An Act to provide minimum disclosure standards for written consumer product warranties; to define minimum Federal content standards for such warranties; to amend the Federal Trade Commission Act in order to improve its consumer protection activities; and for other purposes.
PL 93-637 (S.356), enacted 01/04/1975

88 STAT. ] 
PUBLIC LAW 93-637-JAN. 4, 1975 
2183 
SEC. 110. None of the funds appropriated in this Act shall be used ^^ft'^il^J^s"""'"^ 
to (1) acquire land, (2) provide for site preparation, or (3) install 
utilities for any family housing, except housing for which funds have 
been made available in annual military construction appropriation 
Acts: Provided^ That funds in this Act may be available for family 
housing in accordance with section 502 of the Military Construction 
Authorization Act, 1975, excluding the costs of design and supervision, 
^"'^' P- ^'^^'^• 
inspection and overhead. 
SEC. 111. Notwithstanding any other provision of law, funds avail-
able to the Department of Defense during the current fiscal year for 
the construction of family housing units may be used to purchase sole 
interest in privately owned and Federal Housing Commissioner held 
family housing units if the Secretary of Defense determines it is in the 
best interests of the Government to do so: Provided^ That family 
housing units so purchased do not exceed annual Military Construction 
Authorization Act limitations on unit cost and numbers and are at the 
locations authorized: Provided further^ That housing units so pur-
chased are within the size limitations of title 10, United States Code, 
section 2684. 
This Act may be cited as the "Military (\)nsi ruction Appropriation 
^
^
"
"
^
^ '''^^• 
Act, 1975". 
Approved January 3, 1975. 
Public Law 93-637 
AN A C T 
January 4, 1975 
To provide minimum disclosure standards for written consumer product war- 
1
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ranties; to define minimum Federal content standards for such warranties; 
to amend the Federal Trade Commission Act in order to improve its consumer 
protection activities; and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That this act may 
Magnuson-Mcss 
be cited as the "Magnuson-Moss Warranty—Federal Trade Commis- "^^"decolmislto, 
sion Improvement Act". 
improvement Act. 
15 u s e 2301 
on 
note. 
TITLE I—CONSUMER PRODUCT WARRANTIES 
DEFINITIONS 
SEC. 101. For the purposes of this title: 
^s use 2301. 
(1) The term "consumer product" means any tangible personal 
property which is distributed in commerce and which is normally 
used for personal, family, or household purposes (including any 
such property intended to be attached to or installed in any real 
property without regard to whether it is so attached or installed). 
(2) 
The term "Commission" means the Federal 
Trade 
Commission. 
2184 
PUBLIC LAW 93-637-JAN. 4, 1975 
[88 STAT. 
(3) The term "consumer" means a buyer (other than for pur-
poses of resale) of any consumer product, any person to whom 
such product is transferred during the duration of an implied 
or written warranty (or service contract) applicable to the prod-
uct, and any other person who is entitled by the terms of such 
warranty (or service contract) or under applicable State law 
to enforce against the warrantor (or service contractor) the obli-
gations of the warranty (or service contract). 
(4) The term "supplier" means any person engaged in the 
business of making a consumer product directly or indirectly 
available to consumers. 
(5) The term "warrantor" means any supplier or other person 
who gives or offers to give a written warranty or who is or may 
be obligated under an implied warranty. 
(6) The term "w^ritten warranty" means— 
(A) any written affirmation of fact or written promise 
made in connection with the sale of a consumer product by 
a supplier to a buyer which relates to the nature of the 
material or workmanship and affirms or promises that such 
material or workmanship is defect free or will meet a specified 
level of performance over a specified period of time, or 
(B) any undertaking in writing in connection with the 
sale by a supplier of a consumer product to refund, repair, 
replace, or take other remedial action with respect to such 
product in the event that such product fails to meet the 
specifications set forth in the undertaking, 
which written affirmation, promise, or undertaking becomes part 
of the basis of the bargain between a supplier and a buyer for 
purposes other than resale of such product. 
(t) The term "implied warranty" means an implied warranty 
arising under State law (as modified b
^
y
^ sections 108 and 104(a)) 
in connection with the sale by a supplier of a consumer product. 
(8) The term "service contract" means a contract in writing 
to perform, over a fixed period of time or for a specified duration, 
services relating to the maintenance or repair (or both) of a 
consumer product. 
(9) The term "reasonable and necessary maintenance" consists 
of those operations (A) which the consumer reasonably can be 
expected to perform or have performed and (B) which are neces-
sary to keep any consumer product performing its intended 
function and operating at a reasonable level of performance. 
(10) The term "remedy" means whichever of the following 
actions the warrantor elects: 
(A) repair, 
(B) replacement, or 
(C) refund; 
except that the warrantor may not elect refund unless (i) the 
warrantor is unable to provide replacement and repair is not 
commercially practicable or cannot be timely made, or (ii) the 
consumer is willing to accept such refund. 
88 STAT. ] 
PUBUC LAW 93-637-JAN. 4, 1975 
2185 
(11) The term "replacement" means furnishing a new consumer 
product which is identical or reasonably equivalent to the war-
ranted consumer product. 
(12) The term "refund" means refunding the actual purchase 
price (less reasonable depreciation based on actual use where 
permitted by rules of the Commission). 
(13) The term "distributed in commerce" means sold in com-
merce, introduced or delivered for introduction into commerce, or 
held for sale or distribution after introduction into commerce. 
(14) The term "commerce" means trade, traffic, commerce, or 
transportati on— 
(A) between a place in a State and any place outside 
thereof, or 
(B) which affects trade, traffic, commerce, or transportation 
described in subparagraph (A). 
(15) The term "State" means a State, the District of Columbia, 
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the 
Canal Zone, or American Samoa. The term "State law" includes 
a law of the United States applicable only to the District of 
Columbia or only to a territory or possession of the United States; 
and the term "Federal law" excludes any State law. 
WARRANTY PROVISIONS 
SEC. 102. (a) In order to improve the adequacy of information avail- 
^^ ^^^ ' 
able to consumers, prevent deception, and improve competition in the 
marketing of consumer products, any warrantor warranting a con-
sumer product to a consumer by means of a written warranty shall, 
to the extent required by rules of the Commission, fully and conspicu-
ously disclose in simple and readily understood language the terms 
and conditions of such warranty. Such rules may require inclusion in 
the written warranty of any of the following items among others: 
(1) The clear identification of the names and addresses of 
the warrantors. 
(2) The identity of the party or parties to whom the warranty 
is extended. 
(3) The products or parts covered. 
(4) A statement of what the warrantor will do in the event 
of a defect, malfunction, or failure to conform with such written 
warranty—at whose expense—and for what period of time. 
(5) A statement of what the consumer must do and expenses 
he must bear. 
(6) Exceptions and exclusions from the terms of the warranty. 
(7) The step-by-step procedure which the consumer should 
take in order to obtain performance of any obligation under the 
warranty, including the identification of any person or class of 
persons authorized to perform the obligations set forth in the 
warranty. 
(8) Information respecting the availability of any informal 
dispute settlement procedure offered by the warrantor and a 
recital, where the warranty so provides, that the purchaser may be 
2186 
PUBLIC LAW 93-637-JAN. 4, 1975 
[88 STAT. 
required to resort to such procedure before pursuing any legal 
remedies in the courts. 
(9) A brief, general description of the legal remedies available 
to the consumer. 
(10) The time at which the warrantor will perform any 
obligations under the warranty. 
(11) The period of time within which, after notice of a defect, 
malfunction, or failure to conform with the warranty, the 
warrantor will perform any obligations under the warranty. 
(12) The characteristics or properties of the products, or pai'ts 
thereof, that are not covered by the wai'ranty. 
(13) The elements of the warranty in words or phrases which 
would not mislead a reasonable, average consumer as to the 
nature or scope of the warranty. 
Availability 
^\)^ (1) (A) Thc Commissiou shall prescribe rules requiring that 
prior o sa e. 
