United States Postal Service(TM) 


 In the Matter of the Complaint Against         June 4, 1993

 ALLEN GLAZER d/b/a
 Poster Distribution Center
 5800 Madison Ave., Room #A2
 Sacramento, CA  95841-4816

 and

 Poster Distribution Center
 3323 Watt Ave.
 Sacramento, CA  95821-3609                     P.S. Docket No. 40/59

 APPEARANCE FOR COMPLAINANT:                    Rodney Gould, Esq.
 Consumer Protection Division
 Law Department
 United States Postal Service
 Washington, DC  20260-1144

 APPEARANCE FOR RESPONDENT:                     Michael L. Sterrett, Esq.
 91 Gregory Lane, Suite 7
 Pleasant Hill, CA  94523-4914

INITIAL DECISION

This proceeding was initiated on December 2, 1992, when the Postal Service filed a Complaint alleging that Respondent Allen Glazer d/b/a Poster Distribution Center is engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations in violation of 39 U.S.C. § 3005. Specifically, the Complaint alleges in paragraph 4 that

Respondent falsely represents, directly or indirectly, in substance and effect, whether by affirmative statement, implication or omission, that:

In a timely filed Answer, Respondent denies that he makes the false representations alleged in the Complaint or that he has otherwise violated the statute.

The parties have requested that the Initial Decision be based upon the "Stipulations of the Parties" with attached exhibits filed on March 16, 1993. On March 26, 1993, the parties filed proposed findings of fact and conclusions of law which have been duly considered. To the extent indicated below, proposed findings and conclusions have been adopted; otherwise, they have been rejected as irrelevant or contrary to the evidence.

FINDINGS OF FACT

1. The Respondent, Allen Glazer, is an individual doing business as Poster Distribution Center seeking remittances through a mail receiving agency at 5800 Madison Avenue, Room #A2, Sacramento, CA 95841-4816, and at 3323 Watt Avenue, Sacramento, CA 95821-3609 (Answer, ¶ 2; CX-A, CX-B, CX-7). Respondent's home address is 55 Stanton Avenue, Orinda, CA 94563.

2. Respondent mails circulars to various businesses soliciting the purchase of six "mandatory" California state workplace posters and four or five federal workplace posters such as "California Occupational Safety and Health Notices" and "Federal Minimum Wage Notices." Respondent seeks the remittance through the mail of $24.50 for the complete set of posters and $3.50 for an individual poster (CX-A; CX-B).

False Representations

3. Respondent makes the representations set forth in subparagraphs (a) through (c) of paragraph 4 of the Complaint. The language of the solicitations contributing to each representation, when read in context, is set forth below under each quoted representation. Each of the representations is false.

Representation (a)

Respondent's solicitation is an official government notice.

4. The solicitation is a tri-fold, single-sheet circular. The front of the solicitation, containing the consumer's address, has a return address which reads "California" above the words "Poster Distribution Center" with an address in Sacramento, the capital of California. Under the return address are the words "OFFICIAL BUSINESS," which appears similar to a communication from a government agency. Also prominently printed above the consumer's address are the words "STATE AND FEDERAL POSTING REQUIREMENTS" and in the lower left corner, the words "IMPORTANT NOTICE" (CX-A, B).

5. The inside of the solicitation is entitled:

"NOTIFICATION OF STATE

AND FEDERAL POSTING REQUIREMENTS

FOR CALIFORNIA EMPLOYERS"

The use of the word "Notification" implies a responsibility of a government agency rather than the solicitation of a private company. The solicitation then states:

Thereafter, the solicitation lists six "MANDATORY STATE POSTINGS" and four or five "MANDATORY FEDERAL POSTINGS" together with the specific criminal penalties for failure to post for each one. The solicitation then states:

These authoritarian comments do not give the ordinary reader the impression of a private company advertising a product, but rather a government agency notifying businesses of legal requirements.

6. Since Respondent is not a government agency, Representation (a) is materially false (Stipulation, ¶ 7). The representation is material since it tends to induce the consumer business to purchase the posters.

Representation (b)

Respondent is an agency of the state of California.

7. This representation is made by the use of the word "California" above the Sacramento address, and the words "Official Business," together with all of the language quoted above that indicates a government agency.

8. Since Respondent is not an agency of the state of California (Stipulation, ¶ 7), Representation (b) is materially false. This representation is material in the same way as Representation (a).

Representation (c)

The posters listed in Respondent's solicitation must be purchased and cannot be obtained free from any government agency.

9. Since the solicitations imply that they are official government notices from an agency of the state of California and expressly state that the posters must be purchased, Respondent implicitly represents that the posters must be purchased and cannot be obtained free from any other government agency.

10. Since the posters can be obtained free from government agencies, Representation (c) is materially false (Stipulation, ¶ ¶ 8, 9).

