In the Matter of the Complaint Against

NEW ENGLAND LABS, INC.,
2 Belden Avenue,
Box 308; Box 651 at
Norwalk, Connecticut 06852

P.S. Docket No. 1/219

James J. Robertson, Esq.,
Law Department, U.S. Postal Service, for Complainant

Herman V. Traub, Esq.,
New York, New York, for Respondent

Before: John Lewis, Administrative Law Judge

INITIAL DECISION STATEMENT OF PROCEEDINGS

This proceeding was initiated by the filing of a complaint by the General Counsel of the United States Postal Service on November 28, 1972, charging the above-named Respondent with conducting a scheme or device for obtaining money or property through the mail by means of false representations, in violation of 39 U.S. Code, 3005. In substance, said complaint charges Respondent with having made false representations concerning the effectiveness of its product "NEW SLIM" capsules as an appetite depressant and weight-reduction agent. Respondent appeared by counsel and filed answer denying the various allegations of the complaint, except as to the use of the advertisements referred to therein, and alleging certain affirmative defenses.

Pursuant to notice duly given, a hearing for the reception of evidence was convened on January 23, 1973, in Washington, D.C. Both parties were represented by counsel, and were afforded full opportunity to be heard and to examine and cross-examine witnesses. Complainant called two witnesses, (1) a postal inspector through whom he sought to establish that Respondent's method of operation involved the obtaining of money through the mail by means of statements made in advertising matter, and (2) a physician through whom he sought to establish the falsity of the representations made in Respondent's advertising matter. At the close of the evidence offered by Complainant a recess was granted until February 6, 1973, on motion of counsel for Respondent and over objection of counsel for Complainant, to enable Respondent to secure an expert witness to testify in lieu of the medical witness who had allegedly declined to attend the hearing at the last moment.

Thereafter, on motion of Respondent the date of the hearing was changed to February 15, 1973, and the place thereof to St. Louis, Missouri. On said date and at said place a further hearing was convened for the purpose of receiving the testimony of a physician, through whom Respondent sought to establish the truth of the representations made by it. At the close of the testimony, on motion of counsel for Respondent and over objection of counsel for Complainant, the hearing was recessed until February 22, 1973, in Washington, D. C., for the purpose of receiving the testimony of lay witnesses who had allegedly used Respondent's product.

At the hearing convened in Washington, D.C., on February 22, 1973, counsel for Respondent announced that due to problems in the scheduling of the testimony of his lay witnesses he had elected to dispense with them and close his case. Thereafter, counsel for Respondent moved to dismiss the complaint for failure of proof, which motion was denied by the undersigned after oral argument thereon. Following renewal by counsel for Complainant of his motion for an oral decision made at the initial hearing, full oral argument was had as to whether the evidence sustained the allegations of the complaint. At the close of the argument, the undersigned ruled that he would deny the motion for an oral decision due to a dispute concerning the testimony of the doctor called by Respondent in St. Louis. He further ruled that he would issue a written initial decision but that, in view of the thorough airing of the issues during oral argument on the motions to dismiss and for an oral decision, he would dispense with the filing of written proposed findings. During the course of oral argument Respondent withdrew the affirmative defenses set up in its answer.

After having carefully reviewed the evidence in this proceeding and considered the oral argument of the parties, which may be deemed to constitute oral proposed findings and conclusions, and based on the entire record, including his observation of the witnesses, the undersigned makes the following:

FINDINGS OF FACT

A. The Alleged Solicitation of Money Through the Mail

1. Respondent is engaged in the business of selling a weight- reduction product and program to the general publish which it designates as "NEW SLIM". Persons ordering Respondent's product and plan receive a set of 18 "NEW SLIM" capsules which are described as "Time Release Capsules", and a leaflet which is designated as "THE NEW SLIM PLAN".

2. Public attention is attracted to Respondent's weight- reduction product and plan through advertisements placed in magazines of general circulation. As part of its advertisements Respondent includes an order form for use by prospective customers in ordering the product through the mail. Said order form advises that the "caps" may be ordered in various quantities, i.e., "18 caps $3", "36 caps $6", and "54 caps $9". the record establishes that Respondent does, in fact, obtain money through the mail from customers who have detached and mailed the order form to it, together with payment for Respondent's product.

