Loring Hat Co

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IN THE l\IATTER OF LESSING HAT COMPANY, INC., AND JOSEPH LORING, TRADING AS LORING HAT COMPANY C'OMPLAIN'.r, l!'Ui'DINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED Sell. 26, 1914 Docket -1.! IJ. Complaint, Aug. 20, 1910-Dccision., Mar. 13, 1941 Where a corporation and an individual, who was its president and managed, controlled, and dominated its affairs and activities, engaged in manufacture of enps a111l bats from old, used, Hnd second-hantl hats pnrchHsed by them, through cleaning, steaming, ironing, and shaping and, in some instances, fitting with new trimming-s, sweat ban1ls, and size labels, such previously used felt hat budiPs so that they had apvcumncP of new hnts and cap" made from felts and other materials which had never been worn or used- ( a.) Sold their said hats and eups to retailers, johlJPrs, and wholesalers, with no labeling, marking, or llesil'!nation stamped thereon to indicate to purchasing public that they were in fact made from old hat bodies, cleaned anti renovated; and (b) Failed adeqnat(>ly to inform members of purc-hasing public that such products made hy them were in fact m:tile from old, worn, aud previously used bodies, as distinguislJed ft·om those made from newly manufactured materials, through stumpiug tenn "l\Iatle of Castaway Hats" on sweat bands ot· size la!Jels in such a way that jobber~. wholrsulers, and retailers, leaving 11number, couhl readily 1·emon! that p1•ration of label h~>aring aforesaid term; With rt>salt that, through u~e of ~<aill lnhl'l~ ami utlwr acts nnd pt·uetices above set f01·th, they plnced in hands of uninformed or unscrupulous dt>uler·s means and instrumentality whereby they might deceive or mislead members of purchasing public, by whom, lacking clear and conspicuous label disclosure, articles tlm!'O made are readily tnkPn for tho~f> of nrw material Putirely, into erroneous nnd mistaken bt>lief that tlwy were purchasing hots and caps made from new and unused materials or from bodies from shopworn or unsalable hats, and with efft>ct of mislt>ading and deeeiving u snb!ltanthtl number of whole!lalers, jobbers, retailers, and members of said public into aforesaill erroneous belief and, by r~>a~on thel·eof, into purehnse of a substantial number of said hats an<l <'lips:

lipid, That such acts and practices, under the circumstances set forth, were ull to the prejudke and injury of tlJe public, and constituted unfair and tleceptive acts and practices in commerce. Before Mr. Miles J. Fur-nas, trial examiner. Mr. Robert .l!athiB, Jr., for the Commission. AIr. S. Jerome Loring, of Long Island, N.Y., for respondents. COMPLAINT Pursuant to the provh;ions of the Federal Trade Commission Act a11cl by vir·tue of the authority wste1l in it by said net, the Felleral Complaint 32F.T.C.

Trade Commission, having reason to believe that Lessing Hat Co., Inc., and Joseph Loring, an individual, trading as Loring Hat Co., hereinafter referred to as respondents, have violated the provisions of said act, and it appearing to the Commission that a proce('ding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows: PARAGRAPH 1. Respondent, Lessing Hat Co., Inc., is a corporation organized, existing, and doing business und('r and by virtue of the laws of the State of New York. Respondent, Joseph Loring, is an individual and iS! president of the respondent corpomtion, Lessing Hat Co., Inc., and as such manages, controls, and dominates its C'orporate affairs and activities with reference to the unfair and deceptive acts and practices herein alleged.. Respondent, Joseph Loring, also trades as Loring Hat Co. All of said respondents have their office and principal place of business at Third and Mercer Streets, in the city and State of New York.

