his advertising material represents that t.he Fire-Pak Extinguisher is lmequa1ed in the combination of three factors, those of speed, simplicity and effective.ne,'3s and the impression conveyed regarding this point in Respondent: advertising Inaterial is that for those fire extinguishers on the market today that are fast and speediJy used of the category the speedy and simple fire extinguishers, the Fire-Pak is in this group the most effecti ve and is therefore unequaled.

The complaint in this connection alleges, as heretofore shown, that respondent in his brochure has represented that the Fire-Pak extinguisher is H Unequaled in * * * effectiveness. " The stars sho\vn in the quotation are part of the quotation as set forth in the complaint; they represent 'iyord omissions from the full text of the representation under consideration. The fuji text thereof in respondent' s brochure (CX~ l) reads as follows:

Speed UNEQCALED in Simp.icity Effectiveness (In the advertisement the height of the word " Unequaled" is the s:unc as the combined height of the three words, Speed Simplicity, Effectiveness.

FIRE-PAR MAX-cFACTURIXG CO. 2Hi 191 Decision As heretofore indicated no consumer testimony on the meaning of this advertisement (or any other) was adduced by complaint counsel; he requests the examiner to find from tbe advertisement itself that the alleged representation was in fact made. Complaint counsel contends that the abbreviated advertisement set forth in the complaint LIlequaled in * * * effectiveness" stands a.lone as an independent representation without reference to the claims of "speed" unci "simplicity" for the extinguisher. (Tr. 225~227. Respondent, on the other hand, as seen in his answer and in his testimony contends that he intended to convey the thought in tbe complete non-abbreviated statement, and that the reasonable interpretation of the non-abbreviated statement is, that the File-Pak extinguisber is unequaled in the combinai'ion of the factors of speed simplicity and eflectiveness. The complaint does not challenge the representation that the Fire-Pak extinguisher bas " speed" and simplicity" and counsel supporting tbe complaint does not appear to challenge the tl'uthfuJlness of respondent' s contention that the Fire- Pak extinguisher is "unequaled in the combina.tion of the factors of speed, simplicity and effectiveness. (Emphasis supplied.) In his testimony under cross examination, respondent readily conceded, with the candor that is characteristic of all of bis testimony, that unqualified representation that the Fire-Pak is "unequaled in effectiveness" would be absolutely false. (Tr. 227. The ultimate.e question is thus whether the full unabbreviated statement shauJd be interpreted as a claim that the Fire-Pak was being unqualifiedly represented as being unequaled in effectiveness to all other extinguishers or only as a claim that in the combination oj the three jactors of speed, simplicit.y and effectiveness the Fire-Pac is unequaled by any other extinguisber.

As stated in Zenith Radio Corp. v. Federal Trade Commission, S1lpra the Commission not only has a right to look at. t.he advertisements in question but also to H * * * consider the relevant evidence of record that would aid * * * in int.erpreting the advertisements * * * " making its decision as to whether the practices engaged in by a respond erlt are unfair or decept.ive as charged in n. complaint.. The interpretation to be given to the unabbreviated representation in question is best approacbed in steps. As t.he first step, the examiner finds that the consuming public would regard and interpret the words Speed UNEQCALED in Simplicity Effectiveness as a single, unified st.atement reading " cncqualed in speed, simplicity and effectiveness" and not. as three separate, isolated sentences reading 216 :FEDERAL TRADE COMMISSION DECISIOKS Decision 64 F.

Uncqualed in speed Unequaled in simplicity" and "Unequaled in effectiveness.

It is our further finding that the buying public would reJate the unified statement "Unequaled in speed, simplicity, and effectiveness to the diminutive size of the Fire-Pak as ilustrated in Life-size in the very brochure which carries the unified statement and on the basis of these two factors would conclude that the unified statement was simply a represent.ation that tbe Fire-Pak fire extinguisher was unequaJed in the combination of the three factors of speed, simplicity and effectiveness.

The examiner further finds that the unified sta.tement would not in any event be suggcstiyc to responc1cnfs CUlTent and prospective customers, consisting almost entirely of industrial and commercial firms and Government agencies experienced in the purchase of fire protection equipment, of a representation that the Fire- Pal; \vns unequaled in effectiveness" because on the basis of their experience with ftre extinguishers they would know even without thinking about it consciously t.hat. such vIas not 01(' thought intended to conveyed by the unified statement. In this connection onc of the other statements in respondent's brochure (not a subject of the present litigation) is here pertinent. It reads: File- Pal s were deyelopcd oy('r four years ago to meet the need of COllmercial and industrial people, who have ,vide!y dispersed operations, STIch as vehicles, shops, and thousands of other iustallatiOlls that create a potential fire hazard. An op ration of any type is ahyays under-protccted because of the high cost of larger fire equipment as well as the service and maintenan(:e problew such equipment creates. (CX- The examiner finds and concludes that there has been a failure of proof to show that the fun advertisement (unified statement) here under consideration is false, misleading and decept.ive and accordingly the charge based on this advertisement will be dismissed. The next portion of the charge under consideration is the alleged representation in the respondelles ach- ertisements that the Fire-Pak : has greatcr fire extinguishing capability than other types of fire extinguishers * :; * In his flns"\yer respondent specifically denies that he has made any of his advertising mat-erial the claim "* *' *' that the Fire- Pak Fire Extinguisher is more effective than 'other types of fire ext1nguishers':: but he contends that he has merely represented that the Fire-Pak has greater fire extinguishing capabilities than ce?'tailn other specified types of fire exti'ngu2shel' 8 of specified size or capacity. The examiner finds that the only advertising claim in the advertisements in question which relates to the above alleged representation is the representation in respondents brochure that " Tests Re- FIRE-PAK IA)rUFACTLHIKG co. 217 101 Decis.ion ycaJed That Onc Fire- Pak Has Iore Fire Killing Po",er than 0: or Two Three One Quart Carbon Tetrachloride Extinguishers * * ;") LB CO Extinguishers * .. *' It is concluded anti found that respondent has not represented in his advertisements that the Fire-Pak has ;'greater fire extinguishing capability than other types of fire ext.inguishers " as he is charged with in the complaint but that he has represented only that the Fire- Pak has greater tire extinguishing capability than certain other specifically identified types of fite extinqui8he1' of specified size aT capacity, namely, three one quart carbon tetrachloride extinguishers or two five pound CO extinguishers.

There has thus been a failure of proof that respondent has made the alleged representation but even if the al1egcd representation construed to mean that respondent has represented, as he admits, that the Fire-Pak has greater iire extinguishing capability than three one quart carbon tetrachloride extinguishers or two five pound extinguishers, there has also been a. failure of proof that this represent.ation is not true. In fact complaint counsel has not introduced any evidence to shmv that. the latter statement or representation is not true. On the. other hand, respondent did present testimony in support of his actual representation although the burden of proof did not require him to do so. (Tr. 228, 344, 427. The exa.miner finds and concludes that respondent. has not made the representation e. that the Fire-Pak has greater fire extin- (i. guishing capabilities than other types of fire extinguishers) alleged in the complaint and ac.col'clingly the charge of false advertising in connection therewith will be dismissed as the premise therefor i ll1Ssmg.

