Richman Brothers Co

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IN THE MATTER OF THE RICHMAN BROTHERS COMPANY COMPL.\INT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC, 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 48H. Complaint, Oct. 2, 1.912-Decision, A11r. 6, 1943 Where a corporation, engaged In the manufacture and interstate sale and dis· tributlon of men's clothing and other similar products, operating 62 retail stores in o7 cities throughout the United States, doing a mail-order business, and employing some 600 salesmen; by means of newspaper advertisements, catalogs, cards, and folders, and other advertising matter, directly and by implicatlonneprcsented that its clothing bad been recommended by all consumers' research bodies testing clothing; that all such research bodies, as a result of such tests, had rated its clothing as being of the best grade; and that the leading consumers' research bodies of the United States bad investigated the outstanding brands of clothing and In every Instance rated its clothes first in the low-priced ft()ld;

When in fact only three o! the numerous consumers' research bodies in the United States had actually made tests of, and ratell, its clothing; With eftcct of misleading and deceiving a substantial portion of the purchasing public in aforesaid respects, and of thereby causing it to purchase substantial quantities of said products:

Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and Injury of the public, and constituted unfair and deceptive acts and practices in commerce.

Before Mr. Randolph Preston, trial examiner. Air. B. G. 1Vilson for the Commission.

Jones, Day, Oockley & Reavu, of Cleveland, Ohio, for respondent. Co11rrLAI~T Pursuant to tho provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, tho Federal Trade Commission having reason to believe that The Richman Dros. Co., a corporation, hereinafter referred to as respondent, has violated the provisions of said act, and it appearing to the Commission that a }lroceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARACRArn 1. ll<'spondcnt, The Richman Bros. Co., is a corporation, organized, existing, and doing~ business under and by virtue of the laws of the State of Ohio with its office and principal place of business located at lGOO East Fifty-fifth Street, Cleveland, Ohio. THE RICHMAN BROTHERS CO. 483 482 Complaint The respon\dent is now, and for more than 2 years last past has been, enga.ged in the manufacture of men's clothing and other similar prod- ·ucts, and in the sale and distribution thereof in commerce between and among the various States of the United States and in the District of Columbia. Respondent operates approximately 62 retail stores in 57 cities throughout the United States, does a mail-order business and employs some 600 salesmen.

Ue~pondent causes its said products when sold to be shipped from its said place of bu~iness in the State of Ohio to purchasers thereof lo~ ·cated in various other States of the United States and in the District of Columbia.

Respondent maintains and at all times mentioned herein has maintained a course of trade in its said products in commerce between and among the various States o;f the United States and in the District of Columbia.

PAn. 2. In the course and conduct of its said business and for the purpose of inducing the purchase of its said clothing, the respondent has dis:.;eminated false and misleading statements and representations with respect to said clothing. Such false and misleading statements nnrl representations have been inserted in newspapers having a gen- .eral circulation, catalogs, carJ.s and folders, and other advertising .matter distributed to members of the purchasing public situated in various States of the United States. Among and typical of such false and misleading statements and representations are the following: Recornmen9ed by all consumers' research bodies. Research bodies rate Richman's clothes "tops". During the lust three years the leading consumers' research bodies ot the United States bnve Investigated the outstanuing bmnds o! clothing and In every Instance rated Richman Brothers' clothes first In the low priced field. P .An. 3. Through the use of the foregoing statements and representations and others of similar import not specifically set out herein, the respondent represents and has represented, directly and by implication, that its clothing has been recommended by all consumers' research bodies testing clothing; that all such research bodies as a. result of such tests have rated respondent's clothing to be of the best grade; and that the leading consumers' research bodies of the United States have investigated the outstanding brands of such clothing and in every instance rated respondent's clothes first in the lowpriced field. 1 P ...m. 4. The foregoing statements an_d representations used and disseminated by the respond<'nt in the manner aforesaid are fals~, misleading, and deceptive. In truth and in fact, said clothing offered for sale and sold by respondent has not been recommended by Findings 36F.T.C.

all consumers' research bodies testing clothing, nor have all consumers' research bodies testing clothing rated respondent's clothing as being of the best grade or as being "tops'' as the term is umltrstood by the purchasing public. All the leading consumers' research bodies of the United States have not investigated the brands of respondent's clothing or made tests or rated said clothing first in the low-priced field. In truth and in fact, only three consumers' research bodies have actually made tests and rated respondent's clothing. However, there are numerous other leading organizations in the United. States which are engaged in consumers' research work and \Which are properly qualified. as such and which lun·e not te:;ted or recommended. respondent's products.

PAR. 5. There is a marked. preference on the part of a substantial portion of the purchasing public for men's clothing which has been tested and. rated first in the low-priced field. by leading consumers' research bodies over men's clothing which has not been so tested and rated by such organizations.

PAR. G. The aforesaid. acts an<l practices of the respond.ent have had, and. now have, the capacity and. tendency to and d.o mislead and deceive a substantial portion of purchasers and prospective purchasers into the erroneous and. mistaken 1Jelief that respondent's clothing has in fact been recommcnd.eJ by all leading consumers' research bodies and caused mrmb<'rs of the purchasing public, hrcanse of such errolwous and mistaken belief, to purchase substantial quantities of respondent's said clothing.

