Joseph Gluck and Company, Inc.

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In true Matrer or JOSEPH GLUCK AND COMPANY, INC., ET AL.

COMPLAINT, FINDINGS, AND ORDERS 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 GOES. Complaint, Sept. 4, 1352—Decision, Apr. 2, 19353 The British Isles have for many years been a source of some of the finest fabrics imported into the United States and there is a preference on the part of a substantial portion of the purchasers of cloth in this country for suits made from fabrics imported from that source. Where a corporation and its two officers, engaged in the purchase from mills and jobbers of fabrics which it cut into suit lengths and sold and distributed to dealers— (a) Represented directly and by implication that said fabrics were imported from England through labeling the separate lengths with such typical matter as “HEATH ENGLAND”, accompanied by a representation of a lion and a unicorn within a diamond-shaped parallelogram, and followed by “SUF- FIELD LONDON”; notwithstanding the fact that said fabrics were woven and manufactured in the United States;

With capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the mistaken belief that said fabrics were imported from England and thereby induce its purchase of substantial quantities thereof :

Held, That such acts and practices were all to the prejudice and injury of the public and constituted unfair and deceptive acts and practices in commerce; and, Where said corporation and individuals, engaged in the sale and distribution in commerce of wool products and defined in the Wool Products Labeling Act— (b) Misbranded certain of said products, not composed in whole of wool, in that they were not labeled to show the wool content as required by said Act; With result of placing in the hands of retailers and others a means and instrumentality whereby members of the purchasing public had been and might be misled and deceived as above set forth: Held, That aforesaid practices constituted a violation of the Wool Products Labeling Act and the rules and regulations promulgated thereunder, and unfair and deceptive acts and practices within the intent and meanings of the Federal Trade Commission Act.

As respects the charge in the complaint that respondents, engaged in the interstate sale and distribution of rayon fabrics which had the feel and appearance of wool, affirmatively and by implication represented the same as wool, and thereby misled and deceived a substantial portion of the purchasing public in said respect: said charge was not supported by reliable, probative Complaint 49F. T. C.

and substantial evidence of record, and no finding as to violation could be made with respect thereto, nor order issued.. Before Mr. J. Earl Coz, hearing examiner.

Mr. J.J. McNally and Mr. George E. Steinmetz for the Commission. Halperin, Natanson, Shivite & Scholer, of New York City, for respondents.

ComMPLAINT 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 Joseph Gluck and Company, Inc., a corporation, and Abner Gluck and Ned Gluck, 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:

Paracrapy 1. Respondent Joseph Gluck and Company, 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 of business located at 305 Seventh Avenue, New York, New York. The individual respondents, Abner Gluck and Ned Gluck are President and Secretary-Treasurer, respectively, of the corporate respondent, Joseph Gluck and Company, Inc., and formulate, control and direct the affairs and policies of said corporate respondent. Said individual respondents have their offices at the same place as the corporate respondent.

Par. 2. Said respondents are now, and for several years last past have been, engaged in the sale and distribution of woolen and of rayon fabrics to dealers for resale to the consuming public. Respondents cause said fabrics, when sold, to be transported from their place of business in the State of New York to purchasers thereof located in various other States of the United States. Respondents maintain, and at all times mentioned herein have maintained, a substantial course of trade in said fabrics in commerce among and between the various States of the United States.

Subsequent to the effective date of the Wool Products Labeling Act of 1939 and more especially since 1950, respondents have introduced into commerce, sold, transported, distributed, delivered for shipment and offered for sale in commerce, as “commerce” is defined in the Wool JOSEPH GLUCK & CO., INC., ET AL. 1271 1269 : Complaint Products Labeling Act of 1939, wool products, as “wool products” are defined therein.

Par. 3. In the course and conduct of their said business respondents purchased woolen fabrics and rayon fabrics from mills and jobbers. The said fabrics were then cut by respondents into lengths suitable for making a suit of clothes. The separate lengths were then falsely and deceptively labeled with respect to the country of origin of said fabrics, within the intent and meaning of the Federal Trade Commission Act and were thereafter sold and distributed in commerce, as “commerce” is defined in said Act.

Among and typical of such false and deceptive labeling stamped on the separate pieces of fabric are the following: BRADFORD-ENGLAND (depiction resembling British coat-of-arms) ALL WOOL HEATH-ENGLAND (depiction resembling British coat-of-arms) Through the use of the labeling quoted above, respondents represented, directly and by implication, that said fabrics were imported from England. In truth and in fact said fabrics were not imported from England but were woven and manufactured in the United States. Par. 4. The British Isles have for many years been the source of some of the finest fabrics imported into the United States and there is a preference on the part of a substantial portion of the purchasers of clothing in this country for suits made from fabrics imported from that source. Respondents’ said practice has had, and now has, the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that respondents’ said fabrics were.imported from England and into the purchase of substantial quantities of said fabrics because of such erroneous and mistaken belief.

