# Petition — PAY'N SAVE CORP. v. FEDERAL TRADE COMMISSION (No. 79-1090) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1542%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1980 ## Text Supreme Court, U.& ~ FILED IN THE Supreme Court of the United tog 1 00 | ICHAE u K OCTOBER TERM, 1979 L_RODAK, JR CLER | ° = et MERON eee SEY Pe NO. 79-1090 PAY'N SAVE CORPORATION, a corporation | Petitioner, Vv. FEDERAL TRADE COMMISSION, Respondent. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT RYAN, SWANSON, HENDEL & CLEVELAND By Michael R. Rayton Office & PO Address: 3201 The Bank of California Center Seattle, WA 98164 Telephone: (206) 464-4224 ABCD AT CRAFTSMAN PRESS, SEATTLE TABLE OF CONTENTS Page Citations to Opinion Below. ......... 2 WUPTRRPCR OMe 6 les Eee te eRe he ee 2 GRORCVONE Fregemems cine ee ee we 8 ee 3 Constitutional Provisions and Statutes .... 4 SUM OO I as ig ke ew we 4 Reasons for Granting the Writ. ........ 11 1. The Decision Below Conflicts with the Decisions of Other Courts of Appeal as to the Proper Standard of Liabil- ity to Be Applied Under Section 12... ll 2. This Is a Case of First Impression Inas- much as the FTC Has Never Before At- tempted to Impose Liability in an Adjudicatory Proceeding Upon a Re- tailer For Utilizing Advertisements Prepared by its Supplier ........ 16 3. The Seventh Circuit's Adherence to a Literal Interpretation of Section 12 Disregards the Legislative History and Historical Context From Which Section i2 AVORE =. aan = 108 Tomete Of 6Le pee te oe (aw PLEOEE PERT VOLS NAW Ams AGBACSS OLLI Wi spacks, bat you won't be the ‘of the overeating habit. If you aren't 100% delighted, retyrn your first package for an igpnediace re(uad — no yuections asked, Asan SRI AVAILABLE AT ALL STORES Aeerese Cure fee le S Cece caviwes GQ Mensy Grose J Chore eantcesd wee ee meee et me as oe aR A eeerece coset, cane B Raw EOE ee FROM GEORGIA TO NEBRASKA TO CALIFORNIA © B-7 * x * * * * * Part of the secret of this method is a unique ingredient . . which puts a “brake” on your cravings for sweets, candy, pastries, rich gravies. [6] PAR. 9. Through the use of said adver- tisements and others similar thereto but not specifically set out herein, respondents have represented and are now representing, directly or by implication, that: A. Users of X-11 tablets can lose weight | without restricting their accustomed caloric intake and while they continue to eat the foods of their choice. B. Respondents have a reasonable basis from which to conclude that substantially all users of X-11 tablets will lose a significant amount of weight. C. The X-11 tablet contains a unique ingred- jient. PAR. 10. In truth and in fact: A. Users of X-11 tablets cannot lose weight without restricting their accustomed caloric intake nor while they continue to eat the foods of their choice. In fact, each X-11 package includes a diet highly restricted as to calories and choice of foods, which mist be adhered to if weight loss is to be achieved. B. Respondents have no reasonable basis from which to conclude that substantially all users of X-11 tablets will lose a significant amount of weight. | C. The X-11 tablet does not contain any unique ingredient. PAR. 11. Several of the advertisements described and alluded to in Paragraph Eight hereof include testimonials reciting weight reduction and other figure improvements purportedly attained by lay users of the aforesaid preparation, when such B-8 stated results do not reflect the typical or ordinary experience of consumers with said prepar- ation under circumstances similar to those depicted in the advertisements. These advertisements do not disclose or identify such typical or ordinary experience in any way. Thus, respondents have failed to disclose in their advertising a material fact which, if known to consumers, would be likely to affect their consideration of whether or not to purchase said preparation.[7] PAR. 12. Respondents have marketed and advertised X-11 tablets without disclosing in the advertising thereof that persons with high blood pressure, heart disease, diabetes or thyroid disease should use said preparation only as direct- ed by a physician. Inasmuch as a substantial num- ber of overweight persons are suffering from one or more of said physical conditions, respondents have failed to disclose in their advertising a material fact which, if known to such persons, would be likely to affect their consideration of whether or not to purchase said preparation. PAR. 13. Respondents have marketed and advertised the "X-11 Reducing Plan" without dis- closing in the advertising thereof that a highly restricted caloric diet is an integral part of said plan. Such fact, if known to consumers, would be likely to affect their consideration of whether or not to purchase said product. Thus, respondents have failed to disclose a material fact in their advertising. : PAR. 14. The advertisements referred to in - Paragraphs Eight, Eleven, Twelve and Thirteen were and are misleading in material respects, as alleged in Paragraphs Ten, Eleven, Twelve and Thirteen, and constituted, and now constitute, "false advertise- ments," as that term is defined in the Federal Trade Commission Act, and the statements, represen- tations and omissions described in Paragraphs Nine, Eleven, Twelve and Thirteen were and are mislead- ing, deceptive and unfair acts or practices. PAR. 15. The use by respondents of the aforesaid misleading, deceptive and unfair state- ments, representations, acts and practices, and the dissemination of the aforesaid “false advertise- ments,” have had and now have the capacity and tendency to mislead members of the consuming public into the erroneous and mistaken belief that said statements and representations were and are true and complete, and into the purchase of substantial quantities of X-11 tablets by reason of said erroneous and mistaken belief. PAR. 16. In the course and conduct of their businesses, and at all times mentioned herein, respondents Porter & Dietsch, Inc., William H. Fraser and Pay'n Save Corporation have been and now are in substantial competition, in or affecting commerce, with corporations, firms and individuals in the sale of products and services for weight reduction.(8] PAR. 17. The aforesaid acts and practices of respondents including the dissemination of "false advertisements,” as herein alleged, were and are all to the prejudice and injury of the public and of respondents’ competitors and constituted, and now constitute, unfair and deceptive acts and practices in commerce and unfair methods of compe- tition in or affecting commerce in vic'ation of Sections 5 and 12 of the Federal Trade commission Act. Commisstoner Thompson dissenting. DISSENTING STATEMENT OF COMMISSIONER MAYO J. THOMPSON July 29, 1975 I share the majority's view that the principal distributor of an alleged weight-reducing pill ought to be able to substantiate the claims he makes for it and that, if it is in fact dangerous for people with heart disease, diabetes, high blood pressure, and other diseases to take it, he ought B-10 to say so in his ads. But I cannot agree with my Brethren that a retailer with no involvement in the preparation of the ads in question sould be sub- jected to liability here. The advertisements in question are prepared by the distributor of these pills, Porter & Dietsch, with the actual copy being written by its president and controlling owner, Mr. William H. Fraser. Advertising mats are prepared and sent out to the major regional and loca a chains, including Pay'n Save Corporation, a Seattle-based ent retailer with some 90 stores located in five (5 states. The distributor pays for approximately 90 percent of the cost of these ads, with the cooper- ating retailer paying the remaining 10 percent. Since the messages are directed to the ultimate consumer and generally exhort him to buy from the drug chain, it is the latter's name rather than that of the distributor which appears in the ads. Why pick on Pay'n Save? ther drug chains have been similarly “involved,” including Fred Meyer (Portland); Western Drug (Montana); Pay Less (Tacoma); Skaggs and Grand Central Stores (Botse); Tiffany (2) Drugstores (Eugene, Oregon); Drug Fair (Washington, 0.C.); and Walgreens (Chicago). The staff explains the selection of Pay'n Save by simply noting that it 1s the largest of the partic- ipating chains in the Pacific Northwest. (The investigation was conducted by our Seattle regional office. In other words, Pay'n Save was the most convenient retailer target. $ conceded that Pay'n Save “had a signif- icantly lower level of involvement" in the ads than Porter & Dietsch and its president, Mr. Fraser, but 1 porter & Dietsch is the “exclusive national distributor" of this product, the "X-11" reducing pill. B-11 the staff believes this factor is more than outweighed by the need to establish a new legal precedent. An “important aspect of this case,” the staff tells us, “is the inclusion of the advertis- ing retatler, Pay'n Save Corporation, as a named respondent." A retailer who uses a deceptive ad, we're told, ought to be held fust as liable as the fellow who created it in the first place. Had Pay'n Save made a “thoughtful” examination of the packages in question, including the disclosures on the package insert, it would have known something was wrong. The problem, the staff reports to us, is that the country's retailers have been getting away with murder in this area. While “major general-merchan- dise retailers are frequently involved and/or specifically identified as the advertiser in highly questionable ads devoted to a single product, our research has disclosed no clearcut instances of such retaflers being held responsible for mani- festly deceptive product claims appearing {in such ads. Subjection of Pay'n Save to the ‘cease and desist’ provisions of this order will help to reestablish this responsibility principle in the context of this type of advertising." So there we have it. The staff wants to establish a new principle of trade regulation law. Any retailer who runs an ad prepared a supplier ng in it. Never min at he didn p tn the preparation of the ad and that {it would be economically prohibitive for [3] him to maintain a staff of scientists and lawyers to screen all the supplier ads that a substantial retailer is con- fronted with in the course of a business year. In short, strict “no-fault” liability. Run the ad at your peril. I think the Commission is embarking on an unwise, dangerous, and unnecessary course of action here. It 1s unwise because it defies common sense. It is dangerous because it imposes an intolerable B-12 cost burden on the nation's retailers that can only be passed on to the consumer in the form of still more inflated prices than those we now labor under. And it is unnecessary because a cease and desist order that stops the development of deceptive advertisements at the headwaters clearly makes it a to seine all the downstream tributar- es. I would dismiss Pay'n Save from this com- plaint. INITIAL DECISION BY DANIEL H. HANSCOM, ADMINISTRATIVE LAW JUDGE May 21, 1976 I STATEMENT OF THE CASE ALLEGATIONS OF COMPLAINT The complaint in this proceeding charged respondents Porter & Dietsch, Inc., William H. Fraser, Kelly Ketting Furth, Inc., Joseph Furth and Pay'n Corporation with the dissemination of false advertisements and unfair, misleading and deceptive statements and representations in the advertising, promotion and sale of X-11 tablets in violation of Sections 5 and 12 of the Federal Trade Commission Act. More specifically, the complaint alleged 1 Then Commissioner Thompson dissented from the naming of Pay'n Save Corporation, a large West Coast drug chain, as a respondent in this proceed- ing on the grounds, inter alia that he could not agree that "a retailer with no involvement in the preparation of the ads in question should be subjected to liability here," and that Pay'n Save was being singled out among many drug store chains, as “the most convenient retailer target." See statement issued with the complaint. B-13 that respondents disseminated advertisements which misrepresented, directly or by implication, that "Culsers of X-11 tablets can lose weight without restricting their accustomed caloric intake and while they continue to eat the foods of their choice," that respondents had a "reasonable basis from which to conclude that substantially all users of X-11 tablets will lose a significant amount of weight," and that each "X-11 tablet contains a unique ingredient." The complaint further alleged that some of respondents’ advertisements included testimonials reciting weight reduction and other figure improve- ments purportedly attained by lay users of the "aforesaid preparation" which did not reflect the "typical" or "ordinary" experience of consumers "under circumstances [3] similar to those depicted in the advertisements." Failure of the advertise- ments to disclose or identify the typical or ordinary experience of persons using the tablets was alleged to constitute a failure to disclose a material fact which, if known, would have af- fected the consumer's consideration of “whether or not to purchase said preparation." The complaint also alleged that respondents "marketed and advertised X-11 tablets without disclosing in the advertising thereof that persons with high blood pressure, heart disease, diabetes or thyroid disease should use [them] only as directed by a physician." and that in doing so respondents failed to disclose a material fact in such advertising. Finally, the complaint charged that the "X-11 Reducing Plan" was marketed and advertised without disclosing that "a highly restricted caloric diet [was] an integral part of said plan," and that such constituted a failure to disclose a material fact. RESPONDENTS' ANSWERS Respondents filed answers denying most of the substantive allegations of the complaint, and B-14 raising a number of affirmative defenses. Respon- dents Porter & Dietsch, Inc., William H. Fraser, Kelly Ketting-Furth, Inc., and Joseph Furth denied that they ever marketed a product designated "X-11 Tablets," contending that they were engaged in the sale of the "X-11 Reducing Plan" which “includes for ingestion tablets having the ingredients set forth in Paragraph Three of the Complaint." The foregoing respondents also denied representing that "users of X-11 tablets can lose weight without restricting their accustomed caloric intake and while they continue to eat the foods of their choice," and denied