2922. Misbranding of Colusa Natural Oil and Colusa Natural Oil Capsules. U. S.
v. 9 Bottles, etc (and 5 other seizure actions). Tried to the court; judg-
ment for the Government. Decree of condemnation and destruction.
Judgment affirmed upon appeal. Petition for writ of certiorari denied by
U. S. Supreme Court. ?F. D. C. Nog: 23160, 23197, 23200, 23493, 23512,
23548. Sampte Nos.yg9279-H^39280-H^39289-H, 39290-H, 79506-H,
795W-H,'^99-H,#6500-H,i^09-B^^10-H, 87072-H, 87073-H.)
LIBELS FILED : Between June 2 and August 4, 1947, Northern District of Iowa,
District of Colorado, and Eastern District of Wisconsin.
ALLEGED SHIPMENT : Between the approximate dates of April 1 and July 9,1947,
by the Colusa Remedy Co., from Chicago, 111., and Los Angeles and Hollywood,
Calif.
PRODUCT: 129 2-ounce bottles and 38 4-ounce bottles of Colusa Natural OU
and 135 100-capsule bottles and 39 200-capsule bottles of Colusa Natural Oil
Capsules at Waterloo and Fort Dodge, Iowa; Colorado Springs, Colo.; and
GreerwBay, Racine, and Appleton, Wis. Examination disclosed that the products
consisted of crude petroleum oil.
LABEL, IN PABT :    "Colusa Natural Oil."
NATURE OF CHARGE: Misbranding, Section 502 (a), certain statements on the
bottle labels were false and misleading. These statements represented and
suggested that the articles, when taken individually or in combination, were
effective in the treatment of psoriasis, eczema, leg ulcers, athlete's foot, and
open sores, whereas the articles when taken as directed were not effective for
such purposes.
DISPOSITION : The cases were consolidated for trial in the Northern District of
Iowa, and answers were filed by the Colusa Remedy Co., claimant, denying
that the products were misbranded.
The trial commenced on November 13,1947, and was concluded on November
18, 1947. On November 26, 1947, the court handed down its findings of fact
and conclusions of law and, in accordance therewith, entered a decree provid-
ing for the condemnation and destruction of the products.
The matter was appealed to the United States Court of Appeals for the Eighth
Circuit, and on July 28,1949, after consideration of the briefs and arguments
of counsel, the following opinion was handed down, affirming the judgment
of the district court:
THOMAS, Circuit Judge: "This is an appeal by the claimant from decrees
entered under Section 304 of the Federal Food, Drug, and Cosmetic Act, 21
U. S. C. Section 334, condemning shipments in interstate commerce of certain
drugs on the ground that they were misbranded within the meaning of Section
502 (a) of the Act, 21 U. S. C. Section 352 (a).
"Six libel proceedings were commenced by the government in three different
jurisdictions to condemn six shipments in interstate commerce of Colusa
Natural Oil and Colusa Natural Oil Capsules alleged to have been misbranded,
and the proceedings were consolidated for trial in the Northern District of
Iowa under the provisions of 21 U. S. C. Section 334 (b).
"The shipments involved were made in interstate commerce by the Colusa
Remedy Company, a Nevada corporation, from Los Angeles, California, to the
places and to the consignees named in each of the libels filed in each of the
consolidated proceedings. The drug was bottled in two forms, capsule and
liquid, it being stipulated that the contents in each case were identical, both
containing 'natural unrefined petroleum oil.' It was further stipulated that
the labels attached to the bottles in every case read:
[Colusa Natural Oil] A natural unrefined petroleum oil intended for use in treatment
of Psoriasis, Eczema, Athlete's foot and Leg Ulcers. Directions: Apply to affected
parts and rub it in thoroughly morning and night. For open sores saturate cotton pad
with oil and bind on by gauze. Change to fresh dressing morning and night. For
tender skin oil can be diluted 50? with olive oil. Continue treatment until skin is
smooth and comfortable. We suggest in treatment of Psoriasis, Eczema and Leg Ulcers
using Colusa Natural Oil externally as above directed and Colusa Natural Oil capsules
internally as directed on bottle containing Colusa Natural Oil capsules.
