[Federal Register Volume 84, Number 92 (Monday, May 13, 2019)]
[Rules and Regulations]
[Pages 20776-20777]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09745]


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FEDERAL TRADE COMMISSION

16 CFR Part 18


Guides for the Nursery Industry

AGENCY: Federal Trade Commission.

ACTION: Rescission of the Guides for the Nursery Industry.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') has 
completed its review of the Guides for the Nursery Industry (``Nursery 
Guides'' or ``Guides'') as part of its systematic review of all current 
Commission regulations and guides. Pursuant to that review, the 
Commission now rescinds the Guides.

DATES: The rescission is effective June 12, 2019.

ADDRESSES: Copies of this document are available on the Commission's 
website, www.ftc.gov.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, (202) 326-2889, 
Attorney, Division of Enforcement, Bureau of Consumer Protection, 
Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 
20580.

SUPPLEMENTARY INFORMATION:

I. Background

    The Commission issued the Guides for the Nursery Industry in 
1979.\1\ These Guides address various sales claims for outdoor plants, 
including representations regarding quantity, size, grade, kind, 
species, age, maturity, condition, vigor, hardiness, growth ability, 
price, and origin or place where grown. The Commission amended the 
Guides in 1994 to update legal terminology, and again in 2007 to make a 
technical correction.\2\
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    \1\ The Commission issued the Guides in 1979 (44 FR 11176 (Feb. 
27, 1979)) to replace trade practice rules for the nursery industry 
(16 CFR part 34) first promulgated in the 1950s (23 FR 4803 (June 
28, 1958)). The Guides were intended to help marketers avoid making 
claims that are unfair or deceptive under Section 5 of the FTC Act, 
15 U.S.C. 45. Industry guides, such as the Nursery Guides, are 
administrative interpretations of laws administered by the 
Commission. They do not have the force of law and are not 
independently enforceable. Failure to follow industry guides may 
result, however, in enforcement action under the FTC Act, 15 U.S.C. 
45. In any such action, the Commission must prove that the act or 
practice at issue is unfair or deceptive in violation of Section 5 
of the FTC Act.
    \2\ See 59 FR 64546 (Dec. 14, 1994); 72 FR 901 (Jan. 9, 2007).
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    The Commission reviews its rules and guides periodically to seek 
information about their costs and benefits to consumers and businesses, 
regulatory and economic impact, and general effectiveness in protecting 
consumers and helping industry avoid deceptive claims. These reviews 
assist the Commission in identifying rules and guides that warrant 
modification or rescission.
    On February 22, 2018, the Commission initiated its scheduled 
regulatory review of the Nursery Guides and solicited public comment on 
several issues.\3\ Specifically, the Commission sought input on the 
continuing need for the Guides; their economic impact; possible 
conflict between the Guides and state, local, federal, or international 
laws; and the effect of any technological, economic, environmental, or 
other industry changes. The Commission also solicited comment on issues 
specific to the Guides, such as whether the Commission should update 
plant classification references. In response, the Commission received 
one comment from the National Federation of Independent Business 
(``NFIB''). NFIB argued the Commission should rescind the Guides 
because they are an unnecessary federal regulatory burden. NFIB also 
contended that regulation or guidance concerning the nursery business 
is more properly conducted at the state, rather than federal, level.
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    \3\ See 83 FR 7643 (Feb. 22, 2018).
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    Based on the lack of comments, as well as the paucity of consumer 
complaints and the lack of need for law enforcement action over the 
past two decades, on September 10, 2018 (83 FR 45582), the Commission 
published a Notice of Proposed Rulemaking (``NPRM'') seeking comments 
on a proposed rescission of the Guides. The Commission stated that the 
Guides no longer appear necessary, and thus serve little purpose to 
industry or consumers. Specifically, the types of practices detailed in 
the Guides do not appear to be prevalent in the nursery industry; 
little evidence exists that industry members currently use the Guides 
to help avoid deceptive practices; and rescission will have no impact 
on the FTC's ability to address unfair and deceptive practices in the 
nursery industry.

II. Comments Received

    In response to the proposed rescission notice, the Commission 
received five comments, offering conflicting opinions.\4\ The National 
Federation of Independent Business (``NFIB''), which had commented on 
the initial Notice, supported the proposed rescission, commenting that 
``federal agencies should refrain from imposing unwarranted burdens on 
the American people and revoke unnecessary regulation.'' AmericanHort, 
an industry association representing nursery growers, greenhouses, and 
other garden retailers, supported retaining the Guides but also noted 
that ``the overall need for the Guides has perhaps diminished somewhat 
based on the general evolution of consumer protection mechanisms in our 
society.''
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    \4\ The comments, which can be found at https://www.ftc.gov/policy/public-comments/2018/09/initiative-770, included AmericanHort 
(#00007), NFIB (Nat'l Fed'n of Independent Business) (#00005), 
Lerner (#00004), Smith (#00003), and Harrod (#00002).
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    Three individual commenters opposed rescinding the Guides. 
Commenter Harrod argued that, ``due to the dishonest nature of some 
people,'' the Guides will always be needed. The commenter also asserted 
that rescission would imply that it is ``now okay to deceive people to 
make money.'' Similarly, commenter Lerner explained that the ``average 
nursery consumer lacks the expertise to identify species of plants'' 
and suggested the lack of complaints may be due to the Guides' 
effectiveness.\5\
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    \5\ Commenter Smith also opposed rescission without elaboration.

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[[Page 20777]]

    Although AmericanHort downplayed the Guides' overall necessity, it 
singled out the wild plant guidance (16 CFR 18.6) as particularly 
important. That section indicates that marketers should not sell plants 
collected from the wild without disclosing that fact.\6\ The provision 
further advises that nurseries may identify plants ``propagated'' from 
lawfully-collected wild plants as ``nursery-propagated.'' AmericanHort 
explained that, while this guidance involves a relatively narrow issue, 
it is a ``critical element of industry guidance'' developed following 
negotiations between industry and conservation groups in the early 
1990s. AmericanHort expressed concern this guidance would be lost if 
the Commission discontinues the Guides.\7\
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    \6\ Section 18.6 (``Plants collected from the wild state'') 
reads: ``It is an unfair or deceptive act or practice to sell, offer 
for sale, or distribute industry products collected from the wild 
state without disclosing that they were collected from the wild 
state; provided, however, that plants propagated in nurseries from 
plants lawfully collected from the wild state may be designated as 
`nursery-propagated.' ''
    \7\ Harrod, who supported retention, added that wild plants 
``rarely prosper for a prolonged period of time.''
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III. Rescission of the Guides

    The Commission has decided to rescind the Guides because they no 
longer appear necessary. In reaching this conclusion, the Commission 
has considered the comments received, the prevalence of practices 
covered by the Guides, the industry's use of the Guides, and the 
Commission's ability to address deceptive practices through enforcement 
actions or issuance of other educational materials in the Guides' 
absence. As discussed below, FTC staff can provide guidance and 
business education regarding the advertising of wild plants.
    The record indicates that the types of practices addressed in the 
Guides are not prevalent in the nursery industry. The Guides focus on 
misrepresentations about species, size, rate of growth, and other plant 
characteristics. Neither the comments nor consumer complaints provide 
evidence that these types of deceptive practices are prevalent. Indeed, 
as discussed in the NPRM, nearly all recent complaints received by the 
Commission regarding plant sales involve online plant orders that were 
either dormant or dead upon arrival, incomplete, not delivered in the 
time promised (or at all), or not refunded upon request.\8\
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    \8\ The Guides address some of the practices identified in the 
complaints indirectly or in limited ways. For instance, Sec.  
18.1(c)(2) states it is deceptive to represent ``[t]hat industry 
products are healthy . . . when such is not the fact.'' In addition, 
some complaints involve incorrect orders, which are covered by Sec.  
18.1(a). The Commission sees no need to maintain the Guides to 
address these limited issues and has found no basis to amend the 
Guides to address other Section 5 violations, such as the failure to 
deliver products.
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    Furthermore, with the exception of guidance on wild plants, the 
Commission lacks clear evidence that industry members currently use the 
Guides to help avoid deceptive practices. AmericanHort acknowledged 
that the need for the Guides has ``perhaps diminished'' over the years. 
As noted in the NPRM, FTC staff found no mention of the Guides on 
websites for industry associations, nurseries, or other industry 
entities.
    The Guides do not appear to add substantially to general FTC 
guidance on deceptive practices under the FTC Act.\9\ The current 
provisions focus on misrepresentations about plant characteristics and 
generally address claims that are clearly deceptive on their face, and 
thus unambiguously addressed by Section 5 of the FTC Act. In contrast, 
most of the agency's Guides address difficult implied claims, thus 
providing valuable information to help businesses avoid deception and 
substantiate claims that might otherwise lead to consumer confusion 
(e.g., the Green Guides in 16 CFR part 260). Given AmericanHort and 
Harrod's comments about the usefulness of the Guides' wild plant 
section, the FTC staff will continue to provide business guidance on 
this topic through its online Business Center, which contains plain-
language advice to help businesses understand their responsibilities 
and comply with the FTC Act.\10\ This will ensure the wild plant 
guidance remains available to industry while also giving the FTC 
flexibility to update such guidance as needed.
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    \9\ Section 5 of the FTC Act, 15 U.S.C. 45(a)(1), prohibits 
unfair or deceptive acts or practices in or affecting commerce. See 
FTC Policy Statement on Deception, appended to Cliffdale Assocs., 
Inc., 103 F.T.C. 110, 175 (1984) (``Deception Policy Statement'').
    \10\ See https://www.ftc.gov/tips-advice/business-center/guidance.
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    Finally, contrary to a few commenter suggestions, the Guides' 
rescission will not impact sellers' obligations to avoid deceptive 
practices and otherwise comply with the law, nor will it impact the 
FTC's ability to address deceptive practices in the nursery industry. 
The Guides themselves are not rules. Instead, they contain 
interpretations of how the Commission would apply the FTC Act to 
nursery practices. Therefore, their rescission has no effect on 
existing obligations. Moreover, rescission does not signal an FTC 
withdrawal from efforts to prevent deception in the labeling and 
advertising of these products. Industry members must continue to follow 
the law articulated in pertinent Commission and court decisions, both 
of which are generally applicable to all industries. Industry should 
also consult the FTC's Policy Statement on Deception for guidance, 
which describes how the Commission applies established legal principles 
to address deceptive trade practices. As stated in the Deception 
Statement, the Commission ``will find deception if there is a 
representation, omission, or practice that is likely to mislead the 
consumer acting reasonably in the circumstances, to the consumer's 
detriment.'' \11\ If the Commission determines that certain practices 
in the sale of outdoor plants are materially misleading, it can 
continue to address such practices through enforcement actions under 
Section 5 of the FTC Act.
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    \11\ Deception Policy Statement, 103 F.T.C. at 175.
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List of Subjects in 16 CFR Part 18

    Advertising, Nursery, Trade practices.

PART 18--[REMOVED]

0
For the reasons stated in the preamble, and under the authority of 15 
U.S.C. secs. 5, 6, and 18, the Federal Trade Commission amends 16 CFR 
by removing part 18.

    By direction of the Commission, Commissioners Chopra and 
Slaughter dissenting.
Julie A. Mack,
Acting Secretary.
[FR Doc. 2019-09745 Filed 5-10-19; 8:45 am]
 BILLING CODE 6750-01-P