In the Matter of the Complaint Against AMERICAN GENEALOGIES, INC., P. O. Box 1610, Plainfield, NJ 07061-1610 and SPRING HILL EMPLOYMENT, INC., Spring Hill Road, P. O. Box 55, Sterling, PA 18463-0055 and SPRING HILL DATA PROCESSING, INC., Delaware Avenue, Palmerton, PA 18071-1910 and MICHAEL CAPUTO, Spring Hill Road, P. O. Box 55, Sterling, PA 18463-0055 and JOHN BEDSON, Spring Hill Road, P. O. Box 55, Sterling, PA 18463-0055 and GENEALOGY ROOM and AMERICAN GENEALOGIES, INC., and ELIZABETH ROSS, P. O. Box 5300, Scranton, PA 18505-5300 P.S. Docket No. 27/83 September 18, 1987 Quentin E. Grant Chief Administrative Law Judge APPEARANCES FOR COMPLAINANT: Sandra C. McFeeley, Esq. W. Gary Claytor, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-1112 APPEARANCE FOR RESPONDENT: Edward L. Norwind, Esq. Paulson, Nace & Norwind 1814 "N" Street, N.W. Washington, DC 20036-2404
In a Complaint filed on May 7, l987, Complainant alleged that Respondents are engaged in conducting a scheme or device to obtain money or property through the mail in violation of 39 U.S.C. 3005. The scheme alleged involves postcard solicitations mailed by Respondents inviting addressees to remit money through the mail for the purchase of a family album relating to the addressee's family. The Complaint contains two counts, each alleging certain false representations made by Respondents in the solicitations.
Respondents' Answer contains denials of the principal elements of the Complaint including the allegations of false representation. It also asserts affirmative defenses including laches, estoppel or waiver, and lack of jurisdiction.
On June 19, l987, Respondent John Bedson was held to be in default for failure to file an Answer and a cease and desist order was issued against him.
A hearing was held in Washington, DC on June 24, l987. Complainant called three consumer witnesses, Peter Greenhill, John Devney, John R. Malloy and Postal Inspector Steven Hammer. Respon- dents called no witnesses and introduced no exhibits. Both parties have filed proposed findings of fact and conclusions of law all of which have been considered. To the extent indicated they have been adopted; otherwise they have been rejected as irrelevant or contrary to the evidence.
1. Respondents American Genealogies, Inc. [AGI], Spring Hill Employment, Inc., [SHEI] and Spring Hill Data Processing, Inc., [SHDPI] are Pennsylvania corporations (CX-47, par. 2, 5, 7). Respondent Michael Caputo is the president and owner of AGI and the owner of SHEI and SHDPI (CX-147, par. 3, 4, 6, 8; Answer, Eighth Defense).
2. Respondent Elizabeth Ross is a fictitious person (CX-147, par. 16, 17).
3. Respondent Caputo's business address is Spring Hill Road, Sterling, Pennslyvania 18463. At his request, all mail for him and AGI, SHEI, and SHDPI is delivered to Post Office Box 55, Sterling, PA 18505 (Answer, Eighth Defense).
4. Respondents mail postcard solicitations to members of the public inviting addressees to purchase a family album, for example "The Greenhill Family Album", by mailing an order form with payment to American Genealogies, Inc., P. O. Box 1610, Plainfield, NJ 07061-1610 (CX-117, 119) or to Elizabeth Ross or Genealogy Room, P. O. Box 5300, Scranton, PA 18505-5300 (CX-116, 118, 120, 122; Answer, Eighth Defense). Exhibit A annexed to this decision shows examples of such postcard solicitations (CX-117, 118).
Complainant has alleged four representations, (a) through (d), in paragraph 7 under Count I of the Complaint. These representa- tions relate to solicitations seeking remittances to American Genealogies, Inc., P. O. Box 1610, Plainfield, NJ 07061-1610, for example CX-117. The following findings relate to these representa- tions:
"(a) Persons remitting money in response to American Genealogies, Inc. advertising materials will receive a document principally about the ancestry and family name of the addressee."