representing "that substan- tially all users of X-11 tablets [would] lose a significant amount of weight." Respondents con- tended that they had advertised [4] only the "X-11 Reducing Plan," not tablets and represented only that users of the "X-11 Reducing Plan" would lose some weight, and that they had a reasonable basis for this assertion. Lack of public interest also was urged. Respondent Pay'n Save maintained that it received the prepared X-11 advertisements from Porter & Dietsch, Inc., and therefore "cannot be held liable for the truthfulness of representations made therein by others." Prior to the completion of evidentiary hear- ings respondents Porter & Dietsch, Inc., William H. Fraser, Kelly Ketting Furth, Inc. and Joseph Furth filed an amended answer contending that the Federal Trade Commission is "precluded from bringing this proceeding . . . under the principles of collateral estoppel and/or stare decisis." Respondent Pay'n Save likewise filed an amended answer contending that "Complaint Counsel is precluded from bringing this proceeding under the principles of res judi- cata, collateral estoppel and/or stare decisis." According to respondents, three litigated deci- sions, Alleghany Pharmacal Corporation, 75 F.T.C. B-15 990 (1969), Hanover House and Romar Sales, proceed- ings before the Postal Service,“ preclude trial in this proceeding of issues relating to the "safety and efficacy of phenylpropanolamine as an appetite suppressant for weight reduction. PROCEDURAL HISTORY Complaint was served on the various respon- dents between the end of August and early September 1975. On September 10, the law judge issued an order directing counsel to attempt agreement on a timetable for completion of prehearing matters and a date and place for hearings on the merits. Thereafter, at the request of counsel for Porter 4 Dietsch, Inc., William H. Fraser, Kelly Ketting Furth, Inc., and Joseph Furth, a prehearing confer- ence was held on October 7, 1975, [5] and a time- table was’ issued the following day setting hearings on the merits to commence January 6, 1976. The parties disagreed as to the location of hearings. After considering all submissions, the law judge ordered that hearings be held in Seattle, Washington, where Pay'n Save Corporation and its counsel? and a number of witnesses and 2 Hanover House and Romar Sales Corp., P.S. Dkt. Nos. 2/143 and 2/149 decision of December 5, 1975. 3 Original counsel for Pay'n Save Corporation withdrew on October 2, and Albert A. Caretta, counsel for Porter & Dietsch, Inc., William H. Fraser, Kelly Ketting Furth, Inc. and Joseph Furth, took over as counsel for all respondents. However, on October 28, Mr. Carretta withdrew as counsel for Pay'n Save Corporation because of a possible conflict of interest between that respondent and one or more of the other respondents. Original counsel for Pay'n Save Corporation then reeat ered the proceeding. B-16 complaint counsel were located, and in Washinaton D.C., to take the testimony of East Coast ei nesses. Hearings in Chicago, Illinois, to accomo- date Porter & Dietsch, Inc., William H. Fraser Kelly Ketting Furth and Joseph Furth were alsc offered if requested by those respondents.* In the meantime, Porter & Dietsch, Inc., William H. Fraser, Kelly Ketting Furth, Inc., and Joseph Furth moved on September 24, 1975, for a Corrective News Release" and a stay of the date for fi ling an answer on the ground that the Commis- sion's News Release failed to contain the usual caveat that the Commission issues a complaint when it has “reason to believe” that the law has been violated, and that such action did not imply adjudication of the matters alleged. This motion for a "Corrective News Release" was certified to the Commission recommending that it be granted, but the request for a stay of the date for filing an answer was denied. On October 17, 1975, the Pe granted the motion for such correction. Thereafter, discovery and various oth - trial proceedings continued. The law Nuke tested a number of subpoenas requiring the production of documents and information by respondents, directed the production of specified Commission materials ordered the taking of certain depositions and disposed of a variety of motions. Included among the latter were a motion and supporting memorandum of Porter & Dietsch, Inc., William H. Fraser, Kelly oo Furth, Inc., and Joseph Furth to “Dismiss Complaint Before Trial For Lack Of Public Interest 4 On December 29, 1975, counsel for res pondents formally declined hearings in Chicago, Illinois and evidentiary hearings were not held at this location. B-17 Sufficient To Justify Issuance Of A Cease And Desist Order" and their motion and supporting memorandum for a “Supplementary Corrective News Release." The latter motion was certified to the Commission with a recommendation pursuant to § 3.22 of the rules and was denied by the Commission on December 19, 1975. Respondent Pay'n Save Corporation also filed a motion to "Dismiss Complaint Before Trial Or, In The Alternative, For Summary Decision" which was supported by a memorandum filed by Porter & Dietsch, Inc., William H. Fraser, Kelly Ketting Furth, Inc., and Joseph Furth. This motion was denied by the law judge on December 30, 1976. On December 23, 1975, all respondents filed an action in the U.S. District Court for the District of Columbia seeking a declaratory judgment and restraint of further proceedings in this matter. They alleged that a cease and desist order against them would not be in the public interest, that the Commission's News Releases were improper, and that the scheduling of hearings in Seattle and Washing- ton, D.C., rather than in one location “convenient to all parties," violated the due process clause of the Fifth Amendment, the Administrative Procedure Act and the Commission's rules. On January 5, 1976, after hearing oral argument, the District Court denied respondents’ motion for a preliminary ae and thereafter dismissed the complaint 7 Hearings on the merits commenced in Seattle, Washington, on January 7 and concluded in Washing- ton, D.C., on January 26, 1976, 8 actual hearing days having been utilized during that period. The record consisting of 220 exhibits, many of them multi-paged, and 1,405 pages of transcript was closed by order of the law judge on February 10. Twelve witnesses testified including the individual respondents and an official of Pay'n Save Corpora- tion, and the testimony of three witnesses was entered in the record by stipulation. Complaint B-18 counsel called four medical or scientific experts, Drs. Margen, Drenick, Prout and Sorer, and respon- dents Porter: & Dietsch, Inc., William H. Fraser, Kelly Ketting Furth, Inc,, and Joseph Furth called three, Dr. Fineberg, a medical doctor, Dr. Silver- man, a pharmacologist, and Dr. Hoebel, a specialist in physiological psychology. At the conclusion of the case-in-chief respon- dents orally moved to dismiss on the ground that complaint counsel had not made out a prima facie case (Tr. 1038-97). Ruling was deferred by the law judge until decision on the entire case after all evidence had been received, and permission was granted to respondents to reduce their motion to writing supporting it with record references and legal authority. On March 29, 1976, respondents (except Pay'n Save) filed a comprehensive written motion to dismiss with a separately bound appendix in support. This motion will be referred to hereinafter as "Motion to Dismiss" and will be ruled upon in this Initial Decision in accordance with the findings, discussion and conclusions set forth. This matter is now before the undersigned for decision based upon the allegations of the com- plaint, the answers, the evidence and the proposed findings of fact, conclusions and legal authority filed by all parties. All proposed findings of fact, conclusions and arguments, including those in the Motion to Dismiss, not specifically found or accepted herein, aré rejected. The law judge, having considered the entire record, and all the contentions of the parties, makes the following findings and conclusions and issues the order set out at the end hereof:[8] B-19 Il FINDINGS OF FACT RESPONDENTS 1. Respondent Porter & Dietsch, Inc. (Porter & Dietsch), is a Minnesota corporation with its office and principal place of business in St. Paul. It is engaged in the packaging and sale of pharma- ceutical products, principally by mail and through retail drug stores (Ans. P&D, para 1; Fraser, Tr. 753-54). Porter & Dietsch has sold its X-11 tablets since 1967 (Ans. P&D, para. 3; Fraser, Tr. 769, 823) and, although a few other products are sold, the tablets are by far its largest volume item, amounting -: aan 80 percent of all sales , Tr. 757-61). Bw 2 Individual respondent William H. Fraser is the president and sole owner of Porter & Dietsch (Fraser, Tr. 753-54). As such, Mr. Fraser formu- lates, directs and controls the policies, acts and practices of ie pe respondent Porter & Dietsch . P&D, para. 1). ae 3. ‘ In the course and conduct of their busi- ness, Porter & Dietsch and William H. Fraser have been and now are in substantial competition in or affecting commerce (as "commerce" is defined in the Federal Trade Commission Act) with other corpora- tions, firms and individuals in the sale of pro- ducts and services for weight reduction (Ans. P&D, para. 16). 4. Respondent Kelly Ketting Furth, Inc. (Kelly Ketting Furth) is an advertising agency incorporated in Illinois, with its office and principal place of business in Chicago (Ans. P&, para. 1). Since its organization in 1968, Kelly Ketting Furth has been, and is, the advertising agency for Porter & Dietsch in the marketing of X-11 tablets (Ans. P&D, para. 4; Fraser, Tr. 805; Furth, Tr. 927-32).[9] B-20 5. Individual respondent Joseph F vice-president of Kelly Ketting Furth tha ta the advertising account executive for respondent Porter & Dietsch (Ans. P&D, para. 4; Furth, Tr. 927-36) Mr. Furth participates in the management of Kelly Ketting Furth and is among those responsible for the formulation, direction and control of its acts and practices, including those alleged in the complaint Ms P&D, para. 1). A n the course and conduct of - ness Kelly Ketting Furth and Joseph With abe nos et have been, throughout the period that Kelly biel Furth has been the advertising agency for orter & Dietsch, in substantial competition in or affecting commerce (as "commerce" is defined in the Hh vd Na oe Srgitds Act) with other corpora- , $ and individual oye nen (Ans. P&D, para. 4). ad - Pay'n Save Corporation is a W corporation with its headquarters feeatie th Seattle. It is a major chain of retail drug and sundry stores with outlets located principally in the Northwest and in northern California with some stores in Alaska and Hawaii (Ans. P&D, paras. 1 and 5). Gross sales volume for the 12-month period ending November 1, 1975, was approximately $290 ,000 ,000 (Stipulation, Tr. 435). Porter & Dietsch's X-11 tablets have been sold by Pay'n Save BP eR f P&D, para. 5; Palmer, Tr. 507-08). : e course and conduct of i and throughout the period of its ah Het ing: savor advertising of Porter & Dietsch's X-11 tablets Pay'n Save has been and now is in substantial competition in or affecting commerce (as “commerce” is defined in the Federal Trade Commission Act) with other corporations, firms or individuals in the sale of various products, including products sold as aids in weigh yao BP Tan ght reduction (Ans. P&S, paras. B-21 X-11 TABLETS ‘1. Nature and sales 9. Porter & Dietsch purchase the X-11 tablets they market from the manufacturer in polyethylene pouches containing 21 tablets each. These pouches are then packaged in cartons of two sizes - one box containing two (2) pouches totaling 42 tablets and a larger size containing five (5) pouches totaling 105 tablets (Fraser, Tr. 769-70). The smaller box is normally sold at retail for $3.00 and the larger size for $5.00 (Adm. P&D, No. 9b; CX 36, 39, and 62). In addition to the tablets, each box contains a leaflet providing directions for the purchaser in using the tablets and some advice about obesity, a rudimentary low-calorie diet for a 5-week period, a “calorie value chart" for a limited number of foods, a weight chart and a “warning” against use by individuals with certain physical conditions unless medically supervised (CX 37 and 40). The outside of the box containing the X-11 tablets features in bold lettering "X-11 Reducing Plan" and the headline "EAT WELL!!--and LOSE THAT FAT" (CX 36, 38, 39 and 41). The ingredients, the “adult dose" and a "Caution" (warning) are also provided. 10. X-ll1 tablets were, and are, advertised and marketed extensively throughout the United States as a reducing aid or preparation for the obese, and for those who wish to shed what they consider to be excess body weight. Approximately 80 percent of all retail chain stores in the nation sell X-11 tablets (Fraser, Tr. 783), and annual sales for the year ending April 30, 1975, were in the area of $1,789,000 (Fraser, Tr. 759-61). Each X¥-11 tablet contains 25 milligrams of phenylpro- panolamine, 25 milligrams each of methylcellulose and caffeine and vitamins A (1388 U S P units), By (0.5 mg), Bg (0.5 mg), Be (1 mg), C (15 mg), calcium pantothenate (1 mg), niacinamide (5 mg), E (5 int. units), and By2 (0.5 mcg) (Ans. P&D, para. 3). The ingredients in the X-11 tablets B-22 allegedly conducive to weight loss are phenylpro- Zee ape and methylcellulose. The former is an 11] amphetamine-related compound, which is claimed to ast as an appetite suppressant. The character- istics of phenylpropanolamine will be considered in subsequent findings dealing with the representa- tions contained in respondents’ advertising. Methylcellulose is also represented in the market- ing of X-1l1 tablets as an aid to weight loss, and the characteristics of this substance will also be considered. 11. The promotional approach of respondents with respect to phenylpropanolamine and methylcel- lulose in marketing X-11 tablets is illustrated by statements in a advertisement given wide circula- tion in TV Guide for October 18 through 24, 1975, which stated under a picture of two fingers holding a pill adjacent to the headline "WHAT EACH TABLET CONTAINS" (CX 13): 25mg METHYLCELLULOSE A pure vegetable extract which expands and is intended to give one a feeling of being fuller. 