the class who cannot be located with due diligence. Such attorneys' fees awarded by the court shall not exceed 10 percent of the total judgment unless failure to award a greater amount would be manifestly unjust and not commensurate with the efforts of counsel. [S. 3201, 91st Cong., first sess.] A BILL To amend the Federal Trade Commission Act to provide increased protection for consumers, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the “Consumer Protection Act of 1969”. TITLE I-DECEPTIVE SALES AFFECTING COMMERCE SEC. 101. Section 5 of the Federal Trade Commission Act, as amended (38 Stat. 719; 15 U.S.C. 45) is amended by changing the words "in commerce" whenever they appear to "affecting commerce". SEC. 102. Subsection (a) of section 13 of the Federal Trade Commission Act (52 Stat. 115; 15 U.S.C. 53(a)) is amended to read as follows: "(a) Whenever the Commission has reason to believe— "(1) that any person is engaged in, or is about to engage in, the dissemination or the causing of the dissemination of any advertisement in violation of section 12, or any act or practice which is unfair or deceptive to a consumer and is prohibited by section 5, and "(2) that the enjoining thereof pending the issuance of a complaint by the Commission under section 5, and until such complaint is dismissed by the Commission or set aside by the court on review, or the order of the Commission to cease and desist made thereon has become final within the meaning of section 5, would be to the interest of the public the Commission by any of its attorneys designated by it for such purpose may bring suit in a district court of the United States to enjoin the dissemination or the causing of the dissemination of such advertisement or any such act or practice. Upon proper showing of need, a temporary restraining order or preliminary injunction may be granted without bond: Provided, however, That if a complaint under section 5 is not filed within sixty days of the issuance of the restraining order or preliminary injunction, the order or injunction shall be dissolved and of no further force and effect." TITLE II-ENFORCEMENT OF CONSUMER INTERESTS UNFAIR OR DECEPTIVE ACTS OR PRACTICES SEC. 201. As used in this title (a) “unfair or deceptive practice" means any of the following acts or practices (1) offering goods or services intending not to sell them as offered; (2) advertising goods or services intending not to supply reasonably expectable public demand, unless the advertisement discloses a limitation; (3) stating that services, replacements, or repairs are needed with knowledge that they are not; (4) representing that the consumer is legally obligated to pay for, safeguard, or return unsolicited goods knowing that the consumer is not; (5) representing that the consumer will obtain any rights, privileges, or remedies knowing that the consumer will not; (6) representing that goods are new knowing that they are not; (7) representing that goods are of a particular standard, grade, quality, style, or model knowing they are not; (8) making statements of fact concerning (i) the reason for, existence of, or amounts of price reductions, or (ii) savings in comparison to prices of competitors or one's own price, knowing that such statements are false; (9) representing that goods or services are those of another, knowing they are not; (10) failing to return or refund a deposit or advance payment for goods not delivered or services not rendered, when no default or further obligation of the person making such deposit or advance payment exists; and (11) knowingly representing that goods or services have sponsorship, approval, origin, characteristics of safety or performance, ingredients, uses, benefits, or quantities that they do not have, or that a person has a sponsorship, approval, status, affiliation, or connection that he does not have: Provided, however, That an affirmation by the supplier merely of the value of the goods or services or a statement of his opinion of the goods or services, or similar statements, which do not take unfair advantage of the level of knowledge, ability, experience, or capacity of the consumer shall not be deemed an unfair or deceptive act or practice within the meaning of this paragraph. (b) "knowing", "knowingly", and "knowledge" refer to actual knowledge, knowledge presumed where objective circumstances indicate that the supplier acted with knowledge, or knowledge presumed where circumstances indicate that the supplier acted in disregard of reasonable safeguards or care in ascertaining the truth of representations made; (c) "consumer" means any natural person who is offered or supplied goods or services for personal, family, or household purposes; (d) "supplier" means any person who makes goods or services available to consumers, either directly or indirectly; (e) "goods" includes real property, but does not include securities or interests in securities; and (f) "services" includes insurance services and similar provisions of intangibles, but not the providing of credit. DECEPTIVE ACTS AND PRACTICES UNLAWFUL SEC. 202. It shall be unlawful for any supplier to commit any unfair or deceptive act or practice as defined in section 201 of this title. RESTRAINING VIOLATIONS SEC. 203. The district courts of the United States have jurisdiction to restrain violations of this title upon application by the Attorney General. The court may at any time grant such injunctive relief as it deems appropriate. Whenever it appears to the court that the ends of justice require that other persons should be parties in the action, the court may cause them to be summoned whether or not they reside in the district in which the court is held, and to that end process may be