Irving Stern

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IN THE MATTER OF IRVING STERN ET AL. TRADING AS STERN BROTHERS JEWELRY MANUFACTURING COMPANY ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 6428. Complaint, Oct. 1955-Decision, Feb. 22, 1956 Consent order requiring New York jewelry manufacturers and their out-oftown distributors to cease branding jewelry, particularly chokers and bracelets, of less than 14 karat gold, with the mark "14 K" Before Mr. Everette. Haycraft hearing examiner. M'/". Donald K. King for the Commission. Schaeffer Goldstein of New York City, for respondents. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission ha ving reason to believe that Irving Stern Hyman Stern, Harry Stern and Sylvia Stern hereinafter described as respondents, have violated the provisions of said act, and it appearing to the Commission that a proceeding by it in respect thereto would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: PARAGRAPH 1. Respondents Irving Stern and Hyman Stern are brothers, trading and doing business as a copartnership under the name Stern Brothers Jewelry Manufacturing Company with their principal office and place of business located at 64 W. 48th Street, New York, New York. Respondents Harry Stern and Sylvia Stern are man and wife trading and doing business as a copartnership under the name Twin Jewelry Company. Their office and principal place of business is also located at 64 W. 48th Street, New York, New York.

PAR. 2. Respondents Irving and Hyman Stern manufacture various types of gold jewelry, particularly chokers and bracelets city of which they sell to jobbers and wholesalers located in the New York. Respondents Harry and Sylvia Stern act as the out-oftown distributors for Irving and Hyman Stern. They do no manufacturing of any kind and buy merchandise exclusively from respondents Irving and Hyman Stern. The two partnerships share the same office and are operated in conjunction with each other. 451524--59---- 862 . FEDERAL TRADE COMMISSION. DECISIONS Complaint 52 F. T. C. PAR. 3. In the course and conduct of their business and for the purpose of inducing the purchase or their merchandise, respondents Irving and Hyman Stern have manufactured and ~old and distributed and do now sell and. distribute to respondents Harry and Sylvia Stern and others for resale as hereinafter described certain items of gold jewelry with the phrase "14 1(' ' appearing thereon.

By means or said marking respondents Irving and Hyman Stern represent directly and by implication that said jewelry marked 14 K" is manuractured rrom gold or 14 karat fineness. vVhereas in truth and in fact said jewelry is not manuractured rrom gold of 14 karat fineness but rather from gold or less than 14 karat fineness.

PAR. 4. In the course and conduct or their business respondents Harry and Sylvia Stern do now and for some time past have purchased rrom Irving and Hyman Stern gold jewelry marked "14 IC" manuractured from gold of less than 14 karat. PAR. 5. In the course and conduct or their lmsiness respondents Harry and Sylvia Stern now cause and ror the three years last past have caused the merchandise purchased by them rrom Irving and Hyman Stern when sold by them to be transported from their place or business in the State or New York to distributors, jobbers, and retailers for ultimate resale to the general public located in various other States of the United States. Such respondents maintain and at all times mentioned herein have maintained a substantial course of business in said merchandise in commerce between and among the various States of the United States. PAR. 6. The practice of respondents, as aroresaid, in manuracturing, selling, and distributing the above described jewelry in commerce with the phrase " 14 1(" appearing thereon, has had and now has the tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the false and erroneous belief that said merchandise is manuractured from gold 14 karat fineness and into the purchase or substantial quantities of said merchandise because or such mistaken and erroneous belier. PAR. 7. In the course and conduct or their businesses respondents are in direct and substantial competition with other corporations firms and individuals engaged in the sale in commerce or gold jewelry.

PAll. 8. The acts and practices or respondents, as herein alleged are all to the prejudice and injury or the public and or respondents competitors and constitute unrair and deceptive acts and practices and unfair methods of competition in commerce, within the intent and meaning or the Federal Trade Commission Act. STERN ' BROTHERS JEWELRY MFG. CO. ET AL. 863. 861 Decision INITIAL DECISION BY EVERETT F. HAYCRAFT, HEARING EXAMINER . The Federal Trade Commission. issued its complaint against th~ above-named respondents on October 18 , 1955, charging them with having violated the provisions of the Federal Trade Commission Act through the making of false and misleading representations with respect to the karat fineness of certain articles of jewelry sold by them. In lieu of submitting answer to said complaint, respondents on December 12, 1955, entered into an agreement for consent ~rder with counsel supporting the complaint, disposing of all the issues in this proceeding in accordance with Section 3.25 of the Rules of Practice and Procedure of the Commission, which agreement has been duly approved by the Acting Director of the Bureau of Litigation.

Respondents, pursuant to the aforesaid agreement, have admitted all the jurisdictional facts alleged in the complaint and agreed that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations. Respondents in the agreement waived any further procedural steps before the hearing examiner and the Commission; the making of findings of fact or conclusions of law; and all of the rights they may have to challenge or contest the validity of the order to cease and desist entered in accordance with this agreement. It was further provided that said agreement, together with the complaint, shall constitute the entire record herein; that the agreement shall not become a part of the official record unless and until it becomes a part of the decision of the Commission; that said agreement is for settlement purposes only and does not constitute an admission by the respondents that they have violated the law as alleged in the complaint. The agreement also provided that the order to cease and desist issued in accordance with said agreement shall have the same force and effect as if entered after a full hearing; that it may be altered, modified or set aside in the manner provided for other orders; and that the complaint may be used in construing the termsofThis proceedingthehaving noworder.come on for final consideration by the hearing examiner on the complaint and the aforesaid agreement for consent order, and it appearing that said agreement provides for an appropriate disposition of this proceeding, the aforesaid agreement is hereby accepted and is ordered filed upon becoming part of the Commission s decision in accordance with Sections 3. and 3.25 of the Rules of Practice, and in consonance with the terms of said agreement the hearing examiner makes the following jurisdictional findings and order:

52 F. T. c~ Decision 1. Respondents Irving Stern and Hyman Stern are brothers trading and doing business as a copartnership under the name of Stern Brothers Jewelry Manufacturing Company with their principal office and place of business located at 64 West 48th Street New York, New York. Respondents Harry Stern and Sylvia Stern are man and wife trading and doing business as a copartnership under the name Twin Jewelry Company at the same address. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding, which is in the public interest, and of the respondents hereinabove named; the complaint herein states a cause' provisions of theof action against said respondents under the Federal Trade Commission Act.

ORDER I t is ordered That respondents Irving Stern and Hyman Stern individually and as copartners trading and doing business as Stern Brothers Jewelry Manufacturing Company and Harry Stern and Sylvia Stern, individually and as copartners trading and doing business as Twin Jewelry Company; and respondents' representatives, agents and employees, directly or through any corporate or offering for sale, sale orany other device, in connection with the in part of gold.distribution of any articles composed in whole or is defined in theor an alloy of gold in commerce, as "commerce" Federal Trade Commission Act, do forthwith cease and desist from: article with any Stamping, branding, engraving or marking any or otherwise representingphrase or mark such as 14K or 181(, articledirectly or by implication that the whole or a part of any alloy of gold of a designated finenessis composed of gold or an unless the article or part thereof so marked or represented is composed of gold of the designated fineness within the permissible tolerances established by the National Stamping Act (15 U.S. Code Sections 294, et seq.

DECISION OF THE COl\'Il\USSION AND ORDER TO FILE REPORT OF COMPLIAN CE Pursuant to Section 3.21 of the Commission s Rules of Practice 22nd daythe initial decision of the hearing examiner shall, on the of February, 1956 become the decision of the Commission; andaccordingly: It is ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail thQ manner and form in which they have complied with the order to cease and desist. &:

WEST COAST PACKL~G CORP. ET AL. 865 Opinion