In the Matter of the Complaint Against

NANCY PRYOR 161 Maplewood Ave.
P. O. Box 177
Maplewood, NJ 07040

MILLBURN PRODUCTS
161 Maplewood Ave.
P. O. Box 219 or
P. O. Box 900
Maplewood, NJ 07040 and
605 Bloomfield Ave.
Montclair, NJ 07042

THE MILLBURN BOOK CORP.
P. O. Box 1013 343
Millburn Ave.
Millburn, NJ 07041

P.S. Docket No. 7/81;

Cohen, James A.

APPEARANCE FOR COMPLAINANT:
H. Richard Hefner, Esq.
Consumer Protection Division
Law Department
U. S. Postal Service
475 L'Enfant Plaza West
SW Washington, D.C. 20260

APPEARANCE FOR RESPONDENTS:
Michael J. Herbert, Esq.
Mark D. Schorr, Esq.
Stern, Herbert & Weinroth
186 West State Street
P. O. Box 1298
Trenton, NJ 08607

Charles Lorber, Esq.
Appet, Appet & Lorber
588 U. S. Highway 46
Fairfield, NJ 07006

POSTAL SERVICE DECISION ON PETITION

FOR BREACH OF CONSENT AGREEMENT

On February 22, 1980, the Consumer Protection Division, Law Department, U. S. Postal Service (Complainant), filed a "Petition For Order Based Upon Breach of Consent Agreement," alleging that the captioned Respondents, in connection with one of their diet products, have resumed making certain of the representations they agreed to discontinue in a consent agreement dated September 15, 1979. The Petition alleges that in substance and effect Respondents continue to make these representations in a direct mail circular in the form of a six page "Dear Friend" letter which they distribute through the mail and by which they seek remittances of money through the mail (Exhibits A-1 thru A-6 to the Petition). The permanent relief which Complainant seeks in its Petition is the issuance of a false representation order as authorized by 39 U.S.C., § 3005(a).

Initially Complainant also alleged that Respondents perpetuate the substance and effect of many of the representations which they agreed to discontinue in an advertisement which appeared in the February 6, 1980, editions of the Journal, Lorain, Ohio (Exhibit B to the Petition). At a hearing it was agreed by the parties that this latter advertisement makes essentially the same representations as those contained in the "Dear Friend" letter and that this proceeding need consider only the "Dear Friend" letter to determine whether there has been a breach of the consent agreement (Tr. 4-7, 35-6).

In its Petition Complainant sought the issuance of a temporary detention order, pending resolution of the issue of whether there has been breach of the consent agreement. Such an order was issued on March 6, 1980. On April 15, 1980, the temporary detention order was rescinded and normal mail delivery allowed based on Respondents' agreement to handle such mail in accordance with the terms of the agreement read into the record at the hearing held on April 14-15, 1980 (Tr. 16-30, 193-201).

Respondents filed their initial opposition to the Petition on March 10, 1980, in which they argued that the claims made in the Petition are not borne out by a comparison of the original and current advertisements, the claims in the Petition being, if anything, new allegations of representations in a different promotion. On March 17, 1980, Respondents filed a supplementary response in which they argued that they were entitled to a hearing on the issue of whether the consent agreement has been violated and that the claims of the Postal Service constitute new allegations which should be considered in the context of a separate Section 3005 proceeding. Both responses devoted considerable attention to the effectiveness of Respondents' diet product.

During a telephone conference call with the parties held on March 25, 1980, it was ruled that a hearing would be held at which evidence woule be taken on the issue of whether Respondents have resumed making representations which they agreed to discontinue. It was also ruled that evidence would not be received on the efficacy of Respondents' product inasmuch as that issue was not raised by the Petition. Respondents took exception to this ruling and continued their exception at the hearing (Tr. 11, 62).

On April 14 and 15, 1980, the hearing was held on the issue raised by the Petition. Both parties appeared at the hearing and offered evidence in support of their respective positions. Based on the evidence received at the hearing the following findings of fact are made.

