[Federal Register Volume 62, Number 221 (Monday, November 17, 1997)]
[Rules and Regulations]
[Pages 61225-61226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30111]
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FEDERAL TRADE COMMISSION
16 CFR Part 403
Deceptive Use of ``Leakproof,'' ``Guaranteed Leakproof,'' Etc.,
As Descriptive of Dry Cell Batteries
AGENCY: Federal Trade Commission.
ACTION: Final rule; removal.
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SUMMARY: The Federal Trade Commission (the ``FTC'' or ``Commission'')
announces the repeal of the Trade Regulation Rule on Deceptive Use of
``Leakproof,'' ``Guaranteed Leakproof,'' Etc., as Descriptive of Dry
Cell Batteries (``the Dry Cell Battery Rule'' or ``the Rule''), 16 CFR
Part 403. The rulemaking record, changes in industry practice, and
general voluntary compliance by the industry with the requirements of
an American National Standards Institute standard for dry cell
batteries, which has provisions similar to the Rule's, indicate that
the Dry Cell Battery Rule is no longer necessary or in the public
interest and should be repealed. This document contains a Statement of
Basis and Purpose for repeal of the rule.
EFFECTIVE DATE: November 17, 1997.
ADDRESSES: Requests for copies of the Statement of Basis and Purpose
should be sent to the Public Reference Branch, Room 130, Federal Trade
Commission, Sixth Street and Pennsylvania Ave., N.W., Washington, DC
20580.
FOR FURTHER INFORMATION CONTACT:
Neil Blickman, Attorney, Federal Trade Commission, Bureau of Consumer
Protection, Division of Enforcement, Sixth Street and Pennsylvania
Ave., N.W., Washington, DC 20580, (202) 326-3038.
SUPPLEMENTARY INFORMATION:
Statement of Basis and Purpose
I. Background
On May 20, 1964, the Commission promulgated a trade regulation rule
that states that in connection with the sale of dry cell batteries in
commerce, the use of the word ``leakproof,'' the term ``guaranteed
leakproof,'' or any other word or term of similar import, or any
abbreviation thereof, in advertising, labeling, marking or otherwise,
as descriptive of dry cell batteries, constitutes an unfair method of
competition and an unfair or deceptive act or practice in violation of
section 5 of the FTC Act (16 CFR 403.4). This rule was based on the
Commission's finding that, despite efforts by dry cell battery
manufacturers to eliminate electrolyte leakage, battery leakage and
damage therefrom occurs from the use to which consumers ordinarily
subject dry cell batteries.
The rule provides that manufacturers or marketers are not
prohibited from offering or furnishing guarantees that provide for
restitution in the event of damage from battery leakage, provided no
representation is made, directly or indirectly, that dry cell batteries
will not leak (16 CFR 403.5). The Rule further provides that in the
event any person develops a new dry cell battery that he believes is in
fact leakproof, he may apply to the Commission for an amendment to the
rule, or other appropriate relief (16 CFR 403.6).
The Commission conducted an informal review of industry practices
by examining the advertising, labeling and marketing of dry cell
batteries available for retail sale. This review revealed no
representations that the batteries were leakproof. The Commission's
review, therefore, indicated general compliance with the Rule's
provisions. Moreover, the Commission has no record of receiving any
complaints regarding non-compliance with the Rule, or of initiating any
law enforcement actions alleging violations of the Rule.
Additionally, the Commission's review indicated general voluntary
compliance by the industry with the requirements of American National
Standards Institute (``ANSI'') Standard C18.1M-1992 Dry Cells and
Batteries--Specifications. The ANSI standard contains specifications
for dry cell batteries, and requirements for labeling the products and
their packages. The ANSI standard requires the following information to
be printed on the outside of each battery (when necessary, the standard
permits some of this information to be applied to the unit package):
(1) The name or trade name of the manufacturer; (2) the ANSI/National
Electronic Distributors Association number, or some other identifying
designation; (3) year and month, week or day of manufacture, which may
be a code, or the expiration of a guarantee period, in a clear readable
form; (4) the nominal voltage; (5) terminal polarity; and (6) warnings
or cautionary notes where applicable. See section 8.1 of ANSI Standard
C18.1M-1992.
The ANSI standard recommends that dry cell battery manufacturers
and sellers include on their products and packages several battery user
guidelines and warnings that are relevant to this proceeding. They are:
(1) Although batteries basically are trouble-free products, conditions
of abuse or misuse can cause leakage; (2) failure to replace all
batteries in a unit at the same time may result in battery leakage; (3)
mixing batteries of various chemical systems, ages, applications, types
or manufacturers may result in poor device performance and battery
leakage; (4) attempting to recharge a non-rechargeable battery is
unsafe because it could cause leakage; (5) reverse insertion of
batteries may cause charging, which may result in leakage; (6) devices
that operate on either household current or battery power may subject
batteries to a charging current, which may cause leakage; (7) do not
store batteries or battery-powered equipment in high-temperature areas;
[[Page 61226]]
and (8) do not dispose of batteries in fire. See section 7.5 of ANSI
Standard C18.1M-1992. At a minimum, each dry cell battery and battery
package inspected by Commission staff informed consumers that the
batteries may explode or leak if recharged, inserted improperly,
disposed of in fire, or mixed with different battery types.
