Republic Novelty Company, Inc.

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IN THE MATTER OF REPUBLIC NOVELTY CO~IP ANY, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COl\-UnSSION AND THE FLA1\oUIABLE FABRICS ACTS Docket 6423. Complaint, Sept. 1955-Decision, Ja, n. , 1956 Consent order requiring importers in New York City to cease violating the Flammable Fabrics Act by importing into the United States from Japan and selling silk scarves so highly inflammable as to be dangerous when worn.

Before Mr. James A. Pu't'cell hearing examiner. Mr. Brockm,an Horne for the Commission. llfarlin Sandb'lt1' of New York City, for respondents. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and the Flammable Fabrics Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Republic Novelty Company, Inc. , a corporation, and Herman I\::atz and Samuel R. Cohen, 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 Flammable Fabrics Act, 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:

PARAGRAPH 1. Respondent Republic Novelty Company, Inc., is a New York corporation. Respondents Herman ICatz and Samuel R. Cohen are president and secretary-treasurer, respectively, of respondent Republic Novelty Company, Inc. The individual respondents formulate, direct, and control the acts, practices and policies of said corporate respondent. The business address of all respondents 39 "\Vest 37th Street, N ewY ork, New York. PAR. 2. Respondents, subsequent to July 1, 1954, the effective date of the Flamn1a.ble Fabrics Act, have imported into the United States articles of wearing apparel, as the term "articles of wearing apparel" is defined in the Flammable Fabrics Act, which, under the provisions of Section 4 of said Act, as amended, were so highly flammable as to be dangerous when worn by individuals. Respondents have sold, offered for sale, introduced, delivered for introduction, and Decision 52 F. T. GO' transported and caused to be transported in commerce, as "commerce is defined in the Flammable Fabrics Act, the said articles of wearing: apparel, imported as aforesaid. R,respondents have also transported and caused to be transported the said articles of wearing apparel imported as aforesaid, for the purpose of sale and delivery after sale' in "commerce" as hereinabove defined.

Among the articles of wearing apparel mentioned hereinabove were. silk scarves n1anufactured in Japan.

PAR. 3. Respondents, in the course and conduct of their business are in competition in commerce with others in the sale and offeringfor sale of scarves which are not flammable "articles of wearing apparel" under the Flammable Fabrics Act.

PAR. 4. The use by respondents of the acts, practices and policies. as herein alleged has resulted in substantial trade in commerce being' unfairly diverted to them from their competitors and substantial injury has been done to competition in commerce. PAR. 5. The acts and practices of respondents herein alleged were' and are in violation of the Flammable Fabrics Act and of the rules. nd regulations promulgated thereunder, and as such constitute unfair and deceptive acts and practices and unfair methods of competition in commerce within the intent and meaning of the Federal( Trade Commission Act.

INITIAL DECISION BY JAMES A. PURCELL 1 HEARING EXAMINER The complaint in this proceeding, issued September 27, 1955" charges the respondents Republic Novelty Company, Inc., a corporation existing by virtue of the laws of the State of New York, and Herman I\:atz and Samuel R. Cohen, individually and as officers of the respondent corporation with violation of the Federal Trade Commission Act and of the Flammable Fabrics Act and the Rules and Regulations promulgated thereunder, in connection with the importa- , tion, sale, offering for sale and transporting in interstate commerce' of articles of wearing apparel which articles were so highly flammable as to be dangerous when worn by individuals. After the issuance of said complaint respondents entered into an agreement for consent order with counsel in support of complaint disposing of all the issues in this proceeding, which agreement was duly approved by the Director of the Bureau of Litigation. It was expressly provided in said agreement that the signing thereof is for settlement purposes only and does not constitute an admission by respondents that they have violated the law as alleged in the complaint.

REPUBLIC NOVELTY CO. , INC. - ET AL. 649 647 Decision By the terms of said agreement, the respondents admitted all the jurisdictional allegations of the complaint and agreed that the record herein may be taken as if the Commission had made findings of jurisdictional facts in accordance with such allegations. By s~id :agreement the parties expressly waived a hearing before the hearing ,examiner or the Commission, the making of findings of fact or con- -elusions of law by the hearing examiner or the Commission, the .filing of exceptions and oral argument before the Commission, and :all further and other procedure before the hearing examiner and the 'Commission to which the respondents may be entitled under the Federal Trade Commission Act or the Rules of Practice of the COlllmission.

By said agreement, respondents further agreed that the order to cease and desist issued in accordance with said agreement shall have the same force and effect as if made after a full hearing, presentation of evidence and findings and conclusions thereon, and specifically waived any and all right, power or privilege to challenge or contest the validity of such order.

It was further provided that said agreement, together with the 'Complaint, shall constitute the entire record herein; that the complaint herein may be used in construing the terms of the order issued pursuant to said agreement; and that the said order may be altered modified or set aside in the manner provided by the statute for the 'orders of the Commission.

Said agreement recites that respondent Republic Novelty Company, Inc., is a corporation existing under and by virtue of the laws of the State of New York; that respondents Herman Katz and Samuel R. Cohen are individuals and, respectively, are President and Secretary- Treasurer of the corporate respondent, and as such formulate, direct and control the policies of the corporation. The office and principal place or business of all respondents is located at No. 39 West 37th Street, New York, New York.

Tpe hearing examiner has considered such agreement and the order therein contained, and, it appearing that said agreement and order provides for an appropriate disposition of this proceeding, the same is hereby accepted and is ordered filed upon becoming part of the Commission s decision in accordance with Sections 3.21 and 3.25 of the Rules of Practice, and in consonance with the terms of said agreement, the hearing examiner finds that the Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents named herein, and that this proceeding is in the interest of the public, and issues the following order: Decision 5:2 F. T. C. ORDER It is o1'deied That the respondent Republic Novelty Company, Inc. , a corporation, and its officers, and respondents Herman Katz and S~muel R. Cohen, individually and as officers of said corporation and respondents' representatives, agents and employees, directly or through any corporate or other device, do forthwith cease and desist from:

1. (a) Importing into the United States; or (b) Selling, offering for sale, introducing, delivering for introducastion, transporting or causing to be transported, in commerce, commerce" is defined in the Flammable Fabrics Act; or c) Transporting or causing to be transported, for the purpose, of sale or deli very after sale in commerce;

any article of wearing apparel, which, under the provisions of Section 4 of the said Flammable Fabrics Act, as amended, is so highly flammable as to be dangerous when worn by individuals. DECISION OF THE COMl\HSSION AND ORDER TO FILE REPORT OF COl\IPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall, on the 7th day of January, 1956, become the decision of the Commission; and, accordingly :

It is ordered That the respondents herein shall, within sixty (60) clays after service upon them of this order, file with the Con1mission a report in writing setting forth in detail the manner and form in which they have eomplied with the order to cease and desist. ..,.. .

POSTAL LIFE AND CASUALTY INSURANCE CO. 651 Order