CONCLUSIONS OF LAW

1. (a) Each of Respondent's advertisements must be considered as a whole, and the meaning is to be determined in light of the probable impact of this material on a person of ordinary mind. Donaldson v. Read Magazine, 333 U.S. 178, 189 (1948); Peak Laboratories, Inc. v. U.S. Postal Service, 556 F.2d 1387, 1389 (5th Cir. 1977). The statute is intended to protect the gullible, naive, and less critical reader, as well as the more sophisticated, wary reader. Fields v. Hannegan, 162 F.2d 17 (D.C. Cir. 1947), 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); Leo Daboub, P.S. Docket No. 19/185 (P.S.D. July 10, 1986). Contrary to Respondent's assertion, express misrepresentations are not required. It is the net impression which the advertisement is likely to make upon individuals to whom it is directed which is important, and 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 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).

(b) 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. v. F.T.C., 208 F.2d 382, 387 (7th Cir. 1953); Ralph J. Galliano, P.S. Docket No. 19/15 (P.S.D. May 2, 1985, at p. 9). It is not difficult to select words that will not deceive. See, United States v. 95 Barrels of Vinegar, 265 U.S. 438 (1924).

(c) An inconspicuous disclaimer is not sufficient to dispel the effect of false representations. Leo Daboub, supra; Gottlieb v. Schaffer, supra.

(d) The Administrative Law Judge can determine whether the representations are made, their effect on the ordinary mind, and materiality without the assistance of lay or expert testimony. Standard Research Labs, P.S. Docket No. 7/78 (P.S.D. Oct. 27, 1980); The Robertson-Taylor Company, P.S. Docket Nos. 16/98-102, 16/120-121, (P.S.D. March 31, 1986, at page 29); Vibra-Brush v. Schaffer, 152 F. Supp. 461, 468 (S.D.N.Y. 1957), rev'd on other grounds, 256 F.2d 681 (2nd Cir. 1958).

2. Applying the foregoing standards, I find that Respondent's advertisements make the representations alleged in paragraph 4(a) through (c) of the Complaint. The language contained in the advertisements, when read in context, which directly or impliedly makes these representations is set forth in the findings of fact.

3. As set forth in the findings of fact, the representations set forth in paragraph 4 of the Complaint are materially false.

4. The representations made by Respondent are material because they have a tendency to persuade readers to order and pay for Respondent's product.

5. Respondent argues that his solicitation falls within the exception created by 39 U.S.C. § 3005(d)(3) for advertisements promoting the sale of a publication. However, assuming arguendo that the posters in question constitute "publications" within the meaning of that section, it is clear that Respondent runs afoul of other requirements. In this regard, Respondent's advertisement is "materially false or misleading in its description of the publication" under § 3005(d)(3)(A) since it falsely describes the posters as published by a government agency requiring the payment of a purchase price rather than for free. Similarly, this description constitutes a "material misrepresentation of fact" in violation of § 3005(d)(3)(B).

6. Whether anyone actually complains or has been deceived by Respondent's advertisements is irrelevant on the issue of false representation. Farley v. Heininger, 105 F.2d 79 (D.C. Cir. 1939). It is the likelihood of deception or the advertisement's capacity to deceive which must be judged. Montgomery Ward & Co. v. FTC, 379 F.2d 666 (7th Cir. 1967); Mid-Am Marketing, Inc., P.S. Docket No. 24/12 (P.S.D. on Recon., May 7, 1987). Also, the fact that Respondent's product might have value, and be a convenient way for business consumers to obtain the posters, does not justify the use of false representations.

Finally, the existence of satisfied customers does not establish that the statute has not been violated. Farley v. Heininger, supra.

7. Complainant has established its case by a preponderance of the reliable and probative evidence of record. S.E.C. v. Savoy Industries, Inc., 587 F.2d 1149, 1168 (D.C. Cir. 1978).

8. Respondent is engaged in the conduct of a scheme for obtaining remittances of money through the mail by means of materially false representations in violation of 39 U.S.C. § 3005.

9. Accordingly, the attached False Representation Order and Cease and Desist Order should be issued. 

                                       Randolph D. Mason
                                       Acting Chief Administrative Law Judge


CEASE AND DESIST ORDER NO.
Re: ALLEN GLAZER d/b/a POSTER DISTRIBUTION
CENTER and POSTER DISTRIBUTION CENTER
P.S. Docket No. 40/59

I. Authority and Scope:

This Order is issued pursuant to 39 U.S.C. § 3005(a)(3) and extends to any promotion in which any or all of those persons covered in paragraph II, below, solicit money or property through the mail.

II. Persons Covered:

This Order covers Allen Glazer, individually, and doing business under any and all various names, or through any corporate or other devices, their owners, successors and assignees (hereinafter referred to collectively as "Respondents"), and anyone who would be bound by an injunction issued against the Respondents under Rule 65 of the Federal Rules of Civil Procedure.

III. Conduct Prohibited:

The persons identified in paragraph II, above, are ordered to cease and desist immediately from representing, directly or indirectly, in substance and effect, whether by affirmative statements, implications or omissions that: