Appeal of P.O.D. Docket No. 3/95 -- KRISNEL, INC. and

In the Matter of the Complaint Against KRISNEL, INC. and P.O. Box 188 at Brick Town, New Jersey 08723 and LYNCRIST, INC. and P.O. BOX 536 at Brick Town, New Jersey 08723 P.O.D. Docket No. 3/95

September 1, 1971

William A. Duvall Director, Office of Hearing Examiners

APPEARANCES: H. Richard Hefner, Esq. Law Department United States Postal Service Washington, D. C. 20260 for the Complainant Walter D. LeVine, Esq. Gutkin and Miller 744 Broad Street Newark, New Jersey 07102 for the Respondent

INITIAL DECISION OF HEARING EXAMINER

¹/ This proceeding was initiated by the filing on June 28, 1971, of a complaint by the General Counsel for the United States Postal
Service alleging, in substance, that the Respondent, Krisnel, Inc., and P. O. Box 188 at Brick Town, New Jersey,²/ are engaged in a scheme or device for obtaining money or property through the mails by means of false representations in violation of 39 United States Code 3005.³/ The Respondent's answer was filed on August 17, 1971, and in the answer the Respondent admits using the advertise- ment which was attached to the complaint as Exhibit A, but denies substantially the remainder of the allegations of the complaint and affirmatively states that Respondent is not engaged in the scheme alleged in the complaint.

Specifically, the complaint charges the Respondent with making the following representations in its advertising matter, a copy of which advertising matter is attached to this decision as Appendix A. The representations are as follows:

(a) The "Syntron Method" is a scientifically sound and effective remedy for obesity;

(b) Temporary adherence to the "Syntron Method" is a permanent cure for obesity;

(c) Following the "Syntron Method" will assure obese persons that they will achieve the specified reductions of body weight and size within the prescribed periods of time;

(d) Following the "Syntron Method" will enable obese persons to reduce their reductions of body weight and size irrespective of calorie intake;

(f) The "Syntron Method" represents a significant and radical departure from all other methods of attempting to control obesity;

(g) The "Syntron Method" will succeed after all other known methods of attempting to control obesity have failed; and

(h) The chemical ingredients of "Syntron Tablets" would make a significant contribution to the effectiveness of a program to control obesity.

The complaint, of course, alleges that the representations charged as being made by Respondent are false.

The statute under which this proceeding is brought reads, in pertinent part, as follows:

"(a) Upon evidence satisfactory to the Postmas- ter General that any person is engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations, *** the Postmaster General may issue an order which--

(1) directs any postmaster at an office at which registered or certified letters or other letters or mail arrive, addressed to such a person or to his representative, to return such letters or mail to the sender appropriately marked as in violation of this section, if such person, or his representative, is first notified and given reasonable opportunity to be present at the receiving post office to survey such letters or mail before the postmaster returns such letters or mail to the sender; and

(2) forbids 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 sum named in the money order or postal note."

The product which has been received in evidence in this proceeding as Complainant's Exhibit 5 bears a label indicating that the product is composed of the following ingredients: Benzocaine, 10 milligrams; Thiamine Mononitrate, 5 milligrams; Riboflavin, 2 milligrams; Niacinamide, 3-4/10 milligrams; Ascorbic Acid, 10 milligrams; Caffeine, 15 milligrams; Dextrose, 65 milligrams; and Sodium Caseinate, 100 milligrams.

The first witness to testify on behalf of the Complainant was Inspector Gene F. McHale who testified that among his duties is the responsibility of investigating persons and concerns who may be thought to be operating businesses in violation of postal statutes. In connection with this part of his assignment he encountered the advertisement which is identical to Appendix A to this decision and which appeared in the April 4 issue of the Family Weekly Register Paper.

Responding to this advertisement, Inspector McHale ordered the product by use of a test name and made the required remittance of money by money order, as a result of which he received the Respondent's product.

Now, in addition to the container of tablets, a set of dietary instructions was received from the Respondent. Rather than describe this diet, it will be copied into the record at this point. It might be summarized as containing instructions for the user to eat a half grapefruit and to observe certain other restrictions, but generally allows a fairly varied diet:

                     "THE SYNTRON METHOD 
          To Be Used In Combination With Syntron Tablets 
     BREAKFAST: 1/2 grapefruit (or unsweetened grapefruit 
     juice) 2 eggs any Style, 2 slices of bacon, minimum. 
     Maximum is 12 slices of bacon and 12 eggs, but the 
     amounts must be equal.  Coffee but no milk, cream or 
     sugar (use artificial sweetener if you must), or tea 
     with lemon. 
     LUNCH:  1/2 grapefruit.  Meat, any style, any amount. 
     Salad dressed without sugar, as much as you can eat. 
     Black coffee. 
     DINNER:  1/2 grapefruit.  Meat, any style, with gravy 
     if it is not thickened with flour, or fish, if you 
     like.  Any amount of any green yellow (except corn) or 
     red (except beetroot) vegetables.  Salad, as above, as 
     much as you want.  Black coffee. 
     If you are a bed-time snack-er; tomato juice, or skim 
     milk. 
     NO fruit except for the grapefruit. 
     NO puddings, rice potatoes, bread, pasta (in fact no 
     starches, they form liquids which in turn form fat). 
     NO skipping anything, the bacon at breakfast or the 
     salad at lunch or dinner.  It's the combination that 
     burns the fat. 
     NO corn oil or margarine. 
     NO  eating between meals. 
     YOU MUST begin each meal with grapefruit which acts as 
     a catalyst to start the fat burning. 
     YOU MUST cut down on coffee to one cup a meal; coffee 
     is thought to affect the insulin balance needed for the 
     burning up process. 
     YOU CAN drink, but as sugar is forbidden, try to stick 
     to dry wines or spirits, straight or with soda. 
     YOU CAN have your eggs fried in butter and your 
     vegetables swimming in it, for fat does not form fat, 
     in fact fat burns up fat. 
     YOU CAN eat as much as you want.  You should in fact 
     eat until you are full."  (Ex. C-6)

Dr. Jack Crowell, a medical doctor in private practice in the District of Columbia, appeared as the next witness for the Complainant. Dr. Crowell has been in private practice since 1955 and he specializes in the field of endocrinology and metabolic diseases. Forty percent of Dr. Crowell's practice is in the field of obesity and he is well qualified by training and experience to testify in the area of medicine involved in this proceeding.

Dr. Crowell defined the term "obesity" and he described the different types, the first type being identified as exogenous obesity, or that which is caused by over-eating. Another type, which the doctor said is rare, is the result of certain endocrine diseases.

Persons who are obese do not generally know the type of obesity which they have and they do not know the proper methods to correct the condition. The proper treatment is arrived at by the physician to whom the patient should go and the physician devises a dietary regimen for the patient based upon the individual needs of the patient as ascertained by the doctor by consultation and studies.

To maintain oneself on an extended program of weight reduction is a difficult thing to do and it is more difficult if one attempts to do this alone and without periodic visits to the physician or the use of some other assistance, as in the case of weight watchers clubs, for example.

In regard to the tablets sold by Respondent, the medical witness was familiar with the ingredients. His testimony was that there is no single ingredient in the tablets which by itself would be of any aid to a person who wanted to lose weight. He testified further that the ingredients taken together in the combination in which they are found in Respondent's product similarly would be of no aid to any person who is attempting to take them for the purpose of losing weight.

In regard to the dietary program sent by the Respondent in response to orders from customers, the doctor testified that some people might lose weight by taking this diet and that some other people might gain weight following the same diet. The difference would depend upon the physical makeup of the various individuals and their living and eating habits.

There is nothing in the material offered by Respondent which would enable a person to tell whether he would be the type of individual who would gain while following this diet, or the type of individual who would lose weight while following this diet.

Dr. Crowell described the procedures that he follows in treating an obese person. He stated that different physicians would have different views and would follow different procedures in prescribing for and treating a person who is obese, and to that extent there is a difference of medical opinion in regard to the treatment of obesity.

On the other hand, Dr. Crowell was emphatic when he stated his opinion that there is no doctor who would prescribe the use of Respondent's tablets in a course of treatment for obesity. He stated that his opinion that these tablets would be worthless in a program of treatment for obesity is in conformity with the consensus of informed medical and scientific opinion on this question.

This was the sum and substance of the testimony offered on behalf of the Complainant and no testimony was offered by Respondent.

Upon the basis of the foregoing testimony and the evidence received in this proceeding, I make the following findings of fact:

(1) The Respondent is obtaining and attempting to obtain remittances of money through the mails. This is established by the test correspondence in this case.

(2) Except as hereafter noted, the Respondent makes the representations set forth in paragraph 3 of the complaint:

(a) Representation set forth in 3(a) of the complaint is contained, or made in substance, in the first paragraph of Appendix A to this decision. The language is: "This article told about a NEW, QUICK, SURE and SATISFYING METHOD that started in England and is presently sweeping through France, Holland and ALL OF EUROPE." This representation is also made in the language at the top of the advertisement as follows:

That this Syntron Method is the "Greatest Breakthrough to End Overweight Forever]"

(b) I fail to find and it has not otherwise been established where, if anywhere, the Respondent makes the representation set forth in paragraph 3(b) of the complaint. I see the representation with respect to a permanent cure for obesity but I do not see where it is represented that only temporary adherence to the Syntron Method will produce this result.

