International Oil & Metals Corporation

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

IN THE MATTER OF IXTERKATIOXAL OIL & METALS CORPORATION trading as LIFE NUTRITION ET AL.

ORDER, OPINION, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 8637. Complaint, Aug. 19M-Decision, June 24, 1966 Order requiring a New York City distributor of "Life Nutrition " vitamin capsules to cease making false and exaggerated claims concerning the efficacy of its vitamin products.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that International Oil & Metals Corporation, a corporation, trading as Life Nutrition, and Leon Potash, Henry D. Cohen and Adolf W. Goldschmidt, individual1ly and as offcers of said corporation, and Maxwell Sackheim-Franklin Bruck, 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. Respondent International Oil & Metals Corporation is a corporation, organized and doing business under and by virtue of the laws of the State of Delaware with its principal offce and place of business located at 19 West 61st Street, in the For Commission s opinion in this case, see consolidated opinion of the Commission In the Matter oj Dollar Vitamin Plan, Inc. al. Docket o. 8636 , pp. 933 , 969 herein. ........, Complaint 69 F.

city of New York, State of New York. Said corporate respondent conducts its business under the name Life ?o utrition. Respondents Leon Potash, Henry D. Cohen and Adolf W. Goldschmidt are offcers of the corporate respondent International Oil & Metals Corporation and each participates in the preparation direction and control of the acts and practices of said corporation including the acts and practices hereinafter set forth. Their address is the same as that of said corporate respondent. Respondent :vaxwel1 Sackheim-Franklin Bruck, Inc. , is a corporation, organized and existing under the laws of the State of New York, with its offce and principal place of business located at 545 Madison Avenue, in the City of New York, State of Kew York.

PAR. 2. Respondents International Oil & Metals Corporation Leon Potash, Henry D. Cohen and Adolf W. Goldschmidt are now, and have been for more than one year last past, engaged in the sale and distribution of preparations containing ingredients which come within the classification of drugs as the term "drug is defined in the Federal Trade Commission Act. The designations used by said respondents for said preparations, the formulas thereof and directions for use are as follows: (1) Designation: Life Nutrition High Potency Vitamin-:'Iineral Capsules Formula M.

Min.

Daily Req.

Formula: Vitamin A (Palmitate) 6,700 USP Units 167. Vitamin D (Irrad. Ergost. ) 500 USP Units 125% Vitamin B, (Mononitt) 5 mg. 500% Vitamin B2 (Riboflavin) 2.5 mg. 20S% Vitamin Bo (Pyridoxine Hydrochloride) 0.25 mg.

Vitamin E 2 2 mcg.

Vitamin C 55 mg. 183. Niacinamide 20 mg. 200% Calcium Pantothenate 3 mg.

Vitamin E 2 LV.

Vitamin K (Menadione) 0.5 mg.

Citrus Bioflavonoid Complex 5 mg.

Biotin 2. 5 mcg.

Sodium Caseinate 50 mg.

Ch01i:pe Bitartrate 25 mg.

LIFE NUTRITION ET AL. 987 985 Complaint Min.

Daily Req.

FOTmuZa Inositol 15 mg.

Lysine Monohydrochloride 5 mg.

Calcium (from Dicalcium Phosphate Anhydrous) 25 mg.

Phosphorus (from Dicalcium Phosphate Anhydrous) 20 mg.

Copper (from Copper Sulphate, Monohydrate) 0.45 mg.

Iron (from Ferrous Sulfate, Dried) 10.0 mg. 100. Magnesium (from :\agnesium Sulfate Dried) 1.0 mg.

:Manganese (from Manganese Sulfate) 3 mg.

Potassium (from Potas' sium Sulfate) 1.5 mg.

Zinc (from Zinc Sulfate) 0.1 mg. ",,,oj Sulfur (from the Sulfates) 3.0 mg.

'" Minimum daily requirement '" '" Minimum daily requirement not established Need in human nutrition not established.

Directions A verage dosage for Adults: One Capsule Daily. Food Supplement-For Dietary Purposes Only.

(2) Designation: Life Nutrition High-Potency Vitamin-Mineral Capsules Formula V'l.

Min.

Daily Req.

Formula: Vitamin A (Pa1mitate) 6,700 esp Units 167.5 % Vitamin D (Irrad. Ergost) 670 USP Units 167. Vitamin B, (Mononitt) 4. 3 mg. 430% Vitamin B (Riboflavin) 2.0 mg. 166% Vitamin Be. (Pyridoxine Hydrochloride) 5 mg.

Vitamin B12 3.0 mcg.

Vitamin C 75 mg. 250% Niacinamide 15 mg. 150% Calcium Pantothenate 5 mg.

Vitamin E 2 LU.

Vitamin K ()'Ienadione) 0.4 mg.

Citrus Bioflavonoid Complex 5 mg.

Biotin 2.5 mcg.

Sodium Caseinate 50 mg.

Choline Bitartrate 20 mg.

Complaint 69 F. T.

0/ Min.

Formula: Inositol 10 mg. Daily Req. Liver (whole Dessicated) 10 mg.

Lysine Monohydrochloride 5 mg.

Calcium (from Dicalcium Phosphate Anhydrous) 25 mg.

Phosphorus (from Dicalcium Phosphate Anhydrous) 20 mg.

Copper (from Copper Sulfate Monohydrate) 0.45 mg.

Iron (from Ferrous Sulfate, Dried) 15.0 mg. 150. Magnesium (from Magnesium Sulfate Dried) 1.5 mg.

Manganese (from Manganese Sulfate) 3 mg.

Potassium (from Potassium Sulfate) 1.5 mg.

Zinc (from Zinc Sulfate) 0.5 mg.

Sulphur (from the Sulfates) 12.0 mg.

* Minimum daily requirement ** Minimum daily requirement not established Need in human nutrition not established.

