In the Matter of the Complaint Against KLEIN'S DISTRIBUTING 525 Summit Drive at Lewistown, PA 17044-1253 P.S. Docket No. 13/17; 12/27/83 Cohen, James A. APPEARANCE FOR COMPLAINANT: Kenneth N. Hollies, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-2111 APPEARANCE FOR RESPONDENT: Michael A. Roselle, Esq. Thatcher & Miller 115 West Market Street Lewistown, PA 17044-2130
On October 14, 1983, Complainant filed a Petition for Orders Based on Breach of Consent Agreement in which it alleged that Respondent has breached the terms of a Consent Agreement executed on December 8, 1981, by Carl J. Klein, Jr., owner of Klein's Distributing. Complainant contends that Respondent has breached the terms of the Consent Agreement by resuming, under the captioned name and address, certain practices related to the sale of "look-alike" drug products which it agreed to discontinue.
In the Petition, Complainant sought the issuance of a temporary detention order pending final resolution of the issue concerning the alleged breach of the Consent Agreement. On the basis of the information attached to the Petition, a temporary detention order granted Respondent a period of ten days in which to file a reply to the Petition.
Respondent filed a timely reply in which it denied that it had knowingly breached the terms of the Consent Agreement. In this reply Respondent requested that a hearing be held on the issues raised by the Petition. Subsequently, Respondent filed two supplemental replies in which it admitted that it distributed a multi-colored business card to a Postal Inspector, but denied that the card represents substances that can be construed as "look-alike" drug products. According to Respondent, its previously prohibited colored card advertising scheme and product line were replaced by a product line depicted on cards showing tablets and capsules imprinted with the designation "AKS" or "50845" or "C8858". It contends that these designations are federally approved trademarks and thus were not intended to "defraud the consumer public." In both supplemental replies, Respondent requested that a hearing be held.
Because the undisputed facts establish that Respondent has breached the terms of the Consent Agreement, it has been determined that Respondent has not shown good cause for a hearing to be held.
Paragraphs 2 and 3 of the Consent Agreement executed by Respondent on December 8, 1981, provide in pertinent part:
"2. Respondent agrees to cease and desist immediately from advertising, offering for sale, selling, or otherwise furnishing the following drug products:
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(b) All round white double-scored tablets, known and advertised variously as mini-whites or mini-white crosses.
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(f) All triangle or shield-shaped tablets colored green, gold, or pink, whether plain or imprinted with any letter(s) or number(s).
(g) All hard gelatin capsules described as green and clear, blue and clear, white and clear, or brown and clear, with or without any imprint thereon which reasonably could be mistaken by another for, respectively, the dexamyl product of Smith, Klein and French, the Fastin product of Beecham, Inc., and Eskatrol and Dexedrine products of Smith, Klein and French.
"3. None of Respondent's advertising, promotional, or other material, including oral representations, made available to members of the public in connection with the sale or dispensing of any drug product shall contain any drawing, photograph or other graphic representation nor any description of the appearance of the product or products involved."
The undisputed facts establish that in response to a request for information on Respondent's product line (CX 3, p. 1), a Postal Inspector received advertising materials from Respondent for various capsules and tablets (CX 3 & 4). The advertising materials solicit remittances to Klein's Distributing, 525 Summit Drive, Lewistown, Pennsylvania 17044, and include a multi-colored business card containing photographs of sixteen capsules and tablets offered for sale (CX 3, p. 2; CX 4). Among the tablets pictured on the business card are a round white double-scored tablet and a pink triangle shaped tablet. The pink triangle shaped tablet is imprinted with the letters "AKS." Both tablets are listed among the 28 tablets and capsules shown on Respondent's product description and price list which was a part of its advertising materials furnished to a Postal Inspector (CX 3, p. 3; CX 5).
The multi-colored business card is an advertising or promotional material made available to the public in connection with the sale of drug products. The inclusion of photographs of capsules and tablets on this card violates the prohibition of paragraph 3 of the Consent Agreement. The advertising and offering for sale of white double-scored tablets and pink triangle shaped tablets violate the prohibition of paragraphs 2(b) and (f) of the Consent Agreement. Thus, the use of the multi-colored business card and the advertising and offering for sale of white double-scored tablets and pink triangle-shaped tablets constitute a breach of the terms of the Consent Agreement.
In the Petition, Complainant has asserted that Respondent's current promotional activities violate additional provisions of the Consent Agreement. These assertions need not be addressed since it has already been concluded on the basis of the undisputed facts that Respondent has breached the terms of paragraphs 2(b), 2(f) and 3 of the Consent Agreement.
In accordance with paragraph 11 of the Consent Agreement, Respondent's breach warrants the issuance of an order under 39 U.S.C. § 3005. However, the record indicates that it may be appropriate to tailor such an order along the lines of paragraph 10 of the Consent Agreement. Accordingly, this matter is remanded to the parties for a period of thirty days in which the parties are to attempt to reach agreement on the terms of an appropriate order. The temporary detention order will remain in effect until a final order is issued. In the event the parties are unable to agree on the terms of an appropriate order, Complainant should file a suggested order by February 7, 1984, and Respondent a reply thereto by February 17, 1984.