served in any district. SUITS BY CONSUMERS ADVERSELY AFFECTED SEC. 204. When a supplier, (i) in any action brought by the Attorney General under section 203 of this title, has been enjoined from committing any act or practice, whether after final adjudication or by consent decree, or (ii) in any proceeding brought by the Federal Trade Commission under section 5 of the Federal Trade Commission Act with respect to acts or practices alleged to be unfair or deceptive within the meaning of section 201 of this title, has been ordered to cease and desist from that act or practice, and the order shall have become final within the meaning of section 5, either after adjudication or by consent decree, any consumer claiming to have been adversely affected by the act or practice giving rise to such injunction may bring suit against said supplier, and may recover actual damages, and the costs of suit, including reasonable attorneys' fees, and, when appropriate, restitution, reformation, recision, and other equitable relief. Irrespective of whether an attorney's fee is assessed against a defendant, the court may inquire into the reasonableness of the fee agreed upon between the consumer and his counsel, and revise that fee as the circumstances warrant. JUDGMENT IN FAVOR OF THE UNITED STATES AS EVIDENCE SEC. 205. A final judgment or decree rendered in any proceeding brought by the United States under section 203 of this title to the effect that a defendant has engaged in an unfair or deceptive practice within the meaning of this title shall be prima facie evidence against that defendant in any action or proceeding brought by any other person against the defendant under section 204 of this title, as to all matters respecting which said judgment or decree would be an estoppel as between the defendant and the United States: Provided, however, That this section shall not apply to consent judgments or decrees entered before any testimony has been taken. VENUE SEC. 206. An action under this title may be brought in any district in which the claim arose or in which the defendant resides, is found, has an agent, is licensed to do business, or is doing business. LIMITATION OF ACTIONS SEC. 207. Any proceeding under section 204 of this title shall be brought within one year after the termination of the proceeding under section 203 of this title or the proceeding under section 5 of the Federal Trade Commission Act on which it is predicated. CIVIL INVESTIGATIVE DEMANDS SEC. 208. (a) Whenever the Attorney General has reason to believe that any person under investigation may be in possession, custody, or control of any documentary material, or may have knowledge of any fact, relevant to an unfair or deceptive act or practice within the meaning of this title, he may, prior to the institution of a proceeding under section 203, issue in writing, and cause to be served upon such person, a civil investigative demand, requiring such person to produce the documentary material for examination or to answer in writing written interrogatories pertaining to such knowledge. (b) Each such demand shall (1) state the nature of the conduct alleged to constitute the unfair or deceptive act or practice which is under investigation; (2) describe the class or classes of documentary material to be produced thereunder with such definiteness and certainty as to permit such material to be fairly identified; (3) propound with definiteness and certainty the written interrogatories to be answered; and (4) identify the custodian to whom such material shall be furnished, or the person to whom such answers shall be made. (c) No demand shall (1) contain any requirement which would be held unreasonable if contained in a subpena duces tecum issued by a court of the United States in a proceeding brought under section 203 of this title or if propounded in an interrogatory directed to a defendant in any such proceedings; or (2) require the production of any documentary evidence, or the disclosure of any information, which would be privileged from disclosure if demanded by a subpena duces tecum issued by a court of the United States, or by an interrogatory propounded, in any proceeding under section 203 of this title. (d) Demand may be served at any place within the territorial jurisdiction of any court of the United States. (e) The provisions of sections 4 and 5 of the Antitrust Civil Process Act (76 Stat. 549, 551; 15 U.S.C. 1313, 1314) apply to custodians of material produced pursuant to any demand and to judicial proceedings for the enforcement of any such demand made pursuant to this section. REPORT BY THE ATTORNEY GENERAL SEC. 209. As part of his responsibility to protect consumers against unfair or deceptive acts or practices, the Attorney General shall annually report to the President and the Congress on the effectiveness of this title. OTHER LAWS NOT AFFECTED SEC. 210. This title shall not annul, alter, or affect in any manner the meaning, scope, or applicability of any Federal or State law, including but not limited to laws concerning the provision of goods and services to consumers, or limit in any way the availability of rights or remedies under such law. Hon. WARREN G. MAGNUSON, GENERAL SERVICES ADMINISTRATION, Chairman, Committee on Commerce, U. S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: Your letter of October 31, 1969, requested the views of the General Services Administration on S. 3092, 91st Congress, a bill "To amend the Federal Trade Commission Act to extend protection against fraudulent or deceptive practices, condemned by that Act, to consumers through civil actions, and to provide for class actions for acts in defraud of consumers." Our examination of the bill indicates that its enactment would not affect the functions and responsibilities of the General Services Administration. Accordingly, we offer no comment upon its merits. The Bureau of the Budget has advised that, from the standpoint of the Administration's program, there is no objection to the submission of this report to your Committee. Sincerely, ROD KREGER, Assistant Administrator. DEPARTMENT OF THE AIR FORCE, Washington, D.C., February 5, 1970. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: Reference is made to your request to the Secretary of Defense for the views of the Department of Defense with respect to S. 3092, 91st Congress "To amend the Federal Trade Commission Act to extend protection against fraudulent or deceptive practices, condemned by that Act, to consumers through civil actions, and to provide for class actions for acts in defraud of consumers". The Department of the Air Force has been designated to express the views of the Department of Defense. The purpose of the bill is generally as stated in the title. It is our opinion that the objectives of the bill are directed toward individual consumers and involve personal, family, and household types of goods and services and that the operations of the Department of Defense would in no way be affected by the provisions of the bill, should it be enacted. Accordingly, the Department of the Air Force, on behalf of the Department of Defense, defers to the Consumer Advisory Council and those other agencies primarily concerned. This report has been coordinated within the Department of Defense in accordance with procedures prescribed by the Secretary of Defense. The Bureau of the Budget advises that, from the standpoint of the Administration's program, there is no objection to the presentation of this report for the consideration of the Committee. Sincerely, PHILIP N. WHITTAKER, Assistant Secretary of the Air Force THE GENERAL COUNSEL OF THE TREASURY, Hon. WARREN G. MAGNUSON, DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department on S. 2246, "To amend the Federal Trade Commission Act, as amended, by providing for temporary injunctions or restraining orders for certain violations of that Act." The bill would authorize the Federal Trade Commission to seek a preliminary injunction or restraining order against any person, partnership, or corporation, who it has reason to believe is engaged in an act or practice which is unfair or deceptive to consumers. The proposed legislation is not of primary interest to this Department and the Department has no comment to make on the general meris of the bill. The Department has been advised by the Bureau of the Budget that there is no objection from the standpoint of the Administration's program to the submission of this report to your Committee. Sincerely yours, Hon. FRANK E. Moss, Chairman, Subcommittee for Consumers, U.S. Senate, Washington, D.C. ROY T. ENGLERT, Acting General Counsel. FEDERAL TRADE COMMISSION, Washington, D.C., March 19, 1970. DEAR MR. CHAIRMAN: Reference is made to your letter of March 16, 1970, requesting copies of the recent statement on H.R. 14931 and H.R. 14832 which I presented on behalf of the Commission before the Subcommittee on Commerce and Finance of the Committee on Interstate and Foreign Commerce, House of Representatives, on February 4, 1970. You have also requested copies of proposed amendments to H.R. 14931, embodying the poistion of the Commission in respect to that bill, which have been presented to that Subcommittee. Enclosed are two copies of my prepared statement, and two copies of a letter dated March 12, 1970, addressed to Chairman John E. Moss of the House Subcommittee. These documents clearly present the Commission's position with respect to the Consumer Protection Act of 1969. I am very pleased indeed for the opportunity to have these documents made a part of the record of the hearings which the Subcommittee on Consumers, Senate Commerce Committee, is conducting on S. 3201 and S. 3092. I hope this information meets your request, and if I may be of further assistance, please do not hesitate to let me know. With kind personal regards. Sincerely, CASPER W. WEINBERGER, Chairman. STATEMENT OF CASPAR W. WEINBERGER, CHAIRMAN, FEDERAL TRADE COMMISSION Thank you, Mr. Chairman, for the opportunity to appear before this distinguished Committee to express the views of the Federal Trade Commission on H.R. 14931 and H.R. 14832. H.R. 14931 H.R. 14931, the Consumer Protection Act of 1969, is directed at providing increased protection for consumers. It strengthens the Federal Trade Commission Act, declares certain unfair or deceptive acts or practices to be unlawful, provides a right of action by the Attorney General to restrain such unlawful conduct, and provides a remedy by which consumers adversely affected by such unlawful conduct may seek redress. This bill is identical to S. 3201, upon which each of the Commissioners had an opportunity to comment individually before the Committee on Commerce of the United States Senate in December, 1969. They have requested me to submit at this time copies of their individual statements which they made at that time for inclusion in your record. EXPANSION OF THE COMMISSION'S JURISDICTION Title I of the bill would expand the Commission's geographical jurdisdiction under the Federal Trade Commission Act to practices “affecting" commerce. The Commission supports this enlargement of the geographic scope of its jurisdiction as it will be helpful in enabling the Commission to proceed against consumer frauds and deception hitherto beyond its reach. This revision should clarify any existing gray areas of jurisdiction and facilitate a more efficient utilization of the Commission's resources. |