In the Matter of the Complaint Against

NUTRITIONAL RESEARCH
177-F Riverside Drive
at Newport Beach, CA 92663-4080

P.S. Docket No. 17/117;

Cohen, James A.

APPEARANCE FOR COMPLAINANT:
HildaRosenberg, Esq.
Consumer Protection Division
Law Department
United States Postal Service
Washington, DC 20260-1112

APPEARANCE FOR RESPONDENT:
Charles F. Abbott, Esq.
2230 N. University Highway
Suite 7G
Provo, UT 94604-1509

POSTAL SERVICE DECISION
ON BREACH OF CONSENT AGREEMENT

On August 7, 1984, Complainant filed a Petition for Orders Based on Breach of Consent Agreement in which it alleges that Respondent has breached the terms of a Consent Agreement executed by its owner, Leo Daboub, on December 7, 1983. Complainant contends that Respondent has resumed making certain of the representations which in paragraphs 3, 4 and 7 of the Consent Agreement it agreed to discontinue.

In the Petition, Complainant sought the issuance of a temporary detention order against mail addressed to Respondent at 1666 Newport Boulevard, Costa Mesa, California 92627 and at 177-F Riverside Drive, Newport Beach, California 92663. On the basis of the information attached to the Petition and the positions expressed by the parties at oral argument held at Respondent's request, a temporary detention order was issued on August 8, 1984. The order authorizing the temporary detention of Respondent's mail granted Respondent a period of ten days in which to file a reply to Complainant's Petition. Respondent filed a timely reply to the Petition in which it denied that it had resumed making the representations which it agreed in the Consent Agreement to discontinue. Accompanying the reply was a supporting memorandum and request for hearing. After Respondent made a showing that there was a disputed matter of fact relevant to an issue raised in the Petition, a hearing was held on November 13, 1984. The findings and conclusions which follow are based on the testimony presented at the hearing and the documents which have been made a part of the record.

Findings of Fact

The Complaint initiating this proceeding alleged that Respondent falsely represented directly or indirectly in substance and effect, whether by affirmative statements, omissions, or implications that:

"(a) Mannan-Trim Tablets are an effective remedy for obesity.

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(c) Mannan-Trim Tablets are an effective means of overcoming obesity without dieting, or other actions requiring the exercise of willpower or determination."

After the Answer was filed, negotiations were undertaken by the parties which led to the execution of a Consent Agreement on December 7, 1983. The Consent Agreement provides in pertinent part:

"3. . . .It is agreed, for purposes of this Consent Agreement, that respondent's agreement to avoid the representations contained in paragraph 3(a) of the Complaint is intended to bar respondent from advertising the Mannan-Trim tablets as an effective remedy for obesity, alone, without their being used in conjunction with a diet.

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It is agreed, for purposes of the Consent Agreement, that respondent's agreement to avoid the representations contained in paragraph 3(c) of the Complaint is intended to bar respondent from claiming that Mannan-Trim Tablets are an effective remedy for obesity, alone, without their being used in conjunction with a diet.

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"4. The use of the representations alleged in paragraph 3 of the Complaint or substantially similar representations by respondent, in an attempt to obtain money or property through the mail, for the Mannan-Trim Diet Plan or for Mannan-Trim tablets or any other products containing the ingredient, Glucomannan, or any other vitamin and mineral formulation marketed alone without another drug or any combination thereof, has permanently ceased and will not hereafter be employed by respondent under any name or through any corporate or other device.

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"7. Respondent will not represent in its advertisements for the Mannan-Trim Diet Plan or the Mannan-Trim tablets or any other product containing the ingredient Glucomannan, or any vitamin and mineral formulation marketed without any other drug, or any combination thereof, that the plan or tablet will burn off body fat 24 hours a day."

