text:
    Earl VEST and Fay Vest, Petitioners-Appellees-Cross Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellant-Cross Appellee.
    No. 72-2283.
    United States Court of Appeals, Fifth Circuit.
    June 22, 1973.
    Rehearing and Rehearing En Banc Denied Aug. 8, 1973.

      Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Atty., Tax Div., U. S. Dept, of Justice, Washington, D. C., Lee H. Henkel, Jr., Acting Chief Counsel, William Brackett, Internal Revenue Service, Washington, D. C., Stephen Schwarz, Atty., Tax Div., Dept, of Justice, Washington, D. C., for respondent-appellant-cross-appellee.
    William Monroe Kerr, William L. Kerr, Midland, Tex., for petitioners-appellees-cross-appellants.
    Before GEWIN, SIMPSON and RONEY, Circuit Judges.
   GEWIN, Circuit Judge:

This appeal is from a decision of the Tax Court holding (1) that the grant of underground water rights by taxpayers, Earl and Fay Vest, was a sale and the proceeds were entitled to capital gains treatment and (2) that payments received by the Vests for the grant of various surface rights incident to a mineral lease were in the nature of rent and hence were taxable as ordinary income. The Commissioner appeals from the Tax Court’s characterization of the proceeds from the water rights grant and the taxpayers cross-appeal from the ruling on the surface rights payments. We reverse in part and affirm in part.

I. Water Rights

The Vests owned certain áereage in Winkler County, Texas including the water and mineral rights incident to that property. Prior to April 1963, Shell Oil Company approached them with a proposal to purchase their water rights together with a right of way to facilitate their development. Shell’s chief reason for seeking this agreement was to obtain sufficient reserves to provide water for use in the secondary recovery of oil by means of waterflooding.

On April 29, 1963 a final contract was executed. The Vests transferred to Shell by warranty deed the rights to all water between the depths of 3,000 and 6,500 feet beneath certain described land in Winkler County, Texas save that quantity of water needed by the Vests for their own exploration and production of minerals. Also transferred to Shell was a right of way over the Vests’ land for the purpose of developing the acquired water rights and the construction, operation and maintenance of a trunk pipeline to be used to transport and distribute the water.

Shell, in turn, agreed to make payments in monthly installments extending over a 75 year period although it was not required to pay any fixed amount. See Earl Vest, 57 T.C. 128 (1971). These payments, when they became due, were computed according to Shell’s receipts from the sale of “purchase price water.” Purchase price water was defined as water produced from the water rights transferred to Shell or from other water rights acquired by Shell from others in Winkler, Ward and Ector Counties, Texas, during April 1963, or from other specified areas of Winkler County that might be brought under the agreement at a later time, or any water, not otherwise covered by the agreement, transported through pipelines constructed pursuant to the agreement. Shell had the option of being relieved of any further liability under the agreement if the quantity of “purchase price water” fell below an average of 50,000 barrels per day for six months. In that event, Shell could transfer the acquired water rights back to the Vests and be relieved of any further obligation. However, even if this option were exercised, Shell still retained the right to utilize any pipeline which might have been laid on the Vests property, upon payment of an additional consideration, for the purpose of transporting substances other than water.

From the date of the execution of the agreement through the tax years now in dispute (1965-1967), Shell did not drill any water wells, remove any water directly from the Vests’ land or lay any pipeline. Nevertheless, Shell did pay the Vests a total of $26,630.95 for water extracted and transported from the property of neighboring landowners. The Vests reported this income as capital gain received from the sale of the water rights and the right of way. Rejecting this determination, the Commissioner found that the Vests’ transaction with Shell was a lease giving rise to ordinary income. Deficiencies were assessed accordingly.

The Tax Court, reversing the Commissioner’s determination, held that the income received by the Vests with respect to the water rights and the right of way was capital gain, not ordinary income. Applying the economic interest test approved by this court in Wood v. United States, 377 F.2d 300, 303-304 (1967) it rejected the Commissioner’s assertions that the payments were based on production and that the Vests possessed a reversionary interest in the property. Although the Tax Court acknowledged the relevance of such factors as the Vests’ reservation of water rights for mineral exploration and the absence of either a fixed sales price or a substantial down payment, it did not regard them as controlling. On the contrary, it found that the agreement between the Vests and Shell constituted a sale of the water in place and a permanent interest in the property for a right of way. The Commissioner appeals from this part of the Tax Court’s ruling.

Before reaching the merits of this question, there is a threshold issue which we must discuss briefly. The Commissioner contends that the economic interest test, Palmer v. Bender, 287 U.S. 551, 53 S.Ct. 225, 77 L.Ed. 489 (1933); Commissioner v. Southwest Explor. Co., 350 U.S. 308, 314, 76 S.Ct. 395, 100 L.Ed. 347, 354 (1956), does not govern the tax consequences of the Vests’ transfer of the water rights and the right of way. It is argued that this test was originally conceived to determine who has the depletable interest in minerals with respect to which the percentage depletion allowance is available. As such, the test is said to be a term of art ill-adapted to application outside the depletion context. The Commissioner cites several cases for this position, Bryant v. Commissioner, 399 F.2d 800, 806 (5th Cir. 1968); Moberg v. Commissioner, 365 F.2d 337, 340 (5th Cir. 1966) (Brown, J. concurring), but otherwise gives no concrete economic or scientific reasons to support it.

The view in this circuit is firmly established that the economic interest test can be applied to cases outside the percentage depletion area. “Although the ‘economic interest’ concept was developed and refined primarily in cases dealing with oil and gas law, we have observed that there is ‘no apparent justification for a difference in approach depending on the nature of the mineral involved’ . . . .” Rutledge v. United States, 428 F.2d 347, 350 (5th Cir. 1970). See also Rhodes v. United States, 464 F.2d 1307, 1310 (5th Cir. 1972); Wood v. United States, 377 F.2d 300, 304 (5th Cir. 1967). In the same vein, it has also been recognized on several occasions that regardless of the original purpose of the economic interest test, it is substantially the same as the test employed to determine whether income is taxable as capital gain or ordinary income. Rutledge v. United States, 428 F.2d 347, 351 (5th Cir. 1970); Wood v. United States, 377 F.2d 300, 305 (5th Cir. 1967). See Burton-Sutton Oil Co. v. Commissioner, 328 U.S. 25, 35, 66 S.Ct. 861, 90 L.Ed. 1062, 1069 (1946). In view of these principles, it appears to us that the Commissioner’s argument in this connection is based on semantical distinctions and not considerations of economic or legal substance. Hence, we conclude that the Tax Court’s use of the economic interest test was not erroneous.

