In the Matter of the Complaint Against

 MARIE LAVEAU AFRO-INDIA IMPORT COMPANY
 also known a AFRO-INDIA IMPORT CO., INC.
 at Los Angeles, California

 P.O.D. Docket No. 1/121; 

 APPEARANCES:
 Stanley R. Caiden, Esq.
 9441 Wilshire Boulevard
 Beverly Hills, California for the Respondent

 Saul J. Mindel, Esq.for the Complainant

The Respondent was charged on March 3, 1959, by complaint of the General Counsel of the Post Office Department with conducting an enterprise for the obtaining of remittances of money through the mails by means of false and fraudulent pretenses. A hearing was held before a hearing examiner on May 5, 1959. Because of the illness of the hearing examiner who presided, the proceeding was assigned to another hearing examiner who rendered an initial decision finding that the allegations of the complaint were true and recommending the issuance of a fraud order pursuant to 39 U.S.C. 259 and 732. The Respondent has filed four exceptions to the initial decision and the Complainant has replied.

The first exception is to the finding of the hearing examiner that there was substantial evidence in the record to warrant the issuance of a fraud order. The Respondent sells necromantic articles for black magic which he represents will make the purchaser "lucky in love ... in money ... always." The types of products sold are "occult Louisiana and India goods, incenses, candles, herbs, roots and oils." The test to be applied in evaluating advertisements in fraud proceedings was set forth by the Supreme Court in Donaldson v. Read Magazine, 333 U.S. 178. The court there said:

"***That exceptionally acute and sophisticated readers might have been able by penetrating analysis to have deciphered the true nature of the ... terms is not sufficient to bar findings of fraud by a fact finding tribunal. Questions of fraud may be determined in the light of the effect advertisements would most probably produce on ordinary minds. Laws are made to protect the trusting as well as the suspicious. Federal Trade Commission v. Standard Education Society, 302 U.S. 112, 116."

A comparable type of operation was the subject of Gottlieb v. Schaffer, 141 F.Supp. 7 (S.D.N.Y., 1956). The Court upheld the fraud order and commented as follows on the evidence:

"The plaintiff's contention that no witness was called to demonstrate the falsity of the various statements contained in the advertisements, circulars and brochures for the good luck charms or the perfumes requires little comment. The short answer is that where claims are completely opposed to common knowledge their falsity may be inferred from their preposterous character. Triers of fact, whether courts, juries or administrators, do not require proof of the improbable and they may apply common knowledge and experience with respect to matters."

From an evaluation of the advertisement of the Respondent in the light of the applicable judicial decisions, I conclude that the hearing examiner was correct in his finding and the exception is disallowed.

The second exception of the Respondent deals with the constitutionality of the statute in question. The Supreme Court

held the statute to be constitutional in Donaldson v. Read Magazine, supra. The Respondent asserts that the fraud order will unconstitutionally deprive the Respondent of mail not connected with the unlawful enterprise. Since March 26, 1958, this Department has issued a type of fraud order which does not prohibit the receipt of all mail but is applicable only to mail connected with the unlawful enterprise. The order authorizes the Postmaster to deliver mail which is clearly on its face not connected and inspection by the Respondent of other mail to separate the lawful from the unlawful. Thus this contention is without merit and the exception is disallowed. The third exception deals with the refusal of the hearing examiner to order the place of hearing changed to Los Angeles, California. The Department has a rule on transfer of place of hearing (201.10, 23 F.R. 2794) which requires the Respondent to set forth the testimony which would be offered in the proposed place of hearing, the relevancy of the testimony, and the reason why that testimony cannot be produced in Washington, D.C. Affidavits were submitted from both Mr. Leonard Broudy, the operator of the company, and his attorney, Mr. Stanley Caiden. These indicated that it was desired that the hearing be transferred so that Mr. Broudy could testify in his own behalf and that other witnesses would be called but that it could not be determined at the time just who would be called. Respondent averred that if the hearing were not held in Los Angeles great expense would be involved in sending California counsel to Washington, that Mr. Broudy could not himself attend and that he might in fact have to hire Eastern counsel not familiar with his operation. There was no effect made to show the relevancy of the

testimony of Mr. Broudy other than to say that Mr. Caiden would like to have Mr. Broudy available so that he "might refute or answer on any such points as may be raised and brought under issue as such testimony as may be produced by the Post Office Department at the time of hearing." The Complainant opposed the motion and the hearing examiner denied the transfer. Again, the case of Gottlieb v. Schaffer, op. cit., at page 18, is in point. The Court in sustaining the refusal to transfer to receive "expert" testimony said:

"there was nothing of a scientific or technical nature in any of the statements contained in the advertisements which required expert testimony. No witness was called by the Government to testify as to the truth or falsity of the representation and as noted above, the finding was made by the hearing examiner solely upon the exhibits which were offered into evidence; further he found that statements contained in the advertising required no interpretation."

With the exception that here it is the Respondent whom counsel wanted to be available to testify and in Gottlieb it was an expert witness, the situation is parallel.

Significantly, despite the fact that this Department has a rule of procedure on depositions (201.24) which permits liberal use of depositions, no effort was made by counsel for the Respondent to take a deposition from his client. In fact there was no assurance that the client would be called to testify; it was only that counsel wanted to have him available. Indeed, it was not even shown that the Respondent could not well afford to appear in Washington. Under these circumstances I see no error in the ruling of the hearing examiner and the exception is disallowed.

The fourth exception of the Respondent is to the reassignment of this matter for initial decision by a hearing examiner other than the examiner who conducted the hearing. This was accomplished because of the fact that the hearing examiner who presided had suffered a heart attack and at the time of the reassignment it was estimated by his physician that he would be absent for several months. The only witness who testified at the hearing was the postal inspector who did a routine investigation of the case. The examiner's decision is based solely on his interpretation of the advertising and an application of the law and not on the testimony of the witness. Thus, there was no credibility evaluation of witnesses required as in Gamble-Skogmo, Inc. v. Federal Trade Commission, 211 F.2d 106 (C.A. 8, 1954) and that case is inapposite. The exception is disallowed.

The initial decision of the hearing examiner is affirmed and adopted and an appropriate fraud order will issue.

09/04/59

Ablard, Charles D.