March 16, 1959
In the Matter of the Complaint That
MEDICAL FACTS, INC.
at
New York, New York
(hereinafter called Respondent), is
engaged in conducting a scheme for
obtaining money through the mails in
violation of 39 U. S. Code 259 and 732.
P.O.D. Docket No. 1/74
INITIAL DECISION OF HEARING EXAMIINER
The Respondent in this case is charged with conducting a fraudulent scheme in violation of Sections 259 and 732 of Title 39, United States Code. Specifically, it is alleged that the Respondent is engaged in the sale through the mails of the book "Arthritis Can Be Cured," by Dr. Bernard Aschner, by means of false and fraudulent pretenses representations and promises set forth in the complaint.
The Respondent filed an answer to the complaint admitting that the exhibit attached to the complaint (appended hereto as Attachment A) is a true copy of newspaper advertising material employed by it in its business enterprise, admitting the use of the mails in the operation of its business, but otherwise denying the charges contained in the complaint. As an affirmative defense, the Respondent alleged that the Rules of Practice under which this proceeding was commenced violate the Administrative Procedure Act, rendering this proceeding void.
After due notice, the matter came on for hearing before the undersigned Hearing Examiner to whom the case had been reassigned. Both parties were represented by counsel at the hearing, and the owner of the Respondent company was present in person. Both parties have filed proposed findings of fact, conclusions of law and reasons in support thereof, the last such document having been received on February 26, 1959.
In paragraphs 3 and 4 of the complaint, it is charged that the following representations, which are alleged to be false and fraudulent, are made in the Respondent's newspaper advertising matter:
a. That the book "ARTHRITIS CAN BE CURED" is of value to any arthritic reader because "the vast majority of arthritic and rheumatic victims needlessly suffer pain and incapacity!";
b. That the book "ARTHRITIS CAN BE CURED" is the "'Modern Medical Miracle' every arthritic has prayed for!; i.e., that any person suffering from arthritis regardless of its cause or severity will be ale to adequately and effectively treat, remedy or cure himself or herself of said disease by reading "ARTHRITIS CAN BE CURED" and following the directions given therein;
c. That the said book "reveals in layman's language…astonishing discoveries and curative techniques with which sufferers [of arthritis] are restored to new, lasting health in weeks, often days"; i.e., that any lay reader suffering from arthritis will be able to adequately and effectively treat, remedy and/or cure said condition or disease simply by employing the methods revealed in the book, and that said cure will be accomplished within "weeks" of the commencement of such self-treatment;
d. That the method of treatment and cure for arthritis described in the said book is "much more than just another method for lessening pain, achieving temporary relief, or teaching the arthritic to suffer more comfortably."' i.e., that the methods of treatment set forth in the book entitled "ARTHRITIS CAN BE CURED" constitute a permanent cure for arthritis, rheumatism and kindred diseases, disorders and conditions;
e. That the author of "ARTHRITIS CAN BE CURED", Dr. Bernard Aschner, "won world-wide acclaim for his work with the pituitary gland… [and his] work appears in every medical textbook on physiology.";
f. That "Constitutional Therapy", a system of medicine developed by the said Dr. Bernard Aschner for the treatment of arthritis, "has been hailed as a theoretical and practical contribution [to medical science] of the first magnitude.";
g. That "ARTHRITIS CAN BE CURED" reveals for any reader methods of curative treatment for arthritis and rheumatism which are "medical miracles" and which have cured patients "certified as 'incurable' by medical institutions so famous their names are known to all." i.e., that the so-called arthritis cure revealed to any reader of "ARTHRITIS CAN BE CURED" is superior to any method of treatments utilized by leading medical institutions and will succeed where all other medical practices and procedures have failed;
h. That the said book "shows [any reader] how a successful cure can be achieved", and "when all else has failed…including aspirin and cortisone, heat therapy, diets and exercise, vitamins and gold salts, here is an effective system of treatment and cure!"; i.e., that the said book reveals to any arthritic reader thereof a method of treating and curing himself or herself which is superior to and makes unnecessary or undesirable any treatment utilizing aspirin, cortisone, heat therapy, diets, exercise, vitamins or gold salts;
i. That the said book contains methods for achieving effective and lasting cures for "arthritis, rheumatism, lumbago, neuralgia, neuritis, sciatica, gout, and bursitis."
