Mutual Rosenbloom Corporation

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IN THE MATTER OF MUTUAL ROSENBLOOM CORPORATION (:0:\Ii'LAINT, FINDINGS, AND Ordel. IN REGARD TO THE ALLEGED VIOLATION OF' SEC. 5 OF AN ACT OF CO:-!GRESS APPROVED SEPT. 26, 1014 Docket 8153. Complaint, .June 15, 1931-Decision, Sept. -9, 19.'11 Where a corporation engaged in manufacture of garments, including ladies' dresses, and in sale and distribution thereof in commerce among the various States and in the District of Columbia, in substantial competition with others similat·Iy engaged- Made use of terms "Silk Jersey," "Satin Jersey," and "Silk Jersanese," in describing certain dresses offered and sold by it in advertising and circular matter furnished and distributed to its various customers and prospective customers, notwithstanding fact dresses thus advertised and represented by it were not, in fact, made· from material composed of silk, product of the cocoon of the silk worm, as understood from terms aforesaid by trade and purchasing public;

~lth effect of misleading and deceiving purchasers, and of causing them erroneously to believe that its said dresses were made from materials composed of silk, product of cocoon of silk worm, and,' because of said erroneous help.f, to purchase same, thereby unfairly diverting substantial trade in said commerce to It from its competitors who truthfully represent their products; to their Injury and that of public: Held, That such acts and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Mr. lVilliarn L. Pencke for the Commission. Watterson & lVltynman, of New York City, for respondent. Complaint Pursuant to 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 duties, and for other purposes," the Federal Trade Commission, having reason to believe that Mutual Rosenbloom Corporation, a corporation, hereinafter referred to as the respondent, has been, and is, using unfair methods of competition in commerce, as "commerce" is defined in said act, and it appearing to said Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint Htating its charges in that respect as follows: PARAGRAPH 1. Respondent, Mutual Rosenbloom Corporation, is a corporation organized, existing, and doing business under the laws of the State of New York, with its principal office and place of business at 498 Seventh Avenue, in the city of New York, State of New 978 FEDERAL TRADE COl\Il\IISSIO:N DECISIONS Complaint 251!'. T. C. York. Said respondent is now, and for a number of years last past has been, engaged in manufacturing garments including ladies' dresses, and in the sale and distribution thereof in commerce bet ween and among the yarious States of the United States and the District of Columbia. It causes said products, when sold, to be shipped from its place of business in the State of New York to purclu:sers thereof located in a State or States of the United States other than the State of New York.

PAR. 2. In the course and conduct of its business as aforesaid, respondent is now, and for a number of years last past has been1 in ~ubstantial competition with other corporations, individuals, partnerships, and firms engaged in the sale and shipment of similar products in commerce between and among the various States of the United States and the District of Columbia. PAR. 3. In the course and conduct of its business as .aforesaid, the respondent, in connection with the sale and distribution of its said products, furnishes and distributes to its various customers and prospective customers located in the various States of the United States and the District of Columbia, advertising and circular matter wherein certain dresses offered for sale and sold by the said respondent were and are described variously as "Silk J(>rsey" or "Satin Jersey." Many of its l-iaid customers located in States other than I he State of New York have mailed in to its office orders for "Satin Jersey," "Silk Jersey," and "Silk Jersanese" dresses. Such ordel'¢> were, and are, being filled by said respondent with dresses advertised and sold by it. An example of the circulars being distributed by the respondent as aforesaid contains among other advertising matter the following:

