[Federal Register Volume 62, Number 221 (Monday, November 17, 1997)]
[Rules and Regulations]
[Pages 61225-61226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30111]


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FEDERAL TRADE COMMISSION

16 CFR Part 403


Deceptive Use of ``Leakproof,'' ``Guaranteed Leakproof,'' Etc., 
As Descriptive of Dry Cell Batteries

AGENCY: Federal Trade Commission.

ACTION: Final rule; removal.

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SUMMARY: The Federal Trade Commission (the ``FTC'' or ``Commission'') 
announces the repeal of the Trade Regulation Rule on Deceptive Use of 
``Leakproof,'' ``Guaranteed Leakproof,'' Etc., as Descriptive of Dry 
Cell Batteries (``the Dry Cell Battery Rule'' or ``the Rule''), 16 CFR 
Part 403. The rulemaking record, changes in industry practice, and 
general voluntary compliance by the industry with the requirements of 
an American National Standards Institute standard for dry cell 
batteries, which has provisions similar to the Rule's, indicate that 
the Dry Cell Battery Rule is no longer necessary or in the public 
interest and should be repealed. This document contains a Statement of 
Basis and Purpose for repeal of the rule.

EFFECTIVE DATE: November 17, 1997.

ADDRESSES: Requests for copies of the Statement of Basis and Purpose 
should be sent to the Public Reference Branch, Room 130, Federal Trade 
Commission, Sixth Street and Pennsylvania Ave., N.W., Washington, DC 
20580.

FOR FURTHER INFORMATION CONTACT:
Neil Blickman, Attorney, Federal Trade Commission, Bureau of Consumer 
Protection, Division of Enforcement, Sixth Street and Pennsylvania 
Ave., N.W., Washington, DC 20580, (202) 326-3038.

SUPPLEMENTARY INFORMATION: 

Statement of Basis and Purpose

I. Background

    On May 20, 1964, the Commission promulgated a trade regulation rule 
that states that in connection with the sale of dry cell batteries in 
commerce, the use of the word ``leakproof,'' the term ``guaranteed 
leakproof,'' or any other word or term of similar import, or any 
abbreviation thereof, in advertising, labeling, marking or otherwise, 
as descriptive of dry cell batteries, constitutes an unfair method of 
competition and an unfair or deceptive act or practice in violation of 
section 5 of the FTC Act (16 CFR 403.4). This rule was based on the 
Commission's finding that, despite efforts by dry cell battery 
manufacturers to eliminate electrolyte leakage, battery leakage and 
damage therefrom occurs from the use to which consumers ordinarily 
subject dry cell batteries.
    The rule provides that manufacturers or marketers are not 
prohibited from offering or furnishing guarantees that provide for 
restitution in the event of damage from battery leakage, provided no 
representation is made, directly or indirectly, that dry cell batteries 
will not leak (16 CFR 403.5). The Rule further provides that in the 
event any person develops a new dry cell battery that he believes is in 
fact leakproof, he may apply to the Commission for an amendment to the 
rule, or other appropriate relief (16 CFR 403.6).
    The Commission conducted an informal review of industry practices 
by examining the advertising, labeling and marketing of dry cell 
batteries available for retail sale. This review revealed no 
representations that the batteries were leakproof. The Commission's 
review, therefore, indicated general compliance with the Rule's 
provisions. Moreover, the Commission has no record of receiving any 
complaints regarding non-compliance with the Rule, or of initiating any 
law enforcement actions alleging violations of the Rule.
    Additionally, the Commission's review indicated general voluntary 
compliance by the industry with the requirements of American National 
Standards Institute (``ANSI'') Standard C18.1M-1992 Dry Cells and 
Batteries--Specifications. The ANSI standard contains specifications 
for dry cell batteries, and requirements for labeling the products and 
their packages. The ANSI standard requires the following information to 
be printed on the outside of each battery (when necessary, the standard 
permits some of this information to be applied to the unit package): 
(1) The name or trade name of the manufacturer; (2) the ANSI/National 
Electronic Distributors Association number, or some other identifying 
designation; (3) year and month, week or day of manufacture, which may 
be a code, or the expiration of a guarantee period, in a clear readable 
form; (4) the nominal voltage; (5) terminal polarity; and (6) warnings 
or cautionary notes where applicable. See section 8.1 of ANSI Standard 
C18.1M-1992.
    The ANSI standard recommends that dry cell battery manufacturers 
and sellers include on their products and packages several battery user 
guidelines and warnings that are relevant to this proceeding. They are: 
(1) Although batteries basically are trouble-free products, conditions 
of abuse or misuse can cause leakage; (2) failure to replace all 
batteries in a unit at the same time may result in battery leakage; (3) 
mixing batteries of various chemical systems, ages, applications, types 
or manufacturers may result in poor device performance and battery 
leakage; (4) attempting to recharge a non-rechargeable battery is 
unsafe because it could cause leakage; (5) reverse insertion of 
batteries may cause charging, which may result in leakage; (6) devices 
that operate on either household current or battery power may subject 
batteries to a charging current, which may cause leakage; (7) do not 
store batteries or battery-powered equipment in high-temperature areas;

