Grand Academy Sportswear, Inc.

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IN THE MATTER OF GRAND ACADEMY SPORTSWEAR, INC. ET AL.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26', 1914, .AND OF AN ACT OF CONGRESS APPROVED OCT. 14, 1940 Docket 5860. Complai. , Mar. 1951-Decision, Apr. , 195~ Where a corporation and two officers thereof, engaged in the manufacture and sale and distribution in commerce of wool products, as defined in tbe Wool Products Labeling Act, including certain ladies' skirts labeled " 55% wool 45% rayon (a) Misbranded said skirts within the intent and meaning of said Act, and the Rules and Regulations promulgated thereunder, in that the aggregate of the woolen fibers therein constituted less than 55% and they contained more than 45% of rayon; and (b) Further misbranded said skirts in that the labels affixed thereto did not show the aggregate of all other fibers, each of which constituted less than 5% of tbe total fiber weight:

Held That such acts, practices anti metbods were in violation of said Wool Products Labeling Act and the Rules and Regulations promulgated thereunder, and constituted unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. In arriving at said conclusion, due consideration was given to the protestations of good faith and the statements of respondents, contained in their answer concerning their reputation and standing in the trade as manufacturers of clothing, which, however, were of insufficient cogency to constitute an adequate defense to the present action.

As respects the charge in the complaint that respondents substituted tbe incorrect tags and labels set forth for the tags whicb were affixed to the piece goods from which said skirts \were made: Said charge was dismissed, under the circumstances and conditions of the instant proceeding, as not properly chargeable as a violation of the Wool Products Labeling Act or of the Rules and Regulations promulgated thereunder or of the Federal Trade Commission Act.

Before Mr. James A. Pu.rcell hearing examiner. Mr. Russell T. Porter for the Commission. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and the vV 001 Products Labeling Act of 1939, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Grand Academy Sportswear, Inc., a corporation, and Jack Herbst and Robert Coffield, individually and as 1132 . FEDERAL TRADE COMMISSION DECISIONS Complaint 48 F' officers of Grand Academy Sportswear, Inc. , hereinafter referred to as respondents, have violated the provisions of said Acts and Rules and Regulations promulgated under the 'V 001 Products Labeling .A.ct of 1939, and it appearing to the Commission that. a proceeding by it in respect thereof will be in the public interest, hereby issues its complaint, stating its charges in that respect as follows: p ARAGIV\'PH 1. Grand Academy Sportswear, Inc., is a corporation organized, existing and doing business under and by virtue of the Jaws of New York State, with its office and principal place of business located. at 248 'Vest 35th St. , New York, N. Y. PAR. 2. Subsequent to October 11, 1950, respondents manufactured for introduction into commerce, introduced into commerce, offered for sale in commerce and sold and distributed in commerce as "commerce is defined in the vV 001 Products Labeling Act of 1939, wool products as "wool products" are defined therein. The said wool products included ladies' skirts which were made by respondents from a fabric designated -as "'Parker-Wilder 1121 " purchased from Strand vVoolen Co.

PAR. 3. Upon the labels affixed to the said skirts appeared the following:

55% wool 45% rayon Grand Academy Sportswear Co., Inc.

PAR. 4. The said skirts are misbranded within the intent and meaning of the said Act and the Rules and Regulations promulgated thereunder, in that they were falsely and deceptively labeled with respect to the character and the amount of their constituent fibers. In as "wool" istruth and in fact, the said skirts .were. not 55% wool, defined in the said Act; the aggregate of the woolen fibers therein constituted less than 55% of the said skirts and they contained more than 45 % of rayon. The said articles were further misbranded in that the labels affixed thereto did not show the -aggregate of all other fibers, each of which constituted less than five percentum of the total fiber weight.

PAR. 5. The person by whom the piece goods, from which said skirts were made by respondents, were manufactured for introduction into commerce affixed thereto labels and tags as required by said Act containing information with respect to its fiber content as follows: 20% wool 30% reprocessed wool 50% rayon Respondents have further violated the provisions of the Wool Products Labeling Act of 1939 by substituting for said tags and affixing GRAND ACADEMY SPORTSWEAR, INC. ET AL. 1133 1131 Decision to the said skirts tags and labels containing information set forth in Paragraph Three herein with respect to the content thereof which was not identical with the information with respect to such content upon the tags and labels as affixed to the wool product from which 8~id skirts were made by the person by whom it was manufactured for introduction into commerce.

PAR. 6. The aforesaid acts and practices of respondents as herein alleged were in violation of the "'\V 001 Products Labeling Act of 1939 and the Rules and Regulations promulgated thereunder, and constituted unfair and deceptive acts 'and practices in commerce within the intent and meaning of the Federal Trade Commission Act. DECISION OF THE COMMISSION Pursuant to Rule XXII of the Commission s Rules of Practice, and as set forth in the Commission s "Decision of the Commission and Order to File Report of Compliance, dated April 3, 1952, the initial decision in the instant matter of hearing examiner James A. Purcell, as set out as follows, became on that date the decision of the Commission.

