In the Matter of the Complaint Against PROGRESSIVE SALES PROGRESSIVE SALES GROUP Box 310 at New Rochelle, New York 10804 P.S. Docket No. 5/23; 10/20/76 Lussier, Edward F. APPEARANCES FOR COMPLAINANT: H. Richard Hefner, Esq. Law Department U. S. Postal Service Washington, D.C. APPEARANCES FOR RESPONDENT: John B. Amrod, Esq. Garden City, New York
Respondent has taken an appeal 1/ from the Initial Decision of Chief Administrative Law Judge William A. Duvall which recommended the issuance of an order under 39 United States Code s3005 after finding Respondent engaged in a scheme or device for obtaining money or property through the mails through false representations.
Respondent's three exceptions to the Initial Decision will be taken up individually. The first is to the exclusion by Judge Duvall of certain evidence offered by Respondent at the hearing of the case. The proffered evidence consisted of writings on the subject of ginseng, one of the components of Respondent's product. Respondent quotes that portion of the applicable Rules of Practice, found in Part 952 of 39 CFR, which reads as follows:
"?952.18 Evidence.
(a) Except as otherwise provided in these rules, the rules of evidence governing civil proceedings in matters not involving trial by jury in the courts of the United States shall govern. However, such rules may be relaxed to the extent that the presiding officer deems proper to insure a fair hearing. The presiding officer shall exclude irrelevant, immaterial or repetitious evidence." In so doing Respondent implies that Judge Duvall somehow abused is discretion in not relaxing the rules of evidence to accept the writings. That such is not the case is made obvious by the fact that subparagraph (e) of the same section 952.18 expressly provides that:
"(e) Authoritative writings of the medical or other sciences, may be admitted in evidence but only through the testimony of expert witnesses or by stipulation." Since no proper foundation for the proffered evidence was laid Judge Duvall properly excluded it. Accordingly, Respondent's exception to his so doing is disallowed.
Respondent's second exception is to the finding of fact that the representations made by Respondent are false. Attached as an appendix to this decision for ready reference is the same appendix which was attached to the Initial Decision illustrating the representations charged in the Complaint and the advertisement which was the basis therefor. Respondent contends that the testimony of the medical witness produced by the Complainant at the hearing is not substantial evidence sufficient to warrant the conclusion that the representations are materially false. It contends in this respect that the excluded evidence contradicts the testimony of Complainant's medical expert and should be taken as so weakening it as to render it an inappropriate basis for the ultimate conclusion of falsity. This argument is clearly without merit and must be rejected.
The record is more than adequate to substantially support the factual conclusion of material falsity of the representations and Respondent's second exception is disallowed. For other cases treating with the issue of the weight of medical testimony in false representation proceedings, see Skinny Suit, P.S. Docket No. 3/44 (Feb. 19, 1976), and Roger Laboratories, Inc., P.S. Docket No. 4/123 (April 14, 1976). In this connection Respondent quotes, out of context, Lynch v. Blount, 330 F.Supp. 689 (S.D. N.Y. 1971), aff'd 404 U.S. 1007 (1972) as stating at page 693 that the proof must "substantially support the finding that the false statements were made as part of a scheme to defraud." On the contrary that statement was contained in a part of the decision expressly pointing out the lack of any legal requirement to prove a knowing scheme to defraud. The court was merely commenting that if in a given case the order would put the seller out of business "so much the better" if the proofs support the finding that the false statements were made as part of a scheme to defraud.
The other two cases referred to by Respondent, namely Baslee Products Corp. v. USPS, 356 F.Supp. 841 (D.C. N.J. 1973) and Institute for Weight Control v. Klassen, 348 F.Supp. 1304 (D.C. N.J. 1972), aff'd 474 F.2d 1338 (1973), support Complainant's position in the case rather than Respondent's.
Upon a review of the record and arguments on appeal, Respondent's exceptions must be denied in their entirety. The Initial Decision is hereby affirmed and a remedial order under the provisions of 39 U.S.C. § 3005 is being issued contemporaneously with this decision.