United Contact Lens Corporation et al.

Text (OCR of the scan at left; may contain errors)

dl1ch it has complied with the. order to cease and desist. r x THE -'fATTEn OF UNITED COKTACT LEKS COHPorlATro ET AL.

COXSEXT ORDER J ETC. , l REGARD TO Tile ALLEGED VIOLATION OF THE FEDERAL TRADE CO::BIlSSION ACT Docket 8165. Complaint, Nov. 1960-Decision liar. , 1961 Consent order requiring New York City distributors of contact lenses to opticians for resale to the public, to cease representing falsely in adver. tising: brochures and otherwise that their contact lenses wonlel conect defects in vision and could be worn successfully by all in need of visual ('orrection, that the lenses protected the eye, and that they were unbreakable.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority n sted in it by said \.ct. the Federal Trade Commission, having reason to behen' that T-united Contact Lens Corporation, a corporation and fartin \Veinberger indi vic1ually and as an offcer of sa.id corporation, and R,oJand Hirsch and .Jack ICrakower individually, hereinafter referred to as respondnts, have violated the provisjons of said Act, and jt 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:

UNITED CONTACT LENS CORPORATION ET AL. 479 478 Complaint PARAGRAPH 1. United Contact Lens Corporation is a corporation organized, existing and doing business under and by virtue of the laws of the State of Xew York, with its offce and principal place of business located at 76 Madison Avenue, X ew York, New Yark. 1Iartin ,Veinberger is an ofliccr of said corporation. He presently formulates, directs and controls the policies of the corporate respondent. His address is the same as the corporate respondent. Ronald Hirsch and Jack Krakower were formerly ofliccrs of the corporate respondent, at which time they cooperated in formulating, directing a.nd controlling the policies of said corporation in connection with the acts and practices set fort.h herein. Their address is 7 ,Vest 44th Street, New York, Xew York.

PAR. 2. Corporate respollllent United Contact Lens Corporation and :Hartin ,Veinberger, an offcer of said corporation, arc engaged in the sale of cornea.! contact lenses to opticians who sell them to the public. H,espondentsHonald Hirsch and Jack Krakower, formerly offcers of t.he corporate rf'spondent, have in the past engaged in the business described herein and have participated in the acts and practices herein describecl.

The corporate.e respondent also sells and c1istrilJltes, and has sold and distributed, to sellers of corneal lenses, various types of advertising literature and brochures designed to assist in the sale of their said lenses. Corneal contact lenses are designed t.o correct errors and deficiencies in the vision of the \Ve,arer and are dedces, as de,vice:' is defined in the Federal Tracie Commission Act. -\IL 3. Respondents CRuse, and ha.ve caused, their said cont.act lenses, when sold, to be transported from their place of business in l\T ew York, New York, to purcha.sers thereof located in various other states of the 1;united States. Respondents maintain, and at an times mentioned herein have maintained, a course of trade in said contact lenses in commerce, as "commerce" is defined in the Federal Trade Commission Act. The volume of business in such conmmerce has been and is substantial.

PAH. 4. In the course and conduct of their business, respondents have disseminated, and have caused the dissemination of, advertisements concerning their said devices by the 1;united States mails and by yariOllS means in commerce, as "commerce" is defined in the Federal Tra.de Commission Act, including but not limited to advertising broclllres, Jor the purpose of inducing, and which were likely to induce, directly or indirectly, the purchase of said devices; and respollc1ents have also disseminated, and callsed the dissemination , adve,rtisements concerning their said devices, including but not 480 FEDERAL 'trade COMMISSION DECISIONS CO!lplftint 58 F.

limited to the aforesaid medja for the purpose of inducing and which were likely to induce, directly or indirectly, the purchase of said devices, in commerce, as "commerce" is deiined in the Federal Trade Commission Act.

