Liberty Electronics, Inc.

Text (OCR of the scan at left; may contain errors)

Ix THE MATTER OF LIBERTY ELECTROi\ICS, INC., ET AL.

CONSE OlWER ETC. , IX REGAHI) TO Tile ALLEGED VIOLATION OF THE FEDERAL TRADE COl\DIISSION ACT Docket 8089. Complaint, Aug. 24, i960-Decision, Mar. , 1961 Consent order requiring a Union, X . , manufacturer of rebuilt television picture tubes containing userl parts. to cease making. on labels on such rebuilt tubes alld by other media, such statements as "This Is a Fully Guaranteed NE"\Y Tube . . . a Brand ew . . . glectronic World TV Picture Tube, and representing falsely thereby that the tubes were new in their entirety; and to disclose clearly, on the tubes themselves and on cartons and invoices and in advertising, that slh:h tubes were rebuilt and contained used parts.

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 Liberty Electronics, Inc., a corporation and Mary Garrubbo, individually and as an offcer or said corporation, hereinafter referred to as respondents have violated the provisions of said Act, 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:

PARAGRAPH 1. Respondent Liberty Electronics, Inc., is a corporation organized, existing and doing business under and by virtue or the laws of the State of New Jersey, with its principal offce and plare. of business located at 2436 \Iorris Avenue, Union, New Jersey. 492 FEDERAL TRADE CO BlISSIO:: DECISIOXS C01l111aint 38 F.

R.respondent l\1aly Garrnbbo is an inc1ivicll1fll and an offcer of said corporation. She formulates, directs an(1 controls the acts and practices of the corporate respondent, inc111cling the. acts and practices hereinafter set forth. Her address is the same as that of the corporate respondent.

PAR. 2. Responden1-s ate now, flnd for some time last past have been, engaged in the manufacturing, offering for sale, sale and dis tribution of rebuilt television picture tubes containing used pflrts to distributors who in turn sell to retailers for resale to the public. 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 Jersey to purchasers thereof ,,-ho arb located in various other States of the United States, and maintain, and at all times mentioned herein have maintained a substantial course of trade in said products, in commerce, as "commerce.e:' is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct of their business, Q,lld for the purpose of inducing the sale of their products, respondents made certain statement.s concerning their products on labels and by other media. Among and typical of such statements are t.he following: This Is a Fully GUf'rallfef'rl 1'E'" Tube .fbis is a Brand Kew . . . . Electronic World. TF Pictw.c Tube PAR. 5. Through the use of the aforesftid st.atements, Tespondents represented that cert.ain of their picture tubes .were ne"- in their entirety.

PAR. 6. Said statements and representations were false, misleadig and deeepti ve. In truth and in fact the television picture tubes represented as being "new" were not new in their entirety. PAR. 7. The television picture tubes sold by respondents are rebuilt and contain used parts. Respondents do not disclose on the tubes or on the cartons in "which they are packed or on invoices, or in any other manner that said television picture tubes are rebuilt and contain used parts.

"Then television picture tubes are rebuilt contftining used parts in the absence of a disclosuTc to the contrary, sllch tubes are understood to be and are readily accepted by the public as new tubes. PAR. 8. By failing to disclose the facts as set forn, in Parag!'" ph Se\'en, respondents place in the hands of uninformed or unscrupulous dealers llw,ans and instrumentaEtiE's "\yhe.rehy they may mislead and LIBERTY ELECTRO ICS INC. ET AL. 493 491 Decision deceive the public as to the nature of their said television picture tubes.

PAR. 9. In the conduct of their business, and at all times mentioned herein, respondents 1111'8 been in substantial competition, in commerce with corporations, firms and individuals engaged in the sale of television picture tubes.

PAR. 10. The use by respondents of the aforesaid false, misleading and deceptive statements and representations and the failure of respondents to disclose on their television picture tubes, and on the cartons in which they ate packed, on invoices, or in any other manner that they are rebuilt containing used parts, has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mista,ken belief that said picture tubes are new in their entirety and into the purchase of substantial quantities of respondents' said tubes by reason of said erroneous and mistaken belief. As a consequence 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. tD competition in commerce.

