[Federal Register Volume 61, Number 132 (Tuesday, July 9, 1996)]
[Notices]
[Pages 36063-36065]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17466]
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FEDERAL TRADE COMMISSION
[File No. 962-3053]
Jordan, McGrath, Case & Taylor; Proposed Consent Agreement with
Analysis to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair or deceptive acts or practices and unfair methods of
competition, this consent agreement, accepted subject to final
Commission approval, would prohibit, among other things, the New York
City-based advertising agency from making advertising claims regarding
the efficacy, safety, benefits, or performance of any over-the-counter
internal analgesics unless they have competent and reliable scientific
evidence supporting the claims. The consent agreement settles
allegations stemming from Jordan, McGrath's advertising campaign for
Doan's pills, an over-the-counter back-pain relief medication marketed
by Ciba-Geigy Corporation.
DATES: Comments must be received on or before September 9, 1996.
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: Joel Winston, Federal Trade
Commission, S-4002, 6th and Pennsylvania Ave. NW., Washington, DC
20580. (202) 326-3153; Loren Thompson, Federal Trade Commission, S-
4002, 6th and Pennsylvania Ave. NW., Washington, DC 20580. (202) 326-
2049.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 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 Section 4.9(b) (6) (ii) of the Commission's Rules of
Practice (16 CFR 4.9(b) (6) (ii)).
Agreement Containing Consent Order to Cease and Desist
The Federal Trade Commission, having initiated an investigation of
certain acts and practices of Jordan, McGrath, Case & Taylor, Inc., a
corporation (hereinafter sometimes referred to as ``proposed
respondent''), and it now appearing that proposed respondent is 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 Jordan, McGrath, Case & Taylor,
Inc., by its duly authorized officer, and counsel for the Federal Trade
Commission that:
1. Proposed respondent Jordan, McGrath, Case & Taylor, Inc., is a
corporation organized, existing, and doing business under and by virtue
of the laws of the State of New York with its office and principal
place of business at 445 Park Avenue, New York, New York 10022.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft complaint.
3. Proposed respondent waives:
(a) Any further procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law; and
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement.
4. 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 draft of
complaint contemplated thereby, 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 proposed respondent, 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 this proceeding.
5. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondent that the law has been
violated as alleged in the draft of complaint, or that the facts as
alleged in the draft complaint, other than the jurisdictional facts,
are true.
6. 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 Sec. 2.34 of the Commission's
Rules, the Commission may, without further notice to proposed
respondent: (1) issue its complaint corresponding in form and substance
with the 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 complaint and
decision containing the agreed-to order to proposed respondent's
address as stated in this agreement shall constitute service. Proposed
respondent waives any rights it may 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 in the agreement may be
used to vary or contradict the terms of the order.
7. Proposed respondent has read the proposed complaint and order
contemplated hereby. Proposed respondent understands that once the
order has been issued, it will be required to file one or more
compliance reports showing that it has fully
[[Page 36064]]
complied with the order. Proposed respondent further understands that
it may be liable for civil penalties in the amount provided by law for
each violation of the order after it becomes final.
Order
For purposes of this Order:
1. ``Doan's'' shall mean any over-the-counter internal analgesic
drug, as ``drug'' is defined in the Federal Trade Commission Act,
bearing the Doan's brand name, including, but not limited to, Regular
Strength Doan's analgesic, Extra Strength Doan's analgesic, and Extra
Strength Doan's P.M. analgesic.
2. ``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.
I
It is ordered that respondent Jordan, McGrath, Case & Taylor, Inc.,
a corporation, its successors and assigns, and its officers, agents,
representatives and employees, directly or through any partnership,
corporation, subsidiary, division or other device, in connection with
the advertising, promotion, offering for sale, sale, or distribution of
Doan's or any other over-the-counter analgesic drug, in or affecting
commerce, as ``drug'' and ``commerce'' are defined in the Federal Trade
Commission Act, do forthwith cease and desist from making any
representation, in any manner, directly or by implication, that such
product is more effective than other over-the-counter analgesic drugs
for relieving back pain or any other particular kind of pain, unless,
at the time of making such representation, respondent possesses and
relies upon competent and reliable scientific evidence that
substantiates the representation. For purposes of Part I of this order,
``competent and reliable scientific evidence'' shall include at least
two adequate and well-controlled, double-blinded clinical studies which
conform to acceptable designs and protocols and are conducted by
different persons, each of whom is qualified by training and experience
to conduct such studies, independently of each other.
II
It is further ordered that respondent Jordan, McGrath, Case &
Taylor, Inc., a corporation, its successors and assigns, and its
officers, agents, representatives and employees, directly or through
any partnership, corporation, subsidiary, division or other device, in
connection with the advertising, promotion, offering for sale, sale, or
distribution of Doan's or any other over-the-counter internal analgesic
drug, in or affecting commerce, as ``drug'' and ``commerce'' are
defined in the Federal Trade Commission Act, do forthwith cease and
desist from making any representation, in any manner, directly or by
implication, regarding such product's efficacy, safety, benefits, or
performance, unless, at the time of making such representation,
respondent possesses and relies upon competent and reliable scientific
evidence that substantiates the representation.
