In the Matter of the Complaint Against LEUCADIA PHARMACALS 103 N. Highway 101 at Leucadia, CA 92034 and LEUCADIA PHARMACALS 2521 1/2 Vista Way, Dept.BT-1 at Oceanside, CA 92054 P.S. Docket No. 11/90; 05/27/82 APPEARANCE FOR COMPLAINANT: Thomas A. C L U WZiebarth, Esq. Consumer Protection Division Law Department U.S. Postal Service Washington, DC 20260 APPEARANCE FOR RESPONDENT: F P 9 2 S rank S. Phillips, Esq. Phillips & Phillips 00 Central Federal Tower 25 Broadway San Diego, CA 92101
Respondent has appealed from the Initial Decision of an Administrative Law Judge which holds that, with regard to the sale of the product "Prost-Rite," Respondent is engaged in a scheme for obtaining money or property through the mail by means of materially false representations in violation of 39 U.S.C. § 3005.
On May 19, 1981, the Consumer Protection Division, Law Department, U. S. Postal Service (Complainant) filed a Complaint alleging that Respondent was engaged in selling tablets through the mails, marketed as "Prost-Rite," by means of false representations regarding their efficacy for relieving symptoms of benign prostate hypertrophy (BPH) in violation of 39 U.S.C. § 3005. Specifically, Paragraph II A of the Complaint alleged that:
". . .Respondent represents, directly or indirectly, by means of affirmative statement, implication, or omission, in substance and effect:
(1) that Respondent's. . . .tablets will relieve the following common symptoms of . . . BPH:
(a) getting up nights to urinate;
(b) urgency and frequency of urination;
(c) dribbling and delay in urinating;
(d) pain and discomfort in urinating;
(2) That the effectiveness of Respondent's tablets in relieving the problems enumerated in subparagraph (1), supra, has been proven in two separate clinical tests published in leading medical journals;"
Paragraph II B of the Complaint alleged that even if Respondent's tablets effect the promised relief, the "failure to clearly and conspicuously disclose that the symptoms are usually due to conditions other than BPH in men under 50 years of age, and are frequently caused by conditions other than BPH in men 50 years of age and older, misleads the reader" as to the likelihood of his symptoms being caused by BPH and the likelihood of effective treatment by the use of Respondent's tablets.
In a timely filed Answer Respondent denied that the representations alleged in the Complaint are false. On September 24, 1981, Complainant filed a Motion to Amend the Complaint by adding a revised version of Respondent's advertisement and the address published therein.
At a hearing before an Administrative Law Judge held on September 29, 1981, Complainant presented the testimony of Ernst J. Drenick, M.D. Respondent was represented by its Secretary/Treasurer, who also testified, and submitted two medical journal reports and a Federal District Court decision as proving the efficacy of Prost-Rite in alleviating the symptoms of BPH. Respondent also submitted the revised version of its advertisement which had prompted Respondent's Motion to Amend the Complaint.
On November 2, 1981, the Administrative Law Judge issued an Initial Decision which found that both Respondent's initial and revised advertisements made the representations alleged in Paragraph II A of the Complaint and that they are false. However, the Administrative Law Judge also found that the caveat contained in Respondent's revised advertisement sufficiently refuted the allegations of "failure to disclose" contained in Paragraph II B of the Complaint. Thereafter, Respondent appealed the Initial Decision to the Judicial Officer. Both parties have filed written briefs.
Respondent has taken exception to five findings of fact and six conclusions of law set forth in the Initial Decision. These exceptions have been combined, where appropriate, and are addressed below.
I. "Finding No. 3 that Respondent's current advertisement, attached as Exhibit A to the Initial Decision, makes the representations alleged in Paragraph II of the Complaint";
VI. "Conclusion No. 2 that Respondent's current advertising, as shown in Exhibit A to the Initial Decision, makes the representations alleged in Paragraph II A of the Complaint."
Respondent, while conceding that its initial advertisement makes the representations alleged in Paragraph II of the Complaint (Brief at p. 9), argues that its revised advertisement, a copy of which is attached to the Initial Decision as Exhibit A, does not make these representations. The Administrative Law Judge's conclusion to the contrary appears to be based upon a finding that Respondent admitted making the representations alleged in the Complaint. (Initial Decision, at p. 2). However, the hearing transcript makes clear that Respondent did not make any such admission regarding its revised advertisement (Tr. 4).
Respondent's revised advertisement states, in relevant part:
"PROSTATE PROBLEMS?
If you are over 50 and your doctor says you suffer the Prostate symptoms of benign prostatic hypertrophy such as:
. getting up nights to urinate,
. frequent urination,
. urgency and dribbling,
. delay in starting
YOU SHOULD KNOW ABOUT FORMULA BPH TABLETS. Why? Because many doctors have observed that Formula BPH's combination of ingredients often relieve Prostate symptoms of benign prostatic hypertrophy."
