Dissenting Statement of
Commissioner Orson Swindle
The Commission's complaint in this matter alleges that the defendant violated Section 5 of the FTC Act by making false and unsubstantiated representations in radio infomercials advertising a purported baldness cure. The proposed settlement agreement contains extremely strong injunctive relief, including a ban on participating in any business involving hair loss prevention, hair growth, or baldness treatments. Most of the relief in the settlement is without question necessary and appropriate. I applaud the strong relief obtained in this case. On the other hand, several provisions are unrelated to the unlawful conduct alleged in the complaint or would empower the Commission to seek contempt sanctions for violations of another governmental entity's laws. These provisions are so overreaching that I cannot vote to accept this settlement.
First, the settlement agreement prohibits violations of the Commission's Telemarketing Sales Rule, deceptive practices in the marketing of franchises and business ventures, and violations of the Commission's Franchise Rule. None of this relief is reasonably related to preventing the defendant from deceptively advertising baldness cures or engaging in similar law violations. If there is sufficient information to give the Commission reason to believe that she engaged or is likely to engage in other types of law violations, then we should seek leave to amend the complaint to establish a basis for accepting relief that addresses those violations.
Second, the settlement agreement broadly prohibits the defendant, in connection with the manufacturing, labeling, advertising, promoting, marketing, offering for sale, sale or distribution of any product or service, from "making any representation . . . that does not comply with any applicable rule or regulation established by the Food and Drug Administration" and from "conducting or participating in any telemarketing solicitation without compliance with all applicable federal and state registration and bond requirements." We should not ask a federal court to empower us to enforce another agency's regulations with the club of a contempt action. To do so stretches far beyond the authority given to us by Congress.