In the Matter of the Complaint Against

CONTEMPORARY MISSION, INC.
Publishing Division
285-A Saugatuck Avenue
at Westport, CT 06880

P.S. Docket No. 8/159;

Cowden, Joseph M.

APPEARANCE FOR COMPLAINANT:
Thomas A. Ziebarth, Esq.
Leslie A. Corston, Esq.
Consumer Protection Division
Law Department
Washington, DC 20260-6100

APPEARANCE FOR RESPONDENT:
William D. O'Reilly, Esq.
c/o Contemporary Mission, Inc.
85-A Saugatuck Avenue
estport, CT 06880

POSTAL SERVICE DECISION

This appeal arises from an Initial Decision of an Administrative Law Judge which found that Respondent is engaged in the conduct of a scheme for obtaining money through the mails by means of materially false representations in violation of 39 U.S.C. § 3005. The product which is the subject of this proceeding is a booklet, the "Guaranteed Relaxation Diet Plan," which is described in Respondent's advertising as a "Five Day Wonder Diet."

BACKGROUND

This proceeding was initiated by the Postal Service filing a Complaint charging that Respondent, Contemporary Mission, Inc., by means of an advertisement attached to the Complaint and other advertisements similar thereto represents, "directly or indirectly, in substance and effect, whether by affirmative statements, omissions or implication" that:

(a) the "Five Day Wonder Plan," or "Guaranteed Relaxation Diet Plan", is in fact a "diet," i.e., a program of caloric reduction to be followed as a means of losing weight; and

(b) the "Five Day Wonder Plan," or "Guaranteed Relaxation Diet Plan," is well within anyone's capabilities and will result in substantial weight loss ("5, 10, 15, 20, pounds or more") in five days with minimum effort on the part of the user.

The Complaint further charges that the representations are "materially false as a matter of fact" and thereby constitute a violation of 39 U.S.C. § 3005.

At a hearing on the charges of the Complaint conducted by an Administrative Law Judge, the Postal Service presented as witnesses Postal Service Inspector David G. Hennessey who testified about the purchase of Respondent's product and an expert witness, Arthur Frank, M.D., a specialist in internal medicine, with an emphasis on nutritional problems and management of obesity (CX-2; Tr. 6, 7). Respondent called as a witness, Father Patrick Berkery, a Catholic priest with a Ph.D. in Philosophy, who was the author of the advertisement and the booklet (Tr. 76, 77, 95).

In the Initial Decision the Administrative Law Judge found that Respondent's advertising circular (CX-1) makes by implication the representations alleged in the Complaint (FF-7, 10; CL-2). The Administrative Law Judge also concluded that the representations in Respondent's advertisement are materially false (CL-3); that the effect of the false representations is not dispelled by the promise of a refund (CL-5); and that whether anyone had actually complained about Respondent's advertising or been deceived thereby was irrelevant (CL-6). Therefore, he concluded that Respondent is engaged in the conduct of a scheme which is in violation of 39 U.S.C. § 3005, and that an Order as provided for in § 3005 should be issued (CL-7 and 8).

RESPONDENT'S EXCEPTIONS AND DISCUSSION

In its brief on appeal Respondent takes exception, in whole or in part, to findings of fact 3, 4, 5, 7, 8, 9, 10, 11 and 12, and conclusions of law 2, 3, 4, 6, 7 and 8. Respondent makes general arguments after which it presents four specific allegations of error. Each of Respondent's arguments and allegations of error is hereafter addressed.

GENERAL ARGUMENTS

Respondent first contends that its direct mail circular advertising its booklet (CX-1) is protected as free speech under the First Amendment of the Constitution as interpreted by the United States Supreme Court in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976). It argues that if this constitutionally protected speech is to be abridged the Postal Service must clearly meet its burden of proving that Respondent has made representations which are materially false and not mere puffing or exaggeration.