FINDINGS OF FACT

On August 20, 1979, Complainant filed a complaint alleging that Respondents were engaged in the conduct of a scheme or device for obtaining money through the mail by means of false representations in violation of 39 U.S.C. § 3005. In paragraph III B. of the complaint it was alleged that:

"By means of the aforementioned advertisements, Exhibit B to the complaint is that advertisement which relates to the allegations contained in paragraph III B. and has been admitted into evidence in this proceeding as CX-B Respondent expressly or impliedly represents to the public in substance and effect, that:

B. The Amazing Diet Breakthrough also referred to as 'crashloss program,'

(1) represents a scientific breakthrough or new discovery in the field of controlling obesity;

(2) will cause an obese subject to experience a daily loss of 2 lbs. of fat or fluid for the first week and 9 lbs. every two weeks thereafter;

(3) increases the rate at which the body of an obese subject burns calories;

(4) does not require the obese subject to exercise will-power or self-control;

(5) does not require the obese subject to endure fasting or the symptoms of hunger;

(6) does not require the obese subject to experience any discomfort or the unpleasant sensations normally associated with dieting;

(7) increases the metabolic ratio of an obese subject causing a more rapid conversion of fat into energy;

(8) will enable an obese subject to accomplish spot reduction, i.e., reduces the dimensions of specific areas of the anatomy;

(9) incorporates a product (Diet Bullets) which in itself constitutes an effective means of reducing fat and overcoming obesity. (e.g., '... an anti-fat weapon that was both safe and very powerful.' 'After a lot of research he has developed just such a weapon. Apparently, what happens is that his crash-burn system turns up your body's "inner furnace" and breaks down your excess body fat and automatically flushes it out of your body forever.' 'his anti-fat formula contains absolutely no drugs.' 'It almost seems to evaporate fat and inches from the very first day. It automatically converts body fat to body fueld.' sic 'It starts to work as soon as it enters your system. It instantly begins to shrink your fat cells and also starts to safely stimulate your fat-burning metabolism.' 'The way you use this formula is simple. All you do is mix it with a glass of your favorite beverage and drink it everyday the first thing in the morning. As soon as you do this, you will have automatically stepped up your fat burning metabolism. This will continue for the next 24 hours.' '...fantastic weight lost miracle,' etc.)"

The complaint contained allegations of false representations relating to two other advertisements for diet products, known as "The Amazing Diet Secret Of A Desperate Housewife" and "The Hollywood Emergency Diet." Respondents no longer advertise those products and they are not the subject of this proceeding (Tr. 46, 104).

On September 15, 1979, Respondents, by their president Frank J. Sarcone, signed a consent agreement under which they agreed:

"...The use of the aforementioned advertisements to the extent herein alleged to be false, for obtaining money or property through the mails has been and will be permanently discontinued and abandoned, and will not hereafter be resumed, directly or indirectly."

Other provisions of the consent agreement relate to the handling of mail received in response to the advertisements, the procedures to be employed in the event of a breach and the legal effect of the agreement. The last paragraph of the agreement recites:

"...No officer, employee, or agent of the U. S. Postal Service has expressly or impliedly, directly or indirectly, accepted or approved any revised advertising matter or activities presently employed or contemplated for future use by the undersigned."

The consent agreement was not entered into as the result of fraud or coercion (Tr. 30).

Subsequent to the execution of the consent agreement, Respondents distributed through the country by direct mail a "Dear Friend" letter seeking remittances of money through the mail (Tr. 34-5, 38, 47, 56, 68-9, 77, 81-2; CX-C). The letter consists of 6 pages on the letterhead of Don Schwerdtfeger, M.D., promoting an "anti-fat weapon that is both safe and very powerful]" The product being promoted is the same product advertised as the "Amazing Diet Breakthrough" which was the subject of the allegations made in paragraph III B. of the complaint (Tr. 10, 36-40, 55).

The advertisement was prepared by Respondents' president, Mr. Sarcone, and Dr. Schwerdtfeger (Tr. 67-72, 74-6, 81-2, 98). Despite their testimony to the contrary and the testimony of Mr. Michael Denny, an experienced advertising writer, all of which is not found to be persuasive, the "Dear Friend" letter advertisement viewed in its totality, directly or indirectly continued to make certain of the representations which Respondents, by the terms of the consent agreement agreed to discontinue. Illustrative language in the advertisement which, when read in the context of the entire advertisement, leads to this conclusion is set forth below following the numbered allegation of the complaint to which it applies.

"(1) represents a scientific breakthrough or new discovery in the field of controlling obesity;" (Compl. para. III B(1))

"Finally, after years of research, I feel I have developed just such a weapon. What it consists of is a new diet product and a system that actually burns off body fat, hour-by-hour] (CX-C, p. 1, para. 7.)

"Believe it or not, my new diet system..." (CX-C, p. 1, para. 8; Tr. pp. 106-109.)

"That's all there is to it. This may be the most effective fat-burning method ever developed. It is not a drug. It is not a gimmick. It is a formula that I was only able to develop after years of research and, as I said before, I use it myself. (CX-C, p. 3, para. 5.)

