September 9, 1960
In the Matter of the Complaint That
THE CARDIAC SOCIETY
at
Detroit, Michigan
(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. 1/187
APPEARANCES:
Robert M. Ague, Esq.
Office of the General Counsel
Post Office Department
for the Complainant
Arthur B. Carton, Esq. and
Wilbert McInerney, Esq.
Washington, D. C.
Peter E. Bradt (post-hearing appearance)
Port Huron, Michigan
for the Respondent
INITIAL DECISION OF HEARING EXAMINER
The Respondent sells Vitamin E products, memberships in The Cardiac Society and books. The issue, broadly stated, is whether the Respondent is, as alleged in the complaint, engaged in conduct which is a "scheme or device for obtaining money *** through the mails by means of false or fraudulent pretenses, representations, or promises ***." If so, the Postmaster General is authorized to forbid delivery of mail and payment of money orders, incident to such scheme, to the Respondent. 39 U.S.C. 259 and 732.
The proceeding was begun by the filing of a complaint on October 27, 1959, by the Acting General Counsel of the Post Office Department, charging violation of 39 U.S.C. 259 and 732. More particularly, the complaint alleges: public attention is attracted to Respondent's scheme by means of advertising matter, widely distributed, which is calculated to induce readers to remit money through the mails to Respondent; copies of such advertising matter are exhibits attached to the complaint; by means of such advertising matter and in similar matter Respondent makes certain representations which are false and fraudulent. Of the thirteen misrepresentations by Respondent alleged in paragraph (3) of the complaint: two relate to "E Ferol 30 I.U." (containing Vitamin E) as effective therapy for heart and cardiovascular disease, or as a means of preventing heart disease [sub-paragraphs (a) and (b)]; three relate directly to functions or characteristics of Vitamin E (as proof of its power to treat or prevent heart disease) and cover such matters as Vitamin E being (1) the key to the prevention and treatment of all conditions in which lack of blood supply due to thickened or blocked blood vessels or a lack of oxygen is a basis of the disease (2) a natural anti-thrombin in the human blood and the only substance preventing the clotting of blood which is not dangerous, and (3) a dilator of blood vessels [sub-paragraphs (c), (d) and (g)]; four apparently relate to Vitamin E accelerating healing of burns and wounds, preventing excessive scar tissue or melting away unwanted scar tissue, or being therapeutically effective for X-ray burns and sunburn [sub-paragraphs (e), (f), (h) and (j)]; one relates to whether it is an established clinical fact that if one stops taking Vitamin E even for three days one may suffer a set back [sub-paragraph (i)]; one relates to Vitamin E being therapeutically effective in the treatment of, or as a cure for, sugar diabetes [sub-paragraph (k)]; and two relate to the nature and content of the book "Your Heart and Vitamin E" and whether the information in the book, including the claims made therein for Vitamin E and its relationship to various diseases, is true and in conformity with established medical and scientific evidence [sub-paragraphs (l) and (m)].
The Respondent, by its attorney Arthur B. Carton, Esq., duly filed an answer. The answer was signed by Carl E. Muir, as Secretary-Treasurer. The answer admits: Respondent uses the mails in its enterprise; and, the exhibits attached to the complaint are true copies of advertising material employed by Respondent in its enterprise. Other allegations of the complaint are denied by the answer. The answer also alleges, as a separate defense, a violation of the Administrative Procedure Act but this allegation presumably has been abandoned inasmuch as it was never again mentioned at any stage of the proceeding by anyone.
A hearing was held before this Examiner at Washington, D. C. on March 14, 15, 16 and 17. Witnesses for the Complainant were: Postal Inspector W. J. Hegarty, Dr. Leo Friedman, Dr. John F. Finnegan, Dr. James E. Chapman and Dr. Kenneth D. Campbell. Witnesses for the Respondent were: Mrs. Lillian M. Henderson, Mr. Charles R. Zepp, Mr. Carl E. Muir and Dr. Evan V. Shute. A total of 76 exhibits were received in evidence.
On May 31, 1960, the Complainant and the Respondent filed proposed findings of fact and conclusions of law.
The Respondent's answer admits the use of the mail in the operation of its enterprise. Undisputed evidence shows, and I find, that public attention is attracted to Respondent's enterprise by means of advertising matter, calculated and intended to induce the recipients and others to remit money through the United States mails to Respondent.
There are three specific issues which remain to be resolved in determining whether Respondent is engaged in conduct described in Sections 259 and 732 of 39 U.S.C.
1. Does the Respondent make the representations alleged in the complaint?
2. If so, are such representations material misrepresentations?
3. If so, are such misrepresentations made with the intent to deceive?
Before I proceed with the consideration and resolution of the specific issues, certain matters, by way of general background, should be stated.
The existence of Vitamin E (sometimes referred to as the "anti-sterility" vitamin because of early studies of its effect upon the reproductive system in rats) was announced first in 1922. This vitamin has been investigated quite extensively during the past fifteen years. In animals, symptoms resulting from deficiency in Vitamin E are widespread and have included structural and functional abnormalities of the reproductive system, nervous system, skeletal muscle and cardiac muscle. Many symptoms of Vitamin E deficiency in animals resemble superficially disease conditions in humans but as of 1955 it was stated, in a standard reference book, "there is no unequivocal evidence that Vitamin E *** is of any value in therapy" for man. Thus, experiments with and observations of Vitamin E deficiency in rats, rabbits, guinea pigs, calves and monkeys produced lesions which apparently extended to the cardiac muscle; and such lesions were sometimes associated with electrocardiographic changes and even with heart failure. This experimental background stimulated the use of Vitamin E as possible treatment for every type of cardiac disorder and in diseases of the peripheral vascular system. A standard reference book notes that although "uncritical and uncontrolled studies attest to the value of Vitamin E in the treatment" of various cardiovascular diseases, it is unfortunate that "carefully controlled clinical studies have failed to demonstrate any benefit from Vitamin E in cardiovascular disease that could not be duplicated by the use of a placebo." (Goodman & Gillman, The Pharmacological Basis of Therapeutics, 2d Ed., 1955.)
