In the Matter of the Complaint Against DORSET HOUSE 1199 Broadway at New York, New York 10001 and CLUB RATIO P. O. Box #566 at Cobourg, Ontario, Canada P.S. Docket No. 2/14; APPEARANCES: Thomas A. Ziebarth, Esq. Law Department U. S. Postal Service Washington, D.C. 20260 for Complaiant Charles B. Chernofsky, Esq. One Blue Hill Plaza Pearl River, New York 10965 for Respondent
The Initial Decision in the above-entitled matter upholding the allegations of the complaint and recommending the issuance of a false representation order was issued orally at the conclusion of the hearing and was subsequently reduced to writing. Respondent appealed.
The complaint charges that Respondent has made various false representations in its advertisement soliciting mail order sales of its "Ratio Diet" for weight reduction.
Respondent contends that no remedial order should be issued under 39 U.S.C. 3005 in the absence of complaints from the public. Respondent's attempt to determine whether such complaints had been received was frustrated by the Administrative Law Judge's ruling that testimony on the subject would be inadmissible.
The issue raised by Respondent was settled in Farley v. Heininger, 105 F.2d 79 (CADC 1939), in which the court stated:
"The decisive factor, therefore, is not whether 'any one complains of fraud, or was in fact defrauded', but whether the mails are being used to project a scheme which may result in obtaining money from members of the public by means of false and fraudulent statements."
The Administrative Law Judge properly excluded testimony as to whether the Postal Service had received complaints from the public.
The Initial Decision found Respondent made the representations charged in the complaint. These are:
"(a) That adherence to the 'Ratio Diet' regimen is certain to cause a weight loss of 9 to 12 pounds from problem areas in one week;
"(b) That an obese person following the 'Ratio Diet' can lose 12 pounds of fat in five days and as much as 3 pounds in one day;
"(c) That built-up, excess body fat will be rapidly devoured by the dieter's body chemistry while adhering to the 'Ratio Diet' regimen;
"(d) That the 'Ratio Diet' allows the dieter to eat as much as he desires without counting calories or measuring quantities of food;
"(e) That the weight loss achieved by adherence to the 'Ratio Diet' regimen will be permanent; and
"(f) That the 'Ratio Diet' is a safe, nutritionally sound weight-loss regimen which may be followed indefinitely without medical supervision by the average obese person until he has achieved is proper weight."
Respondent argues that a "refund policy" more generally called a "money back guarantee" negatives any representation that all users will attain the results claimed. As used in Respondent's advertisements (Complainant's Exhibits CX-1 - CX-5) the offer of a refund is clearly intended as an inducement to purchase by assuring the potential purchaser that he will not bear the risk of failure of the program to live up to the promises made for it.
One portion of the advertisement states:
"Guaranteed to melt up to twelve pounds in a week from problem areas: records reveal only seven cases in a thousand reporting less than satisfactory results."
The terms "Guaranteed" and the "satisfactory results" are defined in the refund offer. That offer states:
"They pledge a refund if you fail to shed 9-12 pounds the first week, so don't waste another second suffering while ugly fat robs you of attractive youthful vitality."
Clearly the advertisement represents that in 99.3% of the cases a weight loss of 9 to 12 pounds will be achieved in one week. That high a percentage for practical purposes equates to all. I cannot accept Respondent's quibble that 99.3% is not perfect. It is doubtful that representation of success for all users would be found to be materially false if the claimed results were achieved in 99.3% of the cases. Respondent cites no authority to the contrary.
The proceeding centers on charged representations (a) and (b) in which specific amounts of weight loss are alleged to be represented as achievable by following Respondent's program. Respondent contends the two alleged representations are so contradictory that "no one presented with both would place any validity on them as a promise being held out to all."
However, representation (b) relates to the benefits achievable by obese persons. Representation (a) is not so limited. The lesser, but still startling claim, of achievable weight loss for all under (a) is not inconsistent with a claim under (b) of a higher loss for the obese.
Respondent also argues that his advertisements only report case histories and viewed in that light the advertisements do not make the representations charged. In support of that proposition, Respondent cites the headline in two of his advertisements (CX 4 and 5).
"Reducers Rejoice] 12 lbs. Of Fat 'Eaten' Away In Only 5 Days."
Respondent, as stated above, contends this is only a report of what happened to one individual. In fact, the purpose of the headline is to induce readers to believe they will achieve similar results by following Respondent's program. The introductory words "Reducers Rejoice" can only be intended to cause readers to apply what follows to themselves. Those words negate any inference that the advertiser is reporting an isolated instance. Moreover, the headlines in the other three advertisements put into evidence (CX 1-3) directly represent that "To Lose 12 lbs. In Only 1 Week - Eat] Eat] Eat]" Respondent suggests that a person requiring 3500 calories to maintain his body weight "would lose 5 pounds of mass in a week if he followed the diet (approximately 1,000 calories per day)."
Of course, this statement, even if accepted, does not negate the finding of falsity as to representations (a) and (b). "Five pounds of mass in a week" is a far cry from "9 to 12 pounds in a week" or "12 pounds of fat in 5 days". Moreover, there is no basis for the assumption that Respondent's diet restricts the user to 1,000 calories a day.
The medical testimony clearly establishes that while it may be possible to lose 9 to 12 pounds a week in body mass, fat and water (Tr. p. 53), such a weight loss would occur only in an exceptional case. 1/ A review of the record reveals no basis for overturning Judge Lewis' evaluation of the medical testimony and the conclusions he reached on the basis of that testimony. Accordingly, the exceptions as to representations (a) and (b) are denied.
Respondent has not excepted to the findings that representations (c) and (d) are made. It is clear that these representations were made and there is no reason to disturb the findings in the Initial Decision that they are false.
Respondent urges that the Initial Decision found that representation (e) is false because no weight loss will be permanent. The basis for holding the representation to be false was quite different. It was that the alleged weight maintenance program prescribed for use after weight reduction had been achieved was too vague to act as an assurance that the user would maintain the weight loss.
Respondent excepts to the finding of an implied representation of safety. Apparently he takes the position that he has no obligation to disclose to potential customers any substantial dangers that may be inherent in the program. That position cannot be accepted. See 67 Am. Jur. 2d Sales § 460 et seq. See also the Postal Service Decision in Slimtyme Co., P.S. Docket No. 2/11.
Respondent argues that the policy announced in the Postal Service Decision in Parker Publishing Co., P.O.D. Docket No. 3/80, should be applied here. However, a reading of the advertisement shows that unlike Parker what is being sold is not a "book", but a program of weight reduction. See Lynch v. Blount, 330 F.Supp. 689 (SDNY 1971), aff'd 404 U.S. 1007.
All of Respondent's exceptions have been considered and are disallowed. The Initial Decision is affirmed. Pursuant to 39 U.S.C. 3005 a remedial order is being issued contemporaneously with this decision.
06/13/73
Wenchel, Adam G.
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