U.S. Textile Company, Inc

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

In Tue Matrer or U.S. TEXTILE COMPANY, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE WOOL PRODUCTS LABELING ACTS Docket C-2030. Complaint, Sept. 8, 1971—Decision, Sept. 8, 1971 Consent order requiring a Fall River, Mass., textile converter which markets finished apparel lining and quilted lining fabrics to garment manufacturers to cease misbranding and falsely invoicing its wool products. Complaint Pursuant to the provisions of the Federal Trade Commission 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 U.S. Textile Company, Inc., a corporation and Gershon Salhanick and Leonard W. Kates, 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 Wool Products Labeling Act of 1939, 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:

U.S. TEXTILE COMPANY, INC., ET AL. 383 382 Complaint Paracrapn 1. Respondent U.S. Textile Company, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the Commonwealth of Massachusetts. Individual respondents Gershon Salhanick and Leonard W. Kates are officers of said corporation. They formulate, direct and control the acts, practices and policies of the corporate respondent including the acts and practices hereinafter referred to. Respondents are engaged in business as textile convertors, marketing finished apparel lining and quilted lining fabrics, which they sell to garment manufacturers throughout northeastern United States. Their office and principal place of business is located at 303 Robeson Street, Fall River, Massachusetts.

Par. 2. Respondents, now and for some time last past, have. introduced into commerce, manufactured for introduction into commerce, sold, transported, distributed, delivered for shipment, shipped, and offered for sale, in commerce, as “commerce” is defined in said Wool Products Labeling Act of 1939, wool products as “wool product” is defined therein.

Par. 3. 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 products, but not limited thereto, were quilted fabrics stamped, tagged, labeled, or otherwise identified as containing “70% Reprocessed wool, 80% Unknown Reprocessed fibers” whereas in truth and in fact, such fabrics contained substantially different fibers and amounts of fibers than represented. Pan. 4. 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, were quilted fabrics with labels on or affixed thereto, which failed to disclose the percentage of the total fiber weight of the said wool products, exclusive of ornamentation not exceeding 5 per centum of said total fiber weight of (1) woo! fibers; (2) reprocessed wool; (3) reused wool; (4) each fiber other than wool when said percentage by weight of such fiber was five per centum or more; and (5) the ageregate of all other fibers.

Complaint 79 F.T.C.

Par. 5. The acts and practices of the respondents as set forth 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. Par. 6. Respondents are now, and for some time last past, have been engaged in the advertising, offering for sale, sale, and distribution of certain products, namely quilted fabrics. In the course and conduct of their business as aforesaid, respondents now cause and for some time last past, have caused their said products, when sold, to be shipped from their place of business in the Commonwealth of Massachusetts to purchasers located in various other States of the United States, and maintain and at all times mentioned herein have maintained, a substantial course of trade in said products in commerce, as “commerce” is defined in the Federal Trade Commission Act. Par. 7. Respondents in the course and conduct of their business have made statements on invoices to their customers, misrepresenting the fiber content of certain of their products. Among such misrepresentations, but not limited thereto, were statements setting forth the fiber content thereof as “70/80 Wool,” whereas, in truth and in fact, the product was not as represented but contained substantially different fibers and amounts of fibers than represented. Par. 8. The acts and practices set out in Paragraph Seven have the tendency and capacity to mislead and deceive the purchasers of said products as to the true content thereof. Par. 9. The aforesaid acts and practices of respondents, as herein alleged were, and are, all to the prejudice and injury of the public, and constituted, and now constitute, unfair and deceptive acts and practices in commerce, within the intent and meaning of the Federal Trade Commission Act.

Decision AND Orprer 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 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 Wool Products Labeling Act of 1939 ; and “U.S. TEXTILE COMPANY, INC., ET AL, 385 382 Decision and Order 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 Jaw has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s rules; and The Commission having thereafter considered the matter and haying 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 (80) days, now in further confor mity with the procedure prescribed in Section 2.34(b) of its rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order :

1. Respondent U.S. Textile Company, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the Commonwealth of M assachusetts, with its office and principal place of business located at 303 Robeson Street, Fall River, Massachusetts.

Respondents Gershon Salhanick and Leonard W. Kates are officers of said corporation. They formulate, direct and control the policies, acts and practices of said corporation and their address is the same as that of said corporation.

Respondents are engaged in business as textile convertors, mar keting finished apparel lining and quilted lining fabric, which they sell thr ronghout northeastern United States.

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

ORDER Tt is ordered, That respondents U.S. Textile Company, Inc., a corporation, and its officers, and Gershon Salhanick and Leonard W. Kates, individually and as officers of said corporation, and respondents’ representatives, agents and employees, directly or thr ough any corporate or other device, in connection with the introduction or manufacture for introduction into commerce, or offer ing for sale, sale, transportation, distribution, delivery for shipment or shipment, in commerce, of wool products, as “commerce” and “wool product” are Decision and Order 79 B.T.C.

defined in the Wool Products Labeling Act of 1939, do forthwith cease and desist from misbranding wool products by: 1. 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 affix 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) cf the Wool Products Labeling Act of 1939.

It is further ordered, That respondents U.S. Textile Company, Inc., a corporation, and its officers, and Gershon Salhanick and Leonard W. Kates, individually and as officers of said corporation, and respondents’ representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of quilted fabrics or other products, in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from misrepresenting the character or amount of constituent fibers contained in such products on invoices or shipping memoranda applicable thereto, or in any other manner. It is further ordered, That respondents notify the Commission at least 30 days prior to any proposed change in the corporate respondent such ag 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 the order.

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