In the Matter of the Complaint Against

ORIENTAL NURSERIES, INC. at
P. O. Box 370030
Miami, FL 33137

P.S. Docket No. 8/24;

Duvall, William A.

APPEARANCE FOR COMPLAINANT:
Sandra C. McFeeley, Esq.
Law Department
United States Postal Service
Washington, D.C. 20260

APPEARANCE FOR RESPONDENT:
Tyler Abell, Esq.
David Simon, Esq.
Bregman, Abell, Solter & Kay
1900 L Street, N.W., Suite 610
Washington, D.C. 20036

INITIAL DECISION ^1/

This proceeding was initiated on March 25, 1980, when the Consumer Protection Division, Law Department United States Postal Service, the Complainant, filed a Complaint in which it is alleged that Complainant had reason to believe that Oriental Nurseries, Inc., Respondent, Miami, Florida, is engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representation in violation of Title 39 United States Code, Section 3005.

The Complainant alleges that attention is attracted to the said scheme by means of advertisements in publications of general circulation which are calculate to induce the readers thereof to remit money or property through the mails.

It is alleged in paragraph II of the Complaint that the Respondent's advertisement which was received in evidence as Complainant's Exhibit 1, and a copy of which is attached to this decision as Appendix A. is a copy of a recent advertisement used by Respondent which is typical of those referred to in paragraph I of the Complaint.

In paragraph III of the Complaint, Complainant alleges that by means of such materials and others similar thereto, Respondent represents, directly of indirectly, omissions or implications that the FLOWERING "CHINESE EMPRESS" or Paulownia tomentosa

(a) will grow to be 14 feet in height the first season after planting, and will be 23 feet tall within 2 years after planting;

(b) leaves may be expected to be 2 1/2 feet across;

(c) will produce flowers throughout the spring and summer;

(d) will produce flowers once each in spring and summer;

(e) will thrive in climates with temperatures as low as 25 degrees below zero.

Finally, the Complainant alleges that the aforesaid representa- tions are materially false as a matter of fact. Complainant then requests that a mail stop order as provided in 39 U. S. Code, Section 3005(a)(1) and (2) be issued against the Respondent.

In its Answer to the Complaint, Respondent denies that his actions constitute or constituted a "scheme or device to obtain money or property through the mails by means of false representa- tions" and denies the applicability of the word "scheme" in para- graph I; Respondent admits that attention is attracted by means of the advertisement in publications of general circulation which are calculated to induce the readers thereof to remit money or property through the mails.

Respondent then admits the use of Appendix A; denies the allegations set forth in paragraph III of the Complaint; and denies the charge that the representations set fort in paragraph III of the Complaint are materially false as a matter of fact.

Respondent concludes its Answer with the request that the Complainant be denied an order under 39 U. S. Code 3005 and requests that the Complaint be dismissed with prejudice.

FINDINGS OF FACT

1. The Respondent is engaged in the business of advertising and selling a product through the mails. The product is the "Chines Empress" or Paulownia Tomentosa, which hereafter will be designated by one of these names or by a variation of one of them.

2. The order blank which is part of Appendix A, constitutes a solicitation of money through the mail for the product. In addition, the Respondent, in its Answer, admits that its adver- tisements are calculated to induce readers to submit money or property through the mails.

3. In the sale of the product, Respondent utilizes adver- tising matter, some of which was received in evidence, and as heretofore stated, a copy of that advertising matter is attached to this decision as Appendix A.

4. In the sale of the said product, Respondent by means of Appendix A, makes certain of the representations set forth in paragraph III of the Complaint as indicated below (in support of the foregoing finding certain portions of Appendix A will be quoted):

Complaint, Paragraph III

Allegations (a) is the allegation with reference to the charge that Respondent represents that the Chines Empress will grow to be 14 feet in height the first season after planting and will be 23 feet tall within two years after planting.

