In the Matter of the Complaint Against

SPECIALTY SALES CO.
130 Buena Vista Avenue
at Yonkers, New York 10701

P.S. Docket No. 11/79;

04/05/82

Cohen, James A.

APPEARANCE FOR COMPLAINANT:
H. Richard H C U 4 WHefner, Esq.
Hilda Rosenberg, Esq.
Consumer Protection Division
U.S. Postal Service
75 L'Enfant Plaza West, SW
Washington, DC 20260

APPEARANCE FOR RESPONDENT:
L 2 S ee H. Harter, Esq.
256 Van Ness Avenue
San Francisco, CA 94109

POSTAL SERVICE DECISION

Respondent has appealed from the Initial Decision of an Administrative Law Judge which holds that, with regard to the sale of the product "Sauna-Slimmer," Respondent is engaged in a scheme for obtaining money through the mail by means of false representations in violation of 39 U.S. Code § 3005.

BACKGROUND

On May 14, 1981, the Consumer Protection Division, Law Department, U.S. Postal Service, filed a Complaint which as subsequently amended, alleges that Respondent falsely represents that:

"III...

A. Sauna-Slimmer will rid your body of fat located in the area of your waist and stomach.

B. Sauna-Slimmer will rid your body of the water weight located in the area of your waist and stomach, for more than a temporary period.

C. Sauna-Slimmer firms and tightens muscles in the area of your waist and stomach and your muscles will remain firm and tight even after it is removed."

In its Answer Respondent denied all of the allegations of the Complaint. At a hearing before an Administrative Law Judge, Complainant presented the testimony of William R. Ayers, M.D. Respondent presented no witnesses. On the basis of the testimony presented and the exhibits in the record, the Administrative Law Judge concluded that the Respondent makes the representations alleged in paragraphs III A. and B., but dismissed without prejudice the representation alleged in paragraph III C. The Administrative Law Judge also concluded that the representations alleged in paragraphs III A. and B. are materially false in violation of 39 U.S. Code § 3005.

RESPONDENT'S EXCEPTIONS TO THE INITIAL DECISION

Respondent has stated 4 exceptions to the Initial Decision. In its exceptions Respondent has not challenged the findings or conclusions of the Administrative Law Judge with respect to the existence or falsity of the representation alleged in paragraph III A. of the Complaint. On the basis of the findings and conclusions relating to that representation a False Representation Order should issue. Nonetheless, each of Respondent's exceptions is addressed.

THE ADMINISTRATIVE LAW JUDGE ERRED

BY DENYING RESPONDENT'S REQUEST TO

HAVE THE HEARING MOVED TO MOBILE, ALABAMA

Respondent argues that the Administrative Law Judge's ruling which denied its motion to change the site of the hearing to Mobile, AL, was erroneous and constituted a denial of due process. According to Respondent it had requested the change of the location of the hearing so that it could have its expert witness, A. W. Faris, Ph.D., present to assist counsel and to testify on its behalf. By the failure to hold the hearing in Mobile, AL, Respondent contends its cross-examination of Complainant's expert was rendered ineffective and it was precluded from introducing contrary evidence.

Respondent's timely filed request to change the place of hearing to Mobile, AL, alleged that it was financially precluded from offering the testimony of its expert, Dr. Faris, in Washington, D.C. Complainant opposed Respondent's request and, in an order of July 2, 1981, an Administrative Law Judge denied the request for failure to comply with the requirements of 39 C.F.R. § 952.15, "Change of Place of Hearings." Thereafter, Respondent sought reconsideration of the Administrative Law Judge's denial of its request. In an order dated July 17, 1981, the reconsideration was denied by an Administrative Law Judge, who found inadequate support for the request. The Administrative Law Judge also found that Respondent's witness was going to be in Washington, D.C., to be heard either immediately before or after the other proceeding in which Dr. Faris was to testify.

