In the Matter of the Petition by

AMOCO MOTOR CLUB, a division of
AMOCO ENTERPRISES, INC.,
W.H. VEHMEIER, Publisher,
111 West Jackson Boulevard,
Chicago, Illinois 60604

Revocation of Second-Class Mail Privileges for "ADVENTURE ROAD MAGAZINE"

P.S. Docket No. 2/50

Rudolf Sobernheim Administrative Law Judge

APPEARANCES:
Matthew J. Gallo, Esq.
Maurice P. Glover, Esq.
910 South Michigan Avenue
Chicago, Illinois 60605 for Petitioner

Arthur S. Cahn, Esq.
Grayson M. Poats, Esq.
Law Department U.S. Postal Servpice
Washington, D.C. 20260 for Respondent

INITIAL DECISION

This is a proceeding initiated by Petitioner pursuant to 39 C.F.R. Part 954 to contest the action of Respondent, represented by the Manager of the Mail Classification Division, Finance Department (hereinafter sometimes referred to as the "Manager"), initiated on 29 March 1972 (Pet's Ex. P-10) and made final on 12 February 1973 (File, items D, N),^1/ which revoked, subject to the outcome of this proceeding, the second-class mail privileges granted Petitioner for ADVENTURE ROAD MAGAZINE (hereinafter sometimes referred to as "ADVENTURE ROAD" or the "magazine") on 25 January 1966, effective retroactively as of 29 September 1965 (Resp. Ex. R-1).

After referring to Postal Service Manual (PSM) section 132.226, formerly 39 U.S.C. section 4354(c), the Manager stated the reasons for the proposed revocation as follows (Pet's Ex. P-10):

"The American Oil Motor Club is a division of Amoco Enterprises, Inc. The American Oil Company Credit Cards may be used to purchase products which are advertised in copies of 'Adventure Road Magazine.' The purpose of the American Oil Motor Club is to encourage trips by cars and provide goods and services (such as emergency road and towing service, a $200 arrest bond certificate, pathfinder trip routing service, emergency check cashing service (at any American Oil Motor Club Authorized Station), trip guarantees, %500 theft protection, worldwide travel agency service, testing service (at designated American Oil Motor Club Authorized Stations), traffic and travel accident insurance, payment for legal defense, 'Adventure Road Magazine,' and motor club emblems) to members and associate members.

The American Oil Company sells services and products such as gasoline and oil for cars. The publication 'Adventure Road Magazine' which is devoted primarily to stories about places to visit, camping and vacation travel hints is being used to promote the sales of the Company. Therefore, it appears that the publication is designed primarily for advertising purposes and does not qualify for second-class mail privileges."

Petitioner availed itself of its right to demonstrate compliance with the requirements for second-class mail privileges. On 11 April 1972 the publisher of Petitioner's magazine commented in a memorandum (File, item N, att'mt to ltr Pet'r to PM, Chicago, Ill, dtd 11 Apr. 1972) upon the proposed revocation of second-class mail privileges. He denied that ADVENTURE ROAD was designed primarily for advertising purposes since (i) none of its issues had carried over 35% advertising space; (ii) the magazine was published for the benefit of and as a service to the members of the Amoco Motor Club which was not in the business of selling merchandise; (iii) the content of ADVENTURE ROAD was principally "editorial", i . e ., providing educational, historical, or entertainment information to its readers, and all advertising space was strictly paid for; (iv) membership in the Amoco Motor Club was open to everyone without restriction, road service could be obtained by members at any service station and products advertised in ADVENTURE ROAD could be purchased for cash as well as by charging the price to the purchaser's credit card; and (v) the purpose of the magazine was to educate and inform the Motor Club members concerning nationwide travel attractions and points of interest which would be entertaining and instructive to the entire family, with any selling function relegated to the advertising pages.

He added that the Motor Club felt obligated to publish a magazine directed to the interest of its members in automobile travel on account of which they joint a motor club, that the members of the Amoco Motor Club knew that they were subscribing to the magazine when they joined the club, and that the magazine in his view fulfilled its purpose.

The ensuing consideration of the Manager's proposed revocation action extended over more than ten months. On 12 February 1973 the Manager advised petitioner that he still believed that:

"the publication does not qualify for second-class mail privileges because of the reasons stated in our communication of March 29, 1972, Form 3515. That is, 'Adventure Road Magazine' is designed primarily for advertising purposes. The publication is used essentially for the advancement of the main business of the American Oil Company and Amoco Motor Club (a division of the Amoco Enterprises, Inc.). Section 132.116, Postal Service Manual (section 4354(c) of Title 39, United States Code) provides that publications designed primarily for advertising purposes may not qualify for second-class mail privileges."

From this latter action Petitioner took a timely appeal which was docketed by the Docket Clerk of the Office of the Administrative Law Judges on 16 March 1973 (File, item C).

On March 1973 the Manager advised Petitioner that "[i]n addition to the previously stated reasons for proposing to revoke" the second-class mail privileges of ADVENTURE ROAD he proposed to revoke its permit because the magazine did "not have a legitimate list of subscribers as required by section 132.225, Postal Service Manual" (File, item G). The letter informed Petitioner of its right to appeal from the Manager's action (39 C.F.R. 954.8(b)). Petitioner did not take a separate appeal from this action of the Manager but promptly moved in this proceeding to "dismiss the Letter of Revocation of the United States Postal Service dated March 28, 1973" (File, item G) on the ground that this letter sought to inject ex post facto into the pending proceeding a new ground or revocation contrary to the rule set forth in 39 C.F.R. 9546.^2/ The motion was renewed on 9 November 1973 (File, item 0) but on 20 November 1973 Respondent moved to withdraw the ground for revocation based on the lack of a legitimate list of subscribers, asserted in the Manager's letter of revocation of 28 March 1973. It stated that it preferred to deal with the subscriber list question by general regulation but that it still contended that ADVENTURE ROAD was ineligible for second-class mail privileges because "designed primarily for advertising purposes" (File, item P).

Hearings were held on 20 November and 4 December 1973 in Washington, D. C., and Chicago, Illinois, respectively, at which testimonial and documentary evidence was presented by both parties regarding the "advertising" ground of revocation of second-class mail privileges for ADVENTURE ROAD. The subscribers' list issue was, however, totally disregarded and was not briefed by either party. This part of the proceeding has, therefore, become moot and the issues which it raised need not be considered further.

At the opening of the hearing on 20 November 1973 a further preliminary issue was raised by Petitioner based on the fact that the undersigned administrative law judge had disqualified himself in the Matter of the Petition by Exxon Corporation (P.S. Docket No. 2/85) on the ground of his stock ownership in Exxon. Petitioner argued that Exxon and Petitioner's grandparent Standard Oil Company (Indiana) (hereinafter sometimes referred to as "Standard") were both maintaining motor clubs, publishing magazines, and competing for club memberships in the same market, and that the undersigned as a stockholder of Exxon would be, or at least would appear to be, biased against Petitioner in favor of Exxon and inclined to enhance its business by ruling against Petitioner. No evidence of the claimed competition was proffered in support of the motion. The motion was denied on the record (T 5 et seq .). Although an opportunity was offered (T 8), no interlucotory appeal to the Judicial Officer was taken. The motion was, however, renewed at the time of final briefing (File, item R) and counsel filed an affidavit in support thereof, asserting again that the motor club publications of Standard, issued by Petitioner, and of Exxon "are in competition with each other for the same readership, advertisers, and subscribers" (Aff., p. 5, File, item R), but again no facts were shown beyond this bare assertion to establish the actuality, scope and economic impact of the alleged competition.

Respondent filed a memorandum in opposition to Petitioner's motion fo disqualification and in support of the conclusion that Petitioner has not shown that the undersigned administrative law judge has an interest in the outcome of the instant proceeding requiring him to disqualify himself (File, item S).

Notwithstanding the foregoing motion Petitioner as well as Respondent have filed proposed findings and briefs. Subject to decision on the disqualification motion the matter now stands ready for initial decision.

Findings of Fact

1. Standard is one of the largest integrated organizations in the petroleum industry and the sale of refined petroleum products, including gasoline and motor oil, constitutes about one-half of the company's sales. STANDARD AND POOR'S CORPORATE RECORDS, P-S (Aug.-Sept. 1973), p. 3719.

2. Amoco Oil Company (hereinafter sometimes referred to as "Oil") is a wholly-owned subsidiary of Standard, engaged in refining, transporting and marketing petroleum products, including amoco gasoline, in the United States. Ibid .; see also T 155-156.

3. Amoco Enterprises, Inc. (hereinafter sometimes referred to as "Enterprises") was incorporated on 4 May 1965. It is a wholly-owned subsidiary of Oil (File, item K, Answer to Interr. 14) (T 156). Its certificate of incorporation (Pet'r Ex. P-6) authorizes it, among other activities, to operate and maintain an automobile club, to supply customary services to its members and to promote the interest of automobile users in general and to conduct and carry on a travel service business ( id ., p. 11).

4. Enterprises at all times relevant to this proceeding operated and presently operates the AMOCO Motor Club (hereinafter sometimes referred to as the "Club") as a division, since 1965 has published and continues to publish ADVENTURE ROAD (T 103, 157), and is the sole stockholder of Amoco Insurance Plans, Inc. (T 151) which provides health type insurance to its subscribers (T 104).

5. a. According to a Club membership application folder (Resp. Es. R-6) the Club will provide for its members free road and towing service through a nationwide network of authorized dealers; limited protection against charges based on traffic offenses; traffic and travel accident insurance and payment for unexpected personal expenses due to accidents; worldwide travel agency and Pathfinder trip routing service and ADVENTURE ROAD magazine; and some inor benefits.

b. The membership application card, explaining the terms of the annual dues payment, includes the following sentence:

"Annual membership in the Amoco Motor Club includes $2.00 for my year's subscription to Adventure Road Magazine."

c. The membership application form attached to an interim membership card, sent by the Club to prospective members, also contains the same sentence, apportioning $2.00 of the annual dues to the subscription price of the magazine (Resp. Ex. R-6). Another flyer used by the Club also lists "Quarterly Illustrated Travel Magazine" as a membership benefit.

d. The Club's membership handbook on the use of membership benefits also states (Resp. Ex. R-6, Handbook, p. 15) that Club membership includes a subscription to ADVENTURE ROAD, described as a quarterly "travel magazine, dedicated to increasing travel pleasure and containing feature articles on suitable automobile travel topics."

6. Copies of ADVENTURE ROAD, published between the spring of 1971 and the winter of 1972-1973 prior to the Manager's final revocation action, describe it as the official publication of the Club. For the details of its content see Finding 12.

7. The magazine is printed at present in about 1,200,000 copies per quarter (T 88) nearly all of which are sent to the subscribing members of the Motor Club (see T 147).

8. Enterprises accepts subscriptions from persons who are not Club members (see Pet'r Ex. P-5; T 95-96, 133) but such subscriptions are not actively sought (T 135) and on the record it is apparent that they are but a tiny fraction of the total (see T 127). On the other hand, Club members cannot be nonsubscribers (T 152).

9. Most of the work of Enterprises is contracted out or serviced by its parent (T 132, 153). Specifically, as to the magazine, its publication is since 1968 (T 84) in the hands of R. R. Donnelley and Sons Co. of Chicago, Illinois, the contract of which had at the time of the hearing only recently been renewed (T 71, 132).

10. a. Under the arrangement with Donnelley, its staff in joint meetings with the staff of Enterprises, held at various levels of management, proposes both the general themes of future issues of ADVENTURE ROAD and their implementation in the form of articles, artwork and photographs (T 72-73, 90-92), subject to the ultimate approval of Enterprises (T 94), one of the vice-presidents of which acts as the magazine's publisher (T 103).

b. Donnelley's sales representative for ADVENTURE ROAD testified without contradiction that Donnelley was not directed by Enterprises to promote either the Motor Club or Amoco petroleum products and that it considered it its sole duty to produce an interesting, educational and informative magazine on travel in the United States, Canada and Mexico though there are no set geographic limits (T 73, 74, 107).

c. Enterprises has, of course, the recognized right to make suggestions although it is rarely exercised (T 79). On instance was the insertion of an article on the new office tower of Standard in Chicago in the spring 1973 issue of ADVENTURE ROAD (Pet'r Ex. P-4) which was labeled as "Advertisement" at the alleged suggestion of Postal Service personnel (see T 154). Whether it was properly so labeled can be questioned (see also T 152) but need not be decided. Another instance was the postponement of the publica- tion of an article in favor of an ad (T 83-84).

