In the Matter of the Complaint Against

 ELECTRONIC DEVELOPMENT LAB
 P. O. Box 1560
 at Pinellas Park, FL 33565-0000

 P.S. Docket No. 18/157;  
 
 07/20/84
 
 Grant, Quentin E.  

 APPEARANCES FOR COMPLAINANT:
 H. Ric hard Hefner, Esq.
 Gregory S. Morrell, Esq.
 Consumer Protection Division
 Law Department
 United States Postal Service
 Washington, DC 20260-1112 

 APPEARANCE FOR RESPONDENT:
 Robert J. Boylan, Esq.
 703 King Street 
 Alexandria, VA 22314-3014 

The Complaint in this proceeding alleges that Respondent is violating 39 U.S.C. § 3005 by means of materially false representations concerning an electronic circuit board asembly opportunity advertised in generally circulated publications.

The specific false representations alleged are as follows (Cplt. par. 5):

(a) Persons with no experience or training in the field of electronic assembly will be able to profitably participate in Respondent's program.

(b) The material furnished by Respondent is adequate to assure that persons without prior experience or training in the field of electronic assembly will be able to successfully participate in Respondent's program.

(c) Participation in Respondent's program will assure a reliable extra income or full time livelihood.

(d) Respondent will purchase printed circuit boards assembled by participants in the program.

(e) The requirement for membership in American Electronic Assembly Associates (AEAA) has been established by an outside authority as a prerequisite to participation in Respondent's program.

Respondent's Answer denies all material allegations of the Complaint, demands dismissal of the Complaint, and asks for an award of costs and attorney's fees under the Equal Access to Justice Act (5 U.S.C. § 504).

An evidentiary hearing was held in Washington, D.C. on May 21, 1984. Complainant's witnesses were John T. Holbrook, Wilbur C. Watts, and Peter R. Peterson. Respondent called no witnesses. Respondent's promoter, Arthur Walker, was unable to appear because of an inner ear infection which precluded air travel.

The parties have filed proposed findings of fact and conclusions of law, together with written argument, all of which have been fully considered. To the extent indicated below they have been adopted. Otherwise they have been rejected as irrelevant or contrary to the evidence.

1. Using the mails to receive remittances for sample electronic parts and a membership fee, Respondent conducts an enterprise in which it offers the public the opportunity to earn money by assembling printed electronic circuit boards (P.C. boards) (CX-1, 2; Tr. 7-10).

2. Following is the text of an advertisement concerning the enterprise which appeared in National Financial Publication (CX-1; Tr. 8):

ELECTRONIC DEVELOPMENT LAB, Box 1560, Pinellas Park, FL, 33565. Do you enjoy working with your hands? If so, you may enjoy assembling electronic devices in your home. Prior knowledge or experience is not necessary, and there is no investment required. For additional information on spare time, or full time opportunities write to Electronic Development Lab for complete details.

3. Persons responding to the foregoing advertisement receive from Respondent the following letter (CX-2):

ELECTRONIC DEVELOPMENT LAB

P.O. BOX 1560

PINELLAS PARK, FLORIDA 33565

Subject: Home Assembly of P.C. Boards

Dear Friend:

This is to thank you for your recent inquiry. If you are mechanically inclined and fit into either of the following situations, then this program which we are making available may be for you:

a) You have some spare time and spare space in your home or garage. You need extra income for paying bills, making payments on a new car, or just to plain relieve your present financial pressure, or,

b) You are not happy with your present job and want to build an extensive business of your own on a full time basis and with a full and comfortable income and financial security for yourself.

This program is to get you started in electronic assembly (of printed circuit boards) even though you might have no previous background or training in this field. Electronics is a tomorrow-type industry that is booming even during this recession.

It will require practically no capital since you start in your own basement or garage. We get you around the need for training and experience by supplying you this part in the form of simple to understand plans and directions.

The program works like this:

a) We pay for the parts required by each printed circuit board and send them to you in the form of a kit.

b) You assemble the parts on the board per our instructions and send it back to us.

c) We send you a check for each board assembled.

It is required that all people who assemble our boards be a member of American Electronic Assembly Associates (AEAA). This is a trade group - not a union. The membership fee is $24.95.

We realize that this assembly of P.C. boards is not for everyone. Therefore, we are making it possible for you to examine the type of work that you will be doing before paying the AEAA membership fee. You send $9.95 along with your application. We will then rush you a kit of electronic parts for you to examine. If you are not interested, simply send it back within seven days from postmark date for a no questions asked refund of your $9.95 (only).

If you decide after examination that you do want to earn money by assembling our boards there in your home, just send the balance of the membership fee ($15.00). We, then will send you a brief course on electronic assembly, simple instructions showing where each part goes, and a device for testing each board when completed.

At this time we need a few more assembly people as soon as we can get them. Therefore, we would appreciate it if you would send in your application today if possible in order that we may get you started.

4. Persons who submit an application and the $9.95 fee for the sample kit of electronic parts receive the kit and the following letter (CX-3, 5):

This is to let you know that we received your $9.95 and to extend a welcome to you as a future member of American Electronic Assembly Associates. We are looking forward to having you assemble our printed circuit boards.

