In the Matter of the Petition by

 SMOKENDERS, INC.,
 210 Prospect Street,
 Phillipsburg, New Jersey 08865,

 Denial of Application for Second- Class Mail Privileges for "SMOKENDER WORLD"

 P.S. Docket No. 4/192
 
 January 19, 1977
 
 Rudolf Sobernheim Administrative Law Judge
 
 APPEARANCES:
 Jacquelyn Rogers President of SmokEnders, Inc. 
 210 Prospect Street
 Phillipsburg, New Jersey 08865
 for Petitioner

 Gerald E. Cerasale, Esq.
 Law Department U. S. Postal Service
 Washington, D.C. 20260 for Respondent

This is a proceeding initiated by petitioner pursuant to 39 CFR, Part 954, to contest the ruling of respondent, represented by the Director, Office of Mail Classification, Finance Group, U.S. Postal Service (hereinafter referred to as the "Director") which on 9 January 1976 denied, subject to the outcome of this proceeding, petitioner's application of 13 March 1975 for second-class mail privileges for SMOKENDER WORLD. By letter of 27 February 1976 the Director reaffirmed his ruling.

The reasons for his ruling were stated by the Director in his 9 January 1976 letter to petitioner (Resp. Ex. 9) as follows:

"'SmokEnder World' is published by Dr. Jon and Jacquelyn Rogers. It is the official publication of SmokEnders, Inc., in which Jon and Jacquelyn Rogers are also the major stockholders. The publication gives members and graduates of the SmokEnder program up-to-date scientific information about smoking as well as testimonials from other members on the subject of smoking. As such 'SmokEnder World' is auxiliary to and essentially for the advancement of the main business or calling of Dr. Jon and Jacquelyn Rogers, SmokEnders, Inc.

Section 132.226, Postal Service Manual provides that publications designed primarily for advertising purposes may not qualify for second-class mail privileges. Subsection b of that regulation provides that they include those owned or controlled by individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of the main business or calling of those who own or control them.

Publication by Dr. Jon and Jacquelyn Rogers of 'SmokEnder World' advances the business of SmokEnders, Inc., in which they own controlling stock interest. Therefore, it is concluded that the publication is designed primarily for advertising purposes and in view of the provisions of the above regulation it does not qualify for second-class mail privileges."

In response, petitioner stated its position in a letter of 26 January 1976 to the Postmaster in Phillipsburg, N.J., (Resp. Ex. 10) in substance:

"It is our position that the publication, SmokEnder World, does not in fact advance the business of SmokEnders. The business of SmokEnders is conducting Seminars which teach people how to break the smoking habit. People who have taken these Seminars are referred to as 'Graduates' of the SmokEnder Program. The publication, SmokEnder World, is mailed to these graduates who have already completed the Seminars, and are thus no longer prospects for the main business of SmokEnders."

The Director was not persuaded to modify his ruling and so informed petitioner under date of 27 February 1976 (copy att'd to compl.):

"We have noted the statements in your letter of January 26 to the Postmaster at Phillipsburg regarding our denial action. However, we still believe that 'SmokEnder World' does not qualify for second-class mail privileges because of the reason stated in our communication dated January 9, 1976. That is, it is designed primarily for advertising purposes.

Section 132.226, Postal Service Manual provides that publications designed primarily for advertising purposes may not qualify for second-class mail privileges. Subsection b of this regulation prescribes that they include those owned or controlled by individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of the main business or calling of those who own or control them.

'SmokEnder World' is the publication of SmokEnders, Inc. It is designed as an integral part of the SmokEnders program and provides reinforcement and information to those currently engaged in the smoking cessation program, as well as graduates. It promotes the value of not smoking and in this way advances the main business of SmokEnders, Inc., which is to enroll smokers in the SmokEnders program. It is not subscribed to as a separate item. Graduates of the program continue to receive it without subscribing. Therefore, 'SmokEnder World' is designed for free circulation as a benefit of membership in SmokEnders, Inc."

In this letter the Director added a second reason for denying petitioner's application to the one previously advanced that SMOKENDER WORLD was an advertising publication under Postal Service Manual (PSM) 132.226b, to wit: That it was designed primarily for free circulation (see PSM 132.227).

