Mineral Wells Crystal Producers, Inc

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IN THE MATTER OF MINERAL ·wells CRYSTAL PRODUCERS, INC.

_COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 15 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4512. Complaint, May 29, 1941-Decision, Nov. 14, 1941 "Where a corpat·ation engaged in the processing and in the competitive interstate sale and distribution of mineral crystals for the treatment of certain ailments; in statements and legends on leaflets, letterheads, billheads, sales invoices, display cards and other advertising material, and on the labels and outer wrappings of the product's containers, directly or by implication- ( a) Represented through inclusion of words "l\Iinernl Wells" as a part of its corporate name and through such use of them in aforesaid statements as "Mineral \Veils Crystals," "1\fade in Mineral Wells, Tex.," and "Made from Texas mineral water," that its mineral crystals were produced exclusively from mineral water obtained in its natural state from the earth at or in the vicinity of Mineral Wells, Tex.;

lhe facts being its said product was not processed from mineral water thus obtained at or in the vicinity of said city,-which for a long period had been well and favorably known for its mineral water containing certain constituents, and name of which had long been associated by a substantial portion of the purchasing public with the wells located in its vicinity-and was not made directly from any natural mineral water, but was prepared through mixing ordinary water from the mains of aforesaid city with commercial chemicals purchased by said corporation from chemical companies obtain- Ing their raw materials hundreds of miles distant, and thereafter heating and processing the solution; and (b) Represented that its said product had been endorsed or tested as to quality and fitness by some governmental, scientific or oth&r recognized agency empowered and qualified to certify as to the attributes thereof, through use Of such words and legends as "CERTIFIED l\Iinera1 \Veils crystals," "Use 1' Certified 1\lineral Crystals," and "Certified 1\lineral Crystals" ; he facts being its said product was not properly described as "Certified" inasmuch as it had never been endorsed or tested as to quality or fitness by "\V any recognized agency whatever;

lth effect of misleading and deceiving a substantial portion of the purchas- Ing PUblic as to its product and the place of origin thereof, and of thereby inducing it to purchase substantial quantities of said product whereby trade was diverted unfairly to it from its competitors, including many wbo do not misrepresent their products or the places of otiglu thereof; to tbe · Substantial Injury of competition in commerce: 11 eld., TLat such acts and practices, under the cit·cumstances l!('t forth, were all to the prejudice and Injury of the public and competitors, and constituted Unfair methods of competition In commerce. Jtr. J. V. Buffington for the Commission.

Jtr. A. E. Brooks, of Fort \Vorth, Tex., for respondent. 134 FEDE·RAL T'TRADE COMMI:::STON DECISIONS Complaint 34F. 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 Mineral Wells Crystal Producers, Inc., a corporation, hereinafter referred to as respondent, has violated the provisions of said act, and it appearing to the Com· mission 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, Mineral ·wells Crystal Producers, Inc., is a corporation organize,d, existing, and doing business under and by virtue of the laws of the State of Texas, with its office and principal place of business located in :Mineral 'Veils, Tex. PAR. 2. Respondent is now, and for more than 1 year last past ha5 been, engaged in the processing and in the sale and distribution of • certain mineral crystals intended for use in the treatment of certain ailments of the human body. Respondent causes and has caused said mineral crystals, when sold, to be transported from its place of busi· ness in the State of Texas to purchasers thereof located in various other States of the United Stn.tes and in the District of Columbi:J-. Respondent maintains, and at all times mentioned herein has main· tained, a course of trade in its said product in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. The respondent is now, and at all times mentioned herein has been, in substantial competition with other corporations :mel with individuals, firms, and partnerships also engaged in the processing and in the sale and distribution in commerce between and among the yarions States of the United States and in the District of Columbia. ()f mineral crystals and other medicinal preparations intended for the same or substantially the same uses as those for which respondent's J)product is intended.

PAR. 4. In the course and conduct of its aforesaid business, respond· -ent has made and is now making false and misleading representations with respect to its said product and the source and origin thereof· Such representations have taken the form of statements and legends imprinted on leaflets, letterheads, billheads, sales invoices, display cards, and other advertising material, which respondent has caused and is causing to be distributed among purchasers and prospective purchasers, and on the labels and outer wrappings of the containers in which respondent's product is packed, displayed and sold. Among, MINERAL WELLS CRYSTAL PRODUCERS, INC. 135 133 Complaint and typical of, the false, misleading, and deceptive statements and representations so made and distributed are the following: MINERAL \VELI.S CRYSTAL PRODUCERS, INC, Manufacturers CERTIFIED Mineral Wells Crystals Made in 1\lineral Wells, Tex.

l\lade from Texas mineral water.

Here's to Health Use Cet·tified Mineral Crystals 'Certified Mineral Crystals Processed and distributed by Mineral Wells Crystal Producers, Inc.

Mineral Wells, Texas.

