Burton-Dixie Corporation, John G. Sevcik, A. T. Burton, George S. Knott, Oscar D. Wiley and Ira W. Spackey v. Federal Trade Commission

240 F.2d 166, 1957 U.S. App. LEXIS 5473, 1957 Trade Cas. (CCH) 68,591
CourtCourt of Appeals for the Seventh Circuit
DecidedJanuary 10, 1957
Docket11570
StatusPublished
Cited by2 cases

This text of 240 F.2d 166 (Burton-Dixie Corporation, John G. Sevcik, A. T. Burton, George S. Knott, Oscar D. Wiley and Ira W. Spackey v. Federal Trade Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burton-Dixie Corporation, John G. Sevcik, A. T. Burton, George S. Knott, Oscar D. Wiley and Ira W. Spackey v. Federal Trade Commission, 240 F.2d 166, 1957 U.S. App. LEXIS 5473, 1957 Trade Cas. (CCH) 68,591 (7th Cir. 1957).

Opinion

MAJOR, Circuit Judge.

This is a petition under Section 5(c) of the Federal Trade Commission Act, 15 U.S.C.A. § 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 *168 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 decisions 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 with the requirements of the Administrative Procedure Act, 5 U.S.C.A. § 1001 et seq., and the Commission’s own rules of procedure.

Prior to a consideration of the issues, it appears pertinent to make some statement relative to the nature of feather and down products, together with the processing methods employed, about which there seems to be no dispute. Raw feathers are procured principally from Oriental and European sources of supply. In Europe, second-hand feathers are customarily mixed with new stock, while in the Orient there is no careful sorting, so that “a bale of feathers purchased as goose feathers may contain substantial quantities of duck or chicken feathers.” After purchasing raw feathers, Burton-Dixie draws samples so as to insure that the stock contains the type of feathers represented, within acceptable limits.

The feathers are thoroughly washed, sterilized and dried, after which they are separated by mechanical means. The separator consists of five chambers divided by baffles of varying heights. The feathers are blown upwards by air currents, with the result that down and the lighter feathers are blown over the higher baffles while heavier feathers remain in the compartments separated by lower baffles. At the end of this process, the farthest compartment contains approximately 90 % down and 10% small feathers; the next compartment contains about 80% very small feathers and approximately 20% down; the third chamber contains somewhat larger body feathers with approximately 5% down; the fourth contains large body feathers with almost no down; and the fifth contains wing and tail feathers, commonly known as quills. While it is possible in this manner to isolate a high percentage of down, it is physically impossible to separate some of the small, unmatured feathers from the down or to separate feathers according to type of fowl.

Pillow production falls generally into three types: (1) the down pillow, which is always recognized to contain some light feathers, (2) the mixed whole feather or whole feather and down pillow, and (3) the crushed feather pillow. The instant case involves pillows of the first and third types.

Pillows are never filled singly but in batches. In filling a batch of down pillows, the down is taken from the separator and blown into a steamer, where it is agitated with paddles and live steam. Fpom the mixing steamer, the material is blown into bins, and from these bins the pillows are filled by means *169 of suction blowers.

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240 F.2d 166, 1957 U.S. App. LEXIS 5473, 1957 Trade Cas. (CCH) 68,591, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burton-dixie-corporation-john-g-sevcik-a-t-burton-george-s-knott-ca7-1957.