# Opposition — Warner-Lambert Co. v. Federal Trade Commission

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_0204%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition
- **Published:** January 1, 1978
- **Citation:** 435 U.S. 950

## Text

Supreme Cou

No. 77-855 | FB 8

rt, U.S,

FILED

1978

, JR., CLERK

Gu the Supreme Court of the Gnited States

OcroBER TERM, 1977

WaARNER-LAMBERT COMPANY, PETITIONER
Vv.
FEepeRAL TRADE COMMISSION

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA
CIRCUIT

BRIEF FOR THE FEDERAL TRADE COMMISSION IN OPPOSITION

WADE H. McCREE, JR.,
Solicitor General,
JOHN H. SHENEFIELD,
Assistant Attorney General,
BARRY GROSSMAN,
ANDREA LIMMER,
Attorneys,
Department of Justice,
Washington, D.C. 205380.
MICHAEL N. SOHN,
General Counsel,
GERALD P. NORTON, J
Deputy General Counsel,
W. DENNIS CROSS,
Assistant General Counsel,
JEROLD D. CUMMINS,
Attorney,
Federal Trade Commission,
Washington, D.C. 20580.

Page
EE Ne Aen Ie 1
GI ctintiasenadnennsensanetbennneesendwenennen 1
EY ITI icsnineeerenendeniceenerenntnimeendidrenediniedneniomemiieet 1
TET mitnenndmncemendnneennaemimamedaee 2
GREE ‘etmncdemeadedaumnionesnnatsunnnaneenee 8
A eR CAL Ie 21
CITATIONS
Cases :"
Ail: State Industries v. Federal Trade iaeaiieaiin 423
F. 2d 423, certiorari denied, 400 U.S, 828___.--.--- 1]
Bateman Bracelet Corp. y. Federal Trade Commission,
325 F, 2d 1012, certiorari denied, 377 U.S. 923.._--- 11
Bates vy. State Bar of ashen, No. 76-316, decided
PURO Wh, WUC cccccctcntrescotoendnsccccesccces 12, 15
Bowman Transportation, Inc. vy. Arkunsas-Best
Freight Syatem, Inc., 419 U.S. 281...2.-+.--.---.- 20
Federal Trade Commission v. Algoma Lumber Co
. Be Wet Setecadadgecncusdnbonsssceminetcssen 13
» Federal Trade Commission v. Colgate-Palmolive Co.,
SY ere aii 9,11
Federal Trade Commission v. National Lead Co., 352
We Glanbtenenessnmasnseeeneedaednnaine 9
Federal Trade Commission vy. Ruberoid Co., 343 U.S
GP anmenscnganeageccsnentionsslenannne 9
Feil vy. Federal Trade Commission, 235 F. 2d 879__--- 13
Interstate Commerce Commission v. Jersey City, 322
Weed Girenencnnncwewssncnstibeainegsaneenpeseneus 20
Jacob Siegel Co. v. Federal Trade Commission, 327
We Gennccncuccensuncecenewscesssseecenneses 9-10
J. B. Williams Co. v. Federal Trade Commission, 381
FF. £8 Gib ccencennrennaiepeneccoucetevasssuesce 13
Keele Hair & Scalp Specialists, Inc. v. Federal Trade
OLS 13

Kerran v. Federal Trade Commission, 265 F. 2d 246,
certiorari denied sub nom. Double Eagle Refining
Co. vy. Federal Trade Commission, 361 U.S. 818____- 11

Bo)

BEST COPY AVAILABLE

Il

Cases—Continued
National Commission on Egg Nutrition, 88 F.T.C, 89,
affirmed as modified sub nom. National Commission
on Eyg Nutrition y. Federal Trade Commission, C.A.
7, No. 76-1969, decided November 29, 1977, supple- page

mental opinion issued, January 23, 1978----------- 14
Pan American World Airways, Inc. v. United States,

es 9
Reilly v. Pinkus, 338 U.S. 269---------------------- 13
Royal Baking Powder Co. y. Federal Trade Commis-

sion, 218 F. 2d 744.----------------------------- 11
Virginia State Board of Pharmacy v. Virginia Citi-

zens Consumer Council, Inc., 425 U.S. 748------ 12, 15, 17

Waltham Precision Instrument Co., 61 F-T.C. 1087,
affirmed, 327 F. 2d 427, certiorari denied, 377 U.S.