As is always true in cases of this nature, a careful analysis of the facts is necessary to bring out the essential character of the transaction involved. A finding that an economic interest has been retained by the taxpayer must be supported by a showing of the following facts: (1) the taxpayer must have acquired by investment an interest in the minerals in place and (2) he must look solely to the extraction of the mineral for the return of his capital. Commissioner v. Southwest Explor. Co., 350 U.S. 308, 314, 76 S.Ct. 395, 100 L.Ed. 347, 353 (1956); Rhodes v. United States, 464 F.2d 1307, 1310 (5th Cir. 1972). Since there can be no serious question about the Vests’ pre-agreement investment interest in the water rights and right of way, our chief concern here will be to assess the Vest-Shell agreement in light of the second part of the economic interest test.

The case law relevant to this issue can be dichotomized into two broad yet distinct lines of authority: sales eases and lease cases. Rhodes v. United States, 464 F.2d 1307, 1310 (5th Cir. 1972); Wood v. United States, 377 F.2d 300 (5th Cir. 1967). As a general proposition, if a sale is consummated, the taxpayer divests himself of all economic interest in the minerals transferred and therefore is entitled to treat the proceeds as capital gain. By the same token, if the transaction is a lease or one where the taxpayer looks solely to the extraction of minerals for a return on his capital, then he must treat the proceeds as ordinary income. Rhodes v. United States, 464 F.2d 1307, 1310 (5th Cir. 1972); Rutledge v. United States, 428 F.2d 347, 351 (5th Cir. 1970). See also Commissioner v. Southwest Explor. Co., 350 U.S. 308, 314, 76 S.Ct. 395, 100 L.Ed. 347, 353 (1956).

An exhaustive review of the “sales” cases is not necessary in order to identify the factors which distinguish them from the “lease” decisions. While the presence of language of sale has always been considered relevant, it is well recognized in both lines of authority that the labels or words used by the parties in forming their contract are not controlling. In short, the substance of a contract’s terms and provisions will prevail over its form. Rhodes v. United States, 464 F.2d 1307, 1311 n.4 (5th Cir. 1972); Rutledge v. United States, 429 F.2d 347, 352 (5th Cir. 1970) (lease case). Thus, since this court’s decision in Crowell Land & Mineral Corp. v. Commissioner, 242 F.2d 864 (5th Cir. 1957), it has consistently been held that a sale results where an agreement purports to transfer within a prescribed time period all, Rhodes v. United States, 464 F.2d 1307 (5th Cir. 1972); Gowans v. Commissioner, 246 F.2d 448 (9th Cir. 1957); Day v. Commissioner, 54 T.C. 1417 (1970), or a specific, predetermined quantity of minerals in place, Rhodes, supra, Linehan v. Commissioner, 297 F.2d 276 (1st Cir. 1961); Gowans v. Commissioner, supra, in exchange for a fixed consideration. Rhodes, supra; Day, supra. See also Bryant v. Commissioner, 399 F.2d 800, 806 (5th Cir. 1968); Commissioner v. Remer, 260 F.2d 337 (8th Cir. 1958). The economic effect of an agreement exhibiting these terms is abundantly clear. Not only does the transferor part completely with his interest in the minerals in place, he also acquires a right to receive payments which is not dependent upon extraction by the transferee. There is thus a cashing in of an investment interest and capital gain treatment of the proceeds is appropriate.

The Vest-Shell agreement, despite its language of sale, does not lend itself to easy categorization. It is a borderline transaction for tax purposes reflecting in varying degrees both sale and lease characteristics. Nevertheless, after an analysis of its terms and provisions as a whole, Albritton v. Commissioner, 248 F.2d 49, 51 (5th Cir. 1957), we cannot conclude that this agreement is controlled by Crowell and subsequent “sales” decisions. In our opinion the Vest-Shell agreement differs significantly from the transactions involved in those cases. Because of these critical differences we find that the Vests retained an economic interest in the water rights and right of way transferred to Shell.

Under the terms of the agreement, the Vests did not transfer to Shell all of the water in place or a specific quantity thereof. Though this fact alone represents a key difference from the “sales” eases, it takes on increased importance in light of other provisions in the agreement. These provisions indicate that Shell had no intention of making an outright purchase of water payable in any event. On the contrary, Shell acquired the water rights primarily for use when needed to provide sufficient reserves for the secondary recovery by oil by means of waterflooding. While Shell was obligated to make payments to the Vests in monthly installments over a 75 year period, it is important that Shell controlled the conditions under which this obligation arose. Shell was under no duty to extract any “purchase price water” at all and if it did not, the Vests would receive nothing. We do not think that these terms are equivalent to the quid pro quo that has traditionally been associated with a bona fide sales transaction or a cashing.in of one’s investment interest in property.

But having found that the Vest-Shell agreement is fundamentally unlike the transactions in the Crowell line of decisions involving what were determined to be sales, it does not automatically follow that the Vests retained an economic interest in the water rights. We still must inquire whether the Vests looked to the extraction of the water for a return on their capital. Palmer v. Bender, 287 U.S. 551, 53 S.Ct. 225, 77 L.Ed. 489 (1933); Commissioner v. Southwest Explor. Co., 350 U.S. 308, 76 S.Ct. 395, 100 L.Ed. 347 (1956); Rutledge v. United States, 428 F.2d 347 (5th Cir. 1970) ; Wood v. United States, 377 F.2d 300 (5th Cir. 1967); Albritton v. United States, 248 F.2d 49 (5th Cir. 1957). See also, United States v. White, 401 F. 2d 610 (10th Cir. 1968) (en bane). This is the critical determination. The language of the contract relevant to this point is clear and unambiguous. The Vests possessed the right to be paid a percentage of the proceeds received by Shell from the sale of all “purchase price water” which by definition included but was not limited to water actually extracted from wells situated on the Vests’ property.

