In the Matter of the Complaints Against: SHORE PRODUCTS at Box 174, Edison, New Jersey 08817 and at P. O. Box 427, Bronxville, New York 10708 and TAM COMPANY at 1 Wolfs Lane, Pelham, New York 10803 and SHORE PRODUCTS at Box 174, Edison, New Jersey 08817 and SHORE PRODUCTS at Box 214, New Hampton, New York 10958 P.S. Docket Nos. 5/97 and 5/98 12/22/76 Duvall, William A.; Chief Administrative Law Judge Janice B. Adams, Esq. Law Department United States Postal Service Washington, D.C., for Complainant Conrad J. Lynn, Esq. 233 Broadway, New York, New York, for Respondent Before: William A. Duvall, Chief Administrative Law Judge
Transcribed from oral decision as rendered at close of hearing held December 2, 1976. Minor language changes have been made, but the substance of the decision is unchanged.
These cases were initiated, respectively, on October 27, 1976, in the case of P.S. Docket No. 5/97, and on November 2, 1976, in the case of P.S. Docket No. 5/98.
The procedural steps will be described somewhat later. The Complaints in both cases charge the companies named therein, namely, Shore Products, Box 174, Edison, New Jersey, and Shore Products, Box 214, at New Hampton, New York, with conducting a scheme or device for obtaining money or property through the mails by means of false representations within the meaning of Section 3005 of Title 39, United States Code. Because of evidence received at the hearing the Complaints on motion of Complainant have been amended to include the following names and addresses: Tam Company, 1 Wolfs Lane, Pelham, New York, and Shore Products, P. O. Box 427, Bronxville, New York. Those amendments relate to P.S. Docket No. 5/97. The procedural history with respect to P.S. Docket No. 5/98 is regular, which is to say that the required steps were taken in a timely manner by the Respondent.
The situation is somewhat different with respect to P.S. Docket No. 5/97. In P.S. Docket No. 5/97 the Complaint was served on the Respondent on November 3 and, for the record, let it be indicated that all dates mentioned occur in the year 1976. Thus, the answer was due November 18. On November 22 Complainant filed a motion for default judgment, based on the fact that no answer had been filed by the Respondent within the time prescribed in the appropriate Rules of Practice, specifically, 39 CFR 952.11.
On November 22, however, there was filed with the Docket Clerk a Notice of Appearance by Conrad J. Lynn, Esq. at 233 Broadway, New York. This Notice was dated November 18. In the Notice it was stated that a Memorandum of Law was to follow.
On November 23, in a telephone conversation with Mr. Lynn, I told him that under the Rules of Practice he was already in default, but that if he intended to file an answer to the Complaint he should do so immediately. Mr. Lynn stated that he did not have a copy of the Rules of Practice, which had been sent to his client, but he did say that the answer and a Memorandum of Law would be mailed that day. No action was taken with respect to the motion for the issuance of a default order.
The answer to the Complaint and the Memorandum of Law were received and docketed on November 26. (At this point it may be just as well to state that the answers in both cases are identical, or substantially so.) In the answers the Respondent denies that it claims that the product will clear up or eliminate stretchmarks or discolorations or clear up other skin conditions permanently. The Respondent says, further, that the charges are merely the Complainant's opinions and that there is no charge of deliberate deception. The Respondent states that there is a refund offer, if persons are dissatisfied with their purchases, and that there is no proof of failure to make a refund. And, finally, the Respondent states that it will not appear at this hearing, but will submit the Memorandum of Law, and as a separate document there was submitted at the same time as the filing of the answers the Memorandum of Law.
While the document which has been referred to as an answer has what may be considered the form of an answer, again it does not meet the requirements of the Rules of Practice - specifically, Section 952.10(c) wherein it is provided that the answer shall be "signed personally by an individual respondent, or in the case of a partnership by one of the partners, or, in the case of a corporation or association, by an officer thereof."
