Sommehfeld, Isador

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IN Tile MATTER OF ISADOR SOMMERFELD, TRADING AS DUBINER & SOMMERFELD COMPLAINT AND 1\IODIFIED FINDINGS AND ORDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEI''l'. 20. 1914 Docket 1303. Comp~aint, April 8, 1925-Dccision, Feb. 4. 1937 'Vhere the term "Havana Tobacco" had long meant to cigar tobacco trade and cigar purchasing public of the United States tobacco grown on the Island of Cuba, and where many members of cigar tobacco and cigar trades and of cigar purchasing public had long believed such tobacco to be superior in quality for manufacture of cigars to be sold nnd consumecl in the United States, ancl such trades and public hacl long considered that tobacco there grown hi the Vuelta Abajo area or district of said Island was of a higher or more desirable quality for aforesaid use than tobacco grown in other conn· tries or grown elsewhere on said Island; and thereafter an individual, engaged in New York in manufacturing and selling cigars which contained no tobacco grown on said Island, and in packing same for display and resale to members of the public who purchase cigars for consumption in and from wooden boxes and other containers, and in transporting such products to wholesale and retail dealer purchasers thereof Into and through the District of Columbia and various other States; and never a recipient of any medals, pri:r.es, or awurds from any persons or a~so<:iutions on account of dgars made by him- (a) Caused words "Havana" and "Vuelta Abnjo" to be placed on his cigar boxes and containers, and on the bands of cigars made and sold by him, with effect of mh:lending and dPceh·ing many of said cigar and tobacco trades and mE:>m· bers of chmr purchal'ing public into the Relief that his said cigars were made wholly of Havana tobacco from the aforPsald district; (b) Caused to be placed on the boxes or containers of his said cigars certain labels carrying an outline map of the Island of Cuba and certain inscriptions in the Spanl~;h language to the effect that cl;::ars contained therein were made of finest Vuelta Abnjo tobacco, and that tobacco In question was guaranteed as of the best Havana, and that nnyone rrpreseuting composition thereof to the contrary would be prosecuted to the fullest extent of the law, and con· talning also Spanish inscriptions and depletions of Spanish scenes and persons; and (c) Placed on his said boxes drplctlons of medals such as are awarded at Worlds fairs or conventions by go>ernments, ruling members, manufacturers, trade associations, or others throughout the world, to manufacturers or dealers as prizes, decorotlons, or honors for the exceptional quality of their products, with effect of misleading an(l decPlving aforesaid trade and public into pur· chasing his said cigars as and for such products either imported from Cuba or mnue of Havana tobocco;

With result that mony of the trade and public, rE'Iylng on such words, labels, and inscriptions thus used by him In the manufacture and sale of said products, DUBINER & SOMMERFELD 655 654 Complaint were caused to buy the same instead, or in preference to cigars of competitors who were properly labeling, branding, or advertising their products under said names, brands, or labels, "Havana" and "Vuelta Abajo," and also to cigars of competitors who were making and selling such products from domestic tobacco and who properly did not brand, label, or otherwise represent the same as made of Havana tobacco:

IIeld, That such acts and practices were to the prejudice of the public and competitors, and constituted unfair methods of competition. Mr. Edward E. Reardon for the Commission.

COMPLAINT Acting in the public interest pursuant to the provisions of an Act of Congress, approved September 26, 1914, entitled "An Act to create a Felleral Trade Commission, to define its powers and duties, and for other purposes," the Federal Trade Commission charges that Isadore Sommerfeld, hereinafter referred to as respondent, an indivi<lual doing business under the trade name and style of Dubiner & Sommerfeld, has been and is using unfair methods of competition in commerce in violation of the provisions of Section 5 of said Act, issues this complaint, and states its charges in that respect as follows: PARAGUAI'II 1. Respondent is, -and for a number of years immediately prior to the date hereof, has been engaged in the business of n"1manufacturing and selling cigars, with a principal place of business in the city of New York, State of New York. Respondent causes, and during the times above referred to has caused, the cigars sold by him to be packed for display and resale to the members of the Public who purchase cigars for consumption, in and from wooden boxes or other containers and to be transported to individuals, firms, and corporations, wholesale and retail dealers, the purchasers thereof, from his said place of business to, into, and through the District of Columbia nnd various States of the United States other than the State of origin of the shipment of the cigars. During the times above mentioned, other individuals, firms, and corporations have been, and now are, engaged in manufacturing and selling cigars packed for display and resale in and from wooden boxes or other containers, and who cause and have caused the same, when sold by them, to be transported from without the District of Columbia to the purchasers, individuals, firms, and corporations, wholesale and retail dealers, located in the District of Columbia and in various States of the United States, other than in the State of origin of the shipment, and including those States into which, from Qther States than those in which his shipments originate, the respondent causes and has caused his said cigars to be transported. Complaint 24F. T. C.

