Porte Manufacturing Co., Inc.

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IN THE MATTER OF PORTE ;VIAXUFACTURIJlG CO., mc., ET AL.

CONSENT ORDER ETC. IX REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE BnSSION ACT Docket C-586. Complaint, Sept. 11! 1965-Decision, Sevt. , 1963 Consent order requiring two associated corporations in Brooklyn, N. Y., to cellse sellng automatic transmission fluid having a lubricating oil base of previously used oil that had been reprocessed, with no clear disclosure of such prior use in advertising or on containers; and to cease representing their hydraulic brake fluid as "guaranteed" without disclosing that the "guaran- " was limited to a refund of the price or the brake .fluid or replacement thereof.

Co:.rPLAI 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 Porte 11anufacturing Co., Inc., a corporation, Genuine Chemical Corp., a corporation Raphael Porte, individually and as an offcer of each of said corporations, and Betty Cooper, inrlividually and as an offcer of Porte Manufacturing Co., Inc., hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereto would be in the public PORTE :MjXUFACTURING CO, IKC. ET AL. 683 682 Complaint interest, hereby issues its complaint, stating its charges in that respect a8 fo1Jows:

PARAGRAPH 1. Respondent Porte Manufacturing Co., Inc., is a corporation, organized, existing and doing business under and by virtue of the laws of the State of New York, Genuine Chemical Corp., is a corporation, organized, existing and doing business under and by virtue of the laws of the State of New York. Respondents Raphael Porte and Betty Cooper are offcers and formulate, direct, and control the acts, practices, and poEcies of the corporate respondent, Porte ianufacturing Co., Inc. Raphael Porte is an offcer of Genuine Chemical Corp., and formulates, directs and controls the acts, practices and poEcies of the corporate respondent, Genuine Chemical Corp. Individual respondent, Raphael Porte, is Ekewise the individual owner of The Ray Chemical Co., .J oray Manufacturing Co., Presto Electric Co. Circle Manufacturing Co. and CastoylMfg. Co. A1J respondents have their principal offce and place of business located at 3179 Atlantic A venue, Borough of Brooklyn, COlmty of Kings, city and State of JI ew York.

PAR. 2. Respondent Porte Manufacturing Co. Inc., is now, and has been, engaged in the manufacturing, offering for sale, sale and distribut.ion of automatic transmission fluid, and hydrauEc brake fluid under the brand name of "PORTO . Said respondent has likewise manufactured automat.ic transmission fluid for The Ray Chemical Co. under the brand name "SUPEH 21 ; automatic transmission fluid for the Joray lVIanufactl1ring Co. under the "JORAY" brand name; aut.omaticthe brandtransmissionnamefluid forof the" CASTOYLCastoyl; l1ydrauliclanufacturingbrake fluidCo.forunderthe Genuine Chemical Corp. under the brand name of X-cXl hydrauEc brake fluid for t.he .J oray Manufacturing Co. under the brand name of "STANDARD , and hydrauHc brake fluid for the Presto Electric Co. under the bra.nd name of "PRESTO Respondent' s automatic transmission fluid has, among other functions, a lubricating function.

Said products have been marketed nat.ional1y and have been resold at automotive accessory places of business, bot.h wholesale and retail. PAR. 3. In the course and conduct or their business, respondents have ca,used said automatic transrnission fluid and hydraulic brake fluid, when sold, to be shipped from their place of business in the St.ate of Jlew York t.o t.he purchasers thereof located in various ot.her St.ates of the United Stat.es, ilnd at. a11 t.times mentioned herein have maintained a substantial course of trade in said automatic transmis- Complaint 63 F.

sion fluid and hydraulic brake Huid in commerce as "commerce " is defined in the Federal Trade Commission Act. PAR. 4. In the course and conduct of their business, the respondents have soIdalltomatic transmission fluid which has a lubricating oil base, that consists in whole, or in substantial part, or previously used oil that has been reprocessed or re-refined. For the purpose of inducing t.he sale of aut.omat.ic t.ransmission fluid, respondents have not clearly and conspicnousJy disclosed the prior use of said oil in their advertising or on the containers of said product..

PAR. 5. In the courseancl conduct of their business, and for the purpose of inducing the sale of hydraulic brake fluid, respondents have made llwnerOl1S statements and representations using the word guaranteed", but have not eonspicuousJy and fully disclosed, either in their advertising or on their containers, the nature, extent and conditions or the guaranty and the manner in which the guarantor will perform t.hereunder.

PAn. 6. In trut.h and in fact:

(a) The automatic t.ransmission fluid advertised, sold and distributed by the proposed respondents was manufactured from oil ,which ,vas in whole, or in part, l'e- refil1ea from oil that had been pre viously used for lubricating purposes.