[[Page 61226]]

and (8) do not dispose of batteries in fire. See section 7.5 of ANSI 
Standard C18.1M-1992. At a minimum, each dry cell battery and battery 
package inspected by Commission staff informed consumers that the 
batteries may explode or leak if recharged, inserted improperly, 
disposed of in fire, or mixed with different battery types.
    Based on the foregoing, on March 25, 1997, the Commission published 
an Advance Notice of Proposed Rulemaking (``ANPR'') tentatively 
concluding that industry members that comply with the ANSI standard's 
point-of-sale disclosure requirements also comply with the Rule. 
Accordingly, the Commission tentatively determined that the Dry Cell 
Battery Rule is no longer necessary, and sought comments on the 
proposed repeal of the Rule until April 24, 1997. 62 FR 14050.
    The only comment received in response to the ANPR was submitted by 
the National Electrical Manufacturers Association (``NEMA''), a trade 
association representing all major U.S. manufacturers of dry cell 
batteries.\1\ NEMA supported repeal of the Commission's Dry Cell 
Battery Rule, indicating that it has been superseded effectively in the 
marketplace by ANSI Standard C18.1M-1992.\2\
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    \1\ The comment submitted in response to the ANPR was placed on 
the public record, and filed as document number B21969700001. In 
today's notice, the comment is cited as NEMA, #1.
    \2\ NEMA, #1.
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    After reviewing the comment submitted in response to the ANPR, and 
in light of ANSI Standard C18.1M-1992, on August 19, 1997, pursuant to 
the Federal Trade Commission Act (``FTC Act''), 15 U.S.C. 41-58, and 
the Administrative Procedure Act, 5 U.S.C. 551-59, 701-06, the 
Commission published a Notice of Proposed Rulemaking (``NPR'') 
initiating a proceeding to consider whether the Dry Cell Battery Rule 
should be repealed or remain in effect (62 FR 44099).\3\ This 
rulemaking proceeding was undertaken as part of the Commission's 
ongoing program of evaluating trade regulation rules and industry 
guides to ascertain their effectiveness, impact, cost and need. This 
proceeding also responded to President Clinton's National Regulatory 
Reinvention Initiative, which, among other things, urges agencies to 
eliminate obsolete or unnecessary regulations. In the NPR, the 
Commission announced its determination, pursuant to 16 CFR 1.20, to use 
expedited procedures in this proceeding.\4\ The NPR comment period 
closed on September 18, 1997. The Commission received no comments and 
no requests to hold an informal hearing.
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    \3\ In accordance with section 18 of the FTC Act, 15 U.S.C. 57a, 
the Commission submitted the NPR to the Chairman of the Committee on 
Commerce, Science, and Transportation, United States Senate, and the 
Chairman of the Committee on Commerce, United States House of 
Representatives, 30 days prior to its publication in the Federal 
Register.
    \4\ These procedures included: publishing a Notice of Proposed 
Rulemaking; soliciting written comments on the Commission's proposal 
to repeal the Rule; holding an informal hearing, if requested by 
interested parties; receiving a final recommendation from Commission 
staff; and announcing final Commission action in the Federal 
Register.
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II. Basis for Repeal of Rule

    The Commission has decided to repeal the Dry Cell Battery Rule for 
the reasons discussed in the NPR. In sum, the Commission has reviewed 
the rulemaking record and determined that the practices that brought 
about the Rule, labeling or advertising dry cell batteries as being 
``leakproof,'' are no longer common industry practices. In addition, 
general voluntary compliance by the industry with the requirements of 
ANSI Standard C18.1M-1992 Dry Cells and Batteries--Specifications 
assures compliance with the Rule. Although repealing the Dry Cell 
Battery Rule would eliminate the Commission's ability to obtain civil 
penalties for any future misrepresentations that dry cell batteries are 
leakproof, the Commission has determined that, in these circumstances, 
repealing the Rule would not impair the Commission's ability to act 
effectively. Any significant problems that might arise could be 
addressed on a case-by-case basis under section 5 of the FTC Act, 15 
U.S.C. 45, either administratively or through section 13(b) actions, 15 
U.S.C. 53(b), filed in federal district court. Prosecuting serious 
misrepresentations in district court allows the Commission to obtain 
injunctive relief as well as equitable remedies, such as redress or 
disgorgement. Accordingly, the Commission hereby announces the repeal 
of the Dry Cell Battery Rule.

III. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-12, requires 
an analysis of the anticipated impact of the repeal of the rule on 
small businesses. The reasons for repeal of the Rule have been 
explained in this notice. Repeal of the rule would appear to have 
little or no effect on small businesses. Moreover, the Commission is 
not aware of any existing federal laws or regulations that would 
conflict with repeal of the Dry Cell Battery Rule. Further, no comments 
suggested any adverse effect on small business from repeal. For these 
reasons, the Commission certifies, pursaunt to section 605 of the RFA, 
5 U.S.C. 605, that this action will not have a significant economic 
impact on a substantial number of small entities.

IV. Paperwork Reduction Act

    The Dry Cell Battery Rule imposes no third-party disclosure 
requirements that constitute ``information collection requirements'' 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Since 1964, 
therefore, the Rule has imposed no paperwork burdens on marketers of 
dry cell batteries. In any event, repeal of the Dry Cell Battery Rule 
will permanently eliminate any burdens on the public imposed by the 
Rule.

List of Subjects in 16 CFR Part 403

    Advertising, Dry cell batteries, Labeling, Trade practices.

PART 403--[REMOVED]

    The Commission, under authority of Section 18 of the Federal Trade 
Commission Act, 15 U.S.C. 57a, amends chapter I of title 16 of the Code 
of Federal Regulations by removing Part 403.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 97-30111 Filed 11-14-97; 8:45 am]
BILLING CODE 6750-01-M