Smart Modes of Calif., Inc.

Text (OCR of the scan at left; may contain errors)

IN THE :VIATTER OF SMART MODES OF CALIF. , I)!C., ET AL.

CONSEKT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO:IMISSION , THE FUR PRODUCTS LABELING AKD THE WOOL PRODUCTS LABELING ACTS Docket C-1242. Complaint, June 80 1967 Decisi(m June 30, 1967 Consent order requiring a Los Angeles, Calif, clothing manufacturer to cease misbranding its fur and wool products and falsely invoicing its fun;, COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act, the Fur Products Labeling Act and the Wool P,.oducts 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 Smart Modes of Calif., Inc., a corporation, and Julius Reinis and Lester Leonard, individually and as offcers of said corpol' tion, 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 labeling Act of 19:19 , and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest hereby issiles its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Smart Modes of Calif. , Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of California. Respondents Julius Reinis and Lester Leonard are offcers of the corporate respondent. They formulate, dired and control the acts practices and policies of the said corporate respondent including those hereinafter set forth.

Respondents are manufacturers of fur products and wool prod- SMART MODES OF CALIF., INC. ET AL. 1547 1546 Complaint ucts with their offce and principal place of business located at 834 South Broadway, Los Angeles, California. PAR. 2. Respondents are now, and for some time last past have 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 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 products was, in fact, Australian Opossum. PAR. 4. Certain of said fur products were misbranded in that they were not labeled as reqaired 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 products with labels which failed: J. To show the true animal name of the fur used in any such fur product.

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

3. To show the name, or other identification issued and registered by the Commission, of one or more of the persons who manufactured any such fur product for introduction into commerce, introduced it into commerce, sold it in commerce, advertised or offered it for sale, in commerce, or transported or distributed it in commerce.

PAR. 5, Certain of said fur products were misbranded in that labels attached thereto, set forth the name of an animal other than the name of the animal that produced the fur from which the said fur prorlacts had been manufactured, in violation of Section 4 (3) Complaint 71 F.

of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder.

PAR. 6. 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) Information required under Section 4 (2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was set forth on labels in abbreviated form, in violation of Rule 4 of said Rules and Regulations. (b) Information required under Section 4 (2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was set forth in handwriting on labels, in violation of Rule 29 (b) of said Rules and Regulations. (c) Information required under Section 4 (2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was not set forth in the required sequence, in violation of Rule 30 of said Rules and Regulations. PAR. 7. 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 thc 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. 8. 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 in the following respects: (a) The term "natural" was not used on invoices 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) Required item numbers were not set forth on invoices, in violation of Rule 40 of said Rules and Regulations, PAR. 9. The aforesaid acts and practices of respondents, as herein alleged, are in violation of t.he 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. 10. Respondents, now and for some time last past, have SMART MODES OF CALIF. , INC., ET AL. 1549 1546 Decision and Order manufactured for introduction into commerce, introduced into commerce, sold, transported, distributed, delivered for shipment shipped, and offered for sale, in commerce, as IIcommerce" is defined in the Wool Products Labeling Act of 1939, wool products as "wool product" is defined therein.

PAR. 11. 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 thereunder 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 prod acts, but not limited thereto were wool products stamped, tagged, labeled, or otherwise identified by respondents as "10070 wool " whereas in truth and in fact, said products contained substantially different fibers and amounts of fibers than as represented.

PAR. 12. Certain of said wool products were further 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.

Among such misbranded wool products, but not limited thereto was a wool product with a label on or affxed thereto, which failed to disclose the percentage of the total fiber weight of the said wool product, exclusive of ornamentation not exceeding 5% of the said total fiber weight, of (1) wool; (2) reprocessed wool; (3) reused wool; (4) each fibcr other than wool, when said percentage by weight of such fiber \vas 5;f, or more; and (5) the aggregate of all other fibers.

PAR. 13. The acts and practices of (he respondents as set forth in Paragraphs Eleven and Twelve 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 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 Federal Trade Commission having initiated an investigation of certain acts and practices of the respcndents named in the caption hereof, and the respondents having been famished there- Order 71 F. T.

after with a copy of a draft of complaint which the Bureau of Textiles and Furs proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act, the Fur Products Labeling Act and the Wool Products Labeling Act of 1939; 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 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 romplaint, and waivers and provisions as required by the Commission 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 complaint, accepts said agreement, makes the following jurisdictional findings, and enters the following order: 1. Respondent Smart Modes of Calif. , 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 834 South Broadway, Los Angeles, California.

Respondents Julius Reinis and Lester Leonard are offcers 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 respondents Smart :VIodes of Calif. , Inc. , a corporation, and its offcers, and Julius Reinis and Lester Leonard 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, ofiering 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 SMART MODES OF CALIF. , INC. , ET AL. 1551 1546 Order 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 fur product by:

1. Falsely or deceptively labeling or otherwise identifying such fur product as to the name or designation of the animal or animals that produced the fur contained in the fur product.

2. Failing to affx a label to such fur product showing in words and in ligures plainly legible all the information required to be disclosed by each of the subsections of Section 4 (2) of the Fur Products Labeling Act. 3. Setting forth on a label attached to such fur product the name or names of ady animal or animals other than the name of the animal producing the fur contained in the fur product as specified in the Fur Products Name Guide, and as prescribed by the Rules and Regulations.

4. Setting forth information required under Section 4 (2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder in abbreviated form on a label affxed to such fur product.

5. Setting forth information required under Section 4 (2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder in handwriting on a label affxed to such fur product.

6. Failing to set forth information required under Section 4 (2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder on a label in the sequence required by Rule 30 of the aforesaid Rules and Regulations.

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) (I) of the Fur Products Labeling Act. 2. Failing to set forth the term " natural" as part of the information required to be disclosed on an invoice under the Fur Products Labeling Act and Rules and Regulations promulgated thereunder to describe such fur product which is not pointed, bleached, dyed, tip-dyed, or otherwise artificially colored.

Complaint 71 F.

3. Failing to set forth on an invoice the item number or mark assigned to such fur product.

It is furthe?' ordered That respondents Smart Modes of Calif. Inc., a corporation, and its offcers, and Julius Reinis and Lester Leonard, 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 manufacture for introduction into commerce, the introduction into commerce, or the offering for sale, sale, transportation, distribution, delivery for shipment or shipment, in commerce, of wool products, as Hcommerce" and "wool product" are defined in the Wool Products Labeling Act of 1939, do forthwith cease and desist from misbranding wool products by:

I. Falsely and deceptively stamping, tagging, labeling, or otherwise identifying 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.

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.