c30:No. 75-2102

VAN DUSEN, Circuit Judge,
dissenting and concurring in part:
I respectfully dissent from part II-B of the majority opinion, which states that the Commission did not consider whether modification of the message advertised could eliminate the objectionable, deceptive portion of such message. The majority opinion overlooks this language of the Commission’s opinion (part II-C):
“The law judge’s order bans the use of the Instant Tax Refund phrase or similar words. He found no qualifying language could remedy the deception and that only purging Beneficial’s advertisements of the phrase would suffice. Beneficial vigorously contends that explanatory language could cure any fault and that forced abandonment of its copyrighted and heavily promoted phrase is unwarranted.
“In some instances, it is true, respondents have been allowed to retain trade names which had become valuable business assets, because the misleading qualities of the names could be dispelled by explanation. ... If explanatory language is insufficient to qualify a deceptive trade name or is inherently contradictory, its effect is simply to confuse the public and the Commission in framing a proper remedy must excise the offending phrase altogether. [Citations omitted.] Moreover, the Commission has wide latitude in judgment, particularly in determining whether qualifying words will eliminate a deceptive trade name. .
“In light of these principles, we see no reason for allowing Beneficial to retain the offending slogan. The Instant Tax Refund advertisements, we have held, have the capacity and tendency to mislead and have in fact misled consumers. In fact, since its inception in 1969, the Instant Tax Refund phrase has deceived continuously, and Beneficial’s repeated efforts to explain it have not cured the false impression it leaves. Beneficial’s inability to remedy the deception, which persists even in the qualifying phrase it offers on this appeal as a settlement, confirms what we believe to be obvious. No brief language is equal to the task of explaining the Instant Tax Refund slogan, for the phrase is inherently contradictory to the truth of Beneficial’s offer. In truth, the Instant Tax Refund is not a refund at all, but only Beneficial’s everyday loan service, complete with normal finance charges and credit checks; nor is it in the least related to any tax refunds, for the size of the loan Beneficial wishes to sell is geared to the customer’s credit limit instead of his government refund and many people due a government refund do not qualify for an Instant Tax Refund loan at all; moreover, depending on the season of the year or the customer’s sales resistance, the Instant Tax Refund may be called a Vacation loan, a Taxpayer loan, or a Bill Consolidation loan.
“Beneficial argues that excision of the Instant Tax Refund slogan and words of similar import would prevent any reference to the concept of tax refund loans. This is quite true. The record is absolutely clear that, in Beneficial’s business at least, no such concept exists. If, however, Beneficial should begin offering a special loan service actually related in some way to income tax refunds, it may seek to reopen the order. For now we believe the absolute prohibition necessary.”
[Footnotes omitted.] (1198a-1290a)
I do not believe that the advertisements suggested at page 619 of the majority opinion would make it clear to these consumers that the loan being offered is an everyday consumer loan having no relationship to tax refunds and no special features. Furthermore, on this record I believe the Commission was entitled to conclude that the words “tax refund loan” inherently contradict the idea of an everyday loan unrelated to refunds. The words “tax refund” imply something free and “unique” and the word “Anticipation” in the court-suggested advertisements might only underline the non-existent relationship between the loan and any refund. It is noted that the Commission gave Beneficial the right to reopen its order if a relationship between tax refunds and the loans was shown to exist in future advertisements (see above, this page).
Given the Commission’s consideration of the possibility of a lesser remedy, its broad discretion, and Beneficial’s inability to produce an advertisement which was not misleading, I believe the excision order should be sustained. See Baker’s Franchise Corp. v. FTC, 302 F.2d 258, 262 (3d Cir. 1962), where this court said: “The matter of the choice of remedy is one for the Commission.” See also cases cited at the top of page 618 of the majority opinion. At the least, I believe the Commission in the first instance should be permitted to consider any new advertisements using the Instant Tax Refund language before they are used.
I would affirm the conclusion reached in part II-C of the Commission’s opinion in view of these legal principles adopted by the Supreme Court of the United States:
A. THE COMMISSION MAY PROHIBIT STATEMENTS WHICH, THOUGH LITERALLY TRUE, ARE POTENTIALLY DECEPTIVE.
Although it is now clear that commercial speech enjoys “some” First Amendment protection, the Supreme Court has been careful to state that “regulatory commissions may prohibit businessmen from making statements which, though literally true, are potentially deceptive.” Young v. American Mini Theatres, Inc.,-U.S.-, 96 S.Ct. 2440, 2451, 48 L.Ed.2d 310, and n. 31 (1976); see Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 770-773, 96 S.Ct. 1817, 1830, 48 L.Ed.2d 346 and n. 24 (1976), where the Court said: “The First Amendment, as we construe it today, does not prohibit the State from insuring that the stream of commercial information flows cleanly as well as freely.”
In Young v. American Mini Theatres, Inc., supra at-, 96 S.Ct. at 2451 n. 31, the Court stated: “The power of the Federal Trade Commission to restrain misleading, as well as false, statements in labels and advertisements has long been recognized [citing cases].”
B. THE FEDERAL COURTS ARE LIMITED IN THEIR RIGHT TO REVIEW THE EXERCISE BY AN ADMINISTRATIVE AGENCY OF ITS DISCRETION.
In Jacob Siegel Co. v. Federal Trade Commission, 327 U.S. 608, 66 S.Ct. 758, 90 L.Ed. 888 (1946), the Court repeatedly emphasized the “limited” scope of our review of Commission discretion. In Seigel, the record did not indicate whether a remedy short of excision had been considered or would be adequate. The Court declined to hold that excision was inappropriate and simply remanded for consideration of a more limited remedy. See also Federal Trade Commission v. Algoma Lumber Co., 291 U.S. 67, 54 S.Ct. 315, 78 L.Ed. 655 (1934) (upholding an excision order).
Here the Commission has considered and rejected a more limited remedy, and the Siegel case states at page 613, 66 S.Ct. at page 760, that: “The courts will not interfere except where the remedy selected has no reasonable relation to the unlawful practices found.”
Applying the standard enunciated in Jacob Siegel, which appears to survive the demise of the former commercial speech doctrine, I believe the choice of the remedy of total excision was permissible on this record.
In all other respects, I concur in the majority opinion.
. The majority apparently does not challenge the following findings of the Commission, which are supported by substantial evidence on the whole record (1193a):
“In truth, it is admitted, what Beneficial is offering is its everyday loan service. The Instant Tax Refund is not a refund at all but a personal consumer loan, with regular finance charges, costs, and repayment period. .
Such a loan is always available to anyone meeting Beneficial’s credit standards, whether or not the customer is owed a tax refund by the government, but Beneficial will not make any loan to a person failing to meet its credit standards, even if the customer is due a government refund. The size of the loan Beneficial wishes to sell is not related to any tax refund, but to the customer’s credit limit.” [References to record omitted.]
The testimony of more than five consumers, credited by the Commission, was that they were misled during the later period and “failed to understand that Beneficial was offering only its normal loan service with normal finance charges” (majority opinion at 618). As stated by the majority, “[t]heir impression was that the main qualification for the Instant Tax Refund loan was entitlement to an actual government refund.”

Passage view · GavelSight