H. T. Poindexter & Sons Merchandise Co

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IN THE MA 1'TER OF H. T. POINDEXTER & SONS MERCHANDISE CO.

COMPLAINT , FIXDIN"GS, AND ORDERS IN REGARD '1' 0 THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT m CONGRESS APPROYED SEPT. 26 , 1914, AND OF AN ACT OF COXGRESS APPROVED OCT. 14, 1940 Docket 5875. Oomplaint, Apr. 1951-Deoision, Aug. , 1951 Where a corporation engaged in the introduction into commerce, and in the offer, sale and distribution therein, of "wool products" as defined in the Wool Products Labeling Act of 1939- Misbranded certain of said products in that, labeled as 100 percent wool, they contained no "wool" as defined in said act, but were composed, exclusive of ornamentation not exceeding 5 percent of their total fiber weigbt, of reprocessed wool" ; their constituent fibers and the percentages thereof were not shown on the tags or labels thereon, as required, since composed as above noted, '''holly of " reprocessed wool" ; and constituent fibers of interlinings were not separately set forth upon the tags or labels attached thereto;

Helcl That such acts and practices, under the circumstances set forth, were in violation of the Wool Products Labeling Act and the rules and reguations promulgated thereunder, and were to the prejudice of the public and constituted unfair and deceptive ads and practices in commelce. "'while the complaint also charged that respondent removed from certain wool products, theretofore delivered to it, tags or labels purporting to contain the information required by said Wool Products Labeling Act, with intent to violate the provisions of the Act, and the stipulation established the fact of rcmoval of the labels, it did not establish the element of intent, which was negatived by affdavits executed by certain of respondent' employees; and intent being an essential element where remo,aI of labels 1s charged, it was concluded that said charge in the complaint was not sustained.

Before Mr. Willia111 L. Pack trial examiner. M,.. B. G. TVilson for the Commission. Mr. Wm. K. Poindexter of Kansas City, Mo., for respondent. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and the .W 001 Products Labeling Act of 1939, and by virtue of the authority vested in it by said acts, the Federal Trade Commission having rea sou to believe that I-I. T. Poindexter & Sons Merchandise Co., a corporation hereinafter referred to as respondent, has violated the provisions of said acts and the rules and regulations promulgated under the Wool Products Labeling Act of 1939, 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 charges in that respect as follows:

188 FEDERAL '- TRADE COMMISSION DECISIONS Complaint 48 F. T. O. P ARAGRAPII 1. Respondent H. T. Poindexter & Sons Merchandise Co. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of .Missouri, with its offce and principal place of business located at 801 Broadway, Kansas City, Mo. PAR. 2. Subsequent to September 1, 1949, respondent has introduced into commerce and offered :for sale, sold and distributed in commerce as "commerce " is defined in the IV 001 Products Labeling Act of 1939 wool products as "wool I'rodllcts " are defined therein. PAR. 3. Certain of said wool products were misbranded within the intent and meaning of sf, id act and the rules and regulations promulgated thereunder in tho t they were falsely and deceptively labeled with respect to the character and amount of their constituent fibers as 100 percent wool, whereas in truth and in fact said products contained no " wool" as the tarm is defined in said act, but were composed exclusive of ornamentation not exceeding 5 per centum of their total fiber weight, of ' reproc€ssed wool" as the term is defined in said act. The said wool products so labeled were further misbranded in that their constituent fibers aJld the percentages thereof were not shown on the tags or labels 1.he1'eo II as required by said act, in the manner and form required by the said rules and regulations, since in truth and in fact said products were composed, exclusive of ornamentation, wholly of "reprocessed wool" ai that term is defined in said act. Certain of said wool products were misbranded in that the constituent fibers of their i::lterlinings and the percentages thereof were not separately set forth in the manner and form required by said rules and regnlations upon th" tags or labels attached thereto. PAn. 4. 001 produc1s when received by respondent at its place of business had affxed ther-eto stamps, tags, labels, or other means of ident1fica6on purportin:,; to contain the informa6on required by the \VooJ Products Labeling- Act of 1939. After said wool products were delivered to the respondent and before they were offered for sale or sold by respondent to ri tail stores, said respondent caused and participated in the removal thereof with intent to violate the provisions of the \Vool Products Labeling Act of 1939. PAn. 5. The aforesaid acts and practices and methods of the respondent as herein alleged were in violation of sections 3 , and 5 of the \Vool Products Labeling Act of 1939, and rules 2, 3, and 24 of the rules and regulations promulgated thereunder and constituted nnfa.ir and deceptive acts and practices in commerce within the intent and Jneaning of the Federal Trade Commission Act. I-I. T. POI;\"lEXTER & S01\ S MERCHANDISE. CO. 189 187 Findings DECISION OF THE COMMISSION Pursuant to Rule XXII of the Commission s rules of practice and as set forth in the Commission s "Decision of the Commission and Ordcr t.o File He port. of Compliance " dat.ed August 16, 1951, t.he initia.l decision in the instant matter of trial examiner vVilliam Pack, as set. out. as fonows, became on t.hat. dat.e t.he decision of t.he Commission.

