[Federal Register Volume 70, Number 136 (Monday, July 18, 2005)]
[Notices]
[Pages 41225-41227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14082]


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FEDERAL TRADE COMMISSION

[File No. 032 3144]


Cytodyne, LLC, Evergood Products Corp., and Melvin Rich; Analysis 
of Agreement Containing Consent Order to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of Federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint and the terms of the consent order--embodied in the consent 
agreement--that would settle these allegations.

DATES: Comments must be received on or before August 10, 2005.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Cytodyne, LLC, et al., File No. 032 3144,'' 
to facilitate the organization of comments. A comment filed in paper 
form should include this reference both in the text and on the 
envelope, and should be mailed or delivered to the following address: 
Federal Trade Commission/Office of the Secretary, Room 159-H, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. Comments containing 
confidential material must be filed in paper form, must be clearly 
labeled ``Confidential,'' and must comply with Commission Rule 4.9(c). 
16 CFR 4.9(c) (2005).\1\ The FTC is

[[Page 41226]]

requesting that any comment filed in paper form be sent by courier or 
overnight service, if possible, because U.S. postal mail in the 
Washington area and at the Commission is subject to delay due to 
heightened security precautions. Comments that do not contain any 
nonpublic information may instead be filed in electronic form as part 
of or as an attachment to e-mail messages directed to the following e-
mail box: [email protected].
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    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See Commission Rule 4.9(c), 
16 CFR 4.9(c).
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    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at http://www.ftc.gov. As a matter of discretion, the FTC 
makes every effort to remove home contact information for individuals 
from the public comments it receives before placing those comments on 
the FTC Web site. More information, including routine uses permitted by 
the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Peter Miller (202) 326-2629 or Michael 
Ostheimer (202) 326-2699, Bureau of Consumer Protection, Room NJ-3223, 
600 Pennsylvania Avenue, NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 of 
the Commission Rules of Practice, 16 CFR 2.34, notice is hereby given 
that the above-captioned 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 thirty (30) days. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for July 13, 2005), on the World Wide Web, at http://www.ftc.gov/os/2005/07/index.htm. A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, 
DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement containing a consent order from Cytodyne, LLC, 
Evergood Products Corp., and Melvin Rich, individually and as a manager 
of Cytodyne, LLC and an officer of Evergood Products Corp. (together, 
``respondents'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) 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 involves practices relating to the advertising and 
promotion of Xenadrine EFX, a dietary supplement marketed for weight 
loss. According to the FTC complaint, respondents represented that 
Xenadrine EFX causes rapid and substantial weight and fat loss, causes 
permanent or long-term weight loss, and causes rapid and substantial 
weight loss without the need to diet or increase exercise. The 
complaint alleges that these claims are false and that the company 
failed to have substantiation for them. It further alleges that 
respondents falsely represented that scientific studies prove that 
Xenadrine EFX causes rapid and substantial weight loss and that it is 
more effective than leading ephedrine-based diet products. The FTC 
complaint also alleges that respondents falsely represented that 
persons appearing in Xenadrine EFX advertisements achieved the weight 
loss reported in those ads solely through the use of Xenadrine EFX. 
According to the FTC complaint, persons who appeared in the Xenadrine 
EFX advertisements engaged in rigorous diet and/or exercise programs in 
order to lose weight, and some were provided with a personal trainer. 
Finally, the complaint alleges that, in presenting testimonials for 
Xenadrine EFX by consumer endorsers who purportedly lost weight in the 
ordinary course of using Xenadrine EFX, respondents failed to disclose 
that the endorsers were paid from $1000 to $20,000 in connection with 
their endorsement, a fact that would be material to consumers in their 
decisions about purchasing or using the product.
    The proposed consent order contains provisions designed to prevent 
the respondents from engaging in similar acts and practices in the 
future.
    Part I of the order prohibits representations that Xenadrine EFX or 
any other product containing green tea extract, bitter orange, or 
caffeine causes rapid and substantial weight loss or fat loss. It also 
prohibits representations that any weight loss product causes rapid or 
substantial weight loss without the need to diet or increase exercise.
    Part II prohibits respondents from representing that any weight 
loss product, dietary supplement, food, drug, or device causes weight 
or fat loss, causes permanent or long-term weight loss, or enables 
users to lose weight or fat without the need to diet or increase 
exercise unless the claim is true and respondents possess competent and 
reliable scientific evidence that substantiates the claim. It also 
prohibits respondents from making any other claims about the health 
benefits, performance, efficacy, safety, or side effects of any such 
product unless the claim is true and respondents possess competent and 
reliable scientific evidence that substantiates the claim.
    Part III prohibits any misrepresentation of the existence, 
contents, validity, results, conclusions, or interpretations of any 
test or study in connection with the marketing or sale of any weight 
loss product, dietary supplement, food, drug, or device.
    Part IV prohibits any misrepresentation that the experience 
described in any user testimonial for any weight loss product, dietary 
supplement, food, drug, or device represents the actual experience of 
the endorser as a result of using the product under the circumstances 
depicted in the endorsement.
    Part V prohibits any representation about any endorser of any 
weight loss product, dietary supplement, food, drug, or device unless 
the respondents disclose any material connection that exists between 
the endorser and the respondents or any other person or entity involved 
in manufacturing, marketing, or selling the product.
    Part VI of the proposed order allows the respondents to make any 
representations for any drug that are permitted in labeling for the 
drug under any tentative final or final Food and Drug Administration 
(``FDA'') standard or under any new drug application approved by the 
FDA.

[[Page 41227]]

    Part VII of the proposed order allows the respondents to make 
representations for any product that are specifically permitted in 
labeling for that product by regulations issued by the FDA under the 
Nutrition Labeling and Education Act of 1990.
    Part VIII provides for the payment of $100,000 to the Commission.
    Part IX requires respondents to cooperate in good faith with the 
Commission's reasonable requests for documents and testimony in 
connection with this action or any investigations related to or 
associated with the transactions or the occurrences that are the 
subject of the FTC complaint.
    Part X requires respondents to send a letter to purchasers for 
resale of Xenadrine EFX notifying them of the Commission's order. It 
also provides that if respondents learn that any of its resellers or 
distributors are disseminating any advertisement or promotional 
material containing prohibited representations, they are required to 
request that the resellers or distributors stop making such 
representations and to stop doing business with resellers or 
distributors that do not comply with this request. Part XI requires 
respondents to keep copies of the communications required by Part X.
    Parts XII through XVI require respondents to keep copies of 
relevant advertisements and materials substantiating claims made in the 
advertisements; to provide copies of the order to certain of their 
personnel; to notify the Commission of changes in corporate structure 
(for the corporate respondents) and changes in employment (for the 
individual respondent) that might affect compliance obligations under 
the order; and to file compliance reports with the Commission. Part 
XVII provides that the order will terminate after twenty (20) 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.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 05-14082 Filed 7-15-05; 8:45 am]
BILLING CODE 6750-01-P