The iinal portion of the charge here under consideration is the alleged false representation in respondent's advertisements that the Fire-Pak ..* * * is more effective than extinguishers costing up to six times as much.

The alleged representation is based on a. sentence on the last page of respondents brochure reading; " :Fire-Pa-ks are more effective t.han most extinguishers costing up to six times as much. It. should be observed that there is some disparity between the representation as alleged in the complaint and the actual text of the st.atement made in the brochure. The statement in the brochure limits the application of the claim made therein to "most': extinguishers costing up to six times a.s much, as the Fire-Pak. On the other hand, the alleged representation a.appears to make t.he claim applic.able to any and all extinguishers c.osting up to six times as much as the Fire-Pak.

224-06!J- iO- 218 FEDERAL TRADB COj\IMISSIOK DECISIONS Decision li4 F. It should also be noted that the abaye-qlloted statement in the brochure is followed immediately by another sentence or tfltement which respondent. contends relates to and has the e.1'cct of specifically identifying the types of fire extinguishers "which respond(-nr has reference to in his claim that the Fire-Pak is more eft'ectivc ;' than Jrwst xtingllishers costing up to six times as I1mch:' ns the Fire P(tk. (Emphasis supplied. (Tr. 222~22+. ) The sentence in the brochure which immediately follows the quoted claim reads: ;;Particular attention is invited to the effective ratjng chart on this brochure. The e,examiner agrees ,,' ith respondent's contention that the t.wo sentences are related and that the effect of the second sentence is to qualify the first. sentence by specifically identifying the types extinguishers the a(h.crtiser respondent) is referring to in the expression "most. extinguishers costing up to six times as mu('h. The examiner further finds that. the 11orm,d reaction of pJ'ospeetin: purchasers "\"\ould be to refer to the mentioned chart in the brochure if they desire a. specific identification of the competing fire extillguishers the ac1Yertiscr is referring to in the phrase " most extinguishers costing up to six fillIes as much. The verbal text of the chart referred to has heretofore oecn alJncled to and quoted in another connection but \"\ith an omission of the cost data therein "\which is here pertinent. The fuJl text of the chart reads: " Tests reveal.led that one Fire-Pak has more fire killing pO"' Cl' than three one quart ca,rbon tetrachloride extinguishers (at the cost of onl y one C. ) or t."\vo 5 lb. CO extinguishers (at. 1/, the cost of one CO ' The cost data. is, of' cOllrse, that shown benrcen the parentheses.

Ko proof "\yas offered by counsel supporting- the complaint that the Fire.Pak did DOt. h lVC as claimed " more tire killing po\Yer than three one quart carbon tetrachloride extinguishers 01' two fhe pound CO:! ext.inguishers and similarly complaint counsel did not submit any e\' ic1ence to disprove rcsponclent's claim in the inyohcd statement that it Fire-Pak sells at a fraction of the cost. ai' the i-wo meJJtianed competing types of fire extinguishers. The only evidence the examiner has been able to find in the record on the charge here nncler consideration is the foJ1owing collOflUY bet"\H:cn complaintcounsel and one of his e.xpe.rt. witnesses, a depnty fire chief of \' aslJington Q. Is Commissioll s Exbibit B Ci. , a Fire-Pill; in eyic1E'lleE' 11:0 .\ Jlb:v:oic,1! f'xhillitl more' effectiy€ than extinguishers (:o:"ting: up to six tillll'' i!:, lllll(.JJ,? A. Are more effecti,e? Yet;. ir. more e:teetiye? Q.

A. I wouldn t thinl so. no. sir (Tl'. Hi. , FIRE-PAK 11A), VFACTURI),TG CO. 219 191 Dedsion and a statement by another of complaint counsels expert witnesses an employee of the Department. of Agriculture, Division of Fire Control, the Bureau of Forest Services, ,yho being handed respondent's brochure nand given carte blanche by complaint colm el to go through it and to pick out. t:therefrom stateJnents he thuught were fnJse stated:

A. f.' '1- And it (the brochure. CX-IJ sa:r Firf'- lak" fire more l'ffeetiye than most extinguisbers co.c;ting up to :oix times n;; much" :md I would sny that is a false statement. (Tr. 152.

Thus the issues raised by the t,yO related sentences in the brochure (i. Fire-Paks are more eflective than most extinguishers costing up to six times as much. Particular attention is invited to the eif'active chart on this broehl1re. ) as qualified by 1.he reading matter on the "ett'active charf (i. Tests revealed that. one Fire- PaIi has UlOre fire killing power than three one quart carbon tetrachloride ext.inguishers (at it the, cost of only one C. ) 01' two lh5 lb. CO extinguishers (at. the, cost of one C02 is \rhether it is true tha.t one Fire- Pal. sells at one-third the lost of a one quart carbon tetrachloride extinguisher or at olh.'-seyellth the cost of a one fi,Te pound CO extinguisher a.11d whether one Fire- Pal\ has "11101'8 killing pmyer:- than the described carbon tetrachloride or CO extinguishers.

Xeedless to say the above opinion testimony is hardly germnne to the precise issues here invoh"ecl n.., shown abo,"e. But e\'en if such expert. opinion is considered germmle.: its value is questionable because it is mere opinion without the backing of tests or experiments a.nd cost daul to 13nppo1'1. it.

Accordingly the mentioned expert opinion testimony cannot be demned reliable, probative and substantial evidence, 01 the alleged nntruthfulness of respondent s claim that the Fire-Pak ,It Jesser cost has more fire fighting pmver'" than the described competing (types of fire extinguishers. On the other hand: evidence was introclueecl by respondent tending to support the advertised (;claim although he did not have the initial burden of proof thereon. (1'1' 2:2:2-2:24, 300- 302 , 3:22 , 344. ) The examiner, however, does not deem it necessary to pass on such evidence and specifically refrains from making an ilndings ba.5Cd on such evidence relatiye t.o the truthfulness 01' the (lchertisement in question.

It. is :founel and concluded that there has been a failure of proof to show that responc1en(s representation that the Fire- Pak is mure effective than most extingnishers costing up to six times as much as the Fh' Pak js false. Accordingly the charge of false advertisement based on such representation will be dismissed. Deehioll (;4 F. Although the above clispo e8 of the issues in this proceeding, a summary of complaint counsel's ca in-chief and the examiner cyaluation thereof may be of assistance to the Commission on review, Complaint counsel, who took over from previous counsel what ',"Quid be a very diffcult case to pr sent in any circumstances, adduced the testimony of eight expert witnesses in the field of fire protection. Through them he sought to show that the Fire-Pak fire extinguisher was not "safe ' and " etl' ectivc." contrary to the complaints a.1J1'idgcd version of responclenfs advertisement that the Fire-Pak extinguisher was "Safe-ffective:' As heretofol'!3 shown, the ,yord ':Safe:' in the unabridgerl advertisement (CX~2A) is followed by the words "Non Toxic Non Corrosive 2\on Abrasive ' and " Non Conductor of Electricity" which the examiner has found were the only meanings in which the word "Safe" is used in the advertisement. Through his witnesses complaint counsel sought to ilnport to the word "Safe a new connotation not suggested by the advcrtisemcnt namely, that the Fire-Pak fire extinguisher by virtue of the fact that it requires manual manipulation to disc11argc its dry chemical contents requires the user to get EO close to a. fire as to endanger his person. (1'1' 85. This attempt failed as may be seen from the following colloquy between complaint counsel and his key \witnesses, Roger C. I-Ia.l whose testimony ,,'as adopteel by all other Commission \witnesses: Q. Keeping your mind away from the toxir value (meaning the Fir('.Paj.;s non.toxic quality) of it but the fact that you han to go to tbe fire and shake this ingredient on the fire, rlo rou think there is an ' possible chance of hazard, or danger? A. '1'here could be from the fleat absorption and possibly catching your own clothing on fire bv getting too close. The general probl.em is that most inexperienced people wil not get that close * * * . ('1'1' 83. From the testimony of the saine expert witness it is also found that the \vord ('Safe, when used in connection with a fire extinguisher is normally used to convey the thought that the chemical cont.ent of the extinguisher is non-toxic and a non-conductor of electricity. (Tr. 85~86.

