In the Matter of the Complaint Against THE COLUMBIA MINT 905 Sixteenth Street, N.W. at Washington, DC 20006-1774 P.S. Docket No. 15/98; P.S. Docket No. 15/99; 05/27/83 Duvall, William A. APPEARANCES FOR COMPLAINANT: Sandra C. McFeeley, Esq. Timothy J. Mahoney, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-1100 APPEARANCES FOR RESPONDENT: Basil J. Mezines, Esq. David U. Fierst Stein, Mitchell & Mezines 1800 M Street, N.W. Suite 1060 North Washington, DC 20036-5843
The cases bearing the two docket numbers appearing in the style hereof involve the same Respondent, both of the Complaints were filed on December 8, 1982, both cases were heard on the same day, and post-hearing submittals, two from each party, were filed on the same days, with the last submittal by each being filed on March 31, 1983. The products involved in the cases are not the same, but there are certain similarities between the two cases. In view of the foregoing facts, both cases are decided herein, but each case will be separately treated, except when to do so would result in unnecessary duplication.
In the first matter to be considered, Complainant alleged that Respondent is conducting a scheme to obtain money or property through the mail in the sale of a set, or sets, of Susan B. Anthony dollars on the basis of false representations within the meaning of 39 U. S. Code 3005. The specific charges of the Complaint are as follows: III
"By means of Exhibit One and other similar materials, Respondent represents, directly or indirectly, in substance and effect, whether by affirmative statements, implications or omissions that:
"1. The ordinary person would experience considerable difficulty in assembling the nine-coin set of Susan B. Anthony dollars offered for sale by Respondent.
"2. At eighty-eight dollars ($88.00) per set, the nine-coin set of Susan B. Anthony dollars offered for sale by Respondent is reasonably priced.
"3. The Columbia Mint is a place where coins or medals are made, located in Washington, D. C.
"4. Any of the twenty-cent pieces minted from 1875 through 1878 are worth thirty-nine thousand dollars ($39,000.00) today.
"5. Susan B. Anthony dollars are the shortest lived American coins ever minted.
IV
"The representations set forth in paragraph III above are materially false as a matter of fact."
Respondent answered as follows:
"Preamble. Respondent admits that it is doing business under the name and at the address shown in the caption of the complaint. Except as admitted, Respondent denies each and every allegation in the Preamble" and in each of the subsequent paragraphs of the complaint .
"I. Respondent admits and alleges that its advertisements have appeared in publications of general circulation, and that such advertisements invite readers to remit money through the mails. ***
"II. Respondent admits and alleges that Exhibit One is an advertisement published in December 1982. ***
"III. Respondent admits and alleges that an ordinary person would in fact experience considerable difficulty in assembling the nine-coin set of Susan B. Anthony dollars, that the nine-coin set is reasonably priced, that The Columbia Mint does make coins or medals and is located in Washington, D.C., that a twenty-cent piece from 1876 sold for a price in excess of $39,000, and that the Susan B. Anthony dollars are in fact the shortest lived American coins ever minted. ***
"IV. Respondent denies each and every allegation in paragraph IV."
A hearing was held in Washington, D.C. on March 11, 1983. Both parties were represented by counsel who participated in the examination and cross-examination of witnesses and in the introduction of evidence. Written proposed findings of fact, conclusions of law and supporting arguments, and reply briefs were filed by both parties.
Witnesses for Complainant were Postal Inspectors Connie Edwards and Phillip Brennan (Tr. 18, 29); Nelson Whitman, a professional numismatist for 20 years and a collector for 40 years; former manager for 18 years of the coin department at Woodward & Lothrop, a department store in Washington, D.C., and for the last four years, the owner and president of Capitol Coin and Stamp Company in Washington, D.C. (Tr. 42-43); and Francis C. Frere, of the Department of the Treasury, Bureau of the Mint, where he is Assistant Director of the Mint for Marketing. Mr. Frere presently is responsible for the marketing of the reimbursable numismatic operations and medals sales areas of the mint. Previously, as Assistant Chief of Production, he was jointly responsible for reactivation of facilities and increasing production to have a smooth transition into a new coinage system. (Tr. 86-88)
Respondent's witness was Neil S. Berman, 220 Fifth Avenue, New York, N.Y., a dealer in rare coins for 14 years. In his business, Mr. Berman buys and sells coins for his own account as well as for other coin dealers' accounts; he appraises coins; he finds coins for people who are looking for specific items; and he disposes of coins for people who have excess of specific items. Mr. Berman is a member of a large number of numismatic societies and associations; he has had a number of his articles on numismatic subjects published in various financial and professional journals; he has testified as an expert witness before the Subcommittee on Consumer Affairs and Coins of the House Banking Committee of the United States House of Representatives; he has performed numismatic appraisals for the Internal Revenue Service and for numerous banks; he is a member of the Board of Governors of the Institute of Numismatic and Philatelic Studies of Adelphi University, New York; and he is a contributor to the "Red Book," officially titled "A Guidebook of United States Coins." (Tr. 156-158; RX-3)
Messrs. Whitman, Frere and Berman were recognized as expert witnesses in regard to the matters as to which they testified.
1. Respondent has a mailing address at 905 Sixteenth Street, N.W., Washington, D.C., to which remittances of money through the mail are solicited for Brilliant Uncirculated complete nine-coin Susan B. Anthony Collector Sets. Mail is received at the aforesaid address and forwarded to an address at Rosemont, PA, where orders are processed and from which place merchandise is mailed to customers. (Tr. 19, 20, 22, 25-26, 30; Ans., Preamble; CX-14 (App. A hereto))
2. Respondent is licensed, and is engaged in doing business in the District of Columbia. (Tr. 25)
3. Respondent's advertisements appear in publications of general circulation; Exhibit One to the Complaint (App. A) was published in the November 1, 1982, issue of the Chicago Sun-Times; and Respondent solicits remittances of money through the mails by means of such advertisements. (App. A; Ans., Pars. I and II)
4. Each set of coins offered for sale by Respondent "will consist of one Brilliant Uncirculated coin from each of the only three mints (San Francisco, Denver, Philadelphia) that minted them for the three years they were minted (1979, 1980, 1981)." (App. A, order blank)
5. The price to Respondent's customers of the nine-coin set of Susan B. Anthony Coins is $88 per set (limit - 2 sets per order) plus $2.00 for insured delivery. (App. A, "PRIORITY ORDER FORM" order blank)
The question as to whether Respondent makes the representations set forth in paragraph III of the Complaint will next be considered and disposed of in the light of the following criteria derived from a number of cases.
The meaning of advertising representations is to be judged from a consideration of an advertisement in its totality and the impression it would most probably create in ordinary minds. Donaldson v. Read Magazine, 333 U.S. 178 (1948); Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957); Borg-Johnson Electronics v. Christenberry, 169 F. Supp. 746 (S.D.N.Y. 1959). Express representations are not required. It is the net impression which the advertisement is likely to make upon purchasers to whom it is directed which is important, and even if an advertisement is so worded as not to make an express representation, if it is artfully designed to mislead those responding to it the mail fraud statutes are applicable. G. J. Howard v. Cassidy, 162 F. Supp. 568. See, also, Virginia State Board of Pharmacy v. Virginia Citizens Council, 425 U.S. 748 (1976).
6. Applying the foregoing standards, Respondent makes the representations set forth in Par. III of the Complaint as will now be shown. 1/
A. The ordinary person would experience considerable diffi culty in assembling the nine-coin set of Susan B. Anthony dollars offered for sale by Respondent.
