American Home Products Corporation v. FTC

• Decision Date: 18 October 1968
• Docket Number: No. 17781.,17781.
• Citation: 402 F.2d 232
• Parties: AMERICAN HOME PRODUCTS CORPORATION, Petitioner, v. FEDERAL TRADE COMMISSION, Respondent.
• Court: U.S. Court of Appeals — Sixth Circuit

402 F.2d 232 (1968)

AMERICAN HOME PRODUCTS CORPORATION, Petitioner, v. FEDERAL TRADE COMMISSION, Respondent.

No. 17781.

United States Court of Appeals Sixth Circuit.

October 18, 1968.

Samuel W. Murphy, Jr., New York City, for petitioner; Kenneth N. Hart, James A. Magee, Donovan, Leisure, Newton & Irvine, New York City, Powell McHenry, Dinsmore, Shohl, Barrett, Coates & Deupree, Cincinnati, Ohio, on brief.

David B. Morris, F.T.C., Washington, D. C., for respondent; James McI. Henderson, Gen. Counsel, J. B. Truly, Asst. Gen. Counsel, Charles C. Moore, Jr., Atty., F.T.C., Washington, D. C., on brief.

Sidney P. Howell, Jr., New York City, for amicus curiae — Proprietary Assn.; James F. Hoge, Rogers, Hoge & Hills, New York City, on brief.

Before EDWARDS, CELEBREZZE, and COMBS, Circuit Judges.

COMBS, Circuit Judge.

The Federal Trade Commission has charged the petitioner, American Home Products Corporation, with using unfair and deceptive advertising in connection with the sale and distribution of Preperation H, a non-prescription, proprietary drug sold in ointment and suppository form for use in the treatment of hemorrhoids.

It is alleged in the complaint that petitioner, advertising through newspapers, magazines, radio, television, and other media, represented that Preparation H would:

1) Reduce or shrink hemorrhoids;

2) Avoid the need for surgery as a treatment for hemorrhoids;

3) Eliminate all itch due or ascribed to hemorrhoids;

4) Relieve all pain attributed or ascribed to hemorrhoids;

5) Heal, cure, or remove hemorrhoids and cause hemorrhoids to cease to be a problem.

It was alleged that these representations were false in that Preparation H has no therapeutic effect outside of affording temporary relief of minor pain and itching associated with hemorrhoids.

In its answer petitioner denied making the alleged representations and asserted that if such representations were made they were true in that Preparation H will reduce or shrink hemorrhoids, as well as stop itching and relieve pain.

We find no merit in the contention that the advertisements do not make the representations charged by the Commission. The following radio commercial is typical:

"Hemorrhoid sufferers * * * the proof is here! Proof of dramatic new relief of swollen injured tissue! Proof from doctors * * * from clinics * * * from hospitals.

"Yes, doctors report a new healing medication * * * Preparation H * * * actually shrinks hemorrhoids without surgery. Tests in famous hospitals and clinics reveal: Preparation H relieves pain promptly — heals injured tissue. The secret? Only Preparation H has the new wonder substance that we call Bio-Dyne to draw the body\'s own healing oxygen to the painful area. Here are the dramatic results: One — Preparation H relieves pain and itching promptly. Two — Preparation H heals injured tissue. And three — Preparation H shrinks hemorrhoids * * * without astringents, narcotics, or surgery * * * even in cases of twenty years\' suffering. Yes, the proof is here — proof of the prompt relief of painful hemorrhoids. Get clinically tested, hospital tested Preparation H (optional: Ointment or Suppositories). Preparation H shrinks hemorrhoids without surgery!"

The troublesome question, however, is not whether representations as charged by the Commission have been made by petitioner but whether they were false and misleading or, stated differently, to what extent are the Commission's findings that the representations are false and misleading supported by substantial evidence.

Hearings were held on the Commission's complaint, and the hearing examiner found that petitioner had engaged in unfair and deceptive advertising but recommended a limited order which would permit petitioner to advertise that Preparation H would, in most cases, relieve pain and itching, reduce or shrink hemorrhoids, and "be of significant therapeutic effect" in their treatment. He also recommended that petitioner be permitted to advertise that Preparation H would "enable persons with hemorrhoids to avoid surgery except in unusually severe or persistent cases."