The substance of the Complainant's charges is that the Respondent is representing that the book "Arthritis Can Be Cured" sets forth methods of treatment of arthritis and related diseases which not only can be read and understood by lay persons afflicted with arthritis and the other enumerated condition, but which, also, can be employed by these persons to or upon themselves with the result that the diseases will be overcome and the persons will be restored to good health, even if some of these persons previously have been certified as incurable by reputable medical institutions. Additional chares are that the Respondent is representing that Dr. Bernard Aschner, the author of the book being sold under the foregoing representations, has won world-wide acclaim for his work with the pituitary gland, and that his "constitutional therapy" is a well-known, and widely-used method of treatment of arthritic conditions by reputable medical practitioners.
The Respondent's position is that the Complainant's interpretation of the language in the advertisement is strained, tortuous, exaggerated, distorted, the result of misquotations and omissions, and that the Complainant has taken certain words and phrases out of their contexts and cast them in a different light than that which appears from the advertisement itself. The Respondent insists that the advertising material makes it clear that the book relates treatments used and results obtained by the author, and that the treatments are to be administered by physicians. The Respondent further insists that the public is told that for a specified remittance a copy of a certain book will be sent to the remitter, and that this is, in fact, what takes place. Hence, in the Respondent's view, there can be no fraud.
In reading the advertisement used by the Respondent, one is struck by the repeated use of certain key words and phrases, such as "describes," "reveals," and "tells how." In that portion of the advertisement which contains the Respondent's comments about the book, comprising approximately one column of the three-column page, these key words and phrases are used at least nine times. Furthermore, in the four case histories which are stated to be taken from the book, the words "(Treatment described)" appear in each one of them. Thus, in less than two columns of the advertisement, these expressions are used at least 13 times.
Webster's New International Dictionary, Second Edition (Unabridged), 1994, defines the word "describe" as follows: "To write down, or write about; to state in writing' to transcribe; inscribe. * * * To represent by words, written or spoken; to give an account of; to state in detail the particulars of; * * *." Synonyms of describe are "represent, relate, recount, narrate, express, explain, depict, delineate, characterize and outline."
In the same source, the word "reveal" is defined to mean "to divulge; to disclose; to open up to view; to show plainly or clearly; to display; exhibit ***", and its synonyms are shown to be "discover, disclose, divulge."
The first meaning of to tell "how" in this dictionary, and clearly the sense in which the phrase is used in the Respondent's advertisement, is to tell "in what manner or way" or "by what means or process."
Now, let us examine the way in which these key words are employed by the Respondent. First, it is stated that an "illustrious, internationally recognized pioneer declares that the vast majority of arthritic and rheumatic victims needlessly suffer pain and incapacity! DESCRIBES CURES IN WEEKS! - EVEN DAYS!" This assertion is followed immediately by the statement that in this book "Dr. Aschner reveals in layman's language, for the first time, his astonishing discoveries and curative techniques with which sufferers are restored to new, lasting health in weeks, often days." In the next paragraph it is stated that "in this famous doctor's own words are described" not mere temporary palliatives, but "rapid improvement and safe, lasting cures for those stricken with arthritis and it related diseases - rheumatism, neuralgia, neuritis, sciatica, lumbago, bursitis and gout!"
Next, the book "tells how patients who came on crutches threw them away!" It is said that Dr. Aschner "describes the tortured procession of the 'hopeless' - men and women dismissed from clinics as incurable - whom he cured," and that he "tells how he cured them, as he is curing the 'hopeless' today."