A hearing was held thereafter at which both parties offered testimonial evidence and at which issues of petitioner's publication were made part of the record. These were the issues for December 1974, May and November 1975, January through April 1976 and June 1976 (Resp. Ex. 1 through 8). A special edition of the June 1976 issue, addressed to physicians and other health professionals, was admitted in evidence as respondent's exhibit 12.

Both parties have filed post-hearing briefs.

1. Petitioner SmokEnders, Inc. is a New Jersey corporation incorporated in January 1969 (T 13). Jacquelyn Rogers is the founder, majority stockholder and president of the corporation (T 12-13).

2. a. It has 20 to 30 employees, including a staff director, quality control director and accountant. It trains "graduates" to act as moderators of its seminars. Such moderators receive a nominal fee only and derive their main income from their regular pursuits (T 14).

b. Its business is to teach smokers to stop smoking. It seeks to accomplish this through seminars held 6 or 7 times every year in about 30 cities (T 15). The seminars proper last for nine weeks and are preceded by an explanatory session which is free. The seminars are conducted in accordance with a method developed by petitioner's president. About 20 to 40 persons attend each seminar (T 16) and about 28,000 persons attended seminars in 1975 (T 16).

c. Seminars are announced and participants gained in the main through advertising in the news media of the area where the seminars are being conducted and on occasion by direct mail to physicians (T 15, 86).

3. a. The fee for participation in a seminar runs from $125 to $175, depending on the advertising cost incurred by petitioner in organizing one or more seminars in a particular area.

b. Participants either pay in full for the seminar prior to or at the first session or may pay in five weekly installments (T 36). At the end of the fifth week (which is an important milestone in petitioner's system) all participants are normally paid up.

c. The registration or membership forms which participants fill out prior to or at the start of the seminar (see T 17) contain the following statement:

"Membership fee in smokEnders is $ $2.00 of this amount includes subscription to 'smokEnder World' newsletter for one year."

d. Participants who drop out of a seminar prior to the end of the fifth session are entitled to refunds or credits against participation in future seminars (T 35). Such refunds include the two dollars for the subscription to SMOKENDER WORLD.

e. At the hearing the testimony of petitioner's president established that no refunds are given to those who drop out after the fifth week (T 38). They forfeit their payment, including the two dollars subscription price. Because of this forfeit few participants abandon the course after the first five weeks.

f. Petitioner's president states in her post-hearing brief (Br., p. 2) that since the hearing this policy has been changed and that those who withdraw after the fifth week receive a refund of the two dollars paid for the SMOKENDER WORLD subscription.

4. a. The initial subscription to SMOKENDER WORLD commences upon completion of the seminar and runs for one year. It can be renewed for one-year periods thereafter and some "graduates" do so (T 23).

b. Only those who have completed the seminar receive or can thereafter subscribe to SMOKENDER WORLD (T 22).

c. Free samples within the permissible limits of the postal regulations (PSM 132.461b) are distributed to members of petitioner's staff, the news media and, at least in the past, physicians and other health professionals.

d. In June 1976 a slightly modified copy (Resp. Ex. 12) of that month's issue (Resp. Ex. 8) was sent to physicians and other health professionals. This issue is hereinafter referred to as the "doctors' issue".

5. SMOKENDER WORLD is published monthly except in July, August and December. It is mailed in ca. 30,000 copies per issue (T 23).

6. Most of the text of SMOKENDER WORLD is prepared by petitioner's president. It consists of news items and of what may perhaps be described as low-key inspirational material. It also contains a listing of SmokEnder chapter addresses and of meetings for "graduates" before they were discontinued, and a "Corserv" suggestion box which the reader may cut out and send to petitioner. From time to time the publication also contains announcements of seminars to be held in the near future and "help wanted" ads for staff and field positions in SmokEnders, Inc.

