Home/N.D. Illinois/United States v. Golden Fifty Pharmaceutical Co., Inc.

United States v. Golden Fifty Pharmaceutical Co., Inc.

421 F. Supp. 1199, 1976 U.S. Dist. LEXIS 13133
CourtDistrict Court, N.D. Illinois
DecidedSeptember 21, 1976
Docket74 C 1124
StatusPublished
Cited by4 cases

This text of 421 F. Supp. 1199 (United States v. Golden Fifty Pharmaceutical Co., Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Golden Fifty Pharmaceutical Co., Inc., 421 F. Supp. 1199, 1976 U.S. Dist. LEXIS 13133 (N.D. Ill. 1976).

Opinion

MEMORANDUM DECISION

MARSHALL, District Judge.

The United States has brought this action to collect civil penalties from the defendants Golden Fifty Pharmaceutical Co., Inc. (Golden Fifty), and Michael Posen, Golden Fifty’s president, pursuant to 15 U.S.C.A. §§ 45(7), 49, and 52, for violation of a Federal Trade Commission cease and desist order which became final on June 29, 1970. The United States also requests permanent injunctive relief. Jurisdiction is based upon 28 U.S.C. §§ 1337, 1345, and 1355. The plaintiff’s motion for summary judgment, Fed.R.Civ.P. 56, is ready for decision on the memoranda, exhibits, and affidavits submitted by the parties.

*1201 In material part, the Commission’s order provided:

IT IS ORDERED that respondents Golden Fifty Pharmaceutical Co., Inc., a corporation, and its officers, and Michael Posen, individually and as an officer of said corporation, and its agents, representatives and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of the preparation designated ‘Golden 50 Tabulets,’ or any food, drug, device or cosmetic do forthwith cease and desist from directly or indirectly:
1. Disseminating or causing the dissemination of, by means of the United States mails or by any means in commerce, as ‘commerce’ is defined in the Federal Trade Commission Act, any advertisement which:
(a) Represents directly or by implication that respondents are manufacturers of vitamin and/or mineral preparations or maintain laboratory facilities concerned with the formulation, testing or performance of vitamin and/or mineral preparations.
(b) Represents directly or by implication that any product is offered free or under any other terms when the offer is used as a means of enrolling those who accept the offer in a plan whereby additional supplies of the product are shipped at an additional charge unless all of the conditions of the plan are disclosed clearly and conspicuously and within close proximity to the ‘free’ or other offer.
(c) Represents directly or by implication that an offer is made without ‘further obligation,’ or with ‘no risk,’ or words of similar import denoting on the part of the recipient of such offer when in fact there is an obligation incurred by the recipient.
(d) Represents directly or by implication that an offer is made to only a limited customer group or for only a limited period of time when no such limitations are imposed by respondents.
2. Disseminating, or causing to be disseminated, by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase of respondents’ products in commerce, as ‘commerce’ is defined in the Federal Trade Commission Act, any advertisement which contains any of the representations or misrepresentations prohibited by Paragraph 1 hereof.

Second Amended Complaint, ¶ 7.

The second amended complaint alleges that from October of 1970 to July of 1975 the defendants used several mailing services to disseminate advertisements which violated the cease and desist order. Specifically, Count I charges that the defendants made fourteen mass mailings of advertisements which violated ¶¶ 1(b) and (c); Count II alleges that defendants made an unspecified number of mailings of an advertising leaflet identified as “L-130” in violation of ¶¶ 1(a) and (d); and Count III charges that the defendants mailed an advertisement in violation of ¶ 1(b) to two individuals. By their answer to the second amended complaint, the defendant admitted liability for the conduct charged in Counts I and III of the second amended complaint, but reserved the right to contest the number of violations for which they would be liable and against which the statutory penalties could be assessed. Liability was not admitted for the allegations of Count II. Plaintiff has moved for summary judgment on two issues: defendant’s liability for the violations alleged in Count II; and, the proper calculation of the number of violations represented by the charges in Counts I and III. Each issue will be treated in turn.

I. Appropriateness of Summary Judgment on Count II

Determining whether the advertisements violate the cease and desist order is a two-step process. The first step is to construe or interpret the order itself. This *1202 inquiry is generally perceived as a question of law for the court. E. g., United States v. J. B. Williams Co., Inc., 498 F.2d 414, 431 (2d Cir. 1974). The next step is to determine whether the challenged advertisements fall within the scope of the order as construed. The cases reveal some disagreement as to whether this is a question of law for the court or a question of fact for the trier of fact. In United States v. Vulcanized Rubber & Plastics Co., 288 F.2d 257, 258 & n. 2 (3d Cir. 1961), the court indicated the question is one of law. The court correctly stated that its role in an action to recover civil penalties, is not to determine whether the challenged practice is deceptive, but merely to consider whether the practice falls within the order’s proscription. But drawing this distinction does not answer the question whether the latter analysis involves factual or legal determinations. J. B. Williams, supra, squarely confronted this problem, and found that factual issues are presented. Briefly, the court cited the general rule that the trier of fact decides disputes concerning the meaning and effect of words and acts, particularly if their interpretation depends upon a choice among the reasonable inferences to be drawn from extrinsic evidence. 498 F.2d at 432. Nonetheless, summary judgment is appropriate if the evidence supporting a given interpretation is so clear that a directed verdict would be warranted. Id.; 6 J. Moore, Federal Practice ¶ 56.04[2] (2d ed. 1976). Lacking pertinent authority from this circuit, we adopt the well-reasoned approach of the Second Circuit.

The meaning of ¶¶ 1(a) and (d) of the cease and desist order is clear. Paragraph 1(a) prohibits defendants from disseminating through the mails any advertisement which directly (i. e., expressly) or by implication represents that they manufacture Golden 50 Tabulets, or maintain laboratory facilities for testing the tabulets’ performance. Paragraph 1(d) prohibits defendants from disseminating through the mails any advertisement which represents directly (j.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Commonwealth v. Fall River Motor Sales, Inc.
565 N.E.2d 1205 (Massachusetts Supreme Judicial Court, 1991)
United States v. Reader's Digest Association, Inc.
662 F.2d 955 (Third Circuit, 1981)
United States v. Reader's Digest Ass'n, Inc.
494 F. Supp. 770 (D. Delaware, 1980)

Cite This Page — Counsel Stack

Bluebook (online)
421 F. Supp. 1199, 1976 U.S. Dist. LEXIS 13133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-golden-fifty-pharmaceutical-co-inc-ilnd-1976.