Prior to October, 1959 the Food and Drug Administration, U. S. Department of Health, Education and Welfare, considered Vitamin E as something "for which the need in human nutrition" was not established. But in October, 1959 the Food and Drug Administration formally determined (a) the need for Vitamin E in the physiological processes of the human body has been established (b) but the difficulty of producing experimental dietary deficiency of Vitamin E emphasizes that the diets used in this country are amply supplied with this vitamin, and (c) any claim in the labeling of drugs or of foods offered for special dietary use by reason of Vitamin E that there is need for dietary supplementation with Vitamin E will be considered false.
In April, 1955, the Respondent (under the name "The Heart Foundation") was organized as a non-profit corporation under the laws of the State of Michigan. The purpose of the corporation, as stated in the articles of incorporation was: "Exclusively *** to aid and engage in research and study of the cause, means of preventing, and methods of treating and relieving heart and circulatory diseases; to aid in educating the general public in regard to the results of such research and study; ***; and for the foregoing purposes to receive and distribute donations of supplies, provisions and money, and to raise money by contributions from the general public; ***." Carl E. Muir was an incorporator and member of the original Board of Directors. So also was Campbell C. Calder, of London, Ontario, who was the personal attorney for Dr. Evan Shute, of London, Ontario.
Respondent's amended articles of incorporation in May, 1955 changed its name to "The Cardiac Society" and specifically provided: "Members of the Vitamin E Society, a non-profit Ontario corporation, in good standing and residing in the United States or its possessions are members of The Cardiac Society. ***"
The Vitamin E Society was incorporated in Ontario, Canada, about 1950 by Campbell C. Calder and others. This probably occurred shortly after the American Medical Association in its Journal for February 18, 1950 in an article highly critical of Dr. Evan Shute and his associates referred, among other things,(1) to the public relations office of The Shute Foundation for Medical Research (2) to the fact that The Shute Institute for Clinical and Laboratory Medicine "solicits patients in the same brochure that it uses to solicit funds," and (3) to the fact that the Foundation and the Institute issue pamphlets and booklets, addressed apparently to sufferers from heart disease and other cardiovascular conditions, as well as diabetics persons, promoting an alleged Vitamin E therapy and particularly promoting The Shute Institute because of its unique use of Vitamin E. It would seem that after February 18, 1950, that public relations, solicitation and pamphleteering of the kind decried by the American Medical Association, when carried on by Dr. Shute and his medical colleagues, may have been to a large extent performed first by the Vitamin E Society of Ontario, Canada, and later by The Cardiac Society, the Michigan Corporation.
Carl E. Muir was persuaded in September, 1952 to work for the Vitamin E Society of Ontario by Mr. Calder and Dr. Evan Shute. He (Muir) not only is one of the incorporators and the sole resident agent of The Cardiac Society, the Michigan Corporation, but he is the manager and does whatever needs to be done to conduct its affairs. (Tr. 303) He is not a doctor and has had no medical training but he holds himself out as "by far the most outstanding and authoritative lay lecturer on Vitamin E" and he represents that he "knows the whole Vitamin E story from its beginnings ***" and "***gives the medical evidence ***." (Govt. Exhibit 14, p. 4)
When Mr. Muir and Mr. Calder tried to change the name of the Vitamin E Society, the Ontario Corporation, to the Heart Foundation or the Cardiac Society the office of the Minister of Health in Canada rejected the proposed change. The ground of the rejection of the proposed change was that Vitamin E was more descriptive of the work of Mr. Muir and his organization than "Heart" or "Cardiac" would be. The view of the Canadian Minister of Health may, perhaps, have been influenced by the fact that the Ontario College of Physicians and Surgeons, a disciplinary body which regulates certain details of medical practice in the Province of Ontario, had previously condemned the use of Vitamin E in cardiovascular disease.
Notwithstanding the views of the Canadian Minister of Health, Mr. Muir and Mr. Calder later proceeded to use the name "The Cardiac Society," for certain Canadian activities concerning Vitamin E, as an unincorporated business. (Mr. Muir says this was done with the knowledge of a representative of the Minister of Health.) The Ontario Corporation, Vitamin E Society, is either defunct or dormant.
When Mr. Muir went into Vitamin E work in September, 1952, the Vitamin E Society could not afford to pay him a very high salary but it was planned that if membership and revenues grew he would be paid more. The sales and financial activities of The Cardiac Society (Michigan Corporation) and Mr. Muir are, perhaps, reliably illustrated by that corporation's financial statement for the fiscal year ending April 30, 1959. Gross income from sales of Vitamin E is shown as $87,037.60 against cost of $70,714.03 leaving a favorable balance of $16,323.57. The sale of books yielded a balance of $3,547.32. New membership fees produced $3,086.00 and renewal fees produced $2,451.15 for a total of $5,537.15. Donations yielded a mere $455.40. Emblem sales, after deducting costs, amounted to only $101.00. Thus total income, after deducting cost of sales, aggregated $25,964.44. Other expenditures totaled $24,297.53 of which by far the largest single item is labeled "Management Charge" amounting to $10,416.43. All of the $10,416.43 represents withdrawals from the funds of Respondent (the Michigan Corporation) by Mr. Muir for deposit in Canada where Mr. Muir and his associate, Mr. Calder, used all of that money, or almost all of it, plus some proceeds from their Canadian Vitamin E activities to pay Mr. Muir for his services. It would appear that but for the monetary gain derived from the sale of Vitamin E, the Respondent would not have the means to pay Mr. Muir any compensation. It also appears from the 1959 and earlier financial statements that the more Vitamin E the Respondent sells the more is paid to Mr. Muir for his services. Thus, as he testified, he is on a "bonus or a commission" arrangement. His earnings are contingent, to a large extent, upon the sale of Vitamin E.
The Shute Foundation has received from Respondent cash contributions in 1959. Respondent hopes to contribute again in 1960. (The Foundation is apparently a legal entity formed in May 1947 by Dr. Evan Shute, Mr. Calder, and others to receive donations from the public and patient's fees. Its formation followed alleged discoveries of Dr. Shute and his associates of the therapeutic efficacy of Vitamin E in heart disease.)
Respondent refers patients to the Shute Institute for medical treatment. (The Institute is part of the Foundation's activities that beginning in October, 1948 operated a clinic at London, Ontario headed by Dr. Evan Shute.)
