In the Matter of the Complaint Against

F. PALAFOX, R.Ph. - PALAFOX-KNIGHT LABS,
PALAFOX LABS and/or FERNANDO PALAFOX, R.Ph.,
Drawer 460 at Anthony, Texas 88021

P.S. Docket No. 3/92

April 10, 1975
Rudolf Sobernheim Administrative Law Judge

APPEARANCES:
Lee H. Harter, Esq.
Consumer Protection Office
Law Department U.S. Postal Service
Washington, D.C. 20260 for Complainant

Pat E. Dwyer, Esq.
Ms. Alice Dwyer
107 South Kansas Street
El Paso, Texas 79901 for Respondents

INITIAL DECISION :

This is a proceeding by Complainant against Respondents under 39 U.S.C. 3005 which authorizes action against Respondents on evidence satisfactory to the Postal Service that Respondents are "engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representations."

Complainant alleges that Respondents (including Palafox Labs which it sought to have added as a party only at the hearing) are engaged in such a scheme in the sale of PEPSO PACIFIC (hereinafter sometimes referred to as "PP"). Specifically, Complainant alleges that by the use of advertisements and correspondence in the nature of sales promotion Respondents represent in substance and effect (Complt, par. III):

"A. that Respondent's product will cure chronic digestive problems including chronic gastritis, constipation, and ulcers; e.g., overcome long standing chronic digestive problems such as peptic ulcer and gastritis . . . how to get rid of and stay rid of these painful and dangerous ailments . . ."

* * * *

"D. that Respondent's product is more effective than an antacid;

"E. that Respondent's product has been medically tested and proven to be efficacious, e.g., It has been thoroughly tested in controlled clinical cases."

"F. that Respondent's product is a new medical discovery; e.g., My amazingly effective new medical discovery." and that such representations are false (Complt, par. IV).

The charges that Respondents falsely represented PP to be safe and not to contain harsh drugs (Compl, par. III B, C) were withdrawn by post-hearing agreement of the parties (Stip., dtd 20 Jan. 75). For the testimony herein established that PP did not contain strychnine in harmful quantities and that a harmful arsenical was abandoned as an ingredient after 1 August 1974 because of its potential harmfulness (T 240).

Respondents do not deny that they advertised PP by means of the material cited by Complainant or thereby receive money through the mails charged to them in paragraph III A and D of the complaint or that the claim made and referred to in paragraph III D of the complaint is false.

Respondents moved immediately prior to the hearing to dismiss the complaint for lack of jurisdiction on the ground that the subject matter of the proceeding was within the exclusive jurisdiction of the FDA. The presiding administrative law judge directed, however, that the hearing proceed and reserved final decision on the motion.

A hearing was held at El Paso, Texas, at which both parties submitted testimonial and documentary evidence. Both parties also submitted post-hearing briefs.

FINDINGS OF FACT

1. Palafox-Knight Pharmaceutical Laboratories of Anthony, Texas (hereinafter sometimes referred to as "PKPL") is a partnership of Fernando Palafox and Charles Knight (T 215). It is engaged in the manufacture and sale of Pepso-Pacific (PP) (T 217).

2. PKPL advertises (in 1974 in Capper's Weekly, Compl. Ex. A, G), and sends out advertising material ( e . g . Compl. Ex. B, C) regarding, PP under the names "F. Palafox, R.Ph.-Palafox-Knight Labs" (Compl. Ex. A) and "Palafox Labs" (Compl. Ex. G) and over the signature of "F. Palafox, R.Ph." ( e . g . Compl. Ex. B, C; see also Resp. Ex. G). In his advertising letters "Fernando Palafox, R.Ph." uses the stationery of PKPL. all of these activities are carried out by or on behalf of PKPL.

3. PP is a "colloidal" solution containing the following ingredients (for 8 gals of PP):

19 1/2   oz        bismuth subnitrate
9           oz        pepsin 1:3000 or
4           oz        pepsin 1:10,000
60         oz        sodium tartrate
1 1/2     gals     glycerine
2           gals     distilled water
2           qtrs     190 proof pure alcohol
34         grains  strychnine
1 1/2     oz        pure caramel coloring
10         lbs       granulated sugar

(U.S. Treas. Form 1669, subm. by PKPL u/d 4/18/74, Resp. Ex. B).

