In the Matter of the Petition by NORTH BERGEN NEWS, 8403 Kennedy Boulevard, North Bergen, New Jersey 07047 Revocation of Second-Class Mail Privileges for "NORTH BERGEN NEWS" P.S. Docket No. 1/99August 17, 1972
William A. Duvall Chief Hearing Examiner
APPEARANCES: Joseph Mocco, Esq. Mocco & Mocco 713 Kennedy Boulevard North Bergen, New Jersey 07047 for the Petitioner Arthur Cahn, Esq. Law Department United States Postal Service Washington, D.C. 20260 for the Respondent
On February 23, 1972, the Manager of the Mail Classification Division of the Finance Department of the United States Postal Service advised the publisher of the North Bergen News of North Bergen, New Jersey that it was proposed to annul the second class mail privileges that were previously in effect for that newspaper. There apparently was some subsequent correspondence between the Manager of the Mail Classification Division, who will be hereafter referred to as the Respondent, and the publisher who will hereafter be called the Publisher or Petitioner.
This Notice of Proposed Revocation was reissued on May 16, 1972. In that Notice of Proposed Revocation it was stated that the basis of the action was three-pronged in that it was charged that the publication is designed primarily for free circulation; that the publication does not have a legitimate list of subscribers; and that the publication did not furnish adequate records to the Postmaster or to the Respondent to enable the Respondent to determine whether in fact the Publisher's newspaper is being issued in accordance with the laws and regulations governing second class mail matter. The Publisher was advised the revocation would be final unless within 15 days of receipt of the notice the Publisher took an appeal by filing a petition with the docket clerk of the Postal Service.
The Publisher did take such an appeal; the Respondent filed an answer to the appeal; and the matter was set down for hearing originally on June 22. The Publisher filed, among other motions, a request that the Postmaster at North Bergen, New Jersey conduct an audit of his books and records for the purpose of determining whether there was compliance with the requirements of the laws and regulations governing second class mail matter. It was agreed by the Respondent that such an audit would be conducted. Because of the proximity of the audit to the hearing date, the hearing was continued.
It was required that the parties advise the Hearing Examiner when the audit had been completed so that the matter might be reset for hearing, if a hearing were necessary. The audit was conducted on or about June 8, 1972, by the Postal Inspector. The report was duly made to the Hearing Examiner that little if any more information was gleaned from this audit than had been acquired from previous examinations of the Publisher's records. The case was continued to August 3, but in the meantime the Publisher filed the request for another audit.
In the absence of more detailed information in regard to this entire matter, and on the basis of statements made in response to the motion by the Respondent's Counsel, the motion for the additional audit was denied. It was stated that the hearing would proceed as scheduled. However, this hearing was continued from August 3 to this day, August 8, and for the convenience of the Publisher the hearing was conducted in Newark, New Jersey.
It is to be pointed out that this is a proposed revocation of second class mail privileges which have been for some time in existence for the publication entitled North Bergen News. Therefore, in regard to the issues joined in this proceeding, the burden of proof rests with the Respondent.
The Respondent presented two witnesses to testify in regard to the issues in this proceeding. The first witness was Mr. Herbert Jackson who is the Postmaster of North Bergen, New Jersey. Mr. Jackson conducted a delayed annual audit of the 1971 records on March 23, 1972. The reasons for the delay were requests for extensions of time presented to the Postmaster by the Publisher. On the occasion of this audit Mr. Jackson determined that there were 2200, approximately, subscribers to this publication, but the records of the Petitioner were of such character that the Postmaster could not determine how many of these 2200 subscriptions were paid subscriptions.
In any event, the Postmaster advised the Publisher that, subject to further orders, 2200 of the copies of this newspaper could be mailed at the second class rate. Additional copies mailed would have to be paid at the transient rate. At the time of Postmaster Jackson's audit, he determined that there were approximately 3400 copies of the publication mailed, and this figure includes the 2200 copies which were mailed at the second class rate.
After the request made by the Publisher on May 30, 1972, for an audit of this books and records, a Postal Inspector, Paul Commerford, who is assigned to the Newark division of the Postal Inspection Service, conducted an audit of the books and records of the Publisher.
Mr. Commerford stated that when he went to conduct his audit, which was on June 8, 1972, he asked for the records, in response to which he was given approximately 4000 index cards and four envelopes of orders or subscriptions for the publication. Of the 4000 index cards only about 1500 were marked to indicate when the subscriptions were received. Inspector Commerford said that on the basis of his examination of the Publisher's records, he could not tell how many of the subscriptions to the publication were paid and, therefore, he could not determine how many subscriptions were being sent out free or unpaid.