[Colusa Natural Oil Capsules] A natural unrefined petroleum oil in capsules intended
for internal use in treatment of Psoriasis, Eczema, Leg Ulcers. Directions: For adults
start with one capsule at bedtime then after 3 days change to one capsule after each
meal until skin is smooth and comfortable. For children under ten-one capsule or its
contents squeezed into milk or water at bedtime until skin is smooth and comfortable.
We suggest use of capsules as above directed in conjunction with liquid Colusa Natural
Oil applied externally to affected parts as directed on bottle containing Colusa Natural
Oil in liquid form.
"In each libel it was charged that such labels 'are false and misleading in that
such statements represent and suggest that the articles when taken individually
or in combination are effective in the treatment of psoriasis, eczema, leg ulcers,
athlete's foot, and open sores, whereas, the articles when taken as directed are
not effective for such purposes.'
"In each of the consolidated cases the appellant appeared as claimant and
filed an answer, ? admitting the interstate shipments, the accuracy of the
quoted labels, and denying that the articles were misbranded in interstate
commerce within the meaning of the statute, or that the wording of the labels
is false and misleading in the respects alleged, or that they were liable to
seizure and condemnation pursuant to the provisions of the Act, and praying
for the return of the articles and for such other relief as the case may require.
"The Federal Food, Drug, and Cosmetic Act, 52 Stat. 1040, 21 U. S. C. Section
301, et seq., provides:
[Section 201 (g), 21 U. S. C. 321 (g)] The term "drug" means ... (2) articles
intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease
in man or other animals.
misbranded when introduced into or while in interstate commerce, shall be
liable to be proceeded against on libel of information in any district court
within the jurisdiction of which the article is found.
(b) The article shall be liable to seizure by process pursuant to the libel, and the
procedure in cases under this section shall conform, as nearly as may be, to the
procedure in admiralty.
When proceedings involving the same claimant and the same issues of mis-
branding are pending in two or more jurisdictions they may upon application
of the claimant be consolidated for trial in any district selected by the claimant
where one of the proceedings is pending.
[Section 502, 21 U. S. C. Section 352] A drug ... shall be deemed to be
misbranded-(a) if its labeling is false or misleading in any particular.
"The consolidated cases were tried to the court without a jury and thereafter
the court made findings of fact, conclusions of law, and entered the decrees in
each of the consolidated cases condemning the articles involved, from which
decrees the claimant appeals. United States v. 9 Bottles, More or Less, etc.,
Colusa Natural Oil, et al., 78 F. Supp. 721. And see United States v. Colgrove,
et al., S. D. Oal., 83 F. Supp. 880.
"Under the issues the burden was upon the government to establish that
the labeling upon the bottles was false or misleading in some particular. That
means in this case that the proof must warrant findings by the court (1) that
Colusa Natural Oil and Colusa Natural Oil capsules are represented in the
labeling to be effective or efficacious in the treatment of the skin diseases named
in the labels and (2) that they are neither effective nor efficacious in the
treatment of those diseases.
"Upon the trial the appellant contented that the labeling upon the articles
involved is not 'false or misleading in any particular' within the meaning of
21 U. S. C. Section 352 (a). Its position was and is here that it does not claim
in the labels or otherwise that Colusa Natural Oil will cure any of the diseases
named in such labels. Its claim is that the labels represent only that the
remedies will assist or relieve in the treatment of the diseases referred to in
the labels.
"We think the law is settled both as to the issues and as to the review on .
appeal.
"A proceeding to forfeit and condemn property for violation of a federal
statute but which does not involve the personal conviction of the wrong-doer
for the offense charged is one of a civil nature and not criminal. Dobbin's
Distillery v. United States, 96 U. S. 395, 399; United States v. 985 Cases More
or Less, Etc., 6 Cir., 136 F. 2d 523, 526.
"The provision of Section 304 (b) of the Federal Food, Drug, and Cosmetic
Act, supra, that the procedure to seize misbranded drugs by libel should
conform as nearly as may be to the procedure in admiralty was not intended
'to liken the proceedings to those in admiralty beyond the seizure of the prop-
erty by process in rem, then giving the case the character of a law action. . . .'
445 Cases of Frozen Egg Product v. United States, 226 U. S. 162, 183.
"The Federal Rules of Civil Procedure govern proceedings on appeals in
actions for forfeiture of property for violation of a statute of the United States.
Rule 81 (a) (2), 28 U. S. C. A. following Section 723c; United States v. Cataldo.
