In the Matter of the Complaint Against

WILLMONT PRODUCTS
8831 Sunset Blvd., Suite 300 at
Los Angeles, California 90069

P.S. Docket No. 6/46;

07/19/79

Cohen, James A.

APPEARANCE FOR COMPLAINANT:
Daniel S.Greenberg, Esq.
Consumer Protection Office
Law Department U.S. Postal Service
Washington, D. C. 20260

APPEARANCE FOR RESPONDENT:
Stanley Fleishman, Esq.
Fleishman, Brown, Weston & Rohde
433 North Camden Drive Suite 900
Beverly Hills, CA 90210

POSTAL SERVICE DECISION

Respondent has appealed from the Initial Decision of Chief Administrative Law Judge William A. Duvall holding that Respondent is engaged in conducting a scheme for obtaining money through the mail by means of materially false representations within the meaning of 39 U.S.C. Section 3005.

BACKGROUND

Respondent is engaged in a mail order business soliciting the payment of money through the mail for its products "STUD" and "Wilmont Herbal Blend" (hereinafter referred to as the product). The product consists of capsules containing in equal parts the three herbs damiana leaves, kola nut and sarsaparilla along with excipients. Complainant alleges that Respondent's advertisements represent that the product is an effective aphrodisiac which will enable most males to achieve and maintain larger, harder and prolonged erections and heighten and increase the capacity of males to perform and enjoy sexual tntercourse. According to the advertisements the product will have to be used over a period of 30-90 days in order to achieve these results.

A hearing was held at which evidence was presented on the allegations of the complaint. The evidence presented by both parties is accurately summarized at some length in the Initial Decision. The Complainant based its case primarily on the testimony of Jack L. Segal, M.D. Dr. Segal testified that, in his opinion which is in accordance with the consensus of informed medical opinion, the ingredients of Respondent's product will not have the effect represented in Respondent's advertisements. Respondent presented four witnesses. The testimony of these witnesses establishes that Respondent receives reorders for its product and that after using the product certain of the witnesses felt it had a positive effect on their sexual abilities. Respondent's witnesses do not possess any special knowledge concerning the medical application or effect of the herbs contained in Respondent's product.

The Chief Administrative Law Judge concluded that Respondent's advertisements represent that its product is an effective aphrodisiac which will enable a male to achieve and maintain a larger, harder and prolonged erection and that it will heighten and increase the capacity of a male to perform and enjoy sexual intercourse. On the basis of the testimony of Dr. Segal, which he found to be competent, credible, expert medical opinion, the Chief Administrative Law Judge further concluded that the representations made in Respondent's advertisements are false as to matters of material fact. Accordingly, he recommended issuance of an order under 39 U.S.C. Section 3005.

RESPONDENT'S EXCEPTIONS TO THE
INITIAL DECISION

In support of its appeal from the Initial Decision Respondent has submitted a lengthy brief which, for the most part, makes the same arguments as were made in its brief submitted to the Chief Administrative Law Judge. The Initial Decision addresses each of Respondent's arguments and discusses at length the cases cited by Respondent. The Initial Decision is correct as a matter of fact and law and no useful purpose will be served by repeating in this opinion the substance of the Initial Decision. However, a few additional observations concerning certain of Respondent's arguments are necessary. Respondent's arguments are considered in the order presented.

I

APPLYING THE CONSTITUTIONAL STANDARD OF PROOF REQUIRED IN THE CASE AT BAR, THE COMPLAINANT HAS FAILED TO PROVE BY CLEAR AND CONVINCING EVIDENCE THAT THE REPRESENTATIONS MADE BY RESPONDENT ARE MATERIALLY FALSE AS A MATTER OF FACT.

A. Commercial speech is now protected by the First Amendment.

B. The right of privacy of Respondent's customers.

C. The Complainant has failed to prove by clear and convincing evidence that the representations made by Respondent are materially false as a matter of fact.

The protection of commercial speech by the First Amendment and the cases cited by Respondent were fully discussed in the Initial Decision at pages 14-17. Since the Initial Decision was issued the Court of Appeals for the Second Circuit has had occasion to consider the constitutionality of 39 U.S.C. Section 3005. Holding the statute to be constitutional the Court stated:

"The constitutionality of 39 U.S.C. § 3005, the procedures here employed, and the remedies here instituted cannot be doubted. See Lynch v. Blount, 330 F.Supp. 689 (S.D.N.Y. 1971) (three judge court), aff'd, 404 U.S. 1007 (1972). See also United States v. Outpost Development Corp., 369 F.Supp. 399 (.postal. Cal.) (three judge court), aff'd, 414 U.S. 1105 (1973). The recent Supreme Court decision of Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976), does not require a contrary result. See 425 U.S. at 771: 'Untruthful speech, commercial or otherwise, has never been protected for its own sake.' See also Friedman v. Rogers, 47 U.S.L.W. 4151, 4153-54 (U.S. Feb. 21, 1979). That the corporations' Due Process and First Amendment rights were not violated is made clear by Reilly v. Pinkus, 338 U.S. 269." (Original Cosmetics Products, Inc. and Love Song Cosmetics Corp. v. Strachan, Docket No. 78-6165 (2d Cir. April 30, 1979)).