Beginning in January, 1984, Respondent caused to be published in newspapers throughout the country advertisements for its weight-loss product (Pet. Exhs. 1, 4-49). These advertisements draw attention to Respondent's product by a testimonial in headlines touting a weight loss of 56 pounds in six weeks and "before" and "after" pictures showing the difference which took place in one Monica Lee. Following the headlines and next to the "before" and "after" pictures, Respondent's advertisements state in large bold print at the beginning of the first column of text: "Amazing Japanese weight-loss tablet wins U.S. Patent for its proven ability to flush calories out of your body." There follows a recitation of the difficulties of dieting and exercise and the discovery of a "miracle new diet product from Japan called Mannan-Trim." In response to the question "What is this incredible product?" the advertisements state:

"It's a natural extract from the Konjac root, which grows in Japan. It contains no drugs whatever and was developed by members of the JMA (Japanese Medical Association). Based upon scientific data demonstrating its effectiveness, it was awarded a patent by the UNITED STATES PATENT AUTHORITIES."

The next paragraph of the advertisements state that the "Mannan-Trim Program includes a special diet plan that is protected by U.S. Copyright law." This paragraph continues:

"The way it works is simple. Reduction of body fat and weight depends on reduced calorie intake. Mannan-Trim helps you absorb less calories in two ways. First, it gives you a natural feeling of fullness. You eat less because you aren't as hungry. But second, this remarkable product surrounds much of the fat, protein and carbohydrate calories you do eat, and then flushes them right out of your body."

In subsequent paragraphs of Respondent's advertisements a study is referred to in which substantial weight loss is achieved " w ith no dietary changes," the reader is told that weight can be lost without the "need to suffer while you lose" and that the tablets satisfy "your hunger" while the "calories and carbohydrates you do eat are surrounded by Mannan-Trim and flushed from your body." Some of the advertisements then state that as "your calorie intake diminishes, your body MELTS DOWN POUNDS LIKE FIRE MELTS DOWN ICE]" while others state "your body BURNS OFF BODY FAT HOUR-BY-HOUR" (Tr. 17; Pet. Exh. 1, p. 2; Pet. Exh. 30, p. 3). Finally, the reader is told in Respondent's advertisements in a box entitled "Important Notice" that if weight loss occurs too rapidly, one, rather than two, tablets should be taken before each meal.

The order forms included in the advertisements seek remittances to Respondent at one of the two addresses against which the orders sought in the Petition for Breach have been requested. The order forms refer to Mannan-Trim, but they do not refer to a diet. They instruct the purchaser to return the "product container" if they are dissatisfied. They also require a designation of the number of "tablets" desired as the purchase price is based on the quantity of tablets.

On two occasions a Postal Inspector, using a fictitious name, ordered the product Mannan-Trim (Dec. of Ralph H. Cook). In response to the first order which was sent to Respondent on February 13, 1984, the Inspector received 120 tablets in a white plastic container. No diet was received with this purchase. The second order was placed on June 12, 1984. Both the tablets and a 1200 calorie per day diet were received in response to this order (Dec. of Ralph H. Cook; Pet. Exh. 50).

Discussion and Conclusions

The issue to be decided in connection with a Petition for Orders Based on Breach of Consent Agreement is whether the party signing the agreement has breached the terms of the agreement by continuing to make the representations which it agreed to discontinue. The determination of the truth or falsity of the representations is not in issue. See Raymond Milo, P.S. Docket No. 12/168 (P.S.D. Dec. 31, 1981) and cases cited therein.

Complainant contends that Respondent has failed to comply with the portions of paragraphs 3 and 4 of the Consent Agreement which pertain to paragraphs 3(a) and (c) of the Complaint. Complainant argues in this regard that Respondent continues to advertise its Mannan-Trim tablets as an effective remedy for obesity, alone, without their being used in conjunction with a diet. Complainant also contends that Respondent has failed to comply with paragraph 7 of the Consent Agreement by representing in some of its advertisements that "your body burns off body fat hour-by-hour."

With regard to the alleged violation of paragraphs 3 and 4 of the Consent Agreement, Respondent argues that it was only required to advertise its product with a diet plan and it has complied with this requirement. According to Respondent compliance with the requirements of paragraphs 3 and 4 is shown by the language of its advertisements which states "that (1) the Mannan-Trim program includes a diet plan; (2) reduction of body fat and weight depends on reduced calorie intake; (3) the tablets only 'help you' absorb less calories; (4) the results described in the ad can only be achieved by following the entire Mannan-Trim program" which includes the Diet Plan (Resp. Memo. p. 4). While Respondent views the alleged violation of paragraph 7 to be a closer question, it argues that the phrase "burns off body fat hour-by-hour" is not the same as the prohibited language of the Consent Agreement which is "the plan or tablet will burn off body fat 24 hours a day."