PAR. 11. The aforesaid acts and practices of respondents, as herein alleged, were, and are, a11 to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute unfrLir and deceptive acts and practices and unfair methods of competition, in commerce within the intent and meaning of the Federal Trade Commission Act.

,llr. 3ficlwel J. Vitnle for the Commission. ,lit. Franklin O. Phifer of East Orange . J., for respondents. INITL\L DECISION BY LOREN H. L.I.UGHLIN HE.\RING EXX:\IIXER Thb Federal Trade Commission (sometimes also hereinafter referred to as the Commission) on August 24 1960, issued its complaint herein, charging the above-named respondents with having violated the provisions of the Federal Trade Commission Act, and the respondents were duly served with process. On ovember 14 , 19(;0, there was submitted to the undersigned hen ring cX:llnine,r of the Commission for his consideration and appro\' al :111 "Agreement Contflining Consent Order To Cease And '1 \yhic11 had been entered intoDf'-sist by and between respondents and the fltiOl'ncys for the respective pa.rties, under date of K ovember , 10G0 suhject to the approntl of the Bureau of Litigation of the Commission, ",hi('11 hud subsequently duly approved the same. On due consideration of such agreement, the hearing examiner finds that saiel agreement, uoth in form a,nd in content, is in accord 494 FEDERAL TRADE CQMMISSIQX DECISIOXS Decision 58 F. l\C.

with 1;3.25 of the Commission s Rules of Practice for Adjudicative Proc.eedings, and that by said agreement the pf1rties have specifically agreed to the .following matters:

1. Respondent Liberty Electronics Inc., is a corporation organized e.existing and doing business under and by virtue of the laws of the State of New .Jersey, with its offce and principal place of business located at 2436 1\orris Avenue, l:union, Kew Jersey. Respondent Mary Garrubbo is an offcer of said corporate respondnt. She formulates, directs and controls thc acts and practices of said corporate respondent. I-IeI' address is the same a, s the corporate respondent.

2. Respondents admit a11 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 accordance with such allegations.

3. This agreement disposes of all of this proceeding as to all parties.

4. R.e,sponclents waive:

(a) Any further procedural steps before the Hearing Examiner and the Commission;

(b) The making of findings of fact or conclusions of law; and (c) AU of the rights they may have to chaUenge or contest the validity of the, order to cease and desist entered in Rccordance with this agreement.

5. The record on \"which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint. and this agreement.

6. This agreement shall not become a part of the offcia"! record unless and until it becomes a part of the decision of the Commission. 7. This 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.

8. The following order to cease and desist may be entered in this proceeding by the Commission without. further notice to respondents. Vhen so entered, it shall have the same force and effect as if entered after a full hearing. It may be altered, modified, or set aside in the manner provided for other orcl rs. The complaint. may be used in construing the terms of the order. Upon due consideration of the complaint filed herein and the said "Agreement Containing Consent Order To Cease And Desist " the latter is hereby approved, accepted and ordered filed. The hearing examiner finds from the complaint and the said "Agreement Containing Consent Order To Cease And Desisf' that the Commission LIBERTY ELECTRONICS , INC. , E'l' AL. 495 491 D('C' ion he, jurisdiction of the subject nlRtter of this proceeding and of the pe.rsons of eac.h of the respondents herein; that the complaint states a legal en,use for complaint under.r the Federal Trade Commission Act, against each of the respondents both generally and in each of the pH l'tieu1ars alleged therein; that this proceeding is in the interest of the public; that the folJO\ying order as proposed in said agreement is appropriate for the just. rlisposition of all of the issues in this proceeding as to all of the parties hereto; and that said order therefore should be, and hereby is, entered as follows: It is ordered That respondents Liberty Electronics, Inc., a corporation, and its offcers, and :Mary Garrubbo, individually and as an offcer of said corporation, and respondents' representatives, agents and employe-cs, directly or through any corporate or other device in connection with the offering for sale, sale or distribuiton of rebuilt astelevision picture tubes containing used parts, in commerce, do commerce" is defined in the Federal Trade Commission Act, forthwith cease and desist from:

1. Representing, directly or by implication, that said television picture tubes are new;

2. Failing to clearly disclose on the tubes on the cartons in which they are ' packed, on invoices, and in advertising that. said tubes are rebuilt anel contain used parts;

3. Placing any me-aus or instrumentality in the hands of others ,yhereby they may mislead the pug1ic a,s to the nature and condition of their television picture tubes.

DECISIQX OF THE cmnnSSION ..ND ORDER TO FILE REI ORT OF COl\IrLlA The Commission having considered the hearing examiner s initial decision, filed November 17, 1860, accepting an agreement containing a consent order to cease and desist, theretofore executed by tile respondents and counsel in support of the complaint; and It appearing that the order contained in said initial decision departs from the proposed order set forth in the agreement of the parties in that a COmIlfl was omitted from paragraph 2, creating an ambiguity in the order which should be corrected; and, accordingly I t is ordered That pa.ragraph 2 of the order conbtined in the initial decision be, and it hereby is, revised to read: 2. Failing to clearly disclose on the tubes, on the cartons in which they are packed, on invoices, and in advertising that said tubes are rebuilt and contain used parts. 1 t i8 furthe?' ordered That the intial decision as so modified shall, on the 21st day of March 1961 , become the decision of the Commission.

496 FEDERAL TRADE CO::livIISSIO=' DECISIONS Complnillt 58 F.

1 t is tnTther o)'dered That the respondents, Liberty Electronics Inc., a corporation, and Mary Garrubbo, individuaHy and as an offcer of said corporation, shah, 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 contained in the aforesaid initial decision, as modified.

TIm JIATTER OF JOHN BACALL CONSEN'!' ORDER , ETC. , IN REGARD TO THE ALLEGED VIOLATIO:: OF THE FEDERAL TRADE COM3HSSION AND THE WOOL PRODUCTS LABELING ACTS Docket 8133. Complaint, Oet. 7, 1960-Deoision, .ia1" 23, 1961 Consent order requiring a seller in Los Angeles to cease violating the Wool Products Labeling Act by falsely laheling woolen fabrics as "100% Virgin Wool" and by failng to comply with other labeling requirements. COMPLAINT 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 John Bacall, an individual, hereinafter referred to as respondent, has violated the provisions of said Acts and the Rules and Hegulations promulgated under said vVool Products Labeling Act, 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:

P ARAORAPH 1. Respondent, John Bacal1, is an individual whose offce and principal place of business is at 704 South Spring Street Los Angeles, California.

Paint. 2. Subsequent to the effective date of the Wool Products Labeling Act of 1939, and more especially since September 1 , 1958 respondent has introduced into commerce, sold, transported, distribnted, delivered for shipment and offered for sale in commerce, as commerce" is defined in the VV ool Products Labeling Act of 1939 wool products as "wool products " are defined therein. PAR. 3. Certain of said wool products, namely woolen fabrics, were misbranded by respondent within the intent and meaning of Section JOIL'f BACALL 497 496 Decision 4 (a) (1) of said Wool Products Labeling Act and the Rules and Hegulations promulgated thereunder in that they were falsely and deceptivcly labcled or tagged with respect to the character and amount or the constituent fibers contained therein. Among such misbranded wool products were woolen fabrics labeled or ta.gaged by respondent as consisting or "100% Virgin 'Voal" whereas, in truth and in fact, said woolen rabrics in each instance contained substantially less than 100% wool. PAR. 4. Certain of said wool products were further misbranded by respondent in that they were not stamped, tagged or labeled as required under the provisions of Section 4(a) (2) of thc vVool Products Labeling Act in the manner and form as prescribcd by the Rules and Regulations promulgated thereunder. PAH. 5. The respondent in the course and conduct or his business as aforesaid, was and is in substantial competition in commerce with firms and individuals like\vise enga,ged in the sale of said wool products of the same general nature as those sold by respondent. PAR. 6. The aforesaid acts and practices of the respondent were and are, in violation of the Wool Products Labcling Act of 1939 and the Rules and Regulations promulgated thereunder, and constituted and now constitute unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of the Federal Trade Commission Act. 3fT. De !Vitt T. Puckett supporting the complaint. Mr. John Bacall respondent in person.

