In the Matter of the Petition by ) March 8, 1973 ) MARVIN LEVIN, PUBLISHER ) 8453 S.W. 132nd Street ) Miami, Florida 33156 ) ) Denial of Application for Second- ) Class Mail Privileges for "EXECUTIVE ) BEVERAGE JOURNAL" ) P.S. Docket No. 1/28 APPEARANCES: Marvin Levin, pro se 8453 S.W. 132nd Street Miami, Florida 33156 Petitioner Arthur S. Cahn, Esq. Law Department United States Postal Service Washington, D.C. 20260 for Respondent Wenchel, Adam G.
This proceeding is before the Judicial Officer upon the appeal of the Director, Mail Classification Division, Finance Department, U.S. Postal Service, from the Administrative Law Judge's Initial Decision holding "Executive Beverage Journal" to be entitled to admission to the second-class mail.
Prior to publication of "Executive Beverage Journal" (hereafter EBJ), Marvin Levin, its publisher, was publishing, and he continues to publish, "Southern Beverage Journal" (hereafter SBJ). The latter publication is issued in 35 editions and is intended for free circulation. It consists of listings of the prices charged by various distributors of alcoholic beverages together with other advertising matter and some editorial or reading matter. Each of the 35 editions covers a particular region and each distributor pays for th insertion of his price lists. The editorial matter and substantially all of the display advertising is the same in the various editions of SBJ. EBJ was developed as a publication of interest to executives in the beverage industry and consists of the same reading matter, substantially the same display advertising as contained in SBJ, but is predominantly composed of compilations of all the price lists in the various editions of SBJ.
Upon review of Mr. Levin's application for a second-class permit for EBJ, the Director, Office of Mail Classification, denied the application by a letter of May 19, 1971. He was requested to give further consideration to the matter and confirmed his denial in a letter dated July 14, 1971, amplifying the basis for the initial denial. The publisher thereupon filed a petition appealing from the Director's action. A hearing ensued after which the Administrative Law Judge issued the Initial Decision favorable to the publisher.
The Director has made three contentions concerning "Executive Beverage Journal", any one of which, if sustained, would form a basis for denying Respondent the second-class mail permit. These are:
1. Is designed primarily for advertising purposes;
2. Is designed primarily for free circulation;
3. Does not have a legitimate list of subscribers.
The primarily underpinning of these contentions is Respondent's basic position that EBJ is an edition of SBJ rather than an independent publication. If that position is correct, it follows that EBJ cannot be considered other than a publication designed primarily for advertising purposes and for free circulation as contended in 1 and 2. A separate question would exist as to whether the paid subscriptions to EBJ would form a basis for a legitimate list of subscribers for the combined publication. On the other hand if EBJ is a separate publication, contentions 2 and 3 fall and contention 1 presents the separate question of whether payment for insertion of the price lists in SBJ makes them advertising when published in EBJ.
Further analysis, however, indicates that determination of the publisher's entitlement to the second-class permit can be made by answering the question of whether the price lists are advertising in EBJ.
If the price lists are not considered advertising in EBJ, then the preponderance of the editorial, i.e., non-advertising content of EBJ would be different from the editorial content of SBJ. On the other hand if they are advertising in EBJ, then EBJ would be ineligible for a second-class mail permit as grossly exceeding the 75% limit on advertising content.
The Director is correct in his view concerning advertising to the extent that the appropriate assumption is that payment for printing an advertisement in one publication in the absence of countervailing factors should also be deemed to be payment for printing the same advertisement in other publications of the same publisher.
In the course of the hearing, the Petitioner, Mr. Levin, testified that the publication of their price lists in EBJ does not serve the interests of the distributors, since the audience is not composed of potential customers, but the information in the lists is of great interest and concern to the subscribers. 1/ The Director did not seek to rebut this testimony or to show in what way any listing constituted advertising, except to point to the fact that the publisher had received compensation for its publication in SBJ. Under the circumstances of this case and without the aid of clarification by regulation, I must accept the Administrative Law Judge's conclusion that the publisher's testimony in this regard should be credited and conclude as did the Administrative Law Judge that the publisher has shown that the price lists are not advertising in EBJ.
