In the Matter of the Complaint Against		)   February 18, 1999
						)
PATRICIA MARIE LEROUX				)
9649 Marble Peak Court           		)
Las Vegas, NV 89129-7841         		)
                                 		)
        and                      		)
                                 		)
DATA RESEARCH SERVICES, INC.     		)
c/o Frank Perez, Esq.            		)
Registered Agent                 		)
601 South Rancho Dr., Suite A-10 		)
Las Vegas, NV 89106-4898         		)
                                 		)
     both d/b/a                  		)
                                 		)
COMMITTEE ON MONEY & PRIZE       		)
  ADVISEMENT                     		)
4001 S. Decatur, Suite 37-900    		)
Las Vegas, NV 89103-5800         		)   P.S. Docket No. FR 98-260

APPEARANCE FOR COMPLAINANT:			Janessa L. Grady, Esq.
						Michael W. Mumbach, Esq.
						Civil Practice Section
						United States Postal Service
						475 L’Enfant Plaza, SW
						Washington, D.C. 20260-1127

APPEARANCE FOR RESPONDENT:			Katherine M. Peck, Esq.
						C. Stanley Hunterton, Esq.
						Hunterton & Associates
						333 South Sixth Street
						Las Vegas, NV 89101-5806

This proceeding was initiated on June 4, 1998, when the General Counsel for the United States Postal Service filed a Complaint alleging that Respondents Patricia Leroux and Data Research Services, Inc., doing business as Committee on Money & Prize Advisement, violated 39 U.S.C. §3005 by engaging in a scheme or device for obtaining money or property through the mail by means of false representations.^1/ Specifically, paragraph 8 of the Complaint alleges that Respondents, advertising by direct mail letters, make the following representations, and that these representations are false and material:

In a timely filed Answer, Respondents denied making any false representations. A hearing was held in Las Vegas, Nevada on October 20, 1998. Both parties appeared and were represented by counsel. The Postal Service presented testimony from Postal Inspector Christopher Carrillo, who investigated this case, and from two consumer witnesses. Ms. Leroux testified in her own behalf. Both sides also presented documentary evidence. Both parties filed post-hearing briefs, in the form of proposed findings of fact and conclusions of law, and Respondents filed a reply brief. To the extent indicated below, proposed findings and conclusions have been adopted; otherwise, they have been rejected as irrelevant or contrary to the evidence. The following findings of fact and conclusions of law are based on the entire record, including all testimony and documentary evidence introduced at the hearing, and observation of the witnesses and their demeanor.

1. Respondent, Patricia Marie Leroux, resides in Las Vegas, Nevada. She is the President and sole operator of Data Research Services, Inc., a Nevada corporation. She does business under the name, Committee on Money and Prize Advisement. (Cmplt. and Ans. ¶¶3-5; Cx-7; Tr. 110, 113-14)^2/ .

2. Ms. Leroux had worked for others in the direct mail industry for approximately ten years, and decided in early 1998 to start her own business (Tr. 110-13).

3. Respondent Leroux solicits business by direct mail to consumers, whose names she obtains by buying a mailing list from a New York company.

This list is designed to identify people who may be interested in playing various sweepstakes contests. (Tr. 128-32).

4. Respondent mails to consumers the solicitation annexed hereto as Exhibit A. On the outside of the envelope in which the solicitation is contained, various identification-type numbers and letters are displayed, as is a highlighted statement, "DOCUMENTS ENCLOSED – RECORDED NOTICE." Consumers are asked to respond by signing an enclosed form, annexed hereto as Exhibit B, and returning it, with $19.99, to 4001 S. Decatur, Suite 37-900, Las Vegas, NV 89103-5800. (Cmplt. and Ans. ¶5; Cx-1).

5. A consumer who mails in the signed form and the $19.99 receives from Respondent a compilation of information about many sweepstakes promotions run by various companies, usually in connection with purchase of a product. The information includes the amount and nature of the prizes that are to be awarded, information on how to obtain entry forms, and addresses to write to for further information. (Respondent’s Ex. 2; Tr. 175-77, 182).

6. The reverse side of Respondent’s solicitation, annexed hereto as Exhibit C, explains in some detail that Respondent is not running a sweepstakes and does not award any prizes, but merely produces a report on contests run by other companies. This page also offers a complete refund to anyone who is not satisfied with the report.

