[Federal Register: July 18, 2005 (Volume 70, Number 136)]
[Notices]
[Page 41225-41227]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18jy05-60]
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FEDERAL TRADE COMMISSION
[File No. 032 3144]
Cytodyne, LLC, Evergood Products Corp., and Melvin Rich; Analysis
of Agreement Containing Consent Order to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of Federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint and the terms of the consent order--embodied in the consent
agreement--that would settle these allegations.
DATES: Comments must be received on or before August 10, 2005.
ADDRESSES: Interested parties are invited to submit written comments.
Comments should refer to ``Cytodyne, LLC, et al., File No. 032 3144,''
to facilitate the organization of comments. A comment filed in paper
form should include this reference both in the text and on the
envelope, and should be mailed or delivered to the following address:
Federal Trade Commission/Office of the Secretary, Room 159-H, 600
Pennsylvania Avenue, NW., Washington, DC 20580. Comments containing
confidential material must be filed in paper form, must be clearly
labeled ``Confidential,'' and must comply with Commission Rule 4.9(c).
16 CFR 4.9(c) (2005).\1\ The FTC is
[[Page 41226]]
requesting that any comment filed in paper form be sent by courier or
overnight service, if possible, because U.S. postal mail in the
Washington area and at the Commission is subject to delay due to
heightened security precautions. Comments that do not contain any
nonpublic information may instead be filed in electronic form as part
of or as an attachment to e-mail messages directed to the following e-
mail box: consentagreement@ftc.gov.
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\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See Commission Rule 4.9(c),
16 CFR 4.9(c).
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The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding as
appropriate. All timely and responsive public comments, whether filed
in paper or electronic form, will be considered by the Commission, and
will be available to the public on the FTC Web site, to the extent
practicable, at http://www.ftc.gov. As a matter of discretion, the FTC
makes every effort to remove home contact information for individuals
from the public comments it receives before placing those comments on
the FTC Web site. More information, including routine uses permitted by
the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm
.
FOR FURTHER INFORMATION CONTACT: Peter Miller (202) 326-2629 or Michael
Ostheimer (202) 326-2699, Bureau of Consumer Protection, Room NJ-3223,
600 Pennsylvania Avenue, NW., Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 2.34 of
the Commission Rules of Practice, 16 CFR 2.34, notice is hereby given
that the above-captioned consent agreement containing a consent order
to cease and desist, having been filed with and accepted, subject to
final approval, by the Commission, has been placed on the public record
for a period of thirty (30) days. The following Analysis to Aid Public
Comment describes the terms of the consent agreement, and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for July 13, 2005), on the World Wide Web, at http://www.ftc.gov/os/2005/07/index.htm.
A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington,
DC 20580, either in person or by calling (202) 326-2222.
Public comments are invited, and may be filed with the Commission
in either paper or electronic form. All comments should be filed as
prescribed in the ADDRESSES section above, and must be received on or
before the date specified in the DATES section.
Analysis of Agreement Containing Consent Order To Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, an agreement containing a consent order from Cytodyne, LLC,
Evergood Products Corp., and Melvin Rich, individually and as a manager
of Cytodyne, LLC and an officer of Evergood Products Corp. (together,
``respondents'').
The proposed consent order has been placed on the public record for
thirty (30) days for receipt of comments by interested persons.
Comments received during this period will become part of the public
record. After thirty (30) days, the Commission will again review the
agreement and the comments received, and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
order.
This matter involves practices relating to the advertising and
promotion of Xenadrine EFX, a dietary supplement marketed for weight
loss. According to the FTC complaint, respondents represented that
Xenadrine EFX causes rapid and substantial weight and fat loss, causes
permanent or long-term weight loss, and causes rapid and substantial
weight loss without the need to diet or increase exercise. The
complaint alleges that these claims are false and that the company
failed to have substantiation for them. It further alleges that
respondents falsely represented that scientific studies prove that
Xenadrine EFX causes rapid and substantial weight loss and that it is
more effective than leading ephedrine-based diet products. The FTC
complaint also alleges that respondents falsely represented that
persons appearing in Xenadrine EFX advertisements achieved the weight
loss reported in those ads solely through the use of Xenadrine EFX.
