Petition — National Commission on Egg Nutrition v. Federal Trade Commission
Supreme Court brief1978
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~ Supreme Court, U. &
FILED
APR 28 1978
MICHAEL RODAK, JR., CL
No. 7771551
3n the
Supreme Court of the Anited States
Octroser Term, 1977
NATIONAL COMMISSION ON EGG NUTRITION,
Petitioner,
vs.
FEDERAL TRADE COMMISSION,
Respondent.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
James L. Fox
Donatp P. CoLLeTon
Counsel for Petitioner.
Of Counsel:
Moses, Grsnons, ABRAMSON
& Fox
One East Wacker Drive
Chicago, Illinois 60601
(312) 644-8500
ann esis aletionteiaisieneieiinsiidaeteaniaieaadisaeaemiideaa ema
The Scheffer Press, Inc.—(312) 263-6850
INDEX
PAGE
Citations of Opinion Below ............:.c.cccccscsscssssssssessssesseees 1
Fh Ge I ccerenectateseciteincitniibceciaisttiniinion 2
ED SINE - crcinisassccnnitnenerereestecrininintnacisdcseninntieginnes 2
Constitutional and Statutory Provisions Involved ...... 3
Ie WEE TUE CD cicercscesssinsinibnttoteidinsctnasetemeniionienns 3
Reasons for Granting the Wit .0...........:cccccccseesseeeeees 9
Be ID. cassnceseocensreeechsinesitcseniatidiiniotdnbiaenidicantnnbateas 10
ee nn eliaiedisiiadietieadiiaindaddadainids 21
UNNI. sseensaisnisshiciansstdesebbsceaiioceiteemeiehiadiailiibdadabasinlaneanadeiabiaienei 28
Appendix
Opinion of the Federal Trade Commission,
TE, Cts - NEY ‘eeiicapsicetcasdtenrserrieciastdethiiaiaicetdarcbiciaiataniliains la
Opinion of the United States Court of Appeals
for the Seventh Cireuit, As Amended December
6, 1977, Supplemental Opinion FTC’s Motion
to Amend Judgment January 23, 1978 ............. 47a
Chicago Sun Times publication
SR Uk HIE chitdsdiisnseddiebsosteresucinienteinanitinibenbinceensse 7la
Chicago Daily News
SE TE SENUETT diideiniccissenneceesernicacininianasininedenes 72a
Chicago Daily News
SEE Tei EEE. ceneradceavsebdieaipatincenlindecbenbinidtensiebdinenintlicditi 74a
Chicago Tribune
SEITEN? TEL: TITIES sctestsieiceisicbniniepiiacliaisibitdsantenbicastiiaiamans 76a
II TID accsiansetecesntsecninnermnnseiiinienintedatanossicnensies 78a
ii
PAGE
Cases Crrep
Bates vy. State Bar of Arizona, ........ Us” sdebitiens 53
s & F © * ff) 5 een 12,19
Beneficial Corp. and Beneficial Managements Corp. v.
FTC, 542 F.2d 611, 619-620 (3rd Cir. 1976), cert.
denied, 430 U.S. 983 (1977) ......cccsccsesseeeees 10, 11, 16, 18, 21
Board of Education v. Barnette, 319 U.S. 624, 633-634
CIUENUET dncscnscseshessemetniltsaddiddemasiipatedeeesninctaddbunsibsanbetidianiiiainaisidants 20
Chrysler Corp. v. FTC, 561 F.2d 357, 364 (D.C. Cir.
ee oe eee ee ae 11,19
FTC vy. Colgate-Palmolwe Co., 380 U.S. 374, 392
STSTETEED: ssesitinhdeciipniiesceciiiieenanieie itemise dunniaieasaiakteamldtnaaiencdiaden 10, 22
FTC v. Henry Brach & Co., 368 U.S. 360, 364 (1962) 10
FTC v. National Commission on Egg Nutrition, 517
F.2d 485, 490 (7th Cir. 1975), cert. denied, 426 U.S.
ST GUEIITTIED sctasesitcincinblccdbiiniencelanhaondasisteiealitamlackaiilaaiainiaisieedae 22
FTC y. Ruberoid Co., 343 U.S. 470, 473 (1952)... 10
FTC vy. Simeon Management Corp., 532 F.2d 708
EN TENG SITY Susciinaseaicticstbisenietiasdanigtihicusaeimesmedeeininiiains 15, 16
FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 246-
SOUT SEMI" ‘issnivicnnrebinasbetinndatiidialiiniekestubieiibiascegiet aaa, 17
Grove Laboratories vy. FTC, 418 F.2d 489, 496-497
RENEE Ae eT SA Rea Oe 11
ITT Continental Baking Co., Inc. v. FTC, 532 F.2d
SS * Ff SS eee 11
Jacob Siegel Co. v. FTC, 327 U.S. 608, 613 (1946) ...... 10
Keytshian v. Board of Regents of New York, 385 U.S.
I I NE ce 21
Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241,
NRO Ee Sea OLS SER INO 20
NAACP vy. Button, 371 U.S, 415, 432 (1963) vss 27
iii
PAGE
National Dairy Products Corp. v. FTC, 412 F.2d 605,
GEB-GBE (Tt Chr. 19GB) ecececsscccveesscesecssssesseescvscsscscossssees 11
NLRB v. Pipefitters, 429 U.S. 507, 522 (1977) ........... 17
SEC v. Chenery Corp., 318 U.S. 80 (1943) .....cccccceees 17
Spiegel, Inc. v. FTC, 411 F.2d 481, 484-485 0.0... ccessees 11
U.S. v. National Society of Professional Engineers,
(D.C. Cir.), cert. granted, ........ Wa aewess (1977) .... 20
Virginia State Board of Pharmacy v. Virginia Con-
sumer Council, Inc., 425 U.S. 748 (1976)... eee
I ld alii hadeleeiilidaaie 9, 10, 12, 16, 18, 19, 23
Warner-Lambert Co. v. FTC, 562 F.2d 749 (D.C.
Cir. 1977), cert. denied, ........ - fe \ = 12
Wooley v. Maynard, 430 U.S. 705, 714-717 (1977) ........ 20
Young v. American Mini Theaters, 427 U.S. 50, 68
ERED <csnsecssesdonietesveosmnannteneiodineneotinsmmsseneatesenteerenuienecenn 12
CONSTITUTIONAL PROVISIONS
AND
Sratutes CIrTep
First Amendment of the United States Constitution .... 3
Section 5(a)(1) of the Federal Trade Commission
pp 8 Ry | eevee . 68(a)
Section 12 of the Federal Trade Commission Act,
I A a stemneteinlitnaitentniiibe 70(a)
Bie | o> +
In THe
SUPREME COURT OF THE UNITED STATES
Ocroser Term, 1977
NATIONAL COMMISSION ON EGG NUTRITION,
Petitioner,
vs.
FEDERAL TRADE COMMISSION,
Respondent.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
To Tae Hownoraste Crier Justice or THe Uwnirep
Srates anp Tue Associate Justices or Tue Supreme Court
or Tue Unirep Srates:
Petitioner respectfully prays that a writ of certiorari
issue to review the judgment and opinion of the United
States Court of Appeals for the Seventh Circuit entered
November 29, 1977 and supplemented on January 23, 1978.
OPINIONS BELOW
After filing its complaint in this matter, the Federal
Trade Commission sought and was denied a temporary
injunction in the District Court pending the completion
—
of the administrative proceeding. The Court of Appeals
reversed. 517 F2d 485 (7th Cir. 1975), cert. denied, 426
U.S. 919 (1976). The opinion of the District Court has
not been reported officially but appears unofficially at
1975-1 CCH Tradecases 960,246 (N.D. Ill. 1974).
The decisions of the administrative law judge and the
Federal Trade Commission on the merits are reported
at 88 F.T.C. 84 (1976). The decision of the Seventh
Cireuit on appeal and the supplement thereto — the
subjects of this petition — are officially reported at 570
F2d 157 (7th Cir. 1978).
JURISDICTION
The Court of Appeals rendered its judgment and opin-
ion on November 29, 1977 and issued its supplemental
opinion on January 23, 1978. On February 18, 1978,
Mr. Justice Stevens extended the time in which petitioner
might file a writ for a petition of certiorari to and in-
cluding April 28, 1978. This petition is filed within the
time allowed. Jurisdiction of the Court is invoked under
28 U.S.C. §$1254(1). Jurisdiction of the Court of Appeals
was based on §5(c) of the Federal Trade Commission
Act, 15 U.S.C. $45(e).
QUESTIONS PRESENTED
(1) Whether the Court of Appeals abridged Petition-
er’s First Amendment rights and exceeded the remedial
powers under the Federal Trade Commission Act:
a) in forbidding all truthful, nondeceptive utterance on
the important public controversy about dietary cholesterol
and its possible relation to heart disease unless accom-
panied by judicially prescribed “corrective” statements:
b) in mandating an additional statement which seeks
—
to present as true the government’s opinion on the un-
settled diet-heart disease controversy when a more neutral
form of statement would remedy the evil found by the
Commission; and ¢) in mandating the use of additional
statements for “corrective” purposes for an unlimited
period of time.
(2) Whether the Court of Appeals abridged Peti-
tioner’s First Amendment rights in failing to delineate:
a) what speech must be accompanied by the forms of
additional statements it has mandated and b) what speech
may be uttered without any additional statement.
CONSTITUTIONAL AND
STATUTORY PROVISIONS INVOLVED
The First Amendment of the United States Constitu-
tion provides in relevant part:
“Congress shall make no law . . . abridging the free-
dom of speech, or of the press. .. .”
Sections 5(a)(1) and (ce) and 12 of the Federal Trade
Commission Act, 15 USC §45(a)(1) and 52 are set forth
in the Appendix.
STATEMENT OF THE CASE
Late in 1973 the National Commission on Egg Nutrition
(NCEN),' a not-for-profit corporation formed by five
members of the egg industry, published in the New York
Times and the Wall Street Journal what the Federal
Trade Commission (the Commission) found to be “the
honestly-held views” of NCEN members, App. 5a, that
‘This petition is also filed on behalf of Richard Weiner,
Ine., a co-respondent in the proceeding before the Com-
mission.
a
“there is no scientific evidence that eating eggs increases
the risk of heart disease.”** The Commission challenged
this and several ancillary statements in these publications
under the Federal Trade Commission Act (the Act).
An administrative proceeding followed in which the evi-
dence showed a division among reputable scientists on
the truth of NCEN’s principal statement, NCEN’s experts
testifying that the data offered against eggs would “not
convince anybody” that egg consumption was harmful
to health. App. 15a. On appeal, the Commission found
that “medical experts disagree” as to the relationship
of diet to heart disease. App. 20a. It “expressed no view
as to the merits” of the question, App. 38a, and declined
“to determine ... whose interpretation [of the research
regarding eggs and heart disease] . . . is superior.” App.
12a.
However, the Commission also found that NCEN’s
principal statement, expressed without qualification, might
* Hereafter referred to as NCEN’s principal statement.
*Petitioner’s publications do not raise the difficult
remedial questions surrounding long repeated misleading
advertising themes. See Warner-Lambert Co. v. FTC, 562
F.2d 749 (D.C. Cir. 1977), cert. denied, ........ el. concen
(1978). In this ease Petitioner’s principal statement
appeared in three issues each of the Wall Street Journal
and New York Times some four and one-half years ago
and was repeated by others in a few local papers during
the following six months. Aside from this, some point
of purchase material, a booklet and a display board,
used largely during the same period, the only repetition
given Petitioner’s principal statement has been in the
publications shown in the appendix published in Chicago
newspapers on January 9 and April 13 and 14, 1975.
The law judge found these publications “may warrant
First Amendment protection.” App. 60a.
ea la ly ll <A thle: tea ll ila encase Seie $a Na LN A A A NT GTS a A ie AR ~
oialiiids
also be interpreted to deny the existence of studies from
which qualified experts might reasonably hypothesize that
eating eggs does in fact increase the risk of heart disease.
App. 12a-13a, 17a-18a. The Commission concluded that
such an interpretation of NCEN’s principal statement
would be false and misleading and hence a violation of
the Act.* Id.
Notably, both the administrative law judge and the
Commission failed to predicate liability on several post
1973 publications, found also to make NCEN’s principal
statement, in which NCEN variously criticized govern-
mental action, App. 73a, 75a, reported the 1974 findings
of a panel of British experts on the subject of eggs and
heart disease, App. 7la-75a, and certain current research
findings and opinions in the diet-heart disease field. Jd.
The law judge said these materials “may warrant First
Amendment protection,” App. 60a, and the Commission
agreed, with the qualification that the materials are not
necessarily non-commercial. App. 40a-41a.
In its order the Commission enjoined NCEN from
making its principal statement when made unqualifiedly
but permitted it if accomplished by a disclosure that:
“many medical experts believe that existing evidence
indicates that increased consumption of dietary
cholesterol, including that in eggs, may increase the
risk of heart disease.” App. 45a.
More generally, the order forbade any representation
concerning the relationship between dietary cholesterol
and heart disease unless accompanied by the same dis-
*The Commission further found that the challenged
ancillary statements, most of which NCEN denied making
but whose falsity was not contested, violated the Act.
—
closure. Id. Further, the order forbade any statement
which represents as “insignificant” the available scientific
evidence that dietary cholesterol including that in eggs
may increase the risk of heart attack or misrepresents
the “amount” of scientific evidence that eating eggs
does not increase the risk of heart attack. 7d. Finally,
the order forbade the making of NCEN’s ancillary state-
ments. App. 43a-44a.
On appeal NCEN contended: (1) that the order was
unconstitutionally overbroad in that it forbade not solely
deceptive speech on eggs and heart disease but also a
wide range of truthful utterance on the subject unless
accompanied by governmentally mandated partisan state-
ment not required to forestall deception or misleading
connotation; and (2) that the order was unconstitution-
ally vague in failing adequately to delineate a) the cir-
cumstances under which NCEN’s principal statement
would be forbidden and, in light of the ruling of the law
judge and the Commission on NCEN’s post 1973 publica-
tions, App. 7la-75a, would not become a predicate for
a finding of violation; and b) how, in the face of an
admitted scientific controversy as to whether the data
offered against eggs are significant at all, NCEN was
to know when it was offending the injunction not to
represent the “insignificance” of anti-egg evidence and
not to misrepresent the “amount” of pro-egg evidence.
To illustrate its contentions of overbreadth and vagueness
of the order, NCEN attached to its appeal brief its most
current publication (dated January, 1976, App. 76a-77a)
and suggested that although it was plainly non-deceptive,
without further definition in the order no reasonable man
could determine whether it violated the order provisions.
ee ee ee
—
In its November 29, 1977 decision the Court of Appeals
addressed NCEN’s contention that truthful, non-mislead-
ing speech cannot be burdened under the circumstances
of this case by saying:
“(T jhe challenged condition on the right to make
an assertion that is not deceptive does not meet [the
constitutional test in that it] . . . would require
NCEN to argue the other side of the controversy,
thus interferring unnecessarily with the effective
presentation of the pro-egg position”. App. 62a-68a.
The court, however, then went on to prescribe a new form
of additional statement for use with nondeceptive speech
on the diet-heart subject, namely:
“that there is a controversy among the experts and
NCEN is presenting its side of that controversy.”
App. 68a.
The Commission-formulated statement was retained for
speech commenting on “the state of the available evidence
or information concerning the controversy.” Id.
Only in its January 23, 1978 Supplemental Opinion,
as NCEN continued to argue that on the record in this
ease truthful, non-misleading speech could not constitu-
tionally be conditioned on the making of any added
message, did the court intimate the basis for the order
overbreadth challenged by NCEN:
“we are entitled to asswme that . . . enough taint
[from NCEN’s conduct] remains to justify .. . cor-
rective advertising”. App. 64a.
The Court acknowledged it was making this assumption
even though the Commission had made no finding or
suggestion whatever regarding any continuing effect of
NCEN’s past statements with respect to future truthful
statements. Id.
—
The Court found NCEN’s vagueness contentions to be
without merit and hence did not disturb the Commission
order in this connection. App. 60a-62a. At tie same time,
however, the court declined to say whether NCEN’s post-
1973 publications are permissible under the order and
declined to give any guidance as to how, by or from what
NCEN was to determine what measure of significance
the Court had in mind in prohibiting representations
that evidence against eggs is “insignificant” or as to
what “amount” the Court had in mind in forbidding
misrepresentation of the “amount” of pro-egg evidence.
The Court also gave no hint whether NCEN’s January
1976 publication, App. 75a-77a, was forbidden or permitted
under its order or how NCEN was reasonably to make
that determination.
The Commission’s order, as modifiied and enforced by
the Court of Appeals in its January 23 Supplemental
Opinion, is set out below in relevant part.°
*Part B of the Court's order forbids any advertisement
which:
“1. Represents that eating eggs does not increase
the risk of heart attacks ... or...”
“2. Makes any representation concerning the relation-
ship of dietary cholesterol, including that in
eggs, to heart attacks. . .”
“unless it is clearly and conspicuously disclosed .. .
there is a controversy among medical experts con-
cerning the relationship of dietary cholesterol, in-
cluding that in eggs, to heart disease, and that
respondents are presenting their side of that econ-
troversy.”
