Siegmund Werner, Inc., et al.

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IN THE ~IA TTER OF SIEGi\IUND ,VERNER, INC., ET AL.

CONSE~T miller, ETC., IN REGARD TO THE ..\ALLEGED HOLATION OF THE FEDERAL TRADE CO:\DIISSION ACT Docket 7961. Co1/lplaint, June fJGO-Decision, Nol'. 1960 ConSf'.nt oJ'(ler requiring mnnnfnctnl'ers in Bloomfield. N. , to cease pretieketin;! their sleeping lwl!s "'ith fictitious and excessive prices represented falseJ~' thereby as the 1.1snal rctnil prices, and to cease misrepresenting the sizes of \arions of 'Sf! id brigs h~' setting out on attached labels cnt size full size . etc.. c1inwnsions almost invariably larger than the actual sizes of the finished product.

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, having reason to believe that Siegmund 1Verner Inc., a corporation, and Siegmund ,Verner, Harry Douty and Hedy ,Yprner, indiyidllnlly and as officers of said corporation, hereinafter referred to as responc1t'nts, ha"e violntec1 the provisions of said Act and it appearing to the Commission th::11. a proceeding by it in re~ppct thereof 'ycmhl be in the pll blic interest hereby issues its eomplaint stating its charges in that respect as follo,,' PAIL\GRAPH 1. Respondent Siegmund ,Verner, Inc., is a corporation organized, exishng and doing business 1111(ler and by virtue of llw In,,' s of the State of New York ,,'ith its principal office and place of business located nl 225 BelleviJJe Avenue ~ in the City of Bloomfield. State of ;\e,,- .Tersey. Said corporation operates branches in Los .;\angeles, California and Chicago, 11Jinois. Respondents Siegmund ,Verner, I-Inrry Douty and TIedy ,Verner are individuals and oi1icers of said corporate respondent. They SIEGYIU~D WERNER, IKC. , ET AL. 1139 1138 ;Complaint formulate, direct and control the acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent. PAR. 2. Respondents ate nO1'\, and for some time last past have been, engaged in the manufacture, distribution, sale and advertising, among other things, of sleeping bags.

PAR. 3. In the course and conduct of their business respondents now cause, and for some time last past have caused, their said products, when sold, to be shipped from their place of business in the State of New t ersey and from branches in Los Angeles, California and Chicago, illinois to purehasers thereof located in various other States of the United States and maintain, and at a11 times mentioned herein have maintained, a substantial course of trade in their said products, in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAIL 4. Respondents have engaged in the practice of using fictitious prices in connection with their said products by attaching or causing to be attached thereto, tags upon which certain amounts are printed, thereby representing, directly or by implication, that said amounts are the. usual and customary retail prices of Sftid sleeping bags when, in truth and in fact, said stated amounts are fictitious rmd in excess of the usual and regular retail prices of said sleeping bags, in the trade areas ",here the representations are PAIL 5. By the aforesaid practice respondents plac.e in the handsmade.of retailers and other purchasers of their products, the means and instrumentalities by and through which they may mislead the public as to the usual and cust omary retail prices of said sleeping bags.

PAR. 6. Respondents, in connection with the sale of their sleeping bags, have engaged in misrepresenting the sizes of various of said bags on tags sewn or attached thereto and in advertisements of said bags. Respondents' size deseriptions are stated as " c.ut size full cut. size fuji size" and "size. The dimensions following such descriptions are almost invariably larger than the actual size of the bags in question. The terms " c.ut size fun cut size full size and "size " \"hen used in the manner as stated above, are eonfusing and tend to indicate that sizes following such descriptions are the actual sizes of the finished product. In truth and in fad, this is almost never the case, as the actual sizes of the finished product are substantially smaller than the sizes set out on the labels and advertised.

EAH. 7. In the course and conduct of their business at all times mentioned herein, respondents have been engaged in substantial Decision 57 F.

competition in commerce, with corporations, firms and individuals in the sale of sleeping bags.

