David' S Specialty Shops, Inc. and David, Harry

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IN THE MA'ITER OF DAVID' S SPECIALTY SHOPS, INC. AND DAVID, HARRY AND OSCAR ISRAEL COMPLAINT, FINDINGS, A.ND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 2- 1914, AND OF AN ACT OF CONGRESS APPROVED OCT. 14, 1940 Docket 5852. Complaint, Feb. 21, 1951-Decisi.on, Feb. , 1952 Where a corporate chain organization with several retail outlets in New York and Ohio, and its three officers- (a) Misbranded certain wool products in violation of the Wool Products Labeling Act through labeling them as "100% wool," when they contained in fact substantial quantities of ra~'on fiber; (b) Misbranded said products in that the constituent tillers and the percentages thereof were not shown on the tags or labels thereon as required by said Act and Rules and Regulations promulgated thereunder; (c) Misbranded certain of said products in that the legal name of the manufacturer or other person authorized b~. the Act to affix stamps, etc. thereto or, in lieu thereof, a registered identification numbet', was not shown on the attached labels;

(d) Misbranded certain of said products in that constituent fibers of their interlinings were not separately set forth upon the attached labels, as required by said Rules, etc. ;

(e) Misbranded certain of said products within the intent and meaning of said Act and' Rule 12, in that skirts and coats sold in combination, were not labeled separately with their constituelltfibers and the precentages thereof; (f) ~1isbranded certain of said products in that attached stamps, tags, etc. named fibers not present therein; and After the deliver~' of certain wool products to them and shipment thereof to their retail stores ill Ohio, a nd before offer and :"ale to the public; and with intent to violate the provisions of said Act- (g) Caused and participated in the remov;:ll, and in other cases, in the mutilation, of some of the required stamps, tags, etc. affixed to certain wool products when received by them at thejr place of business; With the result that said wool products, when offered for sale and sold by them to the public at their places of business, did not bear the information required by said Act and Rules and Regulations: Held That such acts, practices and methods, under the circumstances set forth were in violation of the Wool Products Labeling Act of 1~39, an~ the Rules and Regulations promulgated thereunder, and constituted unfair and deceptive acts and vractices ill commerce.

In said proceeding in which respondents filed a substitute answer admitting all of the material allegations of fact set forth in the complaint and waiving all intervening procedure and further hearing as to said facts; and in which the hen ring examiner filed his initial decision, and counsel supporting the complaint seasonably filed an appeal and supporting brief and the Commission granted said appeal:

DAVID' S SPECIALTY SHOPS, INC. ET AL. 831 830 Complaint The Commission was of the opinion that the order to cease and desist contained in the initial decision was deficient in certain respects, in that (1) it did not prohibit respondents from removing 01' mutilating labels or other means of identificatioll with intent to violate the provisions of the Wool Products Labeling Act of 1939, and (2) it did not prohibit respondents from misrepresenting on such labels the character or amount of the constituent fibers contained in the wool products; it appearing that the complaint alleged and respondents' answer admitted that respondents had engaged in both of the for~going illegal practices; and ill lien of said initial decision made its findings, etc. as below set forth.

Before il1T. Clyde 111. II adley, hearing examiner. JIt' . Jesse D. !(ash for the Commission. Yen' IIWH Bi8CO of New York City, for respondents. COl\IPLAINT 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. DavicfsSpecialty Shops, Inc., a corporation, and David Israel, Harry Isra~L and Oscar Israel, individually and as office.ers of said c.orporation, have violated the provisions of said Ac.ts and the Rules and Regulations promulgated under the 'V 001 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 c.charges in that respect as follows:

PARAGRAPH 1. Responde-nt, David' s Specialty Shops, Inc., is a c.corpotation organized, existing and doing business under and by virtue of the laws of the State of New York, with its principal place of business located at 225 "\Vest 34th Street, New Yor1\:, New York. Corpol' ate respondent is a retail store chain organization with several retail outlets located in the States of N e\y York and Ohio. Respondents, Dayid Israel, Harry Israel, and Osc.ar Israel are president, treasurer, and sec.retary, respec.tively, of corpol ate respondent Itnd in such capacities they formulate- and exec.ute its policy.ies and practices. Their business address is the same as that of c.corporate respondent.