· PAR. 5. Through the use of the aforesaid representations, and others of similar import not specifically set out herein, the respondent represents and has represented, directly or through inference that its ~mineral crystals are produced exclusively from mineral water obtained !units natural state from the earth at or in the vicinity of Mineral Wells, 'l'e:x:., and that said product has been endorsed or attested as to quality and fitness by some governmental, scientific or' other recognized agency elllpowered and qualified to certify as to the attributes of said product. PAR. 6. Such representations on the part of the respondent are false and misleading. In truth and in fact, respondent's product is not and has not been processed from mineral water obtained in its natural f>ta.te from the earth at or in the vicinity of :1\Iineral 'Yells, Tex., nor· is it or has it been made directly from Texas mineral water or from any other natural mineral water as it is taken from the earth . . 'lhe preparation of said product, on the contrary, consists of mixing Ordinary water from the city water mains of l\Iim:ral \Veils, Tex., '"ith commercial chemicals purchased by respondent from one or more chemical companies operating and obtaining their raw materials hundreds of miles from the city of l\linerul ·wens, Tex., heating the Solution thus obtained until it reaches a proper gravity, and then ·Cooling the concentrate in refrigerated compartments. Respondent's llroduct is not properly described as "Certified," inasmuch as said broduct has never been endorsed or attested as to quality or fitness Y any governmental, scientific, or any other recognized agency "'whatever.

136 FEDERAL TRADE' COM::Ml'SS'ION' DE'CISIIONS Findings 34F. T. 0.

PAR. 7. The city of :Mineral 'Veils, Tex., has over a long period o£ time become well and favorably known for its mineral water containing certain constituents. The words "Mineral 'Vells," when used in connection with mineral water or a derivative thereof, have been for many years last past, and are now, associated in the minds of a substantial portion of the purchasing public with the wells located at or in the vicinity of the city of Mineral Wells, Tex. The use by the respondent of the words "Mineral 'Veils" in connection with its product constitutes a representation to the public that said product is processed · from water obtained from such wells.

PAR. 8~ The use by the respondent of the words "Mineral Wells" as a part of its corporate name constitutes within itself a false and misleading representation that respondent's prpduct is produced from mineral water obtained from wells at Mineral ·wells, Tex. PAR. 9. Among the competitors of respondent referred to in paragraph Three hereof are many who do not misrepresent their said prod· ucts or the places of origin thereof.

PAR. 10. The use by the respondent of the acts and practices herein set forth has had, and now has, the tendency and capacity to, and does, mislead and deceive a substantial portion of the purchasing public into an erroneous and mistaken belief as to respondent's product and the place of origin thereof, and to induce such portion of the public to purchase substantial quantities of said product as the result of such erroneous and mistaken belief. In consequence, trade has been diverted unfairly to respondent from its competitors, with the result that substantial injury has been done, and is being done, by respondent to competition in commerce between and among the various States of the United States and in the District of Columbia. . PAR. 11. The aforesaid acts and practices of the respondent, as herein alleged, are all to the prejudice and injury of the public and of respondent's competitors, and constitute unfair methods of competition in commerce within the intent and meaning of the Fed· eral Trade Commission Act.

REPORT, FINDINGS AS TO THE FACTS, AND OnnEn Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on May 29, 1941, issued, and on June 2, 1941, served its complaint in this proceeding upon respond· ent, Mineral 'Veils Crystal Producers, Inc., charging it with the use of unfair m{·thods of competition in commerce in violation of the provision!J of said act. After the issuance of said complaint and the MINERAL WELLS CRYSTAL PRODUCERS, INC. 137 133 Findings filing of respondent's answer, the Commission, by order entered herein, granted respondent's motion for permission to withdraw said answer and to substitute therefor an 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, which substitute answer was duly filed in the office of the Commission. Thereafter, this 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 being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Mineral ·wells Crystal Producers, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Texas, with its office and principal place of business located in Mineral 1Vells, Tex. PAR. 2. Respondent is now, and for more than one year last past has been, engaged in the processing and in the sale and distribution of certain mineral crystals intended for use in the treatment of certain ailments of the human body. Respondent causes and has caused said mineral crystals, when sold, to be transported from its Place of business in the State of Texas to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in its said product in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. The r:respondent is now, and at all times mentioned herein has been, in substantial competition with other corporations and with individuals, firms, and partnerships also engaged in the processing and in the sale and distribution in commerce between and nmong the various States of the United States and in the District ?f Columbia of mineral crystals and other medicinal preparations Intended for the same or substantially the same uses ·as those for Which respondent's product is intended.

PAR. 4. In the course and conduct of its aforesaid business, respondent has made and is now making false and misleading representations with respect to its said product and the source and origin thereof. Such representations have taken the form of statements and legends imprinted on leaflets, letterheads, billheads, sales in- 138 FEDE'RAL T'TRADE COMMrS,S'ION' DECLS/IONS Findings 34F. T. C.

voices, display cards and other advertising material which respondent has caused and is causing to be distributed among purchasers and prospective purchasers, and on the labels and outer wrappings of the containers in which respondent's product is packed, displayed and sold. Among, and typical of, the false, misleading and deceptive statements and representations so made and distributed are the following:

l\IINERAL \VELLS CRYSTAL PRODUCERS, INC., Manufacturers CERTIFII'.'D Mineral "\Yells Crystals Made in Mineral Wells, Tex.

Made from Texas mineral water.