25mg PHENYLPROPANALOMINE [sic] An appetite depressant intended to help give one the feeling of a restricted appetite. (See also CX 69-73 and 90-91) Other advertisements hold out the effects purportedly attributable to methylcellulose and phenylpropanolamine, ji.e., a feeling of fullness and depressed appetite, without specifically identifying these substances (CX 4-8, 10, 14-15, 43, 46-47, 50, 52-56, 59, 63-64, 67-68, 77-80, 82-85 and 87-88). fe Respondents were engaged in the advertising and sale of diet tablets 12. Respondents place great emphasis on their contention that they neither marketed nor advertised "“tablets" but, rather, a "plan." B-23 Insofar as this [12] contention involves a defense that representations were not made to the public in respondents’ advertisements as tc the characteris- tics and qualities of the X-l1 tablets, and the weight losses achievable from their use, it is contrary to the evidence and is rejected. Respon- dents' advertisements, directly and by implication, conveyed the net impression to the public that a “wonder” preparation for easy weight reduction - the X-11 tablets - was available. The advertise- ment in the Seattle Times September 10, 1972, reprinted herein, 1s 11Tustrative (CX 18). This advertisement begins with the banner headline "X-11 IS HERE!" and then tells readers who are overweight and want to reduce that they can “EAT WELL. . . AND LOSE THAT FAT! - without ever missing a meal. Weight losses of 5, 10, 25 or more pounds are represented, "GET RID OF 5, 10, 25 OR MORE POUNDS!, as achievable with X-11 tablets. A picture of an attractive and trim lady is given prominence who is quoted as saying "I LOST 80 LBS!" 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R “7 . eed One 8! 98m hoe Oe Oe a ome So — 19, 2 gil eat well na anee B-24 Appendix B ee AV ARARE AT AU, STORES ice HLNGER §, —-=— = | witha,’ «ver missin F or" hat Ka (GET RIDO COUNTERACTS AS AN Apt: +1 2 APré ASER ni 2 i i ait 5 Ii! i! oN G2 ~~ Sale ASTO™ Gussamttia *. | aoe ot Gere tame. etet lw — — we ree mee es Appendix B Initial Decision we n , : P 31 3 aii ram = ; ie — Soe me) : # os. 8 3 “—_ 33,2 > wate 3? 6 i way oes) ees: a1: : > = 4 P ° ed ti act oz 3! is Shree 315: oo 7:4 aks, * AE sp eee ee) Be > HGH te r tv ; ¥ 32, Sebel e st 3 ; os i: = Mies eames DPT bears tice eae = Ly Game epee Pane = watt OS i 3 iss" | = | 535° ? tJ 452. { a hae Sis a 4 = =o y"s we 8-H seety MEY de gg 1 Bt g3t pe Meme Hu hee CEE BS en Rte Bes Bs oe» geezer Nes desced berks Bye Bre F 9 eh ng alee | a Ie a a fe Pipe 3 Meee se are Ree a Oe 4 BR = 2 Si jiisiipasei Tt est aaa at ae a re Bs - ; fhe beeg ae meagre ae Siena tes —_ = a ee Cee ai: 93: : me Te 342 bs oe s Ste iescliatstpie tt: ag fee tebe NS Eas ACER CPO cae § 2 ee Se GS totissgs oe ase. Fr. oa Oe ae eee Pres By TE 2 7 2ts. mw S5- 43 |] 2) ae ie ae Set oS ee a 2: 3 > Se ee POR eS | eee / Me | Si Mm & Fs i8cgiitl..4 Shirts: f . rm : wuei 2 at EE: : i 7 me 25 beret bes Fang: - | ' oe ee ~ cS = : . “ Wi eas 5S tn | Sf Ss ije=u =. 2 sigi tat. t 3 siieete 4 Se 2:Q d& pa Mer geet Sate gee 4 =! x vi dgetes os 2 ? j ei4sisisicgi = 0adi we 6 te Oe » . o bs Seely a eens a? ; . are ER OF ‘ ? ine eae, Z bi ap [tah 3 (33) 7 : oe ‘ a yo 2108 rd ay . «@ as q $ 2 = a ~ ti z Pe apm F, curtce a dk = + Bhs §. -¢ i i fn ge ed Stemae ctcty : = a23 = 323 Cie es haar SE Soe pas 33 Ca ren a Pn fe eg 83 7 a3 FH J yaeisyoineuns sey asoisinek yy =~ y siaiqey 1t-% so Aiddng snog 105 3 epayvodnos syyy. ties B-27 [15]2. ACTS AS AN APPETITE APPEASER Part of the secret of this method is a unique ingredient that acts as a beneficial appetite appeaser, which puts a "brake" on your cravings for sweets, candy, pastries, rich gravies, High-Fat/ High-Calorie foods - everything. It helps you conduct a kind of psychological warfare with yourself as you break some bad old eating habits you probably thought you were stuck with forever. Thus, your appetite is appeased while you take off fat." 13. The advertisement appearing in the Seattle Times, July 8, 1973, also reprinted, emphasizes testimonials of ladies reporting very substantial weight losses (CX 19). It also contains a picture of two fingers holding the X-11 tablet, and advises the reader that if not 100 percent delighted, the "first package" of either 42 tablets or 105 tablets may be returned for an immediate refund. 14. The advertisement in The Idaho Statesman, September 9, 1973, likewise reprinted, contains two pictures of the X-11 tablet (CX 48). The first features the picture of a young lady holding up an X-11 tablet and states: : NOW . . . LABORATORY SCIENCE HAS PERFECTED A TINY PRE-MEAL TABLET WITH A PLAN THAT LETS YOU ENJOY FOODS YOU CHOOSE The bottom half of this advertisement emphasizes the X-11 tablet by a much larger picture of two fingers holding the tablet with adjacent paragraphs entitled "COUNTERACTS HUNGER," "ACTS AS APPETITE APPEASER," containing the same text referred to in Finding 12, and "FORTIFIED WITH VITAMINS, MINER- ALS." The advertisement concludes by announcin "42 Tablets 2.98," "105 Tablets 4.98." [19 B-28 15. The elaborate advertising supplement distributed in the Chicago-Tribune, February 11, 1973, although varying in language, is similar in its message and representations to the foregoing advertisements (CX 49). A post card for mailing to the Walgreen drug chain is printed within the advertiscment with the admonition to prospective purchasers: "IF YOUR STORE HAS RUN OUT OF X-11 TABLETS HURRY!!!" "FILL OUT AND MAIL THIS COUPON FOR YOUR SUPPLY." This advertisement is headlined "X-11 IS HERE" and gives prominence to the picture of a tablet being held between two fingers, telling Chicago-area readers that ". . . Laboratory Science has perfected a Tiny Tablet for EASY REDUCING." 16. Some of respondents’ smaller advertise- ments designed for insertion in newspaper columns, or in fractions of pages in periodicals, condense the representations contained in the larger adver- tisements and refer to X-11 simply as a "tiny tablet." The following is an example (CX 42): | Be OT ae ‘GET RID OF UGLY FAT Emoy “eating the loods you choose while you lose excess, ugly fat. 111 Reducing Plan can heig you sh down. X-11 15 a tiny tablet, easiy swallowed, (hat Comoimes iagrecients [9 com: bat hunger, accesse appetite, supplement wta mins. No dangerous drugs No strenuous exer cise. Over $00 milhon of X11 tablets used aii over Amerca Company ‘aunded in 1928. 11 Reducing Plaa costs $3 - large economy sue S Get S11 now. Your money refunded dy your Gruggist f you don't lose pounds = a9 questions asked. (See also CX 5-7 and 77). B-29 [20]17. Other advertisements told members of the public that they could "LOSE THAT FAT" but “EAT SUFFICIENTLY" - by taking “a pre-meal X-11 Tablet before meals” (CX 51) and that "today" there is “an amazing new reducing plan with X-11 Tablets" (CX 52, 61 and 84). Still other advertisements were again specific in telling the public "WHAT EACH TABLET CONTAINS" (CX 13, 69-73, 90 and 91). Occasional advertisements stated "NO PRESCRIPTION NEEDED" (CX 12, 57 and 65), and some told the public to "[LA]sk the pharmacist for a 42 tablet pack of X-11 Reducing Aid" (CX 53 and 66). 18. With few exceptions, respondents’ adver- tisements concluded with a coupon or statement offering tablets to the public, usually 42 for $3.00 and 105 for $5.00 (see e.g., CX 18-19 and 49 reprinted in this decision). 19. The ladies whose testimonials are promi- nently displayed in the Seattle Times advertisement (CX 19), and published In other newspapers (CX 1, 16, and 76), perceived the advertisements as promoting pills or tablets. Mrs. George Stowe in her initial letter to Porter & Dietsch refers to taking "X-11 tablets" (CX 149). Mrs. Beverly Tellier begins by stating "I am a user of your X-11 diet pills” (CX 148; see also CX 184(2)), and Mrs. Ken Schmidt states to Porter & Dietsch that x talked with you from Walgreen Drug here in Norfolk, Nebraska, last week, about your X-11 diet pills" (CX 147). In publishing these testimonials respon- dents changed all such product references to read "Y¥-11 Plan" or "X-11 Reducing Plan," rather than "tablets" or “diet pills." 20. Other members of the public writing to Porter & Dietsch also looked upon what was marketed and advertised as “tablets,” “pills” or "reducing pills." Their perceptions of the product are evidenced by the following statements: “I started on your X-11 Tablets . . ." (CX 185); "I called up Saturday for an order of 2 boxes of diet X-11 pills" (CX 186); “We are wondering if we [21] + ~ B-30 couldn't buy these pills directly from you..." (CX 187); " . . . I need these pills" (CX 188); "I received your letter regarding getting X-11 tablets in Sutter Creek" (CX 189); "On occasion my husband has the use of your X-11 diet pills" (CX 190); X-1l is the only diet pill I have found that works" (CX 191); “I have tried your X-11 tablets for reducing . . ." (CX 192); "I have been taking your reducing tablet for 4 months . . ." (CX 193); I was on vacation . . . and saw your pills (105) (X-11) reducing pills so I bought a box . . ." (CX 194); "I used your diet pills about four years ago - + o's "PS. The name of the diet pills are X-11 reducing plan" (CX 195); “Please send me another box of 42 X-11 Reducing pills . © ." (CX 196); wxzil is the best reducing tablet sold" (CX 199); Will you please let me know if there jis a place . - « Where I can purchase the X-11 reducing Plan pills" (CX 201); “So I tried X-11 and got down to 130 pounds on the first box of pills" (CX 202); ". - + send me some X-11 Reducing Plan Tablets . .. try some of the other kind of Tablets, but I got sick from them . . ." (CX 203); "In past years I have taken several kinds of reducing pills (from Doctors). all they did was make me nervous... But on X-11 there is no after effects" (CX 204); ". ae Ci] ordered $5.00 worth of diet pills from you - +" (CX 206); and "I would like for you to send _me X-11 reducing tablets" (CX 207). 21. The purpose behind the repeated use of the word "plan" in the advertising copy for X-11 tablets, and the use of "X-11 Reducing Plan" as Porter & Dietsch's designation for its product is evident in the letter dated September 13, 1973, to Mr. Fraser, Porter & Dietsch's president, from Mr. Furth, vice-president of respondent Kelly Ketting Furth and the account executive for X-11 tablet advertising (CX 164): [22] "Dear Bill: * *: * * * * * * Appedrine is flirting with danger. It is the same kind of danger that hit us in the head in the insurance business. Appedrine and Hungrex (even Odrinex) put emphasis on the tablets. That's murder, because the pills will not reduce weight an iota. It is the "Plan" that will keep us out of hot water. I've said it before. If you want me to put the same kind of “punch” into the advertising, so be it. But we've been getting along swell, without it. Let them make their claims, we'll make ours. But I'm afraid we're all going to get into hot water because of Appedrine, Hungrex and Odrinex. Because Hungrex won its case at one time, doesn't mean the sore cannot be reopened. I've seen it happen in the mail order insur- ance business. [23] I don't know if the new 42 line ad will work. That's what tests are for. Ads like Appe- drine (from a copy standpoint) may work, but it may put us out of business faster. * * * * * * * * Cordially, Joseph Furth Vice President" . 22. Labeling the box of tablets the "“X-11 Reducing Plan" and including within the tablet box a leaflet (CX 37 and 40) containing a low-calorie B-32 diet, a calorie value chart, a table of desirable weights and advice, inter alia, that in most cases, “obesity is caused strictly by overeating and indiscretions of diet," that “weight loss is only accomplished whan a minimum of calories are con- sumed," that the purchaser must not “expect a miracle overnight" but "must practice a little 'self-denial'--plus, a will power to get thin," and that if the X-11 tablets are taken one-half hour before each meal and the "Plan, or any other low-calorie diet" is followed, he or she "should lose weight," does not transform the advertising of “diet pills" into the promotion of a ‘reducing "Plan" so as to mean that no representations were made to the public about X-11 tablets. 23. Respondents were engaged in the advertis- ing, marketing and sale of X-11 tablets. The representations to the public in respondents' advertisements were about X-11 tablets and their efficacy in facilitating weight loss. Such representations were made for the sole purpose of eer and inducing the sale of X-11 tablets. ADVERTISING OF X-11 TABLETS 24. Although the pictures, language and format varied, essentially similar statements and themes pervaded respondents' advertisements of X-11 tablets. Respondents agree that "from 1969 to date, the advertising of the 'X-11 Reducing Plan' had remained substantially unchanged" (see Memoran- dum In Support of Motion to Dismiss, etc., filed October 30, 1975, p. 11; see also Furth, Tr. 952, 968-69 and 978-80). 5 all advertising slicks or mats in the record (CX 50 through 91) were published by respondents in some media (Frasier, Tr. 804 and 883). B-33 25. Porter & Dietsch's advertising expendi- tures for X-11 tablets were as follows (CX 179): Year (Ending April 30) Dollars 1975 $ 882,570 1974 1,082 ,396 1973 862 ,986 1972 781 ,566 . 1971 593 ,723 1970 460 ,902 26. The record contains a large number of advertisements published in various media, predom- inately newspapers, promoting the X-11 tablets. As noted earlier, five examples have been reprinted in this decision, four large ads and a small one (CX 18-19, 42, 48 and 49) and have already been discus- sed to some degree. Major metropolitan dailies such as the Seattle Post-Intelligencer (CX 1-4), ba Seattle Hess (CX Ry Washington Post CX 47), the Baltimore Sun (CX 46), the Chicago Tribune (CX 49) were utilized, as well as smaller circulation newspapers such as the Amnon age Daily Times (CX 33), ™ Longview Daily News é e Greensboro Da y sews (CX 75} and the Peoria Journal-Star ( ~ Specialized publica- tions such as TV Guide (CX 10-13) were also em- ployed in the dissemination of X-11 advertisements. 