Virchand Panachand & Company, Inc.

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IN THE MATTER OF VIRCHAND PANACHAND & COMPANY, INC., ET AL. CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO~IMISSION AND THE FLAMMABLE FABRICS ACTS Docket 6996. Complaint, Aug. 1955-Decision, Jan. , 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 in commerce silk scarves so highly inflammable as to be dan-gerous when worn.

Before Mr. James A. Purcell hearing examiner. Mr. Brockman Horne for the Commission. Mr. Jesse Cohen 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 Virchand Panachand & Company, Inc., a corporation Peter Commercial Corporation, a corporation, U. M. Shah, V. V.. Shah, N. R. Shah, C. Ferlazzo, N. B. Shah and Arnold Berke, individually and as officers of said corporations, hereinafter- referred to as respondents, have violated the provisions of said Acts, and the rules and regulations promulgated thereunder, and it appearing 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. Re~pondents Virchand Panachand & Company, Inc., and Peter Commercial Corporation, are corporations organized, existing and doing business under and by virtue of the laws of the State of New York. Respondents U. M. Shah, V. V. Shah, N. R. Shah, C. Ferlazzo, N. B. Shah and Arnold Berke are President, Vice President, Vice President, Secretary, Treasurer and General 1\1:anager, respectively, of above named corporate respondents. The individual respondents formulate, direct and control the policies, acts and practices of said named corporate respondents. The business address of all respondents js 15 Park Row ~ew York 38, Nrw York. PAR. 2. Respondents, subsequent to July 1, 1954, the effective date of the Flammable Fabrics Act have imported into the United States articles of wearing apparel, as the term "articles of wearing apparel" VIRCHAND PANACHAND & CO, ) INC., ET AL. 681 '680 Decision -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, 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. 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.

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

PAR.. 3. Respondents, in the course and conduct of their business :are engaged in direct and substantial competition in commerce with ,other corporations, firms and individuals in the sale and offering for sale of scarves which are not flammable "articles of wearing apparel" under the definition of the Flammable Fabrics Act. PAR. 4. The aforesaid acts and practices of respondents were and :are in violation of the Flammable Fabrics Acts and of the rules and regulations promulgated thereunder, and as such constitute unfair methods of competition and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

INITIAL DECISION BY JAMES A. PURCELL, HEARING EXAMINER The complaint in this proceeding, issued August 23, 1955, charges the respondents Virchand Panachand & Company, Inc., and Peter Commercial Corporation, both of the foregoing being corporations existing and doing business under and by virtue of the laws of the State of New York, and U. M. Shah, V. V. Shah, N. R. Shah, C. Ferlazzo, N. B. Shah and Arnold Berke as individuals and officers of the two respondent corporations, 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 importation, 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 Virchand Panachand & Co., Inc., Peter Commercial Corporation, U. M. Shah and Arnold Berke 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 Acting Director of the Bureau of Litigation. The non-joinder in said agreement of the respondents V. V. Shah, N. R. Shah, C. Ferlazzo Decision 52 F. T. C. . and N. B. Shah will be hereinafter explained. 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. By the terms of said agreement, the signatory respondents admitted all of 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 said agreement the parties expressly waived hearing before the hearing examiner or the Commission, the making of findings of fact or conclusions 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 signatory respondents may be entitled under the Federal Trade Commission Act or the R.ules of Practice of the Commission.

By said agreement the signatory 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 asjde jn the manner providecl by the 8statute for the orders of the Commission.

Accompanying the agreement is an affidavit executed by respondent, Arnold Berke, to the effect that the named respondents V. V. , respectively Shah, N. R. Shah, C. Ferlazzo and N. B. Shah are Vice-President, Vice-President, Secretary and Treasurer of the two corporate respondents but, contrary to the allegations of the complaint, do not formulate, direct and control, and have not formulated directed nor controlled, the policies and activities of the corporate clause. to like effect respondents, which affidavit is confirmed by a contained in the agreement signed by the parties as hereinabove named, and upon consideration of the agreement and affidavit this behalf the order hereinafter passed will contain a clause of dismissal as to these named respondents.

Said agreement recites that the respondents Virchand Panachand & Co. , Inc., and Peter Commercial Corporation are corporations virtue of the Laws of the existing and doing business under and by VIRCHAND PANACHAND & CO. , INC. , ET AL. 683 680 Decision State of New York; that the individual respondents U. :M. Shah and Arnold Berke are, respectively, President and Generall\1manager of the two named corporate respondents and as such formulate direct and control the policies, acts and practices of the corporate respondents; that the office and principal place of business of all respondents signatory is located at No. 15 Park Row, New York New York.

. The 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: ORDER It i.s ordered That respondents Virchand Panachand & Company, Inc., a corporation, and Peter Commercial Corporation, a corporation and their officers, and respondents U. M:. Shah, and Arnold Berke individually and as officers of said corporations, and respondents representatives, agents and employees, directly or through any corporate or other device, do forthwith cease and desist from: 1. Importing into the United States; or 2. Selling, offering for sale, introducing, delivering for introduction, transporting or causing to be transported in commerce, as commerce" is defined in the Flammable Fabrics Act; or 3. Transporting or causing to be transported, for the purpose of sale or delivery after sale in commerce any article of wearing apparel, which under the provisions of Section 4 of said Flammable Fabrics Act, as amended, is so highly flammable as to be dangerous when worn by inclivichmls. Fu1'thel' ordel'ed That the complaint herein be dismissed as to the named respondents V. V. Shah, N. R. Shah, C. Ferlazzo, and N. B. Shah.

DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COl\IPLIAN CE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall, on the 12th day of January, 1956, become the decision of the Commission; and, accordingly:

, , 684 FEDERAL TRADE COML\.HSSION DECISiIONS Decision 52 F. T. C.

It is ordered That the respondents Virchand Panachand & Company, Inc., a corporation, and Peter Commercial, Corporation corporation, and U. M. Shah, and Arnold Berke, individually and as officers of said corporations, 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. M. RUBIN & SONS) INC., ET AL. 685 Decision