Texora International Corp

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IN THE MATTER OF TEXORA INTERNATIONAL CORP., ET AL.

CONSE:-T ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND WOOL PRODUCTS LABELING ACTS Docket C-2794. Complaint, Feb. 1976-Decision, Feb. , 1976 Consent order requiring anew Yark City importer and seller of wool products, among other things to cease misrepresenting the wool and other fiber content of their fahrics; and, to notify their customers that the fabrics they have purchased were misbranded. Further, respondents are prohibited from importing wool products except upon filng a bond with the Secretary of the Treasury in a sum double the value of the products and any duty thereon. Appearances For the Commission: Jerr R. McDonald. For the respondents: Krakower Weissman New York City. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act, as amended, 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 Texora International Corp., a corporation and Max Kovner, individually and as an officer of said corporation hereinafter sometimes 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 Texora International Corp. is a corporation organized, existing and doing business under and by virtue of the laws of the Territory of the Virgin Islands, with its principal office and place of business located at 450 Seventh Ave., New York, New York. Respondent Max Kovner is an officer of the corporate respondent. He formulates, directs, and controls the acts and practices of the corporate respondent including the acts and practices hereinafter set forth. His address is the same as that of the corporate respondent. Respondents are now, and for some time last past have been engaged in the importation and sale of wool products including hut not limited to wool fahrics.

PAR. 2. Respondents, now and for some time last past, have imported Complaint 87 FTC.

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 otherwse identified by respondents as "50% acrylic, 25% reprocessed wool, 25% cotton 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. Respondents' wool products described in Paragraph Three above were imported by the respondents 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 fiher 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 respondents did falsify the consignee s declaration provided for in said Tariff Act of 1930 insofar as it related to the ahove items TEXORA I:-TER:-ATIONAL CORP., ET AL. 275 273 Complaint information enumerated in this paragraph in violation of Section 8 of the Wool Products Labeling Act of 1939 and Section 5 of the Federal Trade Commission Act, as amended.

PAR. 6. 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 or affecting commerce, under the Federal Trade Commission Act, as amended.

PAR. 7. Respondents are now and for some time last past have been engaged in the importation, offering for sale, sale, and distribution of wool products. 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 or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, as amended.

PAR. 8. 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 "50% acrylic, 25% reprocessed wool, 25% cotton" whereas, in truth and in fact, said products contained substantially different fibers and amounts of fibers than represented.

PAR. 9. In the course and conduct of their business, respondents have misrepresented to their customers the character and amount of the constituent fibers contained in their products through falsely and deceptively stamping, tagging, labeling and otherwse identifying said products.

Among such products, but not limited thereto, were fabrics labeled as 55% acrylic, 20% nylon, 20% cotton, 5% linen" whereas, in truth and in fact, such products contained substantially different fibers and amounts of fibers than represented, including wool. PAR. 10. The acts and practices set forth in Paragraphs Eight and ;'ine have the tendency and capacity to mislead and deceive the purchasers of said products as to the true content thereof. PAR. I I. The aforesaid acts and practices of the respondents as herein alleged in paragraphs eight and nine were, and are, all to the prejudice and injury of the public, and constituted, and now constitute unfair and deceptive acts or practices in or affecting commerce, within 276 FEDERAL TRADE COMMISSIO DECISIO Decision and Order 87 FTC. the intent and meamng of the Federal Trade Commission Act, as amended.

DECISIO:- 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 ,, th a copy of a draft of complaint which the Kew 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, as amended, 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 settement 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 hy the Commission 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 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Texora International Corp. is a corporation organ, ized, existing and doing business under and by virtue of the laws of the Territory of the Virgin Islands, with its office and principal place of business located at 450 Seventh Ave., New York, New York. Respondent Max Kovner 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. 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 It is ordered That respondents Texora International Corp., a TEXORA INTERNATIONAL CORP.. ET AL. 277 273 Decision and Order corporation, its successors and assigns, and its officers, and Max Kovner, individually and as an officer of said corporation, and respondents' representatives, agents, and employees, directly or through any corporation, subsidiary, division, or any other device, in connection with the introduction, or importing 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 otherwse identifying such products.

2. Failing to securely affix to or place on, each such product a stamp, tag, label, cr other means of identification showing in a clear 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 is further ordered That respondents Texora International Corp., a corporation, its successors and assigns, and its officers, and Max Kovner, individually and as an officer of Texora International Corp. and respondents' representatives, agents, and employees, directly or through any corporation, subsidiary, division, or other device, do forthwith cease and desist from 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 Texora International Corp., a corporation, and its officers, and Max Kovner, individually and as an officer of said corporation, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the advertising, offering for sale, sale or distribution of fabrics or other products, in or affecting commerce, as "commerce " is defined in the Federal Trade Commission Act, as amended, do forthwith cease and desist from misrepresenting the character or amount of constituent fibers contained in such products on invoices or shipping memoranda applicable thereto, or through stamping, tagging, labeling, advertising 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 furthe?' ordered That the individual respondent named herein promptly notify the Commission in the event of the discontinuance of Decision and Order 87 F.T.C. his present business or employment and 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 shall forthwith distribute a copy of this order to each of its operating divisions. 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 subsidiaries or any other change in the corporation which may affect compliance obligations arising out of the order. 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 fonn in which they have complied with the order to cease and desist contained herein. CLOVER JEWELERS BLVD., INC., ET AL. 279 279 Complaint