Chelsea Leather Goods Co., Inc.

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IN Tm; MATTER OF CHELSEA LEATHER GOODS CO., INC., ET AL.

CONSENT ORDER ETC., r '" m:GARD TO THE ALLEGED VIOLATION OF THE FBDEHAL TRADE COftfInSSIO ACT Docket 8196. Complaint, Nov. B9, 1960-Decision, Mar. 25, 1961 Con,C:f:nt order requiring New York City manufacturers of bilfolds and wallets to cease such misleading practices as stamping products largely made of non-leather materials with the words "Top grain genuine leather Top grain genuine cowhide, and "Cmvhide split leather, and marking non leather products with the words " go Grain; and requiring them to disclose clearly when their products having the texture, feel, and appearance of leather are made of noll-leather materials. C03-fPLAIXT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission having reason to believe that Chelsea Leather Goods Co., Inc., a corporation, and .Joseph Weiss, individually and a.s an offeer of said corporation, hereinafter referred to as respond ents, ha.ve violated the provisions of said 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:

P ARAGHAPH 1. Respondent Chelsea Leather Goods Co. , Inc., is a corporation organized, existing and doing business under and by virtue or the laws of the State of Kew York, with its principal office , , , , Complaint 58 F. T.

and place of business located at 109-11 Spring Street, in the City of New York, State of New York.

R.esponclent Joseph "\Veiss is an individual and is an offcer of the corporate respondent. He formulates, directs and controls the acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. His address is the same as that of the corporate respondent.

PAR. 2. R,csponclents flre now, and for some time la.st past have been engaged in the mallllfn.cturing, advertising, offering for sale sale and distribution of billfolds and wallets to distributors and jobbers and to retailers for resale to the public. ,\H. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said products, when sold, to be shipped from their place of business in the State of New Yark to purchasers thereof locf1tecl in various other states of the united States and iu the District of Columbia, and mainta.in, and at all times mentioned herein have maintained, a substantial course of trade in said products in commerce, as "commerce is defined in the Federal Trade Commission Act. PAR. 4. In the course a,nd conduct. of their business as aforesaid and for the purpose of inducing the sale of said product.s, respondents have engaged in certain acts and practices as follows: 1. Certain of the said products are stamped with words such as Top grain genuine leather Top grain genuine cowhide Cov, hide split leather, and other similar terms and expressions. 2. Certain of sajcl products are made of non-leather materials which simulate leather and ate stamped with the \"ords "Pig Grain 3. Certain of sflid products are manufactured of non-leather lilaterials having the texture, feel and appearance of leather. PAR. 5. Through the use of the aforesaid statements and representations and materials in the manner aforesaid, respondents have represented, directly or indirectly:

1. That the said products marked with the expressions "Top grain genuine leather Top grain genuine cowhide Cowhide split leather, and other similar terms a,nd expressions are made entirely of leather, with the exeeptiou of the necessary fittings and trimmings.

2. That the products made of non-leather materials \"hich simulflte Ip lther ;llld stam )ecl with the expression "pjg Grain" are made of leather.

3. That the products made of non-lcather materials which have the texture, feel and appearance of leather are made of leather. , , CHELSEA LEATHER GOODS CO. , INC. , ET AL. 505 503 Complaint PAR. 6. Said statements and representations are false, misleading and deceptive. In truth and in fact:

1. The said products bearing the markings "Top grain genuine leather Top grain genuine cowhide Cowhide split leather, and other similar terms and expressions are not made entirely of leather with the exception of the necessary fittings and trimmings. Substantial portions of said products, such as the backing and stays, and other significant portions thereof, are made of non-leather products. 2. Said products made of non-leather materials which simulate leather and marked with the expression "Pig Grain" are not made of leather. Said products are made of a non-leather materials. 3. Sa,id products made of non-leather materials which simulate in texture, feel and appearance leather materials, mislead and deceive the purchasing public. The degree of simulation is such that the general public is unable by a reasonably prudent examination of the product to detennine t.hat said product of a non-leather material. PAR. 7. By the aforesaid acts and practices, respondents place in the hands of retailers and dealers the means and instrumentalities by which they may mislead the public as to the quality and composition of said products.

PAR. 8. There is a preference on the part of a substantial portion of the purchasing public for billfolds and wallets made of leather. PAR. 9. In the course and conduct of their business, at an times mentioned herein, respondents have been in subst.antial competit.ion in commerce, with corporations, firms and individuals in the sale of billfolds and '\yal1ets of t.he same general kind and nature as those sold by respondents.

