Empire style Designers League, Inc

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IN THE MATTER OF EMPIRE STYLE DESIGNERS LEAGUE, INC. ET AL.

<:COMPLAINT, FINDINGS, AND ORDER IN REGARD TO TH8 ALLEGED YIOLATIOX OF SEC. 5 OF AN ACT OF CONGRESS APPROVIiiD SEPT. 26, 1914 Docket 41.'16. Complai·nt, May 21, 1940-Deci.~ion, SC'pf. 11, 19-W Where a corporation, members of which were engagt>d in the creation of styles and the designing and making of pattet·ns for women's fur couts and in the grading and copying of such patterns, and In the sale and distribution thereof in commerce, and which was formed with intent and effect of I'Oerving as clearing house for such members who acted in cooperation with it in matters as below Indicated, and said memi.J<>rs, who constituted dominant factot·s In business in question, and r<>pt·esented 75 percent of the output and sale of the products involved, and who, but for matters and things below set forth, would be naturally and normally iu competition with each other, and with others in the business of producing patterns and gradings, and copies thereof, and in the sale thereof to customers throughout the several States and in the District of Columbia- :Entered Into and carried out, as case might be, agreement, combination, and conspiracy with each other and with others including said corporation first referred to, to hinder nud suppress competition in inter><tate sale and distribution of products in question and to create monopoly in theme£>lves In the manufacture and sale thereof; and in pursuance of such agreement, combination and conspiracy, '{1) Collectively und cooperatively arranged for and fixed uniform prices at which tlleir said products were to be sold; ·(2) Collectively and coopemtively published, or cnu~ed to hl' pnbli>:hed, said price lists in newspapers, pet·iodicals, and circulnrs of g<>neral circulation, In various States and in the District of Columbia; and ·(3) Collectively and cooperatively adhered to such uniform .Prices at which th£>ir said products were to be sold as set forth in their price lists issued, exchanged and published as above described; 'With the result that they sold at fixed and tmiform prices to their respective customers, in the various States and in the District of Columbia, their said products and thus d£>livered same, and their customers and users thereof were forced and compelled to pay them prices in accordance with such arbi· trarily fixed and maintained artificial price lewis for products in question and were deprived, to their detrlnwnt, of normal and free competition between and among said members in the purcha;;e of products in question, price competition b£>twe£>n and among thems<>lves in the sale of such articles was hindered and prevent£>d, and power was placed in them to control and Pnhance prices thereof, and with tenrlency unduly to create in th£>ms£>lves monopoly In Rale ot patterns and in gradiugs and copies thereof, and with l'l'l'ect of unreusonnbly restraining commerce th£>rein: Jlcld, That such ucts und prnctlct>;;, UJHler the drcum,:tum·Ps set forth, were all to the prejudice of the public and cuu~titutetl unfair method;~ of competition In comnwrce, nnd unfair and dec<>ptive nets and pra{'tic£>S therein. 874 FEDERAL TRADE COl\lmission DECISIONS Complaint 31 F. T. G. Mr. George lV. 1Villiam8 for the Commission. Air. Sydney U. Cohn, of N"ew York City, for respondl.'nts. Co:m•LAJNT Pursuant to the prm·isions of the Federal Trade Comml~~ion Act,. and by virtue of the authority vested in it by said act, the Federal Trade Commission having reason to believe that Empire Style Designers League, Inc., a corporation, Sol Vogel, an individual doing business as Sol Vogel Fashion Imports, Alexander Greenstein and Abraham Fessler, individually and as copartners doing business as Greenstein Fur 1\Iocles, Samuel Handelman, an individual, Lazare T. Sherman, an individual, 1\Iende.l Levin!.', nn individual, OctavP Golos, an individual, Emngelista Petrocelli, an individual doing business as Van-Celli Fur Fashion Co., .\nthony T. Sozio, an individual, Benedict Savio, an individual, doing businrss as Savio Fur 1\Iodl's, Bern Publishers, Inc., a corporation doing business under the trade name of .American-1\fitchl'Jl Fashion Publislwrs, lwreinafter referred to as respondents, have violated the provisions of the said act, and it appearing to the Commission that a proceeding by it in respect tlwreof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. RPspond('nt, Empire Style Designers League, Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business at 276 Fifth AvPnne in the city of New York, State of New York.

