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American Home Products Corp. v. Federal Trade Commission

decided as amended january 4 1983.: December 3, 1982.

AMERICAN HOME PRODUCTS CORPORATION, A DELAWARE CORPORATION, PETITIONER
v.
FEDERAL TRADE COMMISSION, RESPONDENT



ON PETITION FOR REVIEW OF AN ORDER OF THE FEDERAL TRADE COMMISSION.

Adams, Hunter, and Becker, Circuit Judges.

Author: Adams

Opinion OF THE COURT

ADAMS, Circuit Judge.

Before us is a petition for review of an Order entered by the Federal Trade Commission ("Commission") against American Home Products ("AHP"). The Order requires that AHP cease and desist various deceptive advertisements for a number of its drug products, including Anacin and Arthritis Pain Formula (APF). AHP does not take issue with all of the findings of deceptiveness on which the Order is based. It argues, however, that some of these findings are not supported by substantial evidence, and that, whether or not the findings are adequately supported, certain aspects of the Order remain unjustified. We uphold the Commission's findings, and accordingly will affirm the core of its Order. We agree, however, with some of AHP's objections to the Order's vagueness and breadth, and therefore will direct that the Order be modified accordingly.

I. Background

The petition for review represents the most recent stage of a proceeding that was initiated by an administrative complaint filed almost ten years ago. Issued on February 23, 1973, the complaint alleged that AHP, in its advertisements for Anacin and APF, had engaged in unfair or deceptive acts in violation 15 U.S.C. §§ 45 and 52 (sections 5 and 12 of the Federal Trade Commission Act).*fn1 That same day, the Commission filed similar complaints against Bristol-Myers Company, manufacturer of Bufferin and Excedrin, and Sterling Drug Inc., manufacturer of Bayer Aspirin. These other cases are currently pending on appeal in the Commission, and are not before the Court at this time.

Anacin is a non-prescription analgesic that is composed of two active ingredients, aspirin (400 milligrams) and caffeine (32.5 milligrams). There is no contention here that caffeine, either in itself or in conjunction with aspirin, is an analgesic. Thus, Anacin's sole pain-killing component is aspirin. See App. 303. An "ordinary" aspirin tablet contains 325 milligrams of aspirin. The recommended dosage of Anacin is one or two tablets. APF, also a non-prescription analgesic, contains "micronized" aspirin (486 milligrams) -- that is, it is an aspirin tablet formulated with small aspirin particles -- along with two antacids.

The complaint charged, among other things, that AHP's advertisements had falsely claimed that Anacin has a unique pain-killing formula that has been conclusively proven to be superior in effectiveness to all other non-prescription analgesics, and that Anacin is a tension reliever. Another of the complaint's accusations was that the petitioner misrepresented that APF is superior to competing products in that it causes less frequent side effects. AHP's answer, filed May 29, 1973, denied any violation of the Federal Trade Commission Act. The petitioner's position was that it did not make the advertising claims which the complaint accused it of making, and that any claims it did make were truthful.

15 U.S.C. § 45(a) (1) declares unlawful "unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce. . . ." Under 15 U.S.C. § 52(a), it is unlawful to disseminate "any false advertisement . . . by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase in or having an effect upon commerce of food, drugs, devices, or cosmetics." 15 U.S.C. § 52(b) makes such dissemination of false advertisements an "unfair or deceptive act or practice" under section 45, thereby triggering the various enforcement and review provisions of section 45. "False advertisement," as defined by 15 U.S.C. § 55(a) (1), is a broadly inclusive term. It encompasses not merely advertisements that are literally untrue, but also materially misleading advertisements -- even where it is only the failure to reveal material facts that renders the advertisement misleading.*fn2

Extensive hearings were conducted in connection with the complaint against AHP. On September 1, 1978, the Administrative Law Judge ("ALJ") issued an Initial Decision and Order (App. 85-344), meticulously reviewing the record evidence and resolving most issues in favor of the complaint counsel. On cross-appeals the Commission, in an Order and Opinion issued September 9, 1981, upheld the ALJ in almost all respects (App. 345-426). The ALJ's findings of fact and conclusions of law were adopted except to the extent inconsistent with the Commission's opinion. App. 346. Whereas the ALJ found AHP's practices "unfair and deceptive," the Commission chose to speak only in terms of deception. Both the ALJ and the Commission focused on the capacity of AHP's advertisements to mislead, and, as the Commission remarked in denying rehearing, the difference in approach was "more of form than of substance." App. 430.

