American Fur Coat Co., Inc., et al.

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Ix Tile :MATTER OF A:VIERICAN ycn COAT CO., IKC., ET AL.

CONSENT oBJJJm, ETC. , IN REGARD TO THE ALLEGED \'VIOLATION OF THJ FEDERAL TRADE COl\nnSSIO AND 'f-IE FUR PRODUCTS LABELING ACTS Docket. 7991. Compla-int, June 1. J960-Decision liar. 30, 196.1 Consent order requiring Xew York City fl1ITiel' to cease violating the Fur Products Labeling Act by failing to set forth tbe term "Dyed Mouton pl'oC'cssed Lamb" as required on lnhcls and invokes. by failng to disclose on invoices when fur prolInel!' were composed of g-ils. and by failing to comply with labeling awl invoicing requirements in other rCSr)acts. COMPLAINT Pursuant to the provisions of the Federa.1 Trade Commission Act and the Fur Products Labeling Act, and by virtue or the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that American Fur Coat Co., Inc., a corpora60n Benjamin Dretel and JInrtha Dretel, individually a"nd as offcers or said corporation, and Bert Arak, individually and as manager in charge of business operations, hereinafter rererred to as respondents, have violated the provisions of said Acts and the Rules and Regulations promulgated under the Fur Products Labeling Act and it appea.ring to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its cha.rges in that respect as rollows: PAILi.GRAPH 1. --'\erican Fur Coat Co. , Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York with its offce and principal place of business located at 245 'West 27th Street, New York, Kew York. Benjamin Dretel and Martha Dretel are president and secretarytreasurer, respectively, or the said corporate respondent. Bert Arak is manager in charge or business operations. These individuals control, formulate and direct the acts, practices and policies of the said corporate respondent. Their offce and principal place of business is the same as that or the said corporate respondent. PAIL 2. Subsequent to thc effective date of the Fur Products Labeling Act on August 9, 1952, respondents have been and are now engaged in the introduction into commerce, and in the manuracture ror introduction into commerce, and in the sale, advertising, and offering ror sale, in commerce, and in the transportation and distribution, in commerce, or rur products, and have manufactured for sale, sold, advertised, offered for sale, transported and distributed . , AMERICA.-V FUR COAT CO, ) INC. , ET AL. 509 508 Complaint fur products which have been made in whole or in part of fur which had been shipped and received in commerce as the terms commerce fur" and "fur product" 'are defined in the Fur Products Labeling Act.

PAR. 3. Certain of said fur products were misbranded in violation of the Fur Products Labeling Act in that they were not labeled in accordance with the Hules and Regulations promulgated thereunder in the following respects:

(a) The term "Dyed :\1:outon processed Lamb" was not set forth in the manner required where an election was made to use that term instead of "Dyed Lam b" in violation of Eule ;) of the said Rules and Regulations.

(b) Information required under Section 4(2) of the Fur Products Labeling Act and the l ules and Regulations promulgated thereunder '"Vas mingled with non-required information, in violation of ule 2D (a) of said Rules and Regulations. (c) Information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was set forth in handwriting 011 labels, in violation of Rule 2H(b) of said Rules and Regulations.

(cl) Required item nmnhers were not set forth on labels in violation of Rule 40 of said Rules and Regulations. PAR. 4. Certain of said fur products were falsely and deceptively invoiced by respondents in that they were not invoiced as required by Section 5(b) (1) of the Fur Products Labeling Act, and in the manner and form prescribed by the Rules and Regulations promulgated thereunder.

PAI'- 5. Certain of said fur products were falsely and deceptively invoiced in violation of the Fur Products Labeling Act in that they were not inyoieed ill accordance ,,-ith the Hules and Hegulations promulgated thereunder in the following respects: (a) The tcnn "Dyed :\Iollton processed Lamb" was not set forth in the m,-m 1el" required "h('1'' an election was made to use that term instead of "Dyed L:-nlrb' in violation 01 n1l1e D of the said R.ules and He-gl1lations.

(1J) Failed to cli::close that fur product-s are composed in ,\"hole 01' sl1bstantia11:r of gins \,hen such is the fact, in violation of Rule 20 of said Rules and Regubtions.

(c) Rc,quired item IHlmbers were not set. forth on invoices, in violation of R.nl'2 40 of said Rules ftncl R.egulations. \1:. I) The aTorcsn icl acts md practices of respondents, as herein alleged ) alt in v,;ohtion of the Fur Products Labeling Act and the R.ules fe.net Regulations promulgated thereunder and constitute unfair 510 :FEDERAL TRADE COJ.fMISSION DECISIONS Dccisioll 58 F.

and deceptive acts and pra,ctices in commerce under.r the Federal Trade Commission Act.

