In the Matter of the Complaint Against THE NEW BODY BOUTIQUE, INC. also doing business as THE NEW BODY BOUTIQUE and as SHRINK-WRAP at 2105 Lakeland Avenue Ronkonkoma, NY 11779, et al P.S. Docket No. 11/95; 11/30/82 Cohen, James A. APPEARANCE FOR COMPLAINANT: Hilda Rosenberg, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260 APPEARANCE FOR RESPONDENT: Lee H. Harter, Esq. 2256 Van Ness Avenue San Francisco, CA 94019
Prior proceedings in this matter led to the issuance of False Representation Order No. 82-110 dated July 30, 1982, and False Representation Order No. 82-125 dated September 8, 1982, with respect to the sale of the product "Shrink-Wrap."
On August 3, 1982, Complainant filed a Petition for Supplemental Order with attachments, alleging Respondent is evading or attempting to evade False Representation Order No. 82-110 by conducting a similar enterprise at three new addresses, and in most instances, under the slightly revised trade name, "Shrink-Wrap System." The Petition requests the issuance of a Supplemental Order against:
Shrink-Wrap
Shrink-Wrap System
20 Medford Avenue
Patchogue, NY 11772
Shrink-Wrap System
P.O. Box 2541
Grand Central Station
New York, NY 10163
and
Shrink-Wrap System
122 Portion Road
Lake Ronkonkoma, NY 11779
Respondent filed a Response to the Petition in which it denied that it is evading or attempting to evade the provisions of the False Representation Order. It also requested that a hearing be held if Complainant's Petition is not denied outright. Thereafter, Respondent filed a Motion for a Bifurcated Proceeding and a Change of Place of Hearing. In its Motion, Respondent requested that an initial determination be made without a hearing on the issue of whether the alleged representations are made in Respondent's current advertisements. Respondent also requested that if it is determined that the representations are made, a hearing on the remaining factual matters be held in New York City.
Complainant does not oppose either the bifurcated proceeding or the proposed hearing location, but has requested that the issues to be decided prior to hearing include whether the product is the same as that which is subject to the False Representation Order. By Order dated October 21, 1982, it was determined that the proceeding would be bifurcated and that the representations and outstanding procedural issues would be addressed before any hearing is held. It was noted in the Order that the determination of the existence of the representations in Respondent's current advertising might necessarily require a determination of the product being represented as opposed to what product is actually being furnished to a purchaser. The Order went on to state that if factual issues remained to be resolved, a hearing would be held in New York City.
I. Representations
Complainant alleges that the representations made in Respondent's current advertising are substantially the same as those which were the subject of the prior proceeding. It also contends that the product and the parties are the same and therefore a supplemental order should be issued. Respondent concedes that it is the promoter against whom the False Representation Order was issued and that it is responsible for the publication of the advertisements attached to the Petition for Supplemental Order (Response pp. 2-3). However, it argues that the product has been changed and the advertisements have been revised to reflect the changed product. Therefore, it contends that a supplemental order should not be issued.
The representations alleged in the Complaint which Complainant contends are contained in Respondent's current advertising are:
"a. Within 24 hours, the Shrink-Wrap will cause a net loss of 2-3 inches from the user's waist and 2-3 inches from the user's hips.
. . .
"c. In accomplishing the loss described in (a) and (b) the Shrink-Wrap does not merely shift or compress unwanted weight, but actually rids the body of it.
"d. The weight lost through use of the Shrink-Wrap will not be regained within several hours.
. . .
g. Shrink-Wrap is an effective means of reducing obesity without diet or extensive exercise."
Respondent denies that it makes the representations alleged in paragraphs 1. and g. of the Complaint but admits that it makes the representations alleged in paragraphs c. and d. With respect to paragraphs c. and d., Respondent argues that the product has been changed and therefore while these representations are made, they are true (Response to Petition, pp. 14-17).
a. Within 24 hours the Shrink-Wrap will cause a net loss of 2-3 inches from the user's waist and 2-3 inches from the user's hips.
Complainant argues that Respondent's current advertisements make this misrepresentation in the following language:
"Lose 4-6 inches of bulging fat. . . .Let the Shrink-Wrap System reduce a combination of your waist and hips, NOW]
. . . .
That's right] 4-6 inches starting the very first day."
According to Complainant, an ordinary reader would reasonably believe that two - three inches would be lost from the waist and another two - three inches from the hips in 24 hours to equal the combined loss of four - six inches from the hips and waist during the first day.
Respondent correctly points out that the language of its advertisements quoted by Complainant to support its position omits the phrase "before we cash your check." Thus, the first two lines of the quoted passage should read: "Lose 4-6 inches of bulging fat before we cash your check]" Since in the first paragraph of the text of the advertisements readers are advised to post date their checks for 30 days, Respondent argues that it "conspicuously and affirmatively" represents results within 30 days, not 24 hours as alleged by Complainant. Respondent also cites various testimonials included in its advertisements as showing that it does not represent loss of inches in 24 hours. In these testimonials, loss of inches is stated to take place in periods ranging from 12 days to eight months.