—— 11
Waltham Watch Co. v. Federal Trade Commission, 318

F. 2d 28, certiorari denied, 375 U.S. 944-_--------.- 11
Ward Laboratories, Inc. v. Federal Trade Commission,

276 F. 2d 952, certiorari denied, 364 U.S. 827------- 13

Young v. American Mini Theatres, Inc.,427U.S.530--- 15

Constitution, statutes and regulations :
United States Constitution, First Amendment_-_--_-_--- 7,
12, 14, 15, 17

Federal Trade Commission Act, 38 Stat. 719, as
amended, 15 U.S.C. (1970 ed. and Supp. V) 45:

Section 5(b), 15 U.S.C. (1970 ed.) 45(b) --------- 10, 21
Section 19, 15 U.S.C. (Supp. V) 57b(e) ---------- 10
21 C.F.R. 330.10(a) (5) (ili) ------------------------ 19
21 C.F.R. 331.10(a) (6) (i1) ------------------------- 19
Miscellaneous :
40 Fed. Reg. 52631 (1975) -------------------------- 19
41 Fed. Reg. 38312 (1976) -------------------------- 5
HLR. Conf. Rep. No. 93-1606, 93d Cong., 2d Sess.
ee 10
Note. “Corrective Advertising Orders” of the Federal
Trale Commission, 85 Harv. L. Rev. 477 (1971) ----- 10

ee

Gn the Supreme Court of the United States

OctoBER TERM, 1977

No. 77-855

WaRNER-LAMBERT COMPANY, PETITIONER

Vv. °
FEepERAL TRapE CoMMISSION

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR T ;
caneee HE DISTRIUT OF COLUMBIA

BRIEF FOR THE FEDERAL TRADE COMMISSION IN OPPOSITION

OPINIONS BELOW

‘The opinion of the court of appeals (Pet. App. 5la-
86a) and its supplemental opinion on petition for re-
hearing (Pet. App. 87a-94a) are reported at 562 F
2d 749. The decision and order of the Federal Trade

Commission (Pet. App. la-47a) are re
; . rted
F.T.C. 1598. a i
JURISDICTION

The judgment of the court of appeals was entered
on August 2, 1977. Timely petitions for rehearing were
denied on September 14, 1977 (Pet. App. 95a-97a)

(1)

2

The petition for a writ of certiorari was filed on De-
cember 13, 1977. The jurisdiction of this Court 1s in-

voked under 28 U.S.C. 1254(1).
QUESTIONS PRESENTED

1. Whether the Federal Trade Commission is au-
thorized by statute to require advertisers that have
been found to have engaged in false or deceptive ad-
vertising to include corrective statements in future
advertisements.

2. If so, whether the Conimission properly exercised
its authority on the particular facts of this case.

3. Whether the court of appeals abused its discre-
tion in declining to remand the case to the Commission
for its consideration of a Food and Drug Administra-
tion advisory panel report.

STATEMENT

Since its introduction in 1879, Listerine Antiseptic
Mouthwash (“Listerine”) has been represented as be-
ing beneficial for the treatment of colds and sore
throats (J.A. 2819-2820).' Petitioner Warner-Lam-
bert Company, which manufactures and sells Listerine,
has spent approximately $10 million annually adver-
tising Listerine; the advertisements frequently
stressed that Listerine prevents or ameliorates colds
and cold symptoms (J.A. 490-492, 2817). Listerine’s
major competitors have made no such claims (J.A.
900). In 1972 sales of Listerine accounted for ap-

1“J.A.” refers to the Joint Appendix filed in the court of
appeals.

es re ee

3

proximately 50 percent of the nearly $200 million
mouthwash market (J.A. 491, 2817).

The Federal Trade Commission issued an admini-
strative complaint charging that Warner-Lambert’s
representations * that Listerine would cure, prevent
or ameliorate colds, sore throats and their symptoms
were false and misleading (J.A. 3-13). After exten-
sive hearings the administrative law judge found that
Warner-Lambert’s representations were false (J.A.
503-562). He recommended that Warner-Lambert be
ordered to cease and desist from making such repre-
sentations in advertising and labeling and to include
in all Listerine advertising (if any) for the next two
years the corrective disclaimer that: “Contrary to
prior advertising of Listerine, Listerine will not pre-
vent or cure colds or sore throats, and Listerine will!
not be beneficial in the treatment of cold symptoms or
sore throats’’ (J.A. 586-589).

The Commission substantially adopted the adminis-
trative law judge’s factual findings and order. It found
that Warner-Lambert’s advertisements had created
false beliefs, which are likely to continue to exist and
influence decisions to purchase Listerine, and that
despite any discontinuance of the misrepresentations
a substantial proportion of the consuming public
would retain such false beliefs “well into the 1980’s"’

* Not only Listerine’s advertisements but also its labels repre-
sented that the product was efficacious for the treatment of colds
and sore throats. A typical Listerine label and package carried
the statement : “For * * * Colds and resultant Sore Throats” (Pet.
App. 6a). .

