9323282
B222505

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

COMMISSIONERS:
Robert Pitofsky, Chairman
Mary L. Azcuenaga
Janet D. Steiger
Roscoe B. Starek, III
Christine A. Varney

In the Matter of

NUTRITION 21,

a limited partnership,

DOCKET NO. C-3758
SELENE SYSTEMS, INC.,

a corporation and
general partner of Nutrition 21,

DECISION AND ORDER

and

HERBERT H. BOYNTON,

individually and as President
of Selene Systems, Inc., a
corporation.

The Federal Trade Commission, having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of the complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and

The respondents, their attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than the jurisdictional facts, are true, and waivers and other provisions as required by the Commission’s Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, and having duly considered the comments received, now in further conformity with the procedure described in 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

  1. Respondent Nutrition 21 is a limited partnership organized, existing, and doing business under and by virtue of the laws of the State of California with its office and principal place of business at 1010 Turquoise St., Suite 335, San Diego, CA 92109.
  2. Respondent Selene Systems, Inc. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of California with its office and principal place of business at 1010 Turquoise St., Suite 335, San Diego, CA 92109. It is a general partner of Nutrition 21.
  3. Respondent Herbert H. Boynton is President of Selene Systems, Inc., a corporation. He formulated, directed, and controlled the acts and practices of Nutrition 21 and Selene Systems, Inc. His address is the same as that of Nutrition 21.
  4. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER

DEFINITIONS

For the purposes of this Order:

  1. "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.
  2. "Purchaser for resale" shall mean any purchaser or other transferee of Chromium Picolinate, or of the right or license to sell Chromium Picolinate, either as Chromium Picolinate or as an ingredient of any other product, other than respondents, who sells, or who has sold, Chromium Picolinate, either as Chromium Picolinate or as an ingredient of any other product, to other purchasers or to consumers.
  3. Unless otherwise specified, “respondents” shall mean Nutrition 21, a limited partnership, Selene Systems, Inc., a corporation, their successors and assigns and their officers; and Herbert H. Boynton, individually and as an officer of Nutrition 21 and Selene Systems, Inc.; and each of the above’s agents, representatives, and employees.
  4. “Commerce” shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. 44.

I.

IT IS ORDERED that respondents, directly or through any corporation, partnership, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of Chromium Picolinate or any food, dietary supplement, or drug, as "food" and "drug" are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, that:

A. Such product reduces body fat;

B. Such product causes weight loss;

C. Such product causes weight loss without dieting or exercise;

D. Such product causes long-term or permanent weight loss;

E Such product increases lean body mass or builds muscle;

F. Such product increases human metabolism;

G. Such product controls appetite or craving for sugar;

H. Such product reduces serum cholesterol;

I. Such product lowers elevated blood sugar levels;

J. Such product is effective in the treatment or prevention of diabetes; or

K. Ninety percent or any number or percentage of U.S. adults do not consume diets with sufficient chromium to support normal insulin function, resulting in increased risk of overweight, heart disease, elevated blood fat, high blood pressure, diabetes, or any other adverse effect on health,

unless, at the time the representation is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

II.

IT IS FURTHER ORDERED that respondents, directly or through any corporation, partnership, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of Chromium Picolinate or any food, dietary supplement, or drug, as "food" and "drug" are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, regarding the benefits, performance, efficacy, or safety of such product, unless, at the time the representation is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

III.

IT IS FURTHER ORDERED that respondents directly or through any corporation, partnership, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product or program, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test, study, or research.

IV.

IT IS FURTHER ORDERED that respondents shall send by certified mail, return receipt requested, a copy of the attached Exhibit A to:

A. Each purchaser for resale of Chromium Picolinate with whom respondents have done business since January 1, 1993, within thirty (30) days of the date this order becomes final, to the extent that such purchasers are known to respondents through a diligent search of their records, including but not limited to computer files, sales records, and inventory lists. The mailing shall not include any other documents; and,

B. For a period of three (3) years following service of this order, each purchaser for resale with whom respondents do business after the date of service of this order who has not previously received the notice. Such notices shall be sent no later than the earliest of: (1) the execution of a sales or licensing agreement or contract between respondents and the prospective purchaser for resale; (2) the receipt and deposit of payment from a prospective purchaser for resale of any consideration in connection with the sale or licensing of chromium picolinate; or (3) the date on which respondents first ship chromium picolinate to the purchaser for resale.