7. The Postal Service has received no complaints from consumers about Respondent’s solicitation (Tr. 45-46).^3/

8. Several things on the front page of the solicitation, and on the form to be returned, give this impression. The amount of money, $421,780.00, is prominently displayed, the terms "cash money," and "property prizes" are underlined and in capital letters, there are references to a "GUARANTEED AMOUNT" and to "full access to the Sweepstakes MONEY and PROPERTY." The addressee is told that "your completed document guarantees you full and irrevocable access" to money and prizes. The many indicia of officiality, such as the statement on the envelope, a "Document I.D. No.," a "Validation Stamp," and the heading "RELEASE TO RECEIVER – REGISTRATION," along with other stamps saying "REGISTERED," CONFIDENTIAL," and "AUTHORIZED," on the return form serve no purpose other than to suggest to the recipient that there has been some official determination that he/she has been awarded a cash prize. The same is true of various legal-sounding phrases such as, "HOLDER IN DUE

COURSE," "being duly named," and "do hereby state," and a reference to an Internal Revenue Service form. It is not until the last sentence on page one that there is any hint that Respondent is merely selling a "report." Unlike many other statements on the front of the solicitation, the statement in this last sentence, "this is not a winning sweepstakes or prize notification . . .," is not highlighted in any way.

9. Respondent argues that her solicitation does not make this representation, but there is no question that the representation is false. Respondent awards no cash prizes, and a consumer who mails in the $19.99 will receive only a report containing information on sweepstakes promotions. The representation is material because recipients who believe they will receive a large cash prize are more likely to remit the $19.99.

10. References to the addressee being the "sole holder" of a numbered document, to "your document," and to the addressee being "duly documented," all imply that this addressee has been selected as a prize winner. Likewise, use of the word "confirmed," which is underlined and in capital letters, and a reference to "security procedures" to verify the recipient’s address "for delivery," suggest that the cash prize is just waiting to be delivered. This is further reinforced by the bold print, Prize Certification and Release to Receiver, in close proximity to the figure $421,780.00 on the return form.

11. This representation is false and material for the same reasons as are stated in paragraph 9, above.

12. This is essentially the same representation as alleged in paragraphs "a" and "b". The phrase quoted in the allegation is found in the ninth paragraph on the front of the solicitation and completes the overall impression that the prize will be awarded if the addressee remits the fee. This representation is false and material for the same reasons as are stated in paragraph 9, above.

13. References to documents being "on record with this office," "our records," "our security procedures," and the fact that "we can now notify you," all imply that Respondent represents some sort of office that maintains records of who has won certain sweepstakes prizes that are waiting to be paid out. This representation is false and material for the same reasons as are stated in paragraph 9, above.

14. The same language noted in connection with allegation "d", along with two statements that Respondent was "instructed" to "notify" and "advise" the addressee makes this representation. The representation is clearly false. Respondent does not claim to have any "duty" to correspond with anyone. She sends the solicitation to names taken from a mailing list. The representation is material because it adds to the impression that the addressee has already won a prize, making it more likely that the addressee will remit the $19.99.

15. This is essentially the same representation as in paragraph "b." The personalized nature of the letter, the references to "your document," and the language directed toward confirming the recipient’s correct address, imply that Respondent has information that the particular addressee has won a prize that is waiting to be claimed. This representation is false and material for the same reasons as are stated in paragraph 9, above.

1. Respondents’ solicitations must be considered as a whole and their meaning determined in light of the probable impact on the mind of the ordinary recipients to whom they are directed. Donaldson v. Read Magazine, 333 U.S. 178 (1948); Peak Laboratories v. U.S. Postal Service, 556 F.2d 1387 (5th Cir. 1977); Allen Glazer, P.S. Docket No. 40/59 (P.S.D. January 27, 1994); Charles Smith, P.S. Docket No. 37/180 at 14 (P.S.D. January 31, 1994); Building Trades Association, P.S. Docket No. 37/88 at 6 (P.S.D. August 2, 1993).

2. The statute (39 U.S.C. §3005) is intended to protect the gullible, less critical reader, as well as the sophisticated and the wary. Fields v. Hannegan, 162 F.2d 17 (D.C. Cir. 1947), cert. denied, 332 U.S. 773 (1947); Leo Daboub, P.S. Docket No. 19/185 (P.S.D. July 10, 1986). Representations may be false, within the meaning of §3005, even if many of the statements in a solicitation are literally true. Borg-Johnson Electronics, Inc. v. Christenberry, 169 F. Supp. 746, 750-51 (S.D.N.Y. 1959); Joseph N. Wilkinson, P.S. Docket No. 38/183 (I.D. June 2, 1992). "This section forbids representations that are false or artfully designed to mislead." Dynaquest Corp. v. U.S. Postal Service, 12 F.3d 1144, 1146 (D.C. Cir. 1994). It is the net impression likely to be made by the solicitation that determines whether false representations are made. Donaldson, supra; G.J. Howard Co. v. Cassidy, 162 F. Supp. 568, 572 (E.D.N.Y. 1958); Vibra Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y. 1957), rev’d on other grounds, 256 F.2d 681 (2d Cir. 1958); Charles Smith, supra at 15. In this case, a careful reader may well realize that Respondent is attempting to sell a product, but the overall impression created by the front page of the solicitation, and the form to be returned, is that the recipient has been selected to win a cash prize. Respondent argues that all the legalese and official-looking stamps and phrases are only meant to get the reader’s attention by giving the solicitation some "sizzle." I find them likely to mislead a gullible reader, however. There is nothing to prohibit Respondent from marketing the product she is attempting to sell, and "attention-getters" in advertising are certainly acceptable. The flaw here is that none of the so-called "attention-getters" help to identify the product, and the overall impression of the solicitation is that it is something which it is not.

