Glen Head Mills of Georgia, Inc

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In THe Matrer or GLEN HEAD MILLS OF GEORGIA, INC., ET AL. | CONSENT ORDER, ETC, IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE TEXTILE: FIBER PRODUCTS: IDENTIFICATION ACTS:

Docket C-2327. Complaint, Dec, 1, 1972—Decision, Dec. 1, 1972 os Consent .order requiring “a Jasper, Georgia, wholesaler ‘6f carpeting fabrics . fabricated from-its yarns; among other things to-cease removing: or mutilating information required by the Textile Fiber Products Identification Act; ; failing to ‘maintain. adequate. ‘records; and, misbranding its textile fiber products, Respondent i is further. required to cease using the word “Mills” as “part | of the corporate’ or trade name which misrepresents’ ‘that respondent “owns, operates 0 or controls mills, factories: or manufacturing plants. ‘ : : ‘Compuarnt Pursuant to the provisions of the Federal Trade Commission Act and the Textile Fiber Products Identification Act, and by virtue of the authority vested.in it by said Acts, the Federal Trade Commission, having reason to believe that Glen Head Mills of Georgia, Inc., a corporation, and Edward Negola, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and the rules and regulations promulgated under the Textile Fiber Products Identification 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:

Paracrary 1. Proposed respondent Glen Head Mills of Georgia, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Georgia. The respondent corporation maintains its office and principal place of business at 1 Carl E. Sanders Avenue, Jasper, Georgia. Proposed respondent Edward Negola is an officer of said corporation. He formulates, directs and controls the policies, acts and practices of the corporate respondent including those hereinafter referred to. His address is the same as that of the corporate respondent. 912 FEDERAL TRADE COMMISSION DECISIONS. ©: ‘Complaint — 81 F.T.C.

- Par, 2. Proposed respondents were engaged in the business of purchasing carpet remnants from various sources and the wholesaling of such in the form of rugs. Proposed respondents are currently engaged in the business of purchasing carpet yarns from various sources, having such tufted into carpet rolls to their specifications and the wholesaling of such carpet rolls, as well as rugs made therefrom.

“COUNT I . Alleging violation of the Textile Fiber Products Identification Act and the Federal Trade Commission Act, the allegations of Paragraphs One and Two are incorporated by reference in Count I as if fully set forth herein.

Par. 3. Respondents are now and for some time last past have been engaged in the-introduction, delivery for introduction, manufacture for introduction, sale, advertising, and offering for sale, in commerce, and in the transportation or causing to be transported in commerce, and in the importation into the United States, of textile fiber products; and have sold, offered for sale, advertised, delivered, transported and caused to be transported, textile fiber products, either in their original state or contained in other textile fiber products, as the terms “commerce” and “textile fiber products” are defined in the Textile Fiber Products Identification Act.

Par. 4. Certain of said textile fiber products were 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 textile fiber products, namely area rugs, with labels affixed by Glen Head Mills of Georgia, Inc., which failed to disclose the percentage of the fibers present by weight. Also among such misbranded textile fiber products were carpet rolls offered by Glen Head Mills of Georgia, Inc., which did not have labels affixed thereto disclosing :

