P.S. Docket No. 9/152
January 15, 1981
In the Matter of the Complaint Against
UNITED FRATERNAL ORDER OF PEACE OFFICERS
and
UNITED PEACE OFFICERS YEAR BOOK
Suite #400, 1522 K Street, N.W. at
Washington, DC 20005
and
THE NATIONAL PEACE OFFICER,
and
NATIONAL PEACE OFFICERS ASSOCIATION, INC.
825 N.E. 46th Terrace at
Kansas City, MO 64116
and
at P. O. Box 10602
Kansas City, MO 64118
P.S. Docket No. 9/152
Duvall, William A.
APPEARANCE FOR COMPLAINANT:
H. Richard Hefner, Esq.
Clark C. Evans, Esq.
Steven B. Caver, Esq.
Law Department,
United States Postal Service,
Washington, DC 20260
APPEARANCE FOR RESPONDENT:
Robert G. Duncan, Esq.
Galen Mussman, Esq.
Duncan, Russell and Reardon,
2700 Kendallwood Parkway,
Kansas City, MO 64119
Billy B. Chapman,
Executive Director, The National
Peace Officer's Association, Inc.,
825 N.E. 46th Terrace,
Kansas City, MO 64116
INITIAL DECISION
This proceeding began on October 27, 1980, when the Consumer Protection Division, Law Department, United States Postal Service (Complainant) filed a Complaint in which it charged that United Fraternal Order of Peace Officers and United Peace Officers Year Book at Suite #400, 1522 K Street, N.W., Washington, DC and The National Peace Officer and National Peace Officers Association, Inc., 825 N.E. 46th Terrace at Kansas City, MO and P. O. Box 10602 at Kansas City, MO (hereinafter sometimes referred to as Respondents, individually or collectively, as the context indicates) are engaged in conducting a scheme for obtaining money through the mail by means of false representation in violation of 39 U. S. Code § 3005, including the mailing of matter which is nonmailable under the terms of 39 U. S. Code § 3005(d).
In paragraph I of the Complaint it is alleged that attention is attracted to this scheme by means of unsolicited direct mailings which are in the form of invoices or statements of account.
Complainant alleges in paragraph II of the Complaint that Exhibits "A", "B" and "C" are copies of invoices of the type referred to in paragraph I. Copies of these items are attached hereto as Appendices 1, 2 and 3.
In paragraph III of the Complaint, Complainant alleges that by means of the aforementioned mailings it is expressly or impliedly represented in substance and effect that:
(a) Funds solicited by Respondent will inure to the benefit of law enforcement officers.
(b) The amount set forth on the face of the solicitation is due and owed to Respondent.
(c) The addressee has previously authorized Respondent to publish the "AD COPY" on addressee's behalf.
(d) Respondent is a nationally organized association of peace officers and/or law enforcement officers.
Complainant alleges in paragraph IV of the Complaint that the representations alleged in paragraph III are materially false as a matter of fact.
In paragraph V of the Complaint, it is stated that the mailing of matter which is nonmailable under § 3005(d) of Title 39, United States Code, shall constitute prima facie evidence that the mailer is engaged in conducting a scheme or device for obtaining money or property through the mails by false representations.
Complainant then requests the issuance of an order conforming with 39 U. S. COde § 3005(a)(1) and (2) against the Respondents.
In the Answer filed on behalf of Respondents United Fraternal Order of Peace Officers and United Peace Officers Year Book, Respondent states, in pertinent part:
"1. That the Complaint fails to comply with Title 39, Code of Federal Regulations, Section 952.5 in that it does not state the legal authority and jurisdiction for initiating the Complaint.
"2. That there is no such legal entity as the United Peace Officers Year Book nor The National Peace Officer.
"3. That the respondent specifically deny that they are or have been conducting a scheme for obtaining money through the mail by means of false representations.
"4. That the respondent specifically deny that they have been mailing matter which is non-mailable under the terms of 39 U.S.C. § 3005(d).
"5. That the respondent specifically deny that they have been mailing unsolicited direct mailings in the form of invoices or statements of account.
"6. That respondent specifically deny that Exhibits 'A', 'B' and 'C' were unsolicited mailing, and specifically state that the sending of those invoices or statements was previously authorized by phone.
"7. That in regard to paragraph III of the Complaint;
"(a) Respondent specifically deny that they have expressly or impliedly represented in substance and affect that all of the funds solicited by the respondent or any of them, would inure to the benefit of law enforcement officers and specifically state that some of said funds do inure to the benefit of law enforcement officers including members of the respondent organizations.
"(b) That respondent specifically deny that the amount set forth on the face of the solicitation was not due and owed to respondent in accordance with previous authorization by the person to whom said mailing was directed.