We recognize that a “bare right measured by production does not constitute an economic interest,” Commissioner v. Remer, 260 F.2d 337, 340 (8th Cir. 1958); Rutledge v. United States, 428 F.2d 347, 351 (5th Cir. 1970). But it is also true that “the question in all cases is what is owned by whom, or more exactly, what is the source of the right pursuant to which payments are received.” Bryant v. Commissioner, 399 F.2d 800, 806 (5th Cir. 1968). Here we need only to emphasize what was pointed out earlier. The Vests’ right to receive payments was linked inextricably to Shell’s withdrawal of water or use of the pipelines. Without the occurrence of one or both of those eventualities, Shell incurred no liability whatever. This symbiotic relationship — -between payments and production — is the kind of retained interest which makes the Vest-Shell agreement incompatible with a sale and more in the nature of a lease. Hence, we think the conclusion is escapable that the Vests retained an economic interest in the water rights transferred to Shell. It follows that the proceeds from this transaction were ordinary income and that the Tax Court’s conclusion to the contrary was error.

II. Surface Rights

The second issue on this appeal concerns a lease agreement between the Vests and Standard Oil. Under its terms, the lease, which was executed in 1965, was to run for five years and as long thereafter as gas, oil and other minerals were produced from the land. Paragraph 10 of this lease is the specific provision now in question; it required that Standard make payments to the Vests for well locations, tank batteries, flowlines and roads all of which were surface rights necessary to the exploration of the mineral rights acquired. For the tax year 1965, the total amount of these payments was $33,422.

The Vests assert that these payments should be given capital gain treatment because they were to last for an indefinite period and their purpose was to restore the depreciation in the surface value of the property caused by Standard’s mineral exploration. We reject this argument on both scores.

First of all it is not entirely accurate to suggest that Standard’s payments were to last for an indefinite period. Despite the fact that no one can say precisely when they will terminate, it is, nonetheless, indisputable that they will terminate eventually, if for no other reason, because of the exhaustion of the minerals subject to the Standard lease. The reason, of course, is that once this occurs the purpose of the surface rights will cease to exist. All payments would end and the surface rights would revert to the Vests or their successors in interest. In light of these considerations, the Vests’ restoration of capital loss argument has a hollow ring.

A brief reference to Paragraph 10 of the lease serves to confirm these doubts. It reveals that Standard agreed to pay the Vests for all actual damage caused to the surface of their property, independent of its obligation to pay for the well locations, tank batteries, flowlines and roads. Were we to accept the Vests’ interpretation of this paragraph, it would mean either that the Vests were entitled to be compensated twice for capital loss or that Standard’s duty to reimburse for actual damages were superfluous language without any legal significance. This position is patently untenable. We are compelled to conclude that Standard’s payments for the surface rights were in the nature of rental income, Lindley’s Trust No. 1 v. Commissioner, 120 F.2d 998, 1000 (8th Cir. 1941), and accordingly that there was no error in the decision of the Tax Court to this same effect.

The decision of the Tax Court is reversed in part and affirmed in part.

Reversed in part; affirmed in part.

      . This is disclosed at the outset of the Sales Agreement between the Vests and Shell: “Shell is purchasing these water rights primarily to obtain sufficient reserves to develop to provide water economically to he used in the secondary recovery of oil by means of water floods in various counties in and about Winkler, Ector and Ward Counties, Texas, and such other endeavors as may from time to time require substantial quantities of water.” Waterflooding is a methof recovering oil by means of injecting water into the oil reservoir. See Day v. Commissioner, 54 T.C. 3417, 1420 (1970).

      . Paragraph 2(A) of the Sales Agreement indicates plainly that the transfer of the right of way was not a separate and distinct transaction:
      Incidental to the grant of water rights contained in CONCURRENT CONVEYANCE Shell shall have the right of ingress and egress at all times for the purpose of exploring, prospecting, drilling for, and producing the water found in the rights thereby conveyed and removing the same to other lands, together with the right to construct, maintain and operate processing, purifying, demineralizing, and pumping-plants, and fuel, power, telephone and gathering lines to and from them for handling and removing water from other lands within eight (8) miles of the affected plant as well as from the lands covered hereby, said rights as to fuel, power and gathering lines to apply not only to the lands covered by CONCURRENT CONVEYANCE hut also to the lands expressly excepted therefrom by provision therein

      . Each monthly installment was to equal 13% percent of 3 percent of what Shell received for purchase price water during the month until 1.4 billion barrels of water were covered by the agreement then the amount due would rise to 13% percent of 6 percent of purchase price water.

      . It should be noted that an additional consideration of $10 per rod of pipeline would be paid when this contingency occurred.

      . The amounts received by the Vests from Shell were reported as follows:
      Tear Amount
      1965 $ 4,545.80
      1966 11,278.64
      1967 10,806.51

      . Earl Vest, 57 T.C. 128 (1971). With respect to the Aest-Shell transaction the taxpayers urgently contend that the Tax Court correctly grasped and resolved the issues involved, although in argument it appears that the taxpayers tend to repudiate some of the descriptive terms used by the Tax Court. In reaching its decision the Tax Court specifically alluded to four separate factors and concluded that no one of them or a combination of all of them was sufficient to support the government’s contention that the transaction resulted in a lease rather than a sale. The four factors mentioned and the conclusions reached are as follows:
      1. There was a limitation on the grant to the extent that the petitioners reserved the right to a portion of the water. It
      was concluded that, “This small reservation makes the grant of the water no less complete.”
      2. There was no down payment but the court decided “there is no general requirement under the Code that there be a sizable or any down payment for a transaction to qualify as a sale.
      Here, an economic interest in the natural deposit was not retained; the absence of a down payment is without major significance.”
      3. As to the reversionary interest of the taxpayers it was decided “Since the petitioners have not retained an economic interest in the water in place, the presence of a reverter clause such as this is not inimical to a conclusion that petitioners effected a sale rather than a lease of the water underlying their land.” (emphasis supplied)
      4. As to whether the taxpayers sold Shell an easement or only leased a right-of-way without fixed payments it was concluded : “We note, however, that although the amount of each monthly payment was not fixed, the duty to make payments is to terminate on a specified date after whicli Shell will continue in possession of the easement. Thus Shell was acquiring a permanent interest in the property for the payments made. In any event the transfer of the easement was an indivisible part of the agreement with Shell, and this Court will not split it off to produce an artificial result for the taxation of the proceeds received under the agreement.” (citation omitted).

      . Id. at 150.

      . Id.

      . Id. at 151.

