In the Matter of the Complaint Against SCOTT DAVID WILCOX, VERNON FRAZIER, ADCO MARKETING CORPORATION d/b/a, AMERICAN PUBLISHING, 781 W. Oakland Park Blvd., Suite 117, at Fort Lauderdale, FL 33311-1729 P.S. Docket No. 23/70 June 29, 1987 James A. Cohen Judicial Officer APPEARANCE FOR COMPLAINANT: H. Richard Hefner, Esq. Donald A. Potter, Esq. Consumer Protection Division United States Postal Service Washington, DC 20260-1112 APPEARANCE FOR RESPONDENTS: Frank J. Shannon, III, Esq. Suite 801 The Candler Building 127 Peachtree Street, N.E. Atlanta, GA 30303-1810
Both parties have appealed from the Initial Decision of an Administrative Law Judge finding that Respondents make false representations in violation of 39 U.S.C. 3005 in connection with the sale of books entitled Who's Who in the United States , Who's Who in Society , and Who's Who in New York .
This proceeding was initiated by a Complaint filed by the Consumer Protection Division, Law Department, United States Postal Service (Complainant), which, as amended, alleged that Respondents, in unsolicited mailings to members of the public, make the following materially false representations:
4. (a) Respondents publish a book that is recognized in the professional community as a valuable source listing of outstanding individuals.
(b) Respondents produce "the most important publication in America," which enhances the employment and career opportunities of those individuals listed.
(c) Respondents employ a staff which researches potential candidates for inclusion in its proposed publication based on a review of news articles, editorials, trade publications, social registers, and professional membership rosters.
(d) Respondents have published editions of Who's Who in the United States prior to 1986 and have distributed copies of each volume to major libraries, journalists, historians, researchers, and the Library of Congress.
(e) Respondents are affiliated with Marquis Who's Who, Inc., which regularly publishes biographical resource books, including "Who's Who in America."
(f) Respondents have published editions of Who's Who in Society , Who's Who in New York , Who's Who in California , or some other biographical resource index prior to 1986 and have distributed copies of each volume to major libraries, journalists, historians, researchers, and the Library of Congress.
In a timely filed Answer, as amended, Respondents denied that they make the representations alleged in the Complaint or that those representations are materially false. Respondents, in addition, asserted various jurisdictional and constitutional defenses and contested the inclusion of certain of the named Respondents as parties to this proceeding.
At a hearing before an Administrative Law Judge, both parties were given a full opportunity to present evidence in support of their respective positions. Complainant presented various exhibits and the testimony of six witnesses: Debora L. Keenan, Linda Basilick, James Clark, Judy Pancoast, Brian Kuhn, and Postal Inspector John McNamara. Respondents presented the testimony of Respondent Scott David Wilcox.
Following the hearing and the filing of proposed findings of fact and conclusions of law, the Administrative Law Judge issued an Initial Decision, in which he concluded that Respondents make the representations alleged in subparagraphs 4(a) through 4(d) and 4(f) 1 /, but not subparagraph 4(e), of the Complaint as amended and that all of the representations made are materially false except for the representation alleged in subparagraph 4(c). Based on these findings, the Administrative Law Judge concluded that Respondents are in violation of 39 U.S.C. 3005. He therefore recommended the issuance of a False Representation Order and a Cease and Desist Order against Respondents.
Both parties have filed exceptions to the Administrative Law Judge's findings and conclusions. Each of the exceptions is discussed hereafter.
1. The Administrative Law Judge found that Respondents make the representation alleged in subparagraph 4(f) with respect to the publications entitled Who's Who in Society and Who's Who in New York , but that there was no evidence in the record concerning Respondents' publication of Who's Who in California (I.D. FOF 5).