Viewing Respondent's advertisements in their totality, they are at best ambiguous with regard to the time period in which the "4-6" inch loss will be achieved. The statement lose "4-6 inches starting the very first day" and "lost 4-6 inches before we cash your check" are artfully worded to lead the ordinary reader to believe that the loss will occur within 24 hours. The fact that readers are told to post date their checks and that the testimonials recite periods longer than 24 hours could lead an ordinary reader to come to a contrary conclusion. However, where advertisements are capable of two meanings, they are still misleading. See Rhodes Pharmacal Company v. F.T.C., 208 F.2d 382, 387 (7th Cir. 1953); The New Body Boutique, Inc., P.S. Docket No. 11/95 at pp. 9-10 (P.S.D. July 30, 1982); see also United States v. 95 Barrels of Vinegar, 265 U.S. 438, 443 (1924).
Accordingly, it is concluded that Respondent continues to make this representation.
c. In accomplishing the loss described in (a) and (b) the Shrink-Wrap does not merely shift or compress unwanted weight, but actually rids the body of it.
d. The weight lost through use of the Shrink-Wrap will not be regained within several hours.
As previously noted, Respondent does not deny that its current advertisements make these representations. However, it argues that its advertisements tout a "Shrink-Wrap System" which consists of a garment, diet plan, exercise program and behavior modification program which will accomplish the results represented. Since it is undisputed that the product sent to purchasers responding to Respondent's current advertisements does consist of what purports to be all four items (see affidavit of Postal Inspector Barta), the issue which must be decided at this stage of the proceeding is whether the product sent is the product represented in Respondent's advertising.
There are two advertising formats which are the subject of the Petition for Supplemental Order. The first (Comp. Ex. 2) makes no mention of behavior modification. The word diet is not used anywhere in the advertisement, and the low-cal eating plan is clearly represented for those who "want to go even further." Thus, it is not represented as an essential part of the product. Neither is the exercise program, which is represented as helping the user to "shed unsightly inches even more rapidly." While the term "system" is used in this advertisement, the overall impression is that the desired results will be obtained by the use of the Shrink-Wrap belt alone. Therefore, in this advertising format, Respondent continues to make the representations alleged in paragraphs c. and d. of the Complaint. The New Body Boutique, P.S. Docket No. 11/95 at p. 8 (P.S.D. July 30, 1982).
The other advertising format (Comp. Exs. 3, 4, 14 and 15), contains references to behavior modification and exercise, but these references are clearly in the context of methods by which additional weight can be lost, leaving the impression that the basic loss described in the advertisements will occur from the use of the belt alone. Similarly, the low-cal eating plan is referred to as a way to "continue to shrink." While the testimonials are somewhat ambiguous, they also create the impression that the belt alone will cause weight loss. Particularly significant are the pictures of the trim models wearing the belt and the emphasis on inch loss in the area where the belt is worn. This creates the impression that all that is necessary to lose weight is the use of the belt. Furthermore, this advertising format describes weight loss experienced by skin divers using wet suits and analogizes the Shrink-Wrap to the wet suit, creating the impression in the ordinary mind that because of properties shared with wet suits, the Shrink-Wrap garment will cause loss of pounds and inches.
Both of Respondent's advertising formats continue to represent the Shrink-Wrap garment as the product which will accomplish the results represented. The ordinary reader might well conclude that the Shrink-Wrap garment is more effective when used in combination with diet and exercise, but he would also conclude that it is effective without diet and exercise. Had Respondent intended for the ordinary reader to understand that it was advertising a plan or a system which includes diet, exercise and behavior modification as integral parts, it could have clearly worded its advertisements so that there would have been no question of misrepresentation. As stated in United States v. 95 Barrels of Vinegar, supra, 265 U.S. at 443, "It is not difficult to choose statements, designs and devices which will not deceive." This Respondent has not done. Therefore, it is concluded that Respondent continues to make the representations alleged in paragraphs c. and d. of the Complaint.
g. Shrink-Wrap is an effective means of reducing obesity without diet or extensive exercise.
Complainant argues that the overall impression of Respondent's advertisements is that the belt itself is effective in reducing obesity. While conceding that the advertisements contain references to diet and exercise, it contends that those references are in the context of means by which the user may increase the basic weight loss which the belt alone causes.
Respondent argues that the representation is nonsensical because most obese people know that they have to diet or exercise to lose weight. It further argues that the references in the advertisements to a "Low-Cal Eating Plan", an exercise program, a program of modification of eating patterns, and testimonials place the reader on notice that the system consists of a garment, and a diet, behavior modification and exercise program and, therefore, the representation alleged in the Complaint is not made in Respondent's advertisements.
Respondent's argument that the ordinary reader would not interpret the advertisement as Complainant alleges because most obese people know they have to diet or exercise to lose weight is without merit. See New Body Boutique, Inc., P.S. Docket No. 10/169 at p. 10 (P.S.D. July 7, 1982), and Specialty Sales Co., P.S. Docket No. 11/79 at p. 7 (P.S.D. April 5, 1982). Courts have taken a similar position. See Cates v. Haderlein, 189 F.2d 369 (7th Cir. 1951), rev'd on other grounds, 342 U.S. 804 (1951), and Gottlieb v. Schaffer, 141 F. Supp. 7 (S.D.N.Y. 1956). As stated in the latter case, "The fact that informed and sophisticated persons would readily recognize, laugh-off, or even be amused by, obviously false and absurd statements in an advertisement does not detract from their power to deceive the ignorant, gullible and less experienced." Ibid at p. 16.
