Hair Analysis Lab Shut Down (1985)
Stephen Barrett, M.D.
In 1984, the Federal Trade Commission charged Arthur Furman, two members of his family, and their companies with marketing hair analysis tests with deceptive claims that they could identify mineral imbalanced and provide a reliable basis for recommending dietary supplements. The complaint, which was accompanied by a request for a temporary restraining order, revealed that the lab reported wildly results on six identical submitted by the FDA and that the results also differed from those found by the FDA's own lab. The judge granted the temporary restraining order and, in 1985, agreed with the FTC and issued a permanent injunction barring the defendants from "holding themselves out . . . to persons other than health professionals, as being able, on the basis of hair analysis, to measure accurately the elemental content of a person's body or to recommend vitamin, mineral or other dietary supplements which can correct chemical excesses and deficiencies in a person's body."
The judge's opinion (shown below) was drawn very narrowly so that it could not be used as a road map for stopping hair analysis labs that received their business though health professionals (mostly chiropractors) who submitted the hair samples and interpreted the results of the reports to patients. It would have been helpful if the judge had ruled that hair analysis has no practical value determining the body's nutritional status, whether sold directly to consumers or marketed through professionals. However, he concluded:
- At best, a multi-elemental spectral hair analysis, the procedure employed here, is a useful guide in the hands of a health care professional."
- "The evils present in advertisements aimed at and reports received by direct consumers without the intervention of a health care professional, do not exist when the hair sample is submitted by and the report rendered to a health care professional."
- "The states can be relied upon to regulate those [professionals] who need regulating."
Unfortunately for the public, all three of the above conclusions were wrong. There is a very clear scientific consensus that hair analysis has no practical value in determining the body's nutritional status. There is no reason to believe that consumers will be any safer if such tests are interpreted by the practitioners who routinely obtain them. And it is clear that state regulation has not protected consumers against the misuse of hair analysis. The 1985 FTC action caused the Furmans' laboratory to close, but the agency decided to ignore the laboratories that worked only through practitioners, because it felt that practitioner misconduct should be regulated by state agencies. Until the Internet became popular, few laboratories offered hair analysis directly to the public. Today, direct offerings abound, but the FTC doesn't seem to care.
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
FEDERAL TRADE COMMISSION,
ARTHUR F. FURMAN, et al.,
|CIVIL ACTION NO. 84-803-A|
This action is brought by the Federal Trade Commission (FTC), pursuant to S 13(b) of the FTC Act, 15 U.S.C. S 53(b),1 to enforce S 5(a) of that Act, 15 U.S.C,. § 45(a), which makes unlawful deceptive acts or practices in or affecting commerce. The case was tried to the court on January 22-23, 1985.
115 U.S.C. § 53(b) provides, in part:
"Whenever the Commission has reason to believe --
(1) that any person, partnership, or corporation is violating or is about to violate, any provision of law enforced by the Federal Trade Commission, and
(2) that the enjoining thereof pending the issuance of a complaint by the Commission [and until such complaint is dismissed by the Commission] or set aside by the court on review, or until the order of the Commission made thereon has become final, would be in the best interest of the public --
the Commission by any of its attorneys designated by it for such purpose may bring suit in a district court of the United States to enjoin any such act or practice ••• , and after proper proof the court may issue, a permanent injunction."
That the court may hear and determine an action under this section for a permanent injunction seems settled even if there is no proceeding pending before the FTC. United States v. JS & A Group, Inc., 716 F.2d 451, 457 (7th Cir. 1983).
The FTC is seeking to permanently enjoin the defendants Arthur F. Furman, his wife Ethel Furman, his son Alan Furman, and A & A Laboratory, Inc. (A & A) from continuing or engaging in allegedly deceptive practices involving the mail order marketing of hair analysis. The analysis is designed to quantify the elements contained in a sample of consumer hair.