While commercial speech is protected by the First Amendment it may be regulated to guard against false or misleading advertising. Virginia State Board of Pharmacy, supra, at 771-72. Moreover, it is well established that 39 U.S.C. § 3005 (and predecessor statutory provisions), and proceedings thereunder, are a Constitutional exercise of authority to protect the public against false advertising. E.g., Donaldson v. Read, 333 U.S. 178 (1948); U. S. Postal Service v. Outpost Development Corp., 369 F.Supp. 399 (D. Cal. 1973). The Postal Service does have the burden of establishing a prima facie case which, if it is to prevail, the Respondent must then rebut. See Peak Laboratories v. U. S. Postal Service, 556 F.2d 1387 (5th Cir. 1977); Standard Research Laboratories, P.S. Docket No. 7/48 (P.S.D. 1980). Ultimately, the Postal Service must sustain the burden of persuasion by a preponderance of evidence. See Steadman v. S.E.C., 49 U.S. L.W. 4174 (1981); United States/Great Lakes Federal Surplus Depository, P.S. Docket No. 7/136 (P.S.D. 1981), and cases cited therein at 6.

Contrary to Respondent's contentions, a preponderance of the evidence establishes that Respondent's representations are material, not consequential exaggerations which are frequently described as puffing. See Oriental Nurseries, Inc., P.S. Docket No. 9/116 (P.S.D. 1981), and cases cited therein at 12.

Respondent recognizes that the "ordinary reader" test set forth in Donaldson v. Read, supra, is to be applied in proceedings under 39 U.S.C. § 3005. It cites M.K.S. Enterprises, Inc. v. U. S. Postal Service, 459 F.Supp. 1180 (E.D. N.Y. 1978), and American Image Corp. v. U. S. Postal Service, 370 F.Supp. 964, 966 (S.D. N.Y. 1974), for the proposition that the Postal Service cannot invoke its authority unless the overall effect of the advertising and not isolated phrases of the advertising misleads the ordinary reader. There are correct statements of the law. However, it is the application of these tests to Respondent's advertising and product which are in dispute and which is addressed later in this decision.

Respondent also argues that the elimination of the scienter requirement of the statute places added impoEance on the proper application of the ordinary reader test. As previously stated, the standard of proof required to establish a violation of Section 3005 is the preponderance of evidence standard. The absence of a requirement for a showing of scienter only eliminates an element of proof. It does not effect the application of the evidentiary standard.

RESPONDENT'S SPECIFIC EXCEPTIONS

"Complainant failed to prove its caloric reduction (FF-3, 9, and 10)"

The Initial Decision finds, in effect, that Respondent's plan is not a diet by any commonly recognized definition in that it does not present a program for reduction of caloric intake, and will not cause substantial weight loss within 5 days (FF-9, 10). This finding is based primarily on the testimony of Dr. Frank and the dictionary definition of the term "diet." (FF-4, 9).

Respondent contends that Complainant, as shown by the Complaint and Dr. Frank's testimony, erroneously believes that a diet "inescapably" involves a reduction of caloric intake and that this belief was improperly accepted in the Initial Decision. It contends that this is erroneous because the Atkins and Stillman diets do not employ caloric reduction. It argues that the Initial Decision ignores the primary dictionary definitions of "diet" in Webster's Third New International Dictionary, which is "food and drink regularly provided or consumed" or "habitual course of feeding." Respondent asserts that its plan is a diet in a most fundamental way, "that is, a sensible 'manner of living' (from the Greek, 'diaita'; see Webster's Third New International Dictionary.)" (Respondent's Brief at 7). Respondent objects to FF-5 where Dr. Frank's definition is stated as "A program in which the content, character and quantity of eating is modified for a special purpose such as weight reduction." Respondent also objects to the findings that its diet plan would not fall within these and dictionary definitions stated in the Initial Decision. It describes its "diet plan" as enable "a user to control his weight at a level acceptable to him by providing a simple, easily learned system for eating sensibly ... ." (Id.)

The two non-caloric diets referred to by Respondent are the "Atkins" and "Stillman" diets. There is no evidence in the record concerning the Stillman diet. The paperback book "Dr. Atkins' Diet Revolution" is in evidence (RX-1). Although the Atkins book deprecates "calorie counting" (E.g., at 83-100), it stresses carbohydrate reduction and a change of food types, which actually result in some caloric reduction (Tr. 52-53). A review of the document persuades that the reduction in calories as well as the change in food type will filing Weight loss.

