Appeal of P.S. Docket No. 28/121 -- THE INSTITUTE FOR VISION IMPROVEMENT

In the Matter of the Complaint Against The Respondent: THE INSTITUTE FOR VISION IMPROVEMENT, P.O. Box 7840, 2000 Johannesburg, Republic of South Africa and at P.O. Box E 425, Saint James, N.S.W. 2000, Australia P.S. Docket No. 28/121 12/05/88 Cohen, James A., Judicial Officer APPEARANCE FOR COMPLAINANT: Jerry Belenker, Esq., Consumer Protection Division, Law Department, United States Postal Service, Washington, DC 20260-1144 APPEARANCE FOR RESPONDENT: Mr. Lavers, P.O. Box 7840, 2000 Johannesburg, Republic of South Africa

POSTAL SERVICE DECISION

The General Counsel of the United States Postal Service (Complainant) initiated this proceeding by filing a Complaint alleging that Respondent is engaged in conducting a scheme or device to obtain money or property through the mail by means of materially false representations in violation of 39 U.S.C. § 3005. In accordance with 39 C.F.R. § 952.7(b), Tentative Decision and Order No. 87-112 was issued which concluded that the Complaint and supporting exhibits make a prima facie showing that the orders authorized by 39 U.S.C. § 3005 should be issued against Respondent. Respondent has filed its opposition to the Complaint alleging that the United States Postal Service lacks jurisdiction over this matter and that the representations alleged in the Complaint are not false.

Background

Complainant specifically alleges in paragraph 4 of the Complaint that Respondent, by means of advertisements for "Lax-Optic Lensless Spectacles," falsely represents that its product will:

(a)benefit persons with retinitis pigmentosa;

(b)affect the progression of cataracts; and

(c)be useful to persons with irregular astigmatism, conical cornea and discrete corneal opacities. In the Tentative Decision and Order it was determined that Complainant made a prima facie showing that Respondent makes the representations alleged in the Complaint and that the representations alleged in subparagraphs 4(a) and (b) are materially false. However, it was also concluded that a prima facie showing of the falsity of subparagraph 4(c) had not been made. Following the issuance of the Tentative Decision and Order, Complainant filed a motion to amend the Complaint and to supplement the Tentative Decision and Order to include P.O. Box E 425, St. James, N.S.W. 2000, Australia as an address subject to the Order. Based on a prima facie showing that Respondent uses the same promotional materials to obtain remittances to the Australian address, Complainant's motion was granted. In its opposition to the Complaint, Respondent indicated a willingness to resolve this matter by agreement of the parties. Despite Respondent's willingness, and encouragement by the Judicial Officer, Complainant reported that the parties were unable to resolve this matter by agreement. Accordingly, the matter is being decided on the record. Both parties have presented exhibits in support of their respective positions. Complainant relies on Respondent's promotional materials and a declaration by Garth Stevens, Jr., M.D. Respondent relies primarily on a legal opinion of a South African attorney, a letter and a newsletter from the Texas Association of Retinitis Pigmentosa and an article about pinhole spectacles by James E. Lebensohn, M.D., Ph.D. All of the exhibits and arguments have been considered in arriving at the decision in this matter.

Findings of Fact

1. Respondent is a non-resident foreign company which solicits remittances to P.O. Box 7840, 2000 Johannesburg, Republic of South Africa and P.O. Box E 425, Saint James, N.S.W. 2000, Australia.

2. Respondent solicits remittances through the United States mail from addressees in the United States for a device called "Lax-Optic Lensless Spectacles." The "Lax-Optic Lensless Spectacles" are eyeglasses containing opaque plastic lenses with a series of pinholes.

3. Respondent solicits remittances for its spectacles by use of a fold-open pamphlet consisting of three panels and containing an insert (Comp. Exh. 1). The back panel of the insert entitled "More Testimonials from the U.S.A." contains a letter from Dorothy Stiefel, Director at the Texas Association of Retinitis Pigmentosa. The letter states that Lax-Optic spectacles provide the following distinct advantages over any other type of sunglasses for persons with retinitis pigmentosa:

(a)ready availability of sharp contrast in sunlight;

(b)alleviation of squinting;

(c)lack of stress in bright sunlight; and

(d)no need to wait for eye adjustment when returning indoors from outdoor sunlight.

