In the Matter of the Complaint Against:

UNITED AMERICAN MEDICAL COLLEGE,
P.O. Box 3260 and P.O. Box 3806 and
4106 Saint Claude Avenue,
New Orleans, Louisiana 70117 and at
401 Metairie Road,
Metairie, Louisiana 70005

P.S. Docket No. 4/172

05/05/76

Duvall, William A., Chief Administrative Law Judge

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

Clyde P. Martin, Jr., Esq.
and Raymond A. Milly, Esq.
117 Focis Street,
Metairie, Louisiana, for Respondent

Before: William A. Duvall, Chief Administrative Law Judge

INITIAL DECISION ^1/

This proceeding was initiated by the filing on February 24, 1976, of a Complaint by the Consumer Protection Office of the Law Department of the United States Postal Service, the Complainant, in which it is charged that the United American Medical College at New Orleans, Louisiana, the Respondent, is engaged in conducting a scheme or device for obtaining money or property through the mails by false representations, contrary to the provisions of Section 3005 of Title 39 of the United States Code.

At the hearing the caption of the Complaint was amended to include the address of the Respondent also at Metairie, Louisiana.

The Respondent's Answer was docketed on March 15, 1976, and it includes a general denial of the charges set forth in the Complaint, but it admits the use of the advertisement which is attached to the Complaint as Exhibit A. A copy of that advertisement will be attached to this decision as Appendix A.

In addition to the general denial, the Respondent in its Answer avers that it is chartered under the corporation laws of the State of Louisiana. It avers that it is a correspondence school. It denies saying that its course will qualify one for licensing as a practicing physician. It avers that it does not know what other courses are offered by other medical schools in the United States. It avers that it is administered by its president, who holds an academic M.D. degree. The Respondent in its Answer denies that it said it is accredited by the American Medical Association or the Association of American Medical Schools; but it alleges that its director is a member of the AMA and at one time was a member of the AAMC. It denies making any false representations and requests the dismissal of the Complaint.

The business of this Respondent is the issuance of M.D. degrees, and in the advertisement which is set forth in Appendix A, the Complainant alleges that the Respondent makes the following representations, which, Complainant further alleges, are materially false as a matter of fact. These representations are:

"A. that it [the Respondent] is authorized and accredited by the State of Louisiana for the purpose of granting the degree of doctor of medicine;

"B. that it is an established medical school with adequate teaching facilities (e.g. classrooms, laboratories, etc.) for the purpose of providing instruction in the medical sciences;

"C. that the course of studies and instruction provided will prepare the graduate to qualify for licensing as a medical doctor in the United States;

"D. that the program of studies and instruction offered is commensurate with the programs offered by accredited medical schools in the United States;

"E. that it is administered by and classes are taught by persons holding the M.D. degree and licensed as medical doctors in the United States;

"F. that it is approved by the American Medical Association and the Association of Medical Colleges."

It is these representations which the Respondent denies making and denies that they are false, if they are made.

The advertisement upon which this Complaint is based is short, and it need not be read into the record. In order to determine whether representations are made within the meaning of the statute under which this proceeding has been brought, certain guidelines have been established through various cases that have been decided in the courts.

The leading case in the matter of interpretation of advertising representations is that of Donaldson v. Read Magazine, reported at 333 U.S. 178, where, at pages 188 and 189, the court has the following to say:

"Advertisements as a whole may be completely misleading although every sentence separately considered is literally true. This may be because things are omitted that should be said, or because advertisements are composed or purposefully printed in such way as to mislead. Wiser v. Lawler, 189 U.S. 260, 264; Farley v. Simmons, 99 F.2d 343, 346; see also cases collected in 6 Eng. Rul. Ca. 129-131. That exceptionally acute and sophisticated readers might have been able by penetrating analysis to have deciphered the true nature of the contest's terms is not sufficient to bar findings of fraud by a fact-finding tribunal. Questions of fraud may be determined in the light of the effect advertisements would most probably produce on ordinary minds. Durland v. U.S., 161 U.S. 306-313, 314; Wiser v. Lawler, supra at 264; Oesting v. U.S., 234 F. 304, 307. People have a right to assume that fraudulent advertising traps will not be laid to ensnare them. 'Laws are made to protect the trusting as well as the suspicious.' Federal Trade Commission v. Standard Education Society, 302 U.S. 112, 116."

In the case of Vibra-Brush Corporation v. Schaffer, decided by the United States District Court for the Southern District of New York, 152 F. Supp. 461, 465, the Court said:

"It is not each separate word or a clause here and there of an advertisement which determines its force, but the totality of its contents and the impression of the entire advertisement upon the general populace. * * * The ultimate impression upon the reader results not only from the total of what is stated but also from what is reasonably implied."