+s! C of the Court’s order forbids any advertisement
which:
“1. Represents that there exists, or describes,
scientifie evidence which supports the theory
that consumption of dietary cholesterol, including
=
REASONS FOR GRANTING THE WRIT
This case, one of first impression, presents the im-
portant federal question of concern to all commercial
advertisers of whether under the teachings of Virginia
State Board of Pharmacy vy. Virginia Consumer Council,
Inc., 425 U.S. 748 (1976) truthful, nonmisleading com-
mercial speech on matters of genuine scientific contro-
versy can be constitutionally conditioned on the making
of government prescribed “corrective” statements when
the record does not show and the Commission did not
allege or establish that such corrective statements are
necessary to prevent the speech in question from being
deceptive or misleading. At issue is not merely Petition-
er’s right to express itself truthfully and without govern-
ment interference on the cholesterol/heart disease con-
* (Continued)
that in eggs, does not increase the risk of heart
attacks. . .”
“2. Makes any representation concerning the state
of the available evidence or information concern-
ing the relationship of dietary cholesterol, in-
eluding that in eggs, to heart attacks. . .”
“unless it is clearly and conspicuously disclosed . . .
that many medical experts believe that existing
evidence indicates that increased consumption of
dietary cholesterol, including that in eggs, may in-
crease the risk of heart disease.”
ts My of the Court’s order forbids any advertisement
which :
“1. Represents as insignificant the available scientific
evidence that the consumption of dietary choles-
terol, including that in eggs, may increase the
risk of heart attacks . . . or otherwise misrepre-
sents the amount of scientific evidence that eating
eggs does not increase the risk of heart
attacks. .. .” App. 65a-68a.
—_— =
troversy, but the more general question of whether the
important societal interests advanced by vigorous truth-
ful expression in the mercantile world especially on
matters of scientific importance can flourish if govern-
ment is free to inhibit or forbid that expression without
reasonable cause. Resolution of this issue by this court
is also needed because there is a split hetween the Seventh
Cireuit in this case and the Third Cireuit® regarding
the First Amendment limitations on remedial orders of
the Commission in light of Virginia Board.
This case also presents the important federal question,
not heretofore decided by this court, of what degree of
vagueness is constitutionually permissible in remedial or-
ders of the Commission in light of Virginia Board.
I.
OVERBREADTH
While as a matter of statutory authority the Commis-
sion has wide discretion in fashioning orders, FTC v.
Colgate-Palmolive Co., 380 U.S. 374, 392 (1965), this court
has consistently stated that the Act authorizes only rem-
edies designed to prevent future repetition of conduct
found to be unlawful, FTC v. Henry Broch & Co., 368
U.S. 360, 364 (1962); FTC v. Ruberoid Co., 343 U.S. 470,
473 (1952) and that remedies must have a ‘‘reasonable
relation’’ to the offending practice. Jacob Siegel Co. v.
FTC, 327 U.S. 608, 613 (1946). Under this construction,
lower courts have repeatedly trimmed back Commission
orders which are so broad as to outlaw legitimate speech
° Beneficial Corp. v. FTC, 542 F.2d 611 (3rd Cir. 1976),
cert. denied, 430 U.S. 983 (1977).
—_—
or proscribe expression other than that which if continued
would directly aid in continuing the violation found.
Spiegel, Inc. v. FTC, 411 F 2d 481, 484-485 (7th Cir.
1969); ITT Continental Baking Co., Inc. v. FTC, 532 F
2d 207, 221-222 (2nd Cir. 1969); National Dairy Products
Corp. v. FTC, 412 F 2d 605, 623-624 (7th Cir. 1969);
Grove Laboratories v. FTC, 418 F 2d 489, 496-497 (5th
Cir. 1969).
With the demise of the commercial speech exception to
the First Amendment, the limitation on the Commission’s
remedial powers has engendered the requirement, as a
matter of First Amendment concern, that the remedy
for a violation of the Act be closely related to prevention
of future violations and not needlessly restrict lawful
utterance.
‘*!Djoubtless the Commission’s broad construction
of its §5 remedial authority cannot survive the demise
of the commercial speech exception to the first amend-
ment...
“The Commission, like any governmental agency,
must start from the premise that any prior restraint
is suspect, and that a remedy, even for deceptive ad-
vertising, can go no further than is necessary for the
elimination of the deception.’’ Beneficial Corp. and
Beneficial Managements Corp. v. FTC, 542 F 2d 611,
619-620 (3rd Cir. 1976), cert. denied, 430 U.S. 983
(1977).
See also Chrysler Corp. v. FTC, 561 F 2d 357, 364 (D.C.
Cir. 1977) in which the court deleted ‘‘sweeping pro-
hibitions’’ which were ‘‘potentially limitless’’ and lack-
ing in ‘rational justification’’. As a consequence the
Commission’s discretion in formulating remedies is more
circumscribed today and courts now have a distinctly
=—
heightened duty to assure that the remedy chosen does
not exceed the constitutional limit.
A.
Petitioner’s first overbreadth challenge, following directly
from these principles, is that the First Amendment for-
hids corrective advertising where the ‘‘corrective’’ state-
ment is not reasonably needed to prevent speech covered
by the order from being decentive or misleading.
Nothwithstanding, that the Commission found only a
few representations dealing with this immensely broad
scientific topic to be misleading, Parts B and C of the
order patently forbid virtually all discussion by Petitioner
on the diet/heart disease controversy, certainly all discus-
sion as to eggs and heart disease, unless accompanied by
one of two additional statements ordered by the govern-
ment. No question is raised here as to the power consti-
tutionally to condition the utterance of these few repre-
sentations or those reasonably related thereto upon the
making of some appropriate additional statement without
which they will mislead. Virginia State Board of Phar-
macy v. Virginia Consumer Council, Inc., 425 U.S. 748,
771-772, n.24 (1976): Young v. American Mini Theaters,
427 U.S. 50, 68 (1976); Bates v. State Bar of Arizona,...
U.S... . 53 L Ed. 2d 810, 835-836 (1977) ; Warner-Lambert
Co. v. FTC, 562 F.2d 749 (D.C. Cir. 1977) cert. denied, . ..
U.S. .. . (1978).
Parts B and C, however, reach far beyond the statements
challenged by the Commission and needlessly sweep within
their prohibition an almost unlimited variety of accurate,
nondeteptive scientific discussion on the diet-heart disease
'
2 EEEEE———eoO
=
question. It is the restraint of such discussion, illus-
trated in the footnote,’ which Petitioner challenges here.
* Petitioner posed some of the following illustrations
to the Court of Appeals:
(1) A researcher from the University of Missouri
has recently disseminated an in-press report of an
experiment accepted for publication in the American
Journal of Clinical Nutrition in which whole fresh
ege was added to the diet of 60 men for 12 weeks
and thereafter excluded from their diets for the
same period and in which a second group of 60 men
ate no visible eggs for 12 weeks and thereafter for a
similar period ate one egg daily. The report con-
cludes :
“The findings of this study suggest a high in-
dividual variability of response ... There was
a lack of significant association of change in
sCHOL [serum cholesterol] with dietary intake
of egg and of dietary CHOL itself. These results
are relevant to changes in the national diet cur-
rently recommended to lower sCHOL and [serum
triglycerides] of normal adults. The study sug-
gests that the indiscriminate exclusion of eggs
may prove to be a useless measure’’. Porter,
M.W. et al, Effect of Dietary egg on Serum Choles-
terol and Triglycerides of Human Males.
(2) A somewhat similar egg feeding experiment was
recently reported in the literature, Slater, G et al,
Plasma Cholesterol and Triglycerides in Men with
Added Eagqs in the Diet, Nutrition Reports Interna-
tional, Vol. 14, No. 3 (September 1976). The vounger
men in the study were thought to be in better than
average health and of them the report states:
‘*fT]t would appear that these healthy voung men
have mechanisms that can metabolize from 340
to 790 mg. of cholesterol per day over an eight
week period without any effect on either the plas-
ma cholesterol or triglyceride levels.’’
(3) Dr. Peter N. Herbert, Head, Section of Lipo-
protein Structure Molecular Disease Branch. National
Heart, Lung, and Blood Institute in late October,
1976 submitted to the Federal Trade Commission in
=
None of this requires any further disclosure, much less
that required by the order, to assure that it will not
mislead or deceive. On its face, each statement is literally
true and devoid of any connotation which is or might be
misleading. Yet because of the overbreadth of Parts B
* (Continued )
connection with hearings on a proposed trade regula-
tion rule a brief description of egg feeding experimen-
tation with humans. He concluded:
** These studies suggest that the total interdiction
of egg yolks in diets of hypercholesterolemics—
recommended by ourselves and others—is not
appropriate. ’’
(+) ‘‘Scientists disagee as to the extent to which a
reduction in cholesterol consumption will affect levels
of blood cholesterol’’, .
(5) ‘**Cholesterol, either from the diet or produced
by the body, is one of the constituents of every cell
including cells in the heart muscle.’ ;
(6) **Today, among some heart-research scientists,
theory is developing that particles in the blood which
carry cholesterol (as distinguished from the mere
level of total cholesterol in the blood) may provide
valuable information about the origins of heart
disease.’’
(7) ‘**Heart disease seems to be multifactorial in that
many suspected factors may contribute to the pro-
blem.”’
(8) **Some evidence is emerging that, at least for
some people, increases in dietary cholesterol do not
necessarily translate into increases in serum choles-
terol.’’
(9) **There is a bio-mechanism in man which regu-
lates the body’s syntheseis of cholesterol and sestumted
dietary cholesterol seems to have some influence on
the operation of that mechanism.”’’
(10) **A number of studies by researchers learned
in the field have suggested that the serum choles-
terol elevating effect of dietary cholesterol is signifi-
cantly less than that of some saturated fatty acids.”’
i a ee eee
= =
and C,* each is forbidden unless accompanied by a govern-
ment dictated recitation.
The Court's sole justification for this plain overbreadth,
seemingly added as an afterthought in the Court’s January
23rd Supplemental Opinion, is a supposed need for cor-
rective advertising:
“The past cannot be totally ignored . . . Concrete
evidence of past effects is likely to be difficult and
expensive, if not impossible to obtain in most adver-
tising cases, Even though such evidence is not present,
the FTC is entitled to draw reasonable inferences as
to the effects deceptive statements are likely to have
had upon consumers. Although the weight we can
give to these effects in the present case is limited
by the absence of any findings by the FTC on the
subject, we are at least entitled to asswme that many
persons interested in the egg-cholesterol question have
read NCEN’s advertisements, as it was intended they
should, and that therefore enough taint remains to
justify the limited corrective advertising order we
have approved.’’ App. 64a.
Corrective advertising, however, would be constitutional-
ly offensive here for several reasons. First, the record
contains no evidence’ whatever that there is a lingering
*See note 5, supra.
*In Warner-Lambert Co. v. FTC, 562 F.2d 749 (D.C.
Cir. 1977), cert. denied, ........ § (1978), the only
Court of Appeals decision to approve corrective adver-
tising of the kind involved here, the Court stressed re-
peatedly that future ads would have an inherently decep-
tive tendency unless qualified and that support for this
conclusion was established in the record: ‘‘The disclosure
that Listerine does not relieve colds is essential informa-
tion to correct a widely held, mistaken belief which was
cultivated by petitioner’s past advertising.”’ 562 F.2d
at 759. The order in FTC v. Simeon Management Corp.,
532 F.2d 708 (9th Cire. 1976) “was set aside because
aww 16
consumer misimpression regarding the relation of dietary
cholesterol to heart disease from petitioner’s late 1973-
early 1974 statements or that consumers seeing a truth-
ful statement by Petitioner today, including truthful
statements within Part B and C such as those illustrated,
would form any incorrect belief or otherwise be misled.
(Compare FTC vy. Simeon Management Corp., 532 F 2d 708
(9th Cir. 1976) and Warner-Lambert Co. vy. FTC, supra.
Second, there is no reasonable basis within or dehors the
record to support an ‘‘assumption’’’ that corrective dis-
* (Continued)
there was no evidence that consumers seeing the adver-
tisements formed an incorrect belief or were mislead. In
short, there was nothing to correct. That is not this case.’’
Id. **Here . . . it is the accumulated impact of past ad-
vertising that necessitates disclosure in future adver-
tising.’’ Jd. at 761. **|T)he Commission adduced survey
evidence. .. We find that the... survey data and the ex-
pert testimony there constitute substantial evidence in
support of the need fer corrective advertising in this
ease.”’ Id. at 762-763. In the present case the opposite
situation is presented. Not only was no evidence adduced
that future truthful statements (other than those reason-
ably closely related to those challenged by the Commission)
would mislead without some further cleansing disclosure,
but the Commission never even pretended to venture a
presumption that such was the case.
It seems apparent that if restraint of truthful speech
can be successfully justified on a unsupported ‘‘assump-
tion’’ of the kind here made by the Court of Appeals, the
protected status of truthful commercial speech declared
in Virginia Board is minimal if it exists at all and the
Third Cireuit plainly erred in holding that ‘‘the Com-
mission’s broad construction of its §5 remedial authority
cannot survive the uemise of the commercial speech ex-
a to the First Amendment.’’ Beneficial Corp. v.
C, 542 F.2d 611, 619-620 (3rd Cir. 1976), cert. denied, 430
U.S. 983 (1977). In that case, a split in the circuits exists
regarding the impact of Virginia Board on the remedial
powers of the Commission and this provides an added
reason for this court to grant the writ.
=
closures with truthful statements by Petitioner are needed
to prevent mistaken pro-egg beliefs today. On the con-
trary, the court can take judicial notice that commercial
misstatements and misleading health claims against dietary
cholesterol and eggs crowd the market place daily, and that
if anything anti, not pro-egg statements need deception-
preventing disclosures.
The third reason that corrective advertising is imper-
missible here is that until the Court of Appeals’ January
23, 1978 Supplemental Opinion, this was not a corrective
advertising case, the government having consistently as-
serted that it was not seeking corrective relief, in Peti-
tioner’s judgment for the obvious reason that there was
no basis for it. Indeed, although on each appeal in this
ease Petitioner has argued that the orders impermissibly
proscribed much truthful, nondeceptive speech which
could stand ‘*clean’’ without further disclosure or state-
ment, the government has never sought to justify such
proscription on principles of corrective advertising. For
the Court of Appeals now to make this a corrective ad-
vertising case by ordering and assaying to justify an
extensive restraint of truthful speech on its ‘‘assumption’’
of continuing consumer misunderstanding, neither asserted
nor found by the agency nor evidenced by the record,
both exceeds the scope of that Court’s reviewing authority,
FTC vy. Sperry & Hutchinson Co; 405 U.S. 233, 246-249
(1972); NLRB vy. Pipefitters, 429 U.S. 507, 522 (1977);
SEC vy. Chenery Corp., 318 U.S. 80 (1943), and offends
the most elemental concepts of procedural fairness.
Since there is no basis for corrective advertising here,
and in the absence of such a basis the prohibition of truth-
ful, nonmisleading speech by Parts B and C of the Court
of Appeals order cannot be justified, it follows that those
— 18—
Parts exceed the remedial power granted under Section
5 of the Act and abridge petitioner’s speech rights un-
der the First Amendment. Hence they cannot stand.
B.
Petitioner’s second overbreadth challenge is that the
language of the additional statement mandated by Part
C of the order, namely
‘‘many medical experts believe that existing evidence
indicates that increased consumption of dietary choles-
terol, including that in eggs, may increase the risk
of heart attack,’’ App. 67a,
impermissibly and unnecessarily forces Petitioner to ex-
press an anti-egg position on the merits of the diet heart
disease controversy.
It is one thing to require Petitioner, when expressing its
principal statement or some other view found to be mis-
leading unless accompanied by an additional disclosure,
to state, along the lines of Part B, that the matter is con-
troversial and that petitioner is merely expressing its
opinion. See Virginia Board, supra, u.24. It is quite
another thing, however, to require an additional state-
ment which does not merely assure that the listener will
understand Petitioner’s assertions to be subject to sub-
stantial expert disagreement but goes on to represent
that the point of view of Petitioner and the reputable
experts upon whom it relies is incorrect. This latter ap-
proach is constitutionally intolerable not only because the
remedy proposed is more ‘‘than is necessary for the
elimination of the deception,’’ Beneficial Corp. v. FTC,
542 F 2d 611, 620 (3rd Cir. 1976), cert, denied, 430 U.S.
a ot me et -
== 19 ...
983 (1977), but because it effectively restrains debate" on
one” side of an admittedly unsettled scientific controversy
While it may be true that some restraints upon com-
mercial speech will not undesirably inhibit expression in
cases where the truth of the commercial message is easily
verifiable and where the utterance of the advertisement is
a necessary element of promotion of the product involved,
Virgmia Board, n.24; Bates vy. State Bar of Arizona,
supra, 53 Led.2d at 835-836, no one contends that the
extent of chill a given remedial measure will liave on
legitimate commercial utterance is not pertinent to the
constitutional inquiry. Here speech deals with highly con-
troversial matters and the Commission was unable to find
which viewpoint, as to these controversial matters, is
correct. App. 12a, 38a, 4la. Moreover, the speaker here is
not directly engaged in product promotion. Under such
circumstances, the prospect of Petitioner (or any other
commercial speaker) having unvoluntarily to espouse the
government’s side of the controversy in future truth-
ful discussion, as the additional statement in Part C
requires, will surely chill even the boldest commercial
speaker on a matter of current debate. In such a chilling
ambiance, even the strong hearted will avoid speaking to
the controversy, even though substantial new scientific in-
formation of undeniable public interest on eggs and heart
disease becomes available for report. A measure of the
chill of legitimate speech by the the partisan disclaimer
(and order vagueness, infra 21-27) in this case is the
fact that Petitioner has been constrained from publish-
ing in the media for some twenty seven months by the
prospect of a remedial disclaimer which would foree it
to argue and give credence to a side of the controversy
it and its experts believe is scientifically in error. The
depth of this chill adds force to Petitioner’s argument
that the Part C additional statement exceeds the con-
stitutional limit.