"(c) That respondent specifically deny that the addressee had not previously authorized the respondent to publish the 'AD COPY' on addressees behalf.
"(d) That respondents United Fraternal Peace Officers and National Peace Officers Association, Inc. specifically state that they are a nationally organized association of peace officers and/or law enforcement officers.
8. That respondent specifically deny that they made any materially false representations of fact.
"9. That the respondent specifically deny that they are in violation of 39 U.S.C. § 3005.
* * *"
In a letter dated November 12, 1980, from the Executive Director of the National Peace Officers Associations, Inc. and, also, on behalf of The National Peace Officer, which letter was treated as the Answer of these Respondents to the Complaint, it was stated as follows:
"This is in response to the allegations contained in your complaint published by the Office of Administrative Law Judges dated October 29, 1980 and listed as P.S. Docket 9/152. This response answers only those allegations directed at the National Peace Officers Association and it's sic official journal, The National Peace Officer.
"(a) The National Peace Officers Association is, in fact, a national association made up of profes- sional law enforcement officers from throughout the United States representing various elements of law enforcement including Federal, State, County and City, their active and commissioned reserves and duly commissioned Security Officers approved by Federal, State, County or State governments to operate under their jurisdiction. Further evidence is indicated by the cross section of the country represented by the Officers, Board of Directors and Advisory Council of the National Peace Officers Association.
"(b) Funds received from membership dues and/or receipts from publication of the official journal, The National peace Officer, are used to further the objectives of the National Peace Officers Association through providing services to it's sic members and fulfilling the objectives of the association as outlined in the constitution and by-laws of the association. Which include, but not limited to, providing education scholarships sic for children of members and deceased members, death benefit gratuity, death in the line of duty insurance, national recognition award program for peace officer of the year and other awards of recognition and service, and hosting the National Peace Officers Combat Pistol Championship held in conjunction with the National Conference and School of Instruction for national peace officers.
"(c) The National Peace Officers Association is, and by virtue of Chapter 21, Article 9 of the revised statutes of the State of Nebraska, a duly constituted corporation, and has been for the past 25 years, for the purpose of improving the professionalism and enhance the image of professional law enforcement officers throughout the United States.
"(d) Active membership is sic the National Peace Officers Association is restricted to regularly com- missioned officers of the Federal, State, County and City law enforcement agencies, their active commissioned reserves and duly commissioned Security Officers.
"Examination of the information contained in sub- paragraphs (a) thru (d) above, the entire texts of the constitution and by-laws of the National Peace Officers and other information contained in this letter clearly establishes allegations and charges that the National Peace Officers Association is not a National organiza- tion and one not dedicated to the support of and providing support to it's sic membership is without substance or fact and should be dismissed without further action or consideration.
"As pertaining to the complaint that funds were solicited by the National Peace Officers Association illegally, the following facts are presented.
"(a) The National Peace Officer, official journal of the National Peace Officers Association, is published by contract through a publisher. Subject publisher is responsible for advertising, layout, typesetting, printing and mailing of subject magazine.
"(b) The publisher contracted by this association is Ms. Rosemary Evans, 8141 North Oak Trafficway, Kansas City, Missouri 64118, who has already through her attorney, answered allegations concerning certain ad promotions and ad solicitations. Be it understood, the only relationship the National Peace Officers Association has with the said, Rosemary Evans, is that relationship consisting of contractual agreement for publication of the National Peace Officer and ther sic is absolutely no relationship, business or otherwise, between the National Peace Officers Association and any other publication, organization or business of Ms. Rosemary Evans.
"(c) The National Peace Officers Association, being a professional association of law enforcement officers has never nor ever will allow it's sic association to become involved in any act illegal of unlawful.
"Your previously published allegations required the National Peace Officers Association to, (1) forward a rebuttal to the complaint and, (2) appear in person or be represented by attorney at a hearing on December 19, 1980 in Washington, D.C. to defend the National Peace Officers Association against subject complaints or be ruled against automatically sic for failure to appear. Having submitted full rebuttal for any allegations against this association, and, whereby Ms. Rosemary Evans will defend herself against any allegations brought against her, I submit requiring this association to appear before your hearing in Washington, D.C. is without justification and should be rescinded without prejudice to this association. This is NOT a abandonment of this case.
"Therefore, I hereby petition the Postal Service to immediately rescend sic the requirement for the National Peace Officers Association to personally appear or be officially represented before any future hearings of action in P.S. Docket No. 9/152. Belief or allegations that their sic is relationship between the National Peace Officers Association and other publications or organizations is without substance or fact. Having not received a reply to this petition prior to December 19, 1980, it will be assumed that subject petition is approved and their sic is no administrative or legal requirement for the national Peace Officers Association to personally appear before subject administrative hearing."
