Nationwide Industries, Inc

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

NATIONWIDE INDUSTRY, INC. 853

853 Complaint

IN THE MATTER OF

NATIONWIDE INDUSTRIES, INC.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-3457. Complaint, Aug. 26, 1993--Decision, Aug. 26, 1993

This consent order prohibits, among other things, a North Carolina-based manufacturer of automotive maintenance and cleaning products from making false and misleading environmental claims by representi[illegible] through the use of certain terms, that any product containing a Clas[illegible] or Class II ozone-depleting substance, will not deplete, destroy, or otherwise adversely affect ozone in the upper atmosphere, and also prohibits the respondent from representing that any of its products offer any environmental benefit, unless the respondent possesses competent and reliable scientific evidence that substantiates such representation.

Appearances

For the Commission: Michael Dershowitz and Kevin M. Bank. For the respondent: Laura Luger, Moore & Van Allen, Durham, N.C.

COMPLAINT

The Federal Trade Commission, having reason to believe that Nationwide Industries, Inc., a corporation, hereinafter sometimes referred to as respondent, has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

PARAGRAPH 1. Respondent Nationwide Industries, Inc. is a Pennsylvania corporation, with its office and principal place of business located at 2200 West Main Street, Suite 3000, Durham, North Carolina.

854 \hfill FEDERAL TRADE COMMISSION DECISIONS

\begin{center} Complaint \hfill 116 F.T.C.

\end{center}

PAR. 2. Respondent has advertised, offered for sale, sold and distributed certain automotive aerosol products to the public, including Snap Fix-a-Flat and Snap Super Fix-a-Flat, which contain the chemicals 1,1,1-trichloroethane and chlorodifluoromethane (HCFC-22) (hereinafter “respondent’s products”).

PAR. 3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act.

PAR. 4. Respondent has disseminated or has caused to be disseminated product labeling, advertisements and promotional materials for its products, including but not necessarily limited to, the attached Exhibits A through C.

The aforesaid product labeling (Exhibits A and B) includes the following statements on the front panel of the aerosol container:

(1) No CFC’s Environment Friendly (2) No CFC’s Environmentally Formulated

The aforesaid product labeling includes the following statements on the back panel of the aerosol container:

(3) Non-flammable and environment friendly. Contains no chlorofluorocarbons. (4) Non-flammable and environmentally formulated. Contains no CFC’s or Volatile Organic Compounds (VOC’s).

PAR. 5. Through the statements referred to in paragraph four (1) - (4) in product labeling and advertisements (Exhibits A and B), respondent has represented, directly or by implication, that:

1. There are no ingredients in respondent’s products which are damaging to the environment. 2. Because respondent’s products contain no CFCs (chlorofluorocarbons), respondent’s products do not harm the environment.

PAR. 6. Through the statements referred to in paragraph four (4) on the back panel of the aerosol container (Exhibit B), respondent

NATIONWIDE INDUSTRIES, INC. 855

853 Complaint

has also represented, directly or by implication, that because respondent's products do not contain CFCs (chlorofluorocarbons) or VOCs (volatile organic compounds), respondent's products do not harm the environment.

PAR. 7. The aforesaid promotional materials (Exhibit C) include the following statement:

Formulated to help preserve our environment.

PAR. 8. Through the use of the statement referred to in paragraph seven in its promotional materials (Exhibit C), respondent has represented, directly or by implication, that use of respondent's products helps preserve the environment. PAR. 9. In truth and in fact, respondent's products contain ozone-depleting ingredients, 1,1,1-trichloroethane and chlorodifluoromethane (HCFC-22), which harm or cause damage to the environment by contributing to the depletion of the earth's ozone layer. Therefore, the representations set forth in paragraphs five, six and eight were, and are, false and misleading. PAR. 10. Through the statements and representations referred to in paragraphs five, six and eight, respondent has represented, directly or by implication, that at the time respondent made such representations, respondent possessed and relied upon a reasonable basis for such representations.

PAR. 11. In truth and in fact, at the time respondent made such representations, respondent did not possess and rely upon a reasonable basis for such representations. Therefore, the representation set forth in paragraph ten was, and is, false and misleading. PAR. 12. The acts and practices of respondent 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.

Complaint 116 F.T.C.

