Labeling and Advertising of Home Insulation

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BILLING CODE 4910-13-M -FÉDÉRAL TRADE COMMISSION 16 CFR Part 460 Labeling and Advertising of Home Insulation AGENCY: Federal Trade Commission. a c tio n : Final rule. s u m m a r y: The Federal Trade Commission announces an amendment to its trade regulation rule concerning the labeling and advertising of home insulation (16 CFR Part 460), pursuant to an Order issued by the United States Court of Appeals. The amendment is limited to deleting from the rule all requirements for affirmative disclosures in television advertisements. All other parts of the rule remain in effect. This notice sets out the specific provisions of the rule that are amended. The television advertising disclosure requirements of the rule never became effective, having been stayed by the Commission when it announced the effective date of the rule [45 FR 54702]. EFFECTIVE DATE: October 30,1986. Concurrent with the issuance of these amendments, the Commission lifts the stay of the affirmative disclosure requirements for television advertisements.

FOR FURTHER INFORMATION CONTACT: Kent C. Howerton, R-value Rule Coordinator, Division of Enforcement, Bureau of Consumer Protection, Room B-425, Federal Trade Commission, Washington, DC 20580, (202) 376-8934. SUPPLEMENTARY INFORMATION: In August, 1979, the Commission published its Statement of Basis and Purpose and promulgated a trade regulation rule on the labeling and advertising of home insulation (hereinafter cited as the “Rvalue Rule” or the “Rule”), 16 CFR Part 460.1 Following a series of 1 Final trade regulation rule (hereinafter cited as the “Statement of Basis and Purpose”), 44 FR 50218 (Aug. 27,1979).

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Federal Register / Vol. 51, No. 210 / Thursday, October 30, 1986 / Rules and Regulations 39651 postponements, the Rule became effective (with certain exceptions discussed below) on September 29, 1980.2 Statutory authority for the Rule is provided under Section 18 of the Federal Trade Commission Act, 15 U.S.C. 57a, as amended.

In summary, the major provisions of the Rule: (1) Prescribe standardized test methods for determining the R-values, or effectiveness, of home insulation materials; (2) mandate prepurchase point-of-sale disclosures of R-values and related information to consumers; (3) require disclosure of R-values or related information in advertisements which make specific claims about home insulation products; and (4) require substantiation and qualifying disclosures in advertisements which make energy savings claims about home insulation products. The Rule is designed to enable consumers to evaluate and compare the thermal performance characteristics of home insulation products, and to ensure that promotional claims for these materials will be fair and nondeceptive. Four manufacturers of mineral wool insulation thereafter filed timely petitions for review of the Rule in the United States Court of Appeals. The petitions were consolidated in the Tenth Circuit; 3 and the Commission and the mineral wool manufacturers subsequently agreed to ask the Tenth Circuit to remand the Rule to the Commission. On January 4,1980, pursuant to a joint stipulation signed by all the parties, the Court remanded the Rule to the Commission for further proceedings.4 Under the Court’s Order of January 4, 1980, remanding the Rule, the Commission was required to reconsider issues relating to the representative thickness testing requirement, and to the advertising disclosure requirements of the Rule insofar as they would have applied to television advertisements. The Commission was required to conduct complete rulemaking proceedings under the requirements of Section 18 of the Federal Trade Commission Act, 15 U.S.C. 57a, prior to making any disclosure requirements effective for television advertisements. To comply with the Court’s Order, on August 15,1980, the Commission stayed the affirmative disclosure requirements of the Rule insofar as they would have * effective date of rule, and of a stay of ! I e?®ct °f representative thickness testing and television advertising disclosure requirements of the rule, 45 FR 54702 (Aug. 15,198Q). * Manville Corp. v. FTC, Nos. 79-1955,80-1075, 83-1043 [10th Cir., filed Aug. 31,1979.]. * Id, Order of January 4,1980. applied to television advertising, pending the initiation and completion of further rulemaking proceedings concerning these requirements.® It also stayed the Rule’s representative thickness testing requirement, until such time as the National Bureau of Standards (hereinafter cited as “NBS") resolved certain problems concerning that testing.8 The Commission made all other requirements of the Rule effective as of September 29,1980.7 On August 24,1982, the Commission announced its intention to lift the temporary stay of the effective date of the representative thickness testing requirement because NBS had resolved the technical testing problems concerning such testing. The representative thickness testing requirement, § 460.6 of the Rule, became effective on September 23,1982.8 To resolve the remanded appeal and remove it from the appellate court’s docket, the Commission recently agreed that the Court could enter an Order vacating the television advertising disclosure requirements of the Rule without prejudice to the Commission’s right to recommence new rulemaking proceedings in the future.9 On May 8, 1986, the Court issued its Order vacating the affirmative disclosure requirements of the Rule and dismissed the appeal.10 The Court’s Order is without prejudice to the Commission initiating rulemaking proceedings and promulgating television advertising disclosure requirements for home insulation in the future pursuant to the statutory rulemaking requirements of section 18 of the Federal Trade Commission Act, 15 U.S.C 57a. The Commission issues the amendment to the Rule in this notice to implement the Court’s Order of May 8,1986.11 6 See supra note 2.

