Katten & Marengo, Inc.

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In THE Marrer or KATTEN & MARENGO, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE FUR PRODUCTS LABELING ACTS Docket 8874. Complaint, Apr. 21, 1961—Decision, Aug. 28, 1961 Consent order requiring furriers in Stockton, Calif., to cease violating the Fur Products Labeling Act by advertising in newspapers which represented prices of fur products as reduced from regular prices which were in fact KATTEN & MARENGO, INC., ET AL. 313 312 Complaint fictitious, and as reduced by stated percentages, without keeping adequate records as a basis for such claims.

Complaint Pursuant to the provisions of the Federal Trade Commission Act and the Fur Products Labeling Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Katten & Marengo, inc., a corporation, and Peter J. Marengo, Jr., Peter J. Marengo, III, and Mary Schenone, individually and as officers of said corporation, hereinafter referred to as respondents, have 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 thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: Paracrary 1. Katten & Marengo, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of California with its office and principal place of business located at 500 East Main Street, Stockton, California. Respondents Peter J. Miarengo, Jr., Peter J. Marengo, III, and Mary Schenone control, direct and formulate the acts, practices and policies of said corporate respondent. Their office and principal place of business is the same as that of the said corporate respondent. Par. 2. Subsequent to the effective date of the Fur Products Labeling Act on August 9, 1952, respondents have been and are now 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 have sold, advertised, offered for sale, transported and distributed fur products which have been made in whole or in part of fur which had been shipped and received in commerce, as the terms “commerce”, “fur” and “fur product” are defined in the Fur Products Labeling Act. Par. 8. Certain of said fur products were falsely and deceptively advertised in violation of the Fur Products Labeling Act in that respondents caused the dissemination in commerce, as: “commerce” is defined in said Act, of certain newspaper advertisements, concerning said products, which were not in accordance with the provisions of Section 5(2) of the said Act and the Rules and Regulations promulgated 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. 4. Among and included in the advertisements as aforesaid, but not limited thereto, were advertisements of respondents which Decision 59 F.T.C.

appeared in issues of the Stockton Record, a newspaper published in the city of Stockton, State of California, and having a wide 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, respondents falsely and deceptively advertised fur products in that said advertisements: (a) Represented prices of fur products as having been reduced from regular or usual prices where the so-called regular or usual prices were in fact fictitious in that they were not the prices at which said merchandise was usually sold by respondents in the recent regular course of business in violation of Section 5(a) (5) of the Fur Products Labeling Act and Rule 44(a) of said Rules and Regulations.

(b) Represented directly or by implication through the use of percentage savings claims such as “14 off” that the regular or usual prices charged by respondents for fur products were reduced in direct. proportion to the percentage of savings stated when such was not the fact in violation of Section 5(a)(5) of the Fur Products Labeling Act.

Par. 5. Respondents in advertising fur products for sale as aforesaid made claims and representations respecting the prices and values of fur products. Respondents 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. 6. The aforesaid acts and practices of respondents, as herein alleged, are in violation of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder, and constitute unfair and deceptive acts and practices in commerce under the Federal Trade Commission Act.

Mr. Charles S. Cow for the Commission.

Krolof'. Brown, Belcher & Smart, by Mr. William E. Tout, Stockton, Calif., for the respondents.

Leiria, Decision By Wazter R. Jounson, Heartrnc EXaMiIner In the complaint dated April 21, 1961, the respondents are charged with violating the provisions of the Federal Trade Commission Act and the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder.

On June 20, 1961, the respondents and their attorneys entered into an agreement with counsel in support of the complaint for a consent order.

KATTEN & MARENGO, INC., ET AL. 315 812 Order Under the foregoing agreement, the respondents admit the jurisdictional facts alleged in the complaint. The parties agree, among other things, that the cease and desist order there set forth may be entered without further notice and have the same force and effect as if entered after a full hearing. The agreement includes a waiver by the respondents of all rights to challenge or contest the validity of the order issuing in accordance therewith. The agreement further recites that it 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 hearing examiner finds that the content of the agreement meets all of the requirements of Section 3.25(b) of the Rules of the Commission.

The hearing examiner being of the opinion that the agreement and the proposed order provide an appropriate basis for disposition of this proceeding as to all of the parties, the agreement is hereby accepted and it is ordered that the agreement shall not become a part of the official record of the proceeding unless and until it becomes a part of the decision of the Commission. The following jurisdictional findings are made and the following order issued. 1. Respondent Katten Marengo, Inc., is a corporation existing and doing business under and by virtue of the laws of the State of California, with its office and principal place of business located at 500 Kast Main Street, in the City of Stockton, State of California. Respondents Peter J. Marengo, Jr., Peter J. Marengo, III, and Mary Schenone are officers of said corporate respondent, and their address is the same as that of corporate respondent. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER ft ts ordered, That Katten & Marengo, Inc., a corporation and its officers, and Peter J. Marengo, Jr., Peter J. Marengo, IJ, and Mary Schenone, individually and as officers of said corporation, and respondents’ representatives, agents and employees, directly or through any corporate or other device, in connection with the introduction into commerce, or the sale, advertising, or offering for sale in commerce, or the 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 Decision 59 F.T.C.

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. Falsely or deceptively 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. Represents directly or by implication that the regular or usual price of any fur product is any amount which is in excess of the price at which respondents have usually and customarily sold such products in the recent regular course of business. B. Represents, directly or by implication, through the use of the words, symbols or figures “15 off”, “regular”, “reg.”, or any other words or terms of the same import, that the regular or usual price of any fur product is any amount which is in excess of the price at which the respondents have usually and customarily sold such products in the recent regular course of business. C. Represents, directly or by implication, that any savings from respondents’ regular or usual retail price are afforded to the purchasers of respondents’ fur products unless the price at which same are offered constitutes a reduction from the price at which said fur products have been usually and customarily sold by respondents in the recent regular course of their business. D. Misrepresents, in any manner, the amount of savings available to purchasers of respondents’ fur products or the amounts by which the prices of said fur products are reduced from the prices at which said products are usually and customarily sold by respondents in the recent regular course of their business. 2. Making price claims or representations respecting prices or values of fur products unless there are maintained by respondents full and adequate records disclosing the facts upon which such claims or representations are based.

DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 2.21 of the Commission’s Rules of Practice, the initial decision of the hearing examiner shall, on the 23d day of August 1961, become the decision of the Commission; and accordingly :

Zt is ordered, That 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 the manner and form in which they have complied with the order to cease and desist. MIDWEST LAMP CO. ET AL. 317 Complaint