In the Matter of the Complaint That                         )
                                                                               )
SHERWOOD IMPORTERS                                       )
                                                                               )
at                                                                            )
                                                                               )
Wilmington, Delaware                                            ) P.O.D. Docket No. 2/3
                                                                               )
(hereinafter called Respondent), is                       )
engaged in conducting a scheme for ob-              )
taining money through the mails in vio-                  )
lation of 39 U.S. Code 4005 (formerly                    )
39 U.S. Code 259 and 732).                                   )

Kelly, Raymond J.

DEPARTMENTAL DECISION

This matter comes before the Judicial Officer on an appeal filed by the Respondent herein on January 25, 1961, from the Initial Decision of the Hearing Examiner entered on January 9, 1961. The Respondent, SHERWOOD IMPORTERS, is not represented by Counsel in this proceeding - such pleadings as Respondent has filed herein are signed by Jackson Sherwood for SHERWOOD IMPORTERS.

The Respondent did not appear at the hearing in this case. His contentions are set forth in an answer filed November 18, 1960, to the original complaint entered November 4, 1960.

This complaint charges that the Complainant, the General Counsel for the Post Office Department, has probable cause to believe that a fraudulent scheme is being conducted by Respondent in violation of 39 U.S. Code, Section 4005 and that Respondent is now and has been obtaining remittances of money through the mails by means of false and fraudulent pretenses, representations and promises as follows:

"(1) That public attention is attracted to said scheme by means of advertising matter widely distributed to the public and which is calculated and intended to induce readers thereof to remit money through the mails to Respondent;

(2) That attached as exhibits and made a part hereof are copies of advertising matter mentioned in paragraph (1) above;

(3) That by means of the advertising matter mentioned in paragraph (2), and in similar matter, the Respondent represents to the public in substance and effect:

(a) That Respondent's product 'CLIMAX is a reliable and ethical lubricant made for men who are bothered by premature ejaculation', i.e., that any man suffering from premature ejaculation will be cured of such condition by use of 'CLIMAX', regardless of the cause, nature or extent of such condition;

(b) That Respondent's product is effective for 'men who, for this reason, disappoint their wives during sexual intercourse. Nothing could be more embarrassing or frustrating than this', i.e., that by use of 'CLIMAX', as directed, any male can satisfy his wife during intercourse, regardless of the cause, nature or extent of her previous inability to achieve satisfaction;

(c) That ' a prolongation of coitus in such cases can remove what is often a basic cause of friction between husband and wife and lead to much happier and healthier homes', i.e., that use of 'CLIMAX' will accomplish the results indicated for any user;

(d) That 'CLIMAX has been tested for safety by the PURE FOOD AND DRUG ADMINISTRATION';

(e) That ' t here is a tremendous demand for CLIMAX , so naturally our representatives are in an exceptionable position to make money. Further sic , most sales are repeat orders to that you build a steady business of your own with CLIMAX', i.e., that because of the tremendous demand and repeat orders, any person wishing to become a distributor for Respondent will make a lot of money, and be able to establish a profitable, self-operated business enterprise;

(f) That 'CLIMAX' definitely has been established by medical science as an effective remedy, treatment or cure for premature ejaculation.

(4) That such statements are false and fraudulent and materially misrepresent the value and efficacy of Respondent's product 'CLIMAX.'"

In his original answer to the complaint the Respondent admitted that public attention is directed through the mails to the sale of this product. The Respondent objects to the use of the word "scheme" to describe the sale of his product. He likewise admits the authenticity of the exhibits referred to in paragraph 2 of the complaint which were made a part thereof and which consist of copies of advertising matters mentioned in paragraph 1 of the complaint. He denies paragraph 3 but in his explanation he admits that the statements quoted in each of the lettered sub-paragraphs of paragraph 3 are substantially correct but denies the interpretation the Complainant placed upon the language contained therein. He denies that the product is offered as a cure for various conditions of or that it is useful for or has anything to do with any abnormality in the female but applies only to a condition of the male.

Respondent contends that the language used to attract persons to become sales representatives in subparagraph (e) is legitimate "sales-puffing" and absolutely denies that Respondent ever made the statements contained in sub-paragraph (f). Respondent likewise denies paragraph 4 of the complaint.