On appeal by Commission's counsel, the Federal Trade Commission made new findings and entered a more restrictive order overruling the examiner's findings to the extent they were inconsistent. The Commission's order prohibits petitioner from disseminating in connection with Preparation H or any other hemorrhoidal remedy, advertisements which represent or imply that such product will:

1) Reduce or shrink hemorrhoids or hemorrhoidal tissue or membranes or reduce or shrink swelling associated with hemorrhoids;

2) Avoid the need for surgery as a treatment for hemorrhoids or hemorrhoidal symptoms;

3) Heal, cure, or remove hemorrhoids or eliminate the problem of hemorrhoids;

4) Afford any relief from pain or itching attributed to or caused by hemorrhoids in excess of affording some temporary relief in some cases of pain and itching associated with some types of hemorrhoids;

5) Afford any other type of relief or have any other therapeutic effect upon the condition known as hemorrhoids or upon any of the symptoms or manifestations thereof.

The Commission's order further prohibits petitioner from disseminating any advertising which:

1) Contains any reference (a) to the word "Bio-Dyne" (b) to any word which implies that said product will shrink hemorrhoids; or (c) to any word which implies that said product will provide any relief from pain or itching associated with hemorrhoids in excess of affording some temporary relief in some cases of pain and itching associated with some types of hemorrhoids.

2) Contains any reference to any other ingredient either singly or in combination unless such ingredient is effective in the treatment or relief of hemorrhoids or any of its symptoms and unless the specific effect thereof is expressly and truthfully set forth.

The order also prohibits petitioner from disseminating, in connection with the sale or distribution of any "drug" as that term is defined in the Federal Trade Commission Act, advertising which misrepresents, directly or by implication, the efficacy of such drug.

When petitioner filed its petition for review in this Court, the Commission sought and we granted an injunction pendente lite which prohibits petitioner from disseminating any advertisements in connection with Preparation H which:

1) Represents directly or by implication that the use of such product will:

(a) Avoid the need for surgery as a treatment for hemorrhoids or hemorrhoidal surgery (b) Heal, cure, or remove hemorrhoids or eliminate the problem of hemorrhoids.

2) Contains any reference to the word "Bio-Dyne."

On this appeal, petitioner does not challenge that part of the Commission's order which prohibits representations that Preparation H will eliminate the need for surgery or will heal, cure, or remove hemorrhoids. It is conceded that Preparation H will do none of these things. Petitioner contends, however, that insofar as the order prohibits representations that the drug will reduce or shrink hemorrhoids and relieve pain and itching it is not supported by the evidence. The same assertion is made as to that part of the Commission's order which prohibits the use of the word "Bio-Dyne."

Petitioner also complains that the broad prohibition against misrepresentation of the efficacy of any drug is improper. Joining it in this contention are the Association of National Advertisers, Inc. and the Proprietary Association which have filed briefs as amicus curiae.

Petitioner is a Delaware corporation with its principal place of business in New York. It has sold Preparation H Suppositories and Ointment for many years, and the distribution of and advertising for these products is widely disseminated. The formula for Preparation H has remained the same since the product was originally marketed as a topical ointment for burns and wounds in 1943.

This record is replete with testimony, both medical and lay, dealing with the nature of hemorrhoids in their symptomatic and asymptomatic state, their care and treatment, and the value of Preparation H in treating them and their symptoms. Much of the controversy centers around the definition of "hemorrhoids." The Commission defined the term as follows: "`Hemorrhoids' are masses of dilated weak-walled veins located underneath the mucous membrane of the lower portions of the rectum and under the skin of the anal canal and the peri-anal area." In other words, they are varicose veins located in the rectal area. Depending upon their location, these varicose veins may be classified as internal or external. Internal hemorrhoids are in the top part of the anal canal and are covered by mucosa; external hemorrhoids are in the lower portion of the anal canal and are covered by skin.

According to the testimony in this record, the varicosity just described, and thus...