The Commission's Order has several sections.*fn3 Although the Commission's findings related solely to Anacin and APF, some portions of the Order were directed to other products as well. Part I of the order applied to Anacin, APF, and "any other non-prescription internal analgesic product" of AHP's. In I(A) -- the "establishment" provision -- the Commission demanded that when AHP represents that the superior freedom from side effects or superior effectiveness of one of these products to any other products has been "established or proven," AHP must be able to support this representation with at least two well-controlled clinical investigations. I(B) of the Order -- the "substantial question" provision -- takes I(A) support requirements on AHP whenever its advertisements claim superior effectiveness or freedom from side effects, even when those advertisements do not overtly claim that this superiority has been established or proven.*fn4 If AHP cannot provide two or more well-controlled clinical studies to support its superiority claims, it is prohibited from making such claims in an unequivocal manner. It is allowed, however, to assert superiority, provided it discloses that the superiority is open to substantial question.

Part II of the Order applies to all of AHP's non-prescription drug products, not merely the non-prescription internal analgesics. II(A) prohibits AHP from representing that a product contains an unusual or special ingredient when the actual ingredient is commonly used in other non-prescription drugs intended for the same uses. Under II(B), AHP must cease "making false representations that [any non-prescription drug] product has more of an active ingredient than any class of competing products." The misrepresentation of test or survey data concerning effectiveness or freedom from side effects is proscribed by II(C). II(D), an especially far-reaching provision in the Order, requires that AHP cease even noncomparative claims of effectiveness or freedom from side effects unless it possesses a reasonable basis for these claims.

Under Part III of the Order, AHP is required, whenever an advertisement makes a performance claim for Anacin or APF, to disclose in a clear and conspicuous manner that the analgesic ingredient in the product is aspirin.

Part IV of the Order -- the "tension relief" provision -- covers only Anacin. It directs AHP to cease any representations that Anacin "relieves nervousness, tension, anxiety or depression. . . ."

The Order is prospective only. It is designed to ensure that future advertisements will neither mislead the public further nor confirm entrenched misimpressions induced by previous advertisements. Although the Commission found, and AHP in large part no longer disputes, that AHP has engaged in large-scale deception, the Order reflects no punitive intent. The Order does insist that AHP's advertisements make disclosures under many circumstances, but requires disclosures only where AHP makes certain types of claims. Thus the affirmative obligation to provide information to the public is not unconditional under the Order, but will be triggered only when AHP advances certain claims for its products.

A motion for reconsideration filed by AHP was denied on January 21, 1982 (App. 429-34). In separate statements, two commissioners maintained that the Commission as an exercise of discretion should stay the Order, or vote to reconsider it, because of the possibility that the decision might require modification to guarantee that the treatment of AHP be consistent with that of AHP's competitors, Bristol-Myers and Sterling Drug, which had Commission proceedings pending against them.

AHP then petitioned this Court for review pursuant to 15 U.S.C. § 45(c). It asks that Parts I, II(D) and III be vacated, and that II(A), II(B) and II(C) be limited to Anacin and APF. No relief from the strictures of Part IV is requested. We shall first take up AHP's challenge to the findings of deceptiveness that underlie Part I of the Order, and AHP's administrative due process challenge to Part I(B). We shall then turn to a consideration of whether Part II of the Order must be modified as excessively broad or vague, despite AHP's apparent acceptance of the factual findings on which Part II is predicated. The final portion of the opinion will focus on AHP's First Amendment challenge to Part III of the Order.*fn5

II. Part I of the Order

Part I of the Order consists of two provisions. Part I(A) demands that AHP cease falsely to represent that its non-prescription analgesics are medically proven or established to be superior in effectiveness or freedom from side effects to those of competitors. AHP charges that the Commission lacked substantial evidence either that representations of proven superiority were made, or, if they were made, that they were misleading. Under Part I(B), AHP may not represent the superiority of its non-prescription analgesic unless it has established that there exists a specified level of medical evidence. AHP addresses both procedural and substantive challenges to Part I(B). It argues that it was denied administrative due process by reason of changes in the Commission's theory of liability during the course of the proceedings. AHP's substantive objections to Part I(B) are analogous to those made against Part I(A): that the proscribed claims were never made and would not be misleading even if they were. It should be stressed that all the advertising claims at issue -- both those that the Commission found to have been made and those that AHP acknowledges were present -- are susceptible of objective measurement and intended to be taken seriously. AHP does not defend its advertisements as lawful "puffing."*fn6

