In the Matter of the Complaint Against TYLER PHARMACAL DISTRIBUTORS, INC. at Chicago, Illinois. H.E. Docket No. 4/232; 07/14/58 POST OFFICE DEPARTMENT WASHINGTON, D. C.
A complaint was issued in the above matter charging that the respondent was conducting a fraudulent scheme through the mails for the sale of a medical preparation called Pro-Forma. Pro-Forma was advertised as a breast developer which would "round out and firm up your natural bosom." A hearing was held in Washington, D. C. on January 22 and 23, 1958. The hearing Examiner who heard the evidence rendered an Initial Decision on April 16, 1958, finding that the allegations in the complaint were true and recommending the issuance of an order in accordance with 39 U.S.C. 259. The respondent has filed exceptions to the Initial Decision of the Hearing Examiner. The complainant filed a reply brief on June 2, 1958.
On February 18, 1957, the examiner made separate findings of fact as to the advertising representations wherein he found that the respondent was not representing that its product had received the approval of the medical profession generally. He found that the representations charged in the other five sections of the complaint were being made. The first two exceptions are to these findings. Without ruling on the specific findings and exceptions thereto, it is sufficient to say that the advertisement which was appended to the complaint and upon which the complainant based his case is probably one of the most guarded advertisements for a cosmetic that could be devised. It reads as follows:
"ROUND OUT ... FIRM UP ... YOUR NATURAL BOSOM
PRO-FORMA contains Extract of Galega which has been used for years by women of France to develop a fuller, firmer bosom. If your breasts have lost their youthful firmness and fullness because of nursing or dieting, you may be among the women who find that PRO-FORMA is the key to a lovely contour. PRO-FORMA may help to restore your breasts to feminine beauty. Our medical doctors have stated that they had good results with a considerable percentage of women for whom they prescribed the formula contained in PRO-FORMA.
We do not say that PRO-FORMA is a sure-cure wonder drug, that it will help every woman. We say only that it has given helpful results to some women. Just take three tablets daily as directed. We unconditionally guarantee to refund your full purchase price promptly, if PRO-FORMA has not produced improvements or if you are not completely satisfied after six weeks use. You alone are to be the judge.
PRO-FORMA is absolutely safe when used as directed. It does not contain hormones or harmful drugs, or creams. No massage, no exercise or wearing of applicances is necessary. Some women have been helped within six weeks, others have needed more time and dosage."
In addition the bottle containing Pro-Forma tablets bears the following statement:
"On the basis of their research and experience, our medical advisers have stated that extract of galega has helped some women to make their breasts fuller and firmer. However, the material weight of medical opinion is to the contrary. If Pro-Forma does not accomplish this purpose, we unconditionally guarantee to refund your purchase price."
The complainant would have us interpret this latter statement as an admission by the respondent that his product is valueless. It would seem that the complainant should either "fish or cut bait" in these fraud proceedings. If the complainant charges a respondent with conducting a fraudulent enterprise because they make gross misrepresentations then certainly they should not be able to reverse themselves and use what almost amounts to an apology as an admission of fraud.
Respondent's next eight exceptions, C, D, E, F, G, H, I and J concern the medical testimony in the record. The complainant produced as its expert medical witness, Dr. Kenneth D. Campbell of the Food and Drug Administration. Dr. Campbell testified that he first heard of the drug extract of galega five days before the hearing (TR. pg 86). He did not test the drug. He testified that he thoroughly researched all medical articles in the Food and Drug Administration Library and could find only one article discussing the use of this substance. This was an article published in 1917 by a Dr. Carlson in which he stated that extract of galega was of no value as a galactalogue or milk producing agent (Respondent's Exhibit X). 1/ Dr. Carlson had experimented with the effects of galega on goats and dogs. Dr. Campbell testified that in his opinion there was no substance known to medical science which would accomplish the results for which the respondent's product was advertised. His testimony reveals that he is fully conversant with the upper anatomy of the female. He also testified on cross-examination that if a discovery had been made and reported in a foreign country, this would have been reported in some English language medical journal. He testified that based on Carlson's study, galega had no effect on milk production. 2/
The complainant and the examiner rely on Charles of the Ritz Corp. v. F.T.C., 143 F.2d 676, as authority for the finding of falsity based on medical opinion. The medical opinion in that case, in the language of the Court of Appeals of the Second Circuit was that:
"Two medical experts, one a leading dermatologist, testified for the Commission; and both affirmatively stated that there was nothing known to medical science which could bring about such results. There was no testimony to the contrary." (Emphasis supplied.)
