[Federal Register Volume 62, Number 160 (Tuesday, August 19, 1997)]
[Proposed Rules]
[Pages 44099-44102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21922]
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FEDERAL TRADE COMMISSION
16 CFR Part 403
Deceptive Use of ``Leakproof,'' ``Guaranteed Leakproof,'' Etc.,
as Descriptive of Dry Cell Batteries
AGENCY: Federal Trade Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Trade Commission (the ``FTC'' or ``Commission'')
announces the commencement of a rulemaking proceeding for the Trade
Regulation Rule on Deceptive Use of ``Leakproof,'' ``Guaranteed
Leakproof,'' Etc., as Descriptive of Dry Cell Batteries (``the Dry Cell
Battery Rule'' or ``the Rule''), 16 CFR Part 403. The proceeding will
address whether or not the Dry Cell Battery Rule should be repealed.
The Commission invites interested parties to submit written data,
views, and arguments on how the Rule has affected consumers, businesses
and others, and on whether there currently is a need for the Rule. This
document includes a description of the procedures to be followed, an
invitation to submit written comments, a list of questions and issues
upon which the Commission particularly desires comments, and
instructions for prospective witnesses and other interested persons who
desire to participate in the proceeding.
DATES: Written comments must be submitted on or before September 18,
1997. Notifications of interest in testifying must be submitted on or
before September 18, 1997. If interested parties request the
opportunity to present testimony, the Commission will publish a
document in the Federal Register, stating the time and place at which
the hearings will be held and describing the procedures that will be
followed in conducting the hearings. In addition to submitting a
request to testify, interested parties who wish to present testimony
must submit, on or before September 18, 1997, a written comment or
statement that describes the issues on which the party wishes to
testify and the nature of the testimony to be given.
ADDRESSES: Written comments and requests to testify should be submitted
to Office of the Secretary, Federal Trade Commission, Room H-159, Sixth
and Pennsylvania Ave., NW., Washington, DC 20580, (202) 326-2506.
Comments and requests to testify should be identified as ``16 CFR Part
403 Comment--Dry Cell Battery Rule'' and ``16 CFR Part 403 Request to
Testify--Dry Cell Battery Rule,'' respectively. If possible, submit
comments both in writing and on a personal computer diskette in Word
Perfect or other word processing format (to assist in processing,
please identify the format and version used). Written comments should
be submitted, when feasible and not burdensome, in five copies.
FOR FURTHER INFORMATION CONTACT:
Neil Blickman, Attorney, Federal Trade Commission, Bureau of Consumer
Protection, Division of Enforcement, Sixth and Pennsylvania Ave., NW.,
Washington, DC 20580, (202) 326-3038.
SUPPLEMENTARY INFORMATION:
I. Introduction
Pursuant to the Federal Trade Commission Act (``FTC Act''), 15
U.S.C. 41-58, and the Administrative Procedure Act, 5 U.S.C. 551-59,
701-06, by this Notice of Proposed Rulemaking
[[Page 44100]]
(``NPR'') the Commission initiates a proceeding to consider whether the
Dry Cell Battery Rule should be repealed or remain in effect.\1\ The
Commission is undertaking this rulemaking proceeding as part of the
Commission's ongoing program of evaluating trade regulation rules and
industry guides to determine their effectiveness, impact, cost and
need. This proceeding also responds to President Clinton's National
Regulatory Reinvention Initiative, which, among other things, urges
agencies to eliminate obsolete or unnecessary regulations.
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\1\ In accordance with section 18 of the FTC Act, 15 U.S.C. 57a,
the Commission submitted this NPR to the Chairman of the Committee
on Commerce, Science, and Transportation, United States Senate, and
the Chairman of the Committee on Commerce, United States House of
Representatives, 30 days prior to its publication in the Federal
Register.