A. The Standard of Review of Findings of Deceptiveness

15 U.S.C. § 45(c) directs that "the findings of the Commission as to the facts, if supported by evidence, shall be conclusive." It is "clear that properly interpreted, the statute requires review by the substantial evidence in the record as a whole standard," Beneficial Corp. v. FTC, 542 F.2d 611, 616 (3rd Cir. 1976) (footnote, citing cases, omitted), cert. denied, 430 U.S. 983, 52 L. Ed. 2d 377, 97 S. Ct. 1679 (1977). This standard "does not permit the reviewing court to weigh the evidence, but only to determine that there is in the record '"such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,"'" Steadman v. SEC, 450 U.S. 91, 99, 67 L. Ed. 2d 69, 101 S. Ct. 999 (1981) (quoting previous decisions).

This deferential standard with respect to Commission findings of fact applies to the findings here. Although "in the last analysis the words 'deceptive practices' set forth a legal standard and they must get their final meaning from judicial construction," FTC v. Colgate-Palmolive Co., 380 U.S. 374, 385, 13 L. Ed. 2d 904, 85 S. Ct. 1035 (1965), a Commission finding that advertisements are deceptive or tend to mislead "is obviously an impressionistic determination more closely akin to a finding of fact than to a conclusion of law," Beneficial, supra, 542 F.2d at 617 (applying "substantial evidence" standard to Commission findings that advertisement was deceptive). Colgate-Palmolive explained that the "statutory scheme" created by section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a) (1), in particular the generality and flexibility of the statutory standards of illegality,

necessarily gives the Commission an influential role in interpreting § 5 and in applying it to the facts of particular cases arising out of unprecedented situations. Moreover, as an administrative agency which deals continually with cases in the area, the Commission is often in a better position than are courts to determine when a practice is "deceptive" within the meaning of the Act. This Court has frequently stated that the Commission's judgment is to be given great weight by reviewing courts. This admonition is especially true with respect to allegedly deceptive advertising since the finding of a § 5 violation in this field rests so heavily on inference and pragmatic judgment.

380 U.S. at 385 (footnote omitted). *fn7

The Commission's familiarity with the expectations and beliefs of the public, acquired by long experience, is especially crucial when, as with the advertisements proscribed by Parts I(B) and III of the Order in this case, "the alleged deception results from an omission of information instead of a statement." See Simeon Management Corp. v. FTC, 579 F.2d 1137, 1145 (9th Cir. 1978).*fn8

B. How Advertising is to be Interpreted

"The tendency of the advertising to deceive must be judged by viewing it as a whole, without emphasizing isolated words or phrases apart from their context," Beneficial, supra, 542 F.2d at 617. The impression created by the advertising, not its literal truth or falsity, is the desideratum:

Do these advertisements create a false impression as to the value of "Lite Diet" bread as compared with other articles of food? The Commission's judgment is what controls here unless a court finds that the judgment is unsupported by evidence or is capricious or arbitrary or what you will. We think an examination of the advertisements clearly supports the Commission's finding that by implication and innuendo the deceptive impression had been created.

Bakers Franchise Corp. v. FTC, 302 F.2d 258, 261 (3d Cir. 1962).*fn9

It is true that on some crucial points in the case at hand the Commission lacked direct evidence that consumers were in fact misled. But the Commission need not buttress its findings that an advertisement has the inherent capacity to deceive with evidence of actual deception.*fn10

In the present proceeding, the Commission analyzed not only the words used, but also, with respect to the television advertisements, the messages conveyed through the "aural-visual" pattern. App. 254 and 374-75. The Commission's right to scrutinize the visual and aural imagery of advertisements follows from the principle that the Commission looks to the impression made by the advertisements as a whole. Without this mode of examination, the Commission would have limited recourse against crafty advertisers whose deceptive messages were conveyed by means other than, or in addition to, spoken words. In Standard Oil Co. of California v. FTC, 577 F.2d 653, 659 (9th Cir. 1978), the court upheld a Commission finding "that the predominant visual message was misleading, and that it was not corrected or contradicted by the accompanying verbal message in advertisements." Colgate-Palmolive, supra, 380 U.S. at 385-86 also supports the Commission's right to look beyond spoken words to the message conveyed visually. According to Colgate-Palmolive, "even if an advertiser has himself conducted a test, experiment or demonstration which he honestly believes will prove a certain product claim, he may not convey to television viewers the false impression that they are seeing the test, experiment or demonstration for themselves, when they are not because of the undisclosed use of mock-ups."*fn11

C. Part I(A) of the Order

We have no hesitation in affirming the Commission's determination that AHP represented that the superiority of Anacin had been proven or established,*fn12 and that such representation was deceptive.

