In the case of Federal Trade Commission v. Rhodes Pharmacal Co., Inc., 1954, the Supreme Court ruled in favor of the Federal Trade Commission (FTC). The FTC had issued a cease and desist order against Rhodes Pharmacal for false advertising regarding its product, Lactopeptine. This product was marketed as an effective treatment for various ailments including indigestion and dyspepsia without sufficient scientific evidence to support these claims. The company appealed this decision but it was upheld by both the Seventh Circuit Court of Appeals and later by the Supreme Court. In their ruling, they stated that even if some doctors did prescribe Lactopeptine for those conditions, it didn't justify or validate misleading advertisements made to consumers about its effectiveness which were not supported by substantial evidence.

The dissenting opinion in the Federal Trade Commission v. Rhodes Pharmacal Co., Inc. case argued that the majority's decision to uphold the FTC's cease and desist order was overly broad and potentially harmful to legitimate business practices. The dissent pointed out that while some of Rhodes' advertising claims were indeed false, others were merely exaggerated or puffery, which is common in commercial advertising and not inherently deceptive or unfair under Section 5 of the Federal Trade Commission Act. Furthermore, they contended that by prohibiting all future advertisements for Lactopeptine products without first obtaining FTC approval, regardless of their truthfulness or falsity, would set a dangerous precedent for government censorship over commercial speech. They also expressed concern about potential chilling effects on innovation and competition within pharmaceutical industry due to fear of punitive action from regulatory authorities based on subjective interpretations of what constitutes as misleading advertisement.