      . We do not propose to delineate all of tlie possible ramifications, subtleties and intricacies of the economic interest test as it may be applied in numerous and varied transactions. It has wide application throughout many areas of tax law. We only conclude that the concepts developed with respect to the test constitute a valid and helpful analogy in the solution of the issue involved in this case. We must here determine whether proceeds arising out of agreements calling for the exploitation of natural deposits will be considered ordinary income or whether they will be taxed as proceeds from the sale of a capital asset. Accordingly we ue the test as an aid in characterizing the transaction under consideration. See Wood v. United States, 377 F.2d 300, 304, 306 (5th Cir. 1967).

      . There are a number of other factors which have appeared in these cases but have not by themselves been considered of controlling importance one way or the other. Reverter provisions are one example. While generally more prevalent in leases than sales, they are not necessarily incompatible with the latter. It has been held that if all of a specific, predetermined quantity of minerals are transferred, that which reverts is not the remainder of the mineral ^lepiosit sold but rather the seller’s right ttr-possession of the land from which it was extracted. See Crowell Land & Mineral Corp. v. Commissioner, 242 F.2d 864, 866-867 (5th Cir. 1957); Don C. Day, 54 T.C. 1417, 1425-1426 (1970). Where a mineral deposit has been transferred to make way for the subsequent development of the land under which it lies, some courts have found that fact to be indicative of an intent to sell. See, e. g., Rhodes v. United States, 464 F.2d 1037, 1311 (5th Cir. 1972); Linehan v. Commissioner, 297 F.2d 276, 277 (1st Cir. 1961). Finally, in the water rights cases, there is frequently a reservation by the transferor of a right to use water for certain purposes. Although in one case this reserved right was considered to be significant enough to affect the sales versus lease issue, Puckett v. Commissioner, 23 T.C.M. 238, 241 (1964), aff’d per curiam 355 F.2d 551 (5th Cir. 1966), that is not ordinarily the case. See Don C. Day, 54 T.C. 1417, 1424 (1970); Rev.Rul. 55-295. Contra Rev.Rul. 70-204.

      . See note 1 supra.

      . In reaching this conclusion, we have, of course, taken into account (1) Shell’s right to reconvey free of any further liability in the event that the “purchase price water” dropped below a certain level of output and (2) the Vests’ reservation of a right to use such water as tuay be necessary for mineral exploration in their own right. Neither provision, in our opinion, is a controlling consideration to a proper disposition of this aspect of the case. See note 31 supra.

      . See note 3 supra.

      . The Vests contend that even if the proceeds from the water rights grant are found to be ordinary income, capital gains treatment should still be given to that part of the proceeds allocable to the right of way. But as we indicated earlier in note 2 supra, the grant of the right of way was a necessary part of this transaction, the primary purpose of which was to secure the water rights. Thus, under the circumstances of this case, there is no basis for treating each as a separate grant for income tax purposes.

      . Earl Vest, 57 T.C. 128, at 147 (1971).

      . The relevant portion of Paragraph 10 reads as follows:
      It is understood and agreed that if and when exploratory, development or producing operations are conducted on the above described land, lessee, its successors and assigns, for the surface easement herein granted, shall pay to the surface owner at Kermit, Texas, on demand $150.00 per well location, $50.00 per tank battery site, $50.00 for each single shot hole, $150.00 for each multiple shot hole pattern in connection with seismograph or kindred operations on the land covered hereby, and $5.00 per linear rod for roads constructed and for pipelines laid (pipelines interconnecting storage tanks in the same tank battery and flow lines from a well to a tank battery at the site of that particular well shall not be considered pipelines for the purpose hereof).

      . Standard’s payments were allocated in the following manner:
      1. Well locations at $150 each $ 1,650
      2. Tank batteries at $50 each 100
      3. Plowlines and Roads at $5 per rod 31,672
      $33,422

      . Paragraph 10 states in relevant part:
      , Payment of said sums shall be in full payment for the surface rights in connection with the herein enumerated operations, but, lessee, all successors and assigns, shall be and remain liable to the surface owner and to lessor for any actual damage caused by lessee, and all successors and assigns, to the surface of said land and water therein and thereon, grass, vegetation and growing crops thereon, and livestock operations thereon of the surface owner or occupier, occasioned by neglect or unreasonable use of said surface of the above described land, on demand, at Kermit, Texas, in the respective amounts above set out.


source: Caselaw Access Project

author: EDWARDS, Circuit Judge.

license: Public Domain

text:
    The FIRESTONE TIRE & RUBBER COMPANY, Petitioner, v. FEDERAL TRADE COMMISSION, Respondent.
    No. 72-1990.
    United States Court of Appeals, Sixth Circuit.
    Argued April 4, 1973.
    Decided June 27, 1973.

      Fred H. Bartlit, Jr., Kirkland & Ellis, Chicago, 111., for petitioner; Hammond E. Chaff etz, Thomas A. Gottschalk, Kirkland & Ellis, Chicago, 111., William L. Blum, Dinsmore, Shohl, Coates & Deupree, Cincinnati, Ohio, on brief; John F. Floberg, Harold L. Henderson, Akron, Ohio, of counsel.
    Louis C. Keiler, Jr., Ronald M. Dietrich, Gen. Counsel, Harold D. Rhynedance, Jr., Asst. Gen. Counsel, Miles J. Brown, Washington, D. C., for the Federal Trade Commission.
    Before PHILLIPS, Chief Judge, and EDWARDS and PECK, Circuit Judges.
   EDWARDS, Circuit Judge.

Petitioner Firestone seeks review of an order of respondent Federal Trade Commission under 15 U.S.C. § 45(c) (1970). FTC had found Firestone guilty of unfair and deceptive advertising, in violation of 15 U.S.C. § 45(a) (1970), in relation to two particular advertisements. One of them may be characterized as the “Safe Tire” ad and the second ad as the “Stop 25% Quicker” ad.

I The “Safe Tire” Ad.

As to this series of advertisements, the parties stipulated as follows:

I. Duration of Advertising Program

1. Beginning on December 25, 1967, and continuing through May 18, 1968, the following text, or a text substantially similar to it, was used in certain Firestone advertisements:
THE SAFE TIRE. FIRESTONE When you buy a Firestone tire — no matter how much or how little you pay — you get a safe tire.
Firestone tires are custom-built one by one. By skilled craftsmen. And they’re personally inspected for an extra margin of safety. If these tires don’t pass all of the exacting Firestone inspections, they don’t get out.
Every new Firestone design goes through rugged tests of safety and strength far exceeding any driving condition you’ll ever encounter. We prove them in our test lab. On our test track. And in rigorous day-today driving conditions. All Firestone tires meet or exceed the new Federal Government testing requirements. (They have for some time.)
Firestone — The Safe Tire. At 60,000 Firestone Safe Tire Centers. At no more cost than ordinary tires.