"Again, we must emphasize that the nine-coin collector sets are severely limited. These coins will never be minted again. We challenge you to try to assemble this complete nine-coin set yourself. Go to any bank and ask for a Brilliant Uncirculated Susan B. Anthony dollar from just one of the three years of minting and you will then quickly realize the exceptional opportunity you have. We strongly suggest--to avoid disappointment--that you not delay in ordering." (App. A, last par. starting in Col. 2)
In the above, and other, portions of its advertisement Respondent tells the readers that a limited number of these coins was made; because of the error made in the estimate as to their acceptance, the coins became desirable because of their scarcity; they will "never be minted again"; and Respondent "challenges" readers of the advertisement to try to assemble the nine-coin set for themselves. It is strongly suggested that failure to order the set from Respondent, without delay, will result in the inability to obtain the set with the consequent disappointment to the reader. These statements by Respondent clearly suggest the thought expressed in this representation.
B. At eighty-eight dollars ($88.00) per set, the nine-coin set of Susan B. Anthony dollars offered for sale by Respondent is reasonably priced.
"UNITED STATES TREASURY
MINTING ERROR*
Creates Rare Collecting Opportunity"
(App. A, Caption)
* * *
"What's so remarkable about
this set?
Consider these facts:"
* * *
"This may be the only complete 'closed' coin issue you will ever be able to buy in your lifetime at such a reasonable cost."
(App. A, Col. 1, 5th statement under sub-caption "What's so remarkable ***")
The price of $88.00 for a set of nine coins said to be of such "LIMITED AVAILABILITY" (Sub-caption near bottom of Col. 1, App. A), together with Respondent's outright statement affirming such reasonableness, scarcely could be understood by a reader of Respondent's advertisement as anything other than an assurance that the price is reasonable.
C. The Columbia Mint is a place where coins or medals are made, located in Washington, D.C.
"The Washington, D.C. Columbia Mint has acquired a limited quantity of Susan B. Anthony coins in Brilliant Uncirculated condition and assembled them into complete nine-coin collections, consisting of one coin for each of the three years they were minted (1979, 1980, 1981) and from each of the only three mints (San Francisco, Denver and Philadelphia) that minted them.***"
(App. A, Col. 1, last par.)
* * *
"The Columbia Mint
905 Sixteenth Street, N.W.
Washington, D.C. 20006"
(App. A, Respondent's address on order form)
A "mint", according to the first definition in Webster's New World Dictionary, College Edition, is "a place where money is coined by authority of the government." (See, also, Tr. 60, lines 12-13; Tr. 86, lines 20-25; Tr. 185, lines 1-4) This definition is consistent with the common understanding of the word. The "Washington, D.C. Columbia Mint" seeks remittances of money to itself for coins and it has the money sent to "The Columbia Mint, 905 Sixteenth Street, N.W., Washington, D.C.," the seat of the Government. Respondent's advertisement appeared in a large metropolitan newspaper. The purpose of 39 U. S. Code § 3005 is to protect the unwary and unsuspecting, as well as the knowledgeable and worldly-wise. Gottlieb v. Schaffer, 141 F. Supp. 7, 16 (S.D.N.Y. 1956) It is but a short, and natural step for the average reader to proceed from the advertisement's statements to the impression embodied in the above representation.
D. Any of the twenty-cent pieces minted from 1875 through 1878 are worth thirty-nine thousand dollars ($39,000.00) today.
"SIMILAR COIN WILL HISTORY
WORTH $39,000] REPEAT ITSELF??
"The last time there was a similar collector opportunity was more than 100 years ago when 20-cent coins were minted in 1875, 1876, 1877 and 1878. The similarities between that 20-cent coin and the Susan B. Anthony coins are astounding. The old 20-cent piece was about the same size as a quarter just like the Susan B. Anthony. Consequently, the people rejected it--just like the Susan B. Anthony. Circulation quantities of the old 20-center were struck in large numbers only the first year--just like the Susan B. Anthony. Believe it or not, one of those old 20-cent coins would bring you as much as $39,000 today] Just think about the potential of the Susan B. Anthony coins for you."
(App. A, Col. 2, 2nd complete par.)
The penultimate sentence in the above quotation is a model of ambiguity. In different contexts it could, with justification, be interpreted to mean that "any one of those old 20-cent coins" or "there is one of those old 20-cent coins which" could be sold today for as much as $39,000. As expressed by Respondent, however, the emphasis throughout the paragraph quoted above is on the high value of the old coins, with the result that the natural tendency of the reader is to assign the high value to all of the "old 20-cent coins." The overall effect is to cause the reader to believe that the Anthony dollars being offered by Respondent have a chance to achieve a comparable growth in value.
E. Susan B. Anthony dollars are the shortest lived American coins ever minted.
"What's so remarkable about this set?
Consider these facts:
* * *
"Susan B. Anthonys are undoubtedly the
shortest lived American coins ever
minted."
(App. A, Col. 1, 6th item under sub-caption
"What's so remarkable ***.")
It suffices to say that, for the most part, the representations alleged by Complainant in paragraph III of the Complaint to be made by Respondent are stated in the advertisement in such clear language, or with such artful use of implication and innuendo, that there is little, if any, need to resort to the rules of interpretation previously stated in order to determine their meaning to the average reader. This last charged representation in the Complaint is a vivid illustration of the validity of this statement.
7. The Materiality and The Truth or Falsity of the Representa tions 2/ Paragraph III.1. of the Complaint
Complainant's evidence on the question as to whether "The ordinary person would experience considerable difficulty in assembling the nine-coin set of Susan B. Anthony dollars offered for sale by Respondent" would tend, if anything, to support the finding that the representation is true. If the representation were found to be false, however, it would mean that "any" or "all" ordinary persons would have little, if any, difficulty in acquiring a complete nine-coin set of Susan B. Anthony (SBA) dollars.
The first phase of the problem presented here is that of the available supply of the coins. Mr. Whitman stated that in 1981 3,000,000 of the SBA coins were minted at the Philadelphia Mint. (Tr. 56) The source of his information was the publication entitled "A Guidebook of United States Coins" by R. S. Yeoman. This publication was described by the witness as the "bible for all coin collectors" (Tr. 55), and this categorization was concurred in by Respondent's witness. (Tr. 161) 3/ In this publication no SBA dollars are shown as having been minted in 1982. That no such coins were minted in 1982 was confirmed by the witness Frere (Tr. 99), who also said that production of SBA coins could be resumed in the discretion of the Director of the Mint if the need for them arises, so long as legislative authority exists. (Tr. 102) If, as may be, or may not be true, all 3,000,000 of Philadelphia 1981 SBA's are available, that number would automatically be the maximum number of complete sets of all of the coins minted in the Philadelphia, Denver, and San Francisco mints for the years of 1979, 1980 and 1981, the only years, to date, in which they have been minted. Even if the minting of SBA dollars is resumed at some time, none of the future minting will be dated 1981. Each such coin would bear the year in which it is minted. (Tr. 128) Thus, the maximum number of sets of SBA coins like those offered by Respondent is firmly fixed at 3 million.
There is uncontroverted evidence in the record that there probably are between 11 and 12 million serious coin collectors and about 20 million investors. It was the opinion of Respondent's expert witness, Mr. Berman, that the 3 million Philadelphia-minted 1981 SBA coins could be very easily absorbed into the market. (Tr. 190) It may be that 3,000,000 is such a large number of possibly available sets of the SBA coins that they may never be in great demand. If that possibility exists, however, there is no evidence on that point in the record.
