In the Matter of the Complaint Against

THE ROBERTSON-TAYLOR COMPANY
Suite 290 781 W. Oakland Park Boulevard
at Fort Lauderdale, FL 33311-1729

at 135 E. Oakland Park Blvd.
and at 129 East Oakland Park Boulevard
Fort Lauderdale, FL 33334-1153

and at 5200 North Federal Highway
Fort Lauderdale, FL 33308-3202

P.S. Docket No. 16/99;
P.S. Docket No 16/100

Grant, Quentin E.

APPEARANCE FOR COMPLAINANT:
Hilda Rosenberg, Esq.
Consumer Protection Division
Law Department
United States Postal Service
Washington, DC 20260-1100

APPEARANCE FOR RESPONDENT:
Lee H. Harter, Esq.
2256 Van Ness Avenue
San Francisco, CA 94109-2513

INITIAL DECISION

General

In Complaints filed with this office Complainant alleges that Respondent is in violation of 39 U.S.C. § 3005 in seeking remittances of money through the mail by means of false representations concerning the products involved in these proceedings. The specific false representations alleged are set forth in the findings of fact below.

Respondent's answers to the Complaints denied substantially all the allegations in the Complaints.

On Respondent's motion the hearing location was changed to Fort Lauderdale, Florida, where these matters were heard, along with five other similar proceedings against Respondent, on July 19 -22, 1983.

All proposed findings of fact, conclusions of law, and arguments submitted by the parties have been considered in arriving at these decisions. To the extent indicated they have been adopted. Otherwise, they have been rejected as irrelevant, immaterial, or contrary to the evidence.

Complainant's witnesses in these proceedings were Postal Inspector Gary D. Cantley and Karl Kramer, M.D.

Respondent's witnesses were Mitchell Kenneth Friedlander, President of Respondent, and in P.S. Docket No. 16/99 only, Dr. John W. Gaul, an osteopathic physician.

FINDINGS OF FACT

General

1. Dr. Karl J. Kramer, Complainant's expert witness, is a board certified physician in internal medicine. He is also certified in dermatology which is the study of the function and diseases of the hair, skin and nails (Tr. 299). He graduated from Cornell University with a B.A. in Chemistry, summa cum laude, and studied medicine and did his residency at the Johns Hopkins University in Baltimore (CX-5, p. 1).

In addition to his extensive private office practice, Dr. Kramer treats patients with dermatological problems at several community hospitals and at Jackson Memorial, a hospital affiliated with the University of Miami School of Medicine (Tr. 299, 300).

Dr. Kramer is associated with the University of Miami School of Medicine, where he holds the position of Clinical Associate Professor (Tr. 299). In this capacity, he teaches dermatology residents, attends weekly meetings to discuss the hospital's dermatology patients, and participates in various research and clinical conferences at the school (Tr. 299-300).

Dr. Kramer is familiar with scientific research technique through his association with the National Institutes of Health where he conducted research as a clinical associate in 1971 and 1973 (Tr. 300; CX-5, p. 1). He also participated in research during his residency and has, more recently, conducted studies on the effects of various experimental drugs on skin diseases (Tr. 301, 340).

Dr. Kramer is a member of several professional organizations (CX-5, p. 2). He has recently held the positions of treasurer, vice-president, and president of the Miami Dermatological Society and attends its monthly meetings on a regular basis (Tr. 301). There, patients are presented, their diagnoses and treatments are discussed, and new developments in dermatology are reviewed (Tr. 302). Dr. Kramer also attends one meeting per year of the Florida Society of Dermatology, and the American Academy of Dermatology (Tr. 302). These professional meetings help him to keep abreast of new developments and learn of different treatments for dermatological conditions.

His regular reading of the Journal of the American Academy of Dermatology, Archives of Dermatology, and Cutis, his brief review of the British Journal of Dermatology, and his occasional reliance on the Journal of the Society of Investigative Dermatology further his knowledge in the field (Tr. 303, 307). He also reads dermatology articles in the Journal of the American Medical Association and the New England Journal of Medicine and peruses newsletters for new developments in dermatology (Tr. 303). His awareness of developments in the specialty is further enhanced by his position as dermatology editor of the Journal of the Florida Medical Assoc iation and his review of articles for the Archives of Dermatology (Tr. 303).

