Rabhor Corp

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IN THE Matrer OF RABHOR CORPORATION COMPLAINT, FINDINGS, AND ORDER IN REGARD TO TIIE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3619. Complaint, Oct. 3, 1938-Deoision, Feb. 28, 1941 Where a corporation engaged in manufacture of men's robes, jackets, lounge suits, and other wearing apparel, and In competitive interstate sale and distribution thereof; in advertisements which It furnished retailers for Insertion In newspapers and other publications of interstate circulation, and through circulars with colored depictions of certain of its products which it furnished retailers for distribution to purchasers and prospective purchasers and on tags affixed to certain products- (a) Represented, directly and by inference, that its garments were made entirely of silk, product of the cocoon of the silkworm, through use of words "silk" and "satin,'' and through such typical statements as "* • • silk lined jacket" (or robe), "Silk warp brocade. Satin lined," and· "* • • made from Suskana silk. Pure silk lined" ; Notwithstanding fact that garments were not made entirely of the esteemed and preferred product of cocoon of silkworm, as long understood by consuming and purchasing public from words "silk" and "satin," but were composed of various combinations and mixtures of cotton, rayon, silk, and other fibers, and, as to certain of products In question, were made from material composed of 70 percent cotton and 30 percent silk; and (b) Failed to disclose such content of rayon, which, with appearance and feel of silk, Is by the purchasing public prnctically indistinguishable therefrom, with result of concealing fact that garments concerned were made in whole or in part of chemical fiber or fabric aforesaid; With effect of misleading and deceiving a substantial portion of the purchasing public into the erroneous belief that all said representations were true, and of placing in the hands of uninformed and unscn1pulous retailers means and instrumentality whereby they might, and did, mislead and deceive such public Into erroneous belief that said garments were made wholly of silk, and of therrby diverting trade unfairly to it from competitors who truth· fully advertised their respective merchandise: Held, That such acts and practices, under the circumstances set forth, were all to the prejuuice and injury of the public and competitors, and constituted unfair methods of competition in commerce. Before Mr. Edward E. Reardon, trial examiner. Mr. James L. Fort and Mr. Robert Math~, Jr., for the Commission. Mr. Erwin Feldman, of New York City, for respondent. Col\IPLAINT Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority nsted in it by said act, the Federal RABHOR CORP. 789 788 Complaint Trade Commission, having reason to believe that Rabhor Corporation, a corporation, hereinafter referred to as respondent, has violated the provisions of the said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its chargl's in that respect as follows:

PARAGRAPH 1. Respondent, Rabhor Corporation, 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 located at 1450 Broadway, in the city of New York, State o£ New York.

Respondent is now, and for several years last past has been, engaged in the business o£ manufacturing men's robes, jackets, lounge suits, an<l other wearing apparl'l for men, and in the sale and distribution thereof.

Respondent causes said merchandise when sold to be transported from its place of business in the State o£ New York to purchasers thereof located in other States of the United States and in the District of Columbia.

Respondent maintains, and at all times herein mentioned has maintained, a course of trade in sai<l merchandise sold and distributed by it in commerce between and among the various States of the United States and in the District of Columbia. Respondent is now, and at all time herein mentioned has been, in substantial competition with other corporations an<l with individuals, firms, and partnerships engaged in the sale and distribution of men's robes, jackets, lounge suits, and other wearing apparel for men, in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 2. In the course and conduct of its aforesaid business, respondent, in soliciting the sale of, and selling, its merchandise in such commerce, caused, and now causes, advertising matter to be inserted in newspapers and other publications having a circulation between and among the several States of the United States. In certain of said advertisements respondent has made various statements purporting to be descriptive of the nature, quality, and character of its merchandise, among which are the followi11g:

Suskann Silk Lined Jacket.

Suskana Silk Lined Robe.

Silk Warp Brocade, Satin Lined.

Distinguished tailoring combines with the silk warp brocade !ubric to make this a robe he'll never !orget. Satin lined. Complaint 32F. T. C.

Certain garments are also labeled:

This garment made from Suskana Silk. Pure silk lined. Respondent sells its various garments under the trade name "Suskana" and other trade names.

Respondent also furnished to dealers purchasing its garments advertising copy containing statements similar to those above quoted, for use in local newspapers.

