Doherty, Clifford, Steers & Shenfield, Inc. v. FTC

• Decision Date: 04 April 1968
• Docket Number: No. 17295,17296.,17295
• Citation: 392 F.2d 921
• Parties: DOHERTY, CLIFFORD, STEERS & SHENFIELD, INC., Petitioner, v. FEDERAL TRADE COMMISSION, Respondent. MERCK & CO., Inc., Petitioner, v. FEDERAL TRADE COMMISSION, Respondent.
• Court: U.S. Court of Appeals — Sixth Circuit

392 F.2d 921 (1968)

DOHERTY, CLIFFORD, STEERS & SHENFIELD, INC., Petitioner, v. FEDERAL TRADE COMMISSION, Respondent.

MERCK & CO., Inc., Petitioner, v. FEDERAL TRADE COMMISSION, Respondent.

Nos. 17295, 17296.

United States Court of Appeals Sixth Circuit.

April 4, 1968.

COPYRIGHT MATERIAL OMITTED

James H. McGlothlin, Washington, D. C., Charles E. Buffon, Washington, D. C., John M. Stocker, Rahway, N. J., on brief, for Merck.

Philip K. Schwartz, New York City, Davis, Gilbert, Levine & Schwartz, New York City, on brief; Philip K. Schwartz, Paul B. Gibney, Jr., New York City, of counsel, for Doherty, etc.

Miles J. Brown, Federal Trade Commission, Washington, D. C., James McI. Henderson, General Counsel, J. B. Truly, Asst. Gen. Counsel, Frank Gregory, Attorney, Federal Trade Commission, Washington, D. C., on brief, for respondent.

Before O'SULLIVAN, PHILLIPS and CELEBREZZE, Circuit Judges.

PHILLIPS, Circuit Judge.

The Federal Trade Commission held that the manufacturer of Sucrets, a throat lozenge, and its advertising agency disseminated false advertisements in violation of Sections 5 and 12 of the Federal Trade Commission Act.¹ The manufacturer, Merck & Co., and the advertising agency, Doherty, Clifford, Steers & Shenfield, Inc.,² have filed petitions to review the cease and desist order issued by the Commission.

We affirm and enforce the final order of the Commission in its entirety.

1) The Order Against Merck

Merck manufactures and sells Sucrets and Children's Sucrets. The Commission found that there is no substantial difference between these two products insofar as medical usefulness is concerned. Children's Sucrets have a wild cherry flavor designed to appeal to children.

Merck sponsored television commercials which were created by Doherty. The visual sequence depicted silhouettes of a man's or child's head with a flame in the throat. The flame was shown starting low in the neck and flaring up into the throat. Each commercial showed the word "Sucret" or "Children's Sucret" entering the mouth and going down the throat as the flame flickered and was extinguished. The "Children's Sucret" commercial depicted a "recovered" child, who had been in severe pain before taking the lozenge, playing normally after having consumed the lozenge.

Accompanying the visual sequence of the adult's flaming throat was the following oral representation concerning Sucrets:

"When sore throat strikes and brings fiery pain, what do you do for relief? Millions of people depend on Sucrets for relief of minor sore throat pain. Individually foil wrapped, remarkable Sucrets lozenges relieve sore throat pain fast and kill even Staph and Strep germs with a special pain relieving antiseptic, Hexylresorcinol. So, when minor sore throat strikes and brings fiery pain, Sucrets relieve sore throat pain and kill even Staph and Strep germs. Sucrets are fast. Within minutes you can talk, swallow, even smoke in comfort. So, when sore throat strikes, relieve pain fast and kill even Staph and Strep germs."

The following oral representation accompanied the picture of the extinguishment of the flame in the child's throat:

"When your child has a sore throat. * * * It can make you feel helpless. What do you do to relieve the pain? If he\'s too young to gargle * * * and you want something more effective than candy cough drops * * * try new Children\'s Sucrets * * * specially flavored for youngsters * * * by the makers of regular Sucrets. Children\'s Sucrets contain hexylresorcinol — the gentle antiseptic. And, Children\'s Sucrets relieve pain fast and help fight infection. These lozenges are made especially for children. Look: When minor sore throat strikes and brings burning pain * * * Children\'s Sucrets gently * * * safely * * * take care of the pain * * * and help fight infection. In no time at all * * * your child\'s like himself again. So next time your child has sore throat * * * if he\'s too young to gargle * * * and you want something more effective than candy cough drops * * * Relieve pain fast * * * help fight infection. Get new Children\'s Sucrets!"

The Commission found these commercials to be misleading in material respects and held that they constituted false advertisements within the meaning of the Federal Trade Commission Act. The Commission adopted in substantial part the findings of fact of its hearing examiner, but made certain modifications. Excerpts from these findings, as modified, are set forth as Appendix A.

