Continental Wax Corporation v. FTC, 249

• Decision Date: 16 April 1964
• Docket Number: No. 249,Docket 28259.,249
• Parties: CONTINENTAL WAX CORPORATION, a corporation, and Lee Hall, Herbert Heller and Jack Heller, individually and as officers of said corporation, Petitioners, v. FEDERAL TRADE COMMISSION, Respondent.
• Court: U.S. Court of Appeals — Second Circuit

330 F.2d 475 (1964)

CONTINENTAL WAX CORPORATION, a corporation, and Lee Hall, Herbert Heller and Jack Heller, individually and as officers of said corporation, Petitioners, v. FEDERAL TRADE COMMISSION, Respondent.

No. 249, Docket 28259.

United States Court of Appeals Second Circuit.

Argued January 31, 1964.

Decided April 16, 1964.

Bass & Friend, New York City (Milton A. Bass, New York City, of counsel), for petitioners.

James McI. Henderson, Gen. Counsel, J. B. Truly, Asst. Gen. Counsel, Harold A. Kennedy, Richard Whittington Whitlock, Attys., Federal Trade Commission, for respondent.

Before LUMBARD, Chief Judge, and WATERMAN and MARSHALL, Circuit Judges.

WATERMAN, Circuit Judge.

Petitioners, the Continental Wax Corporation and three of its officers, were found by the Federal Trade Commission to have violated Section 5(a) (1) of the Federal Trade Commission Act, 15 U.S.C. § 45(a) (1), by having in a misleading fashion falsely represented the performance characteristics of a liquid household floor wax which they produce and market. More specifically, the Commission found that petitioners had falsely represented in their advertising and in printed statements on their product that their floor wax, sold under the trade name of "Continental Six Month Floor Wax,"¹ would last as an effective home floor covering for a period of six months. The final order issued by the Commission required that petitioners cease and desist from representing that their floor wax would last for six months, or for any other definite period of time, in excess of the period for which their wax was effective, and prohibited them from designating or describing their product by the term "six months" or any other term denoting a definite period in excess of their wax's effective life.

Petitioners have applied to this court for a review of the decision and order of the Commission, claiming that the Commission erred by: (1) making findings which were contrary to the evidence; (2) fashioning an order which covered petitioners' trade name although the complaint issued against petitioners did not place in issue the legitimacy of that name; and (3) enjoining petitioners from using their trade name instead of permitting the name to be retained but ordering it qualified by appropriate language. Despite these claims of error our review of the record of the proceedings below convinces us that the Commission's decision and order should be upheld without any modification.

In contesting the sufficiency of the evidence underlying the Commission's decision, petitioners have not effectively disputed the Commission's determination of the proper meaning to be accorded their advertising, but have chosen to ground their argument almost exclusively on a claim that the evidence failed to establish the inability of their wax to perform as advertised. In deciding what representations were conveyed by petitioners' advertising statements the Commission was, of course, making a finding of fact, Kalwajtys v. F. T. C., 237 F.2d 654, 656, 65 A.L.R.2d 220 (7 Cir. 1956), cert. denied, 352 U.S. 1025, 77 S.Ct. 591, 1 L.Ed.2d 597 (1957), and that finding, like any other factual determination by the Commission, is to be regarded as conclusive if supported by substantial evidence upon the record considered as a whole. Federal Trade Commission Act, § 5(c), 15 U.S.C. § 45(c). Moreover, the Commission in interpreting advertisements may properly consider the over-all impression those advertisements make on the public, Country Tweeds, Inc. v. F. T. C., 326 F.2d 144, 148 (2 Cir. 1964); Murray Space Shoe Corp. v. F. T. C., 304 F.2d 270 (2 Cir. 1962), and may construe against the advertiser statements susceptible of both a misleading and a truthful interpretation. United States v. Ninety-Five Barrels of Vinegar, etc., 265 U.S. 438, 443, 44 S.Ct. 529, 68 L.Ed. 1094 (1924); Country Tweeds, Inc. v. F. T. C., supra, 326 F.2d at 148; Murray Space Shoe Corp. v. F. T. C., supra, 304 F.2d at 272.

The Commission concluded that petitioners' advertising statements, as understood by the consuming public, embraced more than a claim that some of petitioners' wax would be left sticking to a floor at the end of a six month period, and that they conveyed the impression that petitioners' product would last and be effective for six months for all of the purposes for which floor wax is ordinarily used by the consumer, "including scuff, dirt, and wear resistance; beauty; appearance; gloss; and protection." We agree that this was a fair appraisal of the proper meaning to be attached to petitioners' advertisements. A trusting housewife who is told that she will not have to reapply a waxing product for half a year is entitled to conclude not only that the product will cover her floor with a film of wax for six months, but also that during that period she will not have to remove and replace that film because it has become so dirty, dull and scuffed as to be unsightly.

As to the quality of petitioners' product, the record as a whole more than amply supports the Commission's conclusion that Six Month Floor Wax is incapable of measuring up to the representations which petitioners have used in marketing it. Evidence in support of the complaint consisted of the results of numerous tests to which petitioners' wax product had been subjected. We need not detail all of the test reports here, since the Commission reviewed and summarized them below. Suffice it to say that the tests ranged from those tests designed to elicit a subjective impression of the wax's wearing properties from housewives and other persons experienced in evaluating floor coverings, to those tests calculated to measure accurately the rate at which petitioners' wax would wear off a trod-upon floor through periodically subjecting to geiger counter checks a test floor which had been waxed with a sample of petitioners' product that had been impregnated with a radioactive agent. The results of all of these tests pointed unmistakably to the conclusion that petitioners' wax would not last and would not be effective for a period of six months.

While petitioners express no serious quarrel with the conclusions the Commission has drawn from most of the test reports, and indeed admit in their brief that they do not claim "the same appearance for a floor after two or three months of wear," petitioners do maintain that one of the radioactive isotope tests noted above indicated that their floor wax would at least provide "protection" for six months. Even if we were convinced, contrary to the view which we have already expressed, that the single element of protection can be sensibly separated from that of appearance in evaluating the lasting properties of a floor wax, we are unable to agree with petitioners that the Commission's findings on this issue lacked substantial evidentiary support.

Petitioners strongly rely upon the results of a test conducted at petitioners' request and expense by an independent testing laboratory, which results were introduced in evidence by both complaining counsel and petitioners. In conducting the test, the testing company waxed an area of a test floor with a sample of petitioners' floor wax impregnated with radioactive Carbon 14, and the test floor was then subjected to a traffic density of about 6,000 passes per week. By taking periodic geiger counter checks of the floor and noting drops in the level of radioactivity, the conductors of the test were able to determine the rate at which the radioactive wax was wearing off the floor. The official test report indicated that after a five week period, during which the test floor was subjected to a total of 40,000 passes,² the test was discontinued because the radioactive count for the floor was reaching the normal background level. The president of the testing laboratory testified that this meant that at the end of the five week period and after the 40,000 passes more than 96 per cent of the wax had been worn away.³ Though this witness also stated that the floor, during these five weeks, had been subjected to the equivalent of six months' to one year's normal home wear, we think that the Commission could properly reject his testimony as being contradicted by the actual figures in the official test report which the witness himself had certified. The report estimated normal floor traffic in an average home at about 600 passes per day, an estimate which indicates that a total of 40,000 passes would...