Mr. Coffee, Inc

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IN THE MATTER OF MR. COFFEE, INC.

CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3486. Complaint, Mar. 25, 1994--Decision, Mar. 25, 1994 This consent order prohibits, among other things, an Ohio corporation, that manufactures coffee makers, filters and other products, from making false or unsubstantiated environmental claims for any paper product or package it markets.

Appearances For the Commission: Kevin M. Bank and Michael Dershowitz. For the respondent: Martin R. Gold, Gold, Farrell & Marks, New York, N.Y.

COMPLAINT The Federal Trade Commission, having reason to believe that Mr. Coffee, Inc., a corporation (“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, Mr. Coffee, Inc., is a Delaware corporation with its office and principal place of business located at 24700 Miles Road, Bedford Heights, Ohio. PAR. 2. Respondent has advertised, offered for sale, sold, and distributed coffee-making appliances and coffee filter products to the public, under the trade name “Mr. Coffee” (hereinafter “Mr. Coffee’’).

PAR. 3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as “commerce” is defined in Section 4 of the Federal Trade Commission Act. PAR. 4. Respondent has disseminated or has caused to be disseminated advertisements, including product labeling, and other MR. COFFEE, INC. 157 156 Complaint promotional materials for its “Mr. Coffee” filters, including but not necessarily limited to the attached Exhibits A through D. The aforesaid product labeling (Exhibit A) included the following statement on the front of the package:

Chlorine-free process The aforesaid product labeling (Exhibit A) also included the following statements on the top of the package: Here’s Why Mr. Coffee Filters Are Better For Coffee Lovers and Nature Lovers No Chlorine: The exclusive paper is cleaned and whitened without using chlorine bleach, which has been found to create undesirable byproducts... A subsequent version of the aforesaid product labeling (Exhibit B).includes the following statement on the top of the package: Here’s Why Mr. Coffee Filters Are Better For Coffee Lovers and Nature Lovers Chlorine Byproducts: This exclusive paper is cleaned and whitened using a new process that has virtually eliminated environmentally harmful byproducts created by traditional chlorine bleaching... The aforesaid print advertisement (Exhibit C) included the following statements:

NEW CHLORINE-FREE FILTERS.

Mr. Coffee’s new filters are not only good for your coffee, but for the environment too. The special manufacturing process whitens without elemental chlorine and provides a stiffer, stronger filter ... New chlorine-free filters from Mr. Coffee.

PAR. 5. Through the use of the statements contained in the advertisements referred to in paragraph four, including but not necessarily limited to the advertisements attached as Exhibits A and C, respondent has represented, directly or by implication, that: A. “Mr. Coffee” filters are manufactured without the use of chlorine to clean and whiten them.

Complaint HTET.C.

B. Because “Mr. Coffee” paper filters are made without using chlorine, no undesirable byproducts associated with chlorine bleaching are released to the environment during the manufacturing process.

PAR. 6. In truth and in fact, at the time these advertisements were disseminated, “Mr. Coffee” filters were bleached using a new chlorine dioxide bleaching process. Some elemental chlorine was still present, and the process continued to generate environmentally harmful byproducts associated with chlorine bleaching. Although fewer environmentally harmful byproducts were released than previously, they were not eliminated in the sludge byproduct of the manufacturing process. Therefore, the representations set forth in paragraph five were, and are, false and misleading. PAR. 7. Through the use of the statements contained in the advertisements referred to in paragraph four, including but not necessarily limited to the advertisement attached as Exhibit B, respondent has represented, directly or by implication, that because “Mr. Coffee” filters are cleaned and whitened using a new process not involving traditional chlorine bleaching, environmentally harmful byproducts from the cleaning and whitening process have been virtually eliminated, that is, reduced to an insignificant level. PAR. 8. Through the use of the statements contained in the advertisements referred to in paragraph four, including but not necessarily limited to the advertisement attached as Exhibit B, respondent has represented, directly or by implication, that at the time it made the representation set forth in paragraph seven, respondent possessed and relied upon a reasonable basis for such representation.

