In the Matter of the Complaint Against

ORIENTAL NURSERIES, INC.
P. O. Box 522456
at Miami, FL 33152

P.S. Docket No. 9/116;

Cohen, James A.

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

APPEARANCE FOR RESPONDENT:
Tyler Abell, Esq.
David Simon, Esq.
Bregman, Abell & Kay
1900 L Street, N.W.
Washington, DC 20036

POSTAL SERVICE DECISION

Both Complainant and Respondent have appealed from an Initial Decision of an Administrative Law Judge which holds that with regard to the sale of the Paulownia Tomentosa or "Chinese Empress" tree 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 October 17, 1980, the Consumer Protection Division, Law Department, United States Postal Service, filed a Complaint alleging that Respondent, in connection with the sale of the "Chinese Empress" tree or Paulownia Tomentosa is engaged in a scheme for obtaining money through the mail in violation of 39 U.S.C. § 3005. Specifically, in Paragraph III, the Complaint alleges:

"By means of such materials Appellant's advertisement attached to the Complaint and others similar thereto, Respondent represents, directly or indirectly, in substance and effect, whether by affirmative statements, omissions or implication that:

(a) the CHINESE EMPRESS tree will grow approximately 16 feet in height the first season;

(b) the average person planting the CHINESE EMPRESS tree may reasonably expect growth of significantly more than the typical 6 to 8 ft. in a single season;

(c) the CHINESE EMPRESS tree 'thrives in areas where the temperatures can drop as low as 25 degrees below zero.'

(d) the average gardener can expect the CHINESE EMPRESS tree to produce large number of flowers within one or two years, commensurate with the claimed growth rate of the tree.

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

At a hearing held to take evidence on the allegations of the Complaint, the Complainant presented the testimony of Dr. F. S. Santamour, Jr., a Ph.D., in forestry-plant genetics who is the acting director of the U. S. National Arboretum in Washington, DC, and has had personal experience in raising the paulownia Tomentosa. Respondent called its president to testify about complaints the firm had received, his personal experience in connection with the growth of two of the trees which are planted in the yard of his resident and several photographs which were received into evidence. In addition, the parties stipulated that the record in Oriental Nurseries, P.S. Docket No. 8/24 could be made a part of the evidentiary record in this proceeding. P.S. Docket No. 8/24 addresses a different advertisement of Respondent's but pertains to the same tree.

On the basis of the testimony and the documentary evidence presented, an Administrative Law Judge concluded in an Initial Decision that Respondent makes most, but not all, of the representations alleged, that the representations found to have been made are material and that they are false. Accordingly, it was concluded that Respondent is engaged in activities which are in violation of 39 U.S.C. § 3005.

COMPLAINANT'S EXCEPTION

Complainant's sole exception on appeal relates to the representation alleged in Paragraph III(c) of the Compliant. This paragraph alleges that Respondent represents in substance and effect, whether by affirmative statements, omissions or implication that "the Chinese Empress tree 'thrives in areas where temperatures can drop as low as 25 degrees below zero.'" The portion of Respondent's advertising on which this allegation is based reads:

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

The Administrative Law Judge concluded in the Initial Decision that because the alleged representation in the Complaint omitted the words "shaded or sheltered" the representation alleged in the Complaint was not made in Respondent's advertisement (I.D. p. 5).

Complainant argues that the omission of the words "shaded or sheltered" from the allegation of the Complaint is a minor omission which does not alter the plain message of Respondent's advertising that its tree thrives in areas where temperatures can drop as low as 25 degrees below zero. Complainant points out that the use of the word "even" in the advertisement conveys to the reader the message that the tree will thrive when subjected to undesirable growing conditions. Complainant also argues that the allegation of the Complaint clearly states the charge against Respondent. Respondent contends that the omission is material, not minor as Complainant argues, and that proof of cold-hardiness in a sheltered area would of necessity address issues that do not arise if the issue is cold-hardiness in an unsheltered area. Respondent further argues that Complainant transposes the word "even" in the advertisement and thereby completely alters the plain import of the published words and conveys an impression opposite that derived from the advertisement.

