In the Matter of the Complaint Against: ROSS 7401 Walkermill Road at District Heights, Maryland 20027 P.S. Docket No. 4/6111/24/75
Duvall, William A., Chief Administrative Law Judge H. Richard Hefner, Esq., Law Department, United States Postal Service, Washington, D.C., for Complainant
Samuel T. Ross, Jr., 7401 Walkermill Road, District Heights, Maryland, for Respondent
Before: William A. Duvall, Chief Administrative Law Judge
This proceeding was initiated on August 27, 1975, when the General Counsel for the United States Postal Service, the Complainant, filed a Complaint in which it is alleged that Ross at 7401 Walkermill Road, District Heights, Maryland, 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 of Title 39, United States Code.
In the Complaint, it is alleged that the Respondent attracts attention to his enterprise by means of advertising matter which is disseminated to the public and that this advertising matter is calculated and intended to induce readers to remit money or property through the mails to the Respondent. The specific representations which the Complainant states that the Respondent makes, which representations are alleged to be both material and false, are as follows:
"(a) Persons answering Respondent's advertisement will be employed 'STUFFING ENVELOPES]'
"(b) Respondent will compensate persons employed 'STUFFING ENVELOPES]' at a rate of '$750.00 PER THOUSAND]'"
The Respondent filed an Answer to the Complaint in which it is stated that the representations which Respondent is charged with making indicate that the advertising matter used by the Respondent has been misread; that the Respondent does not offer employment to the readers of his advertisement but that he offers only to give information to his customers as to the steps they can take to enter the business of stuffing envelopes.
This matter came on for hearing on November 5, 1975, and at this hearing Respondent was not represented either in person or by counsel. In this connection, Section 952.11(b) of the Rules of Practice provides as follows:
"(b) If the respondent files an answer but fails to appear at the hearing, the presiding officer shall receive complainant's evidence and render an initial decision."
That procedure will be followed in this case.
As the witness for the Complainant in this proceeding, counsel called Inspector Thomas P. Murphy, who has been a United States Postal Inspector for five years. During the course of his employment as a Postal Inspector, Mr. Murphy had his attention drawn to the activities of the Respondent in this proceeding. Inspector Murphy received complaints from persons who had responded to the advertisement used by this Respondent. In addition, an example of the advertisement used by the Respondent was received in evidence as it appeared on page 165 of the February 1975 issue of "Popular Mechanics." That advertisement reads as follows:
"$750.00 PER THOUSAND] STUFFING ENVELOPES] Details 25. ROSS, 7401 Walkermill, District Heights, Maryland 20027."
As part of his investigation of this situation, Inspector Murphy addressed a letter to the Respondent at the address shown in the Respondent's advertisement on February 18, 1975. In this letter, Inspector Murphy, using his own name and address, transmitted 25 cents and stated that he had seen the advertisement in "Popular Mechanics" and would like to know more about the proposition. Inspector Murphy received no response to that order. Later, on August 28, 1975, Inspector Murphy sent a similar order to Respondent and enclosed with the order the 25 cents that was charged for the information. Again, the Inspector received no reply from the Respondent to this order.
As a further step in the investigation of this proceeding, the Inspector contacted approximately 150 to 175 persons who had responded to an advertisement identical, or very similar, to the one which was received in evidence as Complainant's Exhibit A. Of the total number of persons contacted in this matter by Inspector Murphy, replies were received from approximately 130 people. One of these persons furnished Inspector Murphy with Respondent's literature received by the customer as a result of his response to the Respondent's advertisement. These pieces of literature were received in evidence as Complainant's Exhibits F, G and H.
Complainant's Exhibit F is a form letter to the customer from the Respondent, and it is signed "S. Ross." It extols the benefits of employing the plan of operation offered by Respondent. And the substance of it is that it tells the customer that he can earn $165 a week working for about an hour a day and that if he worked as much as two hours a day, he could double his earnings to $330 per week.
With that form letter to this particular customer, there were enclosed two circulars -- Complainant's Exhibit G, which is a blue circular, and Complainant's Exhibit H, which is a green circular.
On Complainant's Exhibit G, the information which is on Complainant's Exhibit F is largely repeated in capsule form. At the bottom of that exhibit is an order form addressed to S. Ross, 7401 Walkermill Road, District Heights, Maryland 20027. In that order form, the customer is asked to indicate that he wants to start his own business, and he is to enclose $10 by check or money order to get the plan offered for sale by the Respondent. Exhibit G contains printing on only one side.
Complainant's Exhibit H is printed on both sides. Again, there is a restatement of the benefits to be derived from purchasing Respondent's product. There is also mention of a new type of enterprise under which a person is said to be able to earn money by clipping items from newspapers.