The court sustained a finding by the Commission of false advertising. The facts in the instant proceeding are obviously distinguishable from the facts in that case since there was testimony offered to the contrary by the respondent.
The respondent offered the testimony of Dr. Irvin S. Belgrade of Chicago. Dr. Belgrade had conducted an experiment with galega on forty women over a twelve week period testing each of them every week. He had first heard of galega several years ago when his wife informed him that it was being sold by Mr. Kolkey, the President of Tyler Pharmacal Company. Dr. Belgrade at the request of Mr. Kolkey undertook his series of experiments in the latter part of 1955 and reported his results to Mr. Kolkey in April of 1956. The cards on which he recorded his findings were introduced into evidence. (Respondent's Exhibits Y1 - Y40.) His general conclusions were as follows:
1. Gain in breast size with no gain in weight - 4.
2. Gain in breast size with a gain in weight - 5.
3. Gain in breast size with a loss in weight - 10.
4. No change in breast size with no gain in weight - 9.
5. No change in breast size with a gain in weight - 7.
6. No change in breast size - 5.
Dr. Belgrade is a distant relative by marriage to Mr. Kolkey but his medical qualifications were not questioned by the Government. He is a member of the American Medical Association and the Illinois Medical Association. He is a general practitioner and the medical director of Tyler Pharmacal Company. He is paid on the basis of services performed, which consist of answering medical questions and correspondence from interested purchasers.
The examiner concluded that there is a "hazy" relationship between Dr. Belgrade and the Tyler Pharmacal Company to which he apparently attaches some significance. Although Dr. Belgrade seemingly agrees that the relationship is hazy, it is apparent that he is not too well satisfied himself with the arrangement and I do not believe that there has been any substantial discrediting of his testimony because of his financial arrangements with the respondent. It is difficult to imagine that the complainant would think that Dr. Belgrade should offer his services free of charge.
The Hearing Examiner discounts the testimony of Dr. Belgrade as being "mere personal opinion." The respondent contends that the evidence offered by Dr. Campbell is pure opinion testimony. It appears to the Judicial Officer that all the testimony by the doctors was in the nature of expert opinion testimony. All of the expert witnesses gave their opinions and it is now a matter of weighing the variety of opinions given and the degrees of expertise of the witnesses. The testimony of any qualified expert is in the nature of opinion testimony. 20 Am. Jur. 761 et seq.
Dr. Campbell testified in rebuttal to Dr. Belgrade's testimony that the methods used by Dr. Belgrade in his experimentation were not accurate and that his conclusions were of no scientific value. Dr. Campbell proceeded to outline the ways in which he believed the experiments should have been conducted. (Transcript 223 - 226.) This is most impressive testimony but more impressive is the fact that such experimentation was not accomplished by the Government and no attempt was made to obtain any evidence other than the testimony of Dr. Campbell that galega had no known value based upon his research of medical treatises. The Post Office Department has had cases pending against sellers of galega for four years.
I cannot completely discount the testimony of Dr. Belgrade in the same manner as did the Hearing Examiner; both these witnesses are competent medical doctors with qualified educational backgrounds. There is no evidence to discredit Dr. Belgrade's
competency even though his experiment might have been conducted with bet ter scientific accuracy. He, too, had read Dr. Carlson's article and so testified during direct examination stating that it was the only article which he could discover about galega.
The respondent also introduced the interrogatory of Dr. Henri Dewever, a French physician. Dr. Dewever testified as follows:
No. 42 - Q - Do you know whether or not this preparation is used by the members of the medical profession in France for the purpose of developing the size, contour, and firmness of the female breasts?
A - Yes, currently.
43 - Q - Upon what do you base your answer?