The different in the positions of the parties turns primarily on the reader's interpretation of Respondent's advertising and in this regard to a large extent on the use of the word "even" in the advertisement. While the language of Respondent's advertisement may be susceptible to the interpretations urged by both parties, it would not have been difficult for Respondent to have chosen statements which would have clearly stated what it intended. See Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 771-72, fn 24 (1976) citing United States v. 95 Barrels of Vinegar, 265 U.S. 438 (1924). Moreover, in determining the effect of the representations on ordinary readers, it is not necessary to find that all readers interpret an advertisement as making a representation, but only that a significant number of readers would interpret an advertisement as making the alleged representation. The issue is whether the language is liable to deceive, not if it will deceive everyone. Donaldson v. Read, 333 U.S. 178, 189 (1948); U.S. v. 95 Barrels of Vinegar, 265 U.S. 438, 443 (1924); Rhodes Pharmacal Co. v. Federal Trade Commission, 208 F.2d 382, 387 (7th Cir. 1953). Gottlieb v. Schaffer, 141 F.Supp. 7, 16 (S.D. N.Y. 1956). Applying these standards to Respondent's advertising and considering its advertising in its totality, it is concluded that a significant segment of the population would interpret Respondent's advertising as Complainant contends. This interpretation conveys to the reader the cold hardiness of the tree in a more unfavorable growing environment than an open sunny area. Such an interpretation of Respondent's advertisement makes immaterial the omission of the words "shaded or sheltered." It is, therefore, concluded that Respondent makes the representation set forth in Paragraph III(c) of the Complaint.

As noted in the Postal Service Decision in P.S. Docket No. 8/24, while the tree may survive in climates with temperatures as low as 25 degrees below zero, the tree will not thrive. Oriental Nurseries, P.S. Docket No. 8/24 (PSD 1981) at pp. 20, 21. The evidence received at the hearing held in connection with this proceeding is in accord with that finding (Tr. 66-68). Accordingly, it is concluded that the representation alleged in Paragraph III(c) of the Compliant is made in Respondent's advertising and that it is false. Therefore, Complainant's exception on appeal is sustained.

RESPONDENT'S EXCEPTIONS

"THE ADMINISTRATIVE LAW JUDGE ERRED IN FINDING
THAT THE REPRESENTATIONS ALLEGED IN PARAGRAPH
III (a) OF THE COMPLIANT WERE MADE"

Paragraph III(a) of the Complaint alleges that Respondent's advertisement represents that "the Chinese Empress will grow approximately 16 feet in height in the first season." Citing various portions of Respondent's advertisement, the Administrative Law Judge concluded in the Initial Decision that Respondent makes this representation (I.D. pp. 4-5). Respondent argues that a fair reading of its advertisement demonstrates that this representation is not made. Respondent points out that its advertisement represents that its tree may grow 6, 8, 10, 14 or 16 feet in the first season. Respondent argues that the Administrative Law Judge ignored all except the highest number and disregarded all references to the fact that 16 feet was record growth. It is Respondent's position that the ordinary reader understands that the advertisement does not guarantee or even suggest that a tree received in response to the advertisement would grow 16 feet in one season.

Respondent misdescribes the content of its advertisement. The advertisement does not state that a one year old 16 foot high tree would constitute a record growth. The largest print in the advertisement states:

"A RECORD TREE ACTUALLY GREW ALMOST 30 FEET TALL...IN ONLY 14 SHORT MONTHS]"

Immediately below is a statement that a man in Kentucky grew a 16 foot tree in one season. Immediately below that is a statement that a "weak looking sprout" grew 14 feet in one season. Other less prominent language in the advertisement states that a tree growing "from seed" may grow to 6, 8, or even 10 feet tall in the first season. While the advertisement is not clear, the ordinary reader would expect it would receive a tree, not seed for a tree, in response to Respondent's advertising. Accordingly, the advertisement does not represent growth of approximately 16 feet in one season. Therefore, Respondent's position on appeal is without merit.

