Federal Trade Commission v. Good-Grape Co.
| Decision Date | 10 November 1930 |
| Docket Number | No. 5349.,5349. |
| Citation | 45 F.2d 70 |
| Parties | FEDERAL TRADE COMMISSION v. GOOD-GRAPE CO. |
| Court | U.S. Court of Appeals — Sixth Circuit |
E. J. Hornibrook and J. T. Clark, both of Washington, D. C. (Robt. E. Healy, Adrien F. Busick, James W. Nichol, and E. J. Hornibrook, all of Washington, D. C., on the brief), for petitioner.
James L. Fort, of Washington, D. C. (Bloodworth & Fort, of Washington, D. C., Hauer, Spraul, Topmoeller & Arnold, of Cincinnati, Ohio, on the brief), for respondent.
Before MOORMAN, HICKS, and HICKENLOOPER, Circuit Judges.
This is an original proceeding instituted by the Federal Trade Commission against the Good-Grape Company to enforce a modified order1 issued by the Commission which, with the original order2 it modifies, is set out in the margin. There is no pretense that respondent obeyed the order. The contention is that it was invalid. Respondent's business consisted of manufacturing concentrates and selling them to bottlers. The bottlers produced therefrom and bottled a soft drink beverage which they sold to retailers and which in turn was dispensed to the consuming public. The complaint of the Commission was that respondent violated section 5 of the Act of 1914, c. 311 (U. S. Code, tit. 15, c. 2, § 45 15 USCA § 45), by causing the beverage to be manufactured and sold in interstate commerce under the name, brand, or label "Good-Grape" and by advertising this product as "Good-Grape," "Grape," and "Fruit of the Vine," and by otherwise falsely asserting and implying that it was composed wholly or in part of the natural juice of the grape. The complaint further charged that the beverage produced from the concentrates manufactured by respondent was sold in interstate commerce in competition with grape juice and other grape products and imitation grape products. These allegations are sustained by findings of fact which are in turn supported by evidence, and are conclusive. U. S. Code, tit. 15, c. 2, § 45, par. 3 (15 US CA § 45, third paragraph).
The Commission also found that, although the beverage produced from the concentrates sold by respondent was only an imitation grape product, artificially colored and flavored and not made from the natural fruit of the grape, yet the respondent extensively advertised it by means of publications, circulating in interstate commerce and otherwise, as the juice from the natural fruit of the grape; that respondent designed and approved the labels attached to the bottles containing the beverage; that there appeared on some of these labels the name "Good-Grape," and upon others, in addition to this hyphenated word, the phrase or slogan "Fruit of the Vine"; that prior to June, 1923, respondent furnished to bottlers crowns or bottle caps bearing the name "Good-Grape"; that since that date it had furnished crowns or caps bearing the name "Good-Grape" and in addition thereto the phrase "Imitation, artificially colored and flavored" in very small letters, difficult to read; that the bottles used were designed and approved by respondent and had the name "Good-Grape" blown therein, and that, except upon the bottle crowns or caps as indicated, respondent made no reference in its advertising to the fact that the beverage was an imitation, artificially colored and flavored.
These findings are supported by the evidence. The weight to be given to the facts and circumstances as well as the inference to be reasonably drawn therefrom was for the Commission. Fed. Tr. Comm. v. Pac. Paper Ass'n, 273 U. S. 52, 63, 47 S. Ct. 255, 71 L. Ed. 534. The open question is whether the methods and practices of respondent amount to unfair competition to the detriment of a particular and substantial public interest. Fed. Tr. Comm. v. Klesner, 280 U. S. 19, 28, 50 S. Ct. 1, 74 L. Ed. 138; Fed. Tr. Comm. v. Gratz, 253 U. S. 421, 427, 40 S. Ct. 572, 64 L. Ed. 993; Fed. Tr. Comm. v. Balme, 23 F.(2d) 615, 619 (C. C. A. 2).
This court holds that such methods and practices are unfair to both classes of respondent's competitors, to wit, those who sell genuine grape juice and those who frankly sell imitations thereof but mark their goods truthfully. They necessarily divert or tend to divert the trade and injure the business of such competitors. Fed. Tr. Comm. v. Winstead Co., 258 U. S. 483, 493, 42 S. Ct. 384, 66 L. Ed. 729; Procter & Gamble Co. v. Fed. Tr. Comm., 11 F.(2d) 47, 48 (C. C. A. 6); Fed. Tr. Comm. v. Balme, supra; Guar. Vet. Co. v. Fed. Tr. Comm., 285 F. 853, 860 (C. C. A. 2); Royal Bak. Powd. Co. v. Fed. Tr. Comm., 281 F. 744, 752 (C. C. A. 2); Fed. Tr. Comm. v. Kay, 35 F.(2d) 160, 162 (C. C. A. 7); Amer. Tob. Co. v. Fed. Tr. Comm., 9 F.(2d) 570, 575 (C. C. A. 2). It serves no worthwhile purpose to elaborate upon these cases. It is enough that they establish the position taken. In this particular the case presents an aspect entirely different from that shown in Raladam Co. v. Commission (C. C. A.) 42 F.(2d) 430, or in Berkey & Gay Fur. Co. v. Commission (C. C. A.) 42 F.(2d) 427, both decided June 28, 1930.
It is equally clear that a substantial public interest is involved. The beverage is sold for human consumption and ordinarily for immediate use, the labeled cap or crown having been first removed. The average purchaser makes for himself only a casual if any examination of the real character of this five-cent drink. About seventy million bottles of it were consumed in each of the years 1923 and 1924.
Respondent insists that the Commission erroneously declined to permit it to show that in the interval between the issuance of the original and the modified order it had adopted a new formula and was using an amount of grape juice substantially greater than that originally used. It is noted that respondent did not reveal to the Commission or to this court the real amount of juice used in the new formula. However, the Commission was authorized to issue the modified order upon the original record (Fed. Tr. Comm. v. Kay, supra), and the allegation that respondent has in the meantime changed its practice did not strip the Commission of this power. Guar. Vet. Co. v. Fed. Tr. Comm., supra; Fox Film Corp. v. Fed. Tr. Comm., 296 F. 353, 357 (C. C. A. 2); Moir v. Fed. Tr. Comm., 12...
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