Appeal of P.S. Docket No. 20/176 -- PAUL GOLDBERG and THE YELLOW PAGES, INC. and THE YELLOW PAGES

In the Matter of the Complaint Against PAUL GOLDBERG 2861 Somerset Drive at Lauderdale Lakes, FL 33311-1921 and THE YELLOW PAGES, INC. P. O. Box 370769 at Miami, FL 33137-0769 and THE YELLOW PAGES Main Facility P. O. Box 24965 at Ft. Lauderdale, FL 33307-4965 P.S. Docket No. 20/176 11/05/85 Mason, Randolph D. APPEARANCES FOR COMPLAINANT: Don A. Potter, Esq.; H. Richard Hefner, Esq.; Consumer Protection Division, Law Department, United States Postal Service, Washington, DC 20260-1112

APPEARANCES FOR RESPONDENTS: Edmond W. Frank, Esq.; 7100 Biscayne Boulevard, Miami, FL 33138-5702 Paul Goldberg, pro se on brief, 2861 Somerset Drive, Lauderdale Lakes, FL 33311-1921

INITIAL DECISION

This proceeding was initiated on April 9, 1985, when the Postal Service filed a Complaint alleging that Respondents are engaged in conducting a scheme or device for obtaining money through the mails by means of false representations in violation of 39 U.S.C. § 3005, and by means of solicitations in the guise of bills or invoices which are nonmailable under 39 U.S.C. § 3001(d). Specifically, the Complaint, as amended, alleges in paragraph 5 that Respondents falsely represent, expressly or impliedly in substance and effect, whether by affirmative statements, implications or omissions, that:

(a) The amount of money set forth on the statement is owing and due to Respondents by the addressee;

(b) The recipient of the statement has ordered, authorized, or requested a product or services from Respondents;

(c) Respondent is affiliated with Southern Bell or other telephone companies which publish a telephone advertising directory commonly known as the "Yellow Pages."

