Seaberg Mills, Inc., et al.

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IN THE l\1Arter OF SEABERG ULLS, IKC., ET AL.

COXSEKT ORDER , ETC. , IX REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO:if I1SSlOX: THE TEXTILE FIBER l'RODVCT8 lDEX- Tl_FICATION AXD THE FLA:\Ll\IABLE FARIneS ACTS Docket G-728. Compla, int, JIar. 1961;-Decision, liar. 16, 1964 Consent order requiring converter-jobbf'l', O; of textie fabrics in Xew York City, to ceuse using the word ;;:,U11s" as part of their corporate name ta:le Ilunlified: to cease violating the Textile Fiber Products Identification A-:,t b:-" mjsbr Jldil)g as "85% Celepel'li Hncl15% Xylon, textile fiber produc:t:; which coutamed substantially different amounts of acetate and nylon than a", ,"etJl'cscnterl, failng to label and invoice fabrics with the required inforll,1 tion iJJcllH1illg the generic names and perceutage by weight of COllstituent fi!)' aJHl furnishing false guarantees that fabrics were not misbranded; and to cease violating the Flammable Fabrics Act by representing falsely that they had on file with the Commission a continuing guaranty that certain fabrics were not so highly flammable as to be dangerous when worn. CO)fPLA.INT Pursuant to the provisions of the Federal Trade Commission Act, the Textile Fiber Products Identification Act and the Flammable Fabrics Act and by Firtue of the authority vested in it by said Acts the Federal Trade Commission having reason to believe that Seaoerg )Iills, Inc., a corporation and George Greenberg and Norman S;:.,Q:al individually and as offcers of said corporation, hereinafter refer to f1S respondents hayc violated the pro\ isions of said Acts and the Rules and Regulations promulgated under the Textile Fiber Prodnets Identification Act and the Flammable Fabrics Act and it "ppearing to the Commission that a proceeding by it in respect thereof SEABERG 2I.IILLS , IKC. , ET AL. 1369 J368 Complaint chargeswould be in the publicin thatinterest,respecthereby issues asits complaintfollows:stating its P AHAGRAPH 1. Seaberg iills, Inc., is a corporation organized, existingawl doing busines under fwd by virtue of the laws of the State of New York.

lndividual respondents George Greenberg and Norman Segal are oJrcers of the corporate respondent and formulate, direct and control the acts, practices and policies of the corporate respondent including the acts and practices complained of herein. R.respondents are converters and jobbers of textile fiber products namely fabrics, with their otlire and principal place of business located at 39 ,Vest. 37th Street, New York, New York. PAR. 2. In the C011rse and conduct of their business respondents are 110"S and for sometime past have been engaged in the advertising, offering for sale, sale and distribution of textile products in commerce and now cause and for sometime prtst have caused their products WhCll sold to be shipped from their place of business in the State of New York, to purehasers t.hereof in ,' nrious other States of the Cnited St.ates and maintain and at all times mentioned herein lHlYC maintainccl R suhstRntird rol1lse of tT:1C1e of said )1loc1ucts in commerce ns "c.commerce" is defined in the Federal Trade Commission Act. PAR. 3. In the course and conduct of their business in soliciting the sale. of an(l in selling textile products, respondent Seaberg j)Iills Inc. , and the individual respondents doing business under the name Seaberg :Mills, Inc., hate used said name on letterheads, in,'oices bbels and tags and in advertisements of their products. PAIL 4. Through tho use of the word "Mills" as part of the corporate name of Seaberg :Mills, lnc., thc Rforesa..icl respondents repreented that they O"yn or operate mills or factories in 'i\'which the textile products sold by them are manufactured. PAR. 5. In truth nnd in fact the aforesaid respondents do not. OW11 operate or control the mills or fnctories where the textile products sold by them are manufactured but buy the, finished products from ot,hers. The aforesaid representations are therefore false, misleading and deceptive.