We hold that these findings of fact are supported by substantial evidence on the record considered as a whole and that the inferences drawn by the Commission are reasonable and permissible.

The final order of the Commission, which is somewhat broader than the order proposed in the initial decision of the hearing examiner, contains the following directions against Merck:

"It is ORDERED that respondent Merck & Co., Inc., a corporation trading as Quinton Company or under any other name, and its officers, agents, representatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of throat lozenges or any similar preparation, do forthwith cease and desist from, directly or indirectly:

"1. Disseminating, or causing to be disseminated, by means of the United States mails or by any means in commerce, as `commerce\' is defined in the Federal Trade Commission Act, any advertisement which represents directly or by implication that `Sucrets\' or `Children\'s Sucrets\', or any other preparation of similar chemical composition or properties, by virtue of their hexylresorcinol content, or otherwise:

"(a) Will reach, kill or have any effect upon germs contributing to an existing throat infection, or otherwise that they are effective in the treatment of throat infection.

"(b) Will provide relief of the pain of sore throat in excess of temporary relief of minor pain.

"2. Disseminating, or causing to be disseminated, by the United States mails or by any means in commerce, as `commerce\' is defined in the Federal Trade Commission Act, any advertisement which misrepresents directly or by implication the efficacy or therapeutic value of any throat lozenge or similar preparation.

"3. Disseminating, or causing to be disseminated, by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase of any such preparation, in commerce, as `commerce\' is defined in the Federal Trade Commission Act, any advertisement which contains any of the representations prohibited by Paragraphs 1 and 2 hereof."

Merck attacks this order as being broader than warranted by the facts and urges that in no event should the Commission's order be broader than that recommended by the hearing examiner. The order proposed by the hearing examiner sought only to prohibit Merck from representing that its throat lozenges "(a) will kill or render ineffectual germs in the throat tissues that are contributing to an existing throat infection; (b) will afford permanent or long lasting relief of sore throat pain."

Merck asks the Court to substitute the examiner's order for that of the Commission. As said by the Supreme Court of another litigant: "Respondents made no appeal here from some of the findings as to their guilt. Having lost the battle on the facts, they hope to win the war on the type of decree." Federal Trade Commission v. National Lead Co., 352 U.S. 419, 429, 77 S.Ct. 502, 509, 1 L.Ed.2d 438.

The rule is well established that the Commission's findings of fact in the area of trade and commerce are entitled to be given great weight. The Commission is permitted to draw reasonable inferences from the evidence and its findings are conclusive if supported by substantial evidence. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456; J. B. Williams Co. v. Federal Trade Commission, 381 F.2d 884 (6th Cir.); Libbey-Owens-Ford Glass Co. v. Federal Trade Commission, 352 F.2d 415 (6th Cir.).

Reviewing courts are admonished that in cases involving allegedly deceptive advertising the Commission's judgment is to be accorded especial deference. Federal Trade Commission v. Colgate-Palmolive Co., 380 U.S. 374, 385, 85 S.Ct. 1035, 13 L.Ed.2d 904; Libbey-Owens-Ford Glass Co. v. Federal Trade Commission, supra, 352 F.2d 415, 417 (6th Cir.).

It is the function of the Commission to determine "the meaning of advertisements or other respresentations to the public, and their tendency or capacity to mislead or deceive, * * *" Carter Products, Inc. v. Federal Trade Commission, 323 F.2d 523, 528 (5th Cir.). This Court has said that "the Commission is not bound to the literal meaning of the words, nor must the Commission take a random sample to determine the meaning and impact of the advertisements." J. B. Williams Co. v. Federal Trade Commission, supra, 381 F.2d 884, 890 (6th Cir.). The fact that an advertiser made its representations in good or bad faith is not determinative of whether such statements are deceptive and misleading. Koch v. Federal Trade Commission, 206 F.2d 311 (6th Cir.).

The reviewing court's limited scope of inquiry in false advertising cases is particularly appropriate when dealing with representations of the effectiveness of proprietary drugs. Substantial deference to the Commission's findings is required not only by the agency's expertise in interpreting advertisements but also by the great interest in protecting and informing the self-medicating consumer. "Fraudulent misrepresentations of the curative value of nostrums not only operate to defraud purchasers but are a distinct menace to the public health. There are none so credulous as sufferers from disease."³ In evaluating the tendency of advertising to deceive, the Commission is bound to protect the public in general, the unsuspecting as well as the skeptical. Exposition Press, Inc. v. Federal Trade Commission, 295 F.2d 869, 872 (2d Cir.), ...