Max Scharfman

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IN THE T\IATTER OF 1IAX SCHARF;\IAN COXSE.:T ORDER, ETC, : IX HECL\RD TO THE \ALLEGED nOLATION OF THE l'EDERAL TRADE CO),DnSSION .\)m THE prn I'RODUCTS LABELING .\CTS Docket 8144. Complaint, Oct. , 1960-Decis' ion, JIa?" , 1961 COllsent order requiring a furrier in New Rochelle, K. Y., to cease violating the Fur Products Labeling- Act by using on labels of fur products the registered identification number of a person or concern Dot connected with marketing them; by advertising in newspapers which failed to disdose that certain products contained artificially colored fur, represented falsely that purdmsers of advertised furs could "Save up to $200" , that fur products concerned were composed of " choicest skins, that he manufactured his fur products, and that prices were reduced from regular prices which were in fact fictitious; and by failng to maintain adequate records as a basis for his pricing and value claims; and by failng in other respects to conform to labeling and invoicing requirements. COMPLAINT Pursuant the provisions of the Federal Trade Commission Act and the Fur Products Labeling Act, find by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to be.1icve, that )lax Scharfman \ an individual, hereinafter referred to as responc1e.nL has violated the provisions of said Acts and the Rules and Regulations promulgated under the Fur Products Labeling Act, and it. appearing to the Commission that a proceeding by it in respect t.hereof would be in the public interest, hereby issues its complaint st.ating its cha.rges in that respect as follows: PARAGRAPH 1. R.respondent l\fn,x Scharfmfll, an individupJ, prior to about Aprij 5 , 1960, traded as Rosal1e Furs, "ith his offce and principal place of business located at 178 North Avenne, Xe1,Y , MA SCHARFMAN 299 298 Complaint Rochelle, New York. The business is no" operated as Rosalie Furs Inc., a corporation, at the same address. PAR. 2. Subsequent to the effective date of the Fur Products Labeling Act on August 9, 1952, respondent, trading as RosaJle Furs engaged in the introduction into commerce, and in the sale, advertising, and offering for sale, in commerce, and in the transportation and distribution, in commerce, of fur products; and sold, advertised, offered for sale, transported and distributed fnr products which had been made in whole or in part of fut which had been shipped and received in commerce, as the t.terms "commerce fur and "fur product." are defined in the Fur Products Labeling Act. PAR. 3. Respondent falsely and deceptively labeled or otherwise falsely or decepfjvcly identified fur products by using the registered identification number of a person or concern not connected with marketing such fur products in violation of Section 4 (1) of the Fur Products Labeling Act.

PAR. ,1. Certain of said fur products "ere misbranded in that they "ere not labeled as required under the provisions of Section 4(2) of t.he Fur Products Labeling Act and in the manner and form prescribed by t.he Rules and Hegulations promulgated thereunder. PAR. 5. Certain of said fur products were falsely and deceptively invoiced by respondent ill that they were not invoiced as required by Section 5(b) (1) of the Fur Products Labeling Act, and in the manner and form prescribed by the Rules and Regulations promulgated thereunder.

'lt. 6. Certain of said fur products "ere falsely and deceptively invoiced in violation of the Fur Products Labeling Act in that they \were not invoiced in accordance with the Rules and Regulations promulgated t.hereunder in that. required item numbers were not set forth on invoices in violation of Rule 40 of said Rules and Regn1ations.

PAR. 7. Co.rtain of said fur products "ere falsely and dcceptively advertised in violation of the Fur Products Labeling Act in that respondent caused the dissemination in commerce, as "commerce" is defined in said Act, of certain nmvspaper advertisements, concerning said products, which were not in accordance with the provisions of Section fi(o.) of the said Act and the Rnles and Regulations promul ga,ted thereunder; and which advertisements were intended to aid promote and assist, directly or indirectly, in the sale and offering for sale of said fur products.

PAR. 8. Among and included in the advertisements as aforesaid but not limited thereto, were, advertisements of respondent which appeared in issue.s of the Standard Star, a ne"spaper published in 1he City or New Rochelle, State of ),Te,,, York, and having a wiele Decision 58 F.

circulation in said State and various other States of the United States.