EXHIBIT A

:88-1714-C SNAP FIX-A-FLAT 211-5530-4 SW [illegible] SNAP AMERICA'S FAVORITE fix a flat BRAND PERMANENT REPAIR Safe • Fast • Non-Flammable EMERGENCY TIRE REPAIR SYSTEM CAUTION CONTENTS UNDER PRESSURE NET WT. 9 OZ. (255g)

fix-a-flat- Fix-A-Flat is the most advanced emergency tire repair system in modern times. Developed for use with all "12" and "13" tires on passenger cars, trucks and trailers.

• Seals and inflates most tires in as few as 30 seconds. No tools or jacks required.

• Non-flammable and environment friendly. Contains no chlorofluorocarbons. • Safe, non-toxic, and non-corrosive. Will not damage tires, tubes or rims. • Spray can contains everything to fix the tire and inflate it. No need to call for help.

• Works in all climates, hot or cold.

DIRECTIONS:

1. If possible, remove object from tire which caused the flat.

2. Shake can vigorously for one minute after mixing ball starts to rattle.

3. Screw hose onto tire valve stem tightly. 4. Holding can upright, press nozzle firmly and quickly until air and sealant flow into tire. Empty entire contents of can into tire.

5. If tire is completely flat, it may be necessary to drive the car a short distance to distribute the sealant inside the tire.

6. Immediately drive vehicle to a service station to have tire checked and repaired by a professional. 7. If you are unable to inflate the tire, do not drive the car. Call a service station or tow truck for assistance. 8. If you have any questions, call our toll free number 1-800-345-7462.

Fix-A-Flat is the most advanced emergency tire repair system in modern times. Developed for use with all "12" and "13" tires on passenger cars, trucks and trailers.

• Seals and inflates most tires in as few as 30 seconds. No tools or jacks required.

• Non-flammable and environment friendly. Contains no chlorofluorocarbons. • Safe, non-toxic, and non-corrosive. Will not damage tires, tubes or rims. • Spray can contains everything to fix the tire and inflate it. No need to call for help.

• Works in all climates, hot or cold.

DIRECTIONS:

1. If possible, remove object from tire which caused the flat.

2. Shake can vigorously for one minute after mixing ball starts to rattle.

3. Screw hose onto tire valve stem tightly. 4. Holding can upright, press nozzle firmly and quickly until air and sealant flow into tire. Empty entire contents of can into tire.

5. If tire is completely flat, it may be necessary to drive the car a short distance to distribute the sealant inside the tire.

6. Immediately drive vehicle to a service station to have tire checked and repaired by a professional. 7. If you are unable to inflate the tire, do not drive the car. Call a service station or tow truck for assistance. 8. If you have any questions, call our toll free number 1-800-345-7462.

WARNING: DO NOT USE ON TIRES WITH SIDEWALL DAMAGE OR DEFECTIVE TIRES. Do not use on motorcycles or any tire over 16 inches in diameter. Do not use on tires with any type of temporary or spare tire. Do not use on tires with any type of inner tube. Do not use on tires with any type of tire chains. Do not use on tires with any type of tire studs. Do not use on tires with any type of tire sealant already installed. Do not use on tires with any type of tire pressure monitoring system. Do not use on tires with any type of run flat tire. Do not use on tires with any type of low profile tire. Do not use on tires with any type of high performance tire. Do not use on tires with any type of off-road tire. Do not use on tires with any type of racing tire. Do not use on tires with any type of tire that has been retreaded. Do not use on tires with any type of tire that has been regrooved. Do not use on tires with any type of tire that has been recapped. Do not use on tires with any type of tire that has been vulcanized. Do not use on tires with any type of tire that has been patched. Do not use on tires with any type of tire that has been plugged. Do not use on tires with any type of tire that has been booted. Do not use on tires with any type of tire that has been sectioned. Do not use on tires with any type of tire that has been relined. Do not use on tires with any type of tire that has been sleeved. Do not use on tires with any type of tire that has been shimmed. Do not use on tires with any type of tire that has been balanced. Do not use on tires with any type of tire that has been trued. Do not use on tires with any type of tire that has been sipped. Do not use on tires with any type of tire that has been grooved. Do not use on tires with any type of tire that has been studded. Do not use on tires with any type of tire that has been chained. Do not use on tires with any type of tire that has been screened. Do not use on tires with any type of tire that has been [illegible].