4

(Pet. App. 26a-31a).’ The Commission concluded that
“the continued sale of a product under false pretenses
is itself a violation of the FTC Act, which, in the case
of lingering false beliefs created by discontinued ad-
vertisements, can be remedied only by dispelling the
false belief” (Pet. App. 26a; footnote omitted).
The Commission concluded that a “corrective advcr-
tising” disclosure order is “essential” to dispel the lin-
gering effects of years of false advertising and re-

*The continuing association in the public’s perception of
“Listerine” with the prevention and mitigation of “colds” was
demonstrated in market surveys. The court of appeals summarized
the evidence as follows (Pet. App. 74a-75a n. 65):

“The Commission used the results of a series of market surveys
known as ‘Product Q" reports on the ‘Mouthwash Market.’ The
surveys were conducted by petitioner for its own purposes from
1963 to 1971. According to petitioner’s own advertising agency,
‘Product Q is ideally suited to provide guidance in such vital
areas as * * * [hJow successful are the current advertising cam-
paigns of different brands on awareness, recall, attitudes and
sales?’ JA 2785-2786. The surveys showed that about 70%
of the consumers questioned recalled ‘effective for colds and sore
throats’ as a main theme of Listerine advertising. During the
summer, when no cold claims had been broadcast for about six
months, the percentage fell to only 64%; ie., the recall of
cold claims after six months of silence was very substantial. The
surveys also showed that about 60% of consumers questione:|
believed Listerine was ‘one of the best’ mouthwashes for the
quality ‘effective against colds and sore throats.’” JA 568-580.

“The Commission also relied on the testimony of two experts in
the field of consumer marketing surveys. Dr. Bass testified that

cold efficacy belief levels would continue at about 60% for

two years after colds advertising ceased and would remain high
after five years. JA 1591-1592, 1617. Dr. Rossi testified that col]

eflicacy beliefs would decline at no greater a rate than 5% per

year.” JA 1522, 1556-1559.

5

lated misrepresentations (Pet. App. 3la-34a). The
Commission ordered Warner-Lambert to include, in
approximately $10 million of Listerine advertising
(if it chooses to advertise), the following statement
(Pet. App. 46a): *

Contrary to prior advertising, Listerine will
not help prevent colds or sore throats or lessen
their severity.

Warner-Lambert requested the Commission to re-
open its proceedings to consider a draft report issued
in February 1976 by an advisory panel of the Food
and Drug Administration. The advisory panel, estab-
lished to review over-the-counter cough and cold prep-
arations, had dealt with some of the active ingredients
of Listerine (J.A. 922-938). Warner-Lambert did not,
however, contend that the advisory panel had consid-
ered evidence that was unavailable to the Commis-
sion. The Commission denied the petition to reopen,
stating that the draft report had not been adopted by
the Food and Drug Administration and that it had
not found Listerine’s ingredients to be effective for
colds (Pet. App. 49a).°

*The Commission’s statement does not refer to Warner-
Lambert’s “cure” claims, because “the record does not demon-
strate that consumers hold cure beliefs” (Pet. App. 32a n, 29).

* While the case was pending before the court of appeals, the
advisory panel issued its final recommendations to the Commis-
sioner of the Food and Drug Administration. See 41 Fed. Reg.
38312 (1976). Warner-Lambert requested the court to remand
the case to allow it to present additional evidence to the Com-
mission concerning the panel’s recommendation. Tie court of ap-
peals denied the application (Pet, App. 50a). The panel later
dealt with the question fully (id. at 57a-60a).

6

A divided panel of the court of appeals affirmed
the Commission's order. The court first held that the
Commission's finding that Listerine is ineffective for
the treatment of colds and sore throats is supported
by substantial evidence (Pet. App. 54a-60a). It
pointed out that Listerine’s active ingredients kill
only germs (bacteria), whereas colds are caused by
viruses, and that Listerine’s active ingredients do not
reach the loci of cold infections in therapeutic quan-
tities. The court also concluded that there was no
need for the Commission to reopen its proceedings to
consider the report of the Food and Drug Adminis-
tration advisory committee. Nothing in the draft re-
port undermined any of the Commission’s findings,
the court observed, and the report had not, in any
event, been approved by the Food and Drug Adminis-
tration.

The court also held that the Commission has the
statutory authority to order corrective advertising
because its “cease and desist’? power comprises,
aniong other things, the power to prevent advertisers
from capitalizing on a reputation that was based on
false or misleading advertisements in the past (Pet.
App. 60a-G4a, 66a-7la). The court then sustained
the corrective disclosure as an appropriate exercise of
the Commission’s authority (id. at 72a-T7a)-* '

® The court modified the order by striking the preamble “[e ]on-
trary to prior advertising” (Pet. App. Tha~16a). The Commission
disagrees with this modification, and it has filed a conditional
cross-petition for a writ of certiorari, seeking review of the modi-
fication in the event that the Court should grant Warner-Iambert's
petition.

A

7

Judge Robb dissented (Pet. App. 78a-86a). He
would have held that the Commission does not have
the authority to require corrective disclosures in
future advertisements. He agreed with the majority,
however, that the advertisements for Listerine were
false and deceptive and that the Commission was not
required to reopen its proceedings.