Through his expert "witnesses, complaint counsel also sought to show that the Fire.-Pnk extinguisher "-as not "Effec.ive " in a sense other than that used in the Ima.brr dged advertisement in question (CX- 2A) in which it wiJ1 be recaJ1ed that the full text of the advertisement rea,ds;

EFFECTIVE Flammable Liquids Elect.rical Fires and il control flame in ordinary combustibles (Smothers fire instantly) , .

FIRE-PAK MANUFACTLRING co. 221 ) 9) Decisioll In his direct examination of his expert witnesses, complaint counsel sought to show through testimony adduced from such \vitnesses that the " shaker-type" Fire-Pak extinguisher is not an ((effective " fire extinguisher in the sense that its hand method of application severely limits its speed, continuity and range of application as compared to a "pressure-type" of extinguisher and is therefore of value only in small incipient fires. ('11' 72- , 76 , 145 , 154. ) This evidence is inclevant because our findings shmv that respondent in his advertisements represents only that. the Fire-Pak is effective on small incipient fires and because the complaint does not seek to enjoin respondent from advertising t.hat his product is effective on "* * * small fires in their initial stages.

Complaint counsel inirodueed in evidence ten pictures of fires- (CX~6 A~ ) For the most part these represent fires of either flammable liquids or it combination of flammable liquids and "\Y(JOd gratings. There is 110 clear cut evidence from which it can be determined whether the fires shown in the pictnres are small incipient fires or larger fires but all are seriolls fires. ('11'. 11 1.) The record does not contain a definition of It "sma.ll fire" and it is probable that. a nniyersally acceptable definition of a "small fire" does not exist.. The Commission "\,-witnesses testilied that it "\nls their expert. opinion that the Fire-Pak was incapable of putting ont any of the fires shown in the pictures except one or two. There is no showing of record that. any of the Commission expert "\vitnesses have ever had any actual experiencc in trying to put out fires like those shown in the pictures with a shaker-type fire extinguisher similar to the Fire-Pak. On the other hand, respondent testiiied categorieally that he has actually extinguished with the File-Pak extinguisher fires identical with those shown on eight of the pictures and tires similar to those shown on the remaining two pictures. ('11'. 549-556. ) The examiner has eareflllly observed the demeanor of respondent during his participation in this proceeding both as a -witness and as counsel lho se. e has noted respondent's sincerity, random' and endeavor to answer all questions "\with care and exactitude and saw no evidence of eyasion or ,lttempt to distort facts. The examiner finds respondeut"s testimony throughout the hearing to be probative and reliable and not. subject to discount for reasons of self-interest. S. ,T. King, .Jr., all Assistant. Fire Chief of the .Tacksonville (FIn. Fire Department, testifying in behalf of respondent, also testi1iec1 that a Fire-Pal:: extinguisher "\yould put ont any of the fires shown i1l the ten pictures 110tec1 above, (Tr. 305-:315. ) Similar testimony is of the reconl by respon1c1ent"s brother Jnl'reli Lnnwl'Duclley, who for ,t number of ;vcal's sold and c1emOn ll' llec1 Fire- Pal, extinguishers" 222 FEDERAL TRADE CQMMISSIOK DECISIONS Final Order 64 F.'I.

The record also contains a film made in beha-H of respondent showing the extinguishment of ten different fires by means of File- Pak extinguishers, some of Vdlich arc similar to the fire.s in the ten pictures introduced into evidence by complaint counsel and some arc even more spectacular. (1 l0. ) The film is also described verb"l1y ill the record. (1'1' 496- 546. ) As heretofore shom1 , respondent has had epeat orders over the years for File-Pak extinguishers from many r'-' ire Departments, fronl the Forest Diyision of the United States Department of .Agriculture, from the rnitecl States Army Engineers Corps, and from innumerable commercial ilnd industrial concerns.

In so far as the Commission s tell pictlll'es of fire scenes (CX JL-J) are here relevant, from the entire record it is found that the Fire-Pak exting-nisher in the hands of an experienced hand1Br would extinguish the fires therein shown.

Complaint counsel recognizes that the problem in this ease has been not. \\"hethel' respondent's product possesses merit but rather t-lC determination of its 1imitrttiollS \'\which he candidly admits is n ddIi('ult matter to appraise with clefinitiveness. (1'1'. 31G , 318. ) But whatever these limitations are, the examiner is satisfied from the record that respondent. has not made any fnJse representations about his product in the ach-ertisements in (IUestion. To some extent this proceeding has been brought about by imprecisions in respondent's advcrtiscments. At the hearing respondent expressed n willingness and even an eagerness to remove these imprec.isions from his advertisements. (Tr. 4(j9-480: 4D4-- )5. ) It is ::uggested to respondent that he take immediate steps to eliminate from his advertisements the imprecisions which arc suffciently identified in the body of this initial decision.

ORDER It ,is ordered That the complaint herein be, and the same hereby , dismissed.

FIN.H, Onder The Commission, 011 September :23 , 196:3, having issued an order ::taying the effective date of the deci::ion herejll and the Commission now having determined that the proceeding should not be placed on its own doc.ket for l'eyie\y, bl1t that the initial decision of the hearing examiner should be lllodiiiecl in certain particulars: It i;. ()l'del'ed That the below\y-ql1otpd paragraph from page :213 of the initial decision of the hearing examiner, filed Augl1st 10 . lDfj;\ be,\ and it. hereby is, stricken.

FIRE-PAK MA UFACTURI:\G co. 223 191 Final Order \Jthongh the question of whether or not respondent's exr,inguishing agent is ' an approved extinguishing agent' has Hot been placed in issue by the pleadings in this proceeding, it ll. be noted in passing that the dry chemical that respondent used in his Fire-Pak extinguishers is approvcd by the National Board of Fire Vnclenvriters and also, as noted earlier, is in wide use. (CX~ , p. 43; CX~ , p. 17)"' It is fu'lhel' ordered That the follo\ling paragraph be, and it. hereJJY is, substituted in plnce of the paragraph heretofore stricken: Although the question of whether or not respondent's extinguishing agent is ;an approved extinguishing agent' has not been placed in issue by the pleading in this proceeding, respondent is cautioned in his use of the word 'approved.' A repre. scntatire or the company which produces respondent's extinguishing" agent testified that it \las approved only ,,-hen used in one of their extinguishers (1'1'. 271 )). The ational Board of Fire rnderwriters does not ltpprove chemical extinguishing agents separately, but grants approya.l only to fire extinguishers or systems as a whole (CX- , eX-9). An accurate statement concerning respondents ext.inguishing age. , therefore, would be that it. is ut.ilized in certain extinguishers which have been approved by the Xational Board of Fire Underwriters, but that no expre s approval has been accorded the agent itself. It is suggesteu that respondent e.ither precisely qualify his use of the word 'approved' or that he eliminate it from his arhertisements until such time as he obtains express approval of his dey ice from a recognized testing laboratory.

