L. Chester, Inc.

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IN THE 11ATTR OF L. CHESTER, lng., ET AL.

-COXSE T ORDER, ETC., IN REGARD TO THE .ALLEGED .VIOLATION OF Tile FEDER. L TRADE co::unSSION AND THE F17R PRODUCTS k\BE.1NG ACTS Docket C-1'4. Complaint, Feb. 1962-Decision, Feb. 12, 1962 Consent order requiring furriers in :B'ort 'Wayne, Ind., to cease violating the Fur Products Labeling Act by substituting non-conforming labels for those affxed to fur products by the manufacturer; falsely labeling furs as to the names of the proclucing animal, and as "natural" when they were artificially colored; labeling fur products with fictitious prices represented thereby as usual retail prices; failng to show on labels and invoices and in advertising the true animal name of fur, when fur \vas artificially colored, and when fur products \were composed of cheap and waste fur; failng to show on invoiees the country of origin of imported furs; by advertising which represented prices of fur products as reduced from regular prices whicb were in fact fictitious, and as "at cost or below cost" when such was not the fact; and by failng to maintain adequate records as a basis for price and value claims.

, L. CHESTER , INC. , ET AL. 263 262 Complaint 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 sa.id Acts, the Federal Trade Comnlission, having reh,son to believe that L. Chester, Inc., a corporation, and L. Chester Franckowiak and Emily Franckowiak, individually and as offcers of sajd corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and the Eulcs and Ilegulations promulga.t cd under the Fur Products Labeling' Act, and it appearing to the Corilllissiol1 that a proceeding by it in respect thereof would be in the public interest., hereby issues its complaint stating its charges in that respect 88 follows:

PARAGMPH 1. Respondent L. Chester, Inc., is a corporation organized, existing and doing business under r nd by virtue of the laws of the Shttc of Indiana. Individual respondents L. Chest.er Franckowiak and E'mily Franckowiak a.re President and Secretary-Treasurer respect.vdy, of t.ho corpol'ate respondent. Said individual respondents c.oopentt.e in formulating, directing and controlling the acts policies and practices or the corporate re,sponc1cnt including the acts and Pl' acticies hereimtft.er referred to. All respondents have their offce and principal1 prince of business at 2428 I3roaclT\8,y, Fort ",Vayne Ind.

PAP. 2. Subscqucnt to the effective date of the Fur Products Labeling Acr on August 1952, and more especially since 1953, respond- ('H, :: ;1:-:1'(' h('en and are now enge.ged in the introduction into eornmp,rce :incl in the sale, acl vertising, a,nd offering for sale, in commerce, and in the transportation and distribution, in. commerce 01 1111' products: nncl have sold, advertised, offered for sa.le, tra.nsporte:c1 and distributed fur products which have been made in whole or jn part of fur "which had been shipped final received in commerce; and h" :e, 01c1 nc1YeItisecl, offered for sale and processed fur products Ivhich 1.,ave been shipped and received in commerce and upon which fur products substitute labels have been placed by respondents, as the torms nc.commerce fur :: a,nd "fur products" are defined in t.he Fur Pl'octuets Labeling Act.

PAR. 3. H.cspondents in selling, advertising, offering for sale and proce,ssjng fur products which have been shipped and received in commerce, have misbranded such fur products by substituting thereon labels which did not conform to the requirements of Section 4 of the Fur Products Labeling- Act, for the labels affxed to said fur products by the ma,nufacturer or distributor pursuant to Section 4 of said Act in "ioJntion of Section 3 (e) of said Act.

264 FEDERAL TRADE CO:\'lmission DEC'lSIOKS Complaint 60 F.

PAn. 4. Respondents, -in substituting labels as provided for, in Section 3 (C) of the Fur Prollucts Labeling Act, have iRiled to keep and pre erve the records required, in violation of such Section and Rulc 41 of the Rules and Regulations promulgated under the said Act. PAR. 5. Cert ;1 :n of st:id :fur products were misbra.nded in that they \were i'falsely and de.ceptively 1nbelecl or othenvisc falsely and deceptively identified as to the name or names of the animal or animals that produced the :fur from \which said fur products had been manufactured, in viola lion of Section 4 (1) of the Fur Products Labeling liet.

