Westpoint-Stevens Inc. Agrees To Pay Civil Penalty of $360,000

WestPoint-Stevens Inc. has agreed to settle Federal Trade Commission charges that it violated the Textile Fiber Products Identification Act (Textile Act) by misbranding the sheets and towels it manufactures and sells as to the amount of Pima cotton -- a premium type of cotton -- contained in these products. In addition, the FTC charged that the company furnished a false guaranty, stating that its textile products were not misbranded under the Textile Act. WestPoint-Stevens, a Georgia-based company and one of the biggest textile manufacturers in the United States, has agreed to pay a civil penalty of $360,000 to settle these charges. This is the largest civil penalty ever obtained in a Textile Act case.

A new brochure issued today by the FTC offers businesses guidance on the advertising and selling of cotton products.

Under the Textile Act, a textile fiber product is misbranded if it is falsely or deceptively stamped, tagged, labeled, invoiced or otherwise identified as to the name or amount of the constituent fibers contained in the product. According to the FTC's complaint detailing the charges, WestPoint-Stevens violated the Textile Act when it manufactured, advertised, and sold sheets and towels with labels and package inserts indicating that the products were made entirely of Pima cotton, when, in fact, the products were composed of only a range of 6% to 50% Pima cotton.

In addition, according to the FTC, in February 1994, WestPoint-Stevens filed a continuing guaranty with the FTC, stating that all products it shipped or delivered would not be misbranded or falsely or deceptively invoiced or advertised within the meaning of the Textile Act. The complaint charges that WestPoint-Stevens furnished a false guaranty when it sold towels and sheets with labels and package inserts indicating that the products were made entirely of Pima cotton, when, in fact, they were composed of only a range of 6% to 50% Pima cotton.

The proposed settlement of these charges would permanently prohibit WestPoint-Stevens from falsely or deceptively stamping, tagging, labeling, invoicing or otherwise identifying a textile product as to the name or amount of its constituent fibers, within the meaning of the Textile Act. In addition, the company would be prohibited from furnishing a false guaranty that its textile fiber products were not misbranded or falsely or deceptively invoiced or advertised. WestPoint-Stevens also would pay a civil penalty in the amount of $360,000 as part of the proposed settlement. In addition, the settlement would require the company to maintain and make available to the FTC business records demonstrating its compliance with the terms of the settlement.

The Department of Justice filed the complaint and proposed consent decree this morning in the U.S. District Court for the Central District of California, in Los Angeles, on behalf of the FTC. The consent decree is subject to approval by the court. The Commission vote to refer the complaint and proposed settlement to the Department of Justice for filing was 5-0.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the judge.

Copies of the new facts for businesses are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. Copies of the complaint and proposed consent decree will be available shortly from the same address. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov (no period).

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(Civil Action No.: 97-4085 LGB)
(FTC File No. 962 3077)