Public Statement of Chairman Pitofsky, Commissioner Anthony and Commissioner Thompson
In Shell Oil Company
It is true, as the Complaint alleges, that Shell provided its product to sophisticated trade customers, who then incorporated Shell's product into a subsequent product. But we do not believe that this sequence of events allows Shell to escape liability. We believe that all would agree that the interposition of a "sophisticated" party between the originator of deceptive claims and the consumer is not necessarily a defense to "means and instrumentalities" liability. Indeed, the means and instrumentalities doctrine is intended to apply in cases like this one where the originator of the unlawful material is not in privity with consumers, and does not control the actions of those (sophisticated or not) who will make the final decisions as to the message conveyed to consumers. It is well settled law that the originator is liable if it passes on a false or misleading representation with knowledge or reason to expect that consumers may possibly be deceived as a result. See Regina Corp. v. FTC, 322 F.2d 765, 768 (3rd Cir. 1963). Based on the facts, we have reason to believe that standard is met in this case and, accordingly, have voted to finalize the consent agreement.