The respondent has been during the said times, and now is in competition in commerce with the above individuals, firms, and cor· porations, in the sale of his said cigars. PAR. 2. For many years prior to the date hereof, and ever since tobacco has been a commercial export product of the Island of Cubat the term "Havana" tobacco, has meant and continues to mean tobacco of Cuban growth to the cigar tobacco trade, the cigar trade and the cigar purchasing public of the United States, many of whom have during said times considered and continue to consider Cuban grown or ''Havana" tobacco superior in quality, for the manufacture of cigars to be sold and consumed in the United States, to tobacco grown elsewhere. l\fany of the said trade and public have also during said times considered and continue to believe that cigars made in the United States, 'for sale and consumption there, of Cuban tobacco, or cigars made of such tobacco in Cuba for sale and consumption in the United States, are likewise superior in quality to cif!ars made of tobacco grown elsewhere.

PAn. 3. Vuelta Abajo is the name of an area or district in the Island of Cnba, a part of which is in the Province of Pinar del Rio, and in which tobacco is grown which is and has been consiclen·cl, during the times above referred to, hy many of the said tobacco and cigar trade and public, to be of a higher and more desirable quality for use in the manufacture of cigars for sale and consumption in the United States than tobacco grown, not only in countries other than Cnba, bnt even of a highrr and more desirable quality for such purpose than any tobacco grown elsewhere on the Island of Cuba. Likewise many of the said tob:tcco and cigar trade a11<l of the said public have also COJJsiurred during said timrs, and still bclievr, that cigars ma1le in Cuba for sale and consumption in the Unite<l Statrs of tobacco grown in Cuba either wholly or in part in said Vnelta A hnjo district, or cigars made in the United Statrs for sale and con~ sumption there, of tobacco grown in Cuba, either wholly or in part in said Vuelta Ahajo district, are and have been superior in quality to cigars made wholly of tobacco grown outsi<le of said district. To the said trade aiel public Vuelta Abajo tobacco is the most famous tobacco in the world<l that is used in the manufacture of cigars. PAn. 4. For a long period of years prior to and at the time respo111l~ rnt engaged in his said business, cigars made wholly of Cuban tobacco were made in Cuba and in the United States for sale and consumption in the United States by manufacturers whose surname was ''Garcia" and who, respecth·ely, used aml displayed an<l still nse nnd display their said surname either alone or in combination with the rest of their DUBINER & SOMMERFELD 657 '654 Complaint name or with other words on the bands of the cigars, on the said boxes or containers and on labels thereon. For a long time prior to the use of the name "Garcia" by the re- .spondent as hereinafter described, many in the said trade and many of the said public, became accustomed to believe and still believe that cigars in connection with the sale of which the name "Garcia" so .appeared, were made by manufacturers having that name, of Cuban nationality and of Cuban grown tobacco exclusively and that they Were and are of a quality superior to cigars made by many other ~lanufacturers and of tobacco wholly or in part grown elsewhere, and In purchasing cigars became accustomed to and still call for them €ither by the name "Garcia" alone or in combination with the rest .of the name of one of the manufacturers of that surname, and the said manufacturers whose surname is or was "Garcia" have during said times gained a valuable interest and good will in said 'Yorcl when used in connection with the manufacture and sale of cigars in the United States.

PAn. 5. Respondent has caused and still causes the words "Havana", <'Vuelta Abajo" and "Garcia" either alone or in combination with one <>r more other words to be placed on his said cigar boxes or containers and on the l::tbels on said boxes or containers, and the word <'Garcia" to be pla.ced on the bands of the cigars made and sold by him. Respondent has caused and still causes the name l\f. Garcia y Ca, purporting to be the trade name of an individual or the name of a firm or corporation to be placed on the sajd boxes or containers of the said cigars as the manufacturer of said cigars. Respondent causes and has caused certain labels to be placed on the boxes or containers of his said cigars, carrying the outline map of the Island of Cuba and certain inscriptions in the Spanish language that the cigars contained in the said boxes are and were made of the best Vuelta Abajo toba.cco and that the tobacco contained in them was guaranteed to be of the best Havana tobacco and that anyone representing to the contrary would be prosecuted to the fullest extent of the law. llespondent during said times has placed labels containing only Spanish inscriptions and Spanish pictures or illustrations on the boxes or containers of his said cigars. Pictures or illustrations of medals, such as are or have been awarded by governments, trade associations, etc., to manufacturers as prizes, dl'corations or honors for the exceptional qualities of their products, have been and are caused by respondent to be placed on the labels of the boxes or containers of his said cigars.