1. Were the establishment claims made ?

The ALJ's overall method for interpreting advertisements is unexceptionable. He wrote:

I have primarily relied on my knowledge and experience to determine what impression or impressions an advertisement as a whole is likely to convey to a consumer. When my initial determination is confirmed by the expert testimony of complaint counsel or respondents, I rested. When my initial determination disagreed with that of expert testimony, which was often conflicting, I reexamined the advertisement in question, and further considered such record evidence as the ASI copy tests and verbatim responses [a type of survey evidence] before reaching a final determination. In this connection, my determinations agreed in most instances with those of Dr. Ross, complaint counsel's expert, and disagreed with those of Dr. Smith in most instances.

App. 255, footnotes omitted. The Commission expressed its approval of this methodology at some length. App. 421-26. Both the ALJ and the Commission amply defended their reasons for awarding limited weight to the testimony of AHP's expert. App. 255-56; 423-24. The opinion of the ALJ explored in minute detail the survey evidence offered by AHP. App. 210-43. In contrast, the interpretations that AHP presses upon us rely primarily on technical readings of the advertisements in question. If accepted, AHP's position might well preclude the Commission from taking action against advertisements that, when read with scrupulous care by vigilant and literal-minded consumers, could be seen to be making true claims.*fn13

One advertisement which appeared in virtually identical form in several magazines is entitled "News about headache relief you probably missed (unless you read medical magazines)." Beneath what was designed to resemble a clipping from a medical journal, the body of the advertisement informed readers:

In clinical tests on hundreds of headache sufferers, it has now been proven beyond a doubt that today's Anacin delivers the same complete headache relief as the leading pain relief prescription. This advertisement in leading medical journals [i.e., the clipping] told the complete story.

Doctors know Anacin contains more of the specific medication they recommend most for pain than the leading aspirin, buffered aspirin, or extra-strength tablet. Is it any wonder that last year physicians and dentists distributed over 25 million packets of Anacin tablets to their patients?

Now you know that Anacin gives you the same complete headache relief as the leading pain relief prescription. Next headache, see how fast Anacin relieves your pain.

App. 547. See App. 548-49. The advertisement, read with sedulous attention, proclaims that Anacin has been clinically proven to be as effective as the leading prescription analgesic, and that Anacin is known by doctors to have more of the pain reliever they recommend most than do the other leading non-prescription analgesics. There is no explicit representation that Anacin has been clinically proven to be more effective than any other non-prescription analgesics. The ALJ found that the clinical tests in question did not prove Anacin's equivalence to the leading prescription analgesic (App. 184-87), and the Commission appears to have agreed (App. 386). But for the purposes of Part I(A) of the Order, the fundamental objection to the advertisement is that consumers, not unreasonably assuming that prescription drugs are more effective than non-prescription products, will be likely to combine the claim of proven equivalence to the leading prescription drug, and the claim that doctors know that Anacin has more pain reliever than the other non-prescription products, into a claim that Anacin's superiority to the other non-prescription products has been proven.

Another advertisement which appeared in several magazines reads:

What's best to take for tension headache pain? Why not take the fast acting pain-reliever doctors recommend most for headaches? You'll find it in Anacin Tablets. And today's Anacin gives you 100% more of this specific pain-reliever than the other leading extra-strength tablet. In minutes Anacin breaks the grip of headache pain so relaxes its nervous tension, releases pressure on nerves and helps lift pain's depression. You feel great again after taking Anacin. You see Anacin is a special fortified combination of ingredients and only Anacin has this formula. Next time a tension headache strikes, see if medically-proven Anacin doesn't work better for you.