Respondent's plan involves a method of self training in a technique of meditation and stress reduction, which by itself, without a change in eating habits, could not cause a person to lose weight (Tr. 17, 18). The plan provides a 5-day period for learning a relaxation technique, then a second 5-day period for applying that technique to prescribed thoughts which are to be repeated twenty times each night. These relate to the person's self-image. There is no guidance as to what a person should do, other than the relaxation and thought control exercises. The plan does not give any specific "how to's," or advice concerning food choices, amounts, or physical activities to reduce weight. It assumes the reader will know what foods to select or how much to eat and that through the reader's "natural weight control appestat" the reader's weight will be brought under control (CX-3 at 7).

Whether Respondent's meditation method may help people control their weight is not the issue in this case. The issue is whether the advertisement falsely represents the product. In the advertisement (CX-1), the plan is compared with other diets referred to as "run-of-the-mill no-win diet" plans, "a rigid diet regimen," "Old diets that never did what they were supposed to," "every other diet you've tried," and "'in' diets from Hollywood or Westchester or Miami." The advertisement also states that a person will never buy "another diet again." and "Most diet plans put you through torture at table and then expect you to march down to your favorite gym or spa ... ." By such comparison with other diets, which in the entire context clearly suggest weight reduction by changes in eating, the advertisement implies that through its use, weight may be lost with little effort. However, the specific technique is not made clear, being referred to only as the "Relaxation Diet Plan."

An ordinary reader would not think of the Greek derivation or other esoteric, obscure or obsolete usages of the word diet when seeing the word in the context of the advertisement. Instead, by comparing the plan with other "diets," an ordinary reader would equate it to that to which it is compared, i.e., some type of prescribed course of eating which would result in weight loss, even though the advertisement states a person could eat anything he likes.

When Father Berkery was asked why he kept referring to the word "diet" in the advertisement, he stated:

I t is a five-day wonder diet. In other words, the term diet means that I am using it generically to take in any type of program that would have to do with weight control (Tr. 95.)

When asked why the term "five-day wondex diet" was used many more times than the words "the relaxation diet plan," he stated:

I seem to recall there is the term five-day wonder diet, there is a nine-day wonder diet, there is a thirty-day wonder diet. In other words, it is an acceptable term within the diet field. The term five-day meaning that within five days you could re-program your mind, not that you would necessarily lose. There was no attempt to indicate that you could lose 20 pounds. But it was the use of an accepted wonder diet term. (Tr. 96.)

He could not answer as to whether the other diets he referred to (i.e. nine-day and thirty-day) were a kind of psychological conditioning or a program restricting caloric intake with a given list of foods. (Id.)

It is obvious both from the language of the advertisement and the testimony that the ordinary reader would link Respondent's plan with other weight reduction diet plans based on a change in eating habits resulting in caloric reduction. Cf., Baslee Products Corp. v. U. S. Postal Service, 356 F.Supp. 841 (D. N.J. 1973); Reilly v. Pinkus, 388 U.S. 269 (1949); G. J. Howard Co. v. Cassidy, 162 F.Supp. 568, 572 (E.D. N.Y. 1958).

On the basis of the specific representations made and information withheld in the advertisement it is concluded that the advertisement falsely represents that Respondent's plan is a type of "diet" for weight loss as would be understood by an ordinary reader to mean a change in eating which would result in caloric reduction.

This exception is without merit.

2. "Dr. Frank Admitted that He is Not An Expert on Meditation (FF-5, 8)"

Respondent claims that the Administrative Law Judge erred in making any findings based upon the testimony of Dr. Frank with respect to a meditation weight control program because Dr. Frank admitted that he was not an expert on meditation techniques (Tr. 51).

Dr. Frank clearly was an expert on obesity control and on weight loss methods in the medical sense. Father Berkery, whose testimony Respondent contends must be given greater weight than that of Dr. Frank on the efficacy of a meditation weight control program, is not a medical expert. He has no formal background in medicine (Tr. 88), other than through "general attitudinal psychologies" (Tr. 89). Dr. Frank's testimony on the causes of weight reduction was more persuasive than that of Father Berkery. There was no error in the Administrative Law Judge's assignment of weight to that testimony.