II. Firestone’s Design And Manufacturing Testing And Quality Control Procedures

1. The state of tire manufacturing technology in [sic] such that use of the best manufacturing procedures and tests and quality control techniques known to the industry cannot insure that each tire produced by a manufacturer is absolutely free from any defects in materials or workmanship.

2. During the period of the advertisements set forth above, Firestone exercised due care and used its best efforts to employ the best manufacturing procedures and tests and quality control techniques known to the industry to design and manufacture tires free from defects in materials and workmanship.

As to this issue the Commission’s opinion says:

We conclude that respondent’s absolute representation that its tires are “safe” is false and deceptive on its own admission that tires cannot under today’s technology be assured of being free of defects. In view of this technological impossibility, it is an unfair and deceptive act and practice for respondent to make the unqualified assertion of safety which it made in this case.
Conditions of Use Claim
While it is clear from the face of the advertisement that respondent makes no explicit claim that its tires are safe under all conditions of use, we believe it does so implicitly. Respondent’s advertisement asserts flatly that the Firestone tire is “The Safe Tire” and describes the exacting rugged tests (“far exceeding any driving conditions” consumers will ever encounter) which the tires are put through to assure this safety. Respondent’s advertisement gives no indication that there is any limit to the safety of this tire or what such limits might be.

Firestone, on the other hand, emphasizes the stipulation recited above as to its employing the language, “the best manufacturing procedures and tests and quality control techniques known to the. industry” and interprets the "Safe Tire” ad as “assuring average tire consumers that Firestone did everything humanly and technically possible to sell tires free of defects.” Firestone also emphasizes that a large majority of persons interviewed concerning the “Safe Tire” ad thought that it meant something less than a guarantee of absolute safety.

As to this issue the Commission ordered Firestone to cease and desist from:

1. Representing, directly or by implication, that every purchaser of tires bearing the brand name "Firestone,” or any other brand name, is assured of receiving tires free from defects in materials or workmanship or other manufacturing defects.
2. Misrepresenting, in any manner, the effectiveness of respondent’s quality control or inspection procedures.
3. Using the words, “The Safe Tire,” or any other word or phrase of similar import or meaning to describe or designate respondent’s tires or otherwise representing, directly or by implication, that respondent’s tires will be safe under all conditions of use.
4. Making any representation, directly or by implication, regarding the safety of respondent’s tires without disclosing clearly and conspicuously and in close conjunction with such representation that the safety of any tire is affected by conditions of use, such as inflation pressure, vehicle weight, wear, and other operating conditions.

In approaching decision of this issue, this court is limited by statute and case law as to its proper function. The statute which provides for our review also provides that “the findings of the Commission as to the facts if supported by evidence, shall be conclusive.” 15 U.S.C. § 45(c) (1970). This court has described such findings as “entitled to be given great weight,” and has noted that “the Commission is permitted to draw reasonable inferences from the evidence . . .” Doherty, Clifford, Steers & Shenfield, Inc. v. FTC, 392 F.2d 921, 925 (6th Cir. 1968).

Even more to the point and worth quoting at length is the following description of our function in the words of a leading Supreme Court opinion:

In reviewing the substantive issues in the case, it is well to remember the respective roles of the Commission and the courts in the administration of the Federal Trade Commission Act. When the Commission was created by Congress in 1914, it was directed by § 5 to prevent “[ujnfair methods of competition in commerce.” Congress amended the Act in 1938 to extend the Commission’s jurisdiction to include “unfair or deceptive acts or practices in commerce” — a significant amendment showing Congress' concern for consumers as well as for competitors. It is important to note the generality of these standards of illegality; the proscriptions in § 5 are flexible, “to be defined with particularity by the myriad of cases from the field of business.” Federal Trade Comm’n v. Motion Picture Advertising Service Co., 344 U.S. 392, 394, 73 S.Ct. 361, 97 L.Ed. 426.
This statutory scheme necessarily gives the Commission an influential role in interpreting § 5 and in applying it to the facts of particular cases arising out of unprecedented- situations. Moreover, as an administrative agency which deals continually with cases in the area, the Commission is often in a better position than are courts to determine when a practice is “deceptive” within the meaning of the Act. This Court has frequently stated that the Commission’s judgment is to be given great weight by reviewing courts. This admonition is especially true with respect to allegedly deceptive advertising since the finding of a § 5 violation in this field rests so heavily on inference and pragmatic judgment. Nevertheless, while informed judicial determination is dependent upon enlightenment gained from administrative experience, in the last analysis the words “deceptive practices” set forth a legal standard and they must get their final meaning from judicial construction. Cf. Federal Trade Comm’n v. R. F. Keppel & Bros., Inc., 291 U.S. 304, 314, 54 S.Ct. 423, 427, 78 L.Ed. 814. FTC v. Colgate-Palmolive Co., 380 U.S. 374, 384-385, 85 S.Ct. 1035, 1042, 13 L.Ed. 2d 904 (1965). (Footnotes omitted.)

Employing these standards, we affirm the findings of the FTC on the “Safe Tire” issue and enforce its order.

There is, of course, no question but that the ad indulges in some puffing. The statement, “When you buy a Firestone Tire . . . you get a safe tire,” contains no use qualifications as to inflation, load and speed, and is measured against no comparative performance.

When the statement is compared to the stipulation previously quoted, its deficiencies are obvious:

1. The state of tire manufacturing technology in [sic] such that use of the best manufacturing procedures and tests and quality control techniques known to the industry cannot insure that each tire produced by a manufacturer is absolutely free from any defects in material or workmanship.

This stipulation, in effect, concedes that defective Firestone tires can and do reach the consumer.

We deal, of course, with a statutory ban on “unfair or deceptive acts or practices.” If no one were misled, we might reexamine our own conclusions vis-a-vis the Commission’s inferences about this ad in considerably more detail. Here, however, Firestone’s own consumer survey demonstrated that 15.3% of a scientifically selected sample of tire purchasers thought the “Safe Tire” ad meant:

(d) “Every Firestone tire is absolutely safe no matter how it is used and regardless of the tire inflation pressure and load of the ear;” or “Every single Firestone tire will be absolutely free from any defects.”

