Zipatone, Inc

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IN THE ~A TTER OF ZIPATONE, INC. , ET AL.

COKSENT ORDER , ETC. , IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COM)nSSION ACT Docket 3336. Complaint, July g, 1991-Decisi:on, July, 1991 This consent order prohibits, among other things, a Hilside, Ill. , based manufacturer of artists' materials from representing that any product containing a Class I ozone-depleting substance will not damage the environment, and from making any unsubstantiated claims that any product containing an ozone-depleting substance offers environmental benefits.

Appearances For the Commission: Michael Dershowitz. For the respondents: Ben)amin E. Beale, Jr. , officer of Zipatone Inc. Hillside, IL.

CQ).!PLAI;-T The Federal Trade Commission, having reason to believe that Zipatone, Inc., a corporation, and Benjamin E. Beale Jr. , individually and as an officer of said corporation, hereinafter sometimes referred to as respondents, have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would he in the public interest alleges:

PARAGRAPH 1. Respondent Zipatone, Inc. is an Ilinois corporation with its office and principal place of business located at 150 Fencl Lane, Hillside, Ilinois.

Respondent Benjamin E. Beale Jr. is an officer of the corporate respondent named herein. He formulates, directs, and controls the acts and practices of the corporate respondent. His address is the same as that of the corporation.

PAR. 2. Respondents have advertised, offered for sale, sold and distributed certain spray products to the public, including Zipatone Spray Cement, a product which contains the chemical 1 , I - Trichloroethane.

ZIPATONE , INC.. ET AL. 377 376 Complaint PAR. 3. The acts and practices of respondents alleged in this complaint have been in or affecting commerce. PAR. 4. Respondents have disseminated or have caused to be disseminated advertisements for Zipatone Spray Cement. Typical examples of respondents' advertisements and product labeling, but not necessarily all inclusive thereof, are attached hereto as Exhibits A and B.

The aforesaid advertising (Exhibit A) includes the following statement:

Zipatone s time saving spray products use only ecologica!!y safe propellants. You get the job done quickly without damaging the environment." The aforesaid product labeling (Exhibit B) includes the following statement:

ECOLOGICALLY- SAFE PROPELLA:\' PAR. 5. Through the use of statements referred to in paragraph four in its advertising and product labeling, respondents have represented directly or by implication that:

1. Zipatone Spray Cement contains no ingredients that are damaging to the environment.

2. Use of Zipatone Spray Cement will not have a detrimental effect on the earth' s ecology.

PAIL 6. In truth and in fact, Zipatone Spray Cement contains a harmful ozone depleting chemical, 1 1 - Trichloroethane, which will cause damage to the environment and the earth' s ecology by contributing to the depletion of the carth' s ozone layer. Therefore, the representations set forth in paragraph five were, and are, false and mislcading.

PAR. 7. Through the statements and representations referred to in paragraphs four and five, respondents have represented, directly or by implication, that at the time they made such representations respondents possessed and relied upon a reasonable basis for such representations.

PAR. 8. In truth and in fact, at the time respondents made such representations, respondents did not possess and rely upon a reasonable basis for such representations. Therefore, the representations set forth in paragraph seven were, and are, false and misleading. Complaint 114 F.

PAR. 9. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

ZIPATONE, INC., ET AL.

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Ob alaNAN a3090 BANOX}Y BD eudjod7 DOS juaoOs Ulu . ‘ VEWIUCIAUS By BUBOWLD NOU. Alas { QO! ay; 1a no, SHUBYSIOWd S04 § AO ASN SONpOId £ON"16 Foros < s}onpoig ADids euojodi7 :.,: :::: . . ,: j,_;:. ::;;., . , ..:.. Complaint 114 F.

EXHIBIT B 3. 5 co0--;' ;:P nm N V' :. "':t - rr CJ "':::c;:I g ro '; 0 z:; "C '):J 2; I! 0";"'0 6,;Z n '" OJ if?, lilillh; 0: ; " '2 .c " :0- hii . 24-HOUR Medica EMERGENCY Con ;ns T.icl1loroetha"e (CAS 71-55. 1-800-228-5635 LjQuefie- Petroleum Gas (CAS #68476-aS- ZIPATONE, lng., ET AL 381 376 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of respondents Zipatone, Inc. , a corporation and Benjamin E. Beale, Jr" individually and as an officer of said corporation, and the respondents 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 respondents with violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft complaint, a statement that the signing of said agreement is for settement purposes only and does not constitute an admission by respondents 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 respondents have 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 of its Rules, the Commission hereby makes the following jurisdictional findings and enters the following order:

1. Respondent Zipatone, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Ilinois. Zipatone, Inc. has its offces and principal place of business at 150 Fencl Lane, Hillside, Ilinois.