"It works. And now I want to spread the word to other doctors so they can use my diet system to help all of their overweight patients. To make a long story short, what I want to do is write an article and have it published in the various medical journals as I sincerely feel this is the best way to convinct other doctors of the value of my system." (CX-C, p. 3, para. 6.)

The quoted language read in the context of the entire advertisement including the doctor's letterhead and his references to his work and research would lead the ordinary reader to conclude that a scientific breakthrough or a new discovery in the field of controlling obesity is being represented.

"(2) will cause an obese subject to experience a daily loss of 2 lbs. of fat or fluid for the first week and 9 lbs. every two weeks thereafter;" (Compl. para. III B(2))

"Many of the people who have tested my program have lost as much as 2 pounds of fat and fluid every day for the first week. Actually, many people have reported a 6 pound weight loss in just the first 48 hours] After the first week, many people continue to lose as much as 9 pounds every two weeks thereafter. Some people (who were veryobese) have used my method to lose 50, 60 and even 100 pounds and more." (CX-C, p. 2, para. 1.)

"The amazing thing, of course, is the speed at which this sytem works. It is rather remarkable to throw off as much as 6 pounds of fat and fluid in the very first weekend. Just imagine how it must feel to drop up to 2 pounds a day and shrink your waistline up to 3 inches the first week." (CX-C, p. 2, para. 4.)

Although a portion of the quoted language relates to results which have been achieved by others, these representations, as well as the rest of the quoted language read in the context of the remainder of the advertisement directly or indirectly would lead the ordinary reader to understand that Respondents were representing that their product had caused a subject (obese or otherwise) to experience a daily loss of 2 lbs of fat or fluid for the first week and 9 lbs. every two weeks thereafter and that the reader could expect the same results.

"(3) increases the rate at which the body of an obese subject burns calories;" (Compl. para. III B(b))

The Petition does not contend that Respondents have violated the terms of the consent agreement by continuing to make this representation (Tr. 79).

"(4) does not require the obese subject o exercise will-power or self-control;

(5) does not require the obese subject to endure fasting or the symptoms of hunger;

(6) does not require the obese subject to experience any discomfort or the unpleasant sensations normally associated with dieting;" (Compl. paras. III B(4)-(6))

"The way you use this formula is simple. All you do is mix it with a glass of your favorite beverage and drink it every day the first thing in the morning." (CX-C, p. 3, para. 3.)

"Then, during the rest of the day, you eat a wide selection of tasty foods which are scientifically programmed to maintain a high level of fat burn-off. (CX-C, p. 3, para. 4.)

"That's all there is to it. This may be the most effective fat-burning method every developed. It is not a drug. It is not a gimmick. It is a formula that I was only able to develop after years of research and, as I said before, I use it myself." (CX-C, p. 3, para. 5.)

"However, I am pretty sure you are going to be more than satisfied. Actually, I think you're going to be amazed. In fact, I think you are going to lose your excess weight faster and easier than you ever thought possible." (CX-C, p. 5, para. 4.)

The ease and simplicity of weight loss represented by Respondents in the quoted passages and in the context of the remainder of the advertisement would lead the ordinary reader to understand that will-power, self-control, fasting, symptoms of hunger, discomfort and unpleasant sensations would not be experienced.

"(7) increases the metabolic ratio of an obese subject causing a more rapid conversion of fat into energy;" (Compl. para. III B(7))

The Petition does not contend that Respondents have violated the terms of the consent agreement by continuing to make this representation (Tr. 79).

"(8) will enable an obese subject to accomplish spot reduction, i.e., reduces the dimensions of specific areas of the anatomy;" (Compl. para. III B(8))

"My diet product does not necessarily produce a specific spot reduction, but if you are considerably overweight a significant overall loss of excess pounds could easily mean that you could lose:

. 6 inches off waistline

. 4 inches off stomach

. 4 inches off buttocks

. 3 inches off thighs

. 5 inches off hips"

(CX-C, p. 3, para. 1.)

Complainant alleges that by negative implication the quoted language would lead the ordinary reader to understand that Respondents' product will enable an obese subject to accomplish spot reductions. The quoted language is sufficiently qualified so that an ordinary reader would not understand that Respondents' product would enable spot reductions.