We find it hard to overturn the deception findings of the Commission if the ad thus misled 15% (or 10%) of the buying public.

We find no overbreadth or deficiency in the remedial order of the Commission, and as to it we affirm and grant enforcement.

II The “Stops 25% Quicker” Ad.

The Firestone “Stops 25% Quicker” ad reads:

“ . . . Like the original Super Sports Wide Oval Tire. It came straight out of Firestone racing research. It’s built lower, wider. Nearly two inches wider than regular tires. To corner better, run cooler, stop 25% quicker.”

By stipulation the parties agreed that the “stop 25% quicker” portion of the ad above was employed by Firestone in nationwide magazine advertising from January 16, 1967 to September 20, 1968, and omitted thereafter.

The only comparative stopping test submitted by Firestone was also stipulated by the parties as having been proved for this proceeding:

The Commissioner’s position on this issue is stated as follows:

In sum, we find that the admitted circumstances under which respondent tested its tires were limited and that despite these limited test conditions, respondent used these tests as its sole support for its advertisement representing that its Wide Oval tires would stop 25% quicker under all road and weather conditions and relative to all other types of regular tires. Its test did not support, either directly or by reasonable extrapolation, respondent’s broad stopping claim. The particular claim at issue here involves a matter of human safety. It is a claim which consumers themselves cannot verify since they have neither the equipment nor the knowledge to undertake the complicated tire tests required. They must rely on the technical expertise of the manufacturer to assure the validity of its claims. Under such circumstances, it is both unfair and deceptive to consumers to make a specific advertising claim without substantial scientific test data to support it.

Firestone’s position, on the other hand, as stated in its brief is as follows:

As set forth in the statement of facts, there is no dispute in the record that (1) Firestone conducted stopping tests of its Wide Oval tires prior to publishing the advertised claim, (2) Firestone’s tests were adequate and well controlled scientific tests conducted according to established technological standards, (3) the wet concrete test surface was a typical wet hazardous road surface which might be encountered by motorists, (4) the tests demonstrated that on the wet concrete surface, the Wide Oval tire stopped 29.8% quicker than the regular width tire. These record facts, combined with Dr. Brenner’s expert conclusion that the effect of the greater tread width would be more pronounced on dry surfaces, affirmatively demonstrate that Firestone’s scientific tests adequately established the factual accuracy of the “stops 25% quicker” comparison between the Wide Oval and narrow tires.

As to this issue the Commission’s order directed Firestone to cease and desist from:

5. Representing, directly or by implication,- that any of respondent’s automobile tires have any safety or performance characteristic or are superior in quality or performance to other products unless each such characteristic was fully and completely substantiated by competent scientific tests, with the results of the test, the original test data collected in the course of the test, and a detailed description of how the test was performed available in written form for inspection for at least three years following the final use of the representation.

On this appeal Firestone argues that 1) its ad did not impliedly assert that the “stops 25% quicker” language was based on scientific testing and that the Commission made no explicit finding to that effect; 2) that in any event, its own series of tests on wet, slippery pavement did represent adequate scientific proof of its assertion, or if not that, such proof could reasonably be extrapolated from that test, and 3) that the cease and desist order was unreasonably broad and restrictive in requiring scientific proof as to any safety or performance characteristic advertised.

As to the first of these issues, we believe the Commission did find that the “Stops 25% Quicker” ad implied scientific testing. It said:

In the circumstances of this case, we believe that consumers could reasonably have expected Firestone’s performance and safety claims to have been substantiated by scientific tests.

In addition, we think such an implication is entirely reasonable from the comparison and percentage language employed.

As to Firestone’s second argument above, we note at the outset that Firestone presented no witnesses at all in this proceeding. It relied entirely upon data provided by a comparison of two tires (both Firestone products) in ten runs on the same day on the same wet, smooth concrete surface at 15 m.p.h. with the same tire pressure and load. These ten runs showed an average stopping distance of 29.8% less for the Firestone Super Sports Wide Oval tire as compared to a Firestone Super Sports tire of standard tread width.

The Commission makes no comment derogatory to the scientific nature or the accuracy of the test upon which Firestone relies. Rather, it attacks the adequacy of one set of tests on one surface (we would be tempted to add, at one speed) to support the “stops 25% quicker” generalization. Of course, we note that the Commission’s own expert witness, Dr. Brenner, seemed to concede that a tire which stopped quicker on a wet surface would, under similar conditions, as to surface, speed, etc., stop still more quickly on a dry surface. What Dr. Brenner would not concede was that testing on any one surface was adequate to represent driving conditions nationwide. As to his own testing practices, he testified:

In our attempts to develop a test method in order to establish a standard for traction, we laid out five surfaces with different coefficients of friction and different textures, and we ran somewhere in the neighborhood of sixty-five different sets of tires through a variety of tests using skid trailers and vehicle in two maneuvers, stopping distance and in spin-out on a curve. And then we ranked the tires according to their performance on each test, on each surface in each maneuver.

We are by no means sure that the Firestone Wide Oval tire does not “stop 25% quicker.” But that is not our question. We have to deal with the record that has been submitted in this case. On this record we conclude that the Commission’s finding, (that Firestone’s “broad stopping claim” was “unfair and deceptive to consumers” because it was “without substantial scientific test data to support it”) was supported by the evidence in this record and by the fair inferences which the Commission was entitled to draw therefrom. Under our limited standard of review, we certainly cannot hold to the contrary. FTC v. Colgate-Palmolive Co., 380 U.S. 374, 384-385, 85 S.Ct. 1035, 13 L.Ed.2d 904 (1965).

As to Firestone’s third argument regarding the “stops 25% quicker” ad, we find no overbreadth or violation of due process in the cease and desist order paragraph 5.

The Commission’s order to cease and desist is affirmed and granted enforcement.


author: WISDOM, Circuit Judge:

text:
    Ezzie WELCH, Administrator of the Estate of Samuel Welch, et al., Plaintiffs-Appellants, v. OUTBOARD MARINE CORPORATION, Defendant-Appellee.
    No. 72-1974.
    United States Court of Appeals, Fifth Circuit.
    April 20, 1973.

      Daniel E. Broussard, Jr., Alexandria, La., for plaintiffs-appellants.
    Reginald W. Farrar, Jr., Lake Charles, La., for defendant-appellee.
    Before WISDOM, BELL and COLEMAN, Circuit Judges.
   WISDOM, Circuit Judge:

This diversity case involves Louisiana products liability law. The question of particular interest as a matter of law is whether the district court properly charged the jury on what constitutes an “unreasonably dangerous” product in Louisiana.

