Sterling Drug, Inc. v. F.T.C.
| Decision Date | 28 August 1984 |
| Docket Number | No. 83-7700,83-7700 |
| Citation | 741 F.2d 1146 |
| Parties | 1984-2 Trade Cases 66,173 STERLING DRUG, INC., Petitioner, v. FEDERAL TRADE COMMISSION, Respondent. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Lionel Kestenbaum, Howard Adler, Jr., Bergson, Borkland, Margolis, & Adler, Washington, D.C., for petitioner.
Melvin H. Orlans, Regional Counsel, F.T.C., Washington, D.C., for respondent.
On Petition for Review of an Order for the Federal Trade Commission.
Before WRIGHT, HUG, and NELSON, Circuit Judges.
In this appeal from a decision of the Federal Trade Commission, Sterling Drug, Inc. seeks review of a determination that it disseminated false advertising for its nonprescription analgesic products. Sterling contests findings by the Commission that its advertising was deceptive. It contends that the provisions of the cease and desist order are not warranted by the record and that the order applies to more of Sterling's products than is warranted by the record. We uphold the findings and enforce the order.
Sterling Drug, Inc. ("Sterling") manufactures nonprescription internal analgesic products, including Bayer Aspirin, Bayer Children's Aspirin, Vanquish, Cope, and Midol. In February 1983, the Federal Trade Commission issued an administrative complaint against Sterling in which it was alleged that certain Sterling advertisements violated sections 5 and 12 of the Federal Trade Commission Act, 15 U.S.C. Secs. 45 and 52. On the same day, the Commission also charged that two of Sterling's competitors had engaged in deceptive advertising practices. Those complaints named Bristol-Myers Company, which manufactures Bufferin and Excedrin, and American Home Products Corporation, which produces Anacin and Arthritis Pain Formula.
The cases were partially consolidated before an administrative law judge, who held joint hearings on issues common to the three cases. After extensive pretrial discovery, the ALJ held a separate hearing in this case in 1979-80. He heard testimony from forty witnesses, including experts in the fields of medicine, pharmacology, and advertising. He also reviewed hundreds of exhibits and a large volume of scientific publications submitted in conjunction with the testimony of the expert witnesses.
The ALJ found each of the companies liable for violations of the Act and issued broad cease and desist orders barring future violations. Each of the companies appealed to the Commission. In each case, the Commission affirmed the ALJ's decision as modified. 1
In considering Sterling's appeal, the Commission reviewed a complaint against Sterling that charged deceptive advertising as to several of its products. Briefly summarized, the charges made by the complaint and the holdings reached by the Commission are as follows:
A. Advertising for Bayer Aspirin.
1. The complaint charged that Sterling had advertised that it was scientifically established that Bayer Aspirin had overall pharmaceutical superiority to other brands and that it was also pharmaceutically superior as to four specific attributes: purity, freshness, stability, and speed of disintegration.
The Commission held that the Government had not met its burden of proof on the charge that a study done by Sterling on overall pharmaceutical quality did not demonstrate Bayer's superior quality. However, the Commission held that Sterling's scientific study did not establish superior pharmaceutical quality as to the four specific attributes.
2. The complaint charged that Sterling had represented that Bayer's therapeutic effectiveness had been established by scientific means.
The Commission found that the representation had been made in the advertising and that the claim was not supported by scientifically acceptable evidence.
3. The complaint charged that advertising represented that Bayer relieved nervous tension, stress, fatigue, and depression and that there was no reasonable basis for the claim.
The Commission held that the advertising did not make this representation.
B. Advertising for Cope.
The Commission found that the advertising made the representation and that there was no reasonable support for the claim that the formula was unique.
The Commission found that the representation was made and that there was no reasonable support for the claim.
C. Advertising for Midol.
The Commission found that a false representation had been made.
The Commission found that the representation was made and that there was no reasonable support for the claim. Sterling does not challenge this finding on appeal.
D. Advertising for Vanquish.
1. The complaint charged that Sterling claimed that Vanquish was superior to other products as a pain reliever and caused less stomach upset than other products and that this claim was scientifically established.
The Commission found that Sterling had represented that Vanquish was superior as to these qualities and that there was no reasonable basis for the claim, but the Commission also found that Sterling had not claimed that superiority was scientifically established.
E. Advertising for Bayer Children's Aspirin.
1. The complaint charged that Sterling had represented that its children's aspirin had superior therapeutic effectiveness to other products.
The Commission found that there had been no such representation.
The Commission entered a cease and desist order, which is set forth in Appendix A. All portions of the order covered the following Sterling products: Bayer, Bayer Children's Aspirin, Vanquish, Cope, Midol, or other nonprescription internal analgesic products. Paragraph IV of the order also covered all of Sterling's nonprescription drug products. The order set forth the criteria that must be met before Sterling can claim that superior therapeutic effectiveness or pharmaceutical quality has been established scientifically. The order also set forth the standard to be met for these products where claims of therapeutic performance are made but no claims are made that such performance has been scientifically established. The order prohibited Sterling from representing that one of its products has an unusual or special ingredient when the ingredient is commonly used in other similar products. The order also restricted Sterling from representing that the analgesic agent is an ingredient different from aspirin when, in fact, it is aspirin.
In reviewing the Commission's liability determinations, we apply the standard of review set out in 15 U.S.C. Sec. 45(c): the Commission's factual findings, "if supported by evidence, shall be conclusive." This standard requires such relevant evidence as a reasonable mind might accept as adequate to support the conclusion. Litton Industries, Inc. v. F.T.C., 676 F.2d 364, 368 (9th Cir.1982). Thus the reviewing court may not reweigh the evidence, but must accept the findings of the Commission, if supported by substantial evidence in the record as a whole. See American Home Products Corp. v. F.T.C., 695 F.2d 681, 686 (3d Cir.1982).
The term "deceptive practices" states a legal standard, the ultimate determination of which remains with the courts; however, the Supreme Court has held that the Commission's judgment that a practice is deceptive is to be given great weight. The Court stated:
This statutory scheme necessarily gives the Commission an influential role in interpreting Sec. 5 and in applying it to the facts of particular cases arising out of unprecedented situations. Moreover, as an administrative agency which deals continually with cases in the area, the Commission is often in a better position than are courts to determine when a practice is "deceptive" within the meaning of the Act. This Court has frequently stated that the Commission's judgment is to be given great weight by reviewing courts. This admonition is especially true with respect to allegedly deceptive advertising since the finding of a Sec. 5 violation in this field rests so heavily on inference and pragmatic judgment. Nevertheless, while informed judicial determination is dependent upon enlightenment gained from administrative experience, in the last analysis the words "deceptive practices" set forth a legal standard and they must get their final meaning from judicial construction.
F.T.C. v. Colgate-Palmolive Co., 380 U.S. 374, 385, 85 S.Ct. 1035, 1042-43, 13 L.Ed.2d 904 (1965) (citations omitted).
In its examination of the complaint, the Commission distinguished three distinct types of advertising claims. The first type, establishment claims, suggests that a product's superiority has been scientifically established. An advertiser may make this type of representation through the use of specific language, such as "medically proven," or through the use of visual representations.
The second type of claim is a representation that suggests the product is superior without claiming that superiority has been scientifically established. The claimed superiority may refer to therapeutic efficacy or may describe the product's pharmaceutical attributes, such as freshness, purity, color, and shelf life. The Commission requires that the advertiser have a reasonable basis to support a claim of product superiority.
The third type of claim is puffing. These claims are either...
To continue reading
Request your trial
-
Summit Tech. v. High-Line Med. Instruments Co.
..."puffery" as "claims which are either vague or highly subjective." Cook, 911 F.2d at 246 (quoting Sterling Drug, Inc. v. Federal Trade Commission, 741 F.2d 1146, 1150 (9th Cir.1984), cert. denied, 470 U.S. 1084, 105 S.Ct. 1843, 85 L.Ed.2d 143 (1985)); see also 3 McCarthy, § 27.044d ("`Puffi......
-
Detroit Auto Dealers Ass'n, Inc., In re
...if supported by such relevant evidence that a reasonable mind might accept as adequate to support that conclusion. Sterling Drug, Inc. v. FTC, 741 F.2d 1146 (9th Cir.1984), cert. denied, 470 U.S. 1084, 105 S.Ct. 1843, 85 L.Ed.2d 143 (1985). We remand for the limited purposes indicated with ......
-
State v. Living Essentials, LLC, 76463-2-I
...been a benchmark for determining whether ad claims have a reasonable basis since at least 1984. See Sterling Drug, Inc. v. Federal Trade Comm’n, 741 F.2d 1146, 1156-57 (9th Cir. 1984) (performance claims must be supported by "competent and reliable evidence."). Our Supreme Court has held th......
-
Hadley v. Kellogg Sales Co.
...unspecified assertions." Anunziato , 402 F.Supp.2d at 1139 (quoting Glen Holly , 343 F.3d at 1005 ); see also Sterling Drug, Inc. v. F.T.C. , 741 F.2d 1146, 1150 (9th Cir. 1984) (describing puffery as "claims [that] are either vague or highly subjective").With respect to the statement "one ......
-
Table of Cases
...208 (1961) ................ 189 Standard Oil Co. v. United States, 221 U.S. 1 (1911) ......................... 1 Sterling Drug v. FTC, 741 F.2d 1146 (9th Cir. 1984) ........................ 201 Sulzer Limited, 119 F.T.C. 261 (1995) ............................................... 175 Sw. Sun......
-
Procedural Issues in Investigations, Enforcement Actions, and Other Commission Activities
...Corp. v. FTC, 884 F.2d 1489, 1499 (1st Cir. 1989); Bristol-Myers Co. v. FTC, 738 F.2d 554, 561 (2d Cir. 1984); Sterling Drug v. FTC, 741 F.2d 1146, 1154 (9th Cir. 1984). 97. See Ekco Prods. Co., 65 F.T.C. 1163, 1213 (1964), aff’d , 347 F.2d 745 (7th Cir. 1965); American Cyanamid Co. v. FTC,......
-
Civil Government Enforcement
...150. 343 U.S. 470 (1952). 151. Id. at 473; accord Removatron Int’l v. FTC, 884 F.2d 1489, 1499 (1st Cir. 1989); Sterling Drug v. FTC, 741 F.2d 1146, 1154 (9th Cir. 1984); Bristol-Myers Co. v. FTC, 738 F.2d 554, 560-61 (2d Cir. 1984) (“Every provision of the Order must bear a ‘reasonable rel......
-
The Federal Trade Commission
...Int’l v. FTC, 884 F.2d 1489, 1499 (1st Cir. 1989); Bristol-Myers Co. v. FTC, 738 F.2d 554, 561 (2d Cir. 1984); Sterling Drug v. FTC, 741 F.2d 1146, 1154 (9th Cir. 1984). 166. 16 C.F.R. § 3.72(b)(3). See, e.g. , POM Wonderful, LLC , 155 F.T.C. at 191. 167. See, e.g ., FTC v. Infusion Media, ......