In the Matter of the Complaint Against RUSH INDUSTRIES, INC. 871 Willis Ave. Albertson, NY 11507-1915 and HAROLD BREINDEL 871 Willis Ave. Albertson, NY 11507-1915 P.S. Docket No. 18/169; 09/04/84 Grant, Quentin E. APPEARANCES FOR COMPLAINANT: Kennet h N. Hollies, Esq. Brendan J. O'Brien, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-1112 APPEARANCE FOR RESPONDENT: Robert Ullman, Esq. Bass, Ullman & Lustigman 747 Third Avenue New York, NY 10017-2803
The Complaint alleges that Respondents are violating 39 U.S.C. § 3005 by means of the following materially false representations concerning the product, Formula Plus (Complaint para. 3):
a. Formula Plus will prevent facial lines from emerging in or on users' faces.
b. Formula Plus will remove facial lines already existing on users' faces.
c. Formula Plus is effective is described in subparagraphs (a) and (b) of this paragraph beyond any effect commonly available from other "creams, lotions, and make'ups."
d. The results of using Formula Plus are substantially similar to results achievable by a face lift operation.
e. Users of Formula Plus will obtain significant nourishment from the vitamins and nutrients found in Formula Plus.
f. Formula Plus will cause users to look younger by affecting the structure and/or appearance of wrinkles beyond any effect attributable to moisturizing and/or cosmetically covering such wrinkles.
Respondents' Answer to the Complaint denied the making of the alleged false representations but admitted the use of the advertisement attached to the Complaint.
The Answer also asserted the defense that the advertisement is consistent with, and formulated pursuant to, a Consent Agreement entered into between Complainant and Respondent Rush Industries, Inc. in P.S. Docket No. 6/156. Respondent's motion, based on that agreement, to dismiss the Complaint on grounds of res judicata, collateral estoppel and fundamental unfairness was denied by Order dated May 23, 1984. In its post-hearing written argument, Respondent has renewed its motion to dismiss on those grounds.
An evidentiary hearing was held in New York City on June 6, 1984. Complainant's witnesses at the hearing were Postal Inspector DeWayn Marzagalli, Philip Feldman, M.D., and Samuel Uretsky, a pharmacist. Respondents called no witnesses for the reason (stated by its counsel at the hearing) that it believes the matter is res judicata and, therefore, it should not be put to the expense of calling witnesses.
The parties have filed proposed findings of fact and conclusions of law together with written argument, all of which have been considered in arriving at this decision. To the extent indicated, they have been adopted. Otherwise, they have been rejected as irrelevant or contrary to the evidence.
The Judicial Officer's carefully considered decision in Eden Valley Nursery Sales, P.S. Docket No. 7/23, holds that a consent agreement is similar to a voluntary dismissal in a court action and, therefore, is not a final determination which serves as a res judicata or collateral estoppel bar to a subsequent action (citing Kaspar Wire Works, Inc. v. Leco Engineering and Machine, Inc., 575 F.2d 530, 537-538 (5th Cir. 1978); Stevenson v. International Paper Co., 516 F.2d 103 at 108-109 (5th Cir. 1975)). I, therefore, reaffirm my Order of May 23, 1984.
1. By means of direct mail circulars, Respondent Rush Industries, Inc. solicits remittances of money through the mails for its product FORMULA PLUS to 871 Willis Ave., Albertson, NY 11507-1915 (CX-1, 6; Tr. 17-19) where such remittances are, in fact, received.
2. Respondent Harold Breindel is the president and sole owner of Respondent Rush Industries, Inc. and is the sole person in charge of supervision, conduct, and operation of the business of Rush, including product marketing (affid. of Harold Breindel dated March 16, 1984 in support of motion).
3. The label used by Respondent on jars of FORMULA PLUS reads as follows:
Miracle cosmetic moisturizing creme guarantees you a Silky Smooth "Baby Face" complexion.
Net Wt. 2 Oz.
FORMULA PLUS CONTAINS: a special blend of nucleic acid, Ginsing, Aloe Vera, allontoin, panthenol and vitamins A, D and E in a specially formulated base. Apply daily as a moisturizer, make up base AND as a night cream.