Its member~hip consists of the corporations, partnership, firms, and individuals herein named in paragraph 2, all of whom were and are engaged in the crf'ation of styles and the designing and makingof patterns for women's :fur coats and the grading and copying of said patterns, and in the sale, ~nd distribution of the same in constant course of trade in commerce between and among the various States of the United States and in the District of Columbia. Pursuant to such sales, and as a part ther('of, said rP:-<pomlPnts regularly have shipped. and clo ship or cause to be deliwrecl such products to their customers, at their respeeth·e placps of lmsin('ss, located at various points in the several Statps of the United States, other than the Stat(> of N" ew York.

Said J.Pague was forme,} with the pmposp aJHl pffpct of Rl'J'Ving as a clearing house for, nwl with the joint coor)('ration of, its memlx>rs, who, through respondent IRague engage in atte-mpts to, and do, fix uniform pricf's for their said products, and do otherwise advance their mutual interpsts in connection with th('ir said business. E:>.IPIRE STYLE DESIGNERS LEAGUE, INC., ET AL. 875 873 Complaint PAn. 2. The following named respondents constitute the membership of said League:

1. Respondent Sol Vogel is an individual doing business as Sol Vogel Fashion Imports, with his office and principal place of business at 330 Seventh Avenue, New York, N. Y.

2. Respondents Alexander Greenstein and Abraham Fessler, individually, and as copartners doing business as Greenstein Fur Modes, with their office and principal place of busint>ss at 3-!5 Seventh .A.venut>, New York, N. Y.

:3. Respondent Samut>l Handelman is an individual with his office and principal place of busiues.s at 333 Seventh Avt>nue, New York, N.Y.

4. Uespondt>nt Lazare T. Sherman is an individual with his office and principal place of business· at 370 Sevt>nth .A venue, New York, N.Y.

5. RPspondent Mendel Levine is an individual, with his office and principal place of business at 333 Sew nth A venue, New York, N. Y. 6. Respondent Octave Golos is an individual with his office and princiupal place of business at 330 Seventh Avenue, New York, N.Y. 7. Respondent Evangelista Petrocelli is an individual doing business as Van-Celli Fur Fashion Co., with his office and principal place of business at 127 West Thirtieth Street, New York, N.Y. 8. Uespondent Anthony T. Sozio is an individual, with his office and principal place of business at 333 Seventh A wnue, New York, N.Y.

9. Uespondent Benedict Savio is an individual doing business as Savio Fur .Modes with his office and principal place of business at 352 Seventh A venue, New York, N. Y.

10. Respondent Dem Publishers, Inc., is a corporation organized, existing and doing business under and by virtue o£ the la,vs of the State of New York, doing business under the trade name of American- Mitchell Fn~hion Publishers, with its office and principal place o£ business at 3GO Sennth A venue, New York, N. Y. PAR. 3. Said member respondents, in the course and conduct of their l"e!>peetive businesses, as hereinbefore described, but for the matters and things hereinafter set forth, would be naturally and normally in competition with each other andjor in competition with other individuals, copartners, and corporations also engaged in the business of producing patterns and gradings and copies thereof, and in the sale thereof to cuf'tomers locate<l throughout the !'ewrnl States of the United State;; and in the District of Columbia. The said member respondents have at all times herein mentioned, and are now, the dom- Complaint 31l<'.T.C. inant factors in said business, representing approximately 75 percent of the output and sale of said products.

