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ask for a further statement of the difficulties referred to in the Administrator's letter that have arisen from the differing procedures and divided responsibility for determining the truth or falsity of identical representations in labeling and advertising.

At the outset let me assure you of my heartiest sympathy with your purpose of introducing the bill. I know you had in mind the elimination of duplication and conflict that impair consumer protection and create confusion in the regulated industries.

My own views on the character of legislation needed to accomplish this purpose have not changed since our recommendations were made to the Congress in connection with the bill which became the Federal Food, Drug, and Cosmetic Act. In a statement to the Senate Committee on Commerce in March 1935, Mr. W. G. Campbell, who was then Chief of the Food and Drug Administration, said: "If I may, with propriety, refer to the recommendations of the proprietarymedicine manufacturers, the spokesman for certain advertising media, and the Chairman of the Federal Trade Commission, to assign to that organization the enforcement of the advertising provisions of the act, I will say that I am more concerned in the enactment of a law whose terms are adequate for the protection of the consuming public than I am the designation of the governmental body by which it will be enforced. I urge that there be no division of responsibility in the control of adulteration, misbranding, and false advertising of food, drugs, and cosmetics. These three offenses are too intimately interwoven to permit effective treatment separately. The briefest of administrative experience is sufficient to condemn divided administrative authority. Such an arrangement presumes continued harmonious cooperative relationship which cannot possibly exist indefinitely. Any impairment of such relationship will be reflected in the inefficient enforcement which will inevitably result. If the Federal Trade Commission is qualified to administer this law more satisfactorily than the Food and Drug Administration, transfer all phases of its enforcement to that body. As a preliminary to such action I urge also that modification be made of the procedure imposed on it in the act for regulation of trade practices. The issuance of orders to cease and desist is not sufficient to suppress false advertising or to prevent the marketing of adulterated and misbranded articles. So long as an offender realizes that he is free from a visitation of penalties until after he shall have received an invitation to desist, there will be a total absence of incentive voluntarily, through fear or otherwise, to comply with the law. There is need for the exercise of a deterring influence."

Events have abundantly confirmed Mr. Campbell's predictions, except that inharmonious relations have not developed. There has been a free interchange of information between the Federal Trade Commission and the Food and Drug Administration. In some cases scientific investigational work has been done for the Commission in the Administration's laboratories, since the Commission is not equipped with laboratory facilities. But inevitably, there have been differences of opinion between the two agencies in evaluating scientific evidence essential to the control of the regulated commodities, and in determining the meaning to the public of advertising and labeling claims.

Some of the more serious difficulties arise from such differences of opinion. These have occurred with respect to many products, but only a few illustrations will be given. The Willard Tablet case is one. On April 8, 1937, the Commission filed a complaint against the Willard Tablet Co., alleging that the advertising representations concerning Willard Tablets were false. On January 5, 1939, the Commission issued a cease-and-desist order. No appeal from the order was taken and the company submitted a report of compliance, receipt of which was acknowledged by the Commission on April 7, 1939.

In November 1942 we instituted a seizure action under the Food, Drug, and Cosmetic Act against a shipment of Willard Tablets alleging on the basis of what we considered to be conclusive scientific proof that the representations in the labeling were false and misleading. These representations were identical with those submitted in the report of compliance to the Commission. Both the district court and the circuit court of appeals held that the doctrine of res adjudicata applied and that action under the Food, Drug, and Cosmetic Act was barred. In its decision the circuit court said:

"We, therefore, have the incongruous situation of one branch of the Government approving the method now pursued by the claimant and another branch seeking to condemn. This is, to say the least, placing claimant in an embarrassing situation and should be avoided if possible" (141 F. (2d) 141, 143).

This decision does not, of course, prevent action by us against those competitors of the Willard Co. who have not received cease-and-desist orders. We are now confronted with the question of the propriety of attempting action under the Food, Drug, and Cosmetic Act against a large number of antiacid preparations, of which the Willard product is typical, bearing label representations which, by analogy at least, have been sanctioned by the Commission in the Willard case. Certainly such proceedings would place these competitors at a grave disadvantage. Yet our failure to proceed would be prejudicial to those consumers who rely upon the extravagant and misleading therapeutic label claims. This situation is by no means limited to the field of antacid drugs.

Another similar case arose from the proceedings instituted by the Commission in March 1936 against the distributors of Capon Springs Water, the composition of which is essentially the same as that of Washington, D. C., tap water. It was alleged that advertising of the product as a cure for some 52 different diseases was false. In January 1938 the Commission ordered the distributors to cease and desist from representing that Capon Springs Water alone will cure these 52 diseases. The order was appealed to the circuit court of appeals, which, in its opinion, plainly invited full and final litigation of the extent of the therapeutic value of Capon Springs Water. Said the court (107 F. (2d) 516, 517): "We are sustaining the particular order of the Commission solely because of its limited scope. We are not constrained to and therefore do not pass upon the wider controversy implicit in the subject. The dispute over balneal therapeutics has raged in the medical profession and inevitably, therefore, in the courts, ever since the Romans began ‘taking the waters,' * * * As we understand, it still rages and should, we think, be legally, at least, put to rest by a properly prepared case. Because if these so-called mineral waters are not of any independent therapeutic value, the public should be protected against assertions otherwise. If, on the other hand, they do possess separate curative properties, their use and so their advertising should be encouraged." supplied.]

Again at page 518:

[Italics

"The Commission's order is surely the most gentle exercise of its power extant. It as most compelled the petitioners to cut their advertisements to the testimony of their own physician experts. They were ordered to cease and desist from ‘representing directly or by implication that the use of said water alone either externally or internally will cure' 52 named diseases ranging from nephritis to chronic pneumonia (whatever that is) and from poison ivy to sterility.” Finally, at page 519:

“Although this may be our feeling about the order we are affirming, there does not seem to be anything we can do about it. Our function is, of course, not nisi prius, and although not strictly appellate is confined by the statute to the enforcement of, or refusal to enforce, the Federal Trade Commission's orders (15 U. S. C. A., sec. 45 (d)). In the latter aspect, as the greater includes the lesser, we may modify. We cannot, however, sponte sua do what we have not been asked to do."

The respondents thereafter submitted a report of compliance to the Commission which contained a form of sample advertising.

In June 1943, after finding a shipment of Capon Springs Water accompanied by labeling bearing representations substantially the same as those in the sample advertising contained in the report of compliance, this Administration instituted a seizure action against the shipment alleging that these representations were false and misleading. After trial of the issues, the court in February 1945 ordered dismissal of the libel on the ground that the Commission's order was res adjudicata against the Government. We have recommended to the Department of Justice that this decision be appealed.

That a prior adjudication adverse to the Government under food and drug legislation may estop the Commission from the exercise of its power is shown by what occurred in the matter of Lee's Gizzard Capsules. A seizure was instituted in 1934 under the Food and Drugs Act of 1906 against this product, the labeling of which was alleged to be false and fraudulent. The court held the labeling to be neither false nor fraudulent. In June 1936 the Commission issued a complaint against this firm alleging that advertising representations for Gizzard Capsules identical with those involved in the labeling of the seized product were false. The order of the Commission to cease and desist from such advertising representations was appealed to the circuit court of appeals, which held that

the doctrine of res adjudicata precluded action by the Commission (113 Fed. (2d) 583). We know of no other instance wherein the Commission was held to be barred from action because of a prior unsuccessful proceeding under the Food and Drugs Act of 1906 or the Federal Food, Drug, and Cosmetic Act.

Prior to the Willard Tablet case this Administration developed, and the Department of Justice prosecuted successfully, a number of cases alleging that label representations were false and misleading when the same representations in advertising had been considered by the Commission and not found objectionable.

On August 30, 1935, the Commission filed a complaint against W. Gordon Pervis, Tennille, Ga., charging that the respondent had falsely represented his metal plates for use in shoes as a cure for high or low blood pressure, headache, asthma, paralysis, kidney trouble, and other ailments. On October 14, 1936, the Commission dismissed its complaint "for the reason that the evidence adduced does not sustain the allegations of the complaint." In 1940 we instituted criminal proceedings against Pervis for the interstate shipment of the same device misbranded by the same representations which had formed the basis of the Commission's complaint. On November 12, 1940, the jury returned a verdict of guilty and the court imposed a fine of $1,000 and a suspended jail sentence of 6 months.