All of such statements, together with similar statements appearing in respondent's advertising literature and on the labels of its garments, purport to be descriptive of its merchandise and of the material out of which it is made. In all of its advertising literature and through labels and other means, respondent, directly or by inference, through the state.ments and representations herein set out, and other statements of similar import and effect, represents that its garments are made of silk, the product of the cocoon of the silkworm. PAR. 3. The representations made by respondent with respect to the materials out of which its garments are made are false, misleading, and untrue. In truth and in fact the said garm'ents are not made of silk, the product of the cocoon of the silkworm. The true facts are that said garments are made of cotton, rayon, and silk. None of the garments contain a predominance of silk by weight. The representations above set forth were, and are, false and misleading in that said garments so represented, designated, and referred to were not described as being in whole or in part rayon or cotton, as the case may be, and in that the word "rayon" was not used in said advertising in immediate connection and conjunction with said descriptive words and such representation. "\Vhere the word "rayon" appeared in respondent's .advertising it indicated the presence of this fabric in other garments but not in the garments advertised as herein set forth. Such representations, together with the failure to so describe the materials of which said garments were made, had and have the tendency, capacity, and effect of concealing the fact that such garments were and are made, in whole or in part, of rayon or cotton, as the case may be, when it was, and is, the duty of the respondent in any circumstances to make disclosure of the fact that such garments were and are composed, in whole or in part, of rayon by the use of the word "rayon" in immediate connection with said descriptive word!~ and in such a way and manner as to apprise and inform the purchasing and consuming public that such garments were and are composed, in whole or in part, o£ rayon, as the case may be. PAR. 4. The word "silk" :for many years last pest has had, and still has, in the minds of the purchasing and consuming public generally, RABHOR CORP. 791 ·'788 Complaint a definite and specific meaning, to wit, the product of the cocoon of the silkworm. Silk products for many years have held and still hold great public esteem and confidence for their preeminent qualities. Silk fiber has long been woven into a variety of :fabrics and a variety --of distinctive terms have been applied to the fabrics resulting from different types of treatment and weaving of silk fiber. The words "satin" and "crepe" or words of similar import or meaning, when used alone or unacco.mpanied by the name o£ a specific fabric or fiber in connection with the designation or description of men's robes, jackets, or other wearing apparel for men, have been for a long time, and still are, associated in the minds of the public with the materials made of the product of the cocoon of the silkworm and such words, when used as aforesaid, are considered as being descriptive of silk fabrics. The word "rayon" is the name of a chemical fiber or fabric that simulates silk in that it has the appearance and feel of silk and is, by the purchasing public, practically indistinguishable from silk. PAR. 5. There are among respondent's competitors many who sell and distribute men's robes, jackets, lounge suits, and other wearing apparel for men, who do not in any way misrepresent the material out o£ which their garments are made.

PAR. 6. Each and all of the aforesaid false and misleading statements and representations made by the respondent in describing its robes, jackets) lounge suits, and other wearing apparel for men, as hereinabove set out, and the failure to truthfully describe the materials of which said garments were made as aforesaid, have a tendency and capacity to, and do, mislead and deceive a substantial portion of the purchsing public into the erroneous belief that a1l of said representations nre true. The use of said repr~sentations and statements also place in the hands of the retail dealers a means and instrumentality whereby they mislead and deceive a substantial portion of the purchasing public into the erroneous belief that said. garments are made 'wholly of silk, with the result that trade has been diverted unfairly to respondent from competitors who truthfully advertise their respective merchandise. As a consequence thereof, injury has been done and is now bt>ing done by respondent to competition in commerce among and between the various States of the United States and in the District of Columbia.

