Ben D. Fogel

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IN THE MATI'ER OF BEN n FOGEL AND LOUIS SINGER, TRADING AS B. & L. HAT COMPANY . , N COMPLAINT, FINDI:\'GS, AND ORDER IN REGARD TO THE ALLEGED VIOLATIO ' OF SEC. 5 OF AN ACT OF CONGRESS APPROVE]) SEPT. 26, 19H Docket 4679. C011tpla.int, Jan. 23, 194!2-Decision, Sept. 28, 1942 Where two individuals, engaged in the manufacture of women's l1ats rro~ felt and other materials obtained !rom old, worn, and previously use hats, which, after being cleaned, shaped, and fitted with new trimming~ bad the appearance of new hats made entirely from new materials: an in interstate sale and distribution of said products- · Sold such hats, with no labeling, marking, or designation stamped thereon o; attached thereto to indicate that they were in fact maue from pre· · viously used materials, to dealers by whom they were resold to the pu~ chasing public without disclosure of aforesaid fact,. and through sal failure to disclose their true nature, represented that the hats were ne"' hats manufactured entirely from new materials; t With tendency and capacity to mislead and deceive a substantial portion ° tbe purchasing public, thersby causing It to purchase substantial quantitie; of said hats, and to place in the hands of dealers a means to mislead an deceive the purchasing public: · !l Held, That such acts and practices, under the circumstances set forth, were a to the prejudice of the public, and constituted unfair and deceptive acts and practices in commerce.

Before Mr. Edward E. Reardon, trial examiner. !lfr. L. E. Oreel, Jr., for the Commission. J.(alldn, Gliek & Malki'!', of Chicago, Ill., for Louis Singer. COMPLAINT Pursuant to the provislons of the Fed~ral Trade Commission Actl and by virtue of the authority vested in it by said act, the Federnd Trade Commission, having reason to believe that Ben D. Fogel 11? Louis Singer, individually, and trading·as B. & L. Hat Co., herel?d after referred to as respondents, have violated the provisions of Sfl~ act,.and ,it appearing to the Commission that a proceeding by it .10 respect thereof would be in the public interest, he1;eby issues 1ts complaint, stating its. charges in that respect as follows: PARAGRAPH 1. Respondents, Ben D. Fogel and Louis Singer,. fl~ individuals, trading as B. & L. Hat Co., and have their princtp!l office and place of business at 612 '\V'est Lake Street, Chicago, Ill· · PAR. 2. Respondents are now, and for several years last past bn'V'e been, engaged in the business of manufacturing women's hats from).l. B. & L. HAT CO. 565 Complaint felt and other materials obtained from old, worn, and previously Used hats, and of selling the same to retailers, jobbers, or wholesale dealers in the various States of the United States. Respondents cause said hats, when sold, to be transported from their place of · ?usiness in the State of Illinois to the ~foresaid purchasers located In the various States of the United States other than the State of Illinois. Respondents maintain, and at all times mentioned herein. have maintained, a course of trade in said hats in commerce among ana between the various States of the United States, and in the District of Columbia.

PAn. 3. In the course and conduct of their business, respondents buy old, worn, and previously used felt hats. The old, worn, and Previously used felt hat bodies are cleaned and shaped ·and fitted With new trimmings, and sold by respondents to dealers, who, in turn, sell said hats to the purchasing public. · · PAn. 4. The aforesaid old, worn, and previously used hat bodies, after being manufactured into hats, as hereinbefore described, have the appearance of new hats manufactured from felt and other materials which have never been worn or used. ·when articles manufactured from old, worn, and previously used materials having the ap- Pearance of being manufactured from new materials are offered to the purchasing public, and such articles are not clearly and con- S~icuously labeled as being manufactured from old, worn, and pre- 1>tously used materials, they are easily and readily accepted by members of the purchasing public as being manufactured entirely from new materials. · Said hats are sold to retailers and other dealers without any label, lnarking, or designation stamped thereon, or attached thereto, to indicate to the purchasing public or to the dealers that said hats are, in fact, manufactured from old, worn, and previously used hat bodies. s.aid hats are resold to the purchasing public without the fact being d~sclosed that they are manufactured from hat bodies and other mater~als which are old, worn, and previously used, and a substantial por- . hon of the purchasing public is thereby misled to believe that they are, in fact, new hats manufactured entirely from new materials. As a result of this erroneous and mistaken understanding and belief, SUbstantial portions of respondents' hats are purchased by members Of the public. . t PAn. 5. Through the use of the aforesaid acts and practices, the· respondents place in the hands of dealers the means and instrumentalities whereby said dealers may deceive or mislead members of the Purchasing public into the erroneous and mistaken belief that they are purchasing hats munufa.ctured from new materials, when, in fact, 566 FEDERAL TRADE CO:\IMISSION DECISIONS Findings 35F. T. C.

£aid hats are composed entirely or in part of old, worn, and previously used hat bodies.

