Federal Trade Commission v. Rhodes Pharmacal Co.
| Decision Date | 05 July 1951 |
| Docket Number | No. 10375.,10375. |
| Citation | 191 F.2d 744 |
| Parties | FEDERAL TRADE COMMISSION v. RHODES PHARMACAL CO., Inc., et al. |
| Court | U.S. Court of Appeals — Seventh Circuit |
William T. Kelley, Chief Counsel, James W. Cassedy, Associate General Counsel, Federal Trade Commission, and Alan B. Hobbes and James E. Corkey, all of Washington, D. C., for appellant.
Frank E. Gettleman, Arthur Gettleman, Edward Brodkey, Chicago, Ill., for appellees.
Before MAJOR, Chief Judge, and KERNER and FINNEGAN, Circuit Judges.
This is an appeal from a judgment dismissing an action brought under § 13(a) of the Federal Trade Commission Act, 15 U.S.C.A. § 53, to restrain defendants from the further dissemination of false advertisements representing that a certain proprietary drug product manufactured and sold by defendants is an effective remedy or treatment for arthritis and other diseases.
The complaint, after alleging that the Commission had issued an administrative complaint against defendants charging them with having violated § 12 of the Act, averred that defendants have disseminated, and since issuance of the administrative complaint have persisted in disseminating, in interstate commerce, false advertisements in newspapers of general circulation, national in scope, to induce the purchase of "Imdrin"; that these advertisements are false and misleading in that they represent that "Imdrin" is a remarkable, amazing, sensational new discovery of scientific research, and is an adequate, effective and reliable treatment for all kinds of arthritis and rheumatism, and will arrest the progress of, correct the underlying causes of, and cure all kinds of arthritis and rheumatism, and will afford complete and immediate relief from the aches, pains and discomforts thereof.
The complaint further alleged that in fact "Imdrin," however taken, is not an adequate, effective or reliable treatment for, will not arrest the progress of, correct the underlying causes of, or cure any kind of arthritis or rheumatism, and will not afford complete or immediate relief from the aches, pains and discomforts thereof; that any effect of "Imdrin," when used by one suffering from any of the ailments mentioned, is due solely to the acetylsalicylic acid (commonly known as aspirin) and the manganese silicylate content in the preparation; that there are many cases of arthritis which may be cured completely if proper diagnosis and adequate treatment are received promptly; that the further dissemination of such false advertisements may cause immediate and irreparable injury to the public in that persons induced by such false advertisements to purchase "Imdrin" may delay proper treatments, and thereby suffer permanent and irreparable crippling; that various unavoidable delays in the proceedings before the Commission have been encountered, and that until a cease and desist order issued by the Commission becomes final, the dissemination of defendants' false advertising can be halted only by the granting of a temporary injunction.
The complaint was supported by affidavits of medical experts, distinguished members of the medical profession, specializing in the diagnosis, treatment and study of arthritis and related diseases. The affiants in these affidavits averred that they were in daily contact with people who suffer from arthritis, rheumatism and other similar ailments; they stated that they had had many conversations with different patients in which they were told of the various advertisements of proprietary medicines and what the patients understood from such advertisements, and were in a position to know what advertisements of so-called remedies for arthritis and rheumatism mean to persons suffering from diseases of this nature; that they had examined the advertisements here involved, and that such advertisements would mean to persons afflicted with various kinds of arthritis that "Imdrin" is a cure for such an ailment.
Defendants' answer, supported by affidavits of five physicians, denied that the advertisements were false. Additional affidavits were filed by the Commission, purporting to discredit the qualifications of the physicians whose affidavits the defendants had annexed to their answer.
The trial judge denied the injunction and dismissed the complaint because he was of the opinion that the verified pleadings and affidavits presented debatable questions which were not resolved by the supporting affidavits, and adjudged that "Where the equities of the complaint are fully and explicitly met by denial under oath, a preliminary injunction will not be granted." While that may be the rule in private disputes which do not involve the public interest, we think that in the instant case the court failed to apply the proper applicable legal principles.
It is true, of course, that an appellate court will not ordinarily interfere with the action of a trial court either in granting or withholding an injunction, Hecht Co. v. Bowles, 321 U.S. 321, 64 S. Ct. 587, 88 L.Ed. 754, and Bowles v. Huff, 9 Cir., 146 F.2d 428, and will not reverse such an order unless it appears that there was a palpable misapplication of well-settled rules of law on the part of the trial judge, City of Chicago v. Fox Film Corp., 7 Cir., 251 F. 883, and Walling v. National Ice & Fuel Corp., 7 Cir., 158 F.2d 28. It will, however, reverse for failure to apply appropriate equitable and legal principles to the facts, Creedon v. Warner Holding Co., 8 Cir., 162 F.2d 115, and where an injunction is authorized by statute, it is enough if the statutory conditions are satisfied. Henderson v. Burd, 2 Cir., 133 F. 2d 515, 146 A.L.R. 714; Shadid v. Fleming, 10 Cir., 160 F.2d 752. In such cases courts go much further to give relief than they are accustomed to go when only private interests are involved. This is so because "* * * the standards of the public interest, not the requirements of private litigation, measure the propriety and need for injunctive relief * * *." Hecht Co. v. Bowles, 321 U.S. 321, 331, 64 S.Ct. 592.
At this point it is well to note that there is no question as to the component...
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