Gene Hughes Drug Stores, Inc.

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IN THE MATTER OF GENE HUGHES DRUG STORES, INC., ALSO TRADING AS SACRAMENTO PHARMACAL COMPANY; AND EUGENE P.HUGHES CmiPLAI:.-JT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. r; OF AN ACT OF CONGRESS APPnOVED SEPT. 26, 1914 Docket 4316. Corn]Jlaint, Sept. 11, 1940-Decision, July 6, 1942 Where a corporation and its president, engaged In Interstate sale and distribution of their ''SLENDOIDS" drug prepnratlon; by advertisements in newspapers, circulars, and other advertising literature, directly and by implication- Represented that their said preparation was a cure or remedy for obesity and constituted a safe, competent, anu effective treatment therefor; and that use thereof "tones up the entire system," "Turns ugly Fat into Energy," and would relieve the body of excess fat without harmful effects; The facts being lt was not such a cure or l;'afe, effective treatment for obesity; properties thereof were limited to effecting a reduction in weight through eathartic dehydration; and because of such action it might irritate the colon and rectum and tend to produce an irritation of the nervous system, resulting in serious Injury to health ;

With tendency and capacity to mislead and deceive a substantial portion of the purchasing public Into the mistaken belief that such statements were true, and thereby induce purchase thereof:

Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and Injury of the public, and constituted unfair and deceptive acts and practices in commerce.

Before Mr. Ed,ward E. Reardon, trial examiner. Mr. Dewitt T. Puckett for the Commiss.ion.

Mr. ,4. M. Mull, Jr., of Sacramento, Calif., for respm1dents. Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said .act, the Feilcrnl Trade Commission, having reason to believe that Gene Hughes Drug Stores, Inc., a corporation, also trading as Sacramento Pharmacal Co., and Eugene P. Hughes, an individual, trading as Sacramento Pharmacal Co., and as officer of Gene Hughes Drug Stores, Inc., hereinafter referred to as respondents, have violated the provisions of said act, nnd it appearing to the Commission that a proceeding by it in respect thereof would Le to the public interest, hereby issues its complaint, stating its charges in that res.pect as follows: PARAGRAPH 1. Respondent, Gene Hughes Drug Stores, Inc., is a corporation organized, existing, and doing business under the Jaws of GENE HUGHES DRUG STORES, INC., ET AL. 21 20 Complaint the State of California, with its office and principal place of business located at 500 J Street, Sacramento, Calif. Respondent, Eugene P. Hughes, is an individual and the president of the aforesaid corporation '~ith his principal office and place of business located at 500 J Street, Sacramento, Calif. Both the individual respondent, Eugene P. Hughes, and the corporate respondent do business under the tr~tde name of Sacramento Pharmacal Co.

PAn. 2. Respondents are now, and for several years past have been engaged in the sale and distribution of a drug preparation advertised and known as "SLENDOIDS" and as ':SLENDOIDS Nu-Form Capsules," which preparation has been offered for sale and sold as a treatment for obesity. Respondents have caused said preparation, when sold, to be transported from their place of business in the State of Cu.lifornia to purchasers thereof located in various other States of the Dnited States. Respondents· maintain and at all times mentioned herein have maintained, a course of trade in said preparation in com- ~nerce between and among the various States of the United States and In the District of Columbia.

. PAn. 3. In the course and conduct of their aforesaid business, the respondents have disseminated and are now disseminating, and have caused and are now causing the dissemination of, false advertisements concerning their ~aid preparation by the United States mails and by ''arious other means in commerce, as commerce is defined in the Federal Trade Commission Act; and respondents have also disseminated and are now· disseminating, and have caused and are now causing the d.issemination of, false advertisements concerning their said preparation by various means, for the purpose of inducing and which are likely ~0 induce, directly or indirectly, the purchase of their said preparation In commerce, as commerce is defined in the Federal Trade Commission Act. Among and typical of the false, misleading, and deceptive statements and representations contained in said advertisements djsseminated and caused to be disseminated as hereinabove set forth, by t~e United States mails, by advertisements in newspapers, and by Circulars and other advertising literature, are the following: · 1 '· ·DON'T BE FAT "'- SLENDOID~ Nu-Form Capsules An Improved formnlo that tones up the entire system. Turns ugly Fat into Energy, Users say "Amazing." Heduce this Safe, Easy \Yay. At leading drug stores. ' HELEN-the fat girl & I met agafn. She took the hint & is reducing with Slendoids from Walgreens. She says if I can she can too. Lou . . PAn. 4. Through the use of the statements and representations herelnabove set forth, and others similar thereto not' specifically set out Findings 35F.T. C.

herein, the respondents have represented, directly, and by implication, that their preparation designated as "SLENDOIDS" and as "SLEN- DOIDS Nu-Form Cnpsules" is a cure or remedy for obesity and con· stitutes a safe, competent, and effective treatment therefor, and that the use of said preparation will tone up the entire system, turn ugly fat into energy, and relieve the body of excess fat without harmful effects.

