Korner Fabrics, Inc

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In roe Marrer or KORNER FABRICS, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE FLAMMABLE FABRICS ACTS Docket C-1980. Complaint, July 20, 1971—Decision, July 20, 1971 Consent order requiring a New York City seller and distributor of fabrics, incuding certain cotton white organdy fabrics, to cease violating the Fiammable Fabrics Act by importing or selling any fabric which fails to eonform to the standards of said Act.

Complaint Pursuant to the provisions of the Federal Trade Commission Act and the Flammable Fabrics Act, as amended, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that. Korner Fabrics, Inc., a corporation, and Sam Korner and David Korner, 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, as amended, 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: ParscrarH 1. Respondent Korner Fabrics, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York. Its address is 214 West 39th Street, New York, New York.

Respondents Sam Korner and David Korner are officers of the corporate respondent. They formulate, direct and control the acts, practices and policies of the said corporate respondent including those hereinafter set forth.

The respondents are engaged in the sale and distribution of fab- Decision and Order 79 E.T.C.

ries which are intended for use, or which may reasonably be expected to be used, in products, as the terms “fabrics” and “product” are defined in the Flammable Fabrics Act. Par. 2. Respondents are now and for some time last past have been engaged in the sale or offering for gale, in commerce, and the importation into the United States, and have introduced, delivered for introduction, transported and caused to be transported in commerce, and have sold or delivered after sale or shipment in commerce, fabrics, as “commerce” and “fabric” are defined in the Flammable Fabrics Act, as amended, which fabrics failed to conform to an applicable standard or regulation continued in effect, issued or amended under the provisions of the Flammable Fabrics Act, as amended.

Among such fabrics mentioned hereinabove were 100 percent cotton white organdy fabrics designated as Stern & Stern Qualities 9800 and 8805.

Par. 3. The aforesaid acts and practices of respondents were and are in violation of the Flammable Fabrics Act, as amended, 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.

DrEcIsioN AND ORDER The Federal Trade Commission 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 Division of Textiles and Furs, Bureau of Consumer Protection 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 and the Flammable Fabrics Act, as amended; and The respondent 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 respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s Rules; and 83 Decision and Order The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Acts, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in § 2.84(b) of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order: 1. Respondent Korner Fabrics, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York.

Respondents Sam Korner and David Korner are officers of the corporate respondent. They formulate, direct and control the acts, practices and policies of said respondent. Respondents are wholesalers of fabrics with their office and principal place of business located at 214 West 39th Street, New York, New York.

2. The Federal Trade Commission has jurisdiction of the subject matter of the proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered, That respondents Korner Fabrics, Inc., a corporation, and its officers, and Sam Korner and David Korner, 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 selling, offering for sale, in commerce, or importing into the United States, or introduc- - ing, delivering for introduction, transporting or causing to be transported in commerce, or selling or delivering after sale in commerce any product, fabric, or related material; or manufacturing for sale, selling or offering for sale, any product made of fabric or related material which has been shipped or received in commerce, as “commerce,” “product,” “fabric” and “related material” are defined in the Flammable Fabrics Act, as amended, which product, fabric, or related material fails to conform to an applicable standard or regulation issued, amended or continued in effect, under the provisions of the aforesaid Act.

Tt is further ordered, That respondents notify all of their customers who have purchased or to whom have been delivered the fabrics which gave rise to the complaint of the flammable nature of such fabrics and effect recall of such fabrics from said customers. 86 FEDERAL ‘TRADE COMMISSION DECISIONS Decision and Order 79 FVIAC.

It is further ordered, That the respondents herein either process _ the products, fabric, or related material which gave rise to the complaint so as to bring them into conformance with the applicable standard of flammability under the Flammable Fabrics Act, as amended, or destroy said products, fabric, or related material. It is further ordered, That the respondents herein shall, within ten (10) days after service upon them of this order, file with the Commission a special: report in writing setting forth the respondents’ intentions as to compliance with this order. This special report shall also advise the Commission fully and specifically concerning (1) the identity of the fabrics which gave rise to the complaint, (2) the amount of said fabrics in inventory, (3) any action taken and any further actions proposed to be taken to notify customers of the flammability of said fabrics, and effect the recall of said fabrics from customers, and of the results thereof, (4) any disposition of said fabrics since April 8, 1970, in the case of Quality 9800 and since February 10, 1970, in the case of Quality 8805 and (5) any action taken or proposed to be taken to bring said fabrics into conformance with the applicable standard of flammability under. the Flammable Fabrics Act, as-amended, or destroy said fabrics and the results of such action. Such report shall further inform the Commission as to whether or not respondents have in inventory any product, fabric, or related material having a plain surface and made of paper, silk, rayon and acetate, nylon and acetate, rayon, cotton or any other material or combinations thereof in a weight of two ounces or less per square yard, or any product, fabric or related material having a raised fiber surface. Respondents shall submit samples of not less than one square yard in size of any such product, fabric or related material with this report.

lt is further ordered, That respondents notify the Commission at least 30 days prior to any proposed change in the corporate respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of this order.

It is further ordered, That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisiens.

ft is further ordered, That respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commussion a report, in writing, setting forth in detail the manner and form in which they have complied with this order. Complaint