Federal Trade Commission v. Co, COLGATE-PALMOLIVE

• Decision Date: 05 April 1965
• Docket Number: No. 62,COLGATE-PALMOLIVE,62
• Parties: FEDERAL TRADE COMMISSION, Petitioner, v. CO. et al
• Court: U.S. Supreme Court

380 U.S. 374

85 S.Ct. 1035

13 L.Ed.2d 904

FEDERAL TRADE COMMISSION, Petitioner,

v COLGATE-PALMOLIVE CO. et al.

No. 62.

Argued Dec. 10, 1964.

Decided April 5, 1965.

[Syllabus from pages 374-375 intentionally omitted]

Philip B. Heymann, Washington, D.C., for petitioner.

John F. Sonnett, New York City, for respondents.

Mr. Chief Justice WARREN delivered the opinion of the Court.

The basic question before us is whether it is a deceptive trade practice, prohibited by § 5 of the Federal Trade Commission Act,¹ to represent falsely that a televised test, experiment, or demonstration provides a viewer with visual proof of a product claim, regardless of whether the product claim is itself true.

The case arises out of an attempt by respondent Colgate-Palmolive Company to prove to the television public that its shaving cream, 'Rapid Shave,' out-shaves them all. Respondent Ted Bates & Company, Inc., an advertising agency, prepared for Colgate three one-minute commercials designed to show that Rapid Shave could soften even the toughness of sandpaper. Each of the commercials contained the same 'sandpaper test.' The announcer informed the audience that, 'To prove RAPID SHAVE'S super-moisturizing power, we put it right from the can onto this tough, dry sandpaper. It was apply * * * soak * * * and off in a stroke.' While the announcer was speaking, Rapid Shave was applied to a substance that appeared to be sandpaper, and immediately thereafter a razor was shown shaving the substance clean.

The Federal Trade Commission issued a complaint against respondents Colgate and Bates charging that the commercials were false and deceptive. The evidence before the hearing examiner disclosed that sandpaper of the type depicted in the commercials could not be shaved immediately following the application of Rapid Shave, but required a substantial soaking period of approximately 80 minutes. The evidence also showed that the substance resembling sandpaper was in fact a simulated prop, or 'mock-up,' made of plexiglass to which sand had been applied. However, the examiner found that Rapid Shave could shave sandpaper, even though not in the short time represented by the commercials, and that if real sandpaper had been used in the commercials the inadequacies of television transmission would have made it appear to viewers to be nothing more than plain, colored paper. The examiner dismissed the complaint because neither misrepresentation—concerning the actual moistening time or the identity of the shaved substance—was in his opinion a material one that would mislead the public.

The Commission, in an opinion dated December 29, 1961, reversed the hearing examiner. It found that since Rapid Shave could not shave sandpaper within the time depicted in the commercials, respondents had misrepresented the product's moisturizing power. Moreover, the Commission found that the undisclosed use of a plexiglass substitute for sandpaper was an additional material misrepresentation that was a deceptive act separate and distinct from the misrepresentation concerning Rapid Shave's underlying qualities. Even if the sandpaper could be shaved just as depicted in the commercials, the Commission found that viewers had been misled into believing they had seen it done with their own eyes. As a result of these findings the Commission entered a cease-and-desist order against the respondents.

An appeal was taken to the Court of Appeals for the First Circuit which rendered an opinion on November 20, 1962, 310 F.2d 89. That court sustained the Commission's conclusion that respondents had misrepresented the qualities of Rapid Shave, but it would not accept the Commission's order forbidding the future use of undisclosed simulations in television commercials. It set aside the Commission's order and directed that a new order be entered. On May 7, 1963, the Commission, over the protest of respondents, issued a new order narrowing and clarifying its original order to comply with the court's mandate. The Court of Appeals again found unsatisfactory that portion of the order dealing with simulated props and refused to enforce it, 326 F.2d 517. We granted certiorari, 377 U.S. 942, 84 S.Ct. 1352, 12 L.Ed.2d 306, to consider this aspect of the case and do not have before us any question concerning the misrepresentation that Rapid Shave could shave sandpaper immediately after application, that being conceded.

I.

A threshold question presented is whether the petition for certiorari was filed within 90 days after the entry of the judgment below as required by 28 U.S.C. § 2101(c) (1958 ed.). Respondents claim that the failure of the Commission to seek certiorari from the judgment of the Court of Appeals rendered on November 20, 1962, barred a subsequent order prohibiting the use of simulated props in commercials that offer visual proof of a product claim.

After a court of appeals has set aside an order of the Commission on a point of law, the Commission may seek certiorari if it disagrees with the court's legal conclusion. Section 5(i) of the Federal Trade Commission Act² contemplates that when the time for filing a petition for certiorari has passed without a petition being filed, the Commission will enter an order in accordance with the mandate of the court of appeals. The Commission may not merely restate its former position in a new order and then apply for certiorari when the court of appeals reit- erates its previous objection. As was said in Federal Power Comm. v. Idaho Power Co., 344 U.S. 17, 20, 73 S.Ct. 85, 86, 97 L.Ed. 15, 'If the court did no more by the second judgment than to restate what it had decided by the first one * * * the 90 days would start to run from the first judgment.' To the same effect see Federal Trade Comm. v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 211, 73 S.Ct. 245, 248, 97 L.Ed. 245. However, it has also been held that when a reviewing court finds a legal error in an administrative order, the agency is not foreclosed upon the remand of the case from enforcing the legislative policy of the act it administers, provided the new order does not conflict with the reviewing court's mandate.³

Obviously, the court which drafted the mandate is normally in the best position to determine whether the Commission's subsequent order is consistent with the mandate, but this Court is never foreclosed from determining the issue for itself.⁴ The resolution of this issue in the present case requires a detailed analysis of the various opinions, mandates and orders issued by the Commission and the Court of Appeals.

In its initial opinion, dated December 29, 1961, the Commission commented that the heart of the commercials was the visual 'sandpaper test' which was designed to leave the viewer with the impression that he had actually seen such an experiment being performed. The Commission expressed the view that without this visible proof of Rapid Shave's moisturizing ability some viewers might not have been persuaded to buy the product. The Commission then entered into a far-reaching discussion on the use of mock-ups in television and the relationship between 'truth' and 'television salesmanship,' and finally concluded that the use of the plexiglass prop was a deceptive practice. The Commission's order was as inclusive as its discussion. It ordered both respondents to cease and desist from:

'Representing, directly or by implication, in describing, explaining, or purporting to prove the quality or merits of any product, that pictures, depictions, or demonstrations * * * are genuine or accurate representations * * * of, or prove the quality or merits of, any product, when such pictures, depictions, or demonstrations are not in fact genuine or accurate representations * * * of, or do not prove the quality or merits of, any such product.'⁵ (Emphasis added.)

The Court of Appeals understandably was concerned with the broad language in the Commission's opinion and order, especially since the Commission was not dealing with an established deceptive practice but was applying the flexible standards of § 5 to a hitherto unexplored area. The breadth of the Commission's order was potentially limitless, apparently establishing a per se rule prohibiting the use of simulated props in all television commercials, since commercials by definition describe 'the qualities or merits' of products. The court's impression that the order was 'quite ambiguous' was not alleviated when in oral argument counsel for the Commission stated that if a prominent person appeared on television saying 'I love Lipsom's iced tea,' while drinking something that appeared to be tea but in fact was not, the commercial would be a deceptive practice.

In light of the Commission's order and its oral argument, the court concluded that it was the Commission's intention to prohibit all simulated props in television commercials. The court could not agree with this position since it believed that 'where the only untruth is that the substance (the viewer) sees on the screen is artificial, and the visual appearance is otherwise a correct and accurate representation of the product itself, he is not injured.'⁶ But, in setting aside the Commission's order, the court gave little specific guidance for the drafting of a new one. It merely criticized the Commission for holding that mock-ups are 'illegal per se.'⁷ and indicated that the Commission's order 'may' have been too broad in other respects as well.

Following the decision by the Court of Appeals, the Commission entered a new 'proposed final order' on February 18, 1963. This order was accompanied by an explanatory opinion that admitted error in the original disposition of the case and expressed an intention to eliminate the errors found by the Court of Appeals. The Commission explained that its new order was not directed toward the broad prohibition of all undisclosed simulated props in commercials, but merely toward prohibiting respondents from...