Eggland'S Best, Inc

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF EGGLAND' S BEST, INC.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SECS. 5 AND 12 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3520. Complaint, Aug. 15. 1994--Decision . Aug. . 1994 This consent order prohibits, among other things, a Pennsylvania company from misrepresenting the amount of nutrients or other ingredients, such as cholesterol and fat, that is in its eggs or foods containing egg yolks, and requires the respondent to have competent and reliable scientific evidence to substantiate future health benefit claims for such foods and, for one year, to label certain egg packages with a corrective notice stating that no studies show Eggland' eggs are different from other eggs in their effect on serum cholesterol. Appearances For the Commission: Michelle K. Rusk. Anne V. Maher and Beth M. Grossman.

For the respondent: Eugene I. Lambert, Covington Burling, Washington, D.

COMPLAINT The Federal Trade Commission, having reason to believe that Eggland' s Best, Inc. ("respondent ), a corporation, has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

PARAGRAPH 1. Respondent is a Pennsylvania corporation with its offces and principal place of business at 842 First Street, King of Prussia, Pennsylvania.

PAR. 2. Respondent has advertised, labeled, offered for sale sold, and distributed Eggland' s Best eggs and other egg products to consumers. These products are "foods" within the meaning of Sections 12 and IS of the Federal Trade Commission Act. PAR. 3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as "commerce " is defined in Section 4 of the Federal Trade Commission Act. EGGLAND' S BEST, INC. 341 340 Complainl PAR. 4. Respondent has disseminated or has caused to be disseminated advertisements for Eggland' s Best eggs, including butnot necessarily limited to the attached Exhibits A-E. These advertisements contain the following statements: A. Eggland's Best. Eggs that won t increase your serum cholesterol. Imagine! Fresh, delicious, 100% real eggs that won t increase your serum cholesterol. You read it right.

In recent clinical tests as part of a low-fat diet, even a dozen Eggland' s Best eggs a week caused no increase in serum cholesterol even though they contain about as much cholesterol as other eggs.

Know what that means? Now you can eat real eggs again. So go ahead, enjoy! Cut out the coupon below and save on real eggs that won t increase your serum cholesterol.

Eggland' s Best. Now you can eat real eggs again. (Exhibit A (Print: "Eggs That Won t Increase Your Serum Cholesterol" B. You can cat eggs again. . . and not increase your serum cholesterol. Introducing Eggland' s Best. They re fresh, real eggs. And in clinical tests in a low-fat diet even twelve a week caused no increase in serum cholesterol. They re special eggs from special\Jy fed hens. . . . Eggland' s Best. , you can eat real eggs again. " Ver. 3)J lExhibit B (TV: "Egg Dishes, C. Do you remember eating eggs every day? Then there was all this cholesterol business. Well, now we can eat eggs again without worrying about raising our cholesterol.

ew Eggland' s Best eggs are fresh, real eggs that won t increase serum cholesterol. . . even though they contain about as much cholesterol as other eggs. In recent clinical tests, as part of a low-fat diet, people ate as many as twelve Eggland's Rest eggs a week and didn t increase their serum cholesterol.

Eggland' s Best eggs come from very specially fed hens, you see. Hens that eat no animal fat. Just healthy grains, extra Vitamin E and a special all-natural supplement that s rich in minerals. Plus canola oil, the oil lowest in saturated fat. So now there s a delicious, honest-to-goodness fresh egg that we can enjoy without worrying about cholesterol. Now we can eat real eggs again! lExhibit C (Radio: "Hattie " Rev. 3)) D. If you love eggs, but cholesterol has put you on a lowfat diet. here s a way to turn that diet sunny side up.

Introducing Eggland' s Best, eggs from specially fed hens. Like ordinary eggs, they contain cholesterol. Yet in clinical tests, people ate twelve Eggland' s Best eggs a week as part of a low-fat diet and showed no increase in their serum cholesterol.

Try Eggland' s Best. Your cholesterol-conscious diet can now have a sunny side. (Exhibit D (TV: "Put Back On." 93 Rev. E. It' s simple. When the hens eat hetter, you eat better, too. Introducing Eggland' s Best. Premium eggs from hens fed a premium diet. Complaint 118 F. Unlike ordinary eggs, Eggland' s Best are laid by hens that eat no animal fat. Just lots of healthy grains, extra Vitamin E and a little canola oil -- the oil lowest in saturated fat.

lExhibit E (Print: " s Simple PAR. 5. Through the use of the statements contained in the advertisements referred to in paragraph four, including but not necessarily limited to the advertisements attached as Exhibits Arespondent has represented, directly or by implication, that: A. Eating Eggland' s Best eggs wil not mcrease serum cholesterol.