INITIAL DECISION BY JAMES A. PURCELL, HEARING EXAMINER 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 on :M:arch 23, 1951, issued and subsequently served its complaint in this proceeding upon the respondents, Grand Academy Sportswear, Inc., a corporation, and Jack Herbst and Robert Coffield, individually and as officers of the Grand Academy Sportswear, Inc., a corporation charging said respondents with the use of unfair and deceptive ads and practices in commerce in violation of said Acts. On April 13 1951, respondents filed their joint answer specifically admitting the misbranding of their product as charged in the complaint. Said answer alleges that labeling is performed by factory employees by use .of rubber stamps showing the fiber content of various cloths used by respondents and that use of the stamp misbranding the goods as to fiber content as charged in the complaint was inadvertent and without intent on the part of respondents to mislead or deceive and that the officers and the employees will prevent in the future such a repretition of errors." The remaining charges and the conclusions, as set forth in the complaint, are not challenged. Thereafter, the proceeding regularly came on for final consideration by the above-named Hearing Examiner, theretofore duly designated Findings -18 F.

by the Commission, upon said complaint, the respondents' answer thereto, and Proposed Findings and Conclusions submitted by the attorney in support of the complaint, none such having been filed by the respondents. Said Hearing Examiner, having duly considered the record herein, finds that this proceeding is in the interest of the pub- Hc and makes the following findings as to the facts, conclusions drawn therefrom, and order:

FINDINGS AS TO THE FACTS PARAGRAPH 1. Grand Academy Sportswear, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at No. 248 West 35th Street, New York, New York; that respondents Jack Herbst and Robert Coffield are named in their inclividual capacities as well also as officers of the corporate respondent; that the address of both individual respondents corresponds to that the corporate respondent.

PAR. 2. Subsequent to October 11, 1950, respondents manufactured for introduction into commerce, introduced into commerce, offered for sale in commerce and sold and distributed in commerce as "commerce is defined in the Wool Products Labeling Act of 1939, wool products as "wool products" are defined therein. The said wool products included ladies' skirts which were made by respondents from a fabric designated as "Parker- 'Vilder 1121 " purchased from Strand 'V oo)pY' Co.

PAR. 3. Upon the labels affixed to the said skirts appeared the following:

55% wool 450/0 rayon Grand Academy Sportswear Co., Inc. PAR. 4. The said skirts are misbranded within the intent and meaning of the said Wool Products Labeling Act of 1939 and the Rules and Regulations promulgated thereunder, in that they were falsely and deceptively labeled with respect to the character, and amount of their constituent fibers. In truth and in fact, the said skirts were not 55% wool, as "wool" is defined in the said Act; the aggregate of the woolen fibers therein constituted less than 55 % of the said skirts and they contained more than 45 % of rayon. The said articles were further misbranded in that the labels affixed thereto did not show the aggregate of all other fibers, each of which constituted less than five percentum of the total fiber weight.

GRAND ACADEMY SPORTSWE :R' INC. ET AL. 1135 1131 Order CONCLUSIONS The aforesaid acts, practices and methods of respondents were and are in violation of the Wool Products Labeling Act of 1939 and of the Rules and Regulations promulgated thereunder, and also constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. In arriving at the foregoing conclusion the Hearing Examiner has given due consideration to the protestations of good faith and statements of respondents, contained in their answer, concerning their reputation and standing in the trade as manufacturers of clothing, but such protestations and statements are of insufficient cogency to constitute an adequate defense to the present action.

ORDER It is ordel' That the respondents, Grand Academy Sportswear Inc., a corporation, and Jack Herbst and Robert Coffield as officers of said Grand Academy Sportswear, Inc., a corporation and also in their individual capacities, their respective representatives, agents and employers, directly or through any corporate or other device, in connection with the introduction or .manufacture for introduction into commerce, or the sale, transportation or distribution in commerce, as commerce" is defined in the aforesaid Acts, of ladies' skirts or other wool products, as such products are defined in and subject to the "\V 001 Products Labeling Act of 1939, which products contain, purport to contain or any way are represented as containing " vi' ool reprocessed wool" or "reused wool " as those terms are defined in said Act, do forthwith cease and desist from misbranding such products: 1. By falsely and deceptively stamping, tagging, labeling or otherwise identifying such products;

2. By failing to securely affix 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 ,,' eight of such wool products, exclusive of ornamentation not exceeding fiye 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 products of any non-fibrous loading, filling, or adulterating matter. m~J,n- (c) The name or the registered identification number of the ufacturer of such wool products or one or more persons engaged in 213840-54- Order 48 F. T. C.

introducing such wool prochlctsinto c.omme1'ce, 01' in the offering for sale, sale., transportation, 01' distribution thereof in commerce, as commerce~~ is defined in the Federal Trade Commission Act and in th\3 'Vool Products Labeling Act of 1939. P1' ovlcled 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 LabeEng Act of 1939; and provided ju,rther that nothirig contained in this order shall be COllstrue:L as limiting any applicable provisions of said Act or the Rules and Hegulations promulgated thereunder.

lt~:s /,urthel' 01'de1' That the charge of substitution of tags and labels by respondents, contained in Paragraph Five of the complaint is dismissed, such acts, under the circumstances and conditions of the instant matter, not being properly ehargeable as a violation of the 'V 001 Products Labeling~ Act of 1939, or of the Rules and Regulations promulgated thereunder, nor of the Federal Trade Commission Act.

ORDER TO FILE REPORT OF CO~IPLL\.XCE t is o'iYle'l'ed That the respondents herein shall, \within sixty (60) days after service upon them of this order, file. with the Commission a repOli in writing setting forth in detail the manner and form in which they have complied with the order to cease and desist (as required by said de.e1aratory decision and order of April 3, 1952). CLINTON STUDIOS, INC. , ET AL. 1137 Complaint