"The Part C statement is not only partisan in that it
inappropriately takes a sition on the merits
on one side of the diet-heart disease controversy
but it places petitioner at a most unfair disad-
vantage, cf. Chrysler Corp. v. FTC, 561 F 2d 357, 364
— 0) —
(in its findings of fact the Commission declined to even
say whose view was ‘‘more authoritative’? App. 4la) con-
trary to established First Amendment protection for debate
where views differ, cf Wooley vy. Maynard, 430 U.S. 705,
714-717 (1977); Miami Herald Publishing Ce. v. Tornillo,
418 U.S. 241, 256-257 (1974); Board of Education v. Bar-
nette, 319 U.S. 624, 633-634 (1943) and because it im-
properly requires Petitioner to utter an opinion it believes
to he false. U.S. v. National Society of Professional En-
gineers, 59D F 2d 978 (D.C. Cir.), cert. granted, 006.
A eaninias (1977). Significantly, nothing in the record
suggests that legitimate regulatory concerns regarding
petitioner’s discussion of the diet heart disease question
cannot be entirely satisfied by an additional statement’,
where appropriate, along the lines of Part B.
Indeed, the Court of Appeals nowhere explains why the
Part B disclosure is in any way inadequate or how the
Part C disclosure can be constitutionally compelled in
light of its express finding that:
‘*The condition in its present form [i.e. as required by
Part C| would require NCEN to argue the other side
of the controversy, thus interferring unnecessarily
with the effective presentation of the pro-egg posi-
tion. The desired preventive effect can be achieved by
requiring the disclosure that there is a controversy
* (Continued)
(D.C. Cir. 1977), since the Commission continues a broad
tolerance of anti-cholesterol advertising. ‘The Part C
statement thus seems far better suited to shield anti-
cholesterol advertisers from challenge, to drive Petitioner
from the cholesterol debate on the expectation that it will
forego publishing protected speech rather than make the
odious disclosure, and to implant in the public mind the
inessage in the partisan disclosure than to prevent decep-
tion.
=
among the experts and NCEN is presenting its side
of that controversy.’’ App. 62a-63a.
It follows that the partisan language of Part C of the
order cannot be sustained on the record of this case.
a,
Petitioner’s last overbreadth challenge is that even if
the additional statements challenged here could be required
in connection with truthful utterance to serve some limited
corrective purpose, the requirement as drawn is mani-
festly unreasonable in that it is not limited as to time or in
any other manner. Apparently the court also “assumes” that
the lingering misimpression which it “assumes” has been
created by Petitioner’s statements in late 1973 and early
1974 will continue indefinitely." Without substantial sup-
port in the record for such an unrestricted assumption, it
cannot be denied that the additional statement require-
ments of Parts B and C of the order are far more than
necessary to cure the evil at hand and hence unconstitu-
tional as well as beyond Section 5 power. Beneficial Corp.
v. FTC, swpra.
II.
VAGUENESS
There is no doubt that constitutionally permissible re-
straints on speech must be drawn with narrow specificity
so that those affected may know with reasonable certainty
what speech is being proscribed while not being forced
to avoid protected speech for fear of violating proper
orders. Keyishian v. Board of Regents of New York, 385
U.S. 589, 603-604 (1967). The prohibitions in Commission
orders must therefore be sufficiently “clear and precise”
so as “to avoid raising serious questions as to their mean-
* See note 3 supra.
_— a
ing and application.” FTC v,.Colgate-Palmoliwve Co., 380
U.S. 374, 392 (1965).
The Court of Appeals’ order is fatally imprecise in three
respects :
A.
First, the court’s decision fails to resolve the question
whether Petitioner is free in the context of publications
such as App. 7la-78a to make its principal statement and
to report new research on the diet-heart controversy with-
out government restraint.
In January and April, 1975 and in January, 1976, Peti-
tioner published in the news media the results of certain
new research and scientific opinion favorable to eggs.
App. 7la-78a. Three of these publications were found by
the Commission to make Petitioner’s principal statement.
In its first consideration of this material (except the 1976
piece) the Court of Appeals stated enigmatically that it
was granting Petitioner’s motion to incorporate such ma-
terial into the record
“because we are framing the temporary injunction, and
the recent advertising bears on the nature of the pro-
visions that should be included in that injunction.”
FTC v. National Commission on Egg Nutrition, 517
F.2d 485, 490 (7th Cir. 1975), cert. denied, 426 U.S.
919 (1976).
Petitioner believed the Court was thereby indicating that
publications such as the newly incorporated copy would
not be enjoined. The administrative law judge said
somewhat more directly that the materials in question
“may warrant First Amendment protection,” App. 60a,
and accordingly declined to predicate liability upon them.
Again Petitioner took this as approval of the mode of
presentation represented in these materials. The Commis-
ee eee
=< =
sion said nothing inconsistent with the law judge’s posi-
tion, instead declaring that these materials “do not form
the basis of our finding of liability.” App. 40a. The
Court of Appeals in its November 29th decision observed
that the Commission had eliminated any confusion about
the administrative law judge’s statement by stating:
“[ We] must reject the suggestion attributed to the Ad-
ministrative Law Judge ... that [the materials just
described] are not necessarily commercial publications
The fact that the message is conveyed by means of
selected quotations from the works of scientists and
popular writers does not alter the commercial char-
acter of the publication” (App. 60a).
The issue, however, is not solely whether the publications
in question are commercial, for it is now established that
speech is not unprotected merely because it is commercial.
Virginia Board. Assuming these materials to be commer-
cial, the question remains as to whether they are pro-
tected. It is this question the Court has not clearly an-
swered.
If these materials as presented are protected, Petitioner
has an unrestrainable right to publish them, and newer
data, in the same format. The failure of the Court of Ap-
peals’ order clearly to state what circumstances will give
rise to First Amendment protection and which will not
can only deter Petitioner from protected expression such
as publishing the late 1977 official position of the Canadian
government” on the relationship of eggs to heart disease. If
“Evidence is mounting that dietary cholesterol may
not be important to the great majority of people . . . Thus,
a diet restricted in cholesterol would not be necessary to
the general population.” (App. 77a-Sla).
= =
publishing of such a statement is not protected, only a
forthright judicial holding to that effect will cure the
vagueness from which the order suffers.”
The Court of Appeals order is also intolerably vague
in that supposedly distinct classes of utterances which
must be accompanied by one or the other of the two forms
of additional statement’ in Parts B and C of the order
are so overlapping as to be nearly synonymous. As a re-
sult virtually every publication requiring the “controversy
among medical experts” statement would also require the
partisan “many medical experts believe” statement.
For example, what “representation concerning the re-
lationship between eggs and heart disease” (which under
Part B would be enjoined unless accompanied by the
“eontroversy among experts” disclosure) cannot be said,
directly if not indirectly, also to be a representation con-
cerning “information” about the relationship of eggs to
heart disease or concerning the “state of available evi-
dence about the relationship of eggs to heart disease”
(which, under Part C of the order, must be accompanied
by the “many medical experts believe” recitation)? Cer-
tainly it cannot be constitutionally permissible to force
petitioner at risk of penalty to second guess the Commis-
sion as to which disclosure is required. And yet that is
undeniably what the order does.
The fact that Petitioner can request clarification from
the Commission under 16 C.F.R. §3.61(d), App. 61a, does
not justify abridgement of its First Amendment rights.
In any event, Petitioner has already presented the publi-
cations in question to the Commission only to receive the
enigmatic rulings described above.
See note 5 supra.
ones
ee ee eee
_—
C.
Petitioner’s last vagueness challenge relates to Part D
of the Court of Appeals’ order which forbids advertising
which
“represents as insignificant the available scientific evi-
dence that the consumption of dietary cholesterol, in-
cluding that in eggs, may increase the risk of heart
attacks, heart disease, atherosclerosis, arteriosclero-
sis, or any attendant conditions.”
or which
“otherwise misrepresents the amount of scientfic evi-
dence that eating eggs does not increase the risk of
heart attacks, heart disease, atherosclerosis, arterio-
sclerosis, or any attendant condition”. App. 68a.
Once again the order puts Petitioner in an impossible po-
sition. Without revealing what significance is the scientif-
ically “true” significance of existing data or what amount
is the scientifically “correct” amount, or how, by or from
what the “true” significance or “correct” amount is to be
determined, the order bars representations that certain
evidence is “insignificant” and representations that mis-
state the “amount” of certain other evidence. Since this
entire litigation concerns conflicting data evaluations by
equally reputable experts, in short, discussion of a present
scientific controversy which the Commission admittedly
cannot resolve, App. 12a, 20a, 38a, 40a, this provision
in the order gives Petitioner no measure at all of what
is being forbidden or, conversely, of what may be said.
Is it not true that the significance of data supporting
the government’s position is rendered increasingly less
reliable as more research such as the Porter, Slater, and
Herbert work alluded to earlier, App. 12a, 20a, 38a, 40a,
reach the public? Is the Commission prepared or equipped
=
to characterize the “significance” or “amount” of evidence
contained in this ever changing data base? How is Peti-
tioner to know what mode of expression is forbidden?
Does Petitioner’s January 29, 1976 publication (App. 75a-
77a) violate these order provisions? Whose view, evalu-
ation, quantification, interpretation of the “amount” of
evidence will the Commission suffer Petitioner to state?
If scientists cannot agree on this, how is Petitioner to
know what evaluation is acceptable under this order? Is
Petitioner to be held in violation of the order because it
espouses the British Panel’s view of “no evidence” App.
7la? Or Dr. Bernard Bellow’s view that there is ‘*no
authoritative proof” that cholesterol in a balanced diet
causes heart disease” (RX 6 B)'’? Or Dr. William Kannel’s
view that there is no confirmed efficacy in lowering blood
lipids (RX 30A)? Or Dr. George Mann’s belief that the
American Heart Association’s evidence on the diet heart
question is “puny” (RX 140 N.2)? Or the NIH’s stark
conclusion that:
‘*fT]t is not known whether dietary manipulation
has any effect whatsoever on coronary heart disease”
(RX 72K).
Or the respected Dr. Michael DeBakey’s opinion that ‘*in
normal individuals, there is no evidence that eating eggs
can eause heart attacks?’’ (Chicago Sun-Times, Living
Section, p. 3, Jan. 25, 1976) Or the expert opinions of
Petitioner’s own trial witnesses that no evidence exists
that eggs increase the risk of heart attacks? And what is
Petitioner permitted to do under the order with the
Canadian Department of National Health and Welfare’s
October, 1977 statement questioning the supposed case
“RX” refers to exhibits introduced by Petitioner in
the proceeding before the law judge.
ee ee ee
ee ee
a= 97
against eggs? Supra, note 14. Obviously, without further
definition in the order no reasonable man can determine
whether the foregoing representations, if quoted by Peti-
tioner, expressed as Petitioner’s own views, or disseminated
in their original published form ‘“‘by courtesy of Peti-
tioner’’, would violate the order although it would appear
that much if not all this material is protected.
Indeed it is hard to imagine how the line thus drawn
hy the order *‘hetween the permitted and prohibited activ-
ities’’ could be more ambiguous or how such a line could
ever be thought to satisfy the ‘‘standards of permissible
- Vagueness |which] are strict in the area of free ex-
pression”. NAACP y. Button, 371 U.S. 415, 432 (1963).
As the order now stands, it places Petitioner in the dilem-
ma of having to elect among: (1) unwilling adherence to
government orthodoxy by disseminating the government
dictated Part C statement; (2) complete avoidance of the
cholesterol debate including protected expression which,
but for the order provisions, could not be restrained; and,
(3) honest, robust utterance at the risk of contempt and
substantial civil penalties.
The exercise of First Amendment rights should not be
fraught with the perils of The Lady or the Tiger.
—
CONCLUSION
For the reasons given, the writ of certiorari should
issue.
Respectfully submitted,
James L. Fox
DonaLp P. CoLLETON
Counsel for Petitioner.
Of Counsel:
Moses, Gippons, ABRAMSON
& Fox
One East Wacker Drive
Chicago, Illinois 60601
(312) 644-8500
-_ ——_
— la—
APPENDIX
In tHe MATTER oF
NATIONAL COMMISSION ON EGG NUTRITION,
ET AL.
ORDER, OPINION, ETC., IN REGARD TO ALLEGED VIOLATION OF
secs. 5 AND 12 OF THE FEDERAL TRADE COMMISSION ACT
Docket 8987. Complaint, July 23, 1974—Final Order,
July 20, 1976
Oprxion or THE COMMISSION
By Drxon. Commissioner:
[1] Complaint in this matter was issued on July 23,
1974, charging respondents, the National Commission on
Eee Nutrition (NCEN) and its advertising agency,
Richard Weiner, Ine., with violations of Section 5 of
the Federal Trade Commission Act (15 U.S.C. §45) in
connection with their dissemination of certain publications
pertaining to eggs and heart disease. Tn particular, the
complaint alleged that respondents had directly or in-
directly made the following claims, all alleged to be decep-
tive: (1) there is ahsolutely no competent and reliable
seientifie evidence that eating eggs, even in quantity, in-
ereases the risk of heart attacks or heart disease; (2)
there is overwhelming competent and reliable scientific
evidence that eating eggs does not increase the risk
of heart attacks; (3) there is competent and reliable
scientific evidence that dietarv cholesterol (cholesterol con-
tained in food), including that in eggs, decreases the risk
of heart disease; (4) there is competent and relic Je
scientific evidence that avoiding dietary cholesterol, in-
cluding that in eggs, increases the risk of heart disease:
(5) eating eggs does not increase the blood cholesterol
level (cholesterol contained in a person’s blood stream)
in a normal person; (6) a person’s blood cholesterol level
is prevented from being [2] raised or lowered by dietary
=
cholesterol intake because (a) the human body increases
its manufacture of cholesterol in an amount equal to a
decrease in Gietary cholesterol intake and (b) the human
hody eliminates the same amount of cholesterol as that
eaten: and (7) dietary cholesterol, including that in eggs,
is needed by the body for building sex hormones, for
transmitting nerve impulses and for maintaining life in
cells.
The complaint further alleged that respondents had
violated the law by making certain representations while
lacking a ‘‘reasonable basis’’ for so doing. These included
the claims that (1) eating eggs does not increase the risk
of heart attacks and heart disease; (2) dietary cholesterol,
including that in eggs, decreases the risk of heart attacks
and heart disease, and (3) avoiding dietary cholesterol, in-
cluding that in eggs, increases the risk of heart disease.
Hearings were held before Administrative Law Judge
(ALJ) Ernest Barnes, who rendered an initial decision
sustaining the allegations of the complaint, and recom-
mended entry of an order to cease and desist.
At the time it issued its complaint, the Commission also
sought a temporary injunction against certain claims
made by respondent, pending resolution of the adminis-
trative proceeding, pursuant to the provisions of 15 U.S.
C. §53. The District Court for the Northern District of
Tilinois denied the Commission’s request, (Federal Trade
Commission v. National Commission on Eqq Nutrition,
1975-1 CCH Tr. Cases, Par. 60, 246) but the Court of Ap-
peals for the Seventh Circuit reversed and ordered the
District Court to enter an injunction in a form specified
by the Court of Appeals. (517 F.2d 485, May 1975, re-
hearing denied, June, 1975). The District Court duly
entered the injunction. Respondents filed a petition with
the Supreme Court for a writ of certiorari, which peti-
tion the Court denied. 426 U.S. — — (No. 75-405; June
7, 1976).
The instant matter is before the Commission on the
appeal of respondents from the initial decision,
ee Se ee te ote dee
Fie Te ARO OO es cle,
eel tlh Sel ee Ol a ag 6! to
=
I. Jvurispiction
At the outset respondents contend that the Commission
lacks jurisdiction over NCEN because it is not a “cor-
poration” within the meaning of Section 4 of the Federal
Trade Commission [3] Act, which defines a corporation
for purposes of the Act as one “organized to carry on
business for its own profit or that of its members.” In
Community Blood Bank of Kansas City Area, Inc. v. FTC,
405 F. 2d 1011 (8th Cir. 1969), it was held that while the
Commission properly exercises jurisdiction over such
nonprofit corporations as trade associations which carry
on business for the sake of their members, it may not
exercise jurisdiction over nonprofit corporations which
are organized and actually engaged in business for purely
charitable purposes. (405 F. 2d at 222) NCEN argues
that it falls within the exemption recognized in the Blood
Rank case because it is a nonprofit corporation formed
for the eleemosynary purposes of facilitating research
by its “Commissioners” and expression of their individual
views on the “cholesterol issue.”
The administrative law judge concluded that NCEN
was organized to carry on business for the benefit of its
“members,” the egg industry, that its activities were of
a character designed to redound to the industry’s pecu-
niary well-being, and that consequently NCEN is a cor-
poration. within the contemplation of Section Four. (I.
