Cornet & Morgenstern, Inc.

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IN THE MATTER OF CORNET & MORGENSTER"', INC., ET AL.

CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO:\ MISSION , THE WOOL PRODCCTS LABELING AND THE FUR PRODUCTS LABELING ACTS Docket C-1214. Complaint, June 1967 Vecision, June, 1967 Consent order requiring a New York City manufacturer of fur and wool products to cease misbranding and falsely invoicing its merchandise. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act, the Fur Products Labeling Act and the Wool 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 Cornet & Morgenstern, Inc., a corporation, and William :vorgenstern and William Cornet, individually and as of1cers 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 the Wool Products Laheling Act of 1939, and it appearing to the Commission that a proceeding hy it in respect thereof would be in thc public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Cornet & Morgenstern, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York. Respondents William :Ylorgenstern and William Cornet are officers of the corporate respondent. They formulate, direct and control the acts, practices and policies of the corporate respondent including those hereinafter set forth.

Respondents are manufacturers of fur products and wool products with their offce and principal place of business located at 240 West 37th Street, New York, "'ew York.

PAR. 2. Respondents are now, and for some time last past have Complaint 71 F.

been, engaged in the introduction into commerce, and in the manufacture for 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 manufactured for sale, sold, advertised, offered for sale, transported and distributed fur products which have been made in whole or in part of furs which have been shipped and received in commerce as the terms "commerce fur" and "fur product" are defined in the Fur Products Labeling Act.

PAR. 3. Certain of said fur products were misbranded in that they were falsely and deceptively labeled or otherwise falsely or deceptively identil1ed with respect to the name or the country of origin of furs contained in such fur products, in violation of Section 4 (1) of the Fur Products Labeling Act. Among such misbranded fur products, but not limited thereto were fur products labeled to show the country of origin of furs used in such fur products as Australia when the country of origin of such furs was, in fact, Sweden.

PAR. 4. Certain of said fur products were misbranded in that they were falsely and deceptively labeled or otherwise falsely or deceptively identified with respect to the name or designation of the animal or animals that produced the fur from which the said fur products had been manufactured, in violation of Section 4 (1) of the Fur Products Labeling Act.

Among such misbranded fur products, but not limited thereto, were fur products which were labeled as " Opossum" when fur contained in such fur products was, in fact j' Blue Fox, PAIL 5. Certain of said fur products were misbranded in that they were falsely and deceptively labeled to show that fur contained therein was natural, when in fact such fur was pointed bleached, dyed, tip-dyed, or otherwise artificially colored, in violation of Section 4 (1) of the Fur Products Labeling Act. PAR. 6. Certain of said fur products were misbranded in that they were not labeled 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 thereunder.

Among such misbranded fur products, but not limited thereto were fur pmducts with labels which failed: 1. To shmy the true animal name of the fur u:;ed in any such fur product.

2. To disclose that the fur contained in the fur products was CORNET & MORGENSTERN , INC. , ET AL. 811 809 Complaint bleached, dyed, or otherwise artificially colored, when such was the fact.

3. To show the country of origin of the imported furs contained in the fur products.

PAR. 7. Certain of said fur products were misbranded in violation of the Fur Products Labeling Act in that they were not labeled in accordance with the Rules and Regulations promulgated thereunder in the following respects:

(a) The. term "natural" was not used on labels to describe fur products which were not pointed, bleached, dyed, tip-dyed, or otherwise artificially colored, in violation of Rule 19 (g) of said Rules and Regulations.

(b) Sample fur products used to promote or effect sales of fur products were not labeled to show the information required under the said Act and Regulations, in violation of Rule 33 of said Rules and Regulations.

PAR. 8. Certain of said fur products were falsely and deceptively invoiced by the respondents in that they were not invoiced as required by Section 5 (b) (1) of the Fur Products Labeling Act and the Rules and Regulations promulgated under such Act. Among such falsely and deceptively invoiced fur products, but not limited thereto, were fur products covered by invoices which failed to show the true animal name of the fur used in any such fur product.

PAR. 9. Certain of said fur products were falsely and deceptively invoiced in that said ftu' products \were invoiced to show that the fur contained therein was natural, ,vhen in fact such fur \vas pointed, bleached, dyed, tip-dyed or otherwise artificially colored in violation of Section 5 (b) (2) of the Fur Products Labeling Act. PAR. 10. Certain of said fur products were falsely and deceptively invoiced in violation of the Fur Products Labeling Act in that they were not invoiced in accordance with the Rules and Regulations promulgated thereunder inasmuch as required item numbers were not set forth on invoices, in violation of Rule 40 of said Rules and Regulations.