4. Fernando Palafox testified that a "collodial" solution is a transparent liquid in which the ingredients are inseparably merged like sugar and water in coca-cola (T 222). WEBSTER'S NEW WORLD DICTIONARY OF THE AMERICAN LANGUAGE (Coll. ed., 1962) defines "collodial" as in the nature or form of a colloid which is "a gelatinous substance made up of very small, insoluble, nondiffusible particles larger than molecules but small enough so that they remain suspended in a fluid medium without settling to the bottom" ( op . cit ., supra , s . v . colloid, 1.). As far as the record discloses, the fact that PP is a "collodial" solution means in context no more than that all ingredients of PP, fully diffused in the liquid, reach the stomach of the person who takes it.

5. Also according to Fernando Palafox, bismuth, an antiseptic and astringent (T 230), is the sole active ingredient of PP (T 234) and I so find. Bismuth subnitrate and tartaric acid, both in powder form, are combined into bismuth sodium tartrate (T 231). In the intestines or stomach the bismuth sodium tartrate combines with hydrogen sulfite to form bismuth sulfite (T 235). It is the latter which assertedly smoothes out the craters of an ulcer by coating it and causes pain to stop. There is no proof for Mr. Palafox's contentions except his "belief" (T 234-5) and his claim that his product works better than, for instance, plain bismuth sodium nitrate, taken in powder form (T 235).

6. Pepsin, alcohol, strychnine and the formerly used arsenical do not have any therapeutic effect in PP in the dosages used (T 230, 231, 232, 236; see T 117). The only function of strychnine is to hide the disagreeable metallic taste of bismuth and replace it with a bitter taste which users psychologically associate with good medication (T 231).

7. PP is not a new medical discovery (T 192). Its composition is similar to that of a prescription used many times by Mr. Palafox' father who was a practicing physician (T 221-222). Mr. Palafox also claimed that the formula was listed on pages 190 and 188 of the 8th edition of The National Formulary (T 223-4). An inspection of these pages discloses formula for ephedrine products.

8. PP itself is a product sold under that name between 1912 and 1969 by an Alabama pharmacist. When he died, the product went off the market. His son, a civil engineer, acquired it and after his retirement near Anthony, Texas, in 1970 showed it to Mr. Palafox (T 271, 273), 282). The latter became interested in the product when he discovered that it was a "colloidal" solution (T 222) and PP has been sold by the PKPL partnership since about 1972 (T 221).

9. After the death of the Alabama pharmacist in 1969 the PP formula had not been used in any product known to the PKPL partners (T 223) until they started to make and sell PP.

10. PP is not an antacid (T 125).

11. PP was advertised during 1974 in Capper's Weekly, as follows:

(a)         "WHOSE FAULT?
              IF YOU END UP WITH AN ULCER
              BECAUSE YOU IGNORED WARNING
              SIGNALS? WHO'S TO BLAME?
              My new medically proved formula and
              concept are helping thousands nationwide
              to overcome Chronic Digestive Problems
              safely without harsh drugs. Does what
              no antacid can. For details send this
              ad, name and address to me personally.
              F. PALAFOX, R.Ph. - PALAFOX KNIGHT LABS
              DRAWER 460 ANTHONY, TEXAS 88201"
              (Compl. Ex. A)
(b)         "DIGESTIVE PROBLEMS? thousands HELPED.
              Peptic Ulcer, Gastritis over-
              come safely without harsh drugs. Free
              details. Palafox Labs"
              (Compl. Ex. G)

12. Responding to the advertising (Compl. Ex. A), a postal inspector, using a test name, received a lengthy reply, signed by Fernando Palafox, R.Ph. on PKPL stationery, together with a four page pamphlet and a return envelope for her order (Compl. Ex. B).

a. This response is a hard-sell letter, holding out the expectation of relief from troublesome digestive problems at low cost and thus calculated to induce the prospective customer to buy.

b. Relief is to come from "a medication and overall treatment concept that has been proven again and again in controlled clinical cases better and faster than the customary, expensive procedures commonly used nowadays in treatment of chronic digestive problems" (Compl. Ex. B, Ltr. 3d par.).

c. The attached flyer starts with another letter from Mr. Palafox, addressing the prospective customer as "Dear Friend" and reading in relevant part (Compl. Ex. B. Flyer, p. 1):

"I HAVE ALREADY HELPED OVER FIFTY THOUSAND PEOPLE

OVERCOME LONG-STANDING CHRONIC DIGESTIVE PROBLEMS SUCH

AS PEPTIC ULCER AND GASTRITIS AFTER ALL OTHER MEASURES

HAD FAILED.

I WANT THE CHANCE TO SHOW YOU WITHOUT YOUR RISKING A

CENT HOW TO GET RID OF...AND STAY RID OF...THESE

PAINFUL AND DANGEROUS AILMENTS...SAFELY; AND WITHOUT

HARSH DRUGS.

"...my amazingly effective new medical discovery...The after and between-meals pain, the bloating, the night attacks, the nausea and vomiting, the nervousness and inability to get a good night's sleep, and the fear and distate for food--just to name a few of the miseries you may be suffering--will either be going fast...or completely gone.

* * * * * * *

"My formula...has been thoroughly tested in controlled clinical cases.

* * * * * * *

"With your medication you'll receive my helpful FOOD GUIDE and outline for my proven, medically-sound program of self-help measures. Use the medication and the program for 30 days. Then, if you're not pleasantly surprised and completely delighted with your improvement...just write me."

d. Lay testimonials are reproduced inside the flyer and on the back page "some straight facts about chronic digestive problems" ( id ., Flyer, p. 1, 4th par.). The back page facts start with a description of the peptic ulcer as a "raw, open and inflamed sore in the stomach" which is difficult to heal and dangerous if not properly treated, causing hemorrhages and stomach or intestinal wall perforation. Emotional stress is given as a major cause of peptic ulcers. Chronic gastritis is thereafter described as a long-term inflammation of the stomach, common among older people, which causes pain, swelling, tenderness and sometimes nausea, vomiting and diarrhea. Treatment is given (1) to reduce irritation by neutralizing stomach acids through antacids and small quantities of milk and cream and (2) medication to soothe irritated and inflamed tissues and "hasten healing of the ulcer" ( id ., Flyer, p. 4, col. 2).

13. When the postal inspector did not respond promptly to the letter of 2 May 1974 (Compl. Ex. B), she received a further "Dear Friend" inquiry from PKPL, postmarked 11 June 1974, over the signature of Mr. Palafox. He described therein his concept of treatment as including "the use of an amazingly effective medicinal preparation with X-ray proven healing ability" which has "produced outstanding results in case after case." Many patients clinically "treated" with PKPL's methods are said to lead "normal lives...free from the torment that made their lives miserable for so many years" (Compl. Ex. C, ltr, p. 1).

14. An order was thereafter placed by the postal inspector. Under date of 9 July 1974 PKPL sent her still another letter announcing shipment and enclosing a food guide and other materials not relevant to this proceeding. The letter contained the following passage (Compl. Ex. D, ltr, 5th par.):

"I want you to remember, too, that my interest in your well-being is not just for now, but for as long as we can be of service to you in overcoming your trouble.

Just a word about the medication. It's called 'PEPSO-PACIFIC'. It is a unique formula, unlike any other to be found anywhere. Its success, I believe, lies in the fact that it encourages the natural functions of the body rather than to impede or paralyze them as do so many of the popular treatments used nowadays."

15. Shortly after the postal inspector had received the order PKPL sent a further letter, dated 24 July 1974 (Compl. Ex. F), which states over the signature of Mr. Palafox:

"Even with good luck there will be some minor setbacks at first until healing is well along and scar tissue becomes tough enough to withstand the irritation of the stomach acids.

As I've mentioned repeatedly, clinical experience with many patients including periodic x-rays has shown that about four months is required to accomplish a good, long-term result.