Directions: Average Dosage for Adults: One Capsule Daily. Food Supplement-For Dietary Purposes Only.

PAR. 3. Respondents International Oil & Metals Corporation Leon Potash, Henry D. Cohen and Adolf W. Goldschmidt cause the said preparations, 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 al1 times mentioned herein have maintained, a course of trade in said prepa.rations in commerce as "commerce" is defined in the Federal Trade Commission Act. The volume of business in such commerce has been and is substantial.

Respondent Maxwell Sackheim-Franklin Bruck, Inc. , is now and for some time last past has been, the advertising agency of International Oil & Metals Corporation, and now prepares and places, and for some time last past has prepared and placed, for publication advertising material, including the advertising hereinafter referred to, to promote the sale of the said preparations. In the conduct of its business, at al1 times mentioned herein, res- ..

LIFE NUTRITION ET AL. 989 985 Complaint pondent Maxwell Sackheim-Franklin Bruck, Inc. has been in substantial competition, in commerce, with other corporations firms and individuals in the advertising business. PAR. 4. In the course and conduct of their said businesses, respondents have disseminated, and caused the dissemination of, certain advertisements concerning said preparations by the United States mails and by various means in commerce, as "commerce " is defined in the Federal Trade Commission Act, including, but not limited to, advertisements inserted in newspapers, magazines and other advertising media, and by means of circulars and brochures, for the purpose of inducing and which were likely to induce, directly or indirectly, the purchase of said preparations; and have disseminated, and caused the dissemination of, advertisements concerning said preparations by various means, including but not limited to the aforesaid media, for the purpose of inducing and which were likely to induce, directly or indirectly, the purchase of said preparations in commerce, as "commerce" is defined in the Federal Trade Commission Act. PAR. 5. Among and typical of the statements and representations contained in said advertisements disseminated as hereinabove set forth are the following:

Important nutritional news. . . at last! Here s the electrifying news you ve hoped for! We now offer two remarkable formulas-one for men-one for women-each of which combines the powers of at least 26 precious ingredients to help you achieve a feeling of increased pep and energy if you arc otherwise healthy but suffcr from a deficiency of these vitamins and mincra1s. Two truly comprehensive safe high potency vitamin plans including Sodium Caseinate and Citrus Bioflavonoid Complex may help you to increased pep, energy and well-being.

Without these precious vitamins and minerals-in suffcient amounts over a long period-you cannot hope to feel your best in mind and body. You lose strength and energy-you feel tired, nervous and depressed, and you may pay dearly in lowered resistance to disease-lowered effciency and earning power-inability to give your family the loving care and companionship that makes for a happy, successful home life. Two special plans: 1. For men-2. For women-tailored to your needs. 0; * Vitamin Additive For Folks Over 40 . .. Tired during the day? Worn out at night? Life Nutrition s exclusive formula brings you high-potency vita. min-mineral capsules for extra pep and energy. Complaint 69 F.

Our fights have turned to kisses." It's hard to believe that my wife and I us' ed to fight. . . To correct this condition we began taking Life Nutrition Capsules-just one a day! B.efore long we had more pep, our dispositions improved, we ,were back in each other s arms! 1 '\\'as so worried. . . my husband slept all day. . . every Sunday . What can you do when your husband acts like an old man. . . when he doesn enjoy anything better than sleeping a11 day Sunday, and is always "too tired" to have fun-go visiting, to a movie, dancing? What's the answer for a man who has lost his pep and energy while stil young? Those questions used to worry me all the time. For some unknown reason my husband had been robbed of his encrgy and vitality; and I just didn know what to do. Then I saw a Life :\utrition ad in the newspaper It told how men-and women (who arc otherwise normally healthy)-may feel worn-out, nervous and irritable due to an easily corrected deficiency of vitamins in their diet.

Thousands of people had increased their pep and vigor through the help of the Life Nutrition Plan. I thought perhaps it could help my husband, too, so I sent for a trial supply. They made my husband feel like a new man-as happy and energetic as when we were first married. If you want to help your husband, send for a 3D-day trial supply of Life Nutrition High-Potency Capsules today! I always felt simply "run-down." People \",ere thinking of me as a "spoilsport. " I didn t know why until my doctor put me wise. He told me that I acted like a man much older than myself, and explained why I felt "tired" . . Wen, I put off doing anything about my condition-until onc day I sent for a 30 day trial supply of high-potency Life Nutrition Capsules. . In a short time, I began to feel1ike a new man! PAR. 6. Through the use of said advertisements, and others similar thereto, not specifically set out herein, respondents have represented and are now representing directly and by implication that:

1. Life Nutrition High-Potency Vitamin-Mineral Capsules are a new medical and scientific discovery and achievement: 2. Life Nutrition High-Potency Vitamin-f,lineral Capsules Formula M are distinctively suited to the needs of men; 3. Life Nutrition High-Potency Vitamin-Mineral Capsules Formula Ware distinctively suited to the needs of women; 4. Persons past forty years of age have a particular need for Life Nutrition High-Potency Vitamin-Mineral Capsules; 5. Life Nutrition High-Potency Vitamin-Mineral Capsules increase and stimulate sexual vitality;

6. The use of Life Nutrition High-Potency Vitamin-Mineral Capsules and each of the ingredients therein wil be of benefit in LIFE NUTRITION ET AL. 991 985 Complaint the treatment and relief of tiredness, nervousness, depression loss of strength and energy, loss of happiness, loss of a sense of well-being, and appearing and feeling older than one should. PAR. 7. In truth and in fact:

1. Life Nutrition High-Potency Vitamin-Mineral Capsules are not a new medical or scientific discovery or achievement; 2. Life Nutrition High-Potency Vitamin-Mineral Capsules Formula ;I are not distinctively suited to the needs of men; 3. Life J\utrition High-Potency Vitamin-Mineral Capsules Formula W are not distinctively suited to the needs of women; 4. Neither adults past forty years of age nor adults of any other age group have a special need for Life Nutrition High-Potency Vitatnin-Mineral Capsules;