Respondent's argument that it does not make this representation because its advertisements make reference to diet, exercise and behavior modification programs is also without merit. As previously stated in connection with the representations alleged in paragraphs c. and d. of the Complaint, the references to diet, exercise and behavior modification programs do not detract from the overall impression of the advertisements that it is the belt alone which is effective in reducing obesity.
Accordingly, it is concluded that Respondent continues to make this representation in its current advertising.
II. Denial Of Equal Protection
Respondent contends that Complainant is violating Respondent's constitutional rights by denying it equal protection of the law. While recognizing that in the past advertisers have not prevailed on this theory based on the holding in Gottlieb v. Schaffer, 141 F. Supp. 7 at 19 (S.D.N.Y. 1956), it alleges that an entirely different situation exists in this case. Citing Genie Figure Slimmer, P.S. Docket No. 13/80, Respondent contends that "Complainant has by agreement specifically allowed a competitor (with essentially the same garment as sold by Respondent) to expressly make a representation which Complainant would forbid this Respondent from making" (Resp. Brief, p. 24). In connection with this argument, Respondent has filed an application for production of documents relating to Genie and has requested that the General Counsel of the Postal Service appear at the hearing to testify with regard to those documents. Complainant denies that the advertiser in Genie has been allowed to make misrepresentations which Respondent is prohibited from making, but has agreed to provide certain of the documents in Genie to Respondent. Complainant also denies that Respondent is being deprived of its constitutional right to equal protection.
The facts alleged here to not establish a basis for department from our prior reliance on Gottlieb v. Schaffer, supra, 141 F. Supp. at p. 19, in which the court stated: "That others are engaged in similar violations of law does not grant immunity to one who is charged with a specific violation." Furthermore, the enterprise which it is here alleged is engaged in similar violations, Genie Figure Slimmer, was the subject of a Postal Service Complaint. The Consent Agreement filed in that proceeding, which is a matter of public record, and the contents of which we take official notice, does not allow another advertiser to make the representations which Respondent is being prohibited from making. Accordingly, it is concluded that this argument provides no basis for relief to Respondent.
III. Request For A Hearing And Related
a. Request for Hearing
As noted previously, the Order of October 21, 1982, advised the parties that a determination of whether the product is the same as previously advertised may be necessary in order to resolve the issue of the continuance of the representations. Such a determination has been made, and no remaining factual issues are perceived. Therefore, no hearing will be held unless Respondent can demonstrate the existence of remaining disputed material factual issues. Respondent is allowed until December 20, 1982, to make such a showing.
b. Procedural Matters
Respondent has raised a number of procedural matters relating to any hearing which may be held. Respondent first argues that the hearing should be conducted by an Administrative Law Judge and not the Judicial Officer. According to Respondent, the Judicial Officer is not authorized by the Administrative Procedure Act to conduct a hearing, and the Judicial Officer is not an independent trier of fact. The cases cited by Respondent to support its position, predate legislation which was specifically intended to establish the Judicial Officer as an independent officer within the Postal Service who could preside at hearings. See P.L. 86-676, 74 Stat. 554, presently codified at 39 U.S.C. § 204. Thus, under the present statute, the Judicial Officer clearly has authority to preside at hearings. In addition, Postal Service implementing regulations clearly reflect the independence of the Judicial Officer. 39 C.F.R. § 224.1(c)(4). Therefore, there is no merit to this contention.
Respondent has requested the production of all medical reports regarding any "Shrink-Wrap product ever received by Complainant." Complainant objects to this request. Given the limited scope of this Supplemental Order proceeding, and considering our previous conclusion on the product advertised, we do not see how the requested information could be relevant or likely to lead to relevant evidence. Further, Complainant asserts that its medical report was prepared by an expert who will not be called as a witness and under the Federal Rules of Civil Procedure the report of such an expert is discoverable only when exceptional circumstances are shown (FRCP 26(b)(4)(B)). No such circumstances have been shown. Accordingly, based on the nature of this proceeding and the guidelines of FRCP 26, Respondent's request is denied.
Finally, Respondent has requested that the General Counsel appear as a witness at any hearing convened in connection with the Petition for Supplemental Order to testify with respect to the organizational relationship of the General Counsel and the Judicial Officer, and the proceeding in Genie Figure Slimmer. The matters about which Respondent desires the General Counsel's testimony have already been addressed and the testimony would not be relevant to any issue in this proceeding. Moreover, to the extent Respondent is asking that the General Counsel be directed to appear before the Judicial Officer, it is pointed out that the Judicial Officer possesses no subpoena power.
For the foregoing reasons, a Supplemental False Representation Order will be issued against Respondent unless by December 20, 1982, Respondent can show cause why a hearing should be convened to take evidence on factual matters in dispute which are relevant to the disposition of this Supplemental Order proceeding.