UNITED STATES DISTRICT COURT
UNITED STATES OF AMERICA, Plaintiff,
ALYCE DESIGNS, INC., a corporation, ALYCE HAMM, individually and as an officer of the corporation, and JEAN PAUL HAMM, individually and as an officer of the corporation,
Civil Action No. 98 C 4403
WHEREAS: Plaintiff, the United States of America, commenced this action by filing a Complaint on July 20, 1998; defendants were served with the Summonses and Complaints on August 4, 1998; the parties have been represented by the attorneys whose names appear hereafter; and the parties have agreed to the settlement of this action upon the following terms and conditions, without adjudication of any issue of fact or law and without defendants admitting liability for any of the matters alleged in the Complaint;
THEREFORE, on the joint motion of plaintiff and defendants, it is hereby ORDERED, ADJUDGED, and DECREED as follows:
1. This Court has jurisdiction of the subject matter and of the parties.
2. The Complaint states a claim upon which relief may be granted against the defendants under Sections 5(a)(1), 5(m)(1)(A), 9, 13(b), 16(a) and 19 of the Federal Trade Commission Act, 15 U.S.C. §§ 45(a)(1), 45(m)(1)(A), 49, 53(b), 56(a) and 57b.
3. Defendants Alyce Designs, Inc., Alyce Hamm, and Jean Paul Hamm, their successors and assigns, shall pay to plaintiff a civil penalty, pursuant to Section 5(m)(1)(A) of the Federal Trade Commission Act, 15 U.S.C. § 45(m)(1)(A), in the amount of $36,000. Defendants are jointly and severally responsible for paying the penalty.
4. Defendants shall make the payment required by Paragraph 3 on the date of entry of this Consent Decree by certified or cashier's check made payable to the Treasurer of the United States and delivered to: The Office of Consumer Litigation, Civil Division, P.O. Box 386, U.S. Department of Justice, Washington, D.C. 20040 for appropriate disposition.
5. In the event of any default in payment, which default continues for ten (10) days beyond the due date of payment, the entire unpaid penalty, together with interest, as computed pursuant to 28 U.S.C. § 1961 from the date of default to the date of payment, shall immediately become due and payable.
6. Defendants shall send the notice attached hereto as "Appendix A" to all entities to which defendants sold textile wearing apparel in the year preceding the date of entry of this Consent Decree.
7. Defendants, their successors and assigns, and their officers, agents, servants, employees and attorneys, and all persons in active concert or participation with any one or more of them who receive actual notice of this Consent Decree by personal service or otherwise, are hereby enjoined from ever violating, directly or through any corporation, subsidiary, division, or other device, any provision of the Federal Trade Commission's Trade Regulation Rule Concerning the Care Labeling of Textile Wearing Apparel ("the Care Labeling Rule"), 16 C.F.R. Part 423, or as the Rule may hereafter be amended. A copy of this Rule is attached hereto as "Appendix B" and incorporated herein as if fully set forth verbatim.
PERSONS AFFECTED; CONTINUING JURISDICTION
8. Defendants, their successors and assigns shall, within thirty (30) days of the entry of this Consent Decree, provide a copy of this Consent Decree, the Care Labeling Rule, and the Statement of Basis and Purpose for that Rule to each of the officers and directors of defendant Alyce Designs, Inc. and to all supervisory personnel responsible for compliance with the Care Labeling Rule, secure from each such person a signed statement acknowledging receipt of a copy of this Consent Decree, and shall, within ten (10) days of complying with this paragraph, file an affidavit with the Court and serve the Federal Trade Commission by mailing a copy thereof to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580, setting forth the fact and manner of their compliance, including the name and title of each person to whom a copy of the Consent Decree has been provided.
9. With respect to the requirement in section 423.6(c) of the Care Labeling Rule that "a manufacturer or importer must establish a reasonable basis for care information by possessing prior to sale" reliable evidence to support the care information provided on the care label, the following shall be deemed to constitute a reasonable basis for the care information provided on the care label on a garment:
10. Defendants, their successors and assigns, shall maintain the following: a record of the instructions on the care labels on all items of textile wearing apparel offered for sale by defendants; a record of any and all care instructions appearing on hangtags attached to textile wearing apparel offered for sale by defendants; a record of the reasonable basis for each such care instruction; copies of all test reports relating to the care of any textile wearing apparel offered for sale by the defendants (including tests of any component thereof), and the actual items that were tested, including the laboratory reports and sample garments referred to in Paragraph 9; all correspondence to and from customers, suppliers, and consumers relating to the accuracy, adequacy or completeness of the care instructions or any harm to textile wearing apparel which might have been caused by the inaccuracy, inadequacy or incompleteness of the care instructions; and all documents relating to defendants compliance with each provision of this Decree. All such documents and things shall be maintained for five years from the date the defendants last ship the textile wearing apparel at issue to its customers. Defendants shall have the right to destroy all such documents and things thereafter, unless defendants have received notification from the Federal Trade Commission that such documents and things are relevant to an ongoing investigation of defendants by the Federal Trade Commission. Within fifteen (15) days after receipt of a written request, the defendants shall make such documents and things available for inspection and copying by Federal Trade Commission staff during the defendants' regular business hours at defendants offices in Morton Grove, Illinois and Chicago, Illinois.
11. Defendants, their successors and assigns, shall notify the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580, at least thirty (30) days prior to any change in defendants business, including, but not limited to, merger, incorporation, dissolution, assignment, sale resulting in the emergence of a successor corporation, the creation or dissolution of a subsidiary or parent, or any other change that may affect defendants obligations under this Consent Decree.
12. Defendants Alyce Hamm and Jean Paul Hamm shall, for a period of ten years from the date of entry of this Consent Decree, notify the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580, within thirty (30) days of each affiliation with a new business or employment whose activities include manufacturing or importing "textile wearing apparel" (as that term is defined in Section 423.1 of the Care Labeling Rule) that is offered for sale in or affecting commerce, as commerce is defined in Section 4 of the FTC Act, 15 U.S.C. § 44, or of their affiliation with a new business or employment in which their own duties and responsibilities involve manufacturing or importing textile wearing apparel that is offered for sale in or affecting commerce.
13. This Court shall retain jurisdiction of this matter for the purposes of enabling any of the parties to this Consent Decree to apply to the Court at any time for such further orders or directives as may be necessary or appropriate for the interpretation or modification of this Consent Decree, for the enforcement of compliance therewith, or for the punishment of violations thereof.
JUDGMENT IS THEREFORE ENTERED in favor of plaintiff and against defendants, pursuant to all the terms and conditions recited above.
Dated: Chicago, Illinois, , 1998.
UNITED STATES DISTRICT JUDGE
The parties, by their respective counsel, hereby consent to the terms and conditions of the Consent Decree as set forth above and consent to the entry thereof. Defendants waive any rights that may arise under the Equal Access to Justice Act, 28 U.S.C. § 2412, amended by Pub. L. 104-121, 110 Stat. 847, 863-64 (1996).
FOR THE UNITED STATES OF AMERICA:
FRANK W. HUNGER
GARY S. SHAPIRO,
FOR THE FEDERAL TRADE COMMISSION:
FOR THE DEFENDANTS
ALYCE DESIGNS, INC.