[Federal Register Volume 61, Number 182 (Wednesday, September 18, 1996)]
[Notices]
[Pages 49143-49145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23923]
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FEDERAL TRADE COMMISSION
[File No. D.9268]
New Balance Athletic Shoe, Inc.; 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 or deceptive acts or practices and unfair methods of
competition, this consent agreement, accepted subject to final
Commission approval, would prohibit, among other things, the
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Boston-based athletic footwear manufacturer from misrepresenting, in
any manner, that footwear made wholly abroad was made in the United
States, and the quantity of footwear it exports. The agreement resolves
charges that New Balance misrepresented that all of its athletic
footwear sold in the United States is made in the United States when a
substantial amount is made wholly abroad. The Commission also alleged
that New Balance falsely represented that it annually exports to Japan
hundreds of thousands of pairs of athletic shoes that are American
made.
DATES: Comments must be received on or before November 18, 1996.
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: Elaine D. Kolish, Federal Trade
Commission, S-4302, 6th & Pennsylvania Ave, NW, Washington, DC 20580.
(202) 326-3042; C. Steven Baker, Chicago Regional Office, Federal Trade
Commission, 55 East Monroe Street, Suite 1437, Chicago, Illinois 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 3.25 of
the Commission's Rules of Practice (16 CFR 3.25), 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 agreement herein, by and between New Balance Athletic Shoe,
Inc., hereinafter sometimes referred to as respondent, and its
attorneys, and counsel for the Federal Trade Commission, is entered
into in accordance with the Commission's Rules governing consent order
procedures. In accordance herewith, the parties hereby agree that:
1. Respondent New Balance Athletic Shoe, Inc., is a Massachusetts
corporation with its principal office and place of business at 61 North
Beacon Street, Boston, Massachusetts. Respondent is a U.S.
manufacturer, importer, and seller of footwear, with manufacturing
facilities in Lawrence and Boston, Massachusetts, and Norridgewock and
Skowhegan, Maine.
2. Respondent has been served with a copy of the complaint issued
by the Federal Trade Commission charging respondent with violations of
Section 5(a) of the Federal Trade Commission Act, and has filed an
answer to said complaint denying said charges.
3. Respondent admits all the jurisdictional facts set forth in the
Commission's complaint in this proceeding.
4. 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.
5. 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 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 respondent,
in which event it will take such action as it may consider appropriate,
or issue and serve its decision in disposition of the proceeding.
6. This agreement is for settlement purposes only and does not
constitute an admission by respondent that the law has been violated as
alleged in the complaint or that the facts as alleged in the complaint,
other than the jurisdictional facts, are true.
7. 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. 3.25(f) of the
Commission's Rules, the Commission may without further notice to
respondent, (1) issue 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 respondent's address as stated in
this agreement shall constitute service. Respondent waives any right it
might have to any other manner of service. The complaint and amended
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.
8. 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. 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
I
It is ordered that respondent, New Balance Athletic Shoe, 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 footwear 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:
1. That footwear made wholly abroad is made in the United States.
2. The quantity of footwear it exports.
II
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.
III
It is further ordered that respondent shall distribute a copy of
this Order to
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each of its operating divisions and to each of its officers, agents,
representatives, or employees engaged in the preparation or placement
of advertisements, promotional materials, product labels or other sales
materials covered by this Order.
IV
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 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.
V
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.
VI
It is further ordered that this Order will terminate twenty (20)
years from the date it becomes final, or twenty (20) years from the
most recent date that the United States or the Federal Trade Commission
files a complaint (with or without an accompanying consent decree) in
federal court alleging any violation of the Order, whichever comes
later;
Provided, However, that the filing of such a complaint will not
affect the duration of:
A. Any paragraph in this Order that terminates in less than twenty
(20) years;
B. This Order's application to any respondent that is not named as
a defendant in such complaint; and
C. This Order if such complaint is filed after the Order has
terminated pursuant to this paragraph.
Provided Further, that if such complaint is dismissed or a federal
court rules that the respondent did not violate any provision of the
Order, and the dismissal or ruling is either not appealed or upheld on
appeal, then the Order will terminate according to this paragraph as
though the complaint was never filed, except that the Order will not
terminate between the date such complaint is filed and the later of the
deadline for appealing such dismissal or ruling and the date such
dismissal or ruling is upheld on appeal.
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 respondent New Balance
Athletic Shoe, Inc.
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 advertising and promotional practices related
to the sale of athletic shoes. The Commission's amended complaint,
issued on December 18, 1995, charges that respondent falsely
represented that all of its athletic shoes sold in the United States
are made in the United States, and that it annually exports to Japan
hundreds of thousands of pairs of athletic shoes that are made in the
United States.
The proposed consent order contains a provision which is designed
to remedy the advertising violation charges and to prevent the
respondent from engaging in similar acts and practices in the future.
Part I of the proposed order prohibits the respondent from
misrepresenting: (1) that footwear made wholly abroad is made in the
United States; and (2) the quantity of footwear it exports. Part II
requires the respondent to maintain materials relied upon in
disseminating any representation covered by the order. Part III of the
proposed order requires the respondent to distribute copies of the
order to certain company officials and employees. Part IV of the
proposed order requires the respondent to notify the Commission of any
change in the corporation which may affect compliance obligations under
the order. Part V of the proposed order requires the respondent to file
one or more compliance reports. Part VI of the proposed order is a
provision whereby the order, absent certain circumstances, terminates
twenty years from the date of issuance.
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.
Donald S. Clark,
Secretary.
Dissenting Statement of Commissioner Roscoe B. Starek, III in the
Matter of New Balance Athletic Shoe, Inc.
I continue to object to the approach that the majority of the
Commission has elected in this litigation. The settlement is hardly
surprising in light of the Commission's decision to drop the most
important allegation in this matter--involving unqualified ``Made in
USA'' claims for products assembled in the United States from foreign
and domestic components--in favor of an eviscerated complaint and
notice order addressing only narrow claims about exported footwear and
footwear made wholly abroad. For the reasons stated in my dissent from
the Commission's decision to narrow the complaint and notice order, I
again dissent. See New Balance Athletic Shoe, Inc., Docket No. 9268
(Dissenting Statement of Commissioner Roscoe B. Starek, III).
[FR Doc. 96-23923 Filed 9-17-96; 8:45 am]
BILLING CODE 6750-01-P