This charge is based upon the banner at the subcaption near the top of the page which reads as follows:

"NOW] THE FLOWERING 'CHINES EMPRESS' GROWS UP TO A FULL 14 FEET IN ONLY 1 SEASON AND SOARS UP TO 23 FEET...IN ONLY 2 YEARS]]"

The language to the same affect is found in the left-hand column, the second paragraph, the last sentence, as follows:

"Watch with amazement as the flowering ornamental 'CHINESE EMPRESS' tree surges upward and outward as it REACHES UP TO 14 FEET HIGH IN ONLY 1 SEASON...AND UP TO A FULL 23 FEET IN ONLY 2 YEARS."

Allegation (b) charges that the Respondent represents that leaves may be expected to be 2 1/2 feet across. This charge is based upon language that appears in the left-hand column of Appendix A, the third paragraph, the second sentence, as follows:

"Yes, the 'CHINESE EMPRESS' PRODUCES THOUSANDS OF THE MOST BEAUTIFUL ORCHID COLORED FLOWERS YOU HAVE EVER SEEN. ITS LEAVES MEASURE UP TO 2 1/2 FEET ACROSS..."

Allegation (c) is that the Respondent represents that the Paulownia Tomentosa will produce flowers throughout spring and summer. This charge apparently is based on language appearing in the right-hand column, second paragraph, as follows

"but it smothers itself with brilliant BOUQUETS OF DELICATE FLOWERS in Spring and Summer."

The language in the first part of the same sentence to the effect that the Chinese Empress produces "lush green foliage from EASTER TO LABOR DAY" is so obviously related to leaves as opposed to blossoms and flowers that one must conclude that the first part of the sentence clearly does not form the basis for the charge in paragraph III (c) of the Complaint.

It is unrealistic to expect anyone to believe that any plant would be smothered with bouquets of delicate flowers throughout the entire spring and summer of the year. The emphasis on the presence in the tree of the lush green foliage from Easter to Labor Day is inconsistent with the presence on that same tree of bouquets of delicate flowers for that same extended period of time.

Therefore, I find that the charge set forth in paragraph III (c) of the Complaint is overbroad in its scope and I find that the Respondent does not make that representation.

Charge III (d) of the Complaint is that the Chinese Empress will produce once each in spring and summer. This representation is made in the language of the second part of the sentence from the advertisement which was quoted in connection with charge III (c).

The meaning of the language of this portion of the adver- tisement is perfectly clear, namely that under normal circumstances, there will be bouquets of delicate flowers both in the spring and in the summer of each year. Therefore, this representation is made by Respondent.

The last charge set forth in paragraph III of the Complaint is in subparagraph (e) to the effect that the Chinese Empress will thrive in climates with temperatures as low as 25 degrees below zero. The language of this charge is not in conformity with the plain language of the advertisement. The charge goes beyond what the Respondent represents. The way the charge is stated causes it to convey the idea that the plant will thrive in areas where there frequently or regularly is temperature as low as 25 degrees below zero for a lengthy and extended period of time. The language actually used by the Respondent in Appendix A read as follows:

"The amazing 'CHINESE EMPRESS' even thrives in shaded or sheltered areas...in climates where temperatures can drop as low as 25 degrees below zero."

The actual language of this advertisement on this point suggests that such an occurrence as a drop in the temperature as low as 25 degrees below zero is an occurrence that happens quickly; is probably of short duration; and probably does not occur with great frequency.

I find that the Respondent does not make the representation which is set forth in paragraph III (e) of the Complaint.

5. A brief description of the tree which is involved in this proceeding is found, among other places, in Respondent's Exhibit M which is an article "Paulownia, a Valuable New Timber Resource" by Stanley B. Carpenter and Donald H. Graves, the latter of whom was one of Respondent's witnesses.

Excerpts from this description read as follows:

"The Paulownia tree, a native of China, may prove satisfactory for the reclamation of surface mines and provide a valuable timber resource for Kentucky. This little known tree (Paulownia tomentosa) is also called princess tree, royal Paulownia, or Empress tree. Paulownia was named in honor of Anna Pavlovna, daughter of Czar Paul I, and wife of Prince Willem (later King Willem) of the Netherlands.