The testimony that has been summarized above constitutes what I perceive to be the principal evidence presented here on behalf of the Respondent.
On behalf of the Petitioner, Mr. Joseph J. Hermo, who is the managing editor of the publication North Bergen News, testified. Mr. Hermo stated that at various times representatives of the Postal Service would come to the office of the newspaper. Mr. Hermo made every effort to deliver to the Postal representatives such records as he had, and his testimony is uncontradicted that he attempted to comply with the suggestions and recommendations made by representa- tives of the Postal Service in terms of improving his bookkeeping system.
In connection with that phase of the matter, Mr. Hermo has adopted a system under which, when a subscription is received, a metal address plate is made up from the order, and those plates are maintained in metal drawers in the office of the publication. Cards from those plates are run off and filed alphabetically. The orders which are received are placed in envelopes, and each envelope is for a particular month of the year, so that each subscription is put into the envelope for the month in which that subscription is received.
Therefore, by examining the name card which is printed from the addressograph plate, one can determine the month in which the subscription was received. A check of that subscription can be made by going to the envelope for the particular month indicated on the card, and there will be found, or there should be found, and there was found in the example that was tested today, a receipt which the person who obtained this subscription made and gave to the subscriber. The subscriber has the original and a copy is in the records of the Publisher.
As a part of his testimony, Mr. Hermo stated that as of August 7, 1972, there were 3,501 total paid subscriptions to the publication and a total number mailed of 3,825. As of that time, the Publisher was still being allowed second class mailing rates on only 2200 copies of the publication.
On the basis of the facts and circumstances as revealed by this record in this hearing today, I make the following findings of fact and conclusions of law.
1. At the time of the March, 1972, audit of the Petitioner's records by the Postmaster in North Bergen, New Jersey, approximately 3400-3600 copies of the publication were being mailed, of which 2200 were permitted to be mailed at second class rates.
2. At the time of the June, 1972, audit of the records of the Publisher by the Postal Inspector, the Inspector was unable to determine how many copies of the publication were mailed to paid subscribers and how many copies of the publication were mailed to persons for whom no subscription had been paid.
3. There is a legitimate list of subscribers for the publication North Bergen News, and there has been no persuasive showing that the publication is designed primarily for free circulation.
4. The letter of proposed revocation contained the following language: "The review must include an inspection of the publisher's records such as the print order or invoice showing the total number of copies printed, individual and bulk orders for subscriptions, stubs of receipts issued, sales records and returns for over the counter sales, cash books and similar records."
5. From the evidence presented at the hearing this morning it is found that the Publisher has made what appear to be significant and sincere efforts to provide a record-keeping system that could be in conformity with the foregoing quotation in Finding of Fact No. 4.
1. The publication North Bergen News has a legitimate list of subscribers and it is not designed primarily for free circulation, as those terms are used in Section 4354 of Title 39, United States Code.
2. It has not been established by the preponderance of the evidence adduced in this hearing that the record-keeping procedures now in use by the Petitioner are so inadequate as to fail to reveal the type of information required by the laws and regulations of the Postal Service applicable to second class mail matter.
In view of the foregoing findings of fact and conclusions of law, it is the recommendation of this Hearing Examiner that this proceeding be held open for a period of 90 days from this day in order to give the Publisher the opportunity to provide whatever detail is lacking in the matter in which he keeps his books and records.
During this period it is incumbent upon the representatives of the Postal Service, under this recommendation, to explain in whatever detail is necessary to the Publisher precisely what is required and to assist the Publisher to every reasonable extent in the adoption of such a record-keeping system.
At the end of the 90 day period, Counsel for Respondent is to advise the Hearing Examiner, in the event this decision is sustained, as to the degree of satisfaction and efficiency of the bookkeeping system then in use by the Publisher.
If that system is satisfactory from the standpoint of the Postal Service and does not place an unreasonable burden upon the Publisher, then this proceeding should be dismissed.
If, after the exertion of reasonable effort on behalf of the Postal Service to cooperate with the Publisher in the establishment of an adequate bookkeeping system there still remains something to be desired in that system, this proceeding should be reopened for the purpose of examination into the record-keeping system in effect at that time.
I have considered the proposed findings of fact and conclusions of law of both Counsel, and those findings of fact and conclusions of law are adopted to the extent here indicated. Otherwise, such proposed findings of fact and conclusions of law are denied for the reasons that they are not supported by the weight of the evidence, or they are contrary to law, or they are immaterial insofar as this proceeding is concerned. There is no impediment to the parties' getting together and providing for the establishment of an adequate bookkeeping system at the earliest opportunity.
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