PAR. 2. Subsequent to July 15, 1941, respondents have introduced into c.commerce, and offered for sale, sold and distributed in commerce as " commerce" is defined in the ""V 001 Products Labeling Act of 1939 wool products, as "wool products" are defined therein. PAR. 3. Certain of said wool products were misbranded \"within the inte-l1t and meaning of the said act and the Rules and Regulations 21RS40--54---- Complaint 48 F. T. C. promulgated thereunder in that they were falsely and deceptively labeled as 100% wool " whereas in truth and in fact saiel products did not contain 100% wool but contained substantial quantities of rayon fiber. The said wool products so labeled were further misbranded in that their constituent fibers and the percentages thereof were not shown on the tags or labels thereon as required by said Act, in the Juanner and form as required by the said Rules and Regulations. Certain of the wool products were misbranded in that the legal name of the manufacturer thereof or of a person required or authoror other means ofized by said Act to affix stamps, tngs or labels identification thereto, was not shown on the labels attached to its products as required by said Act and in the manner and form required by said Rules and Regulations, nor was there so shown as and for such name thereof a registered identification number as perm.itted by said Rules and Regulations.

. Certain of said wool products were misbranded in that the constituent fibers of their interlinings and the percentages thereof were not separately set forth in the manner and form required by said Rules and Regulations, upon the tags or labels attached thereto. PAll. 4. Certain wool products V\:hen received by respondents at their place of business had affixe~ thereto stamps, tags, labels or other means of identification purporting to contain the information required by the vV 001 Products Labeling Act of 1939. After said wool products were delivered to the respondent and shipped to their retail stores located in Ohio, and before they were offered for sale or sold respondents to the public, said respondents caused and participated in the removal of some and the mutilation of others of the said stamps to violate tags, labels and other means of identification with intent the provisions of the. \V 001 Products Labeling Act of 1939. As a result of respOlidents' said acts and practices in removing and mutilating said stamps, tags, labels and other means of identification affixed to said wool products, said wool products when offered for sale and sold by respondents to the public at their places of business did not have affixed thereto stamps, tags, labels or other means of identification containing the information required by said Act and the Rules and Regulations.

Certain of said wool products were nlisbranded within the intent and meaning of the said Act and Rule 12 of the Rules and Regulations promulgated thereunder in thatthe merchandise conbiined two pieces namely, skirts and coats, sold in combination which pieces were not labeled separately with the constituent fibers and the percentage thereof contained in said garments.

DAVID' S SPECIALTY SHOPS, INC. ET AL. 833 830 Decision Certain of said .wool products were misbranded in that the stamps tags, labels or other marks of identification attached thereon named fibers not present in said garments.

PAR. 5. The aforesaid acts and practices and methods of respondents as alleged were and are in violation of Sections 3, 4 and 5 of the "\V 001 Products Labeling Act of 1939, Rules 2, ?, 12 (a), 13, 24 and 25 of the Rules and Regulations promulgated thereunder and constitute unfair and deceptive practices in commerce within the intent and meaning of the Federal Trade Commission Act. DECISION OF THE COMl\fISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to the provisions of the Federal Trade Commission Act and the 'y 001 Products Labeling Act of 1939, and by virtue of the authority vested in the Commission by said Acts, the Federal Trade Commission on February 21 , 1951, issued and subsequently served upon the respondents named in the caption hereof its complaint in this proceeding, charging said respondents with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said Acts. On March 23, 1951, respondents filed their answer to said complaint. On April 17, 1951, upon motion granted by a hearing examiner of the Commission, theretofore duly designated by it respondents withdrew said original answer and filed in lieu thereof a substitute answer admitting all of the material allegations of fact set forth in said complaint, and waiving all intervening procedure and further hearing as to said facts. Thereafter, on l\1ay 8, 1951, said hearing examiner filed his initial decision. Within the time permitted by the Commission s rules of practice counsel supporting the complaint filed with the Commission an appeal from said initial decision. Thereafter, this proceeding regularly came on for final hearing by the Commission upon this appeal and the brief in support thereof, and the Commission issued its order granting said appeal.

The Commission is of the opinion that the order to cease and desist contained in the initial decision is deficient in certain respects, including (1) the order does not prohibit respondents from removing or mutilating labels or other means (jf identification with intent to violate the provisions of the 1V 001 Products Labeling Act of 1939, and (2) the order does not prohibit respondents from misrepresenting on such labels the character or amount of the constituent fibers contained in the wool products. The complaint alleges and respondents answer admits that respondents have engaged in both of these illegal practices. Therefore, the Commission~ being now fully advised in Findings 48 F. T. C.

the premises, finds that this proceeding is in the interest of the public and makes the following findings as to the facts, conclusion drawn therefrom, and order, the same to be in lieu of the initial decision of the hearing examiner.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, David' s Specialty Shops, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its principal place df business located at 225 West 34th Street New York New York. Corporate respondent is a retail store chain organization with several retail outlets located in the States of New York and Ohio. Respondents, David Israel, Harry Israel, and Oscar Israel are president, treasurer, and secretary, respectively, of corporate respondent and in such capacities they formulate and execute its policies and practices. Their business address is the same as that of corporate respondent.