It /8 further or'dated That. the initial decision of the hellring ex aminer' , filed A llgust 1D , ID63, as herein modified, be, and it hereby is adopted as the decision of the Commission. ORDER I t is oTdel'ed. t the com plaint herein be, and the same hereby , dismissed.

224 FEDERAL TRADE CO:vimission DECISIONS Comjllaint 64 F.

IN TI-IE L\.TTER OF SAMUEL SCHEFF ET AL. DOl"" BUSINESS AS BURMAX SALES CmIPANY ORDER, ETC.\ I REG.\HD TO TJ-lE ,\ALLEGED nol\TION OF THE FEDER.\L TJL-\DE COl\HIlSSIOX .\.CT Docket 8553. Complaint. , Jall. 1963-lJcci8i()/. .Jun. , 1964 Order requiring a Xew York C.itr (1istributor of 1Iom'nbber com\)1' to l'etnilf'r to eease mi.;;l'epl'e:;pnting the composition of it:: JlolH' rubber combs b ' l1 illgthe terms " Hubber HublJel'- Resin," and "Hnrd Rubber " in starnpillg ;1l1d adyel'tisiJJg.

C03IPLAINT Commission Act Pursuant to the provisions of the Federal Trade and by virtue of the authority vested in it by saiel Act, the Fedenl1 Trade Commission, having reason to belie,'e that Samuel Scheff and Burton H. Scheff, individually and as copartners doing business as respondentsDur1lax Sales Company, hereinafter referred to a.s have violated the provisions of said Act, Hnd it appearing to the Commission that. n. proceeding by it in respect t.hereof ,\ould be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAJ'H 1. Respondents Samuel Scheif and Burton H. Scheff ate individuals and copartners doing business as Burmax Sales COllpany, with their offce and principal place of business located at 13U Fifth Avenue, New York )0, New York.

PAn. 2. Hespondents are now, and for some time last past hfln been, engaged in the advertising, offering for sale, sale and distribution of combs designed for use on human hail' to retailers for resale to the public.

PAR. 3. In the Conl'8e md conduct of their business respondents now cause, and for some time last past. have caused, their said prodbusiness in theuct, when sold, to be shipped from their place or State of K eti York and otherwise, to purchasers thereof located in the various other States of the. United States and in the Distric1, of Columbia, and maintain, and at nil times mentioned herein have maintained: n snbstnntial course of trade in said combs in commen' ns "commerce:: is defined in the Federal Trade Commission \ct. PAIL 4. In the course and conduct: of their business, and at an times mentioned herein, respondents han' been in substantial compeic1uals in thetition, in commerce, ,with corporations, firms ,1lhl indi, sale and distribution of combs designed for use all human hail' , BL'RMAX SALES CO. 225 224 Dpdsion PAR. 5. Respondents, in the course and conduct of their aforesaid business, and for t.he purpose of describing and to induce the purchase their combs, hfln stamped and branded said combs as Rubber and ;:R.rubber-Hesill, thereby representing, directly or by implication, that said eOllus are nwcle or c.composed of rubber or hard rubber. Respondents have also designated, referred to and represented said cOlnbs as '; R.ubbeT Rubber-Hesin and "hard Rubber on boxes, packages, circulars, invoices and in various forms of advertising 11flteria-l circulated by them. PAR. G. The said representations were and are false, misleading and deceptive. In truth and in fact, respondents' said combs so stamped, branded and referred to are not made or composed of rubber or hard rubber, but are made or composed of material other than rubber or hard rubber.

\R, 7. There are among the purchasing public substantial numbers of persons who prefer combs made of rubber or hard rubber, as distinguished from combs made or composed of the materials used in J'esponc1ents said combs.

PAR. 8. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that saiel statements and representations were and are true and into the purchase of substantial quantities of respondents' product by reason of said erroneous and mistaken belief.

PAR. D. The aforesaid acts and practices of respondents, as hereill alleged, were, and are, aU to the prejudice and injury of the pubLe and of respondents' compet.itors 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(a) (1) of the Federal Trade Commission Act.

3I1'. Charles S. Cox supporting the complaint. !lb. Donald E. F,W! Kouyhnet ,VRshington, D. , for respondents. IXI'ru, L DECISION BY LEON R. GROSS , I-IEARIXG EXAl\IINER SEI'TE nmR 10 , IDG3 The complaint which11 Iyas issued herein chargedl'respondents Sam- 11el Scheft' and Burton H. Scheff as individuals and copartners doing business as 111lrmax Sales Company with violating Section 5 of the Federal Trade Commission Act by offering for sale, selling anll distribl,ring' in inrerstate ('011111eJ' ('e c.ombs designed for use on 1111man bail', Iyhich combs were sold to retailers for resale to the public \ \ 226 FEDERAL 'TRADE COMMISSION DECISIO:\TS Filldings 64 F.

and 'were deceptively branded and designated as "Hubber" and "Rubbcl'- .Resin and "Hard Rubber when in truth and in fact the combs so stampccl, branded and designated \Were not made or composed 01 rubber or hard "rubber, but were made or composed of material other than rubber or hard rubber. Respondents \\ere duly served with the complaint, and filed their anslfer thereto. . scrif's of pl'chearing conferences "- ere convened at which it developed among other things, that Samuel Schet1:, one of the respondents named in the original complaint and a. partner of Bunnax Sale Company, had lliecl on February H)63 , leaving Burton II. SeheH the other respondent., as the sale suryiying partner of Burmax Sale. Company. \.t. a prehcfll'ing conference conyellec1 on .July 10G;coullsel for respondents moved to withdnnv the allsn-er \\which had theretofore been filed on behalf of respondents and to file, in substitution therefor, fin admission anS'IYer under the Commission s Hllles of Practice for Adjudicative Proceedings, Such admission answer' filed on .July 31 , 1963, and, by order of August 9 , 1963, substituted for the originul answer intel' a.lia recites: . III answer to the complaint filed ill the ahoY!' entitled lll'oceeeling. 1"10:-1)11)(1ent admit. deny and HH'l' a hereinafter E't forth. 1. He."-l1onclents admit all uf the matt'rial nlleg-atioll1: of the complaint f'Xl:P.pt Ow allegations in rE' pect of respondent Samuel Scheff concerning: nl1 ads subsP(lUent to FelJJullry !I . 1fHJ3. the saiel SalluP! Sclwf' being dec'cnsed :1:of February D , l!:G us E'i"tublishl'd lJY ne,"pOlJ(lPnt ' ExhHIi XI). 1. whid1 W:I:- J'ptt'\- ed ill E'yi(leuce nt :1 p1'ehefll'illg" c(lnferl'1J' p on .Jul ' 30, J063. 2. np lJolldents wflin' their right UlHler the ('(Illllif'sion s Hnles of l' r:1(.:ti('P to submit IJl'OposP(l finding' s and conclnsiul1s herein. 3. Respondents spedJicfllJy rt'SPl'E' tlleir right to lietitiull for' I'p\-i('w UIult' r Section 20 of the COllllis..,ioll S Rules of Pl'adkf'. Counsel supporting the complaint. has like\"\-ise waiyed his right to submit proposed findings ilnd conclusions, and has reserved his right to appeal from this Initial Decision, On t.he basis of the namegatiolls in the complaint, the admissions in the amended answer filed July 31, 1963, on belmlf of respondents, and the death certificate of Samuel Scheff (RX 1), the undersigned makes the foJ1o'Doing: YINDll\' GS OF F.\CT 1. Respondents Snnmel SeheiI and Burton H. Scheft' 1 n8.med II the complaint filed herein: were until February 9 , 1963, individuals and copartners doing business as I1l\rmax Sales Company with their office and principal1 place of Imsi1H ss located at 156 J; fifth e1111e Xew York 10, :New York, Samuel SehefT J1nmecl respondent ill the eomp1a.int filed herein individually and as a copartner' of BUJ'max Sales Company, died on February 9 , lDG;j, 1eaying as the sole sur- \\ , , ; B1:RMAX SALES CO. 227 22. Finc1il1gs viying partner of Bunnas Sales Company the respondent Bnrton II. Scheff.