B. Eating Eggland' s Best eggs will not increase serum cholesterol as much as eating ordinary eggs. PAR. 6. Through the use of the statements contained in the advertisements referred to in paragraph four, including but not necessarily limited to the advertisements attached as Exhibits Arespondent has represented, directly or by implication, that at the time jt made the representations set forth in paragraph five, respondent possessed and relied upon a reasonable basis that substantiated such representations.

PAR. 7. In truth and in fact, at the time it made the representations set forth in paragraph five, respondent did not possess and rely upon a reasonable basis that substantiated such representations. Therefore, the representation set forth in paragraph six was, and is false and misleading.

PAR. 8. Through the use of the statements contained in the advertisements referred to in paragraph four, including but not necessarily limited to the advertisements attached as Exhibits Arespondent has represented, directly or hy implication, that clinical studies have proven that adding twelve Eggland' s Best eggs per week to a low-fat diet does not increase serum cholesterol. PAR. 9. In truth and in fact, clinical studies have not proven that adding twelve Eggland' s Best eggs per week to a low- fat diet does not increase serum cholesterol. Therefore, the representation set forth in paragraph eight was, and is, false and misleading. PAR. 10. Through the use of the statements contained in the advertisements referred to in paragraph four, including but not necessarily limited to the advertisements attached as Exhibits C and , respondent has represented, directly or by implication, that: EGGLAND' S BEST, INC. 343 340 Complaint A. Eggland' s Best eggs are low in saturated fat. B. Eggland' s Best eggs are lower in saturated fat than ordinary eggs.

PAR. I 1. In truth and in fact:

A. Eggland' s Best eggs are not low in saturated fat. B. Eggland' s Best eggs are not lower in saturated fat than ordinary eggs.

Therefore, the representations set forth in paragraph ten were, and are, false and misleading.

PAR. 12. The acts and practices of respondent as alleged in this complaint constitute unfair or deceptive acts or practices and the making of false advertisements in or affecting commerce in violation of Sections 5(a) and 12 of the Federal Trade Commission Act. Commissioner Owen dissenting.

.. . ,, _\ ,\ \ , . , , :: ,?. \ .. .&, , ,.. ,., .,,, \..: ,; ,,. ,.. ,,, . ...y..,,,,. ,,: ..,. . ;:. . ;, . . ::.. ;: , ,.,: ,., ,. , .. . "i.

DBC\S\O \SS\O DBCO ffDBRi'\' "iri' cof\,\i\t\t 3AA BY.\\\\\\"i i' r,1.nl'B1.'I 1\ -re':. o.S i. \nc, c.o\est\:O\. "' '" '0 , "'1 1,v. ''t seSut, ::A6' c(pI.'1ot'1. U\e coufP" do utsetut . '1($\ ..c. U\a\ , "4-, -p,pC""'" ..'Y'A'\, # ,,/out se-d teaU \ 1"o& ii 'lO . 1:,Z:,;;i\!""'- , . 'C. o,'ooj\/. c as ' cPt'v.''' 0\ as \f2 S: iff of\':-'" rz ..Or \ ::-c;'" ' 4'? "c: \ 000""'1f , EGGLAND' S BEST, INC. 345 340 Complaint EXHIBIT B \/.. Ar'" irxorp""e EX1JIBIT ?, World""oe Ploz: 825EIGhr.Ave"'- Ayer New Yor. NY10019-7A98 212- 5000 Fo.212. A7d-5dQC CLIEt'' EGGLA:\:J' 5 BEST PiiOGRAIv PRQDCiD Eg FACI ities 1Y TLE "E!; Dishes Vets, 3" DATE 71'2192 ""ur 6ER ZA Y A 202J ... AS PRODUCED... GTH VIID AUDIO (MUSIC THOUGHOUT) OPEr- ON CU OF MA!'' TALKlG TO HIMSELF MA."J DC: !WO eggs over easy CurTOCU lIRPA.""OFTI'OEGCSf:' PAi\ A VO: You can eat eggs again CL'T TO QUICK PA:, OF IA'\ T ALKI MAI\ DC: "No wait "poached ' CUT TO CU OF rOACHED EGG BE!1'G LIFTED A VO: and not increa:. your s.rum clolesterol DUTOFBOILNC WATER CLI TO L/R PA.!''' OF EGGLAJ-'O CARTO Jntroducing Eggland' s Bes\ ell TO eu OF V'I'OlE EGGS FALLJ:'C 1.'\' The re fresh Borur-c WATER CUT TO ECL OF HARD- :"ED EGG BE:'\' real e- PEELED CL I TO PLATE OF EGGS A D rota TOES Andm CLI TO HARD- BO!:"ED EGG BEL'\G SLICED clinicairestsin;i CL'TTO L/R PA'.' OF FULL EGG CARTO:- iOlda\ diet even tweh' e a week CUfTO CL' OF SCRAMBUD EGGS BEJNG Pli QlUse no mcrase in serum cholesterol ON MUF CL'TTO CU OF MAN TAlJG MAN DC: . An omelet CUT TO RAW EGGS BENG MIXED (", BOWL AVO: Thl"TE' speaJ cur TO MUSHROOMS BEI G Pli IN OMELET from spia1\y CUT TO IT Of MAN fed hens. MAN ex ' 'SunnySlde.. that's it"

