Gallia Laboratories, Inc

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF KOLA ASTIER CORPORATION AND GALLIA LABORATORIES, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. l'i OF AN ACT OF CONGRESS APPROVED SEPT, 26, 1914 Docket 4682. Complaint, Jan. 26, 1942-Decision, June 24, 1948 Where two corporations under common ownership and with Identical addresses and officers, engaged In Interstate sale and distribution of their "Kola Astier" medicinal preparati,ln; by meam! of advertisements disseminated through the mails and otherwise, directly and by lmpllcation- Uepresented that their said pt·oduct had therapeutic value in the treatment of disorders and conditions which resulted from exhausted nerves, and constituted an effective tr{'atment for poor digestion and Insomnia; was a tonic which would strengthen, sustain, and promote abundant nerve force; acted directly on the nerve crnters, and sped up the functions of every organ; strengthenrd hrart action, Increased blood circulation, activated liver and kidneys, and Improved digestion; and that use thereof would restore nerve force and lost strength;

'lhe facts being that in the recommended dosage of said product, the amount of caffeine-the only active Ingredient-was approximately the same as that contained In a weak cup of cofff'e; the value of the preparation was limited to that of a tf'mporary stlmulnut, and only to the extent of the stimulating rlfPct obtained ft·om a cup of coffee; It had no therapeutic value In the treatment of any disordrr or condition resulting from exhanstecl nervf's, other than that afforded by a mild, temporary stimulant; any beneficial effect upon poor digestion was negligible, and It might have a tenclency to Increase insomnia; the amount of caffeine In the recommended dosage would have a nrgllgible effect upon heart action or'circulatlon; and the diuretic action of both the cntTeine and theobromine was negligible and would have no etTt>ct In uctivntlug the liver and kidneys; \Vitll f'fft~ct ot misleading and decPlvlng a substantial number of the pm·chasing puhllc into the mistaken belief that said prf'paration was of therapeutic value, thereby causing purchase thereof because of such mistaken belief: Ileld, That such acts and practices, under the circumstances set forth, were all to the prejudice and Injury of the public, and constituted unfair and de· er;utlve acts and nractlces In commerce.

Defore Mr. Edward E. Reardon, trial examiner. Mr. R. P. Bellinger for the Commission.

Mr. Walter L. Post, of New York City, for re~pondents. Cor.ri'LAINT Pursuant to the provisions of the Federal Tmde Commission Act and by virtue of the authority vested in it by said act, the Federal ~trade Commission having reason to believe that Kola Astier Corpora- 934 FE1DERAL TRIADE COMMLSSION. DECiiSILONS Complaint 36F.T.C.

tion, a corporation, and Gallia Laboratories, Inc., a corporation, hereinafter referred to as respondents, have violated the provisions of said act; and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows: PARAGRAPH 1. Respondents, Kola Astier Corporation and Gallia Laboratories, Inc., are corporations, organized, existing and doing business under and by virtue of the laws of the State of New York, each with its principal place of business located at 25±-256 'Vest Thirtyfirst Street, New York, N. Y.

PAn. 2. Respondents are now and for several years last past have been engaged in the offering for sale, sale, and distribution in commerce between and among the various States of the United States and in the District of Columbia of a medicinal preparation designated as Kola As tier.

Respondents cause said preparation, when sold, to be transported from their place of business in the State of New York to purchasers thereof located in various other States of the United. States and in the District of Columbia.

Respondents maintain, and at all times mentioned. herein have maintained, a course of trade in said medicinal preparation in commerce between and among the various Stat~s of the United States and in the District of Columbia.

PAn. 3. In the course and conduct of their aforesaid business the respondents have d.disseminated and are now disseminating, and have caused and are now causing the dissemination of false advertisements concerning tMir said preparation by the United States mails and by various other means in commerce, as "commerce" is defined in the Federal Trade Commission Act for the purpose of inducing, and which are likely to induce, directly or indirectly, the purchase of said preparation; and respondents have also disseminated and are now disseminating, and have caused and are now causing the dissemina· tion 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 pr·eparation 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 false advertisements, disseminated and caused to be disseminated Ly respot)dents, as afore· said, are the following:

KOLA ASTIER CORP, ET AL. 935 933 Complaint Exhausted Nerves Cause of Many Ills Do sudden noises make you jump • • • the radio set you on edge? Are You Irritable, Impatient • "' • snappy wlth your family? Do you easily get the ''blues"? Digestion poor? Spend restless nights? . Exhausted nerves probably explains it all. For remember, it is our nerves that govern and control everything that goes on within us-every activity o~ brain and body. \Vhen sufficient nerve-force is lacking, the entire human machinery slows down-none. of our organs function propet·ly. Restot·e nerve-force and Improvement immediately takes place.

