In the Matter of the Complaint That ) March 4, 1964 ) SPENCER PRODUCTS ) ) at ) ) Hollywood, Los Angeles, California ) P.O.D. Docket No. 2/116 ) (sometimes called Respondent), is ) engaged in conducting a scheme for ) obtaining money through the mails ) in violation of 39 U.S. Code 4005 ) (formerly 39 U.S. Code 259 and 732). ) APPEARANCES: Ralph B. Manherz, Esq. Office of the General Counsel Post Office Department for the Complainant Edwin M. Rosendahl, Esq. 4262 Wilshire Boulevard Los Angeles, California for the Respondent Bosone, Reva Beck
The Complainant in this case has alleged that a fraudulent scheme
is being conducted in violation of 39 U.S. Code 4005 by the Respondent. 1/
From the Initial Decision in the above-named case holding that the "Complainant has not adequately proven essential allegations of the complaint" the Complainant appeals.
Counsel for the Respondent and the Complainant stipulated that the issues are as follows: 1, Does Respondent make representations alleged in the complaint 2/ 2, Are such representations, if made, false? 3, Are such representations made with intent to deceive or defraud?
It is admitted that the advertising of the device, the subject of this matter, is done through the mail and remittances for the sale of the device are received through the mail.
The subject of this case is a prosthesis called an "Erectopen"--a device used on the penis of the male during the sex act. The "Erectopen" is sold in a set containing three sizes. There is a snap on each device.
The interpretation of the advertisement is more accurately described in the Initial Decision, page 6-D 3/ , than in the representations set out in the complaint.
The expert witness for the Complainant was Dr. B. Lyman Stewart and the expert witness for the Respondent was Dr. Paul Pernworth--both eminently qualified in the medical field.
After having studied the transcript one comes to the conclusion that the evidence submitted by the Complainant and the Respondent is apart but not far apart--that there is agreement when the expert witness for the Complainant answered the question--Tr. 56--"Would the wearing of this device as directed, Doctor, enable impotent male users to maintain penile erection during the sex act for an extended period after ejaculation?" with "It is possible". Yet some of his other answers were "I don't think so."
Again to a question asked Dr. Stewart--Tr. 64--"Is the use of a device of this type by a licensed physician approve by the American Medical Association?" the answer was "That is controversial." And to the question "Is it approved or disapproved?" the answer was "I don't think it has been disapproved, not to my knowledge." Both doctors were questioned as to the safety of the device in question. Dr. Pernworth said that the construction of the device made it safe.--Tr. 138. Dr. Stewart said the device was probably safer than other devices.
Dr. Pernworth said--Tr. 138--"I don't think there is any established medical opinion on Erectopen, other than my own and Dr. Stewart's, and those who have tried it." Dr. Stewart based his testimony: 1, on his reading of literature on information relative to the device which is the subject of this case; 2, on experience; 3, talk with other physicians; 4, the experience of two patients with the "Erectopen." Dr. Pernworth based his testimony; 1, on his reading; 2, on his own experience; 3, on the experience of twenty patients. The foregoing indicates there is no consensus of informed medical opinion for this prosthesis used by the male in the sex act. 4/
Both doctors agreed that the causes of impotence are psychogenic, organic--or a combination of both; that of the group of men under 60 years of age 85% and 95% are of psychic origin--having a great many fears.
Dr. Pernworth's patient, Mr. Beavis, in 1962 came to him with an idea and asked Dr. Pernworth to give his idea a trial in the medical practice and make suggestions of improvement.--Tr. 123.
Dr. Pernworth gave the device to twenty patients who had solicited help. He saw twelve to fourteen of them again and talked to others on the telephone. Sixteen had favorable, with "varying degrees of enthusiasm", results. And four had no favorable results and no improvement in their symptoms. After the experience with the twenty patients Dr. Pernworth and Mr. George Beavis formed a business relationship for distribution purposes. Dr. Pernworth wrote the advertising.--Tr. 133. Dr. Pernworth was to receive 10% of the gross sales. Up to the date of the hearing he had received around $3,000. Both men contacted Mr. Louis W. Linetsky, the Respondent in the above-named case. The case turns on whether or not the operation of the business constitutes a fraud as set out in the pertinent statute.
