In the Matter of the Complaint Against R. G. SMITH LABORATORIES Post Office Box 5959 Grand Central Station at New York, NY 10017 P.S. Docket No. 7/132 02/22/80 Duvall, William A. APPEARANCE FOR COMPLAINANT: Thomas A. Ziebarth, Esq. Law Department United States Postal Service Washington, D.C. 20260 APPEARANCE FOR RESPONDENT: Philip Goutell, R. G. Smith Laboratories, Post Office Box 5959, Grand Central Station, New York, NY 10017
This proceeding was initiated when the Office of Consumer Protection of the Law Department United States Postal Service (Complainant), filed a Complaint on December 24, 1979, in which it is charged that R. G. Smith Laboratories (Respondent), at Post
Office Box 5959, Grand Central Station, New York, New York 10017, is engaged in conducting a scheme or device to obtain money or property through the mails by means of false representations within the meaning of Section 3005 of Title 39, United States Code.
In Paragraph (1) of the Complaint it is charged that attention is directed to said scheme by means of advertisements appearing in publications of general circulation and by direct mail circulars, all of which are calculated to induce the readers thereof to remit money or property through the mails.
It is alleged in Paragraph (2) that Exhibits 1 and 2 attached to the Complaint are copies of advertising material used by Respondent which are typical of those referred to in Paragraph (1), above. It is also alleged that by means of such materials and others similar thereto, the Respondent represents, directly or indirectly, in substance and effect, whether by affirmative statements, omissions or implication that:
"(a) THP-400 is a recent medical discovDy;
"(b) THP-400 is 'a miracle cure for "sexual senility" - an amazing youth formula for men and women that can revitalize the user's sex life in just days';
"(c) THP-400 will overcome frigidity in women;
"(d) THP-400 will enable men to engage in repeated sexual activity immediately following a prostate operation;
"(e) THP-400 will immediately enable the user to lead a more satisfying sex life regardless of age;
"(f) THP-400 will enable the user to extend his or her ability to engage in full sexual activity for one, two or three decades in the average case;
"(g) THP-400 will enable the user to increase the frequency of his or her sexual activities regard-
less of age;
"(h) THP-400, when used by men, is guaranteed to revitalize his interest in sex, dramatically improve his sexual performance regardless of age, and help him 'become the type of lover who is never without a sexual partner';
"(i) THP-400, when used by women, is guaranteed to restore her physical charms that can attract a warm and loving mate regardless of age, radically improve her ability to enjoy sex (including multiple orgasms if desired) and help her win the mate she desires regardless of age or age differences; and
"(j) It will ship the product promptly after receiving the order."
Finally, it is charged that the aforesaid representations are materially false as a matter of fact.
The Complaint and the notice of answer and hearing were served upon the Respondent. The Respondent filed an Answer to the Complaint.
In the Answer it was indicated that it was the intention, at that time, of the person by whom the Answer was signed not to appear either by counsel or in person at the hearing. No appearance was entered at the hearing, which was held in Washington, D.C., on February 1, 1980, at the Headquarters of the United States Postal Service.
The Rules of Practice applicable to this type of proceeding in Section 952.11, Subsection (b), provide as follows:
"If the Respondent files an answer but fails to appear at the hearing, the Respondent may, unless timely indications to the contrary are received, be deemed to have abandoned the intention to present a defense to the charges of the complaint, and the Judicial Officer, without further notice to Respondent, may issue the order sought in the complaint."
In this particular case, it was deemed appropriate to proceed with this hearing on the date for which it was scheduled. That was one. The Complainant has presented its case.
The first witness called by the Complainant was Postal Inspector David Fennessey, by whom this case was investigated. Inspector Fennessey testified that he saw an advertisement in the New York Post for Monday, September 7, 1979. This advertisement was offering for sale and soliciting orders for a product known as THP-400, as it is depicted in the advertisement.
The Inspector made the required remittance to the business which is the Respondent in this case, but, as of the date of the hearing, had received no answer to his order.
In the course of his investigation into this case, the Inspector received 17 complaints from various customers to the effect that the Respondent did not deliver the product.
