In the Matter of the Complaint Against JOE WEIDER 25 Maple Street and 55 Maple Street at Norwood, New Jersey 07648 P.S. Docket No. 2/74; 11/14/75 Lussier, Edward F. APPEARANCES FOR RESPONDENT: Lee Harter, Esq. Law Department United States Postal Service Washington, D.C. 20260 APPEARANCES FOR COMPLAINANT: Sheldon S. Lustigman, Esq. Bass, Ullman & Lustigman 747 Third Avenue New York, New York 10017
The subject case is before the undersigned on Petition by the Postal Service for a Supplemental Order against Joe Weider at 21100 Erwin Street, Woodland Hills, California 91364, for representations made in connection with the sale of the product "Slim Gard" from that address. In April 1973 a complaint was filed against Joe Weider at 25 Maple Street and 55 Maple Street, Norwood, New Jersey 07648, alleging that false representations were made in advertisements for the product "Slim Gard". A hearing was held in that proceeding and an Initial Decision was issued by the Chief Administrative Law Judge holding certain representations materially false. There was no appeal from that decision and accordingly mail stop order under 39
United States Code § 3005 was issued. The instant proceeding is brought under 39 Code of Federal Regulations § 952.30 which provides that the Postal Service General Counsel or his designated representative may request the Judicial Officer to issue a supplemental order where there is evidence of an evasion or attempted evasion of the mail stop order.
Respondent Joe Weider of the California address has filed an affidavit in opposition to the Petition for Supplemental Order averring that he is not the same respondent as in the original proceeding and further that his advertising does not make the claims to be false in the Initial Decision. He does not deny that the advertisement which is made the basis for the Petition is his advertisement or that the product is substantially the same product involved in the prior proceeding, as alleged in the Petition. After filing of the affidavit an order was issued giving the parties a specified time in which to elect to proceed to oral hearing on the matter or submit the case on the record. Petitioner responded with a memorandum in support of its Petition electing to submit without oral hearing or further supplementation of the record. In the absence of a timely response from Respondent, a further order was issued on October 22, 1975, giving Respondent until October 30, 1975, to reply to Petitioner's memorandum after which time the case would be considered ready for decision. The record indicates that Respondent received and the case is now considered ready on the record as presently constituted.
The advertisement which was the basis for the Initial Decision is attached hereto as Exhibit A. The representations which the Chief Administrative Law Judge found materially false in the original proceeding were that the use of "Slim Gard" promotes virility, strength and muscle power and that its use will result in the trimming of inches off a person's middle waist, hips and lower back without exercising. Among the subsidiary findings was the finding that the wearing of the "Slim Gard" would contribute nothing in terms of weight reduction, muscle tone, caloric expenditure or permanent water loss through perspiration and that the redistribution of body fluids caused by wearing the garment reduces the stress on the muscles thus precluding the garment's ability to provide isotonic exercise.
While the language of the advertisement here in issue (Exhibit B hereto) differs from that in the advertisement which was the basis for the Initial Decision, the representations there found to be false exist in this advertisement also. Such headlines as "MUSCLE UP] At last . . . Here's the 'MUSCLE MAKERS' you need to muscularize your body INSTANTLY] Let Joe Weider--Trainer of 'Mr. America' and 'Mr. Universe'--help you become a powerful, muscular virile man with these exclusive 'WILDCAT POWERIZERS]'" together with the order form's "Dear Joe, I want a more powerful, virile and muscular body" and the specific language under the "Slim Gard" photograph that it "may be worn completely undetected under regular 'street clothes'" and is a "Miraculous aid to slimming and firming" belie any argument that the reader should know that exercise and/or diet are the determinative ingredients of the results promised. That the advertisement also advises that "Slim Gard" "helps 'melt' flabby pounds and inches off your waist and hips while you work, play or exercise" is hardly a sufficient disclaimer. Moreover, any argument to that effect evaporates immediately when one considers the companion representations that it may be worn under regular "street clothes" and that it is a "miraculous aid to slimming and firming". Thus there is no doubt that the advertisement complained of in the Petition for a Supplemental Order makes substantially the same representations which were found materially false in the Initial Decision and that the continued use of the mails to promote "Slim Gard" under such circumstances is an evasion of that mail stop order if the respondents are the same real parties in interest as alleged in the Petition. If they are not the same then Joe Weider of the California address is entitled to have the case involving the Exhibit B advertisement tried and decided in a new proceeding brought under the Rules of Practice for false representation proceedings, 39 C.F.R. Part 952, so that he may be given the opportunity to defend against the charges of falsity of the advertising claims.