Recognizing the possibility of the unlikelihood of sets of SBA coins comparable to those offered by Respondent being available to great numbers of ordinary persons, it must be said that, except as mentioned above, the testimony of Respondent's witness on this point is not impressive. He does not stock the sets himself, and he was unable to obtain them from any of the seven largest coin dealers in New York. (Tr. 166) In addition, in his "search" he walked into three or four banks looking for the sets and he called at least six or eight other banks. (Tr. 167) He reported that he did not find a single complete set anywhere. (Tr. 168) He added that he would suspect that the farther one goes from a major city the more difficult it would be to find such a set. (Tr. 170) On the other hand, when he was looking for the coin set in New York, price was not a matter that he discussed, but he suspected that if he had bid high enough, he might have been able to find a set somewhere. (Tr. 177-178) Furthermore, he did not inquire of anyone as to the availability of the individual coins that go into the set to deterjine whether one could be assembled. (Tr. 190) Thus, his testimony with reference to the representation alleged in paragraph III.1. of the Complaint has numerous weaknesses.
The sets of coins, or the coins from which such sets can be assembled are in existence. Mr. Whitman stated that the coins are not scarce (Tr. 57); that coins of all three years are equally available; that it is no more difficult to obtain the coins of one of the three years than of any other of the three years; and that a full set could be obtained from a majority of the coin dealers. (Tr. 75) It is simply unrealistic to state that coins of all three years are equally available. RX-6, p. 160 shows that in 1981, Denver minted 250,000 more SBA's than did Philadelphia, and San Francisco exceeded Philadelphia's production by 492,000. Again, Philadelphia's mintage established the maximum and the amount by which the other mints exceeded this maximum is immaterial.
SBA coins are advertised in "COINS" magazine by dealers who offer to furnish the coins minted at each mint for each of the years 1979, 1980 and 1981. (CX 30, pp. 35, 45, 52 and 82, although in the advertisement on p. 82, no coin is listed for the Denver Mint in 1980.) (Respondent objected strenuously to the admission in evidence of CX-30. The reasons for overruling Respondent's objections are set forth in Appendix C to this Decision.)
The sum total of the effect of all of the foregoing evidence is that coin dealers other than Respondent offer either the sets of SBA coins or the coins from which the sets can be assembled. But there is no proof in the record that all of, or any number more than 3 million of ordinary, or extraordinary, persons can acquire a set of coins like the sets offered for sale by Respondent. The evidence establishes that there are some 32 million serious coin collectors and investors who are potential purchasers of the sets that are presently available. It follows that the ordinary person, which term includes all "ordinary persons" whether they are amateur, professional, or non-numismatists, may find it difficult, if not impossible to assemble the complete nine-coin set. As more of such persons acquire the sets, the more difficult it will become until the entire supply has been absorbed. Of course, if a willing buyer's price is right there usually can be found a willing seller, but that fact does not increase the number of available sets.
A. The representation here involved is a material one. Complainant has not sustained its burden of proving the falsity of Respondent's representation that the ordinary person would experience considerable difficulty in assembling the nine-coin set of Susan B. Anthony dollars offered for sale by Respondent.
Is Eighty-Eight dollars ($88.00) a reasonable price for the nine-coin set of SBA dollars offered by Respondent?
There is little evidence in the record on this question.
Complainant's Mr. Whitman stated that he would sell a set comparable to that offered by Respondent "in the neighborhood of $25 to $35 at the present time." (Feb. 1983). This price would be "the same generally among coin dealers." (Tr. 57-58) In pricing any coin, there is no fixed percentage of markup. It would be the current price as published in weekly public coin papers that are read by coin collectors. One of the considerations entering into the sales price is the price paid by the dealer for the particular coin. When asked whether there is a two or three-time markup over the wholesale price, Mr. Whitman said it could very well be possible that different retailers use different standards in pricing. Retailers do not agree on a specific price for which a given coin will be sold, but there would be a degree of pricing (which apparently means that the market for a coin generally tends to determine the price). Mr. Whitman said that "many dealers use an approximation of about ten percent over the wholesale price that is listed in the 'gray sheet'," a daily publication which carries news of coin prices. (Tr. 82-83) Mr. Whitman made no comment as to whether $88 is a reasonable price for the coin set offered by Respondent.
Mr. Berman does not handle this coin set being offered by Respondent, but he did testify as to pricing procedures and practices. He has both bought and sold coins at prices higher and lower than those shown on the "gray sheet." He sees nothing unreasonable about selling a coin for a price that is more than that listed on the guides. Some shops charge more or less than others do for the same coin, and he has had the experience of paying for a coin at one place and discovering later that he could have gotten it for less at another place. Among the factors which enter into the pricing of a coin are: the time required to find it; the replacement value; the availability of the coin; and "what the market will bear." (Tr. 179-182)
Mr. Whitman adopted the latter yardstick as one measure of value when he was asked his opinion as to the current value of an 1825 or 1826 20-cent coin. He replied: "* * * It would depend upon the demand and how much somebody would want it. It could bring 10,000 or it could bring 100,000." (Tr. 78)
The foregoing paragraphs under this issue summarize the evidence that is in the record on this point. This evidence is inconclusive as to whether Respondent's price for its merchandise is or is not reasonable. Respondent's price of $88.00 is approximately 2 1/2 times Mr. Whitman's current maximum price of $35.00. (Tr. 73) There is no testimony in the record that this price differential is unreasonable. There is testimony that coin prices vary from dealer to dealer and that one of the factors to be considered in pricing coins is "what the market will bear."
B. Complainant did not sustain its burden of proof as to the alleged falsity of this material representation.
To Mr. Whitman, the term "mint" means a place where coins and medals are struck. (Tr. 60, 78) To Mr. Berman, a "mint" is a place where coins are manufactured. When asked whether the word could mean "a company that manufactures coins," he replied: "I guess, colloquially." (Tr. 185) Speaking of the United States Mint, Mr. Frere stated that its major function is the production of United States coinage for commerce. (Tr. 86)
Respondent, in its advertisement, refers to itself as "The Washington, D.C. Columbia Mint" and solicits remittances of money to "The Columbia Mint, 905 Sixteenth Street, N.W., Washington, D.C. 20006." (App. A)
Postal Inspector Connie Edwards, the principal investigator in this case, was the first witness called by Complainant. Inspector Edwards called the toll-free telephone number shown on Respondent's advertisement for the Washington Silverpiece, which number is 800-228-5000. (App. B) The call was answered by a woman who said that normal delivery time for the item usually took from four to six weeks. When asked where she was located, the speaker told the Inspector that she was in Rosemont, PA. Inspector Edwards then said that she noticed the Washington, D.C. address on Respondent's advertisement and she asked whether she could go by that office and pick up one of the pieces in order to be assured that she would have it within two weeks. The speaker in Rosemont said she did not know - that the place where she is employed just accepts orders for the item. The speaker in Rosemont did not have a telephone number for the Washington office so the conversation ended.