27. Ads occuping a small portion of a news- paper or periodical page (CX 5-7, 9, 17, 20-34, 42-43, 51, 54, 64, 77, and 89), as well as very large and prominent advertisements, were published (CX 1-4, 8, 10, 13-16, 18, 35, 44-48, [25] 50, 52-53, 66-76, 78-88, 90-91). Some of the large advertisements were elaborate color inserts known as "free standing stuffers " in the advertising trade (Furth, Tr. 930-33). These were placed in the Sunday editions of the nation's leading news- papers. CX 46 was inserted in the Baltimore Sun for Sunday, April 20, 1969, CX 47 in the Washing- ton Post on the same date, and CX 49 in the Chicago Tribune on February 11, 1973. B-34 REPRESENTATIONS CONVEYED TO THE PUBLIC BY RESPONDENTS’ ADVERTISEMENTS FOR X-11 TABLETS: ts Representation that users of X-11 tablets can lose weight without restricting their accus- tomed caloric intake and while they continue to eat the foods of their choice 28. The advertisement published in the Seattie Times, September 10, 1972 (CX 18), as indicated, told prospective users that "X-11 is here" and they could "EAT WELL . . . AND LOSE THAT FAT~--without ever missing a meal," that they could “satisfy [their] appetite" while taking off “pounds,” that they could lose "5, 10, 25 or more pounds" without denying themselves, without dieting hunger, that they would “eat what [they] want," but would eat less because they would not "be the prisoner of the overeating habit." 29. The advertisement published in the Seattle Times, July 8, 1973 (CX 19), also told prospective users of the X-11 tablets that they could "EAT WELL - « » AND LOSE THAT FAT." The ad advised that "NO STARVATION DIETING" was required, that unsightly fat could be lost without "suffering through starvation dieting hunger" or following “boring reducing diets," or any of the "humdrum methods you have known and given up." The advertisement told prospective purchasers of X-11 tablets that they could eat “satisfying meals and snacks," that they would not "go to bed hungry," that the "X-11 Plan" was “not a crash or starvation diet" but a "proved and sound method" "to curb the appetite and still eat 3 satisfying, sensible meals [26] a day," and that laboratory science had perfected a "tiny pre-meal tablet" which "lets you eat three sensible meals a day plus ‘tween meal snacks." 30. The advertisement published June 24, 1973, in the Seattle Post-Intelligencer TV Section (CX 2) likewise featured in black, prominent type “Eat Well . . . Losthat Fat!" The advertisement referred to the "X-11 Plan" as "an extr B-35 easy figure-slimming Plan" that offered a way to "get rid of unsightly, superfluous fat" without “missing a meal," and told the prospective X-11 tablet user that she or he could "Satisfy your appetite and peel off those excess pounds, too.” 31. The advertisement in the same newspaper on June 25, 1974 (CX 3), was again headed in boldtype “Eat Well . . . And Lose Ugly Fat." This adver- tisement continued the theme of the earlier ads that X-11 tablet users could “EAT AND LOSE THAT EXCESSIVE WEIGHT," could "satisfy" their appetites and yet "peel off extra pounds” and could remove excessive weight "without ever going hungry." An identical ad was published in the Seattle Post- Intelligencer TV Section January 1, 1975 (CX 4). 32. The advertisement in the Anchorage Daily Times of March 29, 1974 (CX 8) repeated the state- ments "Eat Well . . . and Lose That Fat!", that laboratory science had "PERFECTED A TINY PRE-MEAL TABLET WITH A PLAN THAT LETS YOU ENJOY FOODS YOU CHOOSE,” that X-11 users could “EAT AND LOSE THAT EXCESSIVE WEIGHT,” and could “satisfy" their appetites and “peel off those extra pounds” “with- out ever going hungry." Users were promised "you will lose weight . . . while you eat well." 33. The full page advertisement in the Spokane Spokesman-Review Sunday Magazine, October 25 1972 (CX 15), similarly announced “EAT WELL. . . AND LOSE THAT FAT!" “WITHOUT EVER MISSING A MEAL," and “You do not deny yourself."(27] 34. A large advertisement in the Seattle Times, February 3, 1974 (CX 45), was headlined "NOW EAT WELL" and “LOSE UGLY FAT!" The text continued this theme with the statement "So enjoy eating that satisfies your appetite as you peel off those extra poundes. You lose weight . . . while you eat well.” 35. The elaborate “free standing stuffer" in the Sunday Baltimore Sun on April 20, 1969 (CX 46) featured banner headlines which read “Lose Ugly Fat" with an "Amazingly Easy Reducing Plan." B-36 The text promised that fat would be lost without “starvation dieting hunger," "boring reducing diets" or “humdrum methods so many women have tried, and given up in despair.” Readers were assured that users of X- 11 tablets could “now” "EAT AND LOSE WEIGHT," could "satisfy" their appetites yet “remove pounds and inches," could “peel off that excessive weight," and could “Enjoy eating the foods" they chose while they lost “unsightly, superfluous fat." Readers were told in heavy letter type "X-11 IS HERE," and that they could "LOSE UGLY FAT . . . without ever missing a meal!" An identical "free standing stuffer" was inserted in ~ Washington Post on the same Sunday (CX 47). - Another advertisement disseminated by vighicaion announced “Are you ona diet? Or planning to go on one? WHY STARVE YOURSELF WHILE YOU REDUCE? EAT . . . AND LOSE THAT FAT!" (CX 57) Other advertisements told the public "TAKE OFF UGLY FAT WITH AN ‘EAT WELL' EATING PLAN" (CX 64). Still others stated "Enjoy eating the foods you choose while you lose excess, ugly fat" (CX 77). 37. The “free standing stuffer" inserted in The Greensboro Record, January 26, 1969 (CX 74), featured "EAT WHAT YOU WANT--AND SLIM DOWN," as did the large insert of January 12, 1969, in the Wisconsin State Journal (CX 75), and the insert of July 28, 1968, in the Peoria Journal Star (CX 83). Other advertisements communicated similar represen- tations, with occasional minor changes in emphasis. See CX 5-7, 9-35, 42-45, and 47-91.[28] 38. Respondents’ advertising told the public that with the X-11 tablets people could "EAT WELL AND LOSE THAT UGLY FAT" (CX 2), that X-11 tablets put “enjoyment into eating" while “unsightly, superfluous fat" was lost (CX 52), that overweight persons could take off ugly fat with an "EAT WELL" eating plan (CX 50), and that people who wanted to lose weight could "eat" and lose "pounds" without dieting hunger, or giving up meals, or by any of the "torturous 500/1000 calorie diets so many women try, and give up in despair" (CX 72). B-37 39. Incorporation deep in the advertising copy of occasional phrases such as users will no longer be the prisoner of the “overeating habit" or that users will “want less" and therefore “eat less" does not change the overall message to the public. The overall effect of respondents’ advertisements was to convey the net impression to the public that users of X-1l tablets could lose body Wt without dieting or consciously or material] changing their eating habits, in the language of the complaint, “without restricting their accus- tomed caloric intake and while they continue to eat the foods of their choice." 2. Representation that substantially all users Of tablets would lose a significant amount of weight and that Se had a C reasonable basSisS Trom W Oo conclude this 40. Although the advertisements for X-11 varied in their format and wording, as stated, the themes remained relatively constant. Purchasers were assured they would realize significant weight losses through use of the X-11 tablets. Respon- dents' advertisements were of a nature to attract the attention of the seriously overweight, espe- cially women, and to induce them to purchase X-11 tablets in the hope of losing large amounts of excess fat. - 41. Representations of significant, indeed, very large, weight losses achievable through the X-11 tablets are prominent in the advertisements respondents disseminated to the public. The impact of these representations is evident by statements recurring throughout the X-11 advertisements, as follows: [29] "I Used to Weigh 160 Ibs. Now I'm Down to 105," i.e., 55 pounds lost, (CX 1, 16, 19, and 76); “I lost over 40 lbs.," “And I lost over 40 Ibs. too” (CX 1, 16, 19, and 76); “I Lost 80 Ibs" (CX 2, 9, 18, 20, 22-24, 30-31, 33-35, 44, and 81); ree x 1% fe : a 3 ce B-38 "Lose Ugly Fat" (CX 3, 4, 10, 14, 25-29, 32, 45, 53-56, 60-61, 63-64, 66-67, 74-75, 78-80, 82-84, and 88); “Lose That Fat" (CX 8, 11, 48, 50-51, 57-59, 69-73, 79, 87, and 90-91); "So You Want To Lose 5, 10, 25 Or More Pounds” (CX 1, 14, 48, 58-£9, 63, 78-80, 82, and 87); "Get Rid of 5, 10, 25 Or More Pounds" (CX 13, 15, 18, 46-47, 49, 50, 52, 57, 65, 70-75, 83, 86, and 90-91); "Get Rid of Ugly Fat" (CX 42, 77); “Lose 5, 10, 25 Or More Pounds Of Fat" (CX 67, 88); "College Student Lost 83 Ibs Of Ugly Fat" (CX 68); "Now . . . Remove Pounds And Inches From Thighs, Nec, Legs, Waist” (CX 84-85); "I enjoy wearing dresses sizes 11-12's rather than 20-1/2" (CX 44). | 42. The X-11 advertisements also conveyed the impression of slimness, and significant weight losses to be achieved through use of X-11 tablets, by pictures of trim-looking women, and silhouettes of slim female figures (CX 1-4, 8-11, 13, 29-31, 33-35, 44-49, 51-56, 58-61, 63, 66-67, 69-76, 78-83, 85, 87-88, and 90-91). 43. Testimonials reporting very large weight losses and implying that new users of X-11 tablets could anticipate like results appeared frequently and were highlighted in respondents’ advertise- ments. These testimonials reported weight losses, as just. quoted, of 55 lbs., over 40 lIbs., and 83 Ibs. (CX 1-2, 9, 16, 18-20, 22-24, 33-35, 44, 68, 76, and 81). 44, Respondents’ advertising portrayed the X-11 tablets as a new, simple, easy, amazing, extraordinary way to lose many pounds of fat. The achievement of such weight losses was, in fact, depicted as a virtual certainty. Continual refer- ences in respondents’ advertisements to "Laboratory Science" having developed a "Tiny Tablet" coupled with the words "NOW," "TODAY," or [30] "RECENTLY" conveyed the impression that the X-11 tablets were the culmination of scientific research, and rein- forced the representation that substantially all users could and would lose any amount of pounds desired, up to 80 and 83 lbs. (CX 8, 14, 46-47, 52, 56, 59, 61, 74-75, 79, 83-84, and 87). B-39 45. Significant large weight losses, in fact, were represented, as “automatic” (CX 74-75). "So why carry around needless, excess weight-- when it's so easy to lose ugly fat automatically with the new X-11 Reducing Plan" (Emphasis in original). The overweight were assured that “thousands of women throughout America are discovering an extra- ordinary new plan that automatically helps get rid of 5, 10, 25 or even more pounds .. ." (CX 74, 75). The public was promised that the X-11 plan “automatically keeps working at home, at work, at play--24 hours a day." (See also CX 46, 47 and 49 which contain similar language). 46. Significant, large weight losses were guaranteed: “RESULTS ARE GUARANTEED--OR MONEY BACK" (CX 1, 16-17, 19); "CIJf flabby fat doesn't disappear, just return the empty package for an immediate refund" (CX 2 and 81; see also 57-58, and 65-66), and "If flabby fat does not vanish ‘like magic' when you follow the X-11 Reducing Plan, just return the empty Ponape for an immediate refund" (CX 15). This theme was constantly repeated in varying language: "LOSE WEIGHT OR YOUR MONEY BACK" (CX 60); "LOSE FAT OR MONEY BACK" (CX 43 and 77); and "TAKE WEIGHT OFF WITH VERY FIRST BOX OR MONEY BACK" (CX 90). The advertisements repeatedly assured members of the public that “You have nothing to lose but pounds and inches," and that large weight losses would be achieved (CX 24, 50, and 79). [31] 47. Respondents' advertisements for X-11l tablets reoresented to the public that substan- tially all users of X-11 tablets would lose a significant, in fact, as large an amount of weight as they desired, and that respondents had a reason- able basis from which to conclude this. B-40 3. Representation that the X-11 tablets contained a “unique” ingredient 48. An examination of respondents’ X-11 advertising reveals that, through the use of explicit words and phrases, these advertisements conveyed to the public the representation that X-11 tablets contained something new, different and unusual--a “unique ingredient" (CX 3-4, 10, 14-15, 18, 48, 50, 63, 68, 70-80, 82, and 87). Respon- dents Porter & Dietsch, William H. Fraser, Kelly Ketting Furth and Joseph Furth admitted in their answer that their advertisements represented directly or by implication that the X-11 tablet contained a “unique” ingredient (Ans. P&D, para. 9), and subsequently identified this "unique" ingredient as phenylpropanolamine (Supp. Adm. P&D, No. 41). 49. In addition to specific reference to a "unique" ingredient, many advertisements described the X-11 tablet as: "a unique formula” (CX 8, 10, 14, 48, 59, 67, 78-80, 82, and 87-88); a “unique preparation" (CX 52, 56, 61 and 84-85); a “special formula" (CX 54); a "specialized, laboratory-ap- proved tablet" (CX 74-75); an “unusual combination of ingredients" (CX 49, 52, 56, 61, 74, and 83-85); a combination of "clinic-tested ingredients" (CX 46-47, 49, 74-75, and 83), and "one of the STRONG- EST DIET AIDS available without a prescription" (CX 3-4, 10-11, 58, 63, 68, 78, 80, 82 and 88). These phrases were copiously utilized in respondents’ advertisements to reinforce the claimed “unique- ness" of X-11 tablets to the purchasing public. [32] DECEPTIONS IN THE ADVERTISING OF X-11 TABLETS } Users of X-l1l tablets cannot lose weight without restricting their accustomed Caloric intake nor while continuing to eat the foods of their choice B-41 50. Excess body weight results from ingestion of more food than the body uses (Dr. Drenick, Tr. 345). A reduction in calories taken in by the body or an increase in calories used by the body must occur for a person to lose any weight, and the weight lost is directly related to the reduction in calories consumed and/or calories utilized (Dr. Drenick, Tr. 350). However, in programs for the overweight or obese, reduction in caloric intake is emphasized. Dr. Thaddeus E. Prout, an expert in endocrinology and metabolism from John Hopkins University Medical School, testified (Tr. 706): In general, one does not attack obesity on the outgoing side for the most part, since it is not profitable to try to run off pounds, in the usual sense of the word, without caloric reduction. For a person to lose a pound of excess fat, a calorie deficit of about 3,500 must be incurred (Dr. Margen, Tr. 264). 51. The X-11 tablets do not, and cannot, in and of themselves, remove weight, fat or excess poundage from the human body (CX 164; Dr. Drenick, Tr. 411; Dr. Margen, Tr. 162; Dr. Fineberg, Tr. 1380-82, and 1392-93). 