There is, next, the following sub-caption:
"REVEALS METHODS AND
TREATMENTS"
Under this sub-caption, the Respondent represents in the advertisement that Dr. Aschner, in his book, "tells in plain, non-technical language what his treatments are, how and why they work." In the next paragraph under the above sub-caption, the Respondent states that "in real-life case after case he (Dr. Aschner) reveals how he achieves his 'medical miracles' quickly, safely, lastingly, often with patients certified as 'incurable' by medical institutions so famous that their names are known to all."
Under the next sub-caption, "SCORES OF ACTUAL CASE HISTORIES" is the following statement: "To the medical practitioner and public, Dr. Ashner says" When all else has failed your patients, including aspirin and cortisone, heat therapy, diets and exercise, vitamins and gold salts - here is an effective system of treatment and cure."
None of the emphasis which is given to some of the language in the foregoing excerpts was supplied by the undersigned, but the emphasis is placed as indicated in the advertisement.
Ina separate box are listed the "Partial Contents" of the book, among which is noted a heading "Effective Methods of Cure other curable conditions: rheumatism, lumbago, neuralgia, neuritis, sciatica, gout, bursitis." Approximately the lower two-fifths of the left and center columns are devoted to the case histories excerpted from the book. The right hand column is devoted to a picture of Dr. Aschner and to biographical data about him, a picture of the book, and a blank for use in ordering the book.
The Complainant introduced other exhibits at the hearing, included among which were Department Exhibits No. B-2 and B-3. These exhibits were received, unsolicited, by Inspector W. J. Hegarty, who investigated the case, but they were addressed to a test name the inspector uses in the performance of his official duties. These exhibits contain practically the same representations as does the newspaper advertisement used by the Respondent, but in Exhibit No. B-3 there is somewhat more emphasis placed on the use by Dr. Aschner of layman's language in the explanation of his methods, medicines and materials. Page 3 of Exhibit No. B-3 has two paragraphs devoted to this theme and they are made to stand out by being printed in red ink, in contrast to the black print on the remainder of the page. The representations in this circular matter about the simplicity and clarity of the language in the book, however, are not confined to these two paragraphs.
There are several factors which address themselves directly to the consideration of the readers of the Respondent's advertising matter. The eye is immediately riveted to the declaration that "ARTHRITIS CAN BE CURED." To the lay arthritic, this statement must inevitably bring a surge of thrilling hope. The reader is then told that an illustrious physician, whose qualifications are glowingly described elsewhere on the page, has made certain "astonishing discoveries" which have, do and will bring about remarkable cures. This outstanding physician has prepared a book in which he "describes" and "reveals" his discoveries, and in this book he "tells in plain, non-technical language what his treatments are, how and why they work." Finally, the advertisement indicates that the book is intended for use by all persons - physicians and non-physicians, as follows:
"To the medical practitioner and public, Dr. Aschner says: When all else has failed your patients, including aspirin and cortisone * * * here is an effective system of treatment and cure." (Underscoring added)
This statement suggests that Dr. Aschner's methods are so effective, so simple and so completely explained in his book that even members of the general public may undertake to treat patients. Certainly, if a layman can undertake to treat others in accordance with the treatments which the Respondent says are expounded in the book, he is able to apply the treatments to himself.
A reading of the Respondent's advertising literature produces the conviction that the interpretation placed by the Complainant on the representations found therein is proper, except as to the representation alleged in subparagraph f. of paragraph 3 of the complaint, with respect to which the undersigned has found insufficient bass in Respondent's advertising matter, and concerning which nothing has been pointed out in Complainant's proposed findings and conclusions. The undersigned concludes that to the average person reading Respondent's newspaper advertisements and circulars, the clear import is that a lay person suffering with arthritis or any of the other specified conditions can read, understand and apply to himself the treatments for his condition, which are clearly set forth in Dr. Aschner's book, and that such person can safely, rapidly and surely bring about a cure of his disease. Upon consideration of all the evidence in this case the undersigned further concludes that, with the exception already noted, the Respondent has been engaged in obtaining remittances of money through the mails for the book "Arthritis Can Be Cured" by means of the representations alleged in the complaint.
