[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