Since the Respondent did not appear at the hearing, the Hearing Examiner invoked Rule 10(b) of the Rules of Practice which provides:

"If the Respondent files an answer but fails to appear at the hearing, the Presiding Officer shall receive Complainant's evidence and render an Initial Decision."

The Hearing Examiner proceeded to hear the evidence produced by the Complainant and to determine the issues herein. He submitted an Initial Decision in which he found that the Respondent is engaged in a scheme for obtaining money through the mails by means of false and fraudulent pretenses, representations and promises in violation of Section 4005 of Title 39 U.S.C.

The record reveals that Respondent was engaged in the mail order business as charged. The Hearing Examiner found that the Respondent made the claims as charged in paragraphs 3(a), 3(b), 3(c) and 3(f) of the complaint and that the claims were false and that they were made with intent to deceive. These findings have ample support in the record (Complainant's Exhibits B-4 and D-2, Respondent's Exhibit 1).

The advertising matter of the Respondent placed in the record by the Complainant shows conclusively that the false and misleading representations which fraudulently misrepresent the product, its value and efficacy and the benefits to be derived from its use are fairly stated in the charges or may reasonably be deduced from Respondent's advertising matter. This is sufficient, Donaldson v. Read Magazine, 333 U.S. 178; Gottlieb v. Schaffer, 141 F.Supp. 7.

The Respondent in his appeal from the Initial Decision of the Hearing Examiner experiences the difficulty most laymen encounter in endeavoring to represent themselves in a legal proceeding. Those of us who are charged with the duty of making decisions on legal matters are bound by the facts as they appear in the record and as they are revealed by the testimony of witnesses and by the exhibits and by the law to be applied thereto.

The Complainant points out in his reply to the Respondent's exceptions that the Respondent's brief on appeal fails to meet any of the specific requirements set forth in Section 201.24(d) of the Department's Rules of Practice. Since the Respondent herein is not represented by Counsel and since the Complainant offers no objection to the consideration by the Judicial Officer of the brief as presented by the Respondent the Judicial Officer will accept and consider the brief insofar as it may contain the Respondent's claims and contentions in reference to the allegations in the complaint and the Initial Decision of the Hearing Examiner.

As near as can be ascertained from a reading of the appeal, Respondent contends that he was denied due process of law and that the intent and spirit of the law and the Rules of Practice in connection with these proceedings were ignored and that the Hearing Examiner was not zealous of the Respondent's rights. There were many other similar changes made against the Hearing Examiner and the Postal Inspector - all of them completely lacking in merit and wholly without any foundation whatsoever. The kindest description would be that they were irresponsible, unwarranted and unverified statements injected into the pleading in this case by one who if he were an Attorney might be subject to censure. A reading of the record of the testimony in this case from page 23 of the transcript through page 30 will clearly show that the Hearing Examiner made diligent efforts to protect the Respondent's rights in these proceedings.

Similarly the respondent's complaint about the way the Inspector conducted the investigation is completely without merit. The Complainant points out in his brief that test correspondence is a proper method to obtain evidence in mail-fraud cases. (Samuels v. U.S., 232 Fed. 536; Kemp v. U.S., 41 App. D.C. 539; Grimm v. U.S., 156 U.S. 604; Scott v. U.S., 172 U.S. 343; Goode v. U.S., 159 U.S. 663; Ackley v. U.S., 200 Fed. 217; Rosen v. U.S., 61 U.S. 29; Andrews v. U.S., 162 U.S. 420; Aycock v. U.S., 62 F.2d 612).

The Respondent claims likewise that he was not served with all of the necessary documents in the case. Respondent was apprised of the nature of the charges in the complaint and that these charges were based upon claims contained in his own literature and surely must have known from which particular piece of his literature these charges were taken. He is charged with knowledge of his own business, U.S. v. Sylvanus, 192 F.2d 96, 105.