^^^ tcrms of any written warranty on a consumer product be made 
available to the consumer (or prospective consumer) prior to the sale 
of the product to him. 
Information, 
^g^ rpj^g Commissiou may prescribe I'ules for determining the 
manner and form in which information with respect to any written 
warranty of a consumer product shall ~be clearly and conspicuously 
presented or displayed so as not to mislead the reasonable, average 
consumer, when such information is contained in advertising, labeling, 
point-of-sale material, or other representations in writing. 
(2) Nothing in this title (other than paragraph (3) of this sub-
section) shall be deemed to authorize the Commission to prescribe the 
duration of written warranties given or to require that a consumer-
product or any of its components be warranted. 
Time extension. 
(^3^ ^]^p Commissiou may prescribe rules for extending the period 
of time a written warranty or service contract is in effect to correspond 
with any period of time in excess of a reasonable period (not less than 
10 days) during which the consumer is deprived of the use of such 
consumer product by reason of failure of the product to conform with 
the written warranty or by reason of the failure of the warrantor (or 
service contractor) to carry out such warranty (or service contract) 
within the period specified in the warranty (or service contract). 
Conditions. 
(c) No Warrantor of a consumer product may condition his written 
or implied warranty of such product on the consumer's using, in con-
nection with such product, any article or service (other than article 
or service provided without charge under the terms of the warranty) 
which is identified by brand, trade, or corporate name; except that 
tlie prohibition of this subsection may be waived by the Conmiission 
if— 
(1) the wari-antor satisfies the Commission that the warranted 
})roduct will function properly only if the article or service so 
identified is used in connection with the wai-ranted product, and 
(2) the Commission finds that such a waiver is in the public 
interest. 
Publication in 
^lic Comuilssiou sluill ideutifv in the Federal Register, and permit 
public comment on, all applications for waiver of the prohibition of 
this subsection, and sliall publish in the Federal Register its disposi-
tion of any such application, including the reasons therefor. 
Federal Register. 
"Limited war-
ranty. " 
88 STAT. ] 
PUBLIC LAW 93-637-JAN. 4, 1975 
2187 
(d) The Commission may by rule devise detailed substantive war-
ranty provisions which warrantors may incorporate by reference in 
their warranties. 
(e) The provisions of this section apply only to warranties which 
pertain to consumer products actually costing the consumer more 
than $5. 
DESIGNATION OF WARRANTIES 
SEC. 103. (a) Any warrantor warranting a consumer product by 
^
^ ^^^ 2303. 
means of a written warranty shall clearly and conspicuously designate 
such warranty in the following manner, unless exempted from doing 
so by the Commission pursuant to subsection (c) of this section: 
(1) If the written warranty meets the Federal minimum 
"f^n warranty." 
standards for warranty set forth in section 104 of this Act, then 
it shall be conspicuously designated a "full (statement of dura-
tion) warranty". 
(2) If the written warranty does not meet the Federal mini-
mum standards for warranty set forth in section 104 of this Act 
then it shall be conspicuously designated a "limited warranty". 
(b) Sections 102, 103, and 104 shall not apply to statements or 
representations which are similar to expressions of general policy 
concerning customer satisfaction and which are not subject to any 
specific limitations. 
(c) In addition to exercising the authority pertaining to disclosure 
granted in section 102 of this Act, the Commission may by rule 
determine when a written warranty does not have to be designated 
either "full (statement of duration)" or "limited" in accordance with 
this section. 
(d) The provisions of subsections (a) and (c) of this section 
apply only to warranties which pertain to consumer products actually 
costing the consumer more than $10 and which are not designated 
"full (statement of duration) w^arranties". 
FEDERAL MINIMUM STANDARDS FOR AVARRANTY 
SE(\ 104. (a) In order for a warrantor warranting a consumer 
is use 2304. 
product by means of a written wari-anty to meet the Federal minimum 
standards for warranty— 
(1) such warrantor must as a minimum remedy such consumer 
product within a reasonable time and without charge, in the case 
of a defect, malfunction, or failure to conform with such written 
warranty; 
(2) notwithstanding section 108(b), such warrantor may not 
impose any limitation on the duration of any implied warranty 
on the product; 
(3) such warrantor may not exclude or limit consequential dam-
ages for breach of any written or implied warranty on such 
product, unless such exclusion or limitation conspicuously appears 
on the face of the warranty; and 
(4) if the product (or a component part thereof) contains a 
defect or malfunction after a reasonable number of attempts by 
the warrantor to remedy defects or malfunctions in such product, 
such warrantor must permit the consumer to elect either a refund 
for, or replacement without charge of, such product or part (as 
the case may be). The Commission may by rule specify for pur-
poses of this paragraph, what constitutes a reasonable number 
of attempts to remedy particular kinds of defects or malfunctions 
under different circumstances. If the warrantor replaces a com-
ponent part of a consumer product, such replacement shall include 
installing the part in the product without charge. 
2188 
PUBLIC LAW 93-637-JAN. 4, 1975 
[88 STAT. 
(b) (1) In fulfilling the duties under subsection (a) respecting a 
written warranty, the warrantor shall not impose any duty other than 
notification upon any consumer as a condition of securing remedy of 
any consumer product which malfunctions, is defective, or does not 
conform to the written warranty, unless the warrantor has demon-
strated in a rulemaking proceeding, or can demonstrate in an admin-
istrative or judicial enforcement proceeding 
(including private 
enforcement), or in an informal dispute settlement proceeding, that 
such a duty is reasonable. 
(2) Notwithstanding paragraph (1), a warrantor may require, as 
a condition to replacement of, or refund for, any consumer product 
under subsection (a), that such consumer product shall be made avail-
able to the warrantor free and clear of liens and other encumbrances, 
except as otherwise provided by rule or order of the Commission in 
cases in which such a recpiirement would not be practicable. 
(3) The Commission may, by rule define in detail the duties set 
forth in section 104(a) of this Act and the applicability of such duties 
to warrantors of different categories of consumer products with "full 
(statement of duration)" warranties. 
(4) The duties under subsection (a) extend from the warrantor 
to each person who is a consumer witli respect to the consumer product. 
(c) The performance of the duties under subsection (a) of this 
section shall not be required of the warrantor if he can show that the 
defect, malfunction, or failure of any warranted consumer product 
to conform with a written warranty, was caused by damage (not 
resulting from defect or malfunction) while in the possession of the 
consumer, or unreasonable use (including failure to provide reasonable 
and necessary maintenance). 
Without 
((J) For purposes of this section and of section 102(c), the term 
"without charge" means that the warrantor may not assess the con-
sumer for any costs tlie warrantor or his representatives incur in 
connection with the required remedy of a warranted consumer product. 
An obligation under subsection (a) (1) (A) to remedy without charge 
does not necessarily require the warrantor to compensate the consumer 
for incidental expenses; however, if any incidental expenses are 
incurred because the remedy is not made Avithin a reasonable time or 
because the warrantor imposed an unreasonable duty upon the con-
sumer as a condition of securing remedy, then the consumer shall be 
entitled to recover reasonable incidental expenses which are so incurred 
in any action against the warrantor. 
(e) If a supplier designates a wai'ranty applicable to a consumer 
product as a "full (statement of duration)" warranty, then the war-
ranty on such product shall, for purposes of any action under section 
110(d) or under any State law, be deemed to incorporate at least the 
minimum requirements of this section and rules prescribed under this 
section. 
FULL A
N
D LIMITED W
A
R
R
A
N
T
I
N
G
} OF A CONSUMER rRODUCT 
1
5 use 2305. 
gEc, 105. Nothing in this title shall prohibit the selling of a con-
sumer product which has both full and limited warranties if sucli 
warranties are clearly and conspicuously differentiated. 
SERVICE CONTRACTS 
1
5 use 2306. 
SEQ^ 106. (a) The Commission may prescribe by rule the manner and 
form in which the terms and conditions of service contracts shall be 
fully, clearly, and conspicuously disclosed. 
