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CCMI in the News
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Appeals Court Finds Evidence of Material False Labeling by Saks Fifth Avenue, Harve Benard, Ltd., and Filenes Basement
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BOSTON,
APRIL 2, 2002--Yesterday afternoon, a federal appeals court ruled in favor
of the Cashmere and Camel Hair Manufacturers' Institute ("CCMI") and one
of its members, L.W. Packard & Co., concerning their claims of false
advertising against Saks Fifth Avenue, Harve Benard, Ltd., and Filenes Basement
in connection the sale of purported "cashmere blend" garments by those parties.
Among other things, the Court agreed with CCMI's and Packard's legal
argument that the defendants’ representations about their products were material,
and could be deemed literally false "by necessary implication" even though
the defendants had argued that, at worst, the statements were only misleading.
The Court also held that there was evidence of intentional and directly false
mislabeling by these defendants, and that the evidence CCMI and Packard had
presented on these issues was legally sufficient to present valid federal
claims for both injunctive relief and damages under the so-called Lanham
Act, 15 U.S.C. 1125, the federal false advertising statute. In its opinion,
the Court exhaustively reviewed what it called the "elaborate and intricate
statutory requirements" in this area, and provided much needed guidance on
the correct interpretation and application of those requirements.
CCMI and Packard were represented in the case by Robert J. Kaler, Esq. of the law firm of Gadsby Hannah LLP, Boston, MA.
Karl
Spilhaus, President of CCMI said, “The decision amounts to a stunning victory
for the forces of truth in labeling and fair competition in the market for
luxury fiber goods. For years, L.W. Packard and the Institute have been
fighting a battle with this manufacturer and its retail customers over the
sale of low-priced women’s blazers purported to contain from 10-20% cashmere
which reliable laboratory reports showed contained virtually no cashmere,
and recycled fiber.
“Consumers and legitimate producers of luxury
fiber products have the right to be protected from this kind of blatant fraud.
The Appeals Court strongly reaffirmed that right today.”
The lawsuit
brought by CCMI and L.W. Packard in 1996 will now be remanded for a jury
trial on the mislabeling issue, and to determine the extent of L.W. Packard’s
damages from the sale of these garments. Packard claims that its sales of
legitimate cashmere blend fabric were damaged significantly by the mislabeling
of these garments, which were manufactured in Eastern Europe and the Far
East from fabric originating in the Prato area of Italy. Both Harve Benard
and Saks Fifth Avenue have previously admitted that, although they were not
labeled as such, the garments contained recycled fiber, which is qualitatively
inferior to new fibers.
Mr. Spilhaus noted, “We and the FTC have been
actively policing cashmere products during the six years since this lawsuit
was first brought and, to be sure, we’ve had our share of victories in the
war against mislabeling. But yesterday’s U. S. Court of Appeals decision
marks the first time in 15 years that the courts have handed down a major
ruling against mislabeled cashmere garments.
“This decision also dispels
the widely-held myth that only garments labeled ‘pure cashmere’ are going
to be scrutinized for mislabeling. Retailers, garment makers and mills should
realize that the stakes are higher than ever for cheaters who trade in mislabeled
cashmere products, even products purporting to have 10-20% cashmere.
“This
decision is also important because it focuses attention on Prato, Italy,
where, for generations, mills have been using ground-up rags to manufacture
recycled cashmere fabrics. Their recycled fabrics never contain pure cashmere
and rarely contain the labeled percentage of fibers.”
A copy of the
decision is available from the CCMI office in Boston, 6 Beacon Street, Suite
1125, Boston, MA 02108, email: info@cashmere.org
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