In the Matter of the Complaint Against

TRAY LABORATORIES, INC.
P. O. Box 4693 at Toledo, Ohio 43620

P.S. Docket No. 2/17;

APPEARANCES:

For Complainant:
H. Richard Hefner, Esq. Washington, D.C.

For Respondent:
Thomas G. Papps, Esq. Papps and Michel Toledo, Ohio

POSTAL SERVICE DECISION

Following the filing of the complaint against the Respondent named above, the parties entered into a Compromise Agreement in the usual form by which Respondent agreed to discontinue making the representations set forth in the complaint. Accordingly, on March 7, 1973, Chief Administrative Law Judge William A. Duvall ordered that further proceedings in this matter be indefinitely suspended. The complaint was directed at Respondent's advertising appearing in national publications for its product "Naturaid". Following execution of the Compromise Agreement, Respondent modified its advertising in various respects. The Complainant, however, believing that Respondent is continuing to make representations that he had agreed to discontinue, filed a petition for a mail stop order upon breach of agreement which was docketed on April 19, 1974. The petition alleges that Respondent is continuing to make five of the seven representations set forth in the original complaint. These are:

"(a) Use of 'Naturaid' will enable a male to achieve natural erections as often and for as long a period of time as may be desired.

"(b) Through use of 'Naturaid' a male may engage in sexual intercourse as frequently as may be desired.

"(c) Use of 'Naturaid' will overcome male impotency.

"(d) Use f 'Naturaid' will prevent dimunition of sexual desire and capacity incident to the process of aging.

"(g) Through use of 'Naturaid' men may engage in sexual intercourse daily irrespective of age."

Respondent denies that the revised advertising breaches the Consent Agreement or that he is continuing to make representations contained in the original complaint. Respondent also raises estoppel, laches, mootness and other affirmative defenses.

A hearing was held before the Judicial Officer on May 15, 1974, at which testimony was presented by both parties as well as oral arguments. Written briefs were dispensed with by consent of all parties.

Continuance of the Representations

A copy of the advertisement attached to the petition as Exhibit A and received in evidence as Complainant's Exhibit C-1 is in the same format as the advertisement upon which the original complaint was based. Language that was the basis of charged Representations (e) and (f) of the original complaint has been eliminated from the revised advertisement. In addition, language relating to the other charged representations has been modified to make the representations less positive. Thus where the original advertisement said with respect to Representations (d) and (g), "Age makes no difference", the revised advertisement states, "Age makes little difference", and where the original advertisement stated with respect to Representation (c), "solves impotency", the revised advertisement states, "this amazing product could be your answer" to impotency. Those changes are not significant in the context of this proceeding. Clearly Respondent is intending to continue the substance of Representations (c), (d) and (g) which he had agreed to discontinue. On the other hand, the revised advertisement does appear to have eliminated representations that the desired results may be achieved as frequently as may be desired. For that reason I find that Respondent is not continuing Representations (a) and (b).

Estoppel or Bad Faith. Respondent alleges in his answer that the attorney for Complainant had approved the revised advertisement. However, he produced no creditable evidence that the revised advertisement was ever submitted to the attorney. On the other hand, at Respondent's insistence the attorney testified on this subject and denied expressly that the revised advertisement had been submitted to him. Further, the agreement itself expressly states that no one on behalf of the Postal Service has approved any revised advertising. There is, therefore, no factual basis for any estoppel defense and no showing of bad faith.

Laches. Respondent alleges that the revised advertisement has been used over a substantial period of time with the knowledge of postal authorities. Aside from the fact that knowledge for a prolonged period of time has not been shown, inaction on the part of the postal authorities for a period of time is not a basis for failing to protect the public from being misled by false representations. As was stated in Institute For Weight Control, Inc. v. Klassen, D.C. N.J. 1972, 348 F.Supp. 1304, aff'd 474 F.2d 1338:

***As a matter of fact, as this Court pointed out at the time, it could well be argued that for a period since October of 1971, until the commencement of the administrative proceeding now under review, the advertisement in question, subsequently found to be a material misrepresentation, had been used to considerably enrich the plaintiff, at the expense of a hoodwinked public. It is also clear that there is nothing in the record that the entry of the stop order will, as contended in the plaintiff's Brief, result in 'destroying plaintiff's business. . . . " (348 F.Supp. at 1316).

Accordingly, the alleged laches are no basis for dismissing the complaint. Efficacy. Respondent alleges the product involved here will produce the results claimed for it in its advertising. However, the rule in a breach of compromise agreement proceeding is that Respondent has foreclosed himself from denying the falsity of the representations he has agreed to discontinue. As stated i American Image Corp. v. USPS, S.Dist. N.Y., January 14, 1974, 73 Civ. 3562:

"Plaintiff perhaps should never have signed such agreement had it wished the opportunity to establish the validity of the claims made on behalf of its product. That opportunity is, however, now foreclosed."

Mootness. While Respondent contends that it has now discontinued all its advertising, the evidence shows that its advertisement is appearing in at least one current publication.

Other contentions of Respondent are denied as obviously without merit.

Conclusion

Upon consideration of the record before me, I find that Respondent is in breach of the obligations he undertook in Compromise Agreement by continuing, to the extent indicated above, representations he had agreed to discontinue and abandon. Therefore, in accordance with the provisions of paragraph 3 of the Compromise Agreement an order pursuant to 39 U.S.C. 3005 is being issued against Tray Laboratories, P. O. Box 4693, at Toledo, Ohio 43620.

Wenchel, Adam G.