(b) Nothing in this title shall be construed to prevent a supplier 
or warrantor from entering: into a service contract with the consumer 
charge." 
88 STAT. ] 
PUBLIC LAW 93-637-JAN. 4, 1975 
2189 
in addition to or in lieu of a written warranty if such contract fully, 
clearly, and conspicuously discloses its terms and conditions in simple 
and readily understood language. 
DESIGNATION OF REPRESENTATIVES 
SEC. 107. Nothing in this title shall be construed to prevent any 
is use 2307. 
warrantor from designating representatives to perform duties under 
the written or implied warranty : Provided^ That such warrantor shall 
make reasonable arrangements for compensation of such designated 
representatives, but no such designation shall relieve the warrantor of 
his direct responsibilities to the consumer or make the representative 
a cowarrantor. 
LIMITATION ON DISCLAIMER OF IMPLIED 
WARRANTIES 
SEC. 108. (a) No supplier may disclaim or modify (except as pro- 
is use 2308. 
vided in subsection (b)) any implied warranty to a consumer with 
respect to such consumer product if (1) such supplier makes any writ-
ten warranty to the consumer with respect to such consumer product, 
or (2) at the time of sale, or within 90 days thereafter, such supplier 
enters into a service contract with the consumer which applies to such 
consumer product. 
(b) For purposes of this title (other than section 104(a)(2)), 
implied warranties may be limited in duration to the duration of a 
written warranty of reasonable duration, if such limitation is con-
scionable and is set forth in clear and unmistakable language and 
prominently displayed on the face of the warranty. 
(c) A disclaimer, modification, or limitation made in violation of 
this section shall be ineffective for purposes of this title and State law. 
COMMISSION 
RULES 
SEC. 109. (a) Any rule prescribed under this title shall be prescribed 
i^ u^*^ 2309. 
in accordance with section 553 of title 5, United States Code; except 
that the Commission shall give interested persons an opportunity for 
oral presentations of data, views, and arguments, in addition to written 
submissions. A transcript shall be kept of any oral presentation. Any 
such rule shall be subject to judicial review under section 18(e) of the 
Federal Trade Commission Act (as amended by section 202 of this 
Act) in the same manner as rules prescribed under section 18(a) (1) 
^"'^' P- ^i^^-
(B) of such Act, except that section 18(e) (3) (B) of such Act shall 
not apply. 
(b) The Commission shall initiate within one year after the date 
of enactment of this Act a rulemaking proceeding dealing with war-
ranties and warranty practices in connection with the sale of used 
motor vehicles; and, to the extent necessary to supplement the pro-
tections offered the consumer by this title, shall prescribe rules deal-
ing with such warranties and practices. In prescribing rules under 
this subsection, the Commission may exercise any authority it may 
have under this title, or other law, and in addition it may require 
disclosure that a used motor vehicle is sold without any warranty 
and specify the form and content of such disclosure. 
Used motor 
h i d e s . 
REMEDIES 
Informal disi 
SEC. 110. (a) (1) Congress hereby declares it to be its policy to 
^^^ settlement 
encourage warrantors to establish procedures whereby consumer dis- 
"15 use 2'3io.^ 
putes are fairly and expeditiously settled through informal dispute 
settlement mechanisms. 
2190 
PUBUC LAW 93-637-JAN. 4, 1975 
[88 STAT. 
^'^^''^- 
(2) The Commission shall prescribe rules setting forth minimum 
requirements for any informal dispute settlement procedure which is 
incorporated into the terms of a written warranty to which any pro-
vision of this title applies. Such rules shall provide for participation 
in such procedure by independent or governmental entities. 
(3) One or more warrantors may establish an informal dispute set-
tlement procedure which meets the requirements of the Commission's 
rules under paragraph (2). If— 
(A) a warrantor establishes such a procedure, 
(B) such procedure, and its implementation, meets the require-
ments of such rules, and 
(C) he incorporates in a written warranty a requirement that 
the consumer resort to such procedure before pursuing any legal 
remedy under this section respecting such warranty, 
then (i) the consumer may not commence a civil action (other than a 
class action) under subsection (d) of this section unless he initially 
resorts to such procedure; and (ii) a class of consumers may not pro-
ceed in a class action under subsection (d) except to the extent the court 
determines necessary to establish the representative capacity of the 
named plaintiffs, unless the named plaintiffs (upon notifying the 
defendant that they are named plaintiffs in a class action with respect 
to a warranty obligation) initially resort to such procedure. In the 
case of such a class action which is brought in a district court of the 
United States, the representative capacity of the named plaintiffs shall 
be established in the application of rule 23 of the Federal Eules of 
28 use app. 
Civil Procedure. In any civil action arising out of a w^arranty obliga-
tion and relating to a matter considered in such a procedure, any 
decision in such procedure shall be admissible in evidence. 
Review o
f dis- 
^4) "pj^g Commlsslou on its own initiative may, or upon written 
procedures!"'^" 
complalut filcd by any interested person shall, review the bona fide 
operation of any dispute settlement procedure resort to which is stated 
in a written warranty to be a prerequisite to pursuing a legal remedy 
under this section. If the Commission finds that such procedure or its 
implementation fails to comply with the requirements of the rules 
under paragraph (2), the Commission may take appropriate remedial 
action under any authority it may have under this title or any other-
provision of law. 
(5) Until rules under paragraph (2) take effect, this subsection 
shall not affect the validity of any informal dispute settlement pro-
cedure respecting consumer wari-anties, but in any action under sub-
section (d), the court may invalidate any such procedure if it finds 
that such procedure is unfair. 
(b) It shall be a violation of section 5(a) (1) of the Federal Trade 
Commission Act (15 U.S.C. 45(a)(1)) for any person to fail to 
comply with any requirement imposed on such person by this title 
(or a rule thereunder) or to violate any prohibition contained in this 
title (or a rule thereunder). 
foremen"/''"' 
(c)(1) The distrlct courts of the United States shall have juris-
diction of any action brought by the Attorney General (in his capacity 
as such), or by the Commission by any of its attorneys designated by 
it for such purpose, to restrain (A) any warrantor from making a 
deceptive warranty with respect to a consumer product, or (B) any 
person from failing to comply with any requirement imposed on such 
person by or pursuant to this title or from violating any prohibition 
contained in this title. Upon proper showing that, weighing the equi-
ties and considering the Commission's or Attorney Creneral's likeli-
hood of ultimate success, such action would be in the public interest 
and after notice to the defendant, a temporary restraining order or 
preliminary injunction may be granted without bond. In the case of an 
88 STAT. ] 
PUBLIC LAW 93-637-JAN. 4, 1975 
2191 
action brought by the Commission, if a complaint mider section 5 of 
the Federal Trade Commission Act is not filed within such period 
is use 45. 
(not exceeding 10 days) as may be specified by the court after the 
issuance of the temporary restraining order or preliminary injunction, 
the order or injunction shall be dissolved by the court and be of no 
further force and effect. Any suit shall be brought in the district in 
which such person resides or transacts business. Whenever it appears 
to the court that the ends of justice require that other persons should 
be parties in the action, the court may cause them to be summoned 
whether or not they reside in the district in which the court is held, 
and to that end process may be served in any district. 
(2) For the purposes of this subsection, the term "deceptive war- 
"Deceptive war-
ranty" means (A) a written warranty which (i) contains an affirma- ""'^' 
tion, promise, description, or representation which is either false or 
fraudulent, or which, in light of all of the circumstances, would 
mislead a reasonable individual exercising due care; or (ii) fails to 
contain information which is necessary in light of all of the circum-
stances, to make the warranty not misleading to a reasonable indi-
vidual exercising due care; or (B) a written warranty created by the 
use of such terms as "guaranty" or "warranty", if the terms and 
conditions of such warranty so limit its scope and application as to 
deceive a reasonable individual. 
