The Warson Products Corporation

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

IN THE MATTER OF THE "\V ARSON PRODUCTS CORPORATION ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COl\:Il\lission ACT Docket 6711. Complaint, Jan. 18, 1957-Decision, Aug. , 1957 Consent order requiring sellers in St. Louis, Mo., to cease disseminating advertising in newspapers and by radio and television broadcasts which represented falsely that their "Warsene Capsules" were an effective treatment for the pains and discomforts of arthritis, rheumatism, etc. ; contained several active ingredients and were made like a doctor s prescription; and were a new and different treatment not theretofore available which would not cause stomach upset.

The individual respondents agreed to the same consent settlement on Jan. 22 1958, intra p. 949.

llfr. Harold A. Kennedy for the Commission. Rogers, Hoge de Hills by Mr. Andrew J. G'rahmn and MT. William L. illcGuire of New York, N. , and lift. Donald E. Fahey, St. Louis, Mo., for respondents.

INITIAL DECISION BY ABNER E. LIPSCOMB, I-IEAIUNG EXAMINER The complaint herein was issued on ~Tnnuary 18 , 1957, charging Respondents with violation of the provisions of the Federal Trade Commission Act by the dissemination of false and misleading advertisements with respect to a drug preparation designated "V,T arsene Capsules " which Respondents sell and distribute in commerce. On June 14 1957, Respondent The ",Varson Products Corporation by its president, Theodore E. Caruso; its counsel; and counsel supporting the complaint entered into an Agreement Containing Consent Order To Cease And Desist, which was approved by the Director and the Assistant Director of the Commission s Bureau of Litigation, and thereafter submitted to the Hearing Examiner for consideration.

Respondent The "\Varson Products Corporation is identified in the agreement as a :Missouri corporation, with its office and principal place of business locate.d at noom 1810, 314 North Broadway, St. Louis, :Missouri, its location prior to September, 1956, having been 220 North Fourth Street, St. Louis, :Missouri. The agreement specifies that it does not dispose of this proceeding as to Respondents John J. Powers, George n. ",Villiams and Donald E. Fahey individually, and that the order contained therein does THE W ARSON PRODUCTS CORP. ET AL. 201 200 Order not prohibit the representations alleged in sub-paragraphs 5 and 6 of Paragraph Six of the complaint, regarding Respondents' product being a buffered formula and that it is the result of research, for the reason that counsel supporting the complaint is of the opinion, on the basis of the evidence now available, that such allegations cannot be sustained.

vvith those two exceptions, Respondent The ",V arson Products Corporation admits all the jurisdictional facts alleged in the complaint; agrees that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations; and waives any further procedure before the Hearing Examiner and the Commission, the making of findings of fact or conclusions of law, and all the rights it may have to challenge or contest the validity of the order to cease and desist entered in accordance with the agreement.

All parties signatory thereto agree that as to that part of this proceeding which is disposed of by this agreement, the record which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and the agreement; that the order to cease and desist as contained in the agreement shall have the same force and effect as if entered after a full hearing, and may be altered, modified or set aside in the manner provided for other orders; that the complaint herein may be used in construing the terms of said order; and that the agreement is for settlement purposes only and does not constitute an admission by Respondent The ",V arson Products Corporation that it has violated the law as alleged in the complaint.

After consideration of the allegations of the complaint and the provisions of the agreement and the proposed order, the I-Iearing Examiner is of the opinion that such order constitutes a satisfactory disposition of this proceeding with respect to Respondent The ",Varson Products Corporation. Accordingly, in consonance with the terms of the aforesaid agreement, the Hearing Examiner accepts the Agreement Containing Consent Order To Cease And Desist; finds that the Commission has jurisdiction over Respondent The vVarson Products Corporation, and over its acts and practices as alleged in the complaint; and finds that this proceeding is in the public interest. Therefore t i8 ordel'ed That R.respondent The ",V arson Products Corporation a corporation, and its officers, representatives, agents, and employees directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of the preparation "Warsene Capsules " or any preparation of substantially similar compo- Decision 54 F.

sition or possessing substantially similar properties, whether sold under the same name or under any other name, do forthwith cease and desist from, directly or indirectly:

1. Disseminating or causing to be disseminated, by means of the United States mails or by any means in commerce, as "commerce is defined in the Federal Trade Commission Act, any advertisement which represents, directly or by implication, that said preparation: a. Is an adequate, effective, or .reliable treatment for the aches pains, or discomforts of any kind of arthritis, rheumatism, neuralgia neuritis, bursitis, sciatica, lumbago muscle soreness, or allied disorders; will afford immediate, complete, or permanent relief from the aches, pains, or discomforts thereof, or have any therapeutic effect on the symptoms or manifestations of any such conditions or disorders in excess of affording temporary relief of minor aches or pains thereof;

b. Contains any analgesic ingredient other than salicylamide; c. Is made like a doctor s prescription: Provided, ho'Wevm' This shall not prohibit the making of truthful representations concerning the use of such product by physicians;

d. Is a new, or substantially c1ifi'erent, kind of preparation or substantially different in its mode of action or analgesic effect from other commonly-used analgesics;

e. "\Vill not cause stomach upset;

2. Disseminating or causing to be disseminated any advertisements by any means, for the purpose of inducing, or which will likely induce, directly or indirectly, the purchase in commerce, as "commerce" is defined in the Federal Trade Commission Act, of such preparation which contain any of the representations prohibited in Paragraph 1 of this order.

DECISION OF THE COl\fl\IISSION AND ORDER TO I~ILE REPORT OF COl\IPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall, on the 22nd day of August, 1957, become the decision of the Commission; and, accordingly :

It oTCle1' That respondent The ",Varson Products Corporation a corporation, shan, within sixty (60) days after service upon it this order, file with the Commission a report in writing, setting forth in detail the manner and form in which it has complied with the order to cease and desist.

. BENTON FURS. 203 Findings