2. At. the time of the issuance of the com plaint herein and for some t.ime prior thereto respondents had been engage,d in adver1is ing, offering for sale, seJ1ing and distributing in commerce, as "com;. merc.e" is defined in the Federal Trade Commission .Act, combs which ,were designed for use on hUmflll hair. Said combs were offered for sale, sold and distributed to retailer,l's for resale to the public.

;). In tbe COll1'Se and conduct of their business, respondents bad caused, and for some time prior to the issuance of the complaint herein, had caused their products, \\hen sold, to be shipped fronl their place of business in the State of 1\ ew Yark, rllcl otherwi to purchasers thereof located in various other States of the rnitecl States and in the District of Colmnbia, Respondents had maintained, and at all times relevant. to this proceeding, had maintained a substantial course of trade in said combs in commerce, as "C011merce" is defined in the Federal Trade Commission Act. 4. In the course and conduct of their business, and at all times relevant to these proceel1ings, respondents had bee.n in substantial competition, in commerce, ,with corporations, finns and individna)s in the sale and distribution of combs designed for use on lllllrmn hair. ;'). In the eOllrse and conduct of their business, and for thc purpose of describing: and in order to induce the purchase of their combs, respondents have stamped, branded nIld designated their said combs as "Rl1bber Rubber-Resin" ancl "hard Rubber and thereby represented, directly or by implication, that said combs "-ere made or composed of rubber or hal'drubber. Respondents have also designated, referred to, and represented their said combs as "Rubber R.rubber-Resin .. nncl " Hard Rubber"' 011 boxes containers packagcs, clrculars, invoices and in various forms of advertisingmaterial circulated by respondents.

6. The aforesaid represe,ntations by respondents were and are in fact false, misleading and deceptiyc. Respondents' said combs, which had been stamped, branded and designated by them as hereinabove set forth were not composed of rubber or hard rubber, but ,were made or composed of material other than rubber or hard rubber. 7. Substantial numbers of persons among the purchasing public ho purchase cornbs, prefer combs made of rubber or hard rubber as distinguished from combs made or composed of materials used in re.sponclents' said combs.

8. Hespol1dents use of the above-mentioned false, misleading and deceptive statements, representations and designations has had, and Conc111::ioll 64 F. T. now has the capacity and tendency to misleacllnembers of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true, and have had the effect of inducing the pmchase of substantial quantities of respond eIlts' products by reason of the aforesaid false, misleading and deceptive designation of the combs as rubber, rubber-resin and hard rubber when in truth and in fact said combs were and arb made or composed of material other than rubber or hard rubber. 9. The aforesaid acts and practices of respondents as herein found were and are to the prejudice and injury of the public and of respondents' competitors. They constituted and now constitute unfair methods of compet.ition in commerce. They \were and are unfair and deceptive acts and practices in commerce and violate Section :5 of the Federal Trade Commission Act. The undersigned makes the following:

COXCLUSIO 1. The Federal Trade Commission has jurisdiction of and over the respondents and the subject matter of this proceeding. 2. The complaint herein states a cause of action, and this proceeding is in the public interest.

3. The acts and practices of respondents in using the false, misleading and deceptive st.atements and representations herein described ,,-ere, and are, aJl to the prejudice of the public aud respondents: competitors, and constituted, and now c.onstitnte, unfair and deceptive acts and practices, and unfair methods of competition, in commerce, within the intent and meaning of the F'ederal Trrlde Commission Act.

4. The aforementioned false, misleading and deceptive acts and practices of respondents are proscribed by the Federal Trade Commission _ ct and should be enjoined, N O\Y, therefore it is onlwi'ed That respondent Burton H. Scheff, individual1Jy, and as a surviving partner of Bnrmax Sales Company, and under fin)" other name or names, anel his representmiyes, agents and employees direct.ly or through any corporate OJ' other elm-ice, in connection \with the offering for sale, sale or distribution in cOlnmerce, as ' commeree" is defined in the J;--cdcJ'al Trade Commission _ \.ct, of combs ftesigned for use on hmnan hail', do lortlnrith censc and desist from: 1. losing the word ;' rubber: or any other word of simiJnl' import or meaning, alone, or in combination wirh any other.r ",lord or ,,-ords, to designate: describe 01' refer to such combs which are nol in fact made entirely of vulcani ed hard rubber j BURMAX SALES CO. 229 22'1 Final Order 2. Representing in any manner that. sfticl combs are rubber or hard rubuer or are made of ruuber or hard rubber unless they arc in fact Innde of yulcanizecl harel rubber' It (s fwdlwJ' ordene! That this complaint be and it hereby is dismissed as to Samuel SeheH, deceased.

Fr:XAL ORDER The Commission, on October 23, 1963: having issued an order staying the eifectiye date of the decision herein and the Commission nmv having determined that the ease should not be placed on its mYJl docket for review:

It 7:8 ordeJ'ed Tlult the initial decision of the hearing examiner filed September 11 , 1963 , be, and it hereby is, adopted as the decision of the Commission.

ORDER It is ordered That respondent Burton H. Scheff, individually, and as a surviving partner of Burmax Sales Company, find under' any other name or names, and his representatives, agents ancl enlployees, directly or through any corporate or other cle,'ice, in eollnection with the offering for sale., sale or distribut.ion .in commerce as "commerce:: is defined in the Federal Trade Commission ..A.. of combs designed for use on 11l1lnan hair, ao forthwith cease and desist from:

1. Gsing the word ';rubber: or any other word of similar import or meaning, alone, or in combination \with any other word or words, to designate, describe or refer to such combs which are not in fact made entirely of Yldcunized hard rubber; 2. Representing in any manner that said combs are rubber or hard rubber or arc made of rubber or hard rubber unless they are in fact made of vulcanized hard rubber. It is furthe?' ordered That this complaint be, and it hereby is, dismissed as to Samuel Scheff, deceased.