PAR. 9. In truth and in fact, at the time respondent made the representation set forth in paragraph seven, respondent did not possess and rely upon a reasonable basis that substantiated such representation. Therefore, the representation set forth in paragraph eight was, and is, false and misleading. PAR. 10. The aforesaid product labeling (Exhibit D) included the following statements on both sides of the package: RECYCLABLE RECYCLED PAPER MR. COFFEE, INC. 159 156 Complaint PAR. 11. Through the use of the statements contained in the advertisements referred to in paragraph ten, including but not limited to the advertisement attached as Exhibit D, respondent has represented, directly or by implication, that both the paperboard package and “Mr. Coffee” paper filters are made from recycled paper.

PAR. 12. In truth and in fact, “Mr. Coffee” paper filters are not made from recycled paper. Therefore, the representation set forth in paragraph eleven was, and is, false and misleading. PAR. 13. Through the use of the statements contained in the advertisements referred to in paragraph ten, including but not necessarily limited to the advertisement attached as Exhibit D, respondent has represented, directly or by implication, that the “Mr. Coffee” paperboard package is recyclable. PAR. 14. In truth and in fact, while the “Mr. Coffee” paperboard package is capable of being recycled, the vast majority of consumers cannot recycle the package because there are only a few collection facilities nationwide that accept that type of paperboard package for recycling. Therefore, the representation set forth in paragraph thirteen was, and is, false and misleading. PAR. 15. Through the use of the “recyclable” statements contained in the advertisements referred to in paragraph ten, including but not necessarily limited to the advertisements attached as Exhibit D, respondent has represented, directly or by implication, that at the time it made the representation set forth in paragraph thirteen, respondent possessed and relied upon a reasonable basis that substantiated such representation.

PAR. 16. In truth and in fact, at the time respondent made the representation set forth in paragraph thirteen, respondent did not possess and rely upon a reasonable basis that substantiated such representation. Therefore, the representation set forth in paragraph fifteen was, and is, false and misleading. PAR. 17. 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.

Commissioner Owen not participating.

Complaint LIV E.T.C.

EXHIBIT A Here y Pete vet. Wee ene Are Best for Coffee Lovers and Nature Lovers » 4 c-3486 —~ 1 Na Chlotine. “re ee eee west B153243 AM Tas Jeet would (DO ceale .Cesera tie . }: WON & SS « Saves Trees. Tre Munutacieine srcess wastes ress LIME wood “Def so ME funee comumes WAMINCINLY Towel IEEE IN MARA HIS FaleES iS) . Better Flavor. dest of af! Tust eopte wad “ested Pesce ules did Mev Make Detler roasting w tee Mr Cortee ilters are also surfer anu wess key to collapse. They will not avectlow, even in the new taster nrewing croert * Fectranic Culleemuker MR.C@FFEE FILTERS 8-12 cup size = Me an rT] 100|ctorne free process.

Better tasting coffee.

