Falls Yarn Mills, Inc.

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IN THE MATTER OF FALLS YAHN IILLS, INC., ET AL.

CQ::SENT ORDER, ETC., IN IilGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COl\Diission AND TIn; WOOL PRODUCTS LABELING ACTS Docket 6511. Complalnt, Feb. 1956~Decision, May 24, 1956 Consent order requiring manufacturers in vVoonsocket, R. I" to cease violating the Wool Products Labeling Act by labeling and invoicing as "65% 70-80 Lambs' Wool~ 300/ mink 5% nylon " cones of yarn which contained substantially less than 30% mink fur fibers.

Before llfr. J. Earl Oox hearing examiner. Mr. Frederick McManu8 for the Commission. Edwards Angell of Providence, R. 1., for respondents. rPLAIN"T 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 reason to believe that Falls Yarn Mils, Inc., a corporation and John Cavedon, Sr. , individually and as an offcer of said corporation, and John Cavedon Jr., indi'Tidually, hereinafter referred to as respondents, have violated the provisions of said Acts and the Rules and Regulations promulgated under said 'Vool Products Labeling Act, and it appearing to the Commission that a proceeding by in respect thereof would be in the public. interest, hereby issues its complaint, stating its charges in that respect as follows: PARAGRAPH 1. Respondent Falls Y arn fills, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Rhode Island, with its offces and principal place of business located at 68 South Main Street, IV oonsocket, Hhode Island.

PAR. 2. The individmtl respondent John Caved on, Sr. is president and treasurer of the corporate re,sponclent and the individual respondent John Caved on, Jr. is the production manager of corporate respondent. These individuals cooperate in formulating, directing and controlling the acts, policies and practices of the corporate respondent. Their address is the same as that of the corporate respondent.

PAR. 3. Subsequent to the effective date of the ' W 001 Products Labeling Act of 1939, and more especially since January 1 , 1954 respondents have manufactured for introduction into commerce, sold 1412 FEDERAL TRADE COl\L\fISS:IO DECISIONS Complaint 52 F.

transported, distributed, delivered for shipment and offered for sale in commerce, as "coml1erce ~~ is defined in said Act, wool products, as wool products ' is cleIine,d therein, consisting of cones of yarn. PAR. 4. Certain of said wool products were misbranded within the intent and meaning of Section 4 (a) (1) of said Wool Products La.beling Act and the Hules and Regulations promulgated thereunder in that they were falsely and deceptively stamped, tagged or labeled with respect to the character and amount of the constituent fibers contained therein.

lmong such misbranded "\1,001 products '\Were cones of yarn stamped and labeled as (5)1 70-80 Lambs-\Vool-300/ mink 5% nylon ,vhe,areas, in truth and in fact aic1 yarn contained substantially less than 30% Inink fibers.

\H. 5. Said '1,001 products consisting of cones of yarn '''ere misbranded ill that t.hey were not stamped, tagged or labeled as required under the provisions of Section 4 (a) (2) of the Vool Products Label ing Act, and in the manner a.nd form prescribed by the Hules and Hegulations promulgated thereunder.

PAR. 6. Respondents, in the course nc1 conduct of their business were and are in eompetit,ion, in commerce, with other corporations and with firms and individuals ill the sale of wool products, including yarns.

PAR. 7. The acts a.nd practices as set forth ill Paragraphs Fonl' and Five constituted misbranding of \,001 products and were in violation of the Wool Pl'clucts Labeling Act of 193D and the Rules and Regulations promnlgated thereunder, and constituted nnfail' and deceptive acts a.nd practices and lUlfair methods of competition in commerce within the intent and meaning of the Fede.ral Trade Commission Act. R. 8. In the course and conduct of their business as aforesaid respondents have made various statements in sales invoice,s and other shipping memora.nda in connection with their cones of yarn shipped in commerce. Among and typical, but not all inclusive of such statemente, is the following: "65%. 70/80 Lamb' Yool, 30% fink, 5% Nylon.

H. 1). Through t.he use of such statement to describe their \vool products, respondents represented that said wool products contained 30% mink fur fibers.

-\R. 10. Said statement was false, misleading and deccptive. In t.ruth and in fact, said product conbLincd substantially less than 300/0 mink fur fibere.

PAll. 11. The use by respondents of the statement set forth in Paragraph Eight had the capacity and tendency to mislead and deceive a substantial portion of the purclutsing public into the erroneous and FALLS YARN MILLS , E\TC. ) ET AL. 1413 1411 Decision mistaken belief that such statement was true a.nd to induce the purchasers of said product to misbrand the fabrics manufactured with said yarn as to their iiber content.

PAR. 12. The acts and practices of the respondents set forth in Paragraph Right were and are to the prejudice and injury of the public and constituted unfair and decept.ive acts and practices, in comrnen, within the intent and meaning of the Federal Trade Commission Act.

INITIAL DECISION BY J. EAUL COX, HEARI:NG EXAloIIXER The complaint charges that respondents, subse,quent to the efIeetive date of the 'Wool Products Labeling Act of 1939, and more especially since January 1 , 1054 , have manufactured, sold, transported and distributed in commerce, as "commerce" is defined in said Act, wool products, as "-wool products" is defined therein, consisting of cones of yarn, certain of which products were misbrftncled in violation of the Fedeml Trade Commission Act and Sections 4 (a) (1) and 4 (a) (2) of the 1Vo01 Products Labeling Act and the Rules and Regulations promnlgate(l thereunder.