PAn. 6. The said cigars made and sold by the respondent have never at any time contained more than a very small amount of Cuban 658 FEDERAL TRADE COl\'LI\USSION DECISIONS Complaint 2!F. T. C.

grown tobacco, anrl during most the aforesaid time they have contained no Cuban grown tobacco.

Neither the respondent nor anyone connected with the said business has or ever had the name "Garcia" as part of his name, and the name M. Garcia y Ca is fictitious and does not represent any individual, firm, or corporation engaged in the manufacture of respond- Pnt's cigars. Respondent has caused the said word.s "Havana," "Vuelta Abajo" and "Garcia'' and the said name ''l\1. Garcia y Ca" to be used on the boxes or containers and labels thereof, and on the bands of his cigars aforesaid, in order to compete 'with the long established concerns having the name "Garcia" or the right to use it, who are cJJgaged in the manufacture and sale of cigars, and to divert the latter's trade to respondent by confusing the identity of the products of both, and leading purchasers to buy those of respondent for those of the said established concerns. Respondent chose, the names "Garcia" and "l\1. Garcia y Ca" unnecessarily and for the purpose of unfair competition with those lawfully entitled to use the name "Garcia."

During the aforesaid time, the name M. Garcia y Ca used by respondent, as aforesaid was and is fictitious and by his said use of the same, respondent knowingly, falsely and unlawfully represents and has represented to the said trade and public that his said cigars are made by a bu,iness concern properly using the name of "Garcia." By the use of the word "Garcia" alone or with other words as aforesaid respondent knowingly, falsely and unlawfully represents to the said trade and public that his cigars are made by manufacturers having that name, ancl that they are made of Havanna tobacco. By the use of the said words IIavanna and Vuelta Abajo, respondent knowingly falsrly and unlawfully represents and has represented to the said trade and public that his said cigars were made of Havana tobacco and. either partly or wholly of tobacco grown in the district of Vueltn Abajo.

UPsponllcnt has knowingly aJH] falsrly represented and guaranteed to the said trade and. public by the labels that the said cigars am not only of Havana tobacco but are of the best Havana. tobacco from the district of Vuelta Aba.io, and has knowingly and fraudulently used the afor£'saidi labels containing only Spanish inscriptions, picturesr and illustratiOI~s in further effort and with intent to receive and clefratHl the trade and members of the public into the belief that his said cigars were and arc made of Havana tcbacco and have the (jUalities characteristic of such cigars.

PAn. 7. The acts and practices of rrspon(lrnt, all hereinbefore set <~ut, have the capacity and tendency to and h:n·e misled, and. deceived DUBINER & SOMMERFELD 659 654 Findings many of the trade and consuming public into the belie£ that respondent's cigars are manufactured by aH individual, firm, or corporation named M. Garcia y Ca; that the manufacturer thereof has the name or the right to use the name 1'Garcia" in connection with the manufacture and sale of cigars; that the tobacco composing his ~aid cigars is Havana tobacco either wholly or in part from the said dil';trict of Vuelta Abajo, and that they are made in and imported from Cuba to the United States .