The next question to be determined is whether the representations made by the Respondent are true or false. On this point very little need be said.
The expert witness who testified on behalf of the Complainant, and about whom more will be said later, testified unequivocally on direct examination that the book does not reveal to any person how arthritis can be cured. (Tr. 36) Furthermore, a large portion of Respondent's counsel's cross-examination of this expert witness consisted of eliciting agreement that it is impractical and difficult - if not impossible - for a lay person to treat himself in the manner outlined in the book. (Tr. 39, et seq.) Finally, in the book, itself, are many references to treatment by a physician, but on page 17, there is the following highly significant paragraph:
"In my textbook for physicians, I have described a vast number of cures based on my methods. On the surface, they seem very simple methods and lay readers may find the idea of self-treatment a very tempting one. This is not recommended. No treatment of arthritis should be attempted without a physician." (Emphasis by Dr. Aschner)
Thus, contrary to what the Respondent represents in the advertising matter concerning the book, the author recommends against self-treatment, and admonishes his readers not to attempt a treatment of arthritis without being under a physician's care. It is concluded, therefore, in view of this overwhelming body of evidence, that the representations found to have been made by the Respondent are false. The only proof in this record with respect to the allegation contained in subparagraph e. of paragraph 3 of the complaint is found on page 36. This proof, being uncontroverted, sustains the Complainant's charge that this representation is false.
Before any action may be taken to issue a fraud order under the cited statutes, it must be determined that certain pretenses, representations and promises are made, that they are false, and, finally, that they are fraudulent. It is the last phase to which attention must now be directed.
The history of the Respondent's present operation was related by Mrs. Ruth Goodelman, the President and sole owner of the business, who was the only witness to appear in behalf of the Respondent. The company was organized on October 16, 1957, according to information furnished by Respondent's counsel. From that time and until his death in December 1957, the business was operated by Mrs. Goodelman's husband. In January, 1958, Mrs. Goodelman assumed control of the business and has continued to guide the affairs of Medical Facts, Inc.
The book "Arthritis Can Be Cured" is published by The Julian Press, Inc., of New York, and Mrs. Goodelman has the sales rights to the book through arrangements with the publisher. There is no contractual or other arrangement between Mrs. Goodelman and Dr. Aschner concerning the book. During his lifetime, Mr. Goodelman wrote the advertising material concerning the book, and Mrs. Goodelman testified that she did not read the material during his lifetime but that she has read it since she took over the business. The advertising matter has remained the same as it was originally written. Mrs. Goodelman has never had the advertisement checked or reviewed by a physician, and she has never discussed Dr. Aschner's treatment with another physician. She thought that the advertisement was refused when it was submitted to the New York Times, but it was before she was connected with the business, and, to the best of her knowledge, this is the only time a publisher has refused to run the advertisement. She did not know the basis of the Times' refusal. Mrs. Goodelman's duties consist of seeing that orders are filled, having discussions with the advertising agents as to the placement of advertising, and paying bills.
Two exhibits were introduced through the Respondent's witness. Respondent's Exhibit No. 1 is a reprint from the "Bulletin of the History of Medicine, Vol. XXXII, No. 5, Sept.-Oct., 1958" which contains a review of Dr. Aschner's book written by Walther Riese, M.D., Chairman of the Department of the History of Medicine and Associate Professor of Psychiatry at the Medical College of Virginia, in Richmond. It is doubtful that many, if any, prospective purchasers of the book encounter this review, so that its value as evidence in this case is dubious, except that the review does negate the idea of self-diagnosis and self-treatment by methods outlined in the book, thus supporting the finding of falsity as to the Respondent's representations to the contrary.