PAR. 4. The said member respondents hereinbefore named and described, during the last 3 years, and to the date of this complaint, have entered into and can-ied out an agreement, combination, and conspiracy with each other and with other persons, firms, and corporations1 including respondent Empire Style Designers League, Inc., to hinder and suppre,ss competition in the interstate sale and distribution of said products, hereinbefore mentioned and described in paragraph 1, and to create a monopoly in the manufacture and sale of said products in the United States in said member respondents. Pursuant to said agreement, combination, and conspiracy, said respondents have collectively and cooperatively performed within the time hereinbefore mentioned, the following acts and practices, to wit: 1. Arranged for and fixed uniform prices at which their said products were and are to be sold.

2. Published, or caused said prices to be published in lists, newspapers, magazines, and other periodicals and circulars with general circulation in the State of New York and in other States of the United States, and in the District of Columbia; and 3. Adhere-d to the said uniform prices at which their said produeti'; are to be sold as set forth in their price lists issued, exchanged, and published as aforesaid.

PAR. 5. Said member respondents, as a result of the activities described in paragraph 4 herein, have sold their said products at fixed and uniform prices to their respective customers located in the various States of the United States and in the District of Columbia, and delivered the same as aforesaid.

PAR. 6. As a result of such agreement, combination, and conspiracy, and the acts and practices performed thereunder, and pursuant thereto. by said respondents, as hereinbefore set forth, the customers and users of said products have been, and now are, forced and compelled to pay said member respondents prices at which their products are arbitrarily fixed and maintained at artificial levels, and have been and are now deprived, to their detriment, of normal and free competition between and among said member respondents in the purchase of said products.

PAR. 7. The acts and practices of the said respondents, as herein alleged, are all to the prejudice of the public; have a dangerous tendency to hinder and prevent, and have actually hindered and prennted price competition between and among said member respondents in the sale of their said products in commerce within the intent and meaning of the Federal Trade Commission Act; han~ placed in said EMPIRE STYLE DESIGNERS LEAGUE, INC., ET AL. 877. 873 Finding-s member respondents power to control and enhance prices of their said products; have a dangerous tendency to create in respondents a monopoly in said products in such commerce; have unreasonably restrained such commerce in their said products, and constitute unfair methods of competition and unfair and deceptive acts and practices,. in commerce, within the intent and meaning of the Federal Trade Commission Act.

REPOnT, FINDINGS AS TO THE FACTs, AND Order Pursuant to the prodsions of the Federal Trade Commission Act, t.he Federal Trade Commission on May 21, 1940, issued, and on l\Iay 23, 1940, served its complaint in this proceeding upon respondents, Empire Style Designers League, Inc., a corporation, Sol Vogel, doing business as Sol Vogel Fashion Imports, Alexander Greenstein and Abraham Fessler, individually, and as copartners doing business as Greenstein Fur l\Iodes, Samuel Handelman, Lazare T. Sherman, Mendel Levine, Octave Golas, individually, Evangelista Petrocelli, doing business as Van-Celli Fur Fashion Co., Anthony T. Sozio, individually, Benedict Savio, doing business as Savio Fur Modes, and Bern Publishers, Inc., a corporation, and also as trading under the name of American-Mitchell· Fashion Publishers, charging them with the ust> of unfair methods of competition and unfair and deceptive acts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondents' answer, the Commission, by order entered herein, granted respondents' motion for permission to withdraw said answer and to substitute therefor an answer admitting all the material allegations of fact set forth in said complaint and waiving all intervening procedure and further hearing as to said facts, which substitute answer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said complaint and substitute answer, and the Commission, having duly considered. the matter and being now fully !Hh·iserl in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts an<l its conclusion drawn therefrom. FIXDIXGS AS TO THE FACTS PARAGUAPH 1. Respo!Hlent, Empire Style Desib'lll'rs League, Inc., is a corporation, organizell, existing, and doing bu~iness under and by virtue of the laws of the State of New York, with its office and principal place of business at 2iG Fifth .henue in the city of New York, State of New York.