5. Life Nutrition High-Potency Vitamin-Mineral Capsules wil not increase or stimulate sexual vitality; 6. Life Nutrition High-Potency Vitamin-Mineral Capsules wil not be of benefit in the treatment or relief of tiredness, nervousness, depression, loss of strength or energy, loss of happiness loss of a sense of well-being, or appearing or feeling older than one should, except in a small minority of persons whose tiredness nervousness, depression, loss of strength or energy, loss of happiness, loss of a sense of well-being, or appearing or feeling older than they should is due to a deficiency of Vitamin B, (Thiamine Mononitrate), Vitamin B, (Riboflavin), Vitamin C (Ascorbic Acid), or Niacinamide. All the remaining ingredients in these preparations are of no benefit in the treatment or relief of said symptoms.

Therefore the advertisements set forth and referred to in Paragraph Five above were and are misleading in material respects and constituted and now constitute, false advertisements as that term is defined in the Federal Trade Commission Act. PAR. 8. Through the use of the statements in the aforesaid advertisements, and others similar thereto not specifically set out herein, respondents have also represented, and are now representing, directly and by implication to persons of both sexes and all ages who experience feelings of tiredness, nervousness, depression, loss of strength and energy, loss of happiness, loss of a sense of well-being, and appearing and feeling older than one should, that there is a reasonable probability that they have symptoms which wil respond to treatment by the use of the aforementioned preparations. In the light of such statements and representations said advertisements are misleading in a material respect and Initial Decision 69 F.

therefore constitute false advertisements as that term is defined in the Federal Trade Commission Act, because they fail to reveal the material facts that in the great majority of persons, or of any age, sex or other group or class thereof, who experience the symptoms of tiredness, nervousness, depression, loss of strength or energy, Joss of happiness, loss of a sense of well-being, or appearing or feeJing older than one should, such symptoms are not caused by a deficiency of one or more of the nutrients provided Life Nutrition High-Potency Vitamin-Mineral Capsules, and that in such persons the said preparations wil be of no benefit. PAR. 9. The dissemination by the respondents of the false advertisements, as aforesaid, constituted, and now constitutes, unfair and deceptive acts and practices in commerce, in violation of Sections 5 and 12 of the Federal Trade Commission Act. Mr. Daniel J. Manelli and Mr. Joel P. Stern supporting the complaint.

Mr. Milton A. Bass and MT. Solomon H. FTiend of Bass & FTiend New York for respondents.

INITIAL DECISION BY JOSEPH W. KAUFMAN, HEARING EXAMINER JUNE 15 , 1965 Summary The above entitled proceeding, D. 8637, and a companion procommenced under 5 and ceeding, D. 8636 (p. 933 hereina, were 12 of the Federal Trade Commission Act, and involve alleged deceptive advertising of vitamin products. Although the two proceedings were never formally consolidated they were informally treated as such, both prior to hearing and thereafter, both being tried together.

In the decision in the companion proceeding, D. 8636 (p. 941 hereina, also filed this day, there is an extensive review of both proceedings, including procedures prior to hearing. This review may be read in connection with the present decision, and is herewith summarized:

Complaints in both proceedings issued on August 11, 1964. In a , IS 1 Food and Drug injunction action commenced on August 17 the respondent vitamin companies and respondent Cohen, the;' defendants, were placed under injunction, with others, on that in res- date and subsequently, by a United States District Court, pect to the misbranding of products involved in the present two LIFE NUTRITION ET AL. 993 985 Initial Decision proceedings. There was also a prior in rem condemnation decree issued by the same court in respect to such products. An appeal directed against the inj function and prior condemnation, was taken to the U.S. Court of Appeals for the Third District. Respondents in the present proceeding cited this appeal, and the injunction proceedings generally, in order to obtain continuances from the examiner.

Shortly prior to the commencement of hearings herein respondents' counsel advised by letter that they would offer no medical experts as part of their defense, explaining that they would state their position at the commencement of the hearings. At the opening of the hearings respondent made an oral motion for dismissal, urging for the first time that the Commission was barred from proceeding, in view of the court litigation and the aI1eged multiplicity of suits, as weil as principles of res judicata. Counsel also stated that, in addition to refraining- from offering expert testimony, as previously announced, they would not even cross-examine complaint counsels' expert witnesses. They further stated that, in order to bring the present proceedings with precedents relied on by them, they amended their answers to admit aI1 non-medical facts, which would include individual JiabiJty of individual respondents represented by them if cease and desist orders should issue.

The examiner reserved decision on the motion until after the hearing- should be concluded, when the points might be briefed. He also denied an alternative request for continuance pending handing down of the Court of Appeals decision. Accordingly, the hearings were more or less pro forma except for the testimony of three medical experts produced by complaint counsel, who, however, were not cross-examined by respondents counsel.

Prior to the hearing herein, the examiner on affdavits, supplemented as directed by him, and on complaint counsels' statement that they were not opposed, granted a motion to dismiss the complaints in this and the companion proceeding in respect to respondent MaxweI1 Sackheim-Franklin Bruck, Inc. , the advertising agency for respondent vitamin companies. Formal dismissal, pursuant to the Rules, is made by the present decision and accompanying order. Prior to hearing, also, there was a motion to dismiss the complaint in respect to respondent Cohen. The motion was opposed by complaint counsel and denied by the examiner. There was an extensive prehearing conference herein foi1owed Initial Decision 69 F.