(b) The "guarant.y" was deceptive because only after having purchased saiel hydraulic brake fluid, and a claim made, did the purchaser ascertain the true fact that said guaranty was limited to a refund of t.he price of hydraulic brake fluid, or replacement thereof. PAR. 7. By the aforesaid practices, respondents have furnished, or otherwise placed in the hands of wholesalers and retailers, directly or indirectly, the means and instrumentalities by and through which they may mislead the public as to the nature of the oil used in the manufacture of said automatic transmission fluid and as to the nature a.nd scope of said "guaranty" llsed 111 connection with the sale of hydraulic brake fluid.

PAR. 8. In the conduct of their business at a1l times mentioned herein, respondents have been in substantial competition in commerce with corporations, firms and individuals, in the saJe of automatic transmission fluid and hydraulic brake fluid. PAR. 9. The use by respondents of the aforesaid false, misleading and decept.ive statements, representations and pract.ices has had, and now has, the capacity and tendency to mislead members of the purchasing public int.o the erroneous and mistaken belief that said statement.s and representations were and are true, and into the purchase POR' TE UFACTURING co. , IXC. , ET AL. 685 682 Decision alll Order of substantial quantities of respondents' products by reason of said erroneous and mistaken belief.

PAR. 10. The aforesaid acts and practices of respondents, as herein alleged, were and are all to the prejudice and injury of the public and of respondents ' competitors and constituted, and now constitute unfair methods of competition in commerce and unfair and deceptive acts and plac6ces in commerce, in violation of Section 5 of the Federal Trade Commission Act.

DECISION AND ORDER The Fede,ral Trade Commission having initiated an investigation of certain acts a.nd practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the Bureau of Deceptive Practices proposed t.o present. to the Commission for its considerat.ion and which, if issued by the Commission, vwuId charge respondents with violation of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent ordc.r, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft 'Of complaint, a state,ment that the signing of said agreement is for settlement purposes only and does not constitute an admission by the respondents that the law has been violated as alleged in such complaint, and ,,,waivers and provisions as required by the Commission s rules; and The Commission, having reason to believe that the respondents have violated the Federal Trade Commission Act, and having determined that complaint should issue stating its charges in that respect hereby issues its complaint, nceepts said agreement, makes the following jurisdictional findings and enters the following order: 1. Respondent Porte 1manufacturing Co. , Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of t.he State of New York.

Respondent Genuine Chemical Corp., is a corporation organized existing and doing business under and by virtue of t.he laws of the State of New York.

Respondent. Raphael Porte is an individual and an offcer of each of said corporations. Respondent Bett.y Cooper is an individual and offcer of Porte Manufacturing Co., Inc., only. Each of the aforementioned companies and respondents have maintained, and stil maintain, their principal offce and place of business 686 FEDERAL TRADE CO'1:IISSION DECISIONS Decision and Order 63 F.

at 3179 Atlantic Avenue, Borough of Brooklyn, County of Kings city and Stat.e of K ew York.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered That respondents Porte IanllfHctllring Co., Inc., a corporation, and its offcers, Raphael Porte and Betty Cooper, individually and as offcers of said corporation; Genuine Chemical Corp., and its offcer, Raphael Porte, individually and as an offcer of said corporation, and respondents' representatives, agents and employees, directly or through any corporate or other device in connection with the manufacturing, offering for sale, sale, or distribution of lubricating oil, including, but. not limited to automatic transmission fluid and hydraulic brake fluid, in commerce, as "commerce is defined in the Federal Trade Commission Act, do forthwith.h cease and desist. from:

1. Advert.ising, offering for sale, packaging or selling, lubrieat.ing oil, including, but not limited to automatic transmission fluid, ,which is composed in ,,,hole or in substantial part oil which has been reclaimed, or in any manner processed from previously used oil, without disclosing such prior use to the purchaser, or potential purchaser, in advertising and in sale promotion material, and by a clear and conspicuous statement to that effect on the front. panel or front panels of the container. 2. Representing in any manner that lubricating oil, including, but not limited to automatic transmission fluid, composed in whole or in part of oil that has been manufact.ured, reprocessed or l'e-refined from oil that. has been previously used, has been manufactured from oil that has not been previously used. 3. Representing, direct.ly or hy implicat.ion, in any manner that their products are guarant.eed unless the nature, extent and conditions of the guarant.y and the manner in which the guarantor wil perform thereunder are clearly and conspicuously disclosed in conjunction with the guaranty representations. It is tw,ther ordered That the respondents herein shall, wit.hin sixty (60) days after senice upon them of this order, file with the Commission a report in ,writing setting forth in detail the manner and form in which they have complied with this order. RHODA LEE , IXC' J ET AL, 687 687 Complaint