Stern & Stern Textiles, Inc.

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In the Matrer or STERN & STERN TEXTILES, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE FLAMMABLE FABRICS ACTS Docket C-16. Complaint, Nov. 6, 1961—Decision, Nov. 6, 1961 Consent order requiring New York City importers to cease violating the Flammahble Fabrics Act. by furnishing their customers with a false guaranty that certain fabrics were not so highly flammable as to be dangerous when worn. Complaint Pursuant to the provisions of the Federal Trade Commission Act: and the Flammable Fabrics Act, and by virtue of the authority vested m it by said Acts, the Federal Trade Commission, having reason to believe that Stern & Stern Textiles, Inc., a corporation, Edwin M. Stern, Jean Pierre Stern and David Grossberg, 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 Flammable Fabrics 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. Respondent Stern & Stern Textiles, Inc., is a corporation duly organized, existing and doing business under and by STERN & STERN TEXTILES, INC., ET AL. 1069 1068 Decision virtue of the laws of the State of New York. Respondents Edwin M. Stern, Jean Pierre Stern and David Grossberg are President- Treasurer, Executive Vice President, and Secretary, respectively, of Stern & Stern Textiles, Inc. The individual respondents formulate, direct and control the policies, acts and practices of the said corporate respondent. The business address of all respondents is 1859 Broadway, New York, New York.

Par. 2. Respondents, subsequent to July 1, 1954, the effective date of the Flammable Fabrics Act, have sold and offered for sale, in commerce; have imported into the United States; and have introduced, delivered for introduction, transported, and caused to be transported, in commerce; and have transporated and caused to be transported, after sale in commerce; as “commerce” is defined in the Flammable Fabrics Act, fabric, as that term is defined therein, which fabric was, under Section 4 of the Flammable Fabrics Act, as amended, so highly flammable as to be dangerous when worn by individuals. Par. 3. Respondents have furnished their customers with a guaranty with respect to the fabrics, mentioned in Paragraph Two hereof, to the effect that reasonable and representative tests made under the procedures provided in Section 4 of the Flammable Fabrics Act, as amended, and the Rules and Regulations promulgated thereunder, show that said fabrics are not, in the form delivered by respondents, so highly flammable under the provisions of the Flammable Fabrics Act as to be dangerous when worn by individuals. There was reason for respondents to believe that the fabrics covered by such guaranty might be introduced, sold, or transported in commerce. Said guaranty was false in that (1) with respect to some of said fabrics, respondents have not made such reasonable and representative tests, and (2) with respect to other of said fabrics, the tests which were made showed that the fabrics were so highly flammable as to.be dangerous when worn by individuals.

Par. 4. The aforesaid acts and practices of respondents were and are in violation of the Flammable Fabrics Act and the Rules and Regulations promulgated thereunder, and as such constitute unfair methods of competition and unfair and deceptive acts and practices in commerce, within the intent and meaning of the Federal Trade Commission Act.

DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act and the Flammable Fabrics Act, and the respondents having been served with notice of Order 59 F.T.C.

said determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as set forth in the complaint. and waivers and provisions as required by the Commission’s rules; and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order:

1. Respondent Stern & Stern Textiles, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at 1359 Broadway, New York, New York. Respondents Edwin M. Stern, Jean Pierre Stern and David Grossberg are officers of the corporate respondent. Their address is the same as that of the 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 It is ordered, That the respondent Stern & Stern Textiles, Inc., a corporation, and its officers, and respondents Edwin M. Stern, Jean Pierre Stern and David Grossberg. individually and as officers of said corporation, and respondents’ representatives, agents and employees, directly or through any corporate or other device, do forthwith cease and desist from:

1.

(a) Importing into the United States: or (b) Selling, offering for sale, introducing, delivering for introduction, transporting, or causing to be transported, in commerce, as “commerce” is defined in the Flammable Fabrics Act; or (c) Transporting or causing to be transported, for the purpose of sale or delivery after sale in commerce, any fabric, which, under the provisions of Section 4 of the said Flammable Fabrics Act, as amended. is so highly flammable as to be dangerous when worn by individuals:

2. Furnishing to any person a guaranty with respect to any fabric which respondents, or any of them, have reason to believe may be introdneed, sold or transported in commerce, which guaranty represents. JOHNSTOWN PRODUCTS 1071 1068 Complaint contrary to fact, that reasonable and representative tests made under the procedures provided in Section 4 of the Flammable Fabrics Act, as amended, and the Rules and Regulations thereunder, show and will show that the fabric, covered by the guaranty, is not, in the form delivered or to be delivered by the guarantor, so highly flammable under the provisions of the Flammable Fabrics Act as to be dangerous when worn by individuals, provided, however, that this prohibition shall not be applicable to a guaranty furnished on the basis of, and in reliance upon, a guaranty to the same effect received by respondents in good faith signed by and containing the name and address of the person by whom the fabric was manufactured or from whom it was received.

It is further ordered, That the 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 this order.