Another instance of this kind involved preparations represented for the treatment of obesity. On March 12, 1940, the Commission filed a complaint against Sekov Corp. et al., of Hollywood, Calif., alleging that its advertising of Sekov Reducer for obesity was false. The Commission found that Sekov Reducer "constitutes a treatment for obesity only when used by persons suffering from hypothyroidism." This Administration had previously instituted seizure proceedings against a shipment of Marmola Prescription Tablets, a product of essentially the same composition as Sekov, alleging that the label representations of the product as a treatment for obesity were false and misleading. The court condemned the goods and, in its opinion filed February 23, 1943, found specifically that "obesity is not caused by hypothroidism" (48 F. Supp. 878, 886).

The need for especially stringent control of drugs containing thyroid was clearly enunciated by the district court:

"Any drug, which for safety in its use requires diagnosis and evaluation, and when taken in the dosage and with the frequency recommended and suggested in its labeling, may expose the users to disease and pain, is dangerous to health. Marmola is such a drug. In it there is an inherent and potential danger that may reasonably be expected to attend its use when one considers that it will be used by the strong, the weak, the old, the young, the well, and the sick, without first having a physical examination or a diagnosis of their condition by a competent physician."

This judgment was affirmed by the circuit courts of appeals (142 F. (2d) 107). Certiorari was denied (65 Supreme Court 68).

Another type of impairment of consumer protection developed in cases against Ayds Candy, which is labeled and advertised as a remedy for obesity. In 1940 and 1941 four seizures were made of this product alleging its labeling to be false and misleading. A default decree was entered in each case. On January 29, 1943, the Commission filed a complaint against the manufacturer, The Carlay Co., and its president and treasurer, Carl A. Futter, alleging that the advertising of the product was false, and on October 18, 1944, issued a cease-and-desist order enjoining such advertising. In February 1944 a criminal action under the Food, Drug, and Cosmetic Act was filed against the same defendants. They appeared and claimed constitutional immunity on the ground that Futter had testified in the proceeding before the Commission. In September 1944 the court sustained the defendants' pleas and they were discharged.

Impairment of consumer protection arises through undue delays in the settlement of issues caused by duality of jurisdiction. As an illustration, this Administration conducted long and costly scientific investigations of Carter's Little Liver Pills through nationally recognized authorities in the field of physiology, pharmacology, and medicine, and on September 25, 1943, instituted seizure proceedings alleging that the labeling of the pills was false and misleading. The Commission was interested in the advertising representations for the product which were the same as those in the labeling, and was kept advised of the results of the investigations as they developed. Some 4 months before the seizure was made the Commission filed a complaint against the manufacturer. The seizure action was set for trial in January 1944. Prior to that time the manufacturer sought an injunction restraining the Commission from proceeding with hearings

on its complaint until final judgment had been rendered in the seizure action. The court refused the injunction and the Commission's hearings began on November 15, 1943, and have been held intermittently, the latest hearing, according to the Commission's docket, having been held on June 13, 1945. The court in which the seizure action was filed has continued to grant postponements pending the completion of the Commission's hearings. Had the seizure action been permitted to go to trial it would undoubtedly have been terminated within a few weeks and in all probability the judgment would be final by this time even if appeals had been taken. The distribution of the allegedly misbranded product has been continued throughout this period and will undoubtedly be continued until the seizure case is tried and the judgment becomes final.

Efficient enforcement necessitates constant planning so as to concentrate action on those offenses that constitute the greatest impairment of public welfare. The extent, character, and timing of our actions on any group of foods, drugs, or cosmetics are determined by the relative seriousness of the adulterations and misbrandings in that group, irrespective of the character of advertising relating to it. Serious adulterations and misbrandings may not be accompanied by serious false advertising, nor is serious false advertising necessarily accompanied by serious adulterations or misbrandings. That there can be no substantial uniformity in the over-all' enforcement plans of the two agencies with respect to the same misrepresentations clear from the fact that actions against such identical misrepresentations constitute only a limited portion of the duties of each agency. It follows that the enforcement plans of the Food and Drug Administration and those of the Federal Trade Commission may call for differing emphasis and timing of operations on the same commodity group. We have had caustic complaints from industry representatives concerning the lack of uniform enforcement with respect to the same representations in labeling and advertising. The attached copy of letter from Mr. Cary Piowaty, of the Florida Lime and Avocado Growers, Princeton, Fla., is in point.

