Harry Carr v. Federal Trade Commission , 302 F.2d 688 ( 1962 )

ALDRICH, Circuit Judge.

This is a petition to review an order of the Federal Trade Commission. Petitioner, a garnetter of wool, has been ordered to cease and desist from misbranding garnetted material with respect to the source of the constituent fibers, and from failing to affix labels disclosing the presence of certain ingredients. It is not actively disputed that petitioner labeled certain bales of garnett as containing 80 per cent camel hair and 20 per cent wool when m fact the percentages were more nearly reversed. The Commission also found that the bales contained reprocessed wool.¹ This finding the petitioner contests. The pertinent statute is the Wool Products Labeling Act, 15 U.S.C.A. §§ 68-68j. There is a criminal penalty provision, § 68h.

Garnetting is a process whereby surplus clippings, threads and other waste materials are shredded and untwisted so that they revert to a mass comparable in appearance and substance with the original wool prior to carding. Petitioner receives the waste from the dealer and acquires no property interest therein, but merely processes it for a fee and arranges for shipment to the dealer’s consignee. Before shipping he affixes labels supplied by the dealer. Petitioner has nothing to do with the source or content of the waste and makes no tests to verify the accuracy of the labels. The Commission does not dispute his contention that it would be impractical for him to do so, but suggests that he could protect himself by a guaranty from the dealer under section 9 of the act, 15 U.S.C.A. § 68g.²

Certain matters may be disposed of at the outset. The act, with immaterial, stated exceptions, applies to all persons manufacturing for introduction, or introducing, wool products into commerce. The only question is whether the garnett is a wool product. If it is, it is clear that petitioner both manufacturers for introduction and introduces.³

Secondly, we are not impressed with petitioner’s contention of the insubstantiality of the evidence that his garnett contained reprocessed wool. Petitioner tried his own case. He introduced no evidence, except to make a formal statement which, unfortunately, we find far from clear. This perhaps illustrates the fact that a party who tries his own case is like a man cutting his own hair—in a poor position to appraise what he is doing. But we could not set aside the finding of the Commission simply by concluding, if we should, that its investigator failed to make a comprehensive examination of all available evidence, or presented only the evidence unfavorable to the petitioner. The finding must stand.

The act defines a wool product as “any product * * * containing wool, reprocessed wool, or reused wool.” 15 U.S.C.A. § 68(e).⁴ This takes care of the content, but it gives no assistance on the crucial word “product.” The Commission dealt with this subject simply by pointing out that something could be an intermediate or process product although it fell short of being a final product. It quoted from Tide Water Oil Co. v. United States, 1898, 171 U.S. 210, at 216, 18 S.Ct. 837, at 839, 43 L.Ed. 139 “Raw materials may be, and often are, subjected to successive processes of manufacture, each one of which is complete in itself, but several of which may be required to make the final product.” We do not find this particularly helpful, because it does not resolve the real question, which is when is a process sufficiently advanced to reach the dignity of a new product. In Hartranft v. Weigmann, 1887, 121 U.S. 609, at p. 615, 7 S.Ct. 1240, at 1243, 30 L.Ed. 1012, in holding that cleaning and grinding seashells, even though by machinery, did not result, for purposes of import duties, in “shells manufactured, or manufacturers of shells,” the court said,

“They were still shells. They had not been manufactured into a new and different article, having a distinctive name, character, or use from that of a shell. The application of labor to an article, either by hand or by mechanism, does not make the article necessarily a manufactured article, within the meaning of that term as used in the tariff laws. Washing and scouring wool does not make the resulting wool a manufacture of wool. Cleaning and ginning cotton does not make the resulting cotton a manufacture of cotton.”

Correspondingly, washing and carding wool does not make a wool product. It is still, generically, wool. The Commission, however, concluded that the garnett in question “is the finished product of the manufacturing process performed by respondent and * * * [s] ince it contains wool and reprocessed wool, it is a ‘wool product’ within the meaning of that term.”

The Commission did not amplify its reasoning. But it seems clear that it could not have found that garnett is a product simply because appellant had performed his own final step. Cleaned wool, which is not normally a wool product, would not become such because it was the only operation performed by a particular individual. If Congress wanted wool labeled, as distinguished from a wool product, it would have been easy to say so. The word “product” must refer objectively to some characteristic of the article itself, irrespective of the party or parties concerned in its manufacture.

In oral argument the Commission contended that since at least some of the ingredients were waste from what had admittedly been wool products, it followed that the garnett was a wool product. We do not follow the logic of this argument. Product comes from the Latin pro ducere, to lead forward. Garnett means, “To remove foreign substance from (wool or cotton) or to reduce (waste) to fiber, by passing through a machine provided with Garnett teeth.” (Webster’s New International Dictionary, Unabridged, 2d ed.; ital. suppl.). We cannot but be struck by the antithetical meanings of producing and reducing to the fiber for the purpose of starting over again. The qualities of an article, and hence whether it is a “product,” must be judged by what it is, not by what it may once have been. In Patton v. United States, 1895, 159 U.S. 500, at 508, 16 S.Ct. 89, at 92, 40 L.Ed. 233 the court said,

“We are also of opinion that the importations in question cannot be considered as manufactures of wool. Assuming that the tops, before being broken up, represented a stage in the process of converting the wool into cloth, which would entitle them to be considered as manufactures; if the tops be reconverted into wool, so that the process has to be gone through with again, the wool loses its character as a manufacture and resumes its character as wool, even though it acquires the new commercial designation of waste.”

We hold that a garnett composed exclusively of ordinary wool waste, that is to say wool which has never been processed, is still wool and not a wool product. It should follow that a garnett of wool which has been processed is no more than reprocessed wool. In fact such gar-nett exactly meets the basic statutory definition.⁵ To the extent that woven or felted wool waste entered into petitioner’s operation his garnett was reprocessed wool, not a product of reprocessed wool.

Petitioner does not come under the act. Whether misdescription of the content of the garnett was an offense under some other statute has not been claimed or argued.

A decree will be entered vacating the order of the Commission.

1 . Reprocessed wool is wool once felted or woven, as distinguished from merely spun or knitted, but reduced to a fibrous state without having been used by the ultimate consumer. See 15 U.S.C.A. § 68(c), infra n. 5; cf. § 68(b) and § 68(d).

2 . If we agreed with the Commission that petitioner produces a wool product, then we would have grave doubts about the possibility of such protection. As it is, we do not reach the question.

3 . Petitioner suggests that the dealer had already introduced the product, if it be one. However, if garnetting is manufacturing a product, by the same token this product was first introduced by petitioner, even though at the dealer’s order.

4 . “(e) The term ‘wool product’ means any product, or any portion of a product, which contains, purports to contain, or in any way is represented as containing wool, reprocessed wool, or reused wool.”

5 . “(c) The term ‘reprocessed wool’ means the resulting fiber [product] when wool has been woven or felted into a wool product which, without ever having been utilized in any way by the ultimate consumer, subsequently has been made into a fibrous state.”