Niresk Industries, Inc., et al.

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IN THE l\L\TTEH OF XIRESK INDUSTRIES, IJ'C., ET AL.

COXSEXT ORDER , ETC. , IX REG \RD TO THE ALLEGED YlOL.\TJOX OF THE FEDERAL TRADE CO)DIISSIOX ACT Docket C-696. ('fJlIplaint, Jan. 1964.-Dccisioll, Jan. 1961; Consent order requiring Cbi(:flgu sf'llers of chrome- plated stf'el fJflt\Yare to the puhlic, to cease repre enting falsely in a(1"e1'ti jng in m gn7.ines that the i'itware has a coating- of sn' , and a permflllcnt finish that will not rust 01' stnilJ , when in fad. it i" eouted with chrl1millll Idlich is llot permanent fIHI ma - lnst (J' taill.

CO::IPLAINT Pursuant to the provisions of the Fe.deral Trade COl1nnission Act and by virtue of the authority vested in it by said Act, the Federal Tr;-de Commission having reason to believe that Niresk Industries , .

462 FEDERAL TRADE COMMISSIOr- DECISIOXS Complaint 64 F.

Inc., a corporation, and Bernice Stone ICahn and Robert Kahn individually and as offcers of said corporation, and Robert Kahn & Associates, Inc., a 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 Niresk Industries, Inc., is a corpOl'fttioll organized, existing and doing business under and by virtue of the laws of the State of Illinois with its principal offce and place of business located at 589 East Illnois Street in the city of Chicago State of Ilinois.

Respondents Bernice Stone Kahn and Robert Kahn are offcers of ),iresk Industries, Inc. They formulate, direct and control the acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. Their address is the same as that. of the eOlporate respondent.

Respondent Robert ICahn & Associates, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Illinois with its princilnl offce and place of business located at 445 :\orth Lake Shore Drive, in the city of Chicago, State of Ilinois.

The aforesaid respondents cooperate and act together in carrying out the acts and practices hereinafter referred to. PAR. 2. Respondent Niresk Industries, Inc., and respondents Bernice Stone Kahn and Robert Kahn, individual11y and as offcers of said corporation, are now, and for some time last past have been engaged in the offering for sale, sale and distribut.ion of chromeplated steel flatware such as knives, forks and spoons to the public. Respondent Robert Kahn & Associates, Inc., is now, and for some t.ime last past has been, the advertising agency of the respondent Niresk Industries, Inc" and now prepares and places, and for some time last past has prepared and placed for publication, advertisements, including advertisements containing the statements hereinafter set forth, to promote the sale of the aforesaid flatware. PAR. 3. In the course and conduct of their business, respondent Njresk Industries, Inc., and responde,nts Bernice Stone Kahn and Robert Kahn, oflicers of said corporation, now calise, and for some time last past have caused, their said flatware, when sold, to be shipped from their place of business in the Stn te of Illinois.s to purchasers thereof located in various other States of the United States, and maintain, and at all times mentioned herein have maintained course of trade in said product in col1merce as "commerce defined in the Federal Trade Commission Act. KIRESK I DUSTRIES ) IKC. ) 1:'1 AL. 463 461 Complaint PAR. 4. In the course and conduct of their businesses, and for the purpose of inducing the purchase of the aforesaid product, respondents have made certain statements in advertisements published in magazines of interstate circulation, distributed to members of the purchasing public. Typical, but not 0.11 inclusive, of such statements ate the following:

Silver Rose Permanent :\lirror Finish Won t Rust or Stain The Ij I/ I/ pattern bas been created for you by world famous silversmitbs. Each piece glows with a luxurious rich sih-enviuc finish * " * PAR. 5. Through the use of the aforesaid statements and representations, and others of similar import but not specifically set out herein, respondents have represented, directly or by implication: (1) That said flatware has a coating or plating of silver. (2) That said flatware has a permanent finish and wil not rust or stain.

PAR. 6. In truth and in fact:

(1) Silver is not used to coat or plate said flatware, but mther the flatware is coated or plated with chromium. (2) The coating or plating is not permanent in that it may wear or be scratched off, exposing the steel underneath which may rust or stain.

Therefore, the statements and representations as set forth in Paragraphs 4 and 5 hereof are false, misleading and deceptive. PAR. 7. In the conduct of their business, at all times mentioned herein, respondent J\iresk Industries, Inc.., and Bernice Stone Kahn and Robert I(ahn, officers of said corporation, have been in substantial competition in commerce, '''ith corporations, firms and individuals in the sale of flatware of the same general kind and nature as that sold by respondents.

PAR. 8. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true a,nc1 into the purchase of substa.ntifLl quantities of the a.fore::aic1 product by reason of said erroneous and mistaken belief.

PAR. 9. The aforesaid acts and practices of re,spondents, as herein alleged, were, and are, all to the prejudice of the public and of the respondents' competitors and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts 464 FEDERAL TRADE COMMISSION DECISIOKS Order G4 F.

and practices, in commerce in violation of Section 5 of the. Federal Trade Commission Act.

DECISro:- AXD 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, ilnd the respondents having been served ,with notice of said determination and w.ith a copy of the complaint the Commission intended to issue, together wjt,h 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 respondents of aU the jurisdictional facts set forth in the complaint to issue herein, 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 such compla.int, and waivers and provisions as required by the Commission s rules; and The Commission, having considered the agreement, hereby acecpts same, issues it complaint in the form C'onten1plated by said agree rnent, makes the follo\\ing jurisdictional findings, and enters the following order:

1. Respondent Niresk Industries, Inc.: is a corporation organized existing and doing business under flld by virtue of the laws of the State of Illinois, \\ith its principal offce and place of business located at 589 East Illinois Street, in the city of Chicago, SUete of Ilinois.

Hespondents Bernice Stone Kahn and Robert Kahn a.rc offcers of Niresk Industries, Inc.: and their address is the same as that. of the corporate respondent.

Respondent Robert l(ahn &. Associates, Inc.: is a corporation organized, existing and doing business under' and by virtue of the laws of the State of Illinois, with its principal office and place of business located at JAD Korth Lake, Shore Drive, in the city of Chicago: State of Illinois.

. The Federal Trade Commission has jurisc1 iction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is oNln"eel That respondents Kiresk Industries, Inc., a corpora tion, and its offcers, and Bernice Stone Kahn and Robert Kahn, indivielualJy and as offcers of saiel eorpol ation, anel Robert Kahn & CRO"\V)\ FURS INC. ET AL. 465 461 Complaint Associates, Inc. , a corporation, and its officers, and respondents agents, representatives and employees, directly OJ' through any corporate or other device, in connection with the offering for sale, sale or distribution of chrome-plated flahral'c, or any other product, in commerce as ';commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: (1) Representing, directly or by implication: a. That chrome-plated flatware, or any other product of similar composition, has a coating or plating of silver. b. That the coating or plating of chrome-plated flatware or any other product of similar composition, is permanent. c. That chrome-plated flatware, 01' any other product of (2)similar:i\isrepresenting,composition, willin anynotmanner,rust or stain.the qua.lity composition, method of construction, durability, corrosion resistance, or performance characteristics of any product. 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 writ.ing setting forth in detail the manner