1 Cir., 157 F. 2d 803; C. C. Co. v. United States, 5 Cir., 147 F. 2d 820; Reynal v.
United States, 5 Cir., 153 F. 2d 929; United States v. 5 Cases, Etc., 9 F. R. D. 81.
"Since this is an action for the forfeiture of property for violation of a
statute of the United States it is governed on appeal by Rule 52 (a) of the
Rules of Civil Procedure, which provides that 'Findings of fact shall not be
set aside unless clearly erroneous, and due regard shall be given to the oppor-
tunity of the trial court to judge of the credibility of the witnesses.' In the
notes to the rules prepared under the direction of the Advisory Committee
on rules appointed by the Supreme Court it is said the foregoing rule 'accords
with the decisions on the scope of the review in modern equity practice'; and
?It is applicable to all classes of findings in cases tried without a jury whether
the finding is of a fact concerning which there was conflict of testimony, or
of a fact deduced or inferred from uncontradicted testimony.' For a clear
statement of the meaning of the rule the notes cite Silver King Coalition
Mines Co. v. Silver King Consolidated Mining Co., 8 Cir., 204 Fed. 166, 177,
in which Judge Walter Sanborn, writing the opinion for the court, said: (?'
. . . where a court has considered conflicting evidence, and made a finding or     ^-
decree, it is presumptively correct, and unless some obvious error of law has
intervened, or some serious mistake of fact has been made, the findings or
decree must be permitted to stand.' The rule has been repeated by the courts
in cases too numerous to be cited. But see Johnson v. Cooper, 8 Cir., 172 F.
2d 937, and Hudspeth v. Msso Standard Oil Co., 8 Cir., 170 P. 2d 418. The
Supreme Court recently said in United States v. 77. S. Gypsum Co., 333 U. S.
364, 395, that a finding of fact is clearly erroneous when 'although there is evi-
dence to support it, the reviewing court, on the entire evidence, is left with
the definite and firm conviction that a mistake has been committed.'
"Upon the trial the government introduced the testimony of ten witnesses.
The first three were agents and employees of the Federal Food and Drug
Administration. They testified that they procured samples of Colusa Natural
Oil and of the Colusa Natural Oil capsules and forwarded portions thereof to
Dr. Hatch, Dr. Rosenberg, Dr. Carney, Dr. Trunnel, and Dr. Brewer. These
doctors testified for the government; and it was agreed that the samples used
by them in their tests and analyses were true samples of the drugs seized
and condemned.
"Dr. Lewis F. Hatch of Austin, Texas, testified that he is Associate Professor
of Chemistry at the "University of Texas, and Research Chemist for the Defense
Research Laboratory at the University of Texas. He had received degrees of
Bachelor of Science in Chemistry, Master of Science in Chemistry and Doctor
of Philosophy, specializing in chemistry. His work had been done on petro-
leum and its derivatives. He had published some 15 papers and pamphlets
relating to the chemistry of petroleum and its derivatives. He had made
several physical and chemical analyses of the samples furnished him of
Colusa Natural Oil and of Colusa Natural Oil capsules and found them to be
the same and apparently from the same source. He found that the material
was essentially insoluble in water, was not radioactive, contained 0.2 of 1
per cent of nitrogen, 0.2 of 1 per cent of sulphur; its specific gravity was 0.924
at 24 degrees centigrade. It did not contain iodine, turpentine, camphor or
ichthyol. He found no evidence of phenol, creosol or similar compounds. The
material he found to be a natural petroleum oil. Ichthyol, he explained, is a
manufactured product made from shale oil originating in Austria. He did
not make a complete breakdown of all the elements of the samples. Such an
examination would require many months.
"Dr. Irwin G. Gross, Ph. D., M. D., head of the Department of Pharmacology
at the University of Iowa, testified that pharmacology is the study of drugs
as to their chemistry, source, physical properties, preparation and physio-
logical effects on living tissue, whether they be used in therapeutic amounts
or otherwise, their absorption, their fats, their excretion and therapeutic
indications for their use. In his opinion crude oil applied to the skin would
act as an emollient; it would soften the skin, and act as an irritant to a slight
extent. It would tend to block the hair follicles of the sebaceous glands and
probably produce an infection of the plugged glands. In his opinion there is
no pharmacological basis for the use of crude oil as beneficial action.
