In the Matter of the Complaint Against BEAUTI-BREAST OF PARIS Post Office Box 3725 at Beverly Hills, California 90212 and 2875 Bates Road at Montreal, P.Q., Quebec, Canada P.S. Docket No. 1/140; APPEARANCES: Robert Ullman, Esq. Bass & Ullman 747 Third Avenue New York, New York 10017 for Respondent Thomas A. Ziebarth, Esq. Law Department United States Postal Service Washington, D.C. 20260 for Complainant
This proceeding is on appeal to the undersigned from the Initial Decision rendered by Chief Administrative Law Judge Duvall in which he recommended the issuance of an order under 39 U.S.C. § 3005 after concluding that Respondent was engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representations in violation of that statute.
Respondent's points of disagreement with the Initial Decision, which will be taken up in the order presented, take the form of the following exceptions:
"1. Respondent excepts to the rendering of the Initial Decision in that inherent in such decision was an evaluation of conflicting testimony from opposing expert witnesses, and evaluation of the demeanor of witnesses under direct and cross examination and a judgment as to creditability of testimony by a substituted Administrative Law Judge who did not preside at the hearing of testimony and the receipt of evidence in this proceeding.
"2. Respondent excepts to the finding that the term 'bustline' in respondent's advertisement is equivalent to the term 'breasts' and that representations as to gaining an increase in the female 'bustline' are equivalent to a representation of enlarging the female breast.
"3. Respondent excepts to the finding that respondent represents that the Hydrolator and cremes will contribute to an increase in the overall measurements of the female chest.
"4. Respondent excepts to the finding that its advertisement represents that Beauti-Breast Plan will reverse the tendency to sagging and aging in the female breasts.
"5. Respondent excepts to the finding that the representations actually made for its products are false.
"6. Respondent excepts to a final disposition herein which is inconsistent with the disposition of a prior proceeding involving a competitor of respondent.
"7. Respondent excepts to the Chief Administrative Law Judge's conclusion of law that an order as provided in 39 U.S.C. § 3005 should be issued against this Respondent."
The first exception attacks the validity of the Initial Decision on the basis that since the administrative law judge who heard the case retired from Federal service a decision by a substitute administrative law judge should not have been rendered without affording Respondent a de novo hearing. Administrative Law Judge John Lewis presided at the hearing which concluded on November 28, 1972. The filing of proposed findings of fact and conclusions of law by the parties was completed by early March
1973. In July 1973 Judge Lewis wrote to Respondent advising that he had retired from Federal service effective June 30, 1973, and asking whether Respondent had any objection to his continuing on the case explaining that the Postal Service had requested him to do so but that there was some difference of opinion with the Civil Service Commission regarding his eligibility to do so. On August 7, 1973, Respondent's counsel replied that he did "not desire to raise any objection to your continuing as Administrative Law Judge". On November 30, 1973, Chief Administrative Law Judge William A. Duvall issued an order, served upon Respondent on December 3, 1973, reassigning the case to himself. The record reveals no further communications from Respondent until after the issuance of the Initial Decision some ten months later in September 1974.
Respondent cites Section 5(d) of the Administrative Procedure Act, 5 U.S.C. § 554(d), requiring that--
"The employee who presides at the reception of evidence * * * shall make the recommended decision or initial decision * * * unless he becomes unavailable to the agency".
Citing the case of Gamble-Skogmo, Inc. v. Federal Trade Commission, 211 F.2d 106 (8th Cir. 1954), Appellant says:
"Conceding that Administrative Law Judge Lewis became unavailable to the agency, the law is clear that this exception to the requirement that the initial decision must be rendered by the examiner who presided at the hearing is not operative when the demeanor of witnesses, the weighing of controverted testimony neither of which is inherently incredible, and credibility evaluation are essential to the rendering of the initial decision."