Dr. Kramer has been qualified as an expert witness with regard to skin and hair products in numerous proceedings before the U.S. Postal Service (Tr. 303, 304, 339).

2. Respondent's expert witness in P.S. Docket No. 16/99, John W. Gaul, is an osteopathic physician who engages in general practice in Davie, Florida, with particular interest in preventive medicine and nutrition. He is a member of numerous osteopathic associations, the American Society of Orthomolecular Physicians, the International Academy of Metabology, and the American College of Applied Nutrition. He has a Ph.D. in nutrition (obtained in an off-campus program of about 1 1/2 years) from Donsback University, Huntington Beach, California.

3. Dr. Kramer's qualifications to testify in 16/99 were significantly superior to those of Dr. Gaul.

P.S. Docket No. 16/99

Derma-Tec 90 Restructuring Facial

Treatment with Procaine

4. At the time this proceeding was initiated Respondent, The Robertson-Taylor Company, by means of advertisements appearing in brochures sent through the mails to prospective customers, solicited orders for its product, Derma-Tec 90 Restructuring Facial Treatment with Procaine, and payment therefore through the mails to its address at 781 W. Oakland Park Boulevard, For Lauderdale, Florida 33311 (Tr. 11, 12, 47, 48; Admissions at B1; CX-1d, 2d). It was stipulated that at the time of the hearing this product was not being sold by Respondent (Tr. 12).

5. Annexed hereto as Ex. A is a copy of Respondent's advertisement for the product (CX-1d).

6. Persons ordering this product from Respondent receive it in a container with a label containing the following instructions for use and list of ingredients (CX-3d):

Usage: Apply small amount to skin areas...Rub in well. Allow to remain on skin for 1 hour, wash with water and pat dry.

Ingredients: Acqueous Solution of Procaine-HCL 4%. Mineral oil, apricot kernal oil, coconut oil, vitamin A, D, Paba, Aloe, Collagen, RNA, elastin and trace minerals PCA, Methyl and Propyl Parabens. Unscented.

7. As alleged in the Complaint as amended, Respondent's advertisements represent that the product will permanently remove wrinkles and age lines (Par. III-1) and that Procaine is effective to remove wrinkles and age lines (Par. III-2). These representations are found in the following portions of the advertisement:

WRINKLES AWAY]]

...

Derma-Tec 90 RESTRUCTURING

FACIAL TREATMENT WITH PROCAINE

...

The Problem: Time-ravaged skin makes you look older than you are. Your youthful appearance is fading as time and the elements make your once taunt sic , smooth face look old and unappealing. You feel uncomfortable among younger women ....

The Solution: Derma-Tec 90 Procaine Skin Cream can transform your entire complexion. Your friends will think you've turned back the hands of time ....

"Contains the active ingredient in Dr. Ana Aslan's world famous Rumanian youth potion. A full therapeutic strength skin cream that can drastically combat the signs of time-ravaged skin."

* * *

"Age lines won't stand a chance when you treat your face to DERMA-TEC 90 Restructuring Facial Treatment with Procaine."

* * *

"a full strength base of protected compounds that wipe out dry skin and leave your face taught sic , smooth, and silky emphasis added .

The foregoing portions of the advertisement promise wrinkle and age line removal, not mere moisturizing and softening (as argued by Respondent).

8. As found above, Dr. Kramer has been qualified as an expert with regard to skin products in other Postal Service proceedings (Tr. 304). He has also conducted research on the effects of specific drugs on the skin (Tr. 301). One of these drugs, Retin-A, also known as Acutane (Tr. 412) has, unlike Derma-Tec 90, preliminarily demonstrated that it may actually alter the sun damage in the dermis (Tr. 411). Sun damage is one of the main causes of wrinkles (Tr. 389). Dr. Kramer also conducted a computerized Med-line literature search on procaine to update extensive research he had performed several years ago (Tr. 406). His experience with the problems of wrinkled skin extends to his clinical practice. At least half of his women patients consult with him about what they can do for their wrinkles (Tr. 401).