DISTRIBUTED BY: RUSH Industries, Inc.,
New York, N.Y. 10010
INGREDIENTS: Water, Stearate, Propylene Glycol, Solid Hydrocarbons, Alcohol Cetyl Ester, Peach Kernel Oil, Monosterate Ester of Glycerin, Wheat Germ Oil, Lecithin, Glycerin, Ethylamine, Protein, Lanolin, Benzoate of Soda, Panthenol, Methyl Paraben, Propyl Paraben, Allantoin, Lemon Essense, Ginseng, Aloe Vera, Nucleio Acid Ex Yeast, FDC Yellow = 5, Vitamin A - 10,000 Units per oz. Vitamin D - 1,000 Units per oz. Vitamin E - 1,000 Units Per oz.
4. Respondent's circular for the product (CX-1) is annexed hereto as Exhibit A.
5. I find each of the representations alleged in the Complaint in the language of the circular quoted below such allegation:
a. Formula Plus will prevent facial lines from emerging in or on users' faces.
b. Formula Plus will remove facial lines already existing on users' faces.
Your Best Weapon to Prevent or Remove Facial Lines
Here is a rich cosmetic cream that could prove to be your best weapon to prevent or remove those ugly emerging facial lines...
Here is your Best Weapon to Prevent or Remove Emerging Facial Lines
After a brief period see the amazing improvement against annoying crows feet, ugly fine lines, and those small noticeable wrinkles. You will look younger...than you ever dreamed possible.
c. Formula Plus is effective as described in subparagraphs (a) and (b) of this paragraph beyond any effect commonly available from other "creams, lotions, and make-ups."
Here is a rich cosmetic cream that could prove to be your best weapon to prevent or remove those ugly emerging facial lines while softening those age revealing wrinkles. Throw away those do nothing creams, lotions and make-ups.
Never before have so many important and expensive beautifiers been concentrated into one extremely effective formula making this a truly "miracle" cosmetic.
d. The results of using Formula Plus are substantially similar to results achievable by a face lift operation.
"This 'Miracle Cosmetic' will have your friends swearing you had a face lift]"
e. Users of Formula Plus will obtain significant nourishment from the vitamins and nutrients found in Formula Plus.
Enriched with amazing RNA Plus Vitamin E, Ginsing, Aloe Vera and other powerful beautifiers.
Formula Plus is a powerfully concentrated cosmetic that gives you a rich source of nutrients including the most remarkable of all, Vitamin E. Plus the much sought after and prized herb. Ginseng: along with herbal extracts, molecular size moisture factors and other important beautifiers including Aloe Vera. Vitamin A, Vitamin D and much much more . . . . Never before have so many important and expensive beautifiers been concentrated into one extremely effective formula making this truly a "miracle" cosmetic.
f. Formula Plus will cause users to look younger by affecting the structure and/or appearance of wrinkles beyond any effect attributable to moisturizing and/or cosmetically covering such wrinkles.
Your Best Weapon to Prevent or Remove Facial Lines
Here is a rich cosmetic cream that could prove to be your best weapon to prevent or remove those ugly emerging facial lines...
Here is your Best Weapon to Prevent or Remove Emerging Facial Lines
Since all wrinkles other than the most superficial involve structural changes in the dermal collagen, or structural elements, of the skin (Tr. 49-50), the only way for Formula Plus to change the appearance of such wrinkles beyond a temporary moisturization of the stratum corneum is by affecting their structure.
6. a. Complainant's witness Philip Feldman is a medical doctor, board certified in dermatology. He has engaged in private practice in dermatology for sixteen years and is a clinical assistant professor of dermatology at Downstate Medical Center in New York (CX-7; Tr. 42, 43). Dr. Feldman was well-qualified to testify in this matter.
b. Complainant's witness Samuel Uretsky has a doctorate in pharmacy and is Assistant Director for Pharmacy at New York University Medical Center. He has taught pharmacology. In his employment at the NYU Medical Center, he is responsible for educational and professional service, drug information, clinical case review, drug product selection, and review of formulation for dermatologics (CX-9; Tr. 121, 122, 128, 129). Dr. Uretsky was qualified to testify in this matter.
7. The following findings are based on Dr. Feldman's opinions and testimony which are in accord with the scientific and medical consensus:
a. Lines and Wrinkles
(The parties have used the terms wrinkles and lines synonymously and interchangeably in testimony and briefs.) Wrinkles are defined as a loss in the usual contour of the skin, primarily caused by the degenerative process by aging (sustained squinting, tension of facial muscles, and sun exposure being other causes) producing loss of elasticity in the dermis and deeper layers of skin (Tr. 49-53; CX-19). Formula Plus is a preparation which is capable of temporarily hydrating, or moisturizing, the stratum corneum of the skin (Tr. 44, 53, 55). The stratum corneum is the very thin, uppermost layer of the skin overlying the epidermis. It is the cornified, anucleated coating of the skin composed of dead cells which have migrated up from the epidermis (Tr. 47, 48; CX-20).