Since 1952 certain Vitamin E manufacturers have paid the cost of a journal (The Summary) which Dr. Shute and his associates at the Shute Foundation send "free" to doctors. In 1952: 7,000 copies of this journal were sent out every six months; the cost per issue was $2,700. Now 12,000 copies are issued each six months and the entire cost is paid for by two pharmaceutical companies (one in Canada and one in the United States) recommended by Dr. Shute for their Vitamin E products and the company in the United States (Testagar) also is the source of Vitamin E products sold by the Respondent. The journal to doctors may be a means whereby Dr. Shute and The Shute Institute seek to persuade doctors to send patients for treatment to the clinic at London, Ontario or to a branch clinic recently opened in the Windsor-Detroit area.
Mr. Muir and, therefore, the Respondent continually urge people to buy Vitamin E for prevention, treatment or cure of a variety of conditions; he and Respondent never say anything against the use of Vitamin E and no matter what facts have been or will be proven as to its inefficacy he and Respondent will continue to sell Vitamin E to the public. (Tr. 367) He says he conceals adverse reports concerning Vitamin E because he only wants to spread good news and bring hope to sick people; however, it is undeniable that his compensation is also largely commensurate with the extent to which he sells Vitamin E. Other income is derived by him and Respondent from the sale of books on Vitamin E and member ship fees which are said to be a means of obtaining a discount from Respondent's list prices for Vitamin E.
There are several general circumstances, somewhat deceptive in nature that might be considered by some to cast doubt upon the legitimacy of Respondent's operations. One such circumstance is the use of the name "The Cardiac Society" to convey the notion that there is some established scientific correlation between all cardiac conditions and Respondent's main activity which is (based on its financial statements) to promote the sale of Vitamin E by it. The office of the Minister of Health in Canada apparently sensed this in rejecting the effort of Messrs. Muir and Calder to use in Canada the corporate name Cardiac Society, in lieu of the corporate name Vitamin E Society. Then, there is the misleading implication in Respondent's certificate of incorporation and elsewhere that Respondent is genuinely interested in educating the public about heart and circulatory diseases when the fact is that its advertising and its publication "The Cardiac" appears to urge use of Vitamin E for all heart and cardiovascular diseases and prevention of heart disease, while deliberately concealing all information from medical source which is adverse to Vitamin E as therapy or prevention in such matters. Third, the Respondent apparently sometimes tries to create the impression that it is independent and unaffiliated with the Shute Foundation and Shute Institute when in fact close analysis of Respondent's origin and functions tends to show that Respondent has been to a considerable extent the public relations office for the Shute organization, promoting certain views of that organization, while concealing contrary views of the medical profession, however reliable they appear to be. Thus, the Respondent with no medical men or even druggists, among its working officers, directors or employees, is promoting and selling Vitamin E to treat very serious diseases of common occurrence, such as heart disease or diabetes.
Respondent's advertising matte shows Respondent is making almost all of the representations charged in paragraph (3) of the complaint. Where interpretation of the Respondent's advertising is involved, the interpretation placed on the advertising by the Complainant, to the extent indicated below, is reasonable (Donaldson v. Read Magazine, 333 U. S. 178) and is in conformity with the effect such advertisements would most likely produce on ordinary minds (Durland v. United States, 161 U. S. 306-313, 314).
I am convinced, after careful study of the record and for reasons stated below, that some of those representations are materially false and made with the intent to deceive, within the meaning of the leading case of Reilly v. Pinkus, 338 U. S. 269.
Pertinent findings of fact and conclusions of law, in respect to the representations, charged in the complaint, are set forth below. For convenience of analysis or disposition, I have categorized the alleged representations into four main groups. Group I consists of A - matters related to paragraphs 3(a) and (b) of the complaint and B - matters related to 3(c), (d) and (g) of the complaint. Group II consists of A - matters related to 3(e), (f), (h) and (j) of the complaint and B - matters related to 3(i) of the complaint. Group III consists of matters related to 3(k) of the complaint and Group IV consists of matters related to 3(l) and (m) of the complaint.
In the order of the foregoing, I proceed to consider whether the alleged representations are being made by Respondent and, if so, whether they are materially false. After determining those questions as to all the alleged representations, I will consider, in detail, whether fraudulent purpose or intent to deceive has been proven.
First, there are five representations directly concerned with Vitamin E and heart or other cardiovascular diseases.
A. Items (3) (a) and (b) of the complaint charge that the Respondent represents to the public in substance and effect:
"(a) That Respondent's product 'E-FEROL 30 I.U. (containing vitamin E) is therapeutically effective and beneficial in the treatment of heart and cardiovascular diseases for any person so afflicted;
"(b) That Respondent's said product will prevent heart disease;"
Each of the foregoing items is concerned only with one Vitamin E product namely, E-Ferol 30 I.U. "I.U" means International Unit and such a unit of Vitamin E has been defined as one milligram of alpha tocopherol acetate, a very specific compound, in an olive oil solution.
There is no doubt that Respondent takes orders for E-Ferol 30 I.U. Its order form lists that product. That is also the product it sold to Mrs. Earl Dilworth, the test correspondence name for Postal Inspector W. J. Hegarty, and the product is part of the evidence in the record. The bottle in which the product is contained prescribes "1 to 2 capsules daily" or "as directed by a physician." The Respondent's advertisements about Vitamin E and heart or other cardiovascular disease do not say they are inapplicable to E-Ferol 30 I.U. and the impression given to credulous persons, eager to prevent or treat heart conditions, is that they are applicable.
Respondent's statements, without significant qualification, reservation or exception, assert or convey the impression that Vitamin E (a) is therapeutically effective and beneficial in the treatment of heart and cardiovascular diseases and (b) will prevent heart disease.
Thus, for example, in the so-called "New Members Issue," of the publication "The Cardiac" (Autumn, 1957) which Respondent mails to those inquiring for information about its activities, Mr. Muir says: "If you are a sufferer from heart disease you will find helpful information in this issue. Even if you are not, you are certainly interested in preventing heart disease." The same issue extols the "power of Vitamin E to treat and prevent heart disease." Although the alleged power of Vitamin E is described in respect to coronary, hypertensive or rheumatic heart disease, as instances of common types of heart disease, the impression conveyed to the credulous is that the power of Vitamin E, as described by Respondent, applies to all persons afflicted by any heart or cardiovascular disease.
Again, as an example, Respondent in its issue of the Cardiac for September, 1958, on page 7, in a box captioned "How Long Will You Live" after noting that the American Heart Association reports "more that 800,000 people died in the United States in 1955 from diseases of the blood vessels" then with special emphasis (italics) states: "Remember! Vitamin E should prove an effective preventative of cardiovascular disease, and it often does wonder when it is too late for prevention."
In view of the foregoing, and other similar representations, made by Respondent, in its advertisements, I find that Respondent makes the representations as charged in paragraphs (3) (a) and (b) of the complaint.
All of the medical evidence establishes that those representations are not true. I find the representations to be false, on the basis of the evidence of four medical doctors, Drs. John F. Finnegan, James E. Chapman, Kenneth D. Campbell and Evan Shute and one biochemist, Dr. Leo Friedman. There is no evidence to the contrary.
Dr. Finnegan, a highly qualified cardiologist and Chief of Medicine at Providence Hospital, Washington, D. C., testified to the following effect: based on his study and practice there is no evidence showing that Vitamin E deficiency causes, or that its administration prevents or cures, any form of heart disease, and it makes no difference how many international units of Vitamin E are used; about 1948 or 1949 he experimented with the use of Vitamin E for less than a year on somewhat under 50 cases of coronary heart disease, in a controlled test in which some patients did and others did not receive Vitamin E, and he found there was "no detectable clinical benefit in *** patients *** due to Vitamin E, none at all" (Tr. 117); controlled tests by various researchers and the views of leading texts in cardiology do not support the original contention that in the treatment and prevention of cardiovascular diseases the use of Vitamin E ha significant merit; in a broad sense, cardiovascular diseases are "diseases of the heart and blood vessels"; Vitamin E would not be an effective treatment for cardiovascular diseases.
Dr. James E. Chapman, cardiologist and internist, attending physician to the Heart Clinic at George Washington University Hospital in the District of Columbia, staff member at various hospitals, and a medical school teacher, testified in effect: he has treated thousands of patients suffering from cardiovascular diseases; the diagnosis of cardiovascular disease generally is preceded by (a) ascertaining the patient's medical history and his complaints, (b) a thorough physical examination with particular attention to the cardiovascular system (the heart and circulatory apparatus) and (c) such things as X-ray or fluoroscopic examination of the heart, electrocardiograms, blood tests and exercise tests; the treatment for each patient must be individualized; Vitamin E, in any strength, would not be effective for parasitic heart disease, or for coronary thrombosis or hypertensive heart disease; there is no evidence that 30 International Units of Vitamin E per day, or any amount thereof, would be therapeutically effective in the treatment of any cardiovascular disease; there is no evidence in the medical literature, or from his practice, that Vitamin E will prevent heart disease.
Dr. Campbell, Acting Director of the Drug and Device Branch of the Food and Drug Administration, United States Department of Health, Education and Welfare, testified: as a doctor engaged in the active practice of medicine, he has treated many patients for cardiovascular diseases; based on his practice, controlled studies in respect to Vitamin E and cardiovascular diseases by various researchers and the report on Vitamin E in "New and Non-Official Drugs, 1959" an authoritative publication of the American Medical Association, he considers Vitamin E to have no therapeutic efficacy for cardiovascular diseases.
Dr. Evan V. Shute, Respondent's only medical witness, testified, that: 1 or 2 capsules a day of 30 International Units of Vitamin E would be quite useless for treating cardiovascular diseases or for preventing heart disease; a representation that 30 I.U. of Vitamin E is therapeutically effective and beneficial in the treatment of heart and cardiovascular diseases for any person so afflicted is broader than any experience would justify; Vitamin E, in any quantity would not be helpful for (a) "left or right shunt between the ventricles," (b) "arterial embolism: and (c) "arterial aneurism"; Vitamin E alone would not be helpful for arteriosclerosis; and, in some of his cases of hypertensive heart disease, Vitamin E was of no help.
Dr. Leo Friedman, a biochemist with a distinguished record of research and study in the field of vitamins, including Vitamin E, presented evidence showing: there has been no demonstration of (a) any dietary deficiency of Vitamin E in the United States, or (b) any correlation between cardiovascular diseases and Vitamin E intake.
All the scientific evidence establishes that Respondent's representations, as described in paragraphs (3) (a) and (b) of the complaint, are untrue. Their falsity is material because it is likely to induce credulous people, eager to treat or prevent heart disease, to part with their money for a product which will surely not do what they are led to believe by Respondent it will do.
Indeed, it is fair to find from the evidence in the record that there is a universality of scientific belief that: (a) Respondent's product "E-Ferol 30 I.U." (containing Vitamin E) is not therapeutically effective and beneficial in the treatment of heart and cardiovascular disease for all persons so afflicted, (b) that this product of Respondent will not prevent heart disease and (c) in the dosage, prescribed by Respondent, of one or two capsules a day, the product would be useless in the treatment of heart and cardiovascular disease or in the prevention of heart disease. I so find.
"An intent to deceive might be inferred from the universality of scientific belief that advertising representations are wholly unsupportable." Reilly v. Pinkus, 338 U. S. 269, 276.
B. The next three representations considered are exact quotations from the so-called "New Members Issue" of Respondent's publication The Cardiac (Govt. Exhibit 4, p. 2) under the caption of "Heart Disease" and the sub-caption "Excerpts from addresses by Dr. W. E. Shute." (Dr. W. E. Shute is the brother of Dr. Evan Shute and several years ago he severed his connection with the Shute Foundation and its clinic in order to go elsewhere to practice medicine.) There is no dispute about the fact that Respondent makes the representations set forth in paragraphs (3) (c), (d) and (g) of the complaint.