Mrs. Ezzie Welch, mother of Samuel Welch, a minor, in her capacity as natural tutrix of her son, sued Outboard Marine Corporation for damages for personal injuries. Young Welch sustained a serious and painful injury when a lawn mower, manufactured by Outboard, threw a piece of wire from its rear that became deeply imbedded in his right ankle. The jury responded to special interrogatories by concluding that the injury was not proximately caused by a defect in the design or construction of the mower that made it unreasonably dangerous for normal use.

On appeal the plaintiff seeks a reversal on three grounds. She argues: (1) that the district court in its charge to the jury misstated the substantive law of Louisiana regarding the definition of “unreasonably dangerous” and gave two contradictory definitions of that phrase; (2) that the jury verdict was not properly supported by the evidence; and, (3) that the court should not have' charged the jury with respect to contributory negligence. We conclude that the charge was not legally erroneous or eon-fusing, that there was substantial evidenee for the jury verdict, and that the issue of contributory negligence is moot, We affirm.

I.

The plaintiff contends that the district court incorrectly stated the Louisiana definition of the term “unreasonably dangerous” in its jury charge and, what is more, confused the jury by giving two contradictory definitions of that term. Counsel for the plaintiff did not object to the charge until he moved for a new trial but he contends that the court should review the charge under the “plain error doctrine”.

The lower court charged the jury:
“Now, in determining whether or not something was unreasonably dangerous to the user you are instructed that the definition of dangerous is generally speaking intended or beset with danger, full of risks, perilous. In determining whether or not there was a defect you are instructed that a condition is unreasonably dangerous so as to constitute a defective condition when it is so dangerous that a reasonable man would not sell the product if he knew of the risks involved.
“In the instant case there is no evidence of any mistake in the production or ordinary negligence on the part of the defendant. We are here confronted with what we usually refer to as a design problem. The product was used exactly as it was intended to be used and yet harm incurred.
“For the design to be unusually dangerous it must be so dangerous that a reasonable man would not sell the product if he knew the risks involved. To put it another way, a product is unreasonably dangerous if it is dangerous to an extent beyond which would be contemplated by the ordinary consumer who purchases it with the ordinary knowledge common to the community as to its characteristics.”

Section 402 A of the Restatement of Torts, Second states: “One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer .” Comment g (Defective Condition) explains that the rule applies “only where the product, is at the time it leaves the seller’s hands, in a condition not contemplated by the ultimate consumer, which will be unreasonably dangerous to him”. The plaintiff bears the “burden of proof that the product was in a defective condition at the time that it left the hands of the particular seller”. Comment i (Unreasonably Dangerous) explains that:

“The rule stated in this Section applies only where the defective condition of the product makes it unreasonably dangerous to the user or consumer. . . . The article sold must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics. . . . ”

The first portion of the quoted charge deals with what is a defective condition, as does Comment g of Section 402 A. Unlike Comment g however, which defines a defective condition as one “not contemplated by the ultimate consumer”, the definition in the charge is in terms of what a reasonable seller would do if he knew of the risks involved. The last paragraph of the quoted charge, however, eliminates any possible confusion, for it states that another way of saying what is an “unreasonably dangerous” condition is to describe it as one that is “dangerous to an extent beyond which would be contemplated by the ordinary consumer”. This last sentence quoted from the charge exactly tracks the language of Comment i of Section 402A.

It should be noted that the first definition deals with “defective condition” and the second with “unreasonably dangerous”. This parallels the Restatement treatment of the subject. We see no necessary inconsistency between a seller-oriented standard and a user-oriented standard when, as here, each turns on foreseeable risks. They are two sides of the same standard. A product is defective and unreasonably dangerous when a reasonable seller would not sell the product if he knew of the risks involved or if the risks are greater than a reasonable buyer would • expect. As Dean Wade has pointed out, since the test for imposing strict liability is whether the product was “not reasonably safe”, this test characterizes the seller’s or manufacturer’s conduct as well as the product. If the defendant has actual or constructive knowledge of the condition of the product, it would be unreasonable for him to sell it. Wade, Strict Tort Liability of Manufacturers, 19 Sw.L.J. 5, 15 (1965).

The language of the seller-oriented standard, as the parties agree, was taken verbatim from a charge approved by this Court in a Texas diversity case, Olsen v. Royal Metals Corporation, 5 Cir. 1968, 392 F.2d 116. In Olsen the Court noted that the Texas courts had extended the strict liability doctrine as expressed in Section 402A to all defective products. See McKisson v. Sales Affiliates, Inc., S.Ct.Tex.1967, 416 S.W.2d 787.

Louisiana courts have not expressly approved the language of Section 402A, but, and consistent with civil law principles, doetrinally the Louisiana decisions are now in agreement with the concept of strict liability based on warranty as embodied in the Restatement of Torts, Second. We shall not review these cases because Soileau v. Nicholas Drilling Company, W.D.La.1969, 302 F.Supp. 119 contains a thorough and incisive discussion of the evolution of the Louisiana rule. In that case Judge Richard J. Putnam concluded:

“It is now the settled jurisprudence of Louisiana that there is a species of strict liability in tort based upon civil law concepts of fault and not circumscribed by considerations of negligence, or personal culpability, imposed upon manufacturers. This rule, with slight theoretical differences, reaches the same result as Section 400 and 402A of the Restatement of Torts, Second, supra.”

See also Lartigue v. R. J. Reynolds Tobacco Company, 5 Cir. 1963, 317 F.2d 19 and Penn v. Inferno Manufacturing Corp., 199 So.2d 210 (La.App. 1 Cir. 1967), cert. denied 251 La. 27, 202 So.2d 649 (1967).

Weber v. Fidelity & Casualty Ins. Co., 1971, 259 La. 599, 250 So.2d 754 is the latest and most important relevant decision of the Louisiana Supreme Court on products liability. In that case the court allowed recovery of damages against a manufacturer for the death of cattle sprayed with a water soluble arsenic . solution used to control animal parasites. The plaintiffs made no showing of any particular negligence by the defendant. Justice Albert Tate, author of the majority opinion in Weber phrased the rule as follows (250 So.2d 755, 756):

“A manufacturer of a product which involves a risk of injury to the user is liable to any person, whether the purchaser or a third person, who without fault on his part, sustains an injury caused by a defect in the design, composition, or manufacture of the article, if the injury might reasonably have been anticipated. However, the plaintiff claiming injury has the burden of proving the product was defective, i. e. unreasonably dangerous to normal use, and that plaintiff’s injuries were caused by reason of the defect. ... If the product is proven defective by reason of its hazard to normal use, the plaintiff need not prove any particular negligence by the maker in its manufacture or processing; for the manufacturer is presumed to know of the vices in the things he makes, whether or not he has actual knowledge of them.”