At this point, it is appropriate to describe in some detail the status and relationship of United Fraternal Order of Peace Officers (United) and National Peace Officers Association (NPOA).
NPOA is an organization of which Billy B. Chapman, who represented that organization at the hearing, is the Executive Director. NPOA publishes The National Peace Officer (hereinafter NPOA Book).
United was established in 1972 by Mrs. Rosemary Evans, who is now the Executive Secretary and Board Member of that organization. United publishes the United Police Officers Year Book (hereinafter United Book). (Tr. 179) Mrs. Evans is also the owner of a publishing business operated under the name Fortune Enterprise or Enterprises. (Tr. 179) She also founded an organization called The United Fraternal Order of Fire Fighters. (Tr. 207)
Mrs. Evans stated that in about February of 1978 she and a Mr. Morton, then Executive Director of NPOA, entered into an agreement, formalized only to the extent of a letter from Mr. Morton to Mrs. Evans, under which Mrs. Evans would publish NPOA's publication. (Tr. 196, 197) In argument, Mr. Chapman said that the publishing contract is with Fortune Enterprises, but in his letter of November 12, 1980, he stated that "The publisher contracted by this agency is Ms. Rosemary Evans, 8141 North Oak Trafficway, Kansas City, Missouri 64118."
Mrs. Evans stated that the publishing contract was initially to run for a period of 5 years, but that the contract was not offered as an exhibit. Mrs. Evans still functions under the contract which was still in effect as of the day of the hearing, and which had about two more years to run. Mrs. Evans and Mr. Chapman did not meet until Mid-October, 1980. (Tr. 233)
Section 3005 of Title 39, United States Code authorizes the Postal Service upon evidence satisfactory to it that any person is engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representation, including the mailing of matter which is nonmailable under § 3001(d) of Title 39 *** the Postal Service may issue an order which, among other things, forbids delivery of mail addressed to such person and forbids payment of money orders made out in favor of such person.
The section continues by providing that for purposes of the preceding sentence the mailing of matter which is nonmailable under § 3001(d) shall constitute prima facie evidence that the mailer is engaged in a scheme or device for obtaining money or property through the mails by means of false representation.
Section 3001(d) then provides, among other things, that matter otherwise legally mailable which is in the form of an invoice or statement of account due, but which is in fact a solicitation for the order of goods or services is nonmailable unless it bears on its face in conspicuous type certain statutory language or certain language prescribed by regulation of the Postal Service, the purpose of which is to advise the recipient of such mail, in effect, that the item is a solicitation, not a bill, and that the recipient of the mailing is under no obligation to make any payment on account of the offer unless the offer is accepted. (See 45 F.R. 26699, April 21, 1980)
Thus, the Complainant cites ample legal authority and jurisdiction for filing the Complaint.
Complainant's Exhibit 1-A is a copy of an invoice bearing the letterhead
"The National Peace Officer
Official Quarterly Publication of National Peace Officers Association, Inc.
Mailing Address
825 NE 46th Terrace
Kansas City, Missouri 64116" The invoice is labeled "INVOICE" at the bottom of the copy. It is addressed to Talbot Bird Co., 10950 Grandview, Shawnee Mission, Ks. 66210, and it is dated "8-6-80".
In the middle of the invoice form there is the following language:
"Business card Ad $39.50
Please enclose ad with check
OK'ed by Jerry Elliott"
At the extreme bottom of the form in smaller type the recipient is advised to --
"Make All Checks Payable To:
NATIONAL PEACE OFFICER"
Complainant's Exhibit 1-B is a copy of the envelope in which the above invoice was mailed to Talbot Bird Co. at the address shown above, "Attn: Mr. Jerry Elliott." The envelope is stamped as received by "Talbot, Bird & Co., Inc., Kansas City Branch," on August 11, 1980.
Complainant's Exhibit 7-A is a statement dated "8-15-80" on the form of
"UNITED PEACE OFFICERS YEAR BOOK
Official Publication of
UNITED FRATERNAL ORDER OF PEACE OFFICERS
THE FEDERAL BLDG.
