In the Matter of the Complaint Against

HAYOUN COSMETIQUE
212 E. 68th Street at
New York, NY 10021

P.S. Docket No. 6/130;

09/21/79

Cohen, James A.

APPEARANCE FOR COMPLAINANT:
H. Richard Hefner. Esq.
Consumer Protection Office
Law Department U. S. Postal Service
Washington, DC 20260

APPEARANCE FOR RESPONDENT:
Norman Roy Grutman, Esq.
Grutman, Morrison & Schafrann
110 East 59th Street New York, NY 10022

POSTAL SERVICE DECISION

Respondent has appealed from the Initial Decision of Administrative Law Judge Quentin E. Grant which recommends the issuance of a mail stop order. The recommendation of the Initial Decision is based on the conclusion that Respondent advertises that its product, the "Hayoun Cosmetique Kit," will cure acne and clear away scars caused by acne, and that such representations are materially false in fact in violation of 39 U.S.C. § 3005.

Respondent takes specific exception to Findings of Fact 2, 20 and 21, and Conclusions of Law 2, 3, 4, 6, 7, 8 and 9 of the Initial Decision. Its exceptions and brief on appeal raises two issues. The first issue relates to the representations alleged in the complaint, and the second relates to the evidence presented at a hearing held before Judge Grant.

I. REPRESENTATIONS OF ADVERTISEMENTS

Respondent contends that the complaint distorts its advertisements and this distortion was accepted by the Administrative Law Judge without any analysis. In the absence of such analysis Respondent argues that the Initial Decision is defective on its face and should be reversed as a matter of law.

Respondent argues that, properly construed, its advertisements represent its treatment will result in any one of three possible degrees of healing. In this regard Respondent relies on the language of the advertisement which reads:

The treatment is unconditionally guaranteed to immediately arrest, reduce, or ultimately banish even the most virulent and tenacious acne condition - including the scars and pockmarks normally left behind. (Emphasis added.)

Respondent directs attention specifically to the disjunctive "or" and the unconditional guarantee which it says the complaint disregards as does the Administrative Law Judge in reaching his conclusions in the Initial Decision. By the use of the word "or", it maintains it represents only that its product will either arrest, reduce or banish acne including scars and pockmarks. The unconditional guarantee, it asserts, constitutes a representation that the product for which the guarantee is made should not be expected to work in all cases.

The Initial Decision at Finding of Fact 2, cites the quoted language and also directs attention to the headlines of the advertisements, "BANISH ACNE FOREVER", as well as the text which includes the words": "This remedy ... has unerring history of success." Applying the test found in Conclusion of Law 1, the Administrative Law Judge properly reached the conclusion in Conclusion of Law 2 that the average person reading Respondent's advertisements would interpret them substantially as characterized in paragraph 3 of the complaint. The following additional language in Respondent's advertisements also supports the conclusion reached in the Initial Decision:

"One of the worlds foremost authorities on beauty and skin care, Edward Hayoun, has perfected a unique, nonsurgical answer to the physically and psychologically destructive nature of common acne. This remedy, featured editorially in VIVA magazine, has an unerring history of success with all of the many men, women and children HAYOUN has personally treated over more than two and one-half decades".

"Meg Currie who refused to accept the prevailing medical consensus that acne could not be cured and agreed to 'try one more time ... .'"

This additional language, the pictures used in the advertisements, and the wording of the advertisements quoted in the Initial Decision, taken together, create the overall impression in the mind of an ordinary reader that Respondent's product will cure acne lesions and scars despite the use of the disjunctive "or" in the passage relied on by Respondent. The overall sense of the advertisement is the existence of a cure that works in all cases. This conclusion is based on the quoted language and more specifically on the words "banish" acne forever," "perfected a unique, nonsurgical answer," "remedy," "Unerring history of success with all men, women and children," "unconditionally guaranteed" "ultimately banish," and is not diminished by the inclusion of the word "or".

The unconditional guarantee encourages the impression of a cure, rather than detracting from it. Respondent has cited cases which hold that a guarantee constitutes a representation that the product offered will not be universally successful. Those cases involved the construction of a money back guarantee of satisfaction. Unlike the cited cases the present case involves an unconditional guarantee of results. Thus the cited cases are not for application under the facts of this case.

