In the Matter of the Complaint Against

 STANNIS RESEARCH INTERNATIONAL
 175 Fifth Avenue - Suite 3030
 New York, NY 10010-7703

 and
 P. O. Box 1779
 New York, NY 10016-1779

 and
 18 West 27th Street
 New York, NY 10001-6904

 P.S. Docket No. 17/60;  

 12/16/83

 Bernstein, Edwin S.  

 APPEARANCE FOR COMPLAINANT:
 Thomas A. Ziebarth, Esq.
 Consumer Protection Division
 Law Department
 United States Postal Service
 Washington, DC 20260-1100

 APPEARANCE FOR RESPONDENT:
 Sheldon S. Lustigman, Esq.
 Bass, Ullman & Lustigman
 747 Third Avenue
 New York, NY 10017-2803 

 BEFORE: Judge Edwin S. Bernstein

Complainant alleged and Respondent denied that Respondent is engaged in a scheme for obtaining money through the mails by false representations.

The parties waived a hearing and on October 25, 1983, filed a written stipulation which indicated that the record consists of the stipulation and Complainant's Exhibits One through Seven. The Stipulation and Complainant's Exhibits One through Seven are received into evidence. On December 2 and 5, 1983, the parties filed proposed findings of fact, proposed conclusions of law and memoranda. All of these have been considered. To the extent indicated, they have been adopted. Otherwise, they have been rejected as irrelevant or not supported by the evidence.

Pursuant to the parties' stipulation, the Complaint is amended in accordance with Complainant's September 12, 1983 Motion to

Amend Complaint and Respondent's September 6, 1983 Answer applies in all respects to the Complaint, as amended.

The parties stipulated and I find:

1. Respondent's advertisements offer for sale through the mail the product FOLLICIN-NH3.

2. Respondent's advertising also offers without charge a booklet entitled "Baldness Conquered." A person may order the booklet without FOLLICIN-NH3, without charge. A person may order FOLLICIN-NH3 and the booklet, in which event the person receives the FOLLICIN-NH3 product, reorder forms for FOLLICIN-NH3 and the booklet. The price of FOLLICIN-NH3 does not include a charge for the booklet; the booklet is provided to such persons at no charge.

3. A substantial number of persons responding to the advertisements (about 20% of the initial responses) order only the booklet.

4. The issue is whether Respondent's advertising that has been received in evidence makes the claims alleged by Complainant in subparagraphs III(a) through (h) of the Complaint. Respondent contends that its advertising materials in evidence do not make these claims.

The parties further stipulated:

1. If it is found that Respondent's advertising makes claims alleged in Paragraph III of the Complaint, Respondent will not contest the truth or falsity of such representations in this proceeding.

2. If it is determined that the representations contained in Paragraph III refer to the booklet and not to the product, FOLLICIN-NH3, Complainant does not contend that the advertisements misrepresented the content of the booklet. There is no issue as to the accuracy or validity of the booklet's content.

3. If Complainant fails to establish that Respondent's advertising makes representations alleged in Paragraph III of the Complaint, the Complaint should be dismissed. If Respondent's advertising makes such representations, an Order under 39 U.S.C. § 3005 should be recommended by the presiding Administrative Law Judge and, if affirmed by the Judicial Officer, such an Order should be issued.

Complainant contends that Respondent's advertising materials refer to Respondent's product, FOLLICIN-NH3. Respondent argues that these representations do not refer to FOLLICIN-NH3, but refer solely to Respondent's booklet, "Baldness Conquered" and the method of hair supplantation described in that booklet. Complainant's Exhibits (CX) 1, 2, and 3 are substantially similar copies of Respondent's advertisements. The advertisements contain different addresses and CX-1 contains the words "Bald? Thinning? Worried? read..." above the heading "Baldness Conquered," while CX-2 and 3 do not contain that language. CX-4 is a different advertisement used by Respondent for the product and booklet.