"Dr. Adolph Rostenberg, Jr., of Chicago, Illinois, is Associate Professor of
Dermatology and Assistant Director of the Allergy unit of the University of
Illinois, College of Medicine. He has been connected with other medical colleges
and has had experience on the staffs of various hospitals. He is a member
of the American Medical Association, of the Society for Investigative Derma-
tology, of the American Academy of Dermatology and Syphilology, and of
the American Academy of Allergy. He testified that eczema is a response
by the skin to a variety of stimulations; that the causes are various, such as
poison ivy; and that in some instances crude petroleum oils are primary irri-
tants. The treatments for eczema are various, depending upon the cause and
the symptoms. In acute eczema oils should not be used because in some cases
they are an irritant, and they should be used in no case because they tend to
dam up the accretions of the skin and provide a good medium on which bacteria
can flourish. Based upon his knowledge, training and experience in the field
of dermatology crude petroleum oil applied either externally or internally is
not an appropriate or effective treatment for all types of eczema, and that
Colusa Natural Oil when used as directed on the label is neither an effective
nor an appropriate treatment for all types of eczema. He had treated five
patients, including himself, with Colusa Natural Oil and it effected no improve-
ment in their cases. He expressed the same opinion as to the effectiveness of
Colusa Natural Oil for the treatment of psoriasis, athlete's foot, and leg ulcers.
It was his opinion that Colusa Natural Oil has no merit for the treatment of
any of those diseases.   He observed that psoriasis is a recurring disease.   It
may get better for a short or indefinite period and then relapse again.
"Dr. Charles M. Brewer, Ph. D., a bacteriologist for the Food and Drug
Administration, tested Colusa Natural Oil to determine, whether it had any
bactericidal or antifungicidal action, and found that it had none.
"Dr. Thomas L. Trunnell graduated from a four-year college course, after
which he completed the course in medicine at the University of Iowa, followed
by three years as an intern with training in dermatology. He practices derma-
tology at Waterloo, Iowa. Seven of his patients he treated with Colusa Natural
Oil, two suffering from psoriasis. They became progressively worse and the
treatment was stopped. Three were treated for eczema without results, and
two for athlete's foot with no improvement. He expressed the opinion that
Colusa Natural Oil has no merit for the treatment of any of those diseases.
"Dr. Robert G. Carney, Assistant Professor of Dermatology at the Iowa Uni-
versity Medical School at Iowa City, Iowa, spends 8 hours a day teaching
students, treating patients, and carrying out research in dermatology. He is a
member of several medical societies. In 1947 he treated patients in the Uni-
versity hospital with Colusa Natural Oil for eczema, stasis ulcer, psoriasis, and
leg ulcers. He concluded that Colusa Natural Oil is neither an appropriate
nor an effective treatment for any such diseases.
"The appellant's evidence consisted of the testimony of 30 witnesses: 14 lay-
users of Colusa; 14 medical doctors by deposition; 1 medical doctor appeared
in person; and a chemist referred to as Dr. Radovich.
"The lay witnesses testified that they had suffered from skin diseases (with-
out naming them), describing the symptoms, their suffering; their treatment
in most cases by doctors without practical results; and when at length they
tried Colusa they received relief in every case; and in some cases they believed
their ailment was cured.
"The medical doctors were general practitioners who treated skin diseases
as well as ailments generally. Their testimony was that they had found Colusa
Natural Oil and Colusa Natural Oil capsules both efficacious in the treatment
of the four skin diseases named in the quoted labels; that it had in many cases
effected permanent cures and had resulted in great relief in all cases.
"Dr. William T. Vincent of Houston, Texas, appeared at the trial and testi-
fied. He is 83 years of age and has practiced medicine since 1889. He studied
at the Allopathic Medical College at Columbus, Ohio, and is a graduate of the
University of Cincinnati. He testified that he had used Colusa Natural Oil
in his practice for eight years; that he had treated hundreds of cases of skin
diseases, including psoriasis, with good results; that he considers it an
efficacious remedy, 'but not a cure all.'
