In the Matter of the Complaint Against WOTRA YELLOW PAGES, INC., P. O. Box 312 at Wayne, New Jersey 07470 and at Box 733, Westwood, New Jersey 07675 P.S. Docket No. 1/182 February 12, 1973 David J. Knight Administrative Law Judge James J. Robertson, Esq., Consumer Protection Office, U.S. Postal Service, Washington, D. C., for complainant. Harry A. LeBien, Esq., Gifford, Woody, Carter & Hays, One Wall Street, New York, New York 10005, and Richard J. Manfre, Esq., 40 Passaic Avenue, Passaic, New Jersey 07055, for respondent.
By complaint filed October 6, 1972, the Consumer Protection Office of the U. S. Postal Service alleges that the respondent, Wotra Yellow Pages, Inc., of Wayne, New Jersey, is engaged in a scheme or device to obtain money through the mails by means of false representations and seeks an order under 39 U.S. Code 3005. 1/ The basis for the complaint is that respondent solicits orders from prospective customers in the form of a bill or invoice which does not contain on its face the language required by 39 U.S. Code 3001(d) and section 123.46 of the Postal Service Manual.2/ This failure to indicate on the face of the solicitation that it is not a bill but an offer to sell a service,
(a) the following notice: 'This is a solicitation for the order of goods or services, or both, and not a bill, invoice, or statement of account due. You are under no obligation to make any payments on account of this offer unless you accept this offer.'; or
(b) in lieu thereof, a notice to the same effect in words which the Postal Service may prescribe."
Sec. 123.46 of the Postal Service Manual requires a notice on the face of the solicitation, "THIS IS NOT A BILL" and "THIS IS A SOLICITATION. YOU ARE UNDER NO OBLIGATION TO PAY UNLESS YOU ACCEPT THIS OFFER".
Both the statute and the Manual prescribe the size of type and format of the notice which must appear on the face of the offer. namely, a listing in an international directory of import-export businesses, is the complainant's basis for the allegation that the respondent falsely represents its service. The complaint also seeks an order under 39 U.S. Code 3001(d) declaring that the solicitation is nonmailable matter.
The respondent answered the complaint on October 30, 1972. It admits that it is engaged in mailing the solicitations described in the complaint but that those solicitations state on the reverse side:
As noted the charge amount is payable only if a bold type listing is requested, in which case remit and retain this portion for your records, otherwise simply disregarded. You are under no obligation to make any payment unless you accept this offer.
All other allegations were denied. The respondent also moved for a change in the place of hearing from Washington, D. C., and the matter came on for hearing in Newark, New Jersey, on December 18, 1972.
At the hearing, the complainant put on no witnesses. It relies on the admissions in the respondent's answer to form a prima facie case.
The respondent's one witness Karl Heinz Reimer, a citizen of West Germany and a resident of South Africa, came to this country to put the Wotra Yellow Pages into operation and is an officer and director of that company. He described the Wotra Yellow Pages as an internatioanal directory and compilation of manufacturers, importers and exporters.
He testified that the solicitation in question (attached as Appendix A hereto) was made up with the advice of counsel. It was at their suggestion that the statement be asterisked on the from side to refer the recipient to the reverse side where the language quoted in the answer was placed, to-wit: that no obligation would be incurred unless the offer was accepted. On September 28, 1972, 28,000 of these solicitations were mailed out. About 600 responses were received of which about 52 were actual subscriptions. The witness testified that 500 of these he considered as positive where the people "definitely understood this is a solicitation form and not an invoice" (Tr. 16). On October 10, 1972, a court order was entered impounding the mail at the Wayne, New Jersey, post office and about 400 pieces of mail--responses to the solicitations--are currently being held there.
A second mailing of a differently devised solicitation was made in the latter part of November 1972, after the complaint was filed, and this one contains the necessary wording on the front at the bottom right hand side. Whether the type size and format of the caveat conform to the statute and regulation was not shown.