878 FEDER.>\I, TR.O.DE COMMISSION DECISIONS Findings 31 F. ·r. c. Its membership consists of the corporations, partnerships, firms, and individuals herein named in paragraph 2, all of whom were and are engaged in the creation of styles and the designing and making of patterns for women's fur coats and the grading and copying of said patterns, and in the sale and distribution of the same in constant cour~ of trade in commerce between nnd among the various States of the United States and in the District of Columbia. Pursuant to such sales, and as a part thereof, said respondents regularly have shipped and <lo ship or cause to be delivered such products to their customers, at their respective places of business, located at various points in the several States of the United States, other than the State of New York. Said League was formed with the purpose and effect of serving as a clearing house for, and with the joint cooperation of, its members, who, through respondent League engage in attempts to, and do, fix uniform prices for their said products, and do otherwise. advance their mutual interests in connection with their said business. PAR. 2. The following named respondents constitute the nwmbership of said League:

1. Rer.;pondent Sol Vogel is an individual doing business as Sol Vogel Fashion Imports, with his office and principal plac.e of business at 330 Seventh Avenue, New York, N. Y.

2. Respond£>nts, Alexander Greenstein and Abraham Fessler, individually, and as copartners doing business as Greenstein Fur l\[odes, with their office and principal place of business at 345 Seventh Avenue, New York, N.Y.

3. Respondent Samuel Hantl£>lman i~ an individual with his office nnd principal place of business at 333 Seventh Avenue, New York, N.Y. 4. Respondent Lazare T. Sherman is an individual with his office and principal place of business at 370 Sewnth Avenue, New York, N.Y. 5. Respondent Mendel Levine is an individual. with his office and principal place of business at 33:3 Seventh Avenue, New York, N.Y. G. Respondent Octave Golos is an individual with his office and prin- (·ipal place of lmsin£>ss at 330 Seventh Avenue, N£>w York, N.Y. 7. Respoml£>nt Entng£>1ista Petrocelli is an individual doing business as Van-Celli Fur Fashion Co., with his office and principal place of business at 127 'Vest Thirtieth Str£>£>t, New York, N. Y. 8. Respondent Anthony T. Sozio is an individual, with his office and principal place of business at 333 S£>wnth Avenue, New York, N.Y. 9. Respond£>nt Denediet Savio is an individual doing business as Savio Fur l\[odes with his office and principal place of business at 352 Seventh ~\venue, New York, N. Y.

10. H£>spondent Dern Publishers, Inc., is a corporation organized, existing. and doing business nml£>r and by virtue of the laws of the EUPlRE STYLE DESIGKERS LEAGUE, INC., ET AL, 879 873 Flu<lings State of New York, doing business under the trade name of American- Mitchell Fashion Publishers, with its office and principal place of business at 3()0 Seventh Axenue, New York, N. Y. PAR. 3. Said member respondents, in the course and conduct of their respective businesses, as hereinbefore described, but for the matters and things hereinafter set forth, would be naturally and normally in competition with each other and/or in competition with other individuals, eopartners, aiel corporations also engaged in the business of producing patterns an<l gradings and copies thereof, and in the sale thereof to customers located throughout the several States of the United States and in the District of Columbia. The said member respondents have at all times herein nll'ntioned, and are now, the dominant factors in fmid business, representing approximately 75 percent of the output and sale of said prollucts.

PAR. 4. The said nwmber respondents hereinbefore named and describell, during the last 3 )'Pars, and to the date of the complaint, have enterell into and carried out an agreement, combination, and con- Rpiracy with each other nnd with other persons, firms, and corporations, including respondent Empire Style Designers Lengue, Inc., to hinder and suppress competition in the interstate sale and distribution of said products, hereinbefore mentioned and described in paragraph 1, and to create a monopoly in the manufacture and sale of said products in the United States in said member respondents. Pursuant to saill agreement, combination, and conspiracy, said respondents have collectively and cooperatively performed, within the time hereinbeforementionell, the following acts and practices, to wit: 1. .Arranged for nnd fixed uniform prices at which their said products were and are to be sold.

