[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: 94-10950]
[[Page Unknown]]
[Federal Register: May 6, 1994]
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FEDERAL TRADE COMMISSION
[File No. 922 3162]
Oak Hill Industries Corp., 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, a New York manufacturer of plastic
tableware 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 any unsubstantiated
representation that any product or package it markets offers any
environmental benefit.
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 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)).
Agreement Containing Consent Order To Cease and Desist
In the Matter of: Oak Hill Industries Corp., a corporation, and
Malcolm Foster, individually and as an officer of said corporation.
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Oak Hill Industries Corp., a corporation,
and Malcolm Foster, individually and as an officer of said corporation
(``proposed respondents''), 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 Oak Hill Industries Corp., by
its duly authorized officer, and counsel for the Federal Trade
Commission that:
1. Proposed respondent Oak Hill Industries Corp. is a corporation
organized, existing and doing business under and by virtue of the laws
of the State of New York, with its principal office or place of
business at 330 East 59th Street, New York, NY 10022.
Proposed respondent Malcolm Foster is an officer of said
corporation. He formulates, directs, and controls the acts and
practices of said corporation. His address is the same as that of said
corporation.
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 Oak Hill 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
A. It is ordered that respondents, Oak Hill Industries Corp., a
corporation, its successors and assigns, and its officers, and Malcolm
Foster, individually and as an officer of said corporation, and
respondents' agents, representatives, and employees, directly or
through any corporation, subsidiary, division, or other device, in
connection with the labeling, advertising, 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
I(A)(2) of this Order, in connection with the advertising, labeling,
offering for sale, sale, or distribution of any non-foam polystyrene,
polypropylene film, or low-density polyethylene film 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; in regard to
any polypropylene film product or package, that such product or package
is recyclable in the few communities with recycling collection programs
for polypropylene film; and in regard to any low-density polyethylene
film product or package, that such product or package is recyclable in
the few communities with recycling collection programs for low-density
polyethylene film; 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, such product or package itself bears 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.
II
It is further ordered that respondents, Oak Hill Industries Corp.,
a corporation, its successors and assigns, and its officers, and
Malcolm Foster, individually and as an officer of said corporation, and
respondents' agents, representatives, and employees, directly or
through any corporation, subsidiary, division, or other device, in
connection with the labeling, advertising, 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.
III
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.
IV
It is further ordered that the corporate respondents 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 advertisements, promotional
materials, products, labels or other such sales materials covered by
this Order.
V
It is further ordered that the individual respondent shall notify
the Commission in the event of the discontinuance of his present
business or employment and of each affiliation with a new business or
employment. In addition, for a period of five (5) years from the date
of service of this Order, he shall promptly notify the Commission of
each affiliation with a new business or employment whose activities
include the sale, distribution, and/or manufacturing of any plastic
product or package or of his affiliation with a new business or
employment in which his own duties and responsibilities involve the
sale, distribution, and/or manufacturing of any plastic product or
package. Each such notice shall include the individual respondent's new
business address and a statement of the nature of the business or
employment in which such respondent is newly engaged, as well as a
description of such respondent's duties and responsibilities in
connection with the business or employment. The expiration of the
notice provision of this paragraph shall not affect any other
obligation arising under 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
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.
VII
It is further ordered that respondents shall, within sixty (6) 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 Oak Hill
Industries Corp., a New York corporation, and Malcolm Foster,
individually and as an officer of the corporate respondent.
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 Oak Hill brand
plastic plates, bowls and utensils. The Commission's complaint in this
matter alleges that Oak Hill brand plastic plates, bowls and utensils
are made from non-foam polystyrene; that they are packaged in thin
plastic packaging which is sometimes made from polypropylene film and
at other times from low-density polyethylene film; and that such
plastic products and packaging do not identify the type(s) of plastic
resin from which they are made. The complaint charges that Oak Hill
falsely represented that the plastic plates, bowls and utensils and the
plastic film packaging are recyclable. In fact, the complaint alleges,
the plastic products and packaging are not recyclable, because there
are only a few collection facilities nationwide that will accept non-
foam polystyrene plates, bowls or utensils or the polypropylene film or
low-density polyethylene film plastic packaging 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 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 I also contains a proviso that allows the respondents
to advertise non-foam polystyrene, polypropylene film or low-density
polyethylene film products or packages as recyclable without violating
Part I 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, polypropylene
film or low-density polyethylene film; or (b) the approximate number of
U.S. communities with recycling collection programs for such product or
package; or (c) the approximate percentage U.S. communities or the U.S.
population to which recycling collection programs for such product or
package are available; and in addition, such product or package itself
bears a clear identification of the specific plastic resin(s) from
which it is made.
Part II 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 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. 94-10950 Filed 5-5-94; 8:45 am]
BILLING CODE 6750-01-M