oC ~N 117 F.T.c, Complaint EXHIBIT C FFFABO AY won nceo scary pay [cer cr otamon santa | wednoy yamuonuny | PaYOD IW Wo si911J 9ay-IULOTYD may] 2plnuoneu sieop jo spuesnow S20Et 62b 22.5, 5 YSN & Aque pon 21 O2/1 see wer o SIC Aps 99 Soa ved Xhoce 28 gare3 2K PVO mn] 49 pADE 20 pare prwgnyaid aye pry, rey Sreuaewa? sen apo dare PUR uy 202 30 soared, J° spaipuny sugawi iy] ‘sivafoid jruaumonaua [E20] $ J ! ! I i Temp en percep muons 230 Lg rma H 01 Autuad e ayeuop am ‘pjos xoq y>ea Jo} s10W SJEY AA, J I I i i I J he] 40 ‘S9a anes sdjay Aqyense 11 os 13qy Poom ssa] saisem osje ssaa ¥ -oid sry] 329119 228u0.ns vagus & sepisoad pue auuopp pauaw 398 pur sry au0> “9]9 NOY suaym ssaooid BuuNo_NUEWwW [e~ads ayy 40 1245eq 22305 AW Jo5 1 21 1 1 2 1442 1300 21 37 51.092232 x0q5 1 21 1 1 3 1443 1344 19 39 54.239853 azis5 1 21 1 1 4 1447 1390 19 38 94.550308 Aue4 1 21 1 2 0 1414 1220 29 206 -1 5 1 21 1 2 1 1418 1220 20 29 75.565422 30)5 1 21 1 2 2 1423 1257 20 79 86.717896 uodno5 1 21 1 2 3 1414 1342 22 38 61.693348 stip5 1 21 1 2 4 1414 1388 20 38 0.000000 asQ,2 1 22 0 0 0 1435 1890 33 337 -1 3 1 22 1 0 0 1435 1890 33 337 -1 4 1 22 1 1 0 1435 1890 33 337 -1 5 1 22 1 1 1 1450 1890 18 40 45.070995 00]5 1 22 1 1 2 1442 1938 25 156 0.000000 IUsWIUOTAUS5 1 22 1 1 3 1437 2102 25 36 74.189095 am5 1 22 1 1 4 1435 2145 25 33 78.445831 40j5 1 22 1 1 5 1435 2186 24 41 45.657349 Inq2 1 23 0 0 0 1404 922 74 1239 -1 3 1 23 1 0 0 1404 922 74 1239 -1 4 1 23 1 1 0 1404 922 74 1239 -1 5 1 23 1 1 1 1442 922 36 76 42.652126 Te5 1 23 1 1 2 1419 1493 28 74 36.955944 ‘999095 1 23 1 1 3 1426 1574 22 56 47.318108 ANAK5 1 23 1 1 4 1416 1636 24 34 61.525532 410}5 1 23 1 1 5 1416 1679 30 60 47.644562 poos5 1 23 1 1 6 1414 1745 30 54 0.000000 ATO5 1 23 1 1 7 1419 1806 17 39 48.825665 10U5 1 23 1 1 8 1418 1854 16 35 50.060669 ae5 1 23 1 1 9 1408 1896 25 64 0.000000 S12i]95 1 23 1 1 10 1414 1968 17 48 86.731491 Mau5 1 23 1 1 11 1405 2025 25 92 0.000000 SaaQo>5 1 23 1 1 12 1404 2127 22 34 37.459454 IW2 1 24 0 0 0 1390 706 28 748 -1 3 1 24 1 0 0 1390 706 28 748 -1 4 1 24 1 1 0 1390 706 28 748 -1 5 1 24 1 1 1 1390 706 28 748 95.000000 2 1 25 0 0 0 787 697 162 1334 -1 3 1 25 1 0 0 787 697 209 1334 -1 4 1 25 1 1 0 787 697 162 1334 -1 5 1 25 1 1 1 817 697 132 681 0.000000 EREFINROTHO5 1 25 1 1 2 780 1433 222 167 71.087830 MAN5 1 25 1 1 3 813 1653 163 378 20.001038 Hilti2 1 26 0 0 0 1361 1748 21 130 -1 3 1 26 1 0 0 1361 1725 21 153 -1 4 1 26 1 1 0 1361 1748 21 130 -1 5 1 26 1 1 1 1366 1725 3 4 4.730217 .5 1 26 1 1 2 1364 1748 18 37 35.215790 755 1 26 1 1 3 1361 1813 16 65 19.295639 ane2 1 27 0 0 0 0 1895 0 598 -1 3 1 27 1 0 0 0 1895 0 598 -1 4 1 27 1 1 0 0 1895 0 598 -1 5 1 27 1 1 1 0 1895 0 598 95.000000 2 1 28 0 0 0 0 1895 0 57 -1 3 1 28 1 0 0 0 1895 0 57 -1 4 1 28 1 1 0 0 1895 0 57 -1 5 1 28 1 1 1 0 1895 0 57 95.000000 2 1 29 0 0 0 944 782 507 1024 -1 3 1 29 1 0 0 944 782 507 1150 -1 4 1 29 1 1 0 1283 788 168 349 -1 5 1 29 1 1 1 1283 788 168 349 25.578445 TIONA 1 29 1 2 0 944 782 149 1024 -1 5 1 29 1 2 1 956 782 105 233 0.000000 SEM5 1 29 1 2 2 1001 1423 36 262 24.617409 ier”5 1 29 1 2 3 967 1803 51 129 0.573158 ‘dl2 1 30 0 0 0 1285 802 18 212 -1 3 1 30 1 0 0 1285 802 18 212 -1 4 1 30 1 1 0 1285 802 18 212 -1 5 1 30 1 1 1 1285 802 18 212 95.000000 2 1 31 0 0 0 0 1895 0 228 -1 3 1 31 1 0 0 0 1895 0 228 -1 4 1 31 1 1 0 0 1895 0 228 -1 5 1 31 1 1 1 0 1895 0 228 95.000000 2 1 32 0 0 0 1176 881 11 137 -1 3 1 32 1 0 0 1176 881 11 137 -1 4 1 32 1 1 0 1176 881 11 137 -1 5 1 32 1 1 1 1176 881 11 137 95.000000 2 1 33 0 0 0 1137 1215 16 11 -1 3 1 33 1 0 0 1137 1215 16 11 -1 4 1 33 1 1 0 1137 1215 16 11 -1 5 1 33 1 1 1 1137 1215 16 11 37.487335 ¥2 1 34 0 0 0 1061 818 20 308 -1 3 1 34 1 0 0 1061 818 20 308 -1 4 1 34 1 1 0 1061 818 20 308 -1 5 1 34 1 1 1 1061 818 20 308 95.000000 2 1 35 0 0 0 1042 959 12 115 -1 3 1 35 1 0 0 1042 959 12 115 -1 4 1 35 1 1 0 1042 959 12 115 -1 5 1 35 1 1 1 1042 959 12 115 95.000000 2 1 36 0 0 0 951 1034 101 13 -1 3 1 36 1 0 0 951 1034 101 13 -1 4 1 36 1 1 0 951 1034 101 13 -1 5 1 36 1 1 1 951 1034 101 13 95.000000 2 1 37 0 0 0 953 979 99 14 -1 3 1 37 1 0 0 953 979 99 14 -1 4 1 37 1 1 0 953 979 99 14 -1 5 1 37 1 1 1 953 979 99 14 95.000000 2 1 38 0 0 0 951 1063 99 13 -1 3 1 38 1 0 0 951 1063 99 13 -1 4 1 38 1 1 0 951 1063 99 13 -1 5 1 38 1 1 1 951 1063 99 13 95.000000 2 1 39 0 0 0 951 848 14 281 -1 3 1 39 1 0 0 951 848 14 281 -1 4 1 39 1 1 0 951 848 14 281 -1 5 1 39 1 1 1 951 848 14 281 95.000000 2 1 40 0 0 0 925 1208 9 79 -1 3 1 40 1 0 0 925 1208 9 79 -1 4 1 40 1 1 0 925 1208 9 79 -1 5 1 40 1 1 1 925 1208 9 79 95.000000 2 1 41 0 0 0 846 716 12 212 -1 3 1 41 1 0 0 846 716 12 212 -1 4 1 41 1 1 0 846 716 12 212 -1 5 1 41 1 1 1 846 716 12 212 95.000000 2 1 42 0 0 0 780 998 37 1199 -1 3 1 42 1 0 0 780 998 37 1199 -1 4 1 42 1 1 0 780 998 37 1199 -1 5 1 42 1 1 1 780 998 37 1199 95.000000 2 1 43 0 0 0 765 1577 23 619 -1 3 1 43 1 0 0 765 1577 23 619 -1 4 1 43 1 1 0 765 1577 23 619 -1 5 1 43 1 1 1 781 1577 7 138 26.189476 TORS 1 43 1 1 2 765 1740 19 456 32.769424 RS MR. COFFEE, INC.

Complaint EXHIBIT D —__--— SS MRO" gua TTy'bo) SUS Aue a Decision and Order 117 F.T.C.

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, its attorney, 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, and having duly considered the comment filed thereafter by interested persons pursuant to Section 2.34 of its Rules, 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 Mr. Coffee, Inc. ("Mr. Coffee") is a Delaware corporation with its office and principal place of business located at 24700 Miles Road, Bedford Heights, Ohio. 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.

MR. COFFEE, INC. 165 156 Decision and Order ORDER I.

A. It is ordered, That respondent Mr. Coffee, Inc., 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, promotion, offering for sale, sale, or distribution of any paper product or package in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from misrepresenting, in any manner, directly or by implication, the extent to which:

(1) Chlorine is used in the manufacture of any such product or package;

(2) Harmful byproducts result from the manufacture of any such product or package;

(3) Any such product or package is made from recycled materials; (4) (i) Any such product or package is capable of being recycled; or (ii) The extent to which recycling collection programs for any such ‘product or package are available.

B. Provided, however, respondent will not be in violation of part I(A)(4)(ii) of this order, in connection with the advertising, labeling, offering for sale, sale, or distribution of any non-corrugated paperboard or cardboard product or package, if it truthfully represents that any such product or package is recyclable, provided that the labeling of such product or package and any advertising referring to the recyclability of such product or package discloses clearly, prominently, and in close proximity to such representation: (a) That such product or package is recyclable in the few communities with recycling collection programs for non-corrugated paperboard or cardboard; or (b) The approximate number of U.S. communities with recycling collection programs for such product or package; or (c) The approximate percentage of the U.S. population or of U.S. communities to which recycling collection programs for such product or package are available.

Decision and Order 117 F.T.C.

For purposes of this order, a disclosure elsewhere on the product package shall be deemed to be “in close proximity” to such representation if there is a clear and conspicuous cross reference to the disclosure. The use of an asterisk or other symbol shall not constitute a clear and conspicuous cross-reference. A cross-reference shall be deemed clear and conspicuous if it is of sufficient prominence to be readily noticeable and readable by the prospective purchaser when examining the part of the package on which the representation appears.

II.

It is further ordered, That respondent Mr. Coffee, Inc., 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, promotion, offering for sale, sale, or distribution of any product packaging or paper product in or affecting commerce, as “commerce” is defined in. the Federal Trade Commission Act, do forthwith cease and desist from representing, in any manner, directly or by implication, that any such product packaging or paper product offers any environmental benefit, unless at the time of making such representation, respondent possesses and relies upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates such representation. For purposes of this order, competent and reliable scientific evidence shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.

I.

It is further ordered, That respondent may continue to deplete its existing inventory of “Mr. Coffee” filter product packaging in the normal course of business without violating this order until August 31, 1993.

MR. COFFEE, INC. 167 156 Decision and Order IV.

It is further ordered, That for five years after the last date of dissemination of any representation covered by this order, respondent, or its successors and assigns, shall maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All materials that were relied upon in disseminating such representation; and B. All tests, reports, studies, surveys, demonstrations, or other evidence in respondent's possession or control that contradict, qualify, or call into question such representation, or the basis relied upon for such representation, including complaints from consumers. V.

It is further ordered, That respondent shall distribute a copy of this order to each of its officers and supervising employees engaged in the preparation and placement of advertisements, promotional materials, product labels or other such sales materials covered by this order.

VI.

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’s report, in writing, setting forth in detail the manner and form in which it has complied with this order.

Commissioner Owen not participating.

Complaint 117 F.T.C.