Par. 5. Rayon is a chemical fiber which may be manufactured so as to simulate wool and other natural fibers in texture and appearance. Fabrics manufactured from such rayon fibers have the feel and appearance of wool. Many members of the purchasing public are unable to distinguish between such rayon fabrics and fabrics made of wool. Consequently, such rayon fabrics are readily accepted by members of the purchasing public as wool products. Par. 6. Those fabrics so sold and distributed by respondents that were composed of rayon simulated wool in texture and appearance. Respondents did not label or otherwise inform the consumers of their said rayon fabrics that they were composed of rayon. Moreover, those rayon fabrics bearing the first above-quoted label were affirmatively Decision; 49 F.T.C.

fepresented as being wool. Respondents’ said practice has had, and now has, the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that respondents’ rayon fabrics were composed of wool and into the purchase of substantial quantities of said rayon fabrics because of such erroneous and mistaken belief.

Par. 7. Respondents’ said wool products, including these composed in whole or in part of wool and those composed of rayon which simulated wool in texture and appearance and those which were affirmatively represented as being wool, were. and are, also misbranded in that they were and are not stamped, tagged or labeled as required under the provisions of Section 4 (a) (2) of the Wool Products Labeling Act of 1989 in the manner and form prescribed by the rules and regulations promulgated under said Act.

Par. 8. By their said acts and practices, respondents place in the hands of retailers and others a means and instrumentality whereby members of the purchasing public may be misled and deceived in the manner aforesaid.

Par. 9. The aforesaid acts and practices of respondents are all to the prejudice and injury of the public. Respondents’ practice of falsely and deceptively labeling their fabrics with respect. to the country of origin of said fabrics: of falsely representing that their fabrics composed of rayon are wool and of failing to disclose the rayon content of said fabrics, constitutes unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

The practice of respondents of misbranding their wool products, including those composed in whole or in part of wool and those composed of rayon which simulated wool in texture and appearance and those which were affrmatively represented as being wool, by failing to attach to said products a stamp, tag or label containing the information required under the provisions of Section 4 (a) (2) of the Wool Products Labeling Act of 1939 were, and are, in violation of the Wool Products Labeling Act of 1939 and the rules and regulations promulgated thereunder and also constitute unfair and deceptive acts and practices 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 2, 1953, the initial decision in the instant matter of hearing examiner J. Earl Cox, as set out as follows, became on that date the decision of the Commission. JOSEPH GLUCK & CO., INC., ET AL. 1273 1269 — Findings INITIAL DECISION BY J. EARL COX, 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 September 4, 1952, issued and subsequently served its complaint in this proceeding upon the respondents named in the caption hereof, charging them with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said Acts and the Rules and Regulations promulgated under the Wool Products Labeling Act of 1939, in connection with the sale of woolen and rayon fabrics. After the filing of respondents’ answer in this proceeding a hearing was held on January 23, 1958, before the above-named hearing examiner of the Commission, theretofore duly designated by it, at which a stipulation was entered into by and between Samuel ‘L. Scholer, attorney for respondents, and George E. Steinmetz, attorney in support of the complaint, subject to the approval of the hearing examiner, whereby it was stipulated and agreed that a statement of facts agreed to on the record may be made a part of the record herein and may be taken as the facts in this proceeding and in lieu of evidence in support of the charges stated in the complaint or in opposition thereto; that the said hearing examiner may proceed upon said statement of facts to make his initial decision stating his findings as to the facts, including inferences which he may draw from the said stipulation of facts, and his conclusion based thereon, and enter his order disposing of the proceeding as to said respondents without the filing of proposed findings and conclusions or the presentation of oral argument. Said stipulation as to the facts expressly provides that upon appeal to or review by the Commission, said stipulation may be set aside by the Commission and this matter remanded for further proceedings under the complaint, Thereafter, this proceeding regularly came on for final consideration by said hearing examiner upon the complaint, answer, and stipulation, said stipulation having been approved by the hearing examiner, who, after duly considering the record herein, 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: FINDINGS AS TO THE FACTS ParacrarH 1. Respondent Joseph Gluck and Company, Ine., 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 of business located at 305 Seventh Avenue, New York, New York, The individual respondents, Abner Gluck and Ned Gluck are Presi- Findings 49 B.T.C.

dent and Secretary-Treasurer, respectively, of the corporate respondent, Joseph Gluck and Company, Inc., and formulate, control and direct the affairs and policies of said corporate respondent. Said individual respondents have their offices at the same place as the corporate respondent.

Par. 2. Said respondents are now, and for several years last past have been, engaged in the sale and distribution of woolen fabrics to dealers for resale to the consuming public. Respondents cause said fabrics, when sold, to be transported from their place of business in the State of New York to purchasers thereof located in various other States of the United States. Respondents maintain, and at all times mentioned herein have maintained, a substantial course of trade in said fabrics in commerce among and between the various States of the United States.

Subsequent to the effective date of the Wool Products Labeling Act of 1939 and more especially since 1950, respondents have introduced into commerce, sold, transported, distributed, delivered for shipment and offered for sale in commerce, as “commerce” is defined in the Wool Products Labeling Act of 1939, wool products, as “wool products” are defined therein.

