Brekke Enterprises

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IN THE MATTER OF BREKKE ENTERPRISES CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE I;EDERAL TRADE COMMISSION ACT Dockei C-2862. Complaint. Jan. 12, 1.977 - Decision Jan. , 1977 Consent order requiring a Tacoma, Washington, building insulation manufacturer among other things, to cease misrepresenting that its products are noncombustible, non-flammable, or non-toxic; that urea-formaldehyde foam has been certified "non-combustible," that it is not included in the F. s cellular plastics activities; and failing to make required disclosures with respect to numerical flame spread rating representations. Further, respondents are required to send certain building offcials and previous purchasers of their products a prescribed statement noting that their products cannot be considered "non-combustible" in actual fire conditions and should be installed accordingly.

Appearances For the Commission: Lawrence S. Blumberg. For the respondent: Pro se.

COM LAINT 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 Brekke Enterprises, hereinafter more particularly described and designated as respondent, has violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect tflCTeof",p;1ld be in tba public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Brekke Enterprises is a corporation organized, existing and doing business under and by virtue of the laws of the State of Washington, with its principal office and place of business located at 1320 Tidehaven Road East, Tacoma, Washington. PAR. 2. Respondent is engaged in the manufacture, marketing and sales of cellular plastics products, including urea-formaldehyde foam in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 3. In the course and conduct of its business, respondent has represented that certain of its urea-formaldehyde foam products are either "non-flammable non-combustible non-combustible per ASTM E- 136- " or "nontoxic.

PAR. 4. In truth and in fact, respondent's urea-formaldehyde foam .

FEDERAL TRADE COMMISSION m CISIONS Decision and Order 89 F. is not non-combustible, non-flammable, or non-toxic. Furthermore ASTM E- 136-65 is an obsolete test; respondent's products would not , be rated "non-combustible"under the currently accepted standard, ASTM E-136-73.

Therefore, these representations were false, deceptive and had a tendency and capacity to mislead consumers, builders, building offcials and the public.

PAR. 5. In the course and conduct of its business as aforesaid, respondent has been in substantial competition in or affecting commerce with other corporations, finns, and individuals, in the sale and distribution of cellular plastics products. PAR. 6. The aforesaid acts and practices of respondents, as alleged herein, 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 and unfair and deceptive acts and practices in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of tQe respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consenf6tdBr ail. admjssion"iythe respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34(b) of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

BREKKE ENTERPRISES Dccision and Order 1. Respondent Brekke Enterprises is a corporation organized existing and doing business under and by virtue of the laws of the State of Washington, with its -principal offce and place of business located at 1320 Tidehaven Road East, Tacoma, Washington. 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 ordered, That Brekke Enterprises, (hereinafter referred to as respondent"), and respondent's successors, assigns, officers, representatives, agents and employee., directly or through any corporation, subsidiary, division, or any other device, in connection with the advertising, offering for sale, selling or distributing in commerce within the United States of urea-formaldehyde foam and other cellular plastics products (hereinafter referred to as "Products ) do forthwith, A. Cease and desist from, 1. Using, publishing or disseminating, or encouraging others to use, publish oc disseminate, directly or indirectly, orally or in writing, whether or not in conjunction with or with reference to any test or standard, such descriptive terminology or expressions as "nonburning, self-extinguishing, non-combustible non-toxic " or any other term, expression, product designation or trade name of substantially the same meaning, except that such terminology or expression may be used with respect to any, product hereafter developed which is, in fact, non-combustible, - non-bllfnihg; -selrextinguishing, or non-toxic, as the case may be, under actual fire conditions, and except that reference may be made to numerical flame spread ratings where (in the case of written reference) the following statement is included as prominently as, and in close conjunction to, such reference:

This numerical flame spread rating is not intended to reflect hazards presented by this or any other material under actual fire conditions.

or where (in the case of oral reference) a disclosure that the numerical flame spread rating is not intended to reflect hazards under actual fire conditions is made in conjunction with such oral reference;

2. Hepresenting that urea-formaldehyde foam is tested, passes, is Decision and Order 89 YT. certified or is rated as "non-combustible" under the test method known as ASTM E- 136-65.

B. " Establish and imple merit a program to identify previous purchasers from respondent of Products since January 1, 1972, and to supply each purchaser so identified with a notice in the form of Appendix A hereof within 120 days from the date this order becomes final.

C. Take all necessary and appropriate actions to inform present and future employees having managerial, sales, marketing, or research responsibility regarding products and all distributors or franchisees of Products of the provisions of Paragraph A and Appendix A of this order and to enforce compliance .therewith by such persons by:

1. Furnishing each present employee, distributor or franchisee within thirty days from the effective date of the order, and each such future employee, distributor or franchisee within thirty days of his assignment to managerial, sales, marketing, or research responsibility regarding Products, with a copy of Paragraph A and Appendix A together with a written notice, over the signature of the respondent' chief executive offcer, which promulgates the policy required in Paragraph A, and (a) which notifies each employee, distributor or franchisee that respondent wil take appropriate disciplinary action which shall, in the event of willful or repeated violations, consist of fine, suspension or dismissal, against any employee who engages in acts or practices prohibited by Paragraph A, and (b) which notifies each distributor or franchisee that respondent will cancel all contracts for the sale or distribution of piodocts.in the event violation ofthe terms of Paragraph A; and 2. Requiring appropriate periodic written assurance from each such person that his business practices conform with the requirements of Paragraph A of this order.

D. Cease and desist from paying, directly or indirectly, any agent distributor, or franchisee, or any other person for the preparation, dissemination or publication of any advertising or promotional material which does not comply with the provisions of Paragraph A of this order.

E. Within thirty days of the effective date of this order, supply a copy of the Notice contained in Appendix A to the International Conference of Building Offcials, Building Officials and Code Administrators, Southern Building Code Congress, National Building Code the National Fire Protection Association, and each federal, state or local building department or other agency or other organization from BREKKE ENTERPRISES Decision and Order which respondent has sought acceptance or approval of its Products for use in building construction.

F. Submit to the Commission within sixty (60) days and one llUndreil twenty (120) days .alter servke upon them of this order, a report, in writing, setting forth in detail the manner and form in which respondent has complied with the order and thereafter to submit such other reports relating to the subject matter of this order as the Commission may thereafter direct.

G. Notify the Commission at least thirty days prior to any proposed change in the corporate respondent such as dissolution assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries engaged in the manufacture or distribution of products in the United States, or any other change in the corporation which may affect compliance obligations arising out of the order.

Commissioner Dole did not participate.

Appendix A IMPORTANT NOTICE REGARDING THE HAMMABILITY OF UREA-FORMALDEHYDE FOAM The flammability characteristics of urea-formaldehyde foam and certain cellular plastics used as building insulation are tested pursuant to numerous lest methods and standards. Included among these are ASTM E-84, 136, E-162, D-635, and D-1692; VL 94 and 723; and N!,'PA 255. The Federal Trade Commission considers that these standards are riot accurate indicators ufthe performance of the tested materials under actual fire conditions and that they are only valid as a measurement of the performance of materials under specific, controlled test conditions. The terminology associated with the above tests or standards, such as "non-burning, self extinguishing, non-combustible, " or "25 (or any other) flame spread" is not intended to and may riot relied the ha7.ards presented by such products under-"cactu9J fire. cNlditieft'i,, No urea-formaldehyde foam product that is currently marketed can be considered non-combustible." Moreover, some hazards associated with numerical flame spread ratings for such products derived from test methods and standards may vary significantly from those which would be expected of other products with the same numerical rating.

In order to protect against fire hazard, urea-formaldehyde foam should not be installed in an exposed or unprotected condition. This notice is not intended to address the hazards presented by any proprietary product. The manufacturer of each particular product should be consulted for complete instructions to minimize the risks that may be involved in the use ofihe product. The Federal Trilde Commission, Washington, D.C. 20580, requests that any representation that is inconsistent with the terms of this notice be brought to its attention.

This notice is distributed by Brekke Enterprises pursuant to agreement with the Federal Trade Commission.

. , Complaint 89 F.