Among and typical of the statements and representations contained in the advertisements disseminated and caused to be disseminated are the following:

Contact lenses actually afford protection to the eye. Anyone who wears glasses no matter how slight the correction can \vear contact lenses.

'" '" IIThey are unbreakable.

Many people wear their contact lenses all day with no thought or concern about them.

PAR. 5. By and through the statements made in said advertisements disseminated and caused to be disseminated, as aroresaid respondents represented, directly or by implication: 1. All persons in need of visual correction can successfully wear respondents' contact lenses.

2. Respondents' lenses win correct all defects in vision. 3. Many persons wear said lenses a11 day. 4. Said lenses afford protection to the eye of the wearer. 5. Said lenses are unbreakable.

PAR. 6. The advertisements containing the aforesaid statements and representations were, and are, misleading in material respects and constituted, and now constitute, "false advertisements \ as that term is defined in the Federal Trade Commission Act. In truth and in fact:

1. A significant number or persons in need of visual correction cannot successfully 'veal' respondents' contact lenses. 2. Said lenses wil not correct a11 defects in vision. 3. Persons cannot wear respondents' lenses a11 day until they have become fully adjusted thereto because of the discomfort that exists.

4. Respondents' contact lenses cover only a small portion of the eye and afford protection only to the portion of the eye that is covered.

5. Said lenses are breakable.

PAll. 7. The dissemination by respondents of the false advertisements, as aforesaid, constituted unfair and deceptive acts and practices, in commerce, within the intent and meaning or t.he Federal Trade Commission Act.

UNITED CONTACT LEXIS CORPORATION ET AL. 48J 478 Dreis.ion llf1' . Garland S. FeTg'wwn supporting the complaint. Bernstein and Steyer by lift. 111wray Steyer of Kew York for respondents.

INITIAL DECISION BY VVAL'l'ER K. :KETT, I-IEARIXG EXA nXER The Federal Trade Commission issued its complaint against the above-named respondents on N ovemher 8, 1960. The complaint charged respondents with falsely advertising the effecti veness of contact lenses. The Commission also charged that said advertisements constituted unfair and deceptive acts and practices within the intent and meaning of the Federal Trade Commission Act. On January 12, 1961, counsel submitted to the undersigned hearing examiner an agreement dated .J anuary 6, 1961 among respondents counsel representing them and counsel supporting the complaint providing for the entry \\ithol1t further notice of a consent order. The agreement was duly approved by the Director, the Assistant Director and tbe Associate Director of the Bureau of Litigation. The hearing examiner finds that said agreement includes all of the provisions required by Section 3.25 (b) of the Rules of the Commission, that is:

A. Au admission by all the respondent parties thereto of jurisdictional facts;

B. Provisions that:

(1) The complaint may be used in construing the terms of the order;

(2) The order shall have the same force and effect as if entered after a full hearing;

(3) The agreement shan not become a part of the offcial record of the proceeding unless and until it becomes a. part of the decision of the Commission;

(4) The entire record of \which any cease and desist order may be based shall consist solely of the complaint and the agreement; (5) The order may be altered, modified, or set aside in tbe manner provided by statute for other orders;

C. 'Waivers of:

(1) The requirement t.hat tile decision must contain a statement of findings of fact and conclusion of la.w; (2) Further procedural steps before the hearing examiner and the Commission.

In addition the agreement cont.nins the following permissive provisions: A \yaiyer by the respondents of any right to challenge or rontest the yal-idity of the order entered in accordance with the agremnent, and a statement that the signing of said a.frreement is for ()S1-2:i7-r,:!- 't2 482 FEDERAL TRADE COMMISSIQX DECISIOKS Order 58 F.

settlement purposes only and does not constitute an admission by Tespondents that they have violated the law as aUeged in the complaint.

IIaving considered said agreement including the proposed order and being of the opinion that they provide an appropriate basis for settlement and disposition of this proceeding, the hearing examiner hereby accepts the agreement but orders that it shall not become a part of the ofleial record unless and until it becomes a part of the decision of the Commission.