2. Published, or eansed said prices to be published, in lists, newspapers, magazines, and other periodicals and circulars with general circulation in the State of New York and in other States of the United Statps, and in the District of Columbia; and . 3.•\<lhered to the said uniform prices at which their said products were and are to be sold as set forth in their price lists issued, exchanged, and published as aforesaid.

PAn. 5. Saitl member respondents, as a result of the activities deseribed in parugraph 4 herein, have sold theit· said products at fixed and uniform prices to thpir respective customers located in the various States of the United States and in the District of Columbia, and delivered the same as aforesaid.

PAR. 6. As a re~;ult of such agreement, eombination, nwl conspirncy and the acts nnl practices perform£>d thereunder, and pursuant therpto, by sailll'Pspondents, us hereinbefore set forth, the customers and users 880 FEDERAL TRADE C01IMISSION DECISIONS Onlel' 311~. 'f. c. of said products have been, and now are, forced and compelled to pay said member respondents prices at which their products are arbitrarily fixed and maintained at artificial levels, and have been and are now deprived, to their detriment, of normal and free competition between and among said member respondents in the purchase of said products. CONCLUSION The acts and practices of the respondents as herein found are all to the prejudice of the public; have a dangerous tendency to, and have actually hindered and prevented price competition between and among respondents in the sale of patterns for women's fur coats and in the sale of gradings and copies of same in commerce within the intent and meaning of the Federal Trade Commission Act; have placed in respondents the power to control and enhance prices in said products; have tended unduly to create in respondents a monopoly in the sale of patterns and in the gradings and copies thereof in such commerce; have unreasonably restmined such commerce in said patterns and in the gradings and copies thereof and constittite unfair methods of competition in commerce and unfair and deceptive acts and practic{'s in commerce within the inrent and meaning of the Federal Trade Commission Act.

ORDER TO CEASE AND DF.SIST This pt·oceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the substitute answer of respondents, which substitute answer admits all o£ the marerial allegations of fact set forth in said complaint~ and states that it waives all intervening procechtre and further hearing as to said facts, and the Commission having made its findings as to the facts and conclusion that said respondents have violated the provisions of the Federal Trade Conunission Act. It i8 ordered, That the respondents, Empire Style Designers League, Inc., a corporation, Sol Vogel, doing business as Sol Vogel Fashion Imports, Alexander Greenstein, and Abraham Fessler, individua.Ily, and as copa.rtners doing business as Greenstein Fur 1\fodes, Samuel Handelman, Lazare T. Sherman, l\Iendel Levine, Octave Golos, Evangelista Petrocelli, doing business as Van-Celli Fur Fashion Co., Anthony T. Sozio, Benedict Savio, doing business as Savio Fur Modes, and Bern Publishers, Inc., a corporation, and also as trading under the name of American-Mitchell Fashion Publishers, their officers, rept-esentatives, agents, and employees, directly or through any corporate or other device, in connection with the EMPIRE STYLE DESIGNERS LEAGUE, INC., ET AL. 881 873 Ordet· o0ffering for sale and distribution of patterns for women's fur coats, gradings or copies thereof, in commerce as "conm1erce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from performing, pursuant to agreement or understanding, or collectively or cooperatively, the following acts or practices: 1. Arranging for and fixing uniform prices at which their &'lid products at·~ to be sold.

2. Publishing or causing said fixed prices to be published in lists, newspapers, magazines, or other periodicals and circulars; and 3. Adhering to fixed prices at which their said products are, to be .sold.

It is further ordered, That the respondents shall, within 60 days after service upon them of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which they have complied with this order.

Syllabus 31 F.'!'. C.