D.p.72)'
* The following abbreviations are used herein:
I.D. —Initial Decision, Finding No.
I.D. p. —Initial Decision, Page No.
CX —Complaint Counsel’s Exhibit No.
RX #—Respondents’ Exhibit No.
Tr. —Transcript of Testimony, Page No.
RB —Respondents’ Appeal Brief to the Commission,
Page No.
CB = —Complaint Counsel’s Answer Brief to the Com-
mission, Page No.
RRB —Respondents’ Reply Brief to the Commission,
Page No,
—_
As the law judge noted, NCEN was created by the egg
industry, or segments thereof, in response to anti-cho-
lesterol attacks on eggs which had resulted in steadily
declining per capita egg consumption. (1.D. 2, CX 101
A,B) NCEN began operation in August 1971 (1.D. 3),
its membership consisting of a small, self-perpetuating
board of directors—Commissioners—who throughout these
proceedings have been individuals with commercial in-
terests in the egg industry. (I.D. 5, 13) From NCEN’s
inception five of its Commissioners were designated by
each of five different egg industry trade associations, (T.
D. 4, [4] CX 1544, 198B, 204a) whose commercial nature
is clear (1.D. 5). Virtually all of NCEN’s funding has
been provided by commercial, egg-industry related or-
ganizations, (I.D. 15, CX 162A) in particular the Ame-
riean Egg Board, which furnished all of NCEN’s staff,
office space, and other assistance, and which received
in advance of implementation itemized budgets of
NCEN’s operations. (I.D. 15) It further appears that
member trade associations were intimately aware of
NCEN’s activities (CX 96-98, 105) and in at least cer-
tain documented instances NCEN Commissioners re-
ported formally on NCEN’s activities to their respective
organizations and received organizational recommenda-
tions or instructions as to courses of action which NCEN
should pursue. (I.D. 14, CX 199A, 200A, 198B).
Newspaper advertisements sponsored hy NCEN, some
bearing the notation “Number — in a series of messages
from America’s egg producers” (CX1), were directed to
consumers, and touted the nutritive virtues of eggs as
well as conveying the message that no increased risk of
heart disease would result from egg consumption, even
“in quantity”. A more detailed recitation of NCEN’s
structure and relationship to the egg industry is contained
in L.D. 1-6 and 12-18.
Respondents argue in their defense that the principal
purpose of NCEN was “* * * To establish the true nu-
tritional values of eggs, particularly in the light of the
lite ue te
—
ON ee ee ee ee a es
out
—.
adverse publicity concerning cholesterol” (CX 150A),
and thereafter to disseminate the individual views of
NCEN Commissioners to the American public. NCEN
Commissioners at trial denied that they served as “re-
presentatives” of the commercial groups of which they
were simultaneously members, or were in any other way
influenced by these commercial groups in the dissemi-
nation of their claims about eggs. (I.D. 18)
This Commission has no reason to doubt that the re-
presentations of NCEN generally reflect the honestly-
held views of its Commissioners.? Nevertheless, our cre-
dulity, like that of the administrative law judge, is heav-
ily if not confiseatorily taxed by the suggestion that
NCEN was established, financed, and operated for the
sole, or even for the principal purpose of permitting
several individuals to disseminate their opinions [5] to
the American public. Rather, the evidence viewed as a
whole preponderates overwhelmingly in favor of the
conclusion that respondent NCEN is a corporation exist-
ing in substantial part for the pecuniary benefit of the
egg industry, and is therefore, like the traditional trade
associations which spawned and nurtured it, subject to
Commission jurisdiction.
In reaching our conclusion we have looked to the evi-
dence with respect to several facets of NCEN’s opera-
tions: (1) origin (a response by the egg industry to
economically harmful attacks on the safety of eggs); (2)
character of membership (egg industry executives, initial-
ly chosen by trade associations); (3) source of funding;
(4) relationships with profit-oriented groups (submission
of budget to AEB; reporting to trade associations, and
at least occasional instructions given by associations) ;
(5) nature of publications; and (6) stated purpose. Ex-
cept with respect to NCEN’s officially stated purpose
the record strongly suggests commercial goals and cha-
2 We do believe, however, that respondents should have
realized that certain of the statements used to convey
NCEN’s belief in the safety of eggs had the tendency and
capacity to deceive, infra., pp. 7-28.
—
racter, Even as to NCEN’s officially stated purpose, an
early version of its Articles of Incorporation lists as
one organizational objective “to promote the general in-
terests of the egg industry.” (CX 136B) In any event,
official characterizations of purpose, some of which ap-
pear to have been changed in suspicions proximity to
developments in this litigation (CB 28-29) can be given
little weight in the face of contradictory evidence as to
the circumstances in which an organization is formed and
the manner in which it actually functions. Similarly, we
must agree with the law judge’s skeptical assessment of
the NCEN Commissioners’ testimony, insofar as that
testimony is both internally inconsistent and contradicted
by contemporaneous documentary evidence. See I.D. 18.
While respondents contend that the factors cited by
the ALJ “neither alone nor taken together” support a
finding of jurisdiction (RB 7), their argument is at best
persuasive only as to the first half of their conclusion.
Obviously a determination of whether Commission ju-
risdiction is properly asserted over a nonprofit corpora-
tion or an individual engaged in activity which has the
effect of promoting a product requires analysis of a
large number of possible indicia of commercial purpose.’
The presence of one factor alone, such [6] as receipt of
financial benefit from a commercial source that happens
to favor the recipient’s viewpoint may well be insuf-
ficient.
Clearly, however, this case presents far more than
the example of an industry choosing to accord a measure
of financial support to an _ otherwise unrelated third
party whose views, when published, inure to the industry’s
benefit. Rather, respondent NCEN was founded and al-
> We do agree with respondents (RB 15) that the AL.!
termed the “stark falsity” of their representations (1.D.
p. 88) is not a relevant factor to be considered on the is-
sue of jurisdiction, assuming arguendo that the ALJ con-
sidered it so to be.
= 7@ =
most entirely funded by the egg industry, with the ob-
vious expectation that it would help counteract econo-
mically damaging publicity. It is staffed by egg industry
executives, originally required to be from specified egg
industry trade associations and, predictably enough, its
publications, whether they represent the “industry” view-
point or not, are of a sort which, if believed, would en-
courage the consumption of eggs. While the assertion of
particular viewpoints may not be a contractual prere-
quisite to NCEN’s receipt of funds, it is reasonable to
doubt that NCEN could continue to exist if its Commis-
sioners were somehow to reach and publicize the conclu-
sion that consumption of eggs in quantity may possibly
increase the risk of heart disease, just as it is doubtful
that any egg industry trade group would continue to
exist if it ceased to promote the interests of those whose
funds are its predominant source of support. We believe
these considerations taken together warrant the conclu-
sion that NCEN is a nonprofit corporation which exists
in principal part for the benefit of the egg industry, and
hence, is subject to Commission jurisdiction.
Respondents contend that whatever may have been
NCEN’s status at the time of the complaint, it has as of
the present time amended its bylaws so as to state ex-
plicitly that NCEN Commissioners shall “serve solely as
individuals and shall not, with respect to NCEN activities
directly or indirectly serve as agents for, or otherwise
represent any trade association, business or commercial
enterprise”. We find no reason in the record of this case
to conclude that this change in the wording of the by-
laws can in any significant respect alter the commercial
character of NCEN, given its origin, the manner in
which it has operated heretofore, and its continued do-
mination by egg industry members, whether or not they
are officially called egg industry “representatives” dur-
ing that portion of the day they devote to the affairs of
NCEN.
[7] This is simply not the case respondents seek to
make it in which an organization engaged primarily in
—
the noncommercial activity of disseminating for their
own sake its members’ views on a subject of scientific
importance incidentally performs a function valuable to
commercial interects. On the contrary, the evidence most
strongly suggests that NCEN is an organization created
and operated to benefit the egg industry through the
incidental medium of what is termed its Commissioners’
expression of their personal viewpoints. If respondents’
argument as to jurisdiction is to be accepted under these
circumstances, there is no company or industry in the
Nation which could not obtain a ready exemption from
laws prohibiting deceptive advertising merely by agree-
ing to fund the efforts of a group of its members or em-
ployees who decide that they wish to establish their own
“National Commission” to do research and _ publicize
their honestly held beliefs in the virtues of the product
they have spent a lifetime selling. We do not believe the
arm of the law was meant to be avoided so easily as
this.
“To defend the place of the egg in the American diet
by every legal means” —as NCEN on one occasion
characterized its goal (RX 139)—is, in sum, not an en-
deavor which entitles a group of egg industry executives
funded by egg industry trade groups to a blanket exemp-
tion from the scrutiny of a statute designed to prevent
the deceptive promotion of products, including eggs. Hav-
ing concluded that jurisdiction over respondents is pro-
perly asserted, we shall proceed to review the allegedly
deceptive representations challenged in this proceeding.‘
* Respondents also argue that in addition to establish-
ing jurisdiction generally over NCEN, the Commission
must establish jurisdiction over each challenged publica-
tion. We take this point to be a variant of respondents’
claim that their publications concerning the virtues of
eggs are not commercial advertisements and are shielded
from Commission scrutiny by the First Amendment, an
argument we discuss in Part III of this opinion. Respon-
dent Weiner does not challenge the ALJ’s finding of
jurisdiction as to it.
ee ee a ae
ial
II. CHaALLencep REPRESENTATIONS
A. “There is no evidence? ? ? ?”
The principal representation challenged in this proceed-
ing is respondents’ claim, made with slight variations of
wording in numerous instances, that there is absolutely
no scientific evidence that eating eggs, even in quantity,
increases the risk of heart attacks or heart disease. (I.
D. 32) The administrative law judge concluded that this
representation was false and misleading. (I.D. pp. 79-81)
[8] An evaluation of the law judge’s determination re-
quires some discussion of the state of medical opinion with
respect to the relationship between “dietary cholesterol’”®
and “coronary heart disease.” A matter of such consi-
derable complexity does not lend itself readily to simple
formulations, and the statements made herein must be
quialified in light of the far more extensive discussion
of the underlying issues contained in the initial decision
and in the record as a whole.
It is apparent from the record of this case that many
well-qualified medical science experts subscribe, with
varying degrees of conviction, to the view that ingestion
of cholesterol and “saturated fats’’ in the human diet is
positively related to the incidence or risk of coronary heart
disease, in the sense that, for many people, increased
consumption of dietary cholesterol and saturated fats
* Cholesterol is a fat-like waxy aleohol, with a sturdy
and durable ring chemical structure that cannot be bro-
ken down. (1.D. 57) “Dietary cholesterol” is that choles-
terol contained in food. Cholesterol is also produced by
the body.
* “Coronary heart disease” is generally defined as an
affliction of the heart muscle and its functions due to in-
adequate blood supply to the heart. See 1.D. 51-54.
* Saturated fats are described in LD. 57. Fat is a nu-
trient, and saturated fats occur in certain foods of
plant origin as well as in many foods of animal origin.
=
will result in an increased risk of heart disease, and
decreased consumption will lower that risk. For case of
reference we shall, like the ALJ, refer to this view as the
‘‘diet/heart disease’? hypothesis, although this generic
term obviously subsumes a wide variety of particular ap-
proaches.°
[9] Egg volks are the major source of readily assimi-
lated cholesterol in the American diet, with one yolk pro-
viding around one-third of average daily intake of ap-
proximately 600-800 mg. Egg yolk has substantially more
cholesterol than any other commonly eaten food (I.D.
55), and contains roughly four grams of saturated fat.
(1.D. 56)°
The diet/heart disease hypothesis proceeds from se-
veral underlying propositions. These are, in outline, that
(1) the amount of dietary cholesterol and saturated fat
* For example, proponents of the diet/heart disease
hypothesis differ among themselves with respect to the
relative importance of reducing consumption of dietary
cholesterol as opposed to saturated fat. Further, it should
be observed that some experts believe that the presence
or absence of various dietary constituents other than cho-
lesterol and saturated fat may be related to the risk of
heart disease. (Tr. 1378, 19-7) This proceeding does not
deal with these views. Also, it is generally believed that
coronary heart disease is multifactorial (I.D. 54), and
those who advocate dietary modification as a means of
lessening its likelihood of occurrence generally recom-
mend other preventive measures as well, examples of
which might include certain sorts of exercise and elimi-
nation of cigarette smoking.
* Average daily intake of fat in the American diet is
over 100 grams. (Tr. 2039) While some who counsel a
reduction in saturated fat intake would include limita-
tion of egg consumption as a partial means of accomplish-
ing this (e.g. Tr. 2157), eggs are primarily cited as a
contributor to the risk of heart disease by virtue of their
cholesterol content, which was the principal focus of the
proceeding before the law judge.
oe ae ant.
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in the diet directly affects the level of cholesterol in the
bloodstream (“serum cholesterol” or “blood cholesterol”)
of many people; (2) higher levels of cholesterol in the
bloodstream are statistically associated with higher levels
of risk of coronary heart disease in sample populations;
and (3) serum cholesterol is “causally implicated” in the
formation of the atherosclerotic lesions (I.D. 51) which
precipitate heart disease.’
The initial decision reviews at great length the results
of ‘a large body of clinical-pathological, experimental, and
epidemiological studies upon which scientists have relied
in formulating the propositions described in the preced-
ing paragraph, and from there the diet/heart disease
hypothesis itself. (1.D. 60-98) The ALJ concluded that:
The studies discussed in Findings 60-98 supra,
constitute competent and reliable scientific evidence.
They were conducted using scientific methodologies,
were performed by competent and highly regarded
investigators, have been reported in “recognized
scientific journals after peer review, and have been
generally accepted by experts in the field and by
the scientifie community. Moreover, reputable [10]
governmental and private scientific organizations have
reviewed the evidence and relied on it in making re-
commendations to the medical profession and to the
public for the treatment and prevention of [coronary
heart disease]. Finally, complaint counsel’s own wit-
nesses relied on the evidence to form expert opinions
regarding the relationship of diet to [coronary heart
disease] and as to the effect of adding an egg per
* In the words of the “Report of Inter-Society Com-
mission for Heart Disease Resources,” a causal relation-
ship between serum cholesterol and heart disease is “bio-
logically plausible in terms of reasonable pathogenetic
mechanisms and concepts of multifactorial etiology re-
lating apparent cause and disease. Alternative hypothes-
es to account for the associations do not fit the majority
of observations to date.” (CX 18-Z9) ;
— 12a —
day to the average American diet (Findings 100-105
infra). [1.D. 99]
Respondents do not deny that well-qualified experts
have relied upon competent and reliable scientific studies
in hypothesizing a relationship between dietary cholester-
ol and heart disease. Respondents argue, however, that
these experts have improperly interpreted the existing
studies, that such studies lend little or no support to the
diet/heart disease hypothesis, and that the studies con-
sequently do not rise to the level of “evidence that eat-
ing eggs will increase the risk of heart disease.” In sup-
port of their position respondents cite the testimony of
certain of their own experts who, when asked at trial
whether in their opinion there is any evidence that eat-
ing eggs will cause or increase the risk of heart disease,
responded in the negative. Respondents would have the
Commission conclude from this that the question of
whether there is evidence to incriminate eggs as a factor
in the risk of heart disease is, like the question of whether
eggs actually do increase the risk, a subject of heated
controversy upon which the Commission can and should
make no pronouncement.
It is certainly not the Commission’s intention to deter-
mine in this proceeding whose interpretation of a diffi-
cult and incomplete body of scientific literature is supe-
rior. It is, however, the Commission’s statutory duty to
ensure that commercial advertisements intended to con-
vince the public of the safety of a product are not de-
ceptive, and that oversimplified expressions of opinion
are not taken out of context and presented as fact in
order to misrepresent the nature of a complex scientific
issue and thereby promote misleadingly the consumption
of eggs.
It is manifest that “scientific evidence” as the term
is commonly understood, may exist in support of a prop-
osition whose truth is contested or, for that matter, in
support of a theory which is ultimately determined by
ee
= et ein ally, a ee ee ee eee een
isd bnbecttintnres. —
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— 13a —
general agreement not to be true at all. “Scientific evi-
dence for a proposition” as that phrase is reasonably
understood, means precisely those competent and reli-
able scientific studies of the sort summarized by the
AI.J which, in the view of a body of well-qualified ex-
perts would lend support to the proposition. To assert
flatly and [11] without qualification that “there is no
evidence for this hypothesis” if what one means is real-
ly that “we, along with one segment of the relevant ex-
pert community, do not believe that the existing evidence
supports this hypothesis” is misleading in the extreme.
We have reviewed with care the testimony of those
experts and sources cited hy respondents. In rendering
their testimony respondents’ witnesses did not dispute
the fact that many experts, in the exercise of reasonable,
albeit disputed, scientific judgment, have relied upon a
large body of scientifie studies in formulating the diet
/heart disease hypothesis. Respondents’ sources appear
to believe, however, that such studies provide so little
warrant for the hypothesis that they should not be de-
scribed as “evidence” for it.
Complaint counsel suggest that respondents’ experts
merely used “no evidence” in the sense of “no conclusive
evidence” or “no direct experimental evidence.” (For
example, there appears to be no good study relating ac-
tual limitation of cholesterol intake by a sample group
to a decline in expected incidence of heart disease.) Dr.
