96-17466. Jordan, McGrath, Case & Taylor; Proposed Consent Agreement with Analysis to Aid Public Comment  

  • [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
    
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    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
    
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    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
    
    
    

Document Information

Published:
07/09/1996
Department:
Federal Trade Commission
Entry Type:
Notice
Action:
Proposed Consent Agreement.
Document Number:
96-17466
Dates:
Comments must be received on or before September 9, 1996.
Pages:
36063-36065 (3 pages)
Docket Numbers:
File No. 962-3053
PDF File:
96-17466.pdf