PAn. 6. Ce,rtnill of said rur products \"Vore misbranded in that they were falsely 01" deceptively labeled to sho" that the fur contained in such fur products \yas wltuI'al: when, in fact, such :fur was bleached dyed or otherwise artificially colored, in violation of Section 4(1) of the FUT Products La-boling Act.

\IL 7. Certain of said :fur prorlucts weTC misbranded in that labels a,ffxcc1 thereto conLtined fictitious price-s and misrepresented the regular ret.ail selling prices of fur products in that the prices representeel on such labels as the regular prices of the fur products were in excess of the retail prices at which the respondent usually ,md regularly sold such fur products in the recent regular course of business, in violation of Section 4(1) of the Fur Products Labeling Act.

PAR. 8. Certain of said fur products were misbranded in that they were not Jabelcd as required under the provisions of Section 4 (2) of the Fur Products Labeling Act and in the manner and form prescribed by the Rules and Regulations promulgated thcreunder. Among such misbrftnded fur products, but not limited thereto, were fur products with labels which failed:

1. To show the true animal name of the fur used in the fur products.

2. To disclose that the fur contained in the fur products was bleached, dyed, or otherwise artifieally colored when such was the fact. PAR. 9. Certain of said fur products were misbranded in violation of the Fur Products Labeling Act in that they were not labeled in a.accordance with the Hules and Regulations promulgated thereunder in the following respects:

(a) The term "Persian Lamb" \vas not set forth in the manner required by Jaw, in violation of Rule 8 of the Rules and Regulations. (b) Information required under Section 4 (2) of the Fur Products Labeling Act and the Rules and Hegulations promulgated there- L. CHESTER , IKC. , ET AL. 265 262 Complaint under was not completely set. out on one side of labels, in violat.ion of Rule 29 (a) of said Rules and Regulations.

(c) The disclosure that fur products were composed in whole or substantial part of paws, tni1s bellies, sides, flanks, gills, ears, throats heads, scrap pieces or waste fur was not set forth on labels, in violation of' Rule 20 of the said Rules and Regulations. PAR. 10. Certain of said fur products were falsely and deceptively invoiced by the respondents in t.hat they ,were not invoiced as required by Section 5(b) (1) of the Fur Products Labeling Act and the Rules and Hrgulations pl'omuJgatcd under such lct. Among such ialsely and deceptively invoiced iur products, but not limited thereto, 'Yerc invoices pertaining to such fur products which failed:

1. To 8hm" t.he true aninml names of the fur used in the fur products.

2. To disclose that the fur conta.ined in the fur products was bleached, dyed, or otherwise artificially colored when such was the fact.

3. To show that the fur products ,,,ere composed in whole or in substHJltial part of paws, tails, bcDies or waste fur, when such was the bet.

4. To show the cOllntry of origin of the imported furs used in the fnr products.

\IL 11. Certain of said fur products ,ycre falsely and deceptively invoiced in that thc invoices contained misrepresentations as to the name or names of thc animal or animals that produced the fur from ,\'which the salt1 flu' products ha.d been manufactured, in violation of Section c, (b) (2) ofthe Fur Products Labeling Act. m. 12. Certain of said fur products ,verc falsely and deceptively invoieed in violation of the Fur Products Labeling Act in that they ,were not invoiced in accordance with the Rules a.nd Hegulations promulgated thereunder in the following respects: (a) Information required under Section 5(b) (1) of the Fur Products Labeling Act and t.he Rules and Regulations pronlulgated thereunder was set forth in abln'8via.tecl form, in violation of Uule 4 of said Rules and Regnlations.

(b) 'The term "Persian Lamh" was not set forth in tbe manner required, in violation of Rulc 8 of said R.ules a.ncl Regulations. (0) The term "Dyed :Mouton Lamb" w"s not set forth in the manner required, in viola60Il of Rulc of said R.ules and Regulations. (d) Information required under Section 5(b) (1) of the Fur Products Labeling Act and the Rules fUlCl Regulations promulgated there- , 266 FEDER.AL TRADE COMMISSION DECISIOI\S Complaint 60 P.

under was not set forth separately on invoices with respect to each section of fur products composed of two or more sections containing different animal furs, in violation of Hule 36 of said Rules and Hegulations.