9. Procaine is a widely used anesthetic, also known as Novacaine (Tr. 393). Dr. Ana Aslan, a Rumanian physician, advocates the systemic use of Procaine, claiming it may benefit the skin's appearance. However, this claim is not made for its topical use (Tr. 397).

10. Derma-Tec 90 will not permanently remove wrinkles and age lines (Tr. 396). The procaine it contains is not effective to remove wrinkles and age lines (Tr. 400). These conclusions of Dr. Kramer are in accord with the informed medical consensus (Tr. 400).

Wrinkles are caused by long term sun damage to the proteins, collagen and elastin, found in the dermis, the thick layer of skin below the outer layer or epidermis (Tr. 389). These proteins are responsible for the skin's elasticity and when they degenerate wrinkles develop in certain areas of the face where there are muscular movements (Tr. 389). Derma-Tec 90 will not restore the skin's elasticity lost through aging (Tr. 396). Topical application of the elastin and collagen found in Derma-Tec 90 will not bring about this result because these proteins do not penetrate the dermis (Tr. 395). The Vitamin A found in this formulation will not reverse the sun's damage (Tr. 411-412). Although preliminary studies show that Retin-A, also known as Acutane or Vitamin A Acid, may alter sun damage to the dermis, Vitamin A, which is an alcohol, does not have the same effect (Tr. 412). Retin-A and Vitamin A have different chemical properties (Tr. 412). Derma-Tec 90 will merely have a temporary, mild smoothing effect on some of the less pronounced wrinkles (Tr. 396, 492, 493).

Derma-Tec 90 is primarily a moisturizer and will be helpful to dry skin which is caused by a lack of water or moisture (Tr. 390-391, 397). In contrast to wrinkles, this condition originates in the epidermal layer (Tr. 390). A moisturizer adds water and places a sealant or layer of oil on top on it to prevent evaporation (Tr. 391-392). Wrinkles and age lines are not synonymous with dry skin (Tr. 392).

11. The representations made by Respondent as alleged in the Complaint and found above are materially false in fact.

P.S. Docket No. 16/100

Medi-Tec 90

12. By means of advertisements appearing in generally circulated publications Respondent solicits orders and payment therefor through the mails for its product Medi-Tec 90 at the following addresses: 781 W. Oakland Park Boulevard, Fort Lauderdale, Florida 33311 (Admissions D-3; CX-1c-21c, 24c; CX-100); 135 East Oakland Park Boulevard, Fort Lauderdale, Florida 33334 (CX-22c, CX-23c, Tr. 47, CX-25c, 26c, CX-100); 129 East Oakland Park Boulevard, Fort Lauderdale, Florida 33334 (Admissions D-4; CX-27c, CX-101) and 5200 North Federal Highway, Fort Lauderdale, Florida 33308 (CX-29c).

13. Examples of Respondent's advertising are annexed hereto. Exhibit B is referred to herein as the "Baldness Cure" format (CX-3c); Exhibit C, the revised "Baldness Cure" format (CX-9c); Exhibit D, "Baldness Cure" brochure (CX-17c); Exhibit E, the "Progressive Baldness: 3,000,000 Can Fight It" format (CX-25c).

14. Respondent has extensively promoted this product. Most of its advertisements maintain the basic "Baldness Cure?" format. (CX-1c). Respondent has made some minor changes to this format in some of its advertising since then (e.g., CX-9c) but as recently as in the April 1983 issues of some publications and the June 1983 issue of one, Respondent's original "Baldness Cure?" advertisement reappeared (CX-12c, 13c, 21c).

15. Persons ordering Medi-Tec 90 Therapeutic Lotion and/or Scalp Treatment receive the product in a container bearing a label with the following instructions for use and list of ingredients:

Usage: Spray liberally onto scalp 2 to 3 times daily. Cleanse hair and scalp daily (evening or morning) with lanolin free shampoo or scalp cleanser (Medi-Tec 90 Therapeutic Cleanser is recommended).