As in the cited case, and in accordance with the discussion and conclusions in the Initial Decision, it is clear Respondent's due process and first amendment rights were not violated in this case.

The right of privacy of Respondent's customers was addressed in the Initial Decision at pages 17-28. The discussion on page 22 of the Initial Decision emphasizes that the Postal Service is not passing on the propriety of using Respondent's product. Rather the mail stop order is being issued because Respondent has materially misrepresented the results which can be achieved by using its product. Under such circumstances there is no invasion of the privacy of Respondent's customers.

Respondent's final argument under this category of contentions relates to the evidence relied on as establishing the efficacy of its product. In this regard Respondent argues that in the Initial Decision at page 9 it was erroneously held that Complainant's medical expert testified that Respondent's product would not accomplish the results promised (Respondent's brief, p. 9). Respondent correctly points out that this testimony was qualified as being medical opinion, no absolute fact. Respondent argues that over the centuries medical opinion often has been shown to be in error. It challenges the correctness of the holding based on such opinion when faced with the direct testimony of three individuals who testified they have used the product with success.

The individuals who testified with regard to what they believed were benefits realized from the use of the product have no training or knowledge concerning the contents of the product or the medical effect thereof. The doctor possesses special knowledge, training, and experience which exceeds that possessed by most medical doctors. The Respondent had full opportunity to present evidence by trained scientific personnel and controlled test results establishing the effectiveness of its product. It elected not to provide any such evidence. Weighing the evidence presented by both parties, I am persuaded that the Chief Administrative Law Judge correctly relied on the testimony of Complainant's expert in establishing that Respondent's product will not have the effect on users which is represented in Respondent's advertising.

Respondent argues that the allegations of the complaint must be proved by clear and convincing evidence in a proceeding under 39 U.S.C. Section 3005. Even if the clear and convincing standard were to be applied the evidence received at the hearing would support a finding in Complainant's favor. However, in administrative proceedings the preponderance of evidence rule generally applies and has been properly applied in proceedings under 39 U.S.C. Section 3005. See S. Gard Jones on Evidence Section 30:4 (1972); accord, Collins Secuotities Corp. v. SEC, 562 F.2d 820, 823 (D.C. Cir. 1977); Wigmore, Evidence Section 2498 (3d ed. 1940); Hanover House, P.S. Docket Nos. 2/143 and 2/149 (I.D. Feb. 14, 1975, P.S.D. Dec. 5, 1975).

Respondent has at various times argued that the placebo effect which may be realized after using its product negates a finding of misrepresentation. This argument has been previously rejected in both court decisions and in final decisions of the Postal Service and is rejected here. See Stauffer Laboratories v. F.T.C., 343 F.2d 75 (9th Cir. 1965); Original Cosmetics Products, Inc. v. Strachan, 459 F.Supp. 496 (S.D.N.Y. 1978, aff'd, Docket No. 78-6165, April 30, 1979); GeGe Cosmetics, Inc., P.S. Docket No. 6/49 (P.S.D. 1978); Manual Garcia Imports, P.S. Docket No. 5/127 (P.S.D. 1977). Accordingly, the placebo effect on some users does not support the efficacy of the product or the truthfulness of Respondent's representations.

Respondent has shown no error in the conclusions of the Initial Decision relating to Respondent's constitutional rights or the evidence relating to the efficacy of its product. Therefore, its arguments on appeal provide no basis for relief.

II

TITLE 39 USC SECTION 3005, AS APPLIED TO AN ADVERTISEMENT FOR A PRODUCT IS UNCONSTITUTIONAL FOR SUBSTANTIALLY THE SAME REASONS THAT TITLE 39 U.S.C. SECTION 3005 WAS FOUND UNCONSTITUTIONAL, BY THE UNITED STATES SUPREME COURT IN BLOUNT V. RIZZI, 400 U.S. 410 (1971).