As we previously promised, we are enclosing the actual parts which you will be mounting on the first p.c. board. You may or may not be familiar with them: they are transistors, diodes, and resistors. The actual p.c. board, along with a written course showing how and where these parts are mounted, plus a simple test device will follow.

The first p.c board (designated Computer XL721) is rather simple in order to make it easier for you to gain experience. For assembling it we will send you $3.10; it should take you about 30 minutes after gaining experience. More complex boards will pay up to $7.50 each.

Incidentally, the knowledge and experience which you gain here will help qualify you as a full time electronic assembly worker with other firms in this vast and expanding industry. If the occasion should arise, and after gaining successful experience, don't hesitate to use us as a reference]

We need a few more assemblers as rapidly as we can get them. So please complete the attached form and return it to us, along with the $15.00 balance of your membership fee, today if possible. We will, in turn, send you the balance of the kit and get you started assembling p.c. boards as soon as practical.

President.

5. Respondent's advertisement and letter sent in response to inquiries, supra (CX-1, 2) make the representations alleged in subparagraphs (a) through (d) of paragraph 5 of the Complaint. Respondent's letter to inquirers does not expressly represent that the requirement for membership in American Electronic Assembly Associates has been established by outside authority. Any possible implication to that effect is not material, the fact being that persons desiring to participate must pay the membership fee regardless of the source of the requirement.

6. Persons electing to participate in the program and who remit the $15.00 membership fee receive a P.C. board on which to mount the electronic parts (received in the sample kit) together with assembly instructions (CX-4).

7. Complainant's witness Peter R. Peterson is the Chief Engineer of the Technical Services Branch Laboratory of the U.S.P.S. Inspection Service. He has a BS in Electrical Engineering from Pratt Institute. Respondent conceded his expertise in the field of electronics and the assembly of P.C. boards.

8. Based on Mr. Peterson's testimony I find as follows:

a. A person with some technical inclination, or a certain amount of determination, using Respondent's assembly instructions could figure out how to put the P.C. board together and successfully assemble it (Tr. 46-54).

b. Three out of 10 average lay persons should be able to assemble the board successfully (Tr. 53, 54).

9. The type of P.C. board in evidence has a wide range of possible applications in the electronics industry (Tr. 49).

10. The experience of Complainant's witnesses Holbrook and Watts with Respondent's program was limited to one P.C. board each.

a. Holbrook's main reason for choosing not to pursue the program was his belief that there was no money to be made receiving, assembling, and mailing the boards one at a time in accordance with his understanding of how the program worked. He was bothered by the fact that four transistors were missing from the parts sent him by Respondent (Tr. 23). However, he did not request the missing parts from Respondent. He simply called Respondent, asked for a refund, and got it (Tr. 14). A review of the instructions fails to reveal support for the "one at a time" processing concept entertained by Mr. Holbrook.

b. Mr. Watts believed that Respondent's program might offer an opportunity for his wife to supplement his Air Force retirement so it was ordered in her name. When the board and electronic parts arrived Mrs. Watts took one look at them and decided that assembling such boards wasn't something she wanted to do (Tr. 26). Mr. Watts had electronic experience in the Air Force and private industry. He proceeded to assemble the board, tested it in accordance with the instructions and mailed it to Respondent (Tr. 27-29). Respondent, by letter, advised Mr. Watts that the board had failed certain test steps, and, therefore, did not qualify for payment (referring to Section F of the instructions) (Tr. 29). Watts replied asking for another board and requesting that the first board be returned so that he could test it again. The response to this request was a letter from Respondent enclosing a refund of $24.95 and expressing regret that Watts was unhappy with the program. Then Watts wrote Respondent stating, in effect, that he was not unhappy with the program and indicating that he wished to continue with it on a volume basis. He received no reply to this letter (Tr. 29-31).

c. Both Holbrook and Watts expressed the opinion that previous electronic experience (which both possessed) was required to assemble the board successfully (Tr. 12, 28).

Because of his superior qualifications, conceded expertise, and appearance of pronounced competency on the witness stand, I give controlling weight to the testimony of Complainant's witness, Peter Peterson, in deciding the falsity issues. Based on his testimony as summarized in findings of fact I must conclude that Complainant has failed to sustain its burden of proof as to the falsity of the representations alleged in subparagraphs (a) and (b) of paragraph 5 of the Complaint.

Also, Complainant has not sustained that burden as to subparagraphs (c) and (d). The testimony of its witnesses Holbrook and Watts, considered in the light of Mr. Peterson's testimony, falls short of proving that Respondent does not purchase p.c. boards properly assembled and successfully tested and that persons who seriously participate in Respondent's program cannot make reliable extra income or full time livelihood. Neither Mr. Holbrook nor Mr. Watts participated in the program to an extent sufficient that their testimony and personal evaluations thereof can be given significant weight on the falsity issues.

1. Complainant has failed to sustain its burden of proof as to the falsity of the representations made by Respondent alleged in subparagraphs (a) through (d) of paragraph 5 of the Complaint.

2. Respondent does not make the representation alleged in subparagraph (e) of paragraph 5 of the Complaint. In any event, the representation alleged is not material as an inducement to join Respondent's program.

3. The Complaint is dismissed.