* * * * * * *

In order for you to continue your regimen without interruption and thereby gain the maximum benefits from your sacrifices, we offer a full 90-day supply of the medication for only $24.95, a savings of almost $5. If this would strain your budget you may order 30-day supplies as you need them at the same price of $9.95. We'll notify you each month shortly before you are due to run out in time to re-order, so that the continuity of your program will not be interrupted."

16. a. The language of Respondent's advertisements and of the promotion letters on their behalf by PKPL makes it clear that Respondents represent to their prospective customers that PP is a medication which effectively treats peptic ulcers and gastritis; that long-term use of PP heals ulcers, ends the torment caused by digestive troubles, described as ulcers and gastritis; and that taking PP as prescribed will overcome the effects of ulcers and gastritis. It is true that the language of the cited literature omits the word "cure" but active verbs like "heal," "end," or "overcome" carry for the ordinary reader the meaning that taking PP will liberate them from the torment of the digestive ailments, named by Respondents; in a four-letter word, that it will "cure" them. hence, there is no question in my mind that Respondents make the representation charged in paragraph III A of the complaint.

b. The language of Respondents' advertisements does not ipsis verbis claim that PP is more effective than an antacid but that it "[d]oes what no antacid can." Given their normal meaning, these words say no more than that PP performs a medicinal function which antacid cannot perform. That this is the thrust of Respondents' statement is indicated in the flyer (Compl. Ex. B) sent out by PKPL accompanying the letter addressed to those responding to the advertisements (Compl. Ex. A, G). On the back of the flyer, PKPL explains that antacid powders are helpful to alleviate distress caused by acid attacks while PP allegedly provides medication against further irritation and hastening the healing of ulcers (Compl. Ex. B). The relationship between PP and antacids is not a major theme of Respondents' advertising material. Their campaign is not directed toward selling PP in place of and as superior to antacids. It is, therefore, difficult to see that the ordinary reader would see in Respondents' advertisement (Compl. Ex. A) anything more than a statement that PP is different from antacids and has an effectiveness of its own which the latter lack. Hence, I find that Respondents do not make the representation charged in paragraph III D of the complaint. If the representation actually made by Respondents is false because PP is ineffective for any purpose represented by them, that subject is adequately covered by the false representation charges in paragraph III A of the complaint.

c. The representations charged in paragraphs III E and F of the complaint are indisputably made by Respondents as the text of their advertising material, quoted above, shows.

17. Both parties presented expert testimony as to the effectiveness of PP, apart from the issue initially raised by the use of strychnine and an arsenical as ingredients. The evidence as to the latter need not be further considered since this issue has been mooted.

18. Complainant's medical expert, a board-certified internist and specialist in gastroenterology (Compl. Ex. H, p. 2), is the chief of the department of medicine and of the gastroenterology service at William Beaumont Army Medical Center and a colonel in the U. S. Army (T 66-7). he is a member of numerous professional associations in his special field, is clinical professor of medicine at the University of New Mexico and is awaiting a similar appointment at the medical school of the Texas Institute of Technology. He has also in recent years published a number of studies in his chosen field (Compl. Ex. H) and is editor of "Gut and Heart Medicine" (T 69).

a. The witness defined an ulcer of the stomach as loss of continuity of the surface of the stomach lining to beneath the muscle layer (T 70-71). Loss of surface continuity to lesser depth is considered an erosion which is rarely chronic (T 71). Ulcers tend to occur in the upper intestinal tract which contains areas bathed in acid or holding pepsin (T 71). A form of ulcers differing from the gastric and duodenal type are stress ulcers due to burns, sepsis, severe trauma (T 133-4). Ulcers traceable to the ordinary "stresses of life," such as Respondents' customers may suffer, are not, however, stress ulcers in the medical sense of the term (T 134, 287).