The Director's brief on appeal cites criteria he states must be met for two publications of a single publisher, using considerable common material, to be considered as separate publications.
"The pricelists are scrutinized with great concern and interest for purely functional sales reasons. The listings are revealing of who is selling what through which distributor at what price. It also shows what new brands entered what local market. What brands are being dropped." (Tr. p. 31, 11. 9-14, 17-21) These are:
"(1) The contents of the controlled circulation publication are prepared for circulation to a different audience and community than covered by the paid circulation newspaper.
"(2) There must be a 20 percent editorial difference between the paid circulation newspaper and controlled circulation newspaper."
No source or authority is cited for these criteria. However, even if valid, these criteria are no obstacle to admitting EBJ to second-class mail. The Director does not contend that EBJ is not prepared for circulation to a different audience than SBJ reaches, and for the reasons given above, EBJ meets the second criterion.
After the Initial Decision was issued, Counsel for the Director attempted to introduce as an issue in the proceeding whether, even if the price lists are not advertising, the publisher should be denied a second-class permit for EBJ because it does not have the essential characteristics of a periodical. The contention is that being primarily composed of price lists, EBJ does not meet the definition of a periodical given in applicable Supreme Court opinions.
In his original letter of May 19, 1971, denying the application, the Director gave as the reason for denying the application that "'An examination of a copy of the February 1971 issue of the publication indicates that it is designed primarily for advertising purposes and it does not constitute a periodical within the meaning of the above law.'"
That denial was confirmed and amplified by the Director's letter of July 14, 1971, in which he stressed the interrelationship of SBJ and EBJ and stressed the status of the price lists as advertising.
The Director's answer does not allege that EBJ lacks the characteristics of a periodical publication other than that it is designed primarily for advertising purposes and fails to meet the circulation requirements.
Certainly, if the language of the May 19, 1971, ruling had been intended to mean more than that EBJ was not a periodical under postal regulations because it is designed primarily for advertising purposes, it was unfair both to the publisher and to the Administrative Law Judge to suppress that meaning. During the course of the hearing the Director's Counsel did not suggest the objection now raised and did not do so even in the posthearing brief. The first suggestion that the content of the non-advertising portion of the publication was a matter in issue was in a motion to remand filed after the Initial Decision was entered.
It is difficult to understand why Counsel seeks to bring an entirely new issue into this proceeding for the first time some 13 months after the petition was filed and after hearing and the Initial Decision. He could have had no basis to believe that the Administrative Law Judge would deal with that question in the Initial Decision because even if the issue had been raised by the initial denial it had clearly been abandoned. 2/ Elementary fairness compels the conclusion that it is too late to bring this issue into this proceeding. If the Director believes that the content of EBJ precludes its having the requisite characteristics of a periodical under applicable law, he may seek, after the grant of the permit, to revoke it unless he is bound by a commitment not to do so. 3/ Whether the objection lately raised is a sound basis for revocation is not in issue here, but will be considered should a later proceeding develop.
1. The reasons given by the Director of Mail Classification in his letters of May 19, 1971, and July 14, 1971, are insufficient to form a basis for denying the publication for a second-class mail permit for EBJ.
2. The Initial Decision of the Administrative Law Judge is affirmed and the denial of the application for a permit is set aside.
3. The application for a permit is remanded to the Director for the issuance of a second-class mail permit for EBJ.
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1/ "* * * the subscribers to this publication represent the top officials associated with the manufacture or sale or distribution of wine and liquor. Price listings of competitive brands would hardly compel a Seagram executive to run to the telephone to order a case of Schenley because it is a little cheaper than his own brand."