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UNITED STATES v. WOODY FASHIONS

Jan 25, 1961

UNITED STATES of America
v.
WOODY FASHIONS, INC., Harry D. Graff and Harry Zucker, Defendants



The opinion of the court was delivered by: DAWSON

Defendants have moved for a dismissal of this multicount indictment. The indictment charges violations of provisions of the Wool Products Labeling Act of 1939 (15 U.S.C.A. §§ 68-68j).

Counts 9 through 55 allege that the defendants, who were manufacturers of wool products, subject to the Wool Products Labeling Act of 1939, failed to keep proper records of facts and transactions relating to the business of the corporate defendant 'in that the aforesaid defendants did neglect and fail to make and cause to be made any entries in books, records and memoranda kept by the said corporate defendant of the purchase of pieces of fabric as herein specified.' The various counts relate to various purchases of pieces of fabric referred to therein.

 In other words, these counts of the indictment charge that the defendants have committed a crime by allowing the corporate defendant to fail and neglect to cause records to be made 'of the purchase of pieces of fabric.'

 Nowhere in the Wool Products Labeling Act of 1939 is there a requirement that a wool manufacturer keep a record of pieces of fabric purchased by it. The act does provide, in § 6 (15 U.S.C.A. § 68d), that wool manufacturers shall keep and preserve certain records when required to do so by rules and regulations of the Federal Trade Commission. Rule 31, issued by the Federal Trade Commission (16 C.F.R. § 300.31) provides that the manufacturer shall keep records which will show the purchase, receipt or use by such manufacturer of all fabric yarn, or fabric, or fibrous material introduced in or made part of any such wool product, together with the name and address of the person or persons from whom the materials are purchased or obtained by the manufacturer.

 That such records were required to be kept by regulations of the Federal Trade Commission, issued under the provisions of the act, seems to be apparent. However, this raises the question of whether failure to keep such records 'of the purchase of pieces of fabric' as specified in the indictment constitutes a crime. The Wool Labeling Act of 1939 had in 10 (15 U.S.C.A. 68h) a statement as to the criminal penalties. This section does not provide for any penalty for a violation of 6 of the act (15 U.S.C.A. 68d). The reason for this omission becomes apparent when you examine 6. Section 6 of the act provides that any manufacturer who neglects or refuses to maintain and preserve such records 'shall forfeit to the United States the sum of $ 100 for each day of such failure, which shall accrue to the United States and be recoverable in a civil action.' In other words, the act distinguishes between criminal penalties for violating certain sections of the act and civil penalties which are recoverable for violation of 6 of the act.

 The indictment herein charges a violation of 6 of the act. This does not carry with it any criminal penalty but specifically provides for a civil penalty. Under the circumstances counts 9 to 55 of the indictment allege matters for which the Government's remedy is limited to a civil penalty. They do not allege matters for which a criminal penalty has been provided. The motion to dismiss these counts of the indictment should therefore be granted.

 The Government urges that irrespective of whether the indictment alleges a violation of 6 of the Wool Products Labeling Act of 1939, it certainly alleges a violation of 10 of the Federal Trade Commission Act (15 U.S.C.A. 50). That act makes it a crime to fail to make full, true and correct entries in the accounts, records and memoranda of a corporation of 'all facts and transactions appertaining to the business of such corporation.' We are here dealing, however, with a specific indictment which relates to a failure to cause records to be made to 'the purchase of pieces of fabric.' This is a record required under the Wool Products Labeling Act of 1939 and the regulations issued thereunder. To attempt to apply the criminal penalty provided in the Federal Trade Commission Act, enacted for an entirely different purpose, would be to import a criminal penalty which does not seem to have been designed for such violations of the Wool Products Labeling Act. In applying the criminal law, the Court should be careful to restrict criminal penalties to the particular offenses defined by Congress and not allow the Government to assert penalties which might be derived from the generalities of some other act which has little, if anything, to do with the particular offense involved. *fn1"

 Counts 1 through 8 of the indictment allege that the defendants unlawfully, wilfully and knowingly manufactured, delivered for shipment, shipped, sold and offered for sale in interstate commerce certain misbranded wool products. The several counts allege the dates, the items, the consignee and the actual composition of the articles.

 Section 3 of the Wool Products Labeling Act of 1939 (15 U.S.C.A. § 68a) makes the introduction or manufacture for introduction or the sale, transportation or distribution of any wool product which is misbranded unlawful. Section 10 of the act (15 U.S.C.A. § 68h) makes a violation of Section 3 of the act a misdemeanor and provides a criminal penalty therefor. These counts of the indictment, therefore, on their face, charge a criminal offense.

 The defendants urge, however, that these counts are duplicitous within the meaning of the decisions in United States v. Universal C.I.T. Credit Corp., 1952, 344 U.S. 218, 73 S. Ct. 227, 97 L. Ed. 260, and United States v. Personal Finance Co., D.C.S.D.N.Y.1959, 174 F.Supp. 871, and have moved for an order dismissing them on that ground. The offense charged in count 1 is merely repeated in counts 2 through 8, with differences in the dates, consignees and composition of the products.

 Duplicitous informations and indictments were considered by the Supreme Court in United States v. Universal C.I.T. Credit Corp., supra, affirming D.C.W.D.Mo.1952, 102 F.Supp. 179. That case involved violations of the Fair Labor Standards Act 29 U.S.C.A. § 201 et seq., minimum wage, overtime and record keeping provisions. Of the thirty-two counts in the information, all but three, one for violation of each section considered, were dismissed. The Supreme Court affirmed the lower court's finding that a course of conduct, rather than separate items making up that course, constituted the punishable offense. The Court said:

 '* * * the statute * * * treats as one offense all violations that arise from that singleness of thought, purpose or action, which may be deemed a single 'impulse,' a conception recognized by this Court in the Blockburger case (Blockburger v. United States, 284 U.S. 299, 52 S. Ct. 180, 76 L. Ed. 306) * * *. Merely to illustrate, without attempting to rule on specific situations: A wholly unjustifiable managerial decision that a certain activity was not work and therefore did not require compensation under F.L.S.A. standards cannot be turned into a multiplicity of offenses by considering each underpayment in a single week or to a single employee as a separate offense.' 344 U.S. at page 224, 73 S. Ct. at page 231.

 Thus a course of conduct was found to be the punishable offense, despite the fact that the Fair Labor Standards Act was framed in terms of singular offenses.

 C.I.T. was reconsidered by the Supreme Court in Bell v. United States, 1955, 349 U.S. 81, 75 S. Ct. 620, 622, 99 L. Ed. 905. The Mann Act, 18 U.S.C.A. § 2421, imposed a fine on anyone who 'knowingly transports in interstate or foreign commerce * * * any woman or girl for the purpose of prostitution or debauchery, or for any other immoral purpose. * * *' The defendant had been convicted on two separate counts for ...


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