Stare, who testified for complaint counsel, may have
used “evidence” in the foregoing senses when he initial-
ly testified that he knew of no evidence “per se” that
eggs increased the risk of heart disease. His testimony
was subsequently qualified. (Tr. 1036ff) At least some
of those witnesses who testified for respondents, how-
ever, appear to have used “no evidence” in the somewhat
stronger sense described in the preceding paragraph.
(Tr. 2051, 2140, 2150, 1485-86)
It seems fair to say, nevertheless, that the difference
between the “evidence” and “no evidence” positions is
— l4a —
one of degree rather than of kind. As respondents’ wit-
ness Dr. Oliver noted in prefacing his account of the
“no evidence” statement of the British Advisory Panel”,
‘evidence in this context would be an aggregate of prob-
ability * * *’? (Tr. 2136) In Dr. Oliver’s view, presum-
ably, the existing research lends so little ( if any) weight
to the view that inereased consumption of eggs will [12]
inerease the risk of heart disease that he cannot con-
sider such research as “evidence” for the proposition.
However. Dr. Oliver did acknowledge that reduction of
serum cholesterol was one part of a regimen which might
in toto reduce the risk of heart disease (Tr. 2125), and
he also noted that he recommended a reduction in egg
consumption for his patients as part of a plan to reduce
saturated fat intake and thereby help reduce the risk
of heart disease. (Tr. 2157) In common with other wit-
nesses, Dr. Oliver further noted that his conclusions as
to the potential harm from dietary cholesterol and as to
the existence of evidence with respect thereto did not
apply to those suffering from gross abnormalities in the
metabolism of lipids, a small fraction of the population
but nonetheless a substantial number of people. (Tr. 2140
-2144)
The testimony of Dr. Yudkin, like Dr. Oliver an emi-
nently well-qualified medical expert, is similarly diffuse.
1 “Ty certain animal species a diet rich in cholesterol
induces the appearance of arterial lesions which have
some similarity to those seen in human subjects, and com-
parative studies of different human populations show
that those which have a diet rich in cholesterol have a
higher death rate from [coronary heart disease]. How-
ever, a diet rich in cholesterol is usually one which is
rich also in saturated fatty acids. Most of the dietary
cholesterol in western communities is derived from eggs,
but we have found no evidence which relates the numbers
of eggs consumed to a risk of [coronary heart disease. |”
(RX 112: Report issues by Britain’s Department of
Health and Social Securit, |
— la —
Asked his understanding of the “no evidence” statement
in the British Panel report (which he and Dr. Oliver
helped prepare), Dr. Judkin replied:
My understanding of this sentence is that i
not find that there was anything in the ARN
either directly saying that a population’s experience
of heart disease goes parallel with the number of
eggs consumed in that population—that is, that there
is no direct evidence, nor was there indirect evidence
that would be convincing that the consumption of
eggs raises the concentration of blood cholesterol
and that this rise in blood cholesterol would increase
the chances of getting a heart attack. (Tr. 1428)
rece interpret the term “evidence” Dr. Yudkin re-
I would say that I would interpret this w
meaning that I could convince a Ag by y Ax
ing them the same facts, to come to the same con-
clusion, that is if it were positive evidence, that the
facts would demonstrate that the number of eggs
does increase, the number of eggs consumed does in-
crease the number of ischemic (coronary) heart dis-
ease. This I would consider evidence. Or conversely
and this is how I meant the negative here, that the
information, the data I could provide, would not
convince anybody that the number of eggs consumed
— the risk of ischemic heart disease. (Tr.
[13] A later portion of Dr. Yudkin’s dir
ul ; ect testimo
similarly reflects the fine line between “no evidence” _
the evidence does not persuade me”:
Question. * * * Based on the data, results of
research as evidenced by those sapevte, based torte
er upon your own personal expertise, results of your
own experimentation and study, debate, based on
your contacts with your fellow scientists, medical
doctors throughout the world, I ask you, do you have
an opinion, based upon a reasonable degree of med-
=
ical certainty, whether or not there is any evidence
that eating eggs causes [coronary heart disease]?
Answer. No. hs |
Q. The answer to my question is yes or no, do you
have an opinion?
A. Yes, I have an opinion.
Q. And what is that opinion?
A. That all these studies were taken into considera-
tion by me and my fellow members of this Panel
when we wrote that report in which we said we
did not have, there is not sufficient evidence to
say that eating eggs causes heart disease.
Q. And do you have an opinion as to whether or not
based on that same factual presentation, whether
or not there is scientific evidence that eating eggs
increases the risk of [coronary heart disease]?
You can answer that question yes or no, do you
have an opinion?
A. Yes.
Q. And what is that opinion?
A. My opinion is that this evidence does not de-
monstrate that eating eggs increases the risk of
heart disease. (Tr. 1444-45)
A similar theme emerges in the following exchange
on recross examination between Dr. Yudkin and coim-
plaint counsel: [14]
Q. Doctor, just to pick up again on the point raised
by Mr. Fox on his redirect, the studies, the line
of studies which we have been talking about
which you assumed in your hypothetical when
you say that these studies are not evidence as
to the cause of heart disease, do you mean that
they do not conclusively establish the cause, or
that they are not evidence in support of the hy-
pothesis or theory that dietary cholesterol is
related to and serum cholesterol and saturated
fat is related to the increased risk of heart dis-
ease?
A. This is a little bit like asking me whether I have
stopped beating my mother, because I wanted to
say something slightly different. I think that the
—lia—
information as you asked me, by excluding other
possibilities, gave me no opportunity than to say
other than they are a part of the evidence. But
I would say, for instance, that the seven countries
study {“Coronary Heart Disease in Seven Coun-
tries,” CX 76] can be used not only as evidence
towards establishing the hypothesis that dietary
fat or dietary cholesterol, as the case may be,
may be involved in causing heart disease but
equally could be used to support the hypothesis
that dietary sucrose and several other factors
between the seven countries and the level of cho-
lesterol is just as great as with others.
Q. Could a competent scientist, including yourself
as a competent scientist * * * use those studies
to say that these studies constitute evidence sup-
porting the theory that the factor, in your case
dietary sucrose, is related to or contributes to
the development of heart disease?
A. Yes. If it is understood that in order to establish
the hypothesis one would need not only this but
lots of other sorts of evidence. (Tr. 1488-89)
[15] In the context of their testimony, subject as it
was to extensive qualification of the sort described in
the preceding pages, we do not dispute respondents’ ex-
perts’ use of the term “no evidence” to characterize the
evidence relied upon by proponents of the diet/heart
disease hypothesis. It is an entirely different matter,
however, for respondents to make the claim “no evidence”
in a setting totally devoid of any mention of the sub-
stantial scientific controversy, the extensive scientific
literature, and the fact that many well-qualified scien-
tists believe that such literature incriminates dietary cho-
lesterol, including that in eggs, as a contributor to the
risk of heart disease.
Respondents argue, in essence, that the claim “there
is no evidence” should be treated, and would be recog-
nized by readers merely as a statement of opinion, i.e.,
“in our opinion and that of certain experts on whom we
—
rely, the existing scientific studies pertaining to dietary
cholesterol, eggs and heart disease lend no support to
the hypothesis that eating eggs increases the risk of heart
disease.” Unfortunately, however, the phrase “there is
no evidence” is also, and perhaps more reasonably subject
to the interpretation that “there do not exist competent
and reliable scientific studies from which weil-jualified
experts could reasonably hypothesize that eating eggs
increases the risk of heart disease.” This latter message
is patently false and misleading.
It is well established, and critical to the notion of
preventing false advertising, that where an advertisement
conveys more than one meaning, one of which is false,
the advertiser is liable for the misleading variation.
Murray Space Shoe Corp. v. FTC, 304 F. 2d 270, 272 (2d
Cir. 1963): Rhodes Pharmacal Co. v. Federal Trade Com-
mission, 208 F. 2d 383, 387 (7th Cir. 1953), modified by
restating the Commission’s order, 348 U.S. 940 (1953).
Nor does our application of that principle in this instance
rest upon some mere semantic quibble or strained inter-
pretation of words, since that meaning of respondents’
claim which deceives is one which is likely to be under-
stood, and reasonably so, by many consumers. A more
appropriate statement of the principle in this ease might
thus be that an otherwise false advertisement is not
rendered acceptable merely because one possible interpre-
tation of it is not untrue.
Respondents ask whether the ALJ (and presumably
now the Commission) “take ncen or the public for fools
in asking them to believe that it is the existence of evi-
dence itself and not a particular interpretation thereof
that NCEN has denied?” (RB 29) We take neither NCEN
nor the public for fools, but quite clearly many members
of the public are not so well acquainted with the diet/
heart disease controversy as is NCEN [16] or this Com-
mission. Some consumers may indeed view the claim
“No evidence” and realize, in light of their prior reading
or consultation with a physician, that it is merely in-
— 19a —
tended to state respondents’ opinion as to the way in
which the existing evidence should be interpreted. Others,
however, without substantial knowledge of the subject
area, may well conclude that the claim means that those
who would identify eggs as a possible contributor to
heart disease have not based their indictment on a massive
body of competent and reliable scientific studies, because
such evidence does not exist.
After all, hardly a day passes on which one may not
read in a newspaper or magazine of charges levelled by
some self-appointed nutrition expert against the safety
of some food product. How many substances remain that
one can eat freely without, in the view of someone, increas-
ing the risk of cancer or some other dread affliction? For
certain of these charges the rejoinder “there is absolutely
no evidence” may be an appropriate response. There
is no scientific evidence. There are no competent and
reliable scientific studies which could lead a body of
well-qualified experts to subscribe to the charges. “No
evidence,” is, however, in the eyes of many people, strong
language, indeed the strongest possible means of dismissing
another’s position. It may do literal and figurative justice
when applied to the claims of quacks. It is not, however,
standing by itself, an accurate way to characterize the
position of those who hypothesize that consumption of
dietary cholesterol, including that in eggs, increases the
risk of heart disease.
The harm in this representation is, moreover, readily
apparent. No consumer who wishes to make well-informed
dietary selections should ignore the existing literature
(or a physician’s evaluation of it) with respect to the
relationship between dietary cholesterol and heart dis-
ease. To be sure, well-informed consumers, like well-
qualified scientists, are likely to draw different conclu-
sions from their studies. As the record shows, eggs are
a “complete food,” with many nutritive virtues. (I.D. 56)
A reasonable person might well decide that the current
state of learning and opinion with respect to dietary
=
cholesterol does not warrant limitation of egg consumption
to any degree. On the other hand, a reasonable person
might equally well conclude that the existing evidence
is sufficiently troublesome to [17] render some limitation
or reduction in consumption of dietary cholesterol (in-
eluding that in eggs) a prudent measure, as many experts
now recommend. In either event, the decision is one which
a consumer should make after a review of all available
information. By representing that “there is no evidence
that eating eggs will increase the risk of heart disease”
respondents discourage that review and represent that
there is no need for the consumer to go beyond their
advertisement, because in this case there is simply “no
evidence” to warrant further inquiry.
For the foregoing reasons we conclude as did the ALJ
that respondents’ principal representation is deceptive.”
[18]
* We also agree with the AI.J’s conclusion that sub-
stitution of the word “proof” in certain publications (7.e.,
“There is absolutely no scientific proof that eating eggs,
even in quantity, will increase the risk of heart disease”
does not cure the misrepresentation, because some people
will read “proof” in the sense of “evidence,” see @.g.
Webster's Third New International Dictionary, p. 1817,
ILD. 37). It should be apparent from the discussion
herein that our finding in this matter cannot be taken
in any measure as sanction for the representation that
“The FTC has determined that there is evidence that
dietary cholesterol may increase the risk of heart disease.”
Such a statement standing unqualified may be no less
misleading to some than respondents’ flat assertion that
there is no evidence. What we have determined is simply
that while medical experts disagree, many believe that
the existing evidence indicates that increased consumption
of dietary cholesterol may increase the risk of heart
disease,
i ln ne ie pe ee _
Pe | eee ee oe ee
os ae
— aoe TS
— 2la—-
B. Other Misrepresentations
Respondents were also charged with making certain
other deceptive representations to bolster their message
that eating eggs, even in quantity, is not harmful, and
in fact, positively desirable. Respondents do not contest
that the alleged claims are misleading, but deny having
made them. Our brief review of these issues follows:
(1) There is competent and reliable scientific evidence
that dietary cholesterol, including that in eggs, is needed
by the body for building sex hormones, for transmitting
nerve impulses, and for maintaining life in cells.
6 ® @ * e * ®
Respondents did not make this claim in so few words,
but it is clearly implied by advertisements such as CX 3
which states in relevant part:
* * * there are those who misguidedly advocate cutting
down on eggs because of their choleseterol content. So we
thought we’d offer a few facts in evidence about what
you’re being asked to give up “now.”
1. Cholesterol is the building block of sex hormones.
2. Cholesterol is needed for your nerves to transmit
their impulses throughout your body.
3. Choleserol is essential for life for every cel! in your
body se*
The clear purport of the foregoing is that the consumer
is being asked to “give up” a substance which is necessary
for important bodily functions. In fact, as respondents
acknowledge, dietary cholesterol, including that in eggs,
is not needed for the foregoing functions (since the body
produces its own), (I.D. 117) and the impression conveyed
by their claim is thus deceptive. The deception is heightened
by the context in which it appears, which is directed
towards explaining why the cholesterol contained in eggs
should not lead one to avoid [19] them. The fact that
cholesterol made by the body is indispensable is obviously
— 22a —
of no relevance to whether one should or should not eat
eggs. We affirm LD. 47 which discusses this issue at
greater length.
(2) there is competent and reliable scientific evidence
that dietary cholesterol, including that in eggs, decreases
the risk of heart disease; and that avoiding dietary choles-
terol increases the risk of heart disease.
e e * ° . * *
CX 2 represented:
There is absolutely no scientific evidence that eating
eggs, even in quantity, will increase the risk of a heart
attack. There is, in fact, preliminary evidence that the
opposite is true, which has led Dr. Roger Williams to
write, “Anyone who deliberately avoids cholesterol in his
diet may inadvertently be courting heart disease.”* In
one recent sudy, four hundred obese, mostly middle-aged
policemen were placed on a diet that included two or
more eggs each day, by Dr. Sam 8S. Berman, a Boston
physician. After eight years, there has not been a single
heart attack reported in the group.
(The asterisk refers to a citation of the book “Nutrition
Against Disease” by Dr. Roger J. Williams.)
The manifest implication of the above-quoted repre-
sentation is that there exists scientific evidence, albeit
“preliminary,” that eating dietary cholesterol, including
that in eggs, is helpful in preventing the risk of heart
disease. None of the experts who appeared for either side
in this proceeding was willing to offer any support for
that proposition. (1.D. 113) The quotation by Dr. Williams
cited in the advertisement is part of a larger selection
from which it is clear that the author meant only that
by avoiding dietary cholesterol, one might inadvertantly
deprive himself or herself of other valuable nutrients,
and the resulting state of malnutrition could increase
the risk of heart disease. We affirm I.D. 42-44, 48, 113,
and 114 which discuss these issues at greater length. [20]
=~ Be ...
(3) There is competent and reliable scientific evidence
that eating eggs does not increase the blood cholesterol
in a normal person.
There is competent and reliable scientific evidence that
a person’s blood cholesterol level is prevented from being
raised or lowered by dietary cholesterol intake because
(a) the human body increases its manufacture of choles-
terol intake and (b) the human body eliminates the same
amount of cholesterol as that eaten.
Respondents do not deny making the first claim, (RB
46) since CX 1 states that “Eggs contain cholesterol—as
do all foods of animal origin—but eating eggs does not
increase the blood cholesterol in a norma! person.”
The judge concluded that the foregoing assertion was
unsupported, and that the evidence of record led to the
opposite conclusion. (I.D. 115) It is clear that scientists
do disagree as to the extent to which a reduction in
cholesterol consumption will affect levels of blood choles-
terol. Moreover, it appears that for some people, increases
in dietary cholesterol do not necessarily translate into
increases in serum cholesterol. However, for other people,
it is equally apparent that increases in consumption of
dietary cholesterol, including that in eggs, will have an
impact on serum cholesterol. (I.D. 115) It is obviously
misleading, therefore, for respondents to claim, without
qualification, that eating eggs will not increase the blood
cholesterol level in a normal person.
With respect to the claims that the body’s mechanisms
operate to compensate for increases and decreases in
dietary cholesterol intake, respondents claim that they
merely represented that the body would produce or excrete
“just about” as much cholesterol as was deducted from
or added to the diet. While the “just about” language does
occur in some of the challenged advertisements, we agree
with the ALJ’s conclusion in I.D. 46 that the implication
of the claim in the context in which it is made is that
the body’s mechanisms operate to prevent an increase or
=
lowering of serum cholesterol in response to dietary modi-
fication. We affirm I.D. 45-46 and 115-116.[21]
C. Corporate Name
The ALJ concluded that the name “National Commis-
sion on Egg Nutrition” has the tendency and capacity to
mislead the public into believing that the corporation is
an impartial, independent, quasi-governmental health
commission, when in fact it is an association of persons
engaged in the egg industry. (I.D. 49) The judge reasoned
that the words “National Commission” in particular would
tend to enhance, misleadingly, the authority of NCEN’s
pronouncements in the eyes of the public, He therefore
recommended that respondent NCEN be required to dis-
close in close proximity to its name the fact that it is an
organization composed of egg producers and others of, or
relating to, the egg industry. While a few of NCEN’s
advertisements did acknowledge that “We're egg people”
or words to similar effect, none included this revelation
in close proximity to the corporate name, and many ad-
vertisements contain no disclosure of corporate composi-
tion whatsoever. (1.D. 49)
NCEN recognized the importance of “what’s in a name”
when it chose its present title to replace the somewhat
more accurate (perhaps too accurate) “Egg Industry
Cholesterol Commssion.” (I.D. 50) The name “National
Commission on Egg Nutrition,” unmodified, is likely to
mislead readers as to the nature of the organization,
given the number of “National Commissions” in the United
States which are, in fact, independent, quasi-governmental
bodies, see, e.g. Sullivan and Kruzas, Encyclopedia of
Governmental Advisory Organizations, pp. 620-21, 619 (2d
ed. 1975).