App. 550, 551, 552 (emphasis in original). A rigorous analysis reveals that this advertisement does not state that Anacin has been "medically-proven" to "work better," but, read literally, merely invites consumers to see for themselves whether "medically-proven Anacin" -- the respects in which it is "medically-proven" are unspecified -- works better for them. But surely it was reasonable for the Commission to conclude that consumers would be likely to take the ambiguous term "medically-proven" to relate to the principal question which the advertisement purportedly addresses: "What's best to take for tension headache pain?"*fn14

The Commission, despite primary reliance on its own knowledge in interpreting the advertisements, weighed all the survey evidence in the record. Although AHP produced several types of empirical data, only one type -- the Audience Studies, Inc. (ASI) tests -- was relevant to determining the meaning of particular advertisements, as AHP's expert admitted (App. 118).*fn15 ASI had conducted tests on behalf of AHP's advertising agency to measure the effectiveness of some advertisements. These tests involved none of the print or radio advertisements but rather were limited to thirty of those that appeared on television. A sample of consumers was shown films in a theater of the advertisements. Thirty or forty minutes later, the consumers wrote down what they recalled, and these responses were then tabulated and coded. AHP's expert, Dr. Smith, apparently found no consumers who thought that an "establishment" claim was made in the advertisements. The Commission, however, for a number of reasons discounted this result as being of limited usefulness. Dr. Smith's analysis was found to be flawed because his

approach was to code a response as a "directly-related recall" only if it recited the precise language of the alleged representation. See, e.g., Smith, Tr. 7541. We believe this to be an overly restrictive use of copy test results. Other expert testimony in the record shows, moreover, that a low response rate of verbatims falling into a particular category is meaningless without an assessment of the advertisement tested and all surrounding circumstances, and that even after such analysis it may be impossible to determine conclusively that a given message was not communicated. (Lukeman, Tr. 241-44, 247-48; Seltzer, Tr. 367-68). In addition, the open-ended questioning technique used by ASI does not elicit an exhaustive playback from consumers of all the representations that may be perceived in the tested advertising.

App. 425-26.

We cannot say that the Commission's appraisal of this evidence was unsupported. It is also significant that there was considerable record evidence of a widespread consumer belief in Anacin's superior efficacy, although not a belief in its established superiority. See App. 311, 416. In view of the inability of consumers to discriminate objectively between competing analgesics, discussed infra, the Commission was "convinced that the primary source of this consumer belief in Anacin's superiority is the advertising of the product." App. 417. The Commission apparently inferred from this that consumers implicitly hold a belief in Anacin's proven superiority; however, the Commission seems not to have relied on this inference in interpreting the advertisements. The Commission also concluded that consumers' belief in superiority, and their implicit belief in established superiority, would be likely to persist unless AHP carried out the directives of the Commission's Order. App. 418.

2. Were the establishment claims deceptive ?

Having upheld the Commission's determination that certain of AHP's advertisements should be read as making the "establishment" claim, we proceed to consider whether the Commission could have found that claim misleading. On this issue as well it is clear that the Commission must be sustained.*fn16 Even though AHP's advertisements never disclosed the presence of aspirin in Anacin, the claim to superior effectiveness appears to be based on the belief that a somewhat larger dosage of aspirin, such as Anacin contains, is more effective in the relief of pain than "ordinary" aspirin.

The Commission carefully considered, and rejected, the evidence that Anacin's superiority had been established or proven. It found that there was "no real dispute as to the type of evidence scientists require before they regard it as having been proven (established) that one drug is more effective than another." App. 376. See App. 158-63.

AHP makes much of the allegation that the word "established" lacks a fixed meaning in the medical-scientific community and that the Commission used various verbal formulations in addition to the word "established." Reply Br. 6-7; Br. 27. This relatively minor terminological dispute cannot disguise the fact that the record evidence, including the testimony of AHP's witnesses, decisively supports the Commission's finding that the scientific community agrees on the criteria for testing the comparative superiority of an analgesic. See App. 376-82. AHP's insinuation that the Commission is imposing an unheard of demand for "absolute" proof is unwarranted in light of the expert testimony.*fn17

Quite apart from the argument that the word "established" is of uncertain meaning, AHP asserts that two studies performed for it by Dr. Gilbert McMahon meet the standard of two well-controlled clinical studies; but the Commission found numerous defects in these studies (App. 383-384).*fn18 The Commission objected that the results were not statistically significant; that the drug product tested against aspirin was not shown to be equivalent to commercially-available Anacin; and that the studies failed to deal with headache pain, which AHP's witnesses conceded to be different from other types of pain. The ALJ, in a closely reasoned analysis of the McMahon studies (App. 175-83), made additional points, including that bias was introduced into the studies by the ongoing "peeking" at and evaluation of data by AHP (App. 179). We are unable to hold that the Commission acted unreasonably in refusing to assign to these studies the probative force that AHP wishes for them.