Paragraphs (3) (c), (d) and (g) of the complaint charge the Respondent with making the following representations:
"(c) That 'It [Vitamin E] is the key both to the prevention and treatment of all those conditions in which a lack of blood supply due to thickened or blocked blood vessels or a lack of oxygen is a part or the whole story of the disease';
"(d) That 'Vitamin E' seems to be a natural anti-thrombin in the human blood stream. It has been found by Zierler of Johns Hopkins and the U. S. Navy Research Department and Kay of Tulane to be a substance normally circulating in the blood which prevents clots occurring inside vessels. It is the only substance preventing the clotting of blood which is not dangerous';
* * * * * * *
"(g) That 'It [Vitamin E] is a dilator of blood vessels'";
Paragraphs (3) (c), (d) and (g) are closely interrelated and overlapping items and perhaps for that reason, if no other, should be considered together. Thus, for example, "lack of blood supply due to thickened or blocked blood vessels" in (3) (c) is directly related to "Vitamin E seems to be a natural anti-thrombin ***" and "the only substance preventing clotting ***" in (3) (d) and Vitamin E is "a dilator of blood vessels" in (3) (g). An anti-thrombin is a substance which helps prevent coagulation or clotting of the blood. A dilator of the blood vessels widens the blood vessel and, thus, would sometimes help provide a more adequate supply of blood.
These three representations, included in the "New Members Issue" of The Cardiac, sent to those first seeking information about Respondent, in context, relate only to the "power of Vitamin E to treat and prevent heart disease of the common types, whether coronary, hypertensive or rheumatic ***" The representations are included by Respondent as among the "characteristics" or "functions" of Vitamin E upon which its power to treat and prevent heart disease are dependent. The representations set forth in (3) (c), (d) and (g) of the complaint, purport, at least in part, to be assertions of medical or scientific facts. Just how and from where the Respondent took these alleged excerpts "from addresses of Dr. W. E. Shute" does not appear from the record and the record also does not disclose when any such statements were made by Dr. W. E. Shute or whether his full addresses contained qualifications, reservations, exceptions or a description of the clinical or other basis, if any, upon which he arrived at such alleged medical facts.
But, the record does show that Dr. W. E. Shute and his brother Dr. Evan Shute in 1947 published a series of articles in the Medical Record on "Vitamin E in Heart Disease" and set forth their findings. And the Council on Pharmacy and Chemistry of the American Medical Association at page 486 of the February 18, 1950 issue of the Association's Journal discussed the work and findings of the Shutes as follows:
"This work did not contain satisfactory data or controls. In many instances the diagnosis was in doubt, other recognized forms of therapy were used concomitantly and control cases were not reported. Subsequent investigations by other workers have failed to substantiate the claims of Shute and his co-workers. These investigations in contrast to those of the Shutes were carefully conducted and adequately controlled. In a panel discussion on Cardiac therapy at the June 1947 meeting of the American Medical Association the following statement was made: 'Vitamin E is of no value in coronary heart disease, hypertension or rheumatic heart disease.' A conference on Vitamin E was held under the auspices of the New York Academy of Science in April 1949. At this time the Shutes presented their evidence, but a number of papers were also presented by outstanding cardiologists from Cornell and Duke Universities which did not substantiate the work of the Shutes." (Resp. Exhibit 2)
When Dr. Evan Shute at the hearing was confronted with Respondent's Exhibit 2, on cross-examination, and asked to point out any erroneous statements in the American Medical Association report he did not do so, probably because he could not. He only showed, based on this Hearing Examiner's observations, he was quite disturbed about the content of the article and the way it appeared to reflect upon him. I am inclined to the view that the statements made in Respondent's Exhibit 2 are quite accurate. Although more than ten years have elapsed since the report of February 18, 1950, Dr. Shute still has conducted no controlled studies. He presented no valid excuse for his failure to have done so.
Dr. Finnegan, the cardiologist, testified in effect, based on his own experience and his study of research material: there is no evidence that Vitamin E is an anti-thrombic agent; there is no scientific evidence that Vitamin E dilates the blood vessels; the findings of Zierler and Kay concerning Vitamin E and blood clotting refer to work on animals, and have not been substantiated on human beings; leading texts in cardiology either omit the mention of Vitamin E or consider it of little or no value for various heart diseases; there is no evidence "that Vitamin E deficiency either causes or that its administration prevents or cures any form of heart disease" (Tr. 100) and therefore (by implication) he would not say that Vitamin E is the key to the prevention and treatment of all those conditions in which a lack of blood supply due to thickened or blocked blood vessels or a lack of oxygen is part or the whole story of the disease. See also the summary of Dr. Finnegan's testimony under I-A, above.
Dr. Friedman, the biochemist, testified: there has been no demonstration of any correlation between cardiovascular diseases and Vitamin E intake.
The views of the American Medical Association, about Vitamin E and cardiovascular diseases, in February, 1950 (Resp. Exhibit 2) are apparently brought up to date in 1959 by its Council on Drugs (formerly Council on Pharmacy ad Chemistry) in "New and Non-Official Drugs" which states:
"It has been claimed that Vitamin E is of value in the treatment of many common serious diseases. Carefully controlled experiments have not substantiated these claims." (Tr. 199)
Dr. Evan Shute, who is not a cardiologist but has specialized in gynecology and obstetrics, testified in part: in his opinion the alleged representations in paragraphs (3) (c), (d) and (g) of the complaint are true (Tr. 563, 564); he had cases in which the use of Vitamin E was helpful in the treatment of certain cardiovascular conditions; there are medical authorities supporting his view in respect to the effect of Vitamin E "in preventing or treating arteriosclerotic lesions or gangrenes" (Tr. 600); an example is an article about "arteriosclerotic obstruction in the extremities" (intermittent claudication) by Livingston and Jones, of England, in the October, 1958 issue of The Lancet; also there are German and Spanish articles; with respect to paragraph (3) (d) of the complaint he has "no real opinion" about whether "Vitamin E seems to be a natural anti-thrombin in the human blood stream"; the statement about Zierler and Kay is an accurate statement of their finding and is not his (Shute's) finding; there are seven or eight substances, used in clinical medicine to prevent clotting of blood but only Vitamin E is not dangerous; all those, who worked with Vitamin E, are of the opinion it will dilate blood vessels (citing Austrian, German and Italian references); he has never conducted controlled tests with Vitamin E; a test of Vitamin E as an anti-coagulant is one of the easiest but he has not conducted such a test because there "is no reason why I have to do all the investigations in this field." (Tr. 738)
I find that Respondent's representations, as made in paragraphs (3) (c), (d) and (g), convey the impression to credulous readers that the statements of medical fact and theory, contained therein, have general scientific acceptance and constitute valid evidence or proof of the efficacy of Vitamin E in the treatment and prevention of coronary heart disease, hypertensive heart disease, rheumatic heart disease, and other heart diseases. Such an impression is contrary to the truth and, therefore, those representations are false. I find that the representations by Respondent, as alleged in paragraphs (3), (c), (d) and (g) do not have general scientific acceptance and they do not constitute valid evidence or proof of the efficacy of Vitamin E in the treatment or prevention of heart disease.
