In the Matter of the Complaint Against

TELESTAR, INC.,
TELESTAR INCORPORATED,
TELSTAR INCORPORATED
200 S. Front Street at
Wormleysburg, PA 17043

P.S. Docket No. 7/141;

Cohen, James A.

APPEARANCE FOR COMPLAINANT:
H. Richard Hefner, Esq.
Consumer Protection Division
Law Department
United States Postal Service
Washington, D.C. 20260

APPEARANCE FOR RESPONDENT:
Jeffrey A. Rabin, Esq.
Jacob R. Evseroff, Esq.
186 Joralemon Street
Brooklyn, NY 11201

POSTAL SERVICE DECISION

Respondent has appealed from an Initial Decision which holds that, with regard to the sale of a product advertised as "The Truth Machine," Respondent is engaged in a scheme for obtaining money through the mail by means of false representations in violation of 39 U.S.C. § 3005.

BACKGROUND

On January 28, 1980, the Consumer Protection Division, Law Department, United States Postal Service, filed a complaint alleging that Respondent is engaged in a scheme for obtaining money through the mail in violation of 39 U.S.C. § 3005. Specifically, in ?? III and IV, the complaint alleges:

III

"By means of the aforementioned advertisements, Respondent expressly or impliedly represents to the public in substance and effect, that:

(a) The TRUTH MACHINE is a certain means for the detection of oral falsity.

(b) The TRUTH MACHINE will enable the user to obtain correct answers in the face of conscious falsehood.

(c) The TRUTH MACHINE is a new generation voice stress analyzer that flawlessly pinpoints deception.

(d) The TRUTH MACHINE may be employed successfully as a certain means for the detection of falsity without the knowledge of the person whose veracity allegedly is being monitored.

(e) The TRUTH MACHINE may be relied upon to supply correct information upon which the user may safely rely in the conduct of his daily affairs.

(f) The TRUTH MACHINE is an effective 'voice stress analyzer.'

(g) The TRUTH MACHINE is an accurate means of detecting and registering voice "'microtremors'".

(h) A 'few hours' or a 'weekend' is sufficient time to enable a purchaser to acquire the experience and knowledge necessary to employ the Truth Machine as a certain means of detecting falsity.

(i) '... if anything goes wrong with the Truth Machine Microtronics will repair it free of charge ... ."

IV

"The aforesaid representations are materially false as a matter of fact."

A hearing was held by an Administrative Law Judge to take evidence on the allegations of the complaint. At the hearing Complainant called as witnesses Dr. W. L. Apple, an Assistant Professor of Psychology at Columbia University, whose areas of research include nonverbal behavior, nonverbal communication and the effects of strong emotion and deception on the voice (Tr. 12, Ex. E); H. H. Branscomb, a consulting engineer with graduate degrees in Electrical Engineering specializing in acoustics, speech and hearing (Tr. 83, Ex. H); and Dr. M. Brenner, a psychologist who has performed studies of stress in voices and related subjects (Tr. 137, Ex. 1). All three witnesses testified they conducted various tests with what was purported to be Respondent's equipment (Tr. 6-8, 15-18, 40-44, 110-112, 149-153, 159-160). As the result of such testing the witnesses concluded that Respondent's equipment would not perform as represented in its advertising (Tr. 40-44, 110-112, 149-153, 159-160).

Respondent presented no testimony in support of its position although afforded ample opportunity to do so. In this regard, in a somewhat unusual procedure, Complainant's evidence was taken on March 4, 1980. At the completion of Complainant's case the hearing was recessed until April 8, 1980, at which time it was anticipated Respondent's witnesses would appear (Tr. 174). On April 8, 1980, Respondent's counsel advised the presiding Administrative Law Judge that Respondent had intended to present the testimony of a Mr. Sparagowski, Dr. Van Greber, Dr. Heisse and Mr. McCullar (Tr. 183, 184). Telephonic inquiry by the presiding Administrative Law Judge established that no arrangements had been made with Drs. Van Greber and Heisse to testify on behalf of the Respondent at any time, let alone April 8, 1980 (Tr. 190). Mr. McCullar had been scheduled to testify but the evening before the hearing informed Respondent's counsel that he would not appear (Tr. 176, 184). The record is silent with regard to Mr. Sparagowski, who apparently was not contacted. The arrangements for the witnesses were to have been made by Mr. McCullar who failed to do so notwithstanding his advice to the contrary to Respondent's counsel (Tr. 189). Because Respondent was not ready to proceed on April 8, 1980, the presiding Administrative Law Judge again recessed the hearing for three weeks until April 29, 1980 (Tr. 192). On that date Respondent again appeared through counsel but failed to present any witnesses (Tr. 211).

On the basis of the testimony of Complainant's witnesses and the exhibits received into evidence, the presiding Administrative Law Judge concluded in the Initial Decision that Respondent makes the representations alleged, that such representations are materially false and that they constitute a violation of 39 U.S.C. § 3005. Accordingly, he recommended the issuance of a mail stop order.

RESPONDENT'S EXCEPTIONS

On appeal, Respondent presents two arguments and then enumerates 6 exceptions which in large part reiterate its two principal contentions. Respondent's first contention relates to the equipment that was tested by Complainant's witnesses and the relationship of that equipment to Respondent's advertising. Respondent contends that the evidence does not establish that the equipment tested is the equipment represented in its advertising. Specifically, Respondent alleges that: (1) Dr. Apple tested only one machine which was not produced at the hearing and varied slightly from the machine introduced into evidence; (2) Dr. Brenner testified that he did not test or compare the internal mechanism of the machine he tested with that admitted into evidence and therefore he could not testify whether they were the same; (3) The machine admitted into evidence was depicted in Appendix B (one of Respondent's advertisements) and that the machine depicted and advertised in Appendix A (another of Respondent's advertisements) was a totally different machine from that in evidence and that tested by the witnesses.

Respondent's second argument is that Complainant's witnesses did not follow the directions set forth in the owner's manual and, therefore, should not have been allowed to testify whether the equipment would operate as advertised. According to Respondent the testimony of Complainant's witnesses should be stricken from the record.

Respondent's principal contentions will be addressed first followed by a consideration of each of its 6 enumerated exceptions.

Respondent's Advertisement and the Equipment Tested

Three advertisements for a "Truth Machine" sold by Telestar, Inc., 200 South Front St., Wormleysburg, PA 17043 were admitted into evidence as Exhibits A, B and C(1) and (3) (Tr. 5-7). The contents of each of the advertisements and the representations set forth therein are essentially the same. Exhibits A and B are advertisements which appeared in national magazines. Exhibit A appeared in the February 1980 issue of Playboy and Exhibit B appeared in the November 1979 issue of Penthouse (Tr. 5-7). Exhibits C(1) and (3) are a circular letter and order form (Tr. 6-8). The units advertised are offered for sale in Exhibits A and B for $149.00 and in Exhibit C(1) for $129.00. Exhibits A and B indicate that the name "Truth Machine" is a registered trademark.

The three advertisements include a depiction of a Truth Machine. The Truth Machines depicted in Exhibits C(1) and B are identical. Each is stated to be a "Microtronics Voice Stress Analyser." The equipment depicted in Exhibit A states it is a "Telestar Series V, Voice Stress Analyzer." It has an LED readout and a distinctly different shape and configuration from the equipment depicted in Exhibits B and C(1). The units depicted in Exhibits B and C(1) do not appear to have an LED readout. Rather, they appear to have a meter from which readings can be taken (Tr. 153). The unit shown in Exhibit A appears to have an on-off switch, an analyze button, clear button, calibration knob and jacks for tape, microphone and DC imput. The controls on the Truth Machine depicted in Exhibits B and C(1) are not shown with sufficient clarity to determine if they are the same or have different functions from those shown on Exhibit A.