1. The Court erred in finding that RESPONDENTS' Solicitation falsely represented that RESPONDENTS publish a Book that is recognized in the Professional Community as a valuable Source Listing of outstanding individuals:
2. The Court erred in determining that RESPONDENTS' Solicitation falsely represented that RESPONDENTS produce the most important publication in America which enhances the employment and career opportunities of those individuals listed:
These exceptions relate to the Administrative Law Judge's finding that Respondents make the representations alleged in subparagraphs 4(a) and 4(b) of the Complaint and that those representations are materially false. Respondents argue that their advertisements could not reasonably be read to make these representations because they express opinions or refer to the experience of others and in so doing are at worst "puffing" which is a constitutionally protected right. While opinions and experiences may in some contexts constitute puffing, as used in Respondents' advertisements they create the impression that the books have achieved a certain status by means of prior publication. The representation of achieved status through prior publication is a misrepresentation of a material fact which induces the purchase of Respondents' books. The misrepresentation of a material fact is not "mere puffing" and is not a constitutionally protected right. Bolger v. Young's Drug Products Corp. , 463 U.S. 60 (1983), citing Central Hudson Gas & Electric Corp. v. Public Service Commission of New York , 447 U.S. 557, 566 (1980). Accord , Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council , 425 U.S. 748 (1976).
Accordingly, there is no merit to these exceptions.
3. The Court erred in finding that RESPONDENTS' Solicitation falsely represented that RESPONDENTS published editions of the above-named Publications, prior to 1986, and have distributed copies of each Volume to major libraries, journalists, historians, researchers, and the Library of Congress.
This exception relates to the Administrative Law Judge's finding that Respondents' solicitations make the representation alleged in subparagraph 4(d) of the Complaint as amended and that the representation is materially false.
The Administrative Law Judge based his finding that the representation is made on language in the solicitations which refers to activities related to these publications in the past or present tenses. Phrases such as: "... we distribute copies....", "Experience has demonstrated....", and "This type of selection process has set....", clearly convey the message that the publications currently exist and have been issued in the past.
Respondents argue that the persons to whom the solicitations were sent are "discriminating purchasers" and that any confusion with respect to this point is the result of "indifference". Contrary to Respondents' argument, the language used in their solicitations, when reasonably read as a whole, would lead the ordinary reader to whom the advertisements are directed to believe that the books have been previously published. Moreover, the ordinary reader has "a right to assume that fraudulent advertising traps will not be laid to ensnare them." Donaldson v. Read Magazine, Inc. , 333 U.S. 178, 189 (1948). Further, the false representation statute is intended to protect the gullible, naive, and less critical reader as well as the more sophisticated and wary reader. See, Fields v. Hannegan, 162 F.2d 17 (D.C. Cir.), cert . denied , 332 U.S. 773 (1947); M.K.S. Enterprises, Inc. v. United States Postal Service , 459 F. Supp. 1180, 1184 (E.D.N.Y. 1978); Gottlieb v. Schaffer , 141 F. Supp. 7 (S.D.N.Y. 1956); IHS Department of Unclaimed Funds and Benefits , P.S. Docket No. 22/155 (P.S.D. Sept. 22, 1986); Leo Daboub , P.S. Docket No. 19/185 (P.S.D. July 10, 1986).
The falsity of this representation is persuasively established in the record. Respondent Wilcox testified that he has never published a Who's Who-type publication or other biographical resource book, nor has he distributed copies of such publications to major libraries, historians, journalists, or researchers (I.D. FOF 6).
Accordingly, the record supports the Administrative Law Judge's conclusion that this representation is made and that it is materially false.
4. The Court erred in determining that RESPONDENTS would not be allowed to show, and introduce into evidence, comparative advertising and the Standards of the advertising industry.
In the early stages of this proceeding, the Administrative Law Judge ruled that evidence relative to advertisements used by the United States Postal Service was irrelevant to the issues in this proceeding. (See ALJ Orders dated March 5, 10 & 13, 1986). Respondents argue that this type of evidence is relevant and that the Administrative Law Judge erred in excluding it from consideration. Respondents cite three cases which they claim support their position. However, the cited cases relate to tort actions involving personal injury claims and have no apparent relevance to the issues raised in this proceeding. In any event, it would not be a defense to the allegations of the Complaint that others, regardless of who they are, use false representations to induce the purchase of their product. See , Gottlieb v. Schaffer, supra , at p. 19; Universal Life Church, Inc. , P.S. Docket No. 7/62 (P.S.D. Feb. 14, 1980); Black Magic Shop , P.O.D. Docket No. 2/210 (D.D. Dec. 28, 1965); Collegiate Distributors Company , P.O.D. Docket No. 1/249 (D.D. June 16, 1960). Since the advertising representations of others do not serve as a defense to the allega- tions of the Complaint, they are not relevant to the issues in this proceeding which relate to whether Respondents' solicitations make the representations alleged in the Complaint and whether those representations are materially false. Therefore, the Administra- tive Law Judge's ruling was proper.
