[Federal Register Volume 59, Number 175 (Monday, September 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22432]


[[Page Unknown]]

[Federal Register: September 12, 1994]


-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION
[File No. 9123145]

 

RN Nutrition, et al.; Proposed Consent Agreement With Analysis To 
Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
require, among other things, the California marketers of the calcium 
supplement product, BoneRestore, to possess competent and reliable 
scientific evidence to substantiate the claims that any food, drug, or 
food or dietary supplement products will treat or cure any disease or 
condition; would prohibit the respondents from using the name 
BoneRestore in a misleading way; and would restrict the use of 
testimonial endorsements that do not represent typical results.

DATES: Comments must be received on or before November 14, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
Phoebe Morse, Boston Regional Office, Federal Trade Commission, 101 
Merrimac St., Suite 810, Boston, MA 02114-4719 (617) 424-5960.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given 
that the following consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of sixty (60) days. Public comment is invited. Such comments or 
views will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii).

    In the Matter of RN Nutrition, a limited partnership, and George 
Page Rank and James W. Nugent, individually and as co-partners, 
trading and doing business as RN Nutrition; Agreement containing 
consent order to cease and desist.


    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of RN Nutrition, a limited partnership, and 
George Page Rank and James W. Nugent, individually and as co-partners, 
trading and doing business as RN Nutrition, hereinafter sometimes 
referred to as proposed respondents, and it is now appearing that 
proposed respondents are willing to enter into an agreement containing 
an order to cease and desist from the use of the acts and practices 
being investigated,
    It is hereby agreed by and between proposed respondents, and their 
attorney, and counsel for the Federal Trade Commission that:
    1. Proposed respondent RN Nutrition is a limited partnership 
organized, existing and doing business under and by virtue of the laws 
of the State of California, with its principal office or place of 
business at 3402-M West MacArthur, Santa Ana, California 92704.
    2. Proposed respondent George Page Rank is an individual who has 
been, and is now, a general partner of RN Nutrition. As such, he 
formulates, or participates in the formulation of, directs and controls 
the acts and practices of RN Nutrition. His business address is 3402-M 
West MacArthur, Santa Ana, California 92704.
    3. Proposed respondent James W. Nugent is an individual who has 
been, and is now, a general partner of RN Nutrition. As such, he 
formulates, or participates in the formulation of, directs and controls 
the acts and practices of RN Nutrition. His business address is 3402-M 
West MacArthur, Santa Ana, California 92704.
    4. Proposed respondents admit all the jurisdictional facts set 
forth in the draft complaint here attached.
    5. Proposed respondents waive:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    (d) All claims under the Equal Access to Justice Act.
    6. This agreement shall not become part of the public record of the 
proceeding unless and until it is accepted by the Commission. If this 
agreement is accepted by the Commission, it, together with the attached 
draft complaint, will be placed on the public record for a period of 
sixty (60) days and information in respect thereto publicly released. 
The Commission thereafter may either withdraw its acceptance of this 
agreement and so notify the proposed respondents, in which event it 
will take such action as it may consider appropriate, or issue and 
serve its complaint (in such form as the circumstances may require) and 
decision, in disposition of the proceeding.
    7. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondents that the law has been 
violated as alleged in the attached draft complaint, or that the facts 
alleged in the attached draft complaint, other than jurisdictional 
facts, are true.
    8. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Section 2.34 of the 
Commission's Rules, the Commission may, without further notice to 
proposed respondents, (1) issue its complaint corresponding in form and 
substance with the attached draft complaint and its decision containing 
the following order to cease and desist in disposition of the 
proceeding and (2) make information public in respect thereto. When so 
entered, the order to cease and desist shall have the same force and 
effect and may be altered, modified, or set aside in the same manner 
and within the same time provided by statute for other orders. The 
order shall become final upon service. Delivery by the U.S. Postal 
Service of the decision containing the agreed-to order to proposed 
respondents' address as stated in this agreement shall constitute 
service. Proposed respondents waive any right they might have to any 
other manner of service. The complaint may be used in construing the 
terms of the order, and no agreement, understanding, representation, or 
interpretation not contained in the order or the agreement may be used 
to vary or contradict the terms of the order.
    9. Proposed respondents have read the proposed complaint and order 
contemplated hereby. Proposed respondents understand that once the 
order has been issued, they will be required to file one or more 
compliance reports showing that they have fully complied with the 
order. Proposed respondents further understand that they may be liable 
for civil penalties in the amount provided by law for each violation of 
the order after it becomes final.