The record here and in the case of The New Body Boutique, P.S. Docket No. 11/95, the case which was to be heard during the same week as this case, establishes that the hearing in The New Body Boutique commenced at 9:25 A.M. on August 17, 1981, and was recessed until August 19, when it resumed and continued on August 20, 1981. On the latter date, Dr. Faris testified on behalf of the Respondent, The New Body Boutique. The hearing in this case commenced at 1:35 P.M. on August 17, 1981, and concluded at 2:50 P.M. There is no indication in the record that Respondent requested a recess of the hearing in this case in order to allow it to present the testimony of Dr. Faris on August 20, 1981.

Respondent's allegation that the Administrative Law Judge erred in denying its request for a change in the place of hearing has no merit. Dr. Faris' appearance at The New Body Boutique hearing contradicts Respondent's assertion that it was financially precluded from presenting his testimony in this case. Respondent appears to have made no effort to have the hearings coordinated so that Dr. Faris' testimony could have been presented in both cases on the same day and on the day on which Complainant's direct evidence in this case was presented. There is no indication Respondent could not have obtained a recess in this case and presented the testimony of Dr. Faris on August 20, 1981, the day on which he testified in The New Body Boutique. Furthermore, Respondent's assertion that it needed Dr. Faris available in order to effectively cross-examine Complainant's expert is not persuasive. Respondent has not shown, and a review of the record does not support, the necessity of having an expert available during the examination and cross-examination of Complainant's expert.

Accordingly, it is concluded that the Administrative Law Judge did not err in failing to grant Respondent's request to change the place of hearing or that Respondent was in any way prejudiced thereby.

THE ADMINISTRATIVE LAW JUDGE'S ACTIONS IN

DISMISSING ALLEGED REPRESENTATION III-C WITHOUT

PREJUDICE WERE ARBITRARY AND CAPRICIOUS, AND

VIOLATED RESPONDENT'S DUE PROCESS RIGHTS.

On August 5, 1981, Complainant moved to dismiss without prejudice paragraph III C. of the Complaint. Respondent objected to a dismissal without prejudice asserting that the claim should be dismissed with prejudice or adjudicated on the merits. At the hearing the Administrative Law Judge dismissed paragraph III C. but reserved ruling on whether the dismissal should be with or without prejudice (Tr. 7). In the Initial Decision, the motion to dismiss without prejudice was granted without explanation (I.D. p. 2).

Respondent argues that the Administrative Law Judge, by issuing his ruling without explanation, failed to comply with the requirements of the Administrative Procedure Act, specifically at 5 U.S.C. § 555(e). Respondent also argues that the ruling was erroneous because it subjects Respondent to future litigation on the issue dismissed.

Respondent's argument that the ruling of the Administrative Law Judge should have been accompanied by some explanation is correct. The ruling was not sufficiently self-explanatory that a brief statement of the grounds for denial of Respondent's request to have the claim dismissed with prejudice or adjudicated on the merits could be omitted. However, the absence of a brief statement has not been shown to have caused Respondent injury or prejudice, and since the ruling was correct, it does not constitute reversible error. This conclusion is reached by considering the Federal Rules of Civil Procedure for guidance.

Under the Federal Rules of Civil Procedure a party may amend a pleading to delete a count of its complaint with court approval which shall be freely given when justice so requires. See Greene v. City of Memphis, 610 F.2d 395 (6th Cir. 1979). Also, under the Federal Rules, plaintiffs, with Court approval, are freely allowed to voluntarily dismiss without prejudice an action or a count thereof, unless the defendant will suffer some legal harm. LeCompte v. Mr. Chip Inc., 528 F.2d 601 (5th Cir. 1976); Green v. City of Memphis, supra. Such legal harm must involve prejudice other than the mere prospect of another law suit. The only prejudice alleged by Respondent in this case is that Complainant will have the opportunity to institute a further proceeding against it for use of the same representation at some future time. Thus, Respondent raises only the threat of a future law suit which is an insufficient basis for denial of a dismissal without prejudice. LeCompte, supra. Accordingly, the dismissal without prejudice was proper.

THE ADMINISTRATIVE LAW JUDGE ERRED

IN FINDING THAT ALLEGED REPRESENTATION

III-B WAS MADE.

In paragraph III B. of the Complaint it is alleged:

"Sauna-Slimmer will rid your body of the water weight located in the area of your waist and stomach, for more than a temporary period."