CL'TTO EC.. .' OF ECCLA.""LJ LCCOO EGGS Egs\and' s&st CUT TO SHOT OF EGCLA'TIS BEST CARTO.'\ Now. you can eat teai f" agam SLTER '\0\\ ' YOU CA'\' fA T REAL EGGS AGA!:'' DEClSlO \lg f.1'. lSSlO " CO feder!\l. '\R!\ " COIl,\p\aint :,46 f,)il-llj' n tI EGGLAND'S BEST , INC. 347 340 Complaint EXHIBIT B \\. ,. Complaint 118 F. EXHIBIT C EXHIBIT C IdlllU1\\ II)f I' I1IIAII. \lrIIIIIIII lil"" -\1"11,. 1"III""1 ii- \111 :hl"

I:' J 1.. J - EGGLANC BrS EGGS Pf'O(;H.r' PRO'J. 'C:' SAME .:'CIL LIES QAC;O TITLf HAHlE Dt, AJgust 24 1992 NUMBER 08- 0792 ft,S PROOUCEC \ENGTf- :60 Track HATTIE: 8i, this is Bat tie winston. Do you remember eating eggs €ve day? Then there was this cholesterol business. Well, no we can eat eggs again without worrying about raising our cholesterol.

New E991and' 5 Best eggs are fresh, real eggs that won ' t increase seru cholesterol... even though they contain about as much cholesterol as either eggs. In recent clinical tests, as part of a low-fat diet, people ate as many as twelve Eggland' s Best eggs a week.., and didn ' t increase their seru cholesterol.

Eggland' s Best eggs come from very specially fed hens, you see.

Hens that eat no animal fat. Just healthy grains, extra vitamin E and a special all- natural supplement that' rich in minerals. Plus canola oil, the oil lowest in saturated fat. So now there s a celicious, honest-togoodness fresh egg that we can enjoy without worrying about cholesterol.

Now we can eat real eggs again! ANC'R: Look for the initials EB" on every Eggland' s Best egg. APl'ROVED EGGLAND' S BEST, INC. 349 340 Complaint EXHIBITD !GGUJ' S IIEST EXHIBIT D 130 TV "PDT lIACr. ON"

1/15/93 Pdp ,,'white ZAYA 3001, 8 PRO UC!:C JrBIC: UNDER THROUGHOUT !f you love eggs, but cholesterol has put you on a low-fat diet.. . here s a way to turn that diet sunny side up. Introducing Eggland' s Best, eggs from specially fed hens.

Like ordinary eggs, they contain cholesterol. Yet, i%' clinical tests, people ate 12 Eggland' andBest eggssho'Weda weekno asl.ncreasepart of a inlow-fattheirdietseruI:, cholesterol. Try Eggland' s Best.

Your cholesterol-conscious diet can now have a sunny side.

Complaint II8F.TC EXHIBITD EXHIBIT 0 - p. 2 EGG LAND'S BEST , INC. 351 340 Complaint EXHIBIT D ;:XHIBIT 0 - p. 3 hen th 1992When JULY RAN .5" CR-NAIf'5 UlahMo"u()fbby-Ju -- AD GUIDEsimple.

MENU Its UTAH eatbette'YOeatbetetoo.

