Rule Concerning Deceptive Advertising and Labeling as to Length of Extension Ladders

FEDERAL TRADE COMMISSION

16 CFR Part 418

Rule Concerning Deceptive Advertising and Labeling as to Length

of Extension Ladders

AGENCY: Federal Trade Commission.

ACTION: Notice of Proposed Rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Federal Trade Commission (``Commission'') announces the

commencement of a rulemaking proceeding for the trade regulation rule

concerning Deceptive Advertising and Labeling as to Length of Extension

Ladders (``Extension Ladder Rule'' or ``Rule''), 16 CFR Part 418. The

proceeding will address whether or not the Extension Ladder Rule should

be repealed. The Commission invites interested parties to submit

written date, 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 notice 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 October 18,

1995.

[[Page 48076]]

Notifications of interest in testifying must be submitted on or

before October 18, 1995. If interested parties request the opportunity

to present testimony, the Commission will publish a notice 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, interest parties who wish to present testimony must submit, on

or before October 18, 1995, 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

Street and Pennsylvania Avenue, NW., Washington, DC 20580, telephone

number 202-326-2506. Comments and requests to testify should be

identified as ``16 CFR Part 418--Comment--Extension Ladder Rule'' and

``16 CFR Part 418--Request to Testify--Extension Ladder 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:

John A. Crowley, Attorney, Bureau of Consumer Protection, Division of

Service Industry Practices, Room H-200, Sixth Street and Pennsylvania

Avenue, NW., Washington, DC 20580, telephone number 202-326-3280.

SUPPLEMENTARY INFORMATION:

I. Introduction

On May 23, 1995 the Commission published an Advance Notice of

Proposed Rulemaking (``ANPR'') seeking comment on the proposed repeal

of the Extension Ladder Rule, 60 FR 27245. In accordance with mandates

of section 18 of the Federal Trade Commission Act (``FTC Act''), 15

U.S.C. 57a, the ANPR was sent to the Chairman of the Committee on

Commerce, Science, and Transportation, United States Senate and the

Chairman of the Subcommittee on Commerce, Trade and Hazardous

Materials, United States House of Representatives. The ANPR comment

period closed on June 22, 1995. The Commission received no public

comments.

Pursuant to the 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 (``NPR'') the Commission initiates a proceeding to consider

whether the Extension Ladder Rule should be repealed or remain in

effect, and solicits public comments.\1\ The Commission is also

interested in comments on whether the Rule should be streamlined or

otherwise amended. If the Commission determines, based on the data,

views and arguments submitted, that the Commission should consider

additional alternatives, it will publish a supplemental notice of

proposed rulemaking and will request public comments on those

alternatives.

\1\ In accordance with mandates of 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 Subcommittee on Commerce, Trade and

Hazardous Materials, United States House of Representatives, 30 days

prior to publication of the NPR.

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, urge

agencies to eliminate obsolete or unnecessary regulations.

II. Background Information

The Extension Ladder Rule regulates the advertising, labeling and

marking of extension ladders. The Commission had found that the

industry practice of representing the sizes or lengths of their

products in terms of the total length of their component sections,

e.g., a ``20-foot'' or ``20-foot size'' extension ladder consisting of

two 10-foot sections, tended to mislead the general public into the

erroneous belief that such represented sizes or lengths were the

maximum working or useful lengths of the products so described. To

correct this misconception, the Commission in 1969 promulgated the

Extension Ladder Rule, which makes it an unfair or deceptive act or

practice and an unfair method of competition to represent the size or

length of such product, in terms of the total length of the component

sections thereof, unless:

(a) Such size or length representation is accompanied by the words

``total length of sections'' or words with similar meanings which

clearly indicate the basis of the representation; and,

(b) Such size or length representation is accompanied by a

statement in close proximity to the size or length representation which

clearly and conspicuously shows the maximum length of the product when

fully extended for use (i.e., excluding the footage lost in

overlapping) along with an explanation for the basis of such

representation.\2\

\2\ The rule then gives an example of proper length

representation when the product consists of two ten foot sections:

``maximum working length 17', total length of sections 20''' or

``17' extension ladder''.

---------------------------------------------------------------------------

The Commission, as part of its oversight responsibilities, reviews

rules and guides periodically. These reviews seek information about the

costs and benefits of the Commission's rules and guides and their

regulatory and economic impact. The information obtained assists the

Commission in identifying rules and guides that warrant modification or

rescission. Accordingly, on April 19, 1993, the Commission published in

the Federal Register a request for public comments on its Trade

Regulation Rule on Advertising and Labeling As To Length of Extension

Ladders, 16 C.F.R. Part 418. 58 FR 21125.

In its Request for Comment, the Commission indicated that if this

rule is retained, the Commission intended to revise the examples

contained in the rule to include ``metric'' measurements. The

Commission then asked commenters to address questions relating to the

costs and benefits of the Rule, the burdens it imposes, and the basis

for assessing whether it should be retained, or amended.

Six specific comments were received. One commenter, a consumer,

opined that the only label that should be on ladders is the ``maximum

working length'' since consumers should not have to do any figuring to

determine the length of the ladder that would meet their needs.

