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Burton-Dixie Corp. v. Federal Trade Commission

January 10, 1957

BURTON-DIXIE CORPORATION, JOHN G. SEVCIK, A. T. BURTON, GEORGE S. KNOTT, OSCAR D. WILEY AND IRA W. SPACKEY
v.
FEDERAL TRADE COMMISSION



Author: Major

Before DUFFY, Chief Judge, MAJOR and LINDLEY, Circuit Judges.

MAJOR, Circuit Judge:

This is a petition under Section 5(c) of the Federal Trade Commission Act, 15 U.S.C.A. Sec. 45(c), to review and set aside an order of the Federal Trade Commission (hereinafter referred to as the Commission), issued June 30, 1955, ordering petitioner Burton-Dixie Corporation (hereinafter referred to as Burton-Dixie) and certain of its officers to cease and desist from misrepresenting the identity of the type of filling material contained in its feather and down products or of the proportions of each type when the filling material is a mixture of more than one kind or type.

The proceeding was commenced by the issuance of a complaint on October 28, 1953, which alleged that petitioners are engaged in the business of manufacturing and selling down and feather products, including pillows, to dealers for resale to the general public and are carrying on such business in interstate commerce in competition with others similarly engaged. The complaint further alleged that petitioners affix labels to their pillows purporting to state the kinds or types and proportions of filling materials contained therein; that typical of the representations as to the kind of such pillows are the statements:

"Trade Name of Pillow

'Countess' -

All new material consisting of Down

'Chatham' -

All new material consisting of 50%

Crushed Chicken Feathers, 50%

Crushed Duck Quill Feathers

'Spring'

'Keystone' -

All new material consisting of 50%

Crushed Goose Quill Feathers, 50%

Crushed Turkey Feathers."

The complaint charged that these representations are false, misleading and deceptive in that the "Countess" pillows contain substantial quantities of material other than down; the "Chatham" pillows contain substantially less than 50% crushed chicken feathers and substantially less than 50% crushed duck quill feathers, and the "Spring" and "Keystone" pillows contain substantially less than 50% crushed goose quill feathers and substantially less than 50% crushed turkey feathers. The complaint charged that these false, misleading and deceptive representations have the tendency and capacity to deceive dealers and the purchasing public as to the filling material of the pillows and to induce the purchase of substantial quantities of pillows because of such mistaken and erroneous belief; that as a result, substantial injury has been done to competition in commerce. Petitioners' practices were alleged to constitute unfair methods of competition and unfair and deceptive acts and practices within the meaning of the Federal Trade Commission Act.

Petitioners by answer admitted the jurisdictional averments of the complaint and that their pillows were labeled as alleged, but denied all other material allegations.

Hearings were had before a designated Examiner of the Commission who, on December 3, 1954, issued his initial decision containing findings of fact, with his conclusions and an order that the complaint be dismissed. Counsel supporting the complaint appealed to the Commission from the Examiner's decision. After hearing the matter on the record, briefs and oral argument of counsel, the Commission rendered its decision, reversing the initial decision of the Examiner. Thereupon, the Commission issued its cease and desist order now under attack.

The instant action was one of eleven proceedings brought by the Commission, involving the feather and down products industry, ten of which were contemporaneously heard, considered and decided by the same Examiner. These related proceedings covered practically all pillow production in the industry. All ten cases heard by the Examiner were appealed to the Commission. In the instant case and in two others in which the complaints had been dismissed, the Commission reversed the decision of the Examiner and issued cease and desist orders. As to the other seven cases, the Commission sustained the Examiner's issuance of similar orders. Thus, the Commission sustained the charges against each manufacturer without exception and irrespective of the conclusion of the Examiner in the separate cases.

The primary issues on this review are two: (1) Whether the decision by the Commission that Burton-Dixie misrepresented the filling content of its down pillows, contrary to the findings of the Examiner, is supported by substantial evidence. This issue involves a number of subsidiary questions which we shall subsequently consider. (2) Whether the decision of the Commission that the contents of Burton-Dixie's crushed feather pillows were misrepresented (a) has any probative evidentiary support and (b) comports ...


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