1522 K Street N.W.
Suite #400
WASHINGTON, D.C. 20005"
This statement identifies itself as a statement of account by the use of the word "STATEMENT" in bold face type in the lower left- hand corner of the form; and by the following words appearing at various places on the form: "terms - 5% Discount If Paid Within 10 Days. PLEASE PAY ON INVOICE; "OFFICIAL RECEIPT WILL BE MAILED WHEN CHECK IS RECEIVED"; "Make All Checks Payable To: UNITED PEACE OFFICERS YEAR BOOK". This statement is addressed to:
"Kansas Office Education
1200 Commercial
Emporia, Ks. 66801"
The following message appears on the form:
"Request for renewal of business card ad $39.50
OK'ed by Mr. Eberle"
Complainant's Exhibit 7B is a follow-up reminder sent by United Fraternal Order of Peace Officers to the same addressee as in the case of CX-7A, but under date of "10-24-80". This statement also solicits payments of membership dues. In the lower left-hand part of this notice the following alleged information is included:
"Membership Dues $39.50
Expiration Date October 1980"
This form is signed "R. M. Evans, Executive Secretary".
Complainant's Exhibit 7C is a copy of an envelope addressed to the same addressee as in the case of CX-7A, and bears the return address of United Fraternal Order of Peace Officers at the Washington, D.C. address. This exhibit is postmarked Kansas City, KS, October 24, 1980.
On November 29, 1979, an application to rent P. O. Box 10602 at Kansas City, MO 64118 was filed on behalf of Fortune Enterprise and signed by R. M. Evans, 825 N.E. 46th Terrace, Kansas City, MO 64116. (CX-32) Inspector Richard N. Shollenberger testified that the box was voluntarily closed on June 6, 1980, and mail for that address was forwarded to 8141 N. Oak Trafficway, Kansas City, MO 64118, the address of the business office of Mrs. Evans. (Tr. 161, 162) That mailing of invoices originated from P. O. Box 10602 is established by CX-5A and CX-3K.
CX-5A is an invoice dated "12-12-79" in the amount of $39.50 addressed to "Air Products & Chemicals, 9725 Alden Road, Lenexa, KS." On the invoice it is stated that the amount sought is for a 1/16 page ad, and that the transaction was "approved by: Mr. McNallen". The mailing is labelled "INVOICE" in the lower left-hand corner thereof, and the addressee is to "Make All Checks Payable to National Peace Officer".
CX-3K is a copy of another invoice from which "825 N.E. 46th Terrace, Kansas City, Missouri," has been stricken through and on which there has been substituted therefor "P. O. Box 10602, Kansas City, MO 64118." It solicits $39.50 for a business card ad; it is addressed to "VFW National Headquarters, 406 W. 34th, Kansas City, MO 64111"; and it is sent to the attention of John Smith.
The exhibits heretofore described suffice to show that invoices or statements of amounts due have been sent through the mails under the names of all Respondents shown in the caption in connection with each of such names.
It now becomes necessary to determine whether the Respondents, or any of them, make the representations set forth in paragraph III of the Complaint.
When a membership organization issues a publication for which it sells advertisements, the average person to whom effort is made to sell advertising space normally and usually believes that some part of the income from the sale of such space will be used for the benefit of the membership. Respondents, therefore, do make the representation expressed in paragraph III (a) of the Complaint.
Examination of exhibits heretofore described, and other exhibits the majority of which will be mentioned later herein, provides proof that Respondent does make the representations found in paragraphs III (b) and (c) of the Complaint.
With respect to whether Respondents United and NPOA represent that they are nationally organized associations of peace officers and/or law enforcement officers, it is concluded that the names of the organizations, the fact that they represent themselves as being publishers, and that they charge substantial rates for their advertising space, all go together to project the image that they are national organizations or associations of peace or law enforcement officers. It is found, therefore, that Respondents United and NPOA do, by implication and in substance and effect, make the representation expressed in paragraph III (d) of the Complaint.
There now remains to be determined the question as to whether the representations herein found to have been made by Respondents are material representations and whether they are true or false.
Complainant asserted in its closing argument that the names of the Respondent organizations and their publications imply that they are operated and published solely for the benefit of their memberships. (Tr. 250, 251) A stronger argument can be made that the money obtained from the sale of advertisements is to be used primarily to defray the costs of publishing the books, with any funds that are remaining to be devoted to benefits for the members. Looking at the situation from a more practical point of view, advertising usually is sold on the basis of the numbers of readers by whom the advertisements will be seen. Thus, the general rule is that advertising is engaged in more for the benefit of the advertiser than for the publisher, although each derives his own benefit in his own way.
