In the Matter of the Complaint Against SAMMY Y. IP, etc. 5628 Montezuma Road at San Diego, CA 92115-2828, et al. P.S. Docket No. 20/65; 09/26/86 Cohen, James A. APPEARANCE FOR COMPLAINANT: Nan M. Kalthoff, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-1112 APPEARANCE FOR RESPONDENT: John P. Murphy, Esq. Imperial Bank Building 701 B Street, Ste. 1300 San Diego, CA 92101-8103
On July 25, l986, Complainant filed a Petition for Supplemental Orders alleging that Respondent Sammy Y. Ip is evading or attempting to evade the provisions of a False Representation Order and Cease and Desist Order previously issued in this proceeding. Complainant contends in the Petition that Respondent is engaged in conducting the same or a similar work-at-home envelope stuffing scheme using promotional materials which are substantially identical to those previously found to be in violation of 39 U.S.C. § 3005. According to Complainant, Respondent's promotional materials contain the same false representations which led to the issuance of the Orders authorized by § 3005.
The names and addresses which Complainant alleges are currently being used by Respondent and against which Complainant seeks the issuance of a False Representation Order are: (l) National Division, P. O. Box 20728, San Diego, California 92120-0728; (2) National Division or National Mailing at P. O. Box 20567, San Diego, California 92120-0567; (3) National Mailing, P. O. Box 19759, San Diego, California 92119-0759; (4) Department B, National Division or National Mailing Division, P. O. Box 20728, San Diego, CA 92120-0728; and (5) Department A, National Mailing Division, P. O. Box 19640, San Diego, CA 92119-0640.
Respondent opposes the issuance of a Supplemental Order contending that his current promotional materials do not contain any materially false representations. Respondent argues that he has made material alterations to his advertisements in order to notify the ordinary reader of the range of possible income one can derive from participation in the advertised activity.
Prior proceedings in this matter led to the issuance of False Representation Order No. 85-94, dated November 29, l985, against (l) Commission Mailing Division and Marketing International, P. O. Box 0197, San Diego, California 92115-0870; (2) Marketing International Commission Mailing Division and Marketing International and Commission Mailing, P. O. Box 15967, San Diego, California 92115-0790; and (3) National Division and Dept. A National Division, P. O. Box 15877, San Diego, California 92115-0780. Cease and Desist Order No. CD-599 was also issued, directing Respondent Sammy Y. Ip to discontinue making representations in connection with a work-at-home envelope stuffing program. These Orders were issued after a full evidentiary hearing */ had been held before an Administrative Law Judge and an Initial Decision and Postal Service Decision issued finding that Respondent makes the representations alleged in the Complaint and that those representations are materially false in violation of 39 U.S.C. § 3005.
The materially false representations alleged in the Complaint which were found to be included in Respondent's promotional materials were that participants in Respondent's program:
"4. a. Will earn $360 a week or more; and
b. The money earned is for work consisting primarily of mailing circulars."
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"7. a. Will be paid for work consisting primarily of stuffing circulars into pre-addressed stamped envelopes and mailing them;
b. Will typically make hundreds of dollars weekly in net earnings;
c. Will receive an income limited only by the amount of time spent stuffing and mailing circulars;
d. Will be paid by the CMA and/or CM/NA for their at-home work;
e. Will be paid for each circular stuffed and mailed; and
f. Will receive from the CMA and/or CM/NA any amount of envelopes and circulars that they want."
Respondent continues to promote his work-at-home program using classified advertisements and circulars seeking remittances to addresses not covered by the prior False Representation Order. The parties agree that Respondent has changed some of the language in these promotional materials although Complainant characterizes the changes as a matter of form, not substance, while Respondent terms the changes "substantive."
The new language employed by Respondent does not alter the substance of the advertisements, and the advertisements continue to make the representations alleged in the Complaint. Respondent's original advertisements claimed earnings of "$360 Weekly/Up," whereas some of the new advertisements promise "$10 - $360 Weekly/Up" (Pet. Exhs. l - 7). One of the new advertise ments simply represents "HUNDREDS WEEKLY" (Pet. Exh. 8). Respondent's circulars state "We can not advertise exactly how much you will make, because we have no way of knowing in advance how much you will put into it. But we can say that commission mailing ventures have been known to produce from $10 to $1,000 weekly" (Pet. Exh. 15). Respondent's position that prospective participants will understand his revised classified advertise ments and the quoted language of the circulars as representing that they can make between $10 and $360 or more per week, but not that they will achieve any level of income under the program is not persuasive.
Despite the changed language, the overall impression conveyed to the ordinary reader continues to be that participants will earn $360 or more per week for stuffing envelopes. Donaldson v. Read Magazine, 333 U.S. 178, 189 (l948); Peak Laboratories, Inc. v. United States Postal Service, 556 F.2d 1387, 1389 (5th Cir. 1977). Express misrepresentations are not required. It is the net impression that the advertisement is likely to make on individuals to whom it is directed that is important, and even if an advertisement is so worded as not to make an express misrepresentation, if it is artfully designed to mislead those responding to it, the false representation statute is applicable. G.J. Howard Co. v. Cassidy, 162 F. Supp. 568 (E.D.N.Y. 1958); see also, Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976). Under these standards, Respondent's new materials continue to make the representation of earnings previously found to be false.
In addition, Respondent does not contest Complainant's assertion that the revised promotion makes the other representations (Complaint, paras. 4b, 7a & 7c-f) previously found to be false. Moreover, a review of the promotional materials confirms that Respondent continues to make these representations. As these representations were found in the original proceedings to be materially false in violation of 39 U.S.C. § 3005, a supplemental order would be justified on the basis of the continued use of these representations without regard to the representations relating to earnings.
Respondent alleges in his Answer to the Petition that his First Amendment rights with respect to commercial speech are severely compromised by the Petition for Supplemental Orders. It is well established that the issuance of orders based on a find ing of a violation of § 3005 does not violate any constitutional rights. Furthermore, the Judicial Officer is not authorized to determine the constitutionality of statutes nor the validity of Postal Service regulations. See 39 C.F.R. § 224.l(c)(4).
By the solicitations which are the subject of the Petition for Supplemental Orders, Respondent Sammy Y. Ip is evading or attempting to evade the provisions of False Representation Order No. 85-94 and Cease and Desist Order No. CD-599 by conducting a similar enterprise at different addresses. Accordingly, the Order sought in the Petition for Supplemental Orders is issued herewith.