Order

I

    It is ordered that RN Nutrition, a limited partnership, and George 
Page Rank and James W. Nugent, individually and as co-partners, trading 
and doing business as RN Nutrition, or under any other name, their 
successors and assigns, and respondents' agents, representatives, and 
employees, directly or through any partnership, corporation, 
subsidiary, division or other device, in connection with the labeling, 
advertising, promotion, offering for sale, sale, or distribution of 
BoneRestore or any food or dietary supplement, food, or drug, as 
``food'' and ``drug'' are defined in section 15 of the Federal Trade 
Commission Act, in or affecting commerce, as ``commerce'' is defined in 
the Federal Trade Commission Act, do forthwith cease and desist from 
representing, in any manner, directly or by implication, that such 
product:

1. builds new bone, builds strong bones, increases bone and causes 
significant bone gain;
2. builds bone better than estrogen or other forms of calcium;
3. slows or stops bone loss;
4. helps persons who suffer from weak or weakening bones;
5. prevents and heals osteoporosis;
6. rebuilds bone and restores lost bone;
7. eliminates pain associated with bone ailments;
8. is absorbed by the body better than other forms of calcium;
9. prevents bone fractures;
10. straightens spinal curvatures; and
11. provides any benefit in the prevention, treatment, or cure of 
osteoporosis, arthritis, back pain, or any other bone ailment or 
condition;

unless, at the time of making such representation, respondents possess 
and rely upon competent and reliable scientific evidence that 
substantiates the representation. For purposes of this Order, 
``competent and reliable scientific evidence'' shall mean tests, 
analyses, research, studies, or other evidence based on the expertise 
of professionals in the relevant area, that has been conducted and 
evaluated in an objective manner by persons qualified to do so, using 
procedures generally accepted in the profession to yield accurate and 
reliable results.

II

    It is further ordered that RN Nutrition, a limited partnership, and 
George Page Rank and James W. Nugent, individually and as co-partners, 
trading and doing business as RN Nutrition, or under any other name, 
their successors and assigns, and respondents' agents, representatives, 
and employees, directly or through any partnership, corporation, 
subsidiary, division or other device, in connection with the labeling, 
advertising, promotion, offering for sale, sale, or distribution of 
BoneRestore or any food or dietary supplement, food, or drug, as 
``food'' and ``drug'' are defined in section 15 of the Federal Trade 
Commission Act, in or affecting commerce, as ``commerce'' is defined in 
the Federal Trade Commission Act, do forthwith cease and desist from 
representing, directly or by implication, that any endorsement (as 
``endorsement'' is defined in 16 CFR 255.0(b)) of the product 
represents the typical or ordinary experience of members of the public 
who use the product, unless, at the time of making such representation, 
respondents possess and rely upon competent and reliable evidence, 
which when appropriate must be competent and reliable scientific 
evidence, that substantiates such representation.

III

    It is further ordered that RN Nutrition, a limited partnership, and 
George Page Rank and James W. Nugent, individually and as co-partners, 
trading and doing business as RN Nutrition, or under any other name, 
their successors and assigns, and respondents' agents, representatives, 
and employees, directly or through any partnership, corporation, 
subsidiary, division or other device, in connection with the labeling, 
advertising, promotion, offering for sale, sale, or distribution of 
BoneRestore or any food or dietary supplement, food, or drug, as 
``food'' and ``drug'' are defined in section 15 of the Federal Trade 
Commission Act, in or affecting commerce, as ``commerce'' is defined in 
the Federal Trade Commission Act, do forthwith cease and desist from 
using the name ``BoneRestore,'' or any other name, in a manner that 
represents, directly or by implication, that such product has the 
ability to restore, build, or increase bone unless, at the time of 
making the representation, respondents possess and rely upon competent 
and reliable scientific evidence that substantiates the representation 
that it restores, builds, or increases bone. This provision does not 
otherwise affect respondents' ability to use the trade name 
``BoneRestore,'' or any other brand name, to make a qualified 
representation that is substantiated by competent and reliable 
scientific evidence.