EGGLAND' S BEST, INC. 353 340 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft 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 respondent with violations of the Federal Trade Commission Act; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondent of all the jurisdictional facls 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 respondent that the law has been violated as alleged in such complaint, 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 respondent has violated the said Act, and that 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 filed thereafter by interested persons pursuant to Section 34 of its Rules, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commssion hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Eggland's Best, Inc. is a corporation organized existing and doing business under and by the virtue of the laws of the State of Pennsylvania, with its offices and principal place of business located at 842 First Street, King of Prussia, Pennsylvania. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

354 FEDERAL TRADE CO:vMISSION DECISIONS Decision and Order 118 F.T.c. ORDER DEFINITION For purposes of this order, the phrase " food containing egg yolk" shall not include " medical foods " as defined by 21 U. c. 360ee (b)(3) as currently in effect as of the date of this order. It is ordered, That respondent Eggland's Best, Inc. , a corporation its successors and assigns, and its offcers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of eggs or any food containing egg yolk in or affecting commerce, as " food" and commerce" are defined in the Federal Trade Commission Act, do forthwith cease and desist from misrepresenting, in any manner directly or by implication, through numerical or descriptive terms or any other means, the absolute or comparative amount of cholesterol total fat, saturated fat or any other nutrient or ingredient in such food. II.

It is filrther ordered That respondent Eggland' s Best, Inc. , a corporation, its successors and assigns, and its officers. agents, representatives and employees, directly or through any corporation subsidiary, division or other device, in connection with the Iabcling, advertising, promotion, offering for sale, sale, or distribution of eggs or any food containing egg yolk in or affecting commerce, as "food" and " commerce " are defined in the Federal Trade Commission Act do forthwith cease and desist from making any representation, in any manner, directly or by implication, about the absolute or comparative effect of such food on serum cholesterol, whether or not such food is consumed as part of an unrestricted diet or as part of any specific dietary regimen, unless at the time of making the representation respondent possesses and relies upon competent and reliable scientific evidence substantiating such representation; provided however, that any such representation that is specifically permitted in labeling for such food by regulations promulgated by the Food and , EGGLAND' S BEST, INC. 355 340 Dccision and Order Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990 will be deemed to be substantiated as required by this paragraph. For 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. It is further ordered That respondent Eggland's Best, Inc. , a corporation, its successors and assigns, and its officers, agents representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of eggs or any food containing egg yolk in or affecting commerce, as "food" and "commerce " are defined in the Federal Trade Commission Act do forthwith cease and desist from making any representation, in any manner, directly or by implication, about the absolute or comparative health benefits of such food. including but not limited tu its effect on heart disease, unless at the time of making the representation respondent possesses and relies upon competent and reliable scientific evidence substantiating such representation; provided however, that any such representation that is specifically permitted in labeling for such food by regulations promulgated by the Food and Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990 will be deemed to be substantiated as required by this paragraph.

IV.

It is jilrther ordered That respondent Eggland's Best, Inc. , a corporation, its successors and assigns, and its officers, agcnts, representatives and employees, directly or through any corporation subsidiary, division or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of any food in or affecting commerce, as "food" and "commerce" are defined in the Federal Trade Commission Act, do forthwith cease and desist from misrepresenting, in any manner, directly or by implication, the Decision and Order 118 F.Te. existence, contents, validity, results, conclusions or interpretations of any test or study.

It is further ordered That respondent Eggland's Best, Inc. , a corporation, its successors and assigns, and its officers, agents, representatives and employees, directly or through any corporation subsidiary, division or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of eggs or any food containing egg yolk in or affecting commerce, as "food" and "commerce" are defined in the Federal Trade Commission Act, do forthwith cease and desist from:

A. Failing to disclose clearly and prominently in any advertisement or promotional material that refers, directly or by implication to the absolute or comparative amount of cholesterol, fat or saturated fat in such food, the average cholesterol content of such food expressed in the following terms:

I. The number of milligrams; and 2. The percentage of "Maximum Daily Value. The statements required by subparagraphs A. I and A.2 of this Part shall appear in close proximity. For purposes of this Part, the term "Maximum Daily Value" shall mean: (1) the daily reference value or other daily intake limit for cholesterol established in an effective final regulation of the Food and Drug Administration; or (2) in the absence of such a regulation, the daily intake limit of cholesterol advised by anyone of the following three organizations: the National Academy of Sciences, the Surgeon General of the Public Health Service, or the American Heart Association. In the event that the Food and Drug Administration does not have a final effective regulation and none of the three named organizations advises that daily cholesterol intake be limited to a specific maximum amount subparagraph A.2 of this Part shall not apply. Provided, however that this Part will not be deemed to apply to any representation that is specifically permitted in labeling for such food product by regulations promulgated by the Food and Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990. , EGGLAND' S BEST, INC. 357 340 Decision and Order B. For a time period of one year, beginning no later than fortyfive (45) days from the date this order becomes final, offering for sale, selling, or distributing eggs unless the package label for such eggs clearly and prominently states, in the exact language that follows, that: "There are no studies showing that these eggs are different from other eggs in their effect on serum cholesterol." Provided, however, that this requirement shall apply only in those geographic areas where respondent has disseminated or caused to be disseminated advertising or promotional materials containing any representation, directly or by implication, about the effect of Eggland' s Best eggs or other eggs on serum cholesterol over a period of 12 weeks or more, or at any time between January I , 1993 and the date of the acceptance of this order by the Commission for public comment, including but not limited to those geographic areas listed in Attachment A to this order.

For purposes of this order clearly and prominently" shall mean as follows:

1. In a television or videotape advenisement, the disclosure shall be presented simultaneously in both the audio and video portions of the advertisement. The audio disclosure shall be delivered in a volume and cadence and for a duration suffcient for an ordinary consumer to hear and comprehend it. The video disclosure shall be of a size and shade, and shall appear on the screen for a duration sufficient for an ordinary consumer to read and comprehend it; 2. In a print advertisement, the disclosure shall be in type size which is at least the same size as that in which the principal portion of the text of the advertisement appears, shall be located in close proximity to the statement or other reference requiring the disclosure and shall he of a color or shade that readily contrasts with the background of the advertisement;

3. In a radio advertisement, the disclosure shall be delivered in a volume and cadence and for a duration sufficient for an ordinary consumer to hear and comprehend it;

4. On a package label, the disclosure shall be in a conspicuous and prominent place on the package, in a conspicuous format, and in conspicuous and legible type in contrast by typography, layout, or color with all other printed material on the package. Provided however, that if the disclosure is displayed on the top or front panel of a standard twelve-egg carton or on the top, front or side panel of Decision and Order 118 F.Te. a standard six-egg carton, is in at least ten (!O) point type and is either on a separate label or enclosed within a border, and both the type and the border are of a color or shade that readily contrasts with the background of the carton, the disclosure shall be deemed to have been made clearly and prominently for purposes of this order. VI.

It is jitrther ordered That for five (5) years after the last date of dissemination of any representation covered by this order, respondent Eggland' s Best, Inc. , or its successors and assigns. shall maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All materials that wcrc relied upon in disseminating such representation; and B. All tests, reports, studies, surveys, demonstrations or other evidence in their possession or control that contradict, qualify or call into question such representation, or the basis relied upon for such representation, including complaints from consumers and complaints or inquiries from governmental organizations. VII.

It isjitrther ordered. That respondent Eggland's Best, Inc. shall within thirty (30) days after service upon it of this order, distribute a copy of the order to each of its operating divisions, to each of its franchisees, to each of its managerial employees, and to each of its officers, agents, representatives or employees engaged in the preparation or placement of advertising or other materials covered by this order and shall secure from each such person a signed statement acknowledging receipt of this order.

V II It is further ordered That respondent Eggland's Best, Inc. shall notify the Commission at least thirty (30) days prior to any proposed change in jts corporate structure, including but not limited to dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or EGG LAND'S BEST , INC. 359 340 Decision and Order affiliates, or any other corporate change that may affect compliance obligations arising out of this order.

IX.

It is That respondent Eggland's Best, Inc. shall further ordered within sixty (60) days after 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 it has complied with this order. Commissioner Owen dissenting.

Decision and Order 118 F.T. ATTACHME:'T A GEOGRAPHIC AREAS WITH CHOLESTEROL-RELATED ADVERTISING OR PROMOTION PURSUANT TO PARAGRAPH VB. OF AGREEMENT CONTAINING CONSENT ORDER I. Iowa 2. Maine 3. Rhode Island 4. Western and Central Pennsylvania 5. Virginia 6. Maryland 7. Washington, D.

