In the Matter of the Complaint Against: CARD REDEMPTION CENTER, 805 Third Avenue, Suite 190, New York, NY 10022-7513 and INTERSTATE DISTRIBUTION CENTER, DEPT. 190, 805 Third Avenue Building, New York, NY 10022-7513 and NR HGHWY I-285, P.O. Box 2596, Smyrna, GA 30081-2596 and 1401 Johnson's Ferry Road, Suite 328-B, Marietta, GA 30082-6495 and SELECT DIRECT, INC., 126 Fifth Avenue, Suite 8C, New York, NY 10011-5606 and DAVID SCHWARTZ, 126 Fifth Avenue, Suite 8C, New York, NY 10011-5606 P.S. Docket No. 30/37 10/03/88 Grant, Quentin E.; Chief Administrative Law Judge APPEARANCES FOR COMPLAINANT: Jerry Belenker, Esq.; Jeff Kahn, Esq., Consumer Protection Division, Law Department, United States Postal Service, Washington, DC 20260-1144 APPEARANCE FOR RESPONDENT: Robert Ullman, Esq., Bass & Ullman, 747 Third Avenue, New York, NY 10017-2873
In a complaint filed April 13, 1988, Complainant alleged that Respondents are engaged in violation of 39 U.S.C. 3005 in that they solicit money or property through the mails by means of express or implied false representations made in direct mail postcards concerning three products: Konar 35mm Camera, Pierre Cardin Gourmet Mixer, and a 4 Piece Luggage Set. Specifically, the Complaint (6) alleges that by means of the format, structure and wording contained in such postcards, Respondents represent that:
(a) the recipient of the postcard is entitled to receive the product based on the results of a contest, sweepstakes or drawing;
(b) the product is worth substantially more than the payment required to receive it;
(c) the remittance required to receive the product is for incidental costs of transporting the product to the recipient;
(d) the product has been set aside specifically for the recipient of the postcard;
(e) the postcard is other than an offer to sell the product;
(f) the payment required to receive the product is something other than its purchase price, with or without postage;
(g) the product is available to the recipient for only a limited time.
Respondents' answer admitted the use of the advertising materials annexed to the complaint but denied the making of the false representations alleged.
At the hearing held in New York, NY, on June 21, 1988, the complaint was amended to delete three counts alleging false representations concerning product descriptions and characteristics (Tr. 23). The complaint was also amended to include as a Respondent Card Redemption Center, 805 Third Avenue, Suite 190, New York, NY 10022-7513 and to add the following address for Interstate Distribution Center: 1401 Johnson's Ferry Road, Suite 328-B, Marietta, GA 30082-6495 (Tr. 20, 21).
At the hearing both parties presented evidence. Complainant's only witness was USPS employee, Jose Lopez, a superintendent of window service. David Schwartz, president of Select Direct, Inc., was Respondents' sole witness. The parties have filed proposed findings of fact, conclusions of law and written argument 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. Respondent Select Direct, Inc., is a Delaware corporation registered to do business in the State of New York. Its address is 126 Fifth Avenue, Suite 8C, New York, NY 10011 (Cplt. 2, not denied, deemed admitted).
2. Respondent David Schwartz is president of Select Direct, Inc. and is intimately involved in the promotional activities of that corporation which are the subject of this proceeding (Tr. 46-63).
3. Select Direct, Inc. does business under the fictitious names Interstate Distribution Center and Card Redemption Center (Tr. 46).
4. By means of direct mail postcards Respondents solicit recipients thereof to remit money through the mail to the following addresses for products called Konar 35mm Camera (CX-1, 2, 6, 8), Pierre Cardin Gourmet Mixer (CX-3), and 4 Piece Luggage Set (CX-4, 5, 7, 9):
INTERSTATE DISTRIBUTION CENTER,
805 Third Avenue Building,
Department 190,
New York, NY 10022
Konar Camera,
4 Piece Luggage
and
INTERSTATE DISTRIBUTION CENTER,
NR Highway I-285,
Box 2596,
Smyrna, GA 30081-2596
Konar Camera,
Cardin Mixer,
4 Piece Luggage
and
INTERSTATE DISTRIBUTION CENTER,
1401 Johnson Perry Road,
Suite 328-B,
Marietta, GA 30082
4 Piece Luggage
and
CARD REDEMPTION CENTER,
805 Third Avenue,
Suite 190,
New York, NY 10022
Konar Camera,
4 Piece Luggage
Copies of typical postcards (CX-1, 3 and 9) are attached hereto as Exhibit A.
5. "(a) the recipient of the post card is entitled to receive the product based on the results of a contest, sweepstakes or drawing;"
Complainant argues that the words "lucky," "eligible," "our authorized shipping facility," and "official control no." together with the name of the product in what appears to be handprinting imply that some degree of good fortune, some instance of special selection, or some other singular event has occurred suggesting to the recipient that he has received a special and significant notification tailored to him rather than simply a mass-mailed advertisement. Complainant argues that the reference to a computerized list of recipient is CX-8 and CX-9 does not avoid this representation.