After the issuance of the complaint, to \which no answer was filpd respondents, their counsel, and counsel supporting the complaint, on April 2, 1956, entered into an Agreement Conta.ining Consent Order To Cease and Desist, which \vas approved by the Director and Assistant Direetor, Bureau of LitiglL60n of the Commission tnd thereafter transmitt.ed to t.he I-Iearing Examiner for considera.tion. The agreement identifies respondent Falls Yarn l\fills, Inc.. as a corporation orga.nized, existing and doing business under ? nd by virtue of the laws of the St.ate of Rhode Isbnd, with its offces and principal place of business located at 68 South Main Street, Woonsocket, Rhode Island, and sta.tes that respondent John Ctwedon, Jr. is president and respondent John Cavedon, Sr. vice president and treasurer of the corpora.te respondent and that these individuals cooperate in formulating, directing and controlling the acts, policies und practices of the corporate respondent. The agreement thus reflects a cha.nge in offcial status of t.he individual respondents S111Ce the issuance of the complaint herein, at \which time John Cavcdon, S1' was president and treasurer, and John Cavec1on, Jr. production manager of the corporate respondent.

The a.agreement provides, among other things, that respondents admit all the jurisdictional facts alleged in the, compbint and that the record herein may be t.taken as if findings of jurisdictional facts had been made in accordance with such allegations; that the record on which the illitial decision anrl the decision of the Commission shall 1414 FEDERAL TRADE COM:VITSE!ION DECISIOXS Decision ;)2 F. be based shall consist solely of the eomplaillt and this agreement; that the agreement shall not become a part of the offcial record unless and until it becomes a patt of the decision of the Commission; that the complaint may be used in construing the tenns of the order agreed upon, which may be altered, modified, or set aside ill the manner provided for other orders; that the agreement is for settlement purposes only and does not constitute an admission by respondents that they have violated the law as alleged in the complaint; and that the order set forth in the agreement and hereinafter included in this decision shall have the same force and effect as if entered after full hearing.

Respondents waive 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 the agreement.

The order agreed upon fully covers all the issues raised in the complaint, and adequately prohibits the acts and practices charged therein as being in violation of the Federal Trade Commission Act and Sections 4 (a) (1) and 4 (a) (2) of the Wool Products Labeling Aet and the Rules and Regulations promulgated thereunder. Accordjngly, the Hearing Examiner finds this proceeding to be in the public interest and accepts the Agreement Containing Consent Order To Cease And Desist as part of the record upon which this decision is based. Therefore It i8 ordered That respondent, Falls Yarn Mills, Inc., a corporation, and its offcers; respondent ohn Cavedon, individually and as an officer of said corporation, and respondent .John Cavcdon, Sr. individually and as an offcer of said corporation, and respondents representatives, agents and employees~ directly or through any corpol' ate or other device, in connection with the introduction or manufacture for introduction into commerce, or the offering for sale, sale transportation or distribution in commerce, as "commerce" is defined in the Federal Trade Commission Act and the ,Yool Products Labeling Act of 1939, of yarns or any other \vool products, as such products are defined in and subject to the ,V 001 Products Labeling Act of 1939, which products contain, purport to contain, or in any way arc represented as containing "woolt "reprocessed wool'j or "reused wool " as those terms arc defined in said Act, do forthwith cease and desist from misbranding such products by 1. Falsely or deceptively stamping, tagging, labeling or otherwise identifying such products as to the character or amount of the COllstituent fibers included therein;

FALLS YARK fills IKC. , ET AL. 1415 Decision 2. Failing to securely affx t.o or place on eflch such product a stamp, tag, label or other means of identification showing in a clear and conspicuous manner:

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

(b) the maximum percentages of the total wcight of such wool product of any non-fibrous loading, fining, or adulterating matter; (c) the name or the registcred identification number of the manufacturer of such wool product or of one or more persons engaged in introducing such wool product into corlll1erce, or in the offering for sale, sale, transportation, distribution or delivery for shipment thereof in commerce, as "commerce" is defined in the VV 001 Products Labeling Act of 1939;

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 vVool Products Labeling Act of 1939, and Provided further Tlmt 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 fw,thel' ordered That Falls Yarn Mills, Inc., a corporation and its offcers, and John Cavedon, Jr., individually and as an offcer of said corporation, and John Cavedon, Sr., individually and as an offcer of said corporation, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of yarn or any other products in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: Iisreprcsenting the constituent fibers of which their products arc composed or the percentages or amounts thereof, ill sales invoices shipping memoranda or in any other manner. DECISION OF TIIT CO:1IlIISSION AXD ORDER TO FILE REPORT OF Co rPLIAXCE . Pursuant to Section 3.21 of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 24th day of :May 1956, become the decision of the Commission j and, accordingly: It is ordered That respondents Fans Yarn :Hills, Inc., a corporation, and John Cavedon, Sr., individually and as an offcer of said corporation, and John Cavedon, Jr., individually and as an offcer of 1416 FEDERAL TRADE C01vIISS,IOK DECISIONS Decision 52F.

said corporation, shan, within sixty (60) days after service upon them of this order, fie with the Commission a report in writing, setting forth in detail the manner and form in which they have complied with the order to cease and desist.

PREMIER PILLOW CORP. BT AL. 1417 Opinion