"(Dr.) Frank O. Radovich of North Hollywood, California, is a chemist with
a degree of Bachelor of Science and Applied Chemistry from the California
Institute of Technology. His experience has been in the petroleum field
entirely. He has been chemist for various petroleum refineries and has had
charge of various testing laboratories; and he has done research work. He has
produced a black viscous tarry material having the appearance of ichthyol
from oils in the United States in and about California. He produced some of
this material from Colusa Natural Oil in 1947. It was of the sulphur type. It
does not, however, fulfill the specifications of the National Formulary. It
would be possible, in his opinion, to manufacture ichthyol from Colusa crude
oil.
"The first question for determination is whether the findings of the court
that the labeling on each of the bottles containing Colusa Natural Oil in the
liquid state or in capsules, when considered in its entirety, would be understood
by a person of average intelligence who was suffering from one of the diseases
referred to therein, and who was seeking a remedy for such disease as repre-
senting that if he would use Colusa Natural Oil as directed, that such oil would
cure or alleviate such diseases of all types and kinds and at all stages thereof
are 'clearly erroneous' within the meaning of those words as used in Rule 52 (a)
of the Federal Rules of Civil Procedure, supra. After careful consideration of
the entire record we think this finding of the court is not erroneous.
"In argument to the trial court counsel for appellant observed that 'The law
with respect to the interpretation of such a label is this. The Court has the
right to presume that purchasers are of average intelligence.' The court
approved and applied this standard. Counsel for appellant continued, saying
that'The most that can be contended is that . . . there is an implied representa-
tion this (Colusa Natural Oil) would be of assistance, that it would be effica-
cious,' defining efficacy to mean to assist in the treatment of disease. We can
find nothing in the label suggesting that Colusa Natural Oil is recommended as
an auxiliary to some other remedy or that the purchaser should use it as an
'assistant' only in the cure or alleviation of any of the diseases named. The
label reads:
A natural unrefined petroleum oil for use in treatment of [the named skin diseases]
. . . Directions: Apply to affected parts . . . Continue treatment until skin is
smooth and comfortable . . .    [Italics supplied.]
Certainly the first quoted clause implies that the use of the oil as directed will
be useful in some way and in some measure in the treatment of the named skin
diseases. It could hardly be said to be a useful treatment if it will neither cure
nor alleviate such diseases.
"The meaning and implications of the second quoted direction, 'Continue
treatment until skin is smooth and comfortable,' are not explained by counsel.
Certainly it implies that the 'smooth and comfortable' condition of the skin
will be. the result of the treatment, and that the Colusa Oil when used as
directed is an effective agent which will produce such a result. It is true the
words 'cure' or 'cured' are not used, but neither is the word 'assist.' If appellant
had intended that persons afflicted with the named diseases would by the
use of Colusa Oil as directed receive assistance only to endure their suffering
it would have been easy to say so and thus avoid any ambiguity in the labeling.
We think the interpretation of the labels by the trial court is reasonable and
neither 'absurd' nor based upon 'a wholly distorted reasoning,' as suggested by
appellant.
"Second, is the representation in the labeling that Colusa Natural Oil when
used as directed 'will cure or alleviate' the named diseases 'false or misleading
in any particular'
"The evidence on this issue is conflicting. Based upon such evidence the
court found that the labeling of the bottles seized in all the cases consolidated
for trial is false and misleading in that there is .no credible or adequate
scientific or medical foundation for any claim or -representation that Colusa
Natural Oil when used externally or internally will cure or will alleviate the
named skin diseases, or will give relief from such diseases or will assist in the
treatment of them. The court heard all of the government's witnesses, all of
appellant's lay witnesses and one of its doctors. Appellant's other evidence
was in the form of depositions. So, giving due regard 'to the opportunity for
the trial court to judge of the credibility of the witnesses' (Rule 52 (a)), we
cannot say that this finding is clearly erroneous.
"But says the appellant in its printed brief the findings of the court are
unsound and indefensible; that the great weight of the evidence is contrary to
the findings. We did not see and hear the witnesses testify, of course, and we
cannot be guided by the opinions of counsel. We may consider only their
reasoning supported by applicable authorities to determine whether the court's
findings are clearly erroneous.
"In its written brief counsel for appellant asserts that 'There is no allega-
tion (in the libels) that the labels in question were on the Colusa bottles when
they were shipped in interstate commerce.' This point was not suggested in
the trial court. On the other hand it admitted in its answer the allegations of
paragraphs 2 and 3 of the libel of information wherein the government alleged: