In the Matter of the Complaint Against: SANDCO, SANDCO PUBLICATIONS, and UNIVERSAL SCIENCE CHURCH, INC., 3414 Ninth Street at Ceres, California 95307 P.S. Docket No. 5/180 07/20/77 Duvall, William A.; Chief Administrative Law Judge Daniel S. Greenberg, Esq. Law Department United States Postal Service Washington, D. C., for Complainant Harley C. Sanders, 3414 Ninth Street, Ceres, California, for Respondent Before: William A. Duvall, Chief Administrative Law Judge
This case was initiated on May 17, 1977, when the Consumer Protection Office of the Law Department of the United States Postal Service, the Complainant, filed a Complaint charging Sandco, Sandco Publications and Universal Science Church, Inc., collectively the Respondent, with engaging in conducting a scheme or device to obtain money or property through the mails by means of false representations within the meaning of Section 3005 of Title 39, United States Code. The name Universal Science Church, Inc. was not included in the Complaint as filed, but it was added by amendment filed prior to the hearing. The Complainant charges that by means of certain advertising material the Respondent represents directly or indirectly, in substance and effect, whether by affirmative statements, omissions, or implication that, (a) Respondent is offering employment consisting of simply forwarding and stuffing circulars in the pre-addressed stamped envelopes at a rate of $50 per hundred to any person remitting the sum of $13.20 for an instruction kit, (b) the Respondent furnishes all of the circulars and envelopes already stamped and addressed, (c) that Respondent needs home workers to stuff the circulars into envelopes in order to avoid the necessity of renting a larger building, hiring more inside employees, taking out insurance, or working present employees overtime, (d) the home worker is guaranteed that he will earn 50 cents cash for each envelope stuffed, (e) that persons remitting the sum of $1 in response to an advertisement which appeared in the February 14, 1977, issue of a publication known as Moneysworth will receive details of a fool-proof system enabling them to earn $52,000 yearly at home mailing letters, (f) that Respondent will print and mail out the sales letters at his expense to persons responding to his dealers' classified advertisements under the promotions described in other advertising material used by the Respondent, (g) the Respondent will place additional classified ads for a dealer at Respondent's cost if the initial ads do not draw sufficient response in order to enable the dealer to make money under the promotion described in said other advertising material, (h) that Respondent needs home workers to collect names for his mailing list because he is unable to find the names to mail to, and (i) Respondent will pay $1 to the home worker for each name collected according to his instructions.
The advertising material, including the circular matter, employed by the Respondent in connection with the business being operated comprised Exhibit Nos. C-1 through C-9 introduced by Complainant by stipulation with Respondent at the outset of the hearing. I have reviewed carefully the charges set forth in the Complaint and I have reviewed with equal care the advertising material employed by the Respondent in the conduct of this business. I find that all of the representations set forth in the Complaint are, in fact, made by the Respondent.
There were five witnesses who testified at the call of the Complainant. Three of these witnesses, namely, Arthur T. Moorehead, Henry Wing and Joe Hughes testified with respect to one of the systems being sold by the Respondent in which certain plans are advertised and referred to as Plans I, II and III. Each of these witnesses made the remittance required to purchase Plan I, and this plan operates in the manner now to be described.
The prospect makes the initial remittance which is in the minimum amount of $100. This remittance is made in response to an unsolicited advertisement received by the individual from the Respondent. In this advertisement the recipient is told that under Plan I the Respondent will place two ads in national publications, either newspapers or magazines, and that the advertisements will be placed in the name of the addressee of the circular. It is anticipated that persons responding to this ad will communicate with the addressee of the initial circular and that the addressee of the initial circular will forward the names of those people who have responded to the advertisement to the Respondent. The Respondent will then send a circular to the persons who responded to the advertisement, and the circular, in turn, would be over the name of the addressee of the original circular and those people to whom the second circular is sent, in order to get into this business, will remit $13.20 to the addressee of the original circular. The last-mentioned individual will retain $9 of that amount and will remit the remaining $4.20 to the Respondent.