USE ONLY AS DIRECTED KEEP OUT OF REACH OF CHILDREN Snap and Fix-A-Flat are registered trademarks of Snap Products, Inc.

© 1988 Snap Products, Inc.

All rights reserved.

Snap Products, Inc.

P.O. Box 1089 Valdosta, GA 31603 1-800-345-7462 0 17424 90745 7

NATIONWIDE INDUSTRIES, INC. 857

Complaint EXHIBIT B

C-3457 B144434

S-88-1714-D SNAP FIX-A-FLAT 221-5520-5 BW BLUE BLACK ORANGE

SNAP AMERICA'S FAVORITE fix a flat BRAND PERMANENT REPAIR Safe • Fast • Non-Flammable EMERGENCY TIRE REPAIR SYSTEM

CAUTION: CONTENTS UNDER PRESSURE READ ALL CAUTIONS AND DIRECTIONS ON BACK PANEL BEFORE USING NET WT. 9 OZ. (255g)

SNAP fix-a-flat.

FIX-A-FLAT is the most advanced emergency tire repair system available today. It seals punctures up to 3/16" in diameter and inflates the tire at the same time. It is non-flammable, safe, and easy to use. FIX-A-FLAT is also the only tire repair system that is TPMS (Tire Pressure Monitoring System) safe. FIX-A-FLAT contains a corrosion inhibitor and rust inhibitor. FIX-A-FLAT is packaged in a recyclable steel container. Contains no CFC's or other ozone depleting chemicals. One 9 oz. can inflates one average passenger tire to 28 PSI. For larger tires, use two or more cans. Note: Certain tires may require more air pressure. Check tire pressure before driving.

DIRECTIONS 1. Immediately after removing object that caused the flat, (nail, screw, etc.) shake can vigorously for 30 seconds. (If object is not removed, pull it out with pliers before repairing.) 2. Screw hose fitting onto tire valve stem. (Make sure fitting is tight.) 3. Holding can upright, press button firmly to release FIX-A-FLAT. Empty entire contents into tire. 4. Immediately drive vehicle 2 to 4 miles to distribute FIX-A-FLAT and inflate tire. 5. If tire is still low, add more air to reach proper pressure. 6. Proceed directly to a tire repair facility to have tire inspected and repaired by a professional. 7. For slow leaks, repeat procedure. If tire is still leaking, consult a professional. NOTE: If tire is completely flat, jack up tire before injecting FIX-A-FLAT. This will allow the tire to inflate easier. Do not drive with tire completely flat. FIX-A-FLAT is a permanent repair when used in accordance with the directions. It will not damage the tire and will not affect the tire's speed rating. FIX-A-FLAT is TPMS safe and can be used in all tires including those with pressure sensors. FIX-A-FLAT is non-flammable and non-toxic. It is also biodegradable and environmentally safe. FIX-A-FLAT will not freeze or boil. For use on passenger cars only. Do not use on motorcycles or any two-wheeled vehicles. Do not use on bicycles. Do not use on tires with sidewall damage. Do not use on tires with punctures larger than 3/16" in diameter. Do not use on tires that are worn or damaged. Do not use on tires that are improperly inflated. Do not use on tires that have been repaired before. Do not use on tires that are leaking from the bead or valve stem. Do not use on tires that are damaged from overheating or overloading. Do not use on tires that are damaged from running flat. Do not use on tires that are damaged from impact. Do not use on tires that are damaged from cuts or snags. Do not use on tires that are damaged from any other cause. CAUTION: Contents under pressure. Keep from heat, sparks, and open flame. Do not puncture or incinerate. Do not store at temperatures above 120°F (49°C). Do not use in a confined area. Use only in a well-ventilated area. Avoid breathing vapors. Avoid contact with eyes and skin. In case of eye contact, flush with water for 15 minutes and get medical attention. In case of skin contact, wash with soap and water. If swallowed, do not induce vomiting. Get medical attention immediately. KEEP OUT OF REACH OF CHILDREN USE ONLY AS DIRECTED FIX-A-FLAT is a registered trademark of Nationwide Industries, Inc.

PATENT PENDING Nationwide Industries, Inc.

Atlanta, GA 30336 MADE IN U.S.A. PART #3457N NET WT. 9 OZ. (255g) 0 74249 07457 7

Complaint 116 F.T.C.