Also, on one side of Complainant's Exhibit H is an order blank addressed to the Respondent. On this order blank there are places by which the customer can indicate whether he wishes to order the plan for profits -- which is the envelope-stuffing plan for $5.00; or the newspaper clipping plan -- which the customer may order for $5.00; or both plans - which the customer may order for $7.50. At the bottom of that order blank is the statement: "Your order shipped same day as received."
It previously has been indicated that Inspector Murphy received no replies when he ordered the information which the Respondent advertised that he would furnish for 25 cents. Of the 130 people who responded to the questionnaire sent to them by the investigating inspector, 20 people indicated that they had sent in the initial 25 cents to the Respondent and that they had received the circular matter sent out by the Respondent. Upon reading that circular matter, they did nothing further.
Twenty-six persons indicated that they had sent 25 cents to the Respondent and received nothing. That 26 does not include the two letters sent to the Respondent by Inspector Murphy. Fourteen individuals indicated that they had sent in the quarters to get the circular matter and that later they had sent in $7.50 to the Respondent but that they received nothing from the Respondent in exchange for their $7.50.
There were six persons who remitted $5.00 to the Respondent in response to the solicitations and the circular matter who received nothing for $5.00 remittances. Out of the entire 130 persons who responded to the Postal Inspector's questionnaire, there was not one who indicated satisfaction with his dealings with the Respondent.
Not all of the facts that have just been recited relate directly to the issues in this case, however. The issues in this case are whether the Respondent makes the representations which are set forth in the Complaint.
In arriving at the answer to this question, consideration must be given to the finding in the case of Donaldson v. Read Magazine, 333 U.S. 178 at page 189, in which the Supreme Court of the United States said that advertisements should be interpreted:: "***in the light of the effect [they] would most probably produce on ordinary minds."
In Gottlieb v. Schaffer, 141 Fed. Supp. 7 at page 16, the Court, after referring to the above-quoted language in Read, concluded that the [Postal] statute was intended to protect:
"The gullible and the simple, even though they do not reach the level of the 'ordinary mind.'" The Court made the further statement: "The purpose of the Postal statute is to protect the unwary and the unsuspecting, as well as the knowledgeable or worldywise--those who are 'trusting as well as suspicious.' The public includes 'that vast multitude, the ignorant, the unthinking and the credulous.' The fact that informed and sophisticated persons would laugh off or even be amused by obviously false and absurd statements in an advertisement does not detract from their power to deceive the ignorant, gullible and less experienced."
In the case of Borg-Johnson Electronics, Incorporated v. Christenberry, 169 Fed. Supp. 746, the Court stated, in substance, that the predecessor of the present statute was violated in each instance in which an advertiser led a prospective customer to believe that he was going to get, in exchange for the price paid by the customer, something that was of greater value than that which the customer actually would receive.
When the advertisement used by Respondent in this case is measured against the remarks of the various courts in the cases just cited, and taking into account the fact that the evidence in this record establishes that 20 people who sent in their 25 cents and received the circular matter of Respondent but did not pursue the matter any further, it is a reasonable inference that there are persons who responded to this advertisement who received less for their money than they expected to receive, and it is certain that they were not offered employment by the Respondent in the activity of stuffing envelopes at the rate of $750 per thousand.
The evidence in this case indicates and clearly establishes that these representations which this Respondent makes, at least as his advertisement will be naturally interpreted by a portion of the population, are false in several respects.
They are false for one reason in that the Respondent furnishes nothing to a rather large percentage of the persons who respond to these advertisements.
They are false in that when a customer responds to this advertisement, he really gets no details as to how to enter the business of stuffing envelopes for the Respondent or for anybody else. What the customer actually receives is a come-on to order other material, at substantially increased prices, and to remit those increased prices to the Respondent. Since many, if not most, of the orders sent in by persons answering Respondent's solicitations go unanswered, it is obvious that Respondent will not pay "$750.00 PER THOUSAND" or any other remuneration. In view of all of the testimony and the evidence in this record, it is concluded that the Respondent is engaged in the business of falsely offering employment to anyone responding to his advertisement. In connection with the promotion of this business, the Respondent uses the United States mail. In the conduct of his business, the Respondent makes the representations which are set forth in the Complaint. The representations found to have been made by the Respondent are materially false, as matters of fact.
Upon the basis of the foregoing findings, it is concluded, as a matter of law, that 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.
It follows, from the foregoing findings of fact and conclusions of law, that an order of the type for which provision is made in 39 United States Code 3005 should be issued against this Respondent.
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