PAR. 11. Respondents furnished false guaranties under Section 10 (b) of the Fur Products Labeling Act with respect to certain of their fur products by falsely repl'esenting in writing that respondents had a continuing guaranty on file with the Federal Trade Commission "when respondents in furnishing such guaranties had reason to believe that the fm products so falsely guarantied would be introduced, sold, transported and distributed commerce, in violation of Rule 48 (e) of said Rules and Regulations Complaint 71 F.

under the Fur Products Labeling Act and Section 10 (b) of said Act.

PAR. 12. 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 methods of competition and unfair and deceptive acts and practices in commerce under the Federal Trade Commission Act.

PAR. 13. Subsequent to the effective date of the Wool Products Labeling Act of 1939, respondents have manufactured for introduction into commerce, introduced into commerce, sold, transported, distributed, delivered for shipment, shipped and offered for sale in commerce, as "commerce " is defined in said Act, wool products as "wool product" is defined therein. PAR. 14. Certain of said wool products were misbranded by the respondents within the intent and meaning of Section 4 (a) (1) of the Wool Products Labeling Act of 1939 and the Rules and Regulations promulgated thereundcr in that they were falsely and deceptively stamped, tagged, labeled, or otherwise identified with respect to the character and amount of the constituent fibers contained therein.

Among such misbranded wool products, but not limited thereto were wool products labeled or tagged by respondents as 100 % wool when in truth and in fact said products contained substantially less than 100% wool.

PAR. 15. Certain of said wool products 'were misbranded by respondents in that they were not stamped, tagged, labeled, or otherwise identified as required under the provisions of section 4 (a) (2) of the Wool Products Labeling Act of 1939 and in the manner and form as prescribed by the Rules and Regulations promulgated under said Act.

PAR. 16. Certain of said wool products were misl;randed in violation of the Wool Products Labeling Act of 1939 in that they were not labeled in accordance with the Rules and Regulations promulgated thereunder in the following respects: 1. The respective common generic names of fibers present in wool products were not used in naming such fibers in required information on stamps, tags, labels, or other means of identification affxed to such wool products, in violation of Rule 8 of the aforesaid Rules and Regulations.

2. Information required under Section 4 (a) (2) of the Wool Products Labeling Act of 1989 and the Rules and Regulations promulgated thereunder was set forth on the stamp, tag, label, or CORNET & MORGENSTERN , II\C. , ET AL. 813 809 Decision and Order other means of identification on or affxed to wool products, in abbreviated form, in violation of Rule 9 of the aforesaid Rules and Regulations.

3. The name of a specialty fiber, in lieu of the word "wool" in describing such specialty fiber, was set forth on one label affxed to a wool product and not set forth in the required fiber content disclosure on the required label affyed to such wool product, in violation of Rule 18 of the aforesaid Rules and Regulations. 4. Samples, swatches or specimens of wool products used to promote or effect sales of \vool products in commerce were not labeled or marked to show the information required under the said Act and Regulations, in violation of Rule 22 of said Rules and Regulations.

PAR. 17. The acts and practices of the respondents as set forth in Paragraphs Fourteen, Fifteen and Sixteen above were, and are in violation of the Wool Products Labeling 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. DECISION AND ORDER The Federal Trade Comnlission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the Bureau of Textiles and Furs proposed to present to the Commi ,3ion for its consideration and which, if issued by the Commission, \vauld charge respondents with violation of the Federal Trade Commission Act, the Fur Products Labeling Act "nel the Wool Products Labeling Act of 1939; anel 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 aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by the respondents that the law has been violated as alleged in such complaint, and waivers and provisions as required by the Con1mission s rules; and The Commission, having reason to believe that the respondents have violated said Acts, and having determined that complaint should issue stating its charges in that respect, hereby issues its Order 71 F.

complaint, accepts said agreement, makes the following jurisdictional findings, and enters the following order: 1. Respondent Cornet & Morgenstern, Inc. , is a corporation organized, existing and doing business under and by virtue of the Jaws of the State of New York, with its offce and principal place of business located at 240 West 37th Street, in the city of New York, State of New York.

Respondents Wiliam Morgenstern and Wiliam Cornet are officers of said corporation and their address is the same as that of said corporation.

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 Cornet & Morgenstern, Inc., a corporation and its offcers, and William Ylorgenstern and William Cornet individually and as offcers of said corporation, and respondents representatives, agents and employees, directly or through any corporate or other device, in connection with the introduction, or manufacture for introduction, into commerce, or the sale, advertising or offering for sale in commerce, or the transportation or distribution in commerce, of any fur product; or in connection ,with the manufacture for sale, sale, advertising, offering for sale transportation or distribution of any fur product which is made in whole or in part of fur which has been shipped and received in commerce, as the terms "commerce fur" and "fur product" are defined in the Fur Products Labeling Act, do forthwith cease and desist from:

A. Misbranding any fm' product by:

1. Falsely OJ' deceptively labeling or ..therwise falsely or deceptively identifying any such fur product as to the country of origin of furs contained in such fur pJ"duct. 2. Falsely or deceptively labeling or otherwise falsely or deceptively identifying any such fur product as to the name or designation of the animal 01' animals that produced the fm contained in such fur product. 3. Representing, directly 01' by implication, on a label that the fm contained in such fur product is natural when such fur is pointed, bleached, dyed, tip-dyed, or otherwlse artificially colored.

4. Failing to affx a label to such fm product showing CORNET & MORGENSTERN , INC. , ET AL. 815 809 Order in words and in figures plainly legible all of the information required to be disclosed by each of the subsections of Section 4 (2) of the Fur Products Labeling Act. 5. Failing to set forth the term "natural" as part of the information required to be disclosed on a label under the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder to describe such fur product which is not pointed, bleached, dyed, tip-dyed, or otherwise artificially colored.

6. Failing to affx a label to such fur product, when used as a sample to promote or effect sales of fur products, sho\ving in words and figures plainly legible all of the information required to be disclosed by each of the subsections of Section 4 (2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder.

B. Falsely or deceptively invoicing any fur product by: 1. Failing to furnish an invoice, as the term " invoice is defined in the Fur Products Labeling Act, showing in words and figures plainly legible all the information required to be disclosed by each of the subsections of Section 5 (b) (1) of the Fur Products Labeling Act. 2. Representing, directly or by implication, on an invoice that the fur contained in such fur product natural when such fur is pointed, bleached, dyed, tipdyed, or otherwise artificially colored. 8. Failing to set forth on an invoice the item number or mark assigned to such fur product.

It is further O1'dered That Cornet & Morgenstern, Inc., a corporation, and its offcers, and William Morgenstern and William Cornet, individually and as offcers of said corporation, and respondents' representatives, agents and employees, directly or through any corporate or other device, do forthwith cease and desist from furnishing a false guaranty that any fur product is not misbranded, falsely invoiced, or falsely and deceptively advertised when respondents have reason to believe that such fur product may be introduced, sold, transported, or distributed in commerce.

It is further ordered That respondents Cornet & :Y10rgenstcrn Inc. , a corporation, and its offcers, and William Morgenstern and Wiliam Cornet, individually and as offcers of said corporation and respondents' representatives, agents and employees, directly Order 71 F.

or through any corporate or other device, in connection with the introduction, or manufacture for introduction, into commerce, or the offering for sale, sale, transportation, distribution, delivery for shipment or shipment, in commerce, of \vool products, as "commerce" and Hwool product" are defined in the VV 001 Products Labeling Act of 1939, do forthwith cease and desist from: Misbranding wool products by:

1. Falsely and deceptively stamping, tagging, labeling, or otherwise identifiying such products as to the character or amount of the constituent fibers contained therein.

2. Failing to securely affx to, or place on, each such product a stamp, tag, label, or other means of identification showing in a clear and conspicuous manner each element of information required to be disclosed by Section 4 (a) (2) of the Wool Products Labeling Act of 1939. 3. Failing to set forth the respective common generic names of fibers present in wool products in naming such fibers in required information on stamps, tags, labels or other means of identification affxed to such wool products.

4. Setting forth information required under Section 4 (a) (2) of the Wool Products Labeling Act of 1939 and the Rules and Regulations promulgated thereunder in abbreviated form.

5. Using the name of a specialty fiber in lieu of the word "\vool" in describing such specialty fiber in nonrequired information or on a secondary label attached to the wool product without the name of the specialty fiber appearing in the required information on the required label affxed to such wool product.

6. Failing to affx labels to samples, s vatches, or specimens of wool products, used to promote or effect the sale of wool products, showing" in 'Nards and figures plainly legible all the information required to be disclosed by each of the subsections of Section 4 (a) (2) of the Wool Products Labeling Act of 1939 and the Rules and Regulations promulgated thereunder.

It is tUTther ordend That the respondents herein shan, 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. ADRIAN THAT, INC. , ET AL. 817 Complaint