De Witt T. Puckett, Esq. supporting the complaint. George Herbert Goodrich, E8q. of G'lggenhei1ne1' , UntcrmyeT & Goodrich of 'Washington, D. C. , for respondents. INITIAL DECISION BY LEON R. Gnoss, I-IEARING EXAl\IlNEH On June 24 , 1960, the J, ecleral Trade Commission issued a complaint aga.inst the above-named responclellts, in ,,,which they were charged with violating the Federal Trade Commission Act, and the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder by, among other things, misbranding by failing to label, aflixing labels which fail to comply with minimum size requirements, mingling required with non-required information, failing to set out completely on one side of a label information required by the law and rules and regulations promulgated thereunder setting forth required information in smaller type than is permitted by law, and falsely ,md deceptively invoicing fur products sold by respondents in interstate commerce. "- true and correct copy of the complaint ",vas served upon the respoDdcmts and each and all of them, as required by law. Thereafter respondents appeared by counsel and agreed to dispose of this proceeding without a forma,1 hearing pursuant to the terms of an agreement dated JanlUuy 16, log1 , containing consent order to cease and desist. The agreement was submitted to the undersigned hearing examiner on January 27, 1961, in accorda,nce with S3.25 of the Commission s Rules of Practice for Adjudicative Proc2cdings. The agreement purports to dispose of this proceeding as to the respondents and each and all of t.hem a, contains the form of a consent cease-and-desist order which the parties have represented is dispositive or the issues involved in this proceeding. The agreement has been signed by the corporate respondent by its president, by the individual respondents individually and as offcers and/or business manager of said corporation, by the attorney for the respondents, by counsel supporting the complaint, and has been approved by the Assistant Director Associate Director and Acting Director of the Bureau of Lit.igation of the Federal Trade Commission. In said agreement respondents admit a11 of the jurisdictional facts alleged in the complaint and agree that the record may be taken as if findings of jurisdictional.l facts had been made in accordance with such allegations. In the agreement the respondents wa 1Y8: (n) fin)' further pl'oC'cc1nn.l steps before the hearing examiner and the Commis ion; (b) the making AMERICA. FUR COAT CO. , INC. , ET AL. 511 508 Findings of findings of fact or conclusions of law; and (c) a11 rights respondents may have to challenge or contest the validity of the order to cease and desist entered in accordance with the agreement. The part.ies further agree, in said agreement, that the record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and the agreement; that the agreement shall not become a part or the offcial record unless and until it becomes a part of the decision of the Federal Trade Commission; that the order to cease and desist entered in this pro ceeding by the Commission may be entered without further notice to the respondents, and when so entered such order will have the same force and effect as if entered after a full hearing. Said order may be altered, modified or set aside in the manner provided for other orders. The complaint may be used in construing the terms OT the order.

The parties have covenanted that the said agreement is Tor settlement purposes only and does not constitute an admission by the respondents that they have violated the law as alleged in the complaint.

This proceeding having now come on :for final consideration on the complaint and the aforesaid agreement aT T anuary 16, 1961 containing consent order, and it appearing that the order which is approved in and by said agreement disposes or all the issues presenteel by the complaint as to a11 of the parties involved, said agreement is hereby accepted and approved as complying with 21 and 3.25 of the Commission s Rules or PnLCtice for Adjudicative Proceedings. The undersigned hearing examiner, ha:ving considered the agreement and proposed order and being of the opinion that the acceptance thereof wiJj be in thc public interest, makes the following findings and issues the follmving order:

FINDINGS 1. The Federal Trade Commission has jurisdiction over the parties and the subject matter of this proceeding, anel this proceeding is in the public interest;

2. Respondent American Fur Coat Co. , Inc. , is a corporation existing a,nd doing business under and by virtue of the laws of the State of New York, with its offce and principal place of business located at 245 West 27th Street, in the City of New York, State of New York;

3. Inelividual respondents Benjamin Dretcl and 2\1artha Dretel are offcers of the corporate respondent and Bert Arak is manager in charge of business operations. These individuals control, formu , , , 512 FEDERAL "'TRADE COMMISSION DECISIONS Findings 58 F.

late and direct the acts, practices and policies of the said corporate respondent, and their offce and principal place of business is the same as that of the said corporate respondent. 4. Respon?dents are engaged in commerce as "commerce" is defined in the pertinent statutes which are invoked by the complaint filed herein. Now, therefore It i8 ordered That American Fnr Coat Co. , Inc. , a corporation and its offcers, and Benjamin Dretel and Martha Dretel, individually and as offcers of said corporation, and Bert Arak, individually and as manager in charge of business operations, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the introduction, manufacture for introduction, or the sale, advertising or offering for sale in commerce or the transportation or distribution in commerce of fur products or in connection with the sale, manufacture for sale, advertising, offering :for sale, transportation or distribution of fur products which have been made in whole or in part of fur which has been shipped and received in commerce, as "commerce fur" and "fur product" are defined in the Fur Products Labeling Act, do forthwith cease and desist from:

1. Misbranding fur products by:

A. Failing to set forth the term "Dyed Mouton processed Lamb" where an election is made to use that term instead of Dyed Lamb; B. Setting forth on labels affxed to fur products: 1. Information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgllted thereunder mingled with non-required information; 2. Information required under Section 4(2) of the Fur Product.s Labeling Act and the Rules and Regnlations promulgllted t hereunder in handwriting.