PAR. 8. The use by the respondents of the aforesaid false, misleading and deceptive statements, representations and praetiees has had and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations, were, and are, true and into the purchase of substantial quantities of respondents' products by reason of said erroneous and mistaken belief. As a eon sequence thereof substantial trade in commerce has been, and is being, unfairly diverted to respondents from their competitors and substantial injury has thereby been, and is being, done to competition in commerce. PAR. 9. The aforesaid acts and practices of respondents, as herein alleged, were, and are, all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute unfair and deceptive acts and practices and unfair methods of eompetition, in c.commerce, within the intent and meaning of the Federal Trade Commission Aet.

l11r. Charles IV. Connell for the Commission. Mr. h'vz:ng ill andelbaum of Newark, N. , for respondents. INITIAL DECISION BY ABNER E. Lrrsco::\IB, I-TEARING EXAJUINER The complaint herein was issued on June 17, 1960, charging Respondents with violation of the Federal Trade Commission Act by using fictitious prices in connection with the sleeping bags ,which they manufacture, distribute, sell and advertise, and by misrepresenting the sizes of various of said bags. Thereafter, on September 19 , 1960, Respondents, their counsel and counsel supporting the complaint herein entered into an Agreement Containing Consent Order To Cease And Desist, which was approved by the Acting Director, Assoeiate Direetor and Assistant Director of the Commission s Bureau of Litigation, and thereafter on September 29 , 1960 , submitted to the Hearing Examiner for consideration.

The agreement identifies Respondent Siegmund ,Verner, Ine. , as a New York corporation, "ith its office and principal place of business located at 225 Bel1evil1e A venne, Bloomfield, New Jersey, and individual Respondents Siegmund ,Verner, I-Iarry Douty and Hedy ,Yerner as oilicers of the c.corporate Respondent, stating further that Respondents Siegmund ,Yerner and Barry Douty formulate, direct and control the acts and practices of the corporate Respondent, their address being the same as that of the corporate Respondent. The agreement contains a recommendation that the complaint be dismissed as to Respondent lied)' ,Verner in her individual capacity SIEGMUND WERNER, INC. , ET AL. 1141 1138 Order for the reasons set forth in the affidavit which is attached to the agreement and made a part thereof.

Respondents admit an the jurisdictional facts alleged in the complaint, and agree that the record may be taken as if findings of jurisdictional facts had been duly made in ac.cordance with such allegations.

Respondents waive any further procedure before the I-Iearing Examiner and the Commission; the making of findings of fact and conclusions of law; and a11 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. All parties agree that the record which the. initial deeision and the decision of the Commission shah be based shall consist solely of the complaint and the agreement; that the order to cease and desist, as contained in the agreement, when it shall have become a part of the decision of the Commission, shan have the same force and effect as if entered after a full hearing, and may be altered, modified or set aside in the manner provided for other orders: that the complaint herein may be used in eonstruing the terms of said order; and that the agreement is for settlement purposes on ly ~ and does not constitute an admission by Hespondents that they hate. violated the law as alleged in the, complaint. After consideration of the allegations of the complaint and the provisions of the agreement and the proposed order, the I-Iearing Examiner is of the opinion that such order constitutes a satisfactory disposition of this proc.eeding. Acc.ordingly, in consonance with the terms of the aforesaid agreement, the I-Iearing Examiner accepts the Agreement Containing Consent Order To Cease And Desist finds that the. Commission has jurisdiction over the Respondents and over their r acts and practic.es as alleged in the complaint; and finds that this proceeding is in the public interest. Therefore It ,is oTdeTerL That Respondent Siegmund "'Verner, Inc., a corpora- ",'Tbon, and its officers, and Hespondents Siegmund erner and Harry Douty, inclividualJy and as officers of said corporation, and Hespondent Hedy "'Verner, as an officer of said corporation, and Respondents representatives, agents and employees, directly or through any corpol' ate or other device, in connection with the offering for sale, sale or distribution of sleeping bags or other merchandise in commerce as "commerce" is defined in the Federal Trade Commission Aet, do forthwith cease and desist from:

1. Advertising, labeling or otherwise representing the "cut size or dimensions of materials used in the,ir construction, unless such representation is accompanied by a description of the finished or actual size, with the latter description being given at least equal promlllence;

, , Complaint 57 F.

2. l\iisrepresenting the size of such products on tags or advertising or in any other manner;

3. Hepresenting, by preticketing or in any other manner, that a certain amount is the retail price of merchandise when said amount is in exc.ess of the pric.e at ",hic.h said merchandise is customarily and usually sold at retail in the trade area ",here the representation is made;

4. Furnishing any means or instrumentality to others by and through which they may mislead the public as to any of the matters referred to in Paragraphs 1 2 and 3. I t is furthe1' onlcreel That the complaint, herein be, and the same hereby is, dismissed as to Respondent I-Ie.dy ,Yerner in her individual eapaci ty .

DECISION OF TI-IE COl\Il\IISSION AXD ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall, on the 17th day of November, 1960 become the decision of the Commission; and accordingly:

1 t i.s orde7'eel That respondents Siegmund ,Yerner, Inc., a eorporation; Siegmund ,Yerner and IIarry Douty, individually and as officers of said corporation; and I-Iedy ,Yerner, as an officer of said corporation, 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 the order to cease and desist.