Outside Carpets, Inc

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IN THE MATTER OF OUTSIDE CAlcPETS INC. ET AL.

CONSF::\T ORDF:R , F:TC., 1:\ REGARD TO THE ALLEGED VIOLATfO:\ OF THE FEDERAL TRADE COMMISSlO:\ AND TH;: FLAMMABLE FABRICS ACTS Dockel ('-2.'88. COllp/llilit, AjnU 24, lD,:l--Jecislo)J , Api! 1.97.. Consent order l' equir:ng a Rome, Georgia manufacturer and seller of carpets and rugs, 2.11l0ng other things to cease manufacturing for sale, selling, im­ porting. , or distributing any produc, fabric, or related material which fails to conform to an applicable standard of flammability 01' regulation issued under the provisions of the Flammable Fabrics Act, as amended. OLTSIDE CARPETS . INC., ET AL. 1259 1258 Complaint 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 Outside Carpets, Inc. a corporation, and James E. Jordan and James Honea, individu­ ally and as officers of the said corporation, hereinafter referred to as respondents, have violated the provisions of the said Acts and the rules and regulations promulgated under the Flamm­ able Fabrics Act, as amended, and it appearing to the Commis­ sion that a proceeding by it in respect thereof would be in the public interest, hereby issues its c0111plaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Outside Carpets, Inc. , is a corpora­ tion organized, existing and doing business under and by virtue of the laws ofthe State of Georgia. RespondentsJames E. Jordan and James Honea are officers of the said corporate respondent. They formulate, direct and control the acts, practices and policies of the said corporation.

Respondents are engaged in the manufacture and sale of car­ pets and rugs \with their office and principal place of business located at Rt. 2, Hermitage Road, Rome, Georgia. PAR. 2. Respondents are now and for some time last past have been engaged in the manufacturing for sale, sale and offering for sale, in commerce, and have introduced, delivered for introduction, transported and caused to be transported in com­ merce, and have sold or delivered after sale or shipment in com­ merce, products, as the terms "commerce " and "product " are defined in the Flammable Fabrics Act, as amended, which pro­ ducts fail to conform to an applicable standard or regulation continued in effect, issued or amended under the provisions of the Flammable Fabrics Act, as amended.

An10ng such products mentioned hereinabove were "Hillcrest" style carpets with high density foam backing subject to Depart­ ment of Commerce Standard For the Surface Flammability of Carpets and Rugs (DOC FF 1-70).

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 regulabons promulgated thereunder, and as such constituted, and now constitute unfair l11ethods of competi­ tion and unfair and deceptive acts and practices in C0l1111erce within the intent and meaning of the Federal Trade Commission Act.

1260 FEDERAL TRADE COMMISSIO:\ DECISIONS Decision aml Order 82 F. DECISION AND ORDER The Federal Trade Commission having initiated an investiga­ tion 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 Flammable Fabrics Act, as amended; and The respondents and counsel for the Commission having there­ after 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 The Commission having thereafter considered the matter and having determined that it had reason to believe that the respon­ dents have violated the said Acts, and that complaint should issue stating its charges jn that respect, and having thereupon accepted the executed consent agreement and placed such agree­ ment on the public record for a period of thirty (30) days, now jn further conformjty wjth the procedure prescribed jn Section 34(b) of its rules, the Commission hereby issues jts complajnt makes the following jurisdictional fjndjngs, and enters the fol­ lowing order:

1. Respondent Outside Carpets, Inc. , js a corporabon organjzed, exisbng and doing busjness under and by vjrtue of the laws of the State of Delaware.

Respondents .J an1es E. Jordan and James Honea are officers of the said corporation. They formulate, direct and control the acts, practices and poljcies of the said corporation. Respondents are engaged in the manufacture and sale of carpets and rugs with the office and principal place of business of respondents located at Rt. 2 , Hermitage Road, Rome, Georgja. 2. The Federal Trade Commission has jurisdiction of the sub­ ject matter of this proceeding and of the respondents, and the proceeding is jn the public interest.

ORDEI( It is o)'de)'ed That respondent Outside Carpets, Inc. , a coy­ j OUTSIDE CARPETS . IKC., ET AL. 1261 1258 Dccision and Order poration, its successors and assigns and its officers, and respon­ dents James E. Jordan and James Honea, individually and as officers of the said corporation and respondents' agents, rep­ resentatives and employees directly or through any corporation subsidiary, division, or other device do forthwith cease and desist from manufacturing for sale, selling, offering for sale, in com­ merce, or importing into the United States, or introducing, delivering for introduction, transporting or causing to be trans­ ported in commerce, or selling or delivering after sale or ship­ ment 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 re­ ceived in commerce, as "cOlllmerce product fabric" and "re­ lated material" are defined in the Flammable Fabrics Act, as amended, which product, fabric or related material fails to con­ form to an applicable standard or regulation continued in effect issued or alllended under the provisions of the aforesaid Act. It is jiirthe)' ordered That respondents notify all of their customers who have purchased or to whom have been delivered the products which gave rise to this complaint of the flammable nature of said products and effect the recall of said products from such customers.

ltis further o'lclered That the respondents herein either pro­ cess the products which gave rise to the complaint so as to bring them into conformance with the applicable standard of flamma­ bijity under the Flammable Fabrics Act, as amended, or destroy said products.

It is further ordereel That the provisions of this order with respect to customer notification, recall and processing or destruction shall be applicable to " Hillcrest" style carpets with high density foam backing as designated in subparagraph one of Paragraph Two of the complaint giving rise to this order and any other styles determined to be in violation of the Flamm­ able Fabrics Act, as amended, prior to the date of acceptance by the Commission, of the final compliance report. It is j1.,rther ordered That respondents herein shall, within ten (J 0) 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 specifi­ cally concerning (1) the identity of the products which gave rise to the complaint, (2) the identity of the purchasers of said pro­ ducts, (3) the amount of said products on hand and in the chan­ 1262 FEDERAL TRADE COMMISSIO:\ DECISIONS Decision and Order 82 F. nels of commerce, (4) any action taken and any further actions proposed to be taken to notify customers of the flammability of said products and effect the recall of said products from cus­ tomers, and of the results thereof, (5) any disposition of said products since April 13 , 1972, and (6) any action taken or proposed to be taken to bring said products into conformance with the applicable standard of flammability under the Flammable Fab­ rics Act, as amended, or destroy said products and the results of such action. Respondents will submit with their report, a complete description of each style of carpet or rug currently in inventory or production. LT pon request, respondents will for­ ward to the Comnlission for testing a sample of any such carpet or rug.

It -isfn/'ther 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 the order. It is further on/ered That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions.

It is fu. rthei' ol'del'ed That the individual respondents named herein promptly notify the Commission of the discontinuance of their present business or employment and of their affihation with a new business or employment. Such notice shall include individ ual respondents ' current business or employment which they are engaged as well as a description of their duties and responsibilities.

It is.t'l'thel' onlaed That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Comnlission a report in writing setting forth in detail the manner and form in which they have complied with this order. GREA T WESTERN UNITED CORP. , ET AL. 1263 Order