Opinion ID: 366386
Heading Depth: 2
Heading Rank: 2

Heading: The Commission's Statutory Power

Text: 18 Petitioners, perhaps in another way of making their first point, argue that the order is beyond the Commission's statutory power because Section 5(a)(1) of the Act, 15 U.S.C. § 45(a)(1), relates only to unfair or deceptive acts and does not define violations with respect to prior substantiation and lack of substantiation for the assertion made. Thus, if a representation is true, the argument runs, no one is deceived or treated unfairly by the mere lack of prior substantiation. But cases both without and within this circuit have held otherwise in situations where a seller or manufacturer has misrepresented safety or performance. The Sixth Circuit has upheld an order prohibiting representations as to tire performance or safety characteristics unless each such characteristic (is) fully and completely substantiated by competent scientific tests. Firestone Tire & Rubber Co. v. FTC, supra, 481 F.2d at 250. This court has upheld an order prohibiting claims as to the air cooling, dehumidification, and circulation performance characteristics of air conditioners unless the manufacturer has a reasonable basis for such statement or representation, which shall consist of competent scientific, engineering or other similar objective material or industry-wide standard based on such material. Fedders Corp. v. FTC, supra, 529 F.2d at 1400-01. And we followed Fedders in spirit with ITT Continental Baking Co. v. FTC, supra, 532 F.2d at 220-21, even though we there limited an order that prohibited representations as to nutritional properties . . . unless the advertised nutritional value can be substantiated for the average and ordinary use of the product by consumers. But the ground of modification was that the order was not reasonably related to the misrepresentation charged, and ITT is not a limitation on the FTC's power to require prior substantiation in a proper case as a reasonable remedy for specific deception practiced. See also National Dynamics Corp. v. FTC, supra, 492 F.2d at 1336. 19 In each case, of course, the prohibitions of the remedial order must bear a reasonable relationship to the deceptive acts found. Because there is no question that Norris wrongfully made safety and performance representations in the past, the requirement of prior substantiation is properly imposed in the remedial order as reasonably calculated to prevent violations of the sort found to have been committed. The requirement is not imposed as an additional burden on petitioners in respect to their truthful claims; rather it prohibits only claims that they cannot substantiate even while it permits continued advertising on the basis of all truthful, objectively substantiated claims. 20 We agree with the FTC that its order is a mere() recogni(tion) that Jay Norris is in a better position than consumers to evaluate safety and performance claims for products sold by it and that, given the proven predilection of Jay Norris to misstate these characteristics, the company (may) henceforth be required to have a reasonable basis for such claims. In fact, as the Commission has pointed out, the obligation that it imposes on Norris is no greater than is required of all advertisers under Section 5. It is merely more explicit. As a proper remedy for past violations, this much we leave and must in the nature of the administrative procedure to the agency's expertise and sound discretion. 21