C. Failing to set forth on labels the item number or mark assigned to a fur product.

2. Falsely or deceptively invoicing fur products by: A. Failing to furnish to purchasers of fur products invoices showing all the information required to be disc.osed by each of the subsections of 5(b) (1) of the Fur Products Labeling Act; B. Failing to set forth the term "Dyed Mouton processed Lamb" \vhere an election is made to use that term instead of Dyed Lamb; C. Failing to disclose that fur products arc composed in whole or in substantial )art of prl\Vs, tails, bellies. sides flanks. ills. ears throats, heads, scrap pieces, or waste furs, when such is the fact: D. Failing to set forth on invoices the item number or mar assigned to a fur product.

FABER BROTHERS , INC. 513 508 Syllabus DECISION OJ. THE CO::MISSION AKD ORDER TO FILE REPORT OF COMPLIANCE The Commission having considered the hearing examiner s initial decision, filed February 14, 1961, accepting an agreement containing a consent order theretofore executed by the respondents and counsel in support of the complaint; and It appearing that the hearing examiner s statement in the first sentence of the initial decision purporting to set forth the alleged violations of law involved in this proceeding includes certain allegations not contained in the complaint; and The Commission being of the opinion that this erroneous summation of the allegations of the complaint should be corrected: It is ordered That the initial decision be, and it hereby is, amended by substituting for the first sentence thereof the following: The Federal Trade Commission issued its complaint against respondents on June 24, 1960, charging ther11 with having violated the Fur Products Labeling Act and the rules and regulations promulgated thereunder by misbranding and falsely and deceptively invoicing certain fur products.

It is further O1ylered That the initial decision, as so amended shall, on the 30th day of :\iarch 1961, become the decision of the Commission.

It is further ordered That the respondents 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 thc order contained in the aforesaid initial decision, as amended.

Ix THE 1vA TIER OF FABER BROTHERS, INC.

CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2 (a) OF Tire CLAYTON ACT Docket 8062. Complaint, July 1960-lJecIs-ion, Mar. 30 , 1961 Consent order requiring Chicago distributors of sporting goods in the fi-ve-State area of Illinois, "\Visconsin, Indiana, :\lichigan, and Iowa, with annual sales in excess of $2 000 000, to cease discriminating in price in violation of Sec. 2 (a) of the Clayton Act by such practices as sellng to its customers classified as "Favorite Sports Stores" on the basis of cost pins 109 while clwrging their competitors cost plus 33%. GSl- iT- GC1- ::J 514 FEDERAL TRADE COMMISSIO)J DECISIONS Complaint 58 F.

COMPLAINT The Federal Trade Commission, having reason to believe that the party respondent named in t.he capt.ion hereof, and hereinafter more particularly designated and described, has violated and is now violating the provisions of Section 2 (a) of the Clayton Act, as amended by the Hobin son-Patman Act (D. C. Title 15, Sec. 13), hereby issues its compla.int, stating its charges \"ith respect thereto as follows: PARAGHAl'II 1. Respondent Faber Brothers, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Illinois, with its offce and principal place of business located at :,50 west Ontario Street, Chicago, Ilinois. PAn. 2. R.csponde.nt is now and has been engaged in the business of selling and distributing sporting goods. Respondent sells its products of like grade and quality to a large number of retailers, including sporting goods stores, hardware stores, hobby shops loud department stores, in a five state a.reh, of Illinois, 1Visconsin, Indiana 1\Jichig8.n and IO\va, for use, consumption or resale therein. H.esponcleurs sales of its products are substantial, exceeding S2 000 000 mlllal1y.

PAR. ;-1. Respondent. sells and causes its products to be tra.nsported from its principal place of business in t.he State of Illinois to customers located in other St.ates of the United States. There has been at all tiTnes mentioned herein a continuous course of trade in said products in COll1merce, as "commerce" is defined in the Clayton Act, as amended.

cb, In the course PAR. tncl conduct of its business in commerce respondent is in substantial competition with other corporations pannerships, individuals and firms engaged in the sale and distribution of sporting goods.

Iany of respondent:s purchasers are likewise in competition with each other in the resale of respondenes products within the same trading areas.

\R. 5. In the course and conduct of its business, and particularly since 19;')8, respondent is now and has been discriminating in price between different purchasers of its products by selling said products to SOlne purchasers at substantially higher prices than the prices charged competing purchasers for such products of bke grade and quality.