Respondent's final argument relating to the representations in its advertisements pertains to what it describes as an absence of supporting analysis on the part of the Administrative Law Judge. Finding of Fact 2 and Conclusions of Law 1 and 2 constitute a suitably complete statement on the part of the Administrative Law Judge for concluding that Respondent's advertisements make the representations alleged in paragraph 3 of the complaint. Thus there is no violation of the requirements of the Administrative Procedure Act (5 USC § 557(c)) or the Rules of Practice in Proceedings Relative to False Representation and Lottery Orders, 39 CFR § 952. It is true the Administrative Law Judge did not in the Initial Decision, focus on the word "or" or the unconditional guarantee, but neither did Respondent argue at the time that he should. Although given two extensions of the period for filing proposed findings of fact and conclusions of law, Respondent did not file such papers within the extended period. The failure to file proposed findings of fact and conclusions of law would not justify a total absence of analysis, but it does explain the lack of discussion of the arguments now made on appeal.

For the foregoing reasons it is concluded that Respondent's advertisements make the representations alleged in the Complaint.

II. EVIDENCE

Respondent first argues that under section 7(d) of the Administrative Procedure Act (5 USC § 556(d), Complainant, as the proponent of the mail stop order sought in this case, has the burden of proving the allegations of the complaint. Respondent further argues that Complainant, not only failed to meet its burden, but that the burden was shifted to Respondent by the presiding Administrative Law Judge. In connection with this argument Respondent specifically takes exception to Findings of Fact 20 and 21 and Conclusions of Law 4, 6 and 7.

Complainant does not disagree that it has the burden of proving the allegations of the complaint. However, it argues it has sustained this burden principally through the testimony of its expert witness Dr. Robert A. Greenberg.

As conceded by Complainant, in order for a remedial Order to issue under 39 USC § 3005, it must prove the charges of the complaint. Although Findings of Fact 20 and 21 could be construed as having shifted this burden to Respondent, the real issue on appeal is whether a preponderance of the evidence establishes that Respondent's kit will not cure acne and clear away scars caused by acne. Based on a review of the record it is concluded that a preponderance of the evidence does establish that the Hayoun kit will neither cure acne nor clear away scars caused by acne. This conclusion is based on an evaluation of all of the evidence in the record including the testimony of the lay witnesses as well as the expert witnesses.

The testimony of Complainant's expert, Dr. Greenberg, as summarized in the Initial Decision and as otherwise appears in the record, establishes a prima facie case which was not persuasively rebutted by Respondent. The specific portions of Dr. Greenberg's testimony which most directly lead to this conclusion are partially quoted and summarized as follows:

1. "Dr. Greenberg testified that one of the treatments for the pitting and scarring associated with acne is peeling of the skin through the use of chemicals. However, he stated that with techniques presently available (including dermabrasion, surgical excision) a 70 percent improvement is often the best that can be realized and frequently a 50 percent improvement is considered good. He testified that the skin cannot be restored to the state in which it existed before the pits and scars developed (Tr. 60, 61)." (FOF 12)

2. "In Dr. Greenberg's opinion respondent's product would not be a cure for acne and would not clear away scars caused by acne (Tr. 61, 62). His opinion is in conformity with the consensus of informed medical opinion in the field of dermatology (Tr. 63, 64.)" (FOF 13)

3. "Well, success would mean to me in slowing down or arresting the process of which there would be very few new lesions developing. That is the prime goal of my therapy and there could be some natural resolution of the scarring with time, but success to me would be to stop the formation of new comedones, papules and cysts.

I have been successful. I haven't been able to remove the scars, but I think I have been successful many times, not at all times, but many times.

. . .

I hesitate to use the word cure at all really. I would say that the condition would be arrested.

Acne runs a natural course. It depends on many factors that we can't control, that I can't control, and when we talk -- when I talk about cure, it's something that the person would achieve, there being a time at which this person by himself will stop developing new acne lesions. I can't induce that." (Tr. 72, 73 and 74)

4. "The condition doesn't go along on a level course. Most often it does have ups and downs, peaks and valleys, so this person may have been clear with no active lesions for a period of time and then run into the problem again.