(e) The disclosure that fur products were composed in whole or in substantial part of pa;ws, tails, bellies, sides, flanks, gills, ears, throats heads, scrap pieces 01' waste fur, was not set forth on invojces in violation of Rule 20 of said Rules and Hegulations. PAn. 13. 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 c011lnerce, as "commerce is defmed in said Act, of certain newspaper advertisements, concernjng said products which \fore not in accordance with the provisions of Section 5 (a) of the said Act and the Hules and Hegulations promulgated thereunder; and which advertisements were intended to aid, promote a.nd assist, directly or indirectly, in the sale and offering for sale of said fur products.

E'. ,lid. PAR. 14. Among and include.d in t.he advertisements as aiol' but not limited thereto, ii-as an fl,c1vertisement of responc1enl, ..which appeftTecl in the Fort ,Vn,:111C News Sentinel, a newspaper published a.nd ha,ving a wide cir-in the city of Fort ,Yayne, State of Indirma, culat.ion in said Stale and various other States of the United States. By means of said advertisement and others or sinlilar import and meaning not specifically referred to herein respondents :fahe,Jy and deceptively advertised fur products in that said advertisement.: (lL) Fa,iIed to disclose the name or names of the ilnimftl or u.nlmals that produced the fur contftined in the f11T product as set forth in the Fur Products me Guide, in violation of Section 5 (a) (1) of the Fur Products Labeling Act.

(b) Failed to set forth the term "Persian Lamb:) in the ;E2.::11cr required, in violation or Rule 8 of said H,ules and Regulation;.. (c) Failed to di :dosc that rur products rvere composed in y;-llOle, or , sides, flanks, gills earsin substantial part of paws, tails, bellies throats, heads, scrap pieces) or ,raste fur, in violation of nn:l::?IJ of said Hules and Regulations.

(d) Represented prices of fur products as luv:ing been l'E', dncecl from regular or usual.l prices "here, the so-called regular or asnal prices were in fact fictitious in that they "e.re not the prices at 'sijich said merchandise was usw\,lly ;:old by respondents in the l' evel1t, reg'11lal' course of its business, in violation of Section 6(a.) (5) of the Fur Products Labeling Act and Rule 44 (a) of said Rules and Regulations. at cost or belo'iY cost.: (e) Represented prices or fur products to be " IJ. CHESTER , IXC. ET AL. 267 262 Decision and Order when such was not the fact, in violation of Section 5 (a) (5) of the Fur Products Labeling Act and Rule 44(a) of said Rules and Regulations. PAR. 15. Respondents in advertising fur products for sale as aforesaid, made claims and representations respecting prices and values OT fur products. Said representations were of the types covered by subsections (a), (b), (c), and (d) of Rule 44 of Rules and Regulations promulgated under the Fur Products Labeling Act. 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. 16. The aforesa,id 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 and unia,ir lncthoc1s of competition in COlmnerce under the Federal Trade Commission Act. DECISION AXD Order The Commission having heretofore determined to issue its complaint charging the responc1enl; named in the caption herco:f with violation of the Federal Trade Commission Act lnd the Fur Procluci Labeling Act, and the rcsponc1ents having been served with notice of said determination and with a copy of the comphint the Commission intended to issue, together \with a proposed form of order; and The respondents and counsel for the COlll1nisslon having there,after executed an agreement containing a. consPllt order, an admission by respondents of all the jurisdictional facts ::et forth in the complaint a state111ent 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 ::et forth in the complaint, and waivers and provisions as required by the Commi::sion s rules; and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form conten1ph1ted by said agreement, makes the following jllrisdjc.tionfll findings, and enters the following order:

1. Respondent L. Chester, Inc., js fL corporation organized, existing and doing business under' and by virtue of the laws of the State of Indiana, with its offce and principal place of business at 2428 Broadway, Fort \Vayne, Incl.

respondents L. Chester Franckowiak and Emily Franckowiak are offcers of said corporation and their address is the same as that of said corporation.

268 FEDERAL TRADE CO),IMIssrON DECISIOXS l)e('sion and Order 60 F.

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.

OUDER It is ordel' That respondents L. Chester, Inc., a corporation, and its officers, and L. Chester Francko"iak and Emily Franckowiak, individually and as offcers of said corporation, flud 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 COlnlnerCe, of any fur product; or in connection with the sale, advertising, offering for sale, tnmsportation or distribution, or any fur product which is made in whole or in part of fur which has been shipped and received in commerce: or in connection with the sale, advertising, offering for sale or processing of lny fur product which has been shipped and received in commerce, and upon which fur product a substitute label has been placed by the respondents, as /' commerce fur" and "fur product" are defined in the Fur Products Labeling Act, do forthwith cease and desist from: 1. Misbranding fur products by:

A. Placing thereon substitute labels for labels affxed to such fur products pursuant to Section 4 of the Fur Products Labeling Act and which substitute labels do not conforrn to the requirements of Section 4 of the said Act.

