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TEMPEST IN A SOUP CAN BBDO EXEC RECALLS LANDMARK LEGAL BATTLE BETWEEN CAMPBELL, THE FTC AND 5 LAW STUDENTS (PART 2 OF 3)

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I looked at him in disbelief. "Come on, Jim, you know better than that. Vinnie Meehan and her people prepare the soups according to the directions on the can. We buy the soup from any grocery store near where we're shooting. ... And we prop. Everybody props. Marbles, pieces of glass ... And you know me and Bob Ballantyne and Vinnie Meehan. You know our agency. We don't cheat. We're a straight-arrow company. And so is Campbell."

Jordan laughed. "OK, Mercer. Next you'll tell me you're a daily communicant like Maloney."

"No, Jim, I'm just a daily commuter. But that's scary enough to keep me honest."

The next couple of weeks seemed to go by in 10 minutes as my group prepared for the spring marketing meetings. Somehow I managed to work in the time to see more and more of Maloney, who in turn was seeing a lot of Campbell Soup's general counsel and secretary, Robert G. Calder Jr. Maloney delivered to Calder reams of advertising material that I had put together and gave him the answers to scores of questions Ballantyne and I had answered.

While both client and agency were busy answering a multitude of questions for the FTC, there were just two questions Campbell Soup and BBDO wanted the FTC to answer: 1) Were advertiser and agency about to be charged with a violation of the FTC Act? and 2) If so, who made the complaint?

We were to learn the answer to the first question in a matter of weeks. But in the more than four years that this drama was to run in Camden, New York and Washington, we were never once allowed to know who were our accusers. When we finally did learn their identity many years later, it was only because of a clerical error in a legal document.

On May 8, 1968, I talked with Don Goerke, Campbell's marketing manager for soups. He said he got the feeling that both Calder and Maloney were concerned about propping. The two lawyers had never been aware of the practice and believed there was some kind of "anti-mock-up" regulation in the FTC act under which propping might make us vulnerable.

"Are you worried about that?" I asked.

"No," he said. "In fact I wasn't worried about anything until I saw the address on Calder's letter to the FTC this morning."

He looked toward the sky, trying to pull it out of memory. "William J. Dorn, Esquire, Advertising Media Project, Bureau of Deceptive Practices, Federal Trade Commission, Washington, D.C.

"How's 'at hit ya? Bureau of Deceptive Practices. If that's who's doing the investigation, sounds like they've made up their minds before they've even started."

Lawyers on the set

The May 17 meetings with Campbell's president went very well. We received approval to produce all the TV and radio commercials and magazine ads we had recommended for the coming year. This meant that, as was our custom, we would spend the summer producing the advertising that would start running nationwide in September, which to Campbell was the official start of the soup season.

This summer was different. Starting then, a preproduction meeting looked like a meeting of the U.N. Security Council. It had almost the same number of people, as much formality, certainly as many arguments, and could have used the same number of interpreters.

The lawyers had taken over.

On July 8, I arrived in the office and Maloney casually told me that William J. Dorn of the FTC's Bureau of Deceptive Practices had paid a visit to BBDO. Maloney had escorted him to the test kitchen and had Vinnie Meehan demonstrate how we prepared the soups for still photography and how marbles or glass were used for propping.

I was fit to be tied; someone from the creative department should have been there to tell the FTC why we propped.

As a result of Dorn's written report on his visit to BBDO, an FTC lawyer named Stuart Lee Friedel wrote a highly significant memorandum to John W. Brookfield Jr., chief of food and drug advertising for FTC. I obtained this memo 20 years later-along with hundreds of other documents on the case-through the Freedom of Information Act. The memorandum, like all the other records, was carefully censored by FTC to black out the name of the "applicants," their term for the complainants.

The memo alleged Campbell engaged in false and deceptive advertising by misrepresenting the amount of solid ingredients in its soup. It recommended the investigation against both the marketer and the agency continue.

Two months later, in September-just as Campbell's advertising for the 1968-69 soup season was breaking-Friedel wrote identical letters to Maloney and Calder: "The staff ... has concluded that a method of advertising a bowl or container of soup which employs the insertion of clear glass marbles into the bottom of said bowl or container to support the solid ingredients present in the soup ... constitutes the use of a mock-up violative of section 5 of the Federal Trade Commission Act.

"In accordance with the above conclusion and in view of your good faith cooperation, you are being hereby afforded the opportunity to submit an assurance of voluntary compliance."

Both client and agency complied. In November, Campbell's president and Tom Dillon, BBDO president, each sent Friedel their signed assurance of voluntary compliance.