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II. Background Information
On May 20, 1964, the Commission promulgated a trade regulation rule
that states that in connection with the sale of dry cell batteries in
commerce, the use of the word ``leakproof,'' the term ``guaranteed
leakproof,'' or any other word or term of similar import, or any
abbreviation thereof, in advertising, labeling, marking or otherwise,
as descriptive of dry cell batteries, constitutes an unfair method of
competition and an unfair or deceptive act or practice in violation of
section 5 of the FTC Act (16 CFR 403.4). This Rule was based on the
Commission's finding that, despite efforts by dry cell battery
manufacturers to eliminate electrolyte leakage, battery leakage and
damage therefrom occurs from the use to which consumers ordinarily
subject dry cell batteries.
The Rule provides that manufacturers or marketers are not
prohibited from offering or furnishing guarantees that provide for
restitution in the event of damage from battery leakage, provided no
representation is made, directly or indirectly, that dry cell batteries
will not leak (16 CFR 403.5). The Rule further provides that in the
event any person develops a new dry cell battery that he believes is in
fact leakproof, he may apply to the Commission for an amendment to the
Rule, or other appropriate relief (16 CFR 403.6).
The Commission conducted an informal review of industry practices
by examining the advertising, labeling and marking of dry cell
batteries available for retail sale. This review revealed no
representations that the batteries were leakproof. The Commission's
review, therefore, indicated general compliance with the Rule's
provisions. Moreover, the Commission has no record of receiving any
complaints regarding non-compliance with the Rule, or of initiating any
law enforcement actions alleging violations of the Rule.
Additionally, the Commission's review indicated general voluntary
compliance by the industry with the requirements of American National
Standards Institute (``ANSI'') Standard C18.1M-1992 Dry Cells and
Batteries--Specifications. The ANSI standard contains specifications
for dry cell batteries, and requirements for labeling the products and
their packages. The ANSI standard requires the following information to
be printed on the outside of each battery (when necessary, the standard
permits some of this information to be applied to the unit package):
(1) the name or trade name of the manufacturer; (2) the ANSI/National
Electronic Distributors Association number, or some other identifying
designation; (3) year and month, week or day of manufacture, which may
be a code, or the expiration of a guarantee period, in a clear readable
form; (4) the nominal voltage; (5) terminal polarity; and (6) warnings
or cautionary notes where applicable.\2\
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\2\ See section 8.1 of ANSI Standard C18.1M-1992.
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The ANSI standard recommends that dry cell battery manufacturers
and sellers include on their products and packages several battery user
guidelines and warnings that are relevant to this proceeding. They are:
(1) although batteries basically are trouble-free products, conditions
of abuse or misuse can cause leakage; (2) failure to replace all
batteries in a unit at the same time may result in battery leakage; (3)
mixing batteries of various chemical systems, ages, applications, types
or manufacturers may result in poor device performance and battery
leakage; (4) attempting to recharge a non-rechargeable battery is
unsafe because it could cause leakage; (5) reverse insertion of
batteries may cause charging, which may result in leakage; (6) devices
that operate on either household current or battery power may subject
batteries to a charging current, which may cause leakage; (7) do not
store batteries or battery-powered equipment in high-temperature areas;
and (8) do not dispose of batteries in fire.\3\ At a minimum, each dry
cell battery and battery package inspected by Commission staff informed
consumers that the batteries may explode or leak if recharged, inserted
improperly, disposed of in fire, or mixed with different battery types.
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\3\ See section 7.5 of ANSI Standard C18.1M-1992.
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Based on the foregoing, on March 25, 1997, the Commission published
an Advance Notice of Proposed Rulemaking (``ANPR'') tentatively
concluding that industry members that comply with the ANSI standard's
point-of-sale disclosure requirements, of necessity, also are in
compliance with the Rule. Accordingly, the Commission tentatively
determined that the Dry Cell Battery Rule is no longer necessary, and
sought comments on the proposed repeal of the Rule.\4\
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\4\ 62 FR 14050.
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The only comment received in response to the ANPR was submitted by
the National Electrical Manufacturers Association (``NEMA''), a trade
association representing all major U.S. manufacturers of dry cell
batteries.\5\ NEMA supports repeal of the Commission's Dry Cell Battery
Rule, indicating that it has been superseded effectively in the
marketplace by ANSI Standard C18.1M-1992.\6\
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\5\ The comment submitted in response to the ANPR has been
placed on the public record, and is filed as document number
B21969700001. In today's notice, the comment is cited as NEMA, #1.