The deception is, moreover, highly material. Some people
will view with skepticism the claims of industry members
as to the virtues of that industry’s products, especially if
they are aware that the subject is a matter of some con-
troversy. They are less likely to be mistrustful of the
pronouncements of a “National Commission” which pub-
— “a
lishes lengthy excerpts from scientific studies “in the
public interest” (CX 176) and assures its audience that
it follows such matters very closely because “we're vitally
concerned with health and good, natural nutrition.” (CX
5) While —— of a misleading corporate or trade
name 1s at times an appropriate remedy, e.g. United
States Naval Weekly, Inc. v. Federal Trade Raladen
207 F. 2d 17 (D.C. Cir. 1953); Federal Trade Commission
v. Army and Navy Trading Co., 88 F. 2d 776 (D.C. Cir.
1937), we believe the. the clarifying disclosure proposed
by the ALJ is an entirely suitable and less drastic means
of curing the deception here, and we shall include such
a requirement in our order.{ 22]
D. Reasonable Basis Claims; *‘ There is (Overwhelming)
Evidence that Eating Eggs Does Not Increase the Risk of
Heart Disease’’
The order of the law judge would require that respon-
dents desist from the following representations unless
they possess ‘ta reasonable basis’’ for them. consisting of
competent and reliable scientific evidence upon which they
rely for making their claim:
1. eating eggs does not increase the risk of heart at-
tacks, heart disease * * * or any attendant condition.
* ¢@© @ @ @© @ &
* * # » bd . °
4. any representation concerning the relationship
of dietary cholesterol, including that in eggs, to heart at-
tacks * * * or any attendant condition.”
ee
_ Par. 1(B)(2) and (3) of the ALJ’s order would also
prohibit respondents from representing without a reason-
able basis that dietary cholesterol, including that in eggs
decreases the risk of heart attacks, heart disease, or any
attendant condition and that avoiding dietary cholesterol,
including that in eggs, increases the risk of heart attacks
* * or any attendant condition. Since Par. I(A) of
the order contradictorily forbids outright the claim that
there is scientifie evidence for these propositions, and. since
respondents concede there is no scientifie evidence to sup-
port the claims (and indeed deny having made them), we
shall omit the ALJ’s paragraphs I(B)(2) and (3) from
our order.
— 26a —
It is settled law that an advertiser in rendering an affir-
mative claim for a product must have a ‘‘ reasonable basis’’
therefor, consisting of such evidence as is appropriate
to provide substantiation for the type of claim being
made. Pfizer Corp., 81 F.T.C. 23 (1972); National Dy-
namics Corp., 82 F.T.C. 488 (1973), aff’d, 492 F. 2d 1333
(2d Cir. 1974), cert. denied, 419 U.S. 993 (1974); Fireston
Tire & Rubber Co., 81 F.T.C. 398 (1973), aff’d, 481 F. 2d
246 (6th Cir. 1973), cert. denied, 414 U.S. 1112 (1973).
The justification for such a requirement is apparent. Many
consumers are likely to assume that when a product claim
is advanced which is in theory subject to objective verifi-
cation, the party making it possesses a reasonable basis
for so doing, and that the assertion does not constitute
mere surmise or wishful thinking on the advertiser’s part.
As a result, the rendition of a claim based upon inadequate
or nonexistent substantiation [23] violates Section 5 for
failure to state a highly material fact, whose omission js
deceptive."
With respect to respondents’ representation that eat-
ing eggs, even in quantity, does not increase the risk of
heart attacks and heart disease, the ALJ concluded:
Respondents had no reasonable basis for making the
representation * * * at the time the representation was
first made. [Citations omitted] The substantiation neces-
sary to form a reasonable basis for the representation
would be the existence of a consistent body of competent
“Compare **Our product is safe’? with ‘* We think our
product is safe, but we really have only the most incon-
clusive evidence upon which to base this statement.’’ The
latter formulation obviously cures the omission of fact
but it is likely to induce considerably fewer consumers
to buy the product. The Commission has also held that
failure to possess a reasonable basis is unfair within the
meaning of Section 5, Pfizer, Inc., supra. Under either
theory, however, the source of illegality is the same—the
abuse of legitimately held consumer expectations that ad-
vertising claims couched in objective terms are not merely
statements of unsubstantiated opinion.
=.
and reliable scientific evidence indicating that eating eggs
does not increase the risk of cup [coronary heart disease }.
Such evidence should come from each of the various dis-
ciplines of medical science and be of the same caliber of
design, analysis, and interpretation as the substantial
existing body of evidence which supports the opposite
conclusion—that eating eggs does increase the serum
cholesterol level of most people and that the serum choles-
terol level is related to an increase in risk of cup. The
substantiating data would also have to offer some rational
explanation for the discrepancy of results between the
claimed substantiating evidence and the existing body of
evidence, [Citations omitted] (I.D. 118) ,
It is not entirely clear from respondents’ brief on appeal
whether or not they challenge this finding of the law
judge. They do, in their brief, take exception to the ALJ’s
{24} finding that they represented that there was ‘‘over-
whelming evidence’’ that eating eggs does not increase
the risk of heart disease," though they apparently do
not object to the findings that they represented that there
is *‘evidence’’ that eating eggs does not increase the risk
of heart disease, and represented implicitly that they pos-
— a reasonable basis for their statement. (1.D. p.
r 6
’ It is clear to us, however, that respondents di’ make
the *‘overwhelming evidence’’ claim. CX 1 states, for in-
stance, *‘there is absolutely no scientifie evidence that
eating eggs in any way increases the risk of heart attack.
Yet the cholesterol bugaboo persists. The mystery is why.
Why, in the face of overwhelming evidence to the contrary,
do some people fear eggs, cholesterol, heart attacks ?’’ See
also 1.D. 39-41 which we aftirm.
‘* Note should be taken of the difference between denying
the existence of evidence implicating eggs and aflirming
the existence of evidence exonerating them. While respon-
dents’ experts may conclude that the evidence cited against
eggs does not warrant the hypothesis that their consump-
tion increases the risk of heart disease, this does not neces-
— 8a —
Of course, a conclusion that there does not exist affirma-
tive evidence to exonerate eggs does not mean that there
cannot be a sensible basis for declining to limit one’s
egg consumption. As noted before, it is obvious from the
record that some experts believe the existing evidence is
not sufficient to warrant a reduction in egg consumption.
It is deceptive, however, to buttress this conclusion with
the suggestion that it is supported by affirmative evidence
of eggs’ harmlessness if such does not exist.
[25] Respondents object strenuously, however, to that
portion of the law judge’s proposed order [Par. 1(B)(1)]
which requires that they possess a reasonable basis, con-
sisting of competent and reliable scientific studies, for
any claim that eating eggs will not increase the risk of
heart disease. They contend that the difficulty of deter-
mining what constitutes adequate substantiation for the
claim will prevent them from making any assertions on
this subject whatsoever. Respondents object similarly to
proposed Par. 1(B)(4) [RB 48].
In an ordinary case we would have little sympthy for
respondents’ contention. Parties making claims about the
attributes of products—and particularly about the safety
of products—owe to the public a high degree of precision
and care. Where there is doubt, not merely as to the
truth, but as to the substantiability of a claim, the public
is seriously disserved by a presentation which implies that
no doubt exists. Claims involving scientific judgments
necessitate careful scientific evaluation before they may be
made, and the difficulty and possible uncertainty involved
** (Continued )
sarily mean that such evidence supports the affirmative
conclusion that eggs do not increase the risk. The evidence
may in the view of these experts simply be supportive of
no conclusion on the subject.
— 9a —
in making such judgments should normally be no bar to
requiring them."
In the instant case, however, we believe a different ap-
proach is warranted. It is apparent that there is very
little which respondents might claim or wish to claim in
their publications that would not be construed by con-
sumers as stating or implying that eating eggs, even in
quantity, will [26] not increase the risk of heart disease.
To insist upon a ‘‘reasonable basis’’ for such assertions
in the face of an evolving body of scientific opinion would
inevitably place the Commission in the position of having
to resolve an issue as to which the record in this case
warns that competent, well qualified experts are peculiarly
likely to evince sharp disagreement.
The foregoing does not mean, of course, that merely
because a scientific question is the subject of intense con-
troversy an advertiser thereby achieves the right to re-
present unqualifiedly that truth resides on one particular
side, with no warning to consumers whatsoever that a
controversy exists and that substantial reputable authority
takes the opposite view. Clearly it is deceptive for respon-
dents to characterize the other side as armed with ‘‘no
evidence’’ and themselves as in possession of ‘‘over-
whelming evidence.’’ Similarly it is patently deceptive
* As the Commission noted in its Pfizer decision,
‘(tlhe question of what constitutes a reasonable
basis is essentially a factual issue which will be
affected by the interplay of overlapping considera-
tions such as (1) the type and specificity of the claim
made—e.q. safety, efficacy, dietary, health, medical;
(2) the type of product—e.g. food, drug, potentially
hazardous consumer product, other consumer product;
(3) the possible consequences of a false claim—e.g.
personal injury, property damage; (4) the degree of
reliance by consumers on the claims; (5) the type, and
accessibility of evidence adequate to form a reason-
able basis for making the particular claims.’’ (Pfizer,
Inc., supra at p. 64)
— 0a —
for respondents to assert or imply unqualifiedly that egg
consumption, even in quantity, will not increase the risk
of heart disease and selectively cite authorities to this
effect when, in fact, a substantial body of scientific opinion
holds to the contrary.
The simple solution to this deception, we believe, is for
respondents to indicate clearly and conspicuously in their
advertising that the claim they seek to make for eggs is sub-
ject to substantial disagreement by qualified experts with-
in the scientific community. This was basically the ap-
proach adopted by the Seventh Circuit Court of Appeals in
eranting an injunction against respondents’ advertising.
Complaint counsel in their brief to the Commission suggest
a similar approach, (CB 54) although they would also
retain reasonable basis provisions. Once it is made clear
that respondents’ claims are the subject of controversy,
and that well-qualified reputable experts disagree, we
think that the deception which may result from respon-
dents’ assertions of eggs’ safety should be eliminated.
Consumers, including those who lack extensive prior
acquaintance with the cholesterol controversy, will recog-
nize that respondents are merely stating their side of a
complex, unresolved scientific debate, and treat such state-
ments accordingly.
We believe that this remedial approach to the problem
presented here is preferable from both the standpoint of
respondents and consumers. On the one hand, were the
Commission [27] to maintain a narrow view of what con-
stitutes a ‘‘reasonable basis’’ for respondents’ position
and require that as a condition for its expression, it might
indeed come at the expense of respondents’ ability to pub-
licize new developments in the field. On the other hand,
were the Commission to adopt a more expansive view of
‘*reasonable basis,’’ it would be granting carte blanche to
respondents to assure consumers directly or by implication
that egg consumption is safe, without mention of the sub-
stantial contrary opinion. A similar right to deceive could,
under the circumstances, hardly be denied those seeking to
promote various low-cholesterol food products with the
—3la—
unqualified claim that eating eggs or other high cholesterol
foods will increase one’s risk of heart disease.
_Respondents argue that a requirement of affirmative
disclosure is inappropriate because it forces them to make
a statement with which they disagree [RRB 17], namely
(in the case of the Seventh Circuit’s proposed disclosure
and that of complaint counsel) the statement that there
is evidence that eating eggs may increase the risk of
heart disease. While we do not agree that respondents
raise a valid objection, we believe it is possible to accom-
modate their concern by requiring merely that they indi-
cate in their advertisements that many medical experts
believe that existing evidence indicates that consumption
of dietary cholesterol, including that in eggs, may increase
the risk of heart disease. It appears from the ‘record of
this ease that respondents would not disagree with the
foregoing formulation, nor need it oceupy an inordinately
large share of the extensive prose which respondents have
of necessity been devoting to this very complex issue.
For the foregoing reasons we have omitted Sections
I(B) (1) and I(B)(4) of the ALJ’s proposed order. Para-
graph I(B) of the order we have entered will permit
respondents to make representations concerning the exist-
ence of scientific evidence or expert opinion supporting
the view that eating eggs does not increase the risk of
heart disease, or to deseribe such evidence, provided that
respondents also disclose clearly and conspicuously in
conjunction therewith the fact that many medical experts
believe that existing evidence indicates [28] that increased
consumption of dietary cholesterol, including that in eggs,
may increase the risk of heart disease.
* The Commission’s authority to require affirmative dis-
closure in advertising is well-established, e.g. J. B. Wil-
liams Company v. C, 381 F.2d 884 (6th Cir. 1967);
Keele Hair ¢ S Specialists, Inc. v. FTC, 275 F.2d 18
(5th Cir., 1960); Ward Laboratories, Inc. v. FTC, 276
F. 2d 952 (2d Cir. 1960), cert. denied, 364 U.S. 827 (1960) ;
Waltham Precision Instrument Co. v. FTC, 327 F. 2d 427
(7th Cir., 1964), cert. denied, 377 U.S. 992 (1964).
=
Respondents also object to Paragraph I(C)(1) of the
order proposed by the administrative law judge, which
would prohibit misrepresentations of the existence, ab-
sence, or quantum of scientific evidence or proof concern-
ing the relationship between eggs and heart disease. Re-
spondents contend that the provision is unduly vague, and
will thus prevent them from advertising. Whether or not
this claim is valid, the Commission has determined to
modify Paragraph I(C)(1) in slight measure in order to
clarify its purpose, without diminishing the necessary
protections against deception which it is designed to
provide. Paragraph I(C)(1) entered herein parallels both
Paragraph I(A)(2) of the notice order and the second
operative paragraph of the injunction entered by the
Seventh Cirenit, prohibiting representations that the evi-
dence that consumption of eggs will not increase the risk
of heart disease is insignificant, and misrepresentations
of the amount of evidence that consumption of eggs will
not increase the risk, or that such evidence is “over-
whelming.”
We respect respondents’ desire to discuss what they
view as the deficient character of the scientifie case here-
tofore made against eggs. Tt would be misleading for the
reasons discussed earlier, however, for them to do so by
claiming that “no evidence” exists against eggs. The
same effect would be achieved were respondents able to
dismiss the quantum of existing evidence (and by impli-
eation the extent of existing contrary authority) as insig-
nificant, and hence not worth considering. Paragraph
T(()(1). like the injunctive provision on which it is mod-
eled, will prevent this, without foreclosing respondents
from expressing their views as to the nature and quality
of the scientific case against eggs.[29]
Ill, FIRST AMENDMENT DEFENSE
Respondents contend that even if the Commission has
jurisdiction over NCEN, its pronouncements on the sub-
ject of eggs and cholesterol are protected from regulation
by the First Amendment. Respondents aver that they do
— 33a —
not claim a right to make false statements on matters
of health (RRB 1) but they appear to maintain that the
controversial nature of their subject matter and its status
as a subject of public debate render their speech immune
from regulation except perhaps insofar as it contains
provable falschoods.”
In its recent opinion in Virginia State Board of Phar-
macy v. Virginia Citizens Consumer Council, Inc., No.
74-895, 44 U.S.L.W. 4686 (May 24, 1976) [96 S.Ct. 1817]
the Supreme Court dispelled what doubts may have lin-
gered that speech does not lose all constitutional protec-
tion merely because it is designed to offer something for
sale or convince the public of a product’s virtues. At the
same time, the Court reiterated that commercial speech
is not “wholly undifferentiable” from other forms, and
that the indulgence of deception which may be necessary
for certain forms of expression to flourish is not essential
in the commercial arena. As the court noted, “Obviously,
much commercial speech is not provably false, or even
wholly false, but only deceptive or misleading. We foresee
no obstacle to a state’s dealing effectively with this prob-
lem.” (44 U.S.L.W. 4693, n. 24) Similarly, the Court
recognized that the nature of commercial speech may
make it “appropriate to require that a commercial mes-
* Of course, whether or not a statement is “provably
false’’ depends in the first instance on what it means.
Respondents themselves do not deny the falsity of the
claims discussed at pp. 18-20, for example, but deny that
their statements conveyed such claims. Similarly, respond-
ents would presumably not deny the falsity of the message
which we believe is clearly conveyed by their ‘‘no evi-
dence” advertisements, althongh they would deny that
such message is actually conveyed by their words. For
these reasons we take respondents’ First Amendment argu-
ment to be, in some measure, that the nature of their
speech is such that the Commission must refrain entirely
from evaluating it pursuant to the standards of Section
Five, even if such evaluation would lead the Commission
to conclude that it is false.
— 34a —
sage appear in such a form, or include such additional
information, warnings and disclaimer, as are necessary to
prevent its being deceptive.” (/d.)
