June 2, 1972
In the Matter of the Complaint Against
INSTITUTE FOR WEIGHT CONTROL, INC.[1]
20 N. Van Brunt Street
at
Englewood, New Jersey 07631
P.S. Docket No. 1/96
APPEARANCES:
James J. Robertson, Esq.
H. Richard Hefner, Esq.
Law Department
United States Postal Service
Washington, DC 20260
for Complainant
Milton Bass, Esq.
Bass & Ullman
342 Madison Avenue
New York, New York 10017
for Respondent
POSTAL SERVICE DECISION[2]
Background
This Proceeding was initiated on May 17, 1972, by the filing of a complaint by the General Counsel, United States Postal Service, charging the Respondent with conducting a scheme or device for obtaining money or property through the mails by means of false representations in violation of 39 U.S.C 3005. In essence, the false representations charged in the complaint concern the nature of Respondent's product known as Skini-Minis, specifically representations concerning the efficacy of that product as a weight-reduction agent, presumably for overweight persons.
On June 8, 1972, the Respondent moved in accordance with applicable rules of procedure for an expedited hearing before the Judicial Officer and both parties moved for issuance of an oral decision at the conclusion of the hearing. The expedited hearing before the Judicial Officer was granted and the ruling on the request for an oral decision was deferred until the evidence was heard. It has not been granted.
Respondent's answer filed on June 7, 1972, denied both that the representations charged were made by the Respondent and that the representations actually made in its advertising material are materially false. Respondent, however, agrees that it uses the mails to obtain remittances of money for its product, Skini-Minis, by means of an advertisement, a copy of which is attached to the complaint.
The answer further noted that the appropriate Respondent in this case would be the Institute for Weight Control, Inc., rather than the caption initially used and consented to an amendment of the caption for that purpose. At the commencement of the hearing, the caption was ordered changed accordingly.
The Estoppel Defense
The answer also raised the affirmative defense of estoppel based upon the claim of the prior submission to the General Counsel of the advertising material attached to the complaint in this docket number following a disposition of a prior proceeding.
It developed during the course of the hearing that the prior proceeding referred to was P.O.D. Docket No. 3/89 captioned In the Matter of the Complaint Against Barbizon Weight Control Systems, Inc. The filing of a complaint in that case on May 26, 1971, resulted in the execution of a compromise agreement in the standard form and the issuance of an order by the Chief Hearing Examiner to suspend proceedings in that case indefinitely.
Subsequently, the Complainant filed a Petition for Order Based Upon Breach of Compromise Agreement to which were annexed a copy of the compromise agreement, an affidavit of a Postal Inspector stating that he had caused three test purchases of Skini-Mini caps to be made, and copies of certain documents in support of the affidavit. Thereafter, the Respondent wrote to the Consumer Protection Office, Law Department of the Postal Service, explaining that any orders filled in violation of the compromise agreement had been filled through inadvertence, stating that Respondent's new advertising was in full compliance with the agreement, and enclosing copies of three advertisements, one using the name Barbizon Weight Control Systems, Inc., a second one using Barbizon Health Control Systems, Inc., and a third, Barbizon Systems. Although the ad using the name Barbizon Health Control Systems, Inc., does contain the statement "Take one Skini-Mini daily and follow Barbizon's calorie control plan", this reference to the calorie control plan does not appear in the same manner in the other two advertisements.
After receipt of that letter, the Consumer Protection Office filed a motion to dismiss without prejudice stating it had doubts as to whether the compromise agreement has in fact been breached as alleged in the petition. The Judicial Officer, accordingly, dismissed the petition without prejudice.
As is frequently the case, the state of the law on estoppel against the government is not clear in all its applications. Probably as good a statement as exists was given by the court in United States v. Lazy F C Ranch, 324 F. Supp. 698 (1971) at page 701 as follows: "In short, the state of the law in this circuit now appears to be that in the absence of some particular sovereign objective necessary to orderly government, and where morals and justice so require, the government may be estopped by the acts of its employees." Of course, the problem with this statement of law, as is often the case, lies in its application to a particular case. I cannot say with a certainty that estoppel should never be applied in proceedings under 39 U.S.C. 3005. However, I do not believe this is an appropriate case in which to apply estoppel.
There is a conflict in the testimony as to whether any agreement was reached by implication as to future advertising during the course of the meeting between representatives of Barbizon and the Consumer Protection Office on June 15, 1971, in connection with the execution of the compromise agreement. Respondent's former vice president testified in effect it was his understanding that an accommodation had been reached suggesting an implied acceptance of revision in Respondent's advertising and that Mr. Hefner was present on behalf of the Post Office Department at the time the discussion took place. Mr. Hefner, on the other hand, testified he did not understand that such an accommodation had been reached during that portion of the meeting that he was present.
Assessing the situation from another view, it is not reasonable to believe that the Post Office Department attorneys would have accepted as compliance with the compromise agreement, advertising which was substantially similar to the advertising which formed the basis of the complaint and the Barbizon case.