IV

    It is further ordered that RN Nutrition, a limited partnership, and 
George Page Rank and James W. Nugent, individually and as co-partners, 
trading and doing business as RN Nutrition, or under any other name, 
their successors and assigns, and respondents' agents, representatives, 
and employees, directly or through any partnership, corporation, 
subsidiary, division or other device, in connection with the labeling, 
advertising, promotion, offering for sale, sale, or distribution of 
BoneRestore or any food or dietary supplement, food, or drug, as 
``food'' and ``drug'' are defined in section 15 of the Federal Trade 
Commission Act, in or affecting commerce, as ``commerce'' is defined in 
the Federal Trade Commission Act, do forthwith cease and desist from 
misrepresenting, in any manner, directly or by implication, the 
existence, contents, validity, results, conclusions, or interpretations 
of any test or study.

V

    It is further ordered that RN Nutrition, a limited partnership, and 
George Page Rank and James W. Nugent, individually and as co-partners, 
trading and doing business as RN Nutrition, or under any other name, 
their successors and assigns, and respondents' agents, representatives, 
and employees, directly or through any partnership, corporation, 
subsidiary, division or other device, in connection with the labeling, 
advertising, promotion, offering for sale, sale, or distribution of 
BoneRestore or any food or dietary supplement, food, or drug, as 
``food'' and ``drug'' are defined in section 15 of the Federal Trade 
Commission Act, in or affecting commerce, as ``commerce'' is defined in 
the Federal Trade Commission Act, do forthwith cease and desist from 
making any representation, in any manner, directly or by implication, 
that any such product will treat, cure, alleviate the symptoms, 
prevent, or reduce the risk of developing any disease, disorder, or 
condition, unless, at the time of making such representation, 
respondents possess and rely upon competent and reliable scientific 
evidence that substantiates the representation.

VI

    Nothing in this Order shall prohibit respondents from making any 
representation that is specifically permitted in labeling for any such 
product by regulations promulgated by the Food and Drug Administration 
pursuant to the Nutrition Labeling and Education Act of 1990.

VII

    Nothing in this Order shall prohibit respondents from making any 
representation for any drug that is permitted in labeling for any such 
drug under any tentative final or final standard promulgated by the 
Food and Drug Administration, or under any new drug application 
approved by the Food and Drug Administration.

VIII

    It is further ordered that for five (5) years after the last date 
of dissemination of any representation covered by this Order, 
respondents, or their successors and assigns, shall maintain and upon 
request make available to the Federal Trade Commission for inspection 
and copying:
    A. All materials that were relied upon in disseminating such 
representation; and
    B. All tests, reports, studies, surveys, demonstrations or other 
evidence in their possession or control that contradict, qualify, or 
call into question such representation, or the basis relied upon for 
such representation, including complaints from consumers.

IX

    It is further ordered that respondents shall forthwith distribute a 
copy of this Order to all principals and managers and to all personnel, 
agents, licensees and distributors, engaged in the preparation or 
placement of advertisements or promotional materials covered by this 
Order and shall obtain from each such employee, agent, licensee and 
distributor a signed statement acknowledging receipt of the Order.

X

    It is further ordered that for a period of five (5) years from the 
date of entry of this Order, respondents George Page Rank and James W. 
Nugent shall provide written notice to the Federal Trade Commission 
within thirty (30) days of:
    A. Any change in his business or employment that may affect 
compliance obligations arising out of this Order;
    B. The discontinuance of his business or employment; and
    C. His affiliation with any new business or employment; each such 
notice to include his business address and telephone number, home 
address, and a statement describing the nature of the business or 
employment and his duties and responsibilities.

