January 10, 1968
In the Matter of the Complaint Against
NATIONAL HEALTH
at
Los Angeles, California
P.O.D. Docket No. 2/271
APPEARANCES:
Arthur S. Cahn, Esq.
Office of the General Counsel
Post Office Department
for the Complainant
Edwin M. Rosendahl, Esq.
9777 Wilshire Boulevard
Beverly Hills, California
for the Respondent
INITIAL DECISION OF HEARING EXAMINER JESSE B. MESSITTE
Respondent (National Health) receives money through the mail by false and fraudulent representations as alleged in the complaint. Among other things, Respondent conveys the false impression to the public that what Respondent sells enables a female to increase the size of her breasts. A fraud order should issue.
Before the Hearing
The General Counsel of the Post Office Department started this proceeding by filing a complaint under 39 U. S. Code 4005.[1] Respondent filed an answer to the complaint.
The proceeding was thereafter assigned to this Hearing Examiner October 19, 1967. On the same day, this Hearing Examiner issued an order for the hearing to commence November 2, 1967.
A short pre-hearing conference took place on November 2, 1967, immediately proceeding the hearing at Los Angeles.
The Hearing
The issues, broadly stated, are:
(1) Does Respondent make the representations alleged in the complaint?
(2) Are such representations false?
(3) Are such representations made with intent to defraud?
The parties stipulated that Respondent receives money through the mail in response to the advertisement, a copy of which is attached to the complaint, or a substantially equivalent advertisement.
Respondent filed an amended answer mainly to disclose a change in the advertising copy from that attached to the complaint.
Complainant’s two witnesses consisted of a postal inspector and a medical doctor. The former testified about Respondent’s advertising and what Respondent sends (a four-page pamphlet containing a drawing of a female breast and describing some exercises) to those who pay the price (three dollars). The medical doctor, among other things, gave his expert opinion that the exercise program sold by Respondent would have no effect upon the size of the breasts of a female who performed such exercises. The doctor further testified that the exercises might be useful in strengthening and enlarging the pectoral muscles which are beneath the breast area.
Respondent’s two witnesses consisted of a medical doctor and a Lee Rogers who admittedly is the person, trading under the fictitious name National Health, advertising and selling something to increase and beautify “BUSTLINES.” Respondent’s medical doctor agreed with Complainant’s medical witness but testified also about his work in preparing the pamphlet which Respondent sells. Lee Rogers said, in substance, he knew nothing about physiology or anatomy but thought the idea about increasing and beautifying bustlines was commercially attractive. So he claims he asked a lawyer (not his counsel in this proceeding) to recommend a doctor (who turned out to be his medical witness in this proceeding) to help because he did not want to go into the promotion without getting advice.[2] Lee Rogers just before using the name “National Health” admits using the name “S. I. Research” and saying then to persons who might want bust development “Don’t waste your hard=earned money on exercises” (Tr. 139). Then, as S. I. Research, he was selling information about surgical procedures for bust development. But now as National Health he sells a pamphlet purporting to describe exercises for bustline development. Testified Rogers, to this apparent strange and sudden change: “It was like, Why did the left hand say one thing and the right hand say something else?” (Tr. 139).
This Hearing Examiner permitted Respondent’s Counsel to put questions to the Government lawyer appearing for Complainant. Despite Respondent’s Counsel’s claim that the matter would be pertinent, the testimony thus adduced was quite irrelevant.
After the Hearing but Prior to the Initial Decision
Pursuant to the order of this Hearing Examiner the parties submitted on or before December 1, 1967, proposed findings of fact and conclusions of law. Thereafter, on December 4, 1967, Complainant filed a “Motion to Strike Certain Portions of Respondent’s Proposed Findings and Conclusions of Law.” This Hearing Examiner allowed Respondent to reply on or before December 28, 1967, to Complainant’s motion. Such a reply was filed by Respondent on December 26, 1967. Complainant’s motion is hereby denied. But, of course, Respondent’s Exhibits “A” and “B” attached to Respondent’s proposed findings are not considered evidential matter but relate only to the possible legal significance of the Mark Eden proceeding to the pending matter concerning the alleged fraud by National Health.[3] The significant of Mark Eden, as a legal precedent, has been duly considered, together with all other legal contentions of the parties and the whole evidential record, in arriving at the decision herein.
Findings of Fact
1. Respondent conducts an enterprise through the mails at Los Angeles, California, for the sale of a program to increase the size of the female bustline.
a. Prior to the time of the filing of the complaint herein (September 13, 1967) Respondent used advertising material, a copy of which is attached hereto marked Exhibit “A”, and made a part hereof. Such advertising material discloses the general nature of Respondent’s enterprise, the name used by Respondent, where Respondent is located and an invitation to the public to use the mails for remittances.
b. Similarly, at the time of the filing of the complaint and subsequent thereto, Respondent used advertising material, a copy of which is attached hereto marked Exhibit “B”, and made a part hereof.
2. Public attention is called to Respondent’s program by means of advertising matter (Exhibits “A” and “B” attached hereto) all of which is designed for, and has the effect of, inducing readers to remit money through the mails to Respondent.
3. Respondent represents to the public in those advertisements that what Respondent sells will enable any woman to increase the size of her bustline. Respondent’s advertising disclosed no limitation or exception and thus may mean, and to some does mean, that it applies to any woman regardless of age, physical appearance or inherent deficiencies
4. Respondent represents to the public that by the use of what Respondent sells, a female will be able to obtain a lovelier, firmer, more exciting bustline. Respondent’s advertisements (Exhibits “A” and “B” attached hereto) contain the words “Yes, it is finally possible for you to have a lovelier, firmer, more exciting bustline!” and also the words “Yes – BUSTLINES can be INCREASED!”
5. Respondent uses the word “bustline” in his advertising material (Exhibits “A” and “B” attached hereto) to mean to the reader the same as the word “bust” or the word “breasts.” The net impression which Respondent’s advertisement, taken as a whole, is likely to make upon the readers is that when Respondent says bustline, that means the breasts. The adjectives in the advertisement “lovelier,” “firmer,” more “exciting” are well designed to indicate to the reader that Respondent is selling something for increasing the size of and beautifying the breast. The picture of the nurse contained in the advertising discloses prominent breasts, although in the main they are covered by clothing. Nothing in Respondent’s advertising attempts to give notice to the reader that Respondent’s reference to an increased bustline means only an increased circumferential measurement around the torso resulting from development of pectoral muscles underlying the breast area. Such a disclosure, of course, might well make the project commercially unattractive for Respondent and preclude many if not most readers of the advertising from making a remittance for the undisclosed program sold by Respondent to increase and beautify “BUSTLINES.” Accordingly, the Respondent is representing to the public by its advertisements that what Respondent sells will cause an increase in the size of the female breast, improvement in their shape and thus their beautification.
6. Respondent represents to the public that Respondent has developed a new system enabling a female to enlarge her breasts.
Respondent’s advertisements contain words which say “At last, National Health as developed a system so dynamic that it is being introduced…” and “Now National Health has developed a minutes per day program so dynamic that it is being introduced…” The fair meaning of these words, in relation to the advertisements as a whole, is that Respondent has developed a new and dynamic system for the enlargement of female breasts. While the word “dynamic” is not a synonym for “revolutionary” the two words have some of the same flavor. The extent to which the average reader would understand the significance, if any, of the use of the word “dynamic” by Respondent or translate the word into the word “revolutionary” (used in the complaint) is probably rather limited. But the idea of newness and the word “introduced” which emphasizes newness, create the impression to the average reader that what is being sold is substantially different from anything previously offered by anyone for the purpose of increasing or beautifying bustlines or breasts.