In the Gamble-Skogmo case the court was faced with a factual issue of whether a wholesale distributor was inducing its retailers not to handle the merchandise of other distributors. The court found that the decision of the substitute examiner was based "in controlling measure" upon the credibility evaluation he made between the irreconcilable testimony of the distributor's officers and the retailers. In VanTeslaar v. Bender, 365 F.Supp. 1007 (D.C. Md. 1973), also cited by Respondent, the factual issue involved an alleged assault by a merchant marine officer upon a superior officer where he, the superior officer, and a third witness told directly contradictory stories of the event.
In the instant case it is clear to me that the decision does not rest upon a determination of credibility of witnesses. Respondent identifies certain findings which it contends establish the contrary. It points to the finding on page 12 that an actual increase in chest girth of two inches after one Beauti-Breast treatment is a physiological impossibility and to the finding on page 17 that some of the user witnesses claimed results which are physiologically impossible as examples of this credibility evaluation. Only one such witness, Mrs. Deanne Hanley, testified to a two-inch increase in bustline measurement after one session of Respondent's program (Tr. 246). Mrs. Hanley's record, in evidence as Respondent's Exhibit 4 (RX 4), reveals that the initial measurement was "(Normal Posture)". Moreover, it is apparent that the finding on page 12 regarding an "actual increase" taken in the context of the paragraph in which it is found, relates to a permanent muscle enlargement and not to any temporary enlargement of the breast as discussed on page 15 of the Initial Decision. Mr. James Hanley, Deanne Hanley's husband, was called by Respondent as an expert witness in physical fitness and the totality of his testimony with respect to increase in the bustline as a result of underlying muscle development resulting from certain prescribed exercises does ot give the slightest basis for concluding that such an increase could come from one half-hour Beauti-Breast session.
The variables in obtaining precise measurements along with the testimony of the expert witnesses of both parties fully support the findings without any resort to a credibility evaluation. What is in issue is not whether the witnesses followed the Beauti-Breast Plan or whether honest measurements were made but rather the degree of accuracy of the measurements and the real cause for any recorded increase.
As another example of a credibility evaluation Respondent points to the finding on page 17 that one of the factors to be taken into account in discounting the testimony of users was that some were on medications which could affect the measurements. This obviously is a finding relating to the weight to be given to the conclusions which could reasonably be drawn from the testimony rather than a credibility evaluation of the witness. Respondent contends that the following statement in the decision referring to, but not identifying, other reasons for discounting the user testimony is proof that a credibility evaluation was involved. The reasons stated were more than ample but two reasons not stated in that paragraph are readily apparent in the lack of controlled precision in the taking of the measurements and the effect of "corrected posture".
Respondent also singles out the finding on page 15 that the official report of Respondent's expert witness, Dr. Gerald Klaz, reveals his own misgivings about the increase in measurements reported in his tests. Respondent considers this finding a "very substantial credibility evaluation" pointing out that Dr. Klaz gave considerable testimony concerning how the recommended exercises would have an effect on breast configuration and increasing the overall girth of the female.
The statement in Dr. Klaz' report which Judge Duvall made reference to is--
"It is a well known medical fact that the breasts are composed mainly of glandular and fatty tissue and that there is very little that can be done to increase these tissues aside from hormonal stimulation or cosmetic surgery. This program relies on the fact that the average woman is not in the best of physical condition, and has need for improved posture and muscle and skin tone."
Judge Duvall had correctly found on page 14 that Dr. Klaz' report is careful to state what the subjects--not Dr. Klaz--had to say about the test in terms of their beliefs of their accomplishments and satisfaction with the program.
Not unrelatedly, but somewhat inconsistently, Respondent contends that the citation on page 14 to a similar medical opinion by Complainant's expert witness, Dr. William J. Evans, ignores Dr. Klaz' testimony that changes in body weight can affect breast size and is, therefore, another credibility evaluation. That contention falls of its own weight.
Respondent would also read the findings on pages 15 and 16 with respect to Dr. Weilerstein's testimony criticizing the tests run by Respondent's witnesses, Dr. Klaz and Mr. Hanley, and the references to the testimony of Dr. Mahmoud Mourad on page 13 as other examples of credibility evaluations. However, there is no basis to conclude that these findings are the result of choosing between irreconcilable testimony of the witnesses. On the contrary the findings have support on the record as a whole and the contention that they require an evaluation of the credibility of the witnesses is not in any way apparent.