Based on the foregoing, on March 25, 1997, the Commission published
an Advance Notice of Proposed Rulemaking (``ANPR'') tentatively
concluding that industry members that comply with the ANSI standard's
point-of-sale disclosure requirements also comply with the Rule.
Accordingly, the Commission tentatively determined that the Dry Cell
Battery Rule is no longer necessary, and sought comments on the
proposed repeal of the Rule until April 24, 1997. 62 FR 14050.
The only comment received in response to the ANPR was submitted by
the National Electrical Manufacturers Association (``NEMA''), a trade
association representing all major U.S. manufacturers of dry cell
batteries.\1\ NEMA supported repeal of the Commission's Dry Cell
Battery Rule, indicating that it has been superseded effectively in the
marketplace by ANSI Standard C18.1M-1992.\2\
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\1\ The comment submitted in response to the ANPR was placed on
the public record, and filed as document number B21969700001. In
today's notice, the comment is cited as NEMA, #1.
\2\ NEMA, #1.
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After reviewing the comment submitted in response to the ANPR, and
in light of ANSI Standard C18.1M-1992, on August 19, 1997, pursuant to
the Federal Trade Commission Act (``FTC Act''), 15 U.S.C. 41-58, and
the Administrative Procedure Act, 5 U.S.C. 551-59, 701-06, the
Commission published a Notice of Proposed Rulemaking (``NPR'')
initiating a proceeding to consider whether the Dry Cell Battery Rule
should be repealed or remain in effect (62 FR 44099).\3\ This
rulemaking proceeding was undertaken as part of the Commission's
ongoing program of evaluating trade regulation rules and industry
guides to ascertain their effectiveness, impact, cost and need. This
proceeding also responded to President Clinton's National Regulatory
Reinvention Initiative, which, among other things, urges agencies to
eliminate obsolete or unnecessary regulations. In the NPR, the
Commission announced its determination, pursuant to 16 CFR 1.20, to use
expedited procedures in this proceeding.\4\ The NPR comment period
closed on September 18, 1997. The Commission received no comments and
no requests to hold an informal hearing.
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\3\ In accordance with section 18 of the FTC Act, 15 U.S.C. 57a,
the Commission submitted the NPR to the Chairman of the Committee on
Commerce, Science, and Transportation, United States Senate, and the
Chairman of the Committee on Commerce, United States House of
Representatives, 30 days prior to its publication in the Federal
Register.
\4\ These procedures included: publishing a Notice of Proposed
Rulemaking; soliciting written comments on the Commission's proposal
to repeal the Rule; holding an informal hearing, if requested by
interested parties; receiving a final recommendation from Commission
staff; and announcing final Commission action in the Federal
Register.
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II. Basis for Repeal of Rule
The Commission has decided to repeal the Dry Cell Battery Rule for
the reasons discussed in the NPR. In sum, the Commission has reviewed
the rulemaking record and determined that the practices that brought
about the Rule, labeling or advertising dry cell batteries as being
``leakproof,'' are no longer common industry practices. In addition,
general voluntary compliance by the industry with the requirements of
ANSI Standard C18.1M-1992 Dry Cells and Batteries--Specifications
assures compliance with the Rule. Although repealing the Dry Cell
Battery Rule would eliminate the Commission's ability to obtain civil
penalties for any future misrepresentations that dry cell batteries are
leakproof, the Commission has determined that, in these circumstances,
repealing the Rule would not impair the Commission's ability to act
effectively. Any significant problems that might arise could be
addressed on a case-by-case basis under section 5 of the FTC Act, 15
U.S.C. 45, either administratively or through section 13(b) actions, 15
U.S.C. 53(b), filed in federal district court. Prosecuting serious
misrepresentations in district court allows the Commission to obtain
injunctive relief as well as equitable remedies, such as redress or
disgorgement. Accordingly, the Commission hereby announces the repeal
of the Dry Cell Battery Rule.
III. Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-12, requires
an analysis of the anticipated impact of the repeal of the rule on
small businesses. The reasons for repeal of the Rule have been
explained in this notice. Repeal of the rule would appear to have
little or no effect on small businesses. Moreover, the Commission is
not aware of any existing federal laws or regulations that would
conflict with repeal of the Dry Cell Battery Rule. Further, no comments
suggested any adverse effect on small business from repeal. For these
reasons, the Commission certifies, pursaunt to section 605 of the RFA,
5 U.S.C. 605, that this action will not have a significant economic
impact on a substantial number of small entities.
IV. Paperwork Reduction Act
The Dry Cell Battery Rule imposes no third-party disclosure
requirements that constitute ``information collection requirements''
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Since 1964,
therefore, the Rule has imposed no paperwork burdens on marketers of
dry cell batteries. In any event, repeal of the Dry Cell Battery Rule
will permanently eliminate any burdens on the public imposed by the
Rule.
List of Subjects in 16 CFR Part 403
Advertising, Dry cell batteries, Labeling, Trade practices.
PART 403--[REMOVED]
The Commission, under authority of Section 18 of the Federal Trade
Commission Act, 15 U.S.C. 57a, amends chapter I of title 16 of the Code
of Federal Regulations by removing Part 403.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 97-30111 Filed 11-14-97; 8:45 am]
BILLING CODE 6750-01-M
