In the Matter of the Complaint Against

PROFIT and CHURCHES OF THE NEW OCTAVE
P. O. Box 13238,
P. O. Box 13328 and
P. O. Box 2606 at
Phoenix, Arizona 85002

P.S. Docket No. 6/5;

10/14/77

Lussier, Edward F.

APPEARANCES FOR COMPLAINANT:
DanielS. Greenberg, Esq.
Law Department
United States Postal Service
Washington, DC

APPEARANCES FOR RESPONDENT:
Michael I. Christson
Phoenix, Arizona

POSTAL SERVICE DECISION

The Initial Decision issued by Chief Administrative Law Judge William A. Duvall, in this proceeding, found Respondent engaged in a scheme or device for obtaining money or property through the United States mails by means of false representations within the meaning of 39 U.S. Code § 3005. Accordingly, a mail stop order was recommended against the names appearing in the above caption. Respondent has filed an appeal from the Initial Decision. Its three-page supporting brief sets forth what the undersigned will take to be its exceptions to the Initial Decision as provided in the applicable Rules of Practice governing such appeals found in 39 C.F.R. § 952.25.

There are two schemes to which the Complaint in these proceedings is directed. The first, involving a work-at-home opportunity stuffing envelopes is made the basis for two separate charges of misrepresentation in the Complaint (Charges (a) and (b)). The second, involving an investment opportunity is made the basis for the third misrepresentation charge in the Complaint (Charge (d)). Judge Duvall found that the Respondent falsely represented that in return for required remittances complete information would be furnished to enable the remitter to obtain employment stuffing envelopes (Charge (a)) in that no person who responds to the advertisement is given complete information which will enable him to obtain employment stuffing envelopes but receives instead information as to how to induce others to respond to similar advertisements. He further found that the aforementioned advertisement will be employed stuffing envelopes in return for compensation based on the quantity stuffed or time spent (Charge (b)) in that no person responding to Respondent's advertisements will be employed stuffing envelopes but must instead spend additional amounts to place the advertisements. Judge Duvall also found that Respondent falsely represented that persons investing substantial sums of money with Respondent are certain to receive a three hundred per cent return on such money (Charge (d)) in that Respondent was never in a position to fulfill that promise. Judge Duvall's decision succinctly analyzes and sets forth the details of these two schemes.

I have reviewed the entire transcript and all of the exhibits and find the findings and conclusions reached by Judge Duvall amply supported by the record. Respondent's exception to the findings on the work-at-home scheme lays great stress upon the fact the newspaper advertisements did not appear in the "Help Wanted" or "Job Opportunities" columns but rather in the "Business Opportunities" columns. While this appears true as to Complainant's Exhibit CX-1 which is an advertisement placed by Respondent, it is not clear that it is also treu of Complainant's Exhibit CX-2, which reflects two advertisements placed by Respondent's "agents." However, it makes no significant difference. What is important is the substance of the advertisement and its effect upon ordinary minds under the test of Donaldson v. Read Magazine, 333 U.S. 178, 189. Respondent's contention that some customers make money in its programs does not alter the Donaldson v. Read standard. Applying that test Judge Duvall found, and properly so, that the representations charged in the Complaint relevant to the envelope-stuffing plan were in fact conveyed by Respondent's advertisements. See R. P.Sales, P.S. Docket No. 6/1 (1977).

With respect to the investment representation, Respondent's contention that it ceased selling after an order by the Arizona Superior Court in June of this year is insufficient assurance, if true, that previous advertising will not continue to draw mail. The statutory protection is a mail-stop order affecting mail related to the schemes using the false representations. It does not apply to other mail or to mail requesting refunds. It certainly is not, as Respondent suggests, in violation of its First Amendment rights for these afford no basis for the use of false representations in commercial enterprises. Virginia State Board of Pharmacy v. Virginia Citizens Council, 425 U.S. 748; Lynch v. Blount, 330 F.Supp. 689, aff'd, 404 U.S. 1007; HollywoodHouse International, Inc. v. Klassen, 508 F.2d 1276; Fields v.Hannegan, 162 F.2d 17, cert. denied, 332 U.S. 773.

Whether or not Respondent has ceased direct advertising it may not continue to receive mail which is in effect the result of its false representations to and/or through its customer "agents." See Sandco, Sandco Publications, Universal ScienceChurch, Inc., P.S. Docket No. 5/180.

The Initial Decision is hereby affirmed and accordingly an appropriate mail-stop order under the provisions of 39 U.S. Code § 3005 is being issued contemporaneously with this Decision.