Norlic Import Company, Inc

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IN THE MATTER OF NORLIC IMPORT COMPANY, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE WOOL PRODUCTS LABELING ACTS Docket C-2583. Complaint, Oct. 22, 1974 — Decision, Oct. 22, 1974 Consent order requiring a New York City importer and seller of wool fabrics, among other things to cease misbranding and falsely guaranteeing its wool products and misrepresenting the fiber content of its goods. Further, respondent is required to bond its imported wool products for twice their value, with the bond subject to forfeiture should applicable legal requirements not be complied with. Appearances For the Commission: Jerry R. McDonald.

For the respondents: Pro se.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and the Wool Products Labeling Act of 1939, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Norlic Import Company, Inc., a corporation, and Norman Lichtenstein, 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 Wool Products Labeling Act of 1939, 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 Norlic Import Company, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at 1290 Avenue of the Americas, New York, N. Y. Individual respondent Norman Lichtenstein is an officer of Norlic Import Company, Inc. He formulates, directs, and controls the acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. His business address is the same as that of the corporate respondent.

Respondents are engaged in the importation and sale of wool products including but not limited to wool fabrics. Complaint 84 F.T.C.

Par. 2. Respondents, now and for some time last past, have imported for introduction into commerce, introduced into commerce, transported, distributed, delivered for shipment, shipped, offered for sale, and sold in commerce as “commerce” is defined in the Wool Products Labeling Act of 1939, wool products as “wool product” is defined therein. Par. 3. Certain of said wool products were misbranded by the respondents within the intent and meaning of Section 4(a)(1) of the Wool Products Labeling Act of 1939 and the rules and regulations promulgated thereunder, in that they were falsely and deceptively stamped, tagged, labeled, or otherwise identified with respect to the character and amount of the constituent fibers contained therein. Among such misbranded wool products, but not limited thereto, were certain wool fabrics stamped, tagged, labeled, or otherwise identified by respondents as “55% polyester, 45%. wool,” whereas, in truth and in fact, said products contained substantially different fibers and amounts of fibers than represented.

Par. 4. Certain of said wool products were further misbranded by respondents in that they were not stamped, tagged, labeled or otherwise identified as required under the provisions of Section 4 (a)(2) of the Wool Products Labeling Act of 1939 and in the manner and form as prescribed by the rules and regulations promulgated under said Act. Among such misbranded wool products, but not limited thereto, were wool products, namely, wool fabrics, with labels on or affixed thereto, which failed to disclose the percentage of the total fiber weight of the said wool products, exclusive of ornamentation not exceeding 5 per centum of said total fiber weight, of (1) wool, (2) reprocessed wool, (3) reused wool, (4) each fiber other than wool, when said percentage by weight of such fiber was 5 per centum or more, and (5) the aggregate of all other fibers.

Par. 5. Respondent’s wool products described in “Paragraph Four” above were imported by the respondent into the United States and, as particularized in said paragraph, were not stamped, tagged, labeled or otherwise identified in accordance with the provisions of the Wool Products Labeling Act of 1939. The invoices of said imported wool products required by the Tariff Act of 1930 failed to set forth the information with respect to said wool products required under the provisions of the Wool Products Labeling Act of 1939, to wit, the percentage of the total fiber weight of the said wool products, exclusive of ornamentation not exceeding 5 per centum of said total fiber weight, of (1) wool, (2) reprocessed wool, (3) reused wool, (4) each fiber other than wool, when said percentage by weight of such fiber was 5 per centum or more, and (5) the aggregate of all other fibers. The respon- 1178 Complaint dent did falsify the consignee’s declaration provided for in said Tariff Act of 1930 insofar as it related to the above items of information enumerated in this paragraph in violation of Section 8 of the Wool Products Labeling Act of 1989 and Section 5 of the Federal Trade Commission Act.

Par. 6. Respondents furnished false guarantees with respect to certain of their wool products by falsely representing in ‘writing that respondents had a continuing guarantee on file with the Federal Trade Commission when respondents in furnishing such guarantees had reason to believe that the wool products so falsely guaranteed would be introduced, sold, transported, and distributed in commerce, in violation of Section 9(b) of the Wool Products Labeling Act of 1939 and the Rules and Regulations promulgated thereunder. _ Par. 7. The acts and practices of respondents as set forth above were, and are, in violation of the Wool Products Labeling Act of 1939 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.

