MARY JO WHITE
United States Attorney
By: Silvia L. Serpe
Assistant United States Attorney
1 Saint Andrew's Plaza
New York, New York 10007
Tel: 212-637-2200

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

UNITED STATES OF AMERICA, Plaintiff,

v.

THE NAHDREE GROUP, LTD., a corporation, Defendant.

Civil Action No.

COMPLAINT FOR CIVIL PENALTIES,
INJUNCTIVE, AND OTHER RELIEF

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), 16(a) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. 45(a)(1), 45(m)(1)(A), 49, 53(b), 56(a) and 57b 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, 16 C.F.R. Part 423 ("the Care Labeling Rule").

JURISDICTION AND VENUE

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), 56(a) and 57b. 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).

DEFENDANT

4. Defendant The Nahdree Group, Ltd. is a Delaware corporation with its office and principal place of business located within the Southern District of New York at 530 Seventh Avenue, New York, New York 10018. Defendant The Nahdree Group, Ltd. resides and transacts business in the Southern 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 The Nahdree Group, Ltd. was engaged in the business of importing and manufacturing "textile wearing apparel" (as that term is defined in Section 423.1 of the Care Labeling Rule), 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 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 affixed to textile wearing apparel a "care label" (as that term is defined in Section 423.1 of the Care Labeling Rule) containing instructions such as the following, or substantially similar statements: "Dry Clean Only By Zurcion Method, Do Not Spray Alcohol Based Products Directly On Garment Such As Perfume, Hair Spray, Deodorant, Etc., Nationwide Cleaners, 1-800-242-GOWN, Guarantee Processing." By the use of the above-described, or substantially similar, labels, defendant has failed to state on the care label a regular care procedure needed for the ordinary use of the product, thereby violating Section 423.6(b) of the Care Labeling Rule. In particular, the dry cleaning instruction on the care label does not state at least one type of solvent that may be used, as required by Section 423.6(b)(2)(i) of the Care Labeling Rule.

8. In numerous 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, by the use of the care labels described in Paragraph 7, defendant has failed to warn against any part of the dry cleaning procedure that consumers or drycleaners can reasonably be expected to use that would harm the garments, thereby violating Section 423.6(b)(2)(ii) of the Care Labeling Rule.

9. In numerous 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 failed to possess, prior to sale, a reasonable basis for all care information disclosed to purchasers on the care labels described in Paragraph 7, including any warnings, thereby violating Section 423.6(c) of the Care Labeling Rule. In particular, the defendant has failed to possess reliable evidence that the garments can be adequately cleaned by the Zurcion method of dry cleaning, and has failed to possess reliable evidence that the garments cannot be cleaned by any other method of dry cleaning or by washing.

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

10. 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."

11. 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).

12. By engaging in the acts and practices described in Paragraphs 7 through 9 above, defendant has violated Section 5(a)(1) of the FTC Act, 15 U.S.C. 45(a)(1).

CIVIL PENALTIES, INJUNCTIVE AND OTHER RELIEF

13. 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).

14. 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.

15. 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 after November 20, 1996.

16. Section 19 of the FTC Act, 15 U.S.C.  57b, authorizes this Court to award such relief as is necessary to redress the injury to consumers or others resulting from defendant's violation of the Care Labeling Rule, including but not limited to public notification respecting the Rule violations.

17. 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, 53(b) and 57b 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 years from the last date on which the item was shipped to a retail store;
  5. Order defendant to notify the public of the Care Labeling Rule violations by distributing to its clients information explaining that defendant is no longer using the care instructions described in Paragraph 7; and
  6. Award plaintiff such additional relief as the Court may deem just and proper.

DATED:

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

OF COUNSEL:

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

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

CONSTANCE M. VECELLIO
Attorney
Division of Enforcement
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
202-326-2966

FOR THE UNITED STATES OF AMERICA:

MARY JO WHITE
United States Attorney
Southern District of New York

_________________________
SILVIA L. SERPE (SS-1845)
Assistant U.S. Attorney
1 Saint Andrew's Plaza
New York, New York 10007

EUGENE THIROLF
Director
Office of Consumer Litigation

________________________
ELIZABETH STEIN
Attorney
Office of Consumer Litigation
Civil Division
U.S. Department of Justice
Washington, DC 20530
(202) 307-0486