4. The "Lax-Optic Lensless Spectacles" will not cure or serve as a treatment for retinitis pigmentosa (Comp. Exh. 2, Stevens Dec., p. 1) and no such claim is made in Respondent's solicitation. However, the "Lax-Optic Lensless Spectacles" will benefit persons with retinitis pigmentosa. Specifically, retinitis pigmentosa sufferers using the spectacles will, as represented in Respondent's solicitation, experience sharp contrast in sunlight, alleviation of glare and squinting, reduction of stress in bright sunlight, and elimination of the need to wait for eye adjustment when returning indoors from outdoor sunlight (Resp. Objection, Annexures 2, 3).

5. The solicitation discusses cataracts on the panel entitled "Clinical Evidence." This section discusses four case histories of cataract patients who used the product and experienced improved vision. The spectacles are said to improve the vision "by removing the disturbing veiling glare," which is an effect achieved only while wearing the spectacles. On the reverse side of the solicitation labeled "More Examples of Successful Applications," the solicitation states that "by utilizing pinhole devices the imperative necessity for surgery may frequently be delayed." In the same section, there is an example of use of the product after cataract extraction. Though the solicitation discusses these cases of the use of the product by cataract sufferers, it does not represent that the product affects the progression of cataracts.

Discussion and Conclusion

I. Respondent contests the jurisdiction of the Postal Service in this matter. Respondent claims that, as a company based in the Republic of South Africa, it need only comply with the laws of that country (Resp. Objection at p. 1). Under 39 U.S.C. § 3005 the Postal Service has authority to issue an Order against "any person" who solicits money by means of false representations through the United States mail. This provision has specifically been interpreted to apply to foreign Respondents. See 39 C.F.R. § 952.7(b). Since Respondent distributes solicitations to addressees within the United States and seeks remittances through the use of the United States mail, under the statute and regulation applicable to this proceeding Respondent is subject to United States law. Accordingly, the United States Postal Service has jurisdiction over this proceeding.

II. Respondent concedes that, as alleged in the Complaint, its solicitation represents that its pinhole spectacles will benefit persons with retinitis pigmentosa. However, Respondent contends that the representation is not false. Complainant, relying solely on the opinion of Dr. Stevens (Comp. Exh. 2), argues that the product is not helpful to persons with the disease.

Dr. Stevens' declaration is not responsive to the issue presented. The question raised by the allegation of the Complaint is whether the product will benefit persons with retinitis pigmentosa. Although Dr. Stevens states that "no effective treatment is currently available" for retinitis pigmentosa, his discussion centers on a concern that patients who use the product will not seek medical attention. Dr. Stevens' declaration expresses his opinion that the product will not cure retinitis pigmentosa n1 but does not address the question whether the product provides a benefit for retinitis pigmentosa sufferers. Since Complainant has presented no evidence relating to the benefits of the use of the product, it has not sustained its burden of proving the falsity of the representation alleged in paragraph 4(a) of the Complaint.

n1 Respondent does not dispute the fact that its product will not cure retinitis pigmentosa (Resp. Objection at p. 3).

III. The next alleged false representation is that "Lax-Optic Lensless Spectacles" will affect the progression of cataracts (Complaint P4(b)). Though the solicitation discusses cases of improved vision for cataract patients who use the device, it does not represent that the product will affect the progression of cataracts. Furthermore, the statement that surgery may be delayed by using the product would not necessarily be understood by an ordinary person reading the solicitation as a whole to be a representation that the progression of cataracts will be affected. Donaldson v. Read Magazine, Inc., 333 U.S. 178, 189 (1948); Borg-Johnson Electronics v. Christenberry, 169 F. Supp. 746, 750 (S.D.N.Y. 1959); Vibra Brush Corp. v. Shaffer, 152 F. Supp. 461, 465 (S.D.N.Y. 1957). Accordingly, Complainant has not established that Respondent makes the representation alleged in subparagraph 4(b) of the Complaint.

IV. Complainant has failed to prove that Respondent is conducting a scheme or device to obtain money or property through the mail by means of materially false representations within the meaning of 39 U.S.C. § 3005. Accordingly, Tentative Decision and Order No. 87-112, dated October 9, 1987, is revoked in accordance with 39 C.F.R. § 952.7(b) and the Complaint is dismissed. Postmasters of facilities processing or detaining mail addressed to Respondent for dispatch abroad shall resume normal dispatch of such mail and shall resume payment of postal money orders drawn to the order of Respondent.