8. Georgia 9. South Carolina 10. Alabama I I. Mississippi 12. Louisiana 13. Arkansas 14. California IS. Nevada 16. Idaho 17. Michigan 18. Colorado 19. South Dakota 20. Washington 21. Montana 22. Alaska 23. Wyoming 24. Missouri 25. Oklahoma 26. Salt Lake City, Utah 27. Raleigh-Durham, North Carolina 28. Southern Ilinois (St. Louis Market) EGGLAND' S BEST, INC. 361 340 Statement SEPARATE STATEMENT OF COMMISSIONER MARY L. AZCUENAGA CONCURRING IN PART AND DISSENTING IN PART The Commission today issues a final consent order settling complaint allegations that Eggland' s Best, Inc., made deceptive advertising claims about its eggs. I join the Commission in finding reason to believe that Eggland' s claims are deceptive and join in approving the order except for paragraph V.B. I do not agree that the corrective notice provision contained in paragraph Y.B. is waranted and I dissent from the order to that extent. In imposing a corrective notice remedy, the Commission must consider whether an advertisement has played a substantial role in creating in the public s mind a false belief about a product that will linger on after the false advertisement ceases. Warner-Lambert Co. v. FTC 562 F.2d 749, 762 (D. C. Cir. 1977), cert. denied 435 950 (I978). A corrective notice provision is intended to dissipate the lingering effects of a deceptive advertisement so that future advertisements do not become part of a continuing deception of the public. Jd. at 769.

Here, there is no direct evidence, such as the consumer surveys and expert testimony in Warner Lambert Co. , that Eggland' s Best's advertisements created a lingering false impression about the effects on serum cholesterol of its eggs. It is unlikely that such an impression was created. Eggland' s Best s advertisements ran for a relatively short period of time, and the claims are contrary to general information about the relationship between the consumption of eggs and serum cholesterol that is available to consumers in significant quantity from a variety of other sources. Without a stronger showing of the need for corrective advertising under the Warer-Lambert test I cannot support the corrective notice provision in the order. During the period for comment on the order, the issue was raised whether the required corrective notice is unduly broad and in itself could be misleading. Although this appears to be a reasonable question, given the available evidence, I do not reach this issue because I would not impose a corrective notice requirement at all. Statement 118 F. STATEMENT OF COMMISSIONER DEBORAH K. OWEN CONCURRING IN PART AND DISSENTING IN PART I concur in the Commission s decision to issue a complaint, and to accept a consent agreement in this matter, except as to Section B. of the order. With respect to that Section, which requires corrective advertising, I dissent.

The seminal case on corrective advertising is the Listerine case, Warner-Lambert Company, 86 FTC 1398 (1975), where the Commission opined:

(I)f a deceptive advertisement has played a substantial role in creating or reinforcing in the public s mind a false and material belief which lives on after the false advertising ceases, there is clear and continuing injury to competition and to the consuming public as consumers continue to make purchasing decisions based on the false belief. Since this injury cannot be avoided by merely requiring respondent to cease disseminating the advertisement, we may appropriately order respondent to take affrmative action designed to teITnatc the otherwise continuing iji effects of the advertisement.