Unquestionably the cards are designed, using the elements relied on by Complainant, to convey the idea that the recipient has been specially chosen for the opportunity to acquire the product. However, I think it unlikely the ordinary recipient would believe that he had been selected in a contest, sweepstakes, or drawing. More likely, the heading "Notice of Solicitation," the advice that his name appears on a list of eligibles which might be, as in fact it is, a computer generated list of mail order purchasers, and the inclusion of the price of the product in the remittance solicited would tell him that the cards are simply clever, hyped offers designed to seize his attention. Therefore, I am unable to find the alleged representation in any of the postcards involved in this proceeding.
6. "(b) the product is worth substantially more than the payment required to receive it;"
Complainant contends the postcards obscure the inclusion of the price of the product in the amount to be remitted by burying the words "product" or "product cost" in a sentence referring to shipping, taxes, processing, and administrative expenses. Complainant says that this obfuscation misleads the recipient to believe the remittance covers incidental expenses substantially less than the value of the product he will receive.
Although perhaps partially obscured, the words "product" and "product cost" are present in large print on all cards and would be read, I find, by the average recipient interested in knowing exactly what the remittance covers.
Consequently, I am unable to find this representation. Were I to find it, lacking evidence of the value of any of the products other than the remittance amount, I could not find falsity.
7. "(c) the remittance required to receive the product is for incidental costs of transporting the product to the recipient;"
For the same reasons given in FOF 6, supra, I am unable to find this representation in any of the postcards.
8. "(d) the product has been set aside specifically for the recipient of the post card"
Complainant says that this representation is to be found in the following factors:
(a) the name of the merchandise is inserted in a manner which appears to be handwritten (implying that a special clerical notation has been made with respect to the recipient and the merchandise in question);
(b) the inclusion of an expiration date for the availability of the merchandise;
(c) the inclusion of the word NOTICE in the caption of the card;
(d) the phrase YOU CAN NOW DEFINITELY OBTAIN;
(e) the box captioned "carrier."
I agree with Complainant's argument and find this representation to be made in all the postcards. However, in the absence of the representations alleged in (a), (b), (c) of paragraph 6 of the complaint (FOF 5, 6 & 7, supra) this representation would not be likely to induce a recipient to order the products. Therefore, its materiality has not been established.
9. "(e) the postcard is other than an offer to sell the product;
"(f) the payment required to receive the product is something other than its purchase price, with or without postage;"
For the same reasons set forth in FOF 5 and 6, supra, I do not find these representations in Respondents' postcards.
10. "(g) the product is available to the recipient for only a limited time."
This representation is made in all the postcards in the "Expiration Date" box. Complainant has failed to prove its falsity, however. The only evidence on the falsity issue is the testimony of David Schwartz to the effect that such ordering deadline are adhered to by Respondents (Tr. 48, 49).
1. The meaning of advertising representations is to be judged from a consideration of an advertisement in its totality and the impression it would most probably create in 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); Borg-Johnson Electronics v. Christenberry, 169 F. Supp. 746 (S.D.N.Y. 1959). Express representations are not required. It is the net impression that the advertisement is likely to make upon purchasers to whom it is directed that is important. Even if an advertisement is so worded as not to make an express representation, if it is artfully designed to mislead those responding to it the false representation statute is applicable. G. J. Howard 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). Vibra-Brush Corp. v. Schaffer, supra; Aronberg v. Federal Trade Commission, 132 F.2d 165, 167 (7th Cir. 1942).
2. An advertisement as a whole may be completely misleading although every sentence separately considered is literally true. This may be because things are omitted that should be said, or because the advertisement is composed or purposefully printed in such a way as to mislead. Donaldson v. Read Magazine, Inc., supra.
3. It is not each separate word or clause here and there of an advertisement that determines its force, but the totality of its contents and the impression of the entire advertisement upon the general populace. Donaldson v. Read Magazine, Inc., supra, at 185-86; Gottlieb v. Schaffer, 141 F. Supp. 7, 17 (S.D.N.Y. 1956).
4. Applying the foregoing standards of interpretation to Respondents' solicitations I do not find in them the representations alleged in the complaint except those alleged in paragraphs 6(d) and (g) which I have found to be not material. While parts of them may offend the sensibilities of a recipient, suggesting a scam, considering each ad as a whole, I find they are no more than extravagant types of advertising which, with the exceptions mentioned, fall short of the misrepresentations alleged.
5. Complainant has failed to sustain its burden of proof as to the alleged representations with the limited exceptions noted above.
6. The complaint is dismissed.