Columbia Refining Co

Text (OCR of the scan at left; may contain errors)

IN THE 1\IATTER OF COLUMBIA REFINING CO.

COMPLAINT, MODIFIED FINDINGS AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 19141 Docket 3511. Complaint, July SO, 1988-Decision, Mar. 21, 1939 Where a corporation engaged, as wholesale dealer in motor oils and lubricants, in selling and distributing such products to purchasers in other States and in the District of Columbia, in substantial competition with others engaged in sale and distribution of such products as aforesaid, and including dealers therein who are not refiners or manufacturers of such products and who sell and offer the same in commerce and do not in any way misrepresent that they are refiners or otherwise misrepresent their business or products- Caused its corporate name, including word "Refining," to appear >ariously In its catalogs and other advertising matter and on its letterheads, invoices and other printed matter and on its containers, issued and circulated by it through the mails, transportation facilities and otherwise to its customers and prospective customers in the various other States and in said District, and represented thereby and otherwise to members of purchasing public, dealers and others, that it owned, controlled and operated a refinery, and that purchasers of its products were dealing directly with tlle manufacturer or refiner of such motor oils and lubricants, for purchase of which oils direct from refiner thereof there is a preference on part of substantial number among members of purchasing public, as securing them, in their belief, better prices, superior quality, and other advantages not ordinarily obtainable when purchasing through middlemen or others who are not actual refiners of such motor oils being purchased; :Facts being it did not manufacture or refine motor oils and lubricants advertised and sold by it as aforesaid, and did not own, operate, or control a refinery, and did not refine any of products which it !!Old, and said representations were false, misleading, and untrue; .

With tendency and capacity to mislead and deceive substantial portion of pur- . chasing public, and purchasers for resale, into erroneous belief that such representations were true, and with result, as direct consequence of such erroneous and mistaken belief induced by its advertising and representations, that number of consuming public and purchasers for resale bought substantial quantities of its said motor oils and lubricants, and trade was unfairly diverted to it from competitors likewise engaged in sale and distribution of such products and who truthfully advertise the same and their business status:

lleld, That such acts, practices, and representations were to the prejudice and injury of the public and competitors and constituted unfair methods of competition and unfair and deceptive acts and practices in commerce. Defore Mr. John J.J(eenan, trial examiner. Mr. John M. Russell for the Commission.

Chamberlin, [{after, lVilds & Jube and Mr. Frederick G. lVei~ser, of New York City, for respondent.

1 Original findings and order, Issued as o! January 18, 1939, not published. Complaint 28F. T. C.

Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that the Columbia Refining Co., a corporation, hereinafter referred to as respondent, has violated the provisions of the said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, Columbia Refining Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of New York, with its principal office and place of business located at 4402 Twenty-third Street, Long Island City, in said State, and with an oil blending and grease compoUJlding plant located at 1 ·westside Avenue, Jersey City, N.J. PAR. 2. Respondent has been for many years last past, and now is, engaged in business as a wholesale dealer in motor oils and lubricants and in the sale and distribution thereof in commerce between and among the various States of the United States and in District of Columbia. Respondent causes said products, when sold, to be transported from its principal place of business in the State of New York and its said branch in the State of New Jersey to the purchasers thereof located in States of the United States other than the States of New York and New Jersey, and in the District of Columbia. In the course and conduct of its said business, respondent is now, and has been at all times mentioned herein, in substantial competition with other corporations and with partnerships, firms, and individuals engaged in the sale and distribution of motor oils and lubricants, in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. In the course and conduct of its business and for the purpose of inducing the purchase of its products, respondent causes its said corporate name, to wit: Columbia Refining Co. of New York, to appear variously in its catalogs and other advertising material and also on its letterheads, invoices, and other printed matter, all of which are issued and circulated by the respondent, through the United States mails and otherwise, to its customers and prospective customers located in the various States of the United States and in the District of Columbia.

Through the use of respondent's corporate name, in the manner hereinabove stated, and through other means, the respondent represents to members of the purchasing public that it owns, controls, and COLUMBIA REFINING CO. 1267 1265 Findings operates a refinery and that purchasers of its products are dealing direct with the manufacturer or refiner of said products. The products so advertised and sold in commerce, as herein described, by the respondent are not in fact manufactured or refined by the respondent. Respondent does not own, operate, or control a refinery and does not refine the products sold by it. There are among the members of the purchasing public a substantial number who prefer to purchase motor oils directly from the refiner thereof, believing that in so doing they secure better prices, superior quality and other advantages not ordinarily obtainable when purchasing through middlemen or others who are not the actual refiners of the motor oils being purchased. PAR. 4. There are dealers in motor oils and lubricants who are not refiners or manufacturers of said products and who sell and offer for sale their prod'tcts in commerce between and among the various States of the United States, and who do not in any way misrepresent that they are refiners, or otherwise misrepresent their business or products.

The aforesaid acts, practices, and representations of the respondent in the course of its advertising, offering for sale, and selling of its products in commerce, as aforesaid, were and are calculated to have, and now have, a tendency and capacity to mislead and deceive a substantial part of the purchasing public into the erroneous belief that said representations are true. As a direct result of this erroneous and mistaken belief, a number of the consuming public have purchased a substantial volume of respondent's products, with the result that trade has been diverted unfairly to respondent from competitors likewise engaged in the business of selling and distributing tnotor oils and lubricants who truthfully advertise their respective products and their business status. In consequence thereof, injury has been done by respondent to competition in commerce between and atnong the various States of the United States and in the District of Columbia.

PAR. 5. The above alleged acts and practices of the respondent are all to the prejudice of the public and of respondent's competitors, and constitute unfair methods of competition and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

REPORT, 1\Iodified FINDINGs As TO THE FACTS AND Onder Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on July 30, 1938, issued and on August 1, 1938, eerved its complaint in this proceeding upon respond- Findings 28l!'.T.C. ent, Columbia Refining Co., a corporation, charging it with the use of unfair methods of competition and. with unfair and deceptive acts and practices in commerce in violation of the provisions of said act. After the issuance and service of said complaint the respondent herein, on September 10, 1938, filed an answer in which it in part admitted and in part denied the allegations of the complaint. Subsequent thereto, on December 7, 1938, respondent, with the approval of the Commission, withdrew its original answer and filed herein a substitute answer admitting all the material allegations of fact set forth in said complaint and waiving all intervening procedure and further hearing as to said facts.

Thereafter the proceeding regularly came on for final hearing before the Commission on the said complaint and substitute answer, and the Commission, having duly considered the matter,; and having found that the proceeding was in the interest of the public, made and entered its findings as to the facts and conclusion on January 18, 1939, and the Commission now being desirous of modifying its said findings, as is provided for under the provision of said Act of Congress, makes this its modified findings as to the facts and conclusion drawn therefrom.

l\IODIFIED FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent Columbia Refining Co. is a corporation duly organized, existing, and doing business under and by virtue of the laws of the State of New York, with its principal office and place of business located at 4402 Twenty-Third Street, Long Island City, N.Y., and with an oil blending and grease compounding plant located at 1 'Vestside Avenue, Jersey City, N. J. Respondent's grease compounding operations are not involved in this proceeding. PAR. 2. Respondent has for many years last past, and now is, en· gaged in business as a wholesale dealer in motor oils and lubricants and in the sale and distribution thereof in commerce between and among the various States of the United States and in the District of Columbia. Respondent causes said products, when sold, to be transported from its principal place of business in the State of New York and its said branch in the State of New Jersey to the purchasers thereof located in States of the United States other than the States of New York and New Jersey and in the District of Columbia. In the course and conduct of its said business, respondent is now and has been at all times mentioned herein, in substantial competition with other corporations and with partnerships, firms, and in- COLUMBIA REFINING CO. 1269 1265 Findings dividuals engaged in the sale and distribution of motor oils and lubri- {!ants in commerce between and among the various States of the United States and in the District of Columbia. PAR. 3. In the course and conduct of its business and for the purpose of inducing the purchase of its products, respondent causes its said corporate name, to wit, Columbia Refining Co. of New York, to appear variously in its catalogs and other advertising material, and also on its letterheads, invoices and other printed matter, and on its containers, all of which are issued and circulated by the respondent through the United States mails, transportation facilities and otherwise, to its customers and prospective customers located in the various States of the United States other than the States of New York and New Jersey and in the District of Columbia. Through the use of the said corporate name in the manner hereinabove stated, and through other means, the respondent represents to the members of the purchasing public, to dealers and others, that it owns, controls, and operates a refinery, and that purchasers of its products are dealing directly with the manufacturer or refiner of such motor oils and lubricants.