KOLA ASTIER will help you. This wonclrrful preparation developed by Dr. P. Astier of Paris !s what leading European doctors themselves take when they get tired out and nervous and want quick new strength. It is a sustaining tonic that never lets you down-that leaves no depressing after-effect. It tones, strength· ens, sustains, pt·ornotes abundant nerve-force. So highly does the medical pt·ofesslon look upon Il.ola Asticr that since 1928 alone over 10,000,000 bottles have been used, mostly as a result of doctors' pt·escriptions. Start taking Kola Astler today and see bow quickly calm nerves, poise, cbeertuJness, mental keenness, and physical vigor, pep and endurance return, VIGOR, VITALITY, STAMINA, THROUGH NEW NERVE FORCE Your nerves contt·ol every function of your body and brain. \Vhen your nerves have weakened, your stomach, liver, klllneys, bowels, cease functioning properly, robbing you of bo<ly strength and mental vigor. You lack "pep," your mlnll becomes sluggish, you are easily dept·essed.

Kola Aster, wonderful, stimulant-tonic developed by Dr. P. Astler of Paris, eoutalns ingredients that act directly on the nerve centers and promote new nerve force which speeds up the functions of every organ. Your heart action is strengthened, blood circulation Increased, liver and kidneys activated, digestion improved. Mental sluggishness disappears. VIm, vigor, cheerfulness, soon return. "Kola Astler restores lost stre11gth," writes one doctor. Another doctor writes, .. I have obtained most satisfactory results with Kola Astler In cases of physical and mental over-strain, nervous exhaustion and general rundown conditions." Get rid of that tired-out feeling. Gain vigor, pep. You can quickly regain lost VIgor and pep with KOLA ASTlE It • • • The powerful yet harmless vitalizer. PAR. 4. Dy the use of the representations hereinabove set forth and ·other representations similar thereto not specifically set out herein, all of which purport to be descriptive of the therapeutic properties of respondents' said preparation, respondents have represented and do now represent, directly and by implication, that their medicinal prepa· ration designated as Kola Astier is a competent and effective remedy for insomnia, restlessness, and exhausted or weakened nerves; that it is an effective tonic which leaves no depressing after-effects; that it tones, strengthens, sustains, and promotes new or abundant nerve force; that it restores calm nerves, poise, cheerfulness, mental keenness, Physical vigor, pep, and endurance; that it acts directly on the nerve "Centers ' strenothens., heart action, increases blood circulation, activates Findings 36F.T.C.

liver and kidneys, improves digestion; that it restores lost strength, relieves physical and mental overstrain, nervous exhaustion, and general run-down condition.

PAR. 5. The foregoing representations and advertisements are grossly exaggerated, false, and misleading. In truth and in fact said preparation is not a competent and effective remedy for insomnia, restlessness, and exhausted or weakened nerves. It is not an effective tonic which leaves no depressing after-effects. It does not tone, strengthen, sustain, and promote new or abundant nerve force. It does not restore calm nerves, poise, cheerfulness, mental keenness, physical vigor, pep, and endurance. It does not act directly on the nerve centers, does not strengthen heart action, does not increase blood circulation, does not activate liver and kidneys, and does not improve digestion. It does not ref:itore lost strength, relieve physical and mental overstrain, nervous exhaustion, or overcome a general rundown condition. Furthermore, said preparation is of no therapeutic value in the treatment of any disease or condition of the body in excess of its effect as a temporary stimulant and a mild diuretic. PAn. G. The use by respondents of the foregoing false, decPptin, misleading, and exaggerated1 stat('ments and repre.'icntn.tions with l'<'spect to respondents' said preparation has had and now has the capacity and tendency to lliHl does misle1Hl and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that said statements und n•presentations are true, and into the purchase of substantial quantities of re~ponclents' said preparation b<'cause of said erroneous and mistahn belief. 11,\R. 7. Tho aforesaid acts and practices as herein allC'gC'<l are all to the prejudice ancl injury of the public, and constitute unfair and dec<•ptive nets and practices in commerce within the intent and meaning of the FedN·nl Trade Commission Act.

