HerbalEGram: Volume 5, Number 9, September 2008

Native Essence, an herb company in New Mexico, is suing the Federal Trade Commission (FTC) over the right to display the historical/traditional uses of herbs on the company’s Web site.¹ In April 2008 Mark Hershiser, owner of Native Essence, received a large packet from the FTC. Within this packet was the option for Hershiser to sign a settlement where he’d be expected to send out a letter explaining that his company Web site contained “false, misleading” and “unsubstantiated”^2,3 historical claims/traditional uses to the consumers of specific herbal products the company sells.² In addition, the FTC’s settlement required that Native Essence pay the FTC all the money from sales of the herbs which the agency deemed had unsubstantiated claims. (The business has been in operation for 15 years).

Hershiser was also informed that instead of paying to the FTC all the money from sales of these herbs, he had the alternative of providing detailed personal and corporate financial disclosure to the FTC so the agency could assess his current financial worth, and he could pay that instead. If Hershiser decided against the settlement, the matter would go to court, and the FTC would reserve the right to freeze his assets during that time.

According to Hershiser the FTC later informed him that it had previously sent him a warning letter in August of 2007 in e-mail form only. Hershiser said that he receives large amounts of junk mail daily and never saw the first warning; it wasn’t until April 2008 when he was informed of his choice of penalties that he had learned of the FTC’s previous attempt to notify him.

However, Hershiser said that he felt unable to accept the terms of the FTC settlement offer. Although the FTC letter states, “Please note that signing a settlement with the FTC would not constitute an admission by you personally or by the Native Essence Herb Company, that you or the company have violated the law,”² Hershiser believed that signing this document would be tantamount to signing a confession.

“They say it is not an admission of guilt but it sure appears to be that to me. If I am not guilty of anything then why would I have to send letters to my customers and why would I have to pay any money?” wrote Hershiser (e-mail, August 13, 2008). “I can’t confess to something when I don’t feel I’ve done anything wrong,” Hershiser said (oral communication, August 4, 2008). “I believe in herbs and I don’t think there’s anything wrong with passing on what my ancestors used them for.” 

Native Essence has currently removed information about traditional uses from its Web site, as a sign of good faith until the matter can be resolved.⁵ However, Mark and Marianne Hershiser say that the First Amendment of the U.S. Constitution gives them the right to say that certain herbs that they sell have an effective history of use.³ But the FTC’s position since 1998 is that making historical claims about an herb is against its advertising guidelines.⁵ The Hershisers have now filed a complaint against the FTC that claims its dietary supplement product advertising guidelines for historical use claims are unconstitutional.⁵

“Herb sellers should be able to tell consumers that an herb has a long historical use to treat a disease,” said Richard Jaffe, Esq., the Houston-based attorney who filed the complaint.³ “The FTC’s prohibition of this kind of truthful information is unreasonable and unconstitutional.”  Jaffe has a long history of activity in promoting “health freedom” issues and defending various alternative medicine practitioners whose practices have been deemed inappropriate or illegal by regulatory agencies.

It is pages 20-22 of the FTC’s guidelines for the advertising of dietary supplements that the plaintiffs have called into question: the section called “Claims Based on Traditional Use” (section II-C-2).⁵

“Specifically, it is the first sentence of that section that the plaintiffs are attacking, along with the FTC's application of the section to implied claims based on historical use,” wrote Jim Prochnow, an attorney based in Colorado who specializes in food and drug issues (e-mail to M. Blumenthal, June 30, 2008). “In addition, the plaintiffs ask the Court to enjoin the FTC from using the section of the Advertising Guide when assessing substantiation of claims [for dietary supplements].”

The Native Essence complaint also compares the FTC restriction of posting traditional uses of herbal medicine to a commercial website as a violation of the privacy rights of citizens. “Consumers have the right to receive this information so that they can make decisions about their health,” said Jaffe (e-mail, July 30, 2008). “If herb sellers are disallowed from providing such information, the regulation adversely affects the right of privacy.”

The FTC has even taken the stance that linking to Web sites that contain information about traditional uses is illegal, even if the pages linked to are government Web sites which contain the same information about herbs. The rule also extends beyond that: “According to the FTC it is just as illegal for a company to link to historical-use information from a non-profit entity which doesn't sell herbs,” said Jaffe.

“This is a precedent-setting case,” Jaffe told NPI Center.² “The issue has never been litigated; it not only affects the Hershisers, but all companies which sell herbal products.”

“If we lose our freedom to pass on information, what have we got?” Hershiser further added (oral communication, August 4, 2008). “If we lose that right, we might as well close up shop and go home.”

Recently the FTC filed a Motion to Dismiss maintaining that the federal court cannot enjoin an agency enforcement action, especially one that has not yet been filed. Since the matter has not gone to court, the FTC points out that “further proceedings could result in an administrative complaint, a federal court complaint, or nothing at all.”⁶

The plaintiffs had until August 28, 2008, to respond to this motion and according to Jaffe, the gist of their response, which they filed on August 25^th, was: “The FTC is wrong that the federal court can't hear the case now. After threatening to file a federal action against them based in part on their historical use claims which the FTC claims violates its guidelines, and after insisting that the Hershisers sign a permanent injunction which would be filed in the New Mexico district court, it's surprising that the FTC claims that the very same court does not have the power to decide whether the guidelines are legal” (e-mail, August 28, 2008).

“In my opinion, the point that Native Essence raises about the use of federal government information about the traditional or historical use of ingredients is a worthy issue,” said Jim Prochnow (e-mail to M. Blumenthal, August 13, 2008). “We will know a lot more by the end of September. Until then, there is no court order that prohibits Native Essence from continuing to conduct business as it has been doing, although doing so places its assets at considerable risk if the FTC prevails.”

More information from the Native Essence perspective is available at www.herbalinformation.com.

—Kelly E. Saxton

References

¹Hershisers v Federal Trade Commission 08-cv-0603 BB/RHS. (10^th cir. Pending). Complaint. Available at http://www.herbalinformation.com/main.html.Accessed August 4, 2008.

²FTC. Letter sent from Erika Wodinsky to Native Essence Herb Company, et al. FTC File No. 082-3115. Washington, DC: Federal Trade Commission; March 28, 2008.

³Native Essence herb Company Sues FTC. NPI Center. June 25, 2008.

⁴Native Essence. Herbal Information page. Native Essence web site. Available at http//www.herbalinformation.com/thefacts.html. Accessed August 4, 2008.

⁵Federal Trade Commission, Bureau of Consumer Protection, Dietary Supplements: An Advertising Guide for Industry. 1998. Accessed August 13, 2008. Available at http://www.ftc.gov/bcp/conline/pubs/buspubs/dietsupp.shtm.