Advisory opinion letter to Mr. Silton

Senior Vice President

Compliance advisory opinion as to whether proposed contents labeling on certain garments would violate consent order to cease and desist, 87 F. C. 1339 (Docket C-2823, released November 5, 1976).

Opi'm:on Letter

October 22, 1976 Dear Mr. Silton:

The Commission has considered the request in your letter of July 16 1976, for advice as to whether you may engage in a proposed course of action without violating the cease and desist order issued by the Commission in the above-captioned matter on March 1, 1976. You state that you are in possession of some 12 600 garments which you wish to sell with the following contents labeling:

Contents Miscellaneous fibers c.omposed chiefly of linen, polyester, acrylic and other non-woolen fibers, with minimum of 17% reprocessed wool.

88 F.

You append laboratory tests which you had caused to be performed on samples of the said garments and which form the basis for the proposed labeling.

On the basis of the facts submitted, you are advised that the Commission is of the opinion that the use of the above contents labeling on those garments in your possession on the effective date of the order and as to the contents of which the said laboratory tests are representative, would not violate the order issued in this matter. By direction of the Commission.

Letter of Requests

July 16, 1976 Dear Mr. Tobin:

In connection with the above-captioned matter, we have heretofore forwarded to your local office, a report of Compliance with respect thereto, and assume that the same has been accepted by your office. The purpose of this letter is to request advice from the Commission pursuant to rule 3.61(d), whether the following proposed course of action if taken by us will constitute eompliance with the Order made in this matter.

By way of background and as your local office is aware, the problem which gave rise to your issuance of the complaint arose out of purchases made by us from an Italian source to be shipped to the Far East for manufacturing and, thereafter, transhipped to the United States for resale. We have been doing business with this source of supply in Italy (along with other importers of similar merchandise from this source), and had no reason to believe that the goods which we were ordering and for which we were paying a price based upon the represented fabric content as shown on their invoice was not only erroneous but was a fraud practiced upon us.

As soon as the mislabeling problem was brought to our attention, we immediately met with the local office of the Federal Trade Commission to attempt to comply with the law and to attempt to resolve the problem of merchandise still on hand and for which no orders were available.

All merchandise carrying the mislabeling has been relabeled in a

. The exhibits refel'red to are not reproduced herein but are available for inspection in the Pub1ic Reference Branch Room 130 of the FTC Bldg" Washington , D.

ADVISORY OPINIONS 1027

manner which appeared to be satisfactory to the local office , as indicated in enclosed copy of their informal advisory letter of December , 1975 (Exhibit A), and enclosed copy of laboratory tests based upon which the recommended relabeling was made (Exhibit B). We have since the letter of December 15, and prior to entry of the final Order, been operating in accordance with the recommendations contained therein. We have taken all feasible steps to dispose of this merchandise, as a result of which we have sustained substantial losses (representing the difference between our cost and the price at which this merchandise was ultimately disposed of). Notwithstanding everything we have done to dispose of this problem, we find that we still retain an inventory of approximately 12 600 units, which we have relabeled but which cannot be disposed of in any substantial quantities immediately. However, as the fall selling season is approaching, we feel confident that our sales effort will be more successful. Accordingly, we hereby request advice from your office whether the continuance of our sales activity related to these remaining products, if continued in accordance with the informal advice contained in the letter of December 15, will in fact constitute compliance with the Order and thereby be acceptable.

In view of the fact that we would like to dispose of the remaining inventory as quickly as possible, and orders for this type of product would normally be received within the next 30-60 days, your prompt action on the request contained herein would be greatly appreciated. Very truly yours SILTON BROTHERS, INC.

Isl Fred SiIton