HEI'OHT, FINDINGS .AS TO THE FAcrs, .AND Onm:n Pursuant to the provisions of the F<'throl Tratle Commis~ion Art, tho Fetlernl Trudo Commission, on January 2G, 19-!2, issued and subsequently ser\'ed its complaint in this proceeding upon the respondents, Kola Asti<>r Corporation, a corporation, nnd Gallia Laboratories, Jnr., a corporation, charging tlwm with the use of unfair nntl deceptive acts and prnctires in comnwrce in violation of the pro,·isions of said art· After tho issuance of saitl complaint and the filing of respomh•nt:;' answers then·to, testimony owl other evi<l<•nre in support of, and in opposition to, the allegations of said complaint were introducetl heforo a trial examiner of tlJC Commission theretofore duly designated by KOLA AISTIER CORP. ET AL. 937 033 Findings it, and said testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission upon said complaint, answers thereto, testimony and other evidence, report of the trial examiner upon the evidence, and briefs filed in support of the complaint and in opposition thereto (oral argument not having been requested); and the Commission, having duly considered'-1 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 as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PAR..\CR.\rii 1. Respondents, Kol:t Astier Corporation and Gallia Laboratories, Inc., are corporations, organized, existing, and doing husine!:is under and by virtue of the laws of the State of New York, each with its principal place of business located at 254-256 'Vest Thirty-first Street, New York, N.Y.

Jl.\R, 2. During the times hereinafter mentioned and in the manner hereinafter described the respondents have been engaged in the offering for sale, sale, and distribution of a medicinal preparation designate<} as "Kola Astier" in commerce among and between the various States of the United States. Hespomlt>nts have caused said prepnration "'hen sold to be transported from tlwir place of business in the State of New York to purchasers thereof located in various other States of the United States and in the District of Columbia. · Respondents maintain, and nt all times mentioned herein have maintained, a course of trade in said medicinal preparation in commerce among and between the various States of the United States. PAn, 3. Respondent, Gallia Laboratories, Inc., was organized in Hl2G. From the date of its organization until about 1!)36 said responde~t was engaged in the sale and distribution of the medicinal preparation Kola Astier to the metlical prof£·~sion. In 1!)36, the respondent~ ~\olu. Astier Corporation, was formed to use the name "Kola Astier" 1ll advertising to the general public. From the date of its organization Until about the year 1!>-n, the rPspmul<'nt, Kola Astier Corporation, "'as engag<•d in the manufacture of the nwdicinal pr('parntion Kola Astier, the entire output of which was sold to the n•spondent, Gallia LnLoratot·i<•s, Inc., for distribution to the purehasers tlwreof. In Hl-H tho respondent, Kola Asticr Corporation, discontinued businffis but '\\·as never dissoh·ed ns u corporation and still continues in existence. Since the discontinuance of active business by the Kola Astier Corl>~ration, the respondent, Gallia Laboratories, Inc., has been engaged ri28713--43-,·ol. 36-62 938 FEID<ERAL TRA.DIE COMMISSION' DE.C.LSII.ONS Findings 3GF.T.C.

in the manufacture, as well as the sale and distribution, of said medicinal preparation. Since 1936 said preparation has been sold to wholesale druggists, chain stores, and a few professional men. The respondents, Kola Astier Corporation and Gallia Laboratories, Inc., are both wholly owned by Dr. P. Astier, with the exception of two qualifying shares. The place of business of each of said re· spondents was located at the same address and the officers of said respondent corporations were identical. In 1!)39 Dr. P. Astier was president; .Albert Thouin, vice president; Edward Lassere, second vice president; and Henry Dalby, secretary-treasurer, of both of said corporations. In February 1942, for the purpose of qualifying to obtain an alcohol permit, Edward Lassere, became president and treasurer of Gallia Laboratories, Inc. This was necessary because the ownership of the stock of said respondent corporation was held by Dr. P. Asti<'r, who resided in Paris, France. There was, however, no change in the ownership of the capital stock of either of said r<'spondcnt corporations.