Ingredients: Deionized water, polysorbate 60, biotin, panthenol. niacin, acetamide MEA.

16. Deionized water is a form of purified water. Polysorbate 60 is a name for an emulsifier or detergent widely used in industry. Biotin, panthenol, and niacin are vitamins. Acetamide MEA is an ester widely used in the cosmetic industry (Tr. 321, 322).

17. Respondent's advertisements for Medi-Tec 90 represent that this product will cause a regrowth of hair on bald or balding scalp (Complaint, paragraph III-1), that it will cause such new hair growth in 2-4 weeks (Complaint, paragraph III-3), and that it is an effective remedy for male pattern baldness, in particular (Complaint, paragraph III-2).

The "Baldness Cure?" advertisements, with or without the minor revisions, claim that the product will grow hair on bald scalp and that one can expect results in 2-4 weeks. Both of these advertisements state:

In 2-4 weeks you will start to see evidence of new hair growth in previously bald or thinner areas. After that your new hair will gradually continue to fill in and thicken. (E.g., CX-21c, 18c, 27c.)

The advertisements post the question, "What was responsible for the Regrowth of Hair?" and supply the answer: "For the many who have used Medi-Tec 90 and experienced the regrowth of hair. The daily application of Medi-Tec 90 solution was the cause." Several testimonials contained in the ads purport to confirm this product's ability to grow hair on balding areas and a series of photographs purport to show regrowth of hair on a user's head.

The original "Baldness Cure?" advertisements are expressly directed at persons suffering from male pattern baldness. They state (e.g., CX-21c):

"Although scores of satisfied clients, both men and women, that once suffered from the problems of pattern baldness are convinced the formula known as Medi-Tec 90 was the cause for their regrowth of hair ...."

. . .

"Note: Formulations developed for the treatment of pattern baldness are presently used by expensive clinics .... The fact is you can apply these same formulations to your scalp at home .... The Robertson-Taylor Co. ... believes that an affordable 'at home' treatment must be made available." emphasis supplied .

The revised "Baldness Cure?" advertisement (CX-9c) does not contain these references. However, since male pattern baldness is the most prevalent cause of baldness (Tr. 314) and Respondent represents that the product will cure baldness generally, I find that the advertisement represents that Medi-Tec 90 will remedy male-pattern baldness. Spectron Ind., P.S. Docket No. 2/8, Postal Service Decision at p. 3 (1973).

The "Baldness Cure?" brochure (e.g., CX-22c) reproduces the "Baldness Cure?" advertisement on its cover and, therefore, makes the same representation. The rest of the brochure reinforces the misrepresentations found in that advertisement. For example, it states, "...finally there is a formula you can trust. Medi-Tec 90 will produce hair growth on presently thin and balding areas of the scalp..."

The reference in the advertisements to the Federal Trade Commission, (original "Baldness Cure?" advertisement, e.g., CX-21c) the U.S. Government, and the medical community (revised "Baldness Cure?" advertisement, e.g., CX-18c) as disputing the effectiveness of any product to grow hair are not effective disclaimers. They are cleverly employed to strengthen the representation that the product will grow hair on bald scalps, despite the asserted negative attitudes attributed to these entities.

Respondent's advertisements headed "Progressive Baldness: 3,000,000 can fight it" also hold out Medi-Tec 90 as a hair grower for persons who are bald (Complaint, paragraph III-1). They claim that a recent study has revealed that progressive balding can be reversed and contain the testimonial of a man who, after using Medi-Tec 90 for one short month, experienced growth where he was once bald.

18. Dr. Kramer was familiar with the ingredients of the product (Tr. 305, 306) and was well-qualified to testify on the falsity issues involved in this proceeding. Respondent's witness, Dr. Gaul, did not testify concerning this product.