Warner-Lambert’s petition for rehearing argued,
among other things, that the required disclosure of
Listerine’s ineffectiveness violated the First Amend-
ment. The court of appeals issued a supplemental
opinion (Pet. App. 87a-93a), pointing out that gov-
ernmental bodies may regulate advertising to ensure
that it is not false and deceptive. It explained (id. at
89a-90a) : “The Commission is not regulating truth-
ful speech protected by the First Amendment, but is
merely requiring certain statements which, if not
present in current and future advertisements, would
render those advertisements themselves part of a
continuing deception of the public.”

‘ The court recognized that on some occasions a re-
quirement of corrective statements might “chill’’
speech, but it thought that the predominant effect
would be to chill false or misleading speech. It con-
cluded (id. at 90a): “whatever incremental chill is
caused by a corrective advertising order beyond that
which would result from a cease and desist order may
well be necessary if the interest of consumers in
truthful information is to be served at all. Otherwise,
advertisers remain free to misrepresent their prod-
ucts to the public, knowing full well that even if the

255-126—78—-2

———E

[Commission] chooses to prosecute they will be re-
quired only to cease an advertising compaign which
by that point will, in all likelihood, have served its
purpose by deceiving the public and already been re-
placed.”’ Finally, the court concluded that the corree-
tive disclaimer is the “least restrictive means” (td.
at 92a) of protecting the public from the continuing
effects of Warner-Lambert’s past deception.

ARGUMENT

This case is, as Warner-Lambert concedes (Pet.
5, 14, 15), one of first impression. 'There is no conflict
among the courts of appeals concerning either the
statutory authority for or the constitutionality of
requirements of “corrective advertising.” The facts
of this case provide compelling justification for the
corrective advertising the Commission ordered, and
the court of appeals correctly upheld the agency’s
authority to provide that relief.

1. The Commission found, and the court of appeals
agreed, that Warner-Lambert’s representations in ad-
vertisements and labels that Listerine is effective for
the treatment of colds and resultant sore throats were
false and misleading. Warner-Lambert does not
challenge those conclusions here. The Commission also
found, and again the court of appeals agreed, that the
continuing sale of Listerine amounts to capitalization
on the erroneous beliefs engendered by the prior false
and misleading advertising (Pet. App. 26a, 87a-92a).
Petitioner does not challenge those conclusions either.
Consequently, as the case comes to this Court, the

ee es seen se

9

only question is whether the Commission may take the
steps that it found, and the court of appeals agreed,
were the “‘least restrictive means” (Pet. App. 92a) es-
sential to prevent Warner-Lambert from capitalizing
in the future on beliefs it produced by prior deception.

Warner-Lambert contends that the Commisison may
not, because, Warner-Lambert argues (Pet. 23-24),
the Commission’s authority to issue “cease and de-
sist” orders does not include the authority to require
advertisers to undo the consequences of their misdeeds.
But this Court has held many times that the Commis-
sion’s “cease and desist” powers afford it ample
authority to impose requirements that it reasonably
believes are appropriate to overcome the past mis-
conduct.’ The Commission’s “cease and desist” powers
similarly authorize it to require corrective statements
in future advertising that Warner-Lambert uses,
where capitalization on the lingering beliefs about
Listerine would constitute renewed deception. The
relief ordered by the Commission “has [a] reasonable

relation to the unlawful practices found to exist”

(Jacob Siegel Co. y. Federal Trade Commission, 327

* See, e.g., Pan American World Airways, Inc, v. United States,
371 U.S, 296, 311-313 and nn. 17 & 18; Federal T’'rade Commission
v. Colgate-Palmolive Co., 380 U.S. 374, 395 (ban on misleading
advertising of “any product,” not only the products involved in
the case) ; Federal Trade Commission v. National Lead Co., 352
U.S. 419, 429-430 (ban on zone delivered pricing system) ; Federal
Trade Commission vy. Ruberoid Co., 343 U.S. 457, 470, 473 (“If the
Commission is to attain the objectives Congress envisioned, it
cannot be required to confine its road block to the narrow lane
the transgressor has traveled”). _

10

U.S. 608, 612-613) and thus was within the Commis-
sion’s authority.” Section 5(b) of the Federal Trade
Commission Act, 38 Stat. 719, 15 U.S.C. (1970 ed.)
45(b), gives the Commission the authority to stop any
person from “using” an unfair practice, and it was
proper for the Commission to conclude that future
advertisements and sales of Listerine without a dis-
claimer amount to a continued “use” of past deception.

Petitioner’s reliance on the legislative history of
the Commission’s statutes is unwarranted. The fact
that Congress chose not to give the Commission the
power to impose civil or criminal penalties is simply
irrelevant to the question whether the Commission
may require an advertiser to undo in future advertis-
ing what it has improperly done in past advertising
and to refrain from capitalizing on its misrepresen-
tations.

