791 F.2d 189 (D.C. Cir. 1986), 85-1047, Thompson Medical Co., Inc. v. F.T.C.

Docket Nº:85-1047.
Citation:791 F.2d 189
Party Name:Trade Cases 67,103 THOMPSON MEDICAL COMPANY, INC., Petitioner, v. FEDERAL TRADE COMMISSION, Respondent.
Case Date:May 27, 1986
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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Page 189

791 F.2d 189 (D.C. Cir. 1986)

Trade Cases 67,103

THOMPSON MEDICAL COMPANY, INC., Petitioner,

v.

FEDERAL TRADE COMMISSION, Respondent.

No. 85-1047.

United States Court of Appeals, District of Columbia Circuit

May 27, 1986

Argued Feb. 6, 1986.

Page 190

Patricia Hatry, New York City, with whom Jeffrey C. Katz, New York City, was on the brief, for petitioner.

Melvin H. Orlans, Atty., F.T.C., with whom Ernest J. Isenstadt, Asst. Gen. Counsel, F.T.C., Washington, D.C., was on the brief, for respondent.

Before ROBINSON, Chief Judge, and MIKVA and GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge MIKVA.

MIKVA, Circuit Judge:

This case concerns a complaint brought by the Federal Trade Commission ("FTC" or "Commission") against petitioner Thompson Medical Company under Secs. 5 and 12 of the FTC Act. 15 U.S.C. Secs. 45 & 52. The complaint alleged and the Commission found that Thompson's advertising for Aspercreme, a topical analgesic, was false and misleading, and constituted an unfair and deceptive practice. The Commission ordered Thompson to refrain from making unsubstantiated claims that Aspercreme is effective and to disclose in the product's labeling and advertising that it does not contain aspirin. Thompson challenges the FTC's order as arbitrary and capricious, contrary to public policy, unsupported by substantial evidence, and discordant with applicable Commission precedent. We find that the Commission's order and decision are supported by the law and the facts, and therefore affirm the FTC.

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BACKGROUND

Petitioner sells an over-the-counter ("OTC") analgesic (pain reliever) known as Aspercreme. Aspercreme is supposed to help arthritis victims and others who seek relief from minor aches and pains. As the name suggests, Aspercreme is a cream meant to be rubbed on the area where an analgesic effect is desired. Despite its name, however, Aspercreme contains no aspirin (acetyl salicylic acid). Rather, Aspercreme's active ingredient is trolamine salicylate (sometimes referred to as TEA/S or TEAS), a chemical relation of aspirin.

Even though Aspercreme contains no aspirin, Thompson's advertising strongly suggested that Aspercreme and aspirin were somehow related. One television advertisement used by Thompson, for example, contained the following monologue:

When you suffer from arthritis, imagine putting the strong relief of aspirin right where you hurt. Aspercreme is an odorless rub which concentrates the relief of aspirin. When you take regular aspirin, it goes throughout your body like this. But, in seconds, Aspercreme starts concentrating all the temporary relief of two aspirin directly at the point of minor arthritis pain.... [Voice over:] Aspercreme. The strong relief of aspirin right where you hurt.

Complaint counsel's exhibit B, In re Thompson Medical Co., Inc., 104 F.T.C. 648, 653 (1984). In this and similar ads, the announcer is shown holding aspirin tablets at the beginning of her monologue; as she speaks the aspirin is replaced by a tube of Aspercreme.

In February of 1981, the FTC issued an administrative complaint against Thompson. Thompson was charged with having violated sections 5 and 12 of the FTC Act. 15 U.S.C. Secs. 45 and 52. These actions prohibit "unfair or deceptive acts or practices in commerce" and "disseminat[ing] ... any false advertisement ... for the purpose of inducing ... the purchase ... of ... drugs." Specifically, Thompson was charged with having made unsupported claims that Aspercreme was effective for the relief of arthritic pain, having falsely represented that this efficacy had been scientifically established, and having falsely represented that Aspercreme contained aspirin. See Initial Decision by Hyun, Administrative Law Judge, In re Thompson Medical Co., Inc., 104 F.T.C. 648, 660, 660-61 (June 24, 1983) ("Thompson Initial Decision"). The FTC complaint was heard before an administrative law judge (ALJ). After compiling a record in excess of 6500 pages, he issued a 127-page opinion finding Thompson liable. See Thompson Initial Decision. The matter was appealed to the Federal Trade Commission. The FTC engaged in extensive review of the ALJ's decision and entered a 56-page opinion of its own, affirming the ALJ's decision and entering a final order against Thompson. See In re Thompson Medical Co., Inc., 104 F.T.C. 648, 786 (Opinion) 842 (Order) (1984) ("Thompson Opinion" and "Order").

The FTC affirmed the ALJ's finding "that Thompson lacked reliable and credible information constituting a reasonable basis for the efficacy claims it made for Aspercreme." Thompson Opinion at 787-88, 821-28. The Commission found that Thompson had represented that Aspercreme was more effective than aspirin, and that Thompson had represented that Aspercreme's effectiveness had been scientifically substantiated. The Commission also found that Thompson had falsely represented that Aspercreme contained aspirin. It found that the alleged misrepresentations were material, and that they were likely to mislead consumers. The Commission also determined that Thompson's false and deceptive advertising had been deliberate. Id. at 791-839.

The FTC issued a final order against Thompson that prohibited the company from using the name Aspercreme unless its advertising and packaging made clear that Aspercreme does not contain aspirin. See Order, 104 F.T.C. 842, part I.A. The Commission also prohibited Thompson from representing that Aspercreme "involves a new scientific principle" when it has "been available for purchase in the United States

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as an [OTC] drug for more than one year," id., part I.B., and from misrepresenting either the ingredients of Aspercreme or the results of any tests or studies of Aspercreme. Id., parts I.C. & D. In the part of its order that has engendered the most controversy, the FTC ordered Thompson to refrain from

  1. Representing that [Aspercreme] is effective for the relief of minor pain and other symptoms of any musculoskeletal disorder....

  2. Representing that [Aspercreme] is as fast or faster than, or is as effective as, or more effective than any other drug or device in the relief of minor pain and other symptoms of any musculoskeletal disorder ...; unless at the time of ... such representation, [Thompson] possesses and relies upon a reasonable basis for such representation consisting of competent and reliable scientific or medical evidence.

Order, part II.

The FTC's Order went on to provide that "competent and reliable scientific evidence shall include at least two adequate and well-controlled, double-blinded clinical studies...." Id.

DISCUSSION

Thompson mounts a tripartite attack on the Commission's decision and order. Thompson first argues that...

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