7. A detailed description of the SMOKENDER WORLD issues in the record will illustrate the foregoing summary.

a. The earliest issue of record is that for December 1974 (Resp. Ex. 1). It contains several news items, an appeal to graduates to help in staffing seminars to be conducted throughout the United States by the May Company, a "want ad" for a chief financial officer of petitioner, and a list of monthly "attitude fix meetings" to be held in New Jersey as a follow-up for persons having completed petitioner's seminars.

b. Next follows the May 1975 issue (Resp. Ex. 2), double in length the December 1974 issue or four instead of two pages. It contains news stories related to smoking, SmokEnder chapter news, letter columns and a story about petitioner's Corserv program. This program is intended to induce corporations to allow SmokEnders seminars to be conducted on their premises for their employees. A coupon in which seminar graduates may suggest the names of companies by which they are employed as prospects is printed next to the story.

c. The November 1975 four-page issue (Resp. Ex. 3) is the first of record to contain a new feature: a list of SmokEnders Chapters with addresses and telephone numbers to enable anyone interested to find out "when the next SmokEnders free opening seminars starts near" one's home. There is also the usual "Corserv" program suggestion slip. The remaining materials are general and organization news, editorial comment, poetry and what the editors seem to consider apt quotations.

d. The January 1976 issue (Resp. Ex. 4) again contains similar material and the chapter list. In addition, however, it contains a four-page list of late January seminar opening sessions and seminar starting dates in twelve states and the District of Columbia, preceded by an appeal to SmokEnders graduates to recommend a seminar opening session to smoking friends or potential re-joiners who are allowed to come back at half-price.

e. The February, March and April issues (Resp. Ex. 5, 6 and 7) follow the same pattern, with a four page opening seminar list covering 13 states, the District of Columbia and Toronto, Canada.

8. a. The June 1976 issue of SMOKENDER WORLD (Resp. Ex. 8) does not vary from the pattern of earlier 1976 issues. It does not include a four page seminar list but contains the chapter list in customary format and hearing reading as follows:

"If life insurance were available at no premium charge, who would refuse it? The investment you made in yourself with smokEnders was paid for a long time ago. There is no charge for the reinforcement insurance that will keep that investment safe and productive in terms of non-smoking rewards. Drop in and remember where you once were. You'll be all the more grateful for where you are."

b. In addition to the regular June issue (Resp. Ex. 8) petitioner ran off an additional number of copies which it mailed to physicians and other health professionals (Resp. Ex. 12). This issue was in all respect identical with the regular June issue except that the heading of the chapter list was changed to read:

"REFER YOUR SMOKING PATIENTS TO US WITH CONFIDENCE

...for smokEnders enjoys an unblemished seven-year reputation for being the very finest in our field.

The oldest and largest organization of its kind, smokEnders has earned the respect and trust of physicians, dentists, educators, health agency professionals and hospital officials throughout North America. Among them, is Dr. Jerome Jaffe of New York's Columbia Presbyterian Medical Center, with whom we conduct joint research.

In hospitals, churches, schools, universities and blue-chip corporations, tens-of-thousands of smokers have learned how to quit calmly and comfortably--without scare tactics, willpower, pain or 'climbing the walls'.

Please keep this list for easy reference. If you wish further information or additional copies, please call your local smokEnder Chapter; or contact our national headquarters at: smokEnders, Phillipsburg, New Jersey, 08865. . . . . or call (201) 454-HELP."

c. As far as the record shows, this was the first issue sent by petitioner to health practitioners soliciting them to send patients to SmokEnders seminars to break their smoking habit. The inference from the record (T 40-41; Pet'r Br., pp. 5-5A) seems clear that petitioner has continued to send out special doctors' issues of subsequent numbers of SMOKENDER WORLD. Petitioner states in its brief (Br., pp. 16-17) that the doctors' edition supersedes the sending of free samples of the publication to health practitioners and that it is mailed at third class bulk rates. Some copies appear, however, to have been sent as second-class mail within the sample limit.

9. Petitioner's president testified at the hearing that she established SMOKENDER WORLD as a channel of communication with those who had successfully completed the SmokEnders seminars but who needed reinforcement and reassurance in order not to resume smoking (T 18-19). She testified that other means of keeping contact with those who had completed the seminars and helping them to continue their new non-smoking habit, such as "attitude fix" and "speakeasy" meetings, were abandoned as ineffective (T 29-30).