The following jurisdictional fmclings arc made and the following order issued:

1. Corpomte respondent "United Contact Lens Corporation is a corporation existing and doing business under' and by virtue of the Jaws of the State of Xew York, with its offce and principal place of business located at 76 Madison Avenue, Xew York, New York. lncli vidual respondent )Iartin 'Veinberger is an offcer of said corporation. He formuhltes, directs and controls (he practices of the corporate respondent. Individual respondents Ronald I-lirsch and Jack ICrakower were formerly offcers o:E the corporate respondent, at which time they coopenlted in formulat.ing, directing and controlling the policies of said corporation in connection ,with the ads and practices as set forth in the complaint.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents. ORDER It is ordered That respondents United Contact Lens Corporation a corporation, and its offcers, and ::Iartin 'Vcinbergcr: individually and as an ollcer of said corporation, and R.onald IIirsch and Jack lCrakmve.r, individually, and their representatives, agents and employees, directly or through any corporate or other device, in connection with the sale of contact lenses, do forthwith cease and desist from, c1irectJy or indirectly:

1. Disseminat.ing or causing to be disseminated any advertisement by means of the -Cnited States Ala,ils or by any means in commerce as " commerce ' is defined in the Federal Trade Commission Act which advertiselnent represents directly, indirectly or by implication that:

(a) All persoris in need of visllal correction can successfully we::l.r respondent.s: contact lenses.

(b) Said 1ense,s will correct nil defects in vision. CONSOLIDATED FELT CO 1PAj\ry, INC. , ET AL. 483 4iS Complaint (c) A person can wear said lenses a11 day unless it is clearly disclosed that this is possible only after such person has been fn11y adjusted thereto.

(d) Said contact lenses afford protection to the eye of the wearer -:nless limi.ted to the slnall portion covered thereby. (e) Said contact lenses arc unbre11kahle. 2. Dissemi.nating or causing to be disseminated any advertisement by any means, :for the purpose of inducing or which is likely to induce, directly or indirectly: the purchase in commerce, as "com- Jnerce is deflnell in the Federal Trade Commission Act, of said contact lenses, ,which adycrtiscn1Pnt contains any of the representations prohjbjtcd in Paragraph 1 hereof.

DECIS-IOX OF THE CCI)DllSSWX .\XD Gallon TO FILE REPORT OF C01IPLIANCE Pursuant to Section ::J.21 01 the Commission s Rules of Practice, the initial t1pcision of the hearing examiner shan on the 17th day of ::darcy ID61, l)(('ome 1"he decision of the C0l111nission; and, accordingly:

II i-' ordered. That the respondents herein shall within sixty (60) day-: after seryicp upon them of this order, fie IviOl the Commission fl report in ,yritiJlf:f setting forth in detail the manner and form in \which they hf1XP complied ,,,i1"h the order t.o cease and desist. Ix THE :JIxrrER OF COXSOLIDATED FELT COMPANY, INC., ET AI,.

C(J?-SEXT CiInfEH: ETC.. IX HEC;ARD TO THE ,\ALLEGED VIOL-\.TION OF Tile FEDEIU.L TIUD1' COJDIISSJON ..;1'I) THE 'VOOL PRODUCTS L_-\BELIXG ACTS Ducket 817-4. Co-mplaint, NUV. 1.1, 19GO-Decision, JIar. , 1961 Consent order requiring two affliated manufacturing concerns in Kearny, , and their common offcer to cease violating the Wool Products Labeling Act by labeling wool batting as "80% reused wool, 20% undetermined fibers" and labeling quilted interlining material as "80% reused wool 20% other fibers" when both products contained substantially less than 80(;1, reused \\-001.