\R. 6. There is a preference on the part of many dealers to huv products including textile products directly from factories OJ' mill believing that by doing so lower prices and other' advantages thereby n('('r11e to them.

PAH. 7. In the conduct of their business ftt all times mentioned herein sflid respondents had been in substantial competition in commerce with corporations, firms and indiyic1uals in the aJe of textile 1370 FEDERAL TRADE C01L\lISSJQ)i DECISJQNS Complaint 64 F.

products of the same general kind and nature as those sold by 1'e. spondents.

PAR. 8. The use by such respondents of the aforesaid false, misleading and deceptive statements, representations and practices has 1Iad and now has the eRpacitv and tendencv to mislead dealers and other purchasers into the er oneous and 1 1mistaken belief that said stawlnents and representations "ere and arc true and into the purchase of substantial quantitics of respondents' products by reason of said erroneous a.nd mistaken belief.

PAR. 9. The aforesaid acts and practices of respondents as alleged in Paragraphs Two through Eight were and ate to the prejudice and injury of the public and of respondents' competitors and constituted and now constitute unfair methods of competition and unfair nd deceptive acts and practices in commerce, in violation of Section 5 (a) (1) of the Federal Trade Commission Act. PAR. 10. Subsequent to the effective date of the Textile Fiber Products Identification Act on March 3, 1960, respondents have been and atc now engaged in the introduction, delivery for introduction sa.le, a.advertising and offering for sale, in commerce, and in the transportation or causing to be transported in commerce a,nd the importation into the United States of textile fiber products; and have som offered for sale, advertised, delivered, transported and caused to be tra.nsported, textile fiber products, which have been advertised or ofofiered for sale, adver- fere,d for sale in commerce; and have sold, tised, delivered, transported and caused to be transported, after shipment in comnlerce, textile fiber products, either in their original st.ate. as the terms "commerce or contained in other textile fiber products, c1e.ined in the Textile Fiber.r Products and "textile libel' product" are Identification Act.

misbranded by PAR. 11. Certain of said textile fiber products were respondents within the intent and meaning of Section 4 (a) of the tile Fiber Products Identification Act and the Hules and Regulations promulgated thereunder in that they were falsely and deceptively stamped, tagged, labeled, invoiced, ad\-ertisecl, or otherwise fibers contained identified as to the name or amount of constituent therein.

-\among such misbranded textile fiber products, but not limited thereto, were textile fiber products with invoices -which set forth the fiber content as 85'7 Celeperm and 15% Xylon, whereas, in truth and in fact said products contained substantially different amounts of acetate and nylon.

SEABERG j\IlLLS ) INC. ! BT AL. 1371 1368 Complaint PAR. 12. Certain of said textile fiber products "ere further misbranded by respondents in that they were not stamped tagged, labeled or otherwise identified as required under the provisions of Section 4(b) of the Textile Fiber Products Identification Act and in the manner and form as prescribed by the Rules and Regulations promulgated under said Act.

Among such misbranded textile fiber products, but not limited thereto, were fabrics which ,were not labeled to show any of the in. formation required to be disclosed under Section 4(b) of such Act and were not covered by invoices correctly disclosing the aforesaid information so as to entitle such products to the exemption from labeling proyidcd by Section 3(d) (5) of such Act. PAR. 13. The respondents have furnished false guaranties that their textile fiber products "ere not misbmnded by falsely invoicing and writing on invoices that respondents had filed a continuing guaranty under the Tcxtile Fibcr Products Identification Act with the Federal Trade Commission, when such was not the fact, in violation of Section 10 (b) of the Tcxtile Fiber Products Identification Act and Rule 38 (d) of the Rules and Regulations promulgated under said Act.