. PAn. 8. Among the individuals, firms, or corporations referred to In paragraph 1 hereof, who are and have been in competition with the respondent, are some who manufacture, and sell cigars made of tobacco, part of which only is f!'rown in Cuba, or of tobacco brrown Wholly elsewhere than in Cuba, and who are not branding or labeling the cigars made by them or the containers thereof with or under the Words, "Havana," "Vuelta Abajo," or "Garcia." Among the individuals, firms, or corporations referred to in said paragraph 1 are some engaged in the manufacture and sale, in commerce, of cigars made wholly of tobacco g-rown in Cuba, either wholly ;Jr in part from the district of Vnelta Abajo, who are properly label- Ing, branding, and advertising cigars made by them under the name, brand or labels, ''Garcia," "Havana," and "Vuelta Abajo." PAn. 9. The above allrged acts and things done by respondent are each and all to the prejudice of the public and respondent's competitors and constitute unfair methods of competition in commerce within the intent and meaning of Section 5 of an Act of Congress entitled, "An Act to create a Federal Trade Commission, to define its powers nnd duties, and for other purposes," approved September 26, 1914. HcronT, Modified FINIJI :-.cs AS TO TIIE Facts, ANn OnnEn Pursuant to the provisions of an Act of Congress approved Scptember 26, 1914, entitled "An Aet to create a Felleral Tmde Commission, to define its powers and duties, and for other purposes," the Fcd- ('ral Trade Commission, on the 8th day of April 192.3, issued and served its complaint in this proceeoding upon said respondt>nt, Isador Sommerfeld, doing business under the trade name and style of Dubiner & Sommerfeld, charging him 'with the use of unfair wethocls of competition in commerce in violation of the provisions of said net. Thereafter, a stipulation was entered into whereby it was stipulated and agreed that a statement of facts signed and executed by the respondent, and ,V. II. Fuller, Chief Counsel of the Federal Trade Commission, subject to the approval of the Commission, might be taken as the facts in this proceeding and in lieu of testimony in sup- Findings 24F.T. C.

port of the charges stated in the complaint and in opposition thereto, and that the said Commission might proceed upon said statement of facts to make its report, stating its findings as to the facts (including inferences which it might draw from said facts) and its conclusion based thereon, and enter its order disposing of the proceeding without presentation of argument or the filing of briefs. Thereafter this proceeding regularly came on for final hearing before the Commission on said complaint and stipulation, said stipulation having been approved and accepted, and the Commission having duly considered the same and being now fully advised in the premises, makes this its modified findings as to the facts and its conclusion drawn therefor~m: 1\IODIFIED FINDINGS AS TO THE FACTS P ARAGRArH 1. Respondent for a number of years immediately prior to April 9, 1925, had been engaged in the business of manufacturing and selling cigars with his principal place of business in the city, county, and State of New York. During the time above referred to, respondent had caused cigars sold by him to be packed for display and resale to the members of the public who purchase cigars for consumption in and from wooden boxes and other containers, and to be transported to individuals, firms, and corporations, "·wholesale and retail dealers, the purchasers thereof, from his said place of business to, into and through the District of Columbia and various other States of the United States other than the State of New York. Dming the time above mentioned and referred to, other individuals, firms, and corporations had been engaged in manufacturing and selling cigars packed for resale in wooden boxes and other containers, and who caused the same when sold by them to be transported from without the District of Columbia to the purchasers, individuals, firms, and corporations, '"wholesale and retail dealers located in the District of Columbia and in various States of the United States other than the State of origin of the shipment, and including those States into which from other States the respondent had caused said cigars to be transported. The respondent had been during the said time, in competition in commerce with the above individuals, firms, and corporations in the sale of his said cigars.

PAR. 2. During the time above mentioned and referred to, and ever since tobacco has been a commercial export product of the Island of Cuba, the term "Havana Tobacco" has meant and continues to mean to the cigar tobacco trade and the cigar purchasing public of the United States, tobacco grown on the Island of Cuba. 1\Iany members of the cigar tobacco trade, the cigar trade and cigar purchasing public DUBINER & SOl\IMERFELD 661 654 Finding!! · of the United States have, during said times believed, and now believe, Havana tobacco grown on the Island of Cuba to be superior in quality for the manufacture of cigars to be sold and consumed in the United States.

Vuelta Abajo is the name of the area or district in the Island of Cuba in which tobacco is grown which was believed during the times above referred to and is now believed by the said tobacco and cigar trade and the said purchasing public to be of a higher and more desirable quality for use in the manufacture of cigars for sale and consumption than tobacco grown not only in other countries than Cuba, but of higher and more desirable quality for such purposes than any tobacco grown elsewhere than on the Island of Cuba. PAn. 3. Respondent hacl caused the words ''Havana" and "Vuelta Abajo" to be place<l on his cigar boxes and containers and on the bands of cigars made and sold by him.

Respondent had caused certain labels C<ll'rying an outline map of the Island of Cuba an<l certain inscriptions in the Spanish language to be Placed on the boxes or containers of his said cigars. The said inscriptions were to the effect that cigars contained in the said boxes were lllade of the finest Vuelta Abajo tobaeco aml that the tobacco in the cigars was guaranteed to be of the best Havana tobacco and the said inscriptions stated that anyone representing the composition of the said cigars to be to the contrary woul<l be prosecuted to the fullest extent of the law.