3. Solicitations themselves are the best evidence as to what representations are made, and the Administrative Law Judge is qualified to make that determination. Directory Publishing Services, Inc. v. Runyon, 851 F. Supp. 484, 488 (D.D.C. 1994); Erica Lynn Kortje, P.S. Docket No. 40/176 at 3 (P.S.D. September 27, 1995); Directory Publishing Services, P.S. Docket No. 38/122 at 6 (P.S.D. February 28, 1994); Allen Glazer, supra at 4. The use of lay or expert testimony is not required, Dynaquest, supra at 1149; Scott P. Cullinane, P.S. Docket No. 39/32 at 7 (P.S.D. November 7, 1994), and the receipt of consumer complaints is not necessary to prove a violation of 39 U.S.C. §3005. Dynaquest, supra at 1147; Hallstone Products, Ltd., P.S. Docket Nos. 41-55-62, FR 95-167 & 168 at 8 (P.S.D. February 14, 1996); The Stars and Stripes-The National Tribune, P.S. Docket No. 37/128 at 6 (P.S.D. October 21, 1993). In this case, the absence of consumer complaints detracts from Complainant’s case, and the consumer testimony of Mr. and Mrs. Anders was unpersuasive and unhelpful, but I find the solicitation to be deceptive nevertheless.

4. Solicitations that are ambiguous or capable of more than one meaning are misleading if one of those meanings is false. Rhodes Pharmacal Co. Inc. v. FTC, 208 F.2d 382,387 (7th Cir. 1953); Scott P. Cullinane, supra at 13; Directory Publishing Services, P.S. Docket No. 38/122 at 11 (P.S.D. February 28, 1994). It is not difficult to select words that will not deceive. United States v. 95 Barrels of Vinegar, 265 U.S. 438, 443 (1924); Oriental Nurseries, Inc., P.S. Docket No. 9/116 at 4 (P.S.D. May 19, 1981). The recipient of a direct mail solicitation is not required to carefully scrutinize every sentence to determine what is being offered. IT&T AG, P.S. Docket No. FOR 98-227 at 4 (P.S.D. January 27, 1999); Scott P. Cullinane , supra at 20; Charles Smith supra at 15; Directory Publishing Services, supra at 14-15.

5. A solicitation may be deceptive because it makes statements that are untrue, or because it omits information that should be disclosed. It is the total impression on the reader, or recipient, that must be judged. Harold P. Weingold, P.S. Docket No. 41/23-30 at 63 (I.D. July 3, 1995); Michael C. Spence, P.S. Docket No. 40/143 at 19 (I.D. October 21, 1994); see also U.S. v. Keplinger, 776 F.2d 678,697 (7th Cir. 1985), cert. denied, 476 U.S. 1183 (1986).

6. An inconspicuous disclaimer is not sufficient to overcome the overall impression made by an advertisement. Gottlieb v. Schaffer, 141 F. Supp. 7, 17 (S.D.N.Y. 1956); American Publishing Services, P.S. Docket No. 34/191 at 6-7 (P.S.D. June 20, 1994); Scott P. Cullinane, supra at 14-16; Leo Daboub, supra at 16. In this case, the information about the true nature of the solicitation is unhighlighted and on the reverse side of the page. Likewise, an offer to pay refunds to dissatisfied customers does not dispel the effect of false advertisements. Farley v. Heininger, 105 F.2d 79, 84 (D.C. Cir. 1939); Jackie Sibold, P.S. Docket No. 39/115 (I.D. December 14, 1992).

7. A representation is material when it is calculated to cause the reader to do what the representor wants the reader to do, or causes the reader to do other than he or she would have done had the truth been told. F.T.C. v. Colgate-Palmolive Co., 380 U.S. 374,387 (1965); Chaachou v. American Central Insurance Co., 241 F.2d 889, 893 (5th Cir. 1957); Charles Smith, supra at 30; Directory Publishing Services, supra at 16.

8. Applying the foregoing standards, I find that Respondents’ solicitation makes the representations alleged in the Complaint, and that these representations are materially false.

9. 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). Respondents are engaged in the conduct of a scheme for obtaining remittance of money through the mail by means of false representation, in violation of 39 U.S.C. §3005.

10. The attached False Representation Order and Cease and Desist Order should be issued.

				Bruce R. Houston
				Chief Administrative Law Judge