In the Matter of the Complaint That ) July 7, 1958 ) JENASOL, ) JENASOL CO., ) JENASOL COMPANY, and ) CHARLES ETTINGER, ) ) at ) H.E. Docket No. 5/29 ) New York, New York, ) ) are engaged in conducting a scheme for ) obtaining money through the mails in ) violation of 39 U. S. Code 259 and 732.) Ablard, Charles D. POST OFFICE DEPARTMENT WASHINGTON, D. C.
A complaint was issued in the above matter on March 14, 1957, charging that the respondent was obtaining remittances of money through the mails for a preparation called "JENASOL R. J. 60 Capsules" by means of false and fraudulent pretenses. On July 17, 1957, the respondent, Marvin Shere, signed an Affidavit of Agreement which was accepted by the respondent and the Hearing Examiner ordered that further proceedings be indefinitely postponed. On January 22, 1958, the Assistant General Counsel for Fraud and Mailability petitioned to reinstate the hearing on the grounds that the affidavit had been breached and according to the provisions of that affidavit a fraud order should be issued against the respondent. A hearing on the question of the breach of the affidavit was held before a Hearing Examiner and an Initial Decision was rendered. He found that the affidavit had been breached and recommended the issuance of a fraud order. The sections of the affidavit of agreement which were alleged and found to have been breached are as follows:
"That in any future mail order operation of the enterprise involved in this proceeding, affiant will not represent or make any claims for the preparation being sold in said enterprise that:
(1) It will cure or eliminate sexual impotency or lost manhood in humans, except where the overall increase in vitality is reflected in an increase in sexual vitality;
* * * * * *
(9) that its use will insure human longevity." (Emphasis supplied).
The respondent has filed five exceptions to the findings of the Hearing Examiner. He first excepts to the finding of a breach of the affidavit. The sole discussion of the Hearing Examiner on this question is on page 5 of his Initial Decision. his conclusion is based on the overall impression of the contents of the advertising. Donaldson v. Read Magazine, 333 U.S. 178. He says,
"it seems clear that this advertising was artfully designed and worded in such a manner as to convince the reader of the claims in question."
It seems to the Judicial Officer that the underlined portions of the two clauses of the affidavit provide enough built-in loop-holes through which the respondent could drive the proverbial Mack truck. What do the words "cure", "eliminate" and "insure" mean? All three have definite connotations of certainty and finality which, I believe, the respondent has avoided in his advertisement. In addition the words following "except" in the first clause give rather broad discretion to the respondent. The complainant apparently accepted this agreement with open eyes after arms length dealing with the respondent. Having accepted the agreement the complainant is bound by its provisions. I cannot construe the advertising as representing what the respondent promised in sections 1 and 9 of the affidavit not to represent. I conclude that the affidavit was not breached and that no order can be issued based on the affidavit. The exception is allowed.
However, the affidavit also provides,
"that the acceptance of this affidavit...as a basis for disposing of the pending charges now involved herein shall not be construed as an approval of any business which the said affiant has conducted or may hereafter conduct..."
It also provides that the,
"affiant understands that this affidavit relates exclusively to the proceeding specified in the caption hereof and its filing will not act as a defense or relieve the undersigned of responsibility for violation of any other statute, but the filing shall not be construed as a confession that the said instant statutes or any other statute has been violated."
Upon consideration of this language, I do not believe that the General Counsel, should he believe that the advertising currently used by the respondent violates that statute, would be precluded from reopening this proceeding either by an amended complaint based upon the new advertising or a new proceeding under the new Rules of Practice. The respondent has expressly stated that he does not construe the affidavit as a confession of a violation of the statute and so the determination of whether the postal fraud statute has been or is being violated is still open to question.
Res judicata and equitable estoppel do not apply to administrative tribunals. Churchill Tabernacle v. F.C.C., 160 F.2d 244, 246; Niagara Mohawk Power Corp. v. F.P.C., 202 F.2d 190, affd. 347 U. S. 239, In Wallace Corp. v. N.L.R.B., 323 U. S. 248, 253 (1944) the Supreme Court discussed the problem as it applied to a labor-management question which arose after a settlement of a union certification proceeding by agreement of all parties. The findings of the board in a proceeding initiated after the settlement were predicated on facts which occurred prior to the settlement. The petitioner challenged this practice and the Court said,
"The petitioner does not argue that any language appearing in the Labor Relations Act denies this power to the Board, but relies upon general principles on which the judicial rule governing estoppel is based. Only recently we had occasion to note that the differences in origin and function between administrative bodies and courts 'preclude wholesale transplantation of the rules of procedure, trial, and review which have evolved from the history and experience of courts.' Federal Communications Commission v. Pottsville Broadcasting Co., 309 U. S. 134, 143. With reference to the attempted settlement of disputes, as in the performance of other duties imposed upon it by the Act, the Board has power to fashion its procedure to achieve the Act's purpose to protect employees from unfair labor practices. We cannot, by incorporating the judicial concept of estoppel into its procedure, render the Board powerless to prevent an obvious frustration of the Act's purposes."
The Congress has given the Postmaster General broad authority over fraudulent enterprises conducted through the mails. Surely, if the National Labor Relations Board is not frustrated by the judicial concept of estoppel then neither is the Postmaster General.
The other exceptions will not be discussed in view of the above decision on the first exception. The decision of the Hearing Examiner is reversed.