Respondent's other exhibit s a letter written by Dr. Aschner and it is addressed "To the Medical Profession of USA, particularly the General practitioner and Family Physicians." In this letter Dr. Aschner states that his "book is not written for self-treatment, but that the treatment should be carried out under the supervision of a family doctor ***." This letter, which has been used only since the late spring of 1958, is sent to purchasers of the book, but it is not sent to them until after they have ordered the book, so that it has no significance to persons who have sent in their remittances with their orders. This exhibit tends further to support the finding of falsity as to Respondent's representations that the treatments outlined in the book may be employed by lay readers to themselves.
When asked whether she had received any complaints about the book, Mrs. Goodelman was vague in her responses, saying that when one is in the mail order business, it is inevitable that he will receive complaints. She did say that she had "had letters from people requesting how they could buy certain medicines referred to in the book ***." These letters were referred to Dr. Aschner through the publishers.
The principal witness for the Complainant was Dr. Ronald William Lamont Havers, M.D., who is pre-eminently qualified by reason for his education, training and experience in the field of arthritis, rheumatism and related diseases. He was graduated from numerous outstanding universities, has been on the staff of numerous hospitals, he has contributed approximately a dozen articles on the subject of arthritis and kindred ailments societies, and since June, 1957, he has been the Medical Director of the Arthritis-Rheumatism Foundation. Since 1949, Dr. Lamont-Havers' activity, time, study and practice have been devoted primarily to the field of arthritis and rheumatism.
Arthritis, according to the expert witness, can be divided in six groups, which he enumerated. The treatment of arthritis begin, naturally, with diagnostic procedures to determine with which type of arthritis the patient is afflicted. In some cases, particularly in the group relating to rheumatoid arthritis, it may be necessary to observe a patient for a year or more. Diagnosis involves the taking of the history of the patient, physical examination, the use of X-ray when appropriate, and observation.
After the diagnosis has been made, treatment begins. Of the six groups into which arthritic conditions may be classified, only one - infectious arthritis - can be cured. With respect to the remainder of the categories of the disease, most of them are chronic and the physician's primary concern is to give those drugs which can be taken over a long period of time. Except in the case of gout, there is no known drug that will be effective in all cases. As to the remainder of the classes of the condition, the basic regime consists of keeping the patient in as good physical condition as possible, and giving certain drugs to bring and keep the disease under control, to which regime is added the advice of the physician to the patient regarding his way of life and his reaction to his environment.
After giving the testimony which has been summarized above, the doctor discussed particularized treatments for the various forms which the conditions may take. He stated that the treatment of the varied conditions is difficult, the determination of the treatment to use in a particular case is difficult, and that the making of these determinations is even more difficult if one is not aware of the actual history of the disease. Dr. Lamont-Havers then stated that the book "Arthritis Can Be Cured" does not reveal in layman's language, or in any language for that matter, how arthritis can be cured. He also stated that there is nothing in this book which tells of an effective and lasting cure for rheumatism, neuralgia, sciatica, bursitis, lumbago or neuritis. Dr. Lamont-Havers stated that the views expressed and the factual statements made by him represent the consensus of current medical opinion.
As previously indicated, on cross-examination by Respondent's counsel, the doctor agreed that in the book the indications are, supported by the direct statements of Dr. Aschner, that the application of the treatments should be undertaken only by a physician or while the patient is under the care of a physician. Dr. Lamont-Havers did say that he thought it might be likely that some lay persons might try to diagnose and treat their conditions after reading the book, but that it was his opinion that no patient should or would be able to do so.
Reviewing the evidence in this case it is seen that arthritis and its related conditions are diseases with which man apparently is to be plagued for some time in view of the fact that of the six general types only one is curable by techniques and drugs presently available. The diagnosis and treatment of all types of the disease are difficult and slow according to modern scientific knowledge and should not be undertaken by anyone other than a trained and skilled physician. Yet, in the name of this Respondent advertisements have been published in newspapers of wide circulation and circular matter has been distributed through the mails in which the public is advised that an illustrious physician has made certain discoveries that are capable of producing quick and lasting cures. Not only has this physician discovered them, but in a book which he has written and which may be purchased from the Respondent, these discoveries are revealed and described, and one is told in plain non-technical language what the discoveries are, and how and why they work.