CO::\PLAINT 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 Consolidated Felt Company, Ine" a 484 FEDERAL 'TRADE co:\nnf3SIO:: DECISIOXS Complaint :is F.T:C: corporation, and Zenith Quilting Corporation, it corporation, and Peter :Miller, individually and as an offcer of said corporations hereinafter referred to as respondents, have violated the provisions of said Acts, and the Rules and Regulations promulgated under the "'V 001 Products Labeling Act, a.nd 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:

PARAGRAI' H 1. Respondent Consolidated Felt Company, Inc., is a corporation organized existing and doing business under and by virtue of the Jaws of the State of New York. Respondent Zenith Quilt.ing Corporation is a corporation organized, existing and doing business under and by virtue of the Jaws of the. State of ew York. Individual respondent Peter Milkr is president and secretary of both corporate respondents. Said individual respondent formulates, directs and controls, the acts, practices and policies of said corporftte respondents. Respondents' offce and principal place of business is located at 1342 Imvooc1 Avenue, Now York, 1' ow York. PAR. 2. Subsequent to 1he effective date of the Vool Products Labeling Act of 10:39 and more especially since April of 1050 respondents have manufactured for introduction into commerce introduced into commerce, sold, transported, distributed, delivered for shipment, or offered for sale in commerce, as "commerce " is defined in said Act, wool products, as "wool products" are definedtherein.

PAR.3. Certain of said wool products were misbranded by respondeuts within the intent and meoning of Section 4(") (1) of said Vool Products Labeling Act and the Rules and Regulations promulgated thereunder, in that they were falsely and deceptively labeled 01' t.agged with respect to the character and amount of the constituent fibers contained therein.

Among such misbranded wool products was ,yool batting labeled or ta.gaged by respondent Consolidated Felt Company, Inc. , as consisting of 800/0 reused wool, 20% undetermined fibers" and quilted interlining ma.teriallabeled or tagged by respondent Zenith Quilting Corpora.tion as consisting of "80% reused wool 200/0 other fibers ",herens in truth and in fact, said products contained substant.ially Jess reused wool than was indicated by the fore.going labels or tags affxed thereto.

\H. '1. Certain of said wool products were further misbranded by respondents in that the.y were not stmnpecl, tagged or labeled as rocuired under the provisions of Section 4(a) (2) of the Yool , .

CONSOLIDATED J; ELT COMPANY DIG. ET AL. 485 4S3 Decision Products Labeling Act of 1030, and in the manner and form prescribed oy the R.ules and Regulations promulgated thereu cler. PAH. 5. Respondents in the course and conduct of their business as aforesa.id, \ycre an(l are in substantial compet.ition in commerce 1with corporations, firms and individuals like"wjsc engaged in the manufacture and saJe of wool products, including wool batting and qlli1ting interlining material.

PAR. 6. The aforesaid acts and pract.ices of t.he respondents were in violation of the \1'001 Products Labeling Act of 1939, and the Hules and n,egulations promulgated thereunder, and constitute unfair methods of competition and unfa.ir and deceptive acts and prfLctices, in commerce, within the intent anclmcaning of the Federal Trftc1e Commission Act.

:lit. Nich"el P. Hughes supporting the complaint Respondents pu; 8e.

IXITL\L DECI.SI0K or .JlIIIX r"E'YI , HE.\HIXG EXA nner The J1 ecleral Trade Commission issued its complaint against the a.bove-named respondents on K oycmber 14, 1960, charging them with having vio1atCll the \1'001 Products Labeling Act of 1939 and the Rules and Hegll)ntions promu)gated therennder, and the Federal Trade Commissioll Act, through the misbranding of certain \''ool product.s. AHel' being selTed with said complaint, respondents appeareu and entered into an agreement containing consent order to cease and desist., dated .January lG 1061 purporting to dispose of all of this proceeding as to all part,ies. Said agreement, which has been signed by all respondents !lncl by counsel support.ing the complaint, and approyed by the Director Associate Director and Assista.nt Director of the Commission s Bureau of Litigation, has been submitted to the fLboye-na,mecl hearing examiner for his consideration, in accordance ,,'ith Section 3.25 of the COITllnission s R.nles of Practice for Acljllclieati YO Proceedings.