Par. 3. In the course and conduct of their said business respondents purchased fabrics composed in whole or in part of wool from mills and: jobbers. The said fabrics were then cut by respondents into lengths suitable for making suits of clothes. The separate lengths were then falsely and deceptively labeled with respect to the country of origin of said fabrics, within the intent and meaning of the Federal Trade Commission Act and were thereafter sold and distributed in commerce, as “commerce” is defined in said Act. Among and typical of such false and deceptive labeling stamped on the separate pieces of fabric are the following: HHATH ENGLAND These words are accompanied by a representation of a lion and a unicorn enclosed within a diamondshaped parallelogram.

SUFFIELD LONDON Through the use of the labeling quoted above, respondents represented, directly and by implication, that said fabrics were imported from England. In truth and in fact said fabrics were not imported from England but were woven and manufactured in the United States.

JOSEPH GLUCK & CO., INC., ET AL. 1275 1269 Conclusion Par. 4. The British Isles have for many years been the source of some of the finest fabrics imported into the United States and there is a preference on the part of a substantial portion of the purchasers of clothing in this country for suits made from fabrics imported from that source. Respondents’ said practice has had, and now has, the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that respondents’ said fabrics were imported from England and into the purchase of substantial quantities of said fabrics because of such erroneous and mistaken belief.

Par. 5. In connection with the respondents’ said wool products which includes those composed in whole or in part of wool, respondents’ practice was, and has been, to label as to content those products consisting entirely of wool, but none of the products consisting in part of wool have been labeled by the respondents to show the wool content thereof as required under the provisions of Section 4 (a) (2) of the Wool Products Labeling Act of 1939 in the manner and form prescribed by the rules and regulations promulgated under said Act. Par. 6. By their said acts and practices, respondents place in the hands of retailers and others a means and instrumentality whereby members of the purchasing public have been and may be misled and deceived in the manner aforesaid.

CONCLUSION The aforesaid acts and practices of respondents are all to the prejudice and injury of the public. Respondents’ practice of falsely and deceptively labeling their fabrics with respect to the country of origin of said fabrics constitutes unfair and deceptive acts and practices ‘in commerce within the intent and meaning of the Federal Trade Commission Act.

The practice of respondents of misbranding their wool products, including those composed in whole or in part of wool, by failing to attach to said products a stamp, tag or label containing the information required under the provisions of Section 4 (a) (2) of the Wool Products Labeling Act of 1989 were, and are, in violation of the Wool Products Labeling Act of 1939 and the rules and regulations promulgated thereunder and also constitute unfair and deceptive acts and practices within the intent and meaning of the Federal Trade Commission Act.

The reliable, probative and substantial evidence of record does not support the charges in the complaint that respondents have engaged in the sale and distribution in commerce of rayon fabrics having the feel and appearance of wool and have affirmatively and by implication Order 49 F.T.C, represented such fabrics as being wool, thereby misleading and deceiving a substantial portion of the purchasing public into the erroneous and mistaken belief that such rayon fabrics were composed of wool and into the purchase of substantial quantities thereof because of such belief. As to these charges there can be no finding that the respondents have violated any of the provisions of the Federal Trade Commission Act and no order can be or will be issued in reference thereto. ORDER It is ordered, That the respondents, Joseph Gluck and Company, Inc., a corporation, and its officers, and Abner Gluck and Ned Gluck, 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 in commerce, as “commerce” is defined in the Federal Trade Commission Act, of fabrics, do forthwith cease and desist from repvesenting, directly or by implication, that fabrics manufactured in the United States were manufactured in any other country. It is further ordered, That the respondents, Joseph Gluck and Company, Inc., a corporation, and its officers, and Abner Gluck and Ned Gluck, 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 introduction into commerce or the offering for sale, sale, transportation or distribution in commerce, as “commerce” is defined in the Wool Products Labeling Act of 1939, of wool fabrics or other wool products, as such products are defined in and subject to said Act, which products contain, purport to contain or in any way are represented as containing “wool,” “reprocessed wool” or “reused wool,” as those terms are defined in said Act, do forthwith cease and desist from misbranding such products by failing:

1. To affix securely to or place on each such product 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 weight, of (1) wool, (2) reprocessed wool, (8) 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; 1269 Order (ec) The name or the registered identification number of the manufacturer of such wool product or of one or more persons engaged in introducing such wool product into commerce or in the offering for sale, sale or distribution thereof in commerce, as “commerce” is defined in the Wool Products Labeling Act of 1939; Provided, That the foregoing provisions concerning misbranding shall not be construed to prohibit acts permitted by paragraphs (a) and (b) of Section 3 of the Wool Products Labeling Act of 1939; and Provided further, That nothing contained in this order shall be construed as limiting any applicable provisions of said Act or the Rules and Regulations promulgated thereunder. ORDER TO FILE REPORT OF COMPLIANCE It is ordered. 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 the order to cease and desist [as required by said declaratory decision and order of April 2, 1953]. 260133—55 84 Syllabus 49 F.T.C.