3. The Circular Does Not Represent That Substantial Weight Loss Will Result in Five Days (FF-7; FF-9; FF-10)"

Respondent disputes the finding that the advertisement represents that there will be a substantial weight loss in five days. This argument goes to the portions of the Initial Decision which support the finding that Respondent makes the second of law alleged and that it is false. Respondent contends that a full and fair reading of the advertisement, in light of the result in M.K.S. Enterprises, supra, shows there has been no violation of 39 U.S.C. § 3005. Specifically, Respondent says that the advertisement simply states that the plan "can (not will) free you of 5, 10, 15, 20 pounds or more of unwanted flab and fat, period]" Respondent asserts that the Plan sets forth a five-day regimen (manner of living) which provides a user with the capability to lose as much weight as he chooses, be it 5 or 20 pounds.

The Complaint paraphrases the statement in large letters on the first page of the advertisement:

LOSE WEIGHT] EVEN WHILE YOU SLEEP, This Revolutionary Diet Plan is Working for You. Yes, WE GUARANTEE THE RELAXATION DIET PLAN Can Free You of 5, 10, 15, 20 pounds or more of unwanted flab and fat]

Throughout the advertisement the FIVE DAY WONDER DIET is emphasized. Nothing in the advertisement contradicts the impression gained from the first page that 5, 10, 15, 20 pounds or more will be lost in five days.

Although the advertisement does not use the word "substantial," the advertisement clearly suggests that a substantial weight loss "of 5, 10, 15, 20 pounds or more" will be achieved with minimal effort on the part of the user. The overall thrust of Respondent's advertisement is on losing weight and the "FIVE DAY WONDER DIET." Accordingly, the Initial Decision follows the rationale of M.K.S. Enterprises, Inc., supra.

This exception is denied.

"Thousands of Customers Purchased the Book Without a Single Complaint (FF-11; FF-12)"

Respondent contends that the Judge erred in finding that the absence of consumer complaints was irrelevant to the issues in this matter. It contends that Fairfield Floral Company v. Bradbury, 89 Fed. 393 (Cir. Ct. D. Maine, 1898), cited by the Judge, is no longer pertinent. This, Respondent argues, is because of an amendment to the Postal Fraud Statute in 1968 which omitted the "scienter" evidentiary requirement. Respondent asserts that customer complaints were not important when scienter was required because they were not necessary to prove a violation of the fraud statutes and were, therefore, immaterial. It contends that under the present statute the absence of complaints is evidence that an "ordinary reader" was not misled.

It is true, as Respondent asserts, that the 1968 statutory amendment eliminated the requirement of proof of scienter, i.e. the intend to defraud. M.K.S. Enterprises v. U. S. Postal Service, supra; United States v. International Term Papers, Inc., 455 F.2d 1277, 1280 (1st Cir. 1973); Lynch v. Blount, 330 F.Supp. 689 (S.D. N.Y. 1971), affirmed, 404 U.S. 1007 (1972). However, the resulting effect was to lessen the evidentiary burden upon the Postal Service, not to increase it, as Respondent's contentions imply.

The present statute, 39 U.S.C. § 3005, authorizes the issuance of mail stop orders upon a finding "that any person is engaged in. at a scheme or device for obtaining money or property through the mail by means of false representation ... ." The change only eliminated the requirement for proof of intent to defraud. It did not change the "ordinary reader" criteria with regard to what is represented in an advertisement.

Although the Administrative Law Judge referred to the lack of consumer complaints as "irrelevant," he received evidence concerning the absence of complaints. The fact that no complaints were received has little, if any, probative force under the "ordinary reader" test. The absence of complaints is as unimportant today as it was to the court in Fairfield Floral Company v. Bradbury, supra, at 396. The decisive factor is whether there is a scheme to obtain money through the mails by means of false representations, not whether anyone complains, or was in fact misled. Farley v. Heininger, 105 F.2d 79, 84 (D.C. Cir. 1939), cert. denied, 308 U.S. 587; United States/Great Lakes Federal Surplus Depository, supra, at 8.

While the Initial Decision should have made reference to the evidence of customer complaints in terms of the probative weight it has to the issues in dispute, the characterization of the evidence as irrelevant was harmless error.

CONCLUSION

After consideration of the entire record and Respondent's arguments and exceptions on appeal, it is concluded that the 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.