l\Iutual-Ito~l'ubloom's Sculptnr<>d Jersmwse Frock Smnrt New Yorkers Ilnve Gone Wild About It. IIarpt'r's Bazunr nnd Vogue both stress this new seulptural quality. The Grecian moulded lines that show every eurve of the flgurp hPn<>llth. And it Is unqne;;ttonahly one of the most Important fashion trends in 8eftsons. Noteworthy, too, be<>am;e it's· In supple bla<:k sillt jersey-furorPd fflhric of the grant Alix. You cnn't do better than to adopt this dress at ouee. In slzPs 10 to 18. PAR. 4. In truth and in fact, said statements and representations made by said respondent, as described in paracrrar)h 3 are false .1 • 1 1" eo 'unu m1s ea< mg in that the said material from which said dresses vr·e manufacturell is not compos<'d of silk, the product of the rocoon of the silkworm, but is comj)OS<'d of material other than silk. Th~ said customers of said re~"pondent were aml are being led to bcl!He hy the respondent that they had been and are receiving mer- MUTUAL ROSENBLOOM CORP. 979 977 Findings ehandise manufactured of silk in accordance with the specifications of their said orders, when in fact the merchandise they received "·as manufactured from material other than silk. . PAR. 5. The said representations and practices as described here- Jnabove have the capacity and tendency to, and do, mislead and <J.eceive the purchasing public into the erroneous beliefs that the dresses manufactured by respondent and described by it as herein set forth are manufactured of silk, and that when they order dresses from the respondent specifying that said dresses be manufactured <Jf silk jersey they receive dresses so manufactured, and are led into the purchase of respondent's dresses on account of such erroneous beliefs induced as aforesaid. As a result of the aforesaid false and misleading statements, representations and practices by the rerespondent with respect to its product, trade has been unfairly di- Vetted to it from its said competitors who do not falsely -represent the quality of their respective products and whose ability to com- Pete successfully with respondent has been, and is, lessened. Injury has been done Ly respondent to substantial competition in commerce among and Letwe«.>n the several States of the United States. PAR. 6. The above acts and things done, or caused to be done, by the respondent, were and are each and all to the prejudice of the Public and of respondent's competitors, and constitute unfair meth- ?ds o:f competition in interstate commerce within the meaning and lntent of Section 5 of "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914.

REPORT, FINDINGS AS TO Tile FACTS, AND ORDER Pursuant to the provisions of an Act of Congress approved Sept~nlber 26, 1914, entitled, "An Act to create a Federal Trade Commis- 81011, to define its powers and duties, and for other purposes," the Federn,l Trade Commission, on June 15, 1937, issued, and on June 16, 1937, served its complaint in this proceeding upon respondent, Mutual Rosenbloom Corporation, charging it with the use of unfair lhethods of competition in commerce in violation of the provisions Qf _said act. On July 12, 1937, the respondent filed its answer, in '"Inch answer it admitted all the material allegations of the com- I>laint to be true and stated that it waived hearing on the charges set forth in the said complaint and that, without further evidence Qr other intervening procedure, the Commission might issue and serve upon it findinrrs as to the facts and conclusion and an order to cease and desist from the violations of law charged in the com- FEDERAL TRADE COMl\IISSION DECISIONS980 Findings 23 F.T.C.

plaint. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said complaint and the answer thereto, and the Commission having duly considered the same, and being now fully advised in the premises, finds that this proceeding is in the interest of the public, and makes this its findings as to the bets and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Mutual Rosenbloom Corporation, is a corporation organized, existing, and doing business under the laws of the State of New York, with its principal office and place of business at 4!)8 Seventh Avenue, in the city of New York, State of New York: Said respondent is now, and for a number of years last past has been, engaged in manufacturing garments, including 1ladies' dresses, and in the sale and distribution thereof in commerce between and among the various States of the United States and the District of Columbia. It causes said products, when sold, to be shipped from its place of business in the State of New York to purchasers thereof located in a State or States of the United States other than the State of New York.

PAR. 2. In the course and conduct of its business as aforesaid, re· fipondent is now, and for a number of years last past has been, in substantial competition with other corporations, individuals, partnerships, and firms engaged in the sale and shipment of similar products in commerce between and among the various States of the United States and the District of Columbia.

