[Federal Register Volume 59, Number 99 (Tuesday, May 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-126624]
[[Page Unknown]]
[Federal Register: May 24, 1994]
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FEDERAL TRADE COMMISSION
[File No. 922 3045]
Keyes Fibre Company; Proposed Consent Agreement With Analysis To
Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit, among other things, a Connecticut-based company from
representing that any of its paper products or packages are degradable,
biodegradable, or photodegradable, or offers any environmental benefits
when disposed of in a sanitary landfill, unless the respondent
possesses competent and reliable scientific evidence to substantiate
such representation. In addition, the consent agreement would prohibit
the respondent from misrepresenting the extent to which any paper
product or package is capable of being recycled or the extent to which
recycling collection programs are available.
DATES: Comments must be received on or before July 25, 1994.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
Michael Dershowitz, FTC/S-4002, Washington, DC 20580. (202) 326-3158.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given
that the following consent agreement containing a consent order to
cease and desist, having been filed with and accepted, subject to final
approval, by the Commission, has been placed on the public record for a
period of sixty (60) days. Public comment is invited. Such comments or
views will be considered by the Commission and will be available for
inspection and copying at its principal office in accordance with
section Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16
CFR 4.9(b)(6)(ii).
Agreement Containing Consent Order To Cease and Desist
In the matter of Keyes Fibre Company, a corporation.
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Keyes Fibre Company, a corporation
(``proposed respondent''), and it now appearing that proposed
respondent is willing to enter into an agreement containing an order to
cease and desist from the acts and practices being investigated,
It Is Hereby Agreed by and between Keyes Fibre Company, by its duly
authorized officer, and its attorney, and counsel for the Federal Trade
Commission that:
1. Proposed respondent Keyes Fibre Company is a corporation
organized, existing and doing business under and by virtue of the laws
of the State of Delaware, with its principal office or place of
business at 301 Merritt 7, Norwalk, Connecticut 06856.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft of complaint here attached.
3. Proposed respondent waives:
(a) Any further procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement;
and
(d) All claims under the Equal Access to Justice Act.
4. This agreement shall not become a part of the public record of
the proceeding unless and until it is accepted by the Commission. If
this agreement is accepted by the Commission, it, together with the
draft of the complaint contemplated hereby, will be placed on the
public record for a period of sixty (60) days and information in
respect thereto publicly released. The Commission thereafter may either
withdraw its acceptance of this agreement and so notify proposed
respondent, in which event it will take such action as it may consider
appropriate, or issue and serve its complaint (in such form as the
circumstances may require) and decision, in disposition of the
proceeding.
5. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondent that the law has been
violated as alleged in the attached draft complaint or that the facts
as alleged in the attached draft complaint, other than the
jurisdictional facts, are true.
6. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Sec. 2.34 of the Commission's
Rules, the Commission may without further notice to proposed
respondent, (1) issue its complaint corresponding in form and substance
with the draft of complaint here attached and its decision containing
the following order to cease and desist in disposition of the
proceeding, and (2) make information public in respect thereto. When so
entered, the order to cease and desist shall have the same force and
effect and may be altered, modified or set aside in the same manner and
within the same time provided by statute for other orders. The order
shall become final upon service. Delivery by the U.S. Postal Service of
the decision containing the agreed-to order to proposed respondent's
address as stated in this agreement shall constitute service. Proposed
respondent waives any right it might have to any other manner of
service. The complaint may be used in construing the terms of the
order, and no agreement, understanding, representation, or
interpretation not contained in the order or in the agreement may be
used to vary or contradict the terms of the order.
7. Proposed respondent has read the complaint and the order
contemplated hereby. It understands that once the order has been
issued, it will be required to file one or more compliance reports
showing it has fully complied with the order. Proposed respondent
further understands that it may be liable for civil penalties in the
amount provided by law for each violation of the order after it becomes
final.
Order
Definitions
For purposes of this Order, the following definitions shall apply:
The term ``product or package'' means any product or package that
is offered for sale, sold or distributed to the public by respondent,
its successors and assigns, under the Chinet brand name or
any other band name of respondent, its successors and assigns; and also
means any product or package sold or distributed to the public by third
parties under private labeling agreements with respondent, its
successors and assigns.