The Administrative Law Judge found that the implications of the total advertisement, combined with Respondent's omission of any statement that water loss in temporary, would lead an ordinary reader to believe that water weight in the waist and stomach area would be lost for more than a temporary period by use of Respondent's product.

Respondent argues that its advertisement does not represent that loss of water weight is more than temporary, and it would not be so understood by an ordinary reader. Moreover, it argues that there is no evidence of how its advertisement would be understood by the ordinary reader, except the testimony of Complainant's expert who stated that most obese persons know they have to either diet or exercise to lose weight (Tr. 37). Since most obese persons know that weight cannot be lost without dieting, Respondent argues they would not be misled by its advertising. Furthermore, it contends that its advertisement clearly depicts the product as a girdle which the ordinary reader would know could not rid the body of water.

While it may be true that most obese persons know that weight cannot be lost without diet and/or exercise, nonetheless, the specific language of the advertisement contradicts that knowledge and represents that weight will be lost without diet and/or exercise. Such a representation will be believed by many ordinary readers.

Respondent's advertisement contains language, relied on by the Administrative Law Judge (I.D. at p. 3), representing that weight will be lost. Combined with the specific statement that "Sauna-Slimmer's unique massaging effect promotes water loss" (CX-11) and the omission of any indication to the reader that such losses will be temporary, it is reasonable to conclude that a person of ordinary mind would find that the representation alleged in paragraph III B. of the Complaint is made by the advertisement. Such a conclusion is consistent with the Supreme Court's admonition that "Laws are made to protect the trusting as well as the suspicious." Donaldson v. Read, 333 U.S. 178, 189 (1947).

Respondent argues that the advertisement depicts Sauna-Slimmer as a girdle and, therefore, would not be understood as a means for losing weight. This argument has no merit. It is true that the picture accompanying the advertisement shows a garment of considerable width which is worn around the midriff. However, the accompanying narrative leaves little doubt that it is touted as a means of losing body fat and water.

With regard to Respondent's argument that there is no testimony of the effect of the advertisement on a person of ordinary mind, there is no need for such testimony since it is within the province of the Administrative Law Judges and the Judicial Officer to determine from the advertisement whether representations are made and their effect on the ordinary mind. 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); Standard Research, P.S. Docket No. 7/48 (P.S.D. 1980); Davinol Products, P.S.Docket No. 7/22 (P.S.D. 1979). An analysis of the advertisement which is the subject of this proceeding leads to the conclusion that the representation alleged in paragraph III B. of the Complaint is made. Accordingly, there is no merit to Respondent's exception.

THE ADMINISTRATIVE LAW JUDGE ERRED IN CONCLUDING THAT ALLEGED REPRESENTATION

III-B WAS FALSE.

Respondent argues that the amount of water loss caused by Sauna-Slimmer would not trigger the thirst mechanism so that the wearer would not be motivated to immediately replace the lost fluid. Thus, Respondent argues that the water loss resulting from the use of its product would not be temporary.

Complainant's expert, Dr. Ayers, testified that Sauna-Slimmer would not rid the wearer of water weight for more than a temporary period (Tr. 18). Dr. Ayers also testified that the body is set to replenish fluid losses in such a way that proportionately more ingested water is retained than usual when there is a deficit in total body water (Tr. 19). Dr. Ayers also testified that the loss of water would not be in the area of the waist and stomach. The loss would be from the blood volume (Tr. 36-37) which would not be localized in any specific part of the body and would be for a period of less than an hour (Tr. 33). There is no evidence in the record to rebut or contradict the testimony of Dr. Ayers. Thus, it is concluded that the Administrative Law Judge's finding that representation III B. of the Complaint is false is supported by the record. Accordingly, Respondent's exception is without merit.

CONCLUSION

After consideration of the entire record and Respondent's exceptions, it is concluded that Respondent is engaged in a scheme to obtain money through the mails by means of materially false representations. Accordingly, Respondent's appeal is denied and a remedial order under 39 U.S.C. § 3005 is being issued contemporaneously with this decision.