PAR. 3. In the course and conduct of its business as aforesaid, the respondent, in connection with the sale and distribution of its said products, furnishes and distributes to its various customers and pros· pective customers located in the various States of the United States and the District of Columbia, advertising and circular matter wherein r.certain dresses offered for sale and sold by the said respondent were and are described variously as "Silk Jersey" or "Satin .Jersey." Many of its said customers located in States other than the State of New York have mailed in to its office orders for "Satin Jersey," "Silk Jersey," and "Silk Jersanese" dresses. One of the circubrs distributed by the respondent contains, among others, the followin~ statement:

MutnnHtosf'nuloom's Sculptun•d Jprsnnel!!e Frock. Smart New Yorkl'rs lln¥e Gone Wild Auout It. Harper's nazaar nud Vogu~ both stress this new sculptural quality. The Grecian moulded lines that show' every curve of the figure beupnth. And it is unquestiounuly one of the most tm· portant fashion trends in sMsons. Notl'worthy, too, because it's in supple black ·MUTUAL ROSENBLOOM CORP. 981 977 Order silk jersey~favored fabric of the great Alix. You can't do better than to adopt this dress at once. In sizes 10 to 18.

Par. 4. The terms "Satin Jersey," "Silk Jersey," and "Silk Jersanese" are understood by the trade and purchasing public to mean and describe a material made from silk, the product of the cocoon of the silk worm, and respondent's use of these terms as above set out caused its customers to believe that the dresses advertised were .tnade from materials composed of silk, the product of the cocoon of the silk worm .

. The dresses so advertised and represented by the respondent were In :fact not made from a material composed of silk, the product of . the cocoon of the silk worm, but are made from a material other than sHk. Orders received by the respondent for "Satin Jersey," ''Silk Jersey,~' and "Silk Jersanese" were and are being filled with dresses which are not made from materials composed of silk, the Product of the cocoon of the silk worm.

Respondent discontinued the practice of describing dresses not .tnade from materials composed of silk, the product of the cocoon of the silk worm, as "Satin Jersey," "Silk Jersey," and "Silk Jersanese," })hor to the issuance of complaint herein.

PAn. 5. The acts and practices of the respondent as hereinabove set out had the capacity and tendency to, and did, mislead and deceive P~rchasers, and to cause them erroneously to believe that respondent's said dresses are made from materials composed of silk, the product of the cocoon of the silk worm, and, because of said erroneous belief, to Purchase respondent's said dresses, thereby unfairly diverting substantial trade in said commerce to the respondent from its coml>etitors, who truthfully represent their products, to the injury of its co111petitors and the public.

CONCLUSION The aforesaid. acts and. practices of the respondent, Mutual Rosenbloom Corporation, are to the prejudice of the public and. of respond· ent's competitors, and constitute unfair methods of competition in· conunerce, 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."

ORDEU 'l'O CEASE AND DESIST . This proceed.ing having been heard by the Fed.eral Trade Commis· ~ton upon the complaint of the Commission and the answer filed here- In on July 12, 1937, by respondent admitting all the material allega· 982 FEDERAL TRADE COl\HIISS10N DECISIONS Order 25 F. T.C.

tions of the complaint to be true and waiving the taking of further evidence and all other intervening procedure, and the Commission having made its findings as to the facts and its conclusion that said ·Tespondent has violated the provisions of an Act of Congress ap· proved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for •other purposes."

It is ordered, That the respondent, Mutual Rosenbloom Corpora· tion, its officers, representatives, agents, and employees, in connection with the offering for sale, sale, and distribution of dresses and gar· ments in interstate commerce or in the District of Columbia, do forth· with cease and desist :

Using the terms "Silk Jersey," "Satin Jersey," or "Silk Jersanese," or the word "Silk" alone or in connection with any other word or words, to designate and describe dresses and garments made from a material not composed entirely of silk, the product of the cocoon of the silk worm.

It is further ordered, That the resr:iondent shall within GO days after service upon it of this order, file with the Commission a report in writing setting forth in detail the inanner and form in which it has complied with this order.

COVERED BUTTON AND BUCI\:LE CREATORS, INC., ET AL. 983 Syllabus