At the Federal Trade Commission’s request, the U.S. Department of Justice has asked a federal district court to impose civil penalties upon the herbal products company Daniel Chapter One (DCO) and its principal, James Feijo, for allegedly violating an FTC Order. The civil penalty action also seeks a preliminary injunction to stop DCO and Feijo from continuing to make deceptive claims on the company’s daily radio show and website about the supposed cancer-fighting properties of its supplements, and to require DCO and Feijo to send a notice to purchasers explaining the FTC’s findings that the advertisements were unsubstantiated, as required by the FTC Order.
Daniel Chapter One and Feijo deceptively advertised that four dietary supplements—BioShark, 7 Herb Formula, GDU, and BioMixx—inhibit tumor formation or growth, eliminate tumors, treat or cure cancer, or heal the effects of radiation or chemotherapy. An administrative trial took place in April 2009, and the Administrative Law Judge found that the defendants were making deceptive claims. The Commission upheld the ALJ’s initial decision in December 2009.
As part of the FTC Order issued in December 2009, Daniel Chapter One and Feijo were required to stop making the deceptive claims, and to send a notice to purchasers explaining the FTC’s findings that advertising claims for the supplements were unsubstantiated, and that consumersshould consult with health care providers before using any herbal product, to ensure that all aspects of their medical treatment work together.
In March 2010, DCO and Feijo petitioned the U.S. Court of Appeals for the District of Columbia Circuit to review the FTC ruling that the defendants were making deceptive claims. In December 2010, the appellate court ruled in favor of the FTC. The Court of Appeals found that the Commission did not exceed its authority by requiring a reasonable basis for the defendants’ claims, and that the defendants’ legal arguments based on the right to freedom of religion were “wholly without merit.” The appellate court finalized its denial of the appeal on February 28, 2011.
The new civil penalty complaint, originally filed on August 13, 2010 by the Department of Justice on the FTC’s behalf, seeks civil penalties from the defendants for violating the FTC Order. The complaint alleges that DCO and Feijo violated the Order by promoting cures for cancer and other tumors without reliable scientific evidence to substantiate their claims, and by ignoring provisions requiring that a corrective notice be sent to past purchasers.
The U.S. District Court for the District of Columbia had stayed the contempt case pending resolution of the defendants’ appeal, and then lifted the stay on March 7, 2011. The DOJ therefore resumed its efforts and refilled its motion for a preliminary injunction to stop the defendants from continuing to violate the Order on March 11, 2011.
The Commission vote to refer the civil penalty complaint to the Department of Justice for filing was 5-0.
The Commission refers a complaint to the DOJ for filing when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law. The case will be decided by the court.
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