5. The Court erred in determining that VERNON FRAZIER and ADCO MARKETING CORPORATION are proper Parties to this action.
The Administrative Law Judge found that Respondents Vernon Frazier and Adco Marketing were persons conducting a scheme within the meaning of 39 U.S.C. 3005(a)(3) and therefore proper parties to this proceeding (I.D. COL 7). The Administrative Law Judge based his conclusion on the documentary evidence of record which he found persuasively shows that American Publishing is an assumed business name of Respondent Adco Marketing, that Respondent Vernon Frazier is the president of Adco Marketing, and that Adco Marketing Corp. was instrumental in securing the names of potential customers for Respondent Wilcox through the use of Marquis Who's Who publications which Adco purchased (I.D. FOFs 1-3). The documentary evidence of record also establishes that Respondent Wilcox does business under the name American Publishing at a business address which is the same as that of Adco Marketing Corp. and that Respondent Wilcox listed Respondent Frazier as a reference on an "Application for Delivery of Mail Through Agent" (PS Form 1583) which he filed with the Postal Service (I.D. FOFs 1-2).
Although Respondent Wilcox testified that his American Publishing business had nothing to do with Adco Marketing and that Vernon Frazier and Adco Marketing had not contributed to the compilation of biographical data, he did not attempt to explain away the documentary evidence showing the connection between Respondents Adco and Frazier and the activities which form the basis for the Complaint in this proceeding. The evidence of record establishes the connection between Respondent Wilcox and Respondents Adco and Frazier by a preponderance of the evidence and, therefore, the latter two Respondents are proper parties to this proceeding.
Complainant takes issue with the Administrative Law Judge's findings that the representation alleged in subparagraph 4(c) of the Complaint is false 2 / and that the representation alleged in subparagraph 4(e) of the Complaint as amended was not made in Respondents' solicitation.
With respect to the representation alleged in subparagraph 4(c), the Administrative Law Judge relied on the testimony of Respondent Wilcox that he does have a staff to research potential candidates for inclusion in the publications and that the staff uses the types of sources listed in subparagraph 4(c). Complainant argues that this testimony is not credible because the witness did not identify the various sources which were used to develop the lists of names to be used. Complainant specifically argues that the use of mailing lists as a source of names demonstrates that no "research" of any consequence was performed by Respondents. While Respondents may have obtained many of the names from mailing lists, the undisputed evidence in the record establishes that Respondents obtained names from various sources including those listed in subparagraph 4(c). Thus, the record supports the Administrative Law Judge's finding.
It its second exception Complainant disputes the Administrative Law Judge's finding that Respondents' solicitations do not
2. "Complainant's Exceptions to Initial Decision" erroneously states that the Administrative Law Judge found that the representation in paragraph 4(c) was not made. However, since the Administrative Law Judge clearly found that the representation was made, this exception is treated as an exception to the finding that the representation was not shown to be false.
represent that Respondents are affiliated with Marquis Who's Who, Inc. Complainant's exception is based on the fact that Respondents sent solicitations to persons who had previously been listed in the Marquis publication and the fact that a number of people who were solicited thought they were being solicited by Marquis. The Administrative Law Judge found that this representation is not made either expressly or by implication because there are many Who's Who publications other than the ones published by Marquis, and the solicitation language tends to dispel confusion between Respondents' publications and other Who's Who publications (I.D. FOF 5). The record supports the Administrative Law Judge's finding. In addition to the language relied on by the Administrative Law Judge, the solicitation letter (e.g., CX-1) identifies the publisher as American Publishing in a reasonably prominent line at the bottom of the letter, and the question-and- answer booklet (e.g., CX-2A&B) uses the phrases "American Publishing's Who's Who" and "American Publishing's Who's Who in the United States" in five separate places. Accordingly, the Administrative Law Judge correctly determined that Respondents do not make the representation that their publications are associated with Marquis Who's Who, Inc.
After consideration of the entire record, it is concluded that the Administrative Law Judge correctly found that Respondents are engaged in a scheme to obtain money or property through the mail by means of materially false representations. Accordingly, the exceptions of both parties are denied and the orders authorized by 39 U.S.C. 3005 and recommended by the Administrative Law Judge for issuance against Respondents are issued herewith.