"(9) incorporates a product (Diet Bullets) which in itself constitutes an effective means of reducing fat and overcoming obesity. (e.g., '... an anti-fat weapon that was both safe and very powerful.' 'After a lot of research he has developed just such a weapon. Apparently, what happens is that his crash-burn system turns up your body's "inner furnace" and breaks down your excess body fat and automatically flushes it out of your body forever.' 'his anti-fat formula contains absolutely no drugs.' 'It almost seems to evaporate fat and inches from the very first day. It automatically converts body fat to body fueld.' sic 'It starts to work as soon as it enters your system. It instantly begins to shrink your fat cells and also starts to safely stimulate your fat-burning metabolism. (The way you use this formula is simple. All you do is mix it with a glass of your favorite beverage and drink it everyday the first thing in the morning. As soon as you do this, you will have automatically stepped up your fat burning metabolism. This will continue for the next 24 hours.' '...fantastic weight loss miracle,' etc.)" (Compl. para. III B(9))

"Some time ago I began to realize that any person who is overweight needs much more than just a diet. I now know that every overweight person needs an anti-fat weapon that is both safe and very powerful] (CX-C, p. 1, para. 6.)

"Finally, after years of research, I feel I have developed just such a weapon. What it consists of is a new diet product and a system that actually burns off body fat, hour-by-hour]" (CX-C, p. 1, para. 7.)

"Apparently, what happens is that my diet system allows your body to break down your excess body fat and flush it out of your system forever." (CX-C, p. 2, para. 3.)

"My first concern when I developed this program was safety. Therefore, my anti-fat formula contains absolutely no drugs. It is made up entirely of 100% natural ingredients. I first tested it on myself and I now use it religiously every day. I have found that my program can even help people who have been hopelessly overweight all their lives, including those who need to lose 20 to 30 or 70 pounds or more." (CX-C, p. 2, para. 5.)

"The way you use this formula is simple. All you do is mix it iwth a glass of your favorite beverage and drink it every day the first thing in the morning." (CX-C, p. 3, para. 3.)

"That's all there is to it. This may be the most effective fat-burning method ever developed. It is not a drug. It is not a gimmick. It is a formula that i was only able to develop after years of research and, as i said before, I use it myself." (CX-C, p. 3, para. 5.)

While the advertisement makes reference to a system and in one paragraph makes a general reference to the food that can be eaten the rest of the day, the principal and motivating thrust of the advertisement is the "product" or "formula." Reading the advertisement as a whole, the ordinary reader would understand Respondents to be advertising a product which in itself constitutes an effective means of reducing fat and overcoming obesity.

CONCLUSIONS OF LAW

1. The consent agreement dated September 15, 1979, was properly executed and sets forth the procedures by which issues from any alleged breach of its terms are to be resolved.

2. The issue to be decided in connection with a petition alleging breach of the terms of a consent agreement is whether Respondents have resumed making the representations they agreed to discontinue and not whether the product will accomplish the results represented. Mark Eden v. Lee, 433 F.2d 1077 (9th Cir. 1970); American Consumer, Inc. v. United States Postal Service, 427 F.Supp. 589 (E.D. Pa. 1977); American Image Corp. v. United States Postal Service, 370 F.Supp. 964 (S.D. N.Y. 1974) aff'd 503 F.2d 1397 (2d Cir. 1974); U.S. Bio-Genics Corp. v. Christenberry, 173 F.Supp. 645 (S.D. N.Y. 1959) aff'd 278 F.2d 561 (2d Cir. 1960).

3. Respondents' revised advertising was circulated subsequent to the execution of the consent agreement and seeks remittances of money through the mail.

4. Under the terms of the consent agreement the representations of Respondents' revised advertising are to be viewed to determine whether they directly or indirectly make the representations alleged in the complaint which Respondents agreed to discontinue. The meaning of the representations made in advertisements are to be judged from a consideration of the totality of the advertisements and the impression they would most probably produce on ordinary minds. Donaldson v. Read Magazine, 333 U.S. 178 (1948); American Image Corp. v. United States Postal Service, supra. Expert testimony, while it may be admissible, is not required in order to determine the effect on the ordinary mind. Body Persuasion Systems, Inc. v. United States Postal Service, Docket No. CV 1996-JWC (C.D. Cal. 1976) aff'd Docket No. 76-1829 (9th Cir. 1978); Baslee Products Corp. v. United States Postal Service, 356 F.Supp. 841 (D. N.J. 1973); Vibra Brush Corp. v. Schaffer, 152 F.Supp. 461 (S.D. N.Y. 1957) rev. on other grounds 256 F.2d 681 (2d Cir. 1958).

5. Applying the foregoing tests to the advertisement containing representations which it is alleged violates the terms of the consent agreement, it is concluded that Respondents continue to make the representations alleged to be false in paragraphs III B.(1), (2), (4), (5), (6) and (9) of the complaint.

Accordingly, the Petition for Breach of Consent Agreement is granted and an order under 39 U.S.C. § 3005 as authorized in paragraph 3 of the consent agreement is being issued contemporaneously with this decision.