PAR. 7. The aforesaid nets and. practices of the respondent as herein alleged. are all to the prejudice and injury of the public and constitute unfair and deceptive acts nnd practices in commt>rce within the intent and meaning of the Fed era 1 Trade Commission Act. llEronT, FINDINGS AS TO THE FACTs, A~n Onder Pursuant to the provisions of the FNleral Trade Commi~sion Act, tlle Ft>dPral TnHle Conunission on October 2, 1!142, isstwd and fiUhsequt>ntly setTetl its <"omplnint in this pro<'eeding upon repontlent, The Uidmlflll Bros. Co., n corporation, <"charging it with the use of unfair and. d.ecrptive ads and practices in commrrre in violation of the provisions of that act. After the issuance of the complaint and the filing of respondent's answer thereto, n hrnring wns hrld before n trial examiner of the Commission theretofore duly tlesignnted by it, at which hearing a stipulation as to the facts was read into the record in lieu of testimony in support of the cl1:1rges f'tntrd in the complaint and in opposition then•to. The ~tipulation provi<tell that the Com- THE RICHMAN BROTHERS CO. 485 482 Findings mission might proceed upon such statement of facts to make its findings us to the facts and its conclusion based thereon, and issue its order disposing of the proceeding without the presentation of argument or the filing of briefs. The respondent expressly waived the filing of a report upon the evidence by the trial examiner. Thereafter, this pr.Jceeding came on for final hearing before the Commission on the complaint, answer, and stipulation as to the facts; 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 Tile FACTS PARAGRAPH 1. Respondent, The Richman Bros. Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Ohio, with its office and principal place of business located at lGOO East Fifty-fifth Street, Cleveland, Ohio. The respondent, is now, and for more than 2 years, last past, has been engaged in the manufacture o£ men's clothing and other similar products, and in the sale nnd distribution thereof in commerce between and among the various States of the United States and in the District of Columbia. Respondent operates approximately 62 retail stores in 57 cities throughout the United States, docs a mail-order business, and has employed some six hundred salesmen.

Respondent causes its said products, when sold, to be shipped from its said place of business in the State of Ohio to purchasers thereof located in various otlwr Stah·s of the United States and in the District of Columbia.

Respondent maintains and at all times mentioned herein has maintained a course of trade in its said products in commerce between and nmong the various States of the United Stt1tcs and in the District of Columbia.

PAR. 2. In the course nnt.l conduct of its said business and for the purpose of inducing the purchase of its salt.l clothing, the respondent has disseminated misleading statements ant.l rPpresrntations with respect to said clothing. Such misleading statements and reprt>sentations have been inserted<l in newspapers having a geneml circulation, catalogs, cards and foldt>rs, and other advertising matter distributed to members of the purchasing public situated in various States of the United States. Among an<l typical of such misleading statements and representations are the following:

necommended by all consumers' research bodies. Uesenrcll bodies rate llle!Jman's clotlws ''tops." Findings 36F.T.O.

During the last three years the leading consumers' research bodies ot the Vnlted States have Investigated the outstanding brands ot clothing and in every instance. rated lllchman Brothers' clothes first in the low priced field. ' PAR. 3. Through the use of the foregoing statements and repre- 1 s~ntations and others of similar import not specifically set out herein,, the respondent represents and has represented, directly and by impli-, cation, that its clothing has been recommended by all consumers', research bodies testing clothing; that all such research bodies as a: result of such tests have rated respondent's clothing to be of the 'best grade; and that the leading consumers' research bodies of the United: States have investigated the outstanding brands of clothing and in. every instance rated respondent's clothes first in the low-priced field. PAR. 4. The foregoing statements and representations used and disseminated by the respondent in the manner aforesaid nre mi:-sleading and deceptive. In truth and in fact said clothing offered for salei and sold by respondent has not been recommended by all consumers' research bodies testing clothing, nor have all consumers' research· bodies 'testing clothing rated respondent's clothing as being of the best grade or as being "tops," as the term is understood by the purchasing public. All the leading consumers' rf.'search bodies of the United States have not investigated respondent's clothing, or made~ tests of or rated said clothing first in the low-priced fiehl. In truth and in fact, only three consumers' research bodies have actually made tests of and rated respondent's clothing. There are numerous other· lending organizations in the United States wl1ich are engaged in consumers' research work a11d which are properly qualified us such, and which have not tested or recommended respondent's products. I)AR. 5. There is a marked preference on the part of a substantial portion of the purchasing public for nwn's clothing which has been tested and rated first in the low-priced field by leading consumers' research bodies, over men's clothing which has not been so tested and ratrd Ly such organizations.

PAR. G. The aforesaid acts and practices of the re!':pondent have had and now have the capacity and tendency to and do misleall and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that respondent's said clothing has been recommended by all consumer research bodies engaged in testing clothing, that all such rc~earch bodies have rated respondent's clothing to be of the best grade, and that the leading consumer research bodies in the United States have investigated the outstanding brands and have found respondent's clothing first in the low-priced field. Said erroneous and mistaken belief has caused such portion of tho public to purchase substantial quantities of respondent's said clothing. THE RICHMAN BROTHERS CO. 487 482 Order CONCLUSION The aforesaid acts and practices of the respondent as 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. OUDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, respondent's answer, and a stipulation as to the facts entered into by and between counsel for the Commission and counsel for the respondent upon the record, 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 ia ordered, That the respondent, The Richman Dros. Co., a corporation, and its officers, agents, representatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of men's clothing in commerce, as "commerce" is defined in the Federal Trade Commis~ion Act, do forthwith cease and desist from:

1. Representing, directly or indirectly, that respondent's clothing has been tested or recommended by all consumers' research bodies in the United States which test clothing.

2. Representing, directly or indirectly, that all consumers' research bodies in the United States which test clothing have rated respond- ~nt's clothing to be of the best grade.

3. Representing, directly or indirectly, that tho leading consumers' research bodies in the United States have tested the outstanding brands of men's clothing and have found respondent's clothing to be first in the low-priced field.

It ia furtlter ordered, That respondent shall, within GO days after service upon it of this order, file with tho Commission a report in Writing setting forth in detail the manner and form in which it has complied with this order.

488 FEDERAL TRADE COMMISSION DECISIONS. Syllabus 3GF.T.C.