"THE ADMINISTRATIVE LAW JUDGE ERRED IN FINDING THAT
THE REPRESENTATIONS ALLEGED IN PARAGRAPH III (b) OF
THE COMPLAINT WERE MADE"

Paragraph III (b) of the Complaint alleges that Respondent's advertisement represents that "the average person planting the Chinese Empress tree may reasonably expect growth of significantly more than the typical 6 to 8 feet in a single season." The Administrative Law Judge found in the Initial Decision that this representation is made and that it is materially false. (I.D. pp. 5, 7-9, 14). Respondent argues that the express language and overall impression of the advertisement would lead a reader to believe that he may expect approximately 10 feet of growth in the first year. Respondent's argument again misdescribes its advertisement as indicating that 16 feet is represented as record growth. For the reasons set forth under the preceding exception it is concluded that Respondent's advertising represents that the normal growth of its tree is significantly more than 6 to 8 feet in one season. Accordingly, this exception is without merit.

"THE INITIAL DECISION AS TO PARAGRAPH III (d) OF
THE COMPLAINT IS ERRONEOUS"

Paragraph III (d) of the Complaint alleges that Respondent's advertising represents that the "average gardener can expect the Chinese Empress tree to produce large numbers of flowers within one to two years, commensurate with the claimed growth rate of the tree." The Administrative Law Judge found in the Initial

Decision that Respondent makes this representation and that it is materially false (I.D. pp. 5-7, 9-10, 14). Respondent argues that the advertisement does not make any mention of the time within which the tree will bloom. Respondent also argues that there is nothing whatsoever in its advertisement pertaining to the expectations of an "average gardener." Accordingly, Respondent argues that since the advertisement is silent on the age of the flowering tree and there is no language concerning expectations of the average gardener, the decision with regard to this representation is incorrect.

The advertisement states:

"When in bloom you tree will produce DAZZLING ARRAYS OF GORGEOUS BOUQUETS OF FLOWERS resembling GIANT SNAP DRAGONS AND FOX GLOVES...these breathtaking bouquets will fill the air with rich fragrances equal to any exotic perfume.

That's right friends, just imagine, not only will you have the FASTEST GROWING TREE IN AMERICA...but you will have your very own FLORAL MASTERPIECE that will transform your garden into a paradise for a lifetime." Several other statements in the advertisement indicate that a purchaser will receive a beautiful flowering tree which will achieve substantial growth in a single season. The advertisement states that the tree's giant heart shaped leaves occur only when the tree is young. There is no similar qualification which would lead the reader to believe that blooms normally occur only on a mature tree, which is in fact the case (Tr. 36). Based on these representations and the entire "atmosphere and thrust" of the advertisement it is concluded that many, if not most, readers would interpret the advertisement as representing that commensurate with the phenomenal growth which occurs the tree will have "Thousands of the most beautiful orchid colored flowers you have ever seen," within one to two years.

With regard to Respondent's argument pertaining to "the average gardener" Appellant's advertisement gives no indication that it is directed toward an individual possessing any particular gardening skill. To the contrary, it states: "It takes only five minutes to plant this unbelievable tree and is so simple that even a child can do it." A review of several dictionary definitions of "gardener" indicates that a gardener is one who does gardening work for compensation or an individual who has more than an occasional interest and nominal expertise in gardening and landscaping matters. Since the advertisement does not represent what "the average gardener" would expect with regard to the blooming characteristics of the tree it can not be concluded that Respondent makes the representation set forth in Paragraph III (d) of the Complaint. Accordingly, this exception is sustained.

"THE ADMINISTRATIVE LAW JUDGE ERRED IN EXCLUDING
EVIDENCE AS TO CUSTOMER COMPLAINTS"

Through the testimony of its president, Respondent attempted to present evidence concerning complaints that had been received by Respondent from purchasers of the tree. Postal Service Counsel objected on the grounds that the customer complaints were irrelevant and immaterial. Respondent's Counsel argued:

"What I am trying to demonstrate is that in fact the complaints were not in any way directed to those matters, but they were complaints about other things." (Tr. 111)

The presiding Administrative Law Judge declined to receive the evidence, presumably on the grounds asserted by Complainant that it was not relevant or material (Tr. 111-112). Respondent argues that as a result of the presiding Administrative Law Judge's exclusion of the customer complaints, the record is devoid of any proof of the effect of the advertisement on its readers.