b. Treatment of gastric and duodenal ulcers falls into four areas: treatment of symptoms; cure; prevention of complica- tions; and prevention of recurrence (T 73). Symptoms are treated with antacids or anticholinergic drugs (T 73), like atropine (T 74). Healing is promoted by removal of noxious drugs (alcohol, aspirin, perhaps caffeine and tobacco (T 73-4)) and by hospitali- zation (T 74). Treatment with a special drug has been found helpful in England (T 74). On the other hand, dietary restrictions, formerly stressed, are deemed of less importance and a bland diet is not considered an effective cure for gastric and duodenal ulcers (T 73, 75, 144). Surgery may be the indicated therapy where complications exist (T 73) and informal psychiatric therapy in the doctor-patient relationship may be important. Stress ulcers may be treated prophylactically with antacids, regardless of symptoms (T 287-288) and are thereafter treated for bleeding and other symptoms as occur (T 289-290).

c. Gastritis in medical understanding is the imflammation of the lining of the gastric pouch (T 75). In its acute form it can be caused by alcohol, lye, infections (T 76). It is most common in a chronic and non-specific form the cause of which is unknown, for which there is no treatment except if symptoms appear (T 76, 146). But as a rule, chronic gastritis manifests no symptoms (T 77, 146). Gastritis sometimes takes rare forms, treated by surgery (T 76).

d. In a lay sense the term "gastritis" is used for any complication in the upper gastric region (T 76) but it has no therapeutic meaning (T 77). A physician faced with such a complaint would try to diagnose it (T 292) and might give an antacid, adjusted in dosage to avoid diarrhea (T 292-3), or try to counteract nausea (T 77).

e. In the opinion of the witness PP is of no value in the treatment of ulcers (T 114) and has nothing but a placebo effect (T 298). There is no indication that such a product is used by gastroenterologists in clinical trials or regular therapy nor is it recommended in modern standard tests (T 114) or in the current periodical literature which the witness follows (T 127-8, 131). The doctors whom he knows do not use it (T 146). Nor is bismuth used today as a gastric astringent (T 116). Bismuth sodium tartrate is specifically used in the treatment of syphilis and other bismuth compounds as mild astringents, especially for esophagitis. Pepsin is not now considered helpful to digestion (T 117-8).

f. Antacids are compounds which neutralize or "buffer" the hydrogen ion in the stomach (T 124) and are commonly used in the treatment of ulcers and gastritis.

19. Of the medical experts called by Respondents, the testimony of one related to lethal dosages of strychnine and arsenicals (T 162 et seq .) and no longer contributes to the resolution of this proceeding.

20. The other was an orthopedic surgeon, also engaged in general practice in El Paso, Texas (T 186) and the brother of Fernando Palafox (T 198).

a. This physician frequently sees persons traumatically injured and suffering from gastro-intestinal problems as a result thereof (T 187) and also treats many persons with "pre-ulcer" conditions (T 188, 199). He sends the latter, however, to a gastronenterologist if their condition persists (T 188, 212). In treating patients he gives them PP, which relieves disturbing pain and other similar symptoms (T 189). He prefers PP over antacids which he considers bad tasting, nauseating and wearing off quickly (T 192).

b. The witness believes that PP "cured" ulcers in the sense that patients get well if they receive medication and if the stress from which they suffer eases (T 201). Recurrence is prevented because the symptoms are relieved (T 202). Instead of talking patients out of their symptoms he gives them PP ( ibid .) but how it works he does not know (T 204). He admits, however, that he was not just telling patients to buy PP but sends them to a gastroenterologist if symptoms remain (T 211, 212).

c. As to whether the alleged beneficence of PP has been established by "controlled clinical cases" depends on the definition. He has observed cases among his own patients but concedes that there have been no clinical cases where results have been scientifically observed and recorded (T 193-4).

21. Fernando Palafox testified on his practices in keeping up relations with his customers, in addition to testifying on the ingredients and history of PP.

a. He keeps a profile card for each purchase, showing their purchases and such gastro-intestinal dangers to their health as their correspondence discloses, and advises purchasers on dosage and health practices (T 220; see Compl. Ex. B; Resp. Ex. F). he also conducts an extensive follow-up correspondence with the postal inspector (Compl. Ex. B, C, D, F) and others ( e . g ., Resp. Ex. G). He considers that he was not only selling a medicine but a total product, including medication together with dietary rules and a style of living, and he always advises customers to see a doctor if their symptoms continue (T 249). He uses the same approach when selling PP over-the-counter.

b. He, too, testified that he considered PP "a cure, or very, very close to a definite cure" for ulcers (T 257) and added that antacids were not. He also explained that Ulcerox, used in a clinic in Anthony, Texas, was the same as PP, but for the color (T 261).