B. The Alleged Representations

3. Respondent's advertising matter contains various statements concerning the efficacy of its product "NEW SLIM" in the loss of weight. A copy of such advertising was attached to the complaint and was admitted by respondent, in its answer, to be typical of the advertisements caused to be published by it in magazines of general circulation. A copy thereof was received in evidence and is attached hereto as Appendix "A".

4. The complaint charges that Respondent has made various representations to the public concerning the effectiveness of its product. These are, in substance, that "NEW SLIM" capsules (a) are an effective aid to appetite and hunger control, (b) will give users a slightly uncomfortable, stuffy feeling, (c) will enable users to lose 10 pounds in 18 days, (d) will enable users to achieve this result without the necessity of adhering to a dietary regimen. Respondent disputes the making of these representations in two principal respects, viz. , that (a) the promised weight loss of "at least 10 pounds within the first 18 days" will be achieved by all users, and (b) this result can be achieved without adhering to a dietary regimen. Respondent contended during oral argument that it promises results from the use of its product only in "some" instances, and that the user is advised he must adhere to "THE NEW SLIM PLAN". Consideration will be given at this point to the disputed representations.

5. Respondent's argument that its advertisements do not promise results to all users rests primarily on the statement in the advertisement that:

"If you don't mind burping or feeling a little gassy, we can probably help you lose weight with the New Slim Plan." [Emphasis added.]

In my judgment the use of the word "probably" does not detract from the scope of the results promised. The advertisement is headed: "Do you really want to lose weight?" It promises a loss in weight of "at least 10 pounds within the first 18 days" or the purchaser's money will be promptly refunded. Reading the advertisement as a whole in the manner in which it would be read by the general public and not by sophisticated lawyers, it is clear that there would be many readers who would interpret it as promising the indicated results to all readers or, at the very least, to the vast bulk of persons who use the product, and certainly not to just some persons who use it.^1/

The fact that the reader is promised a refund if he does not achieve the promised loss of weight is a factor confirmatory of the promise and of the scope thereof, rather than a factor detracting therefrom as Respondent contended during oral argument. To the ordinary reader a money-back guarantee is a function of the seller's assurance that the promised result will be achieved, rather than a cautionary note that it may not be achieved.

See Stein v. Pilling , 256 F. Supp. 238, 243 (D.N.J. 1966), aff'd 379 F.2d 554, a case under the Postal statute, citing the P. Lorillard decision with approval. See also Gottlieb v. Schaffer , 141 F. Supp. 7, 16 (S.D.N.Y. 1956), holding that the Postal statute was intended to protect "the gullible and the simple ... even though they do not reach the level of the 'ordinary mind'."

6. Respondent's position that it does not promise that weight loss can be achieved without dieting, is based principally on the fact that its advertising matter, in the portion quoted in paragraph 5, supra , refers to "THE NEW SLIM PLAN", thereby purportedly advising the reader that a diet plan as well as capsules are involved. While the advertisement does use the word "Plan", in the context in which the word appears there would be many readers who would not understand that this refers to a diet plan. The principal thrust of the advertisement is on the capsules. The advertisement refers to the "New Slim time-release capsules" and the "slightly stuffy feeling" they may produce. It gives the chemical ingredients of the capsules. The order form itself is expressed in terms of ordering a given number of capsules. The vast bulk of ordinary readers viewing the advertisement would interpret it as involving solely the ingestion of capsules. If they paid any attention to the word "Plan", they would infer that the plan consists of the ingestion of certain capsules. At best, readers who might understand that there is some type of plan involved, separate and apart from the capsules, would infer that the capsules are at the heart of the plan rather than a mere adjunct thereto. It may be noted, in this connection, that even the diet pamphlet itself does not necessarily disabuse purchasers of this notion since in listing the elements of the plan, it refers first to the "right attitude", then to "New Slim Capsules" and then only to "New Slim menu guide".

In any event, disclosures made after the reader has purchased a product do not cure the misleading character of the advertisement on the basis of which he made the purchase.^2/

7. From a reading of Respondent's advertising matter as a whole, it is concluded and found that Respondent that Respondent does make, substantially, the representations alleged in the complaint, which representations are incorporated herein by reference as if fully set forth.