AHP also argues that the aspirin "dose response curve" proves Anacin's superior effectiveness (App. 384). Again, it is apparent that the Commission accorded the proffered evidence a thorough examination and reasonably judged it to be insufficient. A dose-response curve, as the name suggests, charts the degree of average pain relief ("response") for different dosages of a drug. While a few points on the curve are established by clinical studies, the remainder are extrapolated, and not proven. According to the Commission,

even assuming that the curve as a whole has been established, the evidence indicates that above 600 mg. the curve is either very shallow or levels off to a plateau (Kantor, Tr. 3573; Lasagna, Tr. 4881). In other words, a substantial increase in dosage is necessary to produce even a small increase in pain relief (Kantor, Tr. 3573; Azarnoff, Tr. 642; F. 257), yet Anacin contains only 150 mg. more aspirin than common aspirin. Indeed, several dose-response studies showed no statistically significant differences in pain relief for dosages greater than 600 mg. (F. 246-55). Thus, the aspirin dose response curve cannot establish the superiority of 800 mg. of aspirin over 650 mg., or, consequently, the superiority of Anacin over aspirin (or other analgesic products).

App. 385, footnotes omitted. ("F." refers to the ALJ's findings). The Commission's treatment of the dose-response curve is well supported by substantial evidence on the record.*fn19

A number of expert witnesses testified that Anacin's superior efficacy has not been established, and some expressed the view that Anacin was not superior. See App. 392. Far from concluding that Anacin's superiority had been proven, the ALJ suggested that Anacin might be less effective than "ordinary" aspirin. The possibility that the caffeine in Anacin could actually heighten awareness of pain was not ruled out. App. 288. Moreover, there was evidence that caffeine exacerbated aspirin's gastrointestinal side effects, App. 288, and "in terms of chronic use, the record evidence strongly suggest[s] that more aspirin may be worse [in its side effects] than less aspirin." App. 285.

There are numerous appellate decisions upholding the Commission's right to require substantiation of advertising claims. In a case involving non-prescription weight-reducing tablets, Porter & Dietsch, Inc. v. FTC, 605 F.2d 294, 305 (7th Cir. 1979), cert. denied, 445 U.S. 950, 63 L. Ed. 2d 784, 100 S. Ct. 1597 (1980), the court refused to strike down an order prohibiting, among other things, representations that any product of the advertiser could achieve any result, "unless the representation is, when made, substantiated by competent scientific and medical tests and studies." This prohibition was more far-reaching than Part I(A) of the present Order in two respects. First, it applied to any of Porter & Dietsch's products, although misrepresentations had been found with respect to only one. Part I(A) of the Order here applies only to AHP's non-prescription drug products. Second, all representations as to "results" were encompassed, not merely claims to superior safety and effectiveness, even though only one "result" (automatic weight loss) had been deceptively claimed.*fn20

D. Due Process and Part I(B) of the Order

Although AHP is correct that there was some vacilation at the administrative level as to the genesis of the theory undergirding Part I(B) of the Order, it cannot be said that AHP was thereby denied administrative due process. AHP charges that the theory of liability on which the relevant section of the complaint relied, and on which evidence was taken at the hearing, was wholly different from the theory on which the Commission predicated Part I(B) of the Order.*fn21 AHP maintains that it was prevented from defending itself against the charge on the basis of which it was found liable, because it lacked notice and because th ALJ excluded relevant evidence. More specifically, the arguement is that Part I(B) of the Order (the "substaintial question" section), which forces AHP either to reveal the extistence of a substantial question about the superiority of its products or to cease advertising such superiority, was premised on the "resonable basis" theory, even though the complaint was brought under the "substantial question" theory, and even though the ALJ refused to accept evidence that would have been relevant under the "resonable basis" proposition.

The "reasonable basis" doctrine of Pfizer, Inc., 81 F.T.C. 23 (1972), is that advertisers must possess and rely on an adequate "reasonable basis" for their claims. The Commission has supported this standard on the grounds that "deception derives from the failure to disclose to consumers the material fact that an affirmative product claim lacks the support that would be presumed absent some qualification of it." App. 390, n. **. Pfizer treated the question of "what constitutes a reasonable basis [as] essentially a factual issue." It listed a number of considerations in resolving the issue in particular cases but remarked that "there may be some types of claims for some types of ...


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