7. Respondent represents to the public that Respondent is somehow associated with the field of medicine and medical research. The picture of the nurse in the advertisements conveys to the average reader that Respondent is somehow involved in medical work or quasi-medical work. From the phrase in the advertisements “National Health has developed” the average reader is given the impression that Respondent is somehow connected with the field of medical research and study.
8. Respondent’s representations made to induce remittances through the mails for what Respondent sells, as set out in paragraph (3), sections a. – d. of the complaint herein, are singly and in combination materially false.
a. Dr. William R. Schumann is a board certified specialist in gynecology and obstetrics. By excellent education, splendid training and professional experience, he is outstandingly qualified as an expert on the subject matter of this proceeding in respect to the female breasts, the causes for poor development of female breasts and the means by which improvements may be made in the size and shape of female breast. His expertise in this area was generally recognized by Respondent’s medical witness who concurred in everything he heard Dr. Schumann testify about. More than 95% of adult females who have experienced a failure of normal breast development and have small breasts have such deficiency because of heredity or to use Dr. Schumann’s words because of “inherited genetic predisposition.” The words “breasts” or “bust” are synonymous and essentially medical terms. The breasts do not include the pectoralis major muscle upon which it is sometimes said the breast rest. There is no non-surgical method which would enable a woman with small undeveloped breasts to increase their size permanently or significantly. Exercises which cause a woman to develop, strengthen or increase the size of her pectoralis major muscle would have no effect on a woman’s breasts. Exercises, such as those described and sold by Respondent, would have no effect on a woman’s bust or breasts if she performed such exercises. There is a universality of medical belief in accord with Dr. Schumann’s opinion that exercise, such as that described and sold by Respondent would have no effect on a woman’s breasts if she performed such exercises. The only practical approach from a medical viewpoint for enlarging significantly and permanently the female breasts is by plastic surgery.
b. Respondent’s medical witness, Dr. Clarence B. Levine, is engaged in the general practice of medicine but with no specialization. About 30% of his patients come to him because of obesity. Dr. Levine exhibited good judgment at the hearing when he listed to Dr. Schumann, and then testified that he was in complete agreement with the testimony of Dr. Schumann. Dr. Levine experienced considerable difficulty at the hearing in identifying what part of the pamphlet, sold by Respondent, he had written and what part he had not written. Dr. Levine (by copying from a standard medical text) did draw the picture of the female breast included in Respondent’s pamphlet. Only a very small part of that drawing indicates the underlying pectoralis major muscle. The pamphlet uses the word “breasts” and does not negate the interpretation that the exercise would increase the size of the breasts. The pamphlet does not directly or indirectly disclose that the maximum effect of the exercise program would be limited to a possible increase in the size of the pectoralis major muscle and such circumferential changes of torso measurement as might result therefrom.
c. Lee Rogers is the person who uses the fictitious name National Health and is responsible for the advertising, the sales and the whole enterprise which is the subject of this proceeding. Mr. Rogers is, or has been, engaged in other mail order promotions. One such business, which he owned and operated as sole proprietor, was under the fictitious name “S. I. Research” which also advertised extensively that it would sell women a method to increase the size of their busts. In the S. I. Research promotion those who sent remittances received a booklet purporting to explain silicone breast implants and silicone injections. Mr. Rogers only recently discontinued the S. I. Research enterprise following a complaint issued by the Federal Trade Commission (F.T.C. Docket No. C-1229).
When Mr. Rogers was promoting S. I. Research as a method to increase the bust his advertisements stated “DON’T WASTE hard-earned money on creams, exercises and so-called remedies that do not work.” Now the same Mr. Rogers under the fictitious name National Health is selling what turns out to be an exercise program to increase the bustline.
Lee Rogers knew nothing of Dr. Levine’s background or experience but sent to him after some attorney (not his counsel in this proceeding) recommended that he do so. Lee Rogers claims he knows nothing about physiology or anatomy.