EXHIBIT C

Super FIX C-3457 B144434

Formulated to help preserve our environment

EXHIBIT C

NATIONWIDE INDUSTRIES, INC. 859

853 Decision and Order

DECISION AND ORDER

The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the above caption, and the respondent having been furnished thereafter with a copy of a draft 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 consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft complaint, a statement that the signing of the 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 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 issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent Nationwide Industries, Inc. ("Nationwide") is a Pennsylvania corporation with its office and principal place of business at 2200 West Main Street, Suite 3000, Durham, North Carolina.

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.

Decision and Order 116 F.T.C.

ORDER

DEFINITIONS

For purposes of this order, the following definitions shall apply:

“Class I 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, 1-trichloroethane. “Class II 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.

I.

It is ordered, That respondent Nationwide Industries, Inc. (hereinafter “Nationwide”), a corporation, its successors and assigns, and its officers, 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, through the use of such terms as “no CFCs,” “CFC free,” “no CFCs, environment friendly,” “no CFCs, environmentally formulated,” “formulated to help preserve the environment,” “ozone safe,” “ozone friendly,” or any substantially similar term or expression, or, by words, depictions, or symbols, directly or by implication, that any such product containing any Class I or Class II ozone depleting substance will not deplete,

NATIONWIDE INDUSTRIES, INC. 861

853 Decision and Order

destroy, or otherwise adversely affect ozone in the upper atmosphere.

II.

It is further ordered, That respondent Nationwide, a corporation, its successors and assigns, and its officers, 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 offers any environmental benefit, unless at the time of making such representation, respondent possesses and relies upon a reasonable basis, consisting of competent and reliable scientific evidence that substantiates such representation. To the extent such evidence consists of scientific or professional tests, analyses, research, studies, or any other evidence based on expertise of professionals in the relevant area, such evidence shall be “competent and reliable” only if those tests, analyses, research, studies, or other evidence are 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.

III.

It is further ordered, That for three years from the date that the representations to which they pertain are last disseminated, respondent shall maintain and upon request make available to the Federal Trade Commission for inspection and copying:

1. All materials that respondent relied upon in disseminating any representation covered by this order. 2. All tests, reports, studies or surveys in respondent’s possession or control that contradict, qualify, or call into question such

Decision and Order 116 F.T.C.

representation or the basis upon which respondent relied for such representation.

IV.

It is further ordered, That respondent shall distribute a copy of this order to each of its operating divisions and to each of its officers, 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.

V.

It is further ordered, That respondent 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 respondent shall, within sixty (60) days after service of this order upon it, 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 it has complied with this order.

DETROIT AUTO DEALERS ASSOCIATION, INC., ET AL. 863

863 Interlocutory Order

IN THE MATTER OF

DETROIT AUTO DEALERS ASSOCIATION, INC., ET AL.

Docket 9189. Interlocutory Order, August 30, 1993

ORDER

Counsel for the General Motors and Lincoln Mercury respondents have moved that the complaint against ten respondents be dismissed and that their names be removed from the order of February 22, 1989. The assets of the following eight dealerships have been sold, and their dealership franchises have been terminated: Porterfield Wilson Pontiac-GMC Truck, Inc., Packer Pontiac Company, Dexter Chevrolet Company, Walt Lazar Chevrolet, Inc., Crissman Cadillac, Inc., Roger Rinke Cadillac Company, Avon Lincoln Mercury, Inc., and Barnett Pontiac, Inc. Except for the assets of Roger Rinke Cadillac Company, which were sold to a related individual who is subject to the Commission's order, the sales were to unrelated buyers, and the sellers retained no interest in the assets or dealerships. Two individually named respondents, Harry C. Demorest and Roger A. Rinke, are deceased. Complaint counsel do not oppose the motion.

The Commission has considered the motion and determined to grant it. Accordingly,

It is ordered, That the complaint against Mr. Demorest, Mr. Rinke, Porterfield Wilson Pontiac-GMC Truck, Inc., Packer Pontiac Company, Dexter Chevrolet Company, Walt Lazar Chevrolet, Inc., Crissman Cadillac, Inc., Roger Rinke Cadillac Company, Avon Lincoln Mercury, Inc., and Barnett Pontiac, Inc. is hereby dismissed.

It is further ordered, That the order of February 22, 1989, of the Commission is hereby modified to delete their names.