By means of said advertisements and others of similar import and meaning, not specifically referred to herein, respondent falsely and deceptively advertised fur products in that said advertisements: (a) Failed to disclose that fur products contained or were composed of bleached, dyed or other"ise artificially colored fur when such "as the fact in violation of Section 5(a) (3) of the Fur Products Labeling Act.

(b) Represented through such statements as "Save up to $200" that such savings could be effected through the purchase of respondent' s fur products, when such was not the fact, in violation of Section 5 (a) (5) of the Fur Products Labeling Act. (c) Represented that fur products "ere composed of "choicest skins" when such "as not the fact, in violation of Section 5(a) (5) of the Fur Products Labeling Act.

(d) Represented that respondent "as a manufacturer of fur products, "hen such "as not the fact, in violation of Section 5 (a) (5) nf the Fur Products Labeling Act.

(e) Represented prices of fur products as having been reduced from regular or usual prices where the so-called regular or usual prices "ere in fact fictitious in that they "ere not the prices at "which said merchandise "as usually sold by respondent in the recent regular course of business in violation of Section 5 (a) (5) of the Fur Products Labcling Act and Rule 44 (a) of said Rules and Regulations. PAR. 9. In advertising fur products for sale as aforesaid respondent made cla.ims and representations respecting the prices and values of fur products. Respondent in making such claims and representations failed to maintain full and adequate records disclosing the facts upon which such claims and representations were based in violation of Rule 44 (e) of said Rules and Regulations. PAR. 10. The aforesaid acts and practices of respondent, as herein alleged, are in violation of the Fur Products Labeling Act and the Rules and R.eglllations promulgated thereunder and constitute unfair and deceptive acts and practices in commerce under the Federal Trade Commission Act.

Dewitt 1'. Puckett, Esq. supporting the complaint. Jonas H. Bernstein, Esq. of Bernstein Be7'tein of New York , for respondent.

INITIAL DECISION BY LEON R. GROSS : IIEARING EXA1\n On October 17 1960, the Federal Trade Commission issued a complaint against the above-named respondent, in "which he "as ;;AX SCHARFMAN 301 298 Decision charged "ith violating the Federal Trade Commission Act, and the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder by, among other things, fa.filing to label and use the registered identification number of a person or concern not connected "ith marketing such fur products in accordance "ith the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder, falsely aud deceptively invoicing, falsely and deceptively advertising, and making claims and representations respecting prices and values of fur products without keeping adequate records of such products sold by it in interstate commerce. A true and correct copy of the complaint was served upon the respondent, as required by Ja". Thereafter respondent appeared by counsel and agreed to disposc of this proceeding "without a formal hearing pursuant to the terms of an agreement dated December 14, 1960, containing consent order to cease and desist. The agreement was submitted to the undersigned hearing examiner on January 5 , 1961, in accordance with 83.25 of the Commission s Rules of Practice for Adjudicative Proceedings. The agreement purports to dispose of this proceeding as to all parties and contains the form of a consent cease-and -desist order "which the parties have represented is dispositive of the issues involved in this proceeding. The agreement has been signed by the respondent the attorncys for both parties, and has been approved by the Assistant Director, Associate Director and Director of the Bureau of Litigation of thc Federal Trade Commission. In said agreement respondent admits all of the jurisdictional facts alleged in the complaint and agrees that the record may be taken as if findings of jurisdictional facts had been made in accordance with such allegations. In the agreement the respondent "waives: (a) any further procedural steps before the hearing examiner and the Commission; (b) the making of findings of fact or conclusions of la,,; and (c) all rights respondent may have to challenge or contest the validity of the order to cease and desist entered in accordance with the agreement. that the record on The parties further agree, in said agreement, "which the initial decision and the decision of the Commission shall be Lased shall consist solely of the complaint and the agreement; that the agreement shall not become a part of the offcial record unless and until it becomes a part of the decision of the Federal Trade Commission; that the order to cease and desist entered in this proceeding further notice to theLv the Commission may be entered "without spondent, and "hen so entered such order will have the same force ,md effect as if entered after a full hearing. Said order may be altered, mocbfied or set aside in the manner provided for other orders. The cOlnplaint may be used in construing the terms of the order.