PAn. 6. For example, respondent classifies certain of its custmners Favorite Sports Stores . R.respondent sells goods of like grade and quality to customers not so designated and who compete with the Favorite Sports Stores:' in the resale of respondenes products. Respondent sells to customers designated "Favorite Sports Stores FABEH BROTHERS , H.. 515 513 Decision on the basis of cost plus 10%. Customers not desibTllated "Favorite Sports Stores" pay the usual price of respondent, which is approximately cost plus 33%.

PAH. 7. The effect of such discriminations in price made by respondent, as hereinbefore set forth, may be substantially to lessen competition or tend to create a Inonopoly in the lines of commerce in which respondent and its purchasers arc respectively engaged or to injure, destroy or prevent competition with respondent and with purchasers of respondent who receive the lower prices. \R. 8. The discriminations in price, as hereinbefore alleged, are in violation of the provisions of Section 2 (it) of the Clayton Act as amended by the Robinson-Patman Act.

3iT. John Pe1'echinsky supporting the complaint. Mr. Sidney J1. Libit of Chicago, Ill., for respondent. INITIAL DECISION BY J OlG, LmvIs: HEARING EXAJIINER The Federal Trade Commission issued its complaint against the above-named respondent on July 29 , 1960, charging it with having violated Section 2 (a) of the Clayton Act, as amended. After being served \with said complaint, respondent entered into an agreement dated January 19, 1961 , containing a consent order to cease and desist purporting to dispose of all of this proce,ecling as to an parties. Said agreement, which has been signed by respondent, by counsel for said respondent and by counsel supporting the complaint, and approvcd by the Dircetor and Associate Director of the Commission s Bureau of Litigation, has been submitted to the abovenamed hearing examiner for his consideration, in accordance with Section 3.25 of the Commission s Hules of Practice for Adjudicative Proceedings.

Respondent, pursuant to the aforesaid agreement, has admitted a11 the jurisdictional allegations of the complaint and agreed that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations. Said agreement further provides that respondent waives any further procedural steps before the hearing examiner and the Commission, the making of findings of fact or conclusions of law and all the right.s it may have to challenge or contest the validity of the order to cease and desist entered in accordance with such agreement. It has been afJrecclC" that the order to cease and desist iss;ed in accordance with said QTeemcnt shall have the same force a.nd effect as if entered after a full heating and that the complaint may be used in construing the terms of said order. It has also been agreed that the record Order 58 F.

herein shall consist solely of the complaint and said agreement, and that said agreement is for settlement purposes only and does not constitute an admission by respondent that it has violated the law as alleged in the complaint.

This proceeding having now come on for fial consideration on the complaint and the aforesaid agreement containing consent order and it appearing that the order provided for in said agreement covers a11 of thc allegations of the complaint and provides for an appropriate disposition of this proceeding as to a11 parties, said agreement is hereby accepted and is ordered filed upon this decision becoming the decision of the Commission pursuant to Sections 3. and 3.25 of the Commission s Rules of Practice for Adjudicative Proceedings, and the hearing examiner, accordingly, makes the following jurisdictional findings and order: 1. Hcspondent .Faber Brothers, Inc., is a corporation existing and doing business under and by virtue of the laws of the State of Illinois, with its offce and principal place of business located at 350 West Ontario Street, in the City of Chicago, State of Ilinois. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding a,nd of the respondent hereinabove named. The complaint states a cause of action against said respondent under the provisions of the Clayton Act.

ORDER It is O''de1'ed That respondent Faber Brothers, Inc., a corporation and its offcers, employees, agents and representatives, directly or through any corporate or other device, in or in connection with the offering for sale, sale or distribution of any of its products in commerce, as "commerce" is defined in the Clayton Act, as amended, do forthwith cease and desist from discriminating, directly or indirectly, in the price of such products of like grade and quality: 1. By selling such products to any purchaser at net prices higher than the net prices charged any other purchaser competing in the resale or distribution of such products;

2. By selling such products to any purchaser at a price which is lower than the price charged any other purc1ulser at the same Jevel of trade, where such lower price undercuts the price at which the purchaser charged the lo-wer price may purchase such products of like grade and qUfl1ity from another seller. 3. By gra,nting or allowing any secret rebate, discount, allowance or other consideration to any purchaser while not granting or allowing an equivalent rebate, discount, allmyance or other consideration to any other purchaser ",-ho competes in the rosale or SMITH-FISHER CORPORATION ET AL. 517 513 Complaint distribution of such products with the purchaser who is granted or al)moved the secret rebate, discount, allowance or other consideration. DECISION OF THE CO::BIISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall, on the 30th day of :March 1961, become the decision of the Commission; and, accordingly:

It is onlo. That the respondent herein shall within sixty (60) clays after-r service upon it of this order, file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with the order to cease and clesist.