The person who is responsible for the making of these representations to the public is Mrs. Goodelman, who testified that she is a housewife and is not qualified even to comment on the alleged treatment she is selling. Yet, Mrs. Goodelman did not for a long time even bother to read the advertisements or circulars used to solicit sales. Even after she read them, she did not put herself to the slight inconvenience of submitting them to a doctor for advice as to their accuracy. The only conclusion that can be drawn from this state of facts is that the truth or falsity of the representations in the advertisement is a matter of complete indifference to Mrs. Goodelman.
It has been established by the uncontroverted medical evidence in this case that it is the consensus of medical opinion that the representations and promises of the Respondent which are alleged in the complaint are false. This fact alone would be sufficient to support an inference of an intent to deceive. (Reilly v. Pinkus, 338 U. S. 269) There were, however, certain other elements in this case which should have indicated to a reasonable person that some caution and concern for the welfare of others ought to be exercised. What was the reason, for example, why the New York Times, one of the country's most reputable newspapers, refused to accept the advertisement? Furthermore, if the treatments were so thoroughly explained and so simple that persons could diagnose and treat themselves, why did purchasers write in to inquire as to how the could obtain some of the medicines recommended for use as part of the treatments? These questions would necessarily raise doubts in the mind of any person who had any regard for his customers, or any sincere belief in the advertising claims upon the basis of which people purchase the item he is selling. None of these matters, however, seem to have had any effect whatsoever on Mrs. Goodelman.
In Respondent's proposed findings and conclusions, it is asserted that the cases of U. S. Nature Products Corp. v. Schaffer, 125 Fed. Supp. 375 and Jarvis v. Shackelton Inhaler Co., 136 F.2d 116, preclude any finding of fraudulent intent in this proceeding. The holding in the first case upon which Respondent relies is, generally, that fraud must be proved, and in the second case it was held that on the basis of the facts in that case the offer to make a refund showed that the respondent was not representing that the product would be efficacious in every instance. This proceeding is clearly distinguishable from the Shackelton case because of the unequivocal and grossly exaggerated claims made by the Respondent for the book being sold. As for the Nature Products Corp. case, where, as in the present case, the President of the Respondent had no reasonable basis for believing her advertising representations to be true, the continuance of making the representations to be true, the continuance of making the representations constitutes such a reckless disregard of what the truth might be as to amount to a fraudulent intent. (Corliss v. U. S., 7 F.2d 455; U. S. v. Pike, 158 F.2d 45; Darnell v. Darnell, 200 F.2d 747) As stated in Borg-Johnson Electronics, Inc. v. Christenberry, Civ. 138-357, U.S.D.C., S.D.N.Y. (January 19, 1959):
"When it appears that an advertiser
deliberately induces its patrons to purchase
its product in the belief that its value far
exceeds its true worth it is sufficient to
support a finding that a fraudulent scheme
was being conducted. Leach V. Carlile, 258
U. S. 138 (1922). This is so, even where there
is a promise to refund the purchase price should
the article sold proves unsatisfactory.
Farley v. Heininger, 105 F.2d 79, 84
(C.A.D.C.), cert. denied 308 U. S 587
(2939)."
The undersigned concludes and finds upon the basis of the record in this case, the testimony of the witnesses, the exhibits introduced at the hearing, the briefs of the parties and a review of the pertinent cases, that the representations made by the Respondent in the sale of the book "Arthritis Can Be Cured" are fraudulent, that is to say that the representations are made with an intent to deceive.
At the hearing Respondent's counsel moved to dismiss this proceeding on the basis of the Court's decision in Borg-Johnson Electronics, Inc. v. Christenberry, supra. Counsel requested and was granted permission to reserve for his brief his argument on the motion.
In support of the motion to dismiss, Respondent urges the following points which, it is claimed, flow from the Borg-Johnson decision:
1. The Post Office Rules violate section
7(a) of the Administrative Procedure Act, 5 U.S.C.