In the absence of the Respondent, full hearing was had by the Hearing Examiner at which witnesses testified, exhibits were introduced and the Hearing Examiner in an apparent endeavor to protect Respondent's rights conducted what might be termed a cross-examination of the witnesses. Some twenty-four exhibits were introduced on behalf of the Complainant and the Hearing Examiner considered fully the record and made the following determination:

That the testimony of Postal Inspector W. J. Hegarty who investigated the case and who had engaged in correspondence with Respondent using a "test" name showed that in response to letters and remittances sent to Respondent he received samples of the product and various pieces of literature through the mails from the Respondent thus establishing the use of the mails in the conduct of this enterprise.

The Hearing Examiner further found that a fair reading of the language in the first three paragraphs of Complainant's Exhibit B-4 was sufficient to form a basis in the mind of the average reader that Respondent's product if used as directed would correct the symptom of premature ejaculation even if the symptom arose from such debilitating conditions as "AGE - NERVOUSNESS - OVERWORK - HYPERTENSION - FINANCIAL PROBLEMS - GENERAL RUNDOWN CONDITION", and that the average person might logically believe that the product would in some way lessen or alleviate these conditions. The Hearing Examiner therefore correctly found that the representation as set forth in paragraph 3(a) of the complaint was made by the Respondent.

The Hearing Examiner pointed out that Dr. Kenneth D. Campbell, Acting Director, Drug and Device Branch of the Food and Drug Administration, a well qualified doctor of medicine testified that in the performance of his duties he had occasion to review the labeling and promotional material for various anesthetic creams such as CLIMAX. Dr. Campbell stated that premature ejaculation occurs most frequently on the part of newly married men because of their nervousness or because of the lack of adjustment with their wives. Another cause of this symptom is the presence of some organic disease or some deep-seated psychosis or psychoneurosis. It was Dr. Campbell's testimony that CLIMAX might serve its intended purpose in the nervous newly-wed, but it would be ineffectual for persons having organic or psychic problems. CLIMAS unquestionably would not be an effective treatment or cure of the latter two underlying conditions.

Dr. Campbell further stated that his views represent the consensus of medical opinion on this subject and that he knew of no reputable physician who would dispute the views as he had expressed them. The Hearing Examiner therefore correctly found that the representation attributed to the Respondent in paragraph 3(a) of the complaint was false.

The Hearing Examiner pointed out that since people of ordinary minds reading the Complainant's Exhibit B-4 might believe that the product might be a treatment for the organic or mental conditions enumerated (Durland v. U.S., 161 U.S. 306) and since the evidence in the case shows that the product would not be an effective treatment for such condition and since the representation is contrary to the universality of scientific belief on the subject (Reilly v. Pinkus, 338 U.S. 269), he found that this representation was made with an intent to deceive or with such a reckless disregard as to what the truth might be as to the tantamount to an intent to deceive (Corliss v. U.S., 7 F.2d 455; Darnell v. Darnell, 200 F.2d 747). This finding finds ample support in the record.

Respondent's exhibit 1 reveals that the Food and Drug Administration was of the opinion that the statement in Complainant's exhibit B-4 beginning with "CLIMAX formula is made especially for men who have lost control of timing due to ****," should be deleted from the sales literature. The Hearing Examiner points out in his Initial Decision that Exhibit 1 is dated months before the mailing of Complainant's exhibit B-4.

The representation set forth in paragraph 3(b) of the complaint appears in the second paragraph of Respondent's letter of September 21, 1960 (Complainant's exhibit D-2).

The representation imputed to the Respondent in paragraph 3(c) of the complaint is an inference which easily may be drawn from the quoted language of this charge which appears in the second paragraph of Complainant's exhibit D-2.

The Hearing Examiner correctly found the representations set forth in paragraphs 3(b) and 3(c) were falsely and fraudulently made by the Respondent and that the representation ascribed to the Respondent in paragraph 3(f) was made and that it is false and fraudulent based upon the same factors as set forth in connection with paragraph 3(a).

Paragraph 3(d) of the complaint is a true statement (Respondent's Exhibit 1) and no evidence was produced concerning the charge in paragraph 3(d). Therefore this decision is not concerned with these paragraphs.

Based upon the complete record in this case, I affirm the finding of the Hearing Examiner that the Respondent is engaged in a scheme for obtaining money through the mails by means of false and fraudulent pretenses, representations and promises in violation of Section 4005, Title 39 U.S. Code.

Appropriate order for the suppression of the fraudulent enterprise will issue forthwith.