2. Respondent Benjamin E. Beale, Jr. is an officer of said corporation. He formulates directs, and controls the acts and practices of said corporation, and his address is the same as that of Zipatone Inc.

3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents and the proceeding is in the public interest.

382 FEDERAL TRADE COM ISSIO:\ DECISIONS Decision and Order 114 F.

Onder DEFINITONS For purposes of the order, the following definitions shall apply: Competent and reliable scientific evidence means such tests analyses, research, studies, or other scientific evidence conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted by others in the profession to yield accurate and reliable results.

Class ozone depleting substance means a substance that harms the environment by destroying ozone in the upper atmosphere and is listed as such in Title 6 of the Clean Air Act Amendments of 1990 Pub. L. No. 101-549, and any other substance which may in the future be added to the list pursuant to Title 6 of the Act. Class I substances currently include chlorofluorocarbons, halons, carbon tetrachloride and 1 1 - Trichloroethane.

Class 11 ozone depleting substance means a substance that harms the environment by destroying ozone in the upper atmosphere and is listed as such in Title 6 of the Clean Air Act Amendments of 1990 Pub. L. No. 101-549, and any other substance which may in the future be added to the list pursuant to Title 6 of the Act. Class II substances currently include hydrochlorofluorocarbons. It is ordered That respondents Zipatone, Inc. (hereinafter " Zipatone ), a corporation, its successors and assigns, and its officers, and Benjamin E. Beale, Jr. , individually as an officer of said corporation and respondents' representatives, agents, and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, labeling, offering for sale, sale, or distribution of any product, in or affecting commerce, as "commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing, directly or by implication, by words depictions, or symbols that any product containing any Class I ozone depleting substance, will not damage the environment, or is ecologically safe, or through the use of any substantially similar term or expression, including but not limited to "ozone friendly" or "ozone safe " that any such product will not damage the environment, or that ZIPATO"E , INC. , ET AL. 383 376 Decision and Order any such product is ecologically safe, or that any such product wil not deplete, destroy, or otherwise adversely affect ozone in the upper atmosphere, II.

It is further ordered That respondents Zipatone, a corporation, its successors and assigns, and its officers, and Benjamin E. Beale, Jr. individually as an officer of said corporation, and respondents representatives, agents, and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, labeling, offering for sale, sale, or distribution of any product, in or affecting commerce, as "commerce " is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing, directly or by implication, by words, depictions or symbols, that any product containing any Class I ozone depleting substance or any Class II ozone depleting substance, or any other ozone depleting substance, offers any environmental benefits, including but not limited to any environmental benefit claims concerning the ecology, atmosphere, upper atmosphere, stratosphere or the ozone layer, unless at the time of making such representation, respondents possess and rely upon a reasonable basis, consisting of competent and reliable scientific evidence that substantiates such representation, III.

It is further ordered That for three years from the date that the representations to which they pertain are last disseminated, respondents shall maintain and upon request make available to the Federal Trade Commission for inspection and copying: 1. All materials that respondents relied upon in disseminating any representation covered by this order.

2, All tests, reports, studies or surveys in respondents' possession or control or of which they have knowledge that contradict any representation of respondents covered by this order. IV.

It is further ordered That respondents shall distribute a copy of this order to each of its operating divisions and to each of its officers Decision and Order 114 F.

agents, representatives, or employees engaged in the preparation and placement of advertisements, promotional materials, product labels or other such sales materials covered by this order. It is further ordered That respondents shall notify the Commission at least thirty (30) days prior to any proposed change in the corporation such as a dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations under this order.

VI.

It is further ordered That the individual respondent named herein shall promptly notify the Commission in the event of the discontinuance of his present business or employment and of each affiliation with a new business or employment. In addition, for a period of five (5) years from the date of service of this order, the respondent shall promptly notify the Commission of each affiliation with a new business or employment whose activities include the sale, distribution and/or manufacturing of any cleaning or adhesive products or of his affiliation with a new business or employment in which his own duties and responsibilities involve the sale, distribution and/or manufacturing of any cleaning or adhesive products. Such notice shall include the respondent's new business address and a statement of the nature of the business or employment in which the respondent is newly engaged as well as a description of respondent's duties and responsibilities in connection with the business or employment. The expiration of the notice provision of this paragraph shall not affect any other obligation arising under this order.

VII.

It is further ordered That respondents shall, within sixty (60) days after service of this order upon them, and at such other times as the Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

ALLEGHANY CORPORATION 385 385 Complaint