10. According to petitioner, smokers block out smoking news from their consciousness. Former smokers, on the other hand, become aware of such news and their awareness reinforces their newly-acquired resolve to stop smoking (T 27).

11. Hence, SMOKENDER WORLD is not available to those attending seminars. Only those who have completed the course receive the publication as part of the "smokending" treatment.

12. The testimony (T 45 et seq .; 51 et seq .) of two highly educated witnesses who abandoned smoking after attending the seminar confirms the point of view expressed by petitioner's president that SMOKENDER WORLD performs a valuable function in keeping those who have abandoned smoking as the result of their participation in a seminar from starting to smoke again.

13. a. Respondent's mail classification specialist, on the other hand, emphasized those contents of SMOKENDER WORLD which are directed toward increasing seminar participation rather than toward consolidating the gains made by those who have completed their seminar course (T 60 et seq .). She pointed to the "want ads" for SmokEnders personnel, to the numerous appeals that "graduates" of the seminars find corporations willing to establish SmokEnder seminars for their employees, that they join petitioner's organization as moderators for seminars and that they recommend petitioner's seminars to their smoking friends who wish to stop smoking.

b. She also pointed to the June 1976 doctors' issue with its appeal to health practitioners to send their smoking patients to petitioner's seminars as another use of SMOKENDER WORLD to advance petitioner's business.

14. Petitioner, in rebuttal, emphasized that chapter and seminar lists are published principally to remind "graduates" of their privilege of attending seminar sessions (T 86) and to participate in chapter activities in case they find it helpful to do so. For referrals by "graduates" or rejoining "graduates" are few in number (T 84). Fees from such sources cover but a small fraction of the publication's cost (T 85-86).

15. Petitioner further asserted that the doctors' issues, mailed at third class rates, must be considered a separate publication because they are addressed to a readership distinct from the "graduates" which reads SMOKENDER WORLD from the point of view of patient care which differs entirely from the effect which SMOKENDER WORLD seeks to foster among those who have but recently completed its seminars. Hence, in petitioner's view, the doctors' issues should not be considered in determining whether petitioner is entitled to second-class mail privileges for SMOKENDER WORLD.

16. Based on the foregoing detailed Findings of Fact and the record as a whole I find:

a. Participants in petitioner's seminars for breaking the participants' smoking habits allocate two (2) dollars of their fee to a one-year subscription to SMOKENDER WORLD, to commence upon completion of the seminar course.

b. Those who fail to complete the seminar course receive a full refund of the subscription price.

c. While the subscription is conditioned in part on completion of the seminar course payment of the subscription price through allocation thereto of $2.00 from the seminar fee is equally necessary to receive SMOKENDER WORLD. As a matter of fact a price is paid for subscribing to SMOKENDER WORLD for one year after completion of the seminar course.

d. SMOKENDER WORLD is published for the purpose of assisting participants in petitioner's seminars in continuing abstention from smoking after completion of the seminar course and in confirming them in their newly-found habit.

e. SMOKENDER WORLD is also used by petitioner to increase participation in its seminars by smokers seeking to break their habit and to find people who will staff its seminars, chapters and headquarters. To this extent petitioner uses SMOKENDER WORLD to advance its business.

f. Each doctors' issue of SMOKENDER WORLD is identical in text and make-up with the corresponding regular issue. The only difference is that one ask health professionals and the other ask "graduates" to recommend the seminars to new participants.

g. Although petitioner uses SMOKENDER WORLD to obtain new staff and seminar participants and thus to advance its main seminar business, petitioner would not have undertaken to publish SMOKENDER WORLD if it did not serve primarily and effectively to strengthen the resolve of participants not to resume smoking after they have completed the seminar course.

1. The Postal Service Manual (PSM) provides in Part 132 in relevant part:

".225 List of Subscribers

Publications must have a legitimate list of persons who have subscribed by paying or promising to pay at a rate above nominal (see 132.228) for copies to be received during a stated time.

.226 Advertising Publications

Publications designed primarily for advertising purposes may not qualify for second-class privileges. They include:

* * *

b. Those owned or controlled by individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of the main business or calling of those who own or control them.

* * *

.227 Free Circulation Publications

Publications designed primarily for free circulation may not qualify for second-class privileges."