Formula Plus has no effect on any part of the skin beneath the stratum corneum (Tr. 55). Application of Formula Plus will temporarily hydrate the stratum corneum, causing it to swell, thereby obscuring very superficial, fine facial lines (or wrinkles) which are in the process of emerging or developing. This effect will last nor more than two hours. Reapplication will not produce a cumulative effect (Tr. 56, 98; CX-20 (Figure 57-6)). Application of the product will, likewise, have only a temporary effect in obscuring very superficial existing facial lines (Tr. 56, 57).
Formula Plus will not prevent facial lines from emerging or remove already existing facial lines.
b. Relative Effectiveness of Formula Plus and Other Creams, Lotions, and Make-up.
The basic components of Formula Plus are, in essence, the same as most other skin moisturizers and the product would be expected to perform the same as other moisturizers (Tr. 57, 58, 79, 82, 86, 107-110).
c. Similarity to Results Achievable by Face Lift Operation.
A face lift operation mechanically deletes facial lines and wrinkles by increasing the tension of the skin, by lifting and doing away with wrinkling. There is no mechanical function to Formula Plus and, therefore, its results cannot be compared to a surgical procedure (Tr. 59). Formula Plus simply obscures very superficial lines for a matter of hours.
d. Nourishment from Vitamins and Nutrients in Formula Plus.
This finding is based on the testimony of Drs. Feldman and Uretsky
There is no clinically significant nourishment that will result from topical application of any of the vitamins and nutrients included in Formula Plus (Tr. 60, 61, 102, 103, 145, 151; CX-15).
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, 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).
The ultimate impression on the reader results not only from what is stated but also from what is reasonably implied therefrom. Vibra-Brush Corp. v. Schaffer, supra; Aronberg v. Federal Trade Commission, 132 F.2d 165 (7th Cir. 1942).
The foregoing principles were applied in finding that Respondents' advertising makes the representations alleged in subparagraphs a. through f. of paragraph 3 of the Complaint.
2. Although informed persons may readily recognize that Respondents' advertising claims for Formula Plus are false and absurd, 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. Donaldson v. Read Magazine, supra.
3. The ordinary person who reads Respondents' solicitation materials would interpret them substantially as characterized in paragraph 3 of the Complaint.
4. These false representations go beyond mere puffery and are material in that their natural tendency is to cause purchases of Formula Plus by persons desiring to rid themselves of facial lines and wrinkles without resorting to face lift surgery or other radical and expensive means.
5. Based upon findings of fact numbered 7, supra, I conclude that the representations found above are false in fact.
6. An expert witness may rely on the product label in forming his opinion on the veracity of the advertising claims made for the product. No chemical analysis si required. Vitahair, P.S. Docket No. 6/76, Initial Decision at 2-3 (1978); Derma-Diet, P.S. Docket No. 5/171, Postal Service Decision at 2 (1977). The product label may be assumed to be correct, unless respondent comes forward with evidence that there are additional ingredients in the product. Schiffahrts Laboratories, P.S. Docket No. 3/193, Initial Decision at 14-15 (1976).
7. Both of Complainant's expert witnesses testified that the formulation of FORMULA PLUS is, in essence, the same as most other skin moisturizers and would perform the same. Respondents failed to come forward with any evidence to rebut the relevant opinions of Complainant's experts, to attenuate their expertise or credibility in any significant respect, or to show that FORMULA PLUS is, in fact, the "miracle cosmetic" represented in its advertising.
8. Complainant has proved its case by a preponderance of the reliable and probative evidence of record.
9. The Postal Service is not bound by the terms of the Consent Agreement in P.S. Docket No. 6/156 insofar as such agreement may be interpreted to permit the making of any representations found to be false herein. To hold otherwise would be violative of 39 U.S.C. § 3005 and the public interest this statute is designed to protect.
10. Respondents are engaged in the conduct of a scheme for obtaining money or property through the mails by means of materially false representations in violation of 39 U.S.C. § 3005. Accordingly, a mail stop order and a cease and desist order, in the forms attached, should be issued against the Respondents.