There is ample medical and scientific authority for the proposition that Vitamin E has not been shown to have any value in the prevention or treatment of coronary heart disease, hypertensive heart disease or rheumatic heart disease. I so find. The evidence supplied by Dr. Evan Shute falls far short of showing any adequate scientific or medical basis for the broad claims made by Respondent for "characteristics" or "functions" of Vitamin E in respect to those diseases of the heart.
I find that Respondent's representations, as alleged in paragraphs (3), (c), (d) and (g) of the complaint, are materially false.
These are five alleged representations, which after careful study, I have concluded are not proven to be materially false, within the meaning of the applicable law.
A. Four alleged representations of Respondent to the public have apparently been considered by the Complainant, in its presentation of evidence at the hearing, to relate to Vitamin E for burns or wounds and, to some extent, they all do. They are set forth in paragraphs (3), (e), (f), (h) and (j) of the complaint as follows:
"(e) That 'Indeed it [vitamin E] actually accelerates the healing of burns and wounds';
"(f) That 'The third major function of Vitamin E is the prevention of excessive scar tissue production and even, in some instances, the ability to melt away unwanted scar';
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(h) That vitamin E is therapeutically effective in the treatment of X-ray burns in humans;
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(j) That Vitamin E is therapeutically effective in the treatment of sunburn";
The content of paragraphs (h) and (j) appear in several brief items in Respondent's publications, The Cardiac or The Cardiac Newsletter. Thus, for example, The Cardiac for September, 1958 urges the use of alpha tocopherol (Vitamin E) for X-ray burns (Govt. Exhibit 14). The Cardiac Newsletter (Govt. Exhibit 17) says Vitamin E ointment is "par excellent" for sunburn.
The content of paragraphs (3) (e) and (f) are quotations from what purport to be excerpts of addresses of Dr. W. E. Shute, as set forth under the caption "Heart Disease" in Respondent's "New Members Issue" of the Cardiac. In context, these two representations like the three, considered in I-B, above, appear to relate to "characteristics" or "functions" of Vitamin E indicative of "power *** to treat heart diseases of the common types, whether coronary, hypertensive or rheumatic." However, neither of the cardiologists, Dr. Finnegan and Dr. Chapman, were asked to express any expert opinion concerning these two representations and their significance, truth or falsity in relation to heart diseases. Rather, these items were the subject matter of the testimony of Dr. Kenneth Campbell in the context of his overall testimony about Vitamin E in relation to treatment of burns and wounds.
Dr. Campbell, qualified as one expert in respect to burns and wounds, and their treatment, testified: Vitamin E taken orally or used in ointment form would not be effective in the treatment of burns or wounds; Vitamin E would not accelerate the healing of burns or wounds; Vitamin E would be ineffective in the treatment of X-ray burns or sunburns; Vitamin E ointment or capsules in any strength will not prevent excessive scar tissue production or melt away unwanted scar; he has never used Vitamin E in connection with burns; he is not familiar with articles in the literature on the subject of Vitamin E's usefulness in the treatment of burns.
Dr. Evan Shute testified, in effect: he believes the representations set forth in paragraphs (3) (e), (f), (h) and (j) to be true; he has personally treated patients for burns and wounds with Vitamin E and it helped; in one burn case (he described) he used penicillin for a while together with Vitamin E; in one wound case (he described) he used chloromycetin for a while and when infection cleared, he used Vitamin E only; there are medical authorities to support the statement that Vitamin E actually accelerates the healing of burns and wounds (he listed some alleged medical authorities); he had patients whose case histories illustrate the claimed function of Vitamin E in respect to scar tissue as set forth in (3) (f) of the complaint; X-ray burns are difficult to heal but he has an X-ray burn on his forehead and he treated it with alpha tocopherol, capsule and ointment, so it has almost completely healed; he has supporting medical authorities in Vitamin E for X-ray burns (he gave three references being limited by the Hearing Examiner in this respect.)
Unlike the situations considered in I-A above, where there is a universality of scientific belief that representations made by Respondent are wholly unsupportable, and unlike the situations in I-B, above, and III below, where carefully controlled tests plus the expert testimony of highly qualified medical specialists, concerning Vitamin E and heart diseases or diabetes disclose well-established scientific results and beliefs which completely fail to substantiate Respondent's representations in such matters, it appears that in respect to burns and wounds there is, on this record, mainly a difference of opinion between Dr. Campbell, a general practitioner and Government official, and Dr. Evan Shute. Dr. Campbell has never used Vitamin E for burns or wounds. Dr. Shute has. I have been referred to no controlled tests on Vitamin E in connection with burns, wounds or scar tissue related thereto. Dr. Shute refers to alleged medical authorities in the literature in support of his opinions on this subject. Dr. Campbell does not refer to any specific medical literature pertaining to the lack of value of Vitamin E for burns or wounds. In this state of the record, I do not consider the subject matter sufficiently tested in the crucible of medical experience to enable me to find the representations of Respondent to be materially false, at this time, within the meaning of applicable law.
However, I have asked myself why Respondent promotes Vitamin E sales for burns, including X-ray burns and sunburn, or wounds when its corporate purpose is "Exclusively *** to aid and engage in research and study of the cause, means of preventing, and methods of treating and relieving heart and circulatory diseases; to aid in educating the general public in regard to the results of such research and study." Burns and wounds are hardly "heart and circulatory diseases."
The only answer I have, thus far, been able to suggest is that probably almost all cardiologists and other physicians, in the United States, have, as a result of the publications by the American Medical Association and others of the results of study, controlled tests and other reliable scientific data, considered Vitamin E relatively useless for heart and circulatory diseases and they have acted accordingly, with their patients, so that Respondent hungry for revenue from the sale of Vitamin E now urges its use even for sunburns, although that seems quite outside its avowed corporate purpose.