In the case of G. J. Howard Company v. Cassidy, 162 F. Supp. 568 at 572, the United States District Court for the Eastern District of New York said:

"It is the net impression which the advertisement is likely to make upon purchasers to whom it is directed which is important, and even if an advertisement is so worded as not to make an express misrepresentation, if it is artfully designed to mislead those responding to it the mail fraud statutes are applicable."

The Court cites Cates v. Haderlein, a Seventh Circuit case decided in 1951 and reported at 189 F.2d 369, 373; a case that was reversed on other grounds, 342 U.S. 804.

Let us now apply the criteria established in these cases to the advertisement on which this case is based. To begin with, the first two words of the advertisement are the words that appear in the largest type. The words are "MEDICAL SCHOOL." Those two words themselves have a certain connotation and carry certain weight with them. If a person has a desire to go to a medical school, he thinks he is going to go there for a purpose. He wants to be qualified to practice medicine, or at least he would like others to believe that he is qualified to practice medicine.

Next, there is the statement that this school is an English-speaking school, or for English-speaking persons. Then it said that it is accredited as an incorporated college. This must be an incorporated college of medicine, because they are the first two words, the eye-catching words, in the advertisement. A person would not enroll in this school to learn to be a journalist or anything else; he goes to this school hopefully to become qualified to practice medicine.

The next words are "Unique admissions." I do not think that these words constitute a misrepresentation.

The next words are "M.D. Degree awarded." That is pretty straightforward language. The M.D. Degree is awarded to those persons who are accepted in and complete the course of instruction offered by the Respondent in this case.

Finally, the reader is told that for the sum of one dollar he will receive the brochure and the application.

The person who remits the dollar does get the brochure from this school -- and one of the witnesses was a judge here in the State of Louisiana, who said that his son saw this advertisement in a popular magazine, and the son's eye was attracted by this ad. He called it to the attention of his father, who wrote to this school. In return, the judge received a brochure, and he was told that because of his qualifications he was accepted and that upon the payment of $1,000 he would be awarded the M.D. degree. Later, it was determined that this gentleman was not accepted by the institution and no such degree was awarded.

Other people, similarly, must have received the impression that this is a school which one may attend by correspondence or otherwise, and as a result be entitled not only to the M.D. degree, but also to be eligible to take the examination for admission to medical practice.

Received in evidence as Respondent's Exhibit 7 is a letter over the signature of Dr. L. M. Weinberg, in which he makes a specific disclaimer as to the solicitations of the United American Medical College by the American Medical Association. This letter was written in response to an inquiry from one of the remitters. Obviously, this person must have been under the impression that this was a fully accredited medical school or he would not have found it necessary to inquire of the director, and the director would not have found it necessary specifically to deny AMA accreditation.

Taking into consideration all of these factors and applying the criteria that were announced in the courts in the cases, excerpts from which have been quoted, it is found that the Respondent, in its advertising literature, does make the representations -- or does make statements which, to the readers, create the impression that they represent those things which are expressed in the language used in the heretofore quoted charges from the Complaint.

It never was seriously contested by the Respondent that the use of the mails is involved in the conduct of this enterprise; and if such a denial were made, it would be refuted by the testimony of Judge Malik, who testified as to his correspondence both to and from the Respondent. In addition to that evidence, there is the solicitation of remittances in the advertisement, which is Exhibit A to the Complaint and Appendix A to this decision.

There remains, therefore, to be determined the question of whether the representations found to be made by the Respondent are true or false.

The Respondent takes the position, in connection with charge A of the Complaint, that all that it has said about itself in terms of accreditation is that it represents itself as being incorporated under the laws of the State of Louisiana.

It is true that there is a certificate of incorporation that is issued to a corporation designated United American Medical College, which is a one-man corporation, of which the individual identified as Dr. Lawrence Mitchell Weinberg is the first director, incorporator, registered agent, executive board and secretary. There are many purposes that are stated in the certificate of incorporation. These are laudatory purposes and might well be those which could be applicable to an institution devoted to the teaching of medicine; but it is a matter of common knowledge that, in many instances, the statements that are contained in a certificate of incorporation are in no way indicative of the actual activities carried on by the organization thereby incorporated.

Next, no person of normal mind would read the language, "accredited as an incorporated college," which closely follows the words "Medical School," and believe that the accreditation consists solely of the issuance by the Secretary of State of the State of Louisiana of a certificate of incorporation. In any event, it has been held many times that the purpose of the postal misrepresentation statute is not to punish the offender, but to protect the public. As we have seen, this advertisement is so worded and certain shadings are given to language, certain omissions are made, that even more sophisticated persons could well believe, and have in fact believed, that this is an organization which is accredited for the purposes for which it appears to be intended, namely, a medical school.