d. Advertising and art work relating thereto is provided by Enterprises (T 92). Amoco ads are provided by its advertising agency (T 160-1). They are paid for at the magazine's published rates (Resp. Ex. R-5; T 161; File, item L) like all other advertis- ing (T 135). Sometimes advertisements are exchanged between Enter- prises and advertisers in the magazine ( ibid .). Such advertising as the magazine contains does not affect its non-advertising content (T 108). There is no question that Donnelley under its contract with Petitioner accomplished the publication of a magazine which has reader appeal also to non-Club members (T 96, 99; see Pet'r Ex. P-7).^3/ In at least one instance an article from ADVENTURE ROAD was reproduced in the Chinese language in a Hong Kong periodical (Pet'r Ex. P-8).

11. In respect of the four issues published in 1973 a profit and loss statement (Pet'r Ex. P-9) shows subscription income in round figures of $2,200,000 and advertising income of about $30,000. After expenses, in which general and administrative overhead is apparently not included, this statement indicates a profit of well over $1,500,000 for the 1973 ADVENTURE ROAD operation. Even if these figures are not entirely accurate they tend to indicate that the magazine provides Enterprises with a very substantial net income. The magazine has been profitable from or almost from the start and its profitability has been increasing (T 158).

12. As to design and content, an examination of the five pre- revocation issues of ADVENTURE ROAD in evidence (Resp. Ex. R-2) shows the following:

a. ADVENTURE ROAD was then a 24-page magazine,^4/ 8 by 11 inches in size and bearing on its front cover a color picture illustrating the theme of the issue. Across the top appears the magazine's name, preceded by the Club symbol, and the issue date; across the bottom left of the cover the them of the issue is printed.

b. The left inside half of the cover page, is taken up by the publisher's editorial which deals with some aspect of the Club's membership benefits, the right half by the table of contents and administrative information.

c. The outside back cover in all instances contains an advertisement in which tires and batteries appear to figure prominently. In all but one instance among the issues forming part of the record the advertisement bears the Amoco device; in some cases reference is also made in words or pictures to the Amoco credit card. The exception in both respects was an ad for TRAVEL IDEAS in the spring 1971 issue.

d. Between the covers there are from eight to ten relatively short illustrated articles covering the theme of the issue. Thus the Winter 1972-1973 issue is devoted to "Adventure in Dining" and contains, for instance, descriptions of restaurants out of the ordinary, a road guide to dining and recipes for unusual dishes. The articles in this and other issues are objectively descriptive of their subject matter and designed to appeal to the reader's mind and to a wide variety of interests among a large readership. They provide numerous suggestions for automobile travel to readers who, by joining a motor club, have indicated an interest in this leisure time activity. Some of the articles, especially on automobile safety and maintenance, make passing references to the Club and to Amoco's associated dealers. Other articles occasionally direct the reader's attention to the Club's Pathfinder tour service. It would, however, be misrepresenting the content of ADVENTURE ROAD to treat these passing references to the Club's or Oil's services as dominating the text of the feature articles or the tone of the magazine.

e. i . About one-third or less of the magazine's pages (including covers) is given over to advertising. Some of the advertising comes from motel chains ( e . g . Best Western Motels) but most of it appears to be for apparel, tools and other kinds of merchandise which can be ordered from the American Oil Merchandise Center in St. Cloud, Minnesota. The advertisements or appurtenant inserts suggest payment by a charge to the reader's Amoco credit card account or by check or money order. ii . The merchandise advertisements in earliest issue of record (Spring 1971) do not refer to payment by check or money order and no advertisement refers to payment in currency. I do not, however, construe any advertisement to bar such payment (see also Pet'r memo, dtd 11 April 1972, File, item N).

13. Both in a pre-hearing deposition and in his testimony at the hearing held in this proceeding the Manager fully explained his analysis of the magazine and the grounds which as a result thereof led him to conclude that the magazine was designed primarily for advertising purposes. In his testimony he emphasized that the Club described the magazine as a service to members and sold subscriptions as part of Club membership, that the editorials encouraged members to use other Club services and were a means of communication between the Club and its members; that the magazine encouraged travel which tied in with the availability of trip maps which the Club was furnishing as a service to its members (T 38); that, although the percentage of advertising space was not in issue (T 41), the magazine contained advertising for the Club and Oil and articles on automobile maintenance mentioning Amoco dealers and the Club's emergency services (T 40). Notwithstanding this strong stand the Manager testified in his deposition that he had explained to Petitioner's representatives "on numerous occasions" that he thought that Petitioner could bring its publication "into compliance without making significant changes in it" (Dep'n filed 11 July 1973, p. 29).

14. On the basis of the foregoing detailed findings of fact and the record as a whole I find:

a. ADVENTURE ROAD was from the start and has continued up to the present to be published by Enterprises as the official publication of the Club which is a division of, and the main business conducted by, Enterprises. Since Enterprises is a wholly-owned subsidiary of Oil, the latter indirectly controls the publication of ADVENTURE ROAD.

b. ADVENTURE ROAD at least from shortly after the start of publication began to be a substantial money earner for Enterprises and was as late as the end of 1973 a source of considerable profit to it and Oil.

c. ADVENTURE ROAD derives nearly all its subscribers from the membership of the Club. The portion of their membership fees which constitutes the subscription price of ADVENTURE ROAD provides in the aggregate nearly all of the income which Enterprises derives from the publication of the magazine. Advertising revenue is obviously not actively sought and is negligible in amount.

d. Most, though not all, advertising is derived from Amoco activities and offers for sale general merchandise sold by the Amoco Oil Merchandise Center or by Amoco dealers. However, such advertising is limited in amount and its insertion in the magazine an incidental result of the latter's publication. Clearly, the sale of the advertised services or merchandise is not the main business or calling of the Club, Enterprises or Oil nor is ADVENTURE ROAD published primarily for such advertising.

e. The magazine is published for a dual purpose: to inform, educate and entertain the reader on automobile travel, including some general topics of automotive service, and to serve as a means of communication between the Club and its reader-members, especially to advise them, and to promote the use, of the services offered by the Club to its members.

f. The record supports the conclusion that ADVENTURE ROAD is considered by readers as an attractive and interesting travel magazine worth perusing and renders persuasive the testimony proffered on Petitioner's behalf that it desires to and does publish ADVENTURE ROAD as such a magazine and that it is intended to serve this end. My own examination of issues of the magazine which are part of the record convinces me that this evaluation of the magazine is correct. Petitioner's record as the publisher of ADVENTURE ROAD provides proof both of its intent to publish and its success in actually publishing the magazine as a worthwhile publication in the field of automobile travel which enhances the prestige or public image of the Club and the Amoco name.

g. As compared to this purpose and its accomplishment, the use of ADVENTURE ROAD as a channel of communication about the Club between the latter and its members appears secondary. From other materials furnished to the members by the Club the former would appear to be well informed about the benefits provided for them. The magazine speaks with any frequency of only two of them: emergency road service and trip maps. It does not appear likely that Petitioner would maintain a publication costing several hundred thousand dollars annually for such limited communication. Moreover, as a channel of communication, the magazine reaches for the very greatest part those who are already customers of Enterprises and, in particular, Oil since nearly all those reached are already Club members and four-fifths of them Amoco credit card holders (T 148).

h. It is likely that the advertising in the magazine and the interest in automobile travel which it helps to generate or keep alive indirectly assist in the sale of two of Oil's major products, gasoline and auto oil. There is no evidence, however, that the magazine is even a substantial advertising vehicle for these products. On the contrary, the various brands of oil and gasoline, including Amoco, are observably and generally known to be advertised directly and aggressively, of which fact I take judicial notice. They are not "advertised" in the covert and indirect fashion in which ADVENTURE ROAD may be said incidentally to promote their use.

On the Motion for Disqualification

The Administrative Procedure Act provides that a presiding employee may at any time disqualify himself from participation in a proceeding governed by the Act (5 U.S.C. 556(b)). If a timely and sufficient affidavit of disqualification is filed, the matter shall be determined as part of the agency record and decision in the case ( ibid .). Section 556 sets no standard for decision on disqualifica- tion requests but the Judicial Code (28 U.S.C. 455) directs any justice or judge of the United States to disqualify himself in any case in which he has a substantial interest. The recently revised and renumbered Postal Service regulations (39 Fed. Reg., pp. 1989 et seq . (1974)) provide that any employee of the Postal Service shall avoid any action which might result in, or give the appearance of,

(i) using Postal Service office for private gain or (ii) giving preferred treatment to any person (39 C.F.R. 447.21(a)(1) and (2)). Nor shall a Postal Service employee have a direct or indirect financial interest which substantially conflicts or appears to conflict with his duties or responsibilities (39 C.F.R. 447.22(a)). It is against such standards that Petitioner's motion for disqualifi- cation of the administrative law judge must be evaluated, at least by analogous application.

As previously set forth herein, Petitioner's motion is predicated upon the alleged competition for readership between VISTA, the publication of the Humble (Exxon) Motor Club and Petitioner's ADVENTURE ROAD and alleges that the administrative law judge's stock interest in Exxon (consisting of less than 100 shares of common stock out of over 30,000,000) may bias him against Petitioner's claim to second-class mail privileges for ADVENTURE ROAD.

No evidence is proffered to show that the alleged competition between the two magazines exists, even if it is accepted as a fact on the basis of an attachment to Petitioner's motion that the magazines resemble each other in the make-up of their cover pages. In consequence there is no basis in fact for finding that the two magazines compete for readers or that Exxon has any interest in seeing Petitioner deprived of its second-class mail privileges for ADVENTURE ROAD. Under the circumstances I cannot conclude that the stock interest which I have in Exxon results in, or creates an appearance of, lack of impartiality or disinterestedness as to the initial decision hereinafter rendered. It is noted that Respondent has not urged that I disqualify myself on the ground of this stock interest in Exxon.

In arriving at the conclusion that Petitioner's motion for disqualification of the administrative law judge should not be granted I am also mindful of the fact that a judge should decide the cases within his jurisdiction coming before him and should not frivolously avoid doing so on tenuous allegations of conflict of interest. See Pierson v. Ray , 386 U.S. 547, 554 (1967); Campbell v. Supreme Court of Florida , 428 F.2d 449 (5th Cir., 1970). or has Petitioner cited authority leading to a contrary conclusion. In re Honolulu Consolidated Oil Co ., 243 Fed. 348 (9th Cir., 1917), on which Petitioner based its oral argument at the hearing, rests firmly on the fact that the District Judge whom the Court of Appeals instructed to disqualify himself had a direct interest in the outcome of the case before him. For he would likely incur monetary liability if he decided the case before him against the defendant. No such conflict situation exists here.

Accordingly, the motion for disqualification is denied.

Conclusions of Law

1. The Manager's revocation of second-class mail privileges for ADVENTURE ROAD was based on 39 U.S.C. 4354(c) which bars from admission as second class mail a "periodical publication designed primarily for advertising purposes." The same prohibition is now found in section 132.226 of the Postal Service Manual (PSM) and 39 C.F.R. 132.2(b)(6). The current regulations set forth as examples of such publications those "owned or controlled by * * * business concerns and conducted as an auxiliary to and essentially for the advancement of the main business * * * of those who own or control them" (PSM 132.225b; 39 C.F.R. 132.2(b)(6)(ii)).

2. There is no contention that the magazine has an excessive advertising content (PSM 132.226c; 39 C.F.R. 132.2(b)(6)(iii) or that, but for the charge of advertising design, it fails to meet any of the requirements of the current Postal Service regulations for admission to second-class mail privileges.

3. In its rebuttal brief (pp. 5-8) Petitioner argues, however, in substance that this "advertising" issue need not be decided because the initial grant of second-class mail privileges and the unquestioned fact that the magazine has not materially changed since its inception estop the Postal Service from revoking its grant seven years later.

4. The same argument was rejected over the dissent of Mr. Justice Harlan in Houghton, Mifflin & Co. v. Payne , 194 U.S. 88 (1904). The Supreme Court held there that the grant of second-class mail privileges created no vested right in the publisher, that principles of law intended to promote administrative consistency and stability could not prevent inquiry into the correctness of the original administrative ruling and that the language of the statute should prevail over incorrect departmental interpretations (194 U.S. at 98-100; for the dissent see id ., at pp. 100 et seq .). The Post Office Department and the Postal Service have in their administrative decisions consistently followed the lead of Houghton v. Payne , supra , and have refused to apply the rule of stare decises or equitable estoppel in any form in reviewing proposed revocation of second-class mail privileges. For such decisions see Shepard's Citations, Inc. , P.S. Docket No. 1/88(1974), slip op., pp. 28-30.

5. The two decisions cited by Petitioner in support of its claim of estoppel are not only inapplicable to second-class mail cases under Houghton v. Payne , supra , but involve situations of a very different character from those encountered here. Gestuvo v. District Director 337 F. Supp. 1093 (C.D. Cal. 1971), involves the attempted revision of the residence status of an alien--a matter very different in its impact from proper enforcement of postal regulations and the amount of postage to be paid. In United States v. Georgia-Pacific Co. , 421 F.2d 92 (9th Cir., 1970), the rule of equitable estoppel was invoked against the Government in land litigation where it had misled defendant in earlier contractual or pseudo-contractual dealings to believe that defendant was the owner of disputed land which it had thereupon improved at its own expense. Here Petitioner in no way changed its position to its detriment in reliance on the second-class mail privileges granted it in January 1966. At most, if the Manager is upheld it will lose the benefit of second class mail rates de futuro . Hence, these decisions do not support Petitioner's claim to the bar of equitable estoppel against the Manager's revocation action.

6. The substantive issues of this proceeding must, therefore, be decided: whether ADVENTURE ROAD is a publication designed primarily for advertising and, in particular, whether it is conducted as an auxiliary to and essentially for the advancement of the main business (to wit: the Club) of its owner Enterprises or of Oil which through Enterprises controls the magazine. Respondent's comment that it need only prove that the magazine is published as auxiliary to and essentially for the advancement of the Club (Br. p. 3, n. 1) is misleading since the Club is the main business of Enterprises to which ADVENTURE ROAD is alleged to be auxiliary and which it is said to advance.

7. The interpretation of the former statutory and present regulatory provisions on which the outcome of this proceeding hinges has been recently reviewed in Vertical Marketing, Inc. , P.S. Docket No. 2/6 (1974). A magazine is published primarily for advertising purposes (i) where notwithstanding editorial content it serves in the first place or for its principal purposes as a tool for advertising merchandise ( Conover mast Publications, Inc. , H.E. Docket No. 5/173 (1958); Pool Publications, Inc. , P.O.D. Docket No. 1/143 (1959); National Association of Trailer Owners, Inc. , P.O.D. Docket No. 1/144 (2d Jud. Off. Dec. 1960); see also Channel Northwest, Inc. , H.E. Docket No. 5/178 (1958); or (ii) where it chiefly seeks to obtain customers for the publisher's goods or services ( The Citizen Soldier , 1 Ops. AAG for P.O.D. 400 (1877), reprinted H.E. Docket No. 5/173 (1958), App. A; Credit Bureau of Albuquerque , P.S. Docket No. 1/218 (1973); Pleasure, Inc. , P.S. Docket No. 1/48(1973)).

8. But even the official publication of an organization such as the Amoco Motor Club, the management of which constitutes the main business of its organizer and owner Amoco Enterprises, Inc., may as a matter of fact sometimes be shown to be published for its own sake and as a moneymaking undertaking, not subordinated to or in essence serving the publisher's main business. See The Diners' Club, Inc. , P.O.D. Docket No. 1/225 (1960), aff'd by Jud. Off. (1961), where the Director of the Postal Service Division of the P.O.D. Bureau of Operations denied the re-entry application for the Diners' Club magazine on the ground that it was primarily designed to advertise the credit card aspect of the business of the Diners' Club.

9. On the record before him, the administrative law judge who heard the Diners' Club case found that the Diners' Club magazine was not essential to the Club's credit card business; that only nominal new credit card business was obtained through the magazine since most of its subscribers were already Diners' Club members; that the Diners' Club intended to publish a diversified magazine attractive as an independent advertising medium; and that the magazine was conducted as a financially self-supporting venture and not to promote the Diners' Club credit card business. Hence he, as well as the Judicial Officer, held that the magazine did not fall within the purview of the provisions of PSM 132.226(b).

10. There exist both similarities and differences in the facts of the two cases.

a. (1) In Diners ' Club the credit card holding Club members were free to subscribe to the magazine which the Club conducted as an attractive advertising medium for advertisers of goods and services for the economically well-off, accessible to all advertisers regardless of whether they were participants in the Club's credit arrangements and capable of competing with other periodicals appealing to the same economic class.

(2) In the instant case the Club is not organized to promote a credit card business on behalf of Amoco but to render to its members services of assistance in automobile travel. The magazine to which the members subscribe as part of their Club membership is operated to inform, educate and entertain the members on the subject of automobile travel. It does not significantly serve as an advertising medium either to affiliated companies or outsiders and does not compete with other magazines.

b. On the other hand, in both cases the magazine does not serve as a means of attracting new Club members and to advance Club business since it is received for the most part by existing members. In both cases, the magazine is also not essential to the main business of its owner, the Diners' Club credit card operation on the one hand, the Amoco Motor Club on the other. In both cases, too, the magazine has become a significant income-producing factor.

c. Finally, in both cases the magazine has independent content appeal to its readers beyond any "house organ" function which it does perform.

11. Petitioner's publication of ADVENTURE ROAD is, in respect of its content, essentially a service undertaking. In part it satisfies the interest of its readers in the popular leisure time activity of automobile travel, in part it creates a favorable public image and prestige for the Amoco Motor Club and hence for Amoco Oil Company. It is not an effort to sell either Club memberships or Amoco gasoline, oil or services. This type of undertaking does not constitute advertising, i . e . an effort to sell goods or services, but an exercise in public relations, i . e . the creation and maintenance of a good public reception for the company (whether identified as Enterprises and its Club or as Oil or both).

12. In a somewhat different context the issue has been raised under a federal statute prohibiting that advertising costs be passed on to the Government under defense contracts (P.L. 87-144 (1962)). Notwithstanding strong statutory language the Armed Services Board of Contract Appeals held in construing that statute that the cost of the defense contractor's Public Communications Department for publication of the "Industrial Booster" was not an advertising cost within the legislative prohibition. The "Industrial Booster" was designed to let the public and interested Government agencies know about the company's support of Government activities and to serve as ready reference to its research and was, therefore, treated as a public relations effort the expense for which was ratably recoverable as a contract cost. Aerojet General Corp ., ASBCA No. 13372, 73-2 BCA #10164, mot. f. recon, den. , id ., #10307; same : The Boeing Company , ASBCA No. 14730, 73-2 BCA #10325. The Aerojet and Boeing cases are by no means on all fours with the instant case but the basic distinction made there between public relations and advertising is illuminating and applicable here.

13. The underlying findings of fact, the applicable administrative precedents, and the legal considerations heretofore discussed all lead to the final conclusion that ADVENTURE ROAD is not as a matter of law a publication primarily designed for advertising purposes or used by those who own or control it as an auxiliary to and essentially for the advancement of their main business. ADVENTURE ROAD, on the contrary, is a profit-making activity of Enterprises, having its own value as such and as a service and public relations effort for the pleasure of its readers and the indirect enhancement of the Amoco image. Hence, the magazine is not banned from second-class mail privileges by PSM 132.226. Accordingly, the revocation action of the Manager is reversed and ADVENTURE ROAD deemed entitled to second-class mail privileges.

1/ Major items in the file of the Office of Administrative Law Judges have been given letters, individually or as a group, to facilitate reference.

2/ The section reads as follows:

" Revocation or suspension .

When the authorized official determines that a publication is no longer entitled to second-class mailing privileges, he shall issue a ruling of suspension or revocation to the publisher at the last known address of the office of publication stating the reasons and attaching a copy of these rules."

3/ Petitioner's Exhibit P-7 was offered to show the interest with which the magazine was received by readers some of whom are and others among whom are not members of the Club. Some of the writers are subscribers or tendering their subscriptions, others appear to have read only a particular issue which came to their attention. Neither the person who selected the letters in the exhibit nor any of the letter writers were called as witnesses at the hearing nor was any testimony introduced as to the volume or significance of this type of correspondence in Petitioner's business. It was the subject of an offer of proof (T 119 et seq .) and on further consideration is now admitted in evidence solely to show that occasional letters were received by the magazine from some readers favorably commenting on its contents.

4/ The format of the magazine, except for an expansion from 24 to 32 pages, has remained unchanged from its inception to the present (T 130).