Arthur Furman, although not an officer, employee or stockholder of A & A, was active in its operations and promotions from 1981 until A & A closed down in August 1984. He is listed as Director of Medical Services on the report generated by persons ordering the hair analysis, although he does not hold a medical degree. A & A paid his expenses for travel and lectures promoting hair analysis service. He received no other compensation during this period except approximately $600, and even part of that was expense reimbursement. Arthur Furman became interested in hair analysis in 1979 and, through A & A, began marketing the analysis. In 1981 A & A began performing the analyses.
Alan Furman, now 23 years old, is the son of Arthur and Ethel Furman. He has been the President of A & A since 1979, and is its 90% stockholder. He did not testify at trial. Although he apparently does some work for A & A,2 it is not clear just what it is. In 1982, 1983, and 1984 Alan received compensation from A & A of approximately $51,000, $120,000 and $50,000, respectively.
2According to Arthur Furman, Alan "ran" the company and he, Arthur, lectured, wrote articles, and was the "liaison• with health care professionals and a consultant to A & A. The evidence persuades the court that Arthur was the dominant force and guiding hand of A & A.
Ethel Furman is a 10% stockholder of A & A. She is also its Vice President and Secretary. She received no compensation from A & A other than approximately $700 in salary. She acted as bookkeeper for A & A, and her expenses were also paid by A & A when she accompanied her husband to conferences and lectures.
The hair analysis which A & A offered its customers was a multi-elemental spectral (or spectroscopic) analysis performed on a sample of hair by a spectrometer that A & A purchased from Beckman Instruments. It was state-of-the-art equipment when purchased by A & A, and it was stipulated at trial that when operated properly it was capable of producing accurate readings of the essential element and toxic element content of the hair sample tested. After the test is performed by the spectrometer a computer printout is generated, similar to PX-18, App. 2, Att. 6, attached as Appendix A.3 As seen the report indicates: a value for each of 13 essential and 5 toxic elements for the consumer1 how that compares, i.e. high or low, with "normal" values1 ratios of certain elements to others and the significance of those ratios1 and a recommended dosage of specific diet supple-ments to correct deficiencies or excesses the report has revealed.
3That exhibit is in three separate pages. As generated, however, the printout is on one piece of paper.
A report such as that just described is generated when a lay consumer or a health care professional responds to advertisements such as the following:
|Plaintiff's Exhibit 1||Plaintiff's Exhibit 2||Plaintiff's Exhibit 8|
Advertisements such as PX-1, directing the prospective customer to respond to Micro Trace Minerals, are in publications aimed at health care professionals, such as The Digest of Chiropractic Economics. These such as PX-2 and PX-8 are in publications directed to lay consumers such as Let's Live, Bestways, and Prevention, and indicate they should mail the return coupon to Trace Mineral Systems. Both Micro Trace Mineral and Trace Mineral Systems are divisions or parts of A & A. The report generated has the identical format for orders submitted to each division.
When the consumer receives the report, he or she also receives an enclosed flyer.(a copy of which is attached as Appendix B). The flyer outlines the perils of water pollution and solicits a $15.85 order to A & A in exchange for which A & A offers to send a container with instructions so that A & A can test the water for its mineral and toxic metal content. Also enclosed with the report is an offer (a copy of which is attached as Appendix C) of Trace Mineral Systems to forward the customer, in exchange for $35.00, a tape cassette of a personalized explanation of the report.
Conveniently, the customer further receives on the same day, in a separately mailed envelope, an order form in which the New Age Nutritional Supplement Co. offers to sell the vitamins, minerals, enzymes, amino acids, and detoxifiers which the report has recommended the customer take to supplement his or her diet. A copy of this order form is attached as Appendix D. New Age Nutritional Supplement Co. is an additional division or part of A & A, and the address given for it on the order form is a post office box in Fort Washington, Maryland, where Arthur Furman resides.
Accuracy of Analysis
In December of 1983 the FTC, through cooperation with the Food and Drug Administration (FDA), sent to Trace Mineral Systems six samples of hair. Two samples were sent on December 23, two more 2 weeks later, and the last 2 after another 2 weeks. Within a week of their mailing, the reports, each accompanied by the flyer and order form (App. C and D), were received. PX-18, App. 2, Att. 4, 5, 6, 7, 8, 9. The FDA conducted its own analysis of the hair from which the samples had been tken. It found, and the court credits the finding, that the analysis of the six hair samples by A & A were incorrect in a substantial number of instances. PX-18, App. 3; PX-31.
