In the Matter of the Petition by

PLEASURE INCORPORATED,
11322 Southland Road,
Cincinnati, Ohio 45240

Denial of Application for Second-Class Mail Privileges for
"PASSPORT TO PLEASURE NEWSLETTER"

P.S. Docket No. 1/48

William A. Duvall Chief Administrative Law Judge

APPEARANCES:
William A. Busemeyer, Esq.
Lindhorst & Dreidame
1200 American Building
Cincinnati, Ohio 45202,
for the Petitioner

Arthur S. Cahn, Esq.
Law Department
United States Postal Service
Washington, D.C. 20260,
for the Respondent

INITIAL DECISION OF ADMINISTRATIVE LAW JUDGE

By letter dated December 28, 1971, the Manager, Mail Classification Division, United States Postal Service (Respondent) advised Pleasure Incorporated, 11322 Southland Road, Cincinnati, Ohio (Petitioner) that it was proposed to deny Petitioner's application for second-class mail entry for the publication "Passport to Pleasure Newsletter." (Petitioner's application had been filed May 3, 1971.)

Respondent advised Petitioner that the denial was based on the Respondent's view that the said publication is designed primarily for adveritising purposes contrary to section 4354(c) of Title 39, United States Code and section 132.226 of the Postal Service Manual. The latter authority defines publications designed primarily for advertising purposes as including (1) those owned or controlled by individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of the main business or calling of those who control them; and (2) those that consist principally of advertising and editorial write-ups or the advertisers.

Respondent also advised Petitioner that the denial would become final unless Petitioner filed with the local postmaster evidence showing that the requirements of law had been met or unless Petitioner filed an appeal within 15 days from Petitioner's receipt of the notice of denial.

Petitioner followed the latter course and filed a timely appeal from the proposed denial.

By Answer to the petition on appeal, Respondent added a further ground for the proposed denial of second-class mail privileges for Petitioner's publication. That additional ground was the allegation that "Passport to Pleasure Newsletter" is not a newspaper or a periodical publication within the meaning of 39 U.S. Code 4351 and 4354(a) (incorporated in the regulations of the Postal Service as 132.211, Postal Service Manual). In addition to the Answer, Respondent issued, under date of January 21, 1972, a new proposed denial of Petitioner's application in which later proposed denial all of the previously stated grounds for such action were incorporated.

The matter came on for hearing on February 24, 1972. Both parties were represented by counsel who examined and cross-examined witnesses through whom exhibits were introduced into the record. Both parties have filed proposed findings of fact, conclusions of law and supporting reasons.

At the hearing, it was established that Petitioner's main business activity is the sale of annual booklets of coupons which entitle the owner to purchase two of specified items for the price of one. Examples of the items which may be so purchased are dinners at various restaurants, tickets to varied sports events, theatre tickets, and the like.

Petitioner's sales of the coupon booklets derive, primarily (95%), from sales campaigns by various religious, fraternal and social clubs which, in this manner, raise funds for their own purposes. Petitioner also receives about 4 per cent renewals of its coupon books from subscribers to its Newsletter and about 1 per cent through ordinary retail sales at store outlets.

In regard to the bulk of sales of the coupon books which, as pointed out, is through various clubs, and perhaps in all manner of sales of these books, one dollar ($1.00) is regarded and treated by Petitioner as the subscription price to its publication, the Newsletter. It is not compulsory to subscribe to the Newsletter and, upon request, refunds of $1.00 are made to persons who do not wish to subscribe to the Newsletter.

The Newsletter is published four times a year, in March, May, August and October. The copies of the Newsletter received in evidence at the hearing were the May, August and October, 1971, issues which were introduced, respectively, as Petitioner's Exhibits P-2, P-3 and P-4.

Examination of these issues of the publication discloses that they consist of a cover page which is devoted solely to a display of information about the Petitioner. Other matter contained in each issue consists of coupons good for purchases at places or for events which were not included in the original coupon booklet, information relating to the places or events connected with the newly published coupons, and promotional statements or statements of policy related to the Petitioner.

From what has been said, it is clear that without Petitioner's annual coupon books there would be no reason for the existence of Petitioner's Newsletter.^1/ It is also clear that the Newsletter is but an adjunct to Petitioner's main business activity, which is the sale of the coupon books. If no formal "advertisement" of Petitioner's business is carried in the "Newsletter" (and this is by no means certain) it is obvious that by disseminating these reminders, Petitioner hopes to stimulate "word-of-mouth" advertising of its principal business.

It is not necessary to dwell at length on the proposition that the Newsletter is not a newspaper or a periodical publication. The Supreme Court of the United States defined a periodical as follows:

"A periodical, as ordinarily understood, is a publication appearing at stated intervals each number of which contains a variety of original articles by different authors, devoted either to general literature of some special branch of learning or to a special class of subjects. Ordinarily, each number is incomplete in itself, and indicates a relation with prior or subsequent numbers of the same series." Houghton v. Payne , 194 U.S. 88 (1904)

No protracted treatment of the subject is necessary to determine that the Newsletter here at issue does not possess the qualifica- tions enunciated in the above quotation.

In the light of all of the foregoing considerations, it is found as facts:

1. Petitioner's publication "Passport to Pleasure Newsletter" is not a newspaper or a periodical publication; and

2. Petitioner's publication "Passport to Pleasure Newsletter" is conducted as an auxiliary to and essentially for the advancement of the main business activity, i.e., the sale of the annual coupon books, of its publisher, the Petitioner in this case.

It is concluded as a matter of law that the publication, "Passport to Pleasure Newsletter" is not entitled to entry into the mails as second-class mail matter; that the determination made by the Manager, Division of Mail Classification in regard to said publication was correct; and that the decision by Respondent to deny the Petitioner's application is sustained.

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1/ After fuller consideration of the factual situation in this case, I concur with Counsel for both parties that the facts as revealed in the Appeal of The Diner's Club , P.O.D. Docket No. 1/255, decided January 27, 1961, are not similar to those shown in this proceeding, and that the decision therein is not applicable to this matter.