"Leaves of Paulownia are enormous, especially on sprouts where leaves of up to 3 feet across have been observed (Fig. 1). They are heart-shaped and twigs are smooth, brown, and are dotted with white lenticels, the bark is brownish gray with shallow fissures. The flowers of Paulownia contribute to its use as an ornamental. Flower buds grow throughout the summer months, mature in October, and are visible as terminal panicles after the leaves fall. In late April of the following year, large 5-lobed lavender flowers emerge before the leaves and rival the catalpa tree in beauty and fragrance.***"

Further descriptive comments are found as part of the Complainant's Exhibit 5, an excerpt from the Autumn 1977 issue of Secrest Arboretum Notes is a publication of the Ohio Agricultural Research and Development Center. Portions of these comments are as follows, from the first page of this exhibit:

"*** Seedling trees may reach 6 feet in 1 year from seed. Sprout growth from established root systems may reach between 10 to 14 feet in a growing season, but usually considerably less. The tree can on occasion grow to a much larger size.***

"The flower buds form in the autumn and persist through the winter. Paulownia is quite sensitive to extremes of weather. In the North, the flower buds usually freeze during the winter so the tree is essentially flowerless. Too much warm weather during the winter will cause the flower buds to drop off. The tree is not completely hardy at Wooster and during severe winters the tree will be killed back to the ground. But it resprouts again in the spring. Princess Tree does better in southern Ohio where it is not so readily winter damaged."

"The fragrant flowers are shaped like Foxglove flowers (some botanists place this tree in the same family as Foxglove, the Figwort Family, Scrophalariaceae). The 2-inch long flowers vary in color from blue to violet or lavender with darker spotting and yellow stripes inside. The flowers bloom in the spring before the leaves unfold and are borne in upright clusters 6 to 12 inches long.***"

6. A great deal of illumination of the issues in this case was provided by virtue of the high caliber of the expert testimony presented by both parties.

7. Complainant's sole witness was Dr. Michael A. Dirr, Director of the University of Georgia Botanical Gardens at Athens, Georgia.

Dr. Dirr received his B.S. Degree in Ornamental Horticulture at Ohio State University in 1966; an M.S. Degree in Ornamental Horticulture in 1971 from the Ohio State University; and a Ph. D. in Plant Physiology at the University of Massachusetts in 1972.

Some of his professional employment has been as follows: from July, 1972, to August, 1977, he was Assistant Professor of Ornamental Horticulture at the University of Illinois, Urbana, Illinois; from August, 1977, to August, 1979, he was Associate Professor of Ornamental Horticulture at the University of Illinois at Urbana, Illinois. From July, 1978, to June, 1979, he was a Mercer Fellow at the Arnold Arboretum at Harvard University, Jamaica Plains, Massachusetts, following which he accepted his present position.

Much of the remainder of Dr. Dirr's qualifications are set forth in his curriculum vitae which was received in evidence as Complainant's Exhibit 3.

8. The Respondent's principal witness was Dr. Donald H. Graves, one of the co-authors of Respondent's Exhibit M. Dr. Graves is in charge of the Cooperative Extension Service at the University of Kentucky in Lexington, Kentucky. He was awarded his B.S. Degree in Forestry at Purdue University in 1959; his M.S. Degree at the University of Florida in 1965; and his Ph.D. in Agricultural Economics at the University of Kentucky in 1974. (Tr. 105-107; Respondent's Submission (filed Apr. 30, 1980) of Names and Qualifications of Expert Witnesses)

He is presently an Extension Specialist in Forestry and Reclamation with the Department of Forestry at the University of Kentucky. He is co-author of a number of publications, including "Paulownia, a Crop Tree for Wood Products and Reclamation of Surface-Mined Land" appearing in the Southern Journal of Applied Forestry, Volume 4, Number 1, page 19 (February 1980). (id.)

9. A striking and somewhat unusual feature of this proceeding was the great extent of agreement that was present in the testimony of the expert witnesses testifying for both sides. This fact was also indicated by Dr. Graves, Respondent's principal witness. (Tr. 175)

10. This similarity of view is illustrated in the following summaries of the testimony of the witnesses on various issues.