XI

    It is further ordered that respondents shall, within sixty (60) 
days after service upon them of this Order, and at such other times as 
the Commission may require, file with the Commission a report, in 
writing, setting forth in detail the manner and form in which they have 
complied with this Order.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement, subject to 
final approval, to a proposed consent order from respondents RN 
Nutrition, a limited partnership, and George Page Rank and James W. 
Nugent, individually and as co-partners, trading and doing business as 
RN Nutrition.
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement and take other appropriate action or make 
final the agreement's proposed order.
    This matter concerns claims made in respondents' direct mail and 
mail order catalog advertisements for their calcium supplement, 
``BoneRestore.'' The Commission's complaint alleges that respondents 
engaged in deceptive advertising by making unsubstantiated claims that 
BoneRestore prevents, treats, and cures bone disease, bone ailments and 
their related symptoms, and that the product is superior in this regard 
to other calcium supplements and/or estrogen. The complaint also 
alleges that respondents falsely claimed to have scientific 
substantiation for these claims. In addition, the complaint alleges 
that respondents made unsubstantiated claims that consumer testimonials 
appearing in their advertisements reflect the typical or ordinary 
experience of members of the public who have used BoneRestore.
    The proposed consent order contains provisions designed to remedy 
the violations charged and to prevent the respondents from engaging in 
similar acts and practices in the future. Part I of the proposed order 
prohibits the respondents from representing that BoneRestore, or any 
food or dietary supplement, food, or drug: builds and restores bone; 
stops bone loss; helps persons with weak bones; treats osteoporosis; 
relieves pain; is superior to calcium or estrogen; prevents fractures; 
straightens spinal curvatures; and that it provides any benefit in the 
prevention, treatment or cure of osteoporosis, arthritis, back pain, or 
other bone ailments, unless respondents possess competent and reliable 
scientific evidence that substantiates the representation.
    Part II of the proposed order prohibits respondents from 
representing that any endorsement of BoneRestore represents the typical 
or ordinary experiences of members of the public who have used the 
product, unless respondents possess competent and reliable scientific 
evidence that substantiates the representation.
    Part III of the proposed order requires respondents to cease using 
the name ``BoneRestore'' or any other brand name that represents that 
such product has the ability to restore, build, or increase bone, 
unless respondents possess competent and reliable scientific evidence 
that substantiates the representation.
    Part IV of the proposed order prohibits respondents from 
misrepresenting the existence, contents, validity, results, 
conclusions, or interpretations of any test or study.
    Part V of the proposed order prohibits respondents from 
representing that BoneRestore or any food or dietary supplement, food, 
or drug, will treat, cure, prevent, or reduce the risk of developing 
any disease, disorder, or condition, unless respondents possess 
competent and reliable scientific evidence that substantiate the 
representation.
    Parts VI and VII of the proposed order include safe harbor 
provisions allowing respondents to make any representation permitted in 
labeling by the Food and Drug Administration for food under the 
Nutrition Labeling and Education Act of 1990, and for drugs under any 
tentative final or final standard promulgated by the Food and Drug 
Administration.
    The remaining portions of the proposed order require respondents to 
maintain materials relied upon in disseminating any representation 
covered by this order, to distribute copies of the order to certain 
officials and employees, to notify the Commission of changes in the 
business and employment of the individual respondents, and to file 
reports detailing respondents' compliance with the order.
    The purpose of this analysis is to facilitate public comment on the 
proposed consent order. It is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.
Donald S. Clark,
Secretary.

Dissenting Statement of Commissioner Deborah K. Owen in the Matter of 
RN Nutrition (File No. 912-3145)

    The reasons for my dissenting vote in this matter are identical to 
those expressed in my separate statement in the companion case, 
Metagenics, Inc. (File No. 912-3347), which is attached.

Dissenting Statement of Commissioner Deborah K. Owen in the Matter of 
Metagenics, Inc. (File No. 912-3347)

    Although I believe that certain of Metagenics' claims were 
unsubstantiated and, therefore, I would have been inclined to support a 
more narrow complaint, I must dissent from today's Commission action 
because I believe that, on balance, it runs contrary to the public 
interest. I fear that the breadth of the allegations in the 
administrative complaint may convey the wrong message to the public and 
thereby discourage not only truthful and nondeceptive claims about 
calcium supplements but, ultimately, their use.
    The Commission has taken great pains in recent years to articulate 
and justify its standards for advertising interpretation and 
substantiation. In taking this action today, I believe that the 
Commission has essentially ceded its authority to the FDA on both 
counts. In short, I find today's Commission action overly restrictive 
and inconsistent with the previously announced policies of the 
Commission. Accordingly, I respectfully dissent.

[FR Doc. 94-22432 Filed 9-9-94; 8:45 am]
BILLING CODE 6750-01-M