That is why I hesitate to use the word cure, because sometimes they get better for a while and then they get worse." (Tr. 76 and 77)

5. The testimony of Dr. Greenberg that the individuals pictured in RX-1 through RX-29 had achieved significant improvement but had not been cured. (Tr. 82-92)

6. "Age plays a role. Acne improves with age generally. The peaks and valleys are more often affected by the amount of sunlight the person is getting, environmental factors such as stress. In women acne may have small cycles associated with the menstrual cycle. Pregnancy can make a dramatic influence on acne for better or for worse.

. . .

I never feel that the treatments that I perform or the antibiotic treatment and topical treatment induces a remission. They tend to control the process to try and minimize it while it is present, but the remission is not something that -- it is something that occurs naturally." (Tr. 99)

7. "And also people who stop using the medication and will have thought that, 'Well, I'm cured.' They stop using the medication and their physiology is such that it is not time that they are going to go into a natural remission and they no longer use controlling measures. They can come back with active lesions again.

Q. Doctor, assuming that the improvement which you have seen in these young ladies between their pictures and the personal appearances before you this morning, assuming during the last substantial period of time, say of a month, say they were only undergoing a Hayoun Cosmetique treatment, the one that is in issue today, would you say that it banishes acne forever?

A. No.

Q. Doctor, would you say that the use of this Hayoun method, assuming that the results you say today have occurred only while that treatment was being used, that it would ultimately banish even the most virulent and tenacious acne?

A. No.

Q. Would you say that it would also banish the scars and pock marks normally left behind?

A. Well, I haven't seen very much improvement in the scars and pock marks and pits."

(Tr. 104 and 105)

The four witnesses who appeared at the hearing and whose pictures in a "before" condition were offered into evidence were observed by the presiding Administrative Law Judge at the hearing. Based on his view of the witnesses he found that all of the young women had "extensive pitting and scarring remaining at the time of the hearing." (FOF 19)

Respondent's expert testified that significant improvements could be achieved using the Hayoun Kit. For example he stated:

1. As of June 1978, the individual shown in RX 20-23 "was approximately 95-98 percent healed of acne. She still had some evidence of shallow scars and only very mild redness of the skin." (Tr. 2-12, 13)

2. As of June 1978 the individual shown in RX 24-29 "had considerable healing of her skin. I would estimate to be well over 90-95 percent from the time I presume these photographs were taken." (Tr. 2-13)

3. "In my opinion at least in the individuals that I have witnessed, I would say, again in my opinion, that with the diligent use of these products, plus the prescribed diet and other suggestions in this booklet, that a considerable degree of healing of the individuals acne would be noted." (Tr. 2-30)

4. "I am considering it because I personally feel that despite the fact that this is not a recognized method of treatment, it certainly may have merit, I would certainly like to continue observing its actions over at least the next year or two.

I would like to interview more of Mr. Hayoun's patients and clients, and certainly if the results continue to be favorable I would strongly consider submitting an article to any recognized scientific publication in dermatology." (Tr. 2-71, 72)

Although Respondent's expert went on to testify that "heal" and "cure" are synonymous, and that one patient of his who used the Hayoun Kit was completely healed (Tr. 2-19, 20, 31) the most reasonable conclusion that can be reached based on the entire record is that the terms "heal" and "cure" are not synonymous and that a considerable degree of healing, not a cure, will result from the use of Respondent's product. This conclusion is consistent with Conclusion of Law 7 of the Initial Decision and that conclusion, as well as Conclusions of Law 3, 4, 6, 8, and 9 are proper and supported by the record and case law.

In reaching the conclusion that Respondent's kit will not cure acne or clear away acne scars, reliance has not been placed on Findings of Fact 20 and 21. The record does not include sufficient evidence to make the statement found in Finding of Fact 20, and Finding of Fact 21, although literally true, should point out the deficiency of the evidence of both parties. Neither Finding is essential to the holding in the Initial Decision or the holding in this final agency decision.

CONCLUSION

Having considered Respondent's exceptions on appeal in light of the entire record it is concluded that the Initial Decision with the exception of Findings of Fact 20 and 21 is correct as a matter of fact and law. Accordingly, Respondent's exceptions are denied and a remedial order under 39 U.S.C. § 3005 is being issued contemporaneously with this decision.