(c) The representation set forth in paragraph 3(c) of the complaint, that the use of the Syntron Method will assure obese persons that they will achieve specified reductions of body weight and size within prescribed periods of time, is made, among other places, in the box in the third column of the advertisement and also it is implicit in the box to the left side of the order blank.

(d) That Respondent makes the representation set forth in paragraph 3(d) of the complaint is supported in the same portions of the advertisement cited in connection with paragraph 3(c) of the complaint.

(e) The representation that the use of the Syntron Method will permit obese persons to achieve specified reductions of body weight and size irrespective of calorie intake is found in the first paragraph of the advertisement, among other places, in the following language: "These fortunate people Stopped Starving Themselves, Stopped Counting Calories and STILL witnessed an unbelievable weight loss almost immediately."

(f) The basis for paragraph 3(f) of the complaint is found, among other places, in the same portions of the advertisement on which the charge contained in paragraph 3(a) of the complaint is based. In addition, the following language found in the third paragraph of the advertisement in these words may reasonably be construed to have the meaning set forth in paragraph 3(f): "I then decided to give this amazing new concept to everyone willing to try something COMPLETELY NEW IN WEIGHT REDUCTION."

(g) Language supporting paragraph 3(g) of the complaint, in which the Respondent is charged with representing that the Syntron Method will succeed after all other known methods of attempting to control obesity have failed, is found in the language in the first paragraph as follows: "People who were overweight, who have tried just about everything to LOSE POUNDS and INCHES and were always unsuccessful ... finally found the missing link as to why, no matter how or what they tried ... would not work to any degree."

(h) The basis for the alleged misrepresentation that the chemical ingredients of Syntron tablets would make a significant contribution to the effectiveness of a program to control obesity (paragraph 3(h) of the complaint) is found in language at the bottom of the first column as follows: "Just take 3 of my special, safe SYNTRON Tablets each day before each of your 3 meals, follow enclosed simple method ... and watch those ugly pounds and inches disappear before your eyes."

(3) The representations found to have been made by the Respondent are materially false and misleading.

Conclusions of Law

(1) Advertisements are to be considered in the light of the effect that such advertisements would most probably produce on ordinary minds. ( Donaldson v. Read Magazine , 333 U.S. 178)

(2) The Complainant had the burden of establishing by persuasive evidence that the representations made by Respondent are false.

(3) The Complainant has sustained the required burden of proof.

(4) The effect of false representations persists even where there is a promise to refund the purchase price should the article sold prove unsatisfactory. ( Borg-Johnson Electronics, Inc. v. Christenberry , 169 Fed. Supp. 746 at 751)

(5) The decisive factor in the issuance of a fraud order is not whether anyone complaints of fraud or was in fact defrauded but whether the mails are being used to project a scheme which may result in obtaining money from the public by means of false and fraudulent statements. This was the holding in the case of Farley v. Heining, 105 F.2d 79.

Now, by analogy, the same would be true in regard to the issuance of an order under the statute as it is now worded. In other words, it is not necessary under Section 3005 or Title 39, United States Code, to prove that a scheme or device for obtaining money or property through the mails by means of false representa- tions is successful to warrant the issuance of an order pursuant to that provision of law.

(6) The Respondent is engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representations as proscribed by the provisions of Section 3005 of Title 39, United States Code.

I have considered the proposed findings of fact and conclusions of law submitted by the parties. To the extent indicated herein, those proposed findings of fact and conclusions of law are adopted. Otherwise, such proposed findings and conclusions are rejected because they are contrary to the evidence or because they are immaterial.

Before closing, I wish to note that no evidence was offered on behalf of the Respondent. The medical evidence in this record consists entirely of the evidence offered on behalf of the Complainant and there is no evidence, substantial or otherwise, to the contrary in this record.

This record, therefore, amply supports the findings of fact and conclusions of law heretofore made. ( U.S. Health Club v. Major , 292 F.2d 665, decided by the Third Circuit Court in 1961.)

Upon the basis of all the foregoing considerations, I recommend that a remedial order be issued against this Respondent as provided in Section 3005 of Title 39, United States Code.

___________________

1/ Transcribed from oral decision as rendered at close of hearing held September 1, 1971, except for correction of certain nonsubstantial typographical or grammatical errors.

2/ The complaint later was amended to include the name and address Lyncrist, Inc. and P.O. Box 536 at Brick Town, New Jersey. Because of the lack of proof, the complaint was dismissed as to Lyncrist.

3/ This section number was 4005 prior to the Postal Reorganization Act.