PAn. 2. In the course and comluct of their business described hc:>rein, respondents for more than 2 years last past have been engage1l in the business of manufacturing caps and hats from felt and other materials obtained from old, used, and second-hand hats and of selling the same to retailers, jobbers, aJHl wholesale dealers located in the various States of the United States. Respondents cause !:-llch caps and hats when sold to be transported from their place of business in the State of New York to the aforesaid purchasers located in the various States of the United States other than the State of New York. Respondents maintain and have maintained a course of tra1le in said hats and caps in commerce amm1g and between the vnrions States of the United States and in the District of Columbia. PAR. 3. In the course and conduct of thpir business respondents buy second-hand, old, worn, and prPvionsly nspd felt hats. Tlw olll, worn, and previously used felt hat bodies are cleaned, steamed, ironed, and shaped by rpspondent and thl:'n are fitted with lli:'W trimmings, sweat bands, size labels, and sold by respondents to retailers nnd wholesale dealers who in turn sell said hats and cups to the purchasing public.

PAn. 4. The aforesaid old, worn, UlHl pre,·ionsly nse1l hat hodiPs, after being manufacture•! into hats or raps, are in some instance>s fitted with new trimmings, sweat bands, a1Hl size labels, as deserihl'll herein, and have the appearance of IH'W hats and caps manufactured from felts and other materials which h:we never been worn or li"P•L 'fhen articles which are in fact manufacture<l from second-hand or used materials, but which have thp appearance of being mannfactm<'d LESSING HAT CO., INC., ET AL. 877 875 Complaint from new materials, are offered to the purchasing public and such articles are not clearly and conspicuously lab('led as being manufactured from used or second-hand materials, they are easily and readily taken by members of the purc>hasing- public as being manufactured entirely from new materials.

Said hats and caps manufactured by respondents are sold to retailers and to jobbers and wholesale dealers without any labelt marking, or designation stamped thl"reon to indic>:lte to the purchasing public that said hats and caps are in fact manufactured from oldt worn, and previously used hat bodies which have been cleaned and renovated by respondents. Said hats and caps are resold to thepurchasing public without disclosing the fact that they are in fact manufactured from hat bodies and other materials which have been previously worn or used and under such circumstances purchasers are led to believe that they are in fact new hats and caps manufactured entireiy from new materials.

On some part of the sweat baJHl or f'ize labels which are attached to said hats or caps, the respondents han• caused to be stnmpe<l thewords "l\Iacle of castaway hats." THs size label is printeu so that one portion has the size mHnber printed thereon and the other portion has the words "l\lnde of c>astaway hats'' printed thereon. These labels are so attached to the ltnt or cap that jobbers, whoh•sale 1lealers, and retailers can readily and easily cut off and remove that portion of the label bearing the term ''l\fade of castaway hats," leaving the siz~ number on the remaining portion of said label. PAR. 5. The term ''l\fade of Castaway Hats" under the conditions of use hen•inabove described does not adequately inform members of tbe purchasing public that the hats and caps manufactured by therespondents and sold under such designation are in fact made from old, worn, and previously used hat bodies as distinguished from hats and caps made from newly manufacture1l materials which have nevt:>rbeen worn or used.

PAR. 6. By the use of the aforesaid label, and the other acts and practices set forth lwrein, the respondents place in the hands of uninformed or unscrupulous jobbers, wholesalers, and retail dealers means and instrumentalities whereby said jobbers, wholesale and retail dealers may deceive or mislead members of the purchasing public into the erroneous and mistaken belief that they are purchasing hats. or caps manufactured from new nn1l nnuseJ materials, which nrc in fact composed entirely or in part of ohl, ~econd-hand, and preYiousl). usee] l1nts or materials.

322fi!):Jm 41 VO!•• !l2 ~,r, 878 FEDERAL TUADE COMMISSION DECISIONS Findiugs 32F.T.C.

PAR. 7. The use by respondents of the acts and practices above set forth has the tendency and capacity to, aml does, mislead and deceive a substantial number of wholesale dealers, jobbers, retail dealers, and members of the purchasing public into the erron!'ous and mistaken beliefs that the said hats and caps are manufactured from new and unused materials or made from new but shopworn hat bOlli!'s which lu:we newr been worn or used and into th£', purchase of n !'lttbstantial number of such hats aml caps because of such erroneous and mistaken beliefs.