Respondent had placed labels containing only inscriptions in the Spanish language on his cigar boxes or containers and had also placed thereon pictures or illustrations of Spanish scmws and prrsons on said cigar boxes or containers. Respondent had placed on said cigar boxes Pictures or illustrations of medals such as are or have been awarded at \Vorld's fairs or conventions, by governments or ruling members thereof, or by manufacturers, trade associations or others throughout the world, to manufacturers or dealers as prizes, (~ecorations or honors for the exceptional quality of their products. The cigars made and sold by the respondent had never at any time contained any tobacco grown on the Island of Cuba. The respondent ha<l never received any medals, prizes or awards from any persons or associations on account of cigars manufactured by him.

PAn, 4. Among the individuals, firms, and corporations referred to above who had been in competition with the respondent there were some who manufactured and sold cigars made of tobacco part of which only was grown in Cuba, or of tobacco grown elsewhere than in Cuba, Order 24F. T. C.

and who were not branding or labeling the cigars made by them or the containers thereof, with the ·words "Havana" and "Vuelta Abajo." PAR. 5. The use, by the respondent, of the terms or words "Havana" and "Vuelta Abajo" on the labels or containers of cigars in connection with their manufacture and sale as above described or in other advertising referred thereto, was false and misleading and had the tendency and capacity to and did mislead and deceive many of said cigar and tobacco trade and members of the public purchasing cigars for consumption into the belief that respondent's said cigars were made wholly of Havana tobacco from the District of Vuelta Abajo. Respondent's use of labels on the boxes or containers of his cigars having thereon an outline map of Cuba, inscriptions solely in the Spanish language, and the said guarantee that the tobacco composing his cigars was Havana tobacco, had the capacity to mislead and deceive the said trade and public, and said trade and public have been misled and deceived thereby into purchasing respondent's cigars as cigars either imported from Cuba or made of Havana tobacco. The use by the respondent of the said words "Havana" and "Vuelta Abajo" and the said labels of Cuba and inscriptions in the Spanish language as above set forth, in the manufacture and sale of his cigars, has caused many of the trade and public relying thereon to purchase respondent's cigars instead of or in preference to cigars of competitors of respondent who were properly labeling, branding or advertising their cigars under the said names, brands or labels "Havana" and "Vuelta Abajo," as well as cigars of competitors who were manufacturing and selling cigars made of domestic tobacco and who properly did llot brand, label, or otherwise represent their said cigars had been made of Havana tobacco.

CONCLUSION The aforesaid acts and practices of respondent, Isador Sommerfeld, trading as Dubiner & Sommerfeld, were to the prejudice of the public and of respondent's competitors, and constituted unfair methods of competition in commerce, within the intent and meaning of Section 5 of an Act of Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

1\IODIFIED ORDER TO CEASE AND DESIST This proceeding having b!l{'n heard by the Federal Tmde Commission upon the complaint of the Commission and the stipulation as to the facts filed herein by respondent on .July 16, Hl25, admittin~ all the material allegations of the complaint to be true and waiving DUBINER & SOMMERFELD 663 Order the taking of further evtdence and all other intervening procedure, and the Commission having made its modified findings as to the facts and its conclusion that said respondent has violated the provisions of an Act of Congress approved September 26, 1914, entitled, "An Act to create a Federal Trade Commission, to define its powers and uuties, and for other purposes."

It U; ordered, That respondent, Isador Sommerfeld, doing busi· ness under the trade name and style of Dubiner & Sommerfeld, his {)officers, representatives, agents, and employees, in connection with the offering for sale, sale, and distribution in interstate commerce or in the District of Columbia of cigars, do forthwith cease and desist from using:

1. The words "Havana" or "Vuelta Abajo," when the said cigars .are not composed entirely of Havana tobacco; 2. 'Words or writing on labels or otherwise solely in the Spanish language, an outline map of Cuba, or pictures or representations of Cuban scenes indicating Cuban origin in the composition of respond· -ent's cigars when the same are not made entirely of Havana tobacco; 3. 'Words or writing in Spanish language on labels or otherwise to such extent or in such manner as to indicate that the cigars are made of Cuban tobacco when the same are not made entirely of Havana tobacco.

It is further ordered, That the respondent shall, within GO days .after service upon him of this order, file with the Commission a re· Port in writing setting forth in defail the manner and form in which he has complied with this order. · Syllabus