Drug Research Corp. v. Curtis Publishing Co.

7 N.Y.2d 435
CourtNew York Court of Appeals
DecidedMarch 24, 1960
StatusPublished

This text of 7 N.Y.2d 435 (Drug Research Corp. v. Curtis Publishing Co.) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Drug Research Corp. v. Curtis Publishing Co., 7 N.Y.2d 435 (N.Y. 1960).

Opinions

Dye, J.

In this libel action the complaint alleges that defendant Ben Pearse wrote an article entitled “Don’t Fall for the Mail Frauds ”, which appeared in the March 29, 1958 issue of the Saturday Evening Post, a magazine owned, published and circulated by defendant Curtis Publishing Company. The article contains the following statements which are complained of (Complaint, par. Eleventh) :

“ The hottest gimmick in the mail-fraud field today is the alleged weight-reducing pill. Recent emphasis by medical authorities on the harmful effect of overweight has made avoirdupois a national obsession. The underlying causes of overweight are often obscure: boredom, nervousness, unrequited love are only a few. But the cure — eating less — calls for something most fat people don’t have when it comes to food: will power.
“ That’s where the gimmicks come in. Certain drugs, medical authorities agree, have the effect of deadening the appetite. Doctors often prescribe them to help obese patients stick to a diet, but they frequently have harmful side effects and generally are available only on prescription. Yet so common is the desire to get something for nothing — in this case slimness without diet — that some schemes promising this impossibility have taken in over a million dollars a year. Forty-five such schemes, not all quite so profitable, have been barred from the mails during the past two years.
“ About a year ago, the Wonder Drug Corporation, in a flood of full-page newspaper advertisements, heralded an allegedly new reducing discovery called Regimen, which required ‘ no giving up the kinds of food you like to eat.’ In the box of green, pink and yellow pills you got for three dollars, however, were instructions warning you to avoid heavy gravies, oils, thick [438]*438soup, rice, spaghetti, jam, jelly, noodles, nuts, ice cream, potatoes, cake, candy, chocolate, cereal, crackers, cream, custard, bread, butter, pastry, pudding, sugar and salt.
‘1 Last June, after an investigation by postal inspectors, officials of the Wonder Drug Corporation voluntarily signed an ‘ affidavit of discontinuance, ’ agreeing to stop soliciting orders through the mail — after taking in $200,000 in six months, according to-inspectors’ estimates. Nevertheless, Begimen is still obtainable over the counter in some retail stores, where postal authorities have no jurisdiction. However, the Federal Trade Commission, which has responsibility concerning deceptive advertising when the mails are not used, has Begimen under investigation.
‘1 Why all this red tape in dealing with questionable schemes í The reason is that Congress has always been leary of interfering with the secrecy or speedy delivery of the mails. In 1868, to break up the many notorious lotteries flourishing at the time, Congress declared it unlawful to use the mails for ‘ lotteries and guessing games.’ In codifying the postal laws four years later, the unlawful list was extended to include mail concerning schemes intended to deceive and defraud the public.’ But even tpday the Postmaster General himself can’t open a letter <or refuse to deliver it, without following certain judicial or administrative procedures.
“ The judicial course is to instigate criminal charges in a Federal court, and successful prosecution will not only stop the fraud but will also punish the defrauder with a prison sentence or fine or both. Administrative action is designed to stop the fraud without imposing criminal penalties. The offender is entitled to an open hearing before an impartial examiner, but if a fraud order is issued, mail addressed to him is returned unopened to the sender, marked ‘ Fraudulent. ’
1 Because of the time element, the Post Office Department generally relies on administrative rather than court action, at least when only nominal sums are involved. A fraud order can be processed in about six months under the Federal Administrative Procedure Act, and in a matter of weeks if the firm cited voluntarily signs a discontinuance affidavit. A criminal action, on the other hand, usually takes much longer, as it did with a mail-order nursery in Bloomington, Illinois

[439]*439According to the complaint, the plaintiff is the manufacturer and a distributor of ‘ ‘ Regimen ’ ’, and, as stated in the briefs, Wonder Drug is a distributor.

It is further alleged that the article concerned the plaintiff; that it is “ false and defamatory as to the product Regimen and the plaintiff ’ ’; that hospital and clinical studies on obese persons had established that patients under no calorie restrictions and taking Regimen lost substantially the same amount of weight as those patients under a 1,000-calorie restriction and taking Regimen; that the published matter gave the impression, as it was intended to, that plaintiff is a swindler and engaged in obtaining money by false pretenses, misrepresentation and fraud, and is engaged in conducting a racket; that the defendants acted with knowledge of the article’s falsity, with malice, and with intent to injure plaintiff’s reputation and business; and that the article has caused drug jobbers, wholesalers, retail chain stores and others to cancel orders for, and refuse to sell, Regimen, has prompted various communications media to refuse Regimen advertising, and has caused grave injury and prejudice to plaintiff’s name and business reputation, all to the tune of $5,000,000.

The sufficiency of the pleading depends in part on whether the article, when fairly read, concerns the plaintiff. That it concerns the Wonder Drug Corporation is obvious, but nowhere does it mention the plaintiff with particularity. The complaint sets forth the connection between the alleged libel and the Drug Research Corporation in abbreviated form, pursuant to rule 96 of the Rules of Civil Practice. But the form of the allegation does not foreclose defendant from impeaching the sufficiency of the complaint on the ground that the pleading, taken as a whole, clearly removes the plaintiff from the reach of the alleged libel (Corr v. Sun Print. & Pub. Assn., 177 N. Y. 131 [1904]; Fleischmann v. Bennett, 87 N. Y. 231 [1881]). In short, rule 96 is not available to supply a deficiency in what might otherwise be a good cause of action.

The Appellate Division saw in the statement ‘ ‘ However, the Federal Trade Commission, which has responsibility concerning deceptive advertising when the mails are not used, has Regimen under investigation ’ ’ a connection with the plaintiff because Wonder Drug Corporation is not mentioned in this context. [440]*440This is straining to reach a result quite inconsistent with a fair reading of the text. Libelous language must be tested by a “ fair ”, not a “ broad ”, reading (cf. Tracy v. Newsday, 5 N Y 2d 134 [1959]). This is so because the law of libel imposes restraints on the right of free speech (Julian v. American Business Consultants, 2 N Y 2d 1 [1956]); and, too, always present is the possibility of resort to penal sanctions (Penal Law, §§ 1340-1349, 1937). The article in its entirety is at variance with the construction that it was written of and concerning the plaintiff. When so read, it effectively negatives the short-form allegation that the article libels the plaintiff. It is one thing to save an ineptly worded pleading by construing it liberally (Civ. Prac.

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7 N.Y.2d 435, Counsel Stack Legal Research, https://law.counselstack.com/opinion/drug-research-corp-v-curtis-publishing-co-ny-1960.