1. The percentages of the fibers present by weight. 2. The generic names of the fibers present. ’ Par. 5. Respondents have failed to maintain proper records showing the fiber content of the textile fiber products fabricated from their yarns and manufactured to their specifications, in violation of Section 6(a) of the Textile Fiber Products Identification Act and Rule 39 of the regulations promulgated thereunder. GLEN HEAD MILLS OF GEORGIA, INC., ET AL. — S13 91 - Complaint Par. 6. Respondents, in violation of Section 5(a) of the Textile Fiber Products ‘Identification Act have caused and participated in the removal of, prior to the time textile fiber products subject to the provisions of the Textile Fiber Products Identification Act were sold and delivered tothe ultimate consumer, labels required by the Textile Fiber ‘Products’ Identification Act to ‘be affixed to such. produicts, without substituting therefore labels conforming to Section 4 of said Act and in the manner prescribed by Section 5(b) of said Act. ~ Par. 7, Respondents in substituting: ‘stamps, tags, labels, or other identification pursuant to Section 5 (b) of the Textile Fiber Products Identification Act have not maintained such records as will show the information set forth on these stamps, tags, labels, or other identification removed together with the name or names of the “person or persons from ‘whom such textile fiber products were received in violation of Section’ 6(b) of the Textile Fiber Products Identification Act. Par. 8. Certain of said textile fiber products were misbranded in violation of the Textile Fiber Products Identification Act in that they were not labeled in accordance with the rulés and régulations promulgated thereunder in that in disclosing the required fiber content infor- _mation:as to floor coverings containing exempted backings, fillings, or paddings, ‘such’ disclosure was not made ‘in’ such a manner ‘as to indicate that.such required fiber content information related only to the face, pile or outer surface of the floor covering and not to the backing, filling or padding, in violation of Rule 11 of the aforesaid rules and regulations.

Par. 9. 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 regulations promulgated thereunder, and constituted, and now constitute, unfair methods of competition and unfair and deceptive acts and practices, in commerce, under the Federal Trade Commission Act.

COUNT II Alleging violation of the Federal Trade Commission Act, the allegations of Paragraphs One and Two are incorporated by reference in Count IT as if fully set forth herein.

Par. 10. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said products, to be shipped from their place of business in the State of Georgia to purchasers thereof located in various other States of the United States, and maintain, 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. 914 _ FEDERAL. TRADE COMMISSION: DECISIONS. ‘Decision and Order 81 F.T.C.

Par. 11. In the conduct of their business, at all times mentioned herein, respondents have been in substantial competition, in commerce, with corporations, firms and individuals in the sale of products of the same general kind as that sold by respondents. Par. 12. In the course and conduct of their business, the aforesaid '. respondents, variously on their labels and elsewhere, refer to the corporate respondent as “Glen Head Mills,”. thus stating or. implying that said corporate respondent functions as a mill to manufacture the — products which it sells. In truth and in fact, while the corporate re-: spondent directs the fabrication of its products, the corporate. respondent does not function at all.as.a.mill nor does it own, operate, or directly and absolutely control-a mill. Thus, the aforesaid representations are false, misleading, and deceptive. » Par. 18.:There is a preference on the part of many ‘members of the public to buy products directly from mills or factories in the belief that, by doing so..certain advantages accrue ‘to. them, including lower prices.. :

Par. 14. The: use by respondents of the aforesdid false, misleading and deceptive statements, representations and: practices has-had, and now. has, the.capacity and.tendency. to mislead dealers and other purchasers. into the. erroneous and mistaken belief that such statements and representations were, and are, true, and into the purchase of substantial quantities of respondents’ products by reason of said erroneous and mistaken belief.

Par. 15. The aforesaid acts and practices of respondents, as herein alleged in Paragraphs Twelve through Fourteen, were and are, all to the prejudice and injury of the public and of respondents’ competitors and constituted, and now ‘constitute, unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of Section 5 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 which the Division of Textiles and Furs 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 Textile Fiber Products Identification Act; and - The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by GLEN’ HEAD MILLS OF GEORGIA, INC., ET AL. 915 $11. Decision and Order 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 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 fora period of thirty (30) days, now in further conformity with the procedure ‘prescribed in Section 2.34(b) of its rules, the Commission hereby issues ~ its complaint; makes the following jurisdictional. findings, and enters the following order:

‘1. Respondent Glen Head Mills of Georgia, Inc., isa corporation organized, existing and doing business under and by-:virtue of the laws of the State of Georgia. Its general offices and principal place of business are located at 1 Carl E.-Sanders Avenue, Jasper, Georgia. Respondent Edward Negola is.an officer of said corporation. He formulates, directs and controls the policies, acts and practices of the corporate respondent including those hereinafter referred to. The address of Edward Negola is the same as that of the corporate respondent. - 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.

ORDER I It is ordered, That respondents Glen Head Mills of Georgia, Inc., a corporation, its successors and assigns, and its officers, and Edward Negola, individually and as an officer of Glen Head Mills of Georgia, Inc., and respondents’ representatives, agents and employees, directly or through any corporation, subsidiary, division or other device, in connection with the introduction, manufacture 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, delivery, transportation or causing to 916 - FEDERAL’ TRADE COMMISSION: DECISIONS Décision ‘and Order 81 F.T.C.

be transported, after shipment in commerée, of any textile fiber prod- ‘uct, 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 Pr oducts Identification Act, do forthwith ‘cease-and desist from:

A. Misbranding textile fiber products by failing to affix a stamp, ‘tag; label ‘or other-means of identification’ to. each such product -showing ina clear, legible and conspicuous manner each element ' of information required to be disclosed by Section 4(b) of the Textile Fiber Products Identification Act. oo B Failing’ to maintain or preserve records of fiber content of . ~ textile fiber products fabricated from their yarns and manu- 'factured to their: specifications as required: by Section 6(a) of the Textile Fiber Products Identification Act and Rule 39 of the rules and regulations promulgated thereunder. ~~ GC. Removing or mutilating, or causing or participating i in the '"yemoval or mutilation of, the stamp, tag, “label or other identifica- “tion required by the Textile Fiber Products Identification Act to be affixed to any textile fiber product, after such textile fiber _ product has been shipped in commerce; and prior to the time such “textile fiber product. is. sold and delivered to the ultimate consumer without substituting therefor labels conforming to Section ‘4 of said Act and the rules and regulations promulgated thereunder and in the manner prescribed by Section 5(b) of the Act. D. Failing to maintain and preserve, as required by Section 6(b) of the Textile Fiber Products Identification Act, such records of the fiber content of textile fiber products as will show the information set forth on the stamps, tags, labels or other identification removed by respondents, together with the name or names of the person or persons from whom such textile fiber products were received, when substituting stamps, tags, labels or other identification pursuant to Section 5(b) of the Textile Fiber Products Identification Act.

E. Failing to set forth in disclosing fiber content information as to floor coverings containing exempted backings, fillings or paddings, that such disclosure relates only to the face, pile or outer surface of such textile fiber products and not the exempted backings, fillings, or paddings.

Ir It is further ordered, That respondents Glen Head Mills of Georgia, Inc., a corporation, its successors and assigns, and its officers, and Ed- GLEN “HEAD ‘MILLS: OF. GEORGIA, INC., ET AL. 917 911 Decision. and Order ward Negola, individually and as an officer of said corporation, and respondents’ representatives, agents and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the offering for sale, sale or distribution of carpet rolls, rugs, or any other articles of merchandise, in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Directly or indirectly using the word “MEills” or ¢ any other word or term of similar import or meaning in or as a part of respondents’ corporate or trade name or representing in any other manner that respondents perform functions of a mill or otherwise manufacture or process the products sold by them unless or until respondents own, operate, or directly or absolutely control the mill, factory or manufacturing plant wherein said products are manufactured.

2. Misrepresenting in any manner that respondents own, operate or control mills, factories or manufacturing plants where their products are manufactured.

It is further ordered, That respondents notify the Commission at _ least thirty (30) days prior to any proposed change in the corporate respondent, Glen Head Mills of Georgia, Inc., such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of the order.

[tis further ordered, That the individual respondent named herein promptly notify the Commission of the discontinuance of his present business or employment and of his affiliation with a new business or employment. Such notice shall include respondent’s current business address and a statement as to the nature of the business or employment in which he is engaged as well as a description of his duties and responsibilities.

It is further ordered, That the respondent corporation, Glen Head Mills of Georgia, Inc., shall forthwith distribute a copy of the order to each of its operating divisions, It is further 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 this order.

918 - FEDERAL: TRADE COMMISSION DECISIONS Complaint. — 81 F.T.C.