On November 29, Complainant's Counsel filed a motion to strike Respondent's answer because of the fact that the answer was not signed by the Respondent, as required by the Rules of Practice, the provisions of which have just been read into the record. The Complainant again requested the issuance of a default order, predicated on the Respondent's failure to file a proper answer in conformance with the requirements of 952.11(a) of the Rules of Practice. Again, however, the motion to strike the answer and the request for a default order were, in effect, denied, although the denial is not in writing. The denial took the form of proceeding with the hearing.
The fact of the matter is that both of the motions filed by Complainant were well taken, and there exist, and did exist, ample grounds for the granting of both of the motions. The fact that these motions were denied in this instance is not to be regarded as a precedent for the future. The denial was based on the representation by Respondent's Counsel that he had not been furnished with and had not seen the copy of the Rules of Practice which had been sent to his client, the Respondent. These Rules are found in Part 952 of Title 39, Code of Federal Regulations, and Respondent's Counsel has specifically referred to that source. In addition, a separate copy of the Rules of Practice will be mailed promptly to Respondent's Counsel.
In the Memorandum of Law submitted by Respondent's Counsel the Respondent admits the use of the advertisements which are attached to the Complaints in both cases.
Respondent in the Memorandum of Law makes the affirmative allegation that racial discrimination motivated the Complainant in the filing and prosecution of these Complaints. He indicates that he is one of only two black persons in the mail order business east of the Mississippi, and that to the best of his knowledge no white person in this type of business is being proceeded against for similar activities. He then cites what he says are examples of advertisements that have appeared in various publications.
Other cases in which respondents located in places east of the Mississippi who have been the subjects of proceedings similar to this one for their activities in the mail order business are in Docket Nos. 4/152, 4/172, 4/178, 5/5, 5/6, 5/12 and 5/14. The foregoing is a list of cases that have been the subjects of Complaints filed by this Complainant within the past four months. This fact dispels the argument of this Respondent that there are no other persons, or few persons other than himself, who are in the mail order business east of the Mississippi against whom such proceedings have been brought.
Respondent next avers that his Constitutional rights are being violated by virtue of the two proceedings. In that connection, the Respondent cites the cases of Detroit Bank v. United States, 317 U.S. 329 and Carter v. Jury Commissioners of Greene County, 396 U.S., he says 520, but the citation should be 320 at page 343. In addition, in connection with P.S. Docket No. 5/98 he cites the case of Walker v. Popenave as the Respondent spells it, but the actual spelling of the name of the Defendant in that case is Popenoe, 80 App. D.C. 129, 149 F.2d 511.
The Detroit Bank case was one in which the Supreme Court affirmed the judgment of the District Court, reported at 41 F. Supp. 41, enforcing at the suit of the government an unrecorded tax lien on real property assessed as part of a decedent's estate. I am at a loss to find a reason for the citation of this case in the instant proceeding, because so far as I am able to discern, it has no relation to, it provides no precedent for, and certainly does not support the position of the Respondent in this proceeding.
In Carter, the court affirmed the decision of the lower court, which enjoined the Jury Commissioners and their clerks from systematically excluding Negroes from the jury rolls, and directed them to compile a jury list in accordance with the laws of the state of Alabama and constitutional principles. The Jury Commissioners were also ordered to submit a report setting forth the manner in which they had carried out the court order. In that case, there had been a showing of discriminatory action in the selection of members of the Grand Jury in Greene County. In this proceeding in which we are involved, the Respondent has made no showing that the Complainant is proceeding in a discriminatory manner. And the Complainant has denied that he is proceeding in such manner. Conclusory allegations and opinions which are set forth in a pleading, wholly unsupported by any oral or documentary evidence, are entitled to no weight and they are of no probative force or effect.
The record in this case, if it establishes anything on this point, establishes that unusual consideration has been extended to this Respondent in providing the Respondent with this hearing, despite varied and substantial failures to comply with the reasonable requirements of the Rules of Practice.