PAR. 2. Subsequent to July 15, 1941, respondents have introduced into commerce, and offered for sale, sold and distributed in commerce, as "commerce" is defined in the "\V 001 Products Labeling Act of 1939, wool products, as "wool products" are defined therein. PAR. 3. Certain of said wool products were misbranded within the intent and meaning of said Act and the Rules and Regulations promulgated thereunder in that they were falsely and deceptively labeled as "100% wool " whereas in truth and in fact said products did not contain 100% wool but contained substantial quantities of rayon fiber. The said wool products so labeled were further misbranded in that their constituent fibers and the percentages thereof were not shown on the tags or labels thereon as required by said Act in the manner and form as required by the said Rules and Regulations. Certain of the wool products we,re misbranded in that the legal mUlle of the manufacturer thereof or of a person required or authorized by said Act to affix stamps, tags or labels or other means of identification thereto, was not shown on the labels attached to such prod ucts as required by said Act and in the manner and form required by said Rules and Regulations, nor was there so shown as and for such name a registered identification number as permitted by said Rules and Regulations.

Certain of said wool products were misbranded in that the constituent fibers of their interlinings were not separately set forth in the manner and form required by said Rules and Regulations, upon the tags or labels attached to the said wool products. DAVID' S SPECIALTY SHOPS, INC. ET AL. 835 830 Order PAR. 4. Certain wool products, when received by respondents at their place of business, had affixed thereto stamps, tags, labels or other means of identification purporting to contain the information required by the 'V 001 Products Labeling Act of 1939. After said wool products were delivered to the respondents and shipped to their retail stores located in Ohio, and before they :were offered for sale or sold by respondents to the public, said respondents caused and participated in the removal of some, and the mutilation of others of the said stamps, tags, labels and other means of identification with the intent to violate the provisions of the vV 001 Products Labeling Act of 1939. As a result of respondents' said acts and practices in removing and mutilating such means of identification affixed thereto said wool products, when offered for sale and sold by respondents to the public at their places of business, did not bear the information required by said Act and the Rules and Regulations. Certain of said wool products were misbranded within the inte. and meaning of the said Act and Rule 12 of the Rules and Regulations promulgated thereunder in that the merchandise contained two pieces, namely, skirts and coats sold in combination, which pieees were not labeled separately with the constituent fibers and the percentages thereof contained in said garments.

Certain of said wool products were misbranded in that the stamps tags, labels or other marks of identification attached thereon named fibers not present in said garments.

CONCLUSION as The aforesaid acts, practices and methods of the respondents, herein found, were and are in violation of the 'V 001 Products Labeling Act of 1939 and the Rules and Regulations promulgated thereunder, and constitute unfair and deceptive acts and practices in commerce. within the intent and meaning of the Federal Trade Commission Act.

ORDER It is ordered, That the respondent, David's Specialty Shops, Inc. n corporation, and its officers, and respondents, David Israel, Harry Israel and Oscar Israel, individually and as officers of said corporadi- tion, and their respective agents, representatives and employees, rectly or t11lough any corporate or other device, in connection with or dis-the introduction into commerce or the offering for sale, sale, tribution in commerce, as "commerce" is defined in the aforesaid " as suchActs, of ladies' skirts and coats, or other "wool products products are defined in and subject to the vV 001 Products Labeling Order 48 F. T. C..

Act of 1939, which products contain, purport to contain, or in any way are represented as containing "wool reprocessed wool orreused wool " as those terms are defined in said Act, do forthwith cease and desist from misbranding such products: 1. By misrepresenting on any stamp, tag, label or other means of identification the character or amount of the constituent fibers of any of said products.

2. By failing to affix securely to or place on such products a stamp, tag, label or other means of identification showing in a clear and conspicuous manner:

(a) The percentage of the total fiber weight of such wool product exclusive of ornamentation not exceeding five percentum of said total fiber weight, of (1) wool, (2) reprocessed wool, (3) reused wool, (4) each fiber other than wool where said percentage by weight of such fiber is five percentum or more, and (5) the aggregate of all other fibers.

(b) The maximum percentage of the total weight of such wool product of any nonfibrous loading, filling, or adulterating matter. (c) The name or the registered identification number of the manufacturer of such wool product or of one or more persons engaged in introducing such wODI product into commerce or in the offering for sale, sale, or distribution thereof in commerce, as "commerce" is defined in the Federal Trade Commission Act and the "\V 001 Products Labeling Act of 1939.