\6\ NEMA, #1.
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Accordingly, after reviewing the comment submitted, and in light of
ANSI Standard C18.1M-1992, the Commission has determined that the Dry
Cell Battery Rule is no longer necessary.\7\ The Commission, therefore,
seeks comments on the proposed repeal of the Dry Cell Battery Rule.
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\7\ Repealing the Dry Cell Battery Rule would eliminate the
Commission's ability to obtain civil penalties for any future
misrepresentations that dry cell batteries are leakproof. The
Commission, however, has tentatively determined that repealing the
Rule would not seriously jeopardize the Commission's ability to act
effectively. Any significant problems that might arise could be
addressed on a case-by-case basis under section 5 of the FTC Act, 15
U.S.C. 45, either administratively or through Section 13(b) actions,
15 U.S.C. 53(b), filed in federal district court. Prosecuting
serious misrepresentations in district court allows the Commission
to obtain injunctive relief as well as equitable remedies, such as
redress or disgorgement.
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III. Rulemaking Procedures
The Commission finds that the public interest will be served by
using expedited procedures in this proceeding. First, there do not
appear to be any material issues of disputed fact to resolve in
determining whether to repeal the Rule. Second, using expedited
procedures will support the Commission's goal of eliminating obsolete
or unnecessary regulations without an undue expenditure of resources,
while ensuring that the public has an opportunity to submit data, views
and arguments on whether the Commission should repeal the Rule.
The Commission, therefore, has determined, pursuant to 16 CFR 1.20,
to use the procedures set forth in this notice. These procedures
include: (1)
[[Page 44101]]
publishing this Notice of Proposed Rulemaking; (2) soliciting written
comments on the Commission's proposal to repeal the Rule; (3) holding
an informal hearing, if requested by interested parties; (4) obtaining
a final recommendation from staff; and (5) announcing final Commission
action in a notice published in the Federal Register.
IV. Invitation To Comment And Questions For Comment
Interested persons are required to submit written data, views or
arguments on any issue of fact, law or policy they believe may be
relevant to the Commission's decision on whether to repeal the Rule.
The Commission requests that commenters provide representative factual
data in support of their comments. Individual firms' experiences are
relevant to the extent they typify industry experience in general or
the experience of similar-sized firms. Commenters opposing the proposed
repeal of the Rule should explain the reasons they believe the Rule is
still needed and, if appropriate, suggest specific alternatives.
Proposals for alternative requirements should include reasons and data
that indicate why the alternatives would better protect consumers from
unfair or deceptive acts or practices under section 5 of the FTC Act,
15 U.S.C. 45.
Although the Commission welcomes comments on any aspect of the
proposed repeal of the Rule, the Commission is particularly interested
in comments on questions and issues raised in this Notice. All written
comments should state clearly the question or issue that the commenter
is addressing.
Before taking final action, the Commission will consider all
written comments timely submitted to the Secretary of the Commission
and testimony given on the record at any hearings scheduled in response
to requests to testify. Written comments submitted will be available
for public inspection in accordance with the Freedom of Information
Act, 5 U.S.C. 552, and Commission regulations, on normal business days
between the hours of 8:30 a.m. to 5:00 p.m. at the Federal Trade
Commission, Public Reference Room, Room H-130, Sixth St. and
Pennsylvania Ave., NW., Washington, DC 20580, (202) 326-2222.
Questions
(1) Should the Dry Cell Battery Rule be kept in effect, or should
it be repealed?
(2) What benefits do consumers derive from the Rule?
(3) How would repealing the Rule affect the benefits experienced by
consumers?
(4) How would repealing the Rule affect the benefits and burdens
experienced by firms that must comply with the Rule?
(5) Are ``leakproof'' or ``guaranteed leakproof'' representations a
significant problem in the marketplace?
(6) Are there any other federal, state, or local laws or
regulations, or private industry standards, that eliminate the need for
the Rule?
(7) Does the existence of ANSI Standard C18.1M-1992 for Dry Cell
Batteries eliminate or greatly lessen the need for the Rule?