PAR. 8. The aforesaid acts and practices of the respondents, as herein alleged, are all to the prejudice of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Ad. RBPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Tmde Commission on the 20th day of August 1940, issued and subsequently served its complaint in this proceeding upon said respondents, Lessing Hat Co., Inc., and ,Joseph Loring, an individual trading as Loring Hat Co., charging them with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint (no answer being filed on behalf of respondents), testimony and other evidence in support of the allegations of said complaint were introduced by Robert Mathis, Jr., attorney for the Commission, the respondents b~ing represented by S. Jerome Loring, before Miles J. Furnas, 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. The respondents expressly agreed that tlw Commission may proceed to make its report, stating its findings as to the facts and its conclusion based thereon, and enter its order disposing of the proceeding without the presentation of argument or the filing of briefs. The respondents further expressly waived the filing of a report upon the evidence by the trial examiner. Thereafter, this proceeding regularly came on for final hearing before the Commil'lsion on the said complaint, testimony, and other evidence; 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 an<l makes itl findings ns to the facts and its eondusion drawn therefrom.

LESSING HAT CO., IKC., ET AL. 879 875 Findings FINDINGS AS TO THF. FACTS PARAGRAPH 1. Respondent, Lessing Hat Co., Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State o£ New York. Respondent, Joseph Loriug, is an individual and is president of the respondent corporation, Lessing Hat Co., Inc., and as such manages, controls, and dominates its corporate affairs and activities with reference to the unfair and de<·eptive acts and practices herein set forth. Respondent, Joseph Loring, also trades as Loring Hat Co. All of said respondents have their office und principal place of business at Third and Mercer Streets, in the city and State of New York.

PAR. 2. In the course and conduct of their said business, respondents, for more than 2 years last past, have been eugnged in the business of manufacturing caps and hats from felt and other materials obtained from old, used, and second-hand hats and of selling the same to retailers, jobbers, and wholesale dealers located in the various States of the United States. Respondents cause such caps and hats, when sold, to be transported from their place of business in the State of New York to the aforesaid purchasers located in the various States of the United States other than the State of New York. Respondents maintain and luwe maintained a course of trade in said hats and caps in commerce among and between the various States of the United States and in the District of Columbia. PAR. 3. In the course and conduct of their business, respondents bny second-hand, old, worn, and previously used felt hats. The old, worn, and previously used felt hat bodies are eleanPd, steamed, ironed, and shaped by respondents and then are fitted with new trimmings, sweat bands, and size labels and sold by respondents to retailers and wholesale dealers, who in tmn sell said hats and caps to the purchasing public.

PAR. 4. The aforesaid old, worn, and previously used hat bodies, after being manufactured into hats or caps, are in some instances fitted with new trimmings, sweat bands, and size labels as described herein and have the appearance of uew hats and caps manufactured from felts anri other materials which have never been worn or used. ~Vhen articles which are in fact manufactured from second-hand or used materials, but which have the appearance of being manufuctm·t>d from llew materials, nr~> offered to the purchasing public and ~<uch nrticiPs 'lll' not cl~>arly and conspicuously lab~>letl ns being mnnnfr~ctnred from nsetl or SN'OJHl-hand materials, th~>y are <>easily and Pintlin;::s 32 F. T. C. readily taken by members of the purchasing public as bling manufactured entirely from new materials.

Said hats and caps manufactured by respondents are sold to retail- PI'S and to jobbers and wholesale dealer'l:> without any labeling, marking, or designation stamped thereon to indicate to the purchasing public that said hats and eaps are in fact matmfactnreu from old, wom, and previously used hat bodies which have been cleaned and renovated by respondents.