As part of his investigation, Inspector Fennessey went to New York where he consulted with the Attorney General of New York in regard to this business. The Attorney General gave Inspector Fennessey an opportunity to examine the container of pills being offered for sale and he also gave him a copy of the pamphlet, which together with the pills constitutes the product being sold by this Respondent.
Inspector Fennessey also identified as Complainant's Exhibit 2 a circular which is used in the conduct of this business by the Respondent in its sale of the product. Complainant's Exhibit 2 will be attached to this decision as Appendix A. The list of ingredients of THP-400 is attached to this decision as Appendix B.
In addition to the 17 complaints of non-delivery received by Inspector Fennessey, he received through the New York Division of the Postal Inspection Service, or was advised by that division of the receipt of 25 additional complaints that the seller did not deliver the product in response to orders and remittances of money accompanying the orders.
Based upon the test correspondence conducted by Inspector Fennessey, and based upon the information received from other divisions of the Postal Inspection Service, it is found as a fact that the Respondent is engaged in conducting an enterprise in which sales, orders and remittances of money through the mail are solicited.
It is found as a fact that the Respondent sells a product through the mails which consists of a quantity of pills called THP-400, and a booklet entitled "Amazing Sexual Potency At Any Age".
The Respondent makes the representations that are set forth in Paragraphs 3(a) through 3(j) of the Complaint. In support of this finding citations will be made to Appendix A of this decision as follows:
Representation 3(a): "THP-400 is a recent medical discovery". On page one of Appendix A, which is a four-page circular, at the top of the page there is the following language in large blue type, "Vital Medical Discovery For Men-Women 40, 50, 60 and Beyond".
Near the center of the page there is the following language, "Because now science has discovered a miracle cure for 'sexual senility', and then the advertisement goes ahead to describe the benefits that are presently available because of this discovery.
Since the Respondent is offering to make available benefit not previously available, the product which will produce the benefit must be a recent medical discovery.
Representation 3(b): "THP-400 is 'a miracle cure for "sexual senility" - an amazing youth formula for men and women that can revitalize (the user's) sex life in just days'."
In addition to the language from Appendix A used in support of Representation 3(a), the additional language in Representation 3(b) is taken verbatim from the middle portion of the first page of Appendix A.
Representation 3(c): "THP-400 will overcome frigidity in women". Near the top of the left-hand column of page two of Appendix A there is the following statement, "A woman-frigid for over 30 years--has enjoyed her first orgasm...at age 74]"
Representation 3(d): "THP-400 will enable men to engage in repeated sexual activity immediately following a prostate operation". This representation is based on language appearing immediately below the language cited above in support of Repre- sentation 3(c) of the Complaint.
Representation 3(e): "THP-400 will immediately enable the user to lead a more satisfying sex life regardless of age". This charge is based upon language taken directly from the second paragraph in the upper right-hand portion of page two of Appendix A.
Representation 3(f): "THP-400 will enable the user to extend his or her ability to engage in full sexual activity for one, two or three decades in the average case". Near the bottom of the right-hand column of page two of Appendix A is the following language: "What the doctors discovered is that FULL SEXUAL ACTIVITY can be extended by one, two or three decades in the average case and, in some cases, by up to 50 years or more]"
Representation 3(g): THP-400 will enable the user to increase the frequency of his or her sexual activities regardless of age".That representation is inherent in the language quoted immediately above in respect to Representation 3(f) of the Complaint.
Representation 3(h): "THP-400, when used by men, is guaranteed to revitalize his (sic) interest in sex, dramatically improve his (sic) sexual performance regardless of age, and help him (sic) 'become the type of lover who is never without a sexual partner'." This charge is based on language quoted practically verbatim, that appears in the second from the last paragraph on page three of Appendix A in the lower right-hand column.
Representation 3(i): "THP-400, when used by women, is guaranteed to restore her (sic) physical charms that can attract a warm and loving mate regardless of age, radically improve her (sic) ability to enjoy sex (including multiple orgasms if desired) and help her (sic) win the mate that she desires regardless of age or age differences". That is based on the paragraph which begins at the very bottom of the right-hand column on page three of Appendix A.