52. As set forth in prior findings, respon- dents' advertisements represented that X-11 tablet users could “Eat Well" and lose weight, and con- veyed the net [33] impression to prospective purchasers that ingestion of X-11 tablets would result in a loss of weight without restriction of accustomed caloric intake and while they continued to eat the foods of their choice. Although this representation was made repeatedly in X-11 adver- tisements, respondents acknowledged in the package insert that “weight loss is only accomplished when a minimum of calories are consumed" (CX 37, 40, and 133). The leaflet admonished X-11 tablet users not to eat between meals and to follow the diet en- closed with the X-11 tablets “or any other low B-42 calorie diet." The diet enclosed with the X-11 tablets provided for a drastically restricted caloric intake. Estimates of the caloric intake permitted under this diet ranged from 650 to 1,000 calories (Dr. Margen, Tr. 169; Dr. Drenick, Tr. 404; Furth, Tr. 986 and 990), and expert witnesses characterized it as a starvation or semi-starvation diet (Dr. Margen, Tr. 169; Dr. Drenick, Tr. 406; Dr. Fineberg, Tr. 1330). Respondents’ diet was also described as "ketogenic" and “unphysiologic." Such a diet causes the person following it to experience a feeling of illness and general weak- ness, and has other undesirable physical effects (Dr. Margen, Tr. 169-72; Dr. Drenick, 415-16). 53. Counsel for respondents Porter & Dietsch, William H. Fraser, Kelly Ketting Furth and Joseph Furth admit that users of X-11 tablets “cannot lose weight without restricting their accustomed caloric intake" (Tr. 661). 54. Respondents’ advertisements also repre- sented, as described, that users of X-11 tablets could lose weight while continuing to eat the foods of their choice. Porter & Dietsch admit that in order to lose weight users of X-11 tablets must diet and not consume high-calorie foods such as gravies, nuts, candy, mayonnaise, pastries, whole milk, fried foods, rich dressings and rich des- serts, and must reduce or minimize their intake of” salt, butter and hign-calorie foods generally (Adm. P&D, No. 28). The insert in the package of X-11 tablets admonishes X-11 users to take coffee or tea without sugar or cream, to eat no gravy, to trim the [34] fat off all ‘meat, to cut down on cream, butter and other high-calorie foods, and to avoid all fried foods, nuts, candy and rich dressings (CX 37, 40 and 133). This extensive enumeration of dietary restrictions makes it clear that users of X-11 tablets cannot continue to eat the foods of their choice. They must restrict the foods and quantities they consume to those permitted under the X-11 diet or other low-calorie diets. The B-43 representations of respondents in their advertise- ments that users of X-11 tablets could lose weight without restricting their accustomed caloric intake, and while continuing to eat foods of their choice, were false, misleading and deceptive. 2. Respondents had no reasonable basis when they introduced their X-ll tablets and now have no reasonable basis from which to concliuce that substantially all users of X-11 tablets would lose a significant amount of weight 55. As stated earlier, the X-11 tablets contain some vitamins, caffeine, methylcellulose and phenylpropanolamine. Users were to take one (1) tablet a half-hour before each meal, and then to follow the menu enclosed in the box of X-1ll tablets “or any other low-calorie diet." According to respondents’ advertising the X-11 tablets “counteracted hunger," "curbed," "appeased," or "depressed" the appetite, put a “brake” on cravings for high-calorie foods--"everything," and enabled users to adhere to the drastically low-calorie intake provided. The alleged appetite “depres- sant," “appeaser,” "brake" or "diet aid" in the X-11 tablet is phenylpropanolamine, and the alleged hunger “counteracter" is methylcellulose, a vege- table extract. Respondents’ advertisements repre- sented that, because of the presence of phenylpro- panolamine and methylcellulose in X-1ll tablets, all users would achieve significant weight losses of virtually any amount desired.[35] A. Respondents had conducted no tests, and were in possession of no reports, tests or studies providing dyreasonable basis from which to conclude that substantially all users of X-1l1 tablets would lose a signifi- cant amount of weight B-44 B-45 56. Individual respondent William H. Fraser, 59. Mr. Fraser testified that he placed president, of corporate respondent Porter & Dietsch, complete reliance upon Mr. Gettleman for having admitted that-he had nothing to support the claims — support and authority for the advertising repre- made in advertisements for the X-11 tablets. He sentations made for X-11 tablets. Mr. Fraser testified (Tr. 822): testified (Tr. 877): Q. Mr. Fraser, at the time you received When Mr. Gettleman sent an ad to me he that letter and in 1974 what tests or marked it okay. I did not cross aT nor dot studies or reports of studies or reports an I. He was the king. He was the man that of tests or other evidence of effec- knew the obesity field. He knew the law. tiveness of the X-11 product did you have He knew the regulationa and I relied en- in your possession? tirely on him. A.° 1 did not have any. . Q. Mr. Fraser, at the time the complaint 60. Mr. Gettleman had no information, research in this matter issued in August 1975, what reports, studies or competent test evidence, which tests or studies or reports of tests or provided a reasonable basis for the representations other evidence of effectiveness did you of weight loss contained in respondents’ X-11 have in your possession? advertising. Individual respondent Joseph Furth, A. I had none. who handled the advertising of the X-11 tablets, testified that in 1968, when his firm, Kelly 57. In 1969 and 1970 the FDA sent one of its Ketting Furth, took over the X-11 account, Mr. investigators to Porter & Dietsch as a result of Gettleman showed him two documents (Tr. 1001 and the advertising claims which were being published 1006), the 1967 Certification of Record by then “around the country" (Tr. 904-07). The FDA inves- Hearing Examiner Poindexter in Alleghany Pharmacal tigator asked Mr. Fraser for any “information or 2 Corp., et al., Dkt. 7176, 75 a C. and the reports on the efficacy of the product which would Court of Appeals decision in [37] Carlay Co. indicate that it [36] was effective for the claims v. Federal Trade Commission, 153 F.2d sO TE that were being made for it" (Tr. 909-10). Mr. 1946). In 1972 when the Commission's staff con- Fraser's response was that he had none (Tr. 910). tacted respondent Pay'n Save Corporation in this 58. The moving force behind the formation of matter requesting substantiation of the represen- Porter & Dietsch, and the initiation and marketing tations in the X-11 advertisements, the Commi s- of the X-11 tablets, was Frank Gettleman, a Chicago sion's letter of inquiry (CX 112) was sent by Pay'n attorney, now deceased. In 1967 he contacted Mr. Save to Porter & Dietsch for reply, inasmuch as Fraser, who had just suffered a business reverse, “Pay'n Save had conducted no scientific studies of telling him that he had something that Mr. Fraser X-11" (Affidavit of Calvin Hendricks, Executive could make a "comeback" at. At a subsequent Vice-President of Pay'n Save Corporation, attached meeting in Chicago, Mr. Gettleman told Mr. Fraser to Motion to Dismiss Complaint Before Trial Or, In about "this diet plan,” the X-11 tablets (Tr. the Alternative, For Summary Decision dated Novem- 823-24). ber 28, 1975, p. 3). Mr. Gettleman answered this inquiry on behalf of Porter & Dietsch and Pay'n CII B-46 nd forwarded to the Commission, as substan- eietien for the X-11 advertising, copies of the Alleghan wegiggnte ag supra, and the Carlay CX 122-26). ee ona Mr. Gettleman discussed the evidence introduced in the Alleghany proceeding, contending that it supported the claims ee se respondents’ advertising. A thorough reading 0 the Alleghany certification discloses that it does not substantiate respondests' advertising represen- tations of weight losses achievable through the use of their X-11 tablets. The complaint in Alleghany Pharmacal did not allege that claims of specific and significant weight losses of virtually any amount from the use of diet pills or tablets were false. The issue was whether “Hungrex tablets, the active ingredient of which was pheny Ipropan- olamine, had any sicnificant pharmacological value as an appetite depressant or weight-reducing agent, or were adequate or effective in the treatment, control or management of obesity. 75 F.T.C. at 997. The hearing examiner thought that the a dence was conflicting and that the allegations 0 the complaint had not been established by a prepon- derance of the evidence. 75 F.T.C. at 1034. On review, the Commission expressly disavowed any opinion "as to the accuracy of [these] findings and conclusions," but dismissed the complaint. The Commission, on the hearing examiner's recommenda- tion, [38] however, ordered that the cease and desist order issued earlier in Alleghany Pharma- cal, 55 F.T.C. 705 (1958), remain in effect. That order prohibited di ssemination of any advertise- ments for “Hungrex" which represented, directly or indirectly, “that any predetermined weight reduc- tion can be achieved by taking or use of said preparation for a prescribed period of time. The Alleghany Pharmacal case does not provide a reasonable basis for the representations of weight loss contained in respondents’ X-11 advertisements. B-47 62. The Carlay decision, supra, did not provide a reasonable basis for respondents to hold out to substantially all users of the X-11 tablets the prospect of significant weight losses of virtually any amount. The product in Carlay was simply a candy-vitamin product, did not contain pheny lpropanolamine, and has no bearing whatever on the truthfulness of respondents’ advertisements for their X-11 tablets. B. Medical texts and references provided no reasonable basis from which to conclude that substantially all users of X-11 tablets would lose a significant amount of weight 63. Excerpts from a number of authoritative medical references and texts were received in evidence. Having reviewed their individual and cumulative import, it is the finding of the law judge that they did not provide a reasonable basis from which respondents could conclude that substan- tially all users of X-11 tablets, containing phenylpropanolamine (25 mg) and methylcellulose (25 mg), would lose a significant amount of weight. 64. The 1962-63 Edition of Drugs of Choice by Drs. Walter Modell and George G. lace? (CX 92), a reliable text of widespread circulation and use in the [39] medical profession, devotes an entire chapter to anorexiants and the problem of obesity. The chapter commences by observing that the desig- nation "“anorexigenic" to a “group of drugs in common use is unfortunate because it implies a precise pharmacologic action on the central nervous system which has never been demonstrated" (CX 92, pp. 1-2). Taking up the properties of specific anorexiant drugs, Drs. Modell and Reader include phenylpropanolamine in the category of “amphet- amine-like drugs" (CX 92, p. 5), note that it tends to elevate blood pressure and that this character- istic “limits its usefulness in the treatment of obesity," and state that (CX 92, p.7): B-48 [a]lthough it is used in over-the-counter remedies for obesity, such as Regimen tablets, Du-Dol, and Ry 121, the amount of pheny Ipropanolamine which they contain is too = ih to exert any pharmacologic effect at all. In their 1966-67 Edition of Drugs of Choice, Drs. Modell and Reader added to the remarks under phenylpropanolamine concerning “over-the-counter remedies for obesity" that (CX 93): [t]hese nostrums have been, or are likely to be, removed from the market because of unsupportable and in some cases grossly illegal advertising claims. An almost identical statement was repeated in the 1972-73 Edition of their text (CX 94). 65. The Pharmacologic Basis of Therapeutics by Drs. Goodman and Gilman, 4th Edition C1970) (CX 95), is another authoritative and reliable text used by the [40] medical profession (Dr. Margen, Tr. 219; Dr. Drenick, Tr. 471). In a section of "Obesity and Weight Reduction," Drs. Goodman and Gilman state that various “sympathomimetic and related drugs" had been used but "[t]hese appetite depressants are of no value without an accompany ing stringent dietary regimen," and that "without consistent supervision no prescribed regimen of drug, or diet is predictably successful” (CX 95C). Drs. Goodman and Gilman do not include pheny!Ipro- panolamine in their list of “anorectic drugs" (CX 95D). In the 5th Edition of their text (1973) (CX 96), Drs. Goodman and Gilman note that “[w]hatever the etiology of obesity, a factor common to all cases is necessarily an intake of amounts of food that supply more energy than the body uses" (CX 96, p. 6). They then repeat statements in the earlier edition that appetite depressants are of “no value" in the areas of obesity and weight reduction B-49 without a “stringent dietary regimen." Again, phenylpropanolamine is not included in their discussion of “anorectic drugs" (CX 96, pp. 6-7). 66. The AMA Drug Evaluations, First Edition, 1971, published by the American Medical Association (CX 97), is another authoritative and reliable reference work widely used by the medical profes- sion and available to respondent: (Dr. Margen, Tr. 219; Dr. Drenick, Tr. 471). ‘inis text states bluntly in its chapter on “Anorexiants" that pheny]propanolamine “is probably ineffective in the dose provided (25 mg)." 67. In December 1972, the FDA published and widely circulated a Drug Bulletin titled Anorectics Have Limited Use in Treatment of Obesit ‘ The FDA's findings applied “to all anorectic drugs," and informed the medical profession and other concerned persons that “all anorectic drugs including amphetamines and methamphetamines" had "limited usefulness in the treatment of obesity." The FDA based its findings on a “unique evaluation of information submitted by the manufacturers of anorectic drugs and a review of the medical liter- ature." After a review of more than [41] 200 drug studies and the records of more than 9,000 pa- tients, the FDA found that “the total impact of drug-induced weight loss over that of diet alone must be considered clinically small," that "pa- tients treated with anorectic drugs lose only a fraction of @ pound a week more than those not taking drugs," and that this “weight loss appeared to be related in part to variables other than the drug, such as the physician-investigator, the population treated and the diet selected” (CX 101). 68. As prior findings disclose, respondents’ advertisements communicated to the public the net impression that virtually any amount of weight could be lost through use of X-11 tablets, "5, 10, 25 or more" pounds, even 80 or 83 pounds. These are significant weight losses. They are of a magnitude to be impressive to the seriousiy over- weight or obese, and obviously were held out to the B-50 public because of that fact, and the capacity of such representations.to sell X-11 tablets. In relation to -the large amounts of weight loss represented in respondents’ advertising as possible through the use of X-11 tablets, the loss of a fraction of a pound a week is insignificant. As Dr. Drenick observed, it "would not be noticeable to anyone who is significantly overweight" and would be medically meaningless (Tr. 386). Further, there is no reason to believe the loss of an additional fraction of a pound would continue for more than a few weeks, even if it were attributable solely to the use of X-11 tablets, because of the development of drug tolerance and other factors (RX 2, p. 206; RX 14, p. 1; Dr. Drenick, Tr. 356; Dr. Prout, Tr. 682). 69. Respondents introduced excerpts from Drill's Pharmacology in Medicine, 4th Edition (1971), which referred to phenylpropanolamine as “active enough to be used for controlling the appetite” (RX 4, p. 2), from Martindale The Extra Pharmacopoeia, 26th Edition (1972), an English reference work published by direction of the Council of the Pharmaceutical Society of Great Britain, which concluded [42] a descriptive para- graph of phenylpropanolamine by stating it “has also been given to reduce the appetite in obesity" (RX 5, p. 3), and from pharmacology an0 Thera- eutics, 7th Edition (1970), by Drs. Grollman and EreT Tam who state that phenylpropanolamine "is used . . . to depress appetite in obesity" (RX 6, p. 2). Dosages for use as an anorectant were not listed in these references. 70. The medical texts and references in the prior finding do not provide support for signifi- cant weight losses of virtually any amount held out by respondents’ advertising to purchasers and users of X-1l1 tablets. That a drug is "used" for a purpose cannot be equated with effectiveness for that purpose (Dr. Margen, Tr. 307; Dr. Drenick, Tr. 471). But even if the references in the foregoing B-51 finding were to be taken as evidence that phenyl- propanolamine had some effectiveness as an appetite suppressant, it does not follow that substantially all users of X-11 tablets would lose a significant amount of weight. C. Expert testimony disclosed no reasonable basis in medical science from which to conclude that substantially all users of X-11 tablets would lose a significant amount of weight 71. The state of medical experience, knowledge and understanding generally, and in the field of obesity and its treatment, did not provide respon- dents with a reasonable basis for the representa- tions of weight loss contained in respondents’ X-11 advertising. The record contains the testimony of three expert medical doctors, called by complaint counsel, who had long-term experience in the treatment of obesity. Additionally, complaint counsel called an FDA pharmacologist who [43] testified in connection with the FDA Drug Bulletin (CX 101). Respondents called three experts, a medical doctor, a professor of pharmacology, and a professor and researcher specializing in physio- logical psychology. The testimony of these experts viewed overall discloses no reasonable basis in medical science, in the opinion of the law judge, for respondents to conclude that substantially all users of X-1l1 tablets would lose a significant amount of weight. / Medical Doctors Dr. Margen 72. Or. Sheldon Margen, called by complaint counsel, is a Professor of Human Nutrition, and the 1970-74 Chairman of the Department of Nutritional Sciences, at the University of California at Berkeley. After majoring in zoology and receiving B-52 a Master's degree in that science and experimental embryology, he graduated from the University of California Medical School in 1943, and was licensed to practice medicine in California the same year. Dr. Margen subsequently has had a distinguished medical career involving private practice, teach- ing, lecturing and, in particular, extensive research. He is an authority in the field of human nutrition, metabolism, and the treatment of obe- sity, and has individually and jointly authored over 85 scientific papers, many in the fields of his expertise. In addition, Dr. Margen has written chapters for a number of scientific texts, and has participated in the writing of a number of others (CX 110). Currently, he is operating, with other researchers at the University of California, a controlled metabolic unit funded by the National Institutes of Health where metabolic studies in human nutrition are conducted. He is also partici- pating in an ongoing, multi-disciplinary obesity program conducted on an outpatient basis at the University (Dr. Margen, Tr. 129 and 141-143). [44] 73. In Dr. Margen's expert opinion drugs have "no place in the treatment of obesity” because it is not a simple problem capable of being cured by a pill (Tr. 162). If there were a “magic pill," in Dr. Margen's view, “obesity would have disap- peared by now" (Tr. 162). Drugs in the treatment of obesity are “essentially placebos in their effect," and are not a helpful or proper thera- peutic approach (Tr. 163). According to Dr. Margen, phenylpropanolamine is essentially a placebo, and is useless in treating obesity (Tr. 164-65, 292-95 and 299-302). Dr. Margen saw “no reason to get an individual started" on drugs such as phenylpropanolamine (Tr. 296): . when the very slight gain which may occur early can just as well be taken care of and overcome by the sympathetic working with a person instead of relying upon just handing out a drug or prescription. B-53 Dr. Margen's opinion that drugs such as phenylpro- panolamine are useless in the treatment of obesity are based upon his research and experience over a ten (10) year period, "I would say after about ten years of trial, I gave them up" (Tr. 255). 74. Dr. Margen testified that he agreed (Tr. 241) with the statements under "Obesity and Weight Reduction" in The Pharmacologic Basis of Thera- eutics (CX 95 and 96) to the effect that appetite epressants were of “no value” in weight reduction “without an accompanying stringent dietary regi- men,” and that it had been regitarly demonstrated that -"without consistent supervision” no prescribed regimen of diet is "predictably successful.” Dr. Margen also agreed with the AMA Drug Evaluations (CX 97) that phenylpropanolamine was “probably ineffective” as an anorexiant in the dose of 25mg provided in X-11 tablets (Tr. 242-43). Dr. Margen testified that epidemiological studies had shown the [45] "break point" between obesity having adverse effects upon health and not having adverse effects upon health was around 20 percent over- weight (Tr. 150). Accordingly, Dr. Margen defined a "“significant" loss of weight from an epidemi- ologist's viewpoint as one which returned an individual's weight to “the area of the so-called safe level" (Tr. 151). Dr. Drenick 75. ODr. Ernst J. Drenick, called as an expert witness by complaint counsel, is a Professor of Medicine at UCLA Medical School, heads the UCLA obesity clinic, and is Chief of. Internal Medicine at the Veterans Administration Hospital, West Los Angeles. He graduated from. New York University College of Medicine in 1941, and has been on the faculty of UCLA medical school since 1955. Or. Drenick's special interest is nutrition and metabo- lic diseases, and his primary work has been in the B-54 field of obesity (Tr. 340-41). He has been in- volved in the study of obesity since 1962, and from that year to the present has studied overweight patients, admitting them to the hospital and determining how they responded to various nutri- tional and weight-reduction programs, their needs for vitamins and different food items, and the effect of various treatment methods. He handles an average of 60 to 70 hospitalized patients and 200 to 300 outpatients each year. Hospitalized pa- tients are admitted for two to four months each, and are carefully observed from the standpoint of psychological responses to various methods of treatment, psychologic makeup, including the yeasons for abnormal eating habits, and how such habits can best be remedied (Tr. 341-42). He is supported by several technicians, two of whom are graduate students with advanced degrees, and at times is assisted by graduate fellows who are M.D.'s or Ph.D.'s (Tr. 342). Dr. Drenick is an authority in the field of obesity and its treat- ment. He has written or co-authored 50 scientific papers, most of which have [46] dealt with obe- sity, weight reduction and associated subjects, including the various psychological processes of obese individuals (CX 114). Dr. Drenick also has prepared chapters for two medical textbooks and performs editorial services as a reviewer for the Journal of the American Medical Association, American Journal of Clinical Nutrition, the Journal of Laboratory and Clinical Medicine, the Annals of Internal Medicine, Gastroenterology, Metabolism, and Obesity and Bariatric Medicine >; Ir. 344-45). 76. Or. Drenick has been unable to achieve permanent weight reduction and maintenance of normal weight with “any of the so-called appetite suppressants." The only way this has been accom- plished has been through dietary restriction in conjunction with increased activity levels, and “prolonged educational programs to re-educate the B-55 patient to normal eating habits." Such re-educa- tion requires a close, ongoing relationship between the patient and the individual supervising his or her progress (Tr. 353). Without such supervision the results are "pitiful" (Tr. 354). Over a period of two years better than 90 percent of those treated return to their original weight or have increased beyond what they started with (Tr. 354). Without continuing “follow-up” the failure rate is "almost universal" (Tr. 354-55). In Dr. Drenick's experience the obese patient has to be taken under the care of a doctor or leader of a weight-reduc- tion program, such doctor or leader has to make sure the patient is weil motivated, and such motivation has to be maintained to make sure the patient does not “backslide" (Tr. 355). 77. Or. Drenick knew of no drug that had “significant results or benefits in weight reduc- tion." Drugs in the "appetite suppressant family," such as phenylpropanolamine, “have a very limited span of effectiveness even if a mild effectiveness were present” (Tr. 356). In Dr. Drenick's profes- sional experience (Tr. 356): [47] The weight loss usually is very, very minor and at the end of five or six weeks the patient realizes that the drug isn't doing any good. He becomes disappointed and is no better off and perhaps worse off. 78. Dr. Drenick agreed with statements in the medical literature that phenylpropanolamine was "ineffective" in achieving weight loss, and shared the opinion that “it should not be used in the treatment of obesity" (Tr. 368-69). Dr. Drenick also agreed with Drugs of Choice (CX 92, 93 and 94) testifying that phenylpropanolamine was "of ques- tionable value or of no value" (Tr. 369). He further agreed with AMA Drug Evaluations (CX 97) that phenylpropanolamine was ‘probably ineffective in the dose provided (25 mg)" (Tr. 372). B-56 79. Dr. Drenick testified that a "significant" weight loss must be a weight loss which was mean- ingful to the patient and significant from a clinical point of view (Tr. 356). To illustrate, Dr. Drenick cited the case of a 350-pound patient who lost 5 or 6 pounds. Such a weight loss was measurable on the scales, but "for the patient medically, it is totally insignificant" (Tr. 357). Dr. Drenick testified (Tr. 357): You can say, well, I have given him amphetamines, he has lost seven pounds in weight. Therefore, that is a good result. It is totally insignificant medically but statistically you can say there was a significant weight los({s]. [48] Dr. Prout 80. Dr. Thaddeus Prout, the third medical expert called by complaint counsel, graduated from Harvard Medical School in 1948. After training in general internal medicine, he studied for three additional years as a fellow in the fields of endocrinology and metabolism. He is currently Chief of Medicine, Greater Baltimore Medical Center, and Associate Professor of Medicine at Johns Hopkins University School of Medicine. Dr. - Prout has taught at Johns Hopkins for many years, and for a period was a full-time faculty member. He is currently Director, Metabolic Division, Moore Clinic, The Johns Hopkins Hospital; Consul- tant in Endocrinology, Veterans Administration Hospital, Perry Point, Maryland; Consultant in Endocrinology, Veterans Administration Hospital, Baltimore, Maryland; Consultant, Department of Health, Education and Welfare; Consultant, Food & Drug Administration, National Institutes of Health; and has served as a consultant for the Bureau of Dangerous Drugs and Narcotics (CX 119; Tr. 670). B-57 Dr. Prout is an authority in the fields of endo- crinology and metabolism, and is Chairman of the FDA's Committee on Endocrine and Metabolic Drugs (Tr. 668-72; CX 119). 81. In 1972 Dr. Prout headed a panel of experts established to advise the FDA on the safety and efficacy of anorectic drugs (CX 120; Tr. 680). This panel, “Consultants on Anorectic Drugs," reported to the FDA in the Fall of 1972 (CX 120). The report of Dr. Prout's panel resulted in the "FDA Drug Bulletin" being circulated to the medical profession, and to other interested groups and organizations in December 1972 (CX 101; Tr. 687). 82. The advisory panel of experts chaired by Dr. Prout reviewed the ‘best evidence available" on anorectic drugs and ali the information submitted to [49] the FDA, including studies, tests, and histories of individuals involving "something in excess of 10,000 patients" (Tr. 723-27). The drugs studied by the panel included amphetamine-related drugs, known also as sympathomimetic amines. Phenylpropanolamine is of the same class although it was not specifically a subject of the panel's study (Tr. 676). The amphetamine-type drugs studied were stronger than phenylpropanolamine in their effects on the human body. According to Dr. Prout "“[a]ll the evidence that we have suggests that is is less potent as an anorectic agent than is the parent compound" (Tr. 708). The panel's findings applied to “all anorectic drugs" including phenylpropanolamine (CX 101). 83. Although there were some members “who would have preferred to make the statements stronger than we made them" (Tr. 727), Dr. Prout's panel of experts were in agreement that anorexiants had a “clinically trivial" effect on weight loss (CX 120). The “increased weight loss of drug treated patients over placebo treated patients was only a fraction of a pound a week," and the panel concluded that " . . . the total impact of drug- induced weight loss over that of diet alone must be oe eo wee See Se a ee B-58 considered clinically trivial" (CX 120). Dr. Prout testified that the panel, after reviewing the peta amount of data available to it, found (Tr, - « « that in general, one would see somewhere between 0.3 to 0.4 pounds per week on the average for these short term studies. Considering the fact that many of these patients were 100 percent over body weight, that was, in fact, a trivial reduction in their total body overload. Losses of 0.3 or 0.4 of a pound a week applied for short periods and would tend to decrease for greater time periods (Tr. 682). [50] 84. The final report to the FDA by the "Con- sultants on Anorectic Drugs" stated that the possible origins of the small weight loss described in the preceding finding were not established and that (CX 120): - « - The increased weight loss appears to be related to variables other than the drug prescribed, such as the physician-investi- gator, the population treated, and the diet prescribed. Studies do not permit conclu- sions as to the relative importance of the drug and non-drug factors on weight loss. 85. Dr. Prout considered that a weight loss due to the action of an anorexiant or other drug, that is, the “additional effectiveness of an anorectic agent over that of a placebo or diet plus placebo" of a pound a week would be "clinically useful and quite significant," but such a drug or agent “is certainly not known at the present time" (Tr. 690-91). He had used anorectic drugs in treating overweight persons in the course of his medical practice, but "without any success" so he had discontinued them “having found no usefulness for them" (Tr. 722-23). B-59 Dr. Fineberg 86. Dr. Seymour K. Fineberg, an expert medical doctor called by respondents, is a physician practicing in New York City and snecializing in internal medicine with particular emphasis in the fields of diabetes, obesity or metabolic disease, and cardiology. He graduated from the University of Arkansas in 1936 and obtained his M.D. in 1940. After receiving his M.D. he spent two years in a general rotating internship, followed by a two-year residency in internal medicine, [51] and then graduate study in basic sciences at New York University School of Postgraduate Medicine (Tr. 1313). He is currently Clinical Associate Profes- sor of Medicine at New York Medical College. Dr. Fineberg has served as a consultant in the field of anorexigenic drugs, and has advised pharmaceutical manufacturers who were evaluating anorexigenic drugs presently on the market (Tr. 1314). He has been a consultant for the AMA Council on Drugs and worked on the chapter on anorexigenic agents in the 1973 Edition of AMA Drug Evaluations. Dr. Fineberg has published abou medical papers, the bulk of them being in the fields of obesity, diabetes and nutrition (RX 44; Tr. 1314). He has a private practice, some of which relates to obesity, which takes about 25 percent of his time (Tr. 1315). 87. Dr. Fineberg became interested in appetite suppressants in the treatment of diabetes in 1958. He wrote an article, “Obesity-Diabetes and Anorexi- genics," published in the Journal of the American Medical Association in February 1961 in which he reported that phenmetrazine hydrochloride and diethylpropion were "significantly anorexigenic” (RX 43). Although Dr. Fineberg believed that anorexiants relieved the symptons of hunger and produced weight loss (Tr. 1325-26, 1328-29, 1344), phenylpropanolamine has not been among the drugs used or studied by him (Tr. 1323, 1336). Dr. Fineberg's knowledge of phenylpropanolamine is eh eee B-60 based on its molecular structure and the fact that a a member of the phenethylamine group (Tr. 1 . 88. In another article, “Anorexiant Drugs in Perspective," published in 1967 in the Journal of the American Geriatrics Society (RX 46), Or. Fineberg sought "to teach the medical profession where they have been making mistakes in the treat- ment of obesity and in their use of appetite suppressants," that those drugs were widely used “despite what all has been said about them," and that “if they do have a small but definite role to play" they “should be used properly" [52] in order to “obtain the right effect in the overall treat- ment of obesity" (Tr. 1348-49). In this article Dr. Fineberg stated that anorexigepic drugs were useful “only during the initial, relatively short weight-reduction period in the course of lifetime control,” and that the “sole purpose" of the drug was "to provide symptomatic relief" (RX 46, p. 3). In orn his article Dr. Fineberg states (RX 46, p. 7): The anorexigenic drug plays a relatively short, minor, though often integral, role in the treatment of obesity, a disorder which requires lifetime control and cannot be cured. The foundation for permanent weight control is an education in calories, dietet- ics and nutrition and in the acceptance of a new way of life. Appetite suppression by drugs is used only to relieve the discomfort of caloric restriction during the early stages of education and mental adjustment. Dr. Fineberg did not mention phenylpropanolamine in his discussion of “anorexiant" drugs, although many others are described or mentioned including dextro- amphetamine, methylamphetamine, phenmetrazine, and diethylpropion. B-61 89. In an article in Drug Therapy in March 1973, cast in a question and answer format, Dr. Fineberg wrote that the only purpose cf appetite suppressing drugs was to "relieve the symptoms of physiologic hunger," and they were only a "crutch" to help an obese patient beyond the initial phase of treatment (RX 45). He stated that obesity should be thought of as a condition "which requires continuous treatment," and that anorexigenic drugs are not useful in helping a patient maintain an initial weight loss, but are only useful "to relieve [53] the discomfort associated with diet- ing." All in all, Or. Fineberg felt that the medical profession did not have a great deal to offer the obese patient (RX 45). Dr. Fineberg also testified that he believed appetite suppressants had an effect, and if properly used and properly presented to an obese patient, often meant "the difference between success and failure in the treatment of a patient's obesity" (Tr. 1329). The appetite suppressants do not take off weight but, in Dr. Fineberg's opinion, the “symptoms are relieved that are produced by hunger” (Tr. 1322). 90. Dr. Fineberg used prescription drugs such as phenmetrazine, dextroamphetamine, and diethyl- propion as appetite suppressants (Tr. 1382). He had never been impressed by anything he read about pheny lpropanolamine as an anorexiant, and had never used it, explaining that he wanted to use a drug "most likely to succeed and do the job that I am asking it to do" (Tr. 1384; see also Tr. 1336, 1341 and 1383). He “had no interest in going to an older member of this family which had never been thought to be a very strong or potent member of that family" -- “Why should I go back and use something which I feel is not as efficacious as the one I had in hand" (Tr. 1383). Dr. Fineberg could not say whether phenylpropanolamine was effective in a 25 mg. dosage tablet for the “normal run of people" (Tr. 1384). However, based on its molec- ular structure and upon medical references, Dr. PE ee ee ME RO NE TT eee OM oe ORT ME ee gree rn nage a B-62 Fineberg believed it to “have some anorexigenic properties" (Tr. 1342). Nevertheless, Dr. Fineberg testified that it would be "impossible" for him to predict what effect the ingestion of a tablet containing phenylpropanolamine prior to a meal would have on the food eaten by a person at such meal (Tr. 1352 and 1384). The dosage of an appe- tite suppressant of any type, in Dr. Fineberg's experience, is a "widely variable thing individ- ually" and must be “tailored to the individual" (Tr. 1345, 1352 and 1388). [54] Other Experts Dr. Silverman 91. Dr. Harold I. Silverman, a Professor of Pharmacology at Massachusetts College of Pharmacy, the Massachusetts College of Optometry, and Boston University Medical School, was called as an expert witness by respondents Porter & Dietsch, William H. Fraser, Kelly Ketting Furth and Joseph Furth. He has published approximately 75 articles and a text on pharmacology. Dr. Silverman graduated from the Philadelphia College of Pharmacy in 1952 where he also received his Ph.D in 1956 (RX 35; Tr. 1101-04). He is not an M.D. and does not treat patients for overweight or obesity. 92. Among Dr. Silverman's publications is an article published in the American Journal of B-63 Silverman found favorable, as well as unfavorable, comments regarding the appetite-suppressant quali- ties of phenylpropanolamine, noting in the process that the FDA had "gone on record" in stating that phenylpropanolamine was "worthless as an appetite depressant" (RX 36, p.8). One of the references listed by Dr. Silverman (RX 36, p. 11, note 15) was a 1939 article which he quoted as reporting that phenylpropanolamine was "[elffective in controlling the appetite of patients on an obesity diet." The author of this article, Dr. Hirsh, had later testified publicly before a Subcommittee of the House Committee on Government Operations investi- gating advertising of weight reducing [55] products in 1957, six years before Dr. Silverman's article was published, and had changed his opinion. See False and Misleading Advertising (Weight Reducing Preparations), Hearings before a Sub- committee of the Committee on Government Opera- Pharmacy in 1963 entitled "PhenyTpropanolamine- Misused? Or Simply Abused?" (RX 36). Dr. Silver- man testified that his main purpose in writing this article was to criticize the "Fazekas" report, published in 1959, which had concluded that pheny1- propanolamine was ineffectual as an appetite suppressant (Tr. 1148). Dr. Silverman reviewed the literature, both national and international (Tr. 1105), and wrote that of all the anorexiants, amphetamine and its analogs are the most effective (RX 36, p. 3). Reviewing the literature, Dr. tions, House of Representatives, 65th Cong., List ession, August 2, 6, 7 and 8, 1957, pp. 56-63. Dr. Hirsh stated to the House Subcommittee that firms marketing reducing pills “endeavor to exploit pheny Ipropanolamine," and that a dose of 25 mg. of pheny!propanolamine taken three times daily "would exercise no appetite depressant effect of signifi- cance for the great vast majority of persons." Although Dr. Silverman's article referenced (RX 36, p- 11, note 7) the Committee hearings, the dispar- ity between the foregoing statement of Dr. Hirsh before the House Committee in 1957, and the 1939 article quoted by Dr. Silverman, was not noted. In concluding his article, Dr. Silverman made a number of points critical of the "Fazekas" study, ques- tioning whether that study warranted condemnation of phenylpropanolamine, but making no claims of specific amounts of weight loss associated with that drug. | 93. Dr. Silverman testified that, in his opinion, phenylpropanolamine is effective as an appetite depressant in 75 mg daily dosages (three B-64 X-11 tablets), and that use in conjunction with a dietary program of 1,200 calories per day would bring about a significant decrease in weight with time (Tr. 1107). He also testified that he had no question that anorectic preparations were very useful in helping individuals lose weight (Tr. 1111). Dr. Silverman regarded statements question- ing the value of anorectic drugs or describing them as placebos as "frequently made unfortunately because of certain intimidation that has occurred in the field of drug therapy" and because there is “unfortunately a small group of persons who try to develop their opinions and unfortunately sometimes manage to get their opinions published in the literature" (Tr. 1110). [56] 94. Dr. Silverman had conducted a study evaluating phenylpropanolamine and a placebo over a several week period (RX 3). He concluded that phenylpropanolamine was effective as an anti-obe- sity agent when used as it was in his study (Tr. 1120). Or. Silverman's study was received in evidence, and will be considered in the following section of this decision along with studies of Dr. Hoebel. 95. Dr. Silverman agreed with the statements in Drill's Pharmacology in Medicine (RX 4), The Extra Pharmacopoeia (RX 5), and Pharmacology and Therapeutics (RX 6), that phenylpropanolamine is used in the treatment of obesity (Tr. 1108-09). Referring to the FDA Drug Bulletin (CX 101), Dr. Silverman testified that he was familiar with this publication and its conclusions. He testified that the FDA had concluded “that anorectic drugs are acceptable and useful agents for the reduction of appetite and useful as a proven measure for those people who are obese" (Tr. 1111). In fact, the FDA Drug Bulletin, as earlier described, concluded that anorectic drugs were of “limited usefulness" in the treatment of obesity, that their effects B-65 “must be considered clinically small," that pa- tients treated with such drugs lost “only a frac- tion of a pound a week more than those not taking drugs," that the fraction of a pound weight loss of those taking drugs "appeared to be related in part to variables other than the drug," and that the wore loss “declines in succeeding weeks" (CX 101). Dr. Hoebel 96. Dr. Bartley G. Hoebel is a physiological psychologist, and a Professor in the Department of Psychology at Princeton University. His field of specialization involves the study of the relation- Ship between brain and behavior. He obtained his Ph.D. at the University of Pennsylvania in 1962, and taught at [57] that institution briefly before moving to Princeton in 1963 where he became a full professor in 1970 (RX 37; Tr. 1176-77). He has serene or co-authored about 35 publications (RX 97. Dr. Hoebel testified it was his opinion, based on his studies, that "people interested in weight loss and knowing that a pill might be involved in suppressing appetite is being [sic] under test" will eat less (Tr. 1195), and that “people taking this pill [containing pheny]propano- lamine] will lose some [weight], on the average, and that individuals, some individuals will lose a lot" (Tr. 1296). People following a restricted diet would be happier, according to Dr. Hoebel, if they used an appetite suppressant, but the effects of the diet and the appetite suppressant have not been scientifically demonstrated to be additive (Tr. 1199-1200). Dr. Hoebel emphasized, however, that his studies demonstrated the effectiveness of phenylpropanolamine to bring about weight loss only under the conditions of his experiments and for short time periods (Tr. 1241). B-66 98. Contrary to his earlier statement, pub- lished as recently as 1975, that phenylpropano- lamine “has never adequately been proven effective" (RX 41, p. 7-8), Dr. Hoebel in this proceeding stated that such proof existed. Recent studies by himself, Dr. Silverman and a Dr. Palmer, according to Dr. Hoebel, support the view that pheny!propano- lamine is an effective anorexiant (Tr. 1205). 