Federal Trade Commission v. Winsted Sted Hosiery Co

• Court: U.S. Supreme Court
• Writing for the Court: BRANDEIS
• Citation: Federal Trade Commission v. Winsted Sted Hosiery Co, 258 U.S. 483, 42 S.Ct. 384, 66 L.Ed. 729 (1922)
• Decision Date: 24 April 1922
• Docket Number: No. 333,333
• Parties: FEDERAL TRADE COMMISSION v. WINSTED STED HOSIERY CO

258 U.S. 483

42 S.Ct. 384

66 L.Ed. 729

FEDERAL TRADE COMMISSION

v WINSTED STED HOSIERY CO.

No. 333.

Argued March 13 and 14, 1922.

Decided April 24, 1922.

Messrs. Solicitor General James M. Beck and Adrien F. Busick, both of Washington, D. C., for petitioner.

[Argument of Counsel from pages 484-487 intentionally omitted] Messrs. Melville J. France and Henry P. Molloy, both of New York City, for respondent.

[Argument of Counsel from pages 487-490 intentionally omitted] Messrs. Frank F. Reed and Edward S. Rogers, both of Chicago, Ill., representing The Armstrong Cork Company, George W. Blabon Company, American Linoleum Manufacturing Company, Nairn Linoleum Company, and Cook's Linoleum Company, Manufacturers of Linoleum.

Mr. Morten Q. Macdonald, of Washington, D. C., representing Paint Manufacturers Association of the United States and National Varnish Manufacturers Association.

Mr. Walter Gordon Merritt, of New York City, representing The Silk Association of America, amici curiae.

Mr. Justice BRANDEIS delivered the opinion of the Court.

The Winsted Hosiery Company has for many years manufactured underwear which it sells to retailers throughout the United States. It brands or labels the cartons in which the underwear is sold, as 'Natural Merino,' 'Gray Wool,' 'Natural Wool,' 'Natural Worsted,' or 'Australian Wool.' None of this underwear is all wool. Much of it contains only a small percentage of wool; some as little as 10 per cent. The Federal Trade Commission instituted a complaint under section 5 of the Act of September 26, 1914, c. 311, 38 Stat. 717, 719 (Comp. St. § 8836e), and called upon the company to show cause why use of these brands and labels alleged to be false and deceptive should not be discontinued. After appropriate proceedings an order was issued which, as later modified, directed the company to——

'cease and desist from employing or using as labels or brands on underwear or other knit goods not composed wholly of wool, or on the wrappers, boxes or other containers in which they are delivered to customers, the words 'Merino,' 'Wool,' or 'Worsted,' alone or in combination with any other word or words, unless accompanied by a word or words designating the substance, fiber or material other than wool of which the garments are composed in part (e. g., 'Merino, Wool and Cotton'; 'Wool and Cotton'; 'Worsted, Wool and Cotton'; 'Wool, Cotton, and Silk') or by a word or words otherwise clearly indicating that such underwear or other goods is not made wholly of wool (e. g., part wool).'

A petition for review of this order was filed by the company in the United States Circuit Court of Appeals for the Second Circuit. The prayer that the order be set aside was granted; and a decree to that effect was entered.¹ That court said:

'Conscientious manufacturers may prefer not to use a label which is capable of misleading, and it may be that it will be desirable to prevent the use of the particular labels, but it is in our opinion not within the province of the Federal Trade Commission to do so.' 272 Fed. 957, 961.

The case is here on writ of certiorari. 256 U. S. 688, 41 Sup. Ct. 625 65 L. Ed. 1172.

The order of the Commission rests upon findings of fact; and these upon evidence which fills 350 pages of the printed record. Section 5 of the act makes the Commission's findings conclusive as to the facts, if supported by evidence.

The findings here involved are clear, specific and comprehensive: The word 'Merino,' as applied to wool, 'means primarily and popularly' a fine long-staple wool, which commands the highest price. The words 'Australian Wool' mean a distinct commodity, a fine grade of wool grown in Australia. The word 'wool' when used as an adjective means made of wool. The word 'worsted' means primarily and popularly a yarn or fabric made wholly of wool. A substantial part of the consuming public, and also some buyers for retailers and sales people, understand the words 'Merino,' 'Natural Merino,' 'Gray Merino,' 'Natural Wool,' 'Gray Wool,' 'Australian Wool' and 'Natural Worsted,' as applied to underwear, to mean that the underwear is all wool. By means of the labels and brands of the Winsted Company bearing such words, part of the public is misled into selling or into buying as all wool, underwear which in fact is in large part cotton. And these brands and labels tend to aid and encourage the representations of unscrupulous retailers and their salesmen who knowingly sell to their customers as all wool, underwear which is largely composed of cotton. Knit underwear made wholly of wool, has for many years been widely manufactured and sold in this country and constitutes a substantial part of all knit underwear dealt in. It is sold under various labels or brands, including 'Wool,' 'All Wool,' 'Natural Wool' and 'Pure Wool,' and also under other labels which do not contain any words descriptive of the composition of the article. Knit underwear made of cotton and wool is also used in this country by some manufacturers who market it without any label or marking describing the material or fibers of which it is composed, and by some who market it under labels bearing the words 'Cotton and Wool' or 'Part Wool.' The Winsted Company's product, labeled and branded as above stated, is being sold in competition with such all wool...