After reviewing the transcript one is left with the impression that "Erectopen" does some good for which it was created--that there is no medical consensus of opinion--that devices to aid impotency are controversial--that such things in one form or another have been known for years--that the snap on this particular device is new and safe--that more experimentation is advisable.
Dr. Pernworth's connection with this whole project--his patients, his directions for use of the device on the advertisements and the business connection--shows no intent to defraud.
A business connection in and of itself does not show intent to defraud--but it is a situation that calls for an explanation. I cannot believe that Dr. Pernworth with his background, present practice, his teaching and his participation in a business deal mean he was a party to a fraudulent endeavor. The testimony establishes
the fact there was no intent--and without intent to defraud there can be no fraud.
With all the "greys" in the testimony I believe there is a good basis for the Hearing Examiner's saying in his Initial Decision:
Page 14, "I. * * * the existence of a consensus of informed medical opinion to the effect that Erectopen, or the equivalent, is not efficacious, safe and generally as represented by Respondent, as stated in said item D 5 , has not been adequately shown by the evidence in this record.
"J. Intent of the Respondent to deceive or defraud the public does not appear from the record of this proceeding. Whatever ambiguities, inexactness, ineptness or exaggeration there may be in the language of the Respondent's advertising does not establish, in the light of the record as a whole, both the falsity of material representations listed in item D. and Respondent's intent to deceive or defraud by such representations."
The Initial Decision is hereby affirmed.5/
1/ The basic statute (39 U.S.Code 4005) so far as here pertinent reads as follows:
"Fraudulent * * * matter
(a) Upon evidence satisfactory to the Postmaster General that any person is engaged in conducting a scheme or device for obtaining money or property through the mail by means of false or fraudulent pretenses, representations, or promises; * * * the Postmaster General may--
(1) direct postmasters at the office at which registered letters or other letters or mail arrive, addressed to such a person or to his representative, to return the registered letters or other letters or mail to the sender marked 'fraudulent' * * * and
(2) forbid the payment by a postmaster to such a person or his representative of any money order or postal note drawn to the order of either and provide for the return to the remitters of the sums named in the money orders or postal notes.
* * * * *
2/ Representations in Complaint:
(3)(a) That the use of the device "Erectopen", sold by the Respondent, will "overcome" the "problem" of unsatisfactory "marital relations" in men who are "unable to attain or maintain sufficient erection" of the male sex organ to perform the sex act, i.e., will enable such men to perform sexual intercourse to the mutual satisfaction of the marital partners;
(b) That the said device will be effective "in developing and maintaining penile erection" in men who, because of lack of such erection, are unable to perform the sex act, regardless of whether the cause is "psychological" or "physiological", i.e., regardless of any cause;
(c) That the said device, when worn as directed, will enable male users to maintain penile erection during the sex act for an "extended period after ejaculation";
(d) That the use of the said device as directed will prevent "premature ejaculation" in male users'
(e) That the method of treatment for overcoming inability of men to perform the sex act by the use of the said device is "new";
(f) That the said device may be used with complete safety to both partners in the sex act;
3/ D. The representations, expressed or reasonably implied, to induce such remittances include: (1) Erectopen is specifically designed to help overcome the problem of the inability of some married men to attain or maintain sufficient erection to achieve satisfactory marital relations; (2) Erectopen can effectively assist in developing penile erection during intercourse and such assistance may occur where previous inability stemmed from reasons, psychological and physiological; (3) Erectopen "could feasibly aid a number of men in maintaining erection for a variable but perhaps extended period after ejaculation"; (4) Erectopen may be of assistance "to some individuals afflicted with premature ejaculation"; (5) Erectopen is a brand new development, and (6) Erectopen may be used by the male in the sex act with safety to himself and his female partner.
4/ School of Magnetic Healing v. McAnnulty, 187 U.S. 94 - 1902; Reilly v. Pinkus, 338 U.S. 269 - 1949.
5/ See page 4.