At about the time FTC was making its controlled submissions, A & A was experiencing difficulties with its spectrometer. The difficulties, or "glitches" as they were referred to by defendants, were episodic in nature, by which the defendants mean that the machine would operate normally, then abnormally, and then, upon retesting, return to normal. After unsuccessful attempts to remedy the problem, it was corrected in late January 1984 when there was a "wholesale" replacement of computer boards. Thereafter the spectrometer apparently operated satisfactorily.
That inaccurate analyses went out to customers during this period is troublesome. And the trouble is compounded by their being no records which indicate to whom the analyses were sent during this period. A & A keeps no duplicates of the computer printouts. The discs or cassettes upon which the information is stored are erased and reused. No other records are apparently kept of the names or addresses of customers. Consequently the only actual reports in evidence and the names of "customers" are the six submitted by the FTC.
The court is not, however, persuaded to award injunctive relief on the basis of inaccuracies in the analysis. These inaccuracies were apparently an aberration, not a part of any routine practice. A & A took prompt remedial action to correct the mal-function of the spectrometer once it was discovered.
Conflicting evidence was presented as to whether an element analysis of hair is a reliable indicator of the element, both essential and toxic, content of the body as a whole. From this evidence the court finds that, at best, a multi-elemental spectral hair analysis, the procedure employed here, is a useful guide in the hands of a health care professional. Used along with other relevant information in the treatment, the results of this procedure can at most help in prescribing nutritional supplements and in the caring for a specific patient where a chemical imbalance in the body is suspected. Indeed the A & A reports say as much in their disclaimers. The first such disclaimer, on Page 2 of the report, recites that "[A]ll of the above information is not intended to be for the diagnosis, prevention or treatment of any disease, or for the assessment of any medical condition." On the last page appears "[T]he following recommended supplementation in your diet is not meant to be prescriptive but as a guide for a healthier, happier life," and "[F]or best results it is recommended that these supplements be taken after consultation with your nutritionist or nutritionally oriented physician.
The difficulty with these disclaimers is that they come after the customer has parted with his or her $36.95. The advertisements which solicit that $36.95 contain no caveats qualifying the claims made in those advertisements. These claims essentially are for good health obtained through self medication ("Control Your own Health") of the "body's mineral excesses and deficiencies." The ". . . report will clearly recommend WHICH supplements to take and WHEN to take them." These statements are deceptive because without the assistance of a health care professional, they claim for the spectrometer more than it can do. Nor can the claims be dismissed as "puffery." We are here dealing with health care—not a sale of vacuum cleaners.
The disclaimers, coming when they do, are not an ameliorating factor. Consumers have been induced to pay their money by the representation that they could control their own health. If they were going to have to go to a professional anyway, why was A & A paid $36.95? Here the customer has received a report containing specific dosage recommendation of mineral nutrients for the alleviation of a specific imbalance in his or her body: a recommendation based, according to the advertisements, on tests "supervised by prominent nutritionists"4 and based on "The Direct Current Plasma (DCP) method—the most accurate method available." Next there conveniently arrives in the mail, at the same time as the report, an order form for just those nutrients that the report has recommended to the customer. It takes no sophisticated marketing expert to realize that, surrounded by the rhetoric of the overblown claims, the disclaimers will be lost.
4The nearest thing to supervision by a prominent nutritionist, as revealed by the evidence, is the reading of the printouts by Arthur Furman.
Defendants suggest that the FTC never argued or pled that the advertisement was deceptive in claiming more for its product than was sent to the customer in the report. Perhaps, but the FTC did allege, in Paragraph 16 of the complaint, that the defendants misrepresented on the basis of hair analysis that they could accurately identify mineral excesses and deficiencies in consumers' bodies and recommend vitamin and other dietary supplements which would balance mineral levels and improve their health. The court has now found that these unqualified representations were made by the defendants and that they are deceptive. The reason they are deceptive is that the consumer is not told in the advertisements, as he or she ought to be told, that hair analysis is only a guide, not a panacea, to be used with a health care professional in determining what mineral excesses and deficiencies exist in the whole body and what nutrients to take to correct those excesses and deficiencies.