The commission then wrote to the complainants and to Campbell and BBDO saying, "... the commission has received adequate assurances that the practice which was under investigation has been discontinued and will not be resumed. Accordingly the matter has been closed."

None of us gave a thought to the last sentence: "The commission may at any time take such further action as the public interest may require."

Simmering on back burner

Four months later, the commission called a press conference nicely timed to let the public get the news that FTC believed it had sufficient evidence to support the complainant's original argument against Campbell and BBDO before the company and agency heard about it. We were notified that the commission planned to institute a formal proceeding.

The chairman of the FTC at the time was Paul Rand Dixon. Fifty-six years old and a Democrat from Tennessee, Dixon had been a federal government lawyer for 31 years. President Kennedy had appointed him FTC chairman in 1961.

With Republican Richard Nixon in the White House, Dixon knew he would soon be replaced. So it should have come as no surprise that he was eager to nail another big-business pelt before leaving.

The press conference unloaded the whole sordid story of the fraudulent and misleading use of marbles in the soup. Interestingly, under Dixon's chairmanship, the commission was not above using some deceptive practices of its own. It led the assembled journalists to believe the transgressions had been committed in TV commercials.

The commission knew full well marbles or glass had never been used in TV spots. There was no need; with TV's motion, the soup was poured and ladled and spooned to show vegetables and meat and pasta. Marbles and other forms of propping were used only in "still" print ads. But FTC told the press the infractions were in television in hopes of garnering bigger headlines and longer sound bites.

The Associated Press wire story ran across the country with headlines like this in the Indianapolis Star: "Marbles in TV soup must go, FTC declares."

Settling to the bottom

On July 30, 1969, 10 months after Campbell and BBDO had both signed an assurance of compliance, both client and agency signed another FTC agreement and consent order. The agreement stated Campbell and BBDO waived all rights to any further procedural steps; waived the requirement the commission's decision contain a statement of findings of fact and conclusions of law; and waived all rights to seek judicial review or to challenge the validity of the order accompanying the agreement.

The document left the soup company and its agency standing in their undershorts while the commission sat comfortably clothed in the voluminous folds of federal regulation.

Five pages of single-spaced typescript, titled "Agreement containing consent order to cease and desist," contained but one tiny thread of fairness, a single sentence that read: "This agreement is for settlement purposes only and does not constitute an admission by proposed respondents that the law has been violated as alleged in the said copy of the draft of complaint here attached."

We relaxed, again. All we had to do was cease and desist using marbles or other props to show the garnish in soup-which we had stopped doing a year earlier.

Student unrest

With the consent order now accepted, we at Campbell and BBDO enjoyed a brief period of serenity, until Oct. 22, 1969. We opened our morning papers that day to read that a group of George Washington University law students had filed a petition with the FTC asking for tougher penalties against us.

Five law students, enrolled in a course on unfair trade practices, had decided to go after the world's biggest soup marketer and the country's fourth-largest advertising agency as a homework assignment.

The five students operated under the name SOUP (Students Opposing Unfair Practices), which they formed as a corporation in D.C. They were led by John H. Banzhaf III, professor of law and legal activism, the same Banzhaf who had founded Action on Smoking or Health in 1967 and who had helped bring about anti-smoking advertising on TV.

What they did in their roles as paper terrorists over the ensuing three years and two months amounted to little more than material for a second-rate musical comedy.

But it cost everyone involved millions of dollars, while tying up scores of honest and responsible business people who had far more productive things to do with their time than help would-be campus radicals do their homework.

The consent order had been issued with a directive that it be placed on the public record for 30 days, until Oct. 20, 1969, to permit members of the public to file comments or views.

On Oct. 7, SOUP sent the commission an application to intervene in the proceedings and requested the commission grant SOUP full disclosure of all records and correspondence of all parties in the case.

On Oct. 20, the students delivered to the commission 20 copies of legal documents including a formal motion to intervene, a provision requesting FTC withdraw its acceptance of the consent order and memorandum requesting SOUP be permitted to act in forma pauperis from that date forward.

This meant they were to be treated as poor people so that in the future they would not have to go to the expense of submitting 20 copies of every document as was required of all others in the action.

Part of the students' gravamen was that the news of the commission's action against Campbell and BBDO was not sufficiently disseminated. They complained that the news of the action "was carried by The New York Times, Washington Post and a couple other newspapers around the country.

"Nobody," they wrote, "in say, the state of Indiana, knows about Campbell's unfair practice."

In choosing Indiana, the students revealed what a perfunctory job they had done on their homework. As noted, the most widely read paper in Indiana, the Indianapolis Star, ran a major story seven months previous.

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