In the Matter of the Complaint Against SHARON L. TAYLOR 2830 Copley Road at Copley, OH 44321-2136 and HALBERT'S, INC. at Bath, OH 44210 P.S. Docket No. 14/32; 04/23/84 Cohen, James A. APPEARANCES FOR COMPLAINANT: Thomas A. Ziebarth, Esq. Steven B. Caver, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-1112 APPEARANCES FOR RESPONDENT: Timothy J. May, Esq. David C. Todd, Esq. Claudia L. Deering, Esq. Patton, Boggs & Blow 2550 M Street, N.W. Washington, DC 20037-1350 Thomas J. Scanlon, Esq. Donahue & Scanlon Suite 1500 One Erieview Plaza Cleveland, OH 44114-1789
Respondents have appealed from the Initial Decision of an Administrative Law Judge which holds that, with regard to the sale of a book related to the surnames of particular addressees, Respondents are engaged in a scheme to obtain money through the mail by means of materially false representations in violation of 39 U.S.C. § 3005.
Paragraph 3 of the Complaint1/ initiating this proceeding alleges that, in solicitations for a book entitled The Amazing Story of the surname in America, Respondents make the following false representations:
(a) the book consists primarily of the story of the particular family name listed in the solicitation;
(b) the book contains detailed and complete research about the history of the surname of addressee family name;
(c) the book contains detailed and complete research about surname of addressee population in the U.S.;
(d) the book contains detailed and complete research about the surname of the addressee coat of arms;
(e) it has spent months of work and thousands of dollars to locate almost every person in the United States having the same surname(s) as the addressee."
Respondents filed an Answer to the Complaint which, among other things, denied making the representations set forth in subparagraphs 3(a) through (d); admitted making the representation set forth in subparagraph 3(e); and denied that their representations are materially false.
After a hearing at which both parties presented evidence on the allegations of the Complaint, the Administrative Law Judge issued an Initial Decision in which he found that Respondents make the representation alleged in subparagraph 3(a) of the Complaint and that it is materially false. However, he also found that Complainant failed to prove Respondents make the representations alleged in subparagraphs 3(b), (c), (d), and (e). Based on his finding that a materially false representation had been made, the Administrative Law Judge concluded that Respondents are engaged in conducting a scheme in violation of 39 U.S.C. § 3005 and that a False Representation Order should be issued (I.D. 17-18). Respondents filed a timely appeal from the Initial Decision to the Judicial Officer.
While the appeal was pending, 39 U.S.C. § 3005 was amended by the Mail Order Consumer Protection Amendments of 1983, Pub. L. No. 98-186, 97 Stat. 1315. On December 14, 1983, Respondents filed a Motion for Reconsideration and Remand, based on this legislation. By Order dated February 27, 1984, the motion was denied because it was concluded the issues raised could be resolved by the Judicial Officer. The present decision addresses these issues as well as the exceptions to the Initial Decision as set forth in Respondents' brief on appeal.
A. Respondent's Motion
Respondents contend that § 2(b) of the amendments, which adds subsection (d)(3) to 39 U.S.C. § 3005, precludes the Postal Service from determining the book of family surnames. They argue that the Administrative Law Judge's finding that a false representation was made relates to the truth or falsity of the book's title and must be set aside.
Complainant contends that Respondents have failed to meet the criteria of the new § 3005(d)(3) which would exempt them from enforcement action.
The recently enacted § 3005(d)(3) provides that § 3005 shall not prohibit the mailing of "an advertisement promoting the sale of a book or other publication, or a solicitation to purchase, or a purchase order for any such publication, if (A) such advertisement, solicitation, or purchase order is not materially false or misleading in its description of the publication; (B) such advertisement, solicitation, or purchase order contains no material misrepresentation of fact: Provided, however, That no statement quoted or derived from the publication shall constitute a misrepresentation of fact as long as such statement complies with the requirements of subparagraphs (A) and (C); and (C) the advertisement, solicitation, or purchase order accurately discloses the source of any statements quoted or derived from the publication. Paragraph (3) shall not be applicable to any publication, advertisement, solicitation, or purchase order which is used to sell some other product in which the publisher or author has a financial interest as part of a commercial scheme."
Section 3005(d)(3) incorporates what is known as the "mirror image doctrine." S. REP. No. 51, 98th Cong., 1st Sess. at 8, reprinted in 1984 U.S. CODE CONG & AD. NEWS 2021; 129 CONG. REC. S15367-68 (daily ed Nov. 3, 1983). The legislative history of this provision makes clear that Congress' purpose was to assure the false representation statute would not be used to question the validity of opinions and ideas presented in publications advertised through the mail. A distinction is drawn however, between enforcement proceedings which seek to challenge the truth of a publication's opinions and ideas and those which seek to stop advertising misrepresentations about what is included in the publication. S. REP. NO. 51, supra, at 8; 1984 U.S. CODE CONG. & AD NEWS 2021.