[30] There is, to be sure, enormous public interest in
the vigorous dissemination of accurate product informa-
tion to consumers by commercial organizations. That in-
terest, which the Supreme Court perceived in the First
Amendment, is no less at the heart of Section Five, whose
goal of promoting competition is advanced in a climate
of useful consumer information. Neither the objectives of
the First Amendment, nor of the FTC Act are well-served,
however, by commercial speech which is deceptive—which
relies upon outright falsehoods or misleadingly oversim-
plified statements of complex issues to induce consumer
beliefs and behavior that might differ considerably if
greater precision were employed. As Justice Stewart noted
in concurring with the majority in Virginia Pharmacy
Board, “* * * the elimination of false and deceptive claims
serves to promote the one facet of commercial price and
product advertising that warrants First Amendment pro-
tection—its contribution to the flow of accurate and reli-
able information relevay. to public and private decision-
making.” (44 U.S.L.W. 4695-96)
Although Virginia State Board of Pharmacy had not
been decided at the time this matter was argued before
the Commission, we think it evident from respondents’
briefs that they do not view their representations as
properly subject to the requirement of non-deceptiveness
which the Court emphasized could appropriately be im-
posed upon commercial speech. Respondents argue in
their briefs that their speech, far from being commercial,
is rather akin to social or political advocacy, and that the
Commission, therefore, may not interfere ‘to any degree
in their expression of “viewpoint.” Alternatively they
seem to suggest that the Supreme Court’s decision in
Bigelow v. Virgima, 421 U.S. 809 (1975) requires a “hal-
ancing” of interests before even misleading commercial
—
speech may be regulated, and that such balancing weighs
here in favor of regulatory abstinence, We cannot agree.”
[31] While there are no doubt aspects of the cholesterol
controversy which impinge upon politics and governmental
policy, those are not the focus of respondents’ publica-
tions, all of which are directed toward conveying, by
varving techniques, the message that eggs are entirely
safe to eat, even in quantity, because consumption of
dietary cholesterol will not increase the risk of heart
disease, or at least has not been implicated by scientific
evidence, Respondents’ early publications (CX 1ff.) con-
vey the message in a conventionally commercial format
(e.q., “The Sexy Egg’’). Later publications make the
same point by means of excerpts from a small and not
particularly representative sample of the scientific litera-
ture, accompanied by appropriate commentary and pro-
fessions of charitable intent, e.g. ‘‘the public has the right
to know.’”’
There are significant differences, we believe, between
scientific health claims made about a product by a com-
mercial organization and commentary on genuine political
or social issues, differences which warrant their well-recog-
nized disparity in legal treatment. Arguments directed to
social and political issues, where made by individuals or cor-
porations, are likely to be recognized by the public as ex-
pressions of opinion, by their very nature subject to con-
troversy and substantial reputable disagreement. Even
interspersed ‘‘factual’’ statements are likely to be viewed
2? We do not wish to mischaracterize respondents’ posi-
tion. They do maintain, of course, that their represente-
tions are neither false nor misleading. On the other hand
they are apparently unwilling to concede that resolution
of this lawsuit depends solely on whether or not the de-
ciding tribunal agrees on that point. For this reason we
understand them to be asserting as defense that the First
Amendment does exempt their statements from liability,
even if they are misleading by the standards customarily
applied by the Commission in analyzing product claim.
— 36a —
with the skepticism reserved for an advocate’s expression
of a disputed point of view. We do not think that con-
sumers, or at least a substantial segment of consumers,
necessarily reserve the same skepticism in viewing what
puport to he largely or entirely factual scientific recita-
tions of the health and nutritive virtues of a food product
by a party presumptively in possession of all information
relevant thereto, ef. Virginia State Board of Pharmacy,
supra, p. 4693, n. 24. While few might still agree that
‘‘advertisements contain the only truths io be relied on
in a newspaper’? (Thomas Jefferson, ‘Letter to Nathaniel
Macon’’), they are clearly an important source of deci-
sion-guiding data for consumers.
Perhaps this is not the way it should be. Perhaps when
consumers read that ‘‘there is absolutely no scientific evi-
dence that eating eggs, even in quantity, will increase the
risk of heart disease’’ they should all recognize this as
merely the advertiser’s interpretation of a controversial
body of evidence, and view it with the appropriate skep-
ticism. But would respondents also desire, and would it
truly be in the public interest, if consumers were to ac-
cord the same intense degree of skepticism to statements
which oecur a few sentences earlier in their advertisement:
‘“* * * eges have fewer calories per gram of protein
than any other natural food * * *. Eggs are an important
source of vitamins A,B,D, and E and are a preferred source
of iron.’? (CX 2)
[32] To the contrary, we believe that some consumers
do, and have a right to place substantial faith in nutrition
and health claims made by commercial organizations. If an
advertiser assures them that the product being touted
contains plentiful quantities of a vitamin, or abundant
amounts of protein, they have a right to assume that these
statements would compel the assent of all or nearly all
experts within the relevant scientific community. Similarly,
when an advertiser, (or a ‘‘National Commission on Egg
Nutrition’’) which presumably knows everything there is
to know about the product being discussed, assures the
lit
— 37a —
public that product is safe, or that there is ‘‘No evidence”’
that it is unsafe, the public will, and we think has a right
to, assume that the advertiser is doing more than express-
ing an opinion that would at best obtain the qualified as-
sent of a mere fraction of those professionally competent
to evaluate it.
For the foregoing reasons we must reject respondents’
contention that their publications are, like true political
commentary, constitutionally immunized from the neces-
sity to adhere to the standards of Section Five of the
Federal Trade Commission Act. Similarly, we doubt that
the Bigelow case compels the application of a balancing of
interests test in each particular case before any regulation
whatsoever may be applied to misleading commercial
speech. That balance has already been struck on a
categorical basis, a fact recognized by the Supreme Court
in Virginia Board of Pharmacy if not in Bigelow itself.
Assuming, however, arguendo that such balancing is ap-
propriate, we conclude that it weighs heavily here in favor
of regulation for the following reasons:
There is scant public benefit and considerable actual
and potential publie harm (1.D. 109-110, 127) in adver-
tising which assures all members of the public that there
is no reason to doubt that they may eat as many eggs as
they wish without any increase in the risk of heart
disease, without a mention that a major segment, perhaps
a substantial majority, of the relevant expert community
strongly disagrees.
Respondents claim that their advertising serves the
worthy purpose of firing debate in an area marked bv
misinformation and misconception. To be sure, the ex-
hibits introduced by respondents demonstrate that they
have no monopoly on the dissemination of misinformation
concerning the relationship [33] between dietary choles-
terol and heart disease, although their advertisements are
probably more likely to catch the ey. than the nutrition
articles to which they object. Nevertheless, assuming
arguendo that respondents’ publications may indeed pro-
=
voke valuable consumer debate, there is no reason to con-
clude that such debate could not and will not be equally
well encouraged, without deleterious side effects, by ad-
vertising that is not misleading. As the Supreme Court
noted in Virginia Board of Pharmacy, **|s]lince adver-
tising is the sine qua non of commercial profits, there is
little likelihood of its being chilled by proper regulation
and foregone entirely.’’ 44 U.S.L.W. 4693, n. 24.
In addition to the public debate, respondents suggest
that regulation of their publications will chill ‘‘independent
thought and variance from government orthodoxy by
those who can contribute to the science of the matter.’’
(RB 36) We agree, of course, that the First Amendment
exists to foster the search for truth as well as the ex-
pression of opinion, and that search may entail societal
sufferance of many deceptions, real and imagined, along
the way. This consideration weighs overwhelmingly in
favor of the right of scientists to disseminate their views
free of scrutiny, or of journalists and publishers te report
upon or promote scientifie works, despite an incideniai
commercial effect, e.g. Scientific Manufacturing Co. v. FTC,
124 F. 2d 640 (3rd Cir. 1944).
The foregoing consideration is far less compelling, how-
ever, in the case of those who would simply use, or misuse,
the works of scientists for the purpose of convincing the
public of a scientific proposition in order to promote the
sale of a commercial product, e.g. Perma-Maid Co. v.
FTC, 121 F. 2d 282 (6th Cir. 1941); Koch, et al. v. FTC,
206 F. 2d 311 (6th Cir. 1953). It should be apparent that
the Commission in its decision has expressed no view as to
the merits of the diet/ heart disease hypothesis, and the
Commission’s opinion, like that the ALJ, simply cannot be
taken as an endorsement of anyone’s orthodoxy except
perhaps by those scientists who, in most unscientific
fashion, choose to draw conclusions about a document with-
out reading it. For these reasons we cannot take seriously
respondents’ suggestion that those who would do research
in this area will in any way be deterred by a Commission
— 39a —
decision adverse to NCEN, and we must similarly conclude
that no reason exists in this case to warrant the Com-
mission’s departure from its statutory duty to proscribe
false and misleading advertising.
[34] The foregoing is not to say, as should by now be
clear, that we view the issues raised by respondent and
the peculiar nature of this case to be wholly irrelevant
to our decision and particularly the question of appro-
priate relief herein. As noted in the preceding discussion
of ‘‘reasonable basis,’’ [Part II(D)] we do believe that
the nature of the dispute here in issue warrants a some-
what different order from that which might ordinarily be
appropriate. We believe that the order we have entered
herein should adequately accommodate those interests
which respondents claim warrant complete regulatory
exemption. Paragraph I(A) of the order will prohibit cer-
tain precisely defined and demonstrated falsehoods which
may be used to convince people of eggs’ safety and nutri-
tive virtue. It will also require respondents to disclose
that NCEN is an organization of egg industry people. At
the same time, the order will not prevent respondents from
presenting to consumers their point of view regarding
the safety of eggs, provided they make it clear that their
assertions are subject to substantial expert disagreement.
Substitution of affirmative disclosure for the requirement
of ‘‘reasonable basis’’ is intended to maximize the cer-
tainty with which respondents may advertise, since inclu-
sion of the disclosure in conjunction with a representation
described in Par. I1(B) will suffice to immunize the re-
presentation from liability under the order.
Respondents also object to the order on grounds that
while it purports to be applicable only to ‘‘advertise-
ments’’ it gives inadequate guidance as to what publica-
tions fall under that term. Complaint counsel suggest a
two-part test: (1) is the publication used in connection
with the sale or promotion of a product, and (2) does it
have a tendency or capacity to induce the sale of, or to
affect any other commercial behavior toward, the product?
—_
Cf. Koch, et al. v. FTC, swpra, at 318 (6th Cir. 1953). In
view of the nature of respondent NCEN, described in part
I of this opinion, it is obvious that any publication dis-
seminated by it in mass media to the lay public, and satis-
fying the second criterion, also satisfies the first. We
think the traditional standard of whether or not a publica-
tion has the tendency or capacity to induce the sale of a
product is also not unduly vague. Publications designed
to convey the point that consumption of a particular pro-
duet, will not increase the risk of heart disease, are clearly
likely to induce the purchase of that [35] product. The
fact that the message is conveyed by means of selected
quotations from the works of scientists and popular
writers does not alter the commercial character of the pub-
lication. Nor is it altered by self-serving professions of
eleemosynary intent, e.g. ‘‘Brought to you in the public
interest.’’ If anything the misleading effect of respon-
dents’ advertisements is enhanced by casting them in the
guise of a ‘‘public service message’’ presented by an un-
identified ** National Commission’’.*'
The term ‘‘advertisement’’ is one which has generally
heen thought sufficiently clear by courts applying it in
Section Five orders, including the Seventh Cireuit which
used the term in issuing an injunction in this matter. (517
F. 2d 485, 491.) We think it is sufficiently clear in this
ease. We do not doubt that if respondents wish, after
entry of an order, to continue the misrepresentations pro-
hibited therein, their ingenious efforts to create a ‘‘non-
advertisement” in which to do so may raise close ques-
tions of interpretation. That, however, can be no reason
in this, or in any other case, for withholding entry of an
order to prohibit the recurrence of what are clearly mis-
leading advertisements.
*' In this regard we must reject the suggestion attributed
to the ALJ (RB 21ff.) that CX 171-173 and 175-176 are
necessarily not commercial publications, although they do
not form the basis for our finding of liability in this matter.
i oS ee eS a ee ee
— 4la —
For the foregoing reasons the initial decision of the
administrative law judge is affirmed, except to the extent
modified herein.*? An appropriate order is appended.** [36 |
APPENDIX
The findings of fact and conclusions of Law set forth in
the initial decision of the administrative law judge are
adopted by the Commission, except to the extent they are
qualified in the Commission’s opinion and in this appendix:
LD 14, p. 9, Add to the end of line 3,
‘*in at least certain docu-
mented instances’’
delete ‘‘(Smith, 1635-36)’’
[Although the conclusion
of the aus for which cita-
tion is given in sup-
port is correct and ap-
parent from the face of
the advertisements, the
citation is inapposite.
delete ‘‘and most authora-
tative [sic]’’
LD. 21, p. 12,
LD 59, p. 32,
*21n addition to modifications described in the text, we
have reviewed the initial decision and respondents’ ob-
jections to it at RB la-Ga, and have made certain changes
in the initial decision findings adopted by the Commission.
These are recited in the Appendix to this opinion.
** We have modified a paragraph proposed by the ALJ
which would have required NCEN to require its members
to sign an agreement to abide by terms of the order as a
condition of membership. The order entered will simply
require that NCEN members be provided with copies of
the order. To the extent that NCEN acts through its mem-
bers, or that its members act on its behalf the corpora-
tion will be liable. While the signature provision is clearly
a necessary remedy in certain cases, we can perceive no
need for it here.
— 42a —
LD. 106, p. 57, change ‘‘The qualifications
as experts on CHD are un-
challenged’’ to ‘* They are
well-qualified as experts
on CHD’’
ILD. 110, p. 59, add at end of finding, ‘‘Of
course, Dr. Blackburn’s
estimate must be qualified
in light of his acknowl-
edgment that he cannot
be certain that increases
in serum cholesterol
levels would in fact re-
sult in increases in the
rate of cup. Tr. 377-79"’
I.D. 120, p. 65, amend final sentence on
this page to read:
**Rather, the proper con-
clusion with respect to
the viewpoint of those
experts quoted herein-
above is approximated by
this statement by the In-
ter-Society Commission
for Heart Disease Re-
sources (Finding 102
supra) :’’
LD. 120, p. 66, delete sentence beginning
‘‘The testimony relied
upon * * *’’ [This sub-
ject is more fully dis-
cussed in Part I of this
opinion. ]
Finat OrpeER
[1] This matter having been heard by the Commission
upon the appeal of respondent from the initial decision,
and upon briefs and oral argument in support thereof and
— 43a —
opposition thereto, and the Commission for the reasons
stated in the accompanying opinion having determined to
sustain the initial decision with certain modifications:
It is ordered, That the initial decision of the administra-
tive law judge, pages 1-95, be adopted as the Findings
of Fact and Conclusions of Law of the Commission, ex-
cept to the extent indicated in the accompanying opinion.
Other Findings of Fact and Conclusions of Law of the
Commission are contained in the accompanying opinion.
It is further ordered, That the following order to cease
and desist be, and it hereby is ,entered:
ORDER
1
It is ordered, That respondents National Commission on
Egg Nutrition and Richard Weiner, Inc., corporations,
their successors and assigns, either jointly or individually,
and [2] respondents’ officers, agents, representatives, and
employees, directly or through any corporation, subsidiary,
division or other device, in connection with the advertising,
offering for sale, sale or distribution of eggs for human
consumption do forthwith cease and desist from:
A. Disseminating or causing the dissemination of any
advertisement by .eans of the United States mail or by
any means in or affecting commerce, as ‘‘commerce’’ is
defined in the Federal Trade Commission Act, which
directly or indirectly
1. Represents that there is no scientific evidence that
eating eggs increases the risk of heart attacks, heart
disease, atherosclerosis, arteriosclerosis, or any attendant
condition ;
2. Represents that there is scientific evidence that
(lietary cholesterol, including that in eggs, decreases the
risk of heart attacks, heart disease, atherosclerosis, ar-
teriosclerosis, or any attending condition;
enoliiininn
3. Represents that there is scientific evidence that avoid-
ing dietary cholesterol, including that in eggs, increases
the risk of heart attacks, heart disease, atherosclerosis,
arteriosclerosis, or any attendant condition;
4. Represents that eating eggs does not increase the
blood cholesterol level in a normal person;
5. Represents that the blood cholesterol level is pre-
vented from being raised or lowered by dietary choles-
terol intake;
6. Represents that the human body increases its manu-
facture of cholesterol in an amount equal to a decrease in
dietary cholesterol intake;
7. Represents that the average human body eliminates
the same amount of cholesterol as that eaten;
[3] 8. Represents that dietary cholesterol, including
that in eggs, ix needed by the body for building sex
hormones, for transmitting nerve impulses and for main-
taining life in cells; or
9. Utilizes the name ‘‘National Commission on Egg
Nutrition’’ unless it is clearly and conspicuously disclosed
in immediate conjunction with the name that the National
Commission on Egg Nutrition is composed of egg prod-
ucers and other individuals and organizations of, or re-
lating to, the egg industry.
