held to fall within its terms. A fuller, more careful consideration of the facts than is here possible in the urgency of these injunction proceedings would be required to determine precisely which of defendant's statements do and which do not make the prohibited suggestions or implications. For that reason, the preliminary injunction should not contain a prohibition of the distribution and use of specific literature.
Service to Past Customers
For several years, defendant Vitasafe sought customers for its products through direct mail and 'pulp' magazine advertising. The aim of this campaign was to enlist members of the public in one of the Vitasafe 'plans' whereby a monthly supply of vitamins would be sent to the customer's home in return for monthly payments. It was this advertising which was, inter alia, the subject of the government's successful condemnation suit.
While the mailing of the offending materials by Vitasafe has been we are assured, brought to a halt, the government seeks to enjoin Vitasafe and the other defendants from further servicing accounts which were gained during the period of mislabeling.
The first asserted ground for this injunctive provision is that Vitasafe ought not to be allowed to enjoy the fruits of their wrongdoing; they ought not to enjoy a profit from customers wrongfully obtained.
This argument is unsatisfactory because it apparently misconstrues the thrust of the condemnation action under which the injunction is sought. That action was in rem, see United States v. 91 Packages, More or Less, Nutrilite Food Supplement, 93 F.Supp. 763 (D.N.J.1950), and was brought against the advertising itself and not against the Vitasafe Company. It established only that said advertising was false and misleading. It did not and could not conclude that claimant was a wrongdoer. The character of Vitasafe's conduct in connection with the condemned literature was irrelevant to the action. United States v. 3963 Bottles, more or less, labeled Enerjol Double Strength, 265 F.2d 332 (7th Cir. 1959), cert. denied, 360 U.S. 931, 79 S. Ct. 1448, 3 L. Ed. 2d 1544 (1959). We are therefore unable to draw a parallel between the case at bar and United States v. United States Gypsum Co., 340 U.S. 76, 71 S. Ct. 160, 95 L. Ed. 89 (1950). There, the Supreme Court said that wrongdoers in civil cases (in that instance, conspirators under the Sherman Act) could and should be restrained from capitalizing on past misdeeds. But there is nothing in the condemnation proceeding on which the injunction here is based which determines that Vitasafe is a wrongdoer. So the company ought not to be enjoined from continued client service on this basis.
The facts of this case suggest other, more tenable, grounds for the restraint. In the Vitasafe condemnation decree opinion, 226 F.Supp. 266 at page 269, footnote 1, we restated our opinion that the advertising circulars in question were labeling within the meaning of the Act. We said that it was labeling,
'* * * since used and designed solely for the purpose of increasing the sale and use of the product; a part of the integrated system of distribution used by claimant in marketing subject capsules. Physical proximity of the advertising to the product in question is not necessary for a finding that the advertising is labeling thereof. (Citing cases.)'
The vitamin capsules and the literature were condemned solely because together they constituted mislabeled food or drugs.
Present consumers of Vitasafe products became customers as subjects of the condemned ads. Any vitamins sold by Vitasafe to such customers now are as much mislabeled by that advertising as if they had been sold before the condemnation decree. The discontinued circulars remain labeling for Vitasafe products in the minds of those previously subjected to it. This is the import of Judge Meaney's decision in United States v. 46 Cartons, more or less, containing Fairfax Cigarettes, 113 F.Supp. 336 (D.N.J.1953).
The condemned labeling was the substance of a long and concerted campaign by Vitasafe. It is fairly inferable from the facts that the vast majority of predecree customers were enticed into the Vitasafe net by false and misleading labeling. Furthermore, the literature which Vitasafe and its associate companies have used of late in connection with both old and new customers, innocuous though some of it may be, tends to reinforce, by similarity in content and form, the effect of the earlier mislabeling.
It is therefore our opinion that the condemned advertising mislabeled all Vitasafe products which were or will be sent to customers obtained prior to the decree. It is necessary and proper, in order to prevent further distribution of mislabeled vitamins, to restrain and enjoin defendant Vitasafe's continued distribution to these customers.
Moreover, what Vitasafe may not do directly, it may not do through corporate sleight of hand. Any products sent by Vitasafe's alter-ego corporations to Vitasafe customers will be equally mislabeled by that company's pre-decree advertising, despite the fact that the name of the corporation on the bottom of the vitamin bottle may have been changed. It would be an empty gesture in this case to enjoin one and to allow the others to continue to perpetrate the prohibited acts. The closely related companies and individuals named in the complaint are therefore properly joined in this portion of the injunction.
Defendants suggest that this provision means 'a company can be completely destroyed if at any time it is held there was a false or misleading statement in its advertising.' Not so. It is only under the circumstances of this case, where the condemned labeling was the core and substance of past business, that complete abstinence alone can provide a cure. The mere discontinuation of circulation can achieve at best an attenuation of the effects of the mislabeling. Under other conditions a far less drastic remedy might well be appropriate.
It must be emphasized that the purpose of this provision of the injunction is not to force the defendant corporations out of business. It does not 'close down' the companies, but requires that they use properly labeled products. Its aim is the protection of the public, which has the right to be free not only from the condemned material itself, but the extended effects of the period of mislabeling.
The motion for relief from paragraphs B(a) and ,(b) is denied. A preliminary injunction will issue identical to the temporary restraining order except that paragraph A(a) and references thereto will be deleted.
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