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Cashmere and Camel Hair Manufacturers Institute

CCMI in the News

 

Appeals Court Finds Evidence of Material False Labeling by Saks Fifth Avenue, Harve Benard, Ltd., and Filenes Basement
 

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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