2. In determining whether the provisions of PSM 13.226 bar second-class mail privileges for petitioner in respect of SMOKENDER WORLD the key point is whether SMOKENDER WORLD is designed "primarily" for advertising or is conducted "as an auxiliary to and essentially for the advancement of" petitioner's main business.

3. "Primarily" means "principally", "fundamentally" or "first in importance" or "precedence". This is the commonly understood meaning of the word and nothing indicates that the word "primarily" should be given a different meaning in the first sentence of PSM 132.226. On that basis PSM 132.226 does not apply. For Petitioner's primary design in publishing SMOKENDER WORLD was and is clearly to give post-seminar support to the new non-smokers and not to gain new seminar participants. This point is clearly supported by the testimony adduced by petitioner as to the publication's purpose and the undisputed testimony that seminar participants are principally obtained through local news media advertising.

4. The application of PSM 132.226b as a bar to petitioner's second-class mail privileges for SMOKENDER WORLD requires that it be owned by a business concern and conducted both as an auxiliary and for the advancement of the concern's main business. SmokEnders, Inc. is a business concern and SMOKENDER WORLD is conducted as an auxiliary thereto at least in the sense that it is published to firm up the conversions of smokers at the completion of a seminar course into non-smokers. It is, however, not conducted for the advancement of petitioner's main business, to wit: to find continually new customers willing to pay the seminar fee and thus to keep the enterprise of petitioner and its stockholders and officers viable and prosperous. The reason is the same as before (Concl. of Law No. 3, supra ): SMOKENDER WORLD is published to assist the "graduates" of its seminars in persevering in continued smoking abstinence. Gains in seminar participation from the publication of SMOKENDER WORLD are incidental.

5. The doctors' and the regular issues of SMOKENDER WORLD published under the same title and, with one variant, with the same text, cannot be treated as different publications. Whether the different readerships addressed by different issues of a publication are separated by geography or professional calling is a distinction without difference. For further discussion and the citation of precedent see the Initial Decision in Post, Inc. Publications , P.S. Docket No. 4/163 (16 Sept. 1976), presently on appeal to the Judicial Officer.

6. There is no denying, however, that the publication of the doctors' issues of SMOKENDER WORLD adds an element of difficulty to the decision reached herein. For the doctors' issues advance the main business of petitioner, i . e ., the seminars which it conducts. Nevertheless, on the record before me, the preponderance of the evidence still favors the conclusion that as a whole SMOKENDER WORLD is not published to advance petitioner's main business. Any further tilting of the balance (if, for instance, the doctors' issues were mailed in a large rather than a small number of copies) may well lead to a conclusion opposite from that reached here. Such matters can, however, be left to a future day.

7. Accordingly, PSM 132.226 does not bar petitioner from mailing SMOKENDER WORLD at second-class mail rates.

8. Respondent also contends the SMOKENDER WORLD is designed for free circulation and that it has no legitimate subscribers because those who have subscribed thereto but fail to complete the seminar find their subscription cancelled.

a. SMOKENDER WORLD is not designed primarily for free circulation. The cost of an annual subscription is $2.00 and it is not argued that this is a nominal rate. The fact that subscriptions to the publication are open only to those who complete the seminar course or, differently stated, that completion thereof is made a condition precedent to the right to receive the publication does not cancel out the payment of the subscription price, effected by allocating thereto $2.00 of the seminar fee paid to petitioner, and convert its paid circulation into a free one.

b. Nor does a subscriber cease to be a legitimate subscriber (see PSM 132.225) because he must first fulfill a particular condition before becoming entitled to subscribe to a publication. Even if failure of the subscriber to fulfill the condition for the subscription leads to a forfeit of the subscription price already paid the subscriber would not cease to be a legitimate subscriber, at least in the situation presented by the record.

9. No authority is cited in respondent's brief for the propositions which it advances and I know of none. In any event, the change in petitioner's refund policy deprives respondent's argument (Resp. Br., Prop. Concl. of Law No. 3) of such force as it otherwise may have had.

10. Accordingly, the denial of petitioner's application for second-class mail privileges in respect of SMOKENDER WORLD was in error and should be withdrawn.