Respondent argues that the Initial Decision is in error on this point since primary reliance was improperly placed on the decision in Lynch v. Blount, 330 F.Supp. 689 (S.D.N.Y. 1971) aff'd, 404 U.S. 1007 (1972). It is Respondent's position that the Lynch decision specifically relied on Valentine v. Chrestensen, 316 U.S. 52 (1942), which was subsequently overruled. Although the holding of Valentine v. Chrestensen has been limited, the Supreme Court's most recent decision, Virginia State Board of Pharmacy v. Virginia Citizens Customers Council, 425 U.S. 748 (1976), which Respondent attempts to distort, specifically recognizes the validity of the regulation of false commercial speech. Thus, Lynch v. Blount continues to reflect existing law. See also Original Cosmetics Products v. Strachan, supra. Accordingly, Respondent has failed to show any error in the holding in the Initial Decision.

III

TITLE 39 U.S.C. SECTION 3005, AS CONSTRUED AND APPLIED HEREIN TO ELIMINATE SCIENTER, IS UNCONSTITUTIONAL, VIOLATING THE FREE SPEECH AND PRESS PROVISIONS OF THE FIRST AMENDMENT.

Respondent argues that in light of the Supreme Court cases "affording commercial advertising First Amendment protection it is unconstitutional to apply the statute to the facts of this case, where Respondent conceivably had a good faith belief that the herbasblend works as advertised..."

The first amendment argument has previously been discussed and found to provide no basis for relief. The constitutional argument has no greater validity because Respondent believes its product will produce the results advertised. The amendment to the statute which eliminates intent as a prerequisite to finding misrepresentation is no unconstitutional. See Lynch v. Blount, supra.

IV

THE PROVISIONS OF TITLE 39 U.S.C. SECTION 3005, ON THEIR FACE AND AS CONSTRUED AND APPLIED ARE VAGUE, AMBIGUOUS, UNCERTAIN AND OVERBROAD, IN VIOLATION OF THE FREE SPEECH AND PRESS, DUE PROCESS AND EQUAL PROTECTION PROVISIONS OF THE FIRST AND FIFTH AMENDMENTS TO THE UNITED STATES CONSTITUTION.

Respondent again only indicates its disagreements with the conclusions reached in the Initial Decision. It does not show specific error or cite any new authorities in support of its position that the Initial Decision is incorrect. It ignores the fact that the statute, as pointed out by Judge Duvall, has been subject to attack on numerous occasions and in all instances has been held to be valid.

In contrast to many statutory provisions, the pertinent language of Section 3005 rather than being vague, ambiguous, uncertain and overbroad is succinct and straightforward. It authorizes the Postal Service to take action against:

"...any person that is engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations..."

Respondent has conceded that it sought to obtain money through the mail. Accordingly, the only question to be resolved is whether it sought to obtain that money by means of false representations. This element of proof is what the Court characterized in Lynch v. Blount, supra, as being "easily recognized once the issues of credibility have been resolved." As to whether Respondent misrepresented its product, Judge Duvall properly resolved the issue in favor of Complainant's medical testimony.

V

THE PROVISIONS OF TITLE 39 U.S.C. SECTION 3005, ON THEIR FACE AND AS CONSTRUED AND APPLIED VIOLATE THE FIRST AMENDMENT TO THE UNITED STATES CONSTITUTION AND THE DUE PROCESS PROVISIONS OF THE FIFTH AMENDMENT, BECAUSE THEY PROVIDE FOR SANCTIONS WHICH GO FURTHER THAN NECESSARY.

Respondent argues that Complainant is attempting to deprive Respondent of its right to "the use of the mails in toto" and that such a remedy bears no reasonable relation to the allegedly improper practice. An order issued under 39 U.S.C. Section 3005 does not deprive Respondent of its use of the mail for all purposes. The order is intended to prevent Respondent from obtaining orders for the product which has been found to be misrepresented. Mail which can be identified from the face of the wrapper as unrelated to the misrepresented product is to be delivered to Respondent. The remedy, therefore, very directly and reasonably relates to the improper practice. Respondent argues that many of its customers are satisfied with the product and that many of the orders filled by it through the mail are reorders which will not be able to be filled. As noted in the Initial Decision, there is no evidence that those placing reorders were satisfied with the product. It is just as possible that they had not received any benefit from the product but, in view of the language of the advertisements advising that the product must be used for an extended period of time before results can be expected, they may have been willing to give the product "another chance." Moreover, it has been found that the product will not produce the results represented, and if"mail are satisfied it is only because of the placebo effect which does vitiate the finding of misrepresentation.

Accordingly, there is no merit to Respondent's argument.

CONCLUSION

After consideration of the entire record it is concluded that the representations made by Respondent in connection with its product are false and that Respondent is engaged in a scheme for obtaining money through the mail by means of materially false representations.

Accordingly, Respondent's appeal is denied and a remedial order under 39 U.S.C. Section 3005 is being issued contemporaneously with this decision. The return portion of the order is stayed for a period of 30 days in which to allow Respondent to enter into a consent agreement or seek judicial review.