PAR. 14. Certain of said textile fiber products "ere misbranded in violation of the Textile Fiber Products Identification Act in that they were not labeled in accordance "ith the Rules and .Regulations promulgated thereunder in the following respect. The generic names and percentages by weight of the constituent fibers present in t.he te.xtiJe fiber products, exclusive of permissive ornamentation, in amounts of more than five percentum were not in order of predominance by "eight in violation of .Rule 16(a) of the foresaid Rules find Regulations.

PAR. 15. The acts and practices of respondents as set. forth above 'were and are in violation of the Textile Fiber Products Identification Act and the Rules and llegulations promulgated thereunder, and constituted and now constitute unfair and deceptive acts and practices and unfair methods of competit.ion in commerce, within the intent and meaning of the Fedeml Trade Commission Act.. PAR. 16. Respondents, subsequent to July 1 , 1954, the effective date of the Flammable Fabrics Act, have sold, and offered for sale, in commerce; have imported into the L united States; a,nd have introduced, delivered for introduction, tnmsported and caused to be transported in commerce; and have transported and cau ed to be transported for the purpose of salc or delivery after sale in commerce; as 1372 FEDERAL TRADE COl\BIISSION DECISIOXS Decision and Order 64 F.

COIIncrce" is defined in the Flammable Fabrics Act, fabrics as that term is defined therein. PAR. 17. Respondents, by falsely representing in writing that the,have a continuing guaranty under the Flammable Fabrics Act on file wit.h the Federal Trade Commission, have furnished their ellstome,rs with a false guaranty with respect to certttin of the fabrics mentioned in Paragraph Sixteen hereof, to the ei:iect that reasonable and representative tests made under the procedures provided in Section 4 of the Flammable Fabrics Act, as amended, and the Rules and Regulations promulgated thereunder, show that said fabrics are not in the form delivered by respondents, so IJighly flammable under the provisions of the Flammahle Fabrics Act as to he dangerous when worn by individuals. There was reason for respondents to believe that the fabrics covered by such guaranty might be introduced, sold or tmnsported in commerce in violation of Section 8 (b) of the aforesaid Aet and Rule 10 (d) of the Rules and Regulations promulgated under such Act.

Said guaranty was false in that respondents did not have such a continuing guaranty on file with the Federal Trade Commission. PAli. 18. The n.foresai(l acts and practices of respondents \i-ere and are in violation of the Flammable Fabrics Act and the Rules and Regulations promulgated thereunder and as sllch constitute unfair methods of competition and unfair act.s and practices in commerce within the intent and meaning of the Federal Trade Commission Act. DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of the Textie Fiber Products Identification Act, the Flammable Fabrics Act, and the Federal Trade Commission Act, and the respondents having been served with notice of said determination and with a copy of the complaint the Commission intended to issue together with a proposed form of order; and The respondents and counsel for the Commission having therefLfteT executed an agreement contajning a consent order, an admission by respondents of al1 the jurisdictional facts set forth in the. complaint to issue herein, a statement that the signing of said agreement -is for settlement purposes only and does not constitute an admissior, by respondents that the law has been violated as set forth in such , SEABERG MILLS , INC. , ET AL. 1373 1368 Decision and Orde.r cOlnplaint and waivers and provisions as required by the Commis Eiun s rules: and The COllunission, having considered the agreement, hereby accepts sarn(', issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the foJ"owing order:

1. Respondent, Seaberg :Mills, Inc. , is a corporation organized existing and doing business under a,nd by virtue of the laws of the State of J\-:ew York with its offce and principal place of business located at 39 ,Vest 37th Street, in the city of New York, State of New York.

Respondents George Greenberg and Norman Segal are offcers of said corporation and their address is the same as that of said corpora: on.

- The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding js in the public interest.

