Contemporary Business Law 8th Edition by Henry Cheeseman

تمرين 7

Ethics Case The Warner-Lambert Company has manufactured and distributed Listerine antiseptic mouthwash since 1879. Its formula has never changed. Ever since Listerine's introduction, the company has represented the product as being beneficial in preventing and curing colds and sore throats. Direct advertising of these claims to consumers began in 1921. Warner-Lambert spent millions of dollars annually advertising these claims in print media and television commercials.
After one hundred years of Warner-Lambert's making such claims, the Federal Trade Commission (FTC) filed a complaint against the company, alleging that it had engaged in false advertising, in violation of federal law. Four months of hearings were held before an administrative law judge that produced an evidentiary record of more than four thousand pages of documents from forty-six witnesses. After examining the evidence, the FTC issued an opinion which held that the company's representations that Listerine prevented and cured colds and sore throats were false. The U.S. Court of Appeals affirmed. Is Warner-Lambert guilty of fraud? If so, what remedies should the court impose on the company? Has Warner-Lambert acted ethically in making its claims for Listerine? Warner-Lambert Company v. Federal Trade Commission , 183 U.S. App. D.C. 230, 562 F.2d 749, Web 1977 U.S. App. Lexis 11599 (United States Court of Appeals for the District of Columbia Circuit)