[Federal Register Volume 60, Number 128 (Wednesday, July 5, 1995)]
[Notices]
[Pages 35029-35032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16447]



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FEDERAL TRADE COMMISSION
[File No. 932-3111]


Quantum Electronics 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 Warwick, Rhode Island based company and 
its principal officers from making unsubstantiated claims about the 
ability of any air cleaning product to eliminate, remove, clear or 
clean any indoor air pollutant--or any quantity of indoor air 
pollutants--from a user's environment.

DATES: Comments must be received on or before September 5, 1995.

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: Jeffrey Klurfeld, Kerry O'Brien, and 
Linda Badger, San Francisco Regional Office, Federal Trade Commission, 
901 Market Street, Suite 570, San Francisco, CA 94103. (415) 744-7920.

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)).
    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Quantum Electronics Corporation, a 
corporation, Albert O. Coates, Maurice Lepenven, and Jacqueline J. 
Maynard, individually and as officers 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 use of the acts and practices being investigated,
    It is hereby agreed by and between proposed respondents, by their 
duly authorized officers, and their attorney, and counsel for the 
Federal Trade Commission that:
    1. Proposed respondent Quantum Electronics Corporation is a 
corporation organized, existing, and doing business under and by virtue 
of the laws of the State of Rhode Island, with its office and principal 
place of business located at 110 Jefferson Blvd., in the City of 
Warwick, State of Rhode Island.
    Proposed respondents Albert O. Coates, Maurice Lepenven,and 
Jacqueline J. Maynard are officers of said corporation. They formulate, 
direct, and control the policies, acts and practices of said 
corporation and their address is the same as that of said corporation.
    2. Proposed respondents admit all the jurisdictional facts set 
forth in the draft of complaint.
    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; and
    c. All rights to seek judicial review or otherwise to challenge or 
contest the 

[[Page 35030]]
validity of the order entered pursuant to this agreement.
    4. This agreement shall not become 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 
complaint contemplated thereby, 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 the 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 of facts, other than 
jurisdictional facts, or of violations of law as alleged in the draft 
complaint.
    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, (a) issue its compliant 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 (b) 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 compliant and decision containing the agreed-to order to proposed 
respondents' address as stated in this agreement shall constitute 
service. Proposed respondents waive any right they may have to any 
other manner of service. The complaint may be used in canstruing the 
terms of the order, and no agreement, understanding, representation, or 
interpretation not contained in the order or the agreement may be used 
to vary or contradict the terms of the order.
    7. Proposed respondents have read the proposed compliant and order 
contemplated hereby. They understand that once the order has been 
issued, they will be required to file one or more compliance reports 
showing that 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

    For the purposes of this Order, the following definitions shall 
apply:
    A. The term ``air cleaning product'' shall mean any product, 
equipment, or appliance designed or advertised to remove, treat, or 
reduce the level of any pollutant(s) in the air.
    B. The terms ``indoor air pollutant(s)'' or ``pollutant(s)'' shall 
mean one or more of the following: Odors, nitrogen dioxide, 
formaldehyde, sulfur dioxide, ammonia, trichlorethylene, carbon 
dioxide, hydrogen sulfide, methane, mold, mildew, bacteria, dust, 
chlorine, fungi, volatile organic compounds, viruses, or any other 
gaseous or particulate matter found in indoor air.
    C. The term ``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 Quantum Electronics Corporation, a 
corporation, its successors and assigns, and its officers, and Albert 
O. Coates, Maurice Lepenven, and Jacqueline J. Maynard, individually 
and as officers of said corporation, and respondents' agents, 
representatives, and employees, directly or through any corporation, 
subsidiary, division or other device, in connection with the 
manufacturing, labelling, advertising, promotion, offering for sale, 
sale, or distribution of any air cleaning 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,
    A. Such product's ability to eliminate, remove, clear, or clean any 
indoor air pollutant from a user's environment; or
    B. Such product's ability to eliminate, remove, clear, or clean any 
quantity of indoor air pollutants from a user's environment;

unless, at the time of making such representation, respondents possess 
and rely upon competent and reliable scientific evidence that 
substantiates the representation.

II.

    It is ordered that respondents Quantum Electronics Corporation, a 
corporation, its successors and assigns, and its officers, and Albert 
O. Coates, Maurice Lepenven, and Jacqueline J. Maynard, individually 
and as officers of said corporation, and respondents' agents, 
representatives, and employees, directly or through any corporation, 
subsidiary, division or other device, in connection with the 
manufacturing, labelling, advertising, promotion, offering for sale, 
sale, or distribution of any air cleaning 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. The use of ozone is more effective in cleaning or purifying 
indoor air than other air cleaning methods;
    B. The product does not create harmful by-products; or
    C. When used as directed, the product prevents or provides relief 
from allergies, asthma, and viruses;

unless, at the time of making such representation, respondents possess 
and rely upon competent and reliable scientific evidence that 
substantiates the representation.

III.

    It is further ordered that respondents, Quantum Electronics 
Corporation, a corporation, its successors and assigns, and its 
officers, and Albert O. Coates, Maurice Lepenven, and Jacqueline J. 
Maynard, individually and as officers of said corporation, and 
respondents' agents, representatives and employees, directly or through 
any corporation, subsidiary, division or other device, in connection 
with the manufacturing, labelling, advertising, promotion, offering for 
sale, sale, or distribution of any air cleaning 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, the efficacy, performance, or health-
related benefit of any such product, 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 the 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 

[[Page 35031]]
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 notify the Commission 
at least thirty (30) days prior to any proposed change in the corporate 
respondent such as 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 arising out of this Order.

VI.

    It is further ordered that each individual respondent shall, for a 
period of five (5) years after the date of service of this Order upon 
him/her, promptly notify the Commission, in writing, of his/her 
discontinuance of his/her present business or employment and of his/her 
affiliation with a new business or employment. For each such new 
affiliation, the notice shall include the name and address of the new 
business or employment, a statement of the nature of the new business 
or employment, and a description of respondent's duties and 
responsibilities in connection with the new business or employment.

VII.

    It is further ordered that the corporate respondent shall, within 
ten (10) days from the date of service of this Order upon it, 
distribute a copy of this Order to each of its officers, agents, 
representatives, independent contractors, and employees involved in the 
preparation and placement of advertisements or promotional materials, 
or who is in communication with customers or prospective customers, or 
who has any responsibilities with respect to the subject matter of this 
Order; and for a period of three (3) years, from the date of issuance 
of this Order, distribute a copy of this Order to all of respondent's 
future such officers, agents, representatives, independent contractors, 
and employees.

VIII.

    It is further ordered that the corporate respondent shall, within 
ten (10) days from the date of service of this Order upon it, deliver 
by first class mail or in person a copy of this Order to each of its 
present distributors or retailers of its ozone generators.

IX.

    It is further ordered that respondents shall, within sixty (60) 
days from the date of 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 Proposed 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 Quantum 
Electronics Corporation, a Rhode Island corporation, and Albert O. 
Coates, Maurice Lepenven, and Jacqueline J. Maynard, individually and 
as officers of the 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 advertising of ozone generators, including 
the ``Panda 200,'' as air cleaning products for use in homes, offices, 
other commercial establishments, and boats. The Commission's complaint 
charges that respondents' advertising contained unsubstantiated 
representations concerning the efficacy of their ozone generators in 
cleaning the air.
    Sepcifically, the complaint alleges that the respondents lacked 
substantiation for their claims that: (1) When used as directed, the 
Panda 200 eliminates, removes, clears, or cleans formaldehyde, sulfur 
dioxide, ammonia, trichlorethylene, carbon dioxide, hydrogen sulfide, 
methane, odors, nitrogen dioxide, mold, mildew, bacteria, dust, 
chlorine, fungi, volatile organic compounds, viruses, and noxious or 
toxic gasses from a user's environment; (2) the use of ozone is more 
effective in cleaning or purifying indoor air than air cleaning 
products that use filters; (3) the Panda 200 does not create harmful by 
products; and (4) when used as directed, the Panda 200 prevents or 
provides relief from allergies, asthma, and viruses.
    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 prohibits respondents from 
representing any air cleaning product's ability to eliminate, remove, 
clear, or clean any indoor air pollutant or any quantity of indoor air 
pollutants from a user's environment, unless respondents possess 
competent and reliable scientific evidence that substantiates the 
representation.
    Similarly, Part II of the proposed order prohibits respondents from 
claiming that (1) the use of ozone is more effective in cleaning or 
purifying indoor air than other air cleaning methods, (2) any air 
cleaning product does not create harmful by-products, or (3) when used 
as directed, any air cleaning product prevents or provides relief from 
allergies, asthma, and viruses, unless respondents possess competent 
and reliable scientific evidence that substantiates the representation.
    As fencing-in relief, Part III of the proposed order provides that 
if respondents represent the efficacy, performance, or health-related 
benefit of any air cleaning product, respondents must possess competent 
and reliable evidence that substantiates the representation.
    The proposed order also requires respondents to maintain materials 
relied upon to substantiate claims covered by the order; to notify the 
Commission of any change in the corporate structure that might affect 
compliance with the order; to notify the Commission of certain changes 
in the business or employment of the named individual respondents; to 
provide a copy of the consent agreement to their employees involved in 
the preparation and placement of respondents' advertisements, or in 
communication with respondents' customers or prospective customers; to 
distribute a copy of the order to their present distributors or 
retailers of their ozone generators; 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 

[[Page 35032]]
the agreement and proposed order or to modify in any way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 95-16447 Filed 7-3-95; 8:45 am]
BILLING CODE 6750-01-M