FTC v. Sterling Drug, Inc.
| Decision Date | 08 March 1963 |
| Citation | 215 F. Supp. 327 |
| Parties | FEDERAL TRADE COMMISSION, Plaintiff, v. STERLING DRUG, INC., Dancer-Fitzgerald-Sample, Inc. and Thompson-Koch Company, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Harold D. Rhynedance, Jr., Berryman Davis, Howard S. Epstein, Attys., Federal Trade Commission, Washington, D. C., for plaintiff.
Dunnington, Bartholow & Miller, New York City, for defendant Dancer-Fitzgerald-Sample, Inc., Frank A. F. Severance, Gordon M. Lucey, New York City, of counsel.
Cahill, Gordon, Reindel & Ohl, New York City, for defendants Sterling Drug, Inc. and Thompson-Koch Co., Matthias F. Correa, Thomas C. Mason, New York City, of counsel.
This is a motion by the Federal Trade Commission, brought on by an order to show cause, for a preliminary injunction to restrain the defendants from disseminating or causing to be disseminated any advertisement which refers to a comparative study of five analgesic products reported in the December 29, 1962 issue of the Journal of the American Medical Association, if such advertisement represents, directly or by implication:
A temporary restraining order was denied by Judge Sugarman. A hearing has been held. There seems to be no substantial controverted issue of fact requiring the taking of testimony.
The application for a preliminary injunction is made pursuant to Section 13 of the Federal Trade Commission Act, 15 U.S.C. § 53, which permits the Commission to apply for a preliminary injunction when it has "reason to believe—(1) that any person, partnership, or corporation is engaged in, or is about to engage in, the dissemination or the causing of the dissemination of any advertisement in violation of section 12 * * *" and that the enjoining thereof "would be to the interest of the public."
Section 12, to which the foregoing section refers, relates to "any false advertisement" which is likely to induce the purchase of "food, drugs, devices, or cosmetics."
The issue on this application is, therefore, whether the Commission has established by the requisite degree of evidence that the defendants are engaged in, or are about to engage in, the dissemination of a "false advertisement."
The background of this proceeding, as it appears from the papers and the record, is that there is intense competition between manufacturers and distributors of various types of analgesic drugs, among which are Bayer Aspirin, St. Joseph's Aspirin, Anacin, Bufferin and Excedrin. The advertising claims for these various analgesic drugs have extolled the comparative benefits of the various products. There have been claims such as "Bufferin gives pain relief twice as fast as aspirin," and the claim of Anacin that it contains "not one pain relieving element but three." Bayer felt that these claims of its competitors were false and injurious to it In 1961 administrative complaints were filed by the Commission relating to the advertising of all these products. But these complaints have not been brought on for hearing even before a trial examiner. It appears that the Commission, perhaps in preparation for hearings, authorized and financed a study of the five proprietary analgesic compounds by two physicians and a medical statistician. These experts made a systematic study and rendered their report to the Commission. At first the Commission refused to allow the report to be published, but after further urging by the doctors that their report should be published in the public interest, the Commission authorized them to publish their findings; and the report was published in the Journal of the American Medical Association on December 29, 1962, with the authorization of the Commission.
The American Medical Association issued a press release, dated December 28, 1962, relating to this article and summarized it as follows:
The Commission does not contend that there is anything false in the report, or in the press release of the American Medical Association with reference thereto. It may have been annoyed that the Government's connection with the study was revealed, but it authorized the publication of the report by these medical experts and their report states at the end of it: "This study was supported by a grant from the Federal Trade Commission, Washington, D. C." The Chairman of the Commission, testifying before a Special Committee of the United States Senate, said that the release of the study by the Commission was an "inadvertence." He said, "Now, the Commission has not evaluated that study as yet, although we paid for the study."*
At any rate, Sterling Drug, Inc., the manufacturer of Bayer Aspirin, thought that the report of this study would assist the sale of its product and tend to refute claims made by its competitors. It commenced an advertising campaign publicizing the results of the study. This advertising campaign precipitated this proceeding.
The issue is whether the advertisements are false.
A typical advertisement, offered by the Commission, is one which appeared in Life Magazine and numerous newspapers throughout the country. This advertisement, in its entirety, reads as follows:
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