In the Matter of the Complaint Against

COSVETIC LABS, or any variation thereof at
P. O. Boxes 49024, 49087, 49303 and 49425,
Atlanta, GA 30329

and at P. O. Boxes 20190, 20429 and 20499,
Atlanta, GA 30325

and at P. O. Box 14048,
Atlanta, GA 30324

and at P.O. Box 95543,
Atlanta, GA 30347,

BRASWELL, INC., or any variation thereof at
P. O. Box 10064,
Atlanta, GA 30319,

COSVETIC LABS, or any variation thereof at
P. O. Box 1097,
Deerfield Beach, FL 33441

P.S. Docket Nos. 9/142, 9/143 and 10/43

Quentin E. Grant Administrative Law Judge

APPEARANCE FOR COMPLAINANT:
Daniel S. Greenberg, Esq.
Consumer Protection Division
Law Department
United States Postal Service
Washington, DC 20260

APPEARANCES FOR RESPONDENT:
John M. Creger, Esq.
H. Robert Ronick, Esq.
Katz, Paller & Land
470 E. Paces Ferry Road
Suite 2000 Atlanta, GA 30363

INITIAL DECISION

These proceedings were initiated by Complaints filed on October 21 and December 19, 1980, alleging that Respondent is in violation of 39 U.S.C. 3005 by engaging in a scheme or device for obtaining money or property through the mails by means of false representations concerning a product called 1980 DIET SYSTEM.

The Complaints specifically allege as follows:

I

That Respondent attracts attention to said scheme by means of advertisements calculated to induce readers thereof to purchase the "1980 Diet System" (also known as the "1980 Diet Package") and by separate advertisements touting the benefits of the individual components of said system.

II

A. That, by means of said advertisements, Respondent represents, directly or indirectly, by means of affirmative statement, implication, or omission, in substance and effect:

(1) That ingestion of the components of the "1980 Diet System" will, for most users, cause the body to burn fat more rapidly than it would have if said system had not been ingested;

(2) That ingestion of the components of the "1980 Diet System" will cause most users to eat less;

(3) That ingestion of the components of the "1980 Diet System" will cause most users to lose weight;

III

That, additionally, the representations made in regard to said individual components are the subject of separate complaints which are incorporated herein and made a part hereof by reference.

The Complaints allege that the representations alleged are materially false in fact.

Respondent filed answers to the Complaints, denying the making and the material falsity of the alleged representations and being engaged in violation of 39 U.S.C. 3005.

To obviate the necessity for repetition of the testimony and pleadings, these cases were consolidated by Order dated January 22, 1981.

On motion of Respondent the location of the hearing was changed from Washington, D.C. to Atlanta, Ga, where it was held from January 26 through 30, 1981.

The parties have filed written argument and proposed findings of fact and conclusions of law all of which have been fully considered and, to the extent indicated, have been adopted. Otherwise, they have been rejected as unsupported by or contrary to the evidence or because of their irrelevance or immateriality.

FINDINGS OF FACT

1. Respondent, under the names and using the addresses showing in the captions of these proceedings, is engaged in selling a product called 1980 DIET SYSTEM (or 1980 DIET PACKAGE) and obtaining money or property therefor through the mails. (CX-151-154); CX-171, 189, 307; Tr. 188-213).

2. The 1980 DIET SYSTEM is a package consisting of GUARANA, DIGESTAID (sometimes referred to in Respondent's advertising as Panzyme II) and APPETITE ELIMINATOR. (Resp. Brief, p. 11).

3. Attached hereto as Exhibits A and B are typical examples of Respondent's advertisements for the product.

4. Respondent's answers in these proceedings denied the making of the representations alleged in the Complaints. At the hearing Complainant placed in evidence Respondent's advertisements for the product. Complainant's proposed findings of fact set forth in detail the language therein which it claims makes the representa- tions alleged. Respondent has not offered evidence, argument, or proposed findings of fact and conclusions of law that its advertising does not make such representations. On this issue its defense is confined to the argument that the representations made are either not false or, if false, are not materially so. On this state of the record the making of the representations as alleged in the Complaints is treated as admitted.

5. Each of the three components of the 1980 DIET SYSTEM was the subject of evidence offered at the consolidated hearing held in Atlanta, Georgia, from January 26 to January 30, 1981, and the subject of separate initial decisions heretofore issued. GUARANA was the subject of the initial decision in P.S. Docket Nos. 9/134 et al., issued May 22, 1981; DIGESTAID was the subject of the initial decision in P.S. Docket Nos. 9/118 et al., issued May 18, 1981; APPETITE ELIMINATOR was the subject of the initial decision in

P.S. Docket Nos. 9/121 et al., issued May 12, 1981. The findings of fact, discussion, and conclusions of law in each of those decisions is incorporated herein as if fully set forth.

6. Based on the separate decision relating to each of the three components of 1980 DIET SYSTEM it is found that the representations made by Respondent as to 1980 DIET SYSTEM (as alleged in the Complaints herein and found, supra ) are false in fact. Such representations are material in that their natural tendency is to induce readers of Respondent's advertising to purchase the product.

CONCLUSIONS OF LAW

1. Respondent is engaged in the conduct of a scheme for obtaining remittances of money through the mails for its product 1980 DIET SYSTEM by means of materially false representations in violation of 39 U.S.C. 3005.

2. An order pursuant to that statute in the form attached should be issued against Respondent.