Berkey & Gay Furniture Co. v. Federal Trade Commission

• Decision Date: 02 July 1930
• Docket Number: No. 5290-5314.,5290-5314.
• Citation: 42 F.2d 427
• Parties: BERKEY & GAY FURNITURE CO. et al. v. FEDERAL TRADE COMMISSION.
• Court: U.S. Court of Appeals — Sixth Circuit

42 F.2d 427 (1930)

BERKEY & GAY FURNITURE CO. et al. v. FEDERAL TRADE COMMISSION.

Nos. 5290-5314.

Circuit Court of Appeals, Sixth Circuit.

July 2, 1930.

S. E. Knappen and F. D. Campau, both of Grand Rapids, Mich., for petitioners.

J. M. Brinson, of Washington, D. C. (Robt. E. Healy and Martin A. Morrison, both of Washington, D. C., on the brief), for respondent.

Before MOORMAN, MACK, and HICKENLOOPER, Circuit Judges.

HICKENLOOPER, Circuit Judge.

The petitioners are manufacturers of furniture, located in the city of Grand Rapids, Mich., and distributing their products to and through dealers only. Complaint was filed before the Federal Trade Commission charging that the respondents, here petitioners, built their furniture principally of other woods and caused the same to be veneered with a thin coating of mahogany or walnut, without disclosing that such furniture was veneered; that numerous persons had been induced by such means to purchase veneered furniture in the belief that the exposed portions of such furniture were made of solid mahogany or solid walnut; and that the practices of said respondents had caused, and was causing, trade to be unfairly diverted to respondents from competitors.

The record discloses, without dispute, that the finest of all modern furniture, having exposed flat surfaces, such as tables, desks, and the like, are constructed of laminated wood, with the grains of the various layers running in different directions so as to prevent cracking and warping, and with a layer of walnut or mahogany veneer secured to the exposed surface. Indeed, such is the only practical way of constructing flat surfaces of large area, and all of the beautiful effects of matched graining may be obtained only in this manner. The practice is substantially universal. The record contains no evidence that any of the dealers to whom the present petitioners sold furniture were in any wise deceived; that the practice of such petitioners cheapens the product or affects its durability; or that any trade whatsoever was thereby diverted to such petitioners from the very few competitors who still attempted the manufacture of furniture of solid or unlaminated woods. The sole question is whether, under these circumstances, there is any evidence to support the order of the commission that the petitioners cease and desist from selling furniture, so constructed, unless such furniture be described, labeled or designated as "Veneered," or from using the word "mahogany" or the word "walnut" in advertisements, catalogues, price lists, invoices, or otherwise, in connection with the sale, or offering for sale, in interstate commerce of furniture so made, unless accompanied by the word or term "Veneered."

The record contains testimony to the effect that some retailers are accustomed to follow the invoices in tagging furniture, not only in affixing symbols to the tag indicative of cost, but also in adding the description. It is thus urged on behalf of the Commission that the petitioners must be charged with knowledge of this practice; that they are responsible for the probable results of their actions; that the labeling of furniture in this manner by the retailer has a tendency to deceive the ultimate purchaser; and that, in any event, no objection can reasonably be taken to the requirement that all manufacturers fully describe their products as and for what they truly are.

In the present case it is unnecessary to determine the elsewhere much-mooted question whether the jurisdiction of the Federal Trade Commission extends to each and all cases of insufficient or false labeling, whereby the public may be led to purchase products which may be harmful, or which are of inferior, or even simply of different, quality, construction, or ingredients, from those which it was intended to purchase, without other showing of the effect of this upon competition.¹ In such a case action by the Commission may be justified, under the terms of the act, only upon the assumption or inference that deception necessarily tends to promote unfair competition with those who are selling the true article or the genuine product called for by the false label. Compare Federal Trade Commission v. Winstead Hosiery Co., 258 U. S. 483, 42 S. Ct. 384, 66 L. Ed. 729; Masland...