In the Matter of the Complaint Against KIMBERLY JEWELS, INC. 177 NE 166 Street and 251 NE 166 Street at Miami, FL 33162 P.S. Docket No. 9/65; 12/10/81 Cohen, James A. APPEARANCE FOR COMPLAINANT: James F. McMullin, Esq. Consumer Protection Division Law Department United States Postal Service 475 L'Enfant Plaza West, S.W. Washington, DC 20260 APPEARANCE FOR RESPONDENT: Stephen H. Broudy, Esq. Entin, Schwartz, Angert, Dion & Broudy 2020 N.E. 163rd Street Suite 300 North Miami Beach, FL 33162
Prior proceedings in this matter led to the issuance of Mail Stop Order No. 81-148, dated July 23, 1981, against mail addressed to Respondent, Kimberly Jewels, Inc., 177 NE 166 Street, and 251 NE 166 Street, Miami, FL 33162, with respect to its envelope stuffing plan.
On October 5, 1981, Complainant filed a Petition for Supplemental Order with attachments, alleging that Respondent is evading or attempting to evade Mail Stop Order No. 81-148 by conducting the same or a similar scheme using a new trade name, Kimberly, Inc., operating from one of the same addresses: 251 NE 166 Street, Miami, FL 33162.
By Notice dated October 6, 1981, Respondent was notified that if it intended to oppose the Petition it could file its Answer no later than 10 calendar days from the date of receipt of the Petition. At Respondent's request, the period for filing the Answer was extended to placement in the mail on or before October 23, 1981. Respondent's Answer, received October 26, 1981, opposes the issuance of the Petition for Supplemental Order. Neither party has requested that a hearing be held.
Accompanying Respondent's Answer to the Petition was a Motion to Dismiss alleging that the Mail Stop Order previously issued was not a final order and, therefore, a supplement thereto could not be issued. The Motion to Dismiss was denied by Postal Service Decision dated November 12, 1981.
Complainant alleges that the representations made in Respondent's advertising are substantially the same as those which were the subject of the prior proceeding. It also asserts that the products furnished in response to the advertisements are nearly identical to those furnished in response to Respondent's previous advertisements. Respondent argues that the advertisements have been changed significantly by the addition of the word "secured" in various places in its advertisements and other changes in the body of the advertisements. These changes, Respondent alleges, were effected in an attempt to comply with the Postal Service Decision in this matter, and pursuant to an Order of a Federal District Court in related litigation.
The record establishes that the two advertisements which Complainant contends serve as the basis for its petition appeared in Globe magazine on June 9, 1981, and July 14, 1981 (Declaration of Inspector Robert Carroll). The June 9th advertisement (Exhibit A to the Declaration of Inspector Carroll) includes the word "secured" in the headline. The July 14th advertisement (Exhibit B) has a headline that is identical to the advertisement which was the subject of the original Complaint (CX-A). Both the June 9 and July 14 advertisements, are identical beyond the headline. They contain some changes from the advertisement which was the subject of the original Complaint. Specifically, Respondent has used the word "secure" or a variation thereof at various places in its references to the envelopes which prospective purchasers are to stuff and return to Respondent. Respondent has also deleted "large," "excellent" and "good" from descriptions of earning capacity. It has also deleted the sentence "There is nothing else to buy from us in order to get started and keep going for years."
On or about June 5, 1981, Inspector Robert Carroll initiated a test purchase in response to Respondent's advertisement in the June 9, 1981, issue of Globe magazine (Declaration of Inspector Carroll). The product received was entitled "Offer & Agreement" and was essentially the same as the product received in response to Respondent's original advertisement. The only discernible difference in the products is in the text of the advertisement that participants are instructed to run in newspapers and periodicals (Compare Exh. F to Declaration of Inspector Carroll and CX-B).
It does not appear to be disputed that the parties to the original proceeding are the parties responsible for the publication of the June 9 and July 14, 1981, advertisements.
While Respondent's Answer generally denies the allegations in the Petition, it has not shown that the changes made in its new advertisements alter the misrepresentations previously found to exist. The changes do not overcome the basic misrepresentation of the advertisement, which is that participants must invest in advertising and secure through such advertising new participants in order to receive envelopes for which they will be paid. The advertisement still conveys the impression that participants will be paid for stuffing envelopes, and not for soliciting additional participants. Moreover, other of the representations found to have been made and found to be false in the original proceedings are not changed. For instance, Respondent's advertisements continue to represent that the $20.00 fee is the sole expenditure of purchasers and that a limited number of persons will be selected to participate in the program.
Accordingly, based on the similarity of the representations and the product offered, it is concluded that Respondent is evading or attempting to evade the provisions of Mail Stop Order No. 81-148 by conducting the same or a similar scheme which is the subject of the Order. In accordance with 39 C.F.R. § 952.30, a supplemental Mail Stop Order against Respondent under the name and at the address alleged in the Petition is being issued contemporaneously with this Decision. However, in view of the pending appeal of the original Postal Service Decision in this case, the return portion of the Mail Stop Order will be stayed until the completion of the appellate procedure.