PAR. 6. The aforesaid acts and practices of the respondents', a.s · herein alieged, are all to the prejudice and injury of the public and · constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on January 23, 1942, issued and subsequently served its complaint in this proceeding upon the respondents, Ben .D. Fogel and Louis Singer, individually, and trading as B. & L. Hat Co., charging them with the use of unfair and deceptive ~tcts and practices in commerce in violation of the provisions of that act. After the filing ·of respondents' answer (which admitted the principal allegations of the complaint), testimony and other evidence in further support of the allegations of the complaint were introduced by the attorney for the Commission before a trial examiner of the Commission theretofore duly l;lesignated by it (no evidence being offered by respondents), and such testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on for final hearing before the 9om· mission on the complaint, the answer thereto, testimony and other evidence, report of the trial examiner upon the evidence, and brief in support of the complaint (no brief having been filed by respon.d· ents and oral argument not having been requested); and the Commission, having duly considered the matter and being now fully advised in the premises, finds that this proceeding is in the interest of the pub· lie and makes this its findings as to the facts and its conclusion drawn therefrom. ' FINDINGS AS TO THE FACTS PARAGRAPH 1. During the period begimi_ing December 1, 19.39, and ending June 27, 1941, the respondents, Ben D. Fogel and Louis Singer, were copartners, operating under the name of B. & L. Hat Co., with their principal office and place of business at 612 West Lake Streed Chicago, Ill. On-June 27, 1941, the copartnership was dissolved, an thereafter respondent, Louis Singer, continued to operate the business ·individually, retaining the trade.n~me ~· & L. Ha~ Co. Responden~ Ben D. Fogel, entered upon a stmtlar hne of busmess at 226 Sout 'Vabash Avenue, Chicago; 111:, :using a different trade name. PAR. 2. During.the period of their copartnership, the respondents were engaged in the business of manufacturing women's hats :from B. & L. HAT CO. 567 564 Ordet• felt and other materials obtained from old, worn, and previously Used hats, and of sellingtheir products to retailers and other dealers. Respondents caused their hats, when sold, to be transported from their place of business i:t the State of Illi:nois to purchasers thereof located in various other States of· the United States. Respondents lnaintained .a course of trade in their hats in commerce among and between various States of the United States. · PAR. 3: In the operation of their business respondents, upon acquiring the old, worn, and previously used felt hats referred to above, ,c:lPmwd and shaped the hat bodies thus obtained, fitted them with · ?ew. trimmings, and then sold the finished prouuct to dealers, who In turn sold the hats to the purchasing public. Respondents' hats had the appearance of new hats manufactured entirely from felt and other materials which had never been worn or used, and for a time the hats were sold by respondents to dealers without any label, lllarking, or designation stamped thereon or attached thereto to indicate that the hats had in fact been manufactured from previously llsed materials. In reselling the hats to the public, the dealers like- Wise failed to disclose that the hats were used or second-hand· hats lather than new hats. In view of the appearance of the hats, respondents' failure to disclose their true nature constituted a repre- SPntation that the hats were new hats manufactured entirely from new materials. ' . PAR. 4. The acts and practic~s of the respondents had the tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belie£ that respondents' hats were new hats manufactured entirely from new nnd unused materials, and to cause such portion of the public to Purchase substantial quantities of respondents' product as a result of the erroneous and mistaken belief so engendered. Respondents' , ll('ts and practices served also to place in the hands of dealers a 1llf'ans or instrumentality whereby such dealers might be enabled to mislead and deceive members of the purchasing public. CONCLUSION The acts and practices of the respondents as herein found are all to the prejudice of the public and constitute unfair and deceptive acts imd practices in commerce within the intent and meanin(J' of the Federal Trade Co:rrimission Act. o ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Com-' lllission upon the complaint of the Commission, the answers of re- FEDERAL TRADE COl\:tMISSJON DECISIONS568 Oruer 3!3F.T.Cspondents (which admitted the prindipal allegations of the complaint), testimony and other evidence in further support of the allegations of the complaint taken before a trial examiner o:f the Commission theretofore duly designated by it (no evidence bein_g offered by respondents), report of the trial examiner upon the evi-. dence, and brief in support of the complaint (no brief having been filed by respondents and oral argument not having been requeste~), and the Commission having made its findings as to the facts and Its conclusion that the rp,.·pondents have violated the provisions of the Federal Tra<le C!Jnunissiori Act ..

It is ordered, That the respondent, Den D. Fogel and Louis Singer, individually, and trading as D. & L. Hat Co., or trading under any other name, and their representatives, agents and ~rn­ ployees·, directly or through any corporate or other device, in co~­ nection with the offering for sale, sale, and distribution of hats Ill commerce, as "commerce" is d~fined in. the Federal Trade Corn· mission Act, do forthwith cease and desist from: 1. Representing that hats composed in whole or in part of used or second-hand materials are new, or are composed of new materials, by failure to stamp in some conspicuous place on the exposed sur· face of the inside of the hat, in conspicuous and legible terms which cannot be removed or obliterated without mutilating the hat itself, a statement that said hats are composed of second-hand or used materials: Provided, That if substa-ntial bands, placed similarly to sweat bands in men's hats, are attached to said hats, then such statement may be stamped upon the exposed surface of such bands: Pr&vi.ded further,. That said stampings are of such nature that they cannot be removed or obliterated without mutilating the band and the band itself cannot be removed without rendering the ha.t unserviceable.

2. Representing in any manner that hats made in whole or in part from old, used, or second-hand materials are new or are corn· posed of new materials.

It is futl'tl~er ordered, That the respondents shall, within GO days after service upon them of this order, file with the Commission .11 report in writing, setting forth in detail the manner and form 10 which they have complied with this order.

It is further &rdered, That no provision in this order shall be construed as relieving responden~s in any respect of the necessity of complying with the requirements of the ·wool Products Labeling Act of 1939 nnd the authorized. rules and regulations thereund<'r. CHICAGO TECHNICAL COLLEGE 569 Syllabus