It i8 further onlm' That respondent Burton H. Scheff shall within sixty (60) days after service upon him of this order, fi1c with the Commission a report, in writing, sett.ing forth in detail the manner and form in 'which he has complied with the order to cease and desist set forth herein.

, Complaint 6-+ F, 1 X Tile )'LUTER OF ABHAHAl\I ILcBEX ET AL. TRADl"G AS FURS BY 1L"EE OF CLA YTOX CONSENT ORDER, ETC., IX REG.\RD TO THE .-\ALLEGED nol..;TTOX OF THE rEDERAL 'frade COl\DIISSIO AND THE Yer PRODrCTS L.\BELIXG ,\CTS Docket C-680. C'complaint. Jan. 15. 1964-Dcdsion. .Jan. 15, 1%1. C(m ent order requiring fI JlwJ111fnet11rer 11111 retail!:)" of furs in Clayton. ::10. , to eense \'violating the Fur l'roclllds Labeling Act hy mis\Jraur1ing, c1eceptin'lr iny(Jicing and nc1rerti..;jng its fur products, and sllb title1ting Inbel which do Hot ("(mform to the l'equin'lUpIlts of the -\(:t. IPL.UXT PnI'SlUllt to the proyisiollS of the Federal Trade Commission Act and the Fur Products Labeling Act and by virtue of the authority vested in it by srdd Acts, the Federal Trade Commission having reason to believe that Abra,ham Haben also known as Al Haben, an individual trading as Furs by Raben or Clayton, hereinafter referred to as respondent, has "iolated the prm-isions of said --\cts and the .Hules and Regulations promulgated under the Fur Products LnbeJing Act, and it appearing to the Commission that a proceeding hy it in respect thereof ,YQuld be in the public intercst, hereby issues its complaint stating its charges in that respect as follows: PAR -\GRAPH 1. Respondent Abraham Raben also kno\'In as Al Raben is an inc1ividmtl trading as Furs by Raben of Clayton. Respondent is a manufacturer ancll'retailer of fur products with hi oflce and principal place of business located at 920 South 13rentwooel, Clayton, l\Iissouri.

PAR. 2. Subsequent to the efIectiYB dllte of the Fur Products Lllbeling Act on August 9, 1952, respondent has been and is 1101\ engaged in the introduction into commerce, a.nd in the nUlllufacturc for introduction into commerce, and in the sale, advert.ising, and oiIpl'iug for sale in commerce, and in the transportation (llld distrib\l- I:ion in commerce, of fur products; and has manufactured for sale sold, advertised, ofierecl for sale, transported and distributed fur products which have been made in whole or in part of furs ,,'which have been shipped and received in commerce, as the terms "COIn- 111crce fur" and "fur product are defined in the Fur Producer Labeling Act.

FURS BY RABEK OF CLA YTOX 231 230 Complaint \R. 0. Certain of said fur products were misbranded in that they ",were falsely and deceptively labeled or othenvise falsely or deceptively identified with respect to the name of the country origin of furs contained in such fur products, in violation of Section 1(1) of the Fur Products Labeling Act.

Among such misbranded fur products, but. not limited the.reto ",were fur products labeled to show the country of origin of furs used in such fur products as the United States hen in fact the furs used in such fur products were. imported. -\R. 4. Certain of said fur products \were misbranded in tllat they were falsely and deceptively labeled or otherwise falsely or deceptively identified with respect to the name or designation of the animal or animals that. produced the fur from which the said fur products had been manufactured, in vio1ntion of Section 4(1) of the Fur Products Labeling Act.

Alnong such misbranded fur products, but not liJnited thereto were fur products labeled as " Broadtail" thereby implying that the furs contained therein ",were entitled to the. designation "Broadtail Lamb: when in truth and in fact they were not entitled to 'mch designation.

PAR. 3. Certain of said fur products were lnisbrallded in that ihey ",were not labeled as required under the provisions of Section 4(2) of the Fur Products Labeling Act and in the manner and form prescribed by the Hules and Hegulations promulgated thc1:eunder.

lmong such misbranded fur products, but not limited thereto were certain fur products without labels and ce.rtain fur products with JabcJs which failed:

1. To show the true animal name of the fur used in the fur product.

2. To disclose that the fur contained in the fur product ",vas bleached dyed, or otherwise artificially colored, when such was the fact.

a. To show the name, or other identification issued and registered by the Commission: 01 one or more of the. persons who manufactured such fur product for introduction into COllmerce, introduced it into COl1unerce, sold it. in commerce: advertised or offered it for saJe, in commerce, or transported or distributed it in commerce. 4. To s11my the country of ongm of the imported furs contained in the fur product.

,, 232 FEDERAL TRADE CO)'L\lISSIO?\T DECISIO COll111aillt 04 F.

\R. G. Certain of said fur products were. rnisbnllrled in violation of the Fur Products Labeling \.ct in that. they "erc not lnbeled in flccorc1nnce ,, ith the Rules and Regulations promulgated 1:11e1'enneler in the follmving respects:

(a) Information required under Section 4(2) of the Fur Products Labeling Act and the 1\u1e8 and He.gulations promulgated thereunder was set forth on labels in abbreviated form, in vio1ntion of Rule 4 of said Rules and Regulaiions.

(b) The term "Persian Lamb as not set forth on labels in the manner required by law, in violation of Rule 8 of said Rules and R.egulations.

(c) The term "Dyed Eroadtail-processed Lmnb"' was not set forth on labels in the manner required by In" , in violation of H111e 10 of sa.id Rules and Regulations.

(d) The terrn " natlU' ttr' was not. used on labels to describe fur products \which were not pointed, bleached, dyed, tip-dyed, or otherwise artificia1Jy colored, in violation of Rule 19 (g) of said Rules and Regulations.

(e) The disclosure that fur products \were composed in whole 01' , earsin substantial part. of paws, tails, bellies, sides, flanks, gills throats, heads, scrap pieces or waste fur where required wns not set forth on labels in violation of Rule 20 of said Bules and Regulations. (f) Labels aflixed to fur products did not c01np1y \with the minimum size requirements of one and three-quarter inches by two and three- quarter inches, in violation of Rule. 27 01 said Rules ami Hegulations.

(g) Information required under Section 1(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was set forth in handwriting on labels, in violation of Rule(h)29 Information(b) of said RuJcsrequiredand underRegulations.Section 4(2) of the Fur Prod- 11Cts Labeling \.ct and the Rules and Regulations promulgated thereunder was not set forth in the required sequence, in violation of Rule ao of S11ic1 Rules and Regulations.

(i) Information required under Section 1(2) of the Fur Products Labeling Act and the Rules and Heglllations promulgated thereunder was not set forth separately on labels \with respect to each section of fur products composed of two or more sections containing different animal furs, in violation of Rule 36 of said Rules and Regulations.