The equipment admitted into evidence as Exhibit D(1) was received by Complainant as the result of a test purchase made in response to Exhibits C(1) and (3). This unit differs in appearance from those shown in Exhibits A, B and C(1). It is labeled as a "Microtronics Series IV, Voice Stress Analyzer" and appears to have a built-in microphone but there is in fact none and it is necessary to use an external microphone (Tr. 128-9). Exhibit D(1) has an LED readout an on-off switch, an analyze button, clear button, calibration knob and jacks for tape, microphone and DC imput. While Exhibit D(1) is not exactly the same as the units shown on Exhibits A, B or C(1), its shape is the same as the units shown on Exhibits B and C(1), and its controls and connections appear to be identical in function, but not in physical location, to the controls for the Telestar Truth Machine depicted in Exhibit A (Tr. 15, 16).

Complainant's witnesses conducted various tests with Respondent's equipment. Mr. Branscomb and Dr. Brenner tested Exhibit D(1) (Tr. 6-8, 86, 137). The unit tested by Dr. Apple was furnished by an officer of the Respondent in connection with an investigation being conducted by the New York City Office of Consumer Affairs (Tr. 15, 17, 18). Dr. Apple's unit was essentially identical to Exhibit D(1), the only difference being that Dr. Apple's unit did not appear to have a built-in microphone which Exhibit D(1) appears to have (Tr. 16). Like Exhibit D(1), Dr. Apple's unit required the use of external microphones (Tr. 128-9).

The evidence establishes, and Respondent does not appear to contest, that despite differences between the units shown in the advertisements and the units tested, the units tested by Complainant's witnesses are the units advertised in Exhibits B and C(1). It does not, however, agree that the units tested are the same as the unit advertised in Exhibit A.

The foregoing comparison of the three advertisements with each other, the unit that was the subject of the test purchase based on one of those advertisements, and the unit tested by Dr. Apple, does not establish with certainty that the unit advertised in Exhibit A and the units tested by Complainant's witnesses were the same. However, in order to prevail Complainant's case need not be free from doubt. The standard of proof in administrative proceedings is the preponderance of evidence standard, i.e., the more reasonable of probabilities. See Michigan Bulb Company, P.S. Docket No. 7/43 (P.S.D. 1979) and the decisions cited therein. The similarity of language used in the advertisements, the fact that they all sought remittances at the same name and address, the use of a registered trademark, the difference between the unit pictured in Exhibit C(1) and the unit received in response to a test purchase, the identity of functions of the controls on the test purchase unit and those shown in Exhibit A, and the similarity to each other of the two units tested, is sufficient to constitute a prima facie case that the units tested are the units which would be received if ordered in response to any of the three advertisements. Such evidence, if unrebutted, constitutes a preponderance of the evidence.

While Respondent contends the unit advertised in Exhibit A differes from those tested, it has presented no evidence to support this contention. The record contains no evidence that the units represented in each advertisement functionally differ from each other or that there is in fact in existence equipment exactly the same as that depicted in any of Respondent's advertisements. If equipment differing signficantly from that tested by Complainant's witnesses exists, the testimony of Complainant's witnesses could have been rebutted by the introduction into evidence of such equipment and appropriate explanatory testimony. No such evidence was presented. Accordingly, it is concluded that a preponderance of the evidence establishes that Exhibits A, B and C(1) and (3) pertain to the same basic equipment which is the equipment tested by Complainant's witnesses.

Testing Procedure

Respondent's second principal contention is that no conclusion could have been reached as to how the equipment would operate since none of Complainant's witnesses followed the instruction manual while performing their tests. All of Complainant's witnesses acknowledged that in performing their tests they did not follow exactly the instructions set forth in the owner's manual provided with Respondent's equipment (e.g. 44-46, 54-57, 115, 118, 121-123, 138 and 164). However, all of Complainant's witnesses possessed impressive credentials (Exhibits E, H and I) and, on the basis of the tests they conducted, which were within their areas of specialty, concluded that Respondent's equipment was not capable of performing as represented (Tr. 40-44, 110-112, 149-153, 159-160). Through counsel, Respondent has alleged that if the procedures set forth in the owner's manual were followed exactly the equipment would perform as represented. However, such allegation is not evidence. While the hearing in this matter was initially scheduled to be held on February 27, 1980, the record remained open until April 29, 1980. If the equipment is as easy to operate as Respondent's advertising states, there was more than ample time available during the recesses in the hearing for Respondent to perform and document a test which followed the instructions in the owner's manual exactly and to present the results of such test for inclusion in the record.