The 1975 legislation to which Warner-Lambert
refers expressly states that Congress did not affeet in
any way the Commission’s power under existing
statutes.” The Commission has exereised for many

* Warner-Lambert contends, in effect, that it may use deceptive
advertising and continue to reap the benefits of the deception
during the pendency of enforcement proceedings and even after
an order is issued, knowing that the order would at most require
it to “go, and sin no more.” The ineffectiveness of such a remedy
might encourage manufacturers to take a “free bite at the apple.”
See Note, “Corrective Advertising Orders” of the Federal Trade
Commission, 85 Harv. L. Rev. 477, 482-483 (1971).

* See 15 U.S.C. (Supp. V) 57b(e). The conference report on the
legislation, which the court of appeals quoted at Pet. App, 64a
but which Warner-Lambert ignores, also stated that the legislation
had nothing to do with the Commission’s existing power, See H.R.
Conf. Rep. No. 93-1606, 93d Cong., 2d Sess, 42 (1975).

|

jl

11

decades the power to require the correction of false
impressions produced by advertising. As the court of
appeals observed, the term “corrective advertising”
may be new, “but the concept is well established”
(Pet. App. 66a). The Commission's longstanding
interpretation of the statute it administers, an inter-

2° For example, courts have uphe!d orders requiring corrective
language to be used in connection with trade names (in advertis-
ing or otherwise) where consumer beliefs associated with products
sold under the trade name and instilled through years of adver-
tising have become misleading because of changes in the product.
See Royal Baking Powder Co. v. Federal Trade Commission, 281
Fed. 744, 753 (C.A. 2); Waltham Watch Co. v. Federal Trade
Commission, 318 F. 2d 28 (C.A. 7), certiorari denied, 375 U.S.
944. See also Waltham Precision Instrument Co., 61 F.T.C. 1027,
1049, affirmed, 327 F. 2d 427 (C.A. 7), certiorari denied, 377 U.S.
992. Similarly, numerous decisions have upheld orders requiring
affirmative disclosures intended to impart material information to
the prospective purchaser (rather than to remove deception from
an ongoing advertising theme), on the ground that it is an unfair
or deceptive practice for the seller to fail to correct erroneous
material assumptions about a seller’s product, even though the
seller never affirmatively misrepresented its products. See Aerran
vy. Federal Trade Commission, 265 F. 2d 246 (C.A. 10), certiorari
denied sub nom. Double Eagle Refining Co. vy. Federal Trade Com-
mission, 361 U.S. 818 (requiring disclosure that oil has been re-
processed ) ; Baldwin Bracelet Corp. v. Federal Trade Commission,
325 F. 2d 1012 (C.A. D.C.), certiorari denied, 377 U.S. 923 (re-
quiring disclosure of country of origin of a manufactured prod-
uct) ; All-State Industries v. Federal Trade Commission, 423 F.2d
423 (C.A. 4), certiorari denied, 400 U.S. 828 (requiring disclosure
that buyer has certain rights). This line of authority was cited
with approval in Federal Trade Commission v, Colgate-Palmolive
Co., supra, 380 U.S. at 388-389, where this Court referred to the
practice as misrepresentation by concealment. If affirmative dis-
closure can be required to correct erroneously held beliefs that did
not arise from any affirmative misrepresentation of the seller, then
it must follow that the Commission may require corrective dis-
closure where erroneous beliefs were caused by the advertiser.

12

pretation left standing by Congress, is entitled to
substantial deference here. |

It makes no difference—cither to the question of
statutory authorization or to the question whether
the Commission has transgressed’ First Amendment
limitations—that Warner-Lambert may believe that
the truth of its previous representations is open to
good-faith dispute. The Conimission is authorized by
statute to ensure that the representations in advertise-
ments are truthful, and the First Amendment also
permits the Commission to scrutinize advertisements
for truth. See Bates v. State Bar of Arizona, No. 76-
316, decided June 27, 1977, slip op. 29-31; Virginia
State Board of Pharmacy v. Virginia Citizens Con-
sumer Council, Ine., 425 U.S. 748, 771-772. Someone
must decide where the truth lies, and the fact that
Warner-Lambert may believe that a statement is
truthful does not make it so.'' Contentions about mat-
ters of scientific fact are susceptible of proof or dis-
proof; once the Commission, supported by substantial
evidence, has found particular contentions to be inac-
curate, it should not matter whether persons reason-
ably could have believed the contrary. The most de-
ceptive statements may be those that reasonable per-
sons could think to be true, but which are false in faet.

There has been no finding in this case, however, that Warner-
Lambert believed in good faith that its representations concerning
Listerine were truthful. The court of appeals observed that the
record “could support” such a finding (Pet. App. 76a), but neither
the court nor the Commission so found. The court held that good
faith “is irrelevant to the need for corrective advertising in gen-
eral” (id. at 76a n. 20). We assume for present purposes, however,
that Warner-Lambert was acting in good faith.