V.

IT IS FURTHER ORDERED that respondents, and their successors and assigns, shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All advertisements and promotional materials containing the representation;

B. All materials that were relied upon in disseminating the representation; and

C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

VI.

IT IS FURTHER ORDERED that respondents shall notify the Federal Trade Commission at least thirty (30) days prior to any proposed change in the partnership or corporation(s), that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the partnership or corporation name or address. Provided, however, that with respect to any proposed change in the corporation about which respondents learn less than thirty (30) days prior to the date such action is to take place, respondents shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

VII.

IT IS FURTHER ORDERED that respondents shall deliver a copy of this order to all current and future principals, partners, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondents shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities.

VIII.

IT IS FURTHER ORDERED that respondent Herbert H. Boynton, for a period of ten (10) years after the date of issuance of this order, shall notify the Commission of the discontinuance of his current business or employment or of his affiliation with any new business or employment. The notice shall include respondent's new business address and telephone number, and a description of the nature of the business or employment and his duties and responsibilities. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

IX.

IT IS FURTHER ORDERED that respondents shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

X.

This order will terminate on July 11, 2017, 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.

By the Commission.

Donald S. Clark
Secretary

ISSUED: July 11, 1997

ATTACHMENT A

[To be printed on Nutrition 21 Stationery]

BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED

[Date]

Dear [purchaser for resale]:

This letter is to inform you that Nutrition 21 recently entered into a consent agreement with the Federal Trade Commission ("FTC") concerning certain claims we made for chromium picolinate, which the FTC has alleged to be deceptive. Although Nutrition 21 does not admit the FTC's allegations, we have agreed to have substantiation for any future claims about the effectiveness of chromium picolinate at the time we make those claims, and to stop making claims that scientific studies demonstrate the effectiveness of chromium picolinate unless those claims are true.

As a part of our settlement with the FTC, we also agreed to send this letter notifying our distributors, wholesalers and others to whom we sell chromium picolinate to stop using or distributing advertisements or promotional materials containing the challenged claims.

The FTC alleged that we made unsubstantiated claims relating to the effectiveness of chromium picolinate. Specifically, the FTC alleged that we did not have a reasonable basis for claims that:

  • Chromium Picolinate significantly reduces body fat;
  • Chromium Picolinate causes significant weight loss;
  • Chromium Picolinate causes significant weight loss without dieting or exercise;
  • Chromium Picolinate causes long-term or permanent weight loss;
  • Chromium Picolinate increases lean body mass and builds muscle;
  • Chromium Picolinate significantly increases human metabolism;
  • Chromium Picolinate controls appetite and craving for sugar;
  • Chromium Picolinate significantly reduces total and LDL serum cholesterol;
  • Chromium Picolinate significantly lowers elevated blood sugar levels;
  • Chromium Picolinate is effective in the treatment and prevention of diabetes; and
  • Ninety percent of U.S. adults do not consume diets with sufficient chromium to support normal insulin function, resulting in increased risk of overweight, heart disease, elevated blood fat, high blood pressure, and diabetes.

The FTC considers a reasonable basis for these types of claims to consist of competent and reliable scientific evidence.

In addition, the FTC alleged that we falsely claimed that scientific studies demonstrated many of the above claims about chromium picolinate.

We request your assistance by asking you to discontinue using, relying on or distributing any advertising or promotional materials for chromium picolinate that make any of the above claims unless and until you possess competent and reliable scientific evidence that substantiates the claims. Please also notify any of your retail or wholesale customers that they should follow the same procedures.

Thank you very much for your assistance.

Very truly yours,

___________________________

HERBERT H. BOYNTON
Chairman of the Board

Nutrition 21