(j) Required item numbers were not. set forth on labels in violation of Rule 40 of said Rules and Regulations. \R. 7. Certain of said fur products \were falsely and deceptively fls l'equil'e(linvoiced by the respondent. in that. the.y \were not invoiced FVRS BY RABE OF CLAYTON 233 230 Complaint by Section 5(b) (1) of the Fur Products Labeling Act and the Hules and Regulations promulgated under sneh Act. Among such falsely and deceptively invoiced fur products, bnt not limited thereto, "\were fur products coycrec1 by invoices "\which failed:

1. To show the true animal name of the fur used in the fur prod uct.

2. To disclose that the fur contained in the fur product. was bleached dyed or ntherwise artificially colored, ,,,hen such was the fact.

3. To show the country of origin of imported furs used in fur products.

PAR. 8. Certain of said fur products were falsely and deceptively invoiced in that respondent set forth on invoices pertaining to fur products the name of an animal other than the name of the animal that produced the fur from "\which the said fur products harl been manufactured, in violation of Seetion 5(b) (2) of the Fur Products Labeling Act.

Among such falsely and deceptively invoiccd fur pJ'oducts but not, limited thereto, were fur products "which were invoiced as ;;Broadtair' thereby implying that the furs contained therein were entitled to the designation "Broadtail LamV' when in trnt11 and in fact they "ere not entitled to such designation.

PAR. 9. Certain of sa.id fur products "\were falsely and deceptively invoiced with respect. to the name of the country of origin of imported furs used in such fur products, in violatiou of Section 5(b) (2) of the Fur Products Labeling Act.

Among such falsely and decept.ively invoiced fur products, but not. lilnitecl thereto, were fur products invoice.d to show the llllme of the country of origin of furs contained in such fur products as the -United States "hen in fact the furs used in such fur products were imported.

PAR. 10. Certain of said fur products Were IaJsely and deceptively invoiced in violation of the Fur Products Labeling Act in that they were. not invoiced in accordance with the Rules and Hegula.tions promulgated thereunder in the following respects: (a) Information required under Section 5(b) (1) of the Fur Products Labeling Act and t.he Rules and Regulations promulgated thereunder was set forth 011 invoices in nbbl'eviated form, in violation of Rule 4 of said Rules and Regulations. (b) The term "Persian La.mb: ,"as not set. forth on invoices in the manner required by In.w: in violation of Rule 8 of said Rules and egulations.

224- -- ,0-- ) U 234 FEDERAL TRADE COM:\IISSION DECISIQXS ('OlllJlaint G4 F.

(c) The term " Dyed Iouton Lamb" ',"s not set forth on inyoices in the manner required by law, in violation of Rule 9 of said Rules and Reg1.11ations.

(d) The term "Dyed Broadtail-processed Lamb" was not set forth on invoices in the InannCl' required by la,v, in violation of Hule 10 of said Hules and Regulations.

(e) The term "natural' "Was not used on invoices to describe fur procluds \vhich ,were not pointed, bleached, dyed, tip dyed, or other1'- ,,'ise "rtificiaJJy colored, in violation of Rule 19 (g) of said Rules and Regulations.

(f) Required item numbers were not set forth all invoices viola6on of Rule 40 of said Rules and Regulations. \.H. 11. Certain of said fur products 'Were falsely and deceptive-Iy advertised in violation of the Fur Products Labeling Act in that certain advertisements intended to aid, promote and assist, directly or indirectly, in the sale and offering for sale of such fur products were not in accordance with the provisions of Section 5(a) of the said Act.

\Jnong and included in the aforesaid advertisements, but not limited thereto, were advertisements of respondent which appeared in issues of the St. Louis County Observer, a nmvspaper published in the State of Iissouri.

\.among such false and deceptive advertisements, but not limited thereto, were advertisements which failed: 1. To show the true animal name of the iur used in the fur prod uet.

'2. To 8ho,,- that the fur contained in the ful' prod net "was blellched dyed, or othenvise artificia.II,y colored, when such \vas the fact.

AH. 12. By means of the aforesaid achertisements and others of similar import and meaning not specifically reierrcd to herein respondent falsely and deceptively adyertisecl fnr prodnc.ts in that certain of said advertisements contained the name or nalles of an animal or animals other than those producing the fur contained in the fur product, in violation of Section ;")(a) (6) of the Fur Products Labe1illg Act.

\.R. 13. By means of the aforesaid advertisements and others of silnilar import and meaning not. specifintlly referred to herein respondent falsely and deceptively advertised fur products in violation of the. Fur Products Labeling Act in that the said fur products were not adyertised in accordance with the Rules and Regulation:: promulgated thereunder in the following respects: (a) The term "Persian La,mb': was not set forth in the ma.nner required, in violation of Rule 8 of the said Rules and Regulations. FURS BY HABEN OF CLAYTON 235 230 Deci..;;ion (b) The term '; natnraF was not used to describe fur products which ,"cre not pointed, bleached, dyed: tip-dyed or otherwise artificially colored, in violation of Rule 19 (g) of the said Rules and Hegulations.

, 1'8- \R. 14. In flche1'1is;ng fur products for sale, as aforesaid spolltlent. m:1.le pricing- claims and representations of the types CO\' eled by subsections (a), (b), (c) and (d) of Rule H of the Regulations under the Fur Products Labeling \ct. Respondent in making such claims and representations f,liled to maintain full and adequate records disclosing the facts upon which such pl'king claims and representations were based, in viohtion of Hule c 4:(e) of the said R.nles and Regulations.

\R. 15. Hesponclent in introducing, selling, advertising, and offering for sale, in commerce, and processing for commerce, fur products; and in selling, achertising, offering for sale and processing fur products ,which have been shipped and received in commerce, has misbranded such fur products by sub titllting thereon, labels which did not conform to the requirements of Seetion 4 of the I' ul' Products Labeling A. , for the labels affxed to said fur products by the nUlllufacturcr or distributor pursuant to Section -: of said Act, ill yioJntion of Section ;1(e) of said Act. \R. IG. The aforesaid acts and practices of respondents, as herein a!leged are in violation of the Fur Products Labeling Act and the Hules and Regulations promulgated thereunder and constitute unfair allcl deceptive acts and practices and unfair methods of competition in COlnmerce under the Federa.l Trade Commission Act. DECISION \ND ORDER The Comlnission having heretofore determined to issue its COJnplaint charging the respondent named in the. caption hereof ,,,ith violation of the Federal Trade Commission Act and t.he Fur Product.s Labeling Act, and the respondent having been served with notice of said determination and ,with a copy of the complaint the Commission intended to issue, together \"ith a proposed form of ordcr; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, nn achnission by respondent of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing" of said agreement is for settlement purposes only and docs not constitute an ac1missiOll by respondent that the law has been violated ns set forth in such complaint, and waivers ilnd provisions as required by the Commission s rules; and , , 236 FEDERAL TRADE CO:'VIMISSIO DECISIONS Order 64 F.

The COll1lis ion, having considered the agreement: hereby accepts same, issues its cOlnplnint in the form contemp1rted by saill agree- Inent, makes the following juris(liC'ional findings, and enters tJw :following order:

1. Hesponclent Abraham Raben also known as Al Raben is tlll individual trading as Furs by Raben of Clayton, \v1t11 hi offce and principal place of business located at 920 South Rl'enhYoocl, Clayton Iissouri.

