ZACHARY W. CARTER
United States Attorney
Eastern District of New York

By:

Assistant United States Attorney
One Pierrepont Plaza, 14th Floor
Brooklyn, New York 11201
Tel.: (718) 254-7000

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA, Plaintiff,
v.
LAISSEZ FAIRE, INC., a corporation, Defendant.

99 Civ. 1624

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 violations of the Commission's Trade Regulation Rule Concerning the Care Labeling of Textile Wearing Apparel ("Care Labeling Rule"), 16 C.F.R. Part 423, and for violations of Section 5(a)(1) of the FTC Act, 15 U.S.C.  45(a)(1).

JURISDICTION AND VENUE

2. This 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 is proper in the Eastern District of New York under 15 U.S.C. 53(b) and 28 U.S.C. 1391(b)-(c) and 1395(a).

DEFENDANT

4. Defendant Laissez Faire, Inc. is a New York corporation with its office and principal place of business located within the Eastern District of New York at 45-20 Astoria Boulevard, Astoria, New York 11103. Laissez Faire, Inc. resides and transacts business in the Eastern District of New York.

THE CARE LABELING RULE

5. 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.

VIOLATIONS OF THE CARE LABELING RULE

6. At all times during which the acts or practices complained of herein occurred, defendant Laissez Faire, Inc. was engaged in the business of importing textile wearing apparel (as "textile wearing apparel" is defined in Section 423.1 of the Care Labeling Rule, 16 C.F.R.  423.1), 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.

7. In numerous instances between October 1996 and August 1997, in connection with the sale of textile wearing apparel in or affecting commerce, defendant failed to possess, prior to sale, a reasonable basis for all care information disclosed to purchasers on the care label, in violation of Section 423.6(c) of the Care Labeling Rule. In particular, in numerous instances one of the care procedures that was recommended on the care label resulted in dye bleeding or color loss.

UNFAIR OR DECEPTIVE ACTS OR PRACTICES
IN VIOLATION OF THE FTC ACT

8. Section 5(a) of the FTC Act, 15 U.S.C.  45(a), provides that "unfair or deceptive acts or practices in or affecting commerce are hereby declared unlawful."

9. 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).

10. By engaging in the acts and practices described in Paragraph 7, defendant has violated the Care Labeling Rule and Section 5(a)(1) of the FTC Act, 15 U.S.C.  45(a)(1).

CIVIL PENALTIES AND INJUNCTION

11. Defendant has violated the Care Labeling Rule as described above with knowledge as set forth in Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A).

12. 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 the way described above constitutes a separate violation for which plaintiff seeks monetary civil penalties.

13. 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 this Court to award monetary civil penalties of not more than $11,000 for each violation of the Care Labeling Rule that occurs on or after November 20, 1996.

14. 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 violation of the FTC Act, as well as such ancillary relief as may be just and proper.

PRAYER FOR RELIEF

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 defendant and in favor of 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 (5) years from the last date on which the item was shipped to a retail store; and
 
(5) Award plaintiff such additional relief as the Court may deem just and proper.

DATED:

OF COUNSEL:

ELAINE D. KOLISH
Associate Director
Division of Enforcement
Federal Trade Commission

MARY K. ENGLE
Assistant Director
Division of Enforcement
Federal Trade Commission

ROBIN P. ROSEN
Attorney Assistant
Division of Enforcement
Bureau of Consumer Protection
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
(202) 326-3740

FOR THE UNITED STATES OF AMERICA:

DAVID W. OGDEN
Acting Assistant Attorney General
Civil Division
U.S. Department of Justice

ZACHARY W. CARTER
United States Attorney
Eastern District of New York

By: _________________________
United States Attorney
One Pierrepont Plaza, 14th Floor
Brooklyn, New York 11201
Tel. No.: (718) 254-7000

EUGENE M. THIROLF
Director
Office of Consumer Litigation

By: _________________________
ELIZABETH STEIN
Attorney
Office of Consumer Litigation
Civil Division
U.S. Department of Justice
Washington, D.C. 20530
Tel. No.: (202) 307-0486