22. Charles Knight, the other partner in PKPL, testified as to his activities in the promotion of Pepso Pacific after he and Mr. Palafox had joined hands.

a. He helped in research, working with the Anthony, Texas clinic of a Dr. Santoscoy, his partner and the latter's brother who testified for Respondents. He tried to put their ideas into words and wrote the letters from which quotations have been set forth herein (T 273).

b. As to the charges in the complaint, he claimed to have avoided any improper representation of "cure" (T 273) and to have followed FTC advertising guidelines regarding such representation (T 274-5). He also claimed that PP had been tested in the earlier period when it was sold from Alabama and that he and his partner in PKPL had used good medical practices (T 275-6). Proof for these assertions beyond the testimony was not, however, supplied by the witness.

c. The witness described thereafter the activities of PKPL in promoting PP, which he offered on his own as a "closing remark" (T 278). He testified that he was a "salesman" and that PKPL's promotion was conducted "for one purpose only" - to "conduct market studies" (T 278). He stated verbatim:

"I know something about marketing and I know before you spend a lot of money that you must know who your market is and as much about them as you can. And that is the reason for all this promotion, and it's a temporary thing, and has been, for all intents and purposes, has been discontinued because we've already gathered in the information we're looking for" (T 278-9).

He added in response to questions by Respondents' counsel as to "some of the factors" taken into consideration "in gathering information" (T 280):

"A Well, age groups is one important indicator for determining the market for a specific product. Demographic information such as whether this product would sell better in isolated areas or - in other words, things that will help you to determine where best to spend your promotion dollar.

JUDGE SOBERNHEIM: The commercial end of it? THE WITNESS: Yes, sir. From the commercial standpoint.

BY MISS DWYER:

Q Do you believe that this product going through the mails has been of benefit?

A Yes. We've gathered enormously valuable information. There would be no other way to get this type of information" (T 281).

23. PKPL currently spends on its correspondence only 10% of what it spent in mid-1974 (T 283).

24. On basis of the foregoing detailed findings of fact and on the record as a whole I find:

a. Respondents represent, as charged in paragraph III A of the complaint, that PP will cure chronic digestive problems including chronic gastritis and ulcers.

(i) Not only does the analysis of Respondents' advertising matter support a finding that this impression is created in the ordinary reader's mind (see FF 16a) but the testimony offered by and on behalf of Respondents establishes that they believe that PP has truly curative powers. If Respondents intended to avoid such representation, they have greatly over-written their advertising material and have failed in their alleged purpose. Avoidance of the word "cure" is not here enough.

(ii) Respondents' claim of having complied with FTC advertising guidelines is unsupported by any evidence as to scope and content of such guidelines or the ways in which Respondents met the restraints which they impose. The contention is unsupported by any probative evidence and Respondents have not sustained their burden of proof in respect thereof.

(iii) I find no representation that PP cures constipation. On this incidental point the complaint fails.

b. The representation that PP cures chronic digestive problems, such as ulcers and chronic gastritis, is false. The term "ulcer" and "chronic gastritis" must be given their technical meaning in medical practice.

(i) In that sense chronic gastritis is an illness of unknown cause and cure and generally without symptoms. If they occur antacids are used for momentary relief. Even if PP can be used to the same end, it would not provide a cure, as Respondents assert.

(ii) In the medical sense ulcer, as distinct from a mere erosion of the intestinal or stomach walls, is treated in a variety of ways. Some symptoms can be treated with antacids, more serious ones with more complex modes of medical intervention. Even if PP provides temporary relief from some minor symptoms such action is not curative. The evidence is plaint that the healing process of genuine ulcers requires modes of treatment other and far removed from ingestion of a bismuth product or that its ingestion is in any way helpful toward a cure.