Justice Tate, perhaps deliberately, avoided the use of the term “strict liability” and he omitted any reference to Section 402A of the Torts Restatement, although he cited two outstanding eases expounding the doctrine of strict liability: Greenman v. Yuba Power Products, Inc., 1963, 59 Cal.2d 57, 27 Cal.Rptr. 697, 377 P. 897 and Henningson v. Bloomfield Motors, 1960, 32 N.J. 358, 161 A.2d 69. Justices Hamlin and McCaleb, the dissenting justices, however, apparently understood the majority opinion as equating the. Weber standard with the strict liability doctrine as expressed in the Restatement. For they referred to the plaintiff’s contention chat the Restatement of Torts “is exactly in point with the instant case”, quoted the black letter of Section 402A and also Comment g on “Defective Condition”, and then declared that “Louisiana has not as yet incorporated the Restatement of Torts, supra, as such into its jurisprudence”. 250 So.2d at 765.

It is also of interest that Justice, then Judge, Tate laid a predicate for Weber in Meche v. Farmers Drier and Storage Co., 193 So.2d 807 (La.App. 3 Cir. 1967). There he expressed himself in terms of Restatement strict liability (193 So.2d 811):

“A manufacturer or seller of a product which involves a risk of injury to the user is liable' to any person, whether the purchaser or a third person, who without fault on his part sustains an injury caused by a defect in the design or manufacture of the article, if the injury might have reasonably been anticipated.”

Judge Tate supported this statement by citing Section 402A, quoting the black letter of the section, and citing Prosser on Torts. Prosser was the Reporter for the Restatement of Torts, Second, at the time the American Law Institute adopted Section 402 A. See also Judge Tate’s dissent in Thomas v. Gillette Co., 230 So.2d 870, 879 (La.App. 3 Cir. 1970).

As we read Weber, therefore, we conclude the Louisiana Supreme Court has extended the strict liability-doctrine, which it earlier applied in food cases, to all manufactured articles. The standards established in Weber are substantially the same as the standards expressed in Section 402A of the Torts Restatement. The result is consistent with Louisiana law. Fault as the violation of a duty- — even in the absence of negligence — agrees with civilian principles generally and with Article 2315 of the Louisiana Civil Code specifically. See Stone, Tort Doctrine in Louisiana: The Concept of Fault, 27 Tul.L.Rev. 1 (1952). “Delictual responsibility without dolus (wilful harming) or culpa (negligent harming) is explainable in terms presumption of fault”. Lartigue, 317 F.2d at 31. In products liability cases fault is imputed to the manufacturer when he violates his duty to the public by marketing a product carrying foreseeable risks to the user or consumer. The effect of Weber has not been fully evaluated, but we find that the decision fully supports the district court’s charge.

The charge as a whole was accurate and fair to both parties. The court informed the jury that the plaintiff did not have to prove negligence, because a manufacturer was presumed to know the defects of an article which he manufactures. The court also charged the jury that the plaintiff had the burden of proving proximate cause, an unreasonably dangerous condition, and that the injury might have been reasonably anticipated.

II.

The plaintiff contends that there is insufficient evidence for the jury verdict. Our role in response to such a challenge was stated in Boeing Co. v. Shipman, 5 Cir. 1969, 411 F.2d 365, 374:

“On motions for directed verdict and for judgment notwithstanding the verdict the Court should consider all of the evidence — not just the evidence that supports the non-mover’s case — but in the light and with all reasonable inferences most favorable to the party opposed to the motion. If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motions is proper. On the other hand, if there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fairminded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied, and the case submitted to the jury.” '

Each party introduced his own expert to testify concerning the safety of the mower. The plaintiff’s expert had no experience with the design of residential mowers, though he had designed a highway heavy use mower. His opinion was that the safety of the Lawn Boy mower was inadequate and that an inexpensive design change could have prevented the accident. He testified that in fact one other mower manufacturer had added a hinged plate on the rear of the mower to obstruct the path of dangerous missiles. This expert himself, however, owned and used a mower without such protective devices; he felt that this was dangerous, but was undecided whether it was unreasonably dangerous. This expert stated that he had no knowledge of the functional difficulties which such safety, devices would present, nor did he have any knowledge of industry safety standards.

The defendant’s expert, employed by the defendant as a design engineer since 1960, testified that the mower in question met all industry safety standards for the year in which it was manufactured. He further stated that because the blade was recessed inside the mower housing, an object could not be thrown directly out from the blade but would be thrown downward, striking the ground first. Furthermore the mower had a second rear wall, four inches behind its inner cylindrical wall, to present a further obstacle to the escape of flying objects. A discharge chute to the side of the mower directed the path of flying grass and other debris. He also testified that the safety devices suggested by the plaintiff would present other functional and safety problems. In fact, Lawn Boy had once offered a rear hinged plate as optional equipment but it was removed from the market because of a lack of demand.

This review of the testimony of the design experts reveals a substantial evidentiary basis for the jury’s verdict that the design or construction was not unreasonably dangerous for normal use. See Boeing Co. v. Shipman, supra. Here the conflict in substantial evidence as decided by the jury must stand.

III.

Finally, the plaintiff contends that because Louisiana has adopted strict liability for product defects, the court erred in charging the jury with respect to contributory negligence. Langlois v. Allied Chemical Corp., 1971, 258 La. 1067, 249 So.2d 133.

Because the jury exculpated the defendant from liability, it did not reach the special interrogatory dealing with contributory negligence. That issue is irrelevant, moot; it was not a factor in the jury determination.

The judgment must be affirmed.

      . The first interrogatory read: “Were the injuries sustained by Samuel Welch proximately caused by a defect in the design or construction of the Lawn Boy Power Mower which made it unreasonably dangerous for normal use?”

      . But see Note, 33 LaX.J. 151 (1972) and Note, 18 LoyX.Rev. 216 (1971-72).