United States Postal Service(TM) 


 In the Matter of the Complaint Against:

 WDAAS or W.D. AND ASSOCIATES,
 P.O. Box 25367,
 Chicago, IL  60625-0367;
 and 
 WILLIAM DAAS,
 3747 Clarington Avenue, Apt. 12B,
 Los Angeles, CA  90034-5858

 P.S. Docket No. 34/60

 11/30/90

 Cohen, James A., Judicial Officer

 APPEARANCE FOR COMPLAINANT: Geoffrey A. Drucker, Esq., Betty A.
 Garner, Esq., Law Department, Consumer Protection Division,
 United States Postal Service, Washington, DC 20260-1144 

 APPEARANCE FOR RESPONDENT: William Daas, #603,
 5117 Folsom Boulevard, Sacramento, CA  95819-4534

POSTAL SERVICE DECISION ON BREACH OF SETTLEMENT AGREEMENT

On October 26, 1990, Complainant filed a Petition alleging that Respondent, William Daas, has breached the terms of a Settlement Agreement (hereafter Agreement), executed on July 21, 1989. According to Complainant, Respondent has breached the terms of the Agreement by continuing to promote his work-at-home, envelope stuffing program using representations which he agreed to discontinue. The names and address to which Respondent currently seeks remittances and against which Complainant sought the issuance of an interim detention order and now seeks the issuance of a false representation order are:

On October 30, 1990, an Interim Detention Order, as authorized by paragraph 5(c) of the Agreement, was issued directing the detention of mail addressed to the above names and address. The Interim Detention Order granted Respondent a period of ten days to respond to the Petition. By letter dated November 11, 1990, Respondent filed a timely response in which he denies that he has breached the terms of the Agreement.

Respondent has not requested a hearing under paragraph 5(e) of the Agreement nor has he shown the existence of any genuine issue of material fact constituting good cause for a hearing to be held. See United States v. Cheramie Bo Truc #5 Inc., 538 F.2d 696, 698 (5th Cir. 1976); Paul Marbin & Co., Inc., et. al., P.S. Docket No. 28/190 at 2 (Order June 5, 1989); and cases cited therein; Damian Hawkins, P.S. Docket No. 25/167 at 3 (P.S.D. May 22, 1987). Accordingly, the issues raised by the Petition will be decided on the record.

Findings of Fact

1. On July 21, 1989, Respondent executed the Agreement in consideration of Complainant's offer to move to suspend further administrative proceedings under the postal false representation statute, 39 U.S.C. § 3005 (see Agreement).

2. By the terms of the Agreement, Respondent agreed that the Order to Cease and Desist attached to the Amended Complaint could be issued and that he would "refrain from violating the Order under any name, through any corporation, or through any other device." (Agreement $ PP 2 & 3).

3. The Order attached to the Amended Complaint was issued as Cease and Desist Order No. CD-2648, on July 31, 1989. The Cease and Desist Order directed Respondent to cease and desist from falsely representing that:

4. In August of 1989, one month after the execution of the Agreement, classified advertisements promoting an envelope stuffing program appeared in several nationally circulated publications. (Cory F. Dudley Declaration Exh. 2 (Dudley Decl.)). The advertisements sought responses to: WD Associates, P.O. Box 66339-G6, Los Angeles, California 90066." Post office box 66339-G6 at Los Angeles, CA 90066 was rented to Respondent on May 8, 1989 (Dudley Decl. Exh. 3).

5. On March 24, 1990, Respondent filed a change of address form with the Postal Service requesting that mail addressed to W.D. Associates at P.O. Box 66339, Los Angeles, California 90066 be sent to 5117 Folsom Blvd., #603, Sacramento, CA 95819. (Dudley Decl. Exh. 7).

6. On April 27, 1990, a Postal Inspection Service employee responded to an advertisement that read "STUFF ENVELOPES for $140/100. Send address label to Associates, 5117 Folsom #603, Sacramento, CA 95819." (Dudley Decl. $ PP 9 & 10).

7. On May 11, 1990, the Inspection Service employee received promotional materials seeking remittances through the mail for participation in a work-at-home, envelope stuffing program (Dudley Decl. $ P 10 & Exhs. 8(d) - (h)). These promotional materials contained the same representations which Respondent agreed to discontinue. (Compare Complainant's Amended Complaint, Exhs. 1 & 2, with Complainant's Petition, Exhs. 8(b), (d) & (e)). The envelope containing the promotional materials was postmarked from Sacramento, California on May 7, 1990, and had a return address of W.D. Associates, P.O. Box 66339, Los Angeles, California 90066. (See Dudley Decl. Exh. 8(a)).

Discussion

Complainant alleges in the Petition that Respondent has breached the terms of the Agreement by distributing solicitations which make the representations he agreed to discontinue. Respondent argues that he currently distributes new flyers which do not contain the representations he agreed to discontinue. Respondent, in addition, contends that because of publishing deadlines he was unable to withdraw from publication the advertisements which appeared shortly after execution of the Agreement. Therefore, he claims those advertisements cannot serve as a basis for finding him in breach of the Agreement. Finally, Respondent contends that any responses he receives to his old advertisements are returned marked "Out of Business."

The advertisements which appeared for the two month period following the execution of the Agreement do not alone establish that Respondent is in breach of the terms of the Agreement. As Respondent contends, it appears reasonable that advertisements placed prior to the execution of the Agreement could not have been withdrawn from publication for the approximately two month period in which they continued to appear in publications of general circulation. In the absence of evidence establishing that Respondent distributed solicitations for his envelope stuffing program in response to those advertisements, we cannot find that the publication of those advertisements constitutes a breach of the Agreement.

However, Respondent did breach the the terms of the Agreement when he mailed the promotional materials containing the prohibited representations to the Postal Inspection Service employee in May of 1990. In this mailing, Respondent promoted his work-at-home, envelope stuffing program using almost identical solicitations which contained the same representations he agreed to discontinue. Respondent's distribution of these promotional materials refutes his contention that responses to his old advertisements were returned marked "Out of Business" and clearly establishes that he has violated the terms of the Agreement.

Respondents new solicitations have not been alleged to be in violation of the terms of the Agreement. Therefore, Respondent's arguments pertaining to these solicitations will not be addressed.

Conclusion

The exhibits attached to the Petition establish that Respondent has breached the terms of the Agreement in the manner alleged in the Petition. Accordingly, pursuant to paragraph 5(b) of the Agreement, a false representation order, as described in 39 U.S.C. § 3005 should be issued. As authorized by paragraph 5(f) of the Agreement, the false representation order will be issued thirty days from the date of this Decision unless judicial review of this Decision has been sought in a United States District Court.