``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
A. It Is Ordered that respondent Keyes Fibre Company, a
corporation, its successors and assigns, and its officers, agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other device, in connection with the
manufacturing, labeling, advertising, 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 representing, in any manner,
directly or by implication:
(1) That any such product or package is degradable, biodegradable,
or photodegradable; or,
(2) Through the use of such terms as degradable, biodegradable, or
photodegradable, or any other similar term or expression, that any such
product or package offers any environmental benefits when consumers
dispose of it as trash that is buried in a sanitary landfill,
unless at the time of making such representation, respondent posses and
relies upon competent and reliable scientific evidence that
substantiates the representation.
B. Provided, however, respondent will not be in violation of Part
I(A) of this Order, in connection with the advertising, labeling,
offering for sale, sale, or distribution of any paper product or
package, if it truthfully represents that such product or package will
degrade into usable compost (e.g., soil-conditioning material, mulch)
in a safe and timely manner, when disposed of in home compost piles or
devices or in municipal solid waste composting facilities, provided
that respondent complies with Part II of this Order and discloses
clearly, prominently, and in close proximity to such representation
that such product or package is not designed to degrade in landfills.
A. It Is Further Ordered that respondent, Keyes Fibre Company, a
corporation, its successors and assigns, and its officers, agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other device, in connection with the
manufacturing, labeling, advertising, 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 form misrepresenting, in any manner,
directly or by implication, the extent to which any such product or
package can be composted by any means or the extent to which municipal
solid waste composting facilities for such product or package are
available.
B. Provided, however, respondent will not be in violation of Part
II(A) of this Order, in connection with the advertising, labeling,
offering for sale, sale, or distribution of any paper product or
package, if it truthfully represents that such product or package will
compost or otherwise be converted into usable compost (e.g., soil-
conditioning material, mulch) in a safe and timely manner, when
disposed of in home compost piles or devices or in municipal solid
waste composting facilities, provided that respondent discloses
clearly, prominently, and in close proximity to any representation
referring or relating to municipal solid waste composting:
(1) That such product or package is compostable where municipal
solid waste composting facilities exist, and the current number of
municipal solid waste composting facilities in the U.S.; or
(2) That such product or package is compostable in the few
communities with municipal solid waste composting facilities; or
(3) the approximate percentage of U.S. communities or the U.S.
population to which municipal solid waste composting facilities are
available.
For purposes of this Order, a disclosure elsewhere on the product
package shall be deemed to be ``in close proximity'' to such terms 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.
III
It Is Further Ordered that respondent, Keyes Fibre Company, a
corporation, its successors and assigns, and its officers, agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other device, in connection with the
manufacturing, labeling, advertising, 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 any such product or
package is capable of being recycled or the extent to which recycling
collection programs for such product or package are available.
IV
It Is Further Ordered that respondent, Keyes Fibre Company, a
corporation, its successors and assigns, and its officers, agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other device, in connection with the
manufacturing, labeling, advertising, 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 representing, in any manner,
directly or by implication, that any product or package 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.
V
Nothing in this Order shall prevent respondent from using any of
the terms cited in Parts I, II and III, or similar terms or
expressions, if necessary to comply with any federal rule, regulation,
or law governing the use of such terms in advertising or labeling.
VI
It Is Further Ordered that for five (5) 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 its possession or control that contradict, qualify, or call
into question such representation, or the basis relied upon for such
representation, including complaints from consumers.
VII
It Is Further Ordered that the 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 advertisement, promotional materials,
product labels or other such sales materials covered by this Order.
VIII
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.
IX
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.
Analysis of Consent Order To Aid Public Comment
The Federal Trade Commission has accepted an agreement, subject to
final approval, to a proposed consent order from respondent Keyes Fibre
Company, a Delaware corporation.
The proposed consent order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement and take other appropriate action, or make
final the agreement's proposed order.