(d) The con~tituent fibers of interlinings of such wool products separately set forth on said identifying marks or labels attached thereto.

3. By failing to label separately each garment or separate piece of merchandise subject to said Act whether two or more such garments or pieces be marketed together or in combination with each other. PTovided That the foregoing provisions concerning misbranding shall not be. construed to prohibit acts permitted by paragraphs (a) and (b) of Section 3 of the "\V 001 Products Labeling Act of 1939; And JJ'i'o'vided f1.wthe1' That nothing contained in this order shall be eonstrued as limiting any applicable provisions of said Act or the Rules and Regulations promulgated thereunder. tis fl.l'J'ther ordered That said respondents and their officers, representatives, agents and employees, as aforesaid, directly or through any corl)orate or other device, in connection with the purchase, offering for sale, sale, or distribution of " 001 products " as such products are defined in and subject to the "\V 001 Products Labeling Act of 1909, do forthwith cease and desist :from causing or participating in the removal or mutilation of any stamp, tag, label, or other means I;, DAVID' S SPECIALTY SHOPS, INC. ET AL. 837 830 Order of identification affixed to any such "wool product" pursuant to the Y\T 001 Products Labeling Act of 1939, with intent to violate the pro. visions of said Act, and which stamp, tag, label, or other means of identification purports to contain all or any part of the information required by said Act.

It is fu1'tli-er' o1'deped 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. 838 FEDERAL TRADE COML\HSSION DECISIONS Order 48 F. T. C.

IN THE Matrer OF QUAKER DISTRIBUTORS, INC. ET AL MODIFIED CEASE AND DESIST ORDER Docket 5673. Order, Pebnwry, 19.5'.2 Order modifying original order of August 6, 1951, 48 F. '1'. C. 96, so as to require respondents, in connection with the offer, etc., of aluminum ware or other merchandise in commerce, to cease and desist from- Representing that they are conducting a poll or survey, "unless they are in fact" so doing; or representing "that they are conducting a poll or survey. where the representation is made in such a manner as to initially conceal from prospective purchasers that they are engaged in the sale of merchandise and from making the other miSrepl'eFentations in said order below set out. Before Mr. Earl J. I(olb hearing Bxaminer. Mr. William L. Peneke for the Commission. Sundheim, Folz, Ka'lnsler Goodis of Philadelphia Pa., for respondents.

MODIFIED ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the respondents' answer thereto, testimony and other evidence in support of and in opposition to the allegations of the complaint introduced before a hearing . examiner of the Commission theretofore duly designated by it, the hearing examiner s recommended decision and exceptions thereto counsel for respondents, briefs and oral argument of counsel, the Commission, having ruled on the exceptions to the hearing examiner recommended decision and having made its findings as to the facts and its conclusion that the respondents had violated the provisions of the Federal Trade Commission Act, on August 6, 1951, issued and subsequently served upon the respondents said findings as to the facts, conclusion, and its order to cease and desist. Thereafter, pursuant to a motion filed by respondents, the Commission reconsidered the matter, and being of the opinion that its order should be modified in certain respeets:

It is ordered That the respondent (Juaker Distributors, Inc., a corporation, and its officers, representatives, agents and employees, and the individual respondents Jack V\Teinstock Nathan Loesberg, Robert Bertin, Jack Gerstel, and Louis Taffer, and their respective representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution QUAKER DISTRIBUTORS, INC. ET AL. 839 838 Order of aluminum ware or other merchandise in commerce, as "commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist froin representing, directly or by implication: 1. That they are conducting a poll or sllrvey, unless they are in fact conducting a bona fide poll or survey;

2. That they are conducting a poll or survey, where the representation is made in such a manner as to initially conceal from prospective purchasers that they are engaged in the sale of merchandise; 3. That the purchasers of the said merchandise are being given a reduced price for such merchandise or any other valuable consideration as a premium or reward for their collection of box tops, clipping of advertisements, cooperation in furnishing information, or participation in any other similar project or activity; 4. That the said merchandise is being sold at a substantial discount or reduction in price when the price so charged is the usual and customary price at which they sell the said merchandise in the ordinary course of business;

5. That respondents' aluminum ware can be used for cooking foods in general without the use of water.

It is further ordered That the respondents shall within sixty (60) days after service upon them of this modified 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. .840 FEDERAL TRADE COMMISSION DECISIONS Complaint 48 F. T. O.