In the Matter of the Complaint Against DANCO KINGS KINGS ENTERPRISES Post Office Box 21487 Post Office Box 21517 at Fort Lauderdale, FL 33316 P.S. Docket No. 5/15; 04/15/77 Lussier, Edward F. APPEARANCES FOR COMPLAINANT: Thomas A. Ziebarth, Esq. Law Department United States Postal Service Washington, DC APPEARANCES FOR RESPONDENT: Robert L. Beals, Esq. Fort Lauderdale, Florida
This matter was originated on May 27, 1976, by the docketing of a Complaint by the Postal Service against Respondents Danco, Danzig, Kings and Kings Enterprises at Post Office Boxes 21487 and 21517 at Fort Lauderdale, Florida. The Complaint charged Respondents with engaging in a scheme to obtain money through the mails by means of false representations and sought a mail-stop order pursuant to 39 United States Code § 3005. After a hearing an Initial Decision was issued by Administrative Law Judge Quentin E. Grant recommending the issuance of a mail-stop order under the statute. An appeal was taken by Respondents to the undersigned in accordance with the applicable Rules of Practice, 39 Code of Federal Regulations Part 952. On motion of the Complainant the Complaint was dismissed as to Respondent Danzig. On September 27, 1976, a final Postal Service Decision was issued by the undersigned upholding Judge Grant's decision and a mail-stop order was issued on the same day.
On March 15, 1977, Respondents filed a motion for amendment of the mail-stop order to restrict its applicability specifically to the particular advertising in evidence in the administrative proceeding. In my absence on official business Acting Judicial Officer William A. Duvall issued a temporary suspension of that part of the mail-stop order provision which requires return of the mail to senders and advice to remitters of postal money orders. The purpose of this suspension was to permit resolution of the motion without prejudice to Respondents and at the same time to protect the public interest by detaining the mail pending resolution. He also wrote to the Postmaster explaining what mail should be released to the Respondents in accordance with the terms of the order.
On March 31, 1977, Respondents filed a Memorandum in Support of the motion for an amended order and on April 6, 1977, Complainant filed its Reply Memorandum. Neither party asked for oral hearing and none seems necessary, the parties' memorandums fully arguing their respective positions on the merits. Thus, the motion is considered ready for decision.
The mail-stop order is applicable to mail addressed to Respondents with respect to the sale of a plan for earning money at home stuffing and mailing envelopes. As in all such cases the representations found false were found in printed materials used by Respondents and placed in evidence in the administrative proceeding. The gist of the present motion is that Respondents, while using the same names and mailing addresses in selling essentially the same plan, are using other advertising material which they contend is not false but as to which the mail-stop order is being applied.
A number of exhibits, numbered C through J, representing this other advertising, were attached to a letter dated March 15, 1977, from Respondents'Counsel to Complainant's Counsel which letter with its attachments, as indicated in Acting Judicial Officer Duvall's order, above referred to, was made a part of the record at the request of Respondents' Counsel. We accept the letter and its attachments as part of the record for purposes of ruling on the motion.
In its response to the motion Complainant takes the position that the advertising represented by Exhibits D, E, G, H, I and J do not come within the purview of the original Complaint and, without prejudice to its rights to take whatever future action is appropriate, agrees mail related to such advertisements should be released to Respondents providing it can be clearly identified as such. The postmaster is accordingly so instructed.
There remains for decision on the motion the applicability of the mail-stop order to mail received in response to Exhibits C and F. As to both of these Complainant opposes modifications of the mail-stop order. Complainant maintains that these two advertisements continue the misrepresentations found false in the administrative proceeding leading to the mail-stop order. Respondents contend they do not. Respondent also contend that the mail-stop order cannot apply to mail received in response to Exhibits C and F because those exhibits were not in evidence in the prior administrative proceeding. Respondents contend rather, that such advertisements should be governed by the procedure set forth in 39 CFR § 952.30 1/ which in effect Respondents say was initiated by filing of the present motion to amend the order (page 5 of Respondents' Memorandum in Support of its Motion for an Amended Order). They maintain further that even if this advertising is determined to continue the misrepresentations any mail postmarked before that determination is made by the undersigned must be released to Respondents. Complainant urges that Respondent's election to use the same name and address brings the mail within the purview of the existing order requiring return of mail to senders and that if the advertising is found to continue the misrepresentations the existing mail-stop order applies and the mail presently being detained in connection therewith should be returned to the senders appropriately marked as in violation of the false representation law rather than given to the Respondents.
When the General Counsel or his designated representative shall have reason to believe that a person is evading or attempting to evade the provisions of any such order by conducting the same or a similar enterprise under a different name or at a different address he may file a petition with accompanying evidence setting forth the alleged evasion or attempted evasion and requesting the issuance of a supplemental order against the name or names allegedly used. Notice shall then be given by the Docket Clerk to the person that the order has been requested and that an answer may be filed within 10 days of the notice. The Judicial Officer, for good cause shown, may hold a hearing to consider the issues in controversy, and shall, in any event, render a final decision granting or denying the supplemental order.
