United States Plywood Corporation

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

Ix THE :MTTR UNITED STATES PLYWOOD CORPORATION ET AL.

CONSE::T ORDER, ETC. , r:r-' REG.ATI TO THE ALLEGED VIOLATION OF THE FEDEUAIJ TRADE COJlnnSSTON ACT Docket 8185. Complaint, Nov. 1960-Decision, May 13, 1961 Consent order requiring New York City distributors to cease advertisingmagazines and newspapers and on tags resembling a tanned cowhide supplied to fabricator purchasers-as "Leather Product of Imported Italian Leather Fibers-Permanently Bonded", its imported product "Barco, having a leather-like appearance but composed of bonded, ground, or pulverized leather with one side plastic coated. and- used in the manufacture 01' such articles as suitcases anc1lac1ies' handhags. IPL \INT Pursua.nt to the provisions of the. Federal Trade Commission A. and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that the United States Plywood Corporation, a corporation, hereinafter-r referred to as respondent, has 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:

PARAGRAPH 1. Respondent United States PJywood Corporation is a corporation organized and existing under the laws of the State of Kew York with its offce and principal phce of business located at 55 West 44th Strect, X ew York, New York. PAR. 2. Respondent L;united States Plywood Corporation is now and for several years last past has been, engaged in the business of advertising, offering for sale, sale and distribution of a material 6S1-237--.(J:J-- , 738 FEDERAL TRADE CO:vMISSION DECISIONS Complaint 58 F.

which it designates as "Barco" to fabricators, who use said product in the manufacture, among other things, of suitcases and ladies handbags which they sell to distributors and jobbers and also to retailers for resale to the public. Respondent corporation imports said material which is composed of bonded, ground or pulverized leather with one side coated with a plas6c or similar substance. PAR. 3. In the course and conduct of its business respondent now causes, and for some time last past has caused, said product when sold, to be shipped from its place of business in the State of K ew York to purchasers thereof located in various other States of the Gnitecl States, and maintains, and at aJl times mentioned herein has maintained, a substantial course of trade in said product in commerce, as "commerce" is defined in the Federal Trade Commission Act.

P AH. 4. In the course and conduct of its business) respondent has made certain statements with respect to its product "Barco" in advertisements, in magazines and newspapers and on tags supplied to the purchasers of said product of which the iol1owing is typical: Leather Product of Imported ItaUan Leather Fibers-Permanently Bonded. The fabricators using respondent's product make use of the foregoing statement originating ,,ith respondent in connection with the products manufactured by them. In addition, respondent furnish said fabricators with tags resembling a tanned cowhide upon which the aforesaid statement is printed which are attached by some of said fabricators to products manufactured by them from said product, which products with said tags attached thereto, are shipped by s"id fabricators to retailers located in states other than the state or states in which the shipments originate. PAR. 5. Products made of "Barco" have the appearance of leather and in the absence of an adequate disclosure as to their actual composition are readily accepteel and understood by many members of the public as being genuine leather, which is not the fact. The statement "Leather Product of Imported Leather Fibers-Permanently Bonded" is confusing to many members of the public and not informative to the extent that they know the actual composition of said product and arc thereby enabled to distinguish it from genuine leather.

PAR. 6. There is a preference on the part of many members of the public for products such as suitcases and ladies handbags made of genuine leather over such articles made from a product such as respondent) PAR. 7. Respondent by means of the aforesaid acts and practices and by failing to adequately disclose thc actual composition of its UNITED STATES PLYWOOD COHPORATIO ET AL. 739 737 Decision said product, furnishcs means and instrumentalities to others whereby the public is confused or misled as to the actual composition of articles made from its said product.

PAR. 8. In the course and conduct of its business, respondent is in substantial competition in commerce with corporations, firms and individuals engaged in the sale of genuine leather and leather substitutes used in the manufacture of suitcases and ladies handbags. PAR. 9. The aforesaid acts and practices of the respondent and its failure to adequately disclose thc composition of its said product has the capacity and tendency to confuse the public as to its composition and to mislead the public into the erroneous and mistaken belief that the articles made therefrom are genuine leather and into the purchase thereof by reason of such erroneous and mistaken belief. As a consequence thereof, substantial trade in commerce has been unfairly diverted to respondent from its competitors and substantial injury has thereby been done to competition in commerce. Morton Ne8'lith, Esq. supporting the complaint. Robert N. Hawes, Esq. of 'Washington D. , for respondents. INITIAL DECISION BY LEOX R. GROSS, HEARING EXAMINER Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission on November 23, 1960 , issued its complaint in this proceeding against respondent United States Plywood Corporation, and a true copy was duly served on said respondent. Thcreafter, on February 7 and 15 , 1961, said respondent filed motions to dismiss the complaint accompanied by an affdavit and copy of contract for the sale of its Barash Division (manufacturers of "Barco ) and all of its assets to The Barash Company, Inc. Said contract was entered into prior to the issuance of this complaint, on October 24, 1960, but the sale was consummated on January 3 , 1961. On February 24th, the undersigned hearing examiner denied the motion to dismiss the complaint until such time as there were impleaded in this proceeding the respondent's successors ) vendees and assigns in the sale of "Barco. " Pursuant to the terms of an agreement dated l\Iarch 15 , 1961, filed with the undersigned on March 20, 1961, signed by attorneys for the original respondent, the substituted respondents, and counsel supporting the complaint, and approved by the Bureau of Litigation, The Barash Company, Inc., a Now York corporation, and Samuel )1. Abrams and I. Barash individually and as offcers of said corporation, as the succcssors vendees and assigns of an the assets of the Barash Division of the respondent United Stales Plywood Corporation Decision 58 F.