On the other hand, the membership of the NPOA does derive benefit in the form of the National Peace Officer's Combat Pistol Championship held in conjunction with the National Conference and School of Instruction for national peace officers. Members, or families of members, of NPOA also derive benefit in the form of insurance which provides certain monetary benefits for the families of peace officers killed in the line of duty. (Ex. NPOA-1; Tr. 267) Mrs. Evans testified that the dues and the advertising revenues collected by United and United Book provide benefits (including insurance) to peace officers. (Tr. 192-204) Cross-examination by Complainant elicited statements to the effect that peace officers benefit to some extent from the income of United and United Boo. (Tr. 205, 206)
In sum, there is insufficient proof to sustain the charge of falsity of the representation set forth in paragraph III (a) of the Complaint. (See, also, Insp. Shollenberger's testimony at Tr. 169)
Complainant produced a number of witnesses who had received solicitations for payment to one or the other of the Associations or to the publication of one of them for membership dues or for advertising space. These witnesses and the exhibits about which they testified are now described. Witness Addressee of Said to be & Tr. pp. Solicited By Date Solicitation Amount Purpose Approved by CX.No. Jerry NPOA & NPOA 8-6-80 Talbot Bird Co. $39.50 Bus. card ad Jerry Elliott 1A
Elliott Book 10950 Grandview et seq. (Tr. 6-11) Shawnee Mission, KS
Robert E. NPOA & NPOA 1-22/79 Sears Roebuck $125.00 1/4 pg. ad Bob Walters 2A
Walters Book & Co. et seq. (Tr. 11-22 3625 Truman Rd.
Kansas City, MO
Larry Lock United & 8-14-80 Churchill Pump- $39.50 Renewal of Russell Hilton 4A (Tr. 22-28) United Book ing Units Inc. bus. card et seq.
Box 512 ad
Chanute, KS
Ted Eberle United & 8-15-80 Kansas Office $39.50 Renewal of Mr. Eberle 7A (Tr. 28-32) United Book Education bus. card et seq.
1200 Commercial ad
Emporia, KS
John M. NPOA & NPOA 12-12-79 Air Products & $39.50 1/16 pg. ad Mr. McNallen 5A
McNallen Book Chemicals et seq. (Tr. 33-37) 9725 Alden Rd.
Lenexa, KS
Insp. M. J. United & Undated Blaisdell's $59.50 Renewal of 8A
Mullally United Book Sport A Rama associate et seq. (Tr. 38-43) Roxsbury St. membership
Kenne, NH
Insp. United & 5-13-80 J.C. Parry & $49.50 Ad 9A
Mullally United Book Sons, Inc. et seq. (Tr. 43-49) 6729 Brookmont Dr.
Baltimore, MD
Witness Addressee of Said to be & Tr. pp. Solicited By Date Solicitation Amount Purpose Approved by CX. No. Insp. United & 2-4-80 The Superior Die $47.50 Bus. card 10A
Mullally United Book 1432 Parsons Ave. et seq. (Tr. 49-64) Columbus, OH
Att: Roger Holstein
Insp. United & 2-5-80 Big Top Drive In $39.50 Ad 11A
Mullally United Book Rest. et seq. (Tr. 64-66) 3384 SE Division
Portland, OR
Insp. United & 4-18-80 Village Inn Pizza $39.50 Ad 12A
Mullally United Boo Parlors, Inc. et seq. (Tr. 66-69) 4221 Winfield Scott Plaza
Scottsdale, AZ
Glenn C. United & 8-15-80 Kings of Salina, $39.50 Renewal of Glenn C. Long 6A
Long United Book Inc. bus. card et seq. (Tr. 82-89) 1215 W. Crawford
Salina, KS
Insp. NPOA & NPOA 3-13-79 VFW National $59.50 1/8 pg. ad John Smith 3A
Mullally Book Headquarters et seq. (Tr. 90-99) 406 West 34th
Kansas City, MO
* CX-3A through 3K were handed to Insp. Mullally by Mr. Smith who said at time of delivery that he had been getting bills for services he had not ordered and that he did not wish to receive. Cross-examination of Insp. Mullally is found at Tr. 69-81 and 99-102.
In all of the foregoing instances, where applicable, the person who is said to have approved the insertion of the ad for which payment is solicited denied that he had "OK'ed" or approved the advertisement or ordered insertion of it in the Book of the organization seeking payment. Sears Roebuck did take a back cover page advertisement in the July, 1978, issue of the NPOA book, but Mr. Walters (CX-2A, above) said it must have been ordered by the retail division of Sears in Kansas City, which is separate and distinct from the distribution division of which he is in charge.He said that whatever the authority for the Sears advertisement in the NPOA book may have been, he was in no way the approving official of Sears. (Tr. 19, 22)
The next, and principal, witness for Complainant was Postal Inspector Richard Shollenberger. Inspector Shollenberger was assigned this case in May, 1980. (Tr. 103) Among the matters that came to his attention were CX-13A and CX-15A which are as follows:
1. CX-13A - Invoice from United Book, dated "7-17-79", addressed to "N mio sic Totten", Bailey's Cross Roads, Virginia. This request was for remittance, with a copy of the advertisement, in the amount of $32.50; 2. CX-15A - Invoice from United Book, dated "7-16-79", addressed to "American Machine Tool", (actually, The American machine Tool Distributors Association), Washington, D.C. This invoice seeks the remittance of the sum of $39.50 for a purpose similar to that of CX-13A.