The first issue to be decided is whether the advertisements, Exhibits C and F, continue the representations found false. For ease of reference there are attached, as appendices hereto, copies of Exhibits A and B which are the advertisements constituting the basis of the Postal Service Decision finding Respondents "engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations" within the meaning of 39 U.S.C. § 3005. There are also attached, as appendices hereto, copies of what have been referred to as Exhibits C and F.
Judge Grant's Initial Decision, upheld by me on appeal, held that Respondents were falsely representing that:
(a) They were offering employment stuffing circulars into envelopes and mailing them;
(b) The initial charge for the "kit" is the only investment the mailer will ever have to make; and
(c) The plan involves nothing more than a few hours weekly at home stuffing and mailing circulars.
The bold print still proclaims "Mail for Kings" with arrows directing the immediate attention to the proclamation "$250.00 per 1,000 circulars mailed." The changes between the advertisements in references to a commission do not substantially shed light on the offer of employment but can as easily suggest a method of payment related to number of circulars mailed. This is highlighted by the further bold print claim of "Simple-Pleasant-Profitable-Stuffing Mailing Envelopes at Home." Nowhere is the prospective purchaser given the information that what he is purchasing is material for the sale of essentially the same selling scheme to others through the placing of advertisements similar to that which he answered to obtain the circular. Of course, once he sends for, and receives, the mailing kit at a cost of $25.00 the air is cleared Respondents' contention pointing to changes in the language between Exhibit C and Exhibit A shows only that the language is carefully chosen to continue the erroneous impression while using different wording conducive more to technical argument than any clear attempt to convey the truth. By the same token the importance placed upon the $25.00 investment continues the representation that the kit is the only investment. Stating that there is "no large investment of time or money" in circumstances where the entire emphasis is upon the $25.00 for the "complete kit" and the purchaser knowing "how much your kit will cost--what you don't know is how much it will cost you in lost income if you don't order" continues in substance and effect the second representation found false in the earlier advertising. Likewise the third representation is continued by the current advertising which does not reveal any more than did the previous advertising the need for the homeworker to institute his own advertising as a prelude to any envelope stuffing at all. The price has gone up from $3.00 and $6.00 to $25.00 but the name of the game is the same. I find that in essence Respondents are continuing, by the use of Exhibits C and F, the representations found false in the original administrative proceeding.
It is concluded that by means of the advertising identified as Exhibits C and F Respondents are continuing the very scheme which the stop order prohibits. The procedure set forth in 39 CFR § 952.30 expressly covers situations where "a person is evading or attempting to evade the provisions of any such order by conducting the same or a similar enterprise under a different name or at a different address." It does not contemplate the situation where one deliberately chooses to use the same name and address already covered by the stop order, as here. There might well be commercial advantages for a Respondent to continue use of the same name and address. For one thing it is conceivable that perspective purchasers on their mailing list would have received the earlier false advertising and associate it with the latest advertisement. Be that as it may, it is clear that Respondents' choice to do so, if its view of the scope of the stop order prevails, presents an obvious impediment to orderly implementation of the mail-stop order. The statute permits the issuance of a mail-stop order upon establishment of a scheme to obtain money by false representations. It applies to all mail sent to that name and address unless it clearly has nothing to do with the scheme that is covered. To restrict its application automatically to the advertisements which were placed in evidence defeats the statutory purpose in that it would permit a Respondent to continue the scheme simply by putting out the identical advertisement using the same name and address immediately after each adverse administrative determination.
If a different name and/or address is used there is quite clearly an important threshold question of whether it is the same party and thus automatic extension of the order is not appropriate. In both cases, of course, the issue is present of whether the new advertisement continues the false representation and on this a Respondent is entitled to be heard, a hearing which Respondents are now receiving. When a Respondent chooses to continue to use the same name and address covered by the mail-stop order and thus eliminates the threshold issues it is incumbent upon him to show that he is not perpetuating the same scheme. It should be ample protection to him, and is no more than minimum protection to the public, to detain the questionable mail pending a determination by the undersigned as to whether he is simply continuing the scheme by use of the same or similar representations. The issue to be decided, since it is not complicated by the necessity of identity of parties or deciding ancillary issues of truth or falsity of the representations, can normally be promptly decided. Once the Respondent raises such an issue about new advertising, and if the postmaster with advice of legal counsel cannot promptly conclude that the mail should be released, the Respondent may file a petition with the Judicial Officer for resolution of the matter and pending resolution the mail can be detained rather than returned. However, to release the mail so held despite a determination that it continues the scheme in such a case frustrates the intent of the statute and the implementing regulations. As such it is overly restrictive. That a different result prevails in the more complicated cases where a mail-stop order has not been issued against a particular name and address and identity of the parties is involved should not alter this result.
Accordingly, on the basis of the above findings and conclusions the postmaster is directed to continue to enforce the terms of the mail-stop order except that, in accordance with Complainant's position with respect to Exhibits D, E, G, H, I and J, any mail that can be clearly identified as in response to those advertisements may be released to Respondent.