Each of these witnesses testified, in substance, that he followed this procedure insofar as his participation was concerned, that is, he made the required initial remittance of at least $100. One person sent in $105 in order to receive, he thought, an additional number of circulars. But, after this remittance was made none of them received any indication or certification that the Respondent had inserted the advertisement which it represented it would insert and they sent letters of inquiry to the Respondent and received no satisfaction.
The difficulty in this situation is that there is a hiatus in the proof. There is no proof that the advertisement which the Respondent was to insert in the national publications was not, in fact, inserted. Each witness testified that since he received no response to such an advertisement, and since he received no proof of the insertion of the advertisement, he assumed that no such advertisement was inserted. While that is sufficient basis for the assumptions, the assumptions, themselves, do not constitute proof that no advertisements were inserted. From that point on the frailty of the testimony with respect to Plan I begins to increase.
There were two other witnesses, a Mr. Orion Potter and a Miss Mary Louise Hughes. Each of these witnesses received what was received in evidence as Complainant's Exhibit No. 1 and was referred to in the hearing as "the circular." Each of these witnesses anticipated that in making the required remittance which, in this case, is $13.20, he or she would receive circulars relating to the Respondent's business. These two witnesses justifiably believed that they would receive, also, the envelopes which had been pre-stamped and pre-addressed and into which the circulars would be placed. After these steps had been taken, according to their belief, the envelopes would be mailed by them. In both of these cases the recipients of Exhibit C-1, after the passage of some period of time, wrote to the Respondent and reminded the Respondent that they had made the remittance and indicated that they had received nothing. Neither of the witnesses ever did receive anything until Miss Hughes took it upon herself to contact the Postal Inspection Service. After the Postal Inspection Service presented the Respondent with a list of dissatisfied customers, on which list Miss Hughes's name appeared, then she received a refund of the amount of money which she had remitted.
The owner of the Respondent testified, and it was not contradicted, that he no longer mails out the circular which is Exhibit No. C-1, but he did testify under oath on the stand that he does from time to time mail a circular which was received in evidence as Exhibit No. C-3 which solicits orders to the Universal Science Church, Inc. 2/ Except for the information on the order form portion of the circular--in other words, in that portion of the circular which would be designated as the body of the circular, there is a difference of less than ten words between Exhibit No. C-3 and Exhibit No. C-1, and there is absolutely no difference insofar as the import of the two circulars is concerned. Having read both of these circulars I find that the individual who is the recipient of either one of these circulars would believe that if he made the required remittance he would receive in exchange therefor circulars of either Sandco or the Universal Science Church, Inc. and that, in addition, he would receive pre-addressed, pre-stamped envelopes into which the circulars would be placed for mailing. Furthermore, he would believe that he would receive .50 for each envelope he so mailed.
2/ The owner of the Respondent may, as
it has been done in other cases, plead that under the First
Amendment to the United States Constitution the issuance of an
order against the Universal Science Church, Inc. is prohibited as
an impermissible infringement of his right to the free exercise of
religion. Such a plea was rejected in Fields v. Hannegan, 162
F.2d 17 (D.C. Cir., 1947), in which the Court said:
"A religious ingredient is no better defense to a charge
of fraud than to a charge of murder."
In his examination of the witnesses Mr. Harley Sanders, who is
the owner of Sandco and Sandco Publications and who is the founder
of the Universal Science Church, Inc., stated that the language of
the order blank in each case indicates that all the remitter is
going to receive is an instruction kit. If one makes the effort,
the language of the order blank can be so construed if that
language is considered in a vacuum. But one does not do that in
trying to determine the meaning of the language of such a document
as C-1 or C-3.
The circular starts off:
"Dear Friend:
3/ In Exhibit C-1, the language is "one
hundred".
At the end of that paragraph there are the following words all in
capital letters:
"IF YOU CAN FOLLOW 4/ SIMPLE EASY TO FOLLOW INSTRUCTIONS]"