[Federal Register Volume 59, Number 186 (Tuesday, September 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23878]


[[Page Unknown]]

[Federal Register: September 27, 1994]


-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION
[File No. 932 3135]

 

Chemopharm Laboratory Inc., d/b/a CP Industries; Proposed Consent 
Agreement With Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

-----------------------------------------------------------------------

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 Utah corporation that markets the ice 
melting product, Superior Sno-N-Ice, from making any environmental 
claim about any product unless it possesses and relies on competent and 
reliable scientific evidence to substantiate the claims. In addition, 
the respondent would be prohibited from misrepresenting the existence 
or contents of any test or study.

DATES: Comments must be received on or before November 28, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: C. Steven Baker, Chicago Regional 
Office, Federal Trade Commission, 55 East Monroe St., Suite 1437, 
Chicago, IL. 60603. (312) 353-8156.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 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 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

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Chemopharm Laboratory Inc., d/b/a CP 
Industries, 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 Chemopharm Laboratory Inc., by 
its duly authorized officer, and its attorney, and counsel for the 
Federal Trade Commission that:
    1. Proposed respondent Chemopharm Laboratory Inc. is a corporation 
organized, existing and doing business under and by virtue of the laws 
of the State of Utah with its principal office or place of business at 
503 North 400 West, Salt Lake City, Utah 84103.
    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:
    1. The term ``product'' means any product that is offered for sale, 
sold or distributed to the public by respondent, its successors and 
assigns, under the ``Superior Sno-N-Ice Melter'' band name or any other 
brand name of respondent, its successors and assigns; and also means 
any product sold or distributed to the public by third parties under 
private labeling agreements with respondent, its successors and 
assigns.
    2. The term ``competent and reliable scientific evidence'' means 
tests, analyses, research, studies or other evidence based on the 
expertise of professionals in the relevant areas, 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 respondent, Chemopharm Laboratory Inc., 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 product 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:
    A. Such product is ``environmentally safe,'' ``protects the total 
environment,'' or otherwise offers any environmental benefit; or
    B. Such product provides the environmental benefits of Calcium 
Magnesium Acetate,

unless such representation is true and, 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.

II

    It is further ordered that respondent, Chemopharm Laboratory Inc., 
a corporation, its successors and assigns, and its offers, 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 product 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 existence, contents, validity, results, 
conclusions, or interpretations of any test or study.

III

    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 
representations; 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.

IV

    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, or employees engaged in the preparation and placement 
of advertisements, promotional materials, product labels or other such 
sales materials covered by this Order.

V

    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.

VI

    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 Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement containing a consent order from Chemopharm 
Laboratory, Inc.,
d/b/a CP Industries, an Utah corporation (``CP Industries'' or 
``respondent''). Upon this agreement, the respondent will cease and 
desist from claiming that any product is environmentally safe, protects 
the total environment, otherwise offers any environmental benefit, or 
provides the environmental benefits of Calcium Magnesium Acetate 
(``CMA''), unless such representation is true and, at the time of 
making such representation, it possesses adequate substantiation. The 
proposed consent agreement also prohibits CP Industries from 
misrepresenting the results of any test or study.
    The proposed consent order has been placed on the public record for 
sixy (60) days for receipt 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 
proposed order contained in the agreement.
    This matter concerns claims made for CP Industries' Superior Sno-N-
Ice Melter product. The complaint accompanying the proposed consent 
order alleges, in part, that the respondent engaged in deceptive acts 
and practices in violation of Section 5 of the Federal Trade Commission 
Act. According to the complaint, the respondent represented that 
Superior Sno-N-Ice Melter does not harm or damage the environment; that 
Superior Sno-N-Ice Melter provides the environmental benefits of CMA; 
that scientific studies of CMA demonstrate that Superior Sno-N-Ice is 
beneficial to the environment; and that it had a reasonable basis for 
these claims. In fact, Superior Sno-N-Ice Melter contains about 95% 
sodium chloride (i.e., rock salt) which does harm or damage the 
environment. Therefore, Superior Sno-N-Ice does harm or damage the 
environment; Superior Sno-N-Ice Melter does not provide the 
environmental benefits of CMA; and scientific studies of CMA do not 
demonstrate that Superior Sno-N-Ice Melter is beneficial to the 
environment. The complaint therefore alleges that the claims are false 
and misleading and also alleges that CP Industries lacked a reasonable 
basis for making the claims.
    The consent order contains provisions designed to prevent the 
respondents from engaging in similar allegedly illegal acts and 
practices in the future.
    Paragraph I of the proposed consent order requires CP Industries to 
cease representing that any product is ``environmentally safe,'' 
``protects the total environment,'' or otherwise offers any 
environmental benefit; or that any product provides the environmental 
benefits of CMA, unless such representation is true and substantiated. 
Paragraph II of the order prohibits CP Industries from misrepresenting 
the existence, contents, validity, results, conclusions, or 
interpretations of any test or study.
    The remaining parts of the proposed consent order require the 
respondent to maintain materials relied upon to substantiate claims 
covered by the order, to distribute copies of the order to each of its 
operating divisions and 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 compliance reports.
    The purpose of this analysis is to facilitate public comment on the 
proposed consent order. It is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 94-23878 Filed 9-26-94; 8:45 am]
BILLING CODE 6750-01-M