Representation 3(j) is that the Respondent "will ship the product promptly after receiving the order". It can be, and is, official noticed that after they have made the required remittance of money purchasers expect a mail-order seller to make prompt shipment of the ordered product or products.
The representations found to have been made by the Respondent are material representations because they are of the kind and the character which are calculated to, and the evidence shows do, cause people to remit money to the Respondent to buy its product.
For proof of the falsity of the representations found to have been made by the Respondent, the Complainant relied upon the testimony of Dr. Robert Reynolds who is a research chemist with the United States Department of Agriculture, with offices at Beltsville, Maryland. Dr. Reynolds graduated from Ohio State University in 1965 with a B.S. Degree, majoring in biology. In 1965 to 1971 Dr. Reynolds attended the University of Wisconsin where he majored in experimental cancer research and graduated in 1971 with a Ph.D. Degree. He is by profession a biochemist.
Biochemistry is defined as the chemistry of life. In this field studies are made of compounds and chemicals essential to life, their interaction and their metabolism within the human body. Their beneficial and adverse effects on the human body are studied when they are taken either in too small or too large quantities.
Based upon Dr. Reynolds' academic background, his training, his experience and his study of the pertinent literature, as well as his association and communication with persons who are well versed in the field, he is qualified to give testimony with respect to the area which is involved in this proceeding. (Dr. Reynolds' Curriculum Vitae, Comp. Ex. 5)
Speaking generally, Dr. Reynolds testified that sexual problems and debility are caused in approximately 80 to 90 percent of the cases by psychological problems. The other kinds of sexual proboems are physical in their nature and they result either from actual physical abnormalities of the individual or they are caused by ingestion of certain drugs or by alcoholism.
Dr. Reynolds is familiar with the ingredients which are contained in the capsules sold by the Respondent, as revealed by the label on the container. (App. B) Each of these ingredients has been recognized as an essential vitamin or mineral for human beings. The product does not contain all of the vitamins and minerals which are currently recognized as being essential for the well-being of the human body.
If one's sexual debility is psychogenic in nature, the taking of Respondent's product will produce no beneficial results. In those cases in which sexual problems are the result of physical situations, the amounts of the various ingredients in Respondent's product are so small as to be incapable, from a biochemical and nutritional point of view, of producing beneficial results.
Another factor to consider is the fact that persons in the United States over 55 years of age generally receive adequate quantities of the ingredients of THP-400 in their average daily diets, thus the ingestion of these capsules by the average person over 55 in the United States is superfluous.
The only possible benefit that might be derived by the taking by such a person of the Respondent's product is to provide some cushion or measure of insurance or assurance that he would be getting adequate quantities of the listed ingredients.
There have been found in certain localities, particularly Iran and Egypt, among persons whose diet consisted principally of wheat and wheat products, that there was a deficiency of zinc. The deficiency arises to a large part because of the presence in wheat of an ingredient which impairs the ability of the body to assimilate, utilize and metabolize zinc.
If persons just described are put on a hospital diet and there is included with the diet 15 to 20 milligrams of zinc, so that the total daily ingestion of zinc is 40 to 50 milligrams, as was the case with the people in Iran, the boys became capable of having an erection and nocturnal emissions and the girls began to menstruate, which they had previously not been able to do.
When these individuals were returned to their original high wheat diet, the development was arrested. If they returned to their villages but kept on the hospital diet, or a good diet with adequate amounts of zinc, the men could father children and the women could bear children.
Therefore, it does appear that there is a shortage of zinc in the diet insofar as Iran and Egypt are concerned.
With respect to the United States, the literature reveals only one incident of a shortage of zinc in the diet. That was a situation involving some people in the District of Columbia in which some men were put on renal dialysis to rid the kidneys of excess uera. This process resulted in sexual impotence of the men. In this situation very large quantities of zinc were added to the solution used in the dialysis procedure and the sexual potency of the men returned.
In neither the case of the people from Iran and Egypt nor in the case of the men from the District of Columbia, would the ingestion of Respondent's capsule, THP-400, have been beneficial, for the reason that the amounts of the various ingredients are so small as to render it impossible for the ingestion of the recommended dosage of these capsules to be of any value to the user the recommended dosage being one capsule daily as a dietary supplement.