The affidavit of Joseph Weider filed in opposition to the Petition for a Supplemental Order attaches another affidavit he submitted to the Superior Court of Bergen County, New Jersey, in July 1973 in support of a civil action to have a Receiver appointed to take over the affairs of Weider Distributors, Inc., the New Jersey Corporation. 1/ There is also attached a copy of an order of the same court, same civil docket number, issued in February 1973 appointing a fiscal agent for the corporation. The Petition for Supplemental Order attaches as Exhibit E, another affidavit of Joseph Weider executed in October 1974 in apparent support of further effort to remove the fiscal agent and appoint a Receiver. The substance of the Weider affidavits is that while Joseph Weider is President and a majority stockholder, or holder by proxy of a majority of stock, of Weider Distributors, Inc., Mr. Lima, the Vice President, began a course of conduct in 1971 resulting in seizure of control and management of the corporation. Mr. Weider disclaims responsibility for the corporate acts and the advertising which formed the basis of the original Postal Service proceeding.
The end result of the court action indicated by the affidavits is not in evidence 2/ but it is obvious from Mr. Weider's own affidavits that he was President of the Respondent corporation at the time of the Postal Service proceedings, that he holds for himself or others a majority stock interest, that this interest was considered sufficient for him, up until October 1974, to engage in negotiations for financial assistance to the New Jersey corporation with interest free loans from other companies in which he had an interest, all as detailed in his October 1974 affidavit above referenced. 3/
Mr. Weider's affidavit in opposition to the Petition for Supplemental Order also attaches copies of two answers in a separate Postal Service proceeding, Docket No. 2/81, as evidence of the fact that "this is not the first time the Postal Service has been confronted with the fact that I have no responsibility for the advertising of Weider Distributors, Inc. in New Jersey which utilizes the name Joe Weider". The two answers in that proceeding which, in point of time, paralleled the filing of pleadings and hearing in the "Slim Gard" case, are signed respectively by Joseph Weider for the California respondents and by John Lima for the New Jersey respondents. All respondents there were represented by the same law firm as all respondents in this case. These pleadings contain a denial of responsibility for advertising appearing at each other's addresses. As such they are allegations and not proof.
Lastly, Mr. Weider's affidavit attaches a copy of a notice he issued in August 1975 disclaiming involvement in the New Jersey enterprise after 1971 and a copy of a notice issued by the Council of Better Business Bureaus, Inc. in August 1975 reporting that "The attorney for Joseph Weider, Weider Health & Fitness Corp., 21100 Erwin Street, Woodland Hills, Cal., has informed the Council that Mr. Weider 'has not participated for at least three years in the management or operation' of Weider Distributors, Inc., 25 Maple Street, Norwood, N.J. 07648, a company bearing the Weider name." Another letter from the Council of Better Business Bureaus, Inc. in August 1975 to a New Jersey law firm representing Mr. Weider, refers to earlier correspondence and reports that it has advised local Better Business Bureaus to delete references indicating an association between the two complaints (Exhibit 1 to Respondent's Supplemental Answer in Opposition to Petition for Supplemental Order).
If the president and majority stockholder of a corporation can personally, or through other business enterprises, engage in the identical activity prohibited by the mail stop order, by the claim that he is not bound by the initial proceedings because of internal management disputes then orders issued under the false representation statute can be evaded with impunity. Mr. Weider's office and stock interest in the corporation were such as to remove any doubt that he was a real party in interest in the original proceedings. Accordingly, whether he personally participated in the decision to utilize the advertising found violative of the statute is irrelevant. It may be noted, however, that any cleansing effect of his denial of personal responsibility for the advertisement, insofar as it might imply disapproval of the false representations utilized, is beclouded by his present advertising of "Slim Gard" in the same fashion. The 1975 notices issued by Mr. Weider and by the Council of Better Business Bureaus at his behest do not change the situation. Nor do the answers filed by Mr. Weider and Mr. Lima in P.S. Docket No. 2/81 referred to above. None of these affect his corporate legal status and obvious financial interest in the proceeding leading up to the issuance of the mail stop order.
Accordingly, the Petition for a Supplemental Mail Stop Order is granted and the terms thereof are extended to the following name and address:
Mr. Joe Weider
21100 Erwin Street
Woodland Hills, California.
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1/ In the original Postal Service proceedings against Joe Weider at the New Jersey addresses the Answer was filed on behalf of the Respondent by Weider Distributors, Inc., John Lima, Vice President, and legal representation was provided by the same law firm representing Joseph Weider in the instant proceedings for a supplemental order. The record also indicates that Mr. Weider was present during at least a portion of the hearing in July 1973.