1006(a), in that they authorize the Judicial Officer
to preside at departmental hearings.
2. The Post Office Rules violate Section
11 of the Administrative Procedure Act, 5 U.S.C.
1010, in that they improperly interfere with the
hearing examiner system and are, therefore, "a
far cry from the mechanical rotation [of Hearing
Examiners] prescribed by the Administrative Pro-
cedure Act."
3. The Court ruling automatically adversely
affects numerous other provisions of the present
Rules of Practice, Procedure and Organization.
4. The current Rules contain other defects
which constitute a breach of the Administrative
Procedure Act and a deprivation of procedural
Due process of law.
5. The Rules of Practice, Procedure and
Organization are further defective in that they
Provide for jurisdiction by the Judicial Officer
Over the Hearing Examiners, contrary to the in-
dependent status of the Hearing Examiners as
required by the Administrative Procedure Act,
5 U.S.C. 1010.
As to the first point raised by the Respondent, it is agreed that the substance of the Court's decision is correctly stated. This part of the Court's holding, however, has no bearing on the instant case for the reason that the hearing was conducted by a Hearing Examiner who was appointed to that position in accordance with the provisions of Section 11 of the Administrative Procedure Act, 5 U.S.C. 1010, and who is, therefore, in one of the categories enumated in Section7(a), 5 U.S.C. 1006(a) as being authorized to preside at the taking of evidence. Thus, insofar as this part of Respondent's argument is concerned, Respondent has in no way been prejudiced, and the argument is inapplicable.
The second point in Respondent's argument is related to the first. Legal questions aside, it is a fact that under the Rules of Practice prior to the Borg-Johnson decision it was possible that the rotation of cases between the Hearing Examiners could be less than the "mechanical rotation" mentioned by the Court. As an aside, it might be well to refer to the words "so far as practicable" which modify "rotation: in Section 11 of the Administrative Procedure Act. The instant case, however, while it was at one time scheduled for hearing before the Judicial Officer, was actually assigned by "mechanical rotation" to the Hearing Examiner who conducted the hearing. This argument of Respondent's therefore, falls of its own weight.
The third point of Respondent's argument requires but little time to answer. The substance of this argument is that because of the ruling of the Court in Borg-Johnson with respect to the Judicial Officer, and because the Rules sometimes employ the term "presiding officer" so as to include the Judicial Officer, it follows that every rule which contains the magic phrase is void.
It is a cardinal rule of statutory construction that every reasonable effort is to be made to give effect to the intent of the legislative body which enacts a statute which has been challenged. (Pollard v. Bailey, 87 U. S. 520; U. S. v. Cochran, 235 F.2d 131, cert. den. 352 U. S. 941) It has also been held that an entire act is not invalidated by a finding that a portion of it is invalid. (Presser v. State of Illinois, 116 U. S. 252; U. S. v. Davio, 136 Fed. Supp. 423) Administrative regulations promulgated pursuant to constitutional or statutory authority have the force and effect of law (Tyson v. Commissioner of Internal Revenue, 68 F.2d 584), and the same rules of construction are applicable to them as are applicable to statutes. (Miller v. U. S., 294 U. S. 435)
The specific holding made by the court in Borg-Johnson is that the Judicial Officer may not conduct hearings required to be heard in accordance with the provisions of the Administrative Procedure Act. This was the Court's decision and that is all the Court decided, so that only that provision of the Rules of Practice of this Department is regarded by the court as invalid. Thus the phrase "presiding officer" now means and includes the Hearing Examiners, and no other person does conduct such hearings and preside at the reception of evidence in these cases. This contention of Respondent's is without merit.
The Court did not express himself on the question of the issuance of a final Departmental decision by the Judicial Officer and this question has never been considered by the Courts. The Postmaster General could not possibly perform all the functions required by the various statutes to be done in his name. This fact was recognized by the President and the Congress when the former promulgated and the latter approved Reorganization Plan No. 3 of 1949, issued under the Reorganization Act of 1949. (5 U.S.C. 113z-15 note) The making of these final Departmental decisions is one function, similar to others, the performance of which the Postmaster General has lawfully delegated to a subordinate officer.