•Id.

■•Id.

8 Notice of lifting of stay of effective date of Final Rule, 47 FR 36806 (Aug. 24,1982). * See supra note 3, Joint Motion For Dismissal dated March 19,1986.

10 Id., Order of May 8,1986. Because affirmative disclosure requirements for television advertisements never became effective, the Court's action does not change any compliance obligations under the Rule.

11 Only the affirmative disclosure requirements for television advertisements are affected by the actions by the Court and the Commission. Other requirements of the Rule apply equally to promotional claims made in television advertisements as to those made in other media. For example, the requirements in § 460.5 that R-values claimed for home insulation products must be based on the specific test methods listed in § 460.5, and the requirements in § 460.11 concerning the rounding of R-values, apply to R-value claims made in television advertisements. Similarly, the savings claim substantiation requirements in §§ 460.19(a) and 460.19(e), and the recordkeeping requirement in § 460.19(f), apply to advertisers who make savings Although the Court’s Order does not restrict the Commission in conducting rulemaking proceedings to consider affirmative disclosure requirements for television advertising, the Commission has decided not to conduct such proceedings at this time and therefore terminates the proposed rulemaking it announced on September 25,1981.12 Concurrent with the issuance of the amendment, the Commission lifts the stay of the affirmative disclosure requirements for television advertisements that it issued on August 15,1980. The amendment obviates the need for the stay.

List of Subjects in 16 CFR Part 460 Advertising, Home insulation, Labeling, Trade practices. PART 460—-[AMENDED] For the reasons set forth in the preamble, 16 CFR Part 460 is amended as follows:

1. The authority citation for Part 460 continues to read as follows: Authority: 38 Stat. 717, as amended, 15 U.S.C. 41 et seq.

2. Section 460.10 is revised to read as follows:

§ 460.10 How statements must be made. All statements called for by this regulation must be made clearly and conspicuously. Among other things, you must follow the Commission’s Enforcement Policy Statement for Foreign Language Advertising (July 24, 1973) (Appendix). The above document is in the Appendix to this regulation. 3. Section 460.18(f) is added to read as follows:

§ 460.18 Insulation ads.

* * * * * (f) The affirmative disclosure requirements in § 460.18 do not apply to ads on television.

4. Section 460.19(g) is added to read as follows:

§ 460.19 Savings claims. * * * * * (g) The affirmative disclosure requirements in § 460.19 do not apply to ads on television.

5. Appendix A to Part 460 is amended by revising the title to read: claims about home insulation products in television advertisements. Lastly, the prohibitions in §§ 460.20, 460.21 and 460.22 against specific representations apply to television advertisements, as well as to those in other media. These requirements became effective, along with other requirements of the Rule, on September 29,1980.

Advance notice of proposed rulemaking, 46 FR 47236 (1981).

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39652 Federal Register / V o l 51, No. 210 ,/ Thursday, October 30, 19B6 // Rules and Regulations Appendix—Enforcement Policy Statement for Foreign Language Advertising Appendix B [Remaved] 6. Appendix B t© Part 460 is removed. By (direction of the Commission. Emily H. Rock, Secretary.

[FR Doc. 86-34549 'Filed 10-29-36; 8:45 am]