A - I know it from my experience within the profession.
44 - Q - If so used, how long has it been used for this purpose.
A - At least twenty years.
45 - Q - While in the active practice of medicine, did you ever have occasion to prescribe Extract of Galega to patients for the purpose of developing the size, contour, and firmness of their breasts?
A - Yes, frequently.
46 - Q - If you did, how many patients would you say you prescribed Extract of Galega for such purpose?
A - I prescribe it currently, but I have never kept statistics of all the clients to whom I have prescribed this medicine for the past ten years. I estimate, however, that I have had some 2000 clients to whom I prescribed it.
47 - Q - What do you mean when you use the terms "size", "contour", and "firmness" in connection with the female breasts?
A - The perfect breast is a breast that has a normal size and relative firmness.
48 - Q - What were the age limits of these patients?
A - I treated three categories of clients:
1) young girls whose development in this respect seemed slow;
2) young mothers who desired to increase the milky secretion;
3) women somewhat older, but before the menopause, whose breasts had become perhaps disfigured or simply insufficient, and who desired to increase them.
57 - Q - ...what did you observe with respect to the increase in the size of the breasts of those patients?
A - As far as some women were concerned; increase of 2 to 3 cm, taken at the level of the nipple.
58 - Q - What was the maximum extent of increase noted by you?
A - 3 cm is a general maximum
59 - Q - What did you observe with respect to the change in contour of the breasts of these patients?
A - Improvement of the form and firmness in general.
60 - Q - What control or measurements did you use to ascertain the extent of the changes stated by you?
A - A tape measure simply.
Interrogatories were also taken from three other French doctors who had given affidavits to the respondent. These were placed in evidence by the complainant. The testimony of two of these doctors, Dr. Pertusier and Dr. Moulle was to the affect that galega was used to increase the supply of milk but had no affect on the firmness or form of the breast. The other one, Dr. Mathieu, testified that he had been acquainted with galega since 1954 and had prescribed it for soft and flabby breasts. He was not a specialist and had only taken a required course in gynecology during his training at medical school.. He testified that there was an increase in firmness and the breasts improved in size and contour in 30% of his cases. He testified that in 1954 he conducted some tests on certain women but no measurements were taken. He admitted that other doctors may not recommend galega for increasing the firmness of the breast but that it might be recommended as a galactalogue.
Dr. Moulle testified that he was a specialist in gynecology and had researched various fields of obstetrics and gynecology in the Hospital Tarnier in Paris. He testified that he had experimented with galega in 1944 for approximately ten months and that his experiments had been presented to a medical society in the form of an oral presentation. His experiments concerned only the problem of increasing milk of mothers in the feeding of babies. He testified that it was not used to develop the size, contour and firmness of female breast. (Interrogatory 45.) He had not measured the size of the breasts in view of the fact that he was concerned only with the flow of milk. The exact results of his experiments for this purpose are not clear from the interrogatories. However, he did testify that the glands of the breast were affected by galega and that he had observed the flow of milk from the breasts. Dr. Moulle is the only specialist among the doctors who testified and he is the only one who has presented any findings to medical bodies, although the exact nature of his findings cannot be deduced from his interrogatory. They are best stated in the following quotes from his interrogatories:
No. 44 - Q - "Do you know whether or not this preparation is used by the members of the Medical profession in France
for the purpose of developing the size, contour, and firmness of the female breasts?
A - No, not to my knowledge."
13 - Q - "Have you ever read the results of your tests with galega with respect to the alleged increase in size or improvement in contour of women's breasts to any scientific bodies?
A - I have read the results of my experiments to the medical association, relative to the increase in the flow of milk in nursing mothers, and I believe my speech is included in their minutes. I have never reported to them or any one, nor do I have any opinion upon the increase, contour, of women's breasts following the taking of galega."
