In the Matter of the Complaint Against: LONG 'N STRONG, Caroline Road at Philadelphia, Pennsylvania 19176; and AMERICAN CONSUMER, Caroline Road at Philadelphia, Pennsylvania 19176; and NAIL BEAUTY, Caroline Road at Philadelphia, PA 19176 P.S. Docket No. 5/6 03/20/78 Duvall, William A.; Acting Judicial Officer
On May 18, 1976, a Complaint was filed by the Consumer Protection Office, Law Department United States Postal Service (Complainant), alleging that Long 'N Strong and American Consumer of Philadelphia, Pennsylvania (hereinafter, collectively, Respondent) were in violation of the provisions of Section 3005 of Title 39, United States Code, in seeking remittances through the mails by means of false representations concerning the product, Long 'N Strong. On June 10, 1976, Respondent executed a Consent Agreement on the basis of which the proceeding was indefinitely suspended. On September 24, 1976, a petition was filed by Complainant alleging that the Consent Agreement had been breached, and seeking the issuance of an order pursuant to Section 3005, supra. On October 19, 1976, the Postal Service Judicial Officer granted the petition and issued a mail stop order (Order No. 76-84). The Postal Service Decision was reviewed and upheld by the U.S. District Court for the Eastern District of Pennsylvania, see American Consumer, Inc. v. United States Postal Service, 427 F. Supp. 589 (1977). On March 29, 1977, Respondent signed a "Modification Agreement" under the terms of which the Respondent agreed (1) to "fill no orders for the product which is subject to the Section 3005 order..." (Mod. Agreement, par. 2) and (2) to "permanently discontinue and abandon the use of all advertisements for the product which is subject to the Section 3005 order" and to "furnish no information to prospective purchasers as to where the product may be obtained." (Mod. Agreement, par. 3). In return for the execution of the Modification Agreement, Order No. 76-84 was vacated by the Judicial Officer on March 31, 1977.
On February 24, 1978, Complainant filed a petition seeking the issuance of a mail-stop order based upon the alleged breach of the Modification Agreement. The following described Exhibits were submitted with the petition:
1. A copy of an advertisement for the product Long 'N Strong which appeared in the January 1978 issue of the publication TRUE LOVE;
2. A copy of an advertisement for the product Long 'N Strong which appeared in the October 1977 issue of the publication PLAYGIRL; in Exhibits 1 and 2, remitters are told to send their orders to "Nail Beauty," Caroline Road, Philadelphia, PA 19176;
3. A copy of a customer's money order receipt showing the test name and address of Sara Velte, P.O. Box 577, Eastman, Georgia 31023, used by Postal Inspector O. J. Broadwater to conduct a test purchase of the product through the mails; the payee of the money order is shown as Nail Beauty;
4. A copy of the envelope addressed to Nail Beauty in which Exhibit 3 was mailed to Respondent;
5. A copy of the address side of a padded mailing envelope addressed to S. Velte, Bx 577, Eastman, Georgia 31023, and bearing the return address of American Consumer, inc., Caroline and Charter Rds., Philadelphia, PA 19176. This envelope, received by Inspector Broadwater, contained a small bottle labelled "Long 'N Strong Natural Collagen Protein Conditioner 1 fl. oz. contains no formaldehyde"; and
6. A set of instructions for the use of Long 'N Strong, in which the purchaser is directed to send future orders for the product to American Consumer, Caroline Road, Philadelphia, PA 19176.
Respondent, through counsel, filed a reply to Complainant's petition, and in the reply there is a more detailed recitation of the history of this proceeding than that which is set forth in the first paragraph of this decision. Respondent then makes the following argument:
"Nowhere does the Petitioner allege that the false representations originally complained of have continued in the present advertisement nor that there are any false representations in the present advertisement at all. All that the Complainant states is that it is the same product. Section 3005 cannot prohibit the sale of a product per se, it can only prohibit the sale of a product 'by means of false representations'."
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"Since Section 3005 can only go to false representations and since the false representations which the Section 3005 Order prohibited are not made and are not alleged to be made, the Respondent has not violated the Modification Agreement because it has not filled any orders received as a result of false representations."
Respondent's argument is not well taken. The situation is briefly described as follows: Respondent chose to obviate the necessity for a hearing on the original complaint by executing a Consent Agreement. Violation of that agreement was charged, and the charge was sustained with the result that a mail-stop order was issued forbidding the delivery of mail and the payment of money orders to the Respondent if such merchandise and money orders related to the sale of a product called "Long 'N Strong." The issuance of the mail-stop order was affirmed by the United States District Court for the Eastern District of Pennsylvania, Edward N. Cahn, Judge, presiding, in American Consumer, Inc. v. United States Postal Service, supra. To avoid the effect of the mail-stop order, Respondent executed the "Modification Agreement" in which Respondent agreed, among other things, (1) to "fill no orders for the product which is subject to the Section 3005 order" and (2) to "furnish no information to prospective purchasers as to where the product may be obtained."
It is the latter agreement that Complainant now charges that Respondent has violated. The Modification Agreement provides that the following procedures are to be followed when such a breach occurs.
"4) (a) A breach of this Agreement by the undersigned will warrant the issuance of an order pursuant to Section 3005(a) supra, by the Judicial Officer of the United States Postal Service, against the names and the addresses appearing in the caption hereof, or any other name(s) and address(es) then in use.
(b) The undersigned further agrees that in the event a petition alleging breach of this Agreement is filed, the Judicial Officer shall be authorized to issue an ex parte order directing the appropriate postmaster(s) to detain mail addressed to the name(s) and address(es) then being employed, pending final resolution of the issue concerning the alleged breach of this Agreement.
(c) The ex parte order described in paragraph (b) above shall be subject to the right of the undersigned or his designated representative to inspect such mail at reasonable times in the presence of a designated employee of the Postal Service. The undersigned shall have the right to immediate possession of such mail as is clearly not related to the alleged breach of this Agreement.
(d) The undersigned shall be allowed ten days or such additional time as the Judicial Officer may permit to answer said petition. If the undersigned does not answer within the time allowed, he shall be deemed in default, and the Judicial Officer may issue the order described in 39 U.S.C. Section 3005(a)."
The arguments presented by Respondent are disposed of concisely in Judge Cahn's American Consumer decision as follows:
"As a result of the consent agreements the plaintiff is bound by the procedures set forth in the agreements for determining whether a breach has been committed. In addition, the plaintiff has waived its right to litigate whether the present or former advertisements were actually fraudulent. The only question that remained for the judicial officer as a result of the agreement was whether the consent agreement was violated. United States Bio-Genics Corp. v. Christenberry, 173 F. Supp. 645 (S.D.N.Y.), aff'd, 278 F.2d 561 (2d Cir. 1960); see American Image Corp. v. United States Postal Serv., 370 F. Supp. 964 (S.D.N.Y.), aff'd, 503 F.2d 1397 (2d Cir. 1974). The consent agreement also precludes the plaintiff from raising constitutional claims at this time. By agreeing to submit to the consent agreement the plaintiff has waived this defense. It is clear that one can knowledgeably and intentionally waive a constitutional right. Brookhart v. Janis, 384 U.S. 1, 86 S.Ct. 1245, 16 L.Ed.2d 314 (1966)." (i.d. p. 591)
The evidence in the form of the exhibits attached to the petition establishes that Respondent is, in fact, doing each and all of those things which, in the Modification Agreement, it specifically and explicitly agreed not to do.
The above findings and conclusions establish that the filing of the instant petition was fully warranted. Accordingly, the petition is granted and the requested mail-stop order forthwith is being issued.