19. The following findings are based on the testimony of Dr. Kramer:

Balding is the absence of easily visible hair. Balding and thinning are a visible diminution in the number of hairs in areas of the scalp (Tr. 313, 314). Male-pattern baldness or androgenic baldness, a condition which is genetically predetermined and hormonally dependent, is by far the most common cause of baldness in men and women (Tr. 314-315). Thirty per-cent of all women suffer from this condition (Tr. 315) and 60-80% of the entire male population have male-pattern baldness (Tr. 314, 357, 358). The second most common cause of baldness, though comparatively rare, is alopecia areata (Tr. 314). There are also even less common causes of baldness (Tr. 320) which when taken as a whole account for less than 5% of all baldness (Tr. 375).

Medi-Tec 90 is not an effective treatment for male pattern baldness (Tr. 319) and will not cause hair growth for adults either with alopecia areata (Tr. 319) or baldness due to less common conditions (Tr. 320). It follows that use of Medi-Tec 90 will not cause new hair growth in two to four weeks (or for that matter--ever) on bald or balding scalps.

20. On the basis of Respondent's statement that it would be offering in evidence a 1974 paper by Drs. Schreck-Purola and Kai Setala entitled "Safety and Mode of Effect of a Hair Preparation," Complainant's Counsel was allowed to examine Dr. Kramer concerning that paper and a 1978 paper by Dr. Schreck-Purola and other persons entitled "The Effect of a Hair Growth Promoting Preparation, Clinical Trials Based on Histo-Quantitative Data." According to Dr. Kramer, these papers do not support Medi-Tec 90's ability to grow hair on bald scalps because different hair preparations were involved, and the scientific techniques of the experiments and the theories upon which they were based were flawed. These papers are not generally relied upon by the medical community as authoritative (Tr. 335). They were never published in scientific journals, other than in the in-house publication of the University of Helsinki (Tr. 334). Although the hair preparations used in the studies contained polysorbate 60 and biotin they also contained amino acids and "Germany concentrate," ingredients which were not contained in Medi-Tec 90 (Tr. 325-326, 369). The 1974 paper was poorly controlled and by the author's own admission was a "preliminary" study (Tr. 327). Patients' reports of hair growth were relied upon, instead of more objective data (Tr. 327-328). Conclusory statements were contained in this paper without indication of the numbers upon which they were based (Tr. 328). The 1978 study was even more unscientific. Out of 24 participants in that study, eleven were arbitrarily excluded and conclusions were based only on those who remained (Tr. 329-330). This, Dr. Kramer asserted, "goes against any of the guidelines for a scientific study," and for this reason he believed "it is basically impossible to draw any conclusion from the drug or the efficacy part of that study." (Tr. 329-330) Dr. Kramer further explained that the study was based on the notion that testosterone or male hormones are produced by cholesterol in the scalp (Tr. 333-334). The hair preparation was thought to remove the cholesterol, preventing those hormones which cause male pattern baldness from ever forming (Tr. 333). The problem with this theory is that cholesterol is converted to testosterone in the adrenal glands and testes, not the scalp (Tr. 333-334). Dr. Kramer also pointed out that there were errors in the charts the authors prepared (Tr. 334).

Ultimately Respondent did not offer these two papers in evidence.

21. The opinions expressed by Dr. Kramer are in accordance with the informed medical consensus (Tr. 338).

22. The representations made by Respondent as alleged in the Complaint and found above are materially false in fact.

CONCLUSIONS OF LAW

1. The meaning of advertising representations is to be judged from a consideration of an advertisement in its totality and the impression it would most probably create in ordinary minds. Donaldson v. Read Magazine, 333 U.S. 178 (1948); Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957); Borg-Johnson Electronics v. Christenberry, 169 F. Supp. 746 (S.D.N.Y. 1959). Express representations are not required. It is the net impression which the advertisement is likely to make upon purchasers to whom it is directed which is important, and even if an advertisement is so worded as not to make an express representation, if it is artfully designed to mislead those responding to it the mail fraud statutes are applicable. G. J. Howard v. Cassidy, 162 F. Supp. 568. See, also, Virginia State Board of Pharmacy v. Virginia Citizens Council, 425 U.S. 748 (1976). The foregoing principles of interpretation were employed in arriving at the findings of representations made by Respondent concerning the products involved in these proceedings.

