MARY JO WHITE
United States Attorney

By:
Assistant United States Attorney
1 Saint Andrew's Plaza
New York, NY 10007
Tel: 212-637-2200

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA, Plaintiff,
v.
TOMMY HILFIGER U.S.A., INC., a corporation, Defendant.

99 Civ. __________ ( )

COMPLAINT

Plaintiff, the United States of America, acting upon notification and authorization to the Attorney General by the Federal Trade Commission ("Commission") for its complaint alleges that:

1. Plaintiff brings this action under Sections 5(a)(1), 5(m)(1)(A), 9, 13(b) and 16(a) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. 45(a)(1), 45(m)(1)(A), 49, 53(b) and 56(a) to obtain monetary civil penalties and injunctive and other relief for defendant's alleged violations of the Commission's Trade Regulation Rule Concerning the Care Labeling of Textile Wearing Apparel, 16 C.F.R. Part 423 ("the Care Labeling Rule").
 
2. The Court has jurisdiction over this matter under 28 U.S.C. 1331, 1337(a), 1345, and 1355 and under 15 U.S.C. 45(m)(1)(A), 49, 53(b) and 56(a). This action arises under 15 U.S.C.  45(a)(1).
 
3. Venue in the Southern District of New York is proper under 15 U.S.C.  53(b) and under 28 U.S.C. 1391(b-c) and 1395(a).
 
4. Defendant Tommy Hilfiger U.S.A., Inc. is a Delaware corporation with its office and principal place of business located within the Southern District of New York at 25 West 39th Street, 13th Floor, New York, NY 10018. Defendant Tommy Hilfiger U.S.A., Inc. resides and transacts business in the Southern District of New York.
 
5. At all times during which the acts or practices alleged herein occurred, defendant Tommy Hilfiger U.S.A., Inc. was engaged in the business of directing or controlling the manufacturing of textile wearing apparel (as "textile wearing apparel" is defined in Section 423.1 of the Care Labeling Rule, 16 C.F.R.  423.1), importing textile wearing apparel and offering for sale and selling such apparel throughout the United States, in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.  44.
 
6. The Care Labeling Rule, promulgated by the Commission on December 9, 1971, was amended by the Commission in 1983 under Section 18 of the FTC Act, 15 U.S.C.  57a. The amended Rule became effective on January 2, 1984, and has since that date remained in full force and effect.
 
7. In some instances in the five years preceding the date of the filing of this complaint, in connection with the sale of textile wearing apparel in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.  44, defendant has violated Section 423.6(b) of the Care Labeling Rule, 16 C.F.R.  423.6(b), which requires that the "care label" (as that term is defined in Section 423.1 of the Care Labeling Rule, 16 C.F.R. 423.1) must state a regular care procedure needed for the ordinary use of the product. In particular, in some instances the care procedure recommended on the care label resulted in dye bleeding from one portion of the garment to another, in fading, or in other damage to the garment.
 
8. In some instances in the five years preceding the date of the filing of this complaint, in connection with the sale of textile wearing apparel in or affecting commerce, defendant has violated Section 423.6(c) of the Care Labeling Rule, 16 C.F.R.  423.6(c), which requires a manufacturer or importer to possess, prior to sale, a reasonable basis for all care information disclosed to purchasers on the care label, including any warnings.
 
9. Section 5(a)(1) of the FTC Act, 15 U.S.C.  45(a)(1), provides that "unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful."
 
10. Pursuant to Section 18(d)(3) of the FTC Act, 15 U.S.C.  57a(d)(3), a violation of the Care Labeling Rule constitutes an unfair or deceptive act or practice in violation of Section 5(a)(1) of the FTC Act, 15 U.S.C.  45(a)(1).
 
11. By engaging in the acts and practices alleged in Paragraphs 7 and 8 above, defendant has violated Section 5(a)(1) of the FTC Act, 15 U.S.C.  45(a)(1).
 
12. Defendant, having knowledge of the Care Labeling Rule as set forth in Section 5(m)(1)(A) of the FTC Act, 15 U.S.C.  45(m)(1)(A), has violated the Rule as alleged above.
 
13. Each sale or attempted sale, during the five years preceding the filing of this complaint, of a garment in which defendant has violated the Care Labeling Rule, in one or more of the ways described above, constitutes a separate violation for which plaintiff seeks monetary civil penalties.
 
14. Section 5(m)(1)(A) of the FTC Act, 15 U.S.C.  45(m)(1)(A), authorizes this Court to award monetary civil penalties of not more than $10,000 for each such violation of the Care Labeling Rule that occurred prior to November 20, 1996. Section 4 of the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C.  2461, as amended, authorizes the Court to award monetary civil penalties of not more than $11,000 for each such violation of the Care Labeling Rule that occurred on or after November 20, 1996.
 
15. Under Section 13(b) of the FTC Act, 15 U.S.C.  53(b), this Court is authorized to issue a permanent injunction against defendant's violating the FTC Act, as well as such ancillary relief as may be just and proper.

PRAYER

WHEREFORE, plaintiff requests that this Court, pursuant to 15 U.S.C. 45(a)(1), 45(m)(1)(A), 49 and 53(b) and the Court's own equity powers:

1. Enter judgment against the defendant and in favor of the plaintiff for each violation alleged in this complaint;
 
2. Award plaintiff monetary civil penalties from defendant for each violation of the Care Labeling Rule alleged in this complaint;
 
3. Enjoin defendant from violating the Care Labeling Rule;
 
4. Order defendant to retain adequate records of the care instructions on each item of textile wearing apparel sold by defendant, adequate records of the reasonable basis for each such care instruction, and other records relating to the adequacy of the care instructions for a period of five years from the last date on which the item was shipped to a retail store; and
 
5. Award such other relief as the Court may deem to be just and proper.

Dated: New York, NY

__________________, 1999

FOR THE UNITED STATES OF AMERICA:

DAVID W. OGDEN
Acting Assistant Attorney General
Civil Division
U.S. Department of Justice
MARY JO WHITE
United States Attorney for the
Southern District of New York

By: ____________________________
Assistant United States Attorney
100 Church Street, 19th Floor
New York, New York 10007
212-637-2200

EUGENE M. THIROLF
Director
Office of Consumer Litigation

By: ____________________________
ELIZABETH STEIN
Attorney
Office of Consumer Litigation
Civil Division
U.S. Department of Justice
P.O. Box 386
Washington, D.C. 20044
202-307-0486

Of Counsel:

ELAINE D. KOLISH
Associate Director
Division of Enforcement

MARY K. ENGLE
Assistant Director
Division of Enforcement

CONSTANCE M. VECELLIO
ROBIN P. ROSEN
Attorneys
Division of Enforcement
Federal Trade Commission
Washington, DC 20580
202-326-2966 or 202-326-3740