Respondents pursuant to t.he aforesaid agreement, have admitted all the jurisdictional facts alleged in the complaint, and have agreed that the record may be tn.ken as if findings of jurisdictional facts had been duly made in accordance "ith such allegations. Said agreement further provides t.hat respondents waive any further procedural st,eps before the hearing examiner and t.he, Commission, the maldng of findings of fact or conclusions of law, and an of the rights they may have to challenge or contest j,he vaEdity of the order to cease and desist entered in accordance "ith said agreement. It has been 486 FEDERAL TRADE CO.MMISSI01\ DECISIONS Order 58 F.

agreed that the order to cease and desist issued in Hccorclance ,"lth said agreement shall have the same force and effect as if entered after a full hearing and that the complaint may be used in construing the terms of said order. It has also been agreed that the afore aid agreement is for settlement purposes only and does not constitute an admission by respondents that they have violated the la\\" as alleged in the complaint.

This proceeding having now come on for final consideration on the complaint and the aforesaid agreement containing consent order. and it appearing that theorc1er provided for in said agreement c.OYf:l'S all of the anegations of the complaint and provides for an appropriate disposition of this proceeding as to all parties, said agreement is hereby accepted and is ordered filed upon this decisioll s becoming the decision of the Commission pursuant to Sections 3.21 and 3.25 of the Commission s Rules of Practice for Adjudicative Proceedings and the hearing examiner, accordingly, ma.kes the following jUrlsclictional findings and order:

1. Respondents Consolidated Felt Company, Inc. and Zenith Quilting Corporation are corporations existing and doing business under and by virtue of the laws of the State of New York. Formerly the principal place of business was 13-12. Iu\\"ood Avenlle in the City of New York, State of Kew York: at present the principal place of business is 60 Passaic Avenue, H::earny, New Jersey. Individual respondent Peter filler is president and secretar;- of both corporate respondents. His offce is the sa,me as the corporate respondents.

2. The Federal Tra.de Commission has jurisdiction of the subject matter of this proceeding and of the respondents hereinabove named. The complaint states a cause of action against said respondents under the vVool Products Labeling Act of 1939 and the Federal Tra.de Commission Act, and t.his proceeding is in the interest of the public.

ORDER I t is ordered That respondents Consolidated Felt Compen ," Inc. a corporation, and its offcers, and Zenith Quilting Corporate.ion corporation and its offcers, and Pet.er Iiller, inc1idclual1y and as an offcer of sflid corporations, and respondents' represent.atives, agents and employees, directly or through any corporate or other device. in connection with the introc1l1ction or mn.nufncture for introc1nection into commerce, or the offering for sale, sale., tra.nsportation or distribution, in comme.rce, as "commerce" is defined in the Federal Trade Commission Act and the IVool Products Labeling Act of 1939 , of wool batting or interlining material, or other ,yool products, as such LAST 'VOOL STOCK CORPORATION ET AL. 487 483 COl1vlnint products are defined in and subject to the 'W 001 Products Labcling Act of 1939, do forthwith cease and desist from misbranding such, products by:

1. Falsely or deceptively stamping, tagging, labeling or otherwise identifying such products as to the character or amount of the constituent fibers included therein.

2. Failing to affx labels to such products showing such elements of information required to be disclosed by Section 4(a) (2) of the Wool Products Laheling Act of 1939.

DECISION OF THE COlDIISSI01- AXD ORDER 'TO FILL REPORT OF CO)lPLIAXCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of t.he hearing examiner shall, on the 17th day of 1:arch 1961, become the decision of the Commission; and, accordingly:

It is ardend That the respondents herein shall within sixty (60) days after service upon them of this order, file with the Commission a report in Ifriting setting forth in detail the manner and form in which they have complied with the order to cease and desist.