Pak. 8. Respondents are now and for some time last past have been engaged in the importation, offering for sale, sale, and distribution of certain products, namely fabrics. In the course and conduct of their business as aforesaid, respondents now cause and for some time last past, have caused their said products, when sold, to be shipped from their place of business in the State of New York to purchasers 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.

Par. 9. Respondents in the course and conduct of their business have made statements on invoices to their customers, misrepresenting the fiber content of certain of their products. Among such misrepresentations, but not limited thereto, were statements setting forth the fiber content thereof as “55% polyester, 45% wool” whereas, in truth and in fact, said products contained substan- _tially different fibers and amounts of fibers than represented. Par. 10. The acts and practices set forth in “Paragraph Nine” have the tendency and capacity to mislead and deceive the purchasers of said products as to the true content thereof.

Par. 11. The aforesaid acts and practices of the respondents as herein alleged in Paragraph Nine were, and are, all to the prejudice and injury of the public, and constituted, and now constitute, unfair and 575-956 O-LT - 76 - 75 Decision and Order 84 F.T.C.

deceptive acts or 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 which the New York Regional Office 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 Wool Products Labeling Act; 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 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 consent agreement and placed such agreement on the public record for a period of sixty (60) 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 Norlic Import Company, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at 1290 Avenue of the Americas, New York, N.Y. Respondent Norman Lichtenstein is an officer of said corporation. He formulates, directs and controls the acts, practices and policies of said corporation and his address is the same as that of said corporation. Respondents are engaged in the importation and sale of wool products including but not limited to wool fabrics. 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.

1178 Decision and Order ORDER It is ordered, That respondents Norlic Import Company, Inc., a corporation, its successors and assigns, and its officers, and Norman Lichtenstein, 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 importation for introduction, into commerce or the offering for sale, sale, transportation, distribution, delivery for shipment, or shipment, in commerce, of wool products, as “commerce” and “wool product” are defined in the Wool Products Labeling Act of 1939, do forthwith cease and desist from misbranding such products by:

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

2. Failing to securely affix to, or place on, each such product a stamp, tag, label, or other means of identification showing in a clear, legible and conspicuous manner each element of information required to be disclosed by Section 4(a)(2) of the Wool Products Labeling Act of 1939.

It 1s further ordered, That respondents Norlic Import Company, Inc, a corporation, its successors and assigns, and its officers, and Norman Lichtenstein, individually and as an officer of Norlic Import Company, Inc., and respondents’ representatives, agents, and employees, directly or through any corporation, subsidiary, division, or other device, do forthwith cease and desist from: , 1. Furnishing a false guarantee that any wool product is not misbranded under the provisions of the Wool Products Labeling Act of 1939.

2. Importing or participating in the importation of wool products into the United States except upon filing bond with the Secretary of the Treasury in a sum double the value of said wool products and ‘any duty thereon, conditioned upon compliance with the provisions of the Wool Products Labeling Act of 1939.

It is further ordered, That respondents Norlic Import Company, Inc., a corporation, and its officers, and Norman Lichtenstein, individually and as an officer of said corporation, and respondents’ representatives, agents and employees, directly or through any corporation or other device, in connection with the advertising, offering for sale, sale or distribution of fabrics or other products, in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from misrepresenting the amount of constituent fibers contained 1178 ° FEDERAL TRADE COMMISSION DECISIONS Decision and Order 84 F.T.C.

in such products on invoices or shipping memoranda applicable thereto, or in any other manner.

It is further ordered, That respondents notify, by delivery of a copy of this order by registered mail, each of their customers that purchased the wool products which gave rise to this complaint of the fact that such products were misbranded.

It is further ordered, That respondents notify the Commission at least thirty (80) 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 subsidiaries or any other change in the corporation which may affect compliance obligations arising out of the order.

It is 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 respondents’ current business and address, 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 shall forthwith distribute a copy of this order to each of its operating divisions. It is further ordered, That 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 the order to cease and desist contained herein.