[Federal Register Volume 59, Number 209 (Monday, October 31, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26932]


[[Page Unknown]]

[Federal Register: October 31, 1994]


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FEDERAL TRADE COMMISSION
[File No. 922 3197]

 

Creative Aerosol Corp.; 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 Jersey manufacturer of children's 
bath soap from representing that certain products or packaging will not 
harm the environment or atmosphere, or that any product or package 
offers any environmental benefit, unless it possesses competent and 
reliable evidence that substantiates the representation. The consent 
agreement also prohibits the respondent from misrepresenting that any 
product or packaging is capable of being recycled, or the extent to 
which recycling collection programs for them are available.

dates: Comments must be received on or before December 30, 1994.

addresses: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th Street and Pennsylvania Avenue 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 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)).

In the Matter of Creative Aerosol Corp., a Corporation; Agreement 
Containing Consent Order to Cease and Desist

[File No. 922-3197]

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Creative Aerosol Corp., a corporation 
(``proposed respondent''), and it now appears 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 Creative Aerosol Corp., by its 
duly authorized officer, and counsel for the Federal Trade Commission 
that:
    1. Proposed respondent Creative Aerosol Corp. is a corporation 
organized, existing and doing business under and by virtue of the laws 
of the State of New Jersey, with its principal office or place of 
business at 71 West Main Street, Freehold, New Jersey 07728-2114.
    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 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 proposed 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:
    ``Volatile Organic Compound'' (``VOC'') means any compound of 
carbon which participates in atmospheric photochemical reactions as 
defined by the U.S. Environmental Protection Agency at 40 CFR 
51.100(s), and as subsequently amended. When the final rule was 
promulaged, 57 FR 3941 (February 3, 1992), the EPA definition excluded 
carbon monoxide, carbon dioxide, carbonic acid, metallic carbides or 
carbonates, ammonium carbonate and certain listed compounds that EPA 
has determined are of negligible photochemical reactivity.
    ``Class I ozone-depleting substance'' means a substance that harms 
the environment by destroying ozone in the upper atmosphere and is 
listed as such in Title 6 of the Clean Air Act Amendments of 1990, Pub. 
L. No. 101-549, and any other substance which may in the future be 
added to the list pursuant to Title 6 of the Act. Class I substances 
currently include chlorofluorocarbons, halons, carbon tetrachloride, 
and 1,1,1-trichloroethane.
    ``Class II ozone-depleting substance'' means a substance that harms 
the environment by destroying ozone in the upper atmosphere and is 
listed as such in Title 6 of the Clean Air Act Amendments of 1990, Pub. 
L. No. 101-549, and any other substance which may in the future be 
added to the list pursuant to Title 6 of the Act. Class II substances 
currently include hydrochlorofluorocarbons.
    ``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 Funny Color Foam brand name or any 
other brand 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'' means 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 respondent, Creative Aerosol Corp., 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 labeling, 
advertising, promotion, offering for sale, sale, or distribution of any 
product or package containing any volatile organic compound, 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, through the use of such terms as 
``environmentally safe,'' ``environmentally safe, contains no 
fluorocarbons,'' or any other term or expression, that any such product 
or package will not harm the environment, or through the use of such 
terms as ``no fluorocarbons,'' or any other term or expression, that 
any such product or package will not harm the atmosphere, 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.

II

    It is further ordered that respondent, Creative Aerosol Corp., 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 labeling, 
advertising, promotion, offering for sale, sale, or distribution of any 
product or package containing any Class I or Class II ozone-depleting 
substance, in or affecting commerce, as ``commerce'' is defined in the 
Federal Trade Commission Act, do forthwith cease and desist from 
representing that any such product or package contains ``no 
fluorocarbons'' or representing, in any manner, directly or by 
implication, that any such product or package will not deplete, 
destroy, or otherwise adversely affect ozone in the upper atmosphere or 
otherwise harm the atmosphere.

III

    A. It is further ordered that respondent, Creative Aerosol Corp., 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 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, respondent will not be in violation of Part 
III(A)(2) of this Order, in connection with the advertising, labeling, 
offering for sale, sale, or distribution of any high-density 
polyethylene cap or aluminum aerosol can, if it truthfully represents 
that such packaging is recyclable, provided that:
    (1) respondent discloses clearly, prominently, and in close 
proximity to such representation:
    (a) in regard to any high-density polyethylene cap, that it is 
recyclable in the few communities with recycling collection programs 
for high-density polyethylene caps; and in regard to any aluminum 
aerosol can, that such packaging is recyclable in the few communities 
with recycling collection programs for aluminum aerosol cans; or
    (b) the approximate number of U.S. communities with recycling 
collection programs for such high-density polyethylene cap or aluminum 
aerosol can; or
    (c) the approximate percentage of U.S. communities or the U.S. 
population to which recycling collection programs for such high-density 
polyethylene cap or aluminum aerosol can are available; and
    (2) in addition, in the case of a high-density polyethylene cap, 
such cap itself bears a clear identification of the specific plastic 
resin(s) from which it is made.
    For purposes of this Order, 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.

IV

    It is further ordered that respondent, Creative Aerosol Corp., 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 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, respondent possesses and relies upon 
competent and reliable evidence, which when appropriate must be 
competent and reliable scientific evidence, that substantiates such 
representation.

V

    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.

