Federal Trade Commission v. Mandel Brothers, Inc.

PETITIONER: Federal Trade Commission
RESPONDENT: Mandel Brothers, Inc.
LOCATION: Union Station

DOCKET NO.: 234
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 359 US 385 (1959)
ARGUED: Mar 23, 1959
DECIDED: May 04, 1959

Facts of the case

Question

Media for Federal Trade Commission v. Mandel Brothers, Inc.

Audio Transcription for Oral Argument - March 23, 1959 in Federal Trade Commission v. Mandel Brothers, Inc.

Earl Warren:

The -- before you proceed, Mr. Friedman, I just -- I just say you don't need to be seated.

The order -- the other orders, that court appear upon the list certified by the Chief Justice and filed with the clerk and will not be orally announced.

Thank you for very much -- now, Mr. Friedman, you may proceed.

Daniel M. Friedman:

Mr. Chief Justice and may it please the Court.

The principal issue in this case which is here on a writ of certiorari to the Court of Appeals for the Seventh Circuit is whether the prohibitions in the Fur Product Labeling Act against false and deceptive invoicing are applicable to invoicing at the retail level, that is when a retail courier sells a fur product to the ultimate consumer.

There's a second issue in the case which I'll discuss subsequently dealing with the scope of the cease-and-desist order entered by the Federal Trade Commission in this case.

At the outset, I would just like to sketch briefly for the Court, since this is the first time this statute is before the Court, what in broad terms it purports to do and why we believe that the court below has misconstrued it.

The Fur Product Labeling Act was passed in 1951 after extensive congressional consideration by three different congresses.

One thing we think that stands out in connection with the history of this Act is that there was a clear congressional purpose to protect the ultimate consumer of fur products.

The statute basically sets up in Section 3 a general prohibition against the sale or distribution of fur or fur products which are falsely or deceptively invoiced, falsely or deceptively advertised or misbranded.

And then the section of the statute goes on in the next two sections and specifies the conditions under which that event would occur.

It states to them basically the provisions are substantially the same.

It states that a fur product is misbranded if there is not attached to it a label which sets forth a certain specified items of information, particularly the name of the animal in accordance with a certain standard, the country of origin of imported furs.

And if in fact there was any used fur, any inferior part of the animal or any dyed fur, that information must be set forth on the label.

Similarly, the statute goes on and requires substantially the same information to be attached to an invoice.

Is there any difference between the courier in the information that goes on the label and require you to go on the label on that statute, or require your to go in the invoice?

Daniel M. Friedman:

Only in one minor particular.

The label requires the name of the manufacturer, the invoice requires the name and address of the seller.

Other than that, they are substantially the same.

I want to emphasize at the outset that when we speak of labels in this field, we do not refer to the traditional kind of label of a piece of cloth that is sown on the lining of the garment.

The label that are used in this business are really called, really tags.

They set forth two examples on the page 64(a) of the record and 66(b) of the record, that these little tags that are attached either to the arm of the garment or to the button, and they just hang there.

And we think this is very crucial because as I shall develop in a moment, we think that the temporary character of the label or the tag means that merely giving this information to the purchaser by this means does not give the purchaser the full measure of protection which we think Congress intended.

We think that Congress intended to go beyond this, and also to give her as a permanent record, the information contained on the invoice.

The respondent in this case operates a large department store in the City of Chicago, and after proper administrative proceedings, the Federal Trade Commission entered a cease-and-desist order finding that respondent had violated all three of these provisions, misbranding, false and deceptive invoicing and false and deceptive advertising.

The Court of Appeals modified the order with respect to misbranding, finding it was too broad in scope.

And in addition, completely struck the provision relating to false invoicing.

The Court reached this conclusion solely by looking to the statutory definition of invoice and it ruled that this definition was so clear on its face that there was no need to have resort to legislative history.

And we think that this construction is erroneous because first, we believe that the definition of invoice when viewed in light of the other provisions of the Act, does apply to retail invoicing and particularly when the legislative history in the purpose of Congress in passing the statute be considered.

And I would now like to turn to the specific statutory provisions involved in this case, which is set forth through pages 36 and 37 of our brief.