This language differs from that of Respondent's prior advertisement. The allegations of misrepresentation contained in
Paragraph II of the Complaint were drafted with the prior version of the advertisement in mind. Although Complainant was aware of the revised advertisement and, indeed, moved to incorporate it as part of the Complaint, it nevertheless made no attempt to amend Paragraph II to reflect the new advertisement's different language. Therefore, the Paragraph II allegations frame the issues of misrepresentation in this case and Complainant's burden of proof with regard to both advertisements.
Whether Respondent's revised advertisement makes representations which fall within the scope of Paragraph II must be ". . .determined in the light of the effect the advertisement . . . would probably produce on ordinary minds." Donaldson v. Read Magazine, 333 U.S. 178, 189 (1947); Peak Laboratories, Inc. v. U.S.P.S., 556 F.2d 1387, 1389-90 (5th Cir. 1977). In this regard, both the advertisement's express and implied representations must be considered. N. Van Dyne Advertising Agency, Inc. v. U.S.P.S., 371 F.Supp. 1373 (S.D.N.Y. 1974); Vibra Brush Corp. v. Schaffer, 152 F.Supp. 461 (S.D.N.Y. 1957).
Respondent argues that under the Donaldson standard, the revised advertisement's "effect on the ordinary reader is to suggest that many men have achieved satisfactory results with Respondent's tablets, and that the ad does not suggest that the tablets will relieve symptoms for all individuals or that it has been scientifically proven to be effective." (Brief at p. 10). However, inherent in Respondent's concession that the advertisement "suggest s . . . satisfactory results" is an admission that the advertisement conveys to the ordinary reader a message that the product is efficacious in the treatment of symptoms of BPH. The advertisement entices the prospective customer by reference to BPH symptoms and the statement that the ingredients in the product have been observed to relieve those symptoms. Thus, the ordinary reader would conclude that relief, as outlined in Paragraph II A of the Complaint, is available by use of the product.
Moreover, the advertisement states that "many doctors have observed" the referenced relief from BPH symptoms. The representation that doctors have observed demonstrations of the efficacy of the product would lend a greater endorsement to the product than if made by any other segment of society. This would lead the ordinary purchaser to conclude that the product relieves BPH symptoms, as charged in Paragraph II A. 1/ The effect is further enhanced by the characterization that "many" doctors have made the represented observation, thus implying the existence of clinical acceptance by the profession to the ordinary reader.
Accordingly, Finding No. 3 and Conclusion No. 2 are affirmed.
II. "Finding No. 5 that Complainant's expert witness, Dr. Ernest J. Drenick, is qualified to testify on the falsity issues in this matter."
Respondent argues that Dr. Drenick, an internist, was not qualified to testify in this matter because "only a urologist would be competent to testify as a medical witness concerning the consensus of informed medical opinion in this case." (Brief at p. 11).
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1/ The Administrative Law Judge's finding that the revised advertisement refuted the allegations of Paragraph II B of the Complaint has not been challenged and requires no further comment.
Dr. Drenick admitted that he is not a urologist (Tr. 28). However, he testified to having been in medical practice for forty years and that he sees "maybe two to three hundred patients a year who have BPH" (Tr. 30). He also testified to having researched urological textbooks in preparing for his testimony (Tr. 18). While the testimony of a urologist would have been preferred, Dr. Drenick's background, practice, and preparation qualify him to testify in this matter. Cf., Super Damiana III, P.S. Docket No. 6/56 (P.S.D. June, 1978) at page 3. Accordingly, Finding No. 5 was proper and is affirmed.
III. "Finding No. 6 that there is no effective medical treatment for BPH";
IV. "Finding No. 8 that an individual has no capacity to use surplus amino acids for any kind of useful function";
V. "Finding No. 9 that studies tend to show that zinc favors growth, and perhaps overgrowth, of the prostate."
VII. "Conclusion No. 3 that the evidence in the record shows that it is the informed medical consensus that the ingredients in Respondent's tablets are not efficacious to produce the results represented in Respondent's advertising and that the representations made by Respondent are therefore false in fact."
Respondent argues that Complainant failed to prove, through its sole witness, Dr. Drenick, that the Prost-Rite formula is not effective in relieving the symptoms of BPH. Moreover, it argues that an examination of Dr. Drenick's testimony reveals that he failed to show that Respondent's tablets are not effective. According to Respondent, Dr. Drenick's testimony concerning the ingredients of its product is insufficient to support a finding with regard to the medical consensus.