B. Falsely find c1eceptlyely labeling or othern-isp identifying such fur products as to the name 01' names of the animal or animals that produced the furs from which such fur products were nWllnfl1crnrecl. C. Representing directly or by imp1icaJ:ion that the fur contained in fur products is natural, when such is not the fact. D. Falsely and deceptively labeling 01' otherwise identifying such products as to the regular price or values thereof by any representation that the regnJnr or usual prices of such products arc any amount in excess aT the price at which respondents have usually and customarily sold such products in the recent r/;,gula.r course of t.their business. E. FRiling to affx labels to fur products showing jn \,"orc1s Hnd figures plainly legible all of tl,e information required to be disclosed by each of the subsections of Section 4 (2) of the Fur Products Labeling Act.

F. Failing to set forth the term "Persian Lanlb" in the manner required where an ele,ction is made to nse that t.erm instead of the word Lamb"

L. CHESTER , INC. , ET AL, 269 262 Decision and Order G. Fililing to set forth on one side of the labels the information required under Section 4(2) of the Fur Products Labeling Act ,md the Rules and Regulations promulgat.ed therell1der. H. Failing to disclose that fur products are composed in "whole or substantial part of paws t.ails, bellies, sides, flanks, gills, ears, throats hefLds, scrap pieces or waste fur.

. Falsely or decepti very invoicing- fur products by: A. Failing to furnish invoices to purchasers of fur products showing in words and figures plainly legible a11 tho information required to be disclosed by each of the subsections of Section 5 (b) (1) of the Fur Products r,,,beling Act.

B. Setting forth an)" misrepresentation as to the name or names of the animal or animals that produced the fur from which the said fnr product has been manufactured.

C. Setting forth information required under Section 5(b) (1) of the Fur Products Labeling Act and the Rule,s and Regulations promulgated thereunder inabbrevia.ted form.

D. Failing to set forth the term "Persian Lamb" in the manner required where an election is made to use that term instead of the "' ord Lamb::

E. Failing to set fort.h the term " Dyed iouton I",amb" in the ma,nner required where an election js made to use thflt term instead of the term Dyed Lamb"

F. Failing to set fort.h information required under Section ,5 (b) (1) of the Fur Products Labeling Act and the R.ules and Regulations promulgftted thereunder with respect to each section of fur products composed of two or lTIOre sections containing different animal furs. G. Fa.filing t.o disclose that fur products are composed in whole or in substantia.! part of paw. , tails, bellies, sides, flanks, gills, ea.rs, throats heads, scrap piece,s or waste fur.

3. F"lscly or deceptively advertising fur products through the use of any advertisement, representation, public annOlIDcement, 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. . Fajls to disclose the name or na.mes of the animal or a.animals producing the fur or furs contained in the fur products, as set forth in the Fur Products Kame Guide, and as prescribed under the R.ules and R.egulations.

B. Fajls to set fort.h the term " Persian La,nib" in the ma.nner re. quired where an election is made to use that term instead of the word Lamb"

270 FEDERAL TRADE COMJvlISSIOK DECI&IONS Complaint 60 F.

C. Fails to disclose that the fur products are composed in whole or in substantial part of paws, tails, belles, sides, flanks, gills, ears throats, heads, scrap pieces or waste fur.

D. Represents directly or by implication that the regular or usual price of any fur product is any amount which is in excess of the prices at which the respondents have usually and regularly sold such products in the recent regular course of their business. E. Represents directly or by implication thcdc prices of fur products are "at cost" or "below cost", when such is not the fact. F. Misrepresents in any manner the savings available to purchasers of respondents' products.

4. Making claims and representation of the types covered by subsections (a) (b), (c), and (d) of Rule 44 of the Rules and Regulations promulgated under the Fur Products Labeling Act unless there are maintained by respondents full and adequate records disclosing the facts upon which such claims and representations are based. 5. Failing to keep and preserve, the records required by the Fur Products Labeling Act and the Rules and Hegulations promulgated thereunder when making the substitution of labels on fur products as provided for in Section 3 (e) of the said act. 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.