December 24, 1958
In the Matter of the Complaint That
JENASOL CO.,
JENASOL COMPANY, and
CHARLES ETTINGER,
at
New York, New York,
(hereinafter called Respondent), is engaged in conducting a scheme for obtaining money through the mails in violation of 39 U. S. Code 259 and 732
P.O.D. Docket No. 1/54
INITIAL DECISION OF HEARING EXAMINER
The General Counsel by Richard S. Farr, Acting Assistant General Counsel, hereinafter referred to as the Complainant, filed on August 28, 1958, a complaint charging the Respondent, identified as one Marvin Schere, of conducting under the names given in the caption hereof, a fraudulent scheme by obtaining remittances of money through the mails by means of certain false and fraudulent pretenses, representations and promises in the sale of a “Royal Jelly” product called “Jenasol RJ Formula 60.” Respondent duly filed authorization of representation by attorneys namely Bass & Friend, Esqs., who duly filed answer.
Prior to the original hearing date of September 29, 1958, Respondent filed on September 22, 1958, a motion to dismiss the proceeding on the ground of “res administrate” in which it was asserted in substance that an agreement of settlement made in a prior proceeding constitutes a bar to this proceeding. (The same motion was filed by said counsel in the matter of Owen Laboratories, P.O.D. Docket No. 1/49, a companion case). Pending Complainant’s reply to this motion and ruling thereon the proceeding was removed from the hearing calendar. On October 2, 1958, Complainant filed his reply and on October 7, 1958, Respondent filed a “Reply Memorandum.” This motion was denied with reasons therefore by order of the undersigned filed October 13, 1958. In this order the hearing was rescheduled for November 13, 1958, being the first available hearing date at that time. However, in the interim Respondent requested leave of the Judicial Officer to appeal this ruling. By order dated October 20, 1958, this was denied. Respondent thereafter, on October 28, 1958, filed an “Amendment to answer.” On motion of the Complainant this proceeding as well as Owen Laboratories, P.O.D. No. 1/49, and U. S. Bio-Genics, P.O.D. No. 1/55, were consolidated for hearing,[1] the same being unopposed by the Respondents who were represented b the same aforesaid counsel. At the hearing held in Washington, D. C., the Complainant was represented by a member of his staff, namely Ralph B. Manherz, Esq. and Respondent by Milton A. Bass, Esq. Both parties filed proposed findings of fact, conclusions of law and supporting reasons on or before the expiration date of December 19, 1958. Thereupon, the record was completed for this decision.
It appears from the answer and the said amendment together with counsel for Respondent’s explanation of the latter (Tr. 22, 23) and the motions made at the conclusion of the hearing (Tr. 69) that there is no issue concerning Respondent’s use of the mails as alleged in the complaint, that is, that the Respondent is advertising through the mails the sale of the product under the names given in the caption hereof, that the exhibits attached to the complaint correctly represent the advertising material and that the alleged representations and promises concerning the efficacy of the product are being made and that they are false. Accordingly, there being no denial I find in accordance with Rule 201.8(c) that the Respondent is conducting the described enterprise in question under the names stated and that he is making the following representations and promises as alleged in the complaint and that they are false and fraudulent:
a. That the use of the respondent’s product “Jenasol RJ Formula 60” as directed will “cure” the causes of such symptoms as “tiredness, irritability, headaches, insomnia, physical *** convulsions”, due to its “Royal Jelly content;
b. That the “Royal Jelly” content of respondent’s product “Jenasol RJ Formula 60” is “an excellent tonic for the nerves” and insures that users will thereby obtain “an almost immediate feeling of ‘well-being’”;
c. That the “Royal Jelly” content of Respondent’s product “Jenasol RJ Formula 60” will “improve the memory, normalize sexual capacities and help alleviate some of the ills of age”;
d. That the “Royal Jelly” content of respondent’s product “Jenasol RJ Formula 60” restores “failing or worn-out glandular activities in human beings”;
e. That the “Royal Jelly” content of respondent’s product “Jenasol RJ Formula 60” “restores” lost or waning physical “vigor” to human beings;
f. That the “Royal Jelly” content of respondent’s product “Jenasol RJ Formula 60” provides “increased sex drive and energy especially to men and women over 40”;
g. That the “Royal Jelly” content of respondent’s product “Jenasol RJ Formula 60” “normalizes all under-developed children”;
h. That the “Royal Jelly” content of respondent’s product “Jenasol RJ Formula 60” is “extremely beneficial for human beings” in the improvement or correction of poor “physical conditions”;
i. That the “Royal Jelly” content of respondent’s product “Jenasol RJ Formula 60” will substantially increase the longevity of users;
j. That the “Royal Jelly” content of respondent’s product “Jenasol RJ Formula 60” adds a substantial and materially valuable therapeutic effect to the other ingredients in said product.