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

ORDER It is ()rdere(l That respondent .Abraham R.aben otherwise known as Al Haben an indjvic1ual trflcling as Furs by Raben of Clayton or under filly other trade name, and respondent s representatives agents and employees, directly or through any corporate 01' other device, in connection -...ith the introduction, or manufacture for introduction, into commerce, or the sale: advertising or offering for sale in commerce, or the transportation or distribution in commerce ()f any fur prodllet; or in connection with the mannfactm' e for sale sale advertising, offering for sale: transportation or distribution, of any fur product which is made in whole or in part of fur -...which hrls been shipped and received in commerce, as the te1'11S " cornmerce :fur" and "fur product are defined in the .Fur Products Labeling Act, do forthwith cease and desist. from: A. i\Iisbranding fur products by:

1. Falsely or deceptively labeling or other1"vise identifying any such fur product as to the country of origin of furs contained in such fur product.

:2. FIt1sely or deceptively labeling or otherwise identifying any such fur product as to the name or designation of the animal 01' animals that produced the fur c.ontnined in the fur product.

3. Fa.filing to affx labels to fur products showing in words and in figures plainly legible all of I"he infoJ'mation required to be disclosed by each of the subsections of Section 4 (2) of the Fur Products Labeling .Act. 4:. Setting forth information required uIlder Section l(2) of the Fur Products Labeling Act and the Rules and Hegulations promulgated thereunder in abbreviated form on Jabels affxed to fur products.

FURS BY RABEN OF CLAYTON 237 230 Order 5. Failing to set forth the term ;'Persian Lamb" on labels in the manner required where an election is made to use that term instead of the word "Lamb"

G. Failing to set forth the term ';Dyed1 Broac1tailprocessed Lamb" on labels in the manner required where an election is made to use that term in lieu of the term Dyed Lamb"

7. Failing to set forth the term ;'KaturaF as part of the informat.ion required to be diselosec1 on labels under the Fur Products Lllueling Act and the Rules and Regulations prOlIlulgatec1 thereunder to describe fur products ,which are not pointed, bleached, dyed, tip-dyed, or othenyisc artificially colored.

S. Failing to disclose on labels that fur products are composed in ,,,hole or in substantial part of pa\Ys, tails benies, sides, Hanks, gills, ears, throats, heads, scrap pieces or waste fur.

9. Affxing to fur products labels that do not comply with the minimum size requirements of one and th1'eequarters inches by two and three-quarters inches. 10. Setting forth information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder in handwriting on Iaoels afixed to fu!' products.

11. Failing to set forth information required under Section 4(2) of the Fur Products Labeling Act and the Rules ilnd Rcgulations promulgated thereunder on labels in the sequence required by Rule 30 of the aforesaid Rnles and Regula tions.

12. Failing to set forth separately on labels attached to fur products composed of two or more sections containing different animal fur the information required under Section 4(2) of the Fur Products Labeling Ad and the Rules and Regulations promulgated thereunder with respect to the fur comprising each section.

13. Failing to set forth on labels the item number or mark assigned to a fur prod uet.

B. Falsely or deceptively invoicing fur products hy: 1. Failing to furnish invoices to purchasers of fur products sh "ing in ,,,ords and figures plainly legible a1l the information required to be disclosed in each of the sub,sections of Section 5 (b) (1) of tile Fm Praclucts Labeling Act.

Order 64 j"

2. Setting forth on invoices pertaining to fur product. any fa.lse or deceptive information with respect to the name or designation of the animal or animals that pl'OdlH:ec1 the fur eontainecl in such fur product.

S, Jlisl'epl'csenting in any mnnnel' , directly or by implication, the country of origin of the fur contained ill ful' products.

4. Setting forth information required under' ectioll 5(b) (1) of the Fur Products Labe1iug Act. anel the nulo; and Hegulations proJlulgated thel'8u11(181' in abbl'eyiatl:(l form.

;J. FniJing to set forth the tel'll ;' Pel', .:iallLamo"' in the manner requil'etl where an election is made to u e that tel'11 instead of the "'YOI'd ;; Lamb' 6. Failing to set. forth the ter11 ;;Dyed ThIollton Lamb' in the manner required "here an election is made to l! that term instead of the words " Dyed Lamb 7. Failing to set forth the 1erm "Dye(l Broacltnil-processed LaJlb: in the manner required ,,'here an election is made to use that term instead of the words "Dyed Lamb" 8. Failing to set. forth the term '; :Katund" fls part of the information required to be disrlo ed on invoices under the Fur Products Labeling Act and Rules and Hegulatioll:: proj1ulgatec1 thereunder to describe fnr products ,,"which are not pointed, bleac:hed, dyed, tip-dyed or otherwise nrtificially colored.

D. Failing to set forth 011 invoices the item number or mark assigned to fur products.

C. Falsely or deceptively advertising ful' products through the use of any acherHscment, representation, public announcement 01' notice -which is intended to aid, promote or assist, directly or indirectly, ill the sale, or of1'ering for sa.le of any fur prod uet, and w hi('h :

1. Fails to set forth in words and figures plainly legible all the infornlation required to he disclosed by each of the subsections of Section 5(a) of the Fur Products Labeling Act.

2. Sets forth the name or names of any animfll or animals other than the name of the aninwl producing' the Jurs contained in the :fur product as specified in the Fill' Product Kame Gl1ide and as prescribed by the Rules and Regulations.

FURS BY RABEN OF CLA YTOX 239 230 Order 3. Fails to set forth the term " Persian Lamb. : in the manner required where all election is nwcle to use that term instead of the word "Lamb"

4. Fails to set forth the term " "'a(mal" as part of the information required to bc disclosecl in advertisements under the Fur Products Labeling: Act and the H111es and Hegulations promulgated thereunder to describe fur product which are not pointed, bleached, dyed, tip-dye(l, or otherwise l1ltificia1Jy eaJored.

D, Iaking claims anll representations of the. types ('overcd by subsections (a), (b), (c) and (d) of Rule H of the Rules and I\egulntions promulga:ted under' the. Fur Prodllctb Labeling \.ct unless there are maintained by respondent full and a(lequate records disclosing the facts upon which such claims ami cprescntations are based.

it fw"ther oiylered That Abraham Raben, also kno\YJ1 n Haben, an individual trading as Furs by l aben of Clayton, or under any other trade name and respondent s representatives, agents ancl employees, directly 01' through any corporate or other device, in ('on11ection with the introduction, sale, aclyertising or offering for sale, in commerce, or the processing for commerce, of fur proclnct s; or in connection \"ith the seIJing, advertising, ofiering for .sne: or processing of fur products "which have been shipped und reccivecl in. commerce, do forthwith cease and desist from misbl'andillg fur products h)T slIhstit nting for the hlhe1 aflxeLl to such fu1' products pursuant to Section 4 of the Fur Produc1sLabeling Act labels whi('h do not conform to the requirements of the aforesaid \.ct and the Hules and Hegulations promulgated thereun(ler. It i8 ll.lather oTdel'ed That the respondent herein shall \,within sixty (GO) days after service upon him of this order, file "ith the Commission a report in writing setting forth in detail the manner unel form in -which he has cornplied with this order. .

240 FEDERAL TRADE CO;\IMISSION DECISIONS Opinion G4 F.