by a prehearing conference order of directions, including a special direction for discovery, on respondents' motion. After conclusion of the hearings, complaint counsel submitted separate Proposed Findings and Conclusions of Law for this and the companion proceeding. Respondents submitted a joint document for both proceedings, entitled Proposed Findings and Conclusions of Law but actually being a memorandum of law on their point of res judicata and multiplicity of suits. Complaint counsel submitted an answering memorandum of Jaw on these points, and respondents submitted a reply memorandum of law. Thereafter on May 17, 1965, the Court of Appeals for the Third Circuit filed its opinion in effect affrming the District Court, in issuing its condemnation and injunction decrees, with some modification. FINDINGS OF FACT (D. 8637) Re Complaint Par. One First.-Respondent International Oil & Metals Corporation is a corporation, organized and doing business under and by virtue of the laws of the State of Delaware with its principal offce and place of business located at 12 East 46th Street, in the city of New York, State of X ew York. Said corporate respondent conducts its business under the name Life Nutrition. Second. Respondents Leon Potash, Henry D. Cohen and Adolf W. Goldschmidt are offcers of the corporate respondent International Oil & Metals Corporation and each participates in the preparation, direction and control of the acts and practices said corporation, including the acts and practices hereinafter set forth. The addresses of respondents Leon Potash and Adolf W. Goldschmidt are the same as that of said corporate respondent. The address of respondent Henry D. Cohen is 377 Crane Street in the city of Orange, State of New Jersey. The above Findings First and Second are supported by admissions in the answer filed herein, dated October 5, 1964, as amended by admissions of record, TR 27 :22-25, ' continuing at TR 28 :1- , TR 30 :10-17 (individual respondents), and TR 31 :15-22.

1 This numbering (One, Two, etc.) follows the numbering of the paragraphs in the wmplaint. The numbering of each paragraph here (Fi, Second, etc.) follows the numbering of the Proposed Findin"s of Fact of complaint counsel. 2 TR 27:22-25 means Transcript of Testimony, page 27 , lines 22 through 25. ..................

LIFE NUTRITION ET AL. 995 985 Initial Decision Re Complaint Par. Two Third. Respondents International Oil & Metals Corporation Leon Potash, Henry D. Cohen and Adolf W. Goldschmidt have for some time last past and up until issuance of the complaint herein engaged in the sale and distribution of preparations containing ingredients which come within the classification of drugs as the term "drug" is defined in the Federal Trade Commission Act. (Commencing at or about the time of the issuance of the complaint, the business activities of respondent vitamin corporation and respondent Cohen were restrained by an order issued by a S. District Court.

The above Finding Third is supported by admissions in the answer filed October 5, 1964, as amended by admissions of record TR 27:22- , TR28:1- , TR 30:10- , TR 31:15-22 (up to issuance of complaint).

Fourth. The designations used by said respondents for said preparations, the formulas thereof and directions for use are as follows :

(1) Designation: Life Nutrition High-Potency Vitamin-Mineral Capsules Formula M.

Min.

Formula: Daily Req. Vitamin A (Palmitate) 6 700 USP -cnits 167. Vitamin D (Irrad. Ergost.) 500 USP Units 125% Vitamin B, (Mononitt) 5 mg. 500% Vitamin B, (Riboflavin) 2. 5 mg. 208% Vitamin Bo (Pyridoxine Hydrochloride) 0.25 mg. Vitamin Bl' 2 mcg.

Vitamin C 55 mg. 183. Niacinamide 20 mg. 200% Calcium Pantothenate 3 mg.

Vitamin E 2 LV.

Vitamin K (1 e:lJddione) 5 mg.

Citrus Bioflavonoid Complex 5 mg.

Biotin 2. 5 mcg.

Sodium Caseinate 50 mg.

Choline Bitartrate 25 mg.

Inositol 15 mg.

Lysine :Jonohydrochloride 5 mg.

Calcium (from Dicalcium Phosphate, Anhydrous) 25 mg. Phosphorus (from Dicalcium Phosphate, Anhydrous) 20 mg.

Copper (from Copper Sulphate, Monohydrate) 0.45 mg. ..............................,........

Initial Decision 69 F.

Iron (from Ferrous Sulfate, Dried) 10.0 mg. 100.0 % Magnesium (from Magnesium Sulfate, Dried) 1.0 mg. Manganese (from Manganes e Sulfate) 0.3 mg. Potassium (from Potassium Sulfate) 1.5 mg. Zinc (from Zinc Sulfate) 0.1 mg.

Sulfur (from the Sulfates) 3.0 mg.

Directions: A verage dosage for Adults: One Capsule Daily. Food Supplement-For dietary Purposes Only.

(2) Designation: Life Nutrition High-Potency Vitamin-Mineral Capsules Formula \V.

Min.

Formula: Daily Req. Vitamin A (Palmitate) 6 700 USP Units 167. Vitamin D (Irrad.,Ergost.) 670 USP Units 167. Vitamin Bl (Mononitt) 4.3 mg. 430% Vitamin B" (Riboflavin) 2.0 mg. 166% Vitamin Bo (Pyridoxine Hydrochloride) 0.5 mg. Vitamin Bl 0 mcg.

Vitamin C 75 mg. 250% Niacinamide 15 mg. 150% Calcium Pantothenate 5 mg.

Vitamin E 2 LU.

Vitamin K (Menadione) 0,4 mg.

Citrus Bioflavonoid Complex 5 mg.

Biotin 2.5 mcg.

Sodium Caseinate 50 mg.

Choline Bitartrate 20 mg.

Inositol 10 mg.

Liver (whole Dessicated) 10 mg.

Lysine Monohydroch10ride 5 mg.

Calcium (from DiCa1cium Phosphate, Anhydrous) 25 mg. Phosphorus (from Dicalcium Phosphate, Anhydrous) 20 mg.

Copper (from Copper Sulfate, Monohydrate) 0.45 mg. Iron (from Ferrous Sulfate, Dried) 15.0 mg. 150% :1agnesium (from Magnesium Sulfate, Dried) 1.5 mg. Manganese (from :\anganese Sulfate) 0. 3 mg. Potassium (from Potassium Sulfate) 1.5 mg. Zinc (from Zinc Sulfate) 0. 5 mg.