Although this first exception has been treated at some length it is necessary to add that there is a further flaw to its validity in this case. In both the Gamble-Skogmo and VanTeslaar cases, cited above, a timely request was made for a de novo hearing when the original examiner became unavailable, which request was denied in each instance. In the subject case Respondent was put on notice that the case was reassigned to Judge Duvall at a time when all that was left to be done was to write the Initial Decision. Respondent remained silent for a period of almost ten months and only raised objection to that reassignment after a decision was rendered adverse to its position. Although the facts are not identical, I believe that the conclusion of the court in Braswell Motor Freight Lines, Inc. v. U.S., 271 F.Supp. 906 (W.D. Tex. 1967), has application here. Respondent's credibility evaluation objection, even if it had merit, which I find it doe not, comes too late in the proceeding. This exception is disallowed.
The second exception, citing page 4, the first ten lines of page 5 and page 18, is to the finding that the term "bustline" in Respondent's advertising is equivalent to the term "breasts" and that representations as to gaining an increase in the female "bustline" are equivalent to a representation of enlarging the female breast. Respondent's argument here capitalizes on the use of the term "bustline" in its advertisement and ignores the repetitive use of the term "breast". The prominence in the advertising photograph of the Hydrolator, which is a contour cup attached to a hose for spray massage of the breast, the cremes, and the well-endowed model, all relate to, and emphasize, the breasts. This exception is disallowed.
Respondent's third exception is to the finding at pages 7, 18, and 19 that Respondent represents that the Hydrolator and cremes which are a part of its Beauti-Breast Plan will contribute to an increase in the overall measurements of the female chest. Its first argument on this exception relates to the cremes.
The complaint allegations regarding representations made by Respondent in its advertising do not mention the cremes specifically. The statements with respect to the cremes on pages 18 and 19 of the Initial Decision under "Summary" refer to the stipulation of the parties that the use of the creme will not enlarge the female breasts and will have no effect upon the size, shape, contour or degree of firmness of the female breasts nor upon the overall circumferential measurement of the female chest (CX 2D). The statement made on page 19 of the Initial Decision that "To represent that the device and the creams will aid in accomplishing the results promised - even under Respondent's definition - is clearly to misrepresent the value and efficacy of these items" must be read in conjunction with the statement on page 18 that "Respondent represents that to accomplish increased 'bustline,' his program, consisting of exercises, hydrolator, cream massage and diet, must be followed." In this connection the order form which is part of the advertisement is for the entire package at a price of $19.98. Complaint allegations 3(a), (b), (c) and (d) all refer to the "Beauti-Breast Plan". It was appropriate therefore to make findings regarding the creme because it is an integral part of the "Plan". 1/
"A fair reading of respondent's advertisement, however, clearly indicates that the Beauti-Breast Program consists of at least three steps and that the Hydrodynamic Beauti-Breast Contour Cup is but one of those three steps. Respondent respectfully submits that no greater emphasis is put in its advertisement on the Contour Cup than on the other two steps, i.e., the Bustline Increase Guide and the Beauti-Breast Cremes. Complaint counsel might just as well have substituted the 'Bustline Increase Guide' or the 'Beauti-Breast Cremes' for the 'Hydrodynamic Beauti-Breast Contour Cup' in paragraph 3(e) of the complaint and made the same allegations. No greater emphasis is made in respondent's advertisement for th Contour Cup than for the Bustline Increase Guide or the Breast Cremes. Each of these steps is described in simple terms with no particular prominence given to one over the other. The same holds true for the illustration in respondent's advertisement wherein all three steps of the Program are depicted, together with the model, in equal prominence, i.e., the Contour Cup, the Bustline Increase Guide and the Beauti-Breast Cremes.
"Respondent does not deny that the Hydrodynamic Beauti-Breast Contour Cup is an integral part of the Beauti-Breast Plan. So are the exercise program (the Bustline Increase Guide) and the Beauti-Breast Cremes." (Appeal Brief, pp. 21-22).
