In the Matter of the Complaint Against:

R & N DISTRIBUTORS,
P.O. Box 35445 at Los Angeles, California 90035

P.S. Docket No. 4/166

07/20/76

Duvall, William A., Chief Administrative Law Judge

Daniel S. Greenberg, Esq.
Law Department
United States Postal Service
Washington, D.C., for Complainant

Joseph Taback, Esq.
8500 Wilshire Boulevard,
Beverly Hills, California, for Respondent

Before: William A. Duvall, Chief Administrative Law Judge

INITIAL DECISION ^1/

This case involves charges by the United States Postal Service, the Complainant, that R & N Distributors of Los Angeles, California, the Respondent, is engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations contrary to the provisions of Section 3005 of Title 39, United States Code.

In the Complaint it is charged that by certain advertising material, a copy of which is attached to the Complaint, the Respondent makes certain representations with respect to the product which it is selling, namely, a device to be used to enlarge the penis, which representations are false and materially false as a matter of fact.

The representations which are set forth in the Complaint are attached to this decision as Appendix A and a copy of the advertisement used by the Respondent is attached to this decision as Appendix B.

There are several issues in this case, as in other cases of this type, and the issues, broadly speaking, are: whether the Respondent advertises its product and solicits remittances of money through the mails for its product; whether the representations which the Complainant charges Respondent with making are, in fact, made by Respondent; and, lastly, whether those representations are true or false as matters of fact.

At the opening of the hearing it was stipulated between the parties that the Respondent does, in fact, use the advertising material which is attached hereto as Appendix B. There is a further part of Appendix B which does not appear thereon, inasmuch as it consists of the order blank which was removed from the original in order to place the order for the product.

Also stipulated at the outset of the hearing, and supported by Exhibits 1, 2, 3, 4, 5 and 6, was the fact that the Respondent, in the conduct of its business, utilizes the mails in obtaining remittances.

Without dwelling at undue length upon the question of whether the Respondent makes the representations which are set forth in the Complaint, it will be stated that a comparison of Appendices A and B to this decision establish that, in the mind of the average person and the average reader to whom these advertisements are addressed, the Respondent does make the representations which are set forth in the Complaint. Donaldson v. Read Magazine, 333 U.S. 178.

These representations in some instances embody the language verbatim that appears in the advertisement used by the Respondent. The persons to whom these advertisements are addressed and to whom they will exert their greatest appeal are not persons of great scientific and medical learning. They are people of the general walks of life who have been described as, "the trusting"; "that vast multitude"; "the ignorant, the unthinking and the credulous". Those descriptions are found in the case of Gottlieb v. Schaffer, 141 F. Supp. 7.

That case was decided at a time when the statute under which that case was brought was referred to as the "postal fraud statute" and before an order could be issued as provided in that statute, it was necessary to find that the Respondent made false representations knowing them to be false, or that he made those representations with such reckless disregard as to whether the representations were true or false as to constitute the equivalent of a knowledge of their falsity. That fact does not alter the situation in this case, in which the effect on the reader of the advertisements is the crucial point.

The Complainant called as an expert medical witness Dr. Shlomo Raz, a medical doctor who, by virtue of his education, training, experience and present occupation as Assistant Professor of Urology at the University of California at Los Angeles, is eminently qualified to testify with respect to the medical phase of this proceeding.

Dr. Raz testified that he had examined the product sold by this Respondent and that the booklet accompanying the product describes a certain ring and a certain vacuum device to be used by a person who wishes to increase the size of his penis. Dr. Raz testified that the size of the male genital organ is determined by one of two factors, one of which is heredity, and the other is the presence or absence of organic conditions or disease. In the latter case, the correction of the organic problem will restore, or bring the penis to its normal size.

Dr. Raz testified that the use of a device as recommended by this Respondent would cause, in many instances, the male user to have an erection. However, after the erection has subsided, the penis will resume the size and configuration that it had prior to the erection. There will be, according to the medical expert, no difference in the size of the flaccid penis brought about by the use of the device, nor will there be any difference in the size of the erect penis brought about by the use of this device.

There are some persons to whom this advertisement will appeal who are impotent for one reason or another, and there are some persons among those impotent people on whom the use of the device will produce an erection. On the other hand, there are some impotent people by whom the device will be used, but on whom such use of the device will produce no effect.