Under date of December 5, 1979, Ms. Naomi Totten, on the letterhead of a business in her name located at Bailey's Cross
Roads, Falls Church, Virginia, wrote a letter to the Better Business Bureau of Washington, D.C., enclosing CX-13A, and stating that she had never contacted, or ordered an advertisement from, the Respondent from whom CX-13A had been received. (CX-13B) Inspector Shollenberger called Ms. Totten, who confirmed the statements made by her in her letter to the Washington Better Business Bureau. 1/ (Tr. 105-106)
Similarly, under date of July 17, 1979, Robert A. Gale, Executive Vice President of the American Machine Tool Distributors Association, wrote a letter (CX-15A) to United, at Washington, D.C. protesting the receipt of CX-15A. In addition, Inspector Shollen- berger interviewed Mr. Gale by telephone on December 15, 1980, and a resume of this interview is as follows:
"Mr. Gale said that his association had never heard of United Fraternal Order of Peace Officers prior to receiving the bill, dated July 16, 1979. He said there was no phone solicitation prior to receiving the bill. If a bill was approved, it would have been by himself. He said that he definitely did not approve any such bill. Mr. Gale said that if his association had received any letters since then, he probably would have just thrown them away since he had already filed a complaint against United Fraternal Order of Peace Officers." (CX-15C) (Tr. 112-113)
A similar series of events arose because of the receipt by Valley Fence Co., Inc., of Louisville, KY, of a statement dated May 22, 1980, demanding that the addressee of the statement pay $89.50 to United Book for a 1/8 page ad. In a telephone interview on December 15, 1980, conducted by Inspector Shollenberger, the remarks of Roy Shuler, President of Valley Fence Company, Inc., were in substance as follows:
"Mr. Shuler said his company has not done business with United Fraternal Order of Peace Officers. He said they may have received a telephone call from them prior to receiving their bill. Mr. Shuler could not recall exactly what was said, but he is sure he told them that they were not interested and if they wanted any solicitation, they would have to send him something that he could look at. Mr. Shuler did not receive anything from United Fraternal Order of Peace Officers except the bill, dated May 22, 1980. Mr. Shuler said that he is the only one authorized to okay any advertisement, and in this case, he did not authorize this solicitation." (CX-14C) (Tr. 108-109)
On June 3, 1980, Inspector Shollenberger personally interviewed Mrs. Rosemary Evans, owner of United, which is the publisher of the United Book, located at The Federal Building, 1522 K Street, N.W., Suite #400, Washington, D.C. 20005. Mrs. Evans is also the owner of Fortune Enterprises, which may be the name under which Mrs. Evans was awarded the "contract" to publish the NPOA Book. The interview was had at 8141 N. Oak Trafficway, Kansas City, MO 64118, which is an office used by Mrs. Evans. At the conclusion of the interview, Mrs. Evans indicated that she understood the postal regulations governing the mailing of solicitations for orders as distinguished invoices or statements for payment.
Inspector Shollenberger reviewed his memorandum of June 4, 1980, summarizing the interview of Mrs. Evans on the preceding day; he said it was accurate and he adopted it as his testimony; whereupon, the memorandum was offered into evidence, and, without objection, it was received as CX-16. (Tr. 113) The body of the memorandum reads as follows:
"Ms. Evans was advised that complaints were being received concerning their mailing of statements to companies to place an ad in the United Peace Officers yearbook. Ms. Evans stated that if any company receiving the statement did not want to place an ad, all they had to do was cancel it. She was then advised that the statements appear to be bills and that many companies would pay the amount even though they actually would not want to place an ad in the United Peace Officer's yearbook.
Ms. Evans was advised that the U. S. Code and Postal Regulations required that a bill, invoice or statement of account due which is in fact a solicitation for an order, is unmailable unless it bears on its face either of two disclaimers. She was told that the solicitation must bear on its face either of the following disclaimers: 'This is a solicitation for the order of goods or services, or both, and not a bill, invoice, or statement of account due. You are under no obligation to make any payments on account of this offer unless you accept this offer.' or 'This is not a bill.'
Ms. Evans stated that she will now have her statements changed to include a disclaimer. She said she would also cross out the statement 'Please pay on invoice' which is on her statement.
Ms. Evans also advised that the injunction against her company by the Attorney General's Office prohibited her from receiving checks through the mail for this yearbook or sending of statements for the yearbook in the State of Missouri.
Ms. Evans stated that she would immediately correct all statements being sent out by her office and when the statements are next printed, a copy will be forwarded to this office. She also said that she would mail copies of all yearbooks printed."
At the conclusion of the interview, Inspector Shollenberger asked to see some of the yearbooks of United, but Mrs. Evans said that none was available at that time. (Tr. 115)
As indicated at the interview, Mrs. Evans mailed to Inspector Shollenberger on June 6, 1980 (CX-18) a copy of what appears to be the cover of the United Peace Officers Yearbook for Arkansas, Illinois, Michigan, South Dakota and Tennessee (undated) (CX-19) and a copy of the statement of the United Book with the following language typed thereon: "'THIS IS NOT A BILL' This is a solicitation. You are under no obligation to pay unless you accept this offer." (CX-17) In addition to the inclusion of the foregoing language, the following language was stricken from the upper right-hand portion of the statement:
"TERMS - 5% Discount if Paid Within 10 Days
PLEASE PAY ON INVOICE"
Thus, assuming that the foregoing added notice is of the proper type size, color and placement on the statement, it must be accepted that Mrs. Evans was, and is, aware of the pertinent requirements of postal regulations. The very least that may be said is that Mrs. Evans had been made fully aware that the invoices and statements previously mailed by her did not comply with the governing statute and with postal regulations. She knew, moreover, that language changes, additions, and deletions, would have to be made in the notices mailed by her in order to bring them into compliance.
Despite the declaration by Mrs. Evans on June 3, 1980, of her intention to tailor her practices to the requirements of law and regulations, her actions showed that she failed to follow that course. It is not necessary to give all of the details of the individual instances, but reference will be made to exhibits which illustrate the fact that Mrs. Evans reverted to the use of her older statements and invoices in their original form without the required additions or deletions of language. Exhibit citations are shown, also, for resumes of interviews in which responsible officers or employees of businesses solicited asserted that they never ordered the insertion of advertising matter in either publication involved in this proceeding, or that they never sought membership - associate or otherwise - in one of the parent associations.
Statement of Responsible CX No. Date Addressee Solicitor Officer or Interview Summary 20A 8-4-80 Ramada Inn United Book CX-20C
Rochester, NY
21A 8-30-80 Gino's United BOok CX-21B
King of Prussia, PA
22A 9-2-80 Argonaut Ins. United Book CX-22B
Co.
Menlo Park, CA
22C 9-30-80 (Same as above United CX-22D, 22E
23A 9-8-80 Stinebaugh United Book CX-23C
Appl. Repair
Salisbury, MD
24A 9-9-80 James H. Binns United Book CX-24B, 24C
Armstrong Cork
Co.
Lancaster, PA
Statement of Responsible CX No. Date Addressee Solicitor Officer or Interview Summary 25A 10-25-80 Foster & United Book CX-25B, 25C
Creighton Co.
Lexington, KY
26A 10-28-80 Local Union United Book CX-26C, 26D
No. 1
Cincinnati, OH
27A 10-30-80 State Contr. United Book CX-27B
& Stone Co.
Lexington, KY
27F 11-12-80 Medersa Agg. United Book CX-28C, 28D
Printers, Inc.
Davenport, IA
29A 11-11-80 Clarence H. United Book CX-29B, 29C
Christiansen, Atty.