PAR. 10. The use by respondents of the aforesaid false, misleading and deceptive statements, represent-ations and practices, has hncl and now has, the capacity and tendency to mislead members of the purchasing public into the errone011S and mistaken belief that said statements a,nd representations "ere and are true, and into the purchase of substantial quantities of respondents' products by reason of such erroneous and mistaken belief. As a consequence thereof substantial trade in said commerce has been and is being unfairly diverted to respondents from their competitors and substantial injury has thereby been, and is being, done to competition in commerce. PAR. 11. The aforesaid acts and practices of the respondents, as herein alleged, "ere and are all t.o the prejudice and injury of the public and of respondents' competitors, and constituted, and now constitute, unfair and deceptive nets and practices and unfa.ir methods of competition in commerce, "within the jntcnt and meaning of the Federal Trade Commission Act.

506 FEDERAL 1'TRADE COMMISSIO DECISIONS Decision 58 F.

lift. T eT1Ytl A. Jordan for the Commission. RespondcDls pi' O - INITIAL DECISIOl\T EY EDWARD CREEL. I-IEARIXG EX.nIINEH The Federal Trade Commission issued its complaint against the above-named respondents on Kovember 29, 18GO, charging them. 'i,ith misrepresenting the materials contained in leather and simulated leather products in yjoIntion of the Federal Trade Commission Act. On February 1 , 1D61 , there was submitted to the undersigned hearing examiner an agreement between respondents and counsel supporting the complaint providing for the entry of a consent order. (;nder the terms of the agreement, the respondents admit the jurisdictional facts alleged in t.he complaint. The parties agree among other t.things, that the cease a.nd desist order thm'e set forth may be entered without further notice and hate the same force and efiect as if entered after a. full hearing, and the document includes a. waiver by the respondents of all rights to challcl1ge or contest the validity of the order issuing in accordance therewith. The f1 greernent further recites that it is for settlement. purposes only and docs not constitute an admission by the respondents that they Jmye violated the law as alleged in the compbint. The hearing examiner fmds that the content of the agreement meets nJl of (-he requirements of f3.25 (b) of the Rules of the Commission. The hearing examiner having considered the agreement and proposed order, and being of the opinion that t.hey provide an appropriate basis for settlement and disposition of this proceeding, hereby accepts the agreement, and it is ordered that said agreement shall not heeoInc a part of the offcial record unless and until it becomes a part of the decision of the Commission. The following jurisdictional findings are made and the following order issued: 1. Hesponclent Chelsea Leather Goods Co. , Inc. , is a ew York corporation with its offce and principal place of business located at 109-11 Spring Street, New York, Kew York. R.respondent Joseph 'Veiss is an individual and is an offcer of the corporate respondent. He formulates, directs and c.ontrols the acts nnd practices of the corporate respondent and has the same address. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and t.he proceeding is in the public interest.

1 On Feb. 21, 1961 the bearing examiner amended the Initial decision by adding this paragraph to Finding 1.

, , , CHELSEA LEATHER GOODS CO, ) INC. ) ET AL. 507 503 Decision OUDER I t is onlered That respondents, Chelsea Leather Goods Co., Inc. a corporation, and its offcers, and Joseph \Veiss, individually and as an offcer of said corporation, fUld respondents: representatives agents and employees, direct1 or through any corporate or other device, in connection with the offering for sale, sale or distribution of billfolds or 'waJ1ets, or any other articles of mercluU1c1ise, in commerce, as "commerce " is l1efinec1 in the Federal Trade Commission Act, do forthwith cease and desist from:

1. (R) -Using the expressions Top grain genuine leather Top grain genuine cowhide Cmyhide split leather" or any other words or terms of similar import or meaning to describe any of said products not made whony of the kind of leather so stated, without conspicuously identifying the parts thereof simulating leather or made of leather other than the kind so represented and disclosing that such parts arc made of other materials or other kinds of leather. (h) 1) slng the expression "Pig Grain" or any other words, terms or expressions which, dircetly or indirectly, represent that the product is leather to describe a product ma,de of non-leather material. (c) Oflering for sale or selling said products made of non- leather material ''which simulates leather unless said products have attached thereto or affxed thereon in such ml1nner that it cannot readily be removed, and of such nature as to remain on the product until it reaches I"he ultimate purchaser, a mark, tag- or label, which clearly and conspicuously discloses that the product is not made of leather. 2. Furnishing or otherwise placing in the hands of retailers or dealers in sa,id products the means and instrumentalities by and through which they may mislead or deceive the public in the manner or as to the things hereinabove inhibited. DECISION OF THE CO:.Il\IISSIO:. AXD ORDER TO FILE In".PORT OF COl\Il'LIANCB Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall, on the 25th day of :JIarch 1961, become the decision of the Commission; and, accordingly:

It i8 ordered That 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. , , 508 FEDERAL TRADE CO IMISSION DECISIONS Complaint 58 F.