When one talks about a medical school, as certainly this advertisement does, again, certain images are conjured up in the mind of the reader and he thinks in terms of laboratories, dissections, libraries, and various other facilities. We have the testimony of the president, director and incorporator, registered agent, executive board and secretary of this institution, to the effect that the address at 4106 St. Claude Avenue, New Orleans, which was given as the location of the school, was in truth and in fact the location of quarters occupied by him which consisted of a living room, bedroom, bath and kitchen. Such quarters provide little accommodation to one who wishes to engage in the study of medicine.

In addition, the curriculum of this institution consists, so far as the testimony of its guiding light is concerned, of three volumes. One is the Physician's Desk Reference, which it is ludicrous to suggest as a text for one's study to prepare oneself to practice medicine. Another is a text in homeopathic medicine, and another is a text in physical medicine. They were the only three textbooks which were mentioned, both in an interview with the representatives of the District Attorney in New Orleans, and also mentioned by the Director of this institution in his testimony. He did say that there might be other subjects which were brought into consideration, but he never mentioned or identified any additional ones.

If one is to attend a medical school, he knows that there is a diversity of subjects which he has to study. Certainly, the wide scope of information that a medical practitioner must have cannot be gleaned from the three textbooks which are used at this institution. It is absurd to represent as accredited an institution which confines itself to the study of these three volumes. Certainly, by confining the texts to these three volumes, the program is not commensurate with the programs offered by accredited medical schools in the United States.

It is a matter of common knowledge that such matters as surgery, anatomy and neurology and many other subjects in a medical school are, and must be, taught by men who hold legitimate M.D. degrees from accredited medical schools. It is, therefore, natural and normal for a reader of an advertisement of a medical school to believe he is going to get the benefit of instruction by men or women of that caliber. That such is not the case with respect to the United American Medical School -- or College -- is evident from the testimony in this proceeding.

The subject of accreditation is an interesting one in this proceeding. By some means which no one at this hearing has any rational explanation for, there came to the director of the UAMC a membership assessment for the AMA. In response to this assessment he remitted the sum of sixty dollars. He, himself, indicated in his testimony that he does not regard himself as being qualified for membership in the AMA. He does not have an explanation as to why he received this membership assessment. There was also a witness who was called, who serves with the AMA, who had no explanation for the occurrence of this event. Therefore, I must conclude that the director and president of the UAMC technically is, or was, a member of the AMA, but that this anomaly is a matter of the sheerest accident.

There is in the record a letter from the legal counsel of the American Association of Medical Colleges, addressed to the president of the United American Medical College, advising the latter that his school is not recognized by the AAMC. This letter produced a revision of the brochure to eliminate indication of approval of the school by the AAMC. However, that unfortunate turn of events was not really a problem for this particular college president. The solution was very simple: he simply formed his own accrediting association, of which he also is president, and he conferred accreditation upon himself and upon his school. Nothing more needs to be said about that arrangement.

It has been found in this proceeding that the Respondent does use the mails in the conduct of this enterprise and that the Respondent does make the representations which are set forth in the Complaint.

The testimony in this proceeding, a large part of it out of the mouth of the president of the Respondent, the United American Medical College, clearly establishes that these representations which have been found to be made are false, and they are false as to material matters of fact.

It is, therefore, concluded as a matter of law that the Respondent, United American Medical College, is 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.

The proposed findings of fact and conclusions of law submitted by the parties have been fully considered and they are adopted to the extent herein indicated. Otherwise, such proposed findings of fact and conclusions of law are rejected for the reasons stated, or because they are contrary to or unsupported by the evidence, or because they are immaterial.

Respondent's counsel cited, in support of his position with respect to accreditation, the case of Consolidated Loan Company v. Louis Harman, a case decided by the District Court of Appeals, Second District, Division Two of California. On reading this case, it is found to be inapposite to the situation with which we have dealt in this proceeding.

The cases which were cited and relied upon in arriving at this decision were cases that were decided at the time the predecessor to the present postal "misrepresentation" statute was known as the postal "fraud" statute. At that time, it was necessary for the Complainant, in order to prevail in a case of this type, to prove that the element of intent existed, that the respondent entertained an intent to deceive the persons to whose attention its advertisement might come.

However, Public Law 90-590, approved on October 17, 1968, amended 39 U.S. Code at what was then 4005 to obviate the need to prove the element of fraud in postal proceedings under that section. That section later became 39 U.S. Code 3005, and now all that is necessary for the Complainant to establish is that the representations made are false. That has clearly been done by the evidence in this proceeding. The amendment of the statute in 1968 did not in any way affect the applicability of the earlier cases insofar as their establishment of criteria for weighing the effect of advertisements is concerned.

It follows from all of the above that an order of the type provided in 39 U.S. Code 3005 should issue against this Respondent.

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1/ Transcribed from oral decision as rendered at close of hearing held April 8, 1976. Minor language changes have been made, but the substance of the decision is unchanged.