Inspector Edwards then looked into the Washington, D.C. telephone directory and found a listing for The Columbia Mint with a local number, but with the location shown as Wynnewood, PA. This call, too, was answered by a woman, and the Inspector asked if she was speaking to The Columbia Mint at 905 Sixteenth Street, Washington, D.C. The Inspector explained her need for the Silverpiece in two weeks and asked if she could come by the office and pick one up. Inspector Edwards was told that she could not do this because no coins are kept at the Washington office "because we are strictly a mail order company." Respondent's representative then offered to put in a rush order and guarantee delivery within two weeks. The Inspector accepted the offer, using her maiden name as the purchaser, and her American Express card. In less than 10 days, the Inspector received a small package (CX-6) postmarked Wynnewood, PA. Enclosed in the package was one of the Washington Silverpieces. (CX-5) (Tr. 18-21)
On February 1, 1982, Inspector Edwards noted the 800 toll-free number on an advertisement for the Susan B. Anthony dollars. (App. A) She called the 800 information number and asked if there is a toll-free number listed for The Columbia Mint. She was told there is such a number which is 1-800-345-1328. This is the number appearing on Appendix A. The address for this number is Rosemont, PA (Tr. 22)
Inspector Edwards learned that Respondent is licensed to do business in Washington, D.C., and is assigned a tax number for filing sales tax reports in the District of Columbia. (Tr. 23)
According to Mr. Whitman (Tr. 81-82) and Mr. Frere (Tr. 118119), there are no private mints in Washington, D.C. at which coins or medals are struck. Mr. Berman does not claim to know much about, or have an interest in private mints since he does not handle very many medals. In the course of his reading he sees their advertisements, and his knowledge about the private mints is, in general, about equal to his knowledge of Respondent. (Tr. 213)
In its post-hearing presentations, Respondent, in regard to this particular issue, states a representation with which it is not charged in the Complaint. Respondent then proceeds to argue that it does make this representation which it says is true. All of which technique is interesting, irrelevant and immaterial. (R.P.F.F. 25-33; R's Reply Brief, Item III, pp. 13-14)
The main point of this portion of Respondent's post-hearing submissions which require some comment is the assertion that "The Location of Respondent's Mint is Immaterial." (R.P.F.F. 34-36)
As previously stated, the only address given by Respondent in its advertising is 905 Sixteenth Street, N.W., Washington, D.C. Postal Inspector Phillip Brennan testified that he went to that address in search of The Columbia Mint. There he found an office building and he was referred by a guard to a law office on the third floor, an office among other business offices. Upon entering the office he was given Columbia Mint literature by a secretary, who told him that only orders are taken in Washington. All shipments are made from Pennsylvania. (Tr. 31-32)
It has been found that the average person believes that the word "mint" refers to a place where coins, used in commercial transactions, are made. That such a place is now selling United States coins from an address in the nation's Capitol city, and advertises publicly that it is doing so, creates in the mind of the average reader the impression that an aura of officialdom surrounds that activity which gives it unusual credibility. Not only is the manufacturing activity itself believable, but, also, the statements the activity makes about itself appear to make it entitled to full credence. The trust so engendered inevitably enhances the credibility of the person or activity about whom or which such statements are made . . . in this case, the Respondent. The secretary in Respondent's Washington office, however, told Inspector Brennan that the silverpieces are minted in Pennsylvania.
C. The representation that The Columbia Mint is a place where coins or medals are made, located in Washington, D.C., is a material representation and it is false.
This is the representation that any of the twenty-cent pieces minted from 1875 through 1878 are worth thirty-nine thousand dollars ($39,000) today.
Respondent insists that the statement "Believe it or not, one of those old 20-cent coins would bring you as much as $39,000 today]" means that there is just one such coin. (R.P.F.F. 37-40) What, then, does Respondent mean by (1) the statement that "The similarities between that 20-cent coin and the Susan B. Anthony coins are astounding"; (2) the statement "The old 20-cent piece was about the same size as a quarter just like the Susan B. Anthony"; and (3) "Consequently, the people rejected it --just like the Susan B. Anthony"?
In the advertisement, the last three statements precede the statements embodied in the present representation. The mind of the reader has become accustomed to seeing the "old 20-center" used in the singular to refer to the entire mintage. When all the similarities between that coin and the Susan B. Anthony have been pointed out, the reader believes the advertisement speaks collectively of the entire group of 20-cent coins by use of the singular. The reader then carries this impression forward to the portion of the advertisement dealing with the high price that just one - any one - "old 20-center" will bring on today's market. The effect of the skill of the adman is to have the reader rank the Susan B. Anthony alongside the "old 20-center" in terms of the value of the investment.
The truth or falsity of this obviously material representation as it would be understood by the average reader is determinable from the following excerpt from A Guidebook of United States Coins, 1983 edition recognized by both parties as "the Bible" for coin collectors (Whitman-Tr. 55; Berman-Tr. 161):
At this point in the I.D. there appears a copy of an advertisement
D. The representation that any of the twenty-cent pieces minted from 1875 through 1878 are worth thirty-nine thousand dollars ($39,000.00) today is false.
This representation is the one in which Respondent states that the "Susan B. Anthonys are undoubtedly the shortest lived American coins ever minted."
With respect to this representation, the best qualified expert to testify in this proceeding was Francis D. Frere, Assistant Director of the Mint for Marketing. Mr. Frere stated that specific legislation is required before the Bureau of the Mint is authorized to produce a coin. An Act must have been passed by the Congress and it must have been approved by the President. (Tr. 97) Such authorization in the case of the 20-cent coin became law on March 3, 1875. (CX-22; RX-6)
As to what determines the end point of the life of a particular issue of coin, Mr. Frere appeared to indicate that, while the matter is not one on which there is unanimity of thought, that point normally would be fixed when the authority to issue a coin is cancelled by later legislation. (Tr. 97) The authority to continue production of the 1875 20-cent coin was terminated by the Act of Congress which was approved by the President on May 2, 1878. (CX-29)
The representation that is here at issue is material, otherwise Respondent would not place such emphasis on the shortness of the life of the Anthony dollars. It is a matter of common knowledge that old, rare coins are more valuable than newer, less rare coins. Regardless of the yardstick by which numismatists measure the life span of a coin, the Congress really determines the period of time for which a coin may be produced. The Congress terminated the life span of the 1875-1878 20-cent coin by the Act of May 2, 1878. The viability of that coin, viewed in the most liberal terms, was four years. Authority for the issuance of the Susan B. Anthony coin was enacted on October 10, 1978. By any reasonable standard of measurement that may be selected, the life span of the SBA dollar has, as of the date of this decision, exceeded that of the 20-cent coin by several months and, also, as of the date of this decision, no legislation to terminate its authorization has been introduced. Exhibit CX-9 is an excerpt from the book by Yeoman which shows an Eisenhower Bicentennial silver dollar that the United States Mint was authorized to produce for only one year. (Tr. 114)
E. The representation that the Susan B. Anthonys are undoubtedly the shortest lived American coin ever minted is false.
Proposed findings of fact and conclusions of law submitted by the parties in this case have been fully considered. Such proposed findings of fact and conclusions of law have been adopted to the extent herein indicated. Otherwise, such proposals are rejected because they are unsupported by and contrary to the law and the evidence in this case or because of their irrelevance or immateriality.
It is concluded as a matter of law that the Respondent, in the sale of the nine-coin set of Susan B. Anthony dollars as herein related, is engaged in conducting a scheme or device for obtaining money through the mails by means of representations that are false in regard to material matters of fact, as heretofore found, within the meaning of Section 3005 of Title 39, United States Code.
An order of the type provided by the said 39 U. S. Code 3005 should be issued against this Respondent.
In this case Complainant alleged that Respondent is engaged in conducting a scheme to obtain money or property through the mails in the sale of a "Washington Silverpiece" by means of false representations within the meaning of 39 U.S.C. § 3005.
The following specific charges are set forth in the Complaint:
III
"By means of Exhibit One App. B to this Decision and other similar materials, Respondent represents, directly or indirectly, in substance and effect, whether by affirmative statements, implications or omissions that:
"1. The Washington Silverpiece offered for sale by Respondent is the first silver coin or medal ever struck commemorating a U. S. President.