86 FTC at 1499- 1500.

As the complaint alleges, Eggland' s ads, in my judgment certainly create an impression that its eggs wi1 not increase serum cholesterol, or, comparatively, increase cholesterol as much as ordinary eggs. However, we must also find that the beliefs created by the challenged ads are likely to linger after the advertising ceases. As to that likelihood, it seems to me imporlant to compare and contrast the facts in Warner-Lambert to the situation here. In Warner-Lambert, decided in 1975 , the Commission noted that the challenged advertising claims had been made directly to the consuming public since 192 I, and involved expenditures of large sums in print and television media. 86 FTC at 1501. The Commission cited to the AU' s Findings of Fact, which noted that Listerine had made the contested representations since the product went on the market almost a century before; that cold and sore throat claims had been made continuously on its labeling since prior to 1938; and that over the ten years preceding the decision, Listerine had spent several million dollars on its colds advertising, the vast majority occurring on network and spot television, covering all parts of the day and evening and particularly in network prime time. ld. 1468 (IDFF 219- 220); see also id. at 1407- 1408 (IDFF 5- 8). The Commission pointed to record testimony indicating the high EGG LAND' S BEST, INC. 363 340 Statement percentage of consumers taking such claims that would remain as long as five years after the ads ended. It concluded: "The record demonstrates that long after Listerine cold efficacy advertising ceased, a substantial proportion of the public would continue to believe in Listerine s efficacy for the treatment and prevention of colds and sore throats. Jd. at I 503 (emphasis supplied). If we contrast the length in time, and the magnitude of Listerine ' s advertising to the instant case, Eggland' s advertising would hardly appear to rise to even a two-digit percentage thereof. We have no evidence that Eggland' s campaign was so similarly saturated and extended that long after it ceases, a substantial portion of the public will continue to believe the challenged claims in the absence of the corrective advertising that the Commission has accepted. One significant factor is in evidence here that was not present in the Listerine case: the barrage of contrary information to which the public is exposed. While the public received little, if any, information from sources other than the advertiser about the true effect of Listerine on colds and sore throats, the vast majority of information available 10 consumers challenges the Eggland claims, and links egg consumption with increased serum cholesterol. Articles in the popular press, television and radio programs, and many cookbooks recommend that consumers lower their consumption of eggs. Doctors and the American Heart Association advise people to limit their egg consumption for health reasons. The general ambient information and perception is that eggs are unhealthy, and this climate is highly relevant in determining whether the false beliefs created by Eggland' s Best advertisements will likely linger. Eggland' s Best advertisements attempted to counteract the common wisdom, but ran for only a short time. Because the information that eating eggs is likely to increase serum cholesterol wil continue to be widely disseminated to consumers through media sources, it is unlikely that the beliefs regarding the effects of Eggland' s Best eggs on serum cholesterol, or their comparative benefits to other eggs, will be maintained. In sum, the half-life of Eggland' s advertising campaign is probably very short.

During the public comment period. eighteen comments were received. Two of these comments supported the Commission position with respect to the corrective labeling notice, and the remaining sixteen comments either disagreed with the Commssion position or were silent on this issue. Comments from the American Statement ! JR FTC. Advertising Federation and the American Association of Advertising Agencies focused on the lack of a factual record indicating that Eggland' s advertising has caused the type of injury that needs to be redressed by corrective advertising, and stressed the quantum difference in factual record between Egglands and Warner-Lambert. Members of the egg industry and academics were also critical of the corrective labeling provision. In addition to echoing the concerns regarding evidence of lingering harm, these commentators believe that the incentive to innovate will be reduced, and that the required language of the corrective label is itself mislcading. In contrast, both the Massachusetts Office of the Attorney General and the Center for Science in the Public Interest (CSPI) believe that corrective advertising is appropriate in this case. Further both request that the Commission expand the scope of the requirement. Thc Massachusetts AG' s Office recommends including Massachusetts in the area where corrective labeling is required, and the CSPI urges the Commission to require that the corrective statement be made in advertising as well as on the carton label. The Commission has chosen to refrain from altering the scope of the corrective advertising based on these comments, and I believe that the weight of the public comment reinforces my earlier opinion in opposition to corrective advertising.

