Miller-Schulman Corporation

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In tee Matrer oF MILLER-SCHULMAN CORPORATION ET AL.

COMPLAINT, SETTLEMENT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914, AND OF AN ACT OF CONGRESS APPROVED OCT. 14, 1940 Docket 6058. Complaint, Oct. 16, 1952-Decision, Jan. 18, 1958 Where a corporation and its two officers, engaged in the manufacture and interstate sale and distribution of wool products as defined in the Wool Products Labeling Act— :

(a) Misbranded certain ladies’ coats in that the interlinings thereof were not stamped, tagged or labeled as required by said Act and the Rules and Regulations promulgated thereunder ;

(b) Misbranded said ladies’ coats in that they were labeled or tagged “100 Percent Wool Interlining”, notwithstanding the fact that said interlinings were not wool as defined by said Act but contained reused wool, together with substantial quantities of miscellaneous other fibers; and (c) Misbranded certain ladies’ coats used as samples to promote sales in commerce in that they were not labeled with the required information: Held, that such acts and practices, under the circumstances set forth, were in violation of the Wool Products Labeling Act and the Rules and Regulations promulgated thereunder, and constituted unfair acts and practices in commerce.

Before Mr. Everett F. Haycraft, hearing examiner. Mr. George E. Steinmetz for the Commission. Jacobs, Leibowite & Kahn, of New York City, for respondents. Complaint Pursuant to the provisions of the Federal Trade Commission Act and the Wool Products Labeling Act of 1939, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Miller-Schulman Corporation, a corporation, and David Miller and David Schulman, individually and as officers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts, 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:

Paracrapy 1. Respondent Miller-Schulman Corporation is a corporation organized and existing under and by virtue of the laws of the MILLER-SCHULMAN CORP. ET AL. 909 908 , Complaint tate of New York, with its principal place of business located at 268 West 38th Street, New York, New York.

The individual respondents, David Miller and David Schulman, are president and secretary-treasurer, respectively, of the corporate respondent, Miller-Schulman Corporation, and formulate, direct and control the affairs and policies of said corporate respondent. Said individual respondents have their offices at the same place as corporate respondent.

Par. 2. Subsequent to the effective date of the said Wool Products Labeling Act and more especially since 1950, respondents have manufactured for introduction into commerce, introduced into commerce, sold, transported distributed, delivered for shipment, and offered for sale in commerce, as “commerce” is defined in the Wool Products Labeling Act, wool products, as “wool products” are defined therein. Par. 3. Certain of said wool products were misbranded in that the interlinings thereof were not stamped, tagged or labeled as required under the provisions of section 4(a) (2) of the Wool Products Labeling Act of 1939 and Rule 24 (a) and (c) of the Rules and Regulations promulgated under said Act.

Par. 4. Certain of said wool products were misbranded within the intent and meaning of said Wool Products Labeling Act and the « Rules and Regulations made thereunder in that they were falsely and deceptively labeled or tagged with respect to the character andamount | of the constituent fibers contained therein. Among the misbranded .” wool products aforementioned were ladies’ coats labeled or tagged by the respondent corporation as containing “100% Wool Interlining,” when in truth and in fact the said interlinings were not wool as defined by the Wool Products Labeling Act of 1939, but contained reused wool together with substantial quantities of miscellaneous fibers other than wool.

Other wool products of respondent corporation, namely ladies’ coats used as samples to promote sales in commerce were not labeled with the required information in violation of Rule 22 of the Commission Rules and Regulations.

Par. 5. The acts and practices of respondents as herein alleged constitute misbranding of wool products and are in violation of the Wool Products Labeling Act of 1939 and the Rules and Regulations promulgated thereunder, and all of the aforesaid acts and practices as alleged herein are 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. 2601383—55. 61 Findings 49 F.T.C.

CONSENT SETTLEMENT } Pursuant to the provisions of the Federal Trade Commission Act and the Wool Products Labeling Act of 1939, the Federal Trade Commission on October 16, 1952, issued and subsequently served its complaint on the respondents named in the caption hereof, charging them with the use of unfair and deceptive acts and practices in violation of the provisions of said Acts.

The respondents, desiring that this proceeding be disposed of by the consent settlement procedure provided in Rule V of the Commission’s Rules of Practice, solely for the purposes of this proceeding, any review thereof, and the enforcement of the order consented to, and conditioned upon the Commission’s acceptance of the consent settlement hereinafter set forth hereby: :

1. Admits all the jurisdictional allegations set forth in the complaint.

2. Consents that the Commission may enter the matters hereinafter set forth as its findings as to the facts, conclusion, and order to cease and desist. It is understood that the respondents, in consenting to the Commission’s entry of said findings as to the facts, conclusion, and order to cease and desist, specifically refrains from admitting or denying that it has engaged in any of the acts or practices stated therein to be in violation of law.

8. Agrees that this consent settlement may be set aside in whole or in part under the conditions and in the manner provided in paragraph (f) of Rule V of the Commission’s Rules of Practice. The admitted jurisdictional facts, the statement of the acts and practices which the Commission had reason to believe were unlawful, the conclusion based thereon, and the order to cease and desist, all of which the respondents consent may be ordered herein in final disposition of this proceeding are as follows:

FINDINGS AS TO THE FACTS Paracrapy 1. Respondent Miller-Schulman Corporation is a corporation organized and existing under and by virtue of the laws of the State of New York, with its principal place of business located at 263 West 88th Street, New York, New York.