PAR. 7. The aforesaid acts and practices of respondent as herein alleged are all to the prejudice o£ the public and to respondent's competitors, and constitute unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act. Findings 32F.T.O.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on October 3, 1938, issued, and subsequently served, its complaint in this proceeding upon respondent, Habhor Corporation, a corporation, charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance o£ said complaint and the filing of respondent's answer thereto, testimony and other evidence in support o£ the allegations of said complaint were introduced by James L. Fort, attorney for the Commission, respondent being represented by Erwin Feldman, Esq. (no testimony being offered in opposition to the complaint), before Edward E. Reardon, an examiner of the Commission theretofore duly designated by it, and said testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said complaint, the answer thereto, testimony and other evidence, brief in support o£ the complaint (respondent not having filed brief), and oral arguments of Robert Mathis, Jr., attorney for the Commission, and Erwin Feldman, Esq., attorney for respondent; and the Commission having duly considered the matter, 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 facts and its conclusion drawn therefrom. FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Rabhor Corporation, is a corporation organized, existing, and doing business under and by virtue of the laws of the State of N~w York with its office and principal place of business located at 1450 Droadway in the city and State of New York. Uespondent is now and for several years last past has been engaged in the business of manufacturing men's robes, jackets, lounge suits, and other wearing apparel for men, and in the sale and distribution thereof. Respondent causes said merchandise when sold to be transported from its place of business in the State of New York to various purchasers thereof located in other States of the United States and in the District of Columbia. Respondent maintains, and at all times herein mentioned has maintained, a course of trade in said merchandise sold and distributed by it in commerce among and between the various States of the United States and in the District of Columbia. Respondent is now, and at all times mentioned herein has been, in substantial competition with other corporations, and with individunle, RABHOR CORP. 793 788 Findings firms, and partnerships engaged in the sale and distribution o:f men's robes, jackets, lounge suits, and other wearing apparel for men in commerce among and between the. various States of the United States and in the District of Columbia.

PAR. 2. In the course and conduct of its aforesaid business, respondent in soliciting the sale of and selling its merchandise in commerce has caused and now causes various advertising matter to be furnished to retail dealers :for insertion in newspapers and other publications having a circulation among and between the various States of the United States and in the District of Columbia. In addition to the foregoing advertising, respondent furnishes to retail dealers various circulars with lithographed colored pictorial representations of certain of its products for distribution to purchasers and prospective purchasers of respondent's products. In certain of said advertisements which appeared with pictorial representations of respondent's prod-· nets aforesaid respond-::Jnt has made various statements purporting to be. descriptive of the quality, character, and fabric content of its merchandise among which the :following are typical: Suskana silk lined 'acket.

' Suskana r-ilk lined lobe.

Silk warp brocade. Satin lined .

. Distinguished tailoring combined with silk wnrrl brocade fab!'ic to make this a robe he'll never forget. Satin lined.

Deluxe Suskana satin lined robe of luxurious brocade • • •. On certain of its robes, the respondent affixed various tags containing among other printed matter the following: This garment is a genuine Rabhor robe, tailored in exclm;ive Suskana jacquard. Pure silk lined.

This garment made from Suskana silk. Pure silk lined. AU of such statements, together with other statements of similar effect which appeared in respondent's advertising literature, on the circulars fumished to retailers for distribution to the purchasing public, and on tags and labels affixed to its garments, purport to be descriptive of its merchandise and of the natm·e and quality of the fabrics out of which such merchandise is made. By the means set forth above respondent directly and by inference represents and has represented that its garments are made entirely of silk, the product of the cocoon of the silkworm.

PAR. 3. The representations so made by respondent with respect to the nature and quality cf the fabrics out of which its garments are Jnade are false, misleading, and untrue. In truth and in fact the said garments so adn•rtised were not made entirely of silk, the product Findings 32 F. T;();. of the cocoon of the silkworm, but are made of various combinations and mixtures of cotton, rayon, silk, and fibers other than silk. A portion of respondent's products were manufactured from a material composed of 70 percent cotton and 30 percent silk. PAR. 4. The word "silk" for many years last past has had and still has in the minds of the purchasing and consuming public generally a definite and specific meaning, to wit, the product of the cocoon of the silkworm. Silk products for many years have held, and still hold, great public esteem and confidence and are preferred for their preeminent qualities. Silk fiber has long been woven into a variety' of fabrics and a variety of distinctive terms have been applied to the fabrics resulting from different types of treatment and weaving of silk fiber. Among such terms is the term "satin." . The word "satin" and other terms of similar import or meaning, when used alone or unaccompanied by the name of a specific fabric of fiber, in connection with the designation or description of garments, as distinguished from the weave used in the fabric, have been for a long time, and still are, associated in the minds of the purchasing public with the materials made of the product of the cocoon of the silkworm, and such words when used as aforesaid are considered as being descriptive of silk fabrics alone. The word "rayon'' is the name of a chemical fiber or fabric that simulates silk in that it has the appearance and feel of silk and is, by the purchasing public, ptactically indistinguishable therefrom. The use by respondent of the representations hereinabove set forth, together with the failure to disclose the rayon content of the fabrics from which said garments were made, has had and now has the tendency, capacity, and effect of concealing the fact that such garments were and are made in whole or in part of rayon. PAR. 5. The Commission finds that there are among respondent's competitors a number who sell and distribute men's robes, jackets, lounge suits, and other wearing apparel for men, who do not in any way misrepresent the kind, quality, or fabric content of the material out of which their garments are made.