PAR. 5. On some part of the sweat band or size labels which are attached to said hats or caps, the respondents have caused to be stamped the word "Made of Castaway Hats." This size label is printed so that one portion has the size number printed thereon and the other portion has the words "Made of Castaway Hats" printed thereon. These labels are so attached to the hat or cap that the jobbers, wholesale dealers, and retail dealers can readily and easily cut off and remove that portion of the label bearing the term "Made of Castaway Hats," leaving tlle size number on the remaining portion of said label. In some instances the label is attached in the reverse of the manner above described so that the portion of the label reading "Made of Castaway Hats" is attached to the hat or eap. PAR. 6. The term "Made of Castaway Hats" under the conditions of use hereinaboye descrihed <loPs not udecpwtPl,Y inform members of the purchasing public that the lwts and caps manufactured by the respondents and sold under such clesignation are in fact made from old, worn, and previously used hat bodies, as distinguislwd from hats and caps made from newly manufactured materials which have never-r bE>en worn or used.

PAR. 7. By the use of the aforesaid labels and the other acts ancl practices ~et forth herein, the respondents place in the hands of uninformed or unscrupulous jobbers, wholesale and retail dealers, a means and instrumentality whereby said jobbers, wholesale ancl retail dealers may deceive or mislead members of the purchasing public into the erroneous nnJ mistaken belief that they are purchasing hats or caps manufactured from new and unused materials, or from shopworn hal bodies, when in fact the hats sold by respondents are composed entirely or in part of old, second-hand, anrl previously used hats or materials. A shopwom hat is one that is discolored or hadly used in window display or badly ltnndled inside thl' !'ltore, so that it is not salable again, or it may be a hat that came thron~h with n markingm· defacement on the surfac·e of the felt or any part of it. It i<; !Ill un"alable hat.

LESSING HAT CO., INC., ET AL. 881 875 Ot·der PAR. 8. The use by the respondents of the acts and practices above set forth has the tendency and capacity to, and does, mislead and deceive a substantial number of wholesale dealers, jobbers, retail dealers, and members of the purchasing public into the erroneous and mistaken belief that the said hats and caps are manufactured from new und unused materials or made from new but shopworn hat bodies which have never~ been worn or used, and into the purchase of a substantial number of said hats or caps because of such erroneous tmd mistaken belief.

CONCLUSION The aforesaid arts and practices of respondents a::; herein found are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices 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 Commission upon the complaint of the Commission, te::>timony and other evidence taken before Miles J. Furnas, an examiner of the Commission theretofore duly designated by it, in support of the allegations o.f the .said complaint and in opposition thereto, by Robert 1\Iathis, Jr., counsel for the Commission, and by S. Jerome Loring, counsel for the respondents, and the Commission having made its findings as to the facts and its conclusion that said respondents have violated the provisions of the Federal Trade Commission Act. It is ordered, That the respondent Lessing Hat Co., Inc., its officers, directors, representatives, agents, mHl Pmploypes, ull(l respondent Joseph Loring, individually and trading as Loring Hat Co., his representath'es, agents, and employees, directly or through any corporate or other device in connection with the offering for sale, sale, and distribution of hats and caps in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing that hats or caps manufactured in whole or in part of used or second-hand materials, are new or are composed of new materials, by failure to stamp on the sweat bands thereof in conspicuous and legible terms which cannot be removed or obliterated without mutilating the sweat bands, a btatement that said products are composed of second hand or used materials, provided that if sweat htn(ls are llot nfli"XPd to sllch hats or cnp.., th\:'n such stumpin~ must 882 FEDERAL TRADE COMMISSION DECISIONE\ Order 32 F.T. C.

appear on the bodies of such hats or caps in conspicuous and legible terms which cannot be removed or obliterated without mutilating said bodies.

2. Representing in any manner that hats or caps made in whole or in part from old, used, or second-hand materials are new or are composed of new materials. . It is further ordered, That respondents shall within 60 days after service upon them o£ 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.

HEALTH RAY MANUFACTURING CO., INC. 883 Syllabus