Here's to Health Use Certified l\Iineral Crystals Certified Mineral Crystals Processed and distributed by Mineral Wells Crystal Producers, Inc.

Mineral Wells, Tex.

PAR. 5. Through the use of the aforesaid representations, and others of similar import not specifically set out herein, the respondent represents and has represented, directly or through inference that its mineral crystals are produced exclusively from mineral water obtained in its natural state from the earth at or in the vicinity of Mineral ·wells, Tex., and that said product has been endorsed or attested as to quality and fitness by some governmental, scientific or other recognized agency empowered and qualified to certify as to the attributes of said product.

PAR. 6. Such representations on the part of the respondent are false and misleading. In truth and in fact, respondent's product is not and has not been processed. from mineral water obtained in its. natural state from the earth at or in the vicinity of Mineral 'Veils, Tex., nor is it or has it been made directly from Texas mineral water or from any other n:1tural mineral water as it is tak~n from the earth. The preparation of said product, on the contrary, consists of mixing ordinary water from the city water mains of Mineral 'Veils, Tex., with commercial chemicals purchased by respondent from one or more chemical companies operating and obtaining their raw materials hundreds of miles from the city of l\Iineral 'Veils, Tex., heating the solution thus obtained until it reaches a proper gravity, and then cooling the concentrate in refrigerated compartments. Respondent's MINERAL WELLS CRYSTAL PRODUCERS, INC. 139 133 Order product is not properly described as "Certified," inasmuch as said product has never been endorsed or attested as to quality or fitness by- any governmental, scientific, or any other recognized agency whatever.

PAR. 7. The city of Mineral "'Wells, Tex., has over a long period of time become well and favorably known for its mineral water containing certain constitutents. The words "Mineral ·wells," when used in connection with mineral water or a derivative thereof, have been for many years last past, and are now, associated in the minds of a substantial portion of the purchasing public with the wells located at or in the vicinity of the city of l\fineral \Veils, Tex. The use by the respondent of the words "Mineral 'Veils" in connection with its product constitutes a representation to the public that said product is prbcessed from water obtained from such wells. PAR. 8. The use by the respondent of the words "1-lineral \Veils" as a part of its corporate name constitutes within itself a false and misleading representation that respondent's product is produced from mineral water obtained from wells at Mineral 'Veils, Tex. PAR. 9. Among the competitors of respondent referred to in paragraph 3 hereof are many who do not misrepresent their said products or the places of origin thereof.

PAR. 10. The use by the respondent of the acts and practices herein set forth has had, and now has, the tendency and capacity to, and does, mislead and deceive a substantial portion of the purchasing public into an erroneous and mistaken belief as to respondent's product and the place of origin thereof, and to induce such portion of the public to purchase substantial quantities of said product as the result of such erroneous and mistaken belief. In consequence, trade has been diverted unfairly to respondent from its competitors, with the result that substantial injury has been done, and is being done, by respondent to competition in commerce between and among the "V"arious States of the United States and in the District of Columbia. CONCLUSION The aforesaid acts and practices of the respondent, as herein found, are all to the prejudice and injury of the public and of respondent's competitors, and constitute unfair methods of competition in comlllerce within the intmt and meaning of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Fec,leral Trade Commission upon the complaint of the Commission and the answer of respond- 140 FEDE·RAL TRADE COMMISISTON' DECIS!WN'S Order 34F.T.O.

ent, in which answer respondent admits all the material allegations of fact set forth in said complaint, and states that it waives all intervening procedure and further hearing as to said facts, and the Comxp.ission having made its findings as to the facts and conclusion that said respondent has violated the provisions of the Federal Trade Commission Act;

It is ordered, That the respondent, Mineral Wells Crystal Producers, Inc., a corporation, 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 mineral crystals in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Using the statement or legend, "Made in 1\Iineral.Wells, Tex.," or any statement or legend of similar import or meaning, on its leaflets, billheads, sales invoices, display cards, or other advertising material, in connection with the sale or the offering for sale of any mineral crystals not produced exclusively from mineral water obtained in its natural state from the earth within the city of Mineral ·wells, Tex., or from the vicinity thereof. · 2. Using the statement or legend, "Made from Texas Mineral \Vater," or any other statement or legend of similar import or meaning, on its leaflets, bj}lheads, sales invoices, display cards, or other advertising material in connection with the sale or the offering for sale of any mineral crystals not produced exclusively from mineral water obtained in its natural state from the earth within the State of Texas. 3. Using the words "Mineral ·wells," or any simulation thereof, in its corporate or trade name, or in any manner to designate, describe, or refer to its business in connection with the sale or the offering for sale of any mineral crystals not produced exclusively from mineral water obtained in its natural state from the earth within the city of Mineral \Veils, Tex., or from the vicinity thereof. 4. Using the word "Certified," or any other word or words of similar import or meaning, on its advertising material, or otherwise, to represent or to imply that respondent's product has been endorsed or attested as to quality or fitness by some governmental, scientific, or other recognized agency empowered and qualified to certify to such facts, ~hen such an endorsement or attestation has not been obtained. It is 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.

DEAN CABOT 141 Complaint