In the Matter of the Complaint Against

U.S. ZIP CODE SERVICE
1100 17th Street, N.W. at
Washington, D.C. 20036

and

U. S. ZIP CODE SERVICE, and
P. O. Box 2808 Main Post Office at
Washington, D.C. 20013

P.S. Docket No. 2/171;

APPEARANCES:
For Complainant:
Daniel S. Greenberg, Esq.
Washington, D.C.

For Respondent:
Myles Ambrose, Esq.
Imogene Lehman, Esq.
Washington, D.C.

POSTAL SERVICE DECISION

Background

This proceeding under 39 U.S.C. 3005 is before me on Respondent's appeal from the Initial Decision.

Respondent publishes the "United States ZIP Code Directory". The complaint charges in effect that in marketing the directory Respondent falsely represents:

1. That the "United States Zip Code Directory" sold by respondent contains essentially the same information as found in the "National Zip Code Directory" published by the United States Government;

2. The United States Government urges the purchase of respondent's directory;

3. Respondent is connected in some manner with the United States Government for purposes of promoting the sale of the directory; and

4. Respondent's directory is being offered for sale by or on behalf of the United States Government.

While the controversy centers primarily on whether Respondent makes the representations charged, descriptions of the ZIP Code system, the official "National ZIP Code Directory" and Respondent's "United States ZIP Code Directory" are helpful.

The ZIP Code system is described in postal regulations ^1/ substantially as follows:

"ZIP Code is a five-digit coding system which identifies each post office and each delivery unit at large offices and associates each with the sectional center or major office through which mail is routed for delivery. The first three digits identify the sectional center or major city. The last two digits identify the post office or other delivery unit."

"All post offices are assigned one or more ZIP codes which should be included in the address on all mail and most post offices are assigned a single ZIP Code which should be used in the address on all mail addressed for delivery at such post offices." "Two or more ZIP Codes are assigned to the larger offices at which two handlings are required on distributing mail to delivery routes and box sections. Separate ZIP Codes are assigned to each delivery unit at such offices so that mail separated to five-digit ZIP Code delivery units can be distributed to delivery routes and box sections in a single handling."

"The National ZIP Code Directory lists ZIP Codes for post office addresses."

Approximately 314 cities are multi-coded cities, ^2/ and obviously those are the nation's largest cities.

The National ZIP Code Directory contains more than 1800 pages of ZIP Code listings while Respondent's directory contains only 56 pages of such listings. The difference is largely accounted for by Respondent's omission of listings by which a user can determine the proper ZIP Code for a specific street address, post office box, government office or rural route at any of the multi-coded cities. The official directory, of course, contains those listings.

Respondent's directory acknowledges the omission of the information mentioned and advises the reader "it is sufficient to use the main post office number listed within this directory" ^3/ and also furnishes advice as to several methods of obtaining the information, including writing to Respondent or using its toll free telephone number.

It is clear that Respondent's directory lacks information contained in the official directory that has substantial utility to the ordinary user of a ZIP Code directory ^4/ although that information can be obtained by mail and between 10 a.m. and 5 p.m. EST by telephone from Respondent at no cost to the purchaser of the directory. The telephone service, although useful, is of course available only during restricted hours which may not coincide with hours of work of others.

It follows, therefore, that if Respondent represents its directory to be as complete as the official directory, that representation is false.

The Representations

Respondent does not contend that the other representations it is charged with making are true, but as indicated above, the charge that Respondent has made any of the representations is strongly contested.

Insofar as the finding that Respondent makes the representation of comparability with the official directory is concerned, Respondent argues:

"This finding is predicated on the assumption that a comparison with the National Zip Code Directory may be implied from Respondent's representation that its product includes a 'complete and full zip code service.' (Complainant's Exhibit D). This assumption might have some validity if Respondent said its product was a complete directory. Then it would be inviting comparison with the National Zip Code Directory. However, Respondent uses the word 'service,' and does so advisedly, representing only that its product is complete as a service; that is, as a directory plus toll-free information lines combined." ^5/ The problem with Respondent's analysis is that the advertisements involved ^6/ promote a directory. It is obvious that the ordinary purchaser will understand the advertisements to mean that the directory provides the full ZIP Code service. Nowhere does Respondent indicate that completeness is to be achieved by a supplemental service rather than in the directory. Other than in the name of the seller, the word "service" occurs in Exhibit D only in the sentence "This includes a complete and full zip code service". Since there is no hint elsewhere in the advertisement that completeness is achieved by the mail and telephone service, it is obvious that the ordinary reader will understand that it is the directory by itself that affords the complete service. It follows that Respondent does represent the directory to be complete. Respondent concedes that if it represents the directory to be complete, the proper reference to determine whether it is complete is the National ZIP Code Directory.

Exceptions as to Other Matter

Respondent was given an opportunity to present evidence concerning intent to deceive. Nevertheless, as stated in the Initial Decision (pages 14, 15), issuance of an order under 39 U.S.C. 3005 does not depend upon a determination of intent to deceive or lack of good faith. ^7/ As part of its evidence on this matter, Respondent showed that it had consulted several attorneys about the question of whether its promotion involved here was actionable under 39 U.S.C. 3005. Among those

Respondent consulted was George Ronis, an attorney practicing in California, whose affidavit is included in the record. In the Initial Decision, the Administrative Law Judge stated "for one reason or another Counsel could not give a final opinion as to the legality of the proposed operation".