PAR. 5. The aforesaid statements and representations used and disseminated by the respondents as hereinabove set forth are grossly exaggerated and false and misleading. In truth and in fact, respondents' preparation "SLENDOIDS," otherwise designated as "SLEN- DOIDS Nu-Form Capsules," is not a cure or remedy for obesity and does not constitute a safe, competent, or ·effective treatment therefor and its use will not tone up the entire system, turn fat into energy, or relieve the body of excess fat without harmful effects. The properties of said preparation are limited to effecting a reduction in weight because of the cathartic dehydration resulting from the use of this preparation. Because of such action the use of this preparation may irritate the colon and rectum and tend to produce an irritation of the nervous system resulting in serious injury to health. PAR. 6. The use by the respondents of the aforesaid false, misleading and deceptive statements and representations with respect to their said preparation, as aforesaid, has had and now has the capacity and trndency to mislead and drceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such statrments and advertisements are true and that the preparation designated as "SLENDOIDS" and as "SLENDOIDS Nu-Form Capsules" is an improved formula that tones up the entire system, turns ugly fat into {'Bergy, and relieves the body of excess fat, safely and easily, and to induce, directly or indirectly, purchase by the public of respondents' said preparation. · PAR. 7. The aforesaid acts and practices of respondents as herein alleged are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on September 17, 1940, issued and subsequently served its complaint in this proc.eeding upon the respondents, Gene Hughes Drug Stores, Inc., a corporation, also trading as Sacramento Pharmacal Co., and Eugene P. Hughes, an individual. GENE HUGHES DRUG STORES, INC., ET AL. 23 '20 Findings trading as Sacramento Pharmacal Co., and as officer of Gene Hughes Drug Stores, Inc., charging them with the use of ·unfair and deceptive .acts and practices in commerce in violation of the provisions of said act.

- .A hearing was held in this matter on June 23, 1941, at which time a stipulation as to the facts entered into by and between counsel for the ~ommission and counsel for the respondents, was read into the record ln lieu of testimony in support of the charges stated in the complaint, or in opposition thereto, and which stipulation further provided that the Commission may proceed upon said statement of facts, without oral argument or the filing of briefs, to make its report stating its ~ndings as to the- facts and its conclusion based thereon and enter lts order disposing of the proceeding. Respondents expressly waived the filing of a trial examiner's report upon the evidence. Thereafter, this proceeding regularly came on for final hearing before the Commission upon said complaint and testimony and other (!Vidence in the form of a stipulation as to the facts upon the record; and the Commission, having duly considered the matter and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings us to the facts .and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Gene Hughes Drug Stores, Inc., is a ~orporation organized, existing, and doing business under the laws of ~he State of Californ_ia, with its office and principal place of business ocated at 500 J Street, Sacramento, Calif. Respondent, Eugene P. ~ughes, is an individual and the president of the aforesaid corporat;on, with his principal office and place of business located at 500 J Street, Sacramento, Calif. Doth the individual respomlent, Eugene P.Uughes, and the corporate respondent do business under the trade name of Sacramento Pharmacal Co.

PAR. 2. Respondents are now, and for several years past have been, (!ngaged in the sale and distribution of a drug preparation advertised and known as "SLENDOIDS" and as "SLENDOIDS Nu-Form Capsules," which preparation has been offered for sale and sold as a treatment for obesity. Respondents have caused said preparation, When sold, to be transported from their place of business in the State of California to purchasers thereof located in various other States 0.f the United States. Respondents maintain and at all times men- ~ioned herein have maintained, a course of trade in said preparation ln commerce between and among the various States of the United States and in the District of Columbia.

24 . FEDERAL TRADE COMMISSION DECISIONS Findings 35F. T.C.

PAR. 3. In the course and conduct of their aforesaid business, the respondents have disseminated, and have caused the dissemination of, false advertisements concerning their said preparation by the United States mails and by various other means in commerce, as "com~ merce" is defined in the Federai Trade Commission Act; and re· spondents have also disseminated, and have caused the dissemination of, false advertisements concerning their said preparation by various means, for the purpose of inducing and which are likely to induce directly or indirectly, the purchase of their said preparation in com· merce, as "commerce" is defined in the Federal Trade Commission 'Act~ Among and typical of the false, misleading, and deceptive statements and representations contained in said advertisements disseminated and caused to be disseminated as hereinabove set forth, by the United States mails,- by advertisements in newspapers, and by circulars and other advertising literature, are the following: DON'T BE FAT SLENDOIDS Nu-Fo1·m Capsules An Improved formula that tones up the entire system. Turns ugly Fat Into Energy. Users say "Amazing." Reduce this S'ate, Easy Way. At leading drug stores.