C. The Alleged Falsity

8. A resolution of the issue of the falsity of the representa- tions made by Respondent revolves primarily around an evaluation of the testimony of the medical witnesses. The credible testimony by Dr. Jack Crowell, Complainant's witness, establishes that Respondent's product will not perform as represented for the following reasons:

a. A sound program for weight reduction involves primarily a dietary management program tailored to the particular individual, so that he will ingest a lesser number of calories than he expends in his daily activities. Such a program is best administered under the guidance of a qualified physician, who can recommend the substitution of foods of lower caloric value for certain higher caloric foods normally eaten by the individual, while seeing to it that a proper dietary balance is maintained and weight is lost at a rate which will not undermine the patient's health or discourage his adherence to the diet.

b. Drugs of various kinds are sometimes used as an adjunct of a program of dietary management. Certain drugs if administered under a doctor's care for brief periods of time may suppress appetite and help patients adhere to a dietary program. However, the use of such drugs over an extended period of time is dangerous and will not help the patient acquire the type of eating habits which will enable him to lose weight and maintain such loss.

c. Respondent's product, NEW SLIM capsules, is of no value whatsoever in causing a reduction in weight or in helping an individual adhere to a weight-reduction diet. Its basic ingredients are (1) sodium carboxymethylcellulose (SCMC), (2) benzocaine, and (3) vitamins and minerals. SCMC is a hydrophilic substance which is sometimes used by physicians in the treatment of certain stomach disorders such as constipation or diarrhea. It acts by swelling to approximately eight times its size and provides bulk in the stomach. The normal dose for such purpose is one gram to a gram and a half. Respondent's product contains "166 mg", an "mg" being one thousandth of one gram. The appetite-curbin ability attributed to such product purports to be due to the feeling of fullness which it produces when it swells in the stomach. However, the infinitesimal quantity of SCMC present in the capsules, compared to the dosage normally administered in the treatment of stomach disorders, is insufficient to produce any significant feeling of fullness in the stomach (which has a capacity of one quart). Moreover, even in the much larger dosages in which it is used by physicians in treating stomach disorders it will not result in any suppression of appetite. The ingredient benzocaine in Respondent's capsules is used as a topical anesthetic, such as in the relief of sore throats, but it is of no value in the suppression of appetite. The vitamins and minerals present in Respondent's capsules may be helpful as dietary supplements in a weight-reduction program, but have no value in suppressing appetite or causing a reduction of weight.

d. Respondent's product, even in conjunction with its diet plan (which recommends three different diets varying from 1,000 to 1,500 calories a day), will not normally enable an individual to lose 10 pounds in 18 days. Since it requires a deficit of 3,500 calories in one's diet to lose one pound, an individual would have to sustain a deficit of 35,000 calories to lose 10 pounds. Except for persons on an unusually high caloric diet (e.g., 4,500 calories) who went on Respondent's lowest caloric diet (1,000 calories), it would not be possible to lose 10 pounds to adhere to a diet as low as 1,000 calories. The most the average overweight individual could hope to achieve would be a loss of one-half pound per day.

9. Respondent contends that the testimony of its own medical witness, Dr. Joseph Lederman, establishes the value of SCMC in weight reduction, and that his testimony should be accepted over that of Dr. Crowell by reason of the fact that the latter's testimony was based on an unsubstantiated "consensus" of medical opinion, whereas the former's testimony was based on actual "clinical" experience. Respondent's position in this respect is wholly without merit. While Dr. Crowell did indicate that his opinion as to the lack of value of SCMC in weight reduction was in accord with the consensus of medical opinion, his basic opinion regarding its ineffectiveness was based on his own extensive experience in the treatment of obesity, including the establishment and administering of an obesity clinic at a recognized university hospital, and the treatment of obese patients in his private practice (constituting 40-50% of his practice). The fact that he did not conduct any extensive scientific experiments with SCMC or test it in his own practice does not require that his testimony be considered less persuasive than that of Dr. Lederman. The latter's opinion was not based on any scientific testing of SCMC, but principally on his experience with obese patients (constituting 15-20% of his practice) and reports of benefits allegedly received from "some" patients. As hereafter noted, such testimony fails to rebut the persuasive testimony of Dr. Crowell and, in a number of respects, supports it.

