In the Matter of the Complaint Against JAY NORRIS CORP. 25 West Merrick Road at Freeport, New York 11521 P.S. Docket No. 4/152; 06/21/76 Lussier, Edward F. APPEARANCES FOR COMPLAINANT: DanielS. Greenberg, Esq. Law Department U.S. Postal Service Washington, D.C. APPEARANCES FOR RESPONDENT: Robert Ullman, Esq. Bass, Ullman & Lustigman New York, New York
Respondent has taken a timely appeal from the Initial Decision of the Chief Administrative Law Judge, William A. Duvall, finding certain misrepresentations in the promotion of Respondent's product, titled an "Isometric Beauty Band", and recommending the issuance of a mail stop order under the provisions of 39 United States Code § 3005. Respondent's appeal is limited to the form of the order rather than to the findings of fact or conclusions of law set forth in the Initial Decision and these are hereby affirmed.
The "Isometric Beauty Band" is advertised to be capable of lifting years off the face of the buyer. With respect to the alleged false representations Judge Duvall found that the band might cause the surface of the face to appear as if it is more firm or had a different tone or condition but that is a purely superficial appearance which would disappear immediately upon removal of the band. He found that insofar as firming, toning and conditioning of the face and strengthening of the facial muscles the use of the band would have no effect whatsoever. He found also that repeated wearing of the band would not have cumulative effects and that when the band is removed, the face reverts to the condition it was in immediately before the device was put on. As to the falsity of two other representations, namely that the band produces a lifting and smoothing of sagging skin and recontours the structure of the face, Judge Duvall found that Complainant did not sustain its burden of proof as to falsity. It is apparent from a reading of the entire decision and a review of the record that the basis for such a finding is related to the appearance created while the band was being worn by two individuals who demonstrated the product in use.
Both prior to and after the Initial Decision in this case, counsel for the parties engaged in settlement discussions without reaching agreement. Respondent considers Complainant's settlement position is unduly broad and arbitrary. Complainant considers Respondent's settlement position would frustrate the ends of the false representation statute. Both parties state their position with great conviction and each perhaps with more feeling than is conducive to settlement.
Respondent's position on appeal is that a mail stop order issued in the normal form would create a large burden upon the local post office since the address against which it would be directed is the address at which Respondent receives all of its mail in large volume. Complainant's reply raises no objection to the burden which the post office would have to shoulder to carry out the order. In this connection, Respondent's statement with respect to the relatively small amounts of mail being received in response to the false advertising serves to further highlight the cost of protection of the public in such cases. However, it does not show that a mail stop order is unnecessary in the circumstances. While the advertisements in question contained department numbers, there is no assurance that the envelopes containing responses to those advertisements would also show the particular department number and thus Respondent's suggestion that the mail stop order be limited to mail showing on the face of the envelope those department numbers is not a satisfactory solution.
The need for Respondent to open its mail at the post office to ascertain which is deliverable to it and which must be returned to senders imposes a necessary burden on both parties. However, it is appropriate to note also that when a firm utilizes the mails for the conduct of its business and in the course thereof falsely represents a product it must bear a certain burden of inconvenience normally flowing from its own actions.
A secondary issue is raised by Complainant's filing of a motion to reopen the proceedings and remand the case to the Chief Administrative Law Judge for consideration of two additional advertisements contained in Jay Norris catalogs which Complainant alleges came first to its attention after the hearing in this case. The copy in these advertisements is much briefer than in the advertisements involved in the hearing, but Complainant contends that both contain the representations found false and that the only issue is whether the representations are in fact made by the language of the advertisements.
Respondent opposes the reopening on the basis that it is unnecessary and improper. It contends that a statement it has been enclosing with shipments in response to all orders for the product subsequent to the Initial Decision renders reopening unnecessary. That statement reads:
"Dear Customer:
A question has arisen with respect to the effect of the Isometric Beauty Band on facial muscles and tissues. In order to avoid any misunderstanding, we want to be sure that you understand that the purpose of the Beauty Band is to give you the benefit of a temporary face lift and the appearance of firmer looking skin and a younger look while you wear it. If there has been any misunderstanding or if you desire to return the Band for a full refund of your purchase price for any reason, please return the Band with your refund request and we shall be pleased to process same promptly.
Very truly yours,
JAY NORRIS CORP."
The false representation statute, 39 U.S.C. § 3005, provides that the postmaster will return mail related to the product to the sender "appropriately marked as in violation of this section." It can readily be seen that the voluntary solution employed by Respondent differs in a number of important respects from that contemplated by the statute. The purchaser is not advised of the statutory violation and does not have her order and payment returned to her but rather is given advice that a "question has arisen" and the burden is placed upon her to seek a refund. It is understandable that Respondent would wish to place the instant proceeding into the most favorable light in any explanation to purchasers, or prospective purchasers, but its letter of clarification, in my judgment, falls far short of satisfying the statutory intent and thus can hardly be said to render further action on new advertisements unnecessary. Moreover, it may also be observed that, in the absence of a Consent Agreement between the parties, entrusting to the offender the execution of a procedure for the protection of the public, in lieu of a mail stop order, would be most exceptional.
Respondent also opposes the reopening contending that § 952.26 of the Rules of Practice, which provides that "Before rendering a final agency decision, the Judicial Officer may order the hearing reopened for the presentation of additional evidence by the parties," does not encompass a situation where a new issue is raised. Respondent contends that Complainant's argument on the catalog advertisements raises a new issue with respect to the term "Isometric" in the product name and it is, therefore, improper to bring it into the case at this point. Complainant counters that it only seeks a determination whether the newly discovered advertisements make any of the claims found false in the earlier advertisements.