"2. Respondent is affiliated with or is otherwise an authorized agent of the U. S. Mint or other unit of the U. S. Government.
"3. The Columbia Mint is a place where coins or medals are made located in Washington, D. C.
"4. The Washington Silverpiece offered for sale by Respondent is the same George Washington commemorative half dollar issued by the United States Mint commencing in 1982.
"5. The number of Washington Silverpieces to be released by Respondent is limited to an edition of pre-determined size.
"6. The Washington Silverpiece offered for sale by Respondent is issued by the United States Mint.
IV
"The representations set forth in paragraph III above are materially false as a matter of fact."
Respondent's Answer is as follows:
"Preamble. Respondent admits that it is doing business under the name and at the address shown in the caption of the complaint. Except as admitted, Respondent denies each and every allegation in the Preamble and in each of the subsequent paragraphs of the Complaint.
I. Respondent admits and alleges that its advertisements have appeared in publications of general circulation, and that such advertisements invite readers to remit money through the mails. ***
II. Respondent admits and alleges that Exhibit One is an advertisement published in December 1982. ***
III. Respondent admits and alleges that the Washington Silverpiece offered for sale by Respondent is the first silver medal ever struck commemorating a United States president, that The Columbia Mint does make coins or medals and is located in Washington, D.C., and that the number of Washington Silverpieces is limited to an edition of pre-determined size. *** Respondent specifically denies that any reference in the advertisement even refers to the U.S. Mint, much less suggests any connection between the Columbia Mint and the U.S. Mint.
IV. Respondent denies each and every allegation in paragraph IV."
The witnesses who testified in P.S. Docket No. 15/98 testified at the call of the same parties on whose behalf they testified in this proceeding.
1. Respondent has a mailing address at 905 Sixteenth Street, N.W., Washington, D.C., to which remittances of money through the mail are solicited for a "Washington Silverpiece." Orders received at the aforesaid address are forwarded to an address at Wynnewood, PA, from which place the merchandise is mailed to customers. (Tr. 19-21; Ans., Preamble; App. B)
2. Respondent is licensed and engaged in doing business in the District of Columbia. (Tr. 25)
3. Respondent's advertisements appear in publications of general circulation. Appendix B was published in the December 1982 issue of "COINS" magazine; and Respondent solicits remittances of money through the mails by means of such advertisements. (App. B; Ans., Pars. I and II)
4. The Washington Silverpiece is a disk of one Troy ounce of .999 Fine Silver, according to the label on its packaging, slightly more than 1 1/2 inches in diameter and approximately 1/8 inch in thickness. On the obverse are the likeness and the name of George Washington, 8 stars and the year "1982." On the reverse is replica of a winged eagle with a shield over the front part of its body, with arrows clasped in its right foot, and with an olive branch clasped in its left foot. Over the head of the eagle and between its upstretched wings there are lines radiating toward the circumference of the disk, while between the radiating lines are stamped the words "1 Ounce .999 Fine Silver". Beneath the eagle's right and left feet, respectively, are the years "1732" and "1982". Proceeding from the earlier year to the later, near the outer circumference, are the words "Two Hundred Fiftieth Anniversary." (CX-5)
5. The price of the Washington Silverpiece is $25, each, (limit - 5 Proof Silverpieces per order) plus $1 each for delivery, and if the customer wishes, a maximum of 2 Washington Silverpiece Proofs in 24 KT gold vermail at $40 each plus $1 each for delivery. (App. B, "OFFICIAL ORDER FORM")
6. Applying to Respondent's advertising material now under consideration the standards of interpretation that were applied to the advertising matter in P.S. Docket No. 15/98, Respondent makes, or makes in substance, the representations set forth in Paragraph III of the instant Complaint to the extent that will now be indicated.
A. The Washington Silverpiece offered for sale by Respondent is the first silver coin or medal ever struck commemorating a U. S. President.
"The First United States Presidential Silverpiece - $25."
(App. B, Subcaption under illustrations)
***"These, the first United States Presidential Silver pieces, will become true family heirlooms to be presented to your children and grandchildren as an important and valuable piece honoring the 250th Anniversary of the birth of George Washington."
(App. B, 3rd Col., 1st Par. under "A Silverpiece of Heirloom Value")
The impression stated in the above representation is a reasonable expression of the thought created in the mind of the reader of the language quoted from the advertisement. */ This quotation is representative of others which might be chosen, but this one is sufficient.
B. Respondent is affiliated with or is otherwise an author ized agent of the U. S. Mint or other unit of the U. S. Government.
"To guarantee the integrity of this unprecedented release, each Washington Silverpiece will be accompanied by its own Certificate of Authenticity attesting to its Issue Date, Limited Edition Proof status, and its Weight --one ounce of pure solid silver. The Certificate is signed by the former member of The United States Assay Commission, whose far sighted planning resulted in this historic Commemorative to George Washington."
(App. B, 1st and 2nd Col., last paragraph before "Limited Time-Price Protected)
The advertising statement reveals that the term of the Assay Commissioner has expired, but there is no statement, or even suggestion, that the Commission is no longer in existence.
* * *
"OFFICIAL ORDER FORM--MAIL BY DECEMBER 31, 1982"
(App. B, Respondent's order form caption)
It is interesting to note the subtlety in the identification of the ordinary order blank as the "OFFICIAL ORDER FORM." This language lends an additional air of officialdom to a "Mint" located in Washington, D.C.
C. The Columbia Mint is a place where coins or medals are made located in Washington, D. C.
"The exclusive release of the first United States Presidential Silverpiece in a 100% Solid Silver Proof specimen has been announced in Washington, D.C. by The Columbia Mint."
(App. B, 1st Col., 1st sent.)
"The one ounce 100% Solid Silver Proof quality Washington Silverpiece is available exclusively from the Washington, D.C. Columbia Mint--one of America's finest private mints."
(App. B, 2nd Col., last sentence before "Limited Time-Price Protected.")
* * *
"The Columbia Mint
905 Sixteenth St. N.W., Washington, D.C. 20006"
(App. B, Respondent's address on "Official
Order Form")
It is difficult to understand how it can be asserted that the reader of Respondent's advertisement can believe, in regard to the location and business of the Respondent, anything other than what is stated in the alleged representation.
D. The Washington Silverpiece offered for sale by Respondent is the same George Washington commemorative half dollar issued by the United States Mint commencing in 1982.
Respondent represents itself to be a Government-affiliated or -authorized place where coins or medals are made. It represents that the authenticity of the product is certified by a former member of the United States Assay Commission. It is inescapable that many readers will believe that this "Silverpiece" that is being offered for sale, (and which so much resembles a coin) is part of the issue minted by the Government to commemorate the 250th anniversary of the birth of George Washington. It is a matter of common knowledge that the ordinary person can not give the names of the people whose pictures appear on the various denominations of paper currency. There is no reason to believe that these same ordinary persons know with particularity the inscriptions on the various coins, and can thereby, on sight of one of them, or on seeing a photograph of the Washington Silverpiece, identify and distinguish between actual coins and photographs of Respondent's product.
E. The number of Washington Silverpieces to be released by Respondent is limited to an edition of pre-determined size.
"The
WASHINGTON SILVERPIECE
LIMITED RELEASE PROOF ISSUE"
(App. B, caption)
***
"LIMITED TIME--
PRICE PROTECTED
"The remarkable price of $25. per Silverpiece has been made possible by a committment sic from current supplies of silver. Because of the extreme fluctuations in the world market price of silver, this special price of $25 each will be guaranteed only until December 31, 1982 or until the initial stockpile of one hundred thousand ounces of pure silver has been minted--whichever event should happen first. Therefore, you are urged to order yours now while the opportunity is before you."