Respondent argued that it is clear that the advertising representations refer to the booklet because: (1) the name of the booklet appears in quotation marks and is preceded by the word "Read". Furthermore, the word "Read" appears in text larger than any text referring to FOLLICIN-NH3; (2) the representations for the booklet make repeated references to a process of hair supplantation as an effective method of baldness treatment and repeatedly state that this process is very expensive, ranging from $2,000 to more than $4,000; (3) the specific statement which refers to the product in the boxed areas of the advertisement containing a picture of FOLLICIN-NH3 does not misrepresent the product; (4) at least 20% of the readers who responded to the initial advertisement, ordered only the booklet.

The law is clear that the meaning of advertising representations must 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). Even if an advertisement is so worded as to not make an express representation, if it is artfully designed to mislead those responding to it, the false representation statute is violated. G. J. Howard v. Cassidy, 162 F. Supp. 568, 572 (E.D.N.Y. 1958).

Although Respondent is accurate with respect to the language that it characterizes in the above arguments, I find that, reading the advertisement as a whole, the impression that is conveyed to the average reader is that the product FOLLICIN-NH3 is the subject of the representations contained in the advertisements. Although the banner headline reads "Bald? Thinning? Worried? Read... 'Baldness Conquered' Medical Breakthrough Successful In More Than 95% Read the balance of the advertisement. There is no reference in that headline to the fact that "Baldness Conquered" is a publication rather than a concept. There also is no explanation that "Read" means "read a publication" rather than "read the balance of the advertisement."

If the reader scans the advertisement, his eye will stop at the pictures showing a man with a prominent balding condition in the first photo and a full head of hair in the second. The advertisement's subheadlines speak of "Excessive Premature Hair Loss", a "$10 million" research program, a "Breakthrough with Over 95% Success In Subjects With Male Pattern Baldness", and "The Hair Supplantation Discovery; A Patented Medical Compound." The latter section links "Hair Supplantation" with "A Patent Medical Compound." The paragraph that follows creates the impression that a medical preparation such as FOLLICIN-NH3 is the discovery which will solve the problems of the reader. That paragraph reads:

THE HAIR SUPPLANTATION DISCOVERY:

A PATENTED MEDICAL COMPOUND

With positive results in over 1,000 cases, our key HAIR SUPPLANTATION discovery is a medical compound, developed and patented by a major unaffiliated drug company. The miracle is that its use in the HAIR SUPPLANTATION process was entirely unforeseen until our testing began. It works by clinically preparing the scalp (without chemical irritants or dangerous hormones) to provide the environment where HAIR SUPPLANTATION can occur...safely and naturally. Though as one client puts it, the HAIR SUPPLANTATION PROGRAM is "simplicity itself", the biological mechanisms involved are too complex to be adequately explained in this limited space. I have therefore authorized a detailed, step-by-step, photo-illustrated report, titled BALDNESS CONQUERED, on the HAIR SUPPLANTATION PROGRAM and the research effort for AN ANSWER TO THE PROBLEM OF BALDNESS, not available to those who wish to see the POSITIVE PROOF in the privacy and comfort of their homes...without the expense of traveling to New York for a private consultation.

Immediately following this description is a picture of a bottle of FOLLICIN-NH3 accompanied by the following boxed-foremphasis text.

NEW] FOLLICIN-NH3

PREPARATION

FOR HAIR

FOLLICIN-NH3 Preparation For Hair has been specially formulated to provide scientific support to continued normal hair growth, hair nourishment, and hair maintenance. Applied directly to the scalp--where it is needed most--FOLLICIN-NH3's "function specific" micronutrient group works quickly to promote essential biological activity...while the FOLLICIN-NH3 regimen helps insure that hair follicles are properly serviced by the microscopic capillaries that carry the chemical building blocks necessary for BEAUTIFUL HAIR.