B. Paragraph (3) (i) of the complaint charges the Respondent with representing that:
"It has been established by many clinicians, particularly the Shute Institute staff, that if you stop taking it (Vitamin E) even for three days you may suffer a set-back."
Complainant contends the foregoing representation is contained in Government Exhibit 12, which is a form letter addressed "To All Members of The Cardiac Society."
That letter does state:
"It has been established by many clinicians, particularly the Shute Institute staff, that the prescribed daily dose of alpha tlcopherol (Vitamin E) must be maintained continually for best results. They advise that if you stop taking it even for three days you may suffer a set-back."
The representation, as made, does not specify use of Vitamin E for any particular impairment, is apparently limited to a dose "prescribed," and assumes that some good result for some undefined impairment has been obtained. In the context in which it appears the representation is quite vague and general. While it shows the Respondent pushing Vitamin E and its continued use, and may perhaps even suggest value of Vitamin E for heart disease or diabetes contrary to any valid scientific proof, I find the record evidence does not clearly establish the representation, charged in paragraph (3) (i) of the complaint was so made as to be a materially false representation. Accordingly, I do not so regard it.
III
Paragraph (3) (k) of the complaint charges Respondent with representing: "That Vitamin E is therapeutically effective in the treatment of, or is a cure for, sugar diabetes."
There is no doubt that Respondent in its publication, The Cardiac, represents: that Vitamin E is therapeutically effective in the treatment of sugar diabetes. That publication for May, 1959 purports under the caption "Status of Living Diabetics" to summarize the features of an article by E. P. Joslin of Boston, described as having appeared in 1951 in the Journal of American Medical Association, and then urges the use of Vitamin E in every diabetic case (a) to reduce or abolish the need for insulin and (b) to treat or prevent complications from "classical insulin - dietary management." The Cardiac publications for December, 1958 and January, 1959 also urge use of Vitamin E in the treatment of diabetes.
I find that Respondent does not represent that Vitamin E is a "cure for" diabetes (in the sense of complete restoration of health and complete elimination of the disease) but does represent that it is therapeutically effective in the treatment of sugar diabetes.
The juxtaposition in The Cardiac for May, 1959, by the Editor, who is a public relations man and fund raiser, of what purports to be a summary of an authoritative article taken from a 1951 American Medical Association Journal about diabetes (Joslin) and his (Editor's) comment (in the same italicized type as the summary) urging use of Vitamin E by all diabetics is, it appears to me, designed to make credulous readers believe that the American Medical Association recommends Vitamin E for diabetes. And nothing could be further from the truth.
As long ago as February 18, 1950, the American Medical Association, in its Journal of that date issued the report of its Council on Pharmacy and Chemistry on Vitamin E. That report noted: the claim in 1949 by a member of the Shute Institute that diabetes responds to Vitamin E; however, investigation of the effects of Vitamin E on juvenile diabetes in 13 patients, by G. M. Guest disclosed no beneficial effects; and a carefully controlled study by E. H. Bensley and his co-workers led them to the conclusion that "evidence was lacking to support the view that Vitamin E is of value in the treatment of diabetes mellitus." In that 1950 article the American Medical Association concluded in part: "It is regrettable that the hopes ***, of countless diabetic persons, should be falsely raised by unbridled enthusiasm." (Resp. Exhibit 2)
Dr. Chapman, the highly qualified physician, with specialization as an internist, testified at the hearing, that: sugar diabetes is a metabolic disorder associated with a deficiency of insulin and it is treated by diet, regulation of activity and insulin supplementation, if necessary; Vitamin E has no action of an insulin-like type, that is, it does not tend to lower elevated blood sugar; it does not provide calories and it does not assist the patient in controlling his activities; therefore, he (Dr. Chapman) sees no valid reason to support the theory that Vitamin E is useful in the treatment of diabetes; there is no scientific evidence showing that by taking Vitamin E a diabetic patient may not require as much insulin; he knows of no scientific demonstration that Vitamin E is useful in the treatment of diabetes; he knows of no internist who would support the view that Vitamin E is effective in the treatment of diabetes.
Dr. Kenneth Campbell, the well-qualified medical practitioner and staff member of the United States Food and Drug Administration testified: he is familiar with sugar diabetes and its treatment; Vitamin e in any strength would not be therapeutically effective in the treatment of sugar diabetes; Vitamin E in no way has the same effects as insulin and therefore its use cannot decrease the amount of insulin needed by a diabetic; about two years ago the Council on Drugs of the American Medical Association included in its official publication "New and Non-Official Drugs," 1959 a statement (applicable to claims made about Vitamin E and diabetes) that "It has been claimed that Vitamin E is of value in the treatment of many common serious diseases. Carefully controlled experiments have not substantiated these claims."
Dr. Evan Shute, whose special medical training has been in obstetrics and gynecology, and not internal medicine, testified about Vitamin E and diabetes. He indicated: he would never claim on the basis of his present knowledge that Vitamin E is a cure for sugar diabetes; in his opinion, Vitamin E is therapeutically effective in the treatment of sugar diabetes; there were case histories of several of his patients with diabetes who were helped by Vitamin E (he described the cases); other authorities support his opinion about Vitamin E and diabetes and Buttirini of Italy is an example; a contrary view is expressed in an excellent article in the American Medical Journal by a group headed by Bensley of Canada; none of the best known texts, dealing with the subject of diabetes, mention Vitamin E as a possible therapeutic device; he thinks there are some thirty papers in the literature pointing out that diabetics can sometimes decrease their insulin when they take Vitamin E; he is "perfectly ignorant about the mechanism" which would cause Vitamin E to reduce the insulin requirements of diabetics.
I find that the scientific evidence surely fails to establish unequivocally, or with anything even approaching reasonable certainty or probability, that Vitamin E is therapeutically effective in the treatment of sugar diabetes. Such reliable evidence, as the controlled tests by Bensley and his co-workers in 1949, and the current views of many doctors, including those most learned in respect to diabetes, namely the specialists in internal medicine, as confirmed by leading texts on diabetes and the studies and conclusions of the Council on Drugs of the American Medical Association, tend to show quite convincingly, and I find that the claim Respondent makes for Vitamin E in the treatment of diabetes is not substantiated. Because Respondent's representation that Vitamin E is therapeutically effective in the treatment of diabetes conveys the impression to credulous readers (a) that scientific evidence establishes that to be the fact and (b) that there is no significant scientific evidence to the contrary, I find the representation to be false and materially so.
