In the Matter of the Complaint Against JAY NORRIS CORPORATION, 25 West Merrick Road at Freeport, New York 11520 P.S. Docket No. 2/120October 19, 1973
Thomas A. Ziebarth, Esq. , Law Department, United States Postal Service, Washington, D. C., for Complainant Jerold W. Dorfman, Esq. , 16 West 61st Street, New York, New York, for Respondent
Before: William A. Duvall, Chief Administrative Law Judge
1/ On August 1, 1973, on behalf of the General Counsel of the United States Postal Service, a complaint was filed in which it is alleged that Jay Norris Corporation at Freeport, New York, the Respondent, is engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representations contrary to the provisions of Section 3005, Title 39, United States Code.
The business in which the Respondent is engaged is the sale of a so-called Lincoln-Kennedy penny and the sale price of the coin is two for $1, ten for $4, twenty-five for $9, one hundred for $29.
The specific representations which have been set forth in the complaint and which are alleged to be false are as follows:
(1) That the United States Treasury Department has minted a Commemorative Lincoln Head penny with a Kennedy profile;
(2) That the Lincoln-Kennedy penny, though legal tender, is uncirculated and never released for ordinary use;
(3) That the issuance of the Lincoln-Kennedy penny is sanctioned by section 332, Title 18 U.S. Code; and
(4) That because said coin is of historical and numismatic significance, it is certain to become a collector's item that will grow and grow in value.
The first question that is to be determined is whether the Respondent uses the mail in the conduct of its business. That matter has been stipulated to and it is also established by the exhibits which have been received in evidence by stipulation.
Next, there is for consideration the question of whether the Respondent makes the representations which are set forth in the complaint. This involves an interpretation of the advertising literature used by the Respondent.
In interpreting the Respondent's advertising matter, as has been suggested by counsel, the leading case is Donaldson v. Read Magazine , 333 U.S. 178, wherein it is said that in interpreting advertising material, the interpretation is to be based upon the effect that the language would probably produce upon persons of ordinary minds and those persons include, as was found in the case of Charles of the Ritz v. Federal Trade Commission , 143 F.2d 676 at 679; "the ignorant, the unthinking and the credulous." In other words, an advertising circular or a piece of advertising matter is not to be interpreted by means of careful analysis of each word or each phrase that appears in the ad but it is to be interpreted upon the basis of its entirety and its effect upon the average person who might read it.
The charges that are in the complaint are based largely on language that has been taken directly from the advertisement, with but few exceptions.
Charge number one is that the United States Treasury Department has minted the pennies that are being sold. This language is not in haec verba in the advertising material used by the Respondent. However, to the average individual, the word "mint," itself, means that the coin that has been minted is produced or has been produced by the United States Government. People who are more sophisticated know that there are private mints but the generality of the people in the United States believe that the minting process is the process that is done by the United States Government and, most particularly, in regard to a coin.
People know that there are commemorative coins and, in fact, it's almost possible to say that the Lincoln-head penny is a commemorative coin. But, the connotation and the suggestion of the use together of the terms "penny" and "minted" convey a clear impression to the ordinary reader that this coin was produced in its entirety, that is to say with the inclusion of the Kennedy profile, by the United States Government.
The charge which is set forth in Paragraph 3(2) of the complaint is taken practically verbatim from the advertising literature used by the Respondent. The same is true with Paragraph 3(3) of the complaint and also the charge that is set forth in Paragraph 3(4) of the complaint is made up almost entirely of language that is used in the advertising material of the Respondent. Therefore, it requires very little interpretation to reach the conclusion that, as a matter of fact, the Respondent does make the representations which are set forth in the complaint.
The next matter to be disposed of is whether the representations found to have been made by the Respondent are true or false.
It is true that the United States Government minted the Lincoln penny. It is false that the United States Treasury Department or any other branch of the United States Government had anything to do with the alteration of the Lincoln penny to include the profile of former President Kennedy.
In regard to the charge that the Lincoln penny, though legal tender, is uncirculated and never released for ordinary use, I find that this charge is technically false, but that it is possible that the ordinary reader would accept one of these coins as being not released for ordinary use. Its preparation and the manner of its presentation indicates that it is intended not to be used in the ordinary manner with other pennies but I don't think that this charge in the complaint, while it is a representation that is made by the Respondent, is a material misrepresentation.
The contrary is true in regard to the representation by the Respondent that the issuance of the Lincoln-Kennedy penny is sanctioned by Section 332, Title 18, United States Code. This is all of a piece with the general impression that is created by the Respondent's advertising material that this coin is produced by the United States Government. This representation is clearly false.
The fourth representation which the Respondent makes is that the coin is of historical and numismatic significance and, therefore, it is certain to become a collector's item that will grow and grow in value. On this point, the numismatic who testified as an expert in the proceeding indicated that there were several factors which go into the question of whether a coin will be of numismatic value.
One yardstick relates to the number of coins struck. The two coins that are in evidence as E-2 and E-3 are 1973 Lincoln-head pennies and the witness testified that there was some astronomical figure, I believe it amounted to at least one billion, of these pennies that have been produced thus far in 1973 and there is no way by which the Respondent in this proceeding can prevent other entre- preneurs from treating other of these Lincoln-head pennies in the same way as the Respondent has. Therefore, the Respondent has no control whatsoever over the number of these coins that may be produced and it is not unlikely at all that if some competitor discovers that this Respondent is making a great deal of money in this enterprise that he, too, will want to get on the bandwagon.
Another yardstick by which the likelihood of increase in the value of a coin may be estimated is the condition of the coin. These coins which are in evidence have no covering on the outside of them and they are made to adhere to the card on which they are presented, apparently, by some paste or glue applied to the back of them by which they're stuck on the card. This leaves one side of the coin, namely the Lincoln-Kennedy side, exposed and its exposure causes deterioration in the appearance of the coin.
Respondent's counsel argued that it is an impossibility for anyone at this stage of this enterprise to predict that these coins will have no value from a numismatic point of view because they have too short a history on which to base any prediction. Well, if it cannot be predicted that they will be of no value, then how can it be predicted, as is done in the advertising material, "As a coin of both historical and numismatic significance, it is certainly to become a collector's item and grow and grow in value." That appears not only to be a prediction, it appears to be almost a guarantee and I don't know how one forecast can be made so positively with claimed validity and another, the opposite prediction, made by an expert, can be said to have no validity. In any event, the evidence of record in this proceeding and the only evidence on this point, is that this coin which is sold by the Respondent will not increase in value and it has no numismatic significance.
So, in summing up, it is found that Respondent does make the representations that are set forth in the complaint and it is found that all of the representations made by the Respondent are false, but that the representation which is in Paragraph 3(2) of the complaint is not a material misrepresentation.
Upon the basis of these findings of fact, I conclude, as a matter of law, that the Respondent is engaged in conducting a scheme or device for obtaining money or property through the mails contrary to the provisions of Section 3005, Title 39, United States Code.
On the basis of this record, an order as provided by the governing statute should be issued against this Respondent.
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