1The Commission’s “Notice’ announcing and promulgating the consent settlement as published herewith, follows :

The consent settlement tendered by the parties in this proceeding, a copy of which is served herewith, was accepted by the Commission on January 18, 1953, and ordered entered of record as the Commission’s findings as to the facts, conclusion, and order in disposition of this proceeding.

The time for filing report of compliance pursuant to the aforesaid order runs from the date of service hereof.

MILLER-SCHULMAN CORP. ET AL. 911 908 Conclusion The individual respondents, David Miller and David Schulman, are president and secretary-treasurer, respectively, of the corporate respondent, Miller-Schulman Corporation, and formulate, direct and control the affairs and policies of said corporate respondent. Said individual respondents have their offices at the same place as corporate respondent.

Par. 2. Subsequent to the effective date of the said Wool Products Labeling Act and more especially since 1950, respondents have manufactured for introduction into commerce, introduced into commerce, sold, transported, distributed, delivered for shipment, and offered for salé in commerce, as “commerce” is defined in the Wool Products Labeling Act, wool products, as “wool products” are defined therein. Par. 3. Certain of said weol products were misbranded in that the interlinings thereof were not stamped, tagged or labeled as required under the provisions of section £ (a) (2) of the Wool Products Labeling Act of 1939 and Rule 24 (a) and (c) of the Rules and Regulations promulgated under said Act.

Par. 4. Certain of said wool products were misbranded within the intent and meaning of said Wool Products Labeling Act and the Rules and Regulations made thereunder in that they were falsely and deceptively labeled or tagged with respect to the character and amount of the constituent fibers contained therein. Among the misbranded wool products aforementioned were ladies’ coats labeled or tagged by the respondent corporation as containing “100 per cent Wool Interlining,” when in truth and in fact the said interlinings were not wool as defined by the Wool Products Labeling Act of 1939, but contained reused wool together with substantial quantities of miscelllaneous fibers other than wool.

Other wool products of respondent corporation, namely ladies’ coats used as samples to promote sales in commerce were not labeled with the required information in violation of Rule 22 of the Commission Rules and Regulations. .

CONCLUSION The acts and practices of respondents as herein found constitute misbranding of wool products and are in violation of the Wool Products Labeling Act of 1939 and the Rules and Regulations promulgated thereunder, and all of the aforesaid acts and practices herein found are 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 49 FLT. CL ORDER TO CEASE AND DESIST Itis ordered, That the respondents, Miller-Schulman Corporation, a corporation, and its officers, and David Miller and David Schulman, individually and as officers of said corporation, and respondents’ representatives, agents and employees, directly or through any corporate or other device, in connection with the introduction or manufacture for introduction into commerce or the sale, transportation or distribution in commerce as “commerce” is defined in the Federal Trade Commission Act and the Wool Products Labeling Act of 1939 of ladies’ coats or other “wool products” as such products are defined in and subject to the Wool Products Labeling Act of 1939, which products contain, purport to contain or in any way are represented as containing “wool,” “reprocessed wool” or “reused wool,” as those terms are defined in said Act, do forthwith cease and desist from :

1. Falsely or deceptively stamping, tagging, labeling or otherwise identifying such products as to the character or amount of the constituent fibers contained therein ;

2. Failing to securely affix to or place on each such product a stamp, tag, label or other means of identification showing in a clear and conspictious manner :

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

(6) The maximum percentages of the total weight of such wool product of any nonfibrous loading, filling, or adulterating matter: (c) The name or the registered identification number of the manufacturer of such wool product or of one or more persons engaged in introducing such wool product into commerce, or in the offering for sale, sale, transportation, distribution or delivering for shipment thereof in commerce, as “commerce” is defined in the Wool Products Labeling Act of 19389.

3. Failing to separately set forth on the required stamp, tag or label or other means of identification the character and amount of the constituent fibers of the interlinings of any such wool product. 4. Failing to label or mark sample wool products used to promote or effect sales in commerce with the respective fiber contents and other information required by law. 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 Prod- MILLER-SCHULMAN CORP. ET AL. 913 908 Order ucts Labeling Act of 1939, and provided further, that nothing contained in this order shall be construed as limiting any applicable provisions of said Act or the Rules and Regulations promulgated thereunder.

It is further ordered, That the respondents shall, within sixty (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 said order.

[S] Miter ScHutmawn Corp.

Miller-Schulman Corporation, a corporation By [S] Davi Mittrr (Name) [S] Pres.

(Title) [S] Davin Minuer David Miller, individually and as president, Miller-Schulman Corporation, a corporation.

[S] Davin Schulman David Schulman, individually and as Secretary-treasurer, Miller- Schulman Corporation, a corporation.

December 12, 1952 (Date) ‘The foregoing consent settlement is hereby accepted by the Federal Trade Commission and ordered entered of record on this 18th day of January, A. D., 1958, Syllabus 49 F. T.C.