PAR. 4. The representations made by the respondent with respect to its business as set out in paragraph 3 hereof, are false, misleading, and untrue. The motor oils and lubricants advertised and sold in commerce, as hereinbefore described, by the respondent, are not manufactured or refined by it. Respondent does not own, operate, or control a refinery and does not refine any of the products sold by it. There are, among the members of the purchasing public, a substantial number who prefer to purchase motor oils directly from the refiner thereof, believing that in so doing they secure better prices, superior quality and other advantages not ordinarily obtainable when purchasing through middlemen or others who are not the actual refiners of the motor oils being purchased. There are dealers in such motor oils and lubricants who are not refiners or manufacturers of said products and who sell and offer for sale their products in commerce between and among the various States of the United States and who do not in any way inisrepresent that they are refiners or otherwise misrepresent their business or products. PAR. 5. The aforesaid acts, practices, and representations o£ the respondent, in the course of its advertising, offering for sale und selling of its products in commerce as aforesaid, were anu are calculated to have, and had, and now have, a tendency and capacity to mislead and deceive a substantial portion of the purchasing public and purchasers for resale into the erroneous belie£ that said representations Order 28F. T.C.

are true. As a direct result of such erroneous and mistaken belief induced by the advertising and representations of respondent, anumber of the consuming public and purchasers for resale have purchased a substantial quantity of respondent's motor oils and lubricants with the result that trade has been unfairly diverted to the respondent from competitors likewise engaged in the business of selling and distributing motor oils and lubricants who truthfully advertise their respective products and their business status.

CONCLUSION The acts, practices and representations of the respondent, Columbia Refining Co., as herein found, have been and are to the prejudice and injury of the public and of respondent's competitors, and constitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

:MODIFIED ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answer of respondent in which answer respondent admits all the material allegations of fact set forth in the complaint and states that it waives all intervening procedure and further hearings as to said facts, and the Commission, on January 18, 1939, having made its findings as to the facts and conclusion that said respondent had violated the provisions of the Federal Trade Commission Act, and having issued its order to cease, and the Commission having on this date modified its said findings as to the facts and now being desirous of modifying its order to cease and desist so as to conform with its said modified findings as to the facts and conclusion, and being advised in the premises.

It is ordered, That the order to cease and desist issued on January 18, 1939, be, and the same is hereby, modified to read as follows: It is ordered, That the respondent, Columbia Refining Co., its officers, representatives, agents, and employees, directly or through any corporate or other device in connection with the offering for sale, sale and distribution of its motor oils and lubricants in commerce, as commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

Representing through the use of the word "Refining" or any word or term of similar import and meaning in its corporate name, cata- COLUMBIA REFINING CO. 1271 1265 Order logs, advertising material, or in any other manner or through any means or device, that it is a refiner or manufacturer of motor oils and lubricants (other than greases) until and unless it owns and operates or directly and absolutely controls a refinery or plant wherein such motor oils and lubricants are manufactured or refined by it. It i8 further ordered, That the respondent shall, within 60 days after service upon it of this order, file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with this order.

Syllabus 28F. T. C.