Appeal of GERHARD SCHINDLER -- P.S. Docket No. FOR 99-187

In the Matter of the Complaint   	)  December 30, 1999
Against                          	)
					)
GERHARD SCHINDLER                	)
					)
	at                       	)
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Lessingstr. 24                   	)
D-69115 Heidelberg               	)
GERMANY                          	)  P.S. Docket No. FOR 99-187

APPEARANCES FOR COMPLAINANT:		Michael W. Mumbach, Esq.
					Alan B. Ostroff, Esq.
					Consumer Protection Law
					United States Postal Service
					475 L'Enfant Plaza, SW
					Washington, DC  20260-1127

APPEARANCE FOR RESPONDENT:		Michael Eckert
					Eckert, Dorsam & Kollegen
					Sofienstrasse 17
					D-69115 Heidelberg
					Germany

POSTAL SERVICE DECISION

On May 10, 1999, Tentative Decision and Order No. 99-41 (hereinafter "Tentative Decision") was issued which concluded that Complainant had made a prima facie showing that Respondent, Gerhard Schindler, is engaged in conducting a scheme for the distribution of money by lottery in violation of 39 U.S.C. §3005(a). On June 22, 1999, Respondent filed a timely reply to the Tentative Decision in which he contends that he is in compliance with international trade laws and denies he is engaged in any conduct that violates the United States false representation and lottery law.

Respondent asserts that he is a duly appointed state lottery agent for the Süddeutsche Klassenlotterie ("SKL"), a state lottery properly organized and regulated in accordance with the laws of the Federal Republic of Germany.⁽¹⁾ Although Respondent works as a lottery agent by promoting the sale of lottery tickets for SKL both within and outside Germany,⁽²⁾ he argues that the Tentative Decision should be revoked because he does not personally organize or conduct the lottery nor does he solicit the remittance of money through the mail. Respondent also contends that his activities are legal under the laws of the European Community and that the enforcement of 39 U.S.C. §3005 by the United States Postal Service violates the General Agreement on Trade in Services (GATS).

Respondent has not shown good cause for dismissing the Complaint and revoking the Tentative Decision. Respondent’s contention that the Tentative Decision should not be issued against him because he does not personally organize or conduct the SKL is without merit. Respondent has not denied that his solicitation, which includes a return envelope bearing his name and address, seeks participation in a foreign lottery. Although Respondent may not personally organize or conduct the lottery, his sale of tickets to be used in the SKL evidences Respondent’s intimate involvement in a scheme for the distribution of money by lottery, and thus under the plain meaning of 39 U.S.C. §3005, Respondent is "engaged in conducting a... scheme for the distribution of money by lottery, chance or drawing of any kind" Therefore, Tentative Decision and Order No. 99-41 was properly issued against Respondent’s name and address.

Respondent’s contention that he does not solicit the remittance of money through the mail is not supported by the record. Respondent argues that because he only solicits payment by credit card or bank transfer, and no payments by cash or Postal Money Orders are received, the United States mail is not used for sending remittances. Respondent offers perspective participants in the SKL the option to purchase tickets by credit card and requests that the recipient send his or her credit card choice along with the credit card information and the cardholder’s signature through the mail in a furnished response envelope. Respondent’s request for a mailed response with the payment and signature information brings the transaction within the coverage of 39 U.S.C. §3005.⁽³⁾

We are not persuaded by Respondent’s additional arguments that because such mailings may be permissible within the European Community the Postal Service is precluded from issuing the orders authorized by 39 U.S.C. §3005. First, the United States Postal Service is not bound by the law of the European Community or by decisions of the Court of Justice of the European Communities.⁽⁴⁾ Second, as a private party, Respondent can only bring an action under the GATS if the German government agrees to sponsor his claim⁽⁵⁾ before the Dispute Settlement Body of the World Trade Organization in accordance with the Dispute Settlement Understanding.⁽⁶⁾

Respondent has not shown good cause for dismissing the Complaint within the time allowed. Accordingly, pursuant to 39 C.F.R. §952.7(b), Tentative Decision and Order No. 99-41 is now the Final Decision and Order of the Postal Service.

					James A. Cohen
					Judicial Officer

¹ Even though the SKL appears to be an authorized lottery under German law, it is not exempt from the prohibitions of 39 U.S.C. §3005, which specifically exempts only those lotteries organized by "a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States…" See 39 U.S.C. §3005(d)(1); see also Mr. T. Vetter, P.S. Docket No. FOR 97-357 (Order Nov. 24, 1997); Hohe Brucke, P.S. Docket No. FOR 96-250 (Order Sept. 26, 1996).
² Respondent has not contested the allegation in the Complaint that his solicitations offer the addressee the chance to participate in a lottery.
³ See The Canadian Express Club, et al., P.S. Docket No. 28/52 (P.S.D. Dec. 23, 1991).
⁴ Respondent cites Case C-275/92, H.M. Customs and Excise v. Schindler, 1994 E.C.R. I-1039 to support his contention that lottery mailings are legal in the European Community. While the Court of Justice of the European Communities finds that such mailings are services under the European Economic Community Treaty, it holds that member states may outlaw such mailings as contrary to the public interest. Therefore, the cited case actually supports the conclusion that the orders authorized by 39 U.S.C. §3005 may be issued against Respondent.
⁵ See e.g., Sung-joon Cho, GATT Non-Violation Issues in the WTO Framework: Are They the Achilles' Heel in the Dispute Settlement Process?, 39 Harv. Int'l L.J. 311, 348 (1998); Judith H. Bello, Some Practical Observations about WTO Settlement of Intellectual Property Disputes, 37 Va. J. Int'l L. 357, 358 (1997); Glen T. Schleyer, Note, Power to the People: Allowing Private Parties to Raise Claims Before the WTO Dispute Resolution System, 65 Fordham L. Rev. 2275 (1997); cf. 19 U.S.C. §3512(c)(1) (1994); Cook v. United States Senate, 20 Ct. Int'l Trade 217 (1996), reh'g denied, 20 Ct. Int'l Trade 457 (1996).
⁶ Understanding on Rules and Procedures Governing the Settlement of Disputes, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, Legal Instruments - Results Of The Uruguay Round vol. 1, (1994); 33 I.L.M. 1125 (1994).