Findings 58 F.

The parties have covenanted that the said agreement is for settlement purposes only and does not constitute an admission by respondent that he has violated the law as alleged in the complaint. This proceeding having now come on for fial consideration on the complaint and the aforesaid agreement of December 14, 1960, containing consent order, and it appearing that the order which is approved in aml by said agreement disposes of aU the issues presented by the complaint as to aU of the parties involved, said agreement of December 14, 1960, is hereby accepted and approved as complying with 993.21 and 3.25 of the Commission s Rules of Practice for Adjudicative Proceedings. The undersigned hearing examiner having considered the agreement and proposed order and being of the opinion that the acceptance thereof wil be in the public interest makes the following findings and issues the following order: FINDI 1. The Federal Trade Commission has jurisdiction over the parties and the subject matter of this proceeding; 2. Respondent Max Scharfman is an individual "ith his offce and principal place of business located at 178 North Avenue, in the City of New Rochelle, State of N e" York; a. R.respondent is engaged in commerce as "commerce" is defined in the Federal Trade Commission Act and the Fur Products Labeling Act;

"1. The complaint filed herein states a cause of action against the respondent under the Federal Trade Commission Act and under the :Fur Products Labeling Act and the Rules and Regulations issued pursua.nt thereto; and this proceeding is in the public int.erest. Now therefore It is order-ed That respondent Iax Sclmrfman, his representatives, agents and enlployees, directly or through any corporate or other device, in connection ''with the introduction into connnerce, or the sale, or advertising or offering for sale, transportation or distribution, in commerce, of fur products; or in connection with the sale advertising, offering for sale, transportation, or distribution of fur products which are made in whole or in part of fur which has been shipped and received in commerce, as "commerce, "fur" and "fur product" are defined in the Fur Products Labeling Act, do forthwith cease and desist from:

1. Iisbranding fur products by:

A. Using the registered identification number of a person or concern not connected with marketing such fur products; MAX SCHARFMfu 303 298 Decision B. Failing to affx labels to fur products sho"ing in words and figures plainly legible all the information required to be disclosed by each of the subsections of g4(2) of the Fur Products Labeling Act. 2. Falsely or deceptively invoicing fur products by: A. Failing to furnish to purchasers of fur products invoices showing all the information required to be disclosed by eowh of the subsections of g5(b) (1) of the Fur Prodnets Labeling Act; B. Failing to set forth on invoices the item number or mark assigned to a fur product.

3. Falsely or deceptivcly advertising fur products through the use of any advertisement, representation, public announcement or notice "which is intended to aid, promote or assist, directly or indirectly, in the sale, or offering for sale of fur products and which: A. Fails to disclose that the fur product contains or is composed of bleached, dyed or other"ise artificially colored fur "hen such is the fact;

B. Rcpresents, directly or by implication, that fur products are composed of choicest skins when such is not the fact; C. Represents, directly or by implication, that respondent is a maufacturer of fur products or 'i\.ords of similar import when such is not the fact;

D. .Represents, directly or by implication, that the regular or usual price of finy fur product is any amount which is in excess of the price at which respondent has usually and customarily sold such productsE. :iIisreprcsentsin the recent inregularallY mannerconrse ofthebusiness;savings available to purchasers of respondent' s fur products.

4. :.\Taking claims and representations respecting prices and values of fur products unless respondent maintains full and adequate records disclosing the facts upon which such claims and representations are based.

DECISION OF TI-IE CQl,OnSSlON AXD ORDER TO FILE REPORT OF COl\PLB..NCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall: on the 7th clay of Iarch, 1961 : become the decision of the Commission; and accordingly:

It is onlend That :\Iax Scharfman, an individual, shall, within sixty (60) days after service upon him of this order, file "ith the Commission a report in writing: setting forth in detail the manner and form in which he has complied with the order to cease and desist. &, 304 FEDERAL TRADE COMJIISSION DECISIONS Decision 58 F.