The test to be applied in interpreting advertising is the effect the advertisements taken as a whole would most probably produce on ordinary minds. See Donaldson v. Read Magazine, Inc., 333 U.S. 178 at 189 (1948). In determining the effect of representations on ordinary readers, it is not necessary to find that all or even a majority of readers would be deceived. It is sufficient to find that readers, whether gullible or wary, would likely interpret an advertisement as making the alleged false representations. Moreover, the advertisements may be deceptive because they contain untrue statements or because statements which should be included are omitted. The impression created by an advertisement may be false even if each statement when considered individually may be true. The reasonable implications of advertisements are to be given weight as well as express statements. Finally, advertisements which are susceptible of two or more meanings, one of which is false, are misleading. See e.g., Donaldson v. Read Magazine, Inc., supra; United States v. 95 Barrels, 265 U.S. 438, 443 (1924); Spiegel Inc. v. F.T.C., 411 F.2d 481 (7th Cir. 1969); Rhodes Pharmacal Co., Inc. v. F.T.C., 208 F.2d 382, 387 (7th Cir. 1953); Baslee Products Corp. v. United States Postal Service, 356 F. Supp. 841 (D.N.J. 1973); Vibra Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957), rev'd on other grounds, 256 F.2d 681 (2nd Cir. 1958); Gottlieb v. Schaffer, 141 F. Supp. 7, 16 (S.D.N.Y. 1956); Stannis Research Int'l, P.S. Docket No. 17/60 (P.S.D. July 30, 1984); Raymond Milo, supra; Oriental Nurseries, P.S. Docket No. 9/116 (P.S.D. May 19, 1981).

Applying the above principles to Respondent's advertising materials, it is concluded that Respondent has resumed making the representations which it agreed to discontinue. The wording of Respondent's advertisements would lead the ordinary reader to conclude that Mannan-Trim tablets alone, without being used in conjunction with a diet, are an effective remedy for obesity. This message is conveyed to the reader from the initial reference to the "Amazing Japanese weight-loss tablet" at the beginning of the advertisements to the order form which seeks remittance for the tablets. This impression is reinforced throughout by the emphasis on the tablet and how it works and such phrases as "with no dietary changes" and "best of all, there is no need to suffer while you lose." While the advertisements refer to a special diet plan, the overall thrust of the language used is that the tablets alone will cause weight loss. Thus, Respondent has violated the terms of paragraphs 3 and 4 of the Consent Agreement.

The representation made in some of Respondent's advertisements that "your body burns off body fat hour-by-hour" would most probably be understood by the ordinary reader to be essentially the same as the representation "that the plan or tablet will burn off body fat 24 hours a day." Thus, Respondent has breached the requirement of paragraph 7 of the Consent Agreement.

Respondent argues the Postal Service should be precluded from bringing this action because it was on notice of the contents of Respondent's advertising and failed to take any action for over six months. According to Respondent it relied to its detriment on the "inactivity and apparent acquiescence of the U.S. Postal Service" and would be severely damaged by the issuance of a False Representation Order.

Respondent cites Mark Eden v. Lee, 433 F.2d 1077 (9th Cir. 1970) in support of this position. The facts in Mark Eden are significantly different from the facts in this case. Thus, Mark Eden does not serve as precedent for this case.

Respondent attempts to distinguish its position from an estoppel situation. However, no meaningful difference exists. Respondent is in essence asking that the Postal Service be estopped from alleging breach of the Consent Agreement. The Postal Service, in furtherance of its responsibility to protect the public, will not be estopped from enforcing the terms of a Consent Agreement even though it may have been aware of Respondent's advertisements for a six month period prior to filing the breach petition. See Consumer Research, Inc., P.S. Docket No. 18/33 (P.SEMPIRE-B.331984) and cases cited therein. Accordingly, this argument does relieve Respondent from the consequences of its breach.

Under paragraph 10 of the Consent Agreement a finding that Respondent has breached the terms of the agreement will warrant the issuance of an order pursuant to 39 U.S.C. § 3005. Such a finding having been made, it is concluded that an order pursuant to 39 U.S.C. § 3005 should be issued. Accordingly, such an order is issued herewith.