[Federal Register Volume 59, Number 87 (Friday, May 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10944]
[[Page Unknown]]
[Federal Register: May 6, 1994]
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FEDERAL TRADE COMMISSION
[File No. 912 3364]
LePage's, Inc., et al.; 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, the Pennsylvania manufacturers of glues
and adhesive tapes from misrepresenting that any product or package is
capable of being recycled, or the extent to which recycling collection
programs are available for such products, and from making
unsubstantiated claims that its products or packages are degradable,
biodegradable or photodegradable, or that their degradability offers
any environmental benefit when disposed of as trash in a sanitary
landfill.
dates: Comments must be received on or before July 5, 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
Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR
4.9(b)(6)(ii)).
LePage's Inc., a Corporation, and LP Holdings, Inc., a Corporation;
Agreement Containing Consent Order To Cease and Desist
[File No. 912 3364]
The Federal Trade Commission having initiated an investigation of
certain acts and practices of proposed respondents LePage's, Inc., a
corporation, and LP Holdings, Inc., a corporation, and it now appearing
that proposed respondents are 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 LePage's, Inc. and LP Holdings,
Inc., by their duly authorized officers, and counsel for the Federal
Trade Commission that:
1. Proposed respondent LePage's, Inc. is a corporation organized,
existing and doing business under and by virtue of the laws of the
State of Pennsylvania.
Proposed respondent LP Holdings, Inc. is a corporation organized,
existing and doing business under and by virtue of the laws of the
State of Delaware. It dominates and controls the acts and practices of
its wholly-owned subsidiary, LePage's, Inc.
The proposed respondents have their principal offices or places of
business at 120 Delta Drive, Pittsburgh, Pennsylvania 15238.
2. Proposed respondents admit all the jurisdictional facts set
forth in the draft of complaint here attached.
3. Proposed respondents waive:
(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
respondents, 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 respondents 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
respondents, (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
respondents' address as stated in this agreement shall constitute
service. Proposed respondents waive any right they 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 respondents have read the complaint and the order
contemplated hereby. They understand that once the order has been
issued, they will be required to file one or more compliance reports
showing they have fully complied with the order. Proposed respondents
further understand that they 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 respondents,
their successors and assigns, under the LePage's brand name or any
other brand name of respondents, their successors and assigns; and also
means any product or package sold or distributed to the public by third
parties under private labeling agreements with respondents, their
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
It is ordered that respondents, LePage's, Inc., a corporation, and
LP Holdings, Inc., a corporation, their successors and assigns, and
their 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 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 terms or expression, that any such
product or package offers any environmental benefits when consumers
dispose or it as trash that is buried in a sanitary landfill,
unless at the time of making such representation, respondents possess
and rely upon competent and reliable scientific evidence that
substantiates such representation.
II
A. It is further ordered that respondents, LePage's, Inc., a
corporation, and LP Holdings, Inc., a corporation, their successors and
assigns, and their 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 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) Any such product or package is capable of being recycled; or,
(2) Recycling collection programs for such product or package are
available.
B. Provided, however, respondents will not be in violation of Part
II(A)(2) of this Order, in connection with the advertising, labeling,
offering for sale, sale, or distribution of any non-foam polystyrene or
any non-corrugated paperboard or cardboard product or package, if they
truthfully represent that such product or package is recyclable,
provided that:
(1) Respondents disclose clearly, prominently, and in close
proximity to such representation:
(a) In regard to any non-foam polystyrene product or package, that
such product or package is recyclable in the few communities with
recycling collection programs for non-foam polystyrene; and in regard
to any non-corrugated paperboard or cardboard product or package, 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 U.S. communities or the U.S.
population to which recycling collection programs for such product or
package are available; and
(2) In addition, in the case of a non-foam polystyrene product or
package, such product or package itself bear a clear identification of
the specific plastic resin(s) from which it is made.
For purposes of this provision, 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.
III
It is further ordered that respondents, LePage's, Inc., a
corporation, and LP Holdings, Inc, a corporation, their successors and
assigns, and their 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 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 such product or package
offers any environmental benefit, unless at the time of making such
representation, respondents possess and rely upon competent and
reliable evidence, which when appropriate must be competent and
reliable scientific evidence, that substantiates such representation.
IV
It is further ordered that for five (5) years after the last date
of dissemination of any representation covered by this Order,
respondents, or their 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 their 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 respondents shall distribute a copy of
this Order to each of their operating divisions and to each of their
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.
VI
It is further ordered that respondents shall notify the Commission
at least thirty (30) days prior to any proposed change in the
corporations 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 corporations which may
affect compliance obligations under this Order.
VII
It is further ordered that respondents shall, within sixty (60)
days after service of this Order upon them, 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 they have
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 respondents LePage's,
Inc., a Pennsylvania corporation, and LP Holdings, Inc., 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 LePage's
Biodegradable Transparent Tape. The Commission's complaint in this
matter alleges that LePage's Biodegradable Transparent Tape is a
cellophane tape made from wood pulp and adhesive material; that the
retail tape product is sold with a hard clear non-foam polystyrene
plastic dispenser that does not identify the type(s) of plastic resin
from which it is made; and that the tape and dispenser are attached to
a non-corrugated paperboard or cardboard backcard. The complaint
charges that the respondents represented without substantiation that
LePage's Biodegradable Transparent Tape 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 and that
compared to other transparent tape, LePage's Biodegradable Transparent
Tape offers a significant environmental benefit after customary
disposal. The complaint further charges that the respondents falsely
represented that the plastic tape dispenser and paperboard backcard of
LePage's Biodegradable Transparent Tape are recyclable. In fact, the
complaint alleges, the plastic tape dispenser and the paperboard
package are not recyclable, because there are only a few collection
facilities nationwide that will accept the non-foam polystyrene tape
dispenser or the non-corrugated paperboard or cardboard backcard for
recycling.
The proposed consent order contains provisions designed to remedy
the violations charged and to prevent the respondents from engaging in
similar acts and practices in the future.
Part I of the proposed order requires that the respondents cease
and desist from representing, in any manner, directly or by
implication, that any of their products or packages are degradable,
biodegradable, or photodegradable, or more specifically 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 respondents possess and rely upon competent and
reliable scientific evidence that substantiates such representation.
Part II of the proposed order requires that the respondents cease
and desist from misrepresenting, in any manner, directly or by
implication, with respect to any product or package the extent to which
it is capable of being recycled or to which recycling collection
programs are available. Part II also contains a provision that allows
the respondents to advertise non-foam polystyrene and non-corrugated
paperboard and cardboard products or packages as recyclable without
violating Part II of the order. The respondents may do so if they
truthfully represent that such products or packages are capable of
being recycled; disclose clearly, prominently and in close proximity to
such claim (a) that such product or package is recyclable in the few
communities with recycling collection programs for non-foam polystyrene
or for non-corrugated paperboard or cardborad; or (b) the approximate
number of U.S. communities with recycling collection programs for such
product or package; or (c) the approximate percentage of U.S.
population to which recycling collection programs for such product or
package are available; and in addition, in the case of any non-foam
polystyrene product or package, such product or package itself bears a
clear identification of the specific plastic resin(s) from which it is
made.
Part III of the proposed order provides that if the respondents
represent in advertising or labeling that any product or package offers
any environmental benefit, they 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.
The proposed order also requires the respondents 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. 94-10944 Filed 5-5-94; 8:45 am]
BILLING CODE 6750-01-M