V. Requests for Public Hearings
Because there does not appear to be any dispute as to the material
facts or issues raised by this proceeding and because written comments
appear adequate to present the views of all interested parties, a
public hearing has not been scheduled. If any person would like to
present testimony at a public hearing, he or she should follow the
procedures set forth in the DATES and ADDRESSES sections of this
notice.
VI. Preliminary Regulatory Analysis
The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-12, requires
an analysis of the anticipated impact of the proposed repeal of the
Rule on small businesses.\8\ The analysis must contain, as applicable,
a description of the reasons why action is being considered, the
objectives of and legal basis for the proposed action, the class and
number of small entities affected, the projected reporting,
recordkeeping and other compliance requirements being proposed, any
existing federal rules which may duplicate, overlap or conflict with
the proposed action, and any significant alternatives to the proposed
action that accomplish its objectives and, at the same time, minimize
its impact on small entities.
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\8\ Section 22 of the FTC Act, 15 U.S.C. 57b-3, also requires
the Commission to issue a preliminary regulatory analysis relating
to proposed rules when the Commission publishes a notice of proposed
rulemaking. The Commission has determined that a preliminary
regulatory analysis is not required by section 22 in this proceeding
because the Commission has no reason to believe that repeal of the
Rule: (1) will have an annual effect on the national economy of
$100,000,000 or more; (2) will cause a substantial change in the
cost or price of goods or services that are used extensively by
particular industries, that are supplied extensively in particular
geographical regions, or that are acquired in significant quantities
by the Federal Government, or by State or local governments; or (3)
otherwise will have a significant impact upon persons subject to the
Rule or upon consumers.
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A description of the reasons why action is being considered and the
objectives of the proposed repeal of the Rule have been explained
elsewhere in this Notice. Repeal of the Rule would appear to have
little or no effect on any small business. The Commission is not aware
of any existing federal laws or regulations that would conflict with
repeal of the Rule.
For these reasons, the Commission certifies, pursuant to section
605 of RFA, 5 U.S.C. 605, that if the Commission determines to repeal
the Rule, that action will not have a significant impact on a
substantial number of small entities. To ensure that no substantial
economic impact is being overlooked, however, the Commission requests
comments on this issue. After reviewing any comments received, the
Commission will determine whether it is necessary to prepare a final
regulatory flexibility analysis.
VII. Paperwork Reduction Act
The Dry Cell Battery Rule imposes no third-party disclosure
requirements that constitute ``information collection requirements''
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Since 1964,
therefore, the Rule has imposed no paperwork burdens on marketers of
dry cell batteries. In any event, repeal of the Dry Cell Battery Rule
would permanently eliminate any burdens on the public imposed by the
Rule.
VIII. Additional Information for Interested Persons
A. Motions or Petitions
Any motions or petitions in connection with this proceeding must be
filed with the Secretary of the Commission.
B. Communications by Outside Parties to Commissioners or Their Advisors
Pursuant to Rule 1.18(c) of the Commission's Rules of Practice, 16
CFR 1.18(c), communications with respect to the merits of this
proceeding from any outside party to any Commissioner or Commissioner's
advisor during the course of this rulemaking shall be subject to the
following treatment. Written communications, including written
communications from members of Congress, shall be forwarded promptly to
the Secretary for placement on the public record. Oral communications,
not including oral communications from members of Congress, are
permitted only when such oral communications are transcribed verbatim
or summarized at the discretion of the Commissioner or Commissioner's
advisor to whom such oral communications are made, and are
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promptly placed on the public record, together with any written
communications relating to such oral communications. Memoranda prepared
by a Commissioner or Commissioner's advisor setting forth the contents
of any oral communications from members of Congress shall be placed
promptly on the public record. If the communication with a member of
Congress is transcribed verbatim or summarized, the transcript or
summary will be placed promptly on the public record.
Authority: 15 U.S.C. 41-58.
List of Subjects in 16 CFR Part 403
Advertising, Dry cell batteries, Labeling, Trade practices.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 97-21922 Filed 8-18-97; 8:45 am]
BILLING CODE 6750-01-M