(d) (1) Subject to subsections (a) (3) and (e), a consumer who is 
'^'^'''•^ ^"^*-
damaged by the failure of a supplier, warrantor, or service contractor 
to comply with any obligation under this title, or under a written 
warranty, implied warranty, or service contract, may bring suit for 
damages and other legal and equitable relief— 
(A) in any court of competent jurisdiction in any State or 
the District of Columbia; or 
(B) in an appropriate district court of the United States, sub-
ject to paragraph (3) of this subsection. 
(2) If a consumer finally prevails in any action brought under 
paragraph (1) of this subsection, he may be allowed by the court to 
recover as part of the judgment a sum equal to the aggregate amount 
of cost and expenses (including attorneys' fees based on actual time 
expended) determined by the court to have been reasonably incurred 
by the plaintiff for or in connection with the commencement and pros-
ecution of such action, unless the court in its discretion shall determine 
that such an award of attorneys' fees would be inappropriate. 
(3) No claim shall be cognizable in a suit brought under paragraph 
(1) (B) of this subsection— 
(A) if the amount in controversy of any individual claim is 
less than the sum or value of $25; 
(B) if the amount in controversy is less than the sum or value 
of $50,000 (exclusive of interests and costs) computed on the basis 
of all claims to be determined in this suit; or 
(C) if the action is brought as a class action, and the number 
of named plaintiffs is less than one hundred. 
(e) No action (other than a class action or an action respecting a 
warranty to which subsection (a) (3) applies) may be brought under 
subsection (d) for failure to comply with any obligation under any 
written or implied warranty or service contract, and a class of con-
sumers may not proceed in a class action under such subsection with 
respect to such a failure except to the extent the court determines 
necessary to establish the representative capacity of the named plain-
tiffs, unless the person obligated under the warranty or service con-
tract is afforded a reasonable opportunity to cure such failure to 
comply. In the case of such a class action (other than a class action 
respecting a warranty to which subsection (a) (3) applies) brought 
2192 
PUBLIC LAW 93-637-JAN. 4, 1975 
[88 STAT. 
under subsection (d) for breach of any written or implied warranty 
or service contract, such reasonable opportunity will be afforded by 
the named plaintiffs and they shall at that time notify the defendant 
that they are acting on behalf of the class. In the case of such a class 
action which is brought in a district court of the United States, the 
representative capacity of the named plaintiffs shall be established 
28 use app. 
in the application of rule 23 of the Federal Rules of Civil Procedure, 
(f) For purposes of this section, only the warrantor actually mak-
ing a written affirmation of fact, promise, or undertaking shall be 
deemed to have created a written warranty, and any rights arising 
thereunder may be enforced under this section only against such war-
rantor and no other person. 
EFFECT ON OTHER LAWS 
1
5 use 2311. 
gj,Q_ i]^]^2. (a) (1) Nothing contained in this title shall be construed 
to repeal, invalidate, or supersede the Federal Trade Commission Act 
(15 U.S.C. 41 et seq.) or any statute defined therein as an Antitrust 
Act. 
(2) Nothing in this title shall be construed to repeal, invalidate, 
or supersede the Federal Seed Act (7 U.S.C. 1551-1611) and nothing 
in this title shall apply to seed for planting. 
(b) (1) Nothing in this title shall invalidate or restrict any right 
or remedy of any consumer under State law or any other Federal law. 
(2) Nothing in this title (other than sections 108 and 104(a) (2) 
and (4)) shall (A) affect the liability of, or impose liability on, any 
person for personal injury, or (B) supersede any provision of State 
law regarding consequential damages for injury to the person or other 
injury. 
(c) (1) Except as provided in subsection (b) and in paragraph (2) 
of this subsection, a State requirement— 
(A) which relates to labeling or disclosure with respect to 
written warranties or performance thereunder; 
(B) which is within the scope of an applicable requirement 
of sections 102, 103, and 104 (and rules implementing such sec-
tions), and 
(C) which is not identical to a requirement of section 102, 103, 
or 104 (or a rule thereunder), 
shall not be applicable to written Avarranties complying with such 
sections (or rules thereunder). 
(2) If, upon application of an appropriate State agency, the Com-
mission determines (pursuant to rules issued in accordance with sec-
tion 109) that any requirement of such State covering any transaction 
to which this title applies (A) affords protection to consumers greatev 
than the requirements of this title and (B) does not unduly burden 
interstate commerce, then such State requirement shall be a]3plicablc 
(notwithstanding the provisions of paragraph (1) of this subsection) 
to the extent specified in such determination for so long as the State 
administers^ and enforces effectively any such greater requirement. 
(d) This title (other than section 102(c)) shall be inapplicable to 
any written warranty the making or content of which is otherwise 
governed by Federal law. If only a portion of a written warrantv is 
so governed by Federal law, the remaining portion shall be subject 
to this title. 
EFFECTIVE 
DATE 
1
5 use 2312. 
S^f.. 112. (a) Except as provided in subsection (b) of this section, 
this title shall take effect 6 months after the date of its enactment 
but shall not apply to consumer products manufactured prior to such 
date. 
88 STAT. ] 
PUBLIC LAW 93-637-JAN. 4, 1975 
2193 
(b) Section 102(a) shall take effect 6 months after the final pub-
lication of rules respecting such section; except that the Commission, 
for good cause shown, may postpone the applicability of such sections 
until one year after such final publication in order to permit any 
designated classes of suppliers to bring their written warranties into 
compliance with rules promulgated pursuant to this title. 
(c) The Commission shall promulgate rules for initial implementa- 
^^"1^^. 
tion of this title as soon as possible after the date of enactment of 
this Act but in no event later than one year after such date. 
TITLE II—FEDERAL TRADE COMMISSION 
IMPROVEMENTS 
JURISDICTION OV COMMISSION 
SEC. 201. (a) Section 5 of the Federal Trade Commission Act (15 
U.S.C. 45) is amended by striking out '4n commerce" wherever it 
appears and inserting in lieu thereof "in or affecting commerce". 
(b) Subsections (a) and (b) of section 6 of the Federal Trade 
Commission Act (15 U.S.C. 46(a), (b)) are each amended by striking 
out "in commerce" and inserting in lieu thereof "in or whose business 
affects commerce". 
(c) Section 12 of the Federal Trade Commission Act (15 U.S.C. 52) 
is amended by striking out "in commerce" wherever it appears and 
inserting in lieu thereof in subsection (a) "in or having an effect 
upon commerce," and in lieu thereof in subsection (b) "in or affecting 
commerce". 
RULEMAKING 
SEC. 202. (a) The Federal Trade Commission Act (15 U.S.C. 41 
et seq.) is amended by redesignating section 18 as section 21, and 
inserting after section 17 the following new section: 
"SEC. 18. (a)(1) The Commission may prescribe— 
"(A) interpretive rules and general statements of policy with 
respect to unfair or deceptive acts or practices in or affecting 
commerce (within the meaning of section 5(a) (1) of this Act), 
and 
"(B) rules which define with specificity acts or practices which 
are unfair or deceptive acts or practices in or affecting commerce 
(within the meaning of such section 5(a) (1)). Rules under this 
subparagraph may include requirements prescribed for the pur-
pose of preventing such acts or practices. 
"(2) The Commission shall have no authority under this Act, other 
than its authority under this section, to prescribe any rule with respect 
to unfair or deceptive acts or practices in or affecting commerce 
(within the meaning of section 5(a)(1)). The preceding sentence shall 
not affect any authority of the Commission to prescribe rules (includ-
ing interpretive rules), and general statements of policy, with respect 
to unfair methods of competition in or affecting commerce. 
"(b) When prescribing a rule under subsection (a) (1) (B) of this 
section, the Commission shall proceed in accordance with section 553 
of title 5, United States Code (without regard to any reference in 
such section to sections 556 and 557 of such title), and shall also 
(1) publish a notice of proposed rulemaking stating with particu-
larity the reason for the proposed rule; (2) allow interested persons 
to submit written data, views, and arguments, and make all such 
submissions publicly available; (3) provide an opportunity for an 
informal hearing in accordance with subsection (c); and (4) promul-
15 use 58. 
