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In the Matter of International Harvester Co.

Federal Trade Commission
104 F.T.C. 949 (1984)


Facts

International Harvester Co. (Harvester) (defendant) sold tractors. Harvester’s tractors sometimes experienced an engine problem where heat and pressure built up in the fuel tank. If the pressure was released suddenly, hot fuel shot into the air, causing burn injuries and fires. The problem was called fuel geysering. Harvester was aware of the fuel-geysering problem and took remedial steps beginning in 1958. Harvester sent a notice to tractor dealers describing the problem. In 1963, Harvester revised the tractor’s operating manual to warn users against removing the fuel cap while the engine was hot. The revised manuals did not mention fuel geysering specifically. Harvester issued a new warning decal in 1976, but distribution of the decal was limited. Finally, in 1979, Harvester instituted the Fuel Fire Prevention Program. The program mailed detailed information to Harvester’s customers, explaining the fuel geysering problem and recommending safety precautions. The Federal Trade Commission (FTC) (plaintiff) initiated an enforcement action, alleging that Harvester’s incomplete disclosure of the fuel geysering problem violated § 5 of the Federal Trade Commission Act (FTC Act). The administrative law judge found that Harvester had violated the FTC Act because the nondisclosure was an unfair trade practice, and Harvester sought review by the full commission.

Rule of Law

Issue

Holding and Reasoning (Douglas, C.)

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