While there is some merit in both positions, the entire matter presents more form than substance on closer evaluation. Complainant should not be able willy-nilly to present new issues at this late date. Neither should Respondent be permitted to continue a promotion by means of representations found false if such is the case. Nor are the statute and the Rules of Practice to be construed so as to provide immunity for advertisements which happen to fall within the time frame between hearing and final agency decision. The basic question here is the proper manner to air the issue.
On the basis of the record, it appears that the catalog advertisements are continuing in effect since Respondent's affidavit attached to its appeal so indicates. There is no reason to believe that the advertisements were deliberately omitted by Complainant in the proceedings culminating in hearing and decision by Judge Duvall. The product advertised is not claimed to be different in any respect from that involved in this proceeding. The question of whether the new advertisements make any of the same claims found false in the circumstances of this case is thus appropriate for resolution under § 952.30 of the Rules of Practice which permits filing of petitions for supplemental orders. It is inherent in such proceedings that different language be evaluated as to its meaning and effect. However, if Complainant desires, and it is not presently apparent that it does, to raise new issues regarding efficacy of the product other than those considered in the proceeding resulting in the Initial Decision in this case, it must file a new complaint. In view of this disposition Complainant's motion to reopen and remand is denied.
Although the above disposes of the appeal from the Initial Decision and the motion to reopen and remand, further comment is deemed advisable on the matter of the settlement proposals put forth by Respondent as an alternate to the mail stop order procedure.
Respondent's first suggestion involves its voluntary return of remittances in response to the advertisements in question together with a statement to the effect that by reason of certain questions raised by the United States Postal Service, Respondent has revised its advertising, enclosing a copy of the revised advertising and giving the consumer the opportunity to reorder on the basis of the revised advertisement. Respondent's second suggestion is that it be permitted to return remittances with the statement that the product is temporarily unavailable and advise the consumer to watch for future advertisements. Both proposals so water down the type of protection clearly intended by the postal false representation statute that, whatever might be said about their utilization by agreement of the parties in a wider Consent Agreement, neither affords a sound basis for refraining from issuing a mail stop order here. Among the objectionable aspects contained in both is the prejudgment of future advertising which would be most inappropriate in view of the function imposed upon the Judicial Officer to issue a final agency decision in such matters only after the prescribed adversary proceedings have run their course.
Respondent's third suggestion, 1/ while involving a notice with greater disclosure to purchasers than in its first two proposals, like them is subject to the threshold disability that the basic authority to negotiate and enter into Consent Agreements properly resides with the General Counsel or his
"We are returning herewith your remittance for the Isometric Beauty Band. As a result of findings made in a United States Postal Service proceeding regarding certain of the claims made on behalf of the Band, and exercises, we have agreed to advise remitters that neither the Band nor the exercises will strengthen facial muscles and tissues; nor will they permanently firm, tone, or condition the face. While it was found that the device will not induce any permanent effects, it was also found that the beauty band, while it is worn, will result in the lifting and smoothing of sagging skin and in a recontouring or reshaping of the structure of the face in terms of tightening the skin and reshaping the outer tissues of the face. If you still wish to order the Band, please send your remittance to us in the enclosed envelope."
This may be compared with the language suggested by Complainant as a portion of a broader Consent Agreement rejected by Respondent.
"We are returning herewith your remittance for the Isometric Beauty Band. As a result of objections made by the U. S. Postal Service to certain of the claims made on behalf of the band and exercises, we have agreed to advise remitters that neither the band nor the exercises will strengthen facial muscles and tissues; nor will they firm, tone, or condition the face. THE ONLY EFFECT WILL BE ONE OF TEMPORARILY LIFTING AND SMOOTHING THE SKIN WHILE THE BAND IS ACTUALLY BEING WORN. THE FACE WILL RETURN TO ITS FORMER APPEARANCE WHEN THE BAND IS REMOVED. NOR WILL REPEATED USE OF THE BAND AND EXERCISES IMPROVE THE APPEARANCE. If you still wish to order the band, please send your remittance to us in the enclosed envelope." designated representative as the complaining party. While neither the Judicial Officer nor the Administrative Law Judges of the Postal Service would be bound to accept, as a basis for dismissal or suspension of a proceeding or order, any agreement considered by them to be improperly executed, or otherwise defective in material respects on its face, this is another matter entirely from negotiating the terms of any such Consent Agreement.
Respondent is quite correct in urging that Complainant should not be allowed to dictate the wording of its disclosures but this works both ways in that the parties are involved in negotiations which are eventually intended to lead to an agreement under terms which both freely accept. While the documents filed on appeal would indicate that the parties are not as far apart as their briefs would indicate, and further effort in this regard is encouraged, their failure to reach agreement is not a matter to be resolved by direction. The best incentive to any agreement is the parties' own knowledge of the strength or weakness of their respective negotiating positions and the reasonable balancing of what is given up for what is obtained, all factors which the undersigned, and properly so, is not privy to in such cases.
The Initial Decision is affirmed. Respondent's request for institution of a procedure other than the usual mail stop order procedure is denied and an order is being issued forthwith. Complainant's motion for a reopening and remand is denied leaving it free to file a Petition for a Supplemental Order under § 952.30 if it so desires.
1/ Respondent's third suggestion involves a return of remittances with the following statement.