Sulphur (from the Sulfates) 12.0 mg.

Directions: Average Dosage for Adults: One Capsule Daily. Food Supplement-For Dietary Purposes Only.

" )Iinimum da.ily requireme!lt.

..,j Minimum daily requirement not established. "*"Need in human nutrition not established. LIFE NUTRITION ET AL. 997 985 Initial Decision The above Finding Fourth is supported by admissions in the answer fied October 5, 1964, as amended by admission of record at TR 27 :22- , TR 28 :1- , TR 30 :10-17, and TR 31 :15-22. Re Complaint Par. Three Fifth. Respondents International Oil & Metals Corporation Leon Potash, Henry D. Cohen and Adolf W. Goldschmidt cause the said preparations, when sold, to be transported from their establishment in the State of New Jersey to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondents at all times mentioned herein have maintained a course of trade in said preparations in commerce, as Hcommerce" is defined in the Federal Trade Commission Act. The volume of business in such commerce has been substantial.

The above Finding Fifth is supported by admissions in the answer fied October 5, 1964, as amended by admission of record at TR 27 :22- , TR 28 :1- , TR 30 :10- , and TR 31 :15-22. Re Complaint Par. Four Sixth. In the course and conduct of their said businesses, respondents have disseminated, and caused the dissemination of, certain advertisements concerning said preparations by the United States mails and by various means in commerce, as "commerce " is defined in the Federal Trade Commission Act, including, but not limited to, advertisements inserted in newspapers, magazines and other advertising media, and by means of circulars and brochures, for the purpose of inducing and which were likely to induce, directly or indirectly, the purchase of said preparations; and have disseminated, and caused the dissemination of, advertisements concerning said preparations by various means, including but not limited to the aforesaid media, for the purpose of inducing and which were likely to induce, directly or indirectly, the purchase of said preparations in commerce, as "commerce " is defined in the Federal Trade Commission Act. The above Finding Sixth is supported by admissions in the answer filed October 5, 1964, as amended by admission of record at TR 27 :22- , TR 28 :1- , TR 30 :10- , and TR 31 :15-22. ... ...

Initial Decision 69 F.

Re Complaint Par. Five Seventh. Among and typical of the statements and representations contained in said advertisements disseminated as hereinabove set forth are the following:

Important Nutritional News. . . AT LAST! Here s the electrifying news you ve hoped for! We now offer two remarkable formula--ne for men and one for women--ach of which combines' the powers of at least 26 precious ingredients to help you achieve a feeling of increased pep and energy if you are otherwise normally healthy but suffer from a deficiency of these vitamins and minerals.

TWO Truly Comprehensive Safe High Potency Vitamin Plans including SODIUM CASEINATE and CITRUS BIOFLAVONOID COMPLEX MAY HELP YOUR BODY TO INCREASED PEP, ENERGY, and WELL- BEING.

Without these precious vitamins and minerals-in suffcient amounts over a long period-you cannot hope to feel your best in mind and body. Yau lose strength and energy-you feel tired, nervous, and depressed, and you may pay dearly in lowered resistance to disease-lowered effciency and earning power-inability to give your family the loving care and companionship that makes for a happy, successful home life. TWO SPECIAL PLA"S: (1) For MEN (2) For WOMEN-Tailored to Your Needs.

VITAMIN ADDITIVE For Folks Over 40 . . . TIRED DURING THE DAY? . . . WORN OUT AT NIGHT? LIFE "UTRITION' S EXCLUSIVE FORMULA BRINGS YOU HIGH-POTENCY VITAMIN-MINERAL CAP- SULES FOR EXTRA PEP AND ENERGY.

Our Fights Have Turned to Kisses" It's hard to believe that my wife and I used to fight. . . . To correct this condition we began taking Life Nutrition Capsules-just one a day! Before long we had more pep, our dispositions improved, and we were back in each other s arms! . . . I Was So Worried. . . MY Husband Slept All Day. . . Every Sunday What can you do when your husband acts like an old man. . . when he doesn t enjoy anything better than sleeping aU day Sunday, and is always too tired" to have fun-go visiting, to a movie, dancing? What' s the answer for a man who has lost his pep and energy while still young? Those questions used to worry me all the time. For some unknown reason my husband had been robbed of his energy and vitality; and I just didn know what to do, Then I saw a Life Nutrition ad in the newspaper. It told how men-and women (who are otherwise normally healthy) -may feel wornout, nervous and irritable due to an easily corrected deficiency of vitamins in their diet.

. . . . . . . . LIFE NUTRITION ET AL. 999 985 Initial Decision Thousands of people had increased their pep and vigor through the help of the Life Nutrition Plan. I thought perhaps it could help my husband, too, so I sent for a trial supply. They made my husband feel like a new man-as happy and energetic as when we were first married. If you want to help your husband, send for a 30-day trial supply of Life Nutrition High-Potency Capsules today! I always felt simply "run-down." People were thinking of me as a "spoilsport. " I didn t know why until my doctor put me wise. He told me that I acted like a man much older than myself, and explained why I felt "tired" Well, I put off doing anything about my condition-until one day I sent for a 30 day trial supply of high potency Life Xutrition Capsules. In a short time, I began to feel like a new man! The above Finding Seventh is supported by the evidence herein. The above statements and representations are contained in respondents' advertising in evidence as CX 38C through 39D. Respondents' counsel admitted on the record that said exhibits pertaining to D. 8637, are true and exact 'copies of advertisements disseminated and caused to be disseminated by respondents. (See TR 71 :12- , TR 72: 1- , 18- , and TR 73 :1. Re Complaint Par. Six Eighth.- Through the use of said advertisements, and others similar thereto not specifically set out herein, respondents have represented, directly and by implication, that Life Nutrition High-Potency Vitamin-Mineral Capsules are a new medical and scientific discovery and achievement.