5. This representation is made in Respondents' solicitations. It is found in the title of the book being offered, "The ( surname of addressee) Family Album"; the prominent, boldfaced repetition of the addressee's surname in connection with the book seven times through- out the brief message; the assurance that the "Unique (surname) Family Album" will "guide you through the discovery and documen- tation of your personal and family heritage"; the statement that "thousands of dollars and months of work went into researching through 70 million families"; the assertion that the album contains a directory of almost every family with the addressee's surname; and finally, the direction to make the check payable to American Genealogies, Inc.
The artful design of the solicitation through the incorporation of the elements listed above creates in the ordinary mind the impression that the book being offered is mainly about the addressee's family name and ancestry. The name of the designated payee is of particular significance. Any doubt about the nature of the book is quite naturally resolved by the word "Genealogies" in the payee's name, a genealogy being an account of the descent of a person or family from an ancestor. Webster's Ninth New Collegiate Dictionary (1986).
The testimony of consumer witness Peter Greenhill (Tr. 25, 27, 33, 35) supports this finding.
"(b) The product offered contains the names and locations of almost every member of the addressee's family in the United States."
6. The solicitation makes this representation in the following:
"Thousands of dollars and months of work went into researching through 70 million families. From this we have located almost every (surname) member in the United States."
The statement on the reverse side of the card that the album contains a directory of almost every family with the addressee's surname rather than every family member with the addressee's surname is insufficiently clear to negate the impression conveyed by the quoted statement that almost every family member will be listed.
This finding is supported by the testimony of consumer witness Peter Greenhill (Tr. 26, 34, 35).
"(c) The product offered contains informa- tion specifically about the origins of the addressee's family in the United States."
7. This representation is made in the following portion of the solicitation :
"THE UNIQUE ( surname) FAMILY ALBUM CONTAINS:
* * *
*The history of our origins in the U. S."
"(d) The majority of the contents of the addressee's edition of the book will be substan- tially different from the contents of an edition of the book pertaining to a family surname different from that of the addressee."
8. This representation is found in the same elements of the solicitation listed in FOF No. 5, supra , together with the following statements:
"THERE WILL BE ONLY ONE EDITION of this invaluable album *** it will be printed only on your specific order.
Complainant has alleged five representations, (a) through (e), in paragraph 12 under Count II of the Complaint. These representa- tions relate to solicitations seeking remittances to either Genealogy Room or American Genealogies, Inc., or Elizabeth Ross, P. O. Box 5300, Scranton, PA 18505-5300 (for example, CX-116, 120, 121, 122). The following findings relate to these representations:
"(a) The addressee of the solicitation is related to the individual who purports to make or sign the solicitation."
9. Several of the solicitations purport to be from a person named Elizabeth Ross with a middle name corresponding to the addressee's surname, for instance Elizabeth Hannah Ross (CX-116) or Elizabeth Black Ross (CX-122). The use of the addressee's surname as a middle name together with the indication that this Elizabeth Ross has performed a long, expensive genealogical research to produce the family album would tend to convey to the ordinary mind the impression that this Elizabeth Ross is related to the addressee. The name Elizabeth Malloy Ross on the solicitation received by consumer witness John R. Malloy was a key factor in his ordering The Malloy Family Album (Tr. 83).
"(b) An individual who is making the solicitation has performed genealogical research that has specifically led to the addressee."
10. This representation is made in some of the solicitations, for instance CX-116, 118 and 120. It is clearly implied in the use of the addressee's surname as the middle name of the sender of the solicitation, Elizabeth (surname) Ross, her address (Genealogy Room, etc.), and the suggestion that thousands of dollars have been spent in searching national, state, government and utility records to come up with names of members of the addressee's family, including the addressee. The testimony of consumer witnesses John Devney (Tr. 49, 62, 63) and John R. Malloy (Tr. 82, 83) supports this finding.
