FOODS, DRUGS, AND COSMETICS 131 Mr. HOGE. Yes; there is protection there, too, and the Federal Trade Commission has handled some such cases. Senator COPELAND. But your judgment is it ought to be written in here? Mr. HOGE. I think so; yes, sir. I think it ought to be in a law of this sort. The Administrator can suit himself as to when he uses it and when he does not use it, but it is there when he wants it. Now, a further suggestion, and that is, in view of the far-reaching provisions on misbranding and advertising, and the criminal aspect of some of it, we suggest the inclusion of a subsection which provides as follows: When construing and enforcing the provisions of this act reasonable allowances, consistent with the purposes of the act shall be made for (1) abnormal individual reactions to food, drugs, and cosmetics, and (2) harmless claims recognized by and under the common law. That is a suggestion on the matter of allergy which has been mentioned from time to time in these hearings. Senator COPELAND. Where would you put it in the bill? Mr. HOGE. I think, perhaps, Senator, that that should be written into each misbranding section with respect to foods, drugs, and cosmetics. Senator COPELAND. I suppose also that might be included in the report on the bill. Mr. HOGE. Of course, that would go to the intent of Congress. This matter of harmless trade claims I have always thought was in the law, whether it was written here or not. It is a matter of the common law, but when you make such comprehensive statutory definitions as we are making, that labeling and advertising shall be considered false. If it is false or misleading in any particular, under any of the provisions of the act, there might be a question. I do not think, perhaps, that that is as great a matter as some reference to the matter of abnormal individual reactions. Now, section 711(a), page 41, is the beginning of the section on seizures, and it provides that any article that is adulterated or misbranded may be seized while in interstate commerce or at any time thereafter by libel. And then on page 43 it provides: but if a chief of station or other employee of the Administration, duly designated by the Secretary, has probable cause to believe that such article is so adulterated as to be imminently dangerous to health, then, and in such case only, the article shall be liable to seizure by such chief of station or employee. Such chief of station or employee may seize the article without any legal process whatever. All he must do is report what he has done after he has done it to the United States attorney, who will then prepare a libel. Now, the chief importance of that section on page 43 is in connec tion with the provision I referred to a moment ago, that drugs and cosmetics are deemed to be adulterated if dangerous to health under the conditions of use in the labeling or advertising. That, for administrative purposes, of course, means if the Administrator thinks it is dangerous. It so provides, if he has probable cause to believe that it is dangerous. Now, the employee designated by the secretary, or a station chief, hearing advertising over the radio, or reading it in the paper, might come to the conclusion that a drug or cosmetic is adulterated, and if , FOOD, 132 FOODS, DRUGS, AND COSMETICS he thinks it is adulterated so as to be imminently dangerous to health, he goes out and seizes it without any process at all. Now, I have a suggestion with respect to section 711 (a), and I will treat it while I am on it. That is page 42. There was a suggestion here the other day that in line 9 there be added the words, "if a court considers it necessary, 'considers seizure necessary". I do not think that accomplishes anything, because it does not provide there shall be any notice, and indeed you cannot very well provide there shall be notice in an in rem proceeding, and the judge seeing one libel coming to his desk in New York is not told or informed that a libel is at the same time going to the desk of a judge in Detroit or Trenton or some other place. I would suggest in line 9 there be added this language: Provided, however, That not more than one seizure action shall be instituted in cases of alleged misbranding except upon order to show cause, and then upon a showing by the Secretary that such article is misbranded in manner or degree as to render such article imminently dangerous to health, or that such alleged misbranding has been the basis of a prior judgment in favor of the United States in a criminal prosecution or libel for condemnation proceeding against such article under this act: And provided further, That said single seizure action shall, on motion, be removed for trial to a jurisdiction of reasonable proximity to the residence of the claimant of such article. Senator COPELAND. Did not we have some such language in one of the bills last year? Mr. HOGE. Yes, in S. 2800 at one time you had a provision that there should not be more than one seizure made for inisbranding, except in cases involving imminent dangers to health and in cases where a prior judgment had been rendered in favor of the United States, and the condition that the labeling of all the products was the same. I think that was it. Now, that which I suggested just now has a relation also to the italicized matter on page 45. That is one of the principal faults with multiple seizures, that seizures can be made any place in the United States, and it makes no particular difference how many. If 4 or 5 or 6 are made, the manufacturer must then transport his witnesses and his data perhaps from