The fourth argument of Respondent's raises certain other matters about the Rules of Practice which are alleged to be illegal or which are alleged to result in a deprivation of constitutional due process of law. The possible deprivation of the right to file proposed findings of fact and conclusions of law is mentioned. The 51-page document containing the proposed findings and conclusions of the Respondent appears to be an inappropriate place to raise this ghost. This is certainly one procedural right of which the Respondent in this case has not been deprived. The Respondent has not been prejudiced, and has no standing to challenge this rule.
Next, under this argument, Respondent alludes to certain time limitations established by the Rules of Practice for the purpose of expediting the cases. This case originally was scheduled to be heard on November 20, 1958. Continuances requested by one or both parties resulted in the case being heard on January 6, 1959. Proposed findings and conclusions originally were due on February 6, 1959. Respondent sought and obtained a delay in filing until February 16, 1959 Because Respondent's counsel was ill, a further delay until February 24th was granted. The document actually was filed, however, on February 26, 1959, and was accepted by the Hearing Examiner on his own initiative. Although in each case, good cause was shown for the continuance or delay, it may be true that the Hearing Examiner was in error to be so lenient, but he was motivated by a desire to give the respondent the benefit of its full :day in court." The suggestion made by the Respondent that he was subjected to an "attempt to straightjacket" him is demonstrably false and completely without foundation.
The best answer to the Respondent's last argument - that the placing of the Hearing Examiners under the Judicial Officer for administrative purposes is violative of Section 11 of the Administrative Procedure Act - is found in the Borg-Johnson case, supra, wherein the Court said:
"Plaintiff asserts * * *
(a) In placing the Hearing Examiners
under the Judicial Officer, the Rules vio-
late Section 11 of the Act, 5 U.S.C. 1010,
which requires that the Hearing Examiners
have independent status and that they can
in no way be controlled by the Agency or
Department. I find no merit in this
argument.***"
With this conclusion of the Court's, the undersigned agrees.
At the hearing and on brief Respondent's counsel made certain
Allusions to his belief that "serious constitutional questions" involving freedom of the press are involved in this case. The undersigned was of the opinion at the time of the hearing, and that opinion remains unchanged, that the question of freedom of the press is not even remotely raised by this proceeding. No attack has been made on the book, as such, which the Respondent has been selling. The only things that have been attacked are the representations made to the public upon which the book has been sold. If a person should obtain and seek remittances of money through the mails for the Constitution of the United States upon representations that would lead purchasers to believe they would receive copies of "Lolita," even then no "serious constitutional question" would be raised. The seller would, nevertheless, be guilty of a violation of the postal fraud statutes. The analogy is illustrative of the situation in this case, because in neither case are remitters receiving that which they are led to believe they will receive.
CONCLUSIONS OF LAW
1. The Respondent, Medical Facts, Inc., at New York, New York, is engaged in obtaining and attempting to obtain remittances of money through the mails for the book "Arthritis Can Be Cured" by Dr. Bernard Aschner upon certain pretenses, representations and promises found herein and charged in the complaint.
2. The pretenses, representations and promises used by the Respondent to obtain and to attempt to obtain remittances of money through the mails for the book "Arthritis Can Be Cured" are false.
3. The pretenses, representations and promises referred to in conclusions 1 and 2 above are fraudulent.
4. In conducting its business in the foregoing manner, the Respondent has engaged in and is engaging in a scheme for obtaining money through the mails by means of false and fraudulent pretenses, representations and promises in violation of Sections 259 and 732 of Title 39, United States Code.
Proposed findings of fact and conclusions of law not discussed specifically herein have been considered and are denied as being without merit.
There is attached hereto for execution by the Judicial Officer the appropriate order for the suppression of the fraudulent enterprise.
William A. Duvall
Hearing Examiner