HELEN-the tat girl & I met again. She took the hint & Is reducing wltll Slendolds from Walgreens. She says it I can she can too. Luu. PAn. 4. Through the use of the statements and representations hereinabove. set forth, and others similar thereto not specifically set out herein, the respondents have represented, directly and by implica~ tion, that their preparation designated as "SI:.ENDOIDS" and as "SLENDOIDS Nu-Form Capsules" is a cure or remedy for obesity and constitutes a safe, competent, and effective treatment therefor, and that the use of said preparation will tone up the entire system, turn ugly fat into energy, and relieve the body of excess fat without harmful effects.

PAn. 5. The aforesaid statements and representations used and disseminated by the respondents as hereinabove set· forth, are grossly exaggerated and false and misleading. In truth and in fact, respond· · ents' preparation "SLENDOIDS," otherwise designated as "SLEN ~ DOIDS Nu-Form Capsules," is not a cure or remedy for obesity and does not constitute a safe, competent, or effective treatment there~ for, and its use will not tone up the entire system, turn fat into energy, or relieve the body of excess fat without harmful effects. The prop~ erties of said preparation are limited to effecting a reduction in weight because of the cathartic dehydration resulting from the use of this preparation. Because of such action the use of this preparation may GENE HUGHES DRUG· STORES, INC., ET AL. 25 20 Order irritate the colon and rectum and tend to produce an irritation of the nervous system, resulting in serious injury to health . • PAn. 6. The use by the respondents of the aforesaid false, misleadtng, and deceptive statements and representations with respect to their said preparation, as aforesaid, has had and now has the capacity and tendency to mislead and deceive a substantial portion of the Purchasing public into the erroneous and mistaken belief that such statements and advertisements are true and that the preparation designated as "SLENDOIDS" and as "SLENDOIDS Nu-Form Capsules" i.~ an improved formula that tones up the entire system, turns Ugl! fat into energy, and relieves the body of excess fat safely and ~as1Iy, and to induce, d_directly or indirectly, purchase by the public of respondents' said preparation. · CONCLUSION The aforesaid acts and practices of respondents, as herein f9und, are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and llleaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST . This proceeding having been heard by the Federal Trade Commis .. ~Ion upon the complaint of the Commission and stipulation as to the acts entered into by and between counsel for the Commission and ?ounsel for the respondents upon the record; and the Commission hav- Ing made its findings as to the facts and its conclusion that said respondents have violated the provisions of the Federal Trade Com- Jn.ission Act.

l t i.~ ordered, That the respondents, Gene Hughes Drug Stores, Inc., a Corporation, trading as Sacramento Pharmacal Co. or trading under any other name, its officers, representatives, agents, and employee~, and Eugene P. Hughes, an individual, trading as Sacramento Pharlllacal Co. or trading under any other name, and as officer of the cor- ~orate respondent, Gene Hughes Drug Stores, Inc., his representatives, agents, and employees, directly or through any corporate or 'O~her device in connection with the offering for sale,'Sale, or distribution of their preparation known as "SLENDOIDS" and as "SLEN- ~OIDS Nu-Form Capsules," or any other preparation of substantially snnilar composition or possessing substantially similar properties, \\>whether sold under the same name or under any other name, do forth- \\>ith cease and desist from directly or indirectly : 1. Disseminating, or causing to be disseminated, any advertisement by means of the United States mails or by a.ny means in commerce ns Order 35F.T. C.

"commerce" is defined in the Federal Trade Commission Act, which advertisement represents directly or through inference. (a) That respondents' preparation is a cure or remedy for obesity or that it constitutes a safe, competent, or effective treatment therefor. (b) That the use ofTespondents' preparation will tone up the entire system or turn fat into energy.

(c) That the use of respondents' preparation will relieve the body of excess fat without harmful results.

2. Disseminating, or causing to be disseminated, any advertisement by any means, for the purpose of inducing or which is likely to induce, directly or indirectly, the purchase in commerce as "commerce" is defined in the Federal Trade Commission Act, of respondents' preparation, which advertisement contains any of the representations prohibited in paragraph 1 hereof and. the respective subdivisions thereof.

It is further ordered, That the respondents shall, within 60 days after service upon them of this order, file with the Comhi.ission a report in writing, setting forth in detail the manner and form in which. they have complied with this order.

• PEGGI'E MORAJ.~ CO., INC., E'f AL. 27 Syllabus