COMMISSIONERS:

Robert Pitofsky, Chairman

Mary L. Azcuenaga

Roscoe B. Starek, III

Sheila F. Anthony

The Commission having heretofore issued its complaint charging the respondents named in the caption hereof with violation of Section 5 of the Federal Trade Commission Act, as amended, and the respondents having been served with a copy of that complaint, together with a notice of contemplated relief; and

The respondents, their attorney, and counsel for the Federal Trade Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true and waivers and other provisions as required by the Commission's Rules; and

The Secretary of the Commission having thereafter withdrawn this matter from adjudication in accordance with § 3.25(c) of its Rules; and

The Commission having considered the matter 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 comment filed thereafter by an interested person pursuant to § 3.25 of its Rules, now in further conformity with the procedure described in § 3.25(f) of its Rules, the Commission hereby makes the following jurisdictional findings and enters the following order:

1. Respondent Metagenics, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of California, with its office and principal place of business located at 971 Calle Negocio, San Clemente, California 92672.

Respondent Jeffrey Katke is an officer of said corporation. He formulates, directs and controls the policies, acts and practices of said corporation and, and his office and principal place of business is located at the above stated address.

2. The Federal Trade Commission has jurisdiction over the subject matter of this proceeding and of the respondents and the proceeding is in the public interest.

3. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of Section 3.25(f) of the Commission's Rules, the Commission may, without further notice to respondents: (1) issue its amended complaint corresponding in form and substance with the draft of amended complaint attached hereto and its decision containing the following order to cease and desist in disposition of the proceeding; and (2) make information public in respect thereto. When so entered, the order to cease and desist shall have the same force and effect and may be altered, modified or set aside in the same manner and within the same time provided by statute for other orders. The order shall become final upon service. Delivery by the U.S. Postal Service of the amended complaint and decision containing the agreed-to order to proposed respondents' address as stated in this agreement shall constitute service. Proposed respondents waive any right they may have to any other manner of service. The amended complaint may be used in construing the terms of the order, and no agreement, understanding, representation, or interpretation not contained in the order or the agreement may be used to vary or contradict the terms of the order.

IT IS ORDERED that respondents Metagenics, Inc., a corporation, doing business as Ethical Nutrients, or under any other name, its successors and assigns, and its officers, and Jeffrey Katke, individually and as an officer of said corporation, and respondents' agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of Bone Builder or any food or dietary supplement, food, or drug, as "food" and "drug" are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, shall not represent, in any manner, directly or by implication, that:

1. post-menopausal women who have lost bone and who use such product will experience no additional bone loss or bone thinning or will achieve a growth of new bone or increased bone thickness greater than the amount of bone lost;

2. users of such product will not experience bone loss or bone thinning;

3. such product restores bone strength;

4. such product reduces or eliminates pain associated with bone ailments; or

5. such product is more bioavailable, more absorbable, or more effectively utilized by the body than other forms of calcium, or is superior to or more effective than other forms of calcium in the prevention or treatment of bone ailments,

unless, at the time of making such representation, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation. 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 respondents Metagenics, Inc., a corporation, doing business as Ethical Nutrients, or under any other name, its successors and assigns, and its officers, and Jeffrey Katke, individually and as an officer of said corporation, and respondents' agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of Bone Builder or any food or dietary supplement, food, or drug, as "food" and "drug" are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, shall not misrepresent, in any manner, directly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test or study.

IT IS ORDERED that respondents Metagenics, Inc., a corporation, doing business as Ethical Nutrients, or under any other name, its successors and assigns, and its officers, and Jeffrey Katke, individually and as an officer of said corporation, and respondents' agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of Bone Builder or any food or dietary supplement, food, or drug, as "food" and "drug" are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, insofar as said respondents make any representation, in any manner, directly or by implication, regarding the relationship between calcium and osteoporosis:

A. shall limit any such representation to the health claims authorized by the Food and Drug Administration for calcium and osteoporosis as set forth in Section 101.72 of Title 21 of the Code of Federal Regulations, 58 Fed. Reg. 2665 (1993), and any amendments thereto; or

B. at the time of making such representation, shall possess and rely upon competent and reliable scientific evidence that substantiates the representation.

IT IS FURTHER ORDERED that respondents Metagenics, Inc., a corporation, doing business as Ethical Nutrients, or under any other name, its successors and assigns, and its

officers, and Jeffrey Katke, individually and as an officer of said corporation, and respondents' agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of:

A. Bone Builder or any food or dietary supplement, food, or drug containing calcium, as "food" and "drug" are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, shall not make any representation, in any manner, directly or by implication, that any such product will treat, cure, alleviate the symptoms of, prevent, or reduce the risk of developing any disease, disorder, or condition; or

B. any food or dietary supplement, food, or drug, as "food" and "drug" are defined in Section 15 of the Federal Trade Commission Act, in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, shall not make any representation, in any manner, directly or by implication, that any such product is more effective than any other product in treating, curing, alleviating the symptoms of, preventing, or reducing the risk of developing any disease, disorder, or condition, unless, at the time of making such representation, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

Nothing in this Order shall prohibit respondents from making any representation that is specifically permitted in labeling for any such product by regulations promulgated by the Food and Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990.

Nothing in this Order shall prohibit respondents from making any representation for any drug that is permitted in labeling for any such drug under any tentative final or final standard promulgated by the Food and Drug Administration, or under any new drug application approved by the Food and Drug Administration.

IT IS FURTHER ORDERED that for five (5) years after the last date of dissemination of any representation covered by this Order, respondents, or their successors and assigns, shall maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. Any advertisement making any representation covered by this Order;

B. All materials that were relied upon in disseminating such representation; and

C. 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.

IT IS FURTHER ORDERED that respondent Metagenics, Inc., or its successors and assigns, shall:

A. Within thirty (30) days after the date of issuance of this Order, provide a copy of this Order to each of its operating divisions, subsidiaries, principals, officers, directors, managers and distributors, and to each of its employees, agents, and representatives engaged in the preparation, placement, or dissemination of advertisements, promotional materials, product labels, or other such sales materials covered by this Order; and

B. For a period of five (5) years from the date of issuance of this Order, provide a copy of this Order to each of its principals, officers, directors, managers and distributors, and to all employees, agents, and representatives engaged in the preparation, placement, or dissemination of advertisements, promotional materials, product labels, or other such sales materials covered by this Order within three (3) days after the person commences his or her responsibilities.

IT IS FURTHER ORDERED that respondent Metagenics, Inc., its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the corporation that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in the acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which the respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify the Commission as soon as practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

IT IS FURTHER ORDERED that for a period of five (5) years from the date of issuance of this Order, respondent Jeffrey Katke shall provide written notice to the Federal Trade Commission within thirty (30) days of:

A. Any change in his business or employment that may affect compliance obligations arising out of this Order;

B. The discontinuance of his business or employment; and

C. His affiliation with any new business or employment; each such notice to include his business address and telephone number, home address, and a statement describing the nature of the business or employment and his duties and responsibilities.

This order will terminate on October 23, 2017, or twenty years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:

A. Any paragraph in this order that terminates in less than twenty years;

B. This order's application to any respondent that is not named as a defendant in such complaint; and

C. This order if such complaint is filed after the order has terminated pursuant to this paragraph.

Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this paragraph as though the complaint was never filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

IT IS FURTHER ORDERED that respondents shall, within sixty (60) days after service upon them of this Order, and at such other times as the Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this Order.

By the Commission, Commissioner Anthony not participating.

Donald S. Clark
Secretary

ISSUED: October 23, 1997