Respondent attempts to make an issue of the Administrative Law Judge's evaluation of the affidavit of George Ronis, Esq. The evaluation made is appropriate since despite his views on the acceptability of Respondent's activities, Mr. Ronis did in fact advise Respondent to seek other advice rather than to rely on Mr. Ronis' professional opinion. ^8/ In any event, however, the finding excepted to has no bearing on the issues involved in this proceeding.

Respondent excepted to paragraph 12 of the findings in the Initial Decision that discusses the quantity of complaints received by Respondent. The exception taken is not that there is any inaccuracy in that paragraph, but is on the basis that the language might be misunderstood. The exception is denied.

Respondent also contends that the Administrative Law Judge improperly found on page 5 of the Initial Decision that "The testimony of a Postal Service employee, offered by Respondent, ^9/ shows that mail will be delayed in delivery if the sender, not knowing the correct zip code, uses the postmaster's zip code." ^10/ Since no evidence was presented to show whether mail incorrectly ZIP Coded in the manner indicated would generally be delayed in delivery as compared with mail bearing no ZIP Code, Respondent excepts to the quoted statement. However, the testimony referred to was to the effect that mail incorrectly bearing the postmaster's ZIP Code would be delayed as compared to correctly ZIP Coded mail. The matter is relevant only to the question of whether Respondent's directory contains essentially the same information as found in the official directory. Surely it does not if the procedure suggested by the former will result in delaying mail as compared to using the correct ZIP Code shown in the official directory.

The Initial Decision describes at some length features of the advertisements that suggest that the Government is involved in the promotion and production of the United States ZIP Code Directory. The various items in Respondent's mailing pieces, including the advertisements, are described in paragraphs 10 and 11(a) of the Initial Decision. While any one of them viewed separately may not have a substantial impact on the reader, the occurrence of so many of these items in a single promotional mailing has the synergistic effect of representing that the United States ZIP Code Directory is being sold on behalf of the

Government by Respondent who is connected with the Government and that the Government urges the purchase of the directory. To view the matter otherwise would be to ignore the rule that in determining what representations they make, ^11/ it is appropriate to look at advertisements as a whole rather than to analyze each sentence in isolation. Accordingly, Respondent's exceptions to the Administrative Law Judge's construction of the advertisement in this regard are denied.

Exceptions as to Conclusions of Law

In its first exception to Conclusions of Law, Respondent summarizes the arguments on its exceptions to findings of fact, adding only the argument that no evidence was introduced to show anyone was in fact deceived. The need for such evidence in these proceedings was laid to rest years ago in the case of Farley v. Heininger, C.C.A. D.C. 1939, 105 F.2d 79, Cert. den. 308 U.S. 587.^12/ Respondent's other exception to conclusions of law would treat a proceeding under 39 U.S.C. 3005 as a criminal trial and require in effect that the Administrative Law Judge apply the standard of beyond "reasonable doubt" used in criminal trials in making his findings. The purpose of proceedings under 39 U.S.C. 3005, however, is not to punish the offender but to protect the public. (Lynch v. Blount, 330 F.Supp. 689 at 693, aff'd 404 U.S.

1007). As such, the usual rule applicable to administrative proceedings applies; namely, that as the moving party, Complainant must bear the burden of establishing his right to the order by a preponderance of the evidence.13/ As indicated above, the Administrative Law Judge has found Complainant has done so and I see no reason to overturn his findings. Moreover, Respondent's novel contention that the Administrative Law Judge's findings against it demonstrate a prejudiced mind is patently without merit and is rejected.

Conclusion

Upon review of the Initial Decision in the light of the exceptions of the parties, I find as did the Initial Decision that Respondent is engaged in a scheme or device for obtaining money or property through the mail by means of materially false representations and that a remedial order should be issued against this Respondent pursuant to 39 U.S.C. 3005. Such an order is being issued contemporaneously with this decision.

04/15/74

Wenchel, Adam G.

_________________

1/ "The purpose of ZIP Code is to achieve greater accuracy and speed in the dispatch and delivery of mail."

2/ Section 125.327 Postal Service Manual; 39 C.F.R. 135.3(b)(7).

3/ But see Sections 125.327 and 134.435 Postal Service Manual; 39 C.F.R. 125.3(b)(7) and 134.4(c)(5).

4/ The finding of the Administrative Law Judge on this issue (Initial Decision, page 6) is discussed at page 8 below.

5/ Appeal Brief, page 6.

6/ Exhibits B and D to the compliant.

7/ See P.S. Decisions in National Opportunity Research Service, P.S. Docket No. 2/125 (3/6/74) and Sharon Woodman Associates, P.S. Docket No. 2/122 (2/12/74) and authorities cited therein.

8/ See also Transcript of 1/14/74, pages 28 and 29, where Respondent's Mr. O'Leary testified that "he felt that what we were now doing, that we were now in compliance, but in his opinion, that he would because of the fact that he was in California, that we would seek out the advice of still another attorney here in the Washington area".

9/ Obviously an inadvertent misstatement, since the testimony was in fact offered by Complainant, but that does not change the value of the testimony.

10/ As Respondent's directory advises may be done.

11/ Donaldson v. Read Magazine, 333 U.S. 178 at 188; Reilly v. Pinkus, 338 U.S. 269 at 274 and 275.

12/ Respondent, of course, overlooks the complaint discussed in paragraph 12 of the Initial Decision.