Respondent stands apart from the merits, on two separate defenses, namely “res administrate” as mentioned, and “that the Rules of Practice, procedure and organization are void, illegal and violative of the Administrative Procedures Act” (Tr. 5), denial of same having been made at the hearing (Tr. 6). On the merits there remains the single issue of whether the required element of intent to deceive has been shown by substantial evidence.
On this issue of intent the Complainant presented a medical witness who testified concerning the efficacy of “Royal Jelly.” The Respondent did not present any witnesses. An evaluation of the testimony of Complainant’s medical witness shows and I so find that the product is worthless to accomplish the various claims and promises made for it as hereinabove found. This witness by reason of his education, training and experience was not only fully qualified to testify on this matter[2] but his testimony represents the present day consensus of informed medical opinion[3] (Tr. 26, 56, 57). The fact that a very small fraction, namely, “2.8% of royal jelly’s constituents are not known yet” (Tr. 26) does not lessen the weight of the testimony of this witness. (See Charles of the Ritz Dis. Corp. v. F.T.C., 143 F.2d 676, where although the ingredients were neither known to the medical witnesses nor had they used the product, their medical testimony was considered to be substantial evidence.) Also, it may be noted that it is not the product per se that is being question but the advertising claims made in connection therewith. These medical claims have been credibly and uncontrovertly testified to by a competent medical witness. Since it is well settled that such medical testimony constitutes substantial evidence, Reilly v. Pinkus, 338 U.S. 269; Charles of the Ritz Dist. Corp., supra; United States v. Mrs. w. B. Wood, Jr., 226 F.2d 924, and cases cited therein, I find that the advertising representations heretofore found are wholly unsupportable.
Complainant justifiably relies on Reilly v. Pinkus, supra, for support of his contention that intent to deceive has been duly shown in this proceeding, namely, that such intent “might be inferred from the universality of scientific belief that advertising representations are wholly unsupportable.” Applying such evidence I find that such wrongful intent has been thus established and accordingly, that the cross-examination conducted by counsel for Respondent failed to lessen this inference. The various questions propounded to such witness on such examination concerning the writings of various persons on “Royal Jelly” are of no significance since Respondent failed to show their reputability as required in this connection. See Reilly v. Pinkus, supra.
That there existed a previous agreement of settlement does not as a single evidentiary circumstance rebut the inference raised of intent to deceive. We are here concerned with what is in a man’s mind and intent to deceive is not necessarily absent because of such a bare circumstance. An analogous situation is shown in the case of Linden v. United States, 254 F.2d 560 where the defendants had proceeded under advise of attorney. In that case it was held to the effect that such a circumstance does not alone constitute a defense on this issue.
Respondents’ proposed findings of three material errors committed by the Hearing Examiner by certain evidentiary rulings are rejected for the reasons given at the hearing and/or that the record fails to support the basis recited for such proposed findings.
Proposed findings of fact and conclusions of law not herein specifically found or concluded have been considered and are rejected as being either immaterial or unjustified.
In view of the foregoing I conclude that the Respondent is conducting a fraudulent scheme as charged in the complaint in violation of the invoked statutes.
There is attached hereto the appropriate order for execution by the Judicial Officer for the suppression of the fraudulent enterprise herein found.
Edward Carlick
Hearing Examiner
[1] At the commencement of this hearing on motion of Complainant, unopposed by Respondent, the last named proceeding was dismissed without prejudice
[2] This witness because of his position with the Food and Drug Administration, being Associate Medical Director, Drug and Device Branch, Bureau of Medicine, had for the past year and a half devoted special attention to this kind of product making a thorough research of the literature and other sources for information.
[3] His testimony on cross-examination of the meaning of the term “consensus of present day medical opinion” that it means “the majority of the doctors in this country” (Tr. 29) was made clear on the redirect-examination, that “there is no difference of informed medical opinion about the worthlessness of royal jelly as a therapeutic agent” (Tr. 57).