99. Dr. Hoebel disagreed with statements made in Drugs of Choice that phenylpropanolamine is ineffective in 25 mg dosages, that obesity is a “singularly human trait," and could be of psychi- atric origin and therefore not amenable to treat- ment with drugs. He also disagreed with the statement that no anorectics are effective without simultaneous control of food intake (Tr. 1223-24). Dr. Hoebel testified that these and [58] other statements of Dr. Modell's were “based on old, inadequate studies which have led him to false conclusions, numerous false statements and a basic bias" (Tr. 1220). Dr. Hoebel also testified that the other medical references referred to during his questioning suffer the same defects as Drugs of B-67 Dr. Sorer 100. Dr.-Heinz Sorer, called as an expert by complaint counsel, is a pharmacologist on the drug abuse staff of the FDA, Division of Neuropharmaco- logical Drug Products (Tr. 616). Dr. Sorer's work entails safety evaluations of drugs, including appetite suppressants, which affect the central nervous system (Tr. 617). Between 1966 and 1972, Dr. Sorer was concerned with an evaluation of sympathomimetic amines undertaken by the FDA to gather information regarding potential abuse of these drugs, and to formulate an FDA policy regard- ing evaluation of their efficacy (Tr. 618-19). The culmination of this FDA effort was CX 101, the FDA Drug Bulletin, discussed in detail earlier Choice since they rely on this major work for the accuracy of their statements. Dr. Hoebel testified that medical textbooks lead people to conclude that phenylpropanolamine is not effective because they were written (Tr. 1225): , - without access to the current or the latest data and in some cases, by people who had very strong prejudices about the nature of obesity in humans and the fact that in their minds, it is something that is psychic and not amenable to drug treatment. Dr. Hoebel's studies (RX 1 and 2) will be con- sidered in detail in the following section of this discussion. herein by Dr. Prout who headed the expert panel evaluating these drugs. Dr. Sorer testified that the effects of the sympathomimetic amine drug group, of which phenylpropanolamine is a member, a "from individual to individual" (Tr. 630). 59 D. Studies by experts called by respondents did not provide a reasonable basis from which to conclude that substantially all users of X-11 tablets would lose a significant amount of weight The studies of ohenylpropanolamine by respon- dents' expert witnesses, Drs. Silverman and Hoebel, were received in evidence, being offered by respon- dents as substantiation for the weight-loss claims made in X-11 advertisements (RX 1, 2 and 3). (a) Dr. Silverman's Study 101. "A Double-Blind Clinical Evaluation of a Phenylpropanolamine-Caffeine-Vitamin Combination And A Placebo In The Treatment of Exogenous Obe- sity" (RX 3), published in Current Therapeutic B-68 Research, Vol. 17, No. 6, June 1975, is a study which Dr. Silverman conducted in collaboration with two medical doctors. Inasmuch as this study was published in June 1975, it obviously could not have provided a reasonable basis for claims for X-11 tablets in advertisements of respondents dissemi- nated in 1968 and subsequent years prior to its publication. Nevertheless, such a study would bear upon the propriety of an order in this proceeding if, in fact, it provided a reasonable basis for the advertising claims. This was not the case, how- ever, for Dr. Silverman's "double-blind" study had some dubious aspects, raising questions as to the reliability of its conclusions. Furthermore, even if this were not the case, the study did not provide a reasonable basis for the representations in respondents’ advertisements that users of X-11 tablets could lose significant, large amounts of excess weight of virtually any amount. [60] 102. Two allegedly parallel groups of exogen- ously obese adults were employed in the study. One group was given a test preparation containing phenylpropanolamine (25 mg), caffeine and multi- vitamins while the other group received a placebo tablet. Both groups were also given a 1,200 calorie diet plan and instructions on its use. Dr. Silverman reported that over a “four-week period" while on the test preparation the "median" weight loss of males was 3-1/2 pounds greater than males on the placebo. The "median" weight loss of females on phenylpropanolamine was 2 pounds greater than the median weight loss of females on the placebo. 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Sse este oe eS e% is ars i “*. “eee . ee « a ee eer a ae) ee or rs OF Oe Mee Beeee fet © Me Otre teere tee {1024 pea, 2s0y pu payy re CSUENECL 2EGiH Steorew FHA ORO OF OT EHO S Bi: - eos me He 28 ee —— oe @--+ « —_— ee ee ee ed ~- _* = * * “— «2 = s ses cw Ses ec =e A oy 5 Fee t= = as eb. 26 eae ° = ( whty tee te0t tee" sv teov *” ee) mete hm gees tee ete eee Ss TS RSS 1 Se selene: cop cae eee osteo 20-5. ames & wee Swe seas 2 © S ‘s ericew ves ceese. @ PDP CE DV TEND? ~ ences . . . -_ec - . oC“ “7-e «Ff _o- - ewe -@ + - @e - . - we + o as es $ ca of ej 3) "Speab . Tk Cee . Be pores ea vere aged? AN thing MOS te | ; . sd Vt] (any | serignaseee eats See 2 \ GPOAt pes sSpLOLN MOR st a B-128 [5] Although respondents do not contest that the advertisements are theirs, they deny that the ads conveyed any of these alleged claims. We approach the task of reviewing the ALJ's findings on the meaning of the ads with utmost care. In particular, we are acutely aware that there is a strong public interest in avoiding constraints on truthful advertising. See Bates v. Arizona, °%7 S.Ct. 2691 (1977); Virginia State Board of Pharmecy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 COLE and Bigelow v. Virginia, 421 U.S. 809 (1975). In Virginia State Board the Supreme Court observed: [the] consumer's interest in the free flow of information of commercial information . . - may be keen, if not keener by far, than his interest in the day's most urgent political debate . . . So long as we pre- serve a predominantly free enterprise economy, the allocation of our resources in large measure will be made through numerous private economic decisions. It is a mat- ter of public interest that those decisions, in the aggregate, be intelligent and well- informed. To this end. the free flow of commercial information is indispensable. 425 U.S. at 763-65. The public interest in the free flow of truthful information makes the task of interpreting advertisements a delicate one. However, commercial speech is not entitled to the same unfettered constitutional protection afforded political speech. Deceptive weer gf Ali - ng oe tutional protection. See Virginia e Board, U.Si-n, oy at 173-78 and Bates, 7 S.Ct, at 2708-09. Deceptive commercial speech does not aid consumers in making their purchasing decisions and may Cause economic injury to those consumers who purchase the advertised product because of the B-129 deception. It also reduces the effectiveness of all advertising by casting doubt on its reli- ability. Therefore, although sensitive to the public interest in the free flow of commercial speech, we serve the same public goals when we meet our statutory obligations by prohibiting deceptive advertising. [6] The ALJ applied common sense and expertise in setting forth the overall effects and nat impres- sions that the advertisement conveyed,’ and he Supported his interpretations with references to the words used, the pictorial displays, and the layouts employed. Respondents complain that use of these well- accepted techniques for discerning the meaning of advertisements distorted them and wrenched various words and phrases from their context.4 We have 3 Such an approach is noc merely permissible, but is vequired in order to assess whether adver- tising is "false" under Section 15 of the FTC Act, supra n. 1 at 1. and the Commission has long been upheld in reading advertising for its total or general impression on the consuming public. See FIC _v. Colgate~Palmolive Co., 380 U.S. 374, 385 (1965) ("the finding of a Section 5 violation in this field rests ..., heavily on inference and pragmatic judgment"): Murray Space Shoe Corp. v. FTC, 304 F.2d 270, 272 (2d Cir. 1962); Charles of the Ritz Distribs. Corp. v. FTC, 143 F.2d (2d Cir. 1944); Exposition Press, Inc., v. FTC, 295 F.2d 869, 872 (2d Cir. 1961), cert. denied, 370 U.S. 917 (1962). 4 Respondents' zeal in pursuing this line of attack exceeds reasonable bounds when on several occasions they argue that the ALJ's findings display bias and prejudice (RB oo 5) SF 22 5950 SPD: B-130 carefully reviewed each of these alleged examples of gerrymandering of the advertisements and we find that respondents’ arguments are without merit. [7] The Advertising and Sale of X-11 Tablets The ALJ found that respondents marketed "X-II tablets"; respondents argue that they marketed the "X-11 Reducing Plan." The difference is significant, we are told, because the "plan" consisted of ingestion of the tablets plus adherence to a restricted diet. Respondents virtually concede that consumption of X-11 tablets alone, without dieting, will not produce any of the weight-reduction results that the advertisements proclaim (RB 31; I.D. 53). The tablets contain phenylpropanolamine hydrochlor- ide ("PPA"); and respondents argue that PPA jis an appetite suppressant that helps people stay on restricted diets. They contend, in short, that the tablets’ are part of the plan and not the plan itself. Respondents emphasize the number of times that the word "plan" is used in the advertisements and the care with which the advertisements were de- signed to assure that express claims of weight loss were credited to the "plan." The ALJ considered that argument but chose instead to ascertain the net impression conveyed by the advertisements. His choice of approach was correct and we affirm his findings. [8] 5 In addition, respondents' package insert candidly admonishes that "weight loss is only accomplished when a minimum of calories are con- sumed" (I.D. 52), and individual respondent Joseph Furth, the advertising account executive for Porter & Dietsch, cautioned the company to avoid emphasiz- ing “tablets" in the advertising because "the pills will not reduce weight an iota . . {ijt is the "Plan' that will keep us out of hot water" (cx 164). B-131 Although the word "plan" was often used in the advertisements, it was not described as a rigorous program of reduced caloric intake. On the con- trary, express claims for the plan stressed its Capacity to allow consumers to “eat well," to avoid “starvation dieting hunger" and “boring reducing diets," and to have "3 sensible meals a day plus ‘tween meal snacks."6 These claims were coupled with and overshadowed by ubiquitous references to X-11 tablets which were described as the key to attaining these objectives. Respondents also object to the ALJ's reference to consumer testimonials in Findings 19 and 20. These letters show that some consumers, even satisfied ones, perceived that respondents were selling tablets or pills rather than a plan. We reject the argument that this evidence is not probative and the further argument that customers’ perceptions are not relevant to the allegation that respondents sold X-11 tablets. At the very least, the letters show that respondents’ advertisements did not so indelibly implant [9] the "x-11 plan" in 6 The diet which respondents assert was part of the "plan" was set forth in the package insert. In Stark contrast to the advertising claims, the insert detailed an extremely strict program of dieting which the ALJ correctly found did not permit between meal snacks and did constitute a starvation or near starvation diet. B-132 consumers’ minds that they refrained from referring to the product as "tablets" or pills." In a related sally, respondents attack a phrase in one of the several relevant findings (1.0. 12) that is not to be found in the advertis- ing itself (RB 36). But the ALJ never found to the contrary and he made it clear that the words were his and not the advertiser's by the customary technique of placing quotation marks around some words and not others. Respondents create and then flog a strawman. The advertisement itself was made a part of the partially disputed finding and we conclude that the ALJ's interpretation of it was correct. Claims of Weight Losses Without Dieting Based on a thorough review of the Challenged advertise- ments, the ALJ found that respondents' advertising conveyed the impression that “users of X-11 tablets could lose body weight without dieting or con- sciously or materially changing their eating habits, . . . ‘without restricting their accustomed caloric intake and while they continue to eat the foods of their choice.'" (I.D. 39) Respondents complain that this and other relevant findings (I.D. 28-38) rest on the erroneous repetition of selective excerpts from the advertisements. In adopting the contested findings, we note that the 7 another objection to the testimonial letters is based on a stipulation among the parties that consumer witnesses would not be called during the proceeding. Even if, by some stretch of the imagination, the stipulation were conetrued to cover documentary materials, respondents waived any objections on these grounds, first, by introducing similar letters of their own and, second, by failing to object to the introduction of complaint counsels's exhibits into evidence. B-133 phrases which the ALJ highlighted were prominently featured in th [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1542%3A1. Public record. Not legal advice.