The Petition for Order Based Upon the Breach of Compromise Agreement was predicated, as indicated above, by purchases purportedly in response to the original advertisement. Dismissal of that petition without prejudice decided no more than that those purchases, which were explained away, were not a proper basis upon which a breach order should be issued. While subsequent advertising contrary to the compromise agreement might also be a breach, that was not the breach alleged in the petition.
Under these circumstances, I find there is no basis for applying estoppel against the Postal Service in this matter. The case of Mark Eden v. Lee, 437 F.2d 1077 (1970), in the Ninth Circuit, to which Respondent refers, holds only that in that case the breach of the compromise agreement had not been established.
The Medical Evidence and Findings of Fact
Medical experts testified for both sides in this proceeding and that testimony was extensive. There was some disagreement among these witnesses; there was also some agreement among all three about the product involved here.
Skini-Minis contain a substantial number of ingredients. All but two of them are vitamins and minerals which all parties agree are of value only in assuring that persons under a rigid diet will receive an intake of the appropriate vitamins and minerals. The more active ingredients are benzocaine and sodium carboxymethylcellulose. The former is intended to alleviate hunger pains in the stomach and the latter is intended to cause a reduction in hunger by a sensation of fullness in the stomach. There is disagreement among the medical experts as to the efficacy of the ingredients mentioned, particularly in the quantities involved in the product.
Considering the evidence as a whole, I find the benzocaine in the quantity here involved would not appreciably affect the users' appetite or hunger. Sodium carboxymethylcellulose in sufficient quantities could cause a loss of appetite or hunger to some degree but this is not determinative of whether the representations made in Respondent's advertising are true or false.
The only evidence before me as to the extent to which the stomach would be filled by a Skini-Mini tablet is that in the testimony of Dr. Cordaro who estimates the size of the mass produced by the amount of the sodium carboxymethylcellulose contained in a Skini-Mini to be approximately that of a walnut. Since the stomach capacity is approximately one quart, the degree of filling indicated would no be substantial.
We turn now to the representations which the Complainant charges are made in the advertising. These are:
1. That the purchaser of Skini-Minis can through their daily use lose ten pounds in two weeks;
2. That Skini-Minis ingredients produce sufficient bulk in the stomach to give its users a full feeling and thereby allow its users to avoid excessive caloric intake which will have some substantial effect on desired weight loss;
3. That Skini-Minis are an effective aid to appetite control; and
4. That Skini-Minis will have a substantial and material contribution to a weight loss of at least ten pounds in two weeks without the necessity of adhering to a dietary regimen.
The advertisement involved in this case, Complainant's Exhibit 1, contains the headline, "LOSE 10 POUNDS IN 2 WEEKS OR YOUR MONEY BACK" followed by the sentence, Skini-Minis are completely safe, contain no amphetamines or habit-forming drugs." The advertisement further states: "The timed release ingredient helps fill your stomach, helps keep you from overeating and helps you shed those unwanted pounds." A further portion of the advertisement states: "Take one Skini-Mini daily. If you haven't lost at least 10 pounds at the end of a 2-week period let us know and we'll return your money no questions asked." The advertisement does not contain any reference to a dietary regimen although, as pointed out, it does refer to helping you from overeating.
I find Representations 1, 3 and 4 are made in the advertisement. While I believe that Representation 2 is substantially made, I do not make a finding with respect to it.
It is clear from the testimony of all the medical witnesses that aside from increasing the need for calories through such means as exercise, the only manner in which weight can be effectively lost is through reduction of caloric intake.
The purchaser of Skini-Mini also gets with the product diet plans which are in evidence as Complainant's Exhibit 4. It appears clear that substantial weight loss can be effected if people adhere to the diet plan. However, the advertisement involved here does not suggest adherence to a diet plan either the one furnished or any other, but indicates that with the use of Skini-Minis the nature desire for food will reduce sufficiently to effect the loss of ten pounds of weight in two weeks. From all the evidence presented, it is quite clear that the result cannot be achieved in this manner but must be coupled with a conscious effort to reduce caloric intake. Thus, I find that Representations 1, 3 and 4 are false.
Conclusion of Law
In light of the findings made above and of all the facts and circumstances shown in the record, I conclude that as a matter of law, Respondent is engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations within the meaning of 39 U.S. Code 3005. Accordingly, a remedial order pursuant to that law will be issued against the Respondent herein.[3]
Adam G. Wenchel
Judicial Officer
[1] The original caption of the proceeding was Jay A. Kaplan d/b/a Institute for Weight Control. At the commencement of the hearing (Transcript, page 3), it was amended to read as shown here.
[2] Transcribed from oral decision rendered at the close of the hearing held June 13 and 14, 1972. Corrections in grammar as well as nonsubstantive editorial changes have been made.
[3] As indicated at page 522 of the Transcript, so long as the order under 39 U.S.C. 3007 is outstanding, the remedial order under 39 U.S.C. 3005 will be issued only after notice to Respondent's Counsel of record.