13

The Commission found Warner-Lambert’s repre-
sentations to be false in fact. Many courts have held
that advertisers must accept such resolutions of dis-
puted questions. See, ¢.g., J.B. Williams Co. v. Fed-
eral Trade Commission, 381 F. 2d 884, 887-889 (C.A.
6); Keele Hair & Scalp Specialists, Inc. v. Federal
Trade Commission, 275 F. 2d 18 (C.A. 5); Feil v.
Federal Trade Commission, 285 F. 2d 879 (C.A. 9).
The advertiser’s good faith belief that the Commission
is wrong does not insulate it from remedial action;
otherwise the advertiser, rather than the Commission,
would have the last word on which product claims
are permissible and which are not. See Federal Trade
Commission v. Algoma Lumber Co., 291 U.S. 67, 81.
Cf. Reilly v. Pinkus, 338 U.S. 269, 276-277. “It is
indeed a rare case where medical experts are called
which does not involve disagreement” (Ward Labora-
tories, Inc. v. Federal Trade Commission, 276 F. 2d
952, 954 (C.A. 2), certiorari denied, 364 U.S. 827),
and there is no sound reason to confine the Commis-
sion’s power effectively to deal with untruthful or
misleading advertisements to the “rare case” in which
everyone (including the advertiser) agrees that the
advertiser’s claims are baseless.”

That the Commission might choose not to resolve a disputed
scientific or medica] issue in one case does not mean that its
authority to resolve such disputes in other cases is limited. Accord-
ingly, Warner-Lambert errs in arguing (Pet. 20-21) that the
decision here conflicts with the Commission’s own decision in

National Commission on Egg Nutrition, 88 F.T.C. 89, affirmed
as modified sub nom. National Commission on Eqg Nutrition v.

14

2. Warner-Lambert contends (Pet. 16-21) that the
Commission’s order violates the First Amendment

Federal Trade Commission, C.A. 7, No. 76-1969, decided November
29, 1977, supplemental opinion issued, January 23, 1978. The Com-
mission did not attempt there to resolve the unsettled scientific
question whether the intake of cholesterol is related to the incidence
of heart disease. The Commission had no need to do so; it found
it to be a deceptive practice to advertise that there was absolutely
no scientific evidence to show that eating eggs increases the risk
of heart disease, where recognized experts, based on reliable and
competent evidence, thought that there is such a connection.
Because its decision was not an endorsement of either side of the
scientific controversy, the Commission’s order did not prevent
the association from presenting to consumers its point of view
regarding the safety of eating eggs. provided that it also made
the statement that many medical experts believe increased con-
sumption of dietary cholesterol, including that in eggs, may
increase the risk of heart disease (88 F.T.C. at 203-205).

Although there were once conflicting beliefs about the cause of
the common cold, the record established that during the last 30
years research has proved that antibacterial agents of the sort
contained in Listerine cannot prevent or mitigate colds. It is un-
disputed that the common cold is caused by viruses, which, after
being inhaled into the nose, infect cells in the nasal pharynx.
Bacteria in the mouth play no role in the causation of colds; hence,
although an antiseptic such as Listerine perhaps “Kills Germs By
Millions on Contact” (as Listerine labels have stated and may
continue to state under the Commission’s order), this would have
no effect on the common cold. Nor would the ingredients of
Listerine have any significant therapeutic effect on symptoms of
colds, according to the evidence (J.A. 506-510). As for sore
throats, Listerine can provide only transient relief attributable to
the mechanical action of gargling rather than to the effects of
Listerine’s ingredients (.J.A. 506).

Petitioner's assertion that there is “genuine scientific contro-
versy” rests largely on the report of the Food and Drug Admin-
istration advisory group. This report, Warner-Lambert says,
found Listerine “likely to be effective for colds” (Pet. 11-12, 22).

15

because it requires an advertiser to make particula:
statements that it does not desire to make.

This Court’s recent cases have held that commercial
speech is protected by the First Amendment. But
the protection is not unqualified. Government may
regulate commercial advertisements to ensure their
truthfulness and to prevent deception. Bates v. State
Bar of Arizona, supra; Virginia State Board of
Pharmacy v. Virginia Citizens Consumer Council,
Inec., supra; Young v. American Mini Theatres, Inc.,
427 U.S. 50, 69 n. 31 (plurality opinion). Commercial
speech is engaged in for profit and is not easily
chilled; moreover, as here, questions about truth and
falsity can be resolved objectively. These special at-
tributes of commercial advertisements “make it ap-
propriate to require that a commercial message
appear in such a form, or include such additional
information, warnings and disclaimers, as are neces-
sary to prevent its being deceptive.” Virginia State
Board, supra, 425 U.S. at 772 n. 24 (emphasis added).