Congress' concern about false or misleading advertising is directly reflected in § 3005(d)(3) as enacted. Under the proviso of subsection (d)(3)(A), a solicitation promoting the sale of a book only falls within the provision's exemption if it is "not materially false or misleading in its description of the publication."
The Administrative Law Judge's conclusion that a False Representation Order should be issued in this case was based on his finding that Respondents' solicitations falsely represent the promoted book as consisting primarily of the story of the addressee's family name, as alleged in the Compliant. In reaching this conclusion, the Administrative Law Judge relied on the use of the title of the book and other language in Respondents' solicitations (I.D. p. 4). This finding, and the allegation which it addresses, do not relate to the truth or falsity of the opinions expressed in the book's contents or of its title. Therefore, this finding is not prohibited by § 3005(d)(3).
B. Respondents' Exceptions to the Initial Decision
"Respondents Take Exception to the ALJ's Conclusion of Law No. 6 that the Titles of Respondents' Books Are Not Constitutionally Protected."
Respondents assert that the title of their book, "The Amazing Story of the surname in America," is constitutionally protected. In Conclusion of Law No. 6 of the Initial Decision, the Administrative Law Judge rejected this argument, stating that "Constitutional guarantees against restrictions of freedom of speech do not protect false advertisements" (I.D. at p. 17). In support of this conclusion, the Administrative Law Judge cited Donaldson v. Read Magazine, Inc., 333 U.S. 178 (1948) and United States Postal Service v. Beamish, 466 F.2d 804, 807 (3d Cir. 1972). Respondents argue that the cited cases are inapposite because the title of a book is not an advertisement and does not lose its constitutional protection merely because it is referenced in one.
The issue in this proceeding is not the truth or falsity of the title itself, but whether Respondents' solicitations are misleading in their use of the title to describe the book's contents. Where a solicitation misleads through such use of the title, it falls within the false advertising prohibition recognized in the cases cited by the Administrative Law Judge and is not constitutionally protected.
While the Administrative Law Judge did not rest his finding that a false representation was made solely on Respondents' descriptive use of the book's title (see infra), Conclusion of Law No. 6 correctly states the law with respect to such use and is affirmed.
"Respondents Take Exception to the ALJ's Conclusion of Law Number 3 that the Advertising Materials Inferentially Make the Representation that the Book Consists Primarily of the Story of a Particular Family Name and His Findings of Fact in Support of that Conclusion."
Respondents challenge the Administrative Law Judge's conclusion that " t he average person reading Respondents' advertisements would interpret them substantially as characterized in subparagraph 3(a) of the Complaint . . ." (I.D. at p. 17). They contend that this conclusion is not supported by the advertising material and is contradicted by the evidence. The Administrative Law Judge found that the representation set forth in subparagraph 3(a) was made, based on the descriptive use of the book's title and other language in the solicitations (I.D. at p. 4).
Respondents rely on a survey conducted by Roger Seasonwein Associates, Inc., as demonstrating that the average reader of the solicitation letters did not perceive the book to consist primarily of the story of his name. While the Administrative Law Judge found this survey to be "professionally performed . . . by a highly experienced and reliable firm and showed a good deal of satisfaction with the book," he also found it did not dispel the conclusion that Respondents' solicitations represented the book as primarily the story of the addressee's family (I.D. at p. 15).
The survey in question, the results of which appear in Respondent's Exhibit No. 23, is fully discussed in the Initial Decision at pages 12 through 15. The Administrative Law Judge correctly found that the survey did not inquire into customer expectations regarding the extent to which name-specific data would be included in the book (I.D. at p. 15; see also Tr. 94). Moreover, while the survey shows that 56.4% of those polled rated Respondents' solicitation letter as accurate in representing the book's contents concerning how the customer's family obtained its name and what the name means, it also shows that a significant number of readers, at least 27.7% of those polled, believed the solicitations to be inaccurate (RX-23, Table 25).2/
Respondents cite a memorandum by Roger S. Seasonwein, who conducted the survey, which attaches particular significance to the survey's finding that Respondents' letter was regarded as more accurate than the average piece of direct mail (RX-22 at p. 4). However, at the hearing, Mr. Seasonwein conceded that measuring deception is "very difficult to do" and cannot be accomplished completely by a survey (Tr. 60; see also Tr. 94). Furthermore, whether these statistics show that Respondents' solicitations are more accurate than other direct mail solicitations is beside the point. In a proceeding under 39 U.S.C. § 3005, the meaning of an advertising representation is to be judged from a consideration of the advertisement in its totality and the impression it would most probably create in ordinary minds. Donaldson v. Read Magazine, Inc., 333 U.S. 178 (1948).