The testimony presented by Complainant's witnesses with regard to the deficiencies of Respondent's equipment was consistent and impressive. Respondent had an opportunity to rebut this testimony but elected not to do so. Accordingly, it was proper to rely on Complainant's evidence and to conclude that Respondent's equipment would not perform as represented.

EXCEPTION I

The Administrative Law Judge erred in denying Respondent's motion to strike Dr. Apple's testimony.

Early in the hearing Respondent's counsel objected to Dr. Apple's testimony stating in part:

"We do not know at this juncture and there is no proof prior to Dr. Apple's testimony that the machine he tested is a machine which was delivered or advertised by Telestar. It is a machine that was supplied to him but that is all we know." (Tr. 22, 23)

Following a discussion of this matter Respondent's objection was overruled by the presiding Administrative Law Judge (Tr. 19-23).

In view of the conclusion previously reached in connection with Respondent's first contention, it is concluded that this objection is without merit.

EXCEPTION 2

The Administrative Law Judge erred in receiving both advertisements (Exhibits A and B) into evidence.

EXCEPTION 3

The Administrative Law Judge erred in permitting testimony pertaining to both advertisements.

Exhibits A and B were received into evidence by stipulation and without objection (Tr. 6). Accordingly, Exception 2 clearly is without merit. Exception 3 merely restates the substance of Respondent's first argument. In view of the conclusion reached in connection with Respondent's argument that the advertisements pertain to, and the units tested were, the same basic "Truth Machine", this exception is without merit.

EXCEPTION 4

The Administrative Law Judge erred in finding that the testimony of Complainant's witnesses substantiated that Respondent's equipment did not perform or meet the representations cited in the complaint because the testing procedure followed did not conform with the procedures set forth in Respondent's operator's manual furnished with its equipment. Therefore, Respondent contends that there could be no finding that Respondent's equipment would not operate if the instructions in the manual were followed.

This argument is the same as Respondent's second contention which was previously addressed and found to be without merit.

EXCEPTION 5

The findings and conclusions of the Administrative Law Judge should be set aside because of the Respondent's inability to produce and call witnesses.

The record is unclear as to why Respondent presented no witnesses at the initial hearing on March 4, 1980. It is clear the hearing was recessed on that date until April 8, 1980, for the specific purpose of permitting Respondent to present testimony at that time. The circumstances surrounding Respondent's failure to present any testimony on April 8 were previously discussed. On April 29, 1980, Respondent's failure to produce any witnesses was attributed to the fact that "Mr. Macula (sic)" (presumably McCullar) was "a target of a pending grand jury investigation" and that "You have the problem of the 5th Amendment rights and situations such as that." (Tr. 214). However, Respondent's counsel acknowledged: "I am not saying that we could not have proceeded with other witnesses. Of course we could have." (Tr. 214).

The presiding Judge demonstrated exceptional patience and consideration in accommodating Respondent's stated intent to refute the evidence presented by Complainant. If the representations made by Respondent in its advertising are true it could have easily and on short notice obtained qualified persuasive rebuttal evidence. Respondent chose not to do so and such failure is not a basis for disturbing the findings and conclusions of the Initial Decision. Accordingly, Respondent's fifth exception is without merit.

EXCEPTION 6

The Chief Administrative Law Judge erred in his determination that the representations in paragraphs II A through H of the complaint are false because it was not based on facts in the record and therefore was erroneous.

This exception is apparently based on Respondent's previous arguments and exceptions. Since they have been found to be without merit, this exception is also found to be without merit.

CONCLUSION

After consideration of the entire record and Respondent's arguments and exceptions on appeal, it is concluded that the Initial Decision correctly holds that Respondent is engaged in a scheme or device 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. § 3005 is being issued contemporaneously with this decision.