In administrative proceedings under 39 U.S.C. § 3005, the Administrative Law Judges and the Judicial Officer, without the assistance of testimony, may properly assess the effect of an advertisement upon the ordinary reader and determine whether representations found to be false are material. See Standard Research Labs, P.S. Docket Nos. 7/78 and 7/86 (P.S.D. 1980) and cases cited therein. Where, however, it has been concluded that evidence could be of assistance in determining the effect of an advertisement on the ordinary mind such evidence has been admitted into the record. E.g., Nancy Pryor, P.S. Docket No. 7/81 (P.S.D. 1980); Sean Michaels, P.S. Docket No. 5/16 (P.S.D. 1979); Sara Michaels, P.S. Docket No. 5/95 (P.S.D. 1979). Cf., Rhodes Pharmacal Co. v. Federal Trade Commission, supra. The existence of actual dissatisfied customers need not be established in order to find a violation of § 3005. See Farley v. Heininger, 105 F.2d, 79 (D.C. Cir. 1939); Fairfield Floral Co. v. Bradbury, 89 Fed. 393 (1898); Damiana Plus, P.S. Docket No. 6/174 (P.S.D. 1979); Sean Michaels, P.S. Docket No. 5/16 (P.S.D. 1977).

While the absence of complaints may constitute some evidence of what the ordinary reader understands Respondent's advertising to represent, it does not possess sufficient probative value to affect the disposition of the case. It did not, therefore, constitute reversable error to refuse its admission even though it may have been relevant.

Respondent also argues that the representations in its advertisement, to the extent they may be somewhat misleading, are directed towards readers of a discerning attitude who would not be deceived by mere commercial "puffing." Respondent contends that there is a distinction between what would be influential and material to a reader seeking a miracle cure or aphrodisiac and one who is contemplating purchasing a tree through the mail. If Respondent's representations were limited to the use of subjective adjectives, its argument might be persuasive. However, Respondent's representations are not so limited. Respondent represents that this is an unusual tree which at the end of the first growing season, in a hostile environment, will reach a height of approximately 16 feet and be covered with flowers. These are specific and material misrepresentations, not inconsequential exaggerations which are frequently described as puffing. Harris v. Rosenberger, 145 F. 449, 455 (8th Cir. 1906); Alaska Employment, P.S. Docket No. 7/166 (P.S.D. 1981).

Respondent also contends that a typical purchaser of its tree, after observing its exceptional growth of 8 to 10 feet in the first year, will be satisfied that he received what was advertised. As previously stated, evidence of dissatisfied customers is not necessary to establish a violation of 39 U.S.C. § 3005. In addition, the existence of satisfied customers does not establish that the cited statute has not been violated. See Farley v. Heininger, supra; Fairfield Floral Co. v. Bradbury, supra; Damiana Plus, supra; Sean Michaels, supra; Grapefruit Diet, P.O.D. Docket No. 3/77 (I.D. 1972).

For the foregoing reasons this exception of Respondent provides no basis for reversing the Initial Decision.

CONCLUSION

After consideration of the entire record and the exceptions of the parties, it is concluded that the Initial Decision was in error in holding that Respondent does not make the representation set forth in Paragraph III (c) of the Complaint. Respondent does make that representation and it is false. It is further concluded that the Initial Decision was in error in holding that Respondent does make the representation in Paragraph III (d). However, the fact that the Initial Decision erred in these holdings does not change the result. Respondent is engaged in a scheme or device for obtaining money through the mails by means of materially false representations. Accordingly, a remedial order under 39 U.S.C. § 3005 is being issued contemporaneously with this decision.