15 use 57a. 
2194 
PUBLIC LAW 93-637-JAN. 4, 1975 
[88 STAT. 
gate, if appropriate, a final rule based on the matter in the rulemaking 
record (as defined in subsection (e) (1) (B)), together with a state-
ment of basis and purpose. 
cedure""^ P
*
"
"
" 
"(c) The Commlsslon shall conduct any informal hearings required 
by subsection (b) (3) of this section in accordance with the following 
procedure: 
"(1) Subject to paragraph (2) of this subsection, an interested 
person is entitled— 
" (A) to present his position orally or by documentary sub-
missions (or both), and 
"(B) if the Commission determines that there are disputed 
issues of material fact it is necessary to resolve, to present 
such rebuttal submissions and to conduct (or have conducted 
under paragraph (2) (B)) such cross-examination of persons 
as the Commission determines (i) to be appropriate, and 
(ii) to be required for a full and true disclosure with respect 
to such issues. 
R^ies. 
"(2) The Commission may prescribe such rules and make such 
rulings concerning proceedings in such hearings as may tend to 
avoid unnecessary costs or delay. Such rules or rulings may 
include (A) imposition of reasonable time limits on each inter-
ested person's oral presentations, and (B) requirements that any 
cross-examination to which a person may be entitled under para-
graph (1) be conducted by the Commission on behalf of that 
person in such manner as the Commission determines (i) to be 
appropriate, and (ii) to be required for a full and true disclosure 
with respect to disputed issues of material fact. 
"(3) (A) Except as provided in subparagraph (B), if a group 
of persons each of whom under paragraphs (1) and (2) would 
be entitled to conduct (or have conducted) cross-examination and 
who are determined by the Commission to have the same or similar 
interests in the proceeding cannot agree upon a single repre-
sentative of such interests for purposes of cross-examination, the 
Commission may make rules and rulings (i) limiting the repre-
sentation of such interest, for such purposes, and (ii) governing 
the manner in which such cross-examination shall be limited. 
"(B) When any person who is a member of a group with 
respect to which the Commission has made a determination under 
subparagraph (A) is unable to agree upon group representation 
with the other members of the group, then such person shall not 
be denied under the authority of subparagraph (A) the oppor-
tunity to conduct (or have conducted) cross-examination as to 
issues affecting his particular interests if (i) he satisfies the 
Commission that he has made a reasonable and good faith effort 
to reach agreement upon group representation with the other 
members of the group and (ii) the Commission determines that 
there are substantial and relevant issues which are not adequately 
presented by the group representative. 
"(4) A verbatim transcript shall be taken of any oral presentation, 
and cross-examination, in an informal hearing to which this subsection 
applies. Such transcript shall be available to the public. 
statement o
f 
"(d) (1) Thc Commlsslou's statement of basis and purpose to accom-
pose! re"qufrel" 
P^Hy a Tule promulgatcd under subsection (a) (1) (B) shall include 
ments. 
(A) a Statement as to the prevalence of the acts or practices treated by 
the rule; (B) a statement as to the manner and context in which such 
acts or practices are unfair or deceptive; and (C) a statement as to 
the economic effect of the rule, taking into account the effect on small 
business and consumers. 
88 STAT. ] 
PUBLIC LAW 93-637-JAN. 4, 1975 
2195 
"(2) (A) The term 'Commission' as used in this subsection and 
"commissicn." 
subsections (b) and (c) includes any person authorized to act in 
behalf of the Commission in any part of the rulemaking proceeding. 
"(B) A substantive amendment to, or repeal of, a rule promulgated 
under subsection (a) (1) (B) shall be prescribed, and subject to judi-
cial review, in the same manner as a rule prescribed under such 
subsection. An exemption under subsection (g) shall not be treated as 
an amendment or repeal of a rule. 
"(3) When any rule under subsection (a)(1)(B) takes effect a 
subsequent violation thereof shall constitute an unfair or deceptive 
act or practice in violation of section 5(a) (1) of this Act, unless the 
Commission otherwise expressly provides in such rule. 
"(e)(1)(A) Not later than 60 days after a rule is promulgated 
Judicial review. 
under subsection (a) (1) (B) by the Commission, any interested per-
son (including a consumer or consumer organization) may file a 
petition, in the United States Court of Appeals for the District of 
Columbia circuit or for the circuit in which such person resides or has 
his principal place of business, for judicial review of such rule. Copies 
of the petition shall be forthwith transmitted by the clerk of the court 
to the Commission or other officer designated by it for that purpose. 
The provisions of section 2112 of title 28, United States Code, shall 
apply to the filing of the rulemaking record of proceedings on which 
the Commission based its rule and to the transfer of proceedings in 
the courts of appeals. 
"(B) For purposes of this section, the term 'rulemaking record' reco^d!""^'*''"^ 
means the rule, its statement of basis and purpose, the transcript 
required by subsection (c)(4), any written submissions, and any 
other information which the Commission considers relevant to such 
rule. 
"(2) If the petitioner or the Commission applies to the court for 
leave to make additional oral submissions or written presentations 
and shows to the satisfaction of the court that such submissions and 
presentations would be material and that there were reasonable 
grounds for the submissions and failure to make such submissions and 
presentations in the proceeding before the Commission, the court may 
order the Commission to provide additional opportunity to make such 
submissions and presentations. The Commission may modify or set 
aside its rule or make a new rule by reason of the additional submis-
sions and presentations and shall file such modified or new rule, and 
the rule's statement of basis of purpose, with the return of such sub-
missions and presentations. The court shall thereafter review such 
new or modified rule. 
"(3) Upon the filing of the petition under paragraph (1) of this 
subsection, the court shall have jurisdiction to review the rule in 
accordance with chapter 7 of title 5, United States Code, and to grant 
^ use voi. 
appropriate relief, including interim relief, as provided in such chapter. 
The court shall hold unlawful and set aside the rule on any ground 
specified in subparagraphs (A), (B), (C), or (D) of section 706(2) 
of title 5, United States Code (taking due account of the rule of 
prejudicial error), or if— 
"(A) the court finds that the Commission's action is not sup-
ported by substantial evidence in the rulemaking record (as 
defined in paragraph (1) (B) of this subsection) taken as a whole, 
or 
"(B) the court finds that— 
"(i) a Commission determination under subsection (c) that 
the petitioner is not entitled to conduct cross-examination or 
make rebuttal submissions, or 
2196 
PUBLIC LAW 93-637-JAN. 4, 1975 
[88 STAT. 
"(ii) a Commission rule or ruling under subsection (c) 
limiting the petitioner's 
cross-examination 
or 
rebuttal 
submissions, 
has precluded disclosure of disputed material facts which was 
necessary for fair determination by the Commission of the rule-
making proceeding taken as a whole. 
"Evidence." 
rj^^iQ term 'evideucc', as used in this paragraph, means any matter in 
the rulemaking record. 
"(4) The judgment of the court affirming or setting aside, in whole 
or in part, any such rule shall be final, subject to review by the Supreme 
Court of the United States upon certiorari or certification, as provided 
in section 1254 of title 28, United States Code. 
"(5) (A) Remedies under the preceding paragraphs of this sub-
section are in addition to and not in lieu of any other remedies provided 
by law. 
"(B) The United States Courts of Appeal shall have exclusive 
jurisdiction of any action to obtain judicial review (other than in an 
enforcement proceeding) of a rule prescribed under subsection (a) (1) 
(B), if any district court of the United States would have had juris-
diction of such action but for this subparagraph. Any such action shall 
be brought in the United States Court of Appeals for the District of 
Columbia circuit, or for any circuit which includes a judicial district 
in which the action could have been brought but for this subparagraph. 