Counsel for the complainant, in cross-examining this witness, brought out that no directory had yet been published by the respondent but he was stopped when he attempted to prove that the respondent had no intention of ever publishing any directory. Questions going to this were outside the scope of the complaint since no allegation on these issues were ever levelled. A motion was then made to amend the complaint to allege that the respondent falsely represents that the directory is an ongoing publication and that the directory will be published in the future.
By agreement of the parties, a date was set for the filing by the complainant of a written motion to amend; the respondent would be allowed 15 days to respond to that motion; and thereafter, the matter would be set for a further hearing (Tr. 36, 48-49). The hearing in progress was temporarily adjourned with the issues as born by the original complaint to be submitted on the pleadings then on file and the evidence adduced at the original hearing.
The complainant's motion to amend was filed on January 5, 1973, alleging that respondent's solicitation indicating (1) that the directory is an ongoing publication, and (2) that it will be published in the near future are false representations. It also seeks to include another address in the complaint at which the respondent allegedly receives remittances as a result of the second solicitation. The complainant states that no real defense was made at the hearing and seeks the entry of a summary order.
Respondent had until January 22, 1973, to reply to this motion. No response was received.
The unopposed motion to amend the complaint is granted. By the respondent's failure to respond to that motion, it has waived its right to a further hearing and the filing of proposed findings of fact and conclusions of law since the time for the filing of those post hearing requests was specifically reserved until the entire hearing was completed (Tr. 48-49). As to the amendments to the complaint, the respondent stands in default. See 39 C.F.R.
952.12(d) and 952.11(a).
Concerning the issues in the complaint as originally filed, I find that the respondent's solicitation does not contain the required advisory to recipients to the effect that the solicitation is but an offer and not a bill. This warning, buried on the reverse side and, at best, obtusely worded, does not satisfy the requirement of 39 U.S. COde 3001(d) requiring caveat to be unmistakenly set forth on the front side.
The question of whether a violation of section 3001(d) amounts to a false representation of section 3005 was answered in International Telex Directory , P.S. Docket No. 1/65, decided March 2, 1972. There, a solicitation containing no advisory on the front side but indicating on the back that the addressee would not be listed in the forthcoming directory unless he paid the bill was found to be in violation of section 3001(d) and the complaint--which sought the issuance of an order under section 3005--was allowed. The order issued in that case states that the respondent
. . .is engaged in conducting a scheme or device for obtaining money or property through the United States mail in violation of Section 3005 of Title 39, United States COde, by means of false representations with respect to solicita- tions in the guise of bills or statements of account not complying with 39 United States Code 3001(d).
The motion to amend the complaint, as noted above, also seeks to include another address at which respondent seeks remittances from the solicitation mailed out after the original complaint was filed. The motion alleges that respondent does not now issue a directory and that it never intends to. Those allegations have gone unchallenged and may be considered as true. See 39 C.F.R. 952.10(b). They apply not to the form of the solicitation but to the statements contained therein. The solicitation which is the subject of the original complaint reads, "WOTRA YELLOW PAGES will be the first directory. . ." and "Our forthcoming edition continuously updated. . ." and the later solicitation states, "Wotra Yellow Pages will be a giant step toward. . ." and "The publishing of the directory, to be continuously updated. . ."must be deemed as false since no directory at all is to be published. Thus the second address included in the motion to amend, based on a second solicitation which was offered and received in evidence (Ex. R-3), should be included in any order to be issued.
I also find, as the answer admits and the evidence shows, that the mail is used to receive money in response to the solicitation.
I conclude that while the respondent did violate section 3001(d) with regard to the solicitation specified in the original complaint, the entire mailing of that solicitation was completed on September 28, 1972, and nothing would be gained by declaring those to be nonmailable. That issue is moot and the complaint, to the extent that it seeks to have this solicitation declared nonmailable, is dismissed.
I further conclude that because of the violation of section 3001(d), the respondent is engaged in a scheme or device to obtain money through the mail by means of false representations and recommend that an order in accordance with 39 U.S. Code 3005 be entered. This order should be directed against the respondent at P. O. Box 312, Wayne, New Jersey, 07470, as cited in the original complaint and Box 733, Westwood, New Jersey, 07675, as cited in the motion to amend the complaint.
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