This matter concerns the labeling and advertising of the
respondent's Chinet disposable tableware. The Commission's
complaint in this matter charges that the respondent represented
without substantiation that Chinet disposable tableware will
completely break down and return to nature--i.e., decompose into
elements found in nature--within a reasonably short period of time
after customary disposal; that Chinet disposable tableware
offers a significant environmental benefit after customary disposal;
that Chinet disposable tableware will completely break down
and return to nature within a short enough period of time after
customary disposal to significantly reduce the amount of garbage in
landfills; and that Chinet disposable tableware will
completely break down and return to nature significantly faster than
other paper plates, or plastic or foam products, to provide a
significant environmental benefit. The complaint further charges that
the respondent falsely represented that Chinet disposable
tableware is compostable through municipal solid waste composting. In
fact, the complaint alleges, while Chinet disposable
tableware is capable of be composted in municipal solid waste
composting facilities, the vast majority of consumers cannot compost
the product in this way because there are only a few municipal solid
waste composting facilities nationwide. In addition, the complaint
charges that Keyes falsely represented that Chinet disposable
tableware is recyclable after ordinary use. In fact, the complaint
alleges, while Chinet disposable tableware is capable of
being recycled, the vast majority of consumers cannot recycle the
product because there are virtually no collection facilities that
accept used paper plates for recycling.
The proposed consent order contains provisions designed to remedy
the violations charged and to prevent the respondent from engaging in
similar acts and practices in the future.
Part I of the proposed order requires that the respondent cease and
desist from representing in the future, in any manner, directly or by
implication, that any of its paper products or packages are degradable,
biodegradable, or photodegradable, or through the use of such terms or
similar terms, that any such product or package offers any
environmental benefits when consumers dispose of it as trash that is
buried in a sanitary landfill, unless at the time of making such
representation, the respondent possesses and relies upon competent and
reliable scientific evidence that substantiates such representation.
This provision includes claims of photodegradation as part of the
prospective relief to be obtained, although respondent's advertising
did not include the term ``photodegradable.'' Part I also contains a
proviso that allows the respondent to advertise paper products or
packages as degradable without violating Part I of the proposed order.
The respondent may do so if it truthfully represents that such product
or package will degrade into usable compost (e.g., soil-conditioning
material, mulch) in a safe and timely manner, when disposed of in home
compost piles or devices or in municipal solid waste composting
facilities, provided that the respondent complies with Part II of the
proposed order, discussed below, and in addition, the respondent
discloses clearly, prominently, and in close proximity to the claim
that such product or package is not designed to degrade in landfills.
Part II of the proposed order requires that the respondent cease
and desist from misrepresenting, in any manner, directly or by
implication, with respect to any paper product or package the extent to
which any such product or package is capable of being composted or the
extent to which municipal solid waste composting facilities are
available. Part II also contains a proviso that allows the respondent
to advertise paper products or packages as compostable without
violating Part II of the proposed order. The respondent may do so if it
truthfully represents that such products or packages are capable of
being composted or otherwise being converted into usable compost (e.g.,
soil-conditioning material, mulch) in a safe and timely manner, when
disposed of in home compost piles or devices or in municipal solid
waste composting facilities and discloses clearly, prominently, and in
close proximity to any representation referring or relating to
municipal solid waste composting: (1) That such product or package is
compostable where municipal solid waste composting facilities exist,
and the current number of municipal solid waste composting facilities
in the U.S.; or (2) that such product or package is compostable in the
few communities with municipal solid waste composting facilities; or
(3) the approximate percentage of U.S. communities or the U.S.
population to which municipal solid waste composting facilities are
available.
Part III of the proposed order requires that the respondent cease
and desist from misrepresenting, in any manner, directly or by
implication, with respect to any paper product or package the extent to
which it is capable of being recycled or the extent to which recycling
collection programs are available.
Part IV of the proposed order provides that if the respondent
represents in advertising or labeling that any product or package
offers any environmental benefit, it must have a reasonable basis
consisting of competent and reliable evidence, which when appropriate
must be competent and reliable scientific evidence, that substantiates
the claims.
Part V of the proposed order allows the respondent to use the terms
cited in parts I, II and III or similar terms, and not be in violation
of the proposed order, if it is necessary for the respondent to comply
with any federal rule, regulation, or law governing the use of such
terms in advertising or labeling.
The proposed order also requires the respondent to maintain
materials relied upon to substantiate the claims covered by the order,
to distribute copies of the order to certain company officials, to
notify the Commission of any changes in corporate structure that might
affect compliance with the order, and to file one or more reports
detailing compliance with the order.
The purpose of this analysis is to facilitate public comment on the
proposed order. It is not intended to constitute an official
interpretation of the agreement and proposed order or to modify in any
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 94-126624 Filed 5-23-94; 8:45 am]
BILLING CODE 6750-01-M
