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. __________ ( )

CONSENT DECREE

WHEREAS: Plaintiff, the United States of America, has commenced this action by filing the Complaint herein; defendant has waived service of the Summons and Complaint; the parties have been represented by the attorneys whose names appear hereafter; and the parties have agreed to the settlement of any violations of the Federal Trade Commission's Trade Regulation Rule Concerning the Care Labeling of Textile Wearing Apparel that occurred in the five years preceding the date of the filing of the Complaint, as alleged in the Complaint, upon the following terms and conditions, without adjudication of any issue of fact or law and without defendant admitting liability for any of the matters alleged in the Complaint;

THEREFORE, on the joint motion of plaintiff and defendant, 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 defendant under Sections 5(a)(1), 5(m)(1)(A), 9, 13(b) and 16(a) of the Federal Trade Commission Act, 15 U.S.C. §§ 45(a)(1), 45(m)(1)(A), 49, 53(b) and 56(a).

 

3. Defendant Tommy Hilfiger U.S.A., Inc., its 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 $300,000.00.

 

4. Defendant shall make the payment required by Paragraph 3 within five (5) days of the date defendant receives notice from plaintiff of entry of this Consent Decree by electronic fund transfer in accordance with instructions provided by The Office of Consumer Litigation, Civil Division, U.S. Department of Justice, Washington, DC 20530.

 

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. Defendant is hereby required, in accordance with 31 U.S.C. § 7701, to furnish to the Federal Trade Commission its taxpayer identification number, which shall be used for purposes of collecting and reporting on any delinquent amount arising out of defendant's relationship with the government.

 

7. Defendant, its successors and assigns, and its 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, directly or through any corporation, subsidiary, division, or other device, shall comply with all provisions 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 the Care Labeling Rule is attached hereto as "Appendix A" and incorporated herein as if fully set forth verbatim.

 

8. Defendant shall provide for a toll-free telephone number to be placed on defendant's care labels, stating in effect "For Product Care Information, Call 1-800-XXX-XXXX." With respect to items of textile wearing apparel that, pursuant to § 423.8 of the Care Labeling Rule, are exempt from care labeling but for which product care information is required, the toll-free telephone number shall be placed in conjunction with the care information provided pursuant to § 423.8(c). Defendant may implement the use of care labels containing the toll-free product care telephone number after its existing inventory of care labels is depleted.

 

9. Defendant, its 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 its officers and directors 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, DC 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.

 

10. Defendant, its 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 defendant; a record of any and all care instructions appearing on hangtags attached to textile wearing apparel offered for sale by defendant; 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 defendant (including tests of any component thereof), and either the actual items that were tested, or a photograph or a duplicate thereof; 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 employee manuals, memoranda, correspondence or other documents containing instructions, explanations, policies or procedures, relating to defendant's compliance with any provision of this Decree.   All such documents and things shall be maintained for five (5) years from the date defendant last ships the textile wearing apparel at issue to its customers. Defendant shall have the right to destroy all such documents and things thereafter, unless defendant has received notification from the Federal Trade Commission. Within forty-five (45) days after receipt of a written request, defendant shall make such documents and things available for inspection and copying by Federal Trade Commission staff during defendant's regular business hours at defendant's offices.

 

11. Defendant, its successors and assigns, shall notify the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, DC 20580, thirty (30) days, or as soon as practicable thereafter, prior to any change in defendant's 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 defendant's obligations under this Consent Decree.

 

12. 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 against defendant, pursuant to all of the terms and conditions recited above.

Dated: New York, NY, _________________________________, 1999.

____________________________________
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. Defendant waives any rights that may arise under the Equal Access to Justice Act, 28 U.S.C. § 2412, as amended by Pub. L. 104-121, 110 Stat. 847, 863-64 (1996).

FOR THE UNITED STATES OF AMERICA:

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

FOR THE FEDERAL TRADE COMMISSION:

________________________________
ELAINE D. KOLISH
Associate Director
Division of Enforcement
Bureau of Consumer Protection

________________________________
MARY K. ENGLE
Assistant Director
Division of Enforcement
Bureau of Consumer Protection

________________________________
CONSTANCE M. VECELLIO
Attorney
Division of Enforcement
Bureau of Consumer Protection

________________________________
ROBIN P. ROSEN
Attorney
Division of Enforcement
Bureau of Consumer Protection
Federal Trade Commission
Washington, DC 20580
202-326-2966 or 202-326-3740

FOR THE DEFENDANT:

TOMMY HILFIGER U.S.A., INC.

By: __________________________
Joel J. Horowitz
Chief Executive Officer and President

__________________________
Jorge Arciniega
Senior Vice President/Counsel
Tommy Hilfiger U.S.A., Inc.
25 West 39th Street, 13th Floor
New York, NY 10018-3805
212-840-8888

By: __________________________
STANLEY W. LEVY
Attorney
Manatt, Phelps & Phillips, LLP
11355 W. Olympic Boulevard
Los Angeles, CA 90064
310-312-4379

__________________________
DONALD STEIN
Attorney
Manatt, Phelps & Phillips, LLP
1501 M Street, N.W.
Suite 700
Washington, DC 20005
202-463-4342