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UNITED STATES v. H. M. PRINCE TEXTILES

March 17, 1966

United States of America, Plaintiff,
v.
H. M. Prince Textiles, Inc.; Prince Mills, Inc.; and Hugo M. Prince, Defendants.


Cannella, District Judge.


The opinion of the court was delivered by: CANNELLA

CANNELLA, District Judge.

Judgment for the Government in the amount of $1,000 in civil penalties. Government's requested injunctive relief is denied.

 This court has jurisdiction of the action pursuant to 28 U.S.C. § 1345 and § 1355.

 This case was tried before this court without a jury on January 17, 1966. It is an action for civil penalties for violation of a Federal Trade Commission (FTC) cease and desist order, 15 U.S.C. § 45(l) and for an injunction against future violations of the order. *fn1"

 On February 10, 1953 the FTC issued a complaint against defendants H. M. Prince Textiles, Inc. and Hugo Prince, among others, charging them with violations of the Wool Products Labeling Act of 1939, 15 U.S.C. § 68 et seq. On August 6, 1953 a consent cease and desist order was issued against the defendants.

 In June of 1962, Prince Textiles (hereafter referred to as Prince) entered into negotiations with Toyo Boshi Kogyo Co., Ltd. (hereafter referred to as Toyo Boshi), which it believed to be a reputable firm, for the purchase of 20,000 pounds of yarn, which was to consist of 60% cashmere and 40% wool. Hugo Prince testified that to the best of his knowledge Prince had dealt with Toyo Boshi on one or two prior occasions. The defendants allege that all correspondence exchanged with Toyo Boshi clearly indicates that the product to be purchased must be 60% cashmere and 40% wool.

 It was agreed that a sample shipment would be sent by Toyo Boshi to Prince by air freight. This was done in July of 1962.

 A contract was entered into with Toyo Boshi on September 17, 1962. Hugo Prince testified that on the same day, after the defendants had an opportunity to have the yarn woven into fabric they sent a sample of the product to the United States Testing Company (hereafter referred to as U.S. Testing), (a recognized testing organization, as testified to by Dr. Golub, a government witness) to be tested for fiber content.

 Defendants contend that the sample was returned on September 25, 1962. U.S. Testing informed the defendants that a proper test could not be conducted from the finished dyed material. A new sample was sent to U.S. Testing on the same date, accompanied by a letter from Prince stating its belief that the goods to be tested were 65% cashmere/35% wool.

 On September 28, 1962, U.S. Testing reported that the sample tested was 58.4% cashmere/41.6% wool. On the basis of this test result, Prince, on October 2, 1962, established the letter of credit required for the purchase from Toyo Boshi of 20,000 pounds of material 60% cashmere/40% wool at $1.75 per pound, c.i.f.

 The 20,000 pounds of yarn labelled as 60% cashmere, 40% wool was sent by Toyo Boshi to Prince in four shipments in October and November of 1962. The material was then sent out to various companies to be spun, finished and sponged.

 On January 3, 1963, Hart, Shaffner and Marx ordered 30 pieces of the material woven into Prince Style No. 458/10.

 On January 28, 1963, Prince sent another sample to U.S. Testing for analysis, accompanied by a letter from Prince stating its belief that the sample was 75% cashmere/25% wool. On February 6, 1963, a written report was sent to Prince stating that the sample was 55.7% cashmere (down), 1.0% cashmere (beard), 42.2% wool and 1.1% other. The defendants claim that the report was initially received on January 29, 1963 and the February 6, 1963 report merely confirmed the earlier report made by telephone.

 On January 31, 1963, four (4) pieces of fabric were shipped to Hart, Shaffner and Marx. They were invoiced as 58% cashmere/42% wool, although labeled 60% cashmere/40% wool. *fn2" On February 8, 1963 four more pieces were shipped to Hart, ...


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