Davenport, IA
To the foregoing list of exhibits must be added others about which testimony by other witnesses has earlier been discussed. They include, among others, the following:
Statement of Responsible
CX No. Dated Witness Officer or Interview Summary
1A 8-6-80 Jerry Elliott Tr. 6-11
4A 8-14-80 Larry Lock Tr. 22-28
7A 8-15-80 Ted Eberle Tr. 28-32
6A 8-15-80 Glenn C. Long Tr. 82-89
On cross-examination Inspector Shollenberger stated that the relationship between NPOA and United is represented by Mrs. Evans in that she was doing business and mailing out bills for both organizations. (Tr. 165) No one, according to the witness, said that he was under the belief that the income from the sale of ads or memberships was to be devoted to the use and benefit of police officers. Similarly, no one reported any statement by any of the Respondents bearing on the question as to whether United or NPOA is a local or a national organization. (Tr. 169)
The first witness for the Respondents, United and United Book was Mrs. Rosemary Evans. Mrs. Evans is the Executive Secretary and a member of the Board of Directors of United, which was organized by a group of policemen who wanted a national organization. (Tr. 179) She has published the Year Book of that organization since 1972. When one buys an advertisement for the United Book he automatically becomes an associate member, in recognition of which he is sent a membership card and an emblem for his car. A renewal notice is sent to him every year. If no response is received in 30 days, a second notice is sent which, if unanswered, results, according to the testimony of Mrs. Evans, in the termination of the membership for that year. (Tr. 180-181) No United Book has been published since 1978, but, as heretofore seen, invoices demanding payment have continued to be mailed. (Tr. 214, CX 22 through 29)
Mrs. Evans is the owner of Fortune Enterprises under which name she has been connected with National Peace Officers Association for three years and for whom she publishes a quarterly publication called the National Peace Officer. (CX-32) Although she had previously described a letter contract (supra, p. 8), Mrs. Evans said that her employment with NPOA is based on an oral agreement she entered into in 1975 with Richard Morton, the predecessor of Mr. Billy B. Chapman as Executive Director. (Tr. 233) Under the agreement Mrs. Evans is to publish the NPOA quarterly 2/ and the period of such employment is to be five years. Mr. Morton died and Mrs. Evans continued to perform under the oral agreement. The exact date of Mr. Morton's death was not stated, but she met Mr. Chapman in about mid-October, 1980. Although the Executive Director of NPOA knows the facts as revealed by this record, or, by virtue of his position with the organization, he ought to be aware of those facts, Mrs. Evans, as of the date of the hearing, had not been told to stop mailing solicitations for the National Peace Officer advertisements. (Tr. 230)
Respondent National Peace Officers Association called as a witness Mrs. Gertrude Moore, Secretary-Treasurer of NPOA for 11 years. Mrs. Moore testified briefly that she has received few complaints about the NPOA's publication or its advertisements. She said that NPOA has about 1000 members at present, each of whom pays annual dues of $22.00. One of the benefits provided for the members is a $1000.00 death benefit for members killed in the line of duty. (Tr. 236-242)
Against this background a decision must be made as to whether the activities by or on behalf of the Respondents named in the Complaint comply with or contravene the pertinent provisions of law and regulation in the manner set forth in the Complaint.
On the question of the truth or falsity of the representations heretofore found to have been made, the following findings are made.
Complainant did not carry its burden of establishing the falsity of representation III (a). On the other hand, benefits to the membership are provided in the form of the pistol-shooting contests, insurance, and the death benefits in which one may participate.
With respect to the representation in III (d) Complainant offered no proof that the organizations are not nationally organized associations of peace officers or law enforcement officers.
The representation in paragraph III (b) of the Complaint was repeatedly shown to be false by the testimony of the witnesses. Some witnesses denied ever having ordered the insertion of an ad in the respective publication and others denied even having previously heard of the organization or the publication by which they were being billed.
Finally, the evidence in this case establishes that, time after time, Respondent typed on its invoices such phrases as "Authorized by" or "Approved by" when, in fact, the persons by whom the authorization or approval was said to have been given (1) did not give such approval or authorization, (2) was not the person in the business organization designated to give such approval or authorization, or (3) the indicated person did not even work for the company to which the billing was sent. The falsity of the representation in paragraph III (c) was repeatedly established. (CX-22 through 29)
The representations found to be false are material because, by the manner in which they were presented and by what was stated, they caused recipients thereof to believe that Respondents' mailing pieces were statements of account due.
Under the names the United Fraternal Order of Peace Officers, the United Peace Officers Year Book, the National Peace Officers Association and The National Peace Officer, Respondents are engaged in conducting a scheme or schemes for obtaining money through the mail by means of false representation within the meaning of § 3005(a) of Title 39, United States Code.
Similarly, the Respondents aforesaid are and have been depositing in the mail matter which is in the form of, and which reasonably could be interpreted or construed as, a bill, invoice, or statement of account due; but constitutes, in fact, a solicitation for the order by the addressee of goods or services, said matter being nonmailable within the meaning of § 3001(d) of Title 39, United States Code.
For the foregoing reasons, an order as provided in 39 United States Code, § 3005(a) in a substantially the form attached, should be issued against the above-named Respondents.
1/ In each instance herein in which reference is made to a telephone interview by a Postal Inspector, the call was initiated by the Inspector who asked for the intended interviewee by name. The person spoken to identified himself or herself as the intended interviewee, or as a person acquainted with the intended interviewee. Additionally, in each case, the person answering the Inspector's call was acquainted with the subject matter of the conversation and was thoroughly familiar with the circumstances concerning which the call was initiated. These facts, together with the corroboration of the business methods of Respondents as shown by the testimony of earlier witnesses as to matters within their own experience and knowledge, leave no doubt as to the admissibility of the Inspector's accounts of the telephone interviews. § 226, McCormick on Evidence, 2nd Ed., 1972; Project Prayer, P.S. Docket No. 8/68, Init. Dec., Nov. 7, 1980, pp. 27-29, decision now on appeal.