New York to San Francisco, if that is where the seizure action is pending, or to New Orleans or some other place. I do not ask that the trial be brought right into the home of the manufacturer. I realize that the administrator sometimes has reasons why he does not want to do that. I do think if goods are seized on the Pacific coast, for instance, and the manufacturer lives in New York, that the trial might be moved to Trenton or to Albany, or even Philadelphia. You can get there in 2 hours. Senator COPELAND. Have not we answered that on lines 10 and 11 on page 45, "on application of the claimant, seasonably made, may be tried in such jurisdiction"? As you have it now Mr. HOGE. I will come to that in a moment. it would mean simply this, that if the seizures are made on the Pacific coast and you live in New York, or the manufacturer lives in New York, it would be a matter of determining which point on the Pacific coast was nearest to New York. Now, a suggestion was made the other day by one of the witnesses that you add to line 14: In cases of multiple seizure at least one such seizure shall be made in the jurisdiction of the United States District Court where the manufacturer resides, or if impossible to locate it there, then in a near jurisdiction. VOL. 3 LEGISLATIVE HISTORY OF THE FOOD, DRUG COSMETIC ACT FOODS, DRUGS, AND COSMETICS 133 In the first place, Senator, you cannot make a seizure in the jurisdiction in which the man resides, except in very extraordinary circumstances, because there is no interstate commerce. Perhaps if the administrator could find a shipment of the goods at the depot already consigned out of the State, with the bill of lading on, perhaps under the decisions that would be interstate commerce and he could seize it, but other than that he could not seize it in the man's own jurisdiction. So that suggestion does not accomplish anything. In the first place, I do not think the administrator should be restricted. He might not be able to find it in a jurisdiction near the manufacturer's residence. Senator COPELAND. Are you suggesting substitute language? Mr. HOGE. Yes. I will read the whole matter so as to get it straight. I would suggest on page 45, lines 2 to 14, that we have this: In cases of articles of food, drugs, or cosmetics seized under the provisions of this section when the same issues of adulteration or misbranding under the provisions of this act, raised by the same claimant, and pending in various jurisdictions, the cases, on application of the claimant, seasonably made, may be removed for trial to a jurisdiction of reasonable proximity to the residence of the claimant. Separate verdicts shall be rendered in each case and judgments entered upon such verdicts in conformity with the provisions of this section. Senator CLARK. Mr. Hoge, let me suggest to you, and to any of the witnesses who have amendments they desire to propose, that they reduce them to writing and file them with the stenographer, so that they may be made a part of the record. In connection with that, let me explain to all who may desire to appear before the committee, that this subcommittee is constituted for the purpose of holding hearings and not making recommendations on the bill to the full committee. In other words, it would be our purpose to report back the hearings to the full committee for such consideration as they may see fit to give them. Therefore, any witness who has a prepared statement I would suggest that he file it with the clerk rather than read it in extenso, because it would serve the same purpose in being reported to the full committee. I do not mean that applies to you, Mr. Hoge, but in view of the fact that you are offering amendments, I deem it proper to make that suggestion. Mr. HOGE. That is all right. On page 32 is "Factory inspection." Senator COPELAND. Mr. Hoge, you are going to leave with us, Senator COPELAND. On this other matter. Mr. HOGE. Yes; I would be glad to, Senator. Now, on "Factory inspection", our objection there is largely to the penalty in subsection (b) on page 33, line 14, down to the bottom. It is provided there that if inspection is refused or permission denied by the manufacturer that the district courts are authorized to enjoin the shipment of goods, whether they are adulterated or not. Our objection is not to inspection but to the penalty. The goods may not be adulterated at all and the circumstances on which the permission to inspect was denied may have been very pertinent. I will file, Mr. Chairman, our suggestion as to how subsection (b) on page 33 should read. In a word, it, is just to compel the inspection. 134 FOODS, DRUGS, AND COSMETICS There has been something said about the whole section, if I might have just a minute on that, as to its constitutionality. I do not mean to launch into a long constitutional argument, but I would question subsection (a) of that section ordering inspection in order adequately to protect public health and welfare. While, of course, that is a perfectly proper purpose, my own thought is that factory inspection in this bill has got to rest for its constitutionality on the commerce clause, just as in the meat inspection act, that rests on the commerce clause to prevent the shipment in interstate commerce of meats that are not fit for consumption, and so it seems that this section should rest on the commerce clause so as to prevent the shipment in interstate commerce of goods that are adulterated or misbranded. Now, for that purpose it seems that subsection (a) should provide that if it cannot be determined, after a food, drug, or