The Commission’s order at issue here is, as the
court of appeals held (Pet. App. 92a), the “least
restrictive means of achieving [the] substantial and
important governmental objective” of preventing de-
ception of consumers. Warner-Lambert’s prior ad-

The court of appeals, however, held that Warner-Lambert’s
Cacaseaatian “is not supported by the facts” (Pet. App. 59a n.
23). The agency advisory panel concluded only that the data it
reviewed—which did not include all the evidence before the Com-
mission (see note 16, infra)—were sufficient to demonstrate

whether the ingredients were effective and that further testing
was required.

16

vertisements have created a widespread belief:on the
part of the public that Listerine is effective as a
treatment of colds and sore throats. Unless Warner-
Lambert includes in future advertisements the lan-
guage specified by the Commission, Warner-Lambert
will continue to obtain benefits from its deception.
It makes little conceptual difference whether this
continued benefit is seen as the fruit of deception or
whether, instead, future advertisements without the
corrective disclaimers are seen as themselves decep-
tive.’ The point, in either case, is that the First
Amendment does not give advertisers a license to reap
the rewards of deceit. The Commission has prohibited
Warner-Lambert from making future representations
that Listerine is efficacious for colds. It is too late to
undo the sales of Listerine from prior years, and the
Commission did not require Warner-Lambert to make
reparations to those it deceived. But the truth need
not lie dormant, and the Commission properly re-
quired Warner-Lambert effectively to retract the
falsehood of its prior advertisements and to desist
from trading on the incorrect beliefs it created.

13 Warner-Lambert repeatedly asserts (Pet. 6, 14, 17) that the
Commission did not find that future advertising would itself be
deceptive unless it carried a disclaimer. This assertion is mislead-
ing. The Commission found (Pet. App. 26a) that future sales
of Listerine would be unfair and based on deception unless the
false beliefs were dispelled and, in light of this finding, it simply
had no occasion to pass on the administrative law judge’s addi-
tional finding that future Listerine “germ killer” advertisements
without a disclaimer would be misleading because they would
remind the public of past “cold” claims (see id. at 32a n. 28).

17

Warner-Lambert’s further contention (Pet. 18)
that the First Amendment prohibits the Commission
from compelling it to say something with which it does
not agree overlooks this Court’s statement in Virginia
State Board that the government may require adver-
tisers to disclose material facts even when they would
rather not do so.“ If petitioner were correct in this
regard, the Commission could cope with deceptive ad-
vertising only when the advertiser consented to the
remedy; this Court has never held that the Commis-
sion’s authority is so limited. Moreover, in proceedings
before the Commission, Warner-Lambert opposed a
suggestion that the required disclosure state that “the
Federal Trade Commission has found” that Listerine
is ineffective in the treatment of colds (J.A. 480-481).
The Commission thus has not required Warner-Lam-
bert to state the Commission’s findings as if it were

** Petitioner contends that the passage in note 24 of the Court's
opinion pertains only to disclosures necessary to make the adver-
tisement truthful within its four corners and not to disclosures
that correct misrepresentations in other advertisements. But there
is no reason to treat the government’s authority to ensure that
the stream of commercial information flows “cleanly as well as
freely” (425 U.S. at 772) so narrowly. The effects of advertising
campaigns may persist for years; the evidence of record shows
that Listerine’s advertisements have had lasting effects (see Pet.
App. 26a-31a). The ability to prevent deception should not be
circumscribed by the 60-second length of a television commercial.
If the Commission can require correct disclosure to follow 30
seconds after a misleading statement, it also should be able to
require disclosure several years later. To hold otherwise is to
allow advertisers to retain the benefits of deceit, since particular
advertisements or advertising campaigns almost always would
have run their course before the Commission could find that the
absence of a full disclosure had made them deceptive.

18

Warner-Lambert’s own belief; to the extent the lan-
guage in the Commission’s order has that appearance,
it does so at Warner-Lambert’s option. Nothing would
prevent Warner-Lambert from stating in advertise-
ments that the Commission, and not Warner-Lam-
bert, has determined that Listerine is useless as a cold
remedy.

3. Petitioner contends (Pet. 22) that the court of
appeals was required to remand the case to the Com-
mission and to instruct the Commission to accept evi-
dence concerning the ongoing Food and Drug Ad-
ministration proceedings. The court of appeals prop-
erly held, however, that the advisory panel’s report
has no significant bearing on this case (Pet. App.
5Ha-60a). It has not been adopted by the Commis-
sioner of the Food and Drug Administration; it is not
based on any evidence that Warner-Lambert has not
already presented to the Commission; and it “does
not, to any significant degree, contradict the Commis-
sion’s findings” (id. at 57a).

The advisory panel did not find, as Warner-
Lambert implies (Pet. 9), that Listerine as a mouth-
wash would “likely” be effective against colds:or their
symptoms. Rather, it concluded concerning each of
Listerine’s ingredients that (Pet. App. 58a-59a) :

there are no well-controlled studies document-
ing the effectiveness of [this ingredient] as an
fantitussive, expectorant, or nasal decon-
gestant |.

