United States Supreme Court Cases & Opinions

U.S. Supreme Court

FTC v. Algoma Lumber Co., 291 U.S. 67 (1934)

Federal Trade Commission v. Algoma Lumber Co.

No. 240

Argued December 14, 15, 1933

Decided January 8, 1934

291 U.S. 67

Syllabus

1. The Federal Trade Commission Act makes the Commission's findings of fact conclusive if supported by evidence, and, upon appeal from the Commission's order, the Circuit Court of Appeals is not at liberty to make its own appraisal of the testimony and pick and choose for itself among uncertain and conflicting inferences. P. 291 U. S. 73.

2. The Commission ordered Pacific Coast lumber dealers to desist from the practice of selling, under the tradename of "California White Pine," lumber made from "Western Yellow Pine" (Pinus ponderosa), finding it an unfair and prejudicial method of competing with lumber made from the true White Pines (Pinus strobus and closely related species), a product of better quality and commanding a higher price.

Held:

(1) That the evidence supported the Commission (a) in finding that the lumber sold by the tradename "California White Pine" is inferior to the true white pine lumber; (b) in finding that the tradename is misleading and causes both confusion and prejudice to retailers, architects, builders, and consumers. Pp. 291 U. S. 76-77.

(2) The fact that "California White Pine" is listed as a trade equivalent of Pinus polderosa in a list of standard commercial names for lumber, forming part of a report of "Simplified Practice Recommendations" issued by the Bureau of Standards, is of little weight as evidence, considering the nature of the Bureau's function and the basis and purpose of its recommendations. P. 291 U. S. 73.

Page 291 U. S. 68

3. In being sold a substitute in the name of a better article, the consumer is prejudiced, even though he save money by it; the public is entitled to get what it chooses, though the choice may be dictated by caprice, or by fashion, or perhaps by ignorance. P. 291 U. S. 78.

4. The practice of marketing a cheaper kind of lumber under the name of a better and more expensive kind is prejudicial to honest dealers and manufacturers; orders that would come to them if the lumber were rightly named are diverted to others whose methods are less scrupulous. P. 291 U. S. 78.

5. The facts that a deceptive tradename was adopted without fraudulent design and has long been in use are not a defense under the Act if its continued use is, in the circumstances, unfair and prejudicial to the public interest. P. 291 U. S. 79.

6. In this case, the evidence contradicts the proposition that the name "California White Pine," misleading in the beginning, had acquired an independent or secondary meaning rendering it innocuous. P. 291 U. S. 80.

7. A tradename, legitimate in one territory, may generate confusion when carried to another, and must be given up. P. 291 U. S. 81.

8. A method of competition may be unfair without being fraudulent in law, but equity perceives a kind of fraud in clinging to a benefit begot of misrepresentation, however innocently made. P. 291 U. S. 81.

9. The contention that the proceedings of the Trade Commission in this case were not "to the interest of the public," based on the thought that, by encouraging the use of Pinus ponderosa, the eastern forests of Pinus strobus would be conserved, is rejected. P. 291 U. S. 81.

10. In requiring that the word "White" be omitted from the name of respondent's product, the Commission did not abuse its discretion. P. 291 U. S. 81.

64 F.2d 618 reversed.

Certiorari, 290 U.S. 607, to review a judgment of the Circuit Court of Appeals annulling an order of the Federal Trade Commission.

Page 291 U. S. 69