The Commisf.:ion finds that the respondent corporations, acting by and through identical ollicers, nct<'d in conjunction and cooperation with each other in performing the acts and practices hereinafter described.

PAn. 4. In the course and conduct of their aforesaid busin<'ss the respondents have disseminated and have caused the disReminntion of false advertisements concerning their said preparation by the Uniterl States mails and by vadous other means in commerce as "commerce" is defined in the Fedual Trade Commission Act; and r<'spondents have also disseminnte1l and have caused the diss<'mination of false ndvertisemc>nts concl'rning their said pr<'parntion hy various means for the purpose of inducing and which are likely to induce, directly or indirectly, the purchase of their said preparation in commerce as "corn· merce" is defined in the Federal Trade Commission Act. Among and typical of the false, misleading, and deceptive statements and r<'prcsentations contained in said fal,;e advertisements disseminated and cau~t·d to Le dissc>minated by respondents as aforesaid, are the following:

Kola Astlt>r, wonderful stimulant-tonic developed by Dr. P. Astlt>r of Paris, contains lngrPtll<'nts that net dlrrctly on the nerve erntt'rs and promote new ntn·e forte which f;IK>t•ds up the fundions ot nery organ. Your lwart. artlon IS ~;trt•ngtlwnt•d, blood circulation lnrr<•flst'tl, lln•r and kidneys ncth·lltl'd, dlgpst1°0 !mprov1•d. .Mental !ilugglshnP!'S lllsappPnrs. VIm, 'tlgor, clwerfulnl'i!S, soon return.

"Kola Astler restores lost strength," writes one doctor. Another doctor writes. "I have obtained most satisfactory results wltb Kola Astler ln cases or vbyslc81 and mental overstrain, nervous exhaustion and general rundown conditions." KOLA ASTIER CORP. ET AL. 939 933 Findings Exhausted Nerves Cause of ~lany Ills Do sudden noises make you jump • • • the radio set you on edge? Are You irritable, Impatient • • • snappy with your family? Do you easily get the "blues"? Digestion poor? Spend restless nights? KOLA Astier will help you. This wonderful preparation developed by Dr. P. Astier of Paris, Is what leading European doctors themselves take when they get tired out and nervous and want quitk new strength. It Is a sustaining tonic that never lets you down-that leaves no deprPsslng after-effect. It tones, Stt·engtlwns, sustains, promotes abundant nerve-force. · You can quickly regain lost vigor and ppp with KOLA ASTIER • • • the :Powerful, yet luu·mlPss vitall7.er-the bracing tonic many doctors take themselves Whenf'ver they get exhausted and want quick, new strength. :PAR. 5. By the use of the re.presentations hereinabove set forth and other representations similar thereto not specifically set out herein, all of which purport to be descriptive of the therapeutic properties of respondents' said preparation, responclt:mts have represented directly and by implication that their meJ.icinal preparation, Kola Astier, has therapeutic value in the treatment of disorders and conditions resulting from exhausted nerves unJ. constitutes a competent and effective treat. Inent for poor digestion and insomnia; that said preparation is a tonic 'Which will strengthen, sustain, and promote abundant nerve force; that said preparation acts directly on the nerve centers, promotes new nerve fotcc, nnd speeds up the functions of every organ; that said prepara· t~on will strengthen heart action, increase blood. circulation, activate hver and kidneys, and improve di~cstion; and that its use will restore nerve force and restore lost strength.

• :PAR. G. Hespondents' prepara.tion contains the extract of the kola nut Jn the proportion of G53 grams of extract of kola nut to 10 kilos of sugar. The dosage recommend.ed by the respondents is 2 teaspoonfuls a day-1 tl'nspoonful 1 hour Lefore the noonday meal and one about 1 hour before the evening meal. Based upon an analysis of this Ple-parntion, it contains 10.084 percent of caffeine and 0.03 percent of theobromine. Caffeine is the only active ingredient in respond.ents' Pl"eparation as 0.03 pt>recent of theobromine is too small to have any appreciable effect, and, in the dosage recommended, the action ~f the theobromine would Le nrll'will'ible. The caffeine contained m re· spondents' preparation in that-o "'dosage recommended is approximately the same as the amount of caffeine contained in a weak cup of coffee. 'lhe value of said preparation is limited to that of a temporary stimu· plant and only to the extent of the stimulating effect obtained from a cup of coffee. This preparation has no therapeutic value in the treat· 111ent of any disorder or condition resulting from exhausted. nerves 940 FEIDERAL TRADE C.OMMJSS.ION DECI<SILOJ.~S Order 36 F. T. C.

