[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