"(C) A determination, rule, or ruling of the Commission described 
in paragraph (3) (B) (i) or (ii) may be reviewed only in a proceeding 
under this subsection and only in accordance with paragraph (3) (B). 
Section 706(2) (E) of title 5, United States Code, shall not apply to 
any rule promulgated under subsection (a) (1) (B). The contents and 
adequacy of any statement required by subsection (b) (4) shall not be 
subject to judicial review in any respect. 
B^ni's- 
"(f)(1) In order to prevent unfair or deceptive acts or practices 
in or affecting commerce (including acts or practices which are unfair 
or deceptive to consumers) by banks, each agency specified in para-
graph (2) of this subsection shall establish a separate division of 
consumer affairs which shall receive and take appropriate action upon 
complaints with respect to such acts or practices by banks subject 
Regulations. 
to Its jurlsdictiou. The Board of Governors of the Federal Reserve 
System shall prescribe regulations to carry out the purposes of this 
section, including regulations defining with specificity such unfair or 
deceptive acts or practices, and containing requirements prescribed 
for the purpose of preventing such acts or practices. Whenever the 
Commission prescribes a rule under subsection (a)(1)(B) of this 
section, then within 60 days after such rule takes effect such Board 
shall promulgate substantially similar regulations prohibiting acts 
or practices of banks which are substantially similar to those pro-
hibited by rules of the Commission and which impose substantially 
similar requirements, unless such Board finds that (A) such acts or 
practices of banks are not unfair or deceptive, or (B) that implemen-
tation of similar regulations with respect to banks would seriously 
conflict with essential monetary and payments systems policies of the 
^Publication m
^ j^Q^rd^ aud pubUshcs any such finding, and the reasons therefor, in 
the Federal Register. 
"(2) Compliance with regulations prescribed under this subsection 
shall be enforced under section 8 of the Federal Deposit Insurance 
Act, in the case of— 
"(A) national banks and banks operating under the code of 
law for the District of Columbia, by the division of consumer 
affairs established by the Comptroller of the Currency; 
Federal Register. 
12 u s e 1818. 
88 STAT. ] 
PUBLIC LAW 93-637-JAN. 4, 1975 
2197 
"(B) member banks of the Federal Eeserve System (other than 
banks referred to in subparagraph (A)) by the division of con-
sumer affairs established by the Board of Governors of the Fed-
eral Reserve System; and 
"(C) banks insured by the Federal Deposit Insurance Corpo-
ration (other than banks referred to in subparagraph (A) or 
(B)), by the division of consumer affairs established by the 
Board of Directors of the Federal Deposit Insurance Corporation. 
"(3) For the purpose of the exercise by any agency referred to in 
paragraph (2) of its powers under any Act referred to in that para-
graph, a violation of any regulation prescribed under this subsection 
shall be deemed to be a violation of a requirement imposed under that 
Act. In addition to its powers under any provision of law specifically 
referred to in paragraph (2), each of the agencies referred to in that 
paragraph may exercise, for the purpose of enforcing compliance with 
any regulation prescribed under this subsection, any other authority 
conferred on it by law. 
"(4) The authority of the Board of Governors of the Federal 
Reserve System to issue regulations under this subsection does not 
impair the authority of any other agency designated in this subsection 
to make rules respecting its own procedures in enforcing compliance 
with regulations prescribed under this subsection. 
"(5) Each agency exercising authority under this subsection shall 
r^ss"*"''° '^°"' 
transmit to the Congress not later than March 15 of each year a 
detailed report on its activities under this paragraph during the 
preceding calendar year. 
"(g) (1) Any person to whom a rule under subsection (a) (1) (B) 
Exemptions. 
of this section applies may petition the Commission for an exemption 
from such rule. 
"(2) If, on its own motion or on the basis of a petition under para-
graph (1), the Commission finds that the application of a rule pre-
scribed under subsection (a)(1)(B) to any person or class or persons 
is not necessary to prevent the unfair or deceptive act or practice to 
which the rule relates, the Commission may exempt such person or 
class from all or part of such rule. Section 553 of title 5, United States 
Code, shall apply to action under this paragraph. 
"(3) Neither the pendency of a proceeding under this subsection 
respecting an exemption from a rule, nor the pendency of judicial pro-
ceedings to review the Commission's action or failure to act under 
this subsection, shall stay the applicability of such rule under sub-
section (a) (1) (B). 
"(h) (1) The Commission may, pursuant to rules prescribed by it, 
compensation. 
provide compensation for reasonable attorneys fees, expert witness 
fees, and other costs of participating in a rulemaking proceeding under 
this section to any person (A) who has, or represents, an interest (i) 
which would not otherwise be adequately represented in such proceed-
ing, and (ii) representation of which is necessary for a fair determina-
tion of the rulemaking proceeding taken as a whole, and (B) who is 
unable effectively to participate in such proceeding because such 
person cannot afford to pay costs of making oral presentations, con-
ducting cross-examination, and making rebuttal submissions in such 
proceeding. 
"(2) The aggregate amount of compensation paid under this sub-
section in any fiscal year to all persons who, in rulemaking proceedings 
in which they receive compensation, are persons who either (A) would 
be regulated by the proposed rule, or (B) represent persons who would 
38-194 O - 76 - 56 Pt. 2 
note. 
gres s. 
2198 
PUBLIC LAW 93-637-JAN. 4, 1975 
[88 STAT. 
be so regulated, may not exceed 25 percent of the aggregate amount 
paid as compensation under this subsection to all persons in such 
fiscal year. 
"(3) The aggregate amount of compensation paid to all persons in 
any fiscal year under this subsection may not exceed $1,000,000." 
(b) Section 6(g) of the Federal Trade Commission Act (15 U.S.C. 
46(g)) is amended by inserting "(except as provided in section 18 
(a) (2) of this Act)" before "to make rules and regulations". 
1
5 use S7a 
(c) (1) The amendments made by subsections (a) and (b) of this 
section shall not affect the validity of any rule which was promul-
gated under section 6(g) of the Federal Trade Commission Act prior 
to the date of enactment of this section. Any proposed rule under 
section 6(g) of such Act with respect to which presentation of data, 
views, and arguments was substantially completed before such date 
may be promulgated in the same manner and with the same validity 
as such rule could have been promulgated had this section not been 
enacted. 
(2) If a rule described in paragraph (1) of this subsection is valid 
Ante, p. 2 193. 
^ud if scctiou 18 of the Federal Trade Commission Act would have 
applied to such rule had such rule been promulgated after the date 
of enactment of this Act, any substantive change in the rule after 
it has been promulgated shall be made in accordance with such 
section 18. 
note ^^^ ^
^
"
^ 
(d) The Federal Trade Commission and the Administrative Con-
study and evai- fercncc of the United States shall each conduct a study and evaluation 
"^'^°"- 
of the rulemaking procedures under section 18 of the Federal Trade 
Report to Con- Commissiou Act and each shall submit a report of its study (including 
any legislative recommendations) to the Congress not later than 18 
months after the date of enactment of this Act. 
INVESTIGATIVE 
A I T T I I O R I T Y 
SEC. 203. (a)(1) Section 6(a) of the Federal Trade Commission 
Act (15 U.S.C. 46(a)) is amended by striking out "corporation" and 
inserting "person, partnership, or corporation"; and by striking out 
"corporations and to individuals, associations, and partnerships", and 
inserting in lieu thereof "persons, partnerships, and corporations". 
(2) Section 6(b) of such Act is amended by striking out "corpora-
tions" where it first appears and inserting in lieu thereof "persons, 
partnerships, and corporations,"; and by striking out "respective cor-
porations" and inserting in lieu thereof "respective persons, partner-
ships, and corporations". 
(3) The proviso at the end of section 6 of such Act is amended by 
striking out "any such corporation to the extent that such action is 
necessary to the investigation of any corporation, group of corpora-
tions," and inserting in lieu thereof "any person, partnership, or 
corporation to the extent that such action is necessary to the investi-
gation of any person, partnership, or corporation, group of persons, 
partnerships, or corporations,". 