My dissent on the use of corrective advertising in this case is not to suggest, however, that corrective advertising is only appropriate where the ad campaign is decades-old and swamps the public. A classic opportunity for appropriately imposing the remedy was the Sun Company case two years ago. File No. 902- 3268. There, the Commission challenged claims linking octane and automobile engine performance made by a company that was previously under a Commission order for earlier false performance and uniqueness claims for its gasoline. Sun Oil Co. 84 FTC 247 (1974). Nonetheless, the Commission agreed to merely a cease-and-desist order, despite the fact that the challenged claims took advantage of and further contributcd to, widcspread consumer misperception about the relationship between octane and performance. The contrast between Ihe Commission s decision there. and here, suggests that the Commssion s current posture on corrective advertising may be more i Moreover. it should he noted that nothing in the Commissior, s action precludes Massachusetts from seeking its own relief and. indeed, M3ssachusetts has filed a I:w suit against Egglam!' s Best EGGLAND' S BEST, INC. 365 340 Statement a function ofrespondents ' willingness to agree to the remedy, rather than of a well defined and implemented policy. Finally, a comment on the remedy itself. The corrective advertising is ordered to be placed on Eggland' s Best carton label. Due to other legal limitations, Eggland' s Best has not made serum cholesterol or heart health claims on the carton. Thus, while the attempt to limit the breadth of the remedy may be well-intentioned I find it highly ironic that corrective advertising has been mandated in a medium where the original deceptive claims were never made. STATEMENT OF ROSCOE B. STAREK, II I support the corrective advertising provision in this order. Under the appeals court decision in Warner-Lamhert Co. , corrective advertising may be ordered if the challenged ads substantially contributed to the development and maintenance of a false and material belief, and a substantial portion of consumers will continue to hold the false belief. I The Warner-Lambert court suggested that the purpose of advertising is to create enduring beliefs in consumers minds, such that the Frc might well presume in some cases that the standard for imposing corrective advertising had been met .' The Warner-Lambert decision accords the Commission substantial discretion in applying a corrective advertising remedy. The Commission must take care, however, to exercise such broad discretion judiciously. The question I had to answer in this case was whether corrective advertising is appropriate in the absence of an extended period of deceptive advertising or extrinsic evidence demonstrating that the false impressions will persist in consumers minds after the ads cease, I have determined that a limited corrective advertising requirement is an appropriate remedy here. First, I have reason to believe that the Eggland' s ads have created in consumers, minds enduring Wamer-Inmberl Co. v. FTC, 562 F. 2d 749 (D, C Cir. 1977), modlf.'lng rind enforcing 86 FTC 1398 (1975). art. denied. 435 U. S. 950 (1978). The court stated that it need not rely upon such a presumption ir: its case, however, because the record contained evidence that the Lislcrinc ads in question had created. in the minds of consumers exposed to the advertising, raise beliefs that would persis! after the C1ds ended. fd.. 562 F.ld at 762-63: see 86 FTC at 1471 n. 23 (data relied upon was a survey of " consumers \I'ho have seen or heard a lot ot advcnising for Lislcrine 3 It is certainly unrealistic to think that we will have this d:lta when the respondents enter into a consent agreement before a complaint is filed Statement 118 F.Te. false impressions about these eggs. Because Eggland' s is able to charge for its eggs about 200% of the typical price per dozen, we have strong evidence that the company s ads have been successful in creating in the minds of its consumers a belief that its eggs are meaningfully superior to other eggs. Second, the superiority touted by Eggland' s ads -- including ads disseminated during the public comment period -- pertains to their effect on serum cholesterol. Common sense tells me that this belief, which relates to the principal attribute purportedly distinguishing Eggland' s eggs from other eggs is not going to disappear overnight, simply because advertising making that claim ceases. Third, consumers who continued to believe that Eggland' s had a demonstrated superiority over typical eggs would suffer an identifiable injury, again due to the price differential. Further, if the ads lead consumers to increase their egg consumption significantly, some consumers may increase their serum cholesterol levels and thus potentially har their health. A corrective notice placed on the egg package would enable consumers to avoid further injury.

Finally, I am persuaded by the careful crafting of the corrective remedy. The instant notice is designed to reach consumers likely to have been misled by Eggland' s ads (those who are preparing to purchase the product), rather than the population at large. It has a limited dissemination schedule and will not be unreasonably costly. Moreover, the notice itself is a statement of fact that is neither derogatory of Eggland' s eggs nor implies criticism of other companies ' products.

Thus, although I think corrective advertising is a remedy that should be used sparingly, I support its inclusion in this order. STATEMENT OF COMMISSIONER DENNIS A. Y AO I voted to accept the consent agreement in this matter. Although I support the terms of the consent agreement, I would have preferred that the complaint include an implied heart disease allegation. The Commission alleges in its complaint that, among other things, Eggland' s Best falsely represented that it had a reasonable basis for claims that eating its eggs will not increase serum cholesterol in an absolute sense and that eating its eggs will not increase serum cholesterol as much as eating ordinary eggs. I believe that reasonable consumers would interpret the express claim that EGGLAND' S BEST, INC. 367 340 Statement Eggland' s eggs will not increase serum cholesterol to imply that those eggs would therefore not increase the risk of heart disease -especially when the express claim was made for eggs, a product notoriously well known for its negative impact on heart health. Although the order does include a requirement that health claims including claims about heart disease, be substantiated by competent and reliable scientific evidence, I believe that industry and the public would best be served if the Commission communicated its belief that an implied health claim has been made here. I I would note that the complaint also alleges that Eggland's Best falsely represented that its eggs are low in saturated fat in an ahsolute sense, and are lower in saturated fat than ordinary eggs. Although I agree that the implied saturated fat claims challenged in the complaint were made, in my view this claim is further down the spectrum of implied claims towards those needing extrinsic evidence than the implied heart disease claim I discuss here. I thus can discern no reason for excluding the implied heart disease claim from the complaint while including the saturated fat claims Complaint 118 F.T.c.