VI

    It is further ordered that respondent shall distribute a copy of 
this Order to each of its operating divisions and to each of its 
offices, 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.

VII

    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.

VIII

    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 Creative 
Aerosol Corporation, 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 Funny Color Foam soap. The Commission's complaint in this 
matter alleges that Funny Color Foam soap is sold in an aluminum 
aerosol can with a plastic cap which is made from high-density 
polyethylene. The product contained the volatile organic compounds 
(VOCs) isobutane and propane and was then reformulated by substituting 
for the VOCs hydrochlorofluorocarbon--chlorodifluoromethane (HCFC-22).
    The Commission's complaint charges that the respondent made the 
following advertising claims while the product contained VOCs: 
``ENVIRONMENTALLY SAFE Contains no fluorocarbons. Non-Irritant. Non-
toxic.'' The complaint alleges that through such claims, the respondent 
represented without substantiation that Funny Color Foam does not 
contain any ingredients that harm or damage the environment. In fact, 
Funny Color Foam contained VOCs--chemicals that under many atmospheric 
conditions contribute to the formation of ground level ozone, a major 
component of smog.
    The complaint also charges that the respondent claimed that its 
reformulated product contains ``NO FLUOROCARBONS.'' The complaint 
alleges that through this claim, the respondent falsely represented 
that because Funny Color Foam contains no fluorocarbons, it will not 
deplete the earth's ozone layer or otherwise harm or damage the 
atmosphere. In fact, Funny Color Foam contains the harmful ozone-
depleting ingredient chlorodifluoromethane (HCFC-22), which harms or 
causes damage to the atmosphere by contributing to the depletion of the 
earth's ozone layer.
    In addition, the complaint charges that the respondent falsely 
represented that Funny Color Foam's aluminum aerosol can and plastic 
cap are recyclable. In fact, the complaint alleges, while the aluminum 
can and plastic cap are capable of being recycled, the vast majority of 
consumers cannot recycle them because there are virtually no collection 
facilities that accept aluminum aerosol cans for recycling and only a 
few collection facilities nationwide that accept the high-density 
polyethylene cap 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.
    The term ``volatile organic compound'' (VOC) is defined in the 
consent order in accordance with the definition adopted by the 
Environmental Protection Agency (EPA) in a February 3, 1992, 
rulemaking. To assist the public and the industry in understanding the 
coverage of this order, those compounds that EPA expressly excluded 
from the definition of VOC at the time the definition was promulgated 
are listed in the order. Because EPA could in the future modify the 
definition based on evolving scientific evidence, the term VOC as used 
in the order will vary depending upon EPA's definition of the term. 
Those compounds that EPA may decide should be excluded from the 
definition of VOC because of negligible photochemical reactivity will 
thus be excluded under the consent order. Likewise any compounds that 
EPA may decide should be defined as VOCs will be covered by the order.
    The proposed order also defines Class I and Class II ozone-
depleting substances, incorporating the definitions established in the 
Clean Air Act Amendments of 1990. Class I substances currently listed 
under the Act include CFCs, halons, carbon tetrachloride, and 1,1,1-
trichloroethane. Class II substances currently consist of HCFCs.
    Part I of the proposed order requires the respondent to cease and 
desist from representing that any product or package containing 
volatile organic compounds is ``environmentally safe,'' 
``environmentally safe, contains no fluorocarbons,'' contains ``no 
fluorocarbons,'' or through the use of any other term or expression, 
that any such product or package will not harm the environment or the 
atmosphere, unless the respondent possesses competent and reliable 
evidence, which when appropriate must be competent and reliable 
scientific evidence, that substantiates the representation.
    Part II of the proposed order requires the respondent to cease and 
desist from representing that any product or package containing any 
Class I or Class II ozone-depleting substance contains ``no 
fluorocarbons'' or representing, in any manner, that any such product 
or package will not deplete, destroy, or otherwise adversely affect 
ozone in the upper atmosphere or otherwise harm the atmosphere.
    Under the Clean Air Act Amendments, the EPA has authority to add 
new chemicals to the Class I and Class II lists. In fact, EPA has added 
methyl bromide and hydrobromofluorocarbons (HBFCs) to the list of Class 
I substances. Thus, the order's definitions of Class I and Class II 
ozone-depleting substances include these and any other substances that 
may be added to the lists. If additional substances are added to the 
Class I or II lists, Part II of the order becomes applicable to claims 
made for products containing those substances after the substances are 
added to the lists.
    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 product or package the extent to which 
it is capable of being recycled or the extent to which recycling 
collection programs are available. Part III also contains a proviso 
that allows the respondent to advertise high-density polyethylene caps 
and aluminum aerosol cans as recyclable without violating Part III of 
the order. The respondent may do so if it truthfully represents that 
such packaging is capable of being recycled; discloses clearly, 
prominently and in close proximity to such claim (a) that such 
packaging is recyclable in the few communities with recycling 
collection programs for high-density polyethylene caps or aluminum 
aerosol cans; or (b) the approximate number of U.S. communities with 
recycling collection programs for such packaging; or (c) the 
approximate percentage of U.S. communities or the U.S. population to 
which recycling collection programs for such packaging is available; 
and in addition, in the case of the high-density polyethylene cap, the 
cap itself bears a clear identification of the specific plastic 
resin(s) from which it is made.
    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.
    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. 94-26932 Filed 10-28-94; 8:45 am]
BILLING CODE 6750-01-M