The Complaint further alleges in paragraph 7 that Respondents' mailings are in the form of or reasonably could be construed as bills, invoices or statements of account due which are solicitations for orders of advertisements to be published in Respondents' Appeal of Appeal of ed directory. Complainant alleges that the solicitations do not carry the disclaimer prescribed by 39 U.S.C. § 3001(d) and the regulations promulgated thereunder, and as such, constitute nonmailable matter. In the Amended Answer filed June 10, 1985, Respondents deny that any violation of the statute occurred. By Order dated July 19, 1985, Complainant's Motion to Amend the Complaint to add "the Yellow Pages, Main Facility" as a Respondent was granted. A hearing was held by the Administrative Law Judge on July 23, 1985 in Fort Lauderdale, Florida. Both parties were represented by counsel and afforded full opportunity to be heard, adduce relevant evidence, and examine and cross-examine witnesses. Respondents filed proposed findings of fact and conclusions of law on August 30, 1985 which have been duly considered. Complainant failed to file a brief. To the extent indicated below, proposed findings and conclusions have been adopted; otherwise, they have been rejected as irrelevant or contrary to the evidence. Based on the entire record herein, including my observation of the witnesses and their demeanor, the exhibits and other relevant evidence adduced at the hearing, I make the following findings of fact and conclusions of law: <CENTER>Findings of Fact</CENTER> 1. Respondent The Yellow Pages, Inc., is a Florida Corporation. Respondent Paul Goldberg is responsible for and directs the corporation's activities and practices. The corporation solicits remittances of money through the mails at P.O. Box 370769, Miami, Florida 33137-0769. Respondent the Yellow Pages, Main Facility, solicits remittances of money through the mails to P.O. Box 24965, Fort Lauderdale, Florida 33307-4965 (Ans. § 1, 2; CX-3; CX-5; RX-3; Tr. 74). 2. Respondents solicit the sending of money through the mail to Respondents by means of direct mailings. Attached hereto, and incorporated herein by reference as Exhibits 1 and 2 are copies of such direct mailings. 3. Exhibit 1 (CX-3, 6) is clearly in the form of, and reasonably could be interpreted or construed as, a bill, invoice, or statement of account due. Respondents do not seriously argue to the contrary. Since the addressees never ordered any advertising services, Exhibit 1 is merely a solicitation in the guise of a bill or invoice. 4. a) Exhibit 2 (CX-1, 5, 8) is also in the form of, and reasonably could be interpreted or construed as, a bill, invoice, or statement of account due. As in the case of Exhibit 1, Exhibit 2 prominently features a specific dollar amount due for directory advertising, and these charges are due by a certain date. The following language appearing in the upper right hand corner of the mailing does not have the effect of changing the overall impression of the ordinary reader that the document is a bill: "Yellow Pages Solicitation Not a bill from Bell South" b) Although the word "solicitation" by itself indicates an attempt to sell advertising (Tr. 27), its meaning in the context of Exhibit 2 is ambiguous. Also, the words "Not a bill from Bell South" indicate to the ordinary reader that this is a bill from the Yellow Pages section of the telephone company rather than a bill for telephone services (Tr. 13, 24, 34). c) In addition, the statement which appears at the bottom of Exhibit 2, does not change the ordinary reader's overall impression that Exhibit 2 is a bill. First, the language appears in very small yellow print and is not noticeable by the ordinary reader (Tr. 9, 24-25, 34). Second, the statement is confusing and ambiguous by itself and in context. It states: <BLOCKQUOTE>"Please make checks payable to 'The Yellow Pages'. Concerning statements of accounts due for which this is not, please authorize and remit."</BLOCKQUOTE> Even if the reader were to study this small print, he would not be warned that the mailing is not a bill or invoice. 5. Exhibits 1 and 2 both constitute nonmailable matter because they do not contain the disclaimer set forth in either 39 U.S.C. § 3001(d) or Domestic Mail Manual § 123.41. 6. As alleged in subparagraph (a) of paragraph 5 of the Complaint, Respondents represent in the mailings that the amount of money set forth on the statement is owing and due to Respondents by the addressee. Both mailings indicate that a specific dollar amount is due for directory advertising, which must be paid by a certain date. As previously indicated, the alleged disclaimers fail to dispel the overall impression that the money is due to Respondents by the addressee. The above representation is false in view of the fact that it was made to individuals who had not ordered the advertising in question (Tr. 11, 25, 35). 7. As alleged in subparagraph (b) of paragraph 5 of the Complaint, Respondents represent that the recipient of the statement has ordered, authorized, or requested a product or services from Respondents. Since the reader is told that he owes a specific dollar amount for directory advertising, Respondents implicitly represent that the addressee ordered such advertising. This representation is false since the addressees did not order the advertising in question (Tr. 11, 25, 35). 8. As alleged in subparagraph (c) of paragraph 5 of the Complaint, Respondents represent that Respondent is affiliated with Southern Bell or other telephone companies which publish a telephone advertising directory commonly known as the "Yellow Pages." (Tr. 34, 13). On both Exhibit 1 and 2, the use of the words "Yellow Pages" is associated by the public with the advertising directories with that name published by telephone companies. In addition, with respect to Exhibit 1, the Respondents' variation of the walking finger logo gives rise to the same association in the mind of the ordinary reader. Since Respondent is not affiliated with any telephone company (Tr. 90), the above representation is false. 9. The above false representations are material because they tend to induce the reader to remit money to the Respondents. <CENTER>Conclusions of Law</CENTER> 1. Under 39 U.S.C. § 3005(a), the mailing of matter which is nonmailable under § 3001(d) "shall constitute prima facie evidence that such person is engaged in conducting a scheme or device for obtaining money or property through the mail by false representations." Thus, the first issue for consideration is whether the Respondents' mailings are "nonmailable." Section 3001 (d) provides that solicitations in the form of, and reasonably interpreted or construed as a bill, invoice, or statement of account due, are nonmailable unless the matter has on its face in conspicuous and legible type, in accordance with regulations prescribed by the Postal Service a disclaimer as provided by the statute or the regulation. This determination is to be based on the totality of the solicitations and the impression created in the minds of those to whom they are directed. Donaldson v. Read Magazine, 333 U.S. 178 (1948) Borg-Johnson Electronics, Inc. v. Christenberry, 169 F. Supp. 746 (S.D.N.Y. 1959); Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957), rev'd on other grounds, 256 F.2d 681 (2nd Cir. 1958). This does not mean that the trier of fact is limited to the interpretation which a majority of recipients would place on the solicitation. Rather, the trusting are to be protected as well as the wary. Donaldson v. Read Magazine, supra, at 189. In determining the effect of the solicitations on the ordinary mind, testimony in addition to the solicitations, while admissible, is unnecessary. Vibra-Brush Corp. v. Schaffer, supra. 2. Using the above standards, and as previously indicated in the Findings of Fact, it is concluded that Respondents' solicitations are in the form of and reasonably could be construed as a bill, invoice, or statement of account due. 3. Moreover, it is clear that the disclaimers contained in the solicitation do not comply with the requirements of 39 U.S.C. § 3001 (d). That section provides that solicitations in the form of invoices are nonmailable ". . . unless such matter bears on its face, in conspicuous and legible type in contrast by typography, layout, or color with other printing on its face, in accordance with regulations which the Postal Service shall prescribe-- (A) The following notice: 'This is a solicitation for the order of goods or services, or both, and not a bill, invoice, or statement of account due. You are under no obligation to make any payments on account of this offer unless you accept this offer.'; or (B) in lieu thereof, a notice to the same effect in words which the Postal Service may prescribe." Domestic Mail Manual § 123.41, which is the regulation issued to implement § 3001(d) requires the statutory disclaimer to be on the face of the solicitation in conspicuous boldface capital letters of prominent contrasting color and in specified print type. The disclaimers contained on Respondents' solicitations clearly do not comply with the requirements of 39 U.S.C. § 3001(d) as implemented by Domestic Mail Manual § 123.41. 4. Accordingly, the solicitations in issue herein are nonmailable under 39 U.S.C. § 3001(d). 5. 39 U.S.C. § 3005(a) provides that the mailing of matter which is nonmailable under § 3001(d) by any person shall constitute prima facie evidence that such person is engaged in conducting a scheme or device for obtaining money or property through the mail by false representations. Since Respondents failed to present any evidence which tends to rebut the prima facie case established by the Complainant, it is concluded that Respondents were obtaining money through the mail by means of false representations in violation of § 3005(a). 6. In addition, applying the standards set forth in the cases cited above, it is concluded that Respondents' solicitations make the representations alleged in paragraph 5 (a) through (c) of the Amended Complaint. As further stated in the Findings of Fact, these representations are materially false. 7. Complainant has met its burden of proof by a preponderance of the reliable and probative evidence of record. S.E.C. v. Savoy Industries, Inc., 587 F.2d 1149, 1168 (D.C. Cir. 1978). 8. The representations made by Respondents are material because they have a tendency to persuade readers to send money to the Respondents to pay for services which were not ordered. 9. Respondent is engaged in the conduct of a scheme for obtaining remittances of money or property through the mail by means of false representations in violation of 39 U.S.C. § 3005. 10. The attached False Representation Order and Cease and Desist Order should be issued. </BODY> </HTML>