In the Matter of the Complaint Against UNITED STATES TESTING AUTHORITY TELEVISION DIVISION 1681 Kennedy Causeway at North Bay Village, FL 33141-9982 AMERICAN TESTING INSTITUTE 6660 Biscayne Boulevard at Miami, FL 33138-6231 and GIFT REDEMPTION CENTER Suite #5 13680 N.W. 19th Avenue at Miami, FL 33054-4214 P.S. Docket No. 14/77; P.S. Docket No. 14/114; 03/21/84 Cohen, James A. APPEARANCE FOR COMPLAINANT: SandraC. McFeeley, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-2111 APPEARANCES FOR RESPONDENT: Edward J. Carnot, Esq. 25 West Middle Lane Rockville, MD 20850-2214
Prior proceedings in these matters led to the issuance of False Representation Order No. 83-16, dated January 17, 1983, against mail addressed to United States Testing Authority, Television Division, 1681 Kennedy Causeway, North Bay Village, FL 33141-9982 and False Representation Order No. 83-113, dated July 6, 1983, against mail addressed to American Testing Institute, 6660 Biscayne Boulevard, Miami, FL 33138-6231, and Gift Redemption Center, Suite #5, 13680 N.W. 19th Avenue, Miami, FL 33054-4214. In both orders, the mail affected related to a lottery, gift enterprise, or scheme for the distribution of money or of real or personal property, by lottery, chance, or drawing of any kind in violation of 39 U.S.C. § 3005 with respect to the awarding of prizes in connection with a survey of television viewers.
On December 16, 1983, Complainant filed a Petition for Supplemental Orders, with attachments, alleging that Respondents are evading or attempting to evade the provisions of such orders by conducting the same or a similar enterprise under the name National Testing Authority at Suite 1000, 1100 17th Street, N.W., Washington, D.C. 20036.
Complainant seeks the issuance of a False Representation Order pursuant to 39 U.S.C. § 3005(a)(1) and (2). It also requests the issuance of a Cease and Desist Order under paragraph (3) of § 3005(a) which was added to the statute by the Mail Order Consumer Protection Amendments of 1983, P.L. 98-186, 97 Stat. 1315 (1983).
Respondents have filed a Motion to Dismiss the Petition contending that the request for a Cease and Desist Order under the new statutory provision entitles them to a full adversarial hearing before an Administrative Law Judge with right of appeal to the Judicial Officer. Respondents also argue that case law requires that a full adversarial hearing be held before an Administrative Law Judge in a supplemental order proceeding under 39 C.F.R. § 952.30.
Respondents contend that the legislative history of the Mail Order Consumer Protection Amendments makes clear that a full hearing is a necessary precursor to the issuance of a Cease and Desist Order. Quoting from page 6 of Senate Report No. 98-51, Respondents argue that Cease and Desist Orders ". . .are to be issued only after a full adversarial hearing under the provisions of the Administrative Procedure Act. . ." Respondents' argument goes on to say that the Administrative Procedure Act, as applied by the Postal Service, anticipates an initial hearing before an Administrative Law Judge and a de novo review by the Judicial Officer. Thus, according to Respondents, the quoted legislative intent precludes issuance of a Cease and Desist Order under the supplemental order procedure (39 C.F.R. § 952.30) conducted before the Judicial Officer without the required hearing.
The few words extracted by Respondents from the Senate report do not spell out the intent urged by them when considered in the fuller pertinent context of that report. On the same page of the Senate Report from which Respondents' quote is taken, it is stated:
Mail stop orders and the proposed cease and desist orders may only be issued by the Judicial Officer of the Postal Service following procedures required by the Administrative Procedure Act (5 U.S.C. Chs. 5, 7), as presently applied to the Postal Service by 39 U.S.C. § 3001(f) and implemented in 39 C.F.R. Part 952.
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Realizing that S. 450 increases the police powers of the Postal Service by granting it the power to issue cease and desist orders requiring a person or his representative to cease and desist from engaging in any fraudulent scheme, device, lottery, or gift enterprise, the Committee notes that such orders are to be issued only after a full adversarial hearing under the provisions of the Administrative Procedure Act contained in 5 U.S.C. Chs. 5, 7. Such procedures are currently required and will continue to be required in any Section 3005 proceeding, pursuant to 39 U.S.C. § 3001(f). Senate Report No. 98-51 at p. 6. (Emphasis supplied).
At the time the Mail Order Consumer Protection Amendments were passed, the Postal Service implementing regulations, 39 C.F.R. Part 952, provided for a full-scale adversarial hearing to try the issues framed by the Complaint and Answer. Upon a showing of good cause the regulations also provided for a hearing by the Judicial Officer on Petitions for Supplemental Orders alleging evasion or attempted evasion of such orders issued following the full-scale hearing process. The Senate Report contains no indication of an intent to impose more extensive hearing requirements with respect to Petitions for Supplemental Orders which seek Cease and Desist Orders than for those which seek only a False Representation Order.
Under the amended statute and the implementing regulations, as under the original statute, Respondents have an opportunity to try fully all issues raised by the Complaint and Answer and to engage in the full range of discovery procedures. They had that opportunity in these cases. Neither the statute as amended nor its legislative history provides any cogent reason for believing that Congress intended that where a Cease and Desist Order is sought in a supplemental order proceeding Respondents, for that reason alone, should have the opportunity to relitigate essentially the same issues litigated in the original proceeding.
The cases cited by Respondents in support of their position that they are entitled to a full hearing on the Petition for Supplemental Order stand for the proposition that a respondent is entitled to a full-scale hearing if there are genuine issues of material fact. Kirby v. Shaw, 358 F.2d 446 (9th Cir. 1966). See also Citizens for Allegan County, Inc. v. Federal Power Commission, 414 F.2d 1125 (D.C. Cir. 1969). At this stage of the proceeding it has not been determined whether such issues exist. If they do exist Respondents will be afforded a full evidentiary hearing by the Judicial Officer. */
Accordingly, the Motion to Dismiss is denied.
/ Under the Administrative Procedure Act, 5 U.S.C. § 556(b), the agency may preside at an evidentiary hearing. The Judicial Officer is the "agency" for the purpose of making final Postal Service decisions under the Administrative Procedure Act, 39 U.S.C. § 204; 39 C.F.R. § 224.1(c)(4).