Provided, however, that it shall be a defense hereunder that the
respondent neither knew nor had reason to know of an inadequacy of
substantiation for the representation.
III
Nothing in this order shall prohibit respondent from making any
representation for any drug that is permitted in labeling for 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.
IV
It is further ordered that for a period of five (5) years after the
last date of dissemination of any representation covered by this order,
respondent, or its 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 its possession or control that contradict, qualify, or call
into question such representation, or the basis relied upon for such
representation, including complaints from consumers.
V
It is further ordered that respondent shall:
A. Within thirty (30) days from the date of entry of this order,
provide a copy of this order to each of its current principals,
officers, directors and managers, and to all personnel, agents, and
representatives having sales, advertising, or policy responsibility
with respect to the subject matter of this order; and
B. For a period of ten (10) years from the date of entry of this
order, provide a copy of this order to each of its future principals,
officers, directors, and managers, and to all personnel, agents, and
representatives having sales, advertising, or policy responsibility
with respect to the subject matter of this order who are associated
with them or any subsidiary, successor, or assign, within three (3)
days after the person assumes his or her position.
VI
It is further ordered that respondent shall notify the Commission
at least thirty (30) days prior to any proposed change in its corporate
structure, including, but not limited to, dissolution, assignment, or
sale resulting in the emergence of a successor corporation, the
creation or dissolution of subsidiaries or affiliates, or any other
corporate change that may affect compliance obligations arising out of
this order.
VII
It is further ordered that this order will terminate twenty (20)
years from the date of its issuance, or twenty (20) years from the most
recent date that the United States or the Federal Trade Commission
files a complaint (with or without an accompanying consent decree) in
federal court alleging any violation of the order, whichever comes
later; provided, however, that the filing of such a complaint will not
affect the duration of:
A. Any part in this order that terminates in less than twenty (20)
years;
B. This order's application to any respondent that is not named as
a defendant in such complaint; and
C. This order if such complaint is filed after the order has
terminated pursuant to this Part.
Provided further, that if such complaint is dismissed or a federal
court rules that the respondent did not violate any provision of the
order, and the dismissal or ruling is either not appealed or upheld on
appeal, then the order will terminate according to this Part as though
the complaint was never filed, except that the order will not terminate
between the date such complaint is filed and the later of the deadline
for appealing such dismissal or ruling and the date such dismissal or
ruling is upheld on appeal.
VIII
It is further ordered that respondent shall, within sixty (60) days
from the date of entry of this order, and at such other times as the
Federal Trade
[[Page 36065]]
Commission may require, file with the Commission a report, in writing,
setting forth in detail the manner and form in which it has complied
with this order.
Analysis of Proposed Consent Order to Aid Public Comment
The Federal Trade Commission has accepted an agreement to a consent
order from Jordan, McGrath, Case & Taylor, Inc. (``Jordan, McGrath''),
an advertising agency.
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 or make final the agreement's proposed
order.
This matter concerns Doan's, an analgesic for which Jordan, McGrath
created and disseminated advertisements. The Commission's proposed
complaint alleges that the respondent represented without a reasonable
basis in its advertisements that Doan's analgesic products are more
effective than other analgesics, including Bayer, Advil, Tylenol, and
Aleve, for relieving back pain. The complaint alleges that respondent
knew or should have known that the representation lacked a reasonable
basis.
The proposed consent order contains provisions designed to prevent
the respondent from engaging in similar acts and practices in the
future. Part I of the proposed order prohibits respondent from making
any representation that Doan's or any other over-the-counter analgesic
drug is more effective than any other such drug for relieving back pain
or any other particular kind of pain, unless it possesses competent and
reliable scientific evidence, consisting of at least two adequate and
well-controlled, double-blinded clinical studies, that substantiates
the representation.
Part II of the proposed order prohibits respondent from making any
representation about the efficacy, safety, benefits, or performance of
any over-the-counter internal analgesic drug, unless it possesses
competent and reliable scientific evidence that substantiates the
representation. This Part further provides that it shall be a defense
under this Part that respondent neither knew nor had reason to know of
an inadequacy of substantiation for a representation.
Part III of the order is a safe harbor provision allowing
representations for any drug that are permitted in the labeling for
that drug under any tentative final or final standard promulgated by
the Food and Drug Administration (``FDA'') or by an approved new drug
application.
Parts IV, V, VI, and VII of the order relate to respondent's
obligation to maintain records, distribute the order to current and
future officers and employees, notify the Commission of changes in
corporate structure, and file compliance reports with the Commission.
Part VIII provides that the order will terminate after twenty years
under certain circumstances.
The purpose of this analysis is to facilitate public comment on the
proposed order, and 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.
[FR Doc. 96-17466 Filed 7-8-96; 8:45 am]
BILLING CODE 6750-01-P