In the Matter of the Complaint Against

DORSET HOUSE, 1199 Broadway at
New York, New York 10001

and

CLUB RATIO,
P. O. Box #566 at
Cobourg, Ontario, Canada

P.S. Docket No. 2/14

Thomas A. Ziebarth, Esq. ,
Law Department, U.S. Postal Service, for Complainant

Charles B. Chernofsky, Esq., of
Halesite, New York, for Respondent

Before: John Lewis , Administrative Law Judge

INITIAL DECISION^1/

STATEMENT OF PROCEEDINGS

This proceeding was initiated by the filing of a complaint by the General Counsel of the United States Postal Service, on January 8, 1973, charging the Respondents named therein with conducting a scheme or device for obtaining money or property through the mail by means of false representations in violation of 39 U.S. Code, 3005. In substance, the complaint charges Respondents with having made false representations concerning the effectiveness, permanence, and safety of their diet plan, known as the "RATIO DIET". Respondents appeared by counsel and filed an answer in which they denied, in substance, the making of the representations alleged, or the falsity thereof.

Pursuant to notice duly given, a hearing for the reception of evidence was convened on February 20, 1973, in Washington, D. C. before me. Both parties appeared by counsel, and were afforded full opportunity to be heard and to examine and cross-examine witnesses. Counsel for Complainant called two witnesses, (1) a Postal inspector, through whom he sought to establish that Respondents' method of operation involved the obtaining of money through the mail by means of statements made in advertising and other literature distributed to customers; and (2) a physician, through whom he sought to establish the falsity of the representa- tions allegedly made in Respondents' advertising matter. Counsel for Respondents elected not to offer any testimony or other evidence, but relied on the cross-examination of the Complainant's medical witness as establishing the failure of Complainant's counsel to establish a prima facie case, and also upon the failure of the advertising matter to contain certain of the representations alleged in the complaint.

At the close of the hearing, counsel for Complainant, pursuant to a motion for an oral decision filed on February 14, 1973, requested that an oral initial decision be issued. Such motion was granted, over objection of counsel for Respondents, on the ground that a timely motion for such a decision had been filed and that, in addition thereto, the nature of the case and the public interest justified such a decision. Oral argument was thereafter permitted to counsel concerning the sufficiency of the evidence to establish the allegations of the complaint.

After having carefully considered the evidence in this proceeding, and based upon the entire record, including the complaint and answer, the exhibits, and the testimony of the witnesses, I make the following:

FINDINGS OF FACT

A. The Alleged Solicitation of Money Through the Mail

1. Respondents are engaged in the business of selling a diet plan which they designate in their advertising matter as, "The Remarkable Ration Diet." Public attention is directed to said plan by advertisements inserted in publications of general circulation, and also in the diet plan booklet itself. While the Respondent, Club Ration, is not mentioned in the advertising matter which is inserted in publications of general circulation, its name is referred to in the diet plan booklet as being associated with the enterprise, and it may appropriately be considered as participating in the representations made in the advertising matter.

2. Readers are invited to order the diet regimen booklet by sending $2 to Respondent, Dorset House, at the address indicated in the booklet. Readers of the diet plan booklet are also invited to send for information on group rates by addressing mail to Respondent, Club Ratio. The record establishes that Respondents do, in fact, obtain money through the mail from customers who, pursuant to the invitation made in the advertisements, order the diet plan booklet through the mail. Respondents do, in fact, ship such diet plan booklet through the mail in response to orders received from customers who respond to their advertisements.

B. The Alleged Representations

3. The offer to sell Respondents' diet plan booklet is made in various advertisements, copies of which have been received in evidence in this proceeding as Complainant's Exhibits 1 through 5, and in the diet plan booklet itself which has been received in evidence as Complainant's Exhibit 9-B. A copy of the primary advertisement used in soliciting orders for the booklet, which is in evidence as Complainant's Exhibit 4, and which was attached to the complaint issued in this proceeding, is attached hereto as Appendix "A". The advertisements contain a number of statements concerning the ability of Respondents' diet plan to enable persons who follow it to lose weight.

4. The complaint alleges that through the use of the advertise- ments in which Respondents seek remittances of money through the mail they make various representations to potential customers concerning the ability of the diet plan to enable such customers to lose weight. From a review of the advertising matter which is in evidence, I find that the ordinary individual reading such advertise- ments would interpret them as making the representations, substantially, as set forth in the complaint, which representations are incorporated herein by reference as if they were fully set forth.

a. The first representation made is that adherence to the diet plan is certain to cause a weight loss of 9 to 12 pounds from problem areas in one week. Counsel for Respondents questions whether this representation was made by reason of the fact that the advertisement pledges a refund if the reader fails to attain the indicated weight loss. In my judgment the pledging of a refund, in the light of the statements made in the advertisements, does not negative the representation made. The reader is in effect guaranteed to achieve the weight loss. The fact that a refund is offered to be made does not minimize the effect of this guarantee upon the mind of the ordinary reader, but reinforces it.

b. The next representation alleged is that persons following the Ratio Diet can lose 12 pounds of fat in five days, and as much as 3 pounds in one day. Counsel for Respondents argues that the advertisement merely cites these losses in weight as examples of individual instances where this has occurred, but that it is not tantamount to a representation that this will occur in every case. While it is true that these are cited as instances of losses that can be achieved, in the context in which they appear in the advertisement the ordinary reader, which includes the ignorant, the unthinking, and the credulous, would in many instances interpret this statement as tantamount to one that this is what the public may generally expect from following the diet plan.