PAR. 6. The aforesaid false and misleading statements and representations used by the respondent in describing its robes, jackets, lounge suits, and other wearing apparel for men, as hereinabove set out, and the failure to truthfully describe and designate the kind or the fabric content of the materials of which said garments were made, have had the tendency and capacity to, and do, mislead and deceive a substantial portion of the purchasing public into the erroneous belief that all of said representations are true. Dy the use of said RABHOR CORP. 795 788 Order representations and statements and the practice of failing to disclose the rayon content of its products, respondent places in the hands of uninformed and unscrupulous retail dealers a means and instrumentality whereby they may, and do, mislead and deceive a substantial portion of the purchasing public into the erroneous belief that said garments are made wholly of silk, with the result that trade has been diverted unfairly to respondent from various competitors who truthfully advertise their respective merchandise. CONCLUSION The aforesaid acts and practices of the respondent, as herein found, are all to the prejudice and injury of the public and of respondent's eompetitors, and constitute unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Cummission upon the complaint of the Commission, the answer of respondent, testimony and other evidence taken before Edward E. Reardon, an examiner of the Commission, theretofore duly designated by it, in support of the allegations of said complaint (no testimony being offered in opposition thereto), brief filed in support of the complaint and oral arguments by Robert :Mathis, Jr., counsel for the Commission) and by Erwin Feldman, counsel for the respondent, and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondent, Rabhor Corporation, a corporation, its officers, representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of its men's robes, jackets, lounge suits, and other wearing apparel, in commerce as commerce is defin.ed in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Using the word "silk" or any other word or term descriptive of silk to describe, designate, or in any way refer to any fabric or product which is not composed wholly of silk, the product of the cocoon of the silkworm: Provided, lw1.oever, That in the case of fabrics or products composed in part of silk and in part of other iibers such term or similar terms may be used as dc~criptiYe of the ~ilk content if there is used in immediate connection or conjunction Order 32F.T.C.

therewith, in letters of at least equal size and conspicuousness, words truthfully describing and designating each constituent fiber or material thereof.

2. Using the unqualified term "satin" or any other descriptive term of similar import or meaning indicative of silk to describe, designate, or in any manner refer to any fabric or product which is not composed wholly of silk, the product of the cocoon of the silkworm: Providedt howe·vert That when said word or descriptive term is used truthfully to designate or describe the type of weave, construction, or finish, such word shall be qualified by using in immediate connection and conjunction therewith, in letters of at least equal size or conspicuousness, a word or words clearly and accurately naming or describing the fibers or materials from which fiaid products are made.

3. Advertising, offering for sale, or selling fabrics, garments, or other products composed in whol~ or in part of rayon without clearly disclosing, by the use of the word "rayon," the fact that such fabrics or products are composed of rayon, and when such fabrics or products are composed in part of rayon and in part of other fabrics or materials, such fabrics or materials shall be designated in immediate connection or conjunction with the word "rayon'' in letters of at least equal size and conspicuousness which shall truthfully describe and designate each constituent fiber or material thereof. 4. Representing in any manner that fabrics or products offered for sale or sold by it contain silk in greater quantity than is actually the case.

5. Representing in any manner or by any means that respondent'!' products are composed of fibers or materials other than those of which such products are actually composed. It i.s fu,rther• ordered, That the respondent shall, within 60 days after service upon it of this order, file with the Commission a rep~rt in writing setting forth in detail the manner and form in which it has complied with this order.

HUSCO MANUFACTURING CO., ETC. 797 Syllabus