B. Disseminating, or causing the dissemination of any
advertisement by means of the United States mail or by
any means in or affecting commerce, as ‘‘commerce’’ +s
defined in the Federal Trade Commission Act which
directly or indirectly
1. Represents that eating eggs does not increase the
risk of heart attacks, heart disease, atherosclerosis, ar-
teriosclerosis, or any attendant condition or represents
that there exists, or describes scientific evidence which
supports the theory that consumption of dietary choles-
terol, including that in eggs, does not increase the risk
3
aw (oe ..
of heart attacks, heart disease, atherosclerosis, arterios-
clerosis, or any attendant condition or
2. Makes any representation concerning the relation-
ship of dietary cholesterol, including that in eges, to heart
attacks, heart disease, atherosclerosis, arteriosclerosis, or
any attendant condition unless it is clearly and conspicu-
ously disclosed in immediate conjunction therewith that
many medical experts believe that existing evidence in-
dieates that increased consumption of dietary cholesterol,
including that in eggs, may increase the risk of heart
disease.
[4] C. Disseminating, or causing the dissemination of,
any advertisement by means of the United States mail or
by anv means in or affecting commerce, as ‘‘commerce’’
is defined in the Federal Trade Commission Act, which
directly or indirectly
1. Represents as insignificant the available scientific
evidence that the consumption of dietary cholesterol, in-
eluding that in eggs, may increase the risk of heart at-
tacks, heart disease, atherosclerosis, arteriosclerosis, or
any attendant condition, or represents that there is over-
whelming scientific evidence or otherwise misrepresents
the amount of scientifie evidence that eating eggs does not
inerease the risk of heart attacks, heart disease, atheros-
clerosis. arteriosclerosis, or any attendant condition.
2. Misrepresents in any manner the physiological effects
of consuming dietary cholesterol or eggs.
II
It ts further ordered, That respondents shall forthwith
distribute a copy of this order to each of their operating
divisions, and to all current and future members of respon-
deut National Commission on Egg Nutrition.
It is further ordered, That each respondent notify the
Commission at least thirty (30) days prior to any pro-
posed change in its corporate structure such as dissolu-
—
r sale resulting in the ee of _
i dissolution of sub-
successor corporation, the creation or =
sidiaries or any other change in the corporation ee
may affect compliance cbligations arising out oO e
order.
-: further ordered, That each respondent shall, within
Ps by? days after this order becomes final, file — beg
Commission a report, in writing. signed by aig
setting forth in detail the manner and form of its
plance with the order to cease and desist.
tion, assignment 0
— 47a —
NATIONAL COMMISSION ON EGG NUTRITION and
Richard Weiner, Inc.,
Petitioners-Appellants,
vs.
FEDERAL TRADE COMMISSION,
Respondent-Appellee.
Nos. 76-1969 and 76-1975.
United States Court of Appeals, Seventh Circuit.
Argued June 17, 1977.
Decided No. 29, 1977.
As Amended Dec. 6, 1977.
Supplemental Opinion on FTC’s Motion to Amend
Judgment Jan. 23, 1978.
Following remand, 517 F.2d 485, Federal Trade Com-
mission entered order prohibiting false and misleading
advertising by egg industry trade association concerning
the relationship between cholesterol, eggs, and heart
disease. The Court of Appeals, Tone, Cireuit Judge, held
that: (1) evidence sustained determination that represen-
tations made by the industry and various advertisements
had been false; (2) the statements complained of were not
immune under the First Amendment from FTC action; (3)
order was not unconstitutionally vague, but (4) industry
should not have heen required to include, in any future
statements concerning the relationship between eggs and
heart disease, information that many medical experts be-
lieve that increased consumption of cholesterol may in-
crease the risk of heart disease.
Enforced in part.
1. Amicus —1
Argument which was not made before the Federal Trade
Commission or by the parties themselves in the Court
of Appeals was not properly before the Court of Appeals
when presented in brief filed by amicus curiae.
—
9. Trade Regulation — 802
Evidence sustained determination of Federal Trade Com-
mission that advertising statements made by trade as-
sociation of the egg industry concerning lack of relation-
ship between cholesterol, eggs, and heart disease were false.
3. Constitutional Law — 90(1)
First Amendment embraces the interests of both the
speaker and the prospective audience, U.S.C.A.Const.
Amend. 1.
4. Constitutional Law — 90.1(1)
Advertising statements of egg industry which categor-
ically and falsely denied the existence of evidence con-
sidering relationship between cholesterol, eggs, and heart
disease, which evidence in fact existed, were not immune
under the First Amendment from FTC order prohibiting
false advertising. U.S.C.A. Const. Amend. 1; Federal
Trade Commission Act §§ 5, 12, 15 U.S.C.A. §§ 45, 52.
5. Trade Reculation — 816
Neither the use of the term ‘‘advertisement’” in FTC
order prohibiting certain misleading statements in adver-
tising nor statement of the Administrative Law Judge
that he did not predicate a finding of violation on certain
materials published by the respondent rendered the order
uneonstitutionally vague. Federal Trade Commission Act,
§§ 5, 12, 15 U.S.C.A. §§ 45, 52.
6. Trade Regulation — 816
Provision of Federal Trade Commission order pro-
hibiting advertising which represented as insignificant the
available scientific evidence that the consumption of dietary
cholesterol, including that in eggs, may increase the risk
of heart disease or which otherwise misrepresented the
amount of scientifie evidence that eating eggs does not
inerease the risk of heart attacks was not unconstitu-
tionally vague. Federal Trade Commission Act, §§ 5, 12,
15 U.S.C.A. §§ 45, 52; U.S.C.A.Const. Amend. 1.
— 49a —
7. Trade Regulation — 812
Federal Trade Commission, in barring false and mis-
leading advertisements, was not limited to prohibiting the
precise misrepresentations which had occurred in the past.
Federal Trade Commission Act, §§ 5, 12, 15 U.S.C.A. §§
45, 52.
8. Constitutional Law — 90.1(1)
First Amendment does not permit Federal Trade Com-
mission to impose a remedy for false and misleading ad-
vertising which is broader than that necessary to prevent
deception or correct the effects of past deception. U.S.C.A.
Const. Amend. 1; Federal Trade Commission Act, 4§ 5, 12,
15 U.S.C.A. §§ 45, 52.
9 Trade Regulation — 812
In the absence of showing a long history of deception
on the part of egg industry with respect to advertisements
concerning relationship between cholesterol, eggs and heart
disease, Federal Trade Commission requirement that the
industry include in any future advertisements concerning
the relationship between eggs and heart disease the state-
ment that many medical experts believe the increased con-
sumption of dietary cholesterol, including that in eggs, may
increase the risk of heart attack; the egg industry should
not have been required to argue the other side of the con-
troversy; the requirement could be imposed only when
the industry chose to make a representation as to the
state of available evidence or information concerning the
controversy. U.S.C.A.Const. Amend. 1; Federal Trade
Commission Act, §§ 5, 12, 15 U.S.C.A. §§ 45, 52.
James L. Fox, Donald P. Colleton, Chicago, Ill., for
petitioners-appellants.
John T. Fischbach, Atty., F T. C., Washington, D. C.,
for respondent-appellee.
=
Before Sprecuer and Tone, Cireuit Judges, and Camp-
BELL, Senior District Judge.*
Tone, Cireuit Judge.
The subject of this appeal is commercial speech under
the First Amendment. Acting pursuant to its power to
prohibit false and misleading advertising, the Federal
Trade Commission has entered a final order directing
petitioners to cease and desist from disseminating adver-
tisements containing statements to the effect that there
is no scientific evidence that eating eggs increases the
risk of heart and circulatory disease.’ Certain statements
ancillary to the one just described are also prohibited, and
the right to make still others is limited and conditioned
by the order. We sustain the order, except for a provision
which we hold to be overbroad
Petitioners are a trade association that calls itself the
National Commission on Egg Nutrition (NCEN), and its
advertising agency, Richard Weiner, Inc. Despite its ofli-
cial-sounding title, NCEN was formed by members of the
egg industry, to counteract what the FTC described as
‘‘anti-cholesterol attacks on eggs which had resulted in
steadily declining per capita egg consumption.’’ To carry
out this mission, NCEN, with Weiner’s assistance, mounted
an advertising and public relations campaign to convey
the message that eggs are harmless and are needed in
human nutrition. In 1974 the FTC filed a complaint charg-
ing petitioners with having violated §§ 5 and 12 of the
Federal Trade Commission Act, 15 U.S.C. §§ 45, 52, by
placing newspaper advertisements containing various false
"The Honorable William J. Campbell, Senior District
Judge of the United States District Court for the Northern
District of Illinois, is sitting by designation.
‘The term ‘‘heart and circulatory disease’’ is used in
this opinion to include, in the Commission’s phrase, ‘‘heart
attacks, heart disease, atherosclerosis, arteriosclerosis, or
any attendant condition.’’
—5la —
and misleading statements with respect to the relation-
ship between eating eggs and heart and circulatory disease.
In its answer, NCEN admitted that it had made represen-
tations in its advertising concerning the absence of scien-
tifie evidence that eating eggs increases the risk of heart
and circulatory disease and also had represented that eat-
ing eggs does not increase the blood cholesterol level in
a normal person, but stated that it was no longer making
such representations in its advertising. NCEN did not
contest that other representations charged were misleading
hut denied having made them.
After filing its complaint, the FTC sought a temporary
injunction in the District Court under § 13(a) of the
Federal Trade Commission Act, 15 U.S.C § 53(a), to
prohibit NCEN from continuing its allegedly false adver-
tising while the administrative proceeding was pending.
The District Court denied the relief sought by the FTC.
We reversed and directed the entry of an injunction for-
bidding the misrepresentations complained of but allowing
NCEN to make ‘‘a fair presentation of its side of the
controversy.’’ FTC vy. National Commission on Egg Nutri-
tion, 517 F.2d 485, 489 (7th Cir. 1975), cert. denied, 426
U.S. 919, 96 S.Ct. 2623, 49 L.Ed.2d 372 (1976).
After hearing the evidence, an administrative law judge
sustained the allegations of the complaint and recom-
mended a cease and desist order. On appeal to the FTC,
the ALJ’s findings were sustained and the recommended
order was adopted with some modifications. NCEN and
Weiner have filed petitions for reveiew of that order by
this court. Only NCEN has filed a brief.
The order directs NCEN and Weiner to cease and
desist from disseminating, by mail or means in or affect-
ing commerce, advertising which directly or indirectly
makes certain specified representations. The one wiiich is
of principal concern here is ‘‘that there is no scientifie evi-
dence that eating eggs increases the risk of . . . heart
fand circulatory] disease... .”’ Other specifically pro-
— 52a —
hibited statements, which the FTC found petitioners had
made in the past, are variations on the same general
theme.* In addition, any representation concerning the re-
lationship of eating eggs, or of dietary cholesterol, in-
cluding that in eggs, to heart and circulatory disease, is
permissible only if
it is clearly and conspicuously disclosed in immediate
conjunction therewith that many medical experts be-
lieve that existing evidence indicates that increased
consumption of dietary cholesterol, including that in
eggs, may increase the risk of heart disease.
Also forbidden is any statement hich
[r]epresents as insignificant the :vailable scientific evi-
dence that the consumption of dietary cholesterol, in-
cluding that in eggs, may increase the risk of...
heart disease, ... or represents that there is over-
whelming scientific evidence or otherwise misrepresents
* Petitioners are forbidden from making any statement
which directly or indirectly represents
... that there is scientific evidence that dietary choles-
terol, including that in eggs, decreases the risk of
... heart [and cireulatory] disease .. .;
. that there is scientific evidence that avoiding
dietary cholesterol, including that in eggs, increases
the risk of .. . heart [and circulatory] disease . . .;
... that eating eggs does not increase the blood choles-
terol level in a normal person;
... that the blood cholesterol level is prevented from
being raised or lowered by dietary cholesterol intake;
.. . that the human body increases its manufacture of
cholesterol in an amount equal to a decrease in dietary
cholesterol intake;
. that the average human body eliminates the
same amount of cholesterol as that eaten;
. that dietary cholesterol, including that in eggs,
is needed by the body for building sex hormones,
for transmitting nerve impulses and for maintaining
life in cells. ..
— 53a —
the amount of scientific evidence that eating eggs does
not increase the risk of . .. heart disease ... [or]
[mJisrepresents in any other manner the physiologi-
eal effects of consuming dietary cholesterol or eggs.
The order also prohibits NCEN from using its name “‘. .
unless it is clearly and conspicuously disclosed in im-
mediate conjunction with the name that iic National Com-
mission on Egg Ntrition is composed of egg producers and
other individuals and organizations of, or relating to, the
egg industry.”’
{1} NCEN does not challenge the requirement that it
identify itself as a trade association if its wishes to con-
tinue using its current title. Nor does it specifically chal-
lenge the findings that the various statements found to
have been made, other than the ‘‘no scientific evidence’’
statement, were false and misleading. The debate before
us is focused on that statement, i.e., that there is no scien-
tifie evidence linking the eating of eggs to an increased
risk of heart and circulatory disease. NCEN argues, first,
that the statement is true; second, that even if it is mis-
leading, the FTC’s prohibition infringes upon NCEN’s
First Amendment rights; and, finally, that even if the
FTC’s holding of a violation is upheld, its order is
unconstitutionally vague and overbroad, going beyond
what is necessary to remedy that violation.°
*The Association of National Advertisers, Inc., in an
amicus brief filed in support of NCEN, argues that the
FTC’s hearing procedures violated the First Amendment
standards set forth in Blount v. Rizzi, 400 U.S. 410, 417,
91 S.Ct. 428, 27 L.E.2d 498 (1971). As the FTC points
out, however, this argument was not made before the
FTC or even by the petitioners themselves in this court
and is therefore not properly before us. See American
Meat Institute v. Environmental Protection Agency, 526
F.2d 442, 449 (7th Cir. 1975).
— §4e
I. Falsity
[2} What the FTC describes as the ‘‘diet/heart
disease’’ hypothesis, subscribed to by ‘‘many well-qualified
medical science experts .. ., with varying degrees of con-
viction,”’ is as follows: For many people, the amounts of
cholesterol and saturated fats which are ingested affect
the risk of heart and circulatory disease; increasing the
amounts increases the risk, and decreasing the amounts
decreases the risk.
Egg yolks contain substantially more cholesterol than
any other commonly eaten food and are a major contribu-
tor of cholesterol in the American diet. The yolk of one
egg provides cholesterol in an amount equal to about one-
third of the average daily per capita consumption of
cholesterol. (Although the yolk also contains saturated
fat, the amount per egg is equal to less than four percent
of the average per capita intake of that substance.)
The diet/heart disease hypothesis is based on several
propositions: First, in many people the cholesterol level
in the blood stream (serum cholesterol) is affected by the
amount of cholesterol and saturated fat in the diet. Second,
relatively high levels of serum cholesterol have been as-
sociated with relatively high incidence of coronary heart
disease in sample populations. Third, relatively high levels
of serum cholesterol contribute to the formation of
atherosclerotic lesions, which precipitate heart disease.
These propositions have been formulated by scientists
based upon, in the FTC’s words, ‘‘the results of a large
body of clinical-pathological, experimental, and epidemio-
logical studies.’’ After describing these studies, the ALJ
had found that they
were conducted using scientific methodologies, were
performed by competent and highly regarded inves-
tigators, have been reported in recognized scientific
journals after peer review, and have been generally
— 55a —
accepted by experts in the field and by the scientific
community.
These administrative findings of fact are not challenged
by NCEN. Instead, it relies upon testimony of its own
expert witnesses that some scientists and doctors are not
persuaded by the studies, and that in the opinion of the
witnesses the sudies are not ‘‘evidence’’ and, in the words
of one witness, ‘‘would not convince anybody that the
number of eggs consumed does increase the risk of ischemic
heart disease.’’
The FTC concluded that, impossible though it may be
to determine whether consuming eggs in fact increases the
risk of heart and circulatory disease, it is possible to
determine the existence and amount of evidence on that
issue. Referring to the testimony of NCEN’s experts
that, in their opinion, there was no evidence of a connec-
tion between eggs and heart and circulatory disease, the
FTC said that
in rendering their testimony respondents’ witnesses
did not dispute the fact that many experts, in the
exercise of reasonable, albeit disputed, scientific judg-
ment, have relied upon a large body of scientific
studies in formulating the diet/heart disease hy-
pothesis.
Responding to the argument that the ‘‘no evidence’”’ state-
ment would be recognized by readers as merely an ex-
pression of opinion, the FTC said,
Unfortunately, however, the phrase ‘‘there is no evi-
dence’’ is also, and perhaps more reasonably subject
to the interpretation that ‘‘there do not exist com-
petent and reliable scientific studies from which well-
qualified experts could reasonably hypothesize that
=_
eating eggs increases the risk of heart disease.’’ This
latter message is patently false and imsleading.*
As the Third Circuit observed in Beneficial Corp. v.
FTC, 542 F.2d 611, 617 (1976), cert. denied, 430 U.S. 983,
97 S.Ct. 1679, 52 L.Ed.2d 377 (1977), ‘‘[w]hether particu-
lar advertising has a tendency to deceive or mislead is
obviously an impressionistic determination more closely
akin to a finding of fact than to a conclusion of law.’’ Ap-
plying the ‘‘substantial evidence’’ rule, and giving due
regard to the FTC’s expertise, we cannot disturb the
finding.
Moreover, our own finding, if it were our province to
make one, would be less charitable to petitioners than that
of the FTC. The various scientific studies and that ex-
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