(App. B, Col. 2)
***
"Due to the unique circumstances of this minting, you are urged to order now. You are guaranteed the original issue minting price of $25 per Silverpiece provided your order is received before the minting limit is reached or before December 31, 1982, whichever occurs first."
(App. B, Col. 3)
This representation clearly expresses the sense of the advertisement on the matter of the number of silverpieces available, and the need for the reader soon to place an order.
F. The Washington Silverpiece offered for sale by Respondent is issued by the United States Mint.
The Assistant Director of the Mint for Marketing testified that the Bureau of the Mint is, in a number of circumstances, referred to as "the Mint." (Tr. 88) He, himself, did so in his testimony. (Tr. 86, 87, 88) Mints are places where coins and medals are made; the Washington Silverpiece bears a strong resemblance to a coin (and may even be one so far as the ordinary reader of the advertisement is aware) and everyone knows that United States coins legally may be minted and issued only by the United States Government through the Mint. The Columbia Mint tells its readers in a single statement tucked inconspicuously in the middle of a full page advertisement that it is one of America's finest private mints. This one disclaimer, however, does not catch the eye, or impress itself on the mind of the reader sufficiently to offset the effect of other references to the Columbia Mint found throughout the advertisement, including the following excerpt from which even the word "Columbia" has been omitted:
"A SILVERPIECE OF
HEIRLOOM VALUE
"By acting before December 31, 1982, you can assure yourself of acquiring directly from The Mint this exclusive Limited Edition 100% Solid Silver Presidential Silverpiece at the original issue minting price." (App. B, Col. 3, 1st sentence.)
Respondent makes the alleged representation.
7. The Materiality and The Truth or Falsity of the Representa tions 4/ paragraph III.1. of the Complaint
Related to the representation that the Washington Silverpiece is the first silver coin or medal ever struck commemorating a U. S. President, Respondent's most strenuous argument was addressed to the point that the word "piece" *** "is never used --even by ordinary consumers --to refer to silver coins." Respondent says that this statement is true because (1) its witness (Berman) says it is true and (2) its witness is better qualified than Complainant's witness (Whitman). (R.P.F.F. 4, 5) Without in any way indicating agreement with this assessment of the relative merits of these two witnesses, both of whom are expert in the field, Respondent appears somehow, when he was addressing this point, almost to have overlooked the witness Frere, Director of Marketing for the Mint, whom he relegated to footnote 9 on page 8 of his first written post-hearing submittal (hereinafter sometimes Brief No. 1). As pointed out earlier, Mr. Frere differed with Mr. Berman. Mr. Frere's experience qualifies him to be better versed in the way in which such a term as "piece" is commonly understood and used by persons outside the Mint, despite, or perhaps because of the fact that the Mint is punctilious in its choice of words to describe the various products of the Mint. Mr. Frere said that when persons not connected with the Mint are asked about a "gold piece" they normally "think of it as being a gold coin," and that, by the same token, reference to a "silver piece" would be taken by such persons to refer to a silver coin. (Tr. 118) The suggestion that Respondent's Silverpiece may be a coin is made even stronger by the comparison of it, in the lower portion of the left-hand column of App. B, with "the famous and rare Morgan and Peace Silver dollars." It is interesting to note that never once in its advertisement does Respondent refer to its "Silverpiece" as a medal or a medallion, another factor reinforcing the possibility that it is a coin that is for sale.
It may be possible that the nature of Mr. Berman's business and the interests of the customers for whom he locates and purchases rare coins make it less likely that he uses the terms, or hears various coins referred to in more popular parlance. (supra, pp. 4-5; Tr. 157-164; RX-3) Nevertheless, it is worthy of note that the "Guidebook of United States Coins" by Yeoman, in which Mr. Berman has been listed as a contributor for years and with which he has been involved for a longer period, refers to different silver coins as "five-cent pieces," "twenty-cent pieces," quarter "pieces," and "fifty-cent pieces" (CX-10, 11, 18, 22, 24 and 26) As previously pointed out, Messrs. Whitman and Berman concurred in the view that the Guidebook, which is an annual publication, is the "Bible" for all coin collectors and for the industry. (Tr. 55, 161)
If legislation authorizing a coin designates it as a coin containing silver, such a coin is a silver coin and it is so regarded by the Mint (U.S.) and by everyone else. Some years back, the use of coins composed 90% of silver was discontinued and the use of 40 percent content of silver was adopted. This change in the silver content did not cause any change in the designation or description of the coins --they were still referred to as silver. (Tr. 112-113)
A Roosevelt dime was produced in silver as well as in a cupronickel clad. An Eisenhower dollar was produced in silver clad as well as cupro-nickel. (CX-7, 8, 9, and other commemorative silver coins are illustrated CX-10 and 11) (Tr. 113-114) The coinage of the Roosevelt and Eisenhower silver pieces pre-dated Respondent's product by a substantial number of years. The matter of the quantity of silver contained in them is immaterial - all are popularly and properly called either silver coins or silver pieces.
If Respondent's product is regarded as a silver commemorative medal, medallion, or other similar item, a claim Respondent does not specifically make in its advertising material, it still is not the first of such objects. There have been many commemorative medals made by the Mint at the authorization and direction of the Congress. Among these have been some silver medals, such as the 1974 John Adams 5/ and the 1976 Thomas Jefferson, which were part of the activities in celebration of the bicentennial of this country. Both of these ante-date Respondent's medals. (Tr. 114116; CX-7, 8, 9, 10, 11)
A. Respondent's representation that its Washington Silverpiece is the first silver coin or medal ever struck commemorating a U. S. President is a material representation, and it is false.
The next representation to be considered is that Respondent is affiliated with or is otherwise an authorized agent of the U. S. Mint or other unit of the U. S. Government.
In Respondent's Response to Request for Admissions submitted prior to the hearing, Respondent admitted that it is not affiliated with and is not otherwise an authorized agent of the United States Mint or of any unit of the United States Government.
B. Accordingly, this material representation is false.
This representation is the one in which Respondent leads the readers of its advertisement to believe that the Columbia Mint is a place where coins or medals are made, located in Washington, D.C.
C. This material representation is found to be false for the reasons stated, supra, in connection with Representation No. III.3. in P.S. Docket No. 15/98 relating to Susan B. Anthony dollars. The pertinent parts of pages 17-21 of this Initial Decision are incorporated by reference at this place as fully as if said pages were set forth herein at length.
In this representation Respondent says or implies that the Washington Silverpiece offered for sale by Respondent is the same George Washington commemorative half dollar issued by the United States Mint commencing in 1982.
When one can see CX-5 together with CX-12 and can compare the two illustrations, he will see that there are differences between the silverpieces.
D. This material representation is false.
This is the representation in which the Respondent states, in substance, that the number of Washington Silverpieces to be released by Respondent is limited to an edition of pre-determined size.
The parties agree, and the record reveals, that there was no evidence adduced in regard to the truth or falsity of this representation. (Comp. Br., p. 21; R. Br. No. 1, p. 25)
E. Accordingly, Complainant failed to bear its burden of proof with respect to this representation and this portion of the Complaint is hereby dismissed. The representation is a material one.
In this representation Respondent leads the readers of its advertisement to believe that the Washington Silverpiece offered for sale by Respondent is issued by the United States Mint. This is a material representation.