The above Finding Eighth is supported by the advertising statements, claims and respresentations in CX 38C ("electrifying news new improved formula finally a formula that really works ), CX 38D ("New Improved Life Nutrition Formula CX 39A and 39B.

Ninth.- Through the use of said advertisements, and others similar thereto not specifically set out herein, respondents have represented, directly and by implication, that Life Nutrition High-Potency Vitamin-Mineral Capsules Formula M are distinctively suited to the needs of men.

The above Finding Ninth is supported by CX 38C ("Special Plan For Men and one For Women ), CX 38D ("TWO SPECIAL PLANS: (1) For MEN (2) For WOMEX ), CX 38E ("High Power Formula for Men. . . ), and by CX 39A, B, C. ) .

Initial Decision 69 F. T. Tenth.- Through the use of said advertisements, and others similar thereto not specifically set out herein, respondents have represented, directly and by implication, that Life Nutrition High-Potency Vitamin-Mineral Capsules Formula Ware distinctively suited to the needs of women.

The above Finding Tenth is supported by CX 38C and 38D (see Finding Ninth, supra), CX 38E ("Special High-Potency Formula For Women ), and CX 38H ("LIFE NUTRITION PLAN FOR WOMEN Eleventh. Through the use of said advertisements, and others similar thereto not specifically set out. herein, respondents have represented, directly and by implication, that persons past forty years of age have a particular need for Life Nutrition High-Potency Vitamin-Mineral Capsules.

The above Finding Eleventh is supported by CX 38G ("VITA- MIN ADDITIVE For Folks Over 40 " and statements under said caption) .

Twelfth. Through the use of said advertisements, and others similar thereto not specifically set out herein, respondents have represented, directly and by implication, that Life Nutrition High-Potency Vitamin-:VIineraJ Capsules increase and stimulate sexual vitality.

The above Finding Twelfth is supported by CX 38E (Heading, Our Fights Have Turned to Kisses" and sentence under next heading, "What can you do when your husband acts like an old man. . . ?" ); CX 38H and 39C.

Thirteenth. Through the use of said advertisements, and others similar thereto not specifically set out herein, respondents have represented, directly and by implication, that the use of Life Nutrition High-Potency Vitamin-Mineral Capsules and each of the ingredients therein wil be of benefit in the treatment and relief of tiredness, nervousness, depression, loss of strength and energy, loss of happiness, loss of a sense of well-being, and appearing and feeling older than one should.

The above Finding Thirteenth is supported by CX 38C ashamed to always to be so tired, I began to feel like a new ! LIFE NUTRITION ET AL. 1001 985 Initial Decision man feel ten years younger in just 30 days have the pep and glow I last had years ago ), and CX 38D ("Without these precious vitamins. . . you feel tired, nervous and depressed. . . See also 38E, G and H, 39A, Band C.

Medical Findings Re Complaint Par. Seven Fourteenth. Life Nutrition High-Potency Vitamin-Mineral Capsules are not a new medical or scientific discovery or achievement.

The above Finding F'ourteenth is supported by the testimony of Dr. McGanity (TR 148-49), Dr. Sappington (TR 186), and Dr. Shank (TR 217) . Their testimony in regard to Vitasafe products is also applicable to Life Nutrition products. Fifteenth. Life Nutrition High-Potency Vitamin-Mineral Capsules Formula M are not distinctively suited to the needs of men.

The above Finding Fifteenth is supported by the testimony of Dr. McGanity (TR 153), Dr. Sappington (TR 187-88), and Dr. Shank (TR 218).

Sixteenth. Life Nutrition High-Potency Vitamin-Mineral Capsules Formula Ware not distinctively suited to the needs of women.

The above Finding Sixteenth is supported by the testimony of Dr. McGanity (TR 153), Dr. Sappington (TR 188), and Dr. Shank (TR 219).

Seventeenth. N either adults past forty years of age nor adults of any other age group have a special need for Life Nutrition High-Potency Vitamin-Mineral Capsules.

The above Finding Seventeenth is supported by the testimony of Dr. McGanity (TR 164), Dr. Sappington (TR 188-89), and Dr. Shank (TR 219).

Eighteenth. Life Nutrition High-Potency Vitamin-Mineral Capsules wil not increase or stimulate sexual vitality. 1002 FEDERAL TRADE COMMISSION DECISIOI\S Initial Decision 69 F.

The above Finding Eighteenth is supported by the testimony of Dr. McGanity (TR 166), Dr. Sappington (TR 189), and Dr. Shank (TR 220).

Nineteenth. The use of Life Nutrition High-Potency Vitamin-Mineral Capsules wil not be of benefit in the treatment or relief of tiredness, nervousness, depression, loss of strength or energy, loss of happiness, loss of a sense of well-being, or appearing or feeling older than one should, except in a small minority of persons whose tiredness, nervousness, depression, loss of strength or energy, loss of happiness, loss of a sense of well-being, or appearing or feeling older than they should is due to a deficiency of Vitamin B, (Thiamine Monoitrate), Vitamin B, (Riboflavin), Vitamin C (Ascorbic Acid), or Niacinamide. All the remaining ingredients in these preparations are of no benefit in the treatment or relief of said symptoms.

The above Finding Nineteenth is supported by the testimony of the three experts called by complaint counsel: Dr. McGanity-TR 127 , 129 (neuroses, infections, etc. ), and 147 , et seq. (less than 1%;. Also TR 133 (small percentage); the Vita safe testimony applying also to Life Nutrition preparations, which contain essentially the same ingredients as Vitasafe, at generally lower dosage levels. Dr. Shank-TR 212- 13 (vitamin content of inadequate quanity), TR 215 (iron content of inadequate quantity), TR 215 , 213 (3 to 5%), TR 216 217 (vitamin deficiency very infrequent).

