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:
- 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.
- 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.
- 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.
- 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:
- "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.
- "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.
- 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.
- “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
|