It was pointed out as the last item in paragraph 6.F. that Respondent, in its advertisement, refers to itself as "The Mint" in the same manner as does the United States Mint.
On the other hand, however, reference is made to the testimony of Inspector Edwards as to the manner in which and the place from which she ordered the Washington Silverpiece which is in the record as CX-5. The return address on the mailing sticker on the package containing the Silverpiece reads "Columbia, 905 16th Street, N.W., Suite 304, Washington, D.C. 20006" but the package is postmarked "Wynnewood PA, Jan 19 '83." It is clear that the United States Mint did not play a part in this transaction. (Tr. 18-21; pp. 18-19, supra; CX-5)
F. The material representation that the Washington Silverpiece offered for sale by Respondent is issued by the United States Mint is false.
The findings that various representations in both cases are material are made in the light of, and when measured by, the criteria established in a number of cases from some of which the following excerpts are taken:
In Lynch v. Blount, 330 F. Supp. 689, (S.D.N.Y., 1971; aff'd. 404 U.S. 1007 (1972)), Judge Medina, speaking for a three-judge District Court, after identifying several laws designed to protect people against fraudulent use of the mails, even if the false statements are made without scienter, said:
"***The purpose of these laws is not to punish the offender but to protect the public. The Post Office Department strongly supported the 1968 amendment for the very purpose of making it less difficult to put an end to these swindles. We think that was a worthy purpose. If, in a given case such as the one now before us, the selling of some particular nostrum is the sole business in which plaintiff is engaged and the stop order will put him out of business, so much the better, if the proofs substantially support the finding that the false statements were made as part of a scheme to defraud.
"This is not to say that stop orders will be upheld by the courts whenever a person has resorted to a little exaggeration or mere puffing. The false statement must be material and it must be substantial to warrant the imposition of this drastic remedy." (id. at 693)
As to the yardstick to use to decide whether a representation is material, it was said in Chaachou v. American Central Insurance Co., 241 F.2d 889, 893 (5th Cir. 1957) that the representation must
"***cause the other party to do other than that which would have been done had the truth been told."
What would seem to be so plain, yet what seems to have been overlooked, ignored, or purposely avoided by Respondent in this case is a simple fact recognized by Mr. Justice Blackmun in his opinion of the court in Virginia Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748, 772 fn. 24, (1975), quoting from United States v. 95 Barrels of Vinegar, 265 U.S. 438, 443 (1924), when he said:
"It is not difficult to choose statements, designs and devices which will not deceive."
On the same point, it was said in Rhodes Pharmacal Co. v. Federal Trade Commission, 208 F.2d 382, 387 (7th Cir., 1953):
"The important question to be resolved is the impression given by an advertisement as a whole. Advertisements which are capable of two meanings, one of which is false, are misleading ***. Advertisements which create a false impression, although literally true, may be prohibited."
Measured by the foregoing standards, the representations alleged in paragraph III of the Complaints in P.S. Docket Nos. 15/98 and 15/99 are material because they far exceed "a little puffing," because they are of the type that would cause the readers to order the products, which they would not be likely to do if the readers were told otherwise, and because a number of Respondent's sales statements are capable of two meanings, one of which is false, as a result of which the statements are misleading and create false impressions.
___________
Proposed findings of fact and conclusions of law submitted by the parties in this case have been fully considered. Such proposed findings of fact and conclusions of law have been adopted to the extent herein indicated. Otherwise, such proposals are rejected because they are unsupported by and contrary to the law and the evidence in this case or because of their irrelevance or immateriality.
It is concluded as a matter of law that the Respondent, in engaging in the operation described in this decision, is engaged in conducting a scheme or device for obtaining money through the mails by means of representations that are false in regard to material matters of fact, as heretofore found, within the meaning of Section 3005 of Title 39, United States Code.
An order of the type provided by the said 39 U. S. Code 3005 should be issued against this Respondent.
William A. Duvall
Chief Administrative Law Judge
At the opening of the hearing certain of Complainant's exhibits in both cases were offered and admitted into evidence by stipulation of the parties. (Tr. 6, 63, 64) CX-2 is an advertisement by Respondent of its Washington Silverpiece which appeared in the December, 1982, issue of "COINS" magazine. CX-30 is the March, 1983, issue of "COINS," subtitled "The Complete Magazine for Coin Collectors." Counsel for neither party was aware of the existence of this issue of the magazine at the time the hearing was opened. At the hearing (Tr. 196-8, 200-202) and in its Proposed Findings of Fact (R.P.F.F. No. 1, in Doc. No. 15/98, Pars. 15 through 18), Respondent insisted that it was error to admit this document and that it would be error to rely on it. The error in its admission is said to be that (1) no hearsay exception supports its admissibility; (2) Complainant gave Respondent no advance notice of the possibility of the use of this publication, as required by Federal Rules of Evidence § 803(24) and as required by a pre-hearing Order; and (3) Complainant gave no copy of the publication to Respondent. It was urged that no reliance could be placed in the content of the publication because it is hearsay and because it "consists of commercial come-ons by unknown coin sellers." (R.P.F.F. No. 1, Par. 16)
It would be strange indeed if Respondent stipulated to the entry into the record in any case of an exhibit (such as CX-2) exemplifying its advertisement which appeared in a publication described by Respondent as "hearsay of the most unreliable sort," consisting of "commercial come-ons by unknown coin sellers," and concerning which "there is no reason in the record to find the advertisements accurate or believable." Respondent will be assumed not to suggest that this description applies to its own advertisement, but Respondent surely should not use such a publication as its advertising medium. In anyevent, based in significant part on the testimony of Respondent's expert witness, as will be set forth later, I do not accept the Respondent's harshly adverse characterization of this exhibit.
In paragraph 16 on page 12 of its Brief No. 1, Respondent did concede that its expert "testified that he had on occasion read this magazine --though not this issue --but did not state whether he ever relied upon it or considers it authoritative. (Tr. 195) He explicitly rejected the reliability of the four advertisements in issue. (Tr. 203, lines 13-14, Tr. 212, lines 7-12.)" On closer examination it will be found that Mr. Berman was less condemnatory of the publication than the foregoing quotations suggest.
If what Mr. Berman said at lines 13 and 14 of Tr. 203 and at lines 7-12 of Tr. 212 was an explicit rejection of the reliability of the advertisements on pages 35, 45, 52 and 82 of CX-30, his rejection at lines 21-24 of Tr. 212 of the reliability of Respondent's advertisement (App. A) was equally explicit. There was the following exchange: "Q. Do you have any idea whether The Columbia Mint would be able to supply you with a set of Anthony dollars they advertised? A. No, I don't."
On the other hand, in describing the publication "COINS," Mr. Berman said that "he has seen it," that "a friend of his writes for it," that " he, Mr. Berman is occasionally quoted in it," that "when he is quoted a copy is sent to him and he reads it," that it probably is "a widely circulated coin magazine among coin collectors," that " he is familiar with it as a publication that is circulated among coin collectors," that it "generally has colorful, interesting stories about coins and currency" (Tr. 194, 195) and that "dealers regularly advertise in 'Coins' Magazine." (Tr. 200-201) Mr. Berman obviously is more familiar with, and regards "COINS" more favorably than Respondent's earlier quotations of its expert's testimony would indicate.
Neither F.R. Ev. § 803(24) nor its counterpart, § 804(b)(5) governs the admissibility of CX-30. The notice requirement stated therein is applicable only to those unspecified matters that may arise under the residual exceptions covered by these portions of Rules 803 and 804.
The question of the admissibility of CX-30 is governed by F.R. Ev. 902(6) which provides:
"Rule 902. Self-authentication.
"Extensive evidence of authenticity as a condition precedent to admissibility is not required with respect to the following:
* * *
"(6) Newspapers and periodicals.--
Printed materials purporting to be newspapers or periodicals.
The Advisory Committee's General Note to Rule 902 is as follows:
"Case law and statutes have, over the years, developed a substantial body of instances in which authenticity is taken as sufficiently established for purposes of admissibility without extrinsic evidence to that effect, sometimes for reasons of policy but perhaps more often because practical considerations reduce the possibility of unauthenticity to a very small dimension. The present rule collects and incorporates these situations, in some instances expending them to occupy a larger area which their underlying considerations justify. In no instance is the opposite party foreclosed from disputing authenticity."
With specific reference to Paragraph (6) of Rule 902, the Advisory Committee said:
"The likelihood of forgery of newspapers or periodicals is slight indeed. Hence no danger is apparent in receiving them. Establishing the authenticity of the publication may, of course, leave still open questions of authority and responsibility for items therein contained. See 7 Wigmore § 2150. Cf. 39 U.S.C. § 4005(b), public advertisement prima facie evidence of agency of person named, in postal fraud order proceeding; Canadian Uniform Evidence Act, Draft of 1936, printed copy of newspaper prima facie evidence that notices or advertisements were authorized."
Insofar as the pre-hearing Order requiring disclosure is concerned, two factors clearly indicated that the proffered exhibit ought to be received. The first factor is that the March, 1983, issue of the publication was on news stands only about two weeks before the hearing (Tr. 197), and Complainant's counsel had seen it only about 15 minutes before Respondent's witness was examined with regard to it. (Tr. 199)
The second factor, and by far the more important one favoring admission of the exhibit, was recognition of (1) the character and probable reliability of the information contained in the publication indicated by Respondent's witness when he spoke of, among other things, its wide circulation among coin collectors, and the fact that dealers regularly advertise in it; and (2) the obvious materiality and relevance of the subject matter sought to be shown. Another important consideration was the tendency of the exhibit to make the existence of a fact in issue more or less probable than it would be without the evidence.
Together, these factors warranted the waiver of strict enforcement of the pre-trial disclosure order, the relaxation of which, in the then existing circumstances, was clearly a matter within the discretion of the judge.
It is true, as Respondent points out in its written posthearing presentations in Docket Nos. 15/98 and 15/99 that Complainant did not, with respect to certain of the representations alleged in the Complaint, offer any consumer testimony to show that consumers regarded the representations as having been made, or that any of such representations, if considered to have been made, were material. (e.g. In P.S. Docket No. 15/98, p. 10, § 13; p. 15, ??23, 24; p. 16, § 29; p. 18, § 36; pp. 19-20, ??38-40; p. 21, § 43; p. 22, § 47; p. 29, § 64. In P.S. Docket No. 15/99, the lack of consumer witnesses is raised as an objection in the following paragraphs in its first post-hearing presentation: p. 5, § 3; p. 7, § 5; pp. 9-10, ??9-10; p. 13, § 21; p. 14, § 24; p. 16, § 29; p. 17, § 31; p. 18, § 33; p. 21, § 44; p. 28, 1st and last ?s.)
The short answer to this argument by Respondent is that there is no need in this kind of proceeding for the kind of testimony the lack of which Respondent notes. For example, Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957), involved the interpretation of an advertisement, and the only evidence of its impression on the ordinary mind was the advertisement, itself. It had been held in the administrative proceeding under 39 U.S. Code 3005 that the impression derived from the advertisement by the ordinary reader was the false impression charged in the complaint. The Court upheld this determination and in doing so the Court said:
"The advertisement contained nothing of a scientific or technical nature which required explanation or the assistance of an expert for an understanding of its meaning or contents. The advertisement was aimed at the ordinary consumer and was published in media purchased by the lay public. The question at issue was the impression which the advertisement as a whole, made upon the average man. This was a matter for the trier of the facts who clearly was in a position, without assistance of expert testimony, to make his finding. The hearing examiner in rejecting the proffered evidence stated he needed no aid in interpreting the advertisement. There was no error in refusing to receive the testimony of the so-called experts. An expert's view of what he deems to be the psychological impact of the contents of an advertisement upon the reader, while it may be of help to those of the advertising world who write copy and advise the advertiser of a potential effective sales appeal, is of little help to an examiner who is called upon to decided sic from the advertisement as a whole the impression it is likely to make upon the general population--the proverbial man in the street. Donaldson v. Read Magazine, 333 U.S. 178, 68 S.Ct. 591, 91 L.ED 628." 152 F. Supp. at 468.
The above position of the Court in Vibra-Brush Corp. has been consistently followed in many administrative cases brought under 39 U.S. Code § 3005. Mamilab Products, Inc., P.S. Docket No. 1/32 (I.D. 1953); Anapax Products, Inc., P.O.D. Docket No. 3/53 (I.D. 1971); Beauty Originals, Inc., P.S. Docket No. 3/24 (P.S. Dec. 1975); Manuel Garcia Imports, P.S. Docket No. 5/127 (P.S. Dec. 1977); Davinol Products, P.S. Docket No. 7/22 (P.S. Dec. 1979). A similar position has been taken by the Federal Trade Commission in its proceedings, and the Commission has been upheld by the Courts. In E.F. Drew & Co., Inc. v. F.T.C., (2 Cir., 1956) 235 F.2d 735, 741, Judge Waterman said, in part, in words familiar to many:
"*** The Commission is not required to sample public opinion to determine what meaning is conveyed to the public by particular advertisements. Zenith Radio Corporation v. Federal Trade Commission, 7 Cir., 1944, 143 F.2d 29, 31; see also New American Library of World Literature v. Federal Trade Commission, 2 Cir., 1954, 213 F.2d 143, 145. The Commission, which is deemed to have expert experience in dealing with these matters, Federal Trade Commission v. R. F. Keppel & Bro., Inc., 1934, 291 U.S. 304, 314, 54 S.Ct. 423, 78 L.Ed. 814, is entitled to draw upon its experience in order to determine, in the absence of consumer testimony, the natural and probable result of the use of advertising expressions. Jacob Siegel Co. v. Federal Trade Commission, 1946, 327 U.S. 608, 614, 66 S.Ct. 758, 90 L.Ed. 888; Federal Trade Commission v. Hires Turner Glass Co., 3 Cir., 1935, 81 F.2d 362, 364.***"
The mere fact that Complainant did not produce victim witnesses is not determinative of the result of the proceeding.
1/ In F.F. 6.A. through 6.E. each representation specifically charged is stated first and underscored. The representation is followed by quoted excerpts from, and citations to the location of language from Respondent's advertising matter which supports the finding that the representation is made. The quoted language is illustrative only, and is not necessarily the only language on which the representation may have been based. In some instances a short comment has been added.
2/ In F.F. 7.A. through 7.E., the evidence with respect to each representation is discussed, after which the finding is stated.
3/ A copy of pertinent portions of the book is in evidence as part of RX-6, of which see p. 161.
*/ See Appendix D.
4/ In F.F. 7.A. through 7.F., the evidence with respect to each representation is discussed and the finding is stated.
5/ Respondent assumes, and it is found herein, that the witness in the discussion that occurred at Tr. 116 meant that the Adams referred to by the witness was John and not Samuel Adams. In any event, there is no doubt about the Thomas Jefferson.