cosmetic has entered interstate commerce, whether it is adulterated or misbranded, that inspection may then be had. Senator COPELAND. I think that has been recognized by the committee, that particular weakness. Mr. HOGE. I will close in just a minute, Mr. Chairman. Finally, our position on advertising is it should be administered by the Federal Trade Commission. It is not a matter of transferring the control of advertising to the Federal Trade Commission, it is a question of transferring the control from the Federal Trade Commission. Advertising is there now. The Mead bill, which we have endorsed, proposes that the jurisdiction and powers of the Federal Trade Commission be enlarged to cover advertising which is false or misleading, for all the purposes of this legislation, and to make unnecessary any showing by the Commission that such advertising is an unfair method of competition. Thus the Raladam case, mentioned here and elsewhere, to the prejudice of this suggestion, and the limitation upon the Federal Trade Commission's jurisdiction would be of no further consequence. Advertising presents a serious problem. If we were concerned only with advertisements which were false in the ordinary meaning of that word, or if we were concerned only with offenders who were deliberate and malicious, there would be no problem. But, for every advertisement which is deliberately and maliciously false, we will be concerned with hundreds of advertisements that are not deliberately false and with advertisers who do not deliberately falsify. We have no objection to criminal prosecution of false advertisements when the public health is involved. But, under this proposed legislation, there will be many advertisements alleged to be false or misleading within the definitions and purposes of this legislation which do not immediately affect the public health. We question the soundness of legislation that makes such offenses criminal and affords the opportunity for corporations and persons who are not criminally inclined being prosecuted in criminal courts with the stigma and embarrassment necessarily incurring from such prosecution. That is the basis for our position on the matter of the Federal Trade Commission handling advertisements. That procedure is of a civil nature an order to cease and desist, with the punishment for violation of the cease and desist order as in contempt of court. That is a serious punishment. We have no objection to injunction against false FOODS, DRUGS, AND COSMETICS 135 and misleading advertisements. And, as above stated, we have no objection to criminal prosecution in the case of advertisements which involve the public health. We suggest that in the section of S. 5 dealing with misbranded food there be added a section similar to section 401 (a) (1) which we have already suggested be transferred from the section on adulteration to the sections on misbranding as to drugs and cosmetics providing that the article be misbranded. "if it is dangerous to health under the conditions of use prescribed in the labeling or advertising thereof." And that, in lieu of the criminal prohibitions as provided in sections 708 (a) (4) and (5), (pp. 34 and 35), there be inserted the provisions of section 5 of the Mead bill, providing that false advertisements generally be referred by the Secretary to the Federal Trade Commission; that the Secretary be granted the authority, just as the Mead bill grants such authority under section 14, to examine the advertisements of food, drugs and cosmetics and to call the advertiser to hearings when the Secretary thinks they are false, to dispose of such matters by warnings or otherwise, if he thinks that is sufficient, or otherwise to refer them to the Commission. Advertising has an essential place in the modern merchandising of food, drugs, and cosmetics. The advertiser should not be compelled to face a criminal prosecution and be publicly branded as a false advertiser because of a difference in opinion or in fact between him and the administrator when the difference is largely technical, academic, or literal. It is desired to prevent false and misleading advertisements but certainly it is not desired-particularly when the public health is not involved-to subject reputable persons and corporations to unjust and unwarranted criminal prosecution, based perhaps on erroneous or academic administrative decisions of violation. It is one thing to enjoin the advertiser from such advertisements, and quite another to subject him to criminal prosecution, branding him as a false advertiser and prejudicing him before the public by the very fact of prosecution, regardless of the ultimate outcome of the prosecution. The consuming public obtains no injunctive relief from punitive procedure. It is just a case of guilty or not guilty. There is no res adjudicata. There is no precedent. Criminal courts do not write opinions which may be used in subsequent cases. The orders and stipulations of the Federal Trade Commission are informative precedents. CONCLUSION In conclusion, I repeat that we desire effective legislation to prevent adulteration, misbranding, and false advertising. We desire it on behalf of the public. We desire it on behalf of industry. We believe that legislation to be effective must be practicable in its application. To that end, and for that purpose, we have offered these criticisms of S. 5 in the hope that legislation will evolve which states the obligations of industry clearly, defines the prohibited acts definitely, and assures to those accused of violating it a trial in judicial tribunals. |