Dr. Sappington-TR 184, 194 (inadequate Vitamin A for advertised symptoms), TR 190:6- , 192 (insuffcient dosage levels, Vitasafe), TR 194 (iron amount clinically insignificant). See, however, TR 192-93 (possible benefit over long period if vitamin deficiency). Complaint counsel, as part of their Proposed Findings and Conclusions of Law, have submitted an extended discussion of the testimony of these doctors insofar as it supports this Proposed Finding Nineteenth. Although the examiner does not regard the testimony of the doctors, read as a whole, as absolutely conclusive to . support the proposed finding in every detail, it is definitely persuasive in support of the proposed finding, which has been adopted by the examiner as proposed, particularly since there is no contradictory medical testimony, respondents having submitted none.

Re Complaint Par. Eight Twentieth. Through the use of the statements in the aforesaid advertisements, and others similar thereto not specifically set LIFE NUTRITION ET AL. 1003 985 Initial Decision herein, respondents have also represented, and are now representing, directly and by implication to persons of both sexes and all depres-ages who experience feelings of tiredness, nervousness, sion, loss of strength and energy, Joss of happiness, loss of a sense of well-being, and appearing and feeling older than one should that there is a .reasonable probability that they have symptoms which wil respond to treatment by the use of the aforementioned preparations. In the light of such statements and representations said advertisements are misleading in a material respect and therefore constitute false advertisements as that term is defined in the Federal Trade Commission Act, because they fail to reveal the material facts that in the great maj ority of persons, or of any age, sex or other group or class thereof, who experience the symptoms of tiredness, nervousness, depression, loss of strength or energy, loss of happiness, loss of a sense of well-being, or appearing or feeling older than one should, such symptoms are not caused by a deficiency of one or more of the nutrients provided Life Nutrition High-Potency Vitamin-Mineral Capsules, and that in such persons the said preparations wil be of no benefit. The above Finding Twentieth is supported by advertised statements, claims and representations in CX 38, 39. See also Finding Kineteenth, supra.

CONCLUSIONS OF LAW (D. 8637) 1. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents. 2. The dissemination by the respondents of the false advertisements, as aforesaid, constitutes unfair and deceptive acts and practices in commerce, in violation of 9 5 and 9 12 of the Federal Trade Commission Act.

3. The aforesaid acts and practices of the respondents are al1 to the prejudice and injury of the public. 4. The term respondents as above used in these conclusions shall not be deemed to include respondent Maxwell Sackheim- Franklin Bruck, Inc. A motion to dismiss in respect to this respondent was granted by the examiner prior to the hearing, and is duly taken into account in this decision, as provided for by 9 6(e) of the Rules. The complaint must be and is dismissed in respect to said respondent.

., ., ., Initial Decision 69 F. NOTE ON MEDICAL EVIDENCE The "Discussion as to Medical Evidence" appearing after the Findings and Conclusions in the companion case, D. 8636, may be read in connection with the present decision. Summarizing, it is believed that the consideration that the medical testimony in the two proceedings was not subjected to cross-examination or exposed to defense medical testimony, should not, by indirection, be utilized to weaken this testimony, which is suffcient on its face. The medical testimony also receives support, in an indirect way, from the decrees and opinions of the District Court and the Court of Appeals in the court litigation. Moreover, it is the examiner s opinion that Matter of Lanolin Plus, Inc. (Rybutol), D. 8150 (1962) (61 F. C. 534), cited and quoted by complaint counsel, is pertinent, if only on the question of inferences or conclusions to be drawn from the expert testimony. Complaint, counsels' Chart (CX 51) shows that the ingredients of respondents' products are much like those of Rybutol. RES JUDICATA MULTIPLICITY OF SUITS Respondents moved to dismiss at the commencement of the hearing herein on the ground that the court litigation and decrees are res judicata and also that there is multiplicity of suits or proceedings.

The motion is hereby denied in the present proceeding on the grounds and reasoning stated in the decision rendered in the accompanying proceeding, D. 8636. Summarized, the reasons are: (1) The motion made after hearing commenced, after Commission personnel had gone to Xew York City, and after witnesses proceeded from Philadelphia to New York City, where respondents and their counsel are located, is untimely, a violation of orderly prehearing procedure, and vexatious. (2) The defense of res judicuta is by its nature hardly one to be invoked by the unsuccessful party in the other litigation. Here respondents have been unsuccessful both in the District Court actions and the Court of Appeals. In the two cases ' relied on by them the res judicata defense was raised by parties vindicated in the other litigation.

(3) The defense of multiplicity of suits is hardly available where, as here, different and further relief with wider application Lee Company v. Federal Trade Commission 113 F. 2rl 583 (8th Cir. 1940). United States v. 14 Cartons AYDS, :not offkialJy reported (E.D. ::lo. , 1946). , LIFE XUTRITIOI\ ET AL. 1005 985 Initial Decision is available in the challenged forum. The Food and Drug Act applies only to labeling, and advertising, or the like accompanying" the articles. The Foods Plus case relied on by respondents does not hold to the contrary, but merely that radio talks may be resorted to in a Food and Drug case to ascertain if proper directions, considering medical claims in the talks, appear on the labels, as required by statute. Respondents cannot claim sanctuary from the Commission s jurisdiction over misrepresentation and advertising generally, merely by reason of having been found to have mislabeled under the Food and Drug Act. (4) The defenses invoked here by respondents involve equitable considerations, and no such considerations urged by respondents outweigh the equities on the other side. Form of Order The order issued here wil follow the order proposed in the complaint. AJI the allegations have been proved, and indeed are hardly controverted. The misrepresentations are in a dangerous field, exploiting human suffering and complaints, and possibly even diverting users from competent medical attention. The drastic U.S. District Court injunction in the Food and Drug litigation rather than being an argument for no order here at aJl, is an argument for a broad and drastic order here, but one covering both general advertising and misrepresentation, not merely mislabeling. It may be noted that respondent Vita safe Corporation has been in trouble with the Federal Trade Commission before, and apparently was ordered in 1964 by another L'S. District Court to pay $18 000 in civil penalties for nine violations of a Commission cease and desist order issued in 1957.