agreed that they be substituted as respondents herein in heu of said respondent United States Plywood Corporation. It i8 ordered That pursuant to the afores"id agreement The Barash Comp"ny, Inc., " Kew York corporation, and Samuel Abrams and I. Barash, individu,,11y and "s offcers of s"id corporation, as the successors, vendees and assigns of all the assets of the Barash Division of the respondent United States Plywood Corporation be and hereby are substitnted as respondents in heu of respondent named in the complaint, United States Plywood Corporation. The substituted respondents, The Barash Company, Inc., a corporation, and Samuel JVI. Abrams and :II. Barash, individuaUy and as offcers of said corporation hereby have waived any further notice of the foregoing complaint. This agreement containing a consent order to cease and desist is hereby approved and accepted as conforming with tho provisions of S3.25 of this Commission s Rules of Practice for Adjudicative Proceedings. Said agreement is hereby found dispositive of a11 the issues raised in the original complaint after the substitution of the new respondents as hereinabove ordered. The undersigned hearing examiner finds that in accordance with the terms of the aforementioned agreements the substituted respondents admit ' all the jurisdictional facts alleged in the complaint as modified by this agreement and agree that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations and this agreement. In the agreement the respondents waive: (aJ any further procedural steps before the hearing examiner and the Commission; (b) the making 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 parties 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 of 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 proceeding by the Commission may be entered \"without further notice to the substituted respondents, and when so entered such order will have the same force and effect as if eniered after a full hearing. Said order may be altered modified or set aside in tlw manner provided for other orders. The complaint may be llsed in construing the terms of t.he order.

This proceeding having now come on for final consideration 011 1he compbint. find the rtfol'esaicl agreement of :\Iarch 18Gl, Coll- UNITED STATES PLYWOOD CORPORATION ET AL. 741 737 l!' indings taining consent order, and it appearing that the order which is approved in and by said agrecment disposes of a1l the issues presented by the complaint as to a1l of the parties involved, said agreement is hereby accepted and approved as complying with and 3.25 of the Commission s Rules of Practice for Adjudicative Proceedings. The undersigned hearing examiner, having considered the agreement and proposed order and being of the opinion that the acceptance thereof will be in the public interest, makes the :fonowing fmdings and issues the following order: FINDIKGS 1. The Federal Trade Commission has jurisdiction over the parties and the subject matter of this proceeding; and this proceeding is in the public interest;

2. The substituted respondent, The Barash Company, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of K ew York with its principal offce and place of business located at 122 Fifth A venue, in the City of New York, State of Kew York. The substituted respondents Samuel M. Abrams and :If. Barash are offcers of The Barash Company, Inc. They formulate, direct and control the acts and practices of said corporation. Their address is the same as that of the corporate respondent;

3. Hesponclents are engaged in commerce as "commerce" is defined in the pertinent statutes which are invoked by the complaint filed herein. K ow, therefore It is ordered That respondents The Barash Company, Inc. , a corporation, and its offcers and Samuel 1\f. Ahrams and M. Barash individually and as offcers of said corporation, and respondents representatives, agcnts and employees, directly or through any corporate or other device, in connection with the manufacturing, offering for sale: sale or distribution in commerce, as "commerce is defined in the Federal Trade Comnlission Act, of "Barco" or other material of leather fibers do forthwith cease and desist from representing directly or indirectly:

1. That a material or product which is not manufactured from t.he hide of an animal is 1cather or genuine leather; 2. That a material is leather if such material is made of leather fibers bonded together with an adhesive and thus is not wholly the hide of an animal, provided however that this shall not be construed as preventing an accurate representation that the material is composed of leather fibers and an adhesive;

742 FEDERAL TRADE COM:\ISSION DECISIONS Complaint 58 F.

3. That such material is leather by attaching hand tags thereto in the shape of a tanned cowhide.

It is further ordel' That said Tespondents their representatives agents or employees cease and desist from offering for sale or selling "Barco" or any other leather fiber material which has the a.appearance or leather unless accompanied by a. disclosure that it is not leather or a disclosure of the general nature of such material as wiJJ clearly show that it is not leather, but this shall not be construed as preventing an accurate representation that t.he materirll is composed of least.her fibers and an adhesive. It i8 further ordered That the complaint be and the same hereby is dismissed as to the respondent United States Plywood Corporatioll1 a corporation, without prejudice.

D.ECISION OF THE COl\I1IISSJQX AXD onder TO FILE R1 pont OF COl\IPLL-XCE Pursuant to Section 3.21 of the Commission s Hides of Practice. the initial decision of the hearing examiner shall. on the 13th clay of 1vIay 1961, become the decision of the Commission; and: accordingly: It ls ordered That respondent.s The Barash Company, Inc. corporation, and its offcers and Samnel I. Abrams fllcl JI. Barash individually and as offcers of said corporation, sh,lll within sixty (60) days after service upon them of this order, file, with the Commission a re.port in writing setting forth in detail the manner and form in which they have complied with the oreler to cease and desist.