It is deceptive to claim, as the advertisements do, that, without knowing anything more about a person than his name and address, defendants can recommend diet supplements which will correct element imbalances in the body on the sole basis of a hair analysis.
Reasonable Belief and Good Faith
The defendants presented evidence that there is a substantial body of authoritative medical literature supporting the view that hair analysis is useful in determining the element whole body content. The court accepts that. But Arthur Furman's having had a reasonable or good faith belief in that view is not a defense to the claims made in the advertisements. The court finds instead that there has been shown no medical or scientific support, so as to make the defendants' reliance on it reasonable, for the unqualified claims made in the advertisements.
Direct Consumer Vis A Vis
Health Care Professionals
Arthur Furman testified that of A & A's business, 20% was directly with consumers and 80% was with health care professionals. Of the 20%, half was domestic and half was foreign. As indicated, no records were produced supporting this, and the testimony is suspect. Whatever the percentages, the evils present in advertisements aimed at and reports received by direct consumers without the intervention of a health care professional, do not exist when the hair sample is submitted by and the report rendered to a health care professional. The latter category will be excluded from any injunctive relief awarded.
The FTC has requested injunctive relief prohibiting the deceptive acts and practices by all the defendants in the future. It has also requested a judgment against the defendants jointly and severally, for the sum of $1,568,534.30, that being the gross amount, as shown by the tax returns of A & A for the years 1979 through 1983 and the testimony of A & A's accountant, received by A & A during its operations from 1979 to date.
A & A has been out of business since August 1984. Arthur Furman, while not presently in the business of providing and marketing spectral hair analysis, by his testimony convinces the court that he still enthusiastically embraces the usefulness of such analysis. Indeed he professes to believe in good faith that what he has caused to be included in the advertisements is correct. The court has found those inclusions to be deceptive. The court is not satisfied that he will not embark again on what, at least for his family, has been a lucrative business. Injunctive relief is necessary to insure that if he does so embark, his enthusiasm will not be permitted to allow him to reenter the deceptive area. Since the evidence reveals that when he does business his son and wife participate with him, they too will be enjoined.
The injunction will prohibit what the court has found to be deceptive. It will not reach the advertisements, such as PX-1, which are directed only to health care professionals. It will prohibit receipt of orders from or reports to direct consumers, as opposed to ones from health care professionals, which are in response to advertisements such as PX-2, 4, 5, 6, 7 and 8. It will also prohibit any representation in any advertisement aimed at direct consumers, directly or by implication, that the hair analysis accurately measures mineral contents in the body, and that recommendations for vitamin, mineral or other dietary supplements can be based on the analysis of one's hair. The use by Dr. Furman of the title "Director of Medical Services," or any other title implying that he has a medical degree, will also be enjoined.
FTC seeks the monetary judgment as rescission of defendants' unlawfully procured consumer contracts. There is vague authority for such relief in a § l3(b) enforcement action. FTC v. U.S. Oil & Gas Corp. 748 F.2d 1431, 1434 (11th Cir. 1984)1 FTC v. H. N. Singer, Inc., 668 F.2d 1107, 1113 (9th Cir. 1982). However, as stated before, the evidence is uncertain as to what percentage of the gross income is attributable to direct consumer and what to health care professional contracts. The latter the court has found benign. No consumer has actually been shown to be deceived. While such a showing is not necessary for a finding of deceptive practices or for injunctive relief, it is a factor to be considered in awarding relief. Although the absence of records is not FTC's fault, neither is there any statutory requirement for the defendants to maintain such records. It would be possible, of course, taking Dr. Furman at his word, to award a judgment of 20% of A & A's gross receipts, but that judgment would be for the benefit of a now-unknown, and so far as this record is concerned, an uncomplaining class of persons. Seeking them out is not worth the candle. Monetary relief will be denied.
United States District Judge
January 30th, 1985
This article was posted on August 31, 2018.