Of the other five commenters, four are manufacturers or suppliers

of ladders and one is a trade association. A number of these comments

refer to the American National Standards Institute (ANSI) standard A14,

which governs the labeling of ladders. ANSI standard A14 details the

requirements for labeling portable wood ladders, portable metal

ladders, fixed ladders, job made ladders and portable reinforced

plastic ladders. The ANSI standard requires specification of the

maximum working length of extension ladders, as well as several other

pieces of information not required by the Extension Ladder Rule,

including the total length of the ladder's sections and the highest

standing level of the ladder. Compliance with the ANSI standard

therefore ensures compliance with the labeling requirements of the

Extension Ladder

[[Page 48077]]

Rule. Several commenters noted this overlap in coverage of the

Extension Ladder Rule and ANSI standard, A14, and recommended that the

Rule be retained unchanged.

Another commenter stated that the Rule has imposed minor,

incremental costs, but opined that the benefits have been significant

in that consumers have a better understanding of extension ladder

length. The commenter questioned whether there was a continuing need

for this Rule given the existence of ANSI standard A14 and UL Standard

184.

In addition to these specific comments, one general comment,

applicable to several rules being reviewed, was received from an

advertising agency association. This organization recommended

rescission of the Extension Ladder Rule because the general

prohibitions of Section 5 of the FTC Act covering false and deceptive

advertising apply to the ladder industry, and thus the Rule creates

unnecessary administrative costs for the government, industry members

and consumers. This commenter did not submit any analysis or data

relating to the imposition of unnecessary administrative costs on

affected industry members, government or consumers.

Commission staff also engaged in an informal review of industry

practices by examining the marking of length on extension ladders

available for retail sale at several chain stores. That review

indicated general compliance with the requirements of the Rule.

Additionally, a check of Commission records failed to find any

complaints regarding non-compliance with the Rule, or any initiation of

law enforcement actions alleging violations of the Rule's requirements.

60 FR 27245.

On May 23, 1995, the Commission issued an Advance Notice of

Proposed Rulemaking (``ANPR'') based on a review of the submissions

received in response to the Request for Comment. The Commission

determined that there may no longer be a need to continue the Extension

Ladder Rule in light of the apparent changes in industry practices and

the existence of standards mandating the point-of-sale disclosures

required by the Rule. 60 FR 27246. No comments were received in

response to this request.

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, the use of 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) 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 requested 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 proposal

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, Federal Trade

Commission, Sixth Street and Pennsylvania Avenue, NW., Washington, DC

20580, telephone number 202-326-2222.

Questions

(1) Does the existence of the ANSI standard governing the labeling

of extension ladders eliminate or greatly lessen the need for the Rule?

(2) What are the benefits and the costs of the Rule to consumers?

(3) What are the benefits and the costs of the Rule to firms

subject to the Rule's requirements?

(4) Are there other federal or state laws or regulations, or

private industry standards, that eliminate a need for the Rule?

(5) Does the Rule overlaps or conflict with other federal, state,

or local government laws or regulations?

(6) Is there a continuing need for the Rule or should the Rule be

repealed?

V. Requests for Public Hearings

Because there does not appear to be any dispute as to 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. 601-11, requires

an analysis of the anticipated impact of the proposed repeal of the

Rule on small businesses.\3\ 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

[[Page 48078]]

proposed action that accomplish its objectives and, at the same time,

minimize its impact on small entities.

\3\ Section 22 of the FTC Act, 15 U.S.C. 57b-3, also requires

the Commission to perform ``regulatory impact analyses'' of a

proposed rule, but only if the rule will have certain

``significant'' economic or regulatory effects. 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 repealing the Rule will have a ``significant''

economic or regulatory impact, either beneficial or detrimental,

upon persons subject to the Rule or upon consumers.

---------------------------------------------------------------------------

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.

In light of 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 Extension Ladder Rule does not impose ``information collection

requirements' under the Paperwork Reduction Act (``PRA''), 44 U.S.C.

3501 et seq. The Rule, however, does contain disclosure requirements,

which specify that when the size or length of an extension ladder is

represented in terms of the total length of the component section such

fact must be noted and a statement must be placed in close proximity to

the notation which clearly and conspicuously discloses the maximum

length of the product when fully extended for use.\4\ Accordingly,

repeal of the Rule would eliminate any burdens on the public imposed by

these disclosure requirements.

\4\ Under amendments to the P.R.A. in the Paperwork Reduction

Act of 1995 (Pub. L. 104-13, 109 Stat. 163, to be codified at 44

U.S.C. 3501-20), which will become effective on October 1, 1995,

these third-party disclosures may constitute a ``collection of

information'' for which OMB clearance must be sought.

---------------------------------------------------------------------------

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 of 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 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.

List of Subjects in 16 CFR Part 418

Advertising, Trade practices, Extension ladders.

Authority: 15 U.S.C. 41-58.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 95-23043 Filed 9-15-95; 8:45 am]

BILLING CODE 6750-01-M