Dr. Reynolds testified that this capsule is similar to many dietary supplements which can be purchased over the counter at a drug store or a grocery store or a health store. Products containing these ingredients have been available in this country for some 30 or 35 years. Therefore, it is false to claim, suggest or imply that the product containing these ingredients is a recent medical discovery.
Dr. Reynolds testified that from a nutritional standpoint the representations found to have been made by the Respondent in Paragraphs 3(b) and 3(i) of the Complaint are false for the reason that the capsules being sold by the Respondent, taken as directed, are incapable of producing the results claimed for them.
In view of the record of non-delivery of the product to the persons who have ordered and paid for it, which is made clear by the testimony in this proceeding, it is obvious that the Respondent does not ship the product promptly after receiving the order.
Summarizing the factual situation revealed by the record in this case, it is found as follows:
1. The Respondent is engaged in conducting an enterprise in which he offers to sell certain products through the mail, and he solicits remittances of money in connection with the sales of the product.
2. The product being offered for sale is a quantity of capsules called THP-400 and a booklet entitled "Amazing Sexual Potency At Any Age".
3. The Respondent makes the representations set forth in Paragraph 3, subparagraphs (a) through (j) of the Complaint.
In making this finding reliance has been placed upon the holdings in Donaldson v. Read Magazine, 333 U.S. 178, 188-9, and Borg-Johnson Electronics v. Christenberry, 169 Fed. Supp. 746 at 751, where, in the latter case, the Court said, "When it appears that an advertiser deliberately induces its patrons to purchase its product in the belief that its value far exceeds its true worth, it is sufficient to support a finding that a fraudulent scheme was being conducted. Leach v. Carlile, 1922, 258 U.S. 138. *** This is so even where there is a promise to refund the purchase price should the article sold prove unsatisfactory. Farley v. Heininger, 70 App. D.C. 200, 105 F.2d 79, 84, cert. den. 1939, 308 U.S. 587, 60 S. Ct. 110, 84 L.Ed. 491."
4. The representations found to have been made by Respondent are material representations.
5. The uncontradicted expert testimony of record in this proceeding is that Respondent's product considered as its individual components, that is the pill and the booklet, or considered together, will not produce the results promised in the representations made by the Respondent in its advertising material.
Based upon the foregoing findings of fact, it is concluded as a matter of law, that the Respondent is, as charged, engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representations within the meaning of Section 3005 of Title 39, United States Code.
It has been pointed out that the Respondent did submit an Answer in this proceeding. An Answer is a pleading. A pleading is not evidence, but, nevertheless, the Respondent did, by implication, in his advertising material, suggest that persons taking this product would or could, receive the represented benefits by virtue of the so-called placebo effect. The placebo effect may occur if a person has a particular problem and he sees an advertisement which convinces him that the product being sold may be beneficial to him; if he orders the product and takes the product as directed, having the belief that he may be benefited, it is possible that he might, in some cases, be benefited.
This is an argument that is presented from time to time in these proceedings. To begin with, not everybody is susceptible to this placebo effect, but aside from that fact, this argument has been previously rejected in both court proceedings and in final decisions of the Postal Service, and it is rejected here. (See Stauffer Laboratories v. F.T.C., 343 F.2d 75 (9th Cir. 1965); Original Cosmetic Products, Incorporated v. Strachan, 459 Fed. Supp. 496, aff'd. 603 F.2d 214 (Table) Apr. 30, 1979, cert. den. 444 U.S. ___ Oct. 15, 1979; GeGe Cosmetics, Inc., P.S. Docket No.6/49, (P.S.D. 1978); Wilmont Products, P.S. Docket No. 6/46, (P.S.D. 1979); and Manual Garcia Imports, P.S. Docket No. 5/127, (P.S.D. 1977).
Accordingly, the fact that the placebo effect may sometimes occur in the case of some users does not support the efficacy of the product or the truthfulness of the Respondent's representation.
In view of all of the foregoing considerations, an order of the type provided in Section 3005 of Title 39, United States Code, substantially in the form attached, should issue against this Respondent.