Any one of the failures which have been alluded to heretofore, particularly with respect to P.S. Docket No. 5/97, would be sufficient to warrant the summary decision of the case, or the striking of the answer and the issuance of the default order.
In the case of Walker v. Popenoe, the United States Court of Appeals for the District of Columbia Circuit held that a pamphlet entitled, "Preparing for Marriage" was not obscene within the meaning of 18 U.S. Code 334, and its author and publisher could not be barred from mailing it. Further, the Court held that the Order of the Postmaster General purporting to bar the pamphlet from the mails was issued without notice and hearing, and, hence, the Order was for that reason a denial of due process.
The Popenoe case, therefore, has no bearing whatsoever on the present proceeding. The purpose of our being here is that, after due notice and after the extension of unusual consideration, the Respondent has been accorded a full opportunity for hearing. That the Respondent elected not to appear either in person or by attorney at this hearing in no way diminishes the fact that Respondent has been accorded full procedural due process.
Next, it will be appropriate to dispose of some of the points raised in the answer filed on behalf of the Respondent.
In the first paragraph of his answer Respondent denies only that it represents that the promised result will be permanent. Thus, in effect, the Respondent admits making the other representations stated in the Complaint. Under Section 952.10(b) of the Rules of Practice any facts alleged in the Complaint which are not denied are expressly admitted, and no further evidence as to these facts need be adduced at the hearing. Nevertheless, we will go beyond the requirements of the Rules of Practice, and we will discuss the testimony with respect to the efficacy of the products and their capability to produce the promised results, if the products are used as directed.
In the second paragraph of his answer, the Respondent says that the charges in the Complaint are simply the statement of the Complainant's opinions, and there is no charge of deliberate deception. Half of that statement is correct. It obviously is the opinion of the Complainant that the Respondent in making its misrepresentations is operating within the meaning of the provisions of 39 U.S. Code 3005.
The second part of Respondent's statement quoted above from the answer, namely, that there is no charge of deliberate deception, indicates that Respondent's Counsel is under the impression or belief that there must be an attempt to deceive established on the part of the Respondent in order for the Complainant to prevail in this type of proceeding. The fact of the matter is, however, that by Public Law 90-590, approved October 17, 1968, the provisions of 39 U.S. Code 4005 were amended to obviate the need to prove an element of intent or fraud in Postal proceedings under that section. Later, Section 4005 became Section 3005 of Title 39, under the Postal Reorganization Act, Public Law 91-375, approved August 12, 1970.
The third point in Respondent's answer is that there is a refund offer for customers who are dissatisfied with their purchases from Respondent, and that there is no charge in the Complaint that the Respondent fails to make good on its refund offer.
This argument was disposed of in the case of Borg-Johnson Electronics v. Christenberry, 169 F. Supp. 746, at 751, where the Court said, "When it appears that an advertiser deliberately induces its patrons to purchase its product in the belief that its value far exceeds its true worth it is sufficient to support a finding that a fraudulent scheme was being conducted." The Court continued by saying, "This is so, even where there is a promise to refund the purchase price should the article sold prove unsatisfactory." There, the Court cites the case of Farley v. Heininger, 70 App. D.C. 200, 105 F.2d 79, at 84, certiorari denied 308 U.S. 587. Borg-Johnson is a case that arose when it was necessary to prove the element of intent to defraud before the Complainant could succeed in its proceedings. But that has no effect on the holding with respect to the refund offer.
Having addressed the points raised in the Respondent's answer, it is now appropriate to proceed to the charges of the Complainant.
A copy of the charges in the Complaint in P.S. Docket No. 5/97 will be attached to this decision as Appendix A. A copy of the advertisement appearing in the September 26, 1976, issue of Modern People will be attached to this decision as Appendix A-1.