(b) (1) The first paragraph of section 9 of such Act (15 U.S.C. 49) 
is amended by striking out "corporation" where it first appears and 
insei'ting in lieu thereof "person, partnership, or corporation". 
(2) The third paragi-aph of section 9 of such Act is amended by 
striking out "corporation or other person" both places where it appears 
and inserting in each such place "person, partnership, or corporation". 
(3) The fourth paragraph of section 9 of such Act is amended by 
striking out "person or corporation" and inserting in lieu thereof "per-
son, partnership, or corporation". 
88 STAT. ] 
PUBLIC LAW 93-637-JAN. 4, 1975 
2199 
(c) (1) The second paragraph of section 10 (15 U.S.C. 50) of such 
Act is amended by striking out "corporation" each place where it 
appears and inserting in lieu thereof in each such place "person, part-
nership, or corporation". 
(2) The third paragraph of section 10 of such Act is amended by 
striking out "corporation" where it first appears and inserting in lieu 
thereof "persons, partnership, or corporation"; and by striking out 
"in the district where the corporation has its principal office or in any 
district in which it shall do business" and inserting in lieu thereof 
"in the case of a corporation or partnership in the district where the 
corporation or partnership has its principal office or in any district in 
which it shall do business, and in the case of any person in the district 
where such person resides or has his principal place of business". 
REPRESENTATION 
15 use 56. 
SEC. 204. (a) Section 16 of the Federal Trade Commission Act is 
amended to read as follows: 
"SEC. 16. (a) (1) Except as otherwise provided in paragraph (2) 
or (3), if— 
"(A) before commencing, defending, or intervening in, any 
civil action involving this Act (including an action to collect 
a civil penalty) which the Commission, or the Attorney General 
on behalf of the Commission, is authorized to commence, defend, 
or intervene in, the Commission gives written notification and 
undertakes to consult with the Attorney General with respect 
to such action; and 
"(B) the Attorney General fails within 45 days after receipt 
of such notification to commence, defend, or intervene in, such 
action; 
the Commission may commence, defend, or intervene in, and supervise 
the litigation of, such action and any appeal of such action in its own 
name by any of its attorneys designated by it for such purpose. 
"(2) Except as otherwise provided in paragraph (3), in any civil 
action— 
"(A) under section 13 of this Act (relating to injunctive 
is use 53. 
relief) ; 
"(B) under section 19 of this Act (relating to consumer 
^o^*- P- 2201. 
redress) ; 
"(C) to obtain judicial review of a rule prescribed by the 
Commission, or a cease and desist order issued under section 5 
of this Act; or 
1
5 use 45. 
"(D) under the second paragraph of section 9 of this Act 
is use 49. 
(relating to enforcement of a subpena) and under the fourth 
paragraph of such section (relating to compliance with section 6 
of this Act) ; 
the Commission shall have exclusive authority to commence or defend, 
and supervise the litigation of, such action and any appeal of such 
action in its own name by any of its attorneys designated by it for such 
purpose, unless the Commission authorizes the Attorney General to 
do so. The Commission shall inform the Attorney General of the 
exercise of such authority and such exercise shall not preclude the 
Attorney General from intervening on behalf of the United States in 
such action and any appeal of such action as may be otherwise pro-
vided by law. 
" (3) (A) If the Commission makes a written request to the Attorney 
General, within the 10-day period which begins on the date of the 
entry of the judgment in any civil action in which the Commission 
2200 
PUBLIC LAW 93-637-J 
AN. 4, 1975 
[88 STAT. 
represented itself pursuant to paragraph (1) or (2), to represent 
itself through any of its attorneys designated by it for such purpose 
before the Supreme Court in such action, it may do so, if— 
"(i) the Attorney General concurs with such request; or 
*'(ii) the Attorney General, within the 60-day period which 
begins on the date of the entry of such judgment— 
"(a) refuses to appeal or file a petition for writ of certio-
rari with respect to such civil action, in which case he shall 
give written notification to the Commission of the reasons 
for such refusal within such 60-day period; or 
"(b) the Attorney General fails to take any action with 
respect to the Commission's request. 
"(B) In any case where the Attorney General represents the Com-
mission before the Supreme Court in any civil action in which the 
Commission represented itself pursuant to paragraph (1) or (2), the 
Attorney General may not agree to any settlement, compromise, or 
dismissal of such action, or confess error in the Supreme Court with 
respect to such action, unless the Commission concurs. 
"Attorney Gen- 
"(C) For purposcs of thls paragraph (with respect to representa-
tion before the Supreme Court), the term 'Attorney General' includes 
the Solicitor General. 
"(4) If, prior to the expiration of the 45-day period specified in 
paragraph (1) of this section or a 60-day period specified in para-
graph (3), any right of the Commission to commence, defend, or 
intervene in, any such action or appeal may be extinguished due to 
any procedural requirement of any court with respect to the time in 
which any pleadings, notice of appeal, or other acts pertaining to such 
action or appeal may be taken, the Attorney General shall have one-
half of the time required to comply with any such procedural require-
ment of the court (including any extension of such time granted by 
the court) for the purpose of commencing, defending, or intervening 
in the civil action pursuant to paragraph (1) or for the purpose of 
refusing to appeal or file a petition for writ of certiorari and the 
written notification or failing to take any action pursuant to paragraph 
3(A) (ii). 
"(5) The provisions of this subsection shall apply notwithstanding 
28 use 501. 
chapter 31 of title 28, United States Code, or any other provision of 
law. 
"(b) Whenever the Commission has reason to believe that any per-
son, partnership, or corporation is liable for a criminal penalty under 
this Act, the Commission shall certify the facts to the Attorney Gen-
eral, whose duty it shall be to cause appropriate criminal proceedings 
to be brought." 
IS use 45. 
(^i^) Section 5(m) of such Act is repealed. 
1
5 use 56 note. 
(^Q) Xhc amendment and repeal made by this section shall not apply 
to any civil action commenced before the date of enactment of this Act. 
CIVIL PENALTIES FOR KNOWING 
VIOLATIONS 
SEC. 205. (a) Section 5 of the Federal Trade Commission Act (15 
U.S.C. 45(a)) is amended by inserting after subsection (1) the follow-
ing new subsection: 
" ( m ) ( l ) ( A ) The Commission may commence a civil action to 
recover a civil penalty in a district court of the United States against 
any person, partnership, or corporation which violates any rule under 
this Act respecting unfair or deceptive acts or practices (other than 
an interpretive rule or a rule violation of which the Commission has 
provided is not an unfair or deceptive act or practice in violation of 
88 STAT. ] 
PUBLIC LAW 93-637-JAN. 4, 1975 
2201 
subsection (a) (1)) with actual knowledge or knowledge fairly implied 
on the basis of objective circumstances that such act is unfair or 
deceptive and is prohibited by such rule. In such action, such person, 
partnership, or corporation shall be liable for a civil penalty of not 
more than $10,000 for each violation. 
"(B) If the Commission determines in a proceeding under subsec-
tion (b) that any act or practice is unfair or deceptive, and issues a 
final cease and desist order with respect to such act or practice, then 
the Commission may commence a civil action to obtain a civil penalty 
in a district court of the United States against any person, partner-
ship, or corporation which engages in such act or practice— 
"(1) after such cease and desist order becomes final (whether 
or not such person, partnership, or corporation was subject to 
such cease and desist order), and 
"(2) with actual knowledge that such act or practice is unfair 
or deceptive and is unlawful under subsection (a) (1) of this 
section. 
In such action, such person, partnership, or corporation shall be liable 
for a civil penalty of not more than $10,000 for each violation. 
"(C) In the case of a violation through continuing failure to comply 
with a rule or with section 5(a) (1), each day of continuance of such 
failure shall be treated as a separate violation, for purposes of sub-
paragraphs (A) and (B). In determining the amount of such a civil 
penalty, the court shall take into account the degree of culpability, 
any history of prior such conduct, ability to pay, effect on ability to 
continue to do business, and such other matters as justice may require. 