A. With respect to the alleged representations in paragraph III (a) of the Complaint, that is, that Respondent represents that

Paulownia Tomentosa will grow to be 14 feet in height in its first season and will be 23 feet tall within two years after planting.

Contrary to Respondent's position I find that the eye of the reader of this advertisement will be focused on the figures stated, rather than the "up to" language used. Even the language used suggests that the stated maxima may routinely be expected by the purchasers. For example, to say that something "soars up to 23 feet" means that is going to go upward and that its anticipated height is 23 feet.

The Complainant's principal witness, Dr. Dirr, made the following statements, in substance, in regard to this issue: In the mid-South area, seedlings will grow from 6 to 8 feet in height in their first season and, sometimes, depending upon the geographical location and other favorable factors, as much as ten feet in the first year. In succeeding years however, the growth will be slower. (Tr. 31-32)

On this same subject the substance of Dr. Graves' testimony was that no other tree that he knows of will equal Paulownia's growth of up to 8 to 10 feet in the first year. He stated further that during the second year there will be diameter growth of this tree but that there will be less growth in height. (Tr. 141, 163)

Dr. Graves cited one case in which a student grew a tree that was over 16 feet tall at the end of the first season and over 20 feet tall when it was cut in September of its second year. Dr. Graves stated, and repeated, that the growth of this tree was an "exception" and he knew of no other tree that had grown at so rapid a rate. (Tr. 125-127)

On this point, also, Respondent's witness, Bill Romeka, had about six trees out of a planting of 15,000 that grew to a height of 12 feet in one season. Mr. Romeka stated, however, that the other 14,994 trees grew to seven or eight feet in height in that same season. (Tr. 201) This experience related by Mr. Romeka is in accord with the expert testimony on this subject.

B. With respect to leaf growth, it is Dr. Dirr's view that the average buyer could not expect that the leaves would be 2 1/2 feet across at the end of one season.

Dr. Graves' opinion was that in juvenile trees, not seedlings, the leaves may exceed 2 1/2 feet, but that the leaves on this particular species of tree tend to get smaller and smaller with each succeeding year of growth. (Tr. 127-128)

C. There was complete agreement between the experts that the normal blossoming pattern of the Chinese Empress is one time a year and that this time is in the spring, usually in April or May, depending upon the geographical location. The flowers last usually for two to three weeks. (Tr. 27, 42, 147, 148, 170) There are unusual circumstances in which blossoms and flowers may appear both in spring and in the fall of the same year. This phenomenon occurs when there is a late winter with a long-lasting summer in which the warm sunlight persists into the later months of the year. This happy event is overcome, however, by the disappointment in the fact that there would be no blossoms or flowers the following spring. The buds from which such spring flowers normally would come were consumed in producing the lovely flowers of the previous fall. Thus, the second year in this sequence would be altogether flowerless. (Tr. 198, 199)

In Respondent's closing argument there were some points raised to which some attention will be directed. Respondent pointed out that Complainant has the burden of proof and that the standards by which advertising literature is judged are rather stringent.

It is, of course, agreed that the Complainant does have the burden of proof with respect to those representations which have been found to be made by the Respondent. More will be said later, but it is found, in substance, that the Complainant has met its burden of proof with respect to establishing the materiality of the representations and the falsity of the representations herein found to be made by Respondent.

The Respondent also pointed out that considerable attention should be directed at the quality of the credentials of the experts who appear in a proceeding of this sort. Attention has been given to the quality of the credentials of both Dr. Dirr and Dr. Graves. Dr. Graves expressly stated that the credentials of Dr. Dirr in relation to the Paulownia Tomentosa are impressive. I feel confident that Dr. Dirr would hold Dr. Graves in equally high regard. There is nothing in this record that would indicate anything to the contrary.