Under section 5 of the Federal Trade Commission Act, as amended by the Wheeler-Lea Act, the Commission is empowered and directed to prevent the use of "unfair methods of competition in commerce and unfair or deceptive acts or practices in commerce." One form of exercise of this power is illustrated by the enclosed "Trade Practice Rules for the Tuna Industry," promulgated June 23, 1945. You will note that these rules govern, among other things, the advertising, labeling, and composition (which of course is within the field covered by various definitions of adulteration in sec. 402 of the Food, Drug, and Cosmetic Act) of canned tuna. Of particular interest are the standards prescribed in rule 1 and the effect they may have on the formulation and validity of standards we expect to provide for canned tuna under section 401 of the Food, Drug, and Cosmetic Act. Investigations necessary to the formulation of such standards were suspended at the beginning of the war, but will soon be resumed. As you know, our food standards must "promote honesty and fair dealing in the interest of consumers," and for that purpose would necessarily include important provisions omitted from the Commission's standards, such as a limitation on the oil or brine added and a specific minimum for fill of container. Furthermore, our standards would fall for want of certainty unless drawn with greater precision than those in the enclosure.

We do not seek to attack the validity of these rules or question the propriety of their promulgation as a legitimate exercise of the Commission's authority to restrain unfair trade practices. Our experts assisted the Commission in compiling the facts which form the basis of the rules. We cite this example merely as a further illustration of confusion to the prejudice of the public which emanates from the duality of jurisdiction. Since it is obvious that our standards must differ from those of the Commission the question arises as to whether the prior existence of the Commission's standards will interfere with the formulation or jeopardize the validity of ours. More than a possibility of such adverse effects exists, notwithstanding the provisions of section 701 (d) of the Federal Food, Drug, and Cosmetic Act.

A further cause of confusion and consequent impairment of consumer protection results from the absence of deterrent effect inherent in the administrative cease and desist procedure. Competitors of those firms who have been ordered to cease and desist know they can continue the forbidden practice until they themselves receive such orders. Because the procedure is cumbersome and time-consuming the offense may be long continued, whereas, if the original proceedings were penal and tried in courts of law a single decision would have a far-reaching influence toward general compliance. That the Federal courts are

well qualified to pass on the truth or falsity of representations made for foods, drugs, and cosmetics has been abundantly demonstrated by the record in thousands of actions involving misbranding brought under the Food and Drugs Act of 1906 and the Federal Food, Drug, and Cosmetic Act of 1938.

I shall be delighted to be of all possible assistance to you in your purpose to eliminate difficulties that have characterized the administration or legislation for the control of foods, drugs, and cosmetics. When the Congress decided in 1938 to delete the advertising provisions from the food, drug, and cosmetic bill, we accepted the decision philosophically. I am not urging that regulatory control of these commodities be combined under any particular agency.

The important thing is the character of the control legislation. In my judgment it should provide for similar procedures against the offenses of adulteration, misbranding and false advertising so that allegations on all three can be combined in a single action when the facts warrant; it should provide that the issues be tried initially in the Federal courts; it should prescribe such penalties as will create an incentive to compliance; it should vest clear responsibility for enforcement in a single agency; it should not interfere with the operation of existing legislation to control unfair practices that do not come within the statutory definitions of adulteration, misbranding, or false advertising.

Sincerely yours,

P. B. DUNBAR, Commissioner of Food and Drugs.

Mr. SADOWSKI. The committee will meet in this room tomorrow morning at 10 o'clock to continue the hearings.

(Thereupon, at 12:15 p. m., the committee recessed, until 10 a. m., Friday, March 8, 1946.)