FOLLICIN-NH3: Quite simply, its got what you need to insure a beautiful, HEALTHY HEAD OF HAIR]

The next paragraph tells the reader that "through a special arrangement with a national maker of Hair Therapy products...the SECRETS OF HAIR SUPPLANTATION are available to the general public... b ecause...knowledge of the ULTIMATE ANSWER TO BALDNESS should not be limited to the privileged few." This continues to encourage the impression that what is being bought is FOLLICIN-NH3 rather than a booklet.

If one orders and reads the booklet, the recommended procedure to "conquer baldness" is found in the section on hair suturing, a procedure in which inert nylon sutures are surgically imbedded in the scalp. Tufts of hair are subsequently tied to these sutures to achieve a kind of semi-permanent toupee. The procedure has nothing to do with reversing the balding process of growing new hair. The section of the booklet describing this procedure closes with the observation that "hair suturing is expensive, with costs running to $2,000 and up..." Respondent indicates it will furnish information on where these procedures are available, upon request.

The fact that Respondent references hair supplantation does not refute Complainant's allegations that the reader is misled by the advertisement. The term, "hair supplantation" is not one generally known to the public. In the context of the balance of the advertisement, the average reader most likely would assume that "hair supplantation" refers to restoring hair by using FOLLICIN-NH3 rather than any other process. The references to treatments costing $2,000, $3,000, $4,000 and more do not alter this conclusion. This language does not indicate that the process recommended by Respondent will cost such sums. It is typical of language found in other advertisements in which advertisers contend that their product can be effective at a fraction of the cost of other products, treatments, or solutions.

The contention that 20% of the readers who respond to the initial advertisement, order only the booklet conversely indicates that approximately 80% of the readers feel that they need to order more than the booklet and, in fact, order the FOLLICIN-NH3 product. This indicates that these people feel that the product will help their baldness problems.

Additionally, the booklet is not normally seen by approximately 80% of Respondent's customers until after they have purchased a supply of FOLLICIN-NH3. Even those who order the booklet without the product receive an order blank that suggests that FOLLICIN-NH3 will reverse the balding process and grow new hair (CX-7). The order form states "Some respond quickly, but naturally most require a longer period of time to reverse any condition which is developed and progressed slowly over the years. That's why we recommend a full SIX MONTH PROGRAM...and that's why the FOLLICIN SIX MONTH PROGRAM FOR HAIR IS GUARANTEED..." (CX-7, p. 1)

Having found that Respondent's advertising materials refer to FOLLICIN-NH3, I further find that Respondent's advertising materials make the representations alleged in Paragraph III of the Complaint. Below are each of the allegations found in Paragraph III. Following each are quotations from Respondent's advertising materials (CX-1 through 4) that substantiate my findings.

(a) Follicin-NH3 will stop balding.

Bald? Thinning? Worried? Read...

"BALDNESS CONQUERED"

At long last we had found the power to stop the tragedy of baldness in its tracks and help almost any man to a bright new beginning...

(b) Follicin-NH3 will prevent baldness.

IF YOU ARE CONCERNED ABOUT EXCESSIVE PREMATURE HAIR LOSS OUR HAIR SUPPLANTATION PROGRAM OFFERS YOU A WAY TO ACTUALLY REVERSE THE SHAME AND SUFFERING OF BALDNESS FOREVER]

(c) Follicin-NH3 will prevent hair loss and balding associ ated with hereditary tendency to baldness.

THEN CAME THE BREAKTHROUGH: OVER 95% SUCCESS IN SUBJECTS WITH MALE PATTERN BALDNESS]

And among men who have visited our clinic in New York City --even those with so-called "irreversible" male pattern baldness --we have achieved a consistent success rate of over 95%.

(d) Follicin-NH3 will cause growth of new hair on a bald or balding scalp.

Even if you are completely bald...even if you haven't had a strand of hair on your scalp in 20 years...with our HAIR SUPPLANTATION PROGRAM you can look strong, virile, and desirable again...with hair that commands respect, the kind of hair women love to run their fingers through.

(e) Follicin-NH3 will stop and reverse hereditary baldness.

THEN CAME THE BREAKTHROUGH: OVER 95% SUCCESS IN SUBJECTS WITH MALE PATTERN BALDNESS]

And among men who have visited our clinic in New York City --even those with so-called "irreversible" male pattern baldness --we have achieved a consistent success rate of over 95%

(f) Follicin-NH3 will cause the growth of healthy new hair.

Even if you are completely bald...even if you haven't had a strand of hair on your scalp in 20 years...with our HAIR SUPPLANTATION PROGRAM you can look strong, virile and desirable again...with hair that commands respect, the kind of hair women love to run their fingers through.

Many were completely bald. Others found that day by day, strand by strand they were losing their hair...and nothing seemed to help. Yet today, almost every single one of these men enjoys A FULL HEAD OF HAIR.

(g) Follicin-NH3 is safe to use.

It works by clinically preparing the scalp (without chemical irritants or dangerous hormones) to provide an environment where HAIR SUPPLANTATION can occur...safely and naturally.

(h) 95% of all bald of balding users of FOLLICIN-NH3 may expect, as a result of such use, to regrow hair.

Medical Breakthrough

Successful in More

Than 95% of All Cases]

THEN CAME THE BREAKTHROUGH: OVER 95% SUCCESS IN SUBJECTS WITH MALE PATTERN BALDNESS]

And among men who have visited our clinic in New York City --even those with so-called "irreversible" male pattern baldness --we have achieved a consistent success rate of over 95%.

Under the terms of the stipulation (paragraph 14), Respondent agreed not to contest the truth or falsity of the allegations in Paragraph III of the Complaint if it is determined that the representations refer to FOLLICIN-NH3 and not the booklet. Also Respondent recognized that an Order under 39 U.S.C. § 3005 would be recommended if it is found that the advertising refers to the product and not the booklet.

1. 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, supra; Vibra-Brush Corp. v. Schaffer, supra; Borg-Johnson Electronics v. Christenberry, supra. Express representations are not required. It is the net impression that the advertisement is likely to make upon purchasers to whom it is directed that is important. 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 false representation statute is applicable. G. J. Howard v. Cassidy, supra. See, also, Virginia State Board of Pharmacy v. Virginia Citizens Council, 425 U.S. 748 (1976).

2. The average person would most likely interpret Respondent's advertising materials as referring to the product FOLLICIN-NH3 and not to the booklet, "BALDNESS CONQUERED."

3. Although an unusually astute person might recognize some of Respondent's advertising claims refer to the booklet and not the product, this does not detract from their tendency to "deceive the ignorant, gullible and less experienced." Gottlieb v. Schaffer, 141 F. Supp. 7, 16 (S.D.N.Y. 1956). The false representation statute was intended to protect such persons as well. Donaldson v. Read Magazine, supra.

4. Evidence, other than Respondent's advertisements and other promotional materials, on the issue of making of the representations alleged in the Complaint is unnecessary. Vibra-Brush, Corp. v. Schaffer, supra; Manuel Garcia Imports, P.S. Docket No. 5/127, Postal Service Decision at p. 5 (1977).

5. The average person reading Respondent's advertisements would interpret them substantially as characterized in the Complaint, as amended.

6. The existence of a money back guarantee does not preclude a finding that the postal misrepresentation statute has been violated because a promise of guarantee will not dispel Respondent's false representations. Borg-Johnson Electronics, Inc. v. Christenberry, supra; G. J. Howard v. Cassidy, supra.

7. Under the terms of the Stipulation (Paragraph 14) Respondent does not contest the truth or falsity of the allegations in Paragraph III of the Complaint if they are deemed to refer to the product FOLLICIN-NH3 and not the booklet. Since the advertisements relate to the product, the representations specified in Paragraph III of the Complaint are held to be materially false.

Therefore, I conclude that Respondent is engaged in the conduct of a scheme for obtaining money through the mails by means of materially false representations in violation of 39 U.S.C. § 3005 and a False Representation Order, substantially in the form attached, should be issued against Respondent.