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COURTAULDS INC. v. KINTNER

March 4, 1960

COURTAULDS (ALABAMA) INC., LeMoyne, Alabama, Plaintiff,
v.
Earl W. KINTNER, individually and as Chairman of Federal Trade Commission, and Robert T. Secrest, Sigurd Anderson, William C. Kern and Edward T. Tait, individually and as Commissioners of Federal Trade Commission, and Federal Trade Commission, Washington 25, D.C., Defendants



The opinion of the court was delivered by: YOUNGDAHL

Plaintiff, a textile manufacturer, has moved the Court to enjoin the Federal Trade Commission, its Chairman and Commissioners, pending the outcome of this lawsuit, from enforcing the Commission's newly promulgated Rules and Regulations under the Textile Fiber Products Identification Act, *fn1" insofar as those Rules and Regulations require the plaintiff to identify its cross-linked cellulosic fibers as rayon.

The Textile Act, enacted on September 2, 1958, was designed 'to protect producers and consumers against misbranding and false advertising of the fiber content of textile fiber products'; it is said to be 'in the tradition of the Wool Labeling Act of 1939, and the Fur Products Labeling Act of 1951'. *fn2" Section 7(c) of the Textile Act, 15 U.S.C.A. ยง 70e(c), provides:

 'The Commission is authorized and directed to make such rules and regulations, including the establishment of generic names of manufactured fibers, under and in pursuance of the terms of sections 70-70k of this title as may be necessary and proper for administration and enforcement.'

 On February 10, 1959, the Commission published, in the Federal Register, a notice of hearing and its proposed rules under the Textile Act. *fn3" In March, 1959, public hearings were held and on June 2, 1959, the Commission promulgated its Rules and Regulations.

 Sixteen categories for manufactured (as opposed to natural) fibers were established; one of these sixteen is 'rayon' and its definition is given by the rule as:

 'A manufactured fiber composed of regenerated cellulose, as well as manufactured fibers composed of regenerated cellulose in which substituents have replaced not more than 15 percent of the hydrogens of the hydroxyl groups.' Sec. 303.7(d); 24 Fed.Reg. 4482 (June 2, 1959).

 For the past several years plaintiff has been in the business of manufacturing and selling fibers composed of regenerated cellulose and since July, 1958, the plaintiff has been selling cross-linked cellulosic fibers with the trade names of 'Corval' and 'Topel' and which are manufactured by a recently patented process. There is no question but that 'fibers composed of regenerated cellulose' fall within the definition of rayon in Sec. 303.7(d)- they do so expressly. There is a question (a) whether 'cross-linked cellulosic fibers' fall within the new definition, and (b) if they do, whether they should- i.e., is a definition of 'rayon' which embraces plaintiff's cross-linked cellulosic fibers so unreasonable as to be invalid.

 In paragraph 20(c) of the complaint, the plaintiff states it demonstrated at the public hearings that 'the broadened definition of the generic name rayon in Proposed Rule 7(h) did not as a matter of chemistry cover cross-linked cellulosic fibers'. Plaintiff has submitted an affidavit of a chemist, John Wharton. But this affidavit, and that of a Paul B. Stam, do not state that plaintiff's fiber does not fall within the definition in Sec. 303.7(d). They state only that plaintiff's fiber is 'different from regenerated cellulose', 'significantly (chemically) different from rayon (regenerated cellulose).'

 On the other hand, the Court has before it the affidavit of Thomas J. Anderson, an attorney with the Federal Trade Commission, who states that after conferences and hearings were held on the question of whether cross-linked cellulosic fibers fell within the proposed rayon category, *fn4" the Commission issued its Rules and Regulations, including subparagraph (d) of Rule 7 defining the term 'rayon' 'in a manner' which 'unquestionably included plaintiff's cross-linked cellulosic fiber'. *fn5"

 The Court starts with the admonition of Mr. Justice Brandeis:

 'Where the regulation is within the scope of authority legally delegated, the presumption of the existence of facts justifying its specific exercise attaches alike to statutes, to municipal ordinances, and to orders of administrative bodies.' Pacific States Box & Basket Co. v. White, 1935, 296 U.S. 176, 186, 56 S. Ct. 159, 163, 80 L. Ed. 138.

 And see Virginia Petroleum Jobbers Ass'n v. Federal Power Commission, 1958, 104 U.S.App.D.C. 106, 110, 259 F.2d 921, 925.

 While it appears that plaintiff's fiber has capabilities which distinguish it from those of 'ordinary rayon' (regenerated cellulose), it is not clear from the legislative history of the Textile Act that performance characteristics-e. g., strength, durability, washability- were intended by Congress to be considered by the Federal Trade Commission in its 'establishment of generic names of manufactured fibers'. *fn6" Before it was enacted, the legislation was described as 'a disclosure bill, for the protection of the consumer'. *fn7" While it seems apparent that the most effective method of 'disclosure' would be in terms of performance characteristics- ...


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