(iii) Respondents have to some extent confused the situation for they use the terms "chronic gastritis" and "ulcer" in a broader, popular sense. Any feeling of stomach upset is in this common speech called "gastritis" or, if of some duration, "chronic gastritis" and the physical phenomenon of damage to the intestinal or stomach walls is referred to as "ulcer," whether or not this is medically correct. But if the words are used this loosely, PP at best doctors symptoms and does not show any curative powers.

(iv) Respondents' alleged contact with PP mail order customers and admonition to consult with a physician if symptoms persist are little more than a "blind" for determining which customer can or will be persuaded to send in repeat orders for PP. No reliance can be placed on this commercially motivated correspondence as a disclaimer of curative powers for Pepso-Pacific.

(v) As between the medical experts, Complainant's witness is by far the more persuasive and disinterested. It was, for instance, his direct testimony that first disclosed, contrary to the complaint, that PP did not contain strychnine in dangerous quantities. I am persuaded by his testimony that there exists no rational basis for attributing to PP any curative power or anything other than a placebo effect. As Respondents' main medical witness testified, giving PP replaces talking to the patient about his troubles.

c. A representation that a product has been medically tested and proved efficacious "in controlled clinical cases" requires more than evidence that a medication is effective to the belief of its dispenser or seller, based on casual observation or sales and market study correspondence and records, I find in the testimony of PKPL partner Charles Knight and of Respondents' main medical witness recognition, albeit a reluctant one, that clinical studies of the efficacy of PP, conducted by trained scientific observers and controlled for the intrusion of subjective feelings, undocumented contention and procedural error, have not been conducted. Since Respondents represent in their advertising material that PP has been so tested their representation (see Complt, par. III E) is false.

d. The only discovery of PP of recent date is that this old and known formula came in or about 1972 into the hands of Fernando Palafox who decided to resume its sale by mail orders and other means in partnership with the owner of the formula and name who had inherited it from his father. Such a set of facts does not justify Respondents' speaking of a new medical discovery or vaunting PP as a product which is new. All that is new is PKPL's exploitation of the old Alabama formula. Hence any representation that the product is a new medical discovery or otherwise new is false (see Complt, par. III F).

CONCLUSIONS OF LAW

1. At the outset Respondents argue that the instant proceeding impinges on the jurisdiction of the Food and Drug Administration. But the authorities cited by them do not hold that under the present drug legislation only the FDA can pass on the truth of over-the-counter drug advertising or that any determination of efficacy of such drug, incident to a postal false representation proceeding, is barred by such legislation. Weinberger v. Hynson, Westcott & Dunning , 412 U.S. 609 (1973), and related decisions involve the apportionment of jurisdiction over drug-approval related issues, arising under the federal Food, Drug and Cosmetic Act of 1938, as amended (21 USC 301 et seq ., 355), between the FDA and reviewing federal appellate courts on the one hand and federal district courts on the other. They do not touch on the relationship between FDA determinations and those entrusted to other agencies of the Government, as to the Postal Service under 39 U.S.C. 3005. It is well established that proceedings under 39 U.S.C. 3005, although overlapping in part with other agency proceedings, may nevertheless be independently conducted and concluded adversely to the respondent. Reilly v. Pinkus , 338 U.S. 269 (1949). No contrary authority has been brought to my attention or is known to me to exist. Hence, Respondents' motion to dismiss the proceeding must be denied.

2. Respondents are engaged in a scheme or device for obtaining money or property through the mails by means of false representations within the meaning of 39 U.S.C. 3005, as alleged in paragraphs III A (Except for constipation), E and F and IV of the complaint.

3. The advertising material used by Respondents will in the mind of the ordinary reader produce the impression that Respondents make the representations charged in paragraphs III A, E and F of the complaint except as paragraph III A refers to constipation. Donaldson v. Read Magazine , 333 U.S. 178, 189 (1948).

4. The caption should be corrected and conformed to the relevant documents, as shown herein. No prejudice results therefrom or from the inclusion of Palafox Labs to Respondents since all advertising material regardless of "name" is issued by Palafox-Knight Pharmaceutical laboratories, the manufacturer and promoter of Pepso-Pacific.

5. Accordingly, an order in the form attached, as provided in 39 U.S.C. 3005 should be issued.