"(c) Persons remitting money in response to American Genealogies, Inc.'s advertising materials will receive a document principally about the ancestry and family name of the addressee."
11. This representation is made in Respondents' solicitations (for instance, CX-119, 120, 121). It is found in the title of the book being offered; the prominent repetition of the addressee's surname throughout; the assurance that thousands of dollars and months of work went into researching the name; the assertion (CX-119) that the album contains a directory of almost every family with the addressee's surname and the history of "our" origins in the U. S.; the implication that the book contains family trees relating to the addressee; and the word "Genealogies" in the corporate name.
"(d) The majority of the contents of the addressee's edition of the book will be substan- tially different from the contents of an edition of the book pertaining to a family surname different from that of the addressee."
12. This representation is made in the solicitations. It is found in the elements of the solicitations listed in FOF No. 11, supra , together with the assertion that there will be but one limited edition of the album to be printed only on the addressee's specific request.
"(e) Some of the family names in the title 'The (name of family) Family Album' are rare in the United States."
13. Respondents make this representation in that portion of some of the solicitations which states that the surname of the addressee has been found to be rare, making the album a very special limited edition (CX-116).
14. The representations found in FOF 5 through 8 (Par. 7a, b, c and d of the Complaint) are false in fact. The family albums received by persons responding to the solicitations are not principally about the ancestry and family names of the addressees (CX-124 through CX-127). Three of the albums in evidence contain approximately 285 pages each (CX-124, 125, 127). There is a title page containing the words "THE ( SURNAME OF ADDRESSEE) FAMILY ALBUM."
Another page is a numbered "certificate" certifying that the purchaser is the owner of the album. Then there are 35 to 45 pages containing a listing of names and addresses of persons having the same surname as the purchaser. There is one page containing a numerical breakdown by states of the persons so listed. The remaining pages of the album are practically identical in each album. They contain nothing specific to the purchaser or to the purchaser's surname. Rather, they consist of general information concerning ethnic origins of immigrants to the United States, origins of family names and their meanings, and instructions for conducting genealogical research. In the listing of persons having the purchaser's surname there is no indication of relationship to the purchaser. Nowhere in the albums in evidence is there informa- tion about the ancestry and family name of the purchaser or other information of genealogical value specific to the purchaser.
The fourth album in evidence, CX-126, differs from the other three described above in that it is of larger format and has only approximately 185 pages, 36 of which are devoted to a listing of persons with the purchaser's surname. Otherwise, its contents are nearly identical to those albums.
The testimony of Peter Greenhill disclosed that in the album he purchased he was the only member of his family listed and that the album did not purport to list members of his family who have a surname different from him due to a change in family name adopted by his great grandfather.
15. The representations found in FOF 9 through 13 (Par. 12(a) through (e) of the Complaint) are false in fact. The name Elizabeth Ross appearing on the solicitations, sometimes with a middle name the same as the surname of the addressee, is fictitious (CX-146, p. 61; Tr. 95). Therefore, there can be no relationship between Elizabeth Ross and the addressee and no genealogical research performed by Elizabeth Ross. As found in FOF 14, above, and for the same reasons, I find that the family albums sold by Respondent are not principally about the ancestry and family names of the purchasers and that the majority of the contents of such albums does not substantially differ from one family album to another.
In representing in certain solicitations that the addressee's family name is rare, Respondents acknowledged using the number 10,000 as the point of demarcation between rare names and those not rare. According to the testimony of Respondent Michael Caputo in a hearing in the U. S. District Court for the Middle District of Pennsylvania, the Social Security Administration (SSA) defines rare names as those appearing less than 10,000 times in its files of Social Security numbers. Mr. Caputo testified that Respondents use information obtained from SSA to determine which surnames occur less than 10,000 times (CX-145, pages 211-217). Complainant placed in evidence a tabulation of the distribution of surnames appearing in solicitations in evidence as CX-1 through CX-116 taken from a report of surname distributions published by the SSA (CX-144). This tabulation shows that none of the surnames in those solicitations occurs less than 10,000 times in the SSA file of SS numbers. Most of them occur far in excess of 10,000 times. I find, therefore, that even according to the definition of rareness used by Respondents the surnames of the addressees of those solicitations are not rare.
At the hearing, evidence offered by Complainant linking Respon- dent Michael Caputo to the scheme involved in Beatrice Bayley, Inc. , P.S. 22/113, was rejected as irrelevant to the false representation issues to be decided and as not appropriate for consideration in connection with the cease and desist order proposed by Complainant (Tr. 14-18). In its post-hearing brief, Complainant again asks admission of this evidence asserting its essentiality to support the broad terms of the recommended cease and desist order.
Complainant cites Leo Daboub , P.S. 19/185, (P.S.D. July 10, l986) and National Gold Mint , P.S. 22/165 (I.D., July 22, l986) in support of its request. Both of these cases involved evidence, offered in support of a cease and desist order, that Respondents had been respondents in prior false representation proceedings involving similar enterprises. Respondent Caputo was not a respondent in Beatrice Bayley, Inc . and, furthermore, an appeal from the PSD in Bayley is pending in U. S. District Court for the District of Columbia. Lack of finality in the Bayley case and lack of precedent for receiving the evidence in question persuade me that my ruling rejecting such evidence should stand. However, I regard the evidence that was received concerning Mr. Caputo and the other Respondents adequate to support the cease and desist order proposed by Complainant. See FOF 1, 3 and 4, supra .
Respondents object to paragraph (8) of the proposed cease and desist order on the ground that it is beyond the jurisdiction, power, and authority of the Postal Service. No citations have been offered in support of the argument. It is noted that a similar provision was included in the cease and desist order issued in the Bayley case. Therefore, it would appear proper to include paragraph (8) as proposed.
1. An advertisement must be considered as a whole and its meaning determined in the light of its probable effect on persons of ordinary minds. Donaldson v. Read Magazine, Inc. , 333 U. S. 178 (1948); 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. l958).
Express misrepresentations are not required. It is the net impression that the advertisement as a whole is likely to make upon individuals to whom it is directed that is important. Even if a solicitation is so worded as to not make an express representation, but 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).
Where an advertisement is ambiguous or capable of more than one meaning, if one of those meanings is false, the advertisement will be held to be misleading. Rhodes Pharmacal Co., Inc. v. F.T.C. , 209 F.2d 382, 387 (7th Cir. l953); Ralph J. Galliano , P.S. Docket No. 19/15 (P.S.D. May 2, l985).
Although an astute person might not be deceived by an advertise- ment, this does not detract from the solicitation's tendency to "deceive the ignorant, gullible and less experienced." Gottlieb v. Schaffer , 141 F. Supp. 7, 16 (S.D.N.Y. 1956). The false represen- tation statute was intended to protect such persons as well. Donaldson v. Read Magazine, Inc. , supra.
2. Applying the foregoing principles, it is concluded that Respondents' solicitations make the representations alleged in paragraphs 7 and 12 of the Complaint. These representations are false in fact.
3. The representations found are material because individually and collectively they tend to induce individuals to remit money through the mail to purchase the family albums sold by Respondents. See Chaachou v. American Central Insurance Co. , 241 F.2d 889, 893 (5th Cir. l957).
4. Complainant has established its case by a preponderance of the reliable and probative evidence of record. S.E.C. v. Savoy Industries , 587 F.2d 1149, 1168 (D.C. Cir. l978).
5. Respondents have offered no evidence or arguments in support of the affirmative defenses set forth in their Answer. These defenses are rejected.
6. Respondents are engaged in the conduct of a scheme or schemes for obtaining money or property through the mails by means of materially false representations in violation of 39 U.S.C. 3005. Accordingly, false representation and cease and desist orders in the forms attached hereto should be issued against Respondents. Respondent Bedson is covered by a cease and desist order previously issued in this case. Therefore, he is not included in that attached hereto.