In determining the effect of the representations on ordinary readers, it is not necessary to find that all or even a majority of readers would likely be deceived. It is sufficient to find that a significant number of readers, whether gullible or wary, would interpret an advertisement as making the alleged false representation. Donaldson v. Read Magazine, Inc., supra; United States v. 95 Barrels of Vinegar, 265 U.S. 43, 443 (1924); Rhodes Pharmacal Co. v. FTC, 208 F.2d 382, 387 (7th Cir. 1953); gottlieb v. Schaffer, 141 F.Supp. 7, 16 (S.D.N.Y. 1956); Oriental Nurseries, P.S. Docket No. 9/116 (P.S.D. May 19, 1981).
In this regard, the record contains letters of complaint which, in strong terms, show that some customers were misled as to the book's contents based on the title and description of the book in Respondents' solicitations (see CX-10 thru 22). The results of the survey also show that a sizable number of customers found Respondents' solicitations to be misleading. While the record also includes letters from customers who appear to be satisfied with their purchase (RX-5 through 19), such letters or the survey responses showing a lack of customer deception do not rebut the conclusion that many ordinary readers were misled by Respondents' solicitations.
A review of the language contained in both the old and new versions of Respondents' letter (RX-20; see Tr. 54) confirms the Administrative Law Judge's finding that the book was represented as primarily the story of the addressee's surname. In addition to the language relied on by the Administrative Law Judge, this representation is also either implied or expressed in the following statements from one or both of Respondents' solicitations: "We (I)3/ have been doing some work relating to (for) people who have the same last name as you do" (CX-1 and 2; RX-1 and 20); "This collection historical and current information is available only"4/ in the surname book (CX-1 and 2; RX-1 and 20); "Due to the uniqueness of your own name, surname and the small surname population in the U.S., (and the very limited edition of this book,) it is economically impossible to produce extra copies" (CX-1 and 2; RX-1 and 20); "I (We) believe this is the only book of its kind in the entire world" (CX-1 and 2; RX-1 and 20); and "The number of surname books in this first edition will be strictly established" (RX-1 and 20).
Moreover, the individual statements, when read together, give an unmistakable overall impression that the book is primarily about the addressee's family.
Finally, Respondents argue that the Administrative Law Judge's finding with respect to subparagraph 3(a) of the Complaint contradicts his findings with respect to subparagraphs 3(b), (c), and (d). The findings that Respondents' solicitations di not make the representations set forth in these other subparagraphs rest on the specific language of each subparagraph which alleged, in turn, that the solicitations represent the book as containing "detailed and complete research" about the surname's history, population in the United States, and coat of arms. The Administrative Law Judge found the solicitations to represent that the book contains "interesting and informative" chapters on these subjects but that "it is a distant leap from 'interesting and informative' to 'detailed and complete'" (I.D. at p. 7). Respondents' attempt to equate the term "detailed and complete" as used in these subparagraphs of the Complaint with the term "primarily" as used in subparagraph 3(a) of the Complaint is unpersuasive.
Thus, the Administrative Law Judge's findings relating to subparagraphs 3(b) through (d) are not necessarily inconsistent with his finding with respect to subparagraph 3(a).
"Respondents Take Exception to the ALJ's Conclusion of Law No. 7 that the Representation Specified in Subparagraph 3(a) of the Complaint is Materially False and His Findings of Fact in Support of that Conclusion."
Conclusion of Law No. 7 states that " t he representation specified in subparagraph 3(a) of the Complaint is materially false" (I.D. at p. 17). In challenging this conclusion, Respondents rely on the testimony of George D. Balsama, a historian, that general information concerning genealogy is history and that history is a story (Tr. 127-130). Respondents also rely on the testimony of Phillip W. McMullin, a genealogist, who stated that the book's title describes its contents (Tr. 166-67.
However, this testimony is not dispositive. The best evidence of whether Respondents' representations regarding the book are misleading is the book itself. A review of the book supports the Administrative Law Judge's reasons for concluding that the representation set forth in subparagraph 3(a) of the Complaint is materially false (see I.D. at pp. 10-11). Further, as noted, the Seasonwein survey and the letters of complaint included in this record indicate that a significant number of Respondents' customers reached the same conclusion. Accordingly, Conclusion of Law No. 7 of the Initial Decision and Findings of Fact supporting that conclusion are affirmed.
After consideration of the entire record and Respondents' exceptions to the Initial Decision, it is concluded that Respondents are engaged in a scheme to obtain money through the mail by means of materially false representations. Accordingly, Respondents' appeal is denied. A remedial order under 39 U.S.C. § 3005 is being issued with this decision.
1/ The references to the Complaint in this Decision are to the Complaint as amended by stipulation of the parties.
2/ The remaining 15.9% of individuals polled either did not respond or responded "don't know" (RX-23, Table 25).
3/ The words in parenthesis appeared in the old version of the solicitation letter.
4/ The word "only" does not appear in the old version of the solicitation letter.