IV
Paragraphs (3) (l) and (m) of the complaint charge Respondent with making the following representations to the public:
"(l) That the book 'Your Heart and Vitamin E' tells you:
'What Vitamin E Is and Does
How It Treats Heart Disease
Its Success in Circulatory Diseases
Your Food' Deficiency in Vitamin E'
and that the information in the book and the claims for vitamin E set forth therein are true and in conformity with established medical and scientific evidence;
"(m) That 'It [the book] explains medical facts in everyday language concerning the help that is available for sufferers from diseases of the heart and blood vessels such as Coronary Heart Disease, Angina Pectoris, Phlebitis, Buerger's Disease, Diabetes, Strokes, etc.'; i.e., that the information contained in the book is true and in conformity with established medical and scientific evidence regarding diseases and conditions above-mentioned";
Respondent uses words contained in paragraphs (3) (l) and (m) in its special advertisement and order form (Govt. Exhibit 16) for the book "Your Heart and Vitamin E" by Dr. Evan Shute and Dr. Wilfred Shute, copyrighted in 1956 by Respondent (Govt. Exhibit 41). In that advertisement and in its publication, The Cardiac, which frequently urges people to buy the book, Respondent conveys the impression that the information contained therein is reliable and accurate, in the sense, that it is in conformity with established medical and scientific practice.
On the basis of the entire record, including particularly the expert testimony of cardiologists, Drs. Finnegan and Chapman, corroborated by controlled tests and the leading texts on cardiology, I find that established medical and scientific practice does not substantiate the conclusions in "Your Heart and Vitamin E" that Vitamin E has therapeutic efficacy for heart diseases, such as coronary heart disease, hypertensive heart disease and rheumatic heart disease. (See: I, above; Govt. Exhibits 47-54; and Resp. Exhibit 2) Accordingly, the representations made by Respondent, in advertising the book, as charged in paragraphs (3) (l) and (m) of the complaint, are materially false.
The book "Your Heart and Vitamin E" deals with many subjects other than the therapeutic efficacy of Vitamin E in the treatment of heart diseases. Other cardiovascular conditions (including vascular complications of diabetes) and burns are (among a multitude of things) mentioned in the book, and were the subject matter of expert testimony and other evidence at the hearing. On such subject matter, the statements in that book as to the efficacy of Vitamin E are, at least, of extremely doubtful scientific validity and are essentially contrary to the testimony of cardiologist, Dr. Finnegan ( in respect to cardiovascular conditions), cardiologist and internist Dr. Chapman (cardiovascular conditions and diabetes) and Dr. Campbell.
But, in view of other findings, it is not necessary now to make detailed findings in respect to the many other matters in the book "Your Heart and Vitamin E," which the record in this case shows, are at least of extremely doubtful scientific validity.
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Proof of intent to deceive is an essential element of fraud under the mail statutes.
An intent to deceive may be inferred "from the universality of scientific belief that advertising representations are wholly unsupportable." Reilly v. Pinkus, 339 U. S. 269, 276.
Respondent's representations, as charged in paragraphs (3) (a) and (b) of the complaint, according to universal scientific belief, are wholly unsupportable. Not even Respondent's own medical advisor would support those representations. (See I-A above.)
In respect to Respondent's representations, as charged in paragraphs (3) (c), (d) and (g) of the complaint, Respondent deliberately concealed adverse scientific reports in respect to these matters and the lack of efficacy of Vitamin E in the treatment of coronary, hypertensive or rheumatic heart disease. This deliberate concealment of well known and highly significant scientific evidence is indicative of an intent to deceive. (See I-B above.)
In respect to Respondent's representation, as charged in (3) (k) of the complaint, the Respondent deliberately withheld reports of controlled scientific tests on Vitamin E used with diabetics showing Respondent's claim as to the therapeutic efficacy of Vitamin E for diabetes to be unsubstantiated. This, too, is some evidence of intent to deceive.
In several instances, Respondent by placing alleged summaries of articles from the American Medical Association or the American Heart Association in juxtaposition or in context with Respondent's sales pitch for the use of Vitamin E for diabetes or heart impairments has done that which subtly but skillfully was designed to create the false impression in credulous readers that the American Medical Association or the American Heart Association support the use of Vitamin E for those diseases. (See discussion under III, above and May, 1959 issue of The Cardiac for illustration of attempted American Medical Association - diabetes - Vitamin E presentation; see discussion under I-A, above and September, 1958 issue, page 7, of The Cardiac for reference to American Heart Association followed by Respondent's words - "Remember! Vitamin E should prove an effective preventative of cardiovascular disease, and it often does wonders when it is too late for prevention.") This conduct of Respondent is further evidence of intent to deceive.
In view of all the evidence in the record and the specific findings above, I find Respondent intends to deceive by its false representations. Actual fraud is proved within the meaning of Reilly v. Pinkus, supra.
I therefore find, as ultimate facts, that: Respondent is engaged in a scheme or device for obtaining money through the mails by means of false or fraudulent pretenses, representations or promises. I therefore conclude, as a matter of law, that within the meaning of 39 U.S.C. 259 and 732, Respondent is engaged in a scheme or device for obtaining money through the mails by means of false or fraudulent pretenses, representations or promises.
Proposed findings and conclusions of the parties are adopted to the extent embodied in this decision. Other proposed findings or conclusions are deemed either not relevant or material to the resolution of the issues.
A few other matters may merit special comment.
1. I considered the testimony of Mrs. Henderson and Mr. Zepp, who said they used Vitamin E for their impairments and believed it helpful, to be of little or no value evidentially as to the truth or falsity of Respondent's representations, as alleged in the complaint, or in respect to the fraudulent purpose of Respondent.
2. Nothing in this decision is intended to discourage Dr. Evan Shute, or others (including the Russian Government which according to Dr. Shute is now making a controlled study) from experimenting with or studying the use of Vitamin E to see whether it can be proven to have any value for any of the ills of mankind. But in the meantime, Respondent should not be permitted to use the mails in its scheme for obtaining remittance by false representations, as above set forth.
A fraud order by the Judicial Officer should issue in the form submitted herewith.
Jesse B. Messitte
Hearing Examiner