ORDER It /s ordered. That respondents Seaberg :Mills, Inc., a corporation and jts offcers, and George Greenberg and Norman Segal, individually and as offcers of said corporation, and their representatives aglonts and employees, directly or through any corporate or other device:, in connection with the offering for sale, sale or distribution of t.textile fahrics in commerce as "commerce" is defined in the Fedeml Trade Commission Act, do forthwith cease and desist from the nse of the name "Seaherg Mills, Inc." unless and until there he used the, following language of qunEfication in the manner set out below: 1. As to letterheads, invoices, and Jabels: "Converters, Jobbers and Distrihutors of Fabrics-Not Textile fanuhcturers or il Owners" in type no smaller than % the size of the type llsed in the trade name, and immediately under the trade name. 2. In all other printed matter, either the foregoing or in Jieu thereof, preceded by an asterisk (* ) or cquivaJent, the same qualification, at the foot of each sheet of printed matter upon "hieh the trade name appears, said trade name being followed by an asterisk (* ) or equivalent each time it appefLrs in said printed matter, and said qualification being printed in type no smaller than %. the size of the type used in the trade name. 1374 FEDERAL TRADE COMMISSIOK DECISIONS Decision and Onler 64 F.

It is further' oJ'dated That respondents Seaberg Mills, Inc., a corporation and their offcers, George Greenberg and Norman Segal individually and as offcers of said corporation, and respondent representatives, agents and employees, directly or through any corporate or other device in connection with the introduction, delivery for introduction, sale, advertising or offering for sale, in commerce, or the transportation or causing to be transported in commerce, or the importation into the United States of any textile fiber product; or in connection with the sale, offering for sale, advertising, delivery, transportation or causing to be transported of any textile fiber product which has been advertised or offered for sale in commerce; or in connection with the sale, offering for sale, advertising, delive,ry, transportation or causing to be transported after shipment in commerce, of any textile fiber product, whether in its original state or contained in other textile fiber products as the terms "commerce" and textile fiber product" are defined in the Textile Fiber Products Identification Act do forthwith cease and desist from: A. Misbranding textile fiber products by:

1. Falsely or deceptively stamping, tagging, labeling, invoicing\ advertising or otherwise identifying- such products as to the name or amount of constituent fibers contained therein.

2. Failing to affx labels to such textile fiber products showing each element of information required to be disclosed bv Section 4 (b) of the Textile Fiber Products Identificatio Act.

3. Failng to affx labels to such textile fiber products setting forth the generic names and percentages by weight of the constituent fibers present in the textile fiber product exclusive of permissive ornamentation, in amounts of more than five percentum, in order of predominance by weight. B. Furnishing false guaranties that textile fiber products are not misbranded or falsely invoiced under the provisions of the Textile Fiber Products Identification Act. It is f1lrther ordered That respondents Seaberg Mills, Inc., a corporation, and its offcers, George Greenberg and Korman Segal. dividually and as offcers of said corporatfon and responden represcntat5ves, agents and employees, directly or through any corporate or other device in connection with the sale or offering for sale , .

THE MARYLAKD ALUMIN-CM SALES CO, ET AL, 1375 1388 Syllabus commerce, or the importation into the United States: or the introduction, delivery for introduction, transportation or causing to be transported in commerce, or the transporting or causing to be trans port.ed for the purpose of sale or delivery after sale in commerce, of fabric, as "fabric" is defined in the Flammable Fabrics Act do forth- "it,)) cease and desist from furnishing to any person a guaranty with reslJect to any fabric which respondents, or any of them, have reason to believe may be introduced, sold or transported in commerce, which guaranty represents, contrary to fact, that reasonable and representative. tests made under the procedures provided in Section 4 of the FJammable Fabrics Act, as amended, and the Rules and Rcgulations thereunder, show that the fabric, covered by the guaranty, is not, in the form delivered or to be delivered by the guarantor, so highly flammable under the provisions of the Flammable Fabrics Act as to be dangerous when worn by individuals, provided, however, that this prC!hibition shall not be applicable to a guaranty furnished on the baf.:is of, and in reliance upon, a guaranty to the same effect received by respondents in good faith signed by and containing the name and address of the person by "ham the fabric "as manufactured or from whom it was received.

it is further ordered That the 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 this order.