I think that one of the principal points in considering this case is the sort of expectation the reader has when he sees the advertisement. The handsome picture that appears in the center of the advertisement, and the choice of words in the advertisement itself, strongly indicated that the described and depicted results, in terms of (a) tree growth, (b) of leaf size, and (c) of twice-annual production of flowers, are results that the purchaser can expect immediately, that is, within months, because the emphasis is on the first season. The unanimous expert testimony from both parties to this proceeding is to the affect that none of these results can be expected to occur in the first season of growth.

Respondent has also made reference to the constitutional aspects which he states are involved in this proceeding. In a number of recent cases it has been reaffirmed that the freedom of speech provisions of the First Amendment of the United States Constitution do not confer on anyone freedom to make misleading statements in advertising material. One such case is Virginia State Board of Pharmacy, et al. v. Virginia Citizens Consumer Council, Inc., et al., 425 U.S. 748 (1976) in which the Court, per Mr. Justice Blackmun, stated, inter alia, "***Untruthful speech, commercial or otherwise, has never been protected for its own sake. Gertz v. Robert Welch, Inc., 418 U.S. 323, 340 (1974); Konigsberg v. State Bar, 366 U.S. 36, 49, and n. 10 (1961). *** The First Amendment, as we construe it today, does not prohibit the State from insuring that the stream of commercial information flow cleanly as well as freely***." (id. 771, 772) Thus, falsity in advertising is not protected by the First Amendment.

One of the cases cited by Respondent's counsel was Peak Laboratories v. United States Postal Service, 556 F.2d 1387. Circuit Judge Clark had the following to say:

"To say that the Postal Service could stop all advertisements which report tests or studies from entering the mails by producing an expert witness who would do no more than express an opinion disagreeing with the reported results, would give it far too great a license to pick and chose what may be delivered through the mails."

This quotation is inapposite with respect to the instant proceeding in view of the fact that not only the Complainant's expert witness, but also the Respondent's expert witnesses agreed (1) that the representations contained in paragraph III (a), (b), and (d) of the Complaint could not be realized in fact, and (2) that those representations were false. The witnesses did not state that the representations were false, but the statements made by the witnesses left no other conclusion possible except that the representations were false. In addition, it should be pointed out that Peak Laboratories v. United States Postal Service is a case in which the issuance of an order against the Respondent under 39 U. S. Code 3005 in a proceeding similar to this one, in the sense that they both arose under the stated statute, was upheld in a per curiam decision and Judge Clark's opinion was a concurring opinion with respect to the results. He dissented only in that one matter with respect to which his language was quoted.

CONCLUSION OF LAW

1. The Respondent is engaged in the solicitation of remittances of money in the mail order sale of the Paulownia Tomentosa or "Chinese Empress" tree.

2. In engaging in the aforesaid business Respondent utilizes advertisements designed to attract and to persuade persons to buy its tree product.

3. In determining the meaning of advertising matter, the piece of advertising material must be considered as a whole and in the light of the effect it would most probably produce on ordinary minds. Donaldson v. Read Magazine, 333 U.S. 178 (1948); Vibra-Brush Corp. v. Schaffer, 152 F. Supp. 461 (S.D.N.Y., 1957)

4. Using the foregoing standard, Respondent does make the representations set forth in subparagraphs (a), (b), and (d) of paragraph III of the Complaint.

5. The representations found to have been made by Respondent are material representations because they are of the character which are calculated to induce readers to make remittances of money to Respondent to purchase the advertised product.

6. The material representations found to have been made by Respondent are false as a matter of fact.

7. The Respondent is engaged in conducting a scheme or device for obtaining money or property through the mails by means of misrepresentations within the meaning of Section 3005 of Title 39, United States Code.

The proposed findings of fact and conclusions of law presented by the parties have been carefully considered. These proposed findings of fact have been adopted in part or denied in part or denied altogether or granted to the extent indicated in this opinion.

Where the proposals have been denied, such denials are for the reasons that the proposed findings are unsupported by or contrary to the evidence or because of their immateriality.

Based upon all the foregoing considerations an order of the type provided for in 39 U. S. Code, Section 3005, substantially in the form attached hereto, should be issued against this Respondent.

1/ This decision was rendered orally at the close of the hearing. It has been edited and transcribed for formal issuance.