All the French doctors had given Kolkey affidavits, infra, in which they said galega was used to make the breasts firm. Both the complainant and the respondent make such of the inconsistencies between the affidavits of the three doctors and their testimony in the interrogatories concerning the effect of the drug on firmness of the breasts. The complainant asserts that the affidavits of the doctors were discredited by the interrogatories and concludes that the respondent had no right to rely upon the affidavits in making his advertising claims. The respondent asserts that this inconsistency is only a reason why the testimony should have been taken by deposition and not by the interrogatory method. In reading the records of this case, the Judicial Officer noted the use of the word "raffermissement" in the affidavits of Doctors Mathieu and Dewever, (Government's Exhibit F and Respondent's Exhibit A.) This word is a form of "raffermir" and the translation in Cassell's New French Dictionary is "to make firm." The English translation of Dr. Mathieu's affidavit contains the word "firm." The French word does not appear in the original statements of Dr. Pertusier or Dr. Moulle but in the official translations by the American Embassy in Paris, the English word "firm" appears. I referred these three statements to the International Mail Division in the Post Office Department and obtained what I believe to be a more accurate translation. These three translations of the third paragraph of the three affidavits are attached to this decision as Appendix A. The word "firm" appears only in Dr. Mathieu's statement. Thus, there is no great inconsistency in the testimony of Dr. Pertusier and Dr. Moulle between their affidavits in the French and the interrogatories. The word "development" can be reasonably construed to mean only development of the milk producing qualities and not development in size since it is used in that context in the statement. This problem will be discussed later in the question of the intent of the respondent.
In summary, I conclude that the complainant failed to prove a fraud in fact. This is not to say that the respondent's
preparation is efficacious but the testimony of Drs. Belgrade and Dewever cannot be ignored. The burden of proof was on the complainant and he failed to meet it. The most that the complainant proved was that there were no known authorities for the proposition that galega will accomplish the purposes for which the respondent claimed and the only thing known about galega is that it is not effective as a galactalogue based upon experiments upon goats and dogs. Opposed to this is the testimony of Dr. Belgrade who conducted his experiment in 1955 and 1956 as to the effect of galega on firming and enlarging the breasts, and the testimony of Dr. Dewever and Dr. Mathieu as to the effect of galega as to both firming the breast and increasing the flow of milk.
The Supreme Court said in Reilly v. Pinkus, 338 U.S. 269,
"We do not understand or accept it as prescribing an inexorable rule that automatically bars reliance of the fact-finding tribunal upon informed medical judgment every time medical witnesses can be produced who blindly adhere to a curative technique thoroughly discredited by reliable scientific experiences. But we do accept the McAnnulty3/ decision as a wholesome limitation upon findings of fraud under the mail statutes when the charges concern medical practices in fields where knowledge has not yet been crystallized in the crucible of experience. For in the science of medicine, as in other sciences, experimentation is the spur of progress. It would amount to condemnation of new ideas without a trial to give the Postmaster General power to condemn new ideas as fraudulent solely because some cling to traditional opinions with unquestioning tenacity."
This admonition is most applicable to this case. The court speaks of "scientific experiences" The only scientific experiences of any of the doctors centers about the testimony of those doctors who used and experimented with galega. Certainly, library research, no matter how thorough, would not be a scientific experience.
This is not to say that every time a person blindly relies on a discredited medical theory that the inference of intent can be rebutted. Vibra-Brush v. Schaffer, 152 F. Supp. 461, 468. The testimony of both of the American doctors is in agreement that there were no theories as to galega except those expressed by Carlson. Dr. Belgrade's experiments even though conducted with a tape measure were in the nature of pioneer experimentation.
The respondent's Exception L questions the examiner's taking official notice of the files in two departmental cases, Penn Pharmaceutical Company, H.E. Docket 3/39 and Hub Pharmaceutical Company, H.E. Docket 4/53. Penn went out of the mail order business on an affidavit of discontinuance and a default order issued against Hub. There was some evidence of record that Manny Kolkey was involved in both enterprises. The examiner could properly take official notice of the records of other Post Office Department proceedings. A more serious question is the purpose for which he could use facts so noticed. The examiner attaches an account of Kolkey's activities and other facts as Appendix C of the Initial Decision. He concludes upon a review of all of these facts that Kolkey's actions were not undertaken and used for a legitimate purpose, thus reaching the conclusion that the respondent devised the enterprise in question with an intent to deceive. I do not believe that the proceedings in Penn and Hub can be used to show a fraudulent intent. Kolkey's connection to some degree with both companies is not disputed. However, the affidavit of discontinuance in Penn admitted nothing on the part of the respondent. To consider this as a basis for making a finding as to the fraudulent intent of Mr. Kolkey would be error. There is a slightly better case for the default order in Hub but even assuming that Mr. Kolkey was in fact the operator at the time of the order, this would seem to be a fairly tenuous basis upon which to reach such a conclusion. A different question would be presented, however, if a contested action had resulted in a finding of fraud with definite connection between the enterprise and Kolkey.
The next exceptions of the respondent, K and M, go to the question of the intent to deceive. A brief chronology of the activities of the respondent in connection with the sale of extract of galega is pertinent. Sometime in early 1954, the respondent, who apparently had some connection with the World Wide Pharmaceutical Company, which was also engaged in the sale of galega, severed that connection. In April of 1954, the respondent returned from France having obtained affidavits from certain French doctors (Respondent's Exhibits H - N) as to their use of galega as a breast developer. Respondent then organized Penn to sell extract of galega. An affidavit of discontinuance was obtained on April 25, 1954. Sometime in 1954, the respondent had been advised by Mr. Callahan of the Bureau of the Chief Postal Inspector and Mr. O'Brien of the Office of the General Counsel that the Food and Drug Administration regarded galega as worthless for developing the breast.
From November 1955 to March 1956, Dr. Belgrade conducted the tests on the forty women mentioned previously. On January 11,
1956, a default order was issued against Hub. On April 4, 1956, Dr. Belgrade submitted his report to the respondent. (Respondent's Exhibit N.) The general conclusion reached was that forty percent of the patients showed an increase in their bust measurements from 1/4 to 2-1/4 inches during the ten week experimentation. In July 1956, the respondent journeyed to France again and obtained additional affidavits from seven doctors. (Respondent's Exhibits A - G). After returning to this country, he consulted with his lawyers in Washington regarding the advertising which he should use. His first advertisement was run in September of 1956. The complaint in this case was issued in October of 1956.
In discussing the question of intent in this case, the Hearing Examiner says it is obvious that he made "no real attempt to obtain the real truth."
Mr. Kolkey, of course, relied upon the official translations by the Embassy as being the true statements of the doctors. They did not speak English. There was no reason why he should not do so. The doctors in turn, when they were questioned through the interrogatories referred back to their affidavits and the statements as they appeared in French. There were no inconsistencies between the affidavits in French and the answers given in the interrogatories with the exception of Dr. Mathieu who stated in the affidavit that galega was used to make the breasts firm but denied this in the interrogatory. The most that can be said of the history of Mr. Kolkey in this enterprise is that he was intent upon embarking upon the sale of galega. He entered into the first three companies with very little knowledge at hand as to the value of the product but he obtained more information from Dr. Belgrade leading him to believe in the efficacy of the product. Whether this information was accurate is subject to question but nevertheless he apparently did rely on it and so testified.
The complainant would make much of the fact that Mr. Kolkey was advised by a member of the Office of the General Counsel and the Bureau of the Chief Inspector that they believed the product was valueless. The facts upon which they based their advice was not shown at the hearing nor was it apparently shown to Mr. Kolkey. While the respondent certainly acted at his peril in proceeding to sell the product after having been so advised, it will be a black day when any conclusive inference of wrongdoing can be drawn from a private citizen's not complying with the oral advice of officials. It was certainly proper for the Government to give this advice but the fact that he proceeded after having been so advised proves nothing except that he was advised and proceeded at his peril. This proceeding is obviously a result of his actions.
I have discussed the testimony of Dr. Belgrade elsewhere but on the question of intent there is no evidence as to why Mr. Kolkey could not rely upon the report given to him by Dr. Belgrade. There is no evidence that the report was rigged and the fact that Dr. Belgrade has received remuneration from Tyler Pharmacal Company does not impeach his credibility as a witness. Certainly the Government would not contend that Dr. Campbell was not a qualified medical witness merely because he is in the employ of the Government.
The Hearing Examiner does not give any material weight to the fact that the advertisement was composed by Mr. Kolkey's attorney for compliance with the law. I agree. The Court of Appeals for the Fourth Circuit recently said in Linden v. U.S., 254 F.2d 560, 568:
"That the defendants proceeded under advice of a lawyer is a fact to be considered together with other facts in determining the question of the defendants' good faith, but legal advice does not under all circumstances constitute an impregnable wall of defense. To hold otherwise would be to say that no matter how violative of law a defendant's conduct may be, and regardless of consciousness of wrongdoing on his part and his adviser's, the advice confers immunity. No such doctrine has been given legal sanction."
The attorneys apparently endeavored to match the advertisement and the labelling with the information upon which Kolkey relied. In this I believe they were successful. Had Kolkey represented that his product did other than what his reports showed that it did, or should he do so in the future, a different question would be presented. In Vibra-Brush Corp. v. Schaffer, supra, the court said:
"The exaggeration of the claims ... far beyond the scope of the advice plaintiff received from its experts, is cogent evidence of intent to deceive."
In the instant proceeding there has been no showing of any such exaggeration. In fact there is testimony in the record that Dr. Belgrade urged the respondent to claim more for the product than was done in the advertisement in question.
Also related to the question of intent is the problem of the money-back guarantee offered by the respondent. The examiner found that the offer did not negate the intent to deceive saying, "it is well established that a promise to refund does not in all circumstances preclude findings of fraudulent intent. Farley v. Heininger, 105 F.2d 79." While the general statement is accurate, the facts of Heininger are probably as distinguishable from the facts in this case as any that could be imagined. In fact they are poles apart. The degree of proof adduced in that case was
remarkably high; in the instant proceeding it is remarkably low. Since the complainant failed to prove a fraud in fact and there is no issue at bar as to the sincerity of the promised refund of the respondent, it appears from the posture of the evidence that the doctrine of Jarvis v. Shackelton Inhaler Co., 136 F2nd. 116, 121 (6th Cir. 1943), should apply. That case also turned on the question of the disclaimer of efficacy for every user. The statements of the respondent in the advertising and the labelling certainly constitute such a disclaimer.
Exceptions N & O of the respondent go to the question raised by Columbia Research and Vibra-Brush decided May 13, 1958, by the Second Circuit. In view of the conclusion elsewhere reached herein, a discussion on this point is not required. The same applies to the last four exceptions, P, Q, R and S.
The Initial Decision of the Hearing Examiner is reversed.
Charles D. Ablard
Judicial Officer
3. In the course of my practice I have frequently had occasion to prescribe Extract of Galega for my female patients with the object of developing and making firm their breasts.
POST OFFICE DEPARTMENT TRANSLATION
3. For many years in the exercise of my profession, I have frequently prescribed the stable Extract of Galega for developing and firming breasts.
EMBASSY TRANSLATION
3. In the course of my practice I have frequently had occasion to prescribe Extract of Galega for my female patients with the object of developing and making firm their breasts, and increasing mammary secretion.
POST OFFICE DEPARTMENT TRANSLATION
3. For many years, both during my internship as well as in actual professional practice, I readily prescribed the stable Extract of Galega (presented as a pharmaceutical specialty) for encouraging the secretion of milk and the development of the breasts.
EMBASSY TRANSLATION
3. In the course of my practice I have frequently had occasion to prescribe Extract of Galega for my female patients with the object of developing and making firm their breasts. I have also while in the service of the Hospital Tarnier, experimented with the principal product, Extract of Galega, manufactured in France.
POST OFFICE DEPARTMENT TRANSLATION
3. For many years, both during my internship, as well as during the exercise of my profession, I have readily prescribed the stable Extract of Galega for increasing milk secretion and the development of the breasts. I have also, in the service of the Tarnier Clinic, 89 Rue d'Assas, Paris, experimented with the principal product manufactured in France, with Galega as a basis.
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1/American Medical Association Journal, May 26, 1917. Dr. Carlson found that, "galega had no beneficial effect on lactation - at least so far as the quantity of milk is concerned."