INITIAL DECISION BY WILLIAM L. PACH:, TRIAL EXAMINER Pursuant t.o t.he provisions of t.he Federal Trade Commission Act. and t.he VV 001 Products Labeling Act of 1939, and by virtue of t.he aut.horit.y vcst.cd in it. by said acts, t.he Federal Trade Commission on April 23, 1951, issued and snbsequcnt.ly served it.s complaint. in this proceeding upon the respondent H. T. Poindexter & Sons 1erehandise Co. a corporation, charging it with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of those acts. After the filing by respondent of its answer to the complaint, a stipulation was entered into whereby it was stipulat.ed and agreed that. a statement of facts executed by counsel supporting the complaint and counsel for respondent might be taken as the facts in this proceeding and in lieu of evidence in support of and in opposition to the charges stat.ed in the complaint, and that such statement of facts might serve as the basis for findings as to the facts and conclusion based thereon and an order disposing of the proceeding, without presentation of proposed findings and conclusions or oral argument. The stipulation further provided that upon appeal to or review by the Commission such stipulation might be setaside by the Commission and this matter remanded for further proceedings under the complaint. Thereafter, the proceeding regularly came on for final consideration by the tria.l examiner upon the complaint, answer, and stipulation (together with certain affdavits attached thereto), the stipulation having been approved by the trial examiner, who, after duly eonsiclering the record herein, finds that this proceeding is in the interest of the public and makes the followino- findinos as to the facts. conclusion dran'n therefrom and order: FINDINGS AS TO THE :FACTS PAHAGn" I'H 1. The respondent, 1-1. T. Poindexter &. Sons :Merchandise Co., is it corporation organized, existing: and doing business under and by virtue of the laws of t.he State of lissonri, with its offce and principal place of business located at 801 Broadway, Kansas City, Mo. Conclusion 48 F. T. C.

PAR. 2. Subsequent to September 1 , 1949, respondent has introduced into commerce and offered for sale, sold, and distributed in commerce as "commerce" is defined in the Wool Products Labeling Act of 1939 wool products, as "wool )roducts:' are defined therein. PAR. 3. Certain of such wool products were misbranded within the intent and meaning of said act and the 1'ules and regulations promulgated thereunder, in that they were mislabeled with respect to the character lnd amount 01 their constituent fibers as 100 percent wool whereas in truth and in lact said produc;ts contained no "wool" as the term is defined in said act, 'out \Vero composed, exclusive of ornamentation not exceeding 5 per centum of their total fiber weight, of "reprocessed wool" as the ternl is defined in said act. The s lid wool products so labeled were further mi"branded in that their constituent fibers and the percentages thereof w(\re not shown on the tags or labels thereon as required by said act in the manner and form required by the said rules and regulations, since in truth and in fact said products were composed, exclusive of ornamentation, wholly of "reprocessed wool" as that term is defined in said act.

Certain or such wool products ",were misbranded in that the constituent fibers or their interlinings and the percentages thereof were not separately set forth in the manner and form required by said rules and regulations upon the tags or labels attached thereto. PAR. 4. The complaint ;llso charges that respondent has removed from certain wool product;, theretofore delivered to it, tags or labels purporting to contain the i aformation required by the .W 001 Products Labeling Act of 1839, such removal, according to the complaint, being with intent to violate the provisions of the act. While the stipulation establishes the fact of removal of the labels, the stipulation, in the examiner s opinion, rails tD establish the element or intent, and affdavits executed by ccrtaill of respondent's employees negative the charge of intent. It is tlw examiner s understanding that where removal of labels is charged, intent is an essential element, and it is therefore concluded that this charge in the complaint has not been sustained.

CONCLUSION The acts and practices of the respondent, as set out in paragraph 3 were in violation of the ,'1001 Products Labeling Act of 1939 and the rules and regulations prol1.ulgated thereunder, and were to thr prejuclice of the public and constituted unfair and deceptive acts and practice,s in commerce with.in the intent and meaning or the Federal Trade Commission Act.

H. T. POINDEXTER & SONS MERCHANDISE, CO. 191 187 Order ORDER It i8 ordered That the respondent, H. T. Poindexter & Sons Merehanc1ise Co., a corporation, and its offcers, representatives, agents and employees, directly or through any corporate or other device, in connection with the introduction into commerce or the offering for sale sale or distribution in commerce, as "commerce" is defined in the aforesaid acts, of wool products, as such products are defined in and subject to the 1Vool Products Labeling Aet of 1939, which products contain, purport to contain or in any "\vay are represcntecl as containing "wool re.processed 'wool " or ': reuscc1 "\1'001 " as those terms ate defined in said act, do forthwith cease and desist from misbranding such products:

1. By using the lmqualificd word "wool" to desjgnatB or describe the constituent fibers of any product when such fiber.rs arc not, in fact, wool as defined in the Wool Products Labeling Act of 1939. 2. By :failing to affx securely to or place on such products a stamp, tag, label, or other means of identification showing in a clear and conspIcnous manner:

(a) The percentage of the total fiber weight of such wool product exclusive of ornamentation not exceeding 5 percentum of said total fiber weight, of (1) wool, (2) reprocessed wool, (3) reused wool (4) each fiber other than wool where saiel percentage by weight of such fiber is5 per centum or more, and (5) the aggregate of all other fibers.

(b) The maximum percentage of the total weight of such wool product of any nonfibrous loading, filling, or adulterating matter. Provided that the foregoing provisions concerning misbranding shall not be construed to prohibit acts permitted by paragraphs (a) and (b) of section 3 of the Wool Products Labeling Act of 18:19: and provided fU1'ther That nothing contained in this order shall be construed as limiting any applicable provisions of said act or the rules a.nd regulations promulgated thereunder. ORDER TO FILE REPORT OF COMl'LIANCE It is ordered That the respondent herein shall, within 60 days after service upon it of this order, file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with the order to cease and desist Las required by said declaratory decision and order of August 16, 1951j. 213840--54-- &, , .

Complaint 48 F. T. C.