c. It is alleged that Respondents have represented that the built-up, excess body fat will be rapidly devoured by the dieter's body chemistry while adhering to the plan. It has been conceded by counsel for Respondents during the oral argument that this representation is made in substance, and it is found by me that Respondents do make the representation.

d. It is alleged that the diet plan will allow dieters to eat as much as possible, and to eat as much as they desire from a list of recommended foods without counting calories or measuring quantities of food. It has been conceded that this representation is made in the advertising, and I find that it is made by Respondents.

e. It is alleged that the representation is made that the weight loss achieved by adherence to the diet plan will be permanent. I find that the reference in the advertisements to other diet plans which have failed to result in a permanent loss of weight, and the contrasting of them with Respondents' diet plan, amounts in substance to a representation that a permanent loss of weight will be achieved by following Respondents' diet plan.

f. It is alleged that the representation is made by Respondents that the diet plan involved in this proceeding is a safe, nutritionally sound weight-loss regimen, which may be followed indefinitely without medical supervision by the average obese person until he has achieved his proper weight. While no such affirmative representation appears in the advertisements, I find that the average individual reader the advertisement would interpret the advertisement as making the representation that the diet plan is basically safe and nutritionally sound, and may be followed by him for an indefinite period without medical supervision. There is no statement in the advertisement itself advising medical supervision, and the oblique reference in the diet plan booklet, page 14, to seeing a doctor if the individual thinks the dietary suggestions could cause problems does not, as Respondents argue, negate the making of the representation.

C. The Alleged Falsity of the Representations

5. It is my finding that the uncontradicted and credible testimony of Dr. Robert Marcus establishes that the representations made by Respondents, as heretofore found, are materially false. Dr. Marcus is an expert in the field of endocrinology and metabolic diseases, including the treatment of obesity, and in the absence of countervailing medical expert testimony, or other testimony consisting possibly of testimony of users or persons who have followed the diet plan, of such a persuasive nature as to justify disregarding Dr. Marcus' testimony, I accept his testimony as establishing the falsity of the representations which I have found to have been made.

a. The Weight Loss Representations . In essence, Respondents have represented that persons who follow the diet plan

(1) may achieve certain losses in weight, within certain time periods, (2) that such loss of weight will come from the rapid devouring of excess body fat due to the dieter's body chemistry, and

(3) such loss may be achieved by eating from a list of recommended foods in quantities as much as the user desires and without counting calories or measuring quantities of the food. According to Dr. Marcus' testimony, this cannot be achieved. The foods which are recommended in the booklet as permitting such a reduction of weight and which are designated as having a factor of 10 or less are all high protein foods. In a normal diet, proteins would constitute 20 percent of the diet, fats 30 to 40 percent, and carbohydrates 50 to 60 percent. There is no necessary magic in weighting a diet heavily in favor of protein foods. Moreover, whether a diet consists of balanced nutrients or one heavily in proteins, a weight loss cannot be achieved unless there is a restriction in the caloric intake. There must be a restriction of sufficient caloric intake as to result in a caloric deficit over the amount of caloric energy expended. As Dr. Marcus indicated, there must be a caloric deficit of 3,500 calories to result in a loss of one pound of body mass. For the average person who is moderately obese the maximum loss that could be achieved by the ingestion of the foods recommended in the booklet, with a factor of 10 or less, could at most result in a loss of 2 to 3 pounds, and than only if the person was judicious in the amount of such foods ingested. If he ate such foods in unrestricted amounts, no weight loss could be achieved. The ingestion of foods high in protein will not result in any rapid devouring of excess body fat and may in fact cause a lesser weight loss than the caloric intake would normally suggest. To the extent that any person achieved a loss of weight by ingesting the foods recommended, it would be as a result of his limiting the quantity of calories ingested to an amount below that which he expends through normal activities. In other words, it would be an accidental result and not a necessary result of following the diet plan.

b. The Permanence of the Loss . According to Dr. Marcus' testimony, any weight loss which may be achieved will not be permanent. This is particularly true of persons who are on a high protein diet, since as soon as they return to what would be a normal diet, they will rapidly regain a large percentage of the weight previously lost. This would be true even where individuals are following what Respondents designate the quantities of these foods to be ingested, the ingestion of certain types of these foods in unregulated quantities will result in a rapid regain of weight, particularly in the case of individuals who have been on a high protein diet.

c. The Safety and Soundness of the Diet . According to Dr. Marcus' testimony, the Ratio Diet is not safe or nutritionally sound, since as a high protein diet it may cause various adverse effects. These include ketosis, which produces nausea and a feeling of lack of well being resulting from a carbohydrate deficiency, arthritis, and kidney malfunction.

d. For the reasons above stated, it is found that the representations made by Respondents are materially false as a matter of fact.

CONCLUSION OF LAW

Respondents are engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations, in violation of 39 U.S. COde, 3005. It is accordingly recommended that an order in the form provided for in 39 U.S. Code, 3005 should be issued.

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1/ Transcribed from oral decision rendered at close of hearing, except for correction of certain nonsubstantial typographical or grammatical errors.