other than that afforded by a mild, temporary stimulant. It has no value as a tonic and cannot restore lost energy or lost strength and will not strengthen, sustain, or promote nerve force. The effect of this preparation is limited to the temporary stimulation of stored energy. The beneficial effect obtainable from the use of respondents' preparation upon poor digestion is negligible and might have a tendency to increase insomnia. The amount of caffeine introduced into the system through the use of respondents' preparation in the dosage recommended would have negligible effect upon the heart action or circulation. The diuretic action of both the caffeine and theobromine in said preparation is negligible and will have no effect in activitating the liver and kidneys.

PAR. 7. The use by the respondents of the foregoing false, deceptive, and misleading statements and representations with respect to said preparation, Kola .Astier, has had and now has the capacity to and does mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that respondents' preparations may be relied upon as an e1fecti ve stimulant for exhausted nerves, heart, and circulatory system, and that it will restore lost energy and nerve force and have therapeutic value in relieving gastrointestinal dis· turbances and other conditions attributed to, or associated with, nervous conditions, and causes such members of the purchasing public to purchase substantial quantities of respondents' preparation because of such erroneous and mistaken beliefs.

CONCLUSION The aforesaid acts and practices of the respondents as herein found are all to the prejudice and injury of the public and constitute unfair and deceptive nets and practices in commerce within the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST This proceeding having Leen heard by the Federal Trade Commis· sion upon the complaint of the Commission, the answers of the re· spondents, testimony, and other evidence in support of, and in oppo· sition to, the alh,gations of said complaint taken before a trial examiner of the Commission theretofore duly designated by it, report of the trial examiner upon the evidence, and briefs filed in support of the complaint and in opposition thereto; and the Commission having made its findings as to the facts and its conclusion that said re::;pondents have violated the provisions of the Federal Trade Commission Act: KOLA AISTIER CORP. ET AL. 941 '933 Order It is ordered, That the respondents, Kola Astier Corporation, a -corporation, and Gallia Laboratories, Inc., a corporation, and their respective officers, agents, representatives, and employees, directly or through any corporate or other device in connection with the offering for sale, sale, or distribution of their medicinal preparation designated "Kola Astier," or any other preparation of substantially similar composition or possessing substantially similar properties, whether sold under the same nan'le or under any other name, do forthwith cease and desist from directly or indirectly:

1. Disseminating or causing to be disseminated any advertisements by means of the United States mails or by any means in commerce as "commerce" is defined in the Federal Trade Commission Act, which advertisement represents directly or through inference, a. That respondents' preparation has any therapeutic value in the treatment of any disorder or condition resulting from exhausted nerves other than that afforded by a mild, temporary stimulant. b. That respondents' preparation is a tonic or that its use will restore lost energy or lost strength, or that it will sustain or promote nerve force.

c. That respondents' preparation constitutes a competent or effective treatment for poor digestion or insomnia.

d. That respondents' preparation has any reliable therapeutic value -or beneficial effect upon heart action or the circulatory system. e. That the diuretic action of respondents' preparation is sufficient to have therapeutic value in activating the liver and kidneys. 2. Disseminating or causing to be disseminated any advertise- ~ent by any means for the purpose of inducing or which is likely to ~nduce directly or indirectly the purchase in commerce, as "commerce'' ls defined in the Federal Trade Commission Act of respondents' meuicinal preparation, Kola Astier, which advertisement contains any of the representations prohibited in paragraph 1 hereof and the respective subdivisions thereof.

It i~ fu:rthe·r 01·dered, That the respondents slmll, within GO days ~after service upon them of this order, file with the Commission a report 111 writing, setting forth in detail the manner and form in which they lHtve complied with this order.

942 FEDERAL TillADE COMl\IISSION DE·CISlLONS Syllabus 36F. T. C.