A copy of the charges in the Complaint in P.S. Docket No. 5/98 will be attached to this decision as Appendix B, and a copy of the advertisement appearing in the September 1976 issue of Modern Screen will be attached to this decision as Appendix B-1.
In each case the Respondent had denied only that it represents that the respective products will produce permanent results in terms of what it offers in its advertising material. To this extent, I agree with the Respondent. I do not believe that the fair reading of the advertising materials used by the Respondent will create in the mind of the average reader that the use of the various products as directed will produce, on a permanent basis, the results which the Respondent holds out.
With that exception, a comparison of the charges in the Complaints with the statements in the respective advertisements on which the charges are based is all that is required to enable one to see that the Respondent does make, except as above indicated, the representations set forth in the Complaint.
It remains to be determined whether these representations found to be made by the Respondent are true or false.
Testifying with respect to this question was Vincent F. Cordaro, M.D., a doctor of medicine, who by virtue of his employment, his experience, his education and training, is well qualified to testify with respect to these matters. Dr. Cordaro testified that there really is no such thing as the literal rejuvenation of the skin. It is possible, however, that the skin may be made to appear less old, and more youthful, in certain circumstances, but in order to accomplish this result the remedies of surgery or even, sometimes, just washing with soap and water are necessary.
When a person has large pores there is nothing that can be done short of the use of X-rays or surgical procedures that would have the effect of decreasing the size of the pores. The size of the pores on the skin of the individual is determined by heredity, and there is no product which can be topically applied that will have the effect of reducing the size of the skin pores.
Oiliness can be remedied temporarily, perhaps even by the application of this product, but that relief is of short duration.
This product has nothing in it which would bring about relief for cases of acne. Neither would the use of the product eliminate pimples or wrinkles. The product might temporarily cause the top surface of the blackhead to be removed, but, again, that result is only temporary, and it would not follow that the use of Respondent's product, Pure Skin or New Skin, would improve the appearance of blackheads in every case.
Since Respondent's product remains on the surface of the skin, there is nothing in the product or connected with the use of the product which will strengthen the underlying tissues, and therefore cause a lifting of sagging facial tissues.
The medical testimony is to the effect that the use of Respondent's product, known as Pure Skin or New Skin, will not cause the user to have clear, smooth, baby-like skin after five days or any other number of days, so far as that's concerned.
With respect to the product sold by Respondent and known as Gege Lotion, Dr. Cordaro indicated that it will not remove ugly stretchmarks or improve uneven, unsightly discoloration. These terms are said by Dr. Cordaro to be descriptive of the condition known as stretchmarks. These conditions result, as a rule, from what the doctor terms as fractures of the skin's surface, due to pregnancy in most instances, or, sometimes, to rapid loss of weight. These stretchmarks appear like breaks in the normal color and tone of the skin and have less substance, that is to say less fat tissue, than adjoining skin and the skin which lies immediately underneath the stretchmark. Dr. Cordaro testified that nothing but plastic surgery will eliminate stretchmarks. Certainly, the use of Gege Lotion will not have that result. Nor will the use of Gege Lotion restore color and tone to the skin which shows on its surface the presence of stretchmarks.
Summarizing the evidence of record in this proceeding, it is found:
1. That the Respondent does advertise its products in publications of wide circulation.
2. In the conduct of its business the Respondent does solicit remittances of money through the mails for its various products.
3. Except as previously indicated, the Respondent does make the representations which are set forth in the Complaint.
4. Except that Complainant did not sustain the burden of proving the falsity of the claim that Pure Skin or New Skin will temporarily relieve oiliness of the skin, the representations found to have been made by the Respondent are medically false as matters of fact.
Based on the foregoing findings of fact, 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 within the meaning of Section 3005 of Title 39, United States Code.
It follows, from the foregoing findings of fact and conclusion of law, that an order of the type provided in 39 U.S. Code 3005 should be issued against the Respondent, under the names covered by these Complaints.