Federal Trade Commission v. Raladam Co

• Decision Date: 27 April 1942
• Docket Number: No. 826,826
• Citation: Federal Trade Commission v. Raladam Co, 316 U.S. 149, 62 S.Ct. 966, 86 L.Ed. 1336 (1942)
• Parties: FEDERAL TRADE COMMISSION v. RALADAM CO
• Court: U.S. Supreme Court

316 U.S. 149

62 S.Ct. 966

86 L.Ed. 1336

FEDERAL TRADE COMMISSION

v RALADAM CO.

No. 826.

Argued April 13, 1942.

Decided April 27, 1942.

Mr. Robert L. Stern, of Washington, D.C., for petitioner.

Mr. Rockwell T. Gust, of Detroit, Mich., for respondent.

Mr. Justice BLACKdelivered the opinion of the Court.

The Circuit Court of Appeals set aside a cease and desist order of the Federal Trade Commission upon the ground that certain findings were not supported by evidence.6 Cir., 123 F.2d 34.The refusal of the court to enforce the Commission's order rested in part upon an interpreta- tion of this Court's decision in a prior controversy between the same parties.Federal Trade Comm. v. Raladam Co., 283 U.S. 643, 51 S.Ct. 587, 75 L.Ed. 1324, 79 A.L.R. 1191.Because of the importance of questions raised, we granted certiorari.315 U.S. 790, 62 S.Ct. 631, 86 L.Ed. —-.

Section 5 of the Federal Trade Commission Act, 38 Stat. 719,15 U.S.C. § 45,15 U.S.C.A. § 45, declares unfair methods of competition in commerce to be unlawful; empowers the Commission to prevent such methods; and authorizes the Commission after hearings and findings of fact to issue orders requiring violators 'to cease and desist from using such method of competition.'In 1929, the Commission, after hearings, found that the Raladam Company had used unfair methods of competition in selling a preparation called Marmola by making misleading and deceptive statements concerning its qualities as a remedy for overweight.The Commission issued a cease and desist order which the Circuit Court of Appeals vacated.6 Cir., 42 F.2d 430.This Court affirmed the Court of Appeals' judgment saying that there was 'neither finding nor evidence from which the conclusion legitimately can be drawn that these advertisements substantially injured, or tended * * * to injure, the business of any competitor or of competitors generally, whether legitimate or not.* * * It is impossible to say whether, as a result of respondent's advertisements, any business was diverted, or was likely to be diverted, from others engaged in like trade, or whether competitors, identified or unidentified, were injured in their business, or were likely to be injured, or, indeed, whether any other anti-obesity remedies were sold or offered for sale in competition, or were of such a character as naturally to come into any real competition, with respondent's preparation in the interstate market.'Federal Trade Comm. v. Raladam Co., supra, 283 U.S. pages 652, 653, 51 S.Ct. pages 591, 592, 75 L.Ed. 1324, 79 A.L.R. 1191.It is clear that the reasons for refusing to enforce the Commission's order are grounded upon the inadequacy of the findings and proof as revealed in the particular record then before this Court.Hence, these reasons are not controlling in this case, arising as it does out of different proceedings and presenting different facts and a different record for our consideration.

In 1935, the Commission instituted the present proceedings against Raladam, charging unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act.Hearings were held and much evidence was heard concerning Raladam's trade methods since the date of the earlier cease and desist order.This time the Commission found with meticulous particularity that Raladam had made many misleading and deceptive statements to further sales of Marmola; that Marmola had many active rivals for the trade of those who were interested in fat-reducing...