9. Respondent conducts the enterprise described above with the intent to deceive and defraud. The universality of medical belief that exercise such as that described in Respondent’s pamphlet will have no effect on the female breasts indicates intent to defraud. Such intent is further revealed by Respondent (Lee Rogers trading as National Health) admitting that he has no knowledge whatsoever of physiology or anatomy. The incompatible representations made by Lee Rogers when he used the name S. I. Research that exercise to increase the bust was a waste of money when contrasted with Lee Rogers under the name National Health selling an undisclosed item which later turns out to be an exercise program for a price, reveals further lee Rogers’ intent to defraud the public under the name of National Health. Lee Rogers knows the representations he makes, under the name National Health, are false.
10. Proposed findings of fact submitted by the parties are adopted only to the extent embodies herein. Otherwise they are rejected as not supported by persuasive evidence or not relevant and material to the determination of those facts necessary for proper disposition of the issues.
Conclusions of Law
1. Respondent is, and has been engaged in a fraudulent scheme operated through the mails in violation of 39 U. S. Code 4005.[4] Respondent makes the representations set forth in the complaint; Respondent’s representations, singly and in combination, are materially false and they are made with intent to defraud.
2. Universality of medical belief that exercise will not alter the size of the female breasts is a permissible and sound legal basis for inferring and concluding that Respondent’s representations to the contrary are made with the intent to defraud.[5] The absence of empirical scientific evidence to corroborate universally accepted medical opinion does not exonerate a Respondent who exploits the gullible with fictitious claims.
3. Fraudulent intent of Respondent may be inferred from all surrounding circumstances including gross misrepresentation in Respondent’s advertising claims and Respondent’s knowledge or reckless disregard concerning the lack of truthfulness in the claims made.[6]
4. Respondent’s offer to refund the purchase price to dissatisfied customers does not render innocuous the false and fraudulent representations Respondent makes to induce remittances by mail.[7]
5. Conclusions of law proposed by the parties are adopted to the extent embodied herein. Otherwise they are rejected as inapplicable to the instant proceeding.
6. A fraud order should issue pursuant to 39 U. S. Code 4005.
Jesse B. Messitte
Hearing Examiner
[1] The statue, 39 U. S. Code 4005, reads so far as there pertinent:
“Upon evidence satisfactory to the Postmaster General that any person is engaged in conducting a scheme or device for obtaining money *** through the mail by means of *** fraudulent *** representations ***; 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] “*** I wouldn’t want to go into anything by the seat of my pants” said Rogers (Tr. 122).
[3] The evidence in Mark Eden was very different from the evidence in the instant proceeding. Moreover, it appears from official files of the Post Office Department that on December 12, 1967, Complainant filed a motion for the issuance of a fraud order against Mark Eden by reason of its alleged violation of the so-called compromise agreement. (See, Mark Eden, P.O.D. Docket No. 2/204, including papers filed on and after December 12, 1967).
[4] Leach v. Carlile, 258 U.S. 138 (1922); Donaldson v. Read Magazine, 333 U.S. 178 (1948).
[5] See: Reilly v. Pinkus, 338 U.S. 269, 276 (1949); Stein’s v. Pilling, 256 F. Supp. 238, 243 (U.S.D.C.N.J. 1966).
[6] Gottlieb v. Schaffer, 141 F. Supp. 7 (U.S.D.C. S.D.N.Y., 1956); See, Corliss v. U. S., 7F.2d 455, 456 (C.A. 8, 1925).
[7] Harris v. Rosenberger, 145 F. 449 (C.A. 8, 1906) cert. den. 203 U.S. 591 (1906); Heininger v. Farley, 105 F.2d 79 (C.A.D.C. 1939( cert. den. 308 U.S. 587 (1939); See, Howard v. Cassidy, 162 F. Supp. 568, 572-3 (U.S.D.C. E.D.N.Y., 1958).