At the hearing, Dr. Drenick testified that the "only effective available treatment for BPH is surgery" (Tr. 12). Respondent concedes that this is a correct statement of current medical opinion (Brief at p. 12). Dr. Drenick further testified that Respondent's preparation, which contains three amino acids (glycine, alanine and glutamic acid) and zinc, "is worthless" for treating the symptoms of BPH (Tr. 13). To support his opinion, Dr. Drenick testified that the normal individual consumes all of the amino acids in much larger quantities than are contained in Respondent's product or are contained in the recommended daily dose (Tr. 13-14), and that an individual has no capacity to use surplus amino acids for any kind of useful function (Tr. 14). He also testified that the zinc in Respondent's tablet would favor growth and perhaps overgrowth of the prostate and would have no effect in treating the symptoms of BPH (Tr. 17-18). While Dr. Drenick's conclusions are not totally free from question, Respondent has not produced any reliable contrary evidence with respect to the ingredients of its product and their effectiveness in treating the symptoms of BPH. Moreover, Dr. Drenick stated that his views reflect the consensus of informed medical opinion (Tr. 27). In view of this testimony which, under the circumstances, is accepted as persuasive, Findings of Fact 6, 8, and 9 and Conclusion of Law 3 are proper. Accordingly, Respondent's exceptions are denied.
VIII. "Conclusion No. 4 that Complainant, except as to Paragraph II B of the complaint, has established its case by a preponderance of the evidence;"
XI. "Conclusion No. 8 that Respondent is engaged in a scheme to obtain remittances of money or property through the mails for its product PROST-RITE by means of representation materially false in fact in violation of 39 U.S.C. § 3005 and that an order should be issued against Respondent in the form attached to the Initial Decision."
As previously discussed, both Respondent's original and revised advertisements contain false representations as alleged in Paragraph II A (1) and (2) of the Complaint. These representations were proven false through the testimony of Dr. Drenick. Accordingly, Conclusions of Law 4 and 8 are affirmed.
IX. "Conclusion No. 5 that the two reports of studies introduced by Respondent as Exhibits 2 and 3 are not valid scientific evidence of the efficacy of Respondent's product."
Respondent argues that the Administrative Law Judge erred in concluding that two medical journal reports submitted as Respondent's Exhibits 2 and 3 2/ did not scientifically prove the efficacy of the Prost-Rite formula. In this regard, Respondent states that Dr. Drenick's criticisms of these studies, upon which the Administrative Law Judge apparently based his conclusion (see Initial Decision, Finding 11), are flawed and should not be accepted.
These reports were previously considered in a case involving a similar product and were discounted because of possible bias on the part of the authors and for other reasons. See Uxbridge Products Company, et al., P.S. Docket No. 2/199 (P.S.D. Dec. 1974) at pages 12-16; aff'd Kurzon v. U.S.P.S., 539 F.2d 788 (1st Cir. 1976). Although the findings in Uxbridge regarding these two reports are ____________________
2/ Feinblatt and Gant, Palliative Treatment of Benign Prostatic Hypertrophy: Value of Glycine-Alamine-Glutamine Acid Combination, 48 Journal of the Maine Medical Association 99 (Jan. 1957), Respondent's Exh. 3; Damrau, Benign Prostatic Hypertrophy: Amino Acid Therapy for Symptomatic Relief, 10 Journal of the American Geriatrics Society 426 (May, 1962), Respondent's Exh. 2. not binding, no reason exists for giving them any greater weight in this case. Apart from Dr. Drenick's characterizations, the major discrepancy between the reports' findings as to the percentage of cases in which the prostate was reduced because of the amino acid formula - 93% in one study and 11% in the other (Respondent's Exh. 3, at p. 101; Respondent's Exh. 2 at p. 428) - is alone sufficient to cast serious doubt on either report's validity.
Moreover, Respondent's own evidence and arguments support the conclusion that these reports do not establish the efficacy of the Prost-Rite formula. At the hearing, Respondent introduced a letter from the Food and Drug Administration (FDA) which states that "we FDA are unaware of any FDA documents which describe the present status of this amino acid formula . . . as to its safety and effectiveness for relief of symptoms due to BPH. Likewise, we are unaware of any medical studies or other reports showing this formulation is or is not safe or effective for relief of BPH" (Respondent's Exh. 5). Similarly, as previously stated,
Respondent's brief "concede s that there is currently no recognized effective medical treatment of the condition of BPH other than surgery." (Brief at p. 12.) Indeed, Respondent places his product within the category of "new ideas that should not be condemned solely because they conflict with traditional opinions" and states that "it is clear in the present case that medical knowledge about BPH is still in a state of flux" (Brief at p. 17).
These admissions offset any claim that the product's efficacy has, as of yet, been clinically proven. Accordingly, Conclusion No. 5 is affirmed.
X. "Conclusion No. 6 that the court opinion in United States of America v. Metabloic Products Corp., Civil Action No. 61-570-S (U.S.D.C. Mass., Jan 25, 1962) does not serve to establish Respondent's claims of efficacy."