I:\'lTIAIl D.ECISIOX BY ':V ALTER IC BEKXETT, HEAlUNG Ex.nHxEH The Commission issued its complaint October 7, 1960 against respondent charging him with misbranding VV 001 Products in violation of the 1V 001 Products Labeling Act of 1939. Counsel submitted to the undersigned hearing examiner on J auuary 1961 an agreement dated January 17, 1961 between the respondent in person and Devitt T. Puckett, counsel supporting the complaint providing for the entry without further notice of a cease and desist order. Said agreement has been duly approved by the Director, the Assistant Director and the Associate Director of the Bureau of Litigation.

The hearing examiner finds that sa,id agreement includes all of the provisions required by Section 3.25 (b) of the Rules of the Commission, that is:

A. An admission by respondent of all jurisdictional facts alleged in the complaint.

681 237--63-- Order 58 F.

B. Provisions that:

(1) The complaint may be used in construing the terms of the order;

(2) The order shall have the same force and effect as if entered after a full hearing;

(3) The agreement shall not become a part of the offcial record of the proceeding unless and until it becomes a part of the decision of the Commission;

(4) The entire record on which any cease and desist order may be based sl",11 consist solely of the complaint and the agreement; (5) The order may be altered, modified, or set aside in the manner provided by statute for other orders. C. Waivers of:

(1) The requirement that the decision must contain a statement of findings of fact and conclusion of law;

(2) Further procedural steps before the hearing examiner and the Commission.

In addition the agreement contains the following permissive provisions: A waiver by the respondent of any right to challenge or contest the validity of the order entered iu accordance with the agreement, and a statement that the signing of 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. Having considered said agreement including the proposed order and being of t.he opinion t.hat they provide an appropriate basis for settlement and disposition of this proceeding, the hearing examiner hereby accepts the agreement but orders that it shall not become a part of the offcial record unless and until it becomes a part of t.he decision of the Commission.

The following jurisdictional findings are made and the following order issued:

1. Respondent John Baea11 is an individual whose principal place of business is located at. 704 South Spring Street, in the City of Los Angeles, State of California.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent. ORDER It is oTdeTerl That the respondent John BacaJl, an individual, and respondent' s representatives, agents and employees, directly or through any corporate or other device, in connection with the introduction into commerce, or the offering for sale, sale transportation or distribution in commerce, a.s "commerce" is defined in the Federal PORTIS STYLE INDUSTRIES CO. ET AL. 499 496 Complaint Trade Commission Act and thc IV 001 Products Labeling Act of 1939 of wool fabrics or other "wool products, as such products are defmed in and subject to the IV 001 Products Labeling Act of 1939 do forthwith cease and desist from:

A. Ylisbranding of such products by:

1. Falsely and deceptively stamping, tagging, labeling or otherwise falsely or deceptively identifying such products as to the character or amount of the constituent fibers included therein; 2. Failing to affx labels to such products showing each element of information required to be disclosed by Section 4(a) (2) of the IV 001 Products Labeling Act of 1939.

DECISION OP 'lhe COllDIISSION AXD ORDER TO FILE REPORT OP COMPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shan on the 23rd day of March, 1961, become the decision of the Commission; and accordingly:

It i8 ordered That the respondent herein shan within sixty (60) da.ys a.after service l1pon him of this order, file with the Commission a report in writing setting forth in detail the manner and form in y\"lich he has compljed with the order to cease and desist.