According to the FTC complaint, persons who appeared in the Xenadrine
EFX advertisements engaged in rigorous diet and/or exercise programs in
order to lose weight, and some were provided with a personal trainer.
Finally, the complaint alleges that, in presenting testimonials for
Xenadrine EFX by consumer endorsers who purportedly lost weight in the
ordinary course of using Xenadrine EFX, respondents failed to disclose
that the endorsers were paid from $1000 to $20,000 in connection with
their endorsement, a fact that would be material to consumers in their
decisions about purchasing or using the product.
The proposed consent order contains provisions designed to prevent
the respondents from engaging in similar acts and practices in the
future.
Part I of the order prohibits representations that Xenadrine EFX or
any other product containing green tea extract, bitter orange, or
caffeine causes rapid and substantial weight loss or fat loss. It also
prohibits representations that any weight loss product causes rapid or
substantial weight loss without the need to diet or increase exercise.
Part II prohibits respondents from representing that any weight
loss product, dietary supplement, food, drug, or device causes weight
or fat loss, causes permanent or long-term weight loss, or enables
users to lose weight or fat without the need to diet or increase
exercise unless the claim is true and respondents possess competent and
reliable scientific evidence that substantiates the claim. It also
prohibits respondents from making any other claims about the health
benefits, performance, efficacy, safety, or side effects of any such
product unless the claim is true and respondents possess competent and
reliable scientific evidence that substantiates the claim.
Part III prohibits any misrepresentation of the existence,
contents, validity, results, conclusions, or interpretations of any
test or study in connection with the marketing or sale of any weight
loss product, dietary supplement, food, drug, or device.
Part IV prohibits any misrepresentation that the experience
described in any user testimonial for any weight loss product, dietary
supplement, food, drug, or device represents the actual experience of
the endorser as a result of using the product under the circumstances
depicted in the endorsement.
Part V prohibits any representation about any endorser of any
weight loss product, dietary supplement, food, drug, or device unless
the respondents disclose any material connection that exists between
the endorser and the respondents or any other person or entity involved
in manufacturing, marketing, or selling the product.
Part VI of the proposed order allows the respondents to make any
representations for any drug that are permitted in labeling for the
drug under any tentative final or final Food and Drug Administration
(``FDA'') standard or under any new drug application approved by the
FDA.
[[Page 41227]]
Part VII of the proposed order allows the respondents to make
representations for any product that are specifically permitted in
labeling for that product by regulations issued by the FDA under the
Nutrition Labeling and Education Act of 1990.
Part VIII provides for the payment of $100,000 to the Commission.
Part IX requires respondents to cooperate in good faith with the
Commission's reasonable requests for documents and testimony in
connection with this action or any investigations related to or
associated with the transactions or the occurrences that are the
subject of the FTC complaint.
Part X requires respondents to send a letter to purchasers for
resale of Xenadrine EFX notifying them of the Commission's order. It
also provides that if respondents learn that any of its resellers or
distributors are disseminating any advertisement or promotional
material containing prohibited representations, they are required to
request that the resellers or distributors stop making such
representations and to stop doing business with resellers or
distributors that do not comply with this request. Part XI requires
respondents to keep copies of the communications required by Part X.
Parts XII through XVI require respondents to keep copies of
relevant advertisements and materials substantiating claims made in the
advertisements; to provide copies of the order to certain of their
personnel; to notify the Commission of changes in corporate structure
(for the corporate respondents) and changes in employment (for the
individual respondent) that might affect compliance obligations under
the order; and to file compliance reports with the Commission. Part
XVII provides that the order will terminate after twenty (20) years
under certain circumstances.
The purpose of this analysis is to facilitate public comment on the
proposed order, and it is not intended to constitute an official
interpretation of the agreement and proposed order or to modify in any
way their terms.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 05-14082 Filed 7-15-05; 8:45 am]
BILLING CODE 6750-01-P