272 F. 957 | 2d Cir. | 1921
October 30, 1918, the Federal Trade Commission issued a complaint against the Winsted Company for a violation of section 5 of the Act of September 26, 1914 (Comp. St. § 8836e); it appearing to the Commission that a proceeding by it in respect thereof would.be to the interest of the public. The particular charge made was:
“Paragraph 3. That for more than one year last past, the respondent, Winsted Hosiery Company, with the purpose, intent, and effect of stifling and suppressing .competition in the manufacture and sale of underwear in interstate commerce, has in the conduct of its business manufactured and sold in commerce aforesaid, and labeled, advertised, and branded certain lines of underwear composed of but a small amount of wool as ‘Men’s Natural Merino Shirts,’ ‘Men’s Gray Wool Shirts,’ ‘Men’s Natural Wool Shirts,’ ‘Men’s Natural Worsted Shirts,’ ‘Australian Wool Shirts.’ That such advertisements, brands, and labels are false and misleading, and calculated and designed to and do deceive the trade and general public into the belief that such underwear is manufactured and made and composed wholly of wool.”
The answer of the defendant set up among other things:
“Paragraph 2. Denies each and every allegation contained in paragraph marked ‘Paragraph Third’ of the complaint herein, except that the respondent admits that for more than one year last past it has in the conduct of its business manufactured and sold in commerce (as set forth in the complaint herein) and labeled, advertised, and branded certain lines of underwear as 4Men’s Natural Merino Shirts,’ ‘Men’s Gray Wool Shirts,’ ‘Men’s Natural Worsted Shirts,’ ‘Australian Wool Shirts,’ ‘Men’s Natural Wool Shirts.’ And respondent further admits that such underwear so manufactured and made are not composed wholly of wool.
“Por a further and separate defense to the complaint herein, respondent alleges as follows:
“Paragraph Third. That for the past 20 years, and at the present time, it has been a general custom and practice in the underwear business to manufacture, label, advertise, and brand underwear as ‘Natural Merino,’ ^Wool,’ ‘Nat-*959 lira! Wool,’ ‘Natural Worsted,’ and ‘Australian Wool,’ when such underwear so described is not composed wholly of wool, lmt, on the contrary, is composed only in part of wool, varying in the percentage of wool according to tho different mills manufacturing such underwear, to meet the varying demands of tho trade solicited and served, and, further, that said general custom and practice has been and now is universal in the underwear trade throughout the United States, and has been followed by all the manufacturers engaged therein, and, further, that said general custom and practice has been and now is well known to and recognized by the distributors of underwear throughout the United States.”
For the purpose of expediting the proceeding and of avoiding the time and expense incident to a hearing, a statement of facts was agreed upon which contains among other things:
“Paragraph 7. That for the past 20 years it has been a general custom and practice in the underwear business to manufacture, label, advertise, and brand underwear, and such wearing apparel as ‘Natural Merino,’ ‘Wool,’ ‘Natural Wool,’ ‘Natural Worsted,’ and ‘Australian Wool,’ when in fact such underwear so described is not composed wholly of wool, and is composed only in part of wool, varying in the percentage of wool according to the different mills manufacturing underwear to meet the varying demands of the trade solicited and served; that this custom and practice is general and universal in the underwear trade throughout the United States, and is followed by manufacturers engaged therein; that there are a few manufacturers of underwear whose products are composed wholly of wool and are branded and labeled by them as ‘All Wool’; that large quantities of underwear and similar wearing, apparel has been imported into the United States from foreign countries, and it comes into direct competition with the underwear manufactured in the mills throughout the United States; that the underwear and similar wearing apparel so imported into the United States has been and now is labeled, branded and advertised as ‘Wool,’ ‘Merino,’ and ‘Worsted’ underwear, in accordance with the general custom and practice in tho underwear trade in the United Slates, although tho said underwear is not composed wholly of wool, hut, on tho contrary, is composed partly of wool in varying percentages.”
The Commission filed its conclusion of law as follows:
“From the foregoing findings the Commission concludes that the method of competition set forth is, under the circumstances set forth, in violation of 'the provisions of section 5 of an act of Congress approved September 26, 1914, entitled ‘An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes.’ ”
And it issued its order to cease and desist as follows:
“Now, therefore, it is ordered that the respondents, Winsted Hosiery Company, its officers, agents, representatives, servants, and employees, cease.and desist from directly or indirectly employing or using the labels and brands ‘Wool,’ ‘Merino,’ and ‘Worsted,’ or any similar descriptive brands or labels on underwear, socks, or other knit goods composed partly oJ? wool, except either (1) when a knit fabric is made entirely of wool yarns of a kind specified, or (2) when the term describing the wool stock is joined with tlio name of other staple or staples contained in the knitted fabric (e. g., Wool and Cotton; Worsted and Cotton; Wool, Worsted, Merino, and Cotton; Worsted, Cotton, and Artificial Silk).
“Respondent is further ordered to file a report in writing with the Commission, three months from notice hereof, stating in detail the maimer in which this order has been complied with and conformed to.”
March, 1920, the Winsted Company filed its petition in this court to set aside the order. Thereupon the Commission applied for permis
January 14, 1921, the following modification of its original order to cease and desist was issued by the Commission:
“This proceeding having been heard by the Federal Trade Commission upon complaint of the Commission, the answer of the respondent, the statement of facts, agreed upon by counsel for the Commission and respondent, and upon the additional evidence taken for the Commission under an order of the United States Circuit Court of Appeals for the Second Circuit, dated October 18, 1920, and the Commission having, by reason of such additional evidence, modified some of its original findings and adopted new findings as to the facts, and adopted its conclusion that the respondent has violated the provisions of the act of Congress approved September 26, 1914, entitled ‘An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,’ it now recommends the following modification of its original order to cease and desist herein, dated January 20, 1920:
“It is npw ordered that the respondent, the Winsted Hosiery Company, its officers, agents, representatives, servants, and employees, do cease and desist from employing or using as labels or bands on underwear or other knit goods not composed wholly of wool, or on- the wrappers, boxes, or other containers in which they are delivered to customers, the word ‘Merino,’ ‘Wool,’ or ‘Worsted’ alone or in combination with any other word or words, unless accompanied by a wórd or words designating the substance, fiber, or material other than wool of which the garments are composed in part (e. g., ‘Merino, Wool, and Cotton’; ‘Wool and Cotton’; ‘Worsted, Wool, and Cotton’; ‘Wool, Cotton, and Silk’), or by a word or words otherwise clearly indicating that such underwear or other goods is not made wholly of wool (e. g., part wool).
“Respondent is further ordered to file a report in writing with the Commission, three months from notice hereof, stating in detail the manner in which this order has been complied with and conformed to.”
The order is reversed.