ORDER It is ordered That respondents International Oi1 & :VIetals Corporation, a corporation, trading as Life Nutrition or under any other name, or names, and its offcers; and Leon Potash, Henry D. Cohen, and Adolf W. Goldschmidt, individually and as offcers of said corporation; and said respondents ' agents, representatives and employees do forthwith cease and desist from, directly or indirectly, or through any corporate or other device, in connection with the offering for sale, sale or distribution of "Life Nutrition High-Potency Vitamin-Mineral Capsules Formula W" or "Life , United States Y. Articles of Drllg . FOQds P1118, Inc. 2:-9 F. Supp. 465 , 68 (D. C., , 1965).

Initial Decision 69 F.

Nutrition High-Potency Vitamin-Mineral Capsules Formula M" or any other preparation of substantially similar composition or possessing substantially similar properties, under whatever name or names sold :

A. Disseminating or causing the dissemination of any advertisement by means of the United States mails or by any means in commerce, as "commerce" is defined in the Federal Trade Commission Act, which represents directly or by implication:

1. That said preparation is a new medical or scientific discovery or achievement;

2. That said preparation is distinctively suited to the needs of men;

3. That said preparation is distinctively suited to the needs of women;

4. That adults of any age group have a special need for said preparation;

5. That said preparation wil increase or stimulate sexual vitality;

6. That the use of said preparation wil be of benefit in the treatment or relief of tiredness, nervousness, depression, loss of strength or energy, loss of happiness Joss of a sense of well-being, or appearing or feeling older than one should, unless such advertisement expressly limits the effectiveness of the preparation those persons whose symptoms are due to a deficiency of Vitamin B, (Thiamine Mononitrate), Vitamin B, (Riboflavin), Vitamin C (Ascorbic Acid), or Niacinamide and further, unless such advertising clearly and conspicuously reveals the fact that in the great majority of persons, or of any age, sex, class or other group thereof who experience such symptoms, these symptoms are caused by conditions other than those which may respond to treatment by the use of the preparation and that in such persons the preparation wil not be of benefit;

7. That the ingredients in said preparation other than Vitamin B, (Thiamine Monitrate), Vitamin E, (Riboflavin), Vitamin C (Ascorbic Acid) or Niacinamide wil be of benefit in the treatment or relief of tiredness nervousness, depression, loss of strength or energy, LIFE NUTRITION ET AL. 1007 985 Final Order Joss of happiness, Joss of a sense of well-being, or appearing or feeling older than one should. B. Disseminating, or causing to be disseminated, by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase of any such preparation, in commerce, as "commerce" is defined in the Federal Trade Commission Act, any advertisement which contains any of the representations prohibited in or which fails to comply with any of the affrmative requirements of Paragraph A hereof.

It is further ordered That the complaint herein is dismissed and hereby declared to be dismissed, as to the following respondent Maxwell Sackheim-Franklin Bruck, Inc., a corporation. FINAL ORDER This matter having been heard by the Commission on an appeal by respondents from the initial decision of the hearing examiner and upon briefs and argument in support thereof and in opposition thereto; and The Commission having rendered its decision that the findings of fact and conclusions of law in the initial decision and the order proposed by the examiner should be adopted as the findings, conclusions and order of the Commission, except as hereinafter set forth:

It is ordered That the findings of fact in the initial decision be and they hereby are, adopted as the findings of the Commission with the following exceptions:

1. Paragraph Second shall be, and it hereby is, modified to strike the name of Henry D. Cohen from the first line thereof;

2. Paragraph Third be, and it hereby is, modified to strike the name of Henry D. Cohen from the second line thereof; 3. Paragraph Fifth be, and it hereby is, modified to strike the name of Henry D. Cohen from the second line thereof; 4. A new paragraph First (a), reading as follows be, and it hereby is, inserted after the conclusion of Paragraph First: In January, 1960 , prior to joining respondent International Oil & Metals Corporation, respondent Henry D. Cohen became the president of Knoll Pharmaceutical Corp., a manufacturer of ethical drugs. Under his employment contract with Knoll Pharmaceutical Corp., which runs until Novem- Final Order 69 F.

ber 4, 1971, he is required to devote his full working time to the interests of that company. Early in 1961, he became a secretary and director of respondent International Oil & Metals Corporation, which position he held until December 1964, when he resigned. During this period he played no active part in the management of the corporation and did not participate in its policy decisions.

It ':s further ordered That the conclusions of Jaw in the initial decision be, and they hereby are, adopted as the conclusions of law of the Commission except that Paragraph 4 thereof be, and it hereby is, modified to read as follows:

The term respondents as above used in these conclusions except where specifically noted, shall not be deemed to include respondents Henry D. Cohen and :Vlaxwel1 Sackheim- Franklin Bruck, Inc. The motion to dismiss in respect to respondent Maxwell Sackheim-F'ranklin Bruck, Inc. was granted by the examiner prior to the decision, and is duly taken into account in this decision, as provided for by 93.6 (e) of the Rules. The complaint must be and is dismissed with respect to this respondent. With respect to respondent Henry D. Cohen the complaint is dismissed without prejudice.

It ':s further ordered That the order proposed by the hearing examiner be, and it hereby is, adopted as the order of the Commission, except that the name of Henry D. Cohen shall be deleted from the first paragraph thereof and an additional paragraph shall be inserted in the order following the final paragraph in the proposed order:

It ':s further ordered That the complaint herein be, and it hereby is, dismissed as to Henry D. Cohen, without prejudice to the right of the Commission to take such further corrective action as future events may warrant. It ':s further ordered That the respondents herein shall within sixty (60) days after service upon them of this order fie with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order. CLAIROL INC. 1009 Complaint