Impotency is divided into two categories, and those two categories are organic impotence, which means that there is a physical reason why an erection cannot be achieved, and then there is functional impotence, most of which arises from psychological causes.

Persons who are impotent, that is to say, impotent lay persons to whom this advertisement will appeal, will not know of their own knowledge whether their impotence arises from organic causes or from functional causes. In any event, all of those persons on whom the use of the device will have no effect are greatly misled.

The Respondent raised a point or two on the legal aspects of this proceeding which require some comment. Respondent suggested that it was improper or illegal to require that the Respondent name its prospective witnesses in order to have the hearing transferred to Los Angeles County, California. The rule of practice which is involved in this situation appears at 39 C.F.R. 952.15 in which it is provided that not later than the date fixed for the filing of the answer a party may file a request that a hearing be held to receive evidence in his behalf at a place other than that designated for hearing in the notice. Then there is specified certain information which must be included in the request.

This rule is not a one-way street. It is applicable to either party to a proceeding, and it has happened that the Complainant has requested that the proceeding be conducted in some place other than Washington, D.C. At these times the Complainant has been required to meet the same requirements that the Respondent in this proceeding had to meet. There is no discrimination with respect to anybody in connection with this rule.

Respondent also attacks this proceeding as being unconstitutional as in violation of the rights guaranteed citizens under the First and the Fifth Amendments to the Constitution. This question has been raised many times, and it has been disposed of always in favor of the constitutionality of the Act under which these proceedings are brought and many times, though not always, as to the application of the statute in particular cases.

One such as is that of Lynch v. Blount which was tried in the United States District Court for the Southern District of New York and is reported at 330 F. Supp. 689. In deciding that the procedures under examination in that case were proper and that the statute is constitutional, the Court held as follows on page 694:

"Plaintiff seems to assume that what he calls 'First Amendment safeguards' are always the same, whether the area involved is politics, religion, obscenity, commercial fraud or what not else. We think the safeguards defined in Blount v. Rizzi, 400 U.S. 410, 91 S.Ct. 423, 27 L.Ed.2d 498 (1971), for obscenity cases are wholly inappropriate, unnecessary and inapplicable to the field of commercial fraud". (Lynch v. Blount was affirmed by the Supreme Court of the United States at 404 U.S. 1007 (1972).)

As recently as May 24, 1976, the Supreme Court of the United States has expressed itself on the viability of those statutes which require that sellers of merchandise represent their products fairly and accurately. That case is Virginia State Board of Pharmacy, et al., Appellants v. Virginia Citizens Consumer Council, Inc., et al., case number 74-895, 44 Law Week 4686, May 25, 1976. Speaking for the majority in that case, Mr. Justice Blackmun said: "Untruthful speech, commercial or otherwise, has never been protected for its own sake. Gertz v. Robert Welch, Inc., 418 U.S. 323, 340 (1974); Konigsberg v. State Bar, 366 U.S. 36, 49 and n. 10 (1961). Obviously, much commercial speech is not provably false, or even wholly false, but only deceptive or misleading. We foresee no obstacle to a State's dealing effectively with this problem." In a footnote, Mr. Justice Blackmun cites, among other cases, the case of United States v. 95 Barrels of Vinegar, 265 U.S. 438 at page 443 (1924), where it is said: "It is not difficult to choose statements, designs and devices which will not deceive."

This proceeding is a proper area of activity of the Postal Service in carrying out its function under 39 U.S. Code 3005 which, as heretofore pointed out, ,was enacted for the protection of the public.

It has been found that the Respondent advertises its product to the general public and that it does, in the course of conducting its business, solicit remittances of money through the mails. It has, further, been found that Respondent does, in connection with its business, make the representations which are set forth in the Complaint. Finally, it has been found that Respondent's representations are materially false as to matters of fact. It follows that the Respondent is, in fact, engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representations within the meaning of Section 3005 of Title 39, United States Code.

Based upon all the foregoing considerations, an order of the type provided for in 39 U.S. Code 3005 should be issued against this Respondent.

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1/ Transcribed from oral decision as rendered at close of hearing held June 14, 1976. Minor language changes have been made, but the substance of the decision is unchanged.