DEBRA A. VALENTINE
General Counsel

ANN F. WEINTRAUB (AW 3080)
PHYLLIS H. MARCUS
JAMES A. PRUNTY
Attorneys for Plaintiff
Federal Trade Commission
One Bowling Green, Suite 318
New York, NY 10004
(212) 607-2815

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NEW YORK

FEDERAL TRADE COMMISSION,
Plaintiff,
v.
MEGA FURNITURE, INC.,
and
CANDIDO CRUZ individually and as an officer or director of Mega Furniture, Inc.,
Defendants.

Civil Action No. ____________

COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF

Plaintiff, the Federal Trade Commission ("FTC" or "Commission") brings this action under Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C.  53(b), to secure preliminary and permanent injunctive relief, restitution, disgorgement, and other equitable relief for deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a). For its Complaint, plaintiff, by its undersigned attorneys, alleges:

JURISDICTION AND VENUE

1. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. 1331, 1337(a) and 1345 and 15 U.S.C.  45(a) and 53(b).

2. Venue in the United States District Court for the Eastern District of New York is proper under 28 U.S.C.  1391(b) and (c), and 15 U.S.C.  53(b).

THE PARTIES

3. Plaintiff, the Federal Trade Commission, is an independent agency of the United States Government created by statute. 15 U.S.C. 41 et seq. The Commission is charged, inter alia, with enforcement of Section 5(a) of the FTC Act, 15 U.S.C.  45(a), which prohibits deceptive acts or practices in or affecting commerce. Misrepresentations and omissions of material facts made to induce a reasonable consumer to purchase products or services are deceptive acts or practices that are prohibited by Section 5(a) of the Act. The Commission is authorized to initiate federal district court proceedings, by its own attorneys, to enjoin violations of the FTC Act in order to secure such equitable relief as may be appropriate in each case. 15 U.S.C.  53(b).

4. Defendant Mega Furniture, Inc. was incorporated in 1997 as a New York corporation. Its principal place of business is 524 Grand Street, Brooklyn, NY 11211. Mega Furniture transacts business within the Eastern District of New York by promoting its merchandise to consumers in New York. It obtains many of its products from out-of-state wholesale sellers, including sellers in the Commonwealth of Massachusetts.

5. Defendant Candido Cruz is the president of Mega Furniture, Inc. and has an ownership interest in the company. Individually, or in concert with others, he directs, controls, formulates, or participates in the acts and practices of Mega Furniture, including the acts and practices complained of below. He transacts business in the Eastern District of New York.

COMMERCE

6. At all times relevant to this complaint, defendants have maintained a substantial course of trade in the advertising, promotion, offering for sale and sale of used mattresses and other furniture and other goods and services in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.  44.

DEFENDANTS' BUSINESS PRACTICES

7. Defendant Candido Cruz owns and operates defendant Mega Furniture, Inc. Mega Furniture is a retail seller of household furniture, including used mattresses. Used mattresses are commonly referred to as "rebuilt" mattresses. Within the used bedding industry, the term rebuilt refers to everything from the complete dismantling and reconstruction of a used mattress to the mere recovering of an old mattress with new mattress "ticking." Ticking is the term for the strong fabric used as a covering for mattresses and other upholstered products.

8. Defendant Mega Furniture sells used mattresses under the brand name "Sleep-eze -- Orthopedic Type," as well as under other brand names.

9. Mega Furniture's sales staff has represented on at least two occasions within the last 120 days that used mattresses sold under the brand name "Sleep-eze -- Orthopedic Type" are "rebuilt" mattresses that are comprised of "all new materials except for the springs."

10. The used mattresses that Mega Furniture sells are simply old mattresses that have been recovered with a new mattress ticking. Defendants' used mattresses usually bear a label stating that the mattress contains "used materials." These labels often are obscured by the heavy plastic covering the mattresses.

DEFENDANTS' VIOLATIONS OF SECTION 5(a) OF THE FTC ACT

COUNT I

11. Defendants represent to consumers that the "Sleep-eze -- Orthopedic Type" mattresses and other used mattresses they sell are comprised of "all new materials except for the springs."

12. In truth and in fact, defendants' "Sleep-eze - Orthopedic Type" mattresses and other used mattresses they sell are not comprised of all new materials except for the mattress springs.

13. Therefore, defendants' representations, as set forth in Paragraph 11 above, are false and misleading and constitute deceptive acts or practices, in violation of Section 5 of the FTC Act, 15 U.S.C.  45.

COUNT II

14. In connection with the offering for sale of used mattresses, defendants represent that the "Sleep-eze -- Orthopedic Type" mattresses and other used mattresses they sell are "rebuilt."

15. Defendants fail to disclose to consumers that the rebuilt mattresses they sell are simply used mattresses that have been recovered with a new mattress ticking. This additional information is material to consumers in deciding whether to purchase a used mattress from Mega Furniture.

16. In light of the representations made in Paragraph 14, defendants' failure to disclose the material information in Paragraph 15 constitutes a deceptive act and practice in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a).

CONSUMER INJURY

17. Defendants' violations of Section 5 of the FTC Act have caused and continue to cause substantial financial injury to consumers and pose potential risks to consumers' health and safety. Absent injunctive relief by this Court, defendants are likely to continue to injure consumers and harm these important public interests.

THIS COURT'S POWER TO GRANT RELIEF

18. Section 13(b) of the FTC Act, 15 U.S.C. 53(b), empowers this Court to grant injunctive and other ancillary relief, including consumer redress, disgorgement and restitution, to prevent and remedy violations of any provision of the law enforced by the FTC.

19. This Court, in the exercise of its equitable jurisdiction, may award other ancillary relief to remedy injury caused by defendants' law violations.

PRAYER FOR RELIEF

WHEREFORE, plaintiff requests this Court, as authorized by Section 13(b) of the FTC Act, 15 U.S.C. 53(b), and pursuant to its own equitable powers:

  1. To permanently enjoin defendants from violating the FTC Act as alleged herein;
  2. To award such relief as the Court finds necessary to redress injury to consumers resulting from defendants' violations of the FTC Act, including, but not limited to redress, restitution, and a disgorgement of ill-gotten gains; and,
  3. To award plaintiff the costs of bringing this action, as well as such other additional equitable relief as the Court may determine to be just and proper.

Respectfully Submitted,

DEBRA A. VALENTINE
General Counsel

Dated:_____________ , 2000

ANN F. WEINTRAUB (AW 3080)
PHYLLIS H. MARCUS
JAMES A. PRUNTY
Attorneys for Plaintiff
Federal Trade Commission
One Bowling Green, Suite 318
New York, NY 10004
(212) 607-2815