10. Dr. Lederman's testimony corroborates Dr. Crowell's that drugs are merely "ancillary aids" (Tr. 119) to a dietary management program, which should be administered by a physician and be tailored to the individual's dietary needs and physical makeup. While Dr. Lederman did refer to "fillers" (which includes SCMC) as being among the drugs which he had prescribed along with appetite depressants such as the amphetamines, and tranquilizers, his testimony fails to establish that SCMC has any affirmative value in suppressing appetite or causing a reduction in weight. Dr. Lederman's principal experience with a so-called filler involved methylcellulose, which was combined with another drug in a proprietary product that he had prescribed for patients some years previously. After considerable reluctance in revealing the identity of the other drug with which methylcellulose was combined, he finally admitted it was "very likely" that the other drug was "an amphetamine type drug" (Tr. 138). Since the amphetamines have themselves been recognized as an appetite depressant (albeit one which is now considered dangerous to use and is no longer on the market), there is no valid scientific basis for Dr. Lederman's opinion that it was the methylcellulose which depressed the appetite of his patients. Moreover, there was considerable uncertainty in Dr. Lederman's testimony as to how effective it was even in combination with the other drug. He would merely state that "some" of his patients had reported that the pill had helped them by giving them a sensation of fullness and reducing their appetite. Despite its purported value as an appetite depressant Dr. Lederman has not recommended SCMC or methylcellulose to patients in recent years. His explanation was that the pill containing methylcellulose and the other drug was no longer being manufactures. However, since methylcellulose is not a prescription item and is available for use in the treatment of stomach disorders, there would be nothing to prevent his recommending it to patients in proper dosages. His failure to do so suggests a lack of conviction as to the affirmative value of methylcellulose or SCMC in the suppression of appetite.^3/ In any event, based on Dr. Lederman's testimony and demeanor as a whole, I am not persuaded that Respondent has established SCMC's value in weight reduction sufficiently to overcome Dr. Crowell's persuasive testimony to the contrary. It may also be noted that Dr. Lederman's testimony agrees with that of Dr. Crowell as to the lack of effectiveness of benzocaine and vitamins and minerals in causing a reduction of weight, and as to the need for a dietary regimen to result in a dietary deficiency of 35,000 calories in order to enable a patient to lose 10 pounds in 18 days.

11. The greater weight of the credible evidence establishes that (a) Respondent's NEW SLIM capsules are not an effective aid to appetite and hunger control, (b) they will not produce an uncomfortable, stuffy feeling of such a nature as to depress the appetite or hunger, (3) they will not enable users thereof to lose 10 pounds in 18 days or any other substantial amount of weight, and (4) to the extent persons following Respondent's diet plan do lose any substantial amount of weight such loss would be due to the diet plan, and the capsules do not make any substantial contribution thereto. It is accordingly concluded and found that the representations made by Respondent with respect to its NEW SLIM capsules are materially false as a matter of fact.

CONCLUSION OF LAW

Respondent is engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations, in violation of 39 U.S. Code, 3005. It is accordingly recommended that an order in the form attached, as provided in 39 U.S. Code, 3005, should be issued.

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1/ As stated in P. Lorillard v. Federal Trade Commission , 186 F.2d 52, 84 (4 Cir. 1950):

"In determining whether or not advertising is false or misleading within the meaning of the statute, regard must be had, not to fine spun distinctions and argument that may be made in excuse, but to the effect which it might reasonably be expected to have upon the general public. 'The important criterion is the net impression which the advertisement is likely to make upon the general populace.'"

2/ Exposition Press Inc. v. Federal Trade Commission , 295 F.2d 869, 873 (2 Cir. 1961); cert . denied 370 U.S. 917.

3/ When asked on cross-examination whether the cessation in the manufacture of the pill containing methylcellulose could be due to the fact that it was not effective as an appetite or hunger depressant, Dr. Lederman conceded that it "could be" (Tr. 135).