"(2) If the cease and desist order establishing that the act or prac-
tice is unfair or deceptive was not issued against the defendant in 
a civil penalty action under paragraph (1) (B) the issues of fact in 
sucli action against such defendant shall be tried de novo. 
"(3) The Commission may compromise or settle any action for a 
civil penalty if such compromise or settlement is accompanied by a 
public statement of its reasons and is approved by the court." 
(b) The amendment made by subsection (a) of this section shall 
^^ ^^^ '^^ "°'^-
not apply to any violation, act, or practice to the extent that such 
violation, act, or practice occurred before the date of enactment of 
this Act. 
CONSUMER REDRESS 
SEC. 206. (a) The Federal Trade Commission Act (15 U.S.C. 45(a)) 
is amended by inserting after section 18 the following new section: 
"SEC. 19. (a) (1) If any person, partnership, or corporation violates 
^^ use 57b. 
any rule under this Act respecting unfair or deceptive acts or prac-
tices (other than an interpretive rule, or a rule violation of which 
the Commission has provided is not an unfair or deceptive act or 
practice in violation of section 5(a)), then the Commission may com-
mence a civil action against such person, partnership, or corporation 
for relief under subsection (b) in a United States district court or 
in any court of competent jurisdiction of a State. 
"(2) If any person, partnership, or corporation engages in any 
unfair or deceptive act or practice (within the meaning of section 
5(a)(1)) with respect to which the Commission has issued a final 
cease and desist order which is applicable to such person, partner-
shij), or corporation, then the Commission may commence a civil action 
against such person, partnership, or corporation in a United States 
district court or in any court of competent jurisdiction of a State. If 
the Commission satisfies the court that the act or practice to which the 
cease and desist order relates is one which a reasonable man would 
2202 
PUBLIC LAW 93-637-JAN. 4, 1975 
[88 STAT. 
have known under the circumstances was dishonest or fraudulent, the 
court may grant relief under subsection (b). 
"(b) The court in an action under subsection (a) shall have juris-
diction to grant such relief as the court finds necessary to redress 
injury to consumers or other persons, partnerships, and corporations 
resulting from the rule violation or the unfair or deceptive act or prac-
tice, as the case may be. Such relief may include, but shall not be limited 
to, rescission or reformation of contracts, the refund of money or 
return of property, the payment of damages, and public notification 
respecting the rule violation or the unfair or deceptive act or practice, 
as the case may be; except that nothing in this subsection is intended 
to authorize the imposition of any exemplary or punitive damages. 
"(c) (1) If (A) a cease and desist order issued under section 5(b) 
has become final under section 5(g) w^ith respect to any person's, 
partnership's, or corporation's rule violation or unfair or deceptive 
act or practice, and (B) an action under this section is brought with 
respect to such person's partnership's, or corporation's rule violation 
or act or practice, then the findings of the Commission as to the 
material facts in the proceeding under section 5(b) with respect to 
such person's, partnership's, or corporation's rule violation or act or 
practice, shall be conclusive unless (i) the terms of such cease and 
desist order expressly provide that the Commission's findings shall 
not be conclusive, or (ii) the order became final by reason of section 
5(g) (1), in which case such finding shall be conclusive if supported 
by evidence. 
'^°'^''^- 
"(2) The court shall cause notice of an action under this section to 
be given in a manner which is reasonably calculated, under all of the 
circumstances, to apprise the persons, partnerships, and corporations 
allegedly injured by the defendant's rule violation or act or practice 
of the pendency of such action. Such notice may, in the discretion of 
the court, be given by publication. 
Hn'l!^''' °^ ^'"''' 
"(^) ^ ^ action may be brought by the Commission under this sec-
tion more than 3 years after the rule violation to which an action under 
subsection (a) (1) relates, or the unfair or deceptive act or practice to 
which an action under subsection (a) (2) relates; except that if a cease 
and desist order with respect to any person's, partnership's, or corpora-
tion's rule violation or unfair or deceptive act or practice has become 
final and such order was issued in a proceeding under section 5(b) 
which was commenced not later than 3 years after the rule violation or 
act or practice occurred, a civil action may be commenced under this 
section against such person, partnership, or corporation at any time 
before the expiration of one year after such order becomes final. 
"(e) Kemedies provided in this section are in addition to, and not 
in lieu of, any other remedy or right of action provided by State or 
Federal law. Nothing in this section shall be construed to affect any 
authority of the Commission under any other provision of law." 
1
5 use 57b 
(b) The amendment made by subsection (a) of this section shall 
not apply to— 
(1) any violation of a rule to the extent that such violation 
occurred before the date of enactment of this Act, or 
(2) any act or practice with respect to which the Commission 
issues a cease-and-desist order, to the extent that such act or 
practice occurred before the date of enactment of this Act, unless 
such order was issued after such date and the person, partnership 
or corporation against whom such an order was issued had been 
notified in the complaint, or in the notice or order attached thereto, 
that consumer redress may be sought. 
tations 
note 
Ante, 
p. 2201. 
88 STAT. ] 
PUBLIC LAW 93-638-JAN. 4, 1975 
2203 
AUTHORIZATION OF APPROPRIATIONS 
SEC. 207. The Federal Trade Commission Act (15 U.S.C. 41 et seq.) 
is amended by inserting after section 19 the following new Section: 
"SEC. 20. There are authorized to be appropriated to carry out the 
^
^ use S7c. 
functions, powers, and duties of the Federal Trade Commission not 
to exceed $42,000,000 for the fiscal year ending June 30, 1975; not to 
exceed $46,000,000 for the fiscal year ending June 30, 1976; and not to 
exceed $50,000,000 for the fiscal year ending in 1977. For fiscal years 
ending after 1977, there may be appropriated to carry out such func-
tions, powers, and duties, only such sums as the Congress may hereafter 
authorize by law." 
Approved January 4, 1975. 
Public Law 93-638 
AN : A C T 
January 4, 1975 
To provide maximum Indian participation in the Government and education of 
'-^' ^^^^^ 
tlie Indian people; to provide for the full participation of Indian tribes in 
programs and services conducted by the Federal Government for Indians and 
to encourage the development of human resources of the Indian ptiople; to 
establish a program of assistance to upgrade Indian education; to support the 
right of Indian citizens to control their own educational activities; and for 
other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That this Act may 
Indian seif-
be cited as the "Indian Self-Determination and Education Assistance Educ'a'^ion ATSL"-
_/^Q^" 
ance A c t . 
25 u s e 450 
CONGRESSIONAL FINDINGS 
note. 
SEC. 2. (a) The Congress, after careful review of the Federal 
^^ "
^
*
-
^ '*^°" 
Government's historical and special legal relationship with, and result-
ing responsibilities to, American Indian people, finds that— 
(1) the prolonged Federal domination of Indian service pro-
grams has served to retard rather than enhance the progress of 
Indian people and their communities by depriving Indians of the 
full opportunity to develop leadership skills crucial to the realiza-
tion of self-government, and has denied to the Indian people an 
effective voice in the planning and implementation of programs 
for the benefit of Indians which are responsive to the true needs 
of Indian communities; and 
(2) the Indian people will never surrender their desire to con-
trol their relationships both among themselves and with non-
Indian governments, organizations, and persons. 
(b) The Congress further finds that—• 
(1) true self-determination in any society of people is depend-
ent upon an educational process which will insure the development 
of qualified people to fulfill meaningful leadership roles; 
(2) the Federal responsibility for and assistance to education 
of Indian children has not effected the desired level of educational 
achievement or created the diverse opportunities and personal 
satisfaction which education can and should provide; and 
(3) parental and community control of the educational process 
is of crucial importance to the Indian people. 
DECLARATION or POLICY 
SEC. 3. (a) The Congress hereby recognizes the obligation of the 
^s use 450a.