Respondent next argues that the representation alleged in complaint paragraph 3(e) unfairly singles out the Hydrolator and that all the advertisement claims for this device is that it will stimulate the breasts and increase circulation helping to firm and tone them. The representation alleged in 3(e) is:
"(e) That the 'Hydrodynamic Beauti-Breast Contour Cup' helps firm and tone-up the breasts and is an integral and essential part of the Beauti-Breast Plan and makes a material contribution to the promised physical results."
One need only look at the advertisement and Respondent's own arguments regarding what the "Plan" consists of to conclude that this representation was in fact made. Respondent's third exception is, accordingly, disallowed.
Respondent's fourth exception is to the finding on page 6 that its advertisement represents that the Beauti-Breast Plan will reverse the tendency to sagging and aging in the female breasts. Applying the criteria established in the cases cited on pages 7-9 of the Initial Decision, and for the reasons given by Judge Duvall on page 6 of the decision, I find this representation was made. This exception is disallowed.
Respondent's fifth exception is to the finding that the representations as found, are false. In support thereof Respondent recites in detail, as it did in its original brief, the evidence as it views it. It is quite clear from the record that neither the Hydrolator nor the cremes will increase the size of the breasts. Neither will exercise increase the size of the breasts although it may increase the bustline measurement as may improved posture or an increase in weight. Mr. Hanley admitted that exercise does not really firm the breasts (Tr. 220) and
Dr. Klaz' testimony regarding possible uplift effect in certain cases relates to tone and size increase of the underlying pectoralis major muscle (Tr. 306-311, 383). When all the evidence relating to the effect that the Beauti-Breast Plan will have on the prospective purchaser from the standpoint of beautifying her breasts is considered, Judge Duvall's summary most succinctly states the result. No belaboring of the evidence is necessary. The record is clear that the purchaser is not going to obtain the results that form the heart of Respondent's advertising. If the advertising had explained in clear terms what Respondent's witnesses testified the Beauti-Breast Plan is all about, the allure would be missing undoubtedly but that is the choice open to promoters of products and the fact they have this choice in the first instance is the reason for the enactment of the law which is the basis for this proceeding. Respondent's representations are false and its fifth exception is disallowed.
Respondent's sixth exception is to the disposition of this case as being inconsistent with the disposition in a prior proceeding involving a competitor. Here Respondent refers to P.O.D. Docket No. 2/204, the Mark Eden case which, after a number of administrative decisions, was ultimately decided by the 9th Circuit Court of Appeals in a decision reported at 433 F.2d 1007 (1970). That case involved the issue of whether the advertising was in breach of the terms of a settlement agreement entered into between Mark Eden and the Post Office Department. The final departmental decision clearly stated:
"It should be thoroughly understood that no statement in this decision is intended, nor should it ever be construed, in any way to be a judgment as to the truth or falsity of the representations - past, current or future - used or to be used by the Respondent in the sale of the device and the program. The entire effort and intention has been to determine, solely and in the manner agreed upon by the parties, (1) whether the Respondent breached the Affidavit of January 30, 1967, in the manner alleged in Complainant's Motion of December 12, 1967; and (2) whether the revisions of the challenged advertising cure the specific breach."
Moreover, at the time of the Mark Eden case the prior statute, 39 U.S.C. § 4005, was in effect which included the requirement for proof of scienter, intent to defraud. For whatever reasons there may have been to proceed no further with that case it is not the function of this administrative proceeding to decide whether others may properly be made the subject of complaints under 39 U.S.C. § 3005 but rather, once a complaint has been filed by proper authority (in the Postal Service, the Postal Service General Counsel or his designated representative), to decide whether the evidence produced in the course of the administrative hearing relating to the particular complaint warrants the conclusion that a statutory violation exists on the facts of the case. In this case that conclusion has been reached. Respondent's sixth exception is disallowed.
Respondent's seventh and last exception is to the conclusion just referenced. As indicated, I consider the conclusion justified by the record. The exception is disallowed and I am issuing an appropriate order under 39 U.S.C. § 3005 contemporaneously with this decision.
03/25/75
Lussier, Edward F.
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