Karla Creations, LTD

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In Toe Marrer or KARLA CREATIONS, LTD., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE FLAMMABLE FABRICS ACTS Docket C-2099. Complaint, Nov, 15, 1971—Decision, Nov. 15, 1971 | Consent order requiring a marketer of Skokie, Ill., to cease marketing dangerously flammable products in violation of the Flammable Fabrics Act. Complaint Pursuant to the provisions of the Federal Trade Commission Act and the Flammable Fabrics Act, as amended, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Karla Creations, Ltd., a corporation, and Helen Cohen and Thelma Bud, individually and as officers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and the rules and regulations promulgated under the Flammable Fabrics Act, as amended, 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:

Paracrarn 1. Respondent Karla Creations, Ltd., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Illinois. Its address is 4111 Greenwood Street, Skokie, Tlinois.

Respondents Helen Cohen and Thelma Bud are officers of the corporate respondent. They formulate, direct and control the acts, practices and policies of the said corporate respondent, including those hereinafter set forth.

768 . FEDERAL TRADE COMMISSION DECISIONS Complaint 79 F.T.C.

Respondents are engaged in the sale of ladies’ wearing apparel, including, but not limited to, ladies’ scarves. Par. 2. Respondents are now and for some time last past have been engaged in the sale and offering for sale, in commerce, and have introduced, delivered for introduction, transported and caused to be transported in commerce, and have sold or delivered after sale or shipment in commerce, products, as the terms “commerce” and “product” are defined in the Flammable Fabrics Act, as amended, which fail to conform to an applicable standard or regulation continued in effect, issued or amended under the provisions of the Flammable Fabrics Act, as amended. ;

Among such products mentioned hereinabove were ladies’ scarves. Par. 3. The aforesaid acts and practices of respondents were and are in violation of the Flammable Fabrics Act, as amended, and the rules and regulations promulgated thereunder, and as such constituted, and now constitute, unfair methods of competition and unfair and deceptive acts and practices in commerce, within the intent and meaning of the Federal Trade Commission Act.

Decision AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act, and the Flammable Fabrics Act, as amended; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by the respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Acts, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed agreement and placed such agreement on the public record for a period of thirty (380) days, now in further conformity with the procedure prescribed in Section 2.34(b) of its rules, the Commission hereby issues (67 : Decision and Order its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent Karla Creations, Ltd., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Illinois.

Respondents Helen Cohen and Thelma Bud are officers of said corporation. They formulate, direct and control the acts, practices and policies of said corporate respondent.

Respondents are engaged in the sale of ladies’ wearing apparel. including, but not limited to, ladies’ scarves. Their office and principal place of business is located at 4111 Greenwood Street, Skokie, Illinois. 2. The Federal Trade Commission has jurisdiction of the subject. matter of this proceeding and of the respondents, and the proceeding is in the public interest.

7 ORDER lt is ordered, That the respondents Karla Creations, Ltd., a corporation, and its officers, and Helen Cohen and Thelma Bud, individually and as officers of said corporation, and respondents’ representatives, agents and employees, directly or through any corporate or other device, do forthwith cease and desist from selling, offering for sale, in commerce, or. importing into the United States, or introducing, delivering for introduction, transporting or causing to be transported in commerce, or selling or delivering after sale or shipment in commerce, any product, fabric, or related material; or selling or offering for sale, any product made of fabric or related material which has been shipped or received in commerce as “commerce,” “product,” “fabric” and “related material” are defined in the Flammable Fabrics Act, as amended, which product, fabric, or related material fails to conform to an applicable standard or regulation issued, amended or continued in effect, under the provisions of the aforesaid Act.

It is further ordered, That respondents notify all of their customers who have purchased or to whom have been delivered the products which gave rise to the complaint, of the flammable nature of said products and effect the recall of said products from such customers. It is further ordered, That the respondents herein either process the products which gave rise to the complaint so as to bring them into conformance with the applicable standard of flammability under the Flammable Fabrics Act, as amended, or destroy said products. lt ts further ordered, That the respondents herein shall, within ten (10) days after service upon them of this order, file with the Com- Decision and Order 79 F.T.C.

mission a special report in writing setting forth the respondents’ intentions as to compliance with this order. This special report shall also advise the Commission fully and specifically concerning (1) the identity of the products which gave rise to the complaint, (2) the number of said products in inventory, (3) any action taken and any further actions proposed to be taken to notify customers of the flammability of said products and effect the recall of said products from customers, and of the results thereof, (4) any disposition of said products since March 10, 1971, and (5) any action taken or proposed to be taken to bring said products into conformance with the applicable standard of flammability under the Flammable Fabrics Act, as amended, or destroy said products, and the results of such action. Such report shall further inform the Commission as to whether or not respondents have in inventory any product, fabric, or related material having a plain surface and made of paper, silk, rayon and acetate, nylon and acetate, rayon, cotton or any other material or combinations thereof in a weight of two ounces or less per square yard, or any product, fabric, or related material having a raised fiber surface. Respondents shall submit samples of not less than one square yard in size of any such product, fabric, or related material with this report. It is further ordered, That respondents notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent, such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of ubsidiaries or any other change in the corporation which may affect, compliance obligations arising out of this order. It is further ordered, That the respondent. corporation shall forthwith distribute a copy of this order to each of its operating divisions. It ts 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.