19

The panel recommended that each of Listerine’s active
ingredients should be placed in Category ITI, and
that Warner-Lambert and other producers should be
required to produce “[d]ata to demonstrate effective-
ness * * *” (Pet. App. 59a)."* As the court of appeals
stated, “[s]ince the FDA did not consider the exten-
sive record compiled in the FTC proceedings, its con-
clusion that there is insufficient data about the ingre-
dients of Listerine to justify classifying it as effective
or ineffective is not necessarily inconsistent with the

15 Under the Food and Drug Administration (FDA) regula-
tions, the placement of a product in Category ITI denotes that the
panel lacks evidence either to approve or to disapprove the elaims
for the product. See 21 C.F.R. 330.10(a) (5) (iii).

After the FDA panel report was placed on the public record, the
Commission’s Bureau of Consumer Protection filed comments with
FDA, submitting relevant excerpts from the adjudicative record
in this case and recommending, in view of the affirmative evidence
adduced in the Commission’s proceeding concerning the lack of
efficacy of Listerine for treatment of colds, that the FDA place
the active ingredients in Listerine, when used by a gargling
mechanism, in Category IT. Placement in Category II would mean
that a mouthwash similar to Listerine could not, under FDA
regulations, carry a label indicating that the product may be used
as treatment for cold symptoms (21 C.F.R. 331.10(a) (6) (ii) ).
The Commissioner of FDA has not yet acted on this recommenda-
tion.

Warner-Lambert incorrectly asserts (Pet. 8-9 n. 9) that under
the Commission’s “Proposed Rule Concerning Advertising for
Over-the-Counter Drugs” (40 Fed. Reg. 52631), the Commission
would proceed against advertising for over-the-counter drugs only
where the FDA has found the drug misbranded and has placed
it in Category II. This is incorrect. The rule applies to drugs in
Category II, but nothing in the proposed rule would limit Com-
mission action to such situations and, indeed, the rule is silent on
the proper treatment of drugs that the FDA finally places in Cate-

gory ITI.

20

FTC’s conclusion that Listerine’s advertising claims
are deceptive” (Pet. App. 59a-60a ).”"

The court of appeals’ refusal to remand the case to
the Commission for additional evidence is consistent
with this Court’s prior decisions. Bowman Transpor-
tation, Inc. vy. Arkansas-Best , Freight System, Inc.,
419 U.S. 281, 294-296; Interstate Commerce Commis-
sion v. Jersey City, 322.U.S. 503, 514-515. Administra-
tive proceedings must have an end, and the submission
of the advisory panel’s report is not a sufficient reason
to require the Commission to go through another
round of hearings.”

%* The evidence that was before the FDA panel fell far short
of the extensive evidence that was before the Commission. .The
record before the FDA advisory panel (which had the task of
analyzing some 180 ingredients used in as many as 50,000 products
(.J.A. 3121-8229) ), insofar as it deals with these ingredients in a
monthwash, was limited to the St. Barnabas study, a clinical study
of Listerine conducted by Warner-Lambert but assessed as worth-
less by experts who had examined the methodology Warner-
Tambert used in the study (J.A. 2207-2394). See generally Pet.
App. 38a—41a, 55a-56a, 58a n. 19.

The panel’s tentative report, published in February 1976, did
not refer to mouthwashes or the St. Barnabas study (J.A. 3090-
3803). As the court of appeals noted, it appears that the references
to the St. Barnabas study and to mouthwashes were included in
the report only as an afterthought, and then only at Warner-
Lambert’s urging (Pet. App. 58a). The minutes of the panel’s final
meeting state that “a letter was received concerning the fact that
no references were made in the report on a submission concerning
the use of volatile aromatics in mouthwashes for the symptomatic
relief of the common cold.” The panel voted to add to sections of
the report dealing with menthol, eucalyptol and thymol a para-
graph containing a reference to mouthwashes and the St. Barnabas
study (J.A. 3045-3046).

17 If the FDA eventually takes final action that Warner-Lambert
deems relevant to the continued validity or applicability of the
Commission’s decision and order, it may petition the Commission
for relief pursuant to 15 U.S.C. 45(b).

21
CONCLUSION

The petition for a writ of certiorari should be
denied.

Respectfully submitted.

Wave H. McCrer. Jr.,
Solicitor General.

JOHN Fi. SHENEFIELD,

Assistan: Attorney General.

Barry Grossman,

ANDREA LIMMER,

Atto "
MICHAEL N. Soun, as

General Counsel,
GERALD P. Norton,

Deputy General Counsel,
W. Dennis Cross,

Assistant General Counsel,
JeEROLD D. Cummins,

Attorney,

Federal Trade Commission.

FEesruary 1978.

©.S. GOVERN WENT PRINTING OFFicE: i978

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_0204%3A2. Public record. Not legal advice.