2. Although informed persons may readily recognize that Respondent's advertising claims are false and absurd, this does not detract from their tendency to "deceive the ignorant, gullible and less experienced." Gottlieb v. Schaffer, 141 F. Supp. 7, 16 (S.D.N.Y. 1956). The false representation statute was intended to protect such persons as well. Donaldson v. Read Magazine, Inc., supra.

3. Evidence, other than Respondent's advertisements and other promotional materials, on the issue of the making of the representations charged in the Complaint is unnecessary. Manuel Garcia Imports, P.S. Docket No. 5/127, Postal Service Decision at p. 5 (1977); Beauty Originals, Inc., P.S. Docket No. 3/24, Postal Service Decision at p. 3 (1975) (" T he cases are legion in which the trier of fact is called upon to apply the test of Donaldson v. Read, 333 U.S. 178, without resort to lay testimony.")

4. The average person reading Respondent's advertisements would interpret them substantially as characterized in the complaints as amended.

5. An expert witness may rely on the product label in forming his opinion on the veracity of the advertising claims made for the product. No chemical analysis is required. Vitahair, P.S. Docket No. 7/76, Initial Decision (1978); Derma-Diet, P.S. Docket No. 5/171, Postal Service Decision (1977). The product label may be assumed to be correct, unless Respondent comes forward with evidence that there are additional ingredients in the product.

Schiffahrts Laboratories, P.S. Docket No. 3/193, Initial Decision (1976). Respondent did not produce such evidence.

6. Expert opinion testimony need not be based upon tests of the particular product to constitute sufficient evidence of false advertising. Reilly v. Pinkus, 338 U.S. 269, 274 (1949); Original Cosmetics Products, Inc. v. Strachan, 459 F. Supp. 496 (S.D.N.Y. 1978), aff'd, 603 F.2d 214 (2d Cir. 1979), cert. denied, 444 U.S. 195 (1979); Athena Products Ltd., P.S. Docket No. 12/136, Decision on Motions and Initial Decision at p. 30 (August 13, 1982) aff'd, Postal Service Decision (May 16, 1983).

7. The existence of a money back guarantee does not preclude a finding that the postal misrepresentation statute has been violated because a promise of guarantee will not dispel Respondent's false representations. Borg-Johnson Electronics, Inc. v. Christenberry, 169 F. Supp. 746, 751 (S.D.N.Y. 1959); G. J. Howard v. Cassidy, 162 F. Supp. 568, 572 (E.D.N.Y. 1958); Farley v. Heininger, 105 F.2d 79, 84 (D.C. Cir. 1939); George M. Ernst, Jr. d/b/a Many Interested Savers, Inc., P.S. Docket No. 13/88, Postal Service Decision (August 4, 1982).

8. In the Medi-Tec 90 proceeding (P.S. Docket No. 16/100) I rejected Respondent's offer of the transcript of testimony concerning Polysorbate 60 given in an earlier Postal Service proceeding (Cosvetic Labs, et al., P.S. Docket No. 8/160, et al.) as I also rejected a similar offer in New Generation, et al., P.S. Docket No. 11/152. In the Postal Service Decision in New Genera tion (5/13/83) the Judicial Officer said that I should have admitted such testimony - but after reviewing it found that it was of "questionable relevance" and that the product involved in Cosvetic Labs contained "allegedly active ingredients not relevant" to the New Generation product. He then went on to say:

"In any event, Bio-Genesis the product involved in Cosvetic Labs has been determined not to have been proven effective in either stopping excessive hair loss due to male pattern baldness or causing the regrowth of hair."

The latter reason alone supports my rejection of Respondent's offer of the transcript of the same testimony in the Medi-Tec 90 case.

9. The representations made by Respondent concerning the products involved in these proceedings, as found above, are materially false in